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TheStreet Open House

LMI Aerospace Announces Second Quarter 2010 Results

LMI Aerospace, Inc. is a leading provider of design engineering services, structural components, assemblies and kits to the aerospace, defense and technology industries. Through its Aerostructures segment, the company primarily fabricates machines, finishes and integrates formed, close-tolerance aluminum and specialty alloy components and sheet-metal products, for large commercial, corporate and military aircraft. It manufactures more than 30,000 products for integration into a variety of aircraft platforms manufactured by leading original equipment manufacturers and Tier 1 aerospace suppliers. Through its Engineering Services segment, operated by its D3 Technologies, Inc subsidiary, the company provides a complete range of design, engineering and program management services, supporting aircraft lifecycles from conceptual design, analysis and certification through production support, fleet support and service-life extensions.

The LMI Aerospace, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=4971

This news release includes forward-looking statements related to LMI Aerospace, Inc.'s, outlook for 2010 and 2011, which are based on current management expectations. Such forward-looking statements are subject to various risks and uncertainties, many of which are beyond the control of LMI Aerospace, Inc. Actual results could differ materially from the forward-looking statements as a result of, among other things, the factors detailed from time to time in LMI Aerospace, Inc.'s filings with the Securities and Exchange Commission. Please refer to the Risk Factors contained in the company's Annual Report on Form 10-K for the year ended December 31, 2009, and any risk factors set forth in our other subsequent filings with the Securities and Exchange Commission.

LMI Aerospace, Inc.
 Condensed Consolidated Statements of Operations
(Amounts in thousands, except share and per share data)
(Unaudited)
     
  Three Months Ended June 30, Six Months Ended June 30,
  2010 2009 2010 2009
         
Sales and service revenue        
Product sales  $36,657  $39,843  $76,901  $82,577
Service revenues   19,288  22,986  39,459  44,254
Net sales  55,945  62,829   116,360  126,831
Cost of sales and service revenue        
Cost of product sales  25,021  30,935   52,797  62,501
Cost of service revenues  17,699  18,511  35,932  36,361
Cost of sales  42,720  49,446  88,729  98,862
Gross profit  13,225   13,383  27,631  27,969
         
Selling, general and administrative expenses  7,763  7,939  15,803  16,412
Severance and restructuring  --   --    --   362
Income from operations  5,462  5,444  11,828  11,195
         
Other income (expense):        
Interest expense, net  (167)  (413)  (394)  (835)
Other, net   (41)  17  (45)  (24)
Total other income (expense)  (208)   (396)  (439)  (859)
         
Income before income taxes  5,254  5,048   11,389  10,336
Provision for income taxes  1,918  1,839  4,157   3,773
         
Net income  $3,336  $3,209  $7,232  $6,563
         
Amounts per common share:         
Net income per common share  $0.29  $0.28  $ 0.63  $0.58
         
Net income per common share assuming dilution  $0.29  $0.28  $0.62  $0.58
         
Weighted average common shares outstanding  11,416,021  11,291,492  11,393,022  11,284,678
Weighted average dilutive common shares outstanding outstanding  11,640,826  11,319,521  11,603,850  11,313,004
 
 
LMI Aerospace, Inc.
Condensed Consolidated Balance Sheets
(Amounts in thousands, except share and per share data)
(Unaudited)
     
  June 30, 2010 December 31, 2009
Assets    
Current assets:    
Cash and cash equivalents   $329  $31
Trade accounts receivable, net of allowance of $197 at June 30, 2010 and $279 at December 31, 2009  34,321  35,469
Inventories, net  44,304  45,703
Prepaid expenses and other current assets  3,185  2,849
Deferred income taxes  3,730  3,799
Total current assets  85,869  87,851
     
Property, plant and equipment, net  21,141  19,322
     
Goodwill  49,102  49,102
Intangible assets, net   21,892  22,965
Other assets  852  977
Total assets  $178,856   $180,217
     
Liabilities and shareholders' equity    
Current liabilities:    
Accounts payable  $8,799  $7,778
Accrued expenses   11,182  8,089
Short-term deferred gain on sale of real estate  233  233
Current installments of long-term debt and capital lease obligations  250  326
Total current liabilities  20,464  16,426
     
Long-term deferred gain on sale of real estate  3,190  3,307
Long-term debt and capital lease obligations, less current installments   4,307  17,210
Deferred income taxes  7,546  7,546
Other long-term liabilities  --  1,235
Total long-term liabilities  15,043  29,298
     
Shareholders' equity:    
Common stock, $0.02 par value per share; authorized 28,000,000 shares; issued 12,084,713 shares and 11,996,389 shares at June 30, 2010 and December 31, 2009, respectively  242  240
     
Preferred stock, $0.02 par value per share; authorized 2,000,000 shares; none issued at either date  --  --
Additional paid-in capital   72,725  71,375
Treasury stock, at cost, 301,772 shares at June 30, 2010 and 359,188 shares at December 31, 2009  (1,432)  (1,704)
Retained earnings  71,814  64,582
Total shareholders' equity  143,349  134,493
Total liabilities and shareholders' equity  $178,856  $180,217
 
 
LMI Aerospace, Inc.
 Condensed Consolidated Statements of Cash Flows
(Amounts in thousands)
(Unaudited)
   
  Six Months Ended June 30,
  2010 2009
Operating activities:    
Net income  $7,232  $6,563
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation and amortization  3,715  3,790
Restricted stock compensation  917  923
Deferred tax provision  57  146
Other noncash items   322  909
Changes in operating assets and liabilities, net of acquired businesses:    
Trade accounts receivable  1,228   (10,833)
Inventories  885  3,649
Prepaid expenses and other assets  121   (90)
Accounts payable  540  (5,562)
Accrued expenses  2,182  138
Net cash provided (used) by operating activities  17,199  (367)
Investing activities:    
Additions to property, plant and equipment   (4,465)  (1,213)
Acquisitions, net of cash acquired  --   (10,047)
Other, net   11  (29)
Net cash used by investing activities  (4,454)  (11,289)
Financing activities:    
Principal payments on long-term debt and notes payable  (193)  (259)
Advances on revolving line of credit  13,177  41,464
Payments on revolving line of credit  (25,963)  (29,464)
Changes in outstanding checks in excess of bank deposits  481  -- 
Other, net  51  14
Net cash (used) provided by financing activities  (12,447)  11,755
Net increase in cash and cash equivalents  298  99
Cash and cash equivalents, beginning of year   31  29
Cash and cash equivalents, end of quarter  $329  $128
 
 
LMI Aerospace, Inc.
Selected Non-GAAP Disclosures
(Amounts in thousands)
(Unaudited)
     
  Three Months Ended June 30 Six Months Ended June 30
  2010 2009 2010 2009
         
Non-GAAP Financial Information        
Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)(1):        
         
Net Income  $3,336  $3,209  $7,232  $6,563
         
Income tax expense  1,918   1,839  4,157  3,773
Interest expense, net  167  413  394   835
Depreciation and amortization  1,773  1,835  3,715  3,790
Stock based compensation   450  397  917  923
Severance and restructuring costs  --    --   --   362
Acquisition costs  --   --   --    239
TCA wind-up costs  --   --   --   249
Other, net   41  (17)  45  24
         
Adjusted EBITDA  $7,685  $7,676   $16,460  $16,758
         
Free Cash Flow (2):        
         
Net cash provided by operating activities  $10,749  $7,439   $17,199  $ (367)
Less:        
Capital expenditures  (2,914)  (338)  (4,465)  (1,213)
         
Free cash flow  $7,835  $7,101  $12,734  $ (1,580)
         
1. We believe Adjusted EBITDA is a measure important to many investors as an indication of operating performance by the business. We feel this measure provides additional transparency to investors that augments, but does not replace the GAAP reporting of net income and provides a good comparative measure. Adjusted EBITDA is not a measure of performance defined by GAAP and should not be used in isolation or as a substitute for the related GAAP measure of net income.
 
2. We believe Free Cash Flow is a measure of the operating cash flow of the Company that is useful to investors. Free Cash Flow is a measure of cash generated by the Company for such purposes as repaying debt or funding acquisitions. Free Cash Flow is not a measure of performance defined by GAAP and should not be used in isolation or as a substitute for the related GAAP measure of cash generated (used) by operating activities. 
CONTACT:  LMI Aerospace, Inc.
          Ed Dickinson, Chief Financial Officer
          636.916.2150

LMI Aerospace, Inc. Logo

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