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LMI Aerospace, Inc. Announces Third 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 Balance Sheets
(Amounts in thousands, except share and per share data)
(Unaudited)
     
  September 30, 2010 December 31, 2009
Assets    
Current assets:    
Cash and cash equivalents  $ 34  $ 31
Trade accounts receivable, net of allowance of $176 at September 30, 2010 and $279 at December 31, 2009  32,986  35,469
Inventories, net  44,575  45,703
Prepaid expenses and other current assets  3,338  2,849
Deferred income taxes  3,723  3,799
Total current assets  84,656  87,851
     
Property, plant and equipment, net  22,022  19,322
     
Goodwill  49,102  49,102
Intangible assets, net  21,358  22,965
Other assets  885  977
Total assets  $ 178,023  $ 180,217
     
Liabilities and shareholders' equity    
Current liabilities:    
Accounts payable  $ 6,965  $ 7,778
Accrued expenses  13,584  8,089
Short-term deferred gain on sale of real estate  233  233
Current installments of long-term debt and capital lease obligations  215  326
Total current liabilities  20,997  16,426
     
Long-term deferred gain on sale of real estate  3,132  3,307
Long-term debt and capital lease obligations, less current installments   57  17,210
Deferred income taxes  7,546  7,546
Other long-term liabilities  --  1,235
Total long-term liabilities  10,735  29,298
     
Shareholders' equity:    
Common stock, $0.02 par value per share; authorized 28,000,000 shares; issued 12,074,604 shares and 11,996,389 shares at September 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  73,018  71,375
Treasury stock, at cost, 301,772 shares at September 30, 2010 and 359,188 shares at December 31, 2009   (1,432)  (1,704)
Retained earnings  74,463  64,582
Total shareholders' equity  146,291  134,493
Total liabilities and shareholders' equity  $ 178,023  $ 180,217
LMI Aerospace, Inc.
 Condensed Consolidated Statements of Operations
(Amounts in thousands, except share and per share data)
(Unaudited)
         
  Three Months Ended September 30, Nine Months Ended September 30,
  2010 2009 2010 2009
         
Sales and service revenue        
Product sales  $ 33,036  $ 38,212  $ 109,937  $ 120,789
Service revenues  19,248  20,537  58,707  64,791
Net sales  52,284  58,749  168,644  185,580
Cost of sales and service revenue        
Cost of product sales  24,553  30,055  81,099  92,556
Cost of service revenues  15,766  16,386  47,949  52,747
Cost of sales  40,319  46,441  129,048  145,303
Gross profit  11,965  12,308  39,596  40,277
         
Selling, general and administrative expenses  8,231  7,515  24,034  23,927
Severance and restructuring  --   (50)  --   312
Income from operations  3,734  4,843  15,562  16,038
         
Other income (expense):        
Interest expense, net  (160)  (443)  (554)  (1,278)
Other, net  55  (3)  10  (27)
Total other income (expense)  (105)  (446)  (544)  (1,305)
         
Income before income taxes  3,629  4,397  15,018  14,733
Provision for income taxes  980  1,609  5,137  5,382
         
Net income  $ 2,649  $ 2,788  $ 9,881  $ 9,351
         
Amounts per common share:         
Net income per common share  $ 0.23  $ 0.25  $ 0.87  $ 0.83
         
Net income per common share assuming dilution  $ 0.23  $ 0.25  $ 0.85  $ 0.83
         
Weighted average common shares outstanding  11,442,567  11,320,527  11,409,718  11,296,544
Weighted average dilutive common shares outstanding  11,655,193  11,348,333  11,623,058  11,324,697
LMI Aerospace, Inc.
 Condensed Consolidated Statements of Cash Flows
(Amounts in thousands)
(Unaudited)
     
     
  Nine Months Ended September 30,
  2010 2009
Operating activities:    
Net income  $ 9,881  $ 9,351
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization  5,520  5,567
Restricted stock compensation  1,381  1,290
Charges for inventory obsolescence and valuation  1,004  1,521
Other noncash items  (277)  428
Changes in operating assets and liabilities, net of  acquired businesses:    
Trade accounts receivable  2,584  (10,018)
Inventories  124  10,151
Prepaid expenses and other assets  811  180
Accounts payable  (1,294)  (7,261)
Accrued expenses  3,601  (448)
Net cash provided by operating activities   23,335  10,761
Investing activities:    
Additions to property, plant and equipment   (5,931)  (2,648)
Acquisitions, net of cash acquired  --   (10,047)
Other, net  (671)  (110)
Net cash used by investing activities   (6,602)  (12,805)
Financing activities:    
Principal payments on capital leases and notes payable  (264)  (374)
Advances on revolving line of credit  13,520  43,819
Payments on revolving line of credit  (30,520)  (38,819)
Other, net  534  (132)
Net cash (used) provided by financing activities  (16,730)  4,494
Net increase in cash and cash equivalents  3  2,450
Cash and cash equivalents, beginning of year  31  29
Cash and cash equivalents, end of quarter  $ 34  $ 2,479
LMI Aerospace, Inc.
Selected Non-GAAP Disclosures
(Amounts in thousands)
(Unaudited)
         
  Three Months Ended September 30 Nine Months Ended September 30
  2010 2009 2010 2009
         
Non-GAAP Financial Information        
Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)(1):        
         
Net Income  $ 2,649  $ 2,788  $ 9,881  $ 9,351
         
Income tax expense  980  1,609  5,137  5,382
Interest expense, net  160  443  554  1,278
Depreciation and amortization  1,805  1,777  5,520  5,567
Stock based compensation  464  367  1,381  1,290
Severance and restructuring costs  --   (50)  --   312
Acquisition costs  --   --   --   239
TCA wind-up costs  --   --   --   249
Other, net  (55)  3  (10)  27
         
Adjusted EBITDA  $ 6,003  $ 6,937  $ 22,463  $ 23,695
         
Free Cash Flow (2):        
         
Net cash provided by operating activities  $ 6,136  $ 11,001  $ 23,335  $ 10,761
Less:        
Capital expenditures  (1,466)  (1,435)  (5,931)  (2,648)
         
Free cash flow  $ 4,670  $ 9,566  $ 17,404  $ 8,113
         
         
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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