LMI Aerospace, Inc. Announces Third Quarter 2010 Results
LMI generated gross profit of $12.0 million or 22.9 percent of sales during the quarter ended September 30, 2010, compared to $12.3 million or 21.0 percent of sales in the prior year. The Aerostructures segment provided gross profits of $8.9 million or 25.9 percent of sales in the third quarter of 2010, up from $8.3 million or 21.5 percent for the same period in 2009. The previous period included inefficiencies and less coverage of fixed costs as production dropped during the company's inventory reduction program. The third quarter of 2010 encountered higher than expected costs on a new military ground support program in our Mexicali facility. The Engineering Services segment generated a gross profit of $3.0 million or 16.7 percent of sales in the quarter ended September 30, 2010 versus $4.0 million or 19.8 percent of sales for the third quarter of 2009. This decline was attributable to lower revenue levels providing less coverage of fixed costs and lower billable hours as the segment transitioned engineers from maturing programs to new programs.
Selling, general and administrative expenses (SG&A) were $8.2 million for the quarter ended September 30, 2010, compared to $7.5 million for the year ago quarter. SG&A in the Aerostructures segment for the third quarter of 2010 was $6.4 million, up from $5.8 million in the third quarter of 2009, primarily due to professional fees, and personnel costs, including hiring fees. Engineering Services segment SG&A was $1.7 million in the third quarter of 2010, unchanged from the prior year.
Net interest expense was $0.2 million in the quarter ended September 30, 2010 compared to $0.4 million the prior year as LMI paid its revolving line of credit down to zero during the quarter. Income tax expense for the third quarter of 2010 was $1.0 million compared to $1.6 million the prior year. LMI adjusted tax expense in the third quarter of 2010 for various tax matters resulting in a benefit of $0.4 million. Additionally, the company modified its 2010 current effective tax rate to 36.2 percent compared to 36.5 percent in the third quarter of 2009.
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