News | Press Releases
LMI Aerospace Announces Results for the Third Quarter of 2007
ST. LOUIS, Nov 06, 2007 /PRNewswire-FirstCall via COMTEX News Network/ -- LMI Aerospace, Inc. (Nasdaq: LMIA), a leading provider of design engineering services, structural components, assemblies and kits to the aerospace, defense and technology industries, today announced results for the third quarter of 2007, which include two months of operations of D3 Technologies, Inc., acquired on July 31, 2007.
Net sales in the quarter ended September 30, 2007, were $47.8 million compared to $30.8 million in the quarter ended September 30, 2006. In the third quarter of 2007, net sales for the Aerostructures segment, which consists of all LMI operations other than D3 Technologies, were $35.8 million. Sales for the acquired D3 Technologies Engineering Services segment were $12.0 million. Net income for the third quarter of 2007 was $4.2 million, or $0.37 per diluted share, compared to $2.7 million, or $0.24 per diluted share, in the third quarter of 2006. The net income for the third quarter of 2007 includes an after tax benefit of $0.4 million resulting from certain customer claim settlements of $0.5 million less an interest charge of $0.1 million for unamortized finance cost for a loan replaced as a result of the D3 Technologies acquisition.
"Our legacy LMI business has continued to improve, as increasing customer demand together with better productivity resulting from the use of lean manufacturing techniques, and enhanced performance of our supply chain organization, have resulted in higher sales and gross margins," said Ronald S. Saks, President and CEO of LMI Aerospace, Inc. "In addition, the engineering expertise added by our acquisition of D3 Technologies is expected to advance our strategy of leveraging existing customer relationships in order to increase market share, especially now that we are capable of executing design build projects."
For the nine months ended September 30, 2007, net sales were $113.9 million compared to $92.8 million in the nine months ended September 30, 2006. Net income for the first nine months of 2007 was $9.3 million or $0.83 per diluted share, compared to $8.0 million or $0.77 per diluted share in the year-ago period.
In the Aerostructures segment, net sales of kits and components for corporate and regional aircraft in the third quarter of 2007 were $12.4 million or 34.6 percent of total segment sales, compared to $11.6 million or 37.7 percent of sales, in the third quarter of 2006. The increase was due primarily to increased production rates of aircraft manufactured by Gulfstream. Sales of products used in large commercial aircraft in the third quarter of 2007 were $11.5 million or 32.1 percent of sales, compared to $9.5 million or 30.8 percent of sales in the third quarter of 2006. Higher production rates for certain models of Boeing aircraft, including the 737, 747 and 787, contributed to the increase. Military products generated sales of $9.2 million ($8.0 million excluding $1.2 million of claim settlements) or 25.7 percent of sales in the third quarter of 2007, compared to $7.6 million or 24.7 percent of sales in the year-ago quarter.
Net sales for the Engineering Services segment, were $12.0 million for the two months during which it was part of LMI. Net sales of engineering services for large commercial aircraft were $6.3 million, primarily for Boeing 787, 777, and 747 models. Net sales for corporate and military aircraft were $4.9 million.
Gross profit for the third quarter of 2007 was $13.3 million or 27.8 percent of sales compared to $8.4 million or 27.3 percent of sales in the third quarter of 2006. Gross margin for the Aerostructures segment was 30.9 percent (29.2 percent excluding claim settlements) as higher production rates and improved manufacturing efficiencies provided better coverage of fixed costs. Gross profit for the Engineering Services segment was $2.2 million or 18.3 percent of sales. Selling, general and administrative expenses were $6.4 million in the third quarter of 2007, including $1.3 million from the Engineering Services segment, or 13.3 percent of sales, compared to $4.5 million or 14.6 percent of sales in the year-ago quarter. Included in selling, general and administrative expenses for the Engineering Services segment was $0.5 million of non-cash amortization of restricted stock awards and intangibles.
Interest expense in the third quarter of 2007 was $650,000, compared to interest income of $134,000 in the third quarter of 2006, largely reflecting borrowings to fund the D3 Technologies' acquisition. Income taxes in the third quarter of 2007 were $2.1 million, compared to $1.3 million in the year- ago quarter. The effective tax rate was 33.1 percent in the third quarter of 2007 compared to 32.2 percent in the third quarter of 2006. The backlog at September 30, 2007, was $143 million, up from $128 million at September 30, 2006.
"Our quoting activity for components, kits and assemblies continues at a high level and our growing backlog for new and existing programs provides better visibility of future customer demand," Saks added. "We have adjusted our guidance ranges slightly for 2007 and 2008 given some near term program delays as well as growing pressure to accelerate certain 2008 programs." Our guidance is as follows:
2007 Sales: $172 million - $175 million (Aerostructures: $142 million - $144 million; Engineering Services: $30 million - $31 million) Gross margin: 25.5% - 26.5% (Aerostructures: 27.5% - 28.5%; Engineering Services: 18.5% - 19.5%). SG&A: $22.5 million - $23.8 million (Aerostructures: $20 million - $21 million; Engineering Services: $2.5 million - $2.8 million, including $1.1 million in acquisition related expenses) Interest expense: $900,000 Tax rate: 34.5% - 35.5% 2008 Sales: $237 million - $257 million (Aerostructures: $160 million - $170 million, Engineering Services: $77 million - $87 million) Gross margin: 25.0% - 26.5% SG&A: $31.0 million - $33.0 million (including $2.5 million in acquisition related expenses) Interest expense: $1.9 million - $2.2 million Tax rate: Approximately 36%
"We are making good progress in establishing a design/build organization that will support the sale of our services and will manage projects from the planning stage through the manufacture of the completed product," said Saks. "We have strong interest from our customers and are ready to take on some projects now. Our improved financial position and wider array of products and services places us in a good position to manage and build larger projects for our customers, who are increasingly interested in design and assembly and are seeking suppliers who can provide higher level, more complex services and products."
LMI Aerospace, Inc. is a leading provider of design engineering services, structural components, assemblies and kits to the aerospace, defense and technology industries. The company fabricates, machines, finishes and integrates formed, close tolerance aluminum and specialty alloy components and sheet metal products primarily for large commercial, corporate and military aircraft. LMI Aerospace, Inc. 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.
This news release includes forward-looking statements related to LMI Aerospace, Inc.'s outlook for 2007 and 2008, 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, 2006, and any risk factor 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, 2007 December 31, 2006 Assets Current assets: Cash and cash equivalents $355 $24,411 Short-term investments - 2,243 Trade accounts receivable, net of allowance of $353 at September 30, 2007 and $311 at December 31, 2006 31,860 14,658 Inventories 38,079 33,956 Prepaid expenses and other current assets 1,786 1,760 Deferred income taxes 2,865 2,210 Income taxes receivable 1,206 232 Total current assets 76,151 79,470 Property, plant and equipment, net 19,519 19,514 Goodwill 48,389 5,653 Customer intangible assets, net 19,798 3,425 Other assets 1,428 548 Total assets $165,285 $108,610 Liabilities and stockholders' equity Current liabilities: Accounts payable $9,551 $9,758 Accrued expenses 11,654 3,916 Short-term deferred gain on sale of real estate 234 147 Current installments of long-term debt and capital lease obligations 677 238 Total current liabilities 22,116 14,059 Long-term deferred gain on sale of real estate 3,832 2,493 Long-term debt and capital lease obligations, less current installments 33,015 583 Deferred income taxes 5,915 965 Total long-term liabilities 42,762 4,041 Stockholders' equity: Common stock, $.02 par value per share; authorized 28,000,000 shares; issued 11,819,057 shares and 11,577,631 shares at September 30, 2007 and December 31, 2006, respectively 236 232 Preferred stock, $.02 par value per share; authorized 2,000,000 shares; none issued in both periods - - Additional paid-in capital 66,668 66,104 Treasury stock, at cost, 387,188 shares at September 30, 2007 and 389,732 share at December 31, 2006 (1,837) (1,849) Retained earnings 35,340 26,023 Total stockholders' equity 100,407 90,510 Total liabilities and stockholders' equity $165,285 $108,610 LMI Aerospace, Inc. Condensed Consolidated Statements of Operations (Amounts in thousands, except share and per share data) (Unaudited) Three Months Ended Nine Months Ended September 30 September 30 2007 2006 2007 2006 Net sales $47,795 $30,799 $113,906 $92,809 Cost of sales 34,494 22,430 83,117 67,271 Gross profit 13,301 8,369 30,789 25,538 Selling, general and administrative expenses 6,396 4,435 16,338 12,807 Income from operations 6,905 3,934 14,451 12,731 Other income (expense): Interest income (expense), net (650) 134 (258) (216) Other, net (2) (63) (25) (63) Income before income taxes 6,253 4,005 14,168 12,452 Provision for income taxes 2,068 1,289 4,851 4,470 Net income $4,185 $2,716 $9,317 $7,982 Amounts per common share: Net income per common share $0.38 $0.24 $0.84 $0.78 Net income per common share assuming dilution $0.37 $0.24 $0.83 $0.77 Weighted average common shares outstanding 11,157,959 11,112,599 11,155,041 10,266,897 Weighted average dilutive common shares outstanding 11,291,108 11,234,505 11,279,643 10,390,833
SOURCE LMI Aerospace, Inc.
Copyright (C) 2007 PR Newswire. All rights reserved
News Provided by COMTEX