LMI Aerospace Announces Second Quarter 2010 Results
Selling, general and administrative expenses (SG&A) were $7.8 million for the second quarter of 2010, down from $7.9 million for the year ago quarter. Aerostructures segment SG&A for the second quarter of 2010 was $5.9 million, down from $6.1 million in the second quarter of 2009. Engineering Services segment SG&A was $1.9 million in the second quarter of 2010, unchanged from the prior year.
Net interest expense was $167,000 in the second quarter of 2010 compared to $413,000 the prior year due to lower debt levels and the continued favorable interest rate environment. The effective income tax rate for the second quarter of 2010 and 2009 was 36.5 percent and 36.4 percent, respectively.
During the second quarter of 2010, LMI generated $7.8 million in free cash flow, up from $7.1 million the prior year. LMI ended the second quarter of 2010 with $4.2 million of revolving debt. Subsequent to the end of the quarter, the revolving line of credit was completely repaid.
"Our operating performance at Aerostructures, measured by on-time delivery and quality performance, continues to improve," Saks added, "with some of the benefit being better control of inventory, resulting in generation of free cash flow. Engineering Services continues to manage margins and cash flow effectively at current volume levels, which are reduced from 2009. The result is that free cash flow has continued to be strong in the second quarter and effective the first week of July 2010, we repaid our revolving line of credit and are now investing $3 million to $5 million daily. We expect to use our strong financial position to invest in new programs, primarily design-build, and to make strategic acquisitions in the coming months. Our acquisitions due diligence has increased in the last few months, with several interesting properties becoming available."LMI also announced that backlog at June 30, 2010, was $226 million compared to $238 million at June 30, 2009.
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