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LMI Aerospace Inc. Reports Operating Results (10-Q)

May 07, 2010 | About:
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10qk

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LMI Aerospace Inc. (LMIA) filed Quarterly Report for the period ended 2010-03-31.

Lmi Aerospace Inc. has a market cap of $183.3 million; its shares were traded at around $15.65 with a P/E ratio of 13.4 and P/S ratio of 0.8. LMIA is in the portfolios of John Buckingham of Al Frank Asset Management, Inc..

Highlight of Business Operations:

Net sales of components for corporate and regional aircraft were $11.5 million for the first quarter of 2010 compared to $15.8 million for the first quarter of 2009, a decrease of $4.3 million, or 27.2%. The decrease was primarily due to $4.8 million in nonrecurring tooling sales in the first quarter of 2009, including tooling sales of $2.8 million on the G250, $1.1 million on the CRJ-1000 and $0.9 million on the G650. There were no significant tooling sales in this market sector for the first quarter of 2010. The decrease was partially offset by increased sales related to the G450/G550 of $1.0 million from $9.0 million in the first quarter of 2009 to $10.0 million in the first quarter of 2010.

Net sales of products used in large commercial aircraft were $18.5 million for the first quarter of 2010 compared to $14.7 million for the first quarter of 2009, an increase of $3.8 million, or 25.9%. The increase in net sales to this market was primarily due to weakness in sales in the first quarter of 2009 resulting from the impact of the Boeing strike. Sales related to the 737 program increased $1.3 million from $4.7 million in the first quarter of 2009 to $6.0 million in the first quarter of 2010. Sales related to the 747 program also increased $1.3 million from $3.1 million in the first quarter of 2009 to $4.4 million in the first quarter of 2010. Sales related to the 767 wing modifications increased slightly from $5.0 million in the first quarter of 2009 to $5.6 million in the first quarter of 2010. Sales related to the 777 program also increased from $0.9 million in the first quarter of 2009 to $1.5 million in the first quarter of 2010 due to nonrecurring tooling sales.

Military products generated $9.3 million of net sales in the first quarter of 2010 compared to $11.1 million in the first quarter of 2009, a decrease of $1.8 million, or 16.2%. This decrease partially resulted from a decline of $1.5 million in sales for the Apache Helicopter program from $1.9 million in the first quarter of 2009 to $0.4 million in the first quarter of 2010, primarily due to changes made in the customer s inventory management process. In addition, Blackhawk sales declined by $0.9 million from $8.6 million in the first quarter of 2009 to $7.7 million in the first quarter of 2010, primarily due to continued inventory destocking by our customers.

Net sales for the Engineering Services segment were $19.2 million for the first quarter of 2010 as compared to $20.8 million for the first quarter of 2009, a decrease of $1.6 million, or 7.7%. The decrease is primarily the result of less support required for the Boeing 747-8 platform as many of the assigned tasks were completed during 2009. Tooling support also experienced a decreased workload due to less demand. Approximately $17.3 million, or 90%, of the segment s revenues for the first quarter of 2010 were recorded under reimbursement type contracts compared to $20.6 million, or 99%, for the first quarter of 2009, a decrease of $3.3 million, or 16.0%. These contracts generate revenue from labor hours worked at varying pre-negotiated rates and other direct costs plus an administrative fee. Net sales under these reimbursement contracts are primarily for commercial, corporate and military markets.

During the first three months of 2010, our operating activities generated $6.5 million of cash compared with the $7.8 million cash used in the first three months of 2009. Net cash provided by operating activities for the first three months of 2010 was favorably impacted by a $3.0 million increase in accrued expenses and negatively impacted by a $3.6 million increase in accounts receivable. The increase in accrued expense was primarily due to timing of payroll related expenses. The increase in accounts receivable resulted from extended payment terms negotiated with certain customers which primarily occurred subsequent to the first quarter of 2009, heavy shipments during March 2010 and a March 2010 tooling billing of $1.5 million.

Net cash used in investing activities was $1.6 million for the first three months of 2010 compared to $11.0 million for the first three months of 2009. In 2009, we used $10.0 million of cash to fund the acquisition of Intec. Cash used in the first quarter of 2010 was primarily for the acquisition of capital equipment. Total capital expenditures were $1.6 million for the first three months of 2010 compared with $0.9 million for the first three months of 2009.

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