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LMI Aerospace Announces Second Quarter 2010 Results

Outlook for 2010 and 2011

The company also revised guidance for 2010. On a consolidated basis, the company now expects revenue to range between $233 million and $242 million. Gross profit should be between 23.1 percent and 24.3 percent with SG&A ranging from $31.3 million to $32.2 million. Net interest expense is expected to be between $650,000 and $700,000 for the year and the effective tax rate is expected to continue at 36.5 percent. Capital expenditures are planned to be approximately $8 million. Depreciation, amortization and non-cash stock compensation expense are expected to be between $9.2 million and $9.4 million. The expectations for each segment are as follows:

Aerostructures

  • Net sales of between $159 million and $164 million
  • Gross profit of between 26.0 percent and 27.0 percent
  • SG&A ranging from $24.5 million to $25.0 million

Engineering Services

  • Net sales of between $74 million and $78 million
  • Gross profit of between 17.0 percent and 18.5 percent
  • SG&A ranging between $6.8 million and $7.2 million

Aerostructures revenue expectations were revised downward, primarily due to lower expectations for military helicopter sales and purchase order awards and delays in the transfer of work statement on certain military projects. Aerostructures gross margin guidance was improved slightly reflecting actual performance for the first six months of 2010. Selling, general and administrative expenses for the segment were lowered by reducing the high end of the range at Aerostructures. Engineering Services sales were revised upward to reflect certain new awards that are expected to contribute to the second half of the year. 

LMI also announced initial revenue guidance for 2011. Overall, LMI expects revenue of between $248 million and $265 million. The Aerostructures segment expects to benefit from planned production rate increases on several programs, including the 737, 747, 777 and 787 at Boeing and the G650 at Gulfstream. Production rates are expected to be flat on Blackhawk programs but certain recent wins should augment volumes in 2011. Based upon these developments, LMI expects revenue for the Aerostructures segment to be between $168 million and $178 million. Engineering Services is expected to improve to between $80 million and $88 million. 

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