11-K 1 lmi11k090705.htm LMI AEROSPACE, INC. - FORM 11-K FOR YEAR ENDED 12-31-2004 LMI Aerospace, Inc. - Form 11-K for Year Ended 12-31-2004
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 11-K

(Mark One)

[X]
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
   
 
For the fiscal year ended December 31, 2004

OR

[   ]
TRANSITION REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
   
 
For the transition period from ____________ to ____________


Commission file number 000-24293

A. Full title of the plan and the address of the plan, if different from that of the issuer named below:

LMI Aerospace, Inc. Profit Sharing and Savings Plan and Trust


B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:

LMI Aerospace, Inc.
3600 Mueller Road
St. Charles, Missouri 63302-0900




REQUIRED INFORMATION

(a)
Financial Statements. Filed as part of this Report on Form 11-K are the financial statements and the schedules thereto of the LMI Aerospace, Inc. Profit Sharing and Savings Plan and Trust as required by Form 11-K, together with the report thereon of BKD, LLP, independent auditors, dated May 10, 2005.
   
(b)
Exhibits:
   
 
Exhibit No.
Description
     
 
23.1
Consent of BKD, LLP.


 

 

LMI Aerospace, Inc. Profit-Sharing and
Savings Plan and Trust
EIN 43-1309065 PN 002
 
Accountants’ Report and Financial Statements
 
December 31, 2004 and 2003
 


 

 







Board of Trustees
LMI Aerospace, Inc. Profit-Sharing and
  Savings Plan and Trust
St. Charles, Missouri


We were engaged to audit the accompanying statements of net assets available for benefits (modified cash basis) of LMI Aerospace, Inc. Profit-Sharing and Savings Plan and Trust as of December 31, 2004 and 2003, and the related statements of changes in net assets available for benefits (modified cash basis) for the years then ended. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
 
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
 
As described in Note 2, these financial statements and supplemental schedule were prepared on a modified cash basis of accounting, which is a comprehensive basis of accounting other than accounting principles generally accepted in the United States of America.
 
In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of LMI Aerospace, Inc. Profit-Sharing and Savings Plan and Trust as of December 31, 2004 and 2003, and the changes in its net assets available for benefits for the years then ended, on the basis of accounting described in Note 2.
 

 

 

 




Board of Trustees
LMI Aerospace, Inc. Profit-Sharing and
  Savings Plan and Trust
Page 2.

 
The accompanying supplemental schedule of assets (held at end of year) (modified cash basis) is presented for the purpose of additional analysis and is not a required part of the basic financial statements, but is supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental schedule is the responsibility of the Plan’s management. The supplemental schedule has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole.
 
 
/s/ BKD, LLP
 

 

 

 
St. Louis, Missouri
May 10, 2005

Federal Employer Identification Number: 44-0160260

 



LMI Aerospace, Inc. Profit-Sharing and Savings Plan and Trust
 
 
December 31, 2004 and 2003
 


   
2004
  
2003
  
               
Investments
  
$
14,095,951
  
$
11,193,074
  
               
Net Assets Available for Benefits
  
$
14,095,951
  
$
11,193,074
  



 

 

 

See Notes to Financial Statements                                                                                            3

LMI Aerospace, Inc. Profit-Sharing and Savings Plan and Trust
 
 
Years Ended December 31, 2004 and 2003
 


   
2004
  
2003
  
               
Investment Income
              
Net appreciation in fair value of investments
  
$
3,274,482
  
$
832,602
  
Interest and dividends
    
195,764
    
200,415
  
               
Net investment income
    
3,470,246
    
1,033,017
  
               
Contributions
              
               
Employer
    
193,313
    
236,385
  
Participants
    
907,937
    
1,110,759
  
Rollovers
    
7,195
    
3,153
  
               
     
1,108,445
    
1,350,297
  
               
Total additions
    
4,578,691
    
2,383,314
  
               
Deductions
              
Benefits paid to participants
    
1,609,525
    
1,192,060
  
Administrative expenses
    
66,289
    
58,443
  
               
Total deductions
    
1,675,814
    
1,250,503
  
.
              
               
Net Increase
    
2,902,877
    
1,132,811
  
               
Net Assets Available for Benefits, Beginning of Year
   
11,193,074
    
10,060,263
  
               
Net Assets Available for Benefits, End of Year
  
$
14,095,951
  
$
11,193,074
  

 

 

 

See Notes to Financial Statements                                                                                            4

LMI Aerospace, Inc. Profit-Sharing and
Savings Plan and Trust
 
 
December 31, 2004 and 2003
 

 

Note 1: Description of the Plan
 
The following description of the LMI Aerospace, Inc. Profit-Sharing and Savings Plan and Trust (the “Plan”) provides only general information. Participants should refer to the Summary Plan Description for a more complete description of the Plan’s provisions, which is available from the Plan Administrator.
 
 
General
 
The Plan is a defined contribution plan covering all employees of LMI Aerospace, Inc. and certain subsidiaries (Leonard’s Metals, Inc., LMI Finishing, Inc. and Precise Machining, LLC) (collectively the “Company”) who have at least 1,000 hours of service and six months of continuous employment. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA).
 
 
Contributions
 
Each year, the Company contributes to the Plan a percentage of eligible participant contributions as determined by the Company’s Board of Directors. For the years ended December 31, 2004 and 2003, the Board elected to contribute $0.50 for each $1 contributed by each participant up to a maximum employer matching contribution of $675. Additional amounts may be contributed at the discretion of the Company’s Board of Directors. Participants may contribute up to 60% of their annual wages. Contributions are subject to certain limitations. Participants’ contributions to the Plan in excess of amounts allocable to participant accounts totaled $15,914 at December 31, 2004. Participants direct the investment of their contributions as well as the Company’s contribution into various investment options offered by the Plan. The Plan currently offers 12 mutual funds and the common stock of the Company as investment options for participants.
 
 
Participant Accounts
 
Each participant’s account is credited with the participant’s contribution, the Company’s contribution and plan earnings and is charged with an allocation of administrative expenses. Allocations are based on participant earnings or account balances, as defined. The benefits to which a participant is entitled is the benefit that can be provided from the participant’s vested account.
 
 
Vesting
 
Participants are immediately vested in their voluntary and employer matching contributions plus earnings thereon. Vesting in the Company’s discretionary contribution portion of their accounts plus earnings thereon is based on years of continuous service. A participant is fully vested after seven years of continuous service. The nonvested balance is forfeited upon termination of service. Forfeitures are allocated among active participants on a pro-rata basis.
 
 

 

                                                                                         5

LMI Aerospace, Inc. Profit-Sharing and
Savings Plan and Trust
 
Notes to Financial Statements
 
December 31, 2004 and 2003
 


 
Payment of Benefits
 
Upon termination of service, an employee may elect to receive either a lump-sum amount equal to the value of his account or a joint and survivor annuity.
 
 
Participant Loans
 
Participants may borrow from their fund accounts a minimum of $1,000 up to a maximum of $50,000 or 50% of their account balance, whichever is less. The loans are secured by the balance in the participant’s account and bear interest at rates that range from 4.5% to 10.0%, which are commensurate with local prevailing rates at loan inception as determined by the plan administrator.
 
 
Plan Termination
 
Although it has not expressed an intention to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan, subject to the provisions of ERISA. In the event of plan termination, participants will become 100% vested in their accounts.
 


Note 2: Summary of Significant Accounting Policies
 
  
Method of Accounting
 
The Plan maintains its accounts on the modified cash basis of accounting, which is a comprehensive basis of accounting other than accounting principles generally accepted in the United States of America. Consequently, certain revenue and the related assets are recognized when received rather than when earned and certain expenses are recognized when paid rather than when the obligation is incurred.
 
 
Valuation of Investments and Income Recognition
 
Quoted market prices are used to value investments. The Plan’s investment in the Federated Capital Preservation Fund is carried at contract value.
 
Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the cash basis. Dividends are recorded on the ex-dividend date.
 
 

 

6
LMI Aerospace, Inc. Profit-Sharing and
Savings Plan and Trust
 
Notes to Financial Statements
 
December 31, 2004 and 2003


 
Use of Estimates
 
The preparation of financial statements in conformity with the modified cash basis of accounting requires management to make estimates and assumptions that affect the reported amounts of assets and changes therein and disclosure of contingent assets at the date of the financial statements. Actual results could differ from those estimates.
 
 
Plan Tax Status
 
The Plan obtained its latest determination letter on January 17, 2001, in which the Internal Revenue Service stated that the Plan and related trust, as then designed, were in compliance with the applicable requirements of the Internal Revenue Code and therefore not subject to tax. The Plan has been amended since receiving the determination letter. However, the plan administrator believes that the Plan and related trust are currently designed and being operated in compliance with the applicable requirements of the Internal Revenue Code.
 
 
Payment of Benefits
 
Benefit payments to participants are recorded upon distribution.
 

 

7
LMI Aerospace, Inc. Profit-Sharing and
Savings Plan and Trust
 
Notes to Financial Statements
 
December 31, 2004 and 2003

 

Note 3: Investments
 
The Plan’s investments are held by a bank-administered trust fund. The following table presents the Plan’s investments. Investments that represent 5% or more of total plan assets are separately identified.

   
2004
  
2003
  
Investments at Fair Value
              
               
Mutual Funds
              
Fidelity Advisor Equity Growth Fund
  
$
1,752,719
  
$
2,290,918
  
Janus Balanced Fund
    
2,751,569
    
2,880,768
  
Other
    
1,747,944
    
767,549
  
               
LMI Aerospace, Inc. Common Stock
    
3,703,653
    
1,766,377
  
               
     
9,955,885
    
7,705,612
  
Investments at Contract Value
              
               
Federated Capital Preservation Fund
    
3,457,369
    
2,743,211
  
               
Investments at Estimated Fair Value
              
               
Participant Loans
    
682,697
    
744,251
  
               
Total investments
  
$
14,095,951
  
$
11,193,074
  

 
During the years ended 2004 and 2003, the Plan’s investments (including gains and losses on investments bought, sold and held during the year) appreciated in value by $3,274,482 and $832,602, respectively, as follows:
 
   
2004
  
2003
  
Investment Appreciation (Depreciation)
              
               
LMI Aerospace, Inc. Common Stock
  
$
2,908,377
  
$
(163,940
)
Mutual Funds
    
366,105
    
996,542
  
               
Net appreciation in fair value
  
$
3,274,482
  
$
832,602
  

Interest and dividends realized on the Plan’s investments for the years ended 2004 and 2003 were $195,764 and $200,415, respectively.
 

 

8
LMI Aerospace, Inc. Profit-Sharing and
Savings Plan and Trust
 
Notes to Financial Statements
 
December 31, 2004 and 2003


Information on the averages of the fully benefit-responsive contracts embedded within the Federated Capital Preservation Fund carried at contract value is as follows:
 
   
2004
  
2003
  
               
Average yield
    
3.41
%
  
4.02
%
Crediting interest rate at December 31
    
3.35
%
  
3.48
%
Fair value
  
$
3,382,000
  
$
2,796,000
  

 


Note 4: Related Party Transactions
 
Active participants can purchase LMI Aerospace, Inc. common stock from their existing account balances. At December 31, 2004 and 2003, participants held 668,530 and 865,870 shares, respectively.
 
Certain plan investments are shares of mutual funds managed by Federated, which is a service organization for the trustee of the Plan.
 
The Plan incurs expenses related to general administration and record keeping. The Plan sponsor pays these expenses and certain accounting and auditing fees relating to the Plan. The Plan also invests in common stock of the Plan sponsor and funds related to the Plan custodian.
 

Note 5: Reconciliation of Financial Statements to Form 5500
 
The following is a reconciliation of net assets available for benefits per the financial statements at December 31, 2004 and 2003, to Form 5500:
 
 
   
2004
  
2003
  
               
Net assets available for benefits per the financial statements
  
$
14,095,951
  
$
11,193,074
  
Additional deemed distributions of participant loans
    
11,039
    
34,180
  
               
Net assets available for benefits per Form 5500
  
$
14,106,990
  
$
11,227,254
  


9
LMI Aerospace, Inc. Profit-Sharing and
Savings Plan and Trust
 
Notes to Financial Statements
 
December 31, 2004 and 2003


The following is a reconciliation of benefits paid to participants per the financial statements for the years ended December 31, 2004 and 2003, to Form 5500:
 
   
2004
  
2003
  
               
Benefits paid to participants per the financial statements
  
$
1,609,525
  
$
1,192,060
  
Less: Current year additional deemed distributions of participant loans
    
(11,039
)
  
(34,180
)
Plus: Prior year additional deemed distributions of participant loans
    
34,180
    
—
  
               
Benefits paid to participants per Form 5500
  
$
1,632,666
  
$
1,157,880
  

 

Note 6: Subsequent Event
 
 
Change in Custodian
 
As of January 1, 2005, the Plan changed their custodian and record keeper. They are in the process of finalizing a new plan document.
 
 
Plan Merger
 
Effective January 1, 2005, the LMI Aerospace Regional Savings Plan (the “Regional Plan”) was merged into the Plan. The Regional Plan had net assets of $1,922,370 as of December 31, 2004.
 

 

 

10


Supplemental Schedule
 

 




           
   
Description
  
Current
  
Investment Type and Issuer
  
of Investment
  
Value
  
                     
Mutual Funds
                    
                     
* Federated Capital Preservation Fund
    
345,737
    shares  
$
3,457,369
  
* Federated Stock Trust
    
2,784
    shares    
103,495
  
* Federated Kaufmann Fund
    
51,553
    shares    
276,325
  
* Federated Mini-Cap Index Fund
    
10,830
    shares    
169,699
  
* Federated Max-Cap Index Fund
    
3,998
    shares    
97,743
  
* Federated Total Return Bond Fund
    
7,948
    shares    
86,156
  
* Federated Capital Appreciation Fund
    
4,831
    shares    
122,464
  
Baron Growth Fund
    
10,815
    shares    
485,253
  
Fidelity Advisor Equity Growth Fund
    
38,344
    shares    
1,752,719
  
Janus Balanced Fund
    
129,486
    shares    
2,751,569
  
Janus Advisor International Growth Fund
    
4,924
    shares    
142,364
  
Constellation Clover Small Cap Value Fund
    
9,809
    shares    
264,445
  
                     
* LMI Aerospace, Inc. Common Stock
    
668,530
    shares    
3,703,653
  
                     
Participant Loans
    
4.5% - 10.0%
 
  
682,697
  
                     
               
$
14,095,951
  


* Represents a party-in-interest to the Plan.





11


SIGNATURES

The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.

 
LMI AEROSPACE, INC. PROFIT SHARING
 
AND SAVINGS PLAN AND TRUST
   
 
By:
LMI AEROSPACE, INC., as Plan Administrator
     
Date: September 13, 2005
By:
/s/ Lawrence E. Dickinson
   
Lawrence E. Dickinson
   
Chief Financial Officer and Secretary