Free cash flow was $4.7 million in the third quarter of 2010. The quarter benefited from a milestone payment on the MJET contract and receipts of certain deferred receivables. Free cash flow for the first nine months of 2010 was $17.4 million.
LMI also announced that backlog at September 30, 2010, was $226 million compared to $228 million at September 30, 2009.
Outlook for 2010 and 2011
The company revised guidance for 2010 to recognize the reduction in sales that occurred in the third quarter, as well as the deferral in the fourth quarter of $4.0 million of tooling now expected to be recognized in 2011. On a consolidated basis, the company now expects annual revenue of $224 million. Gross profit should be between 23.0 percent and 24.0 percent with SG&A ranging from $31.9 million to $32.5 million. Net interest expense is expected to be between $700,000 and $750,000 for the year and the effective tax rate is expected to be 34.4 percent, excluding any potential benefit from an extension of research and experimentation tax credits. Capital expenditures are planned to be approximately $8 million. The expectations for each segment are as follows:Aerostructures
- Sales of $150 million
- Gross profit of between 26.0 percent and 27.0 percent
- SG&A ranging from $24.5 million to $25.0 million
- Sales of $74 million
- Gross profit of between 17.0 percent and 18.0 percent
- SG&A of $7.5 million