10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended September 30, 2015.

or

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from _________ to __________

Commission file number: 000-24293

LMI AEROSPACE, INC.

(Exact name of registrant as specified in its charter)

Missouri	43-1309065
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

411 Fountain Lakes Blvd.
St. Charles, Missouri	63301
(Address of principal executive offices)	(Zip Code)

(636) 946-6525

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x                  No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes x                  No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	o	Accelerated filer	x
Non-accelerated filer	o	Smaller reporting company	o

(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o                    No x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

On November 2, 2015, there were 13,256,922 shares of our common stock, par value $0.02 per share, outstanding.

LMI AEROSPACE, INC.

QUARTERLY REPORT ON FORM 10-Q

FOR THE FISCAL QUARTER ENDING SEPTEMBER 30, 2015

PART I.  FINANCIAL INFORMATION

		Page No.
Item 1.	Financial Statements (Unaudited).
	Condensed Consolidated Balance Sheets as of September 30, 2015 and December 31, 2014.	3
	Condensed Consolidated Statements of Comprehensive Income (Loss) for the three months and nine months ended September 30, 2015 and 2014.	4
	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2015 and 2014.	5
	Notes to Condensed Consolidated Financial Statements.	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	26
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	36
Item 4.	Controls and Procedures.	36
	PART II.  OTHER INFORMATION
Item 1.	Legal Proceedings.	37
Item1A.	Risk Factors.	38
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	38
Item 3.	Defaults Upon Senior Securities.	38
Item 4.	Mine Safety Disclosures.	38
Item 5.	Other Information.	38
Item 6.	Exhibits.	38
SIGNATURE PAGE		39
EXHIBIT INDEX		40

2

PART I

FINANCIAL INFORMATION

Item 1. Financial Statements.

LMI Aerospace, Inc. Condensed Consolidated Balance Sheets (Amounts in thousands, except share and per share data) (Unaudited)
	September 30, 2015			December 31, 2014
Assets
Current assets:
Cash and cash equivalents	$	476		$	7,927
Accounts receivable, net	61,389			58,234
Inventories	118,877			114,279
Prepaid expenses and other current assets	10,830			10,255
Deferred income taxes	3,775			3,913
Total current assets	195,347			194,608
Property, plant and equipment, net	101,102			99,482
Goodwill	86,784			86,784
Intangible assets, net	47,671			50,940
Other assets	8,971			10,622
Total assets	$	439,875		$	442,436
Liabilities and shareholders’ equity
Current liabilities:
Accounts payable	$	17,961		$	21,755
Accrued expenses	24,634			26,072
Current installments of long-term debt and capital lease obligations	3,557			3,424
Total current liabilities	46,152			51,251
Long-term liabilities:
Long-term debt and capital lease obligations, less current installments	267,607			265,554
Other long-term liabilities	3,101			3,289
Deferred income taxes	4,155			4,207
Total long-term liabilities	274,863			273,050
Shareholders’ equity:
Common stock, $0.02 par value per share; authorized 28,000,000 shares; issued 13,287,688 and 13,089,003 shares at September 30, 2015 and December 31, 2014, respectively	266			262
Preferred stock, $0.02 par value per share; authorized 2,000,000 shares; none issued at either date	—			—
Additional paid-in capital	97,239			95,460
Accumulated other comprehensive loss	(201		)	(170		)
Treasury stock, at cost, 30,767 and 28,396 shares at September 30, 2015 and December 31, 2014, respectively	(333		)	(359		)
Retained earnings	21,889			22,942
Total shareholders’ equity	118,860			118,135
Total liabilities and shareholders’ equity	$	439,875		$	442,436

See accompanying notes to condensed consolidated financial statements.

3

LMI Aerospace, Inc. Condensed Consolidated Statements of Comprehensive Income (Loss) (Amounts in thousands, except share and per share data) (Unaudited)
	Three Months Ended   September 30,						Nine Months Ended   September 30,
	2015			2014			2015			2014
Sales and service revenue
Product sales	$	84,114		$	81,693		$	246,730		$	245,349
Service revenue	11,519			15,642			38,928			53,674
Net sales	95,633			97,335			285,658			299,023
Cost of sales and service revenue
Cost of product sales	67,514			61,535			197,211			195,170
Cost of service revenue	11,493			13,757			35,853			45,215
Cost of sales	79,007			75,292			233,064			240,385
Gross profit	16,626			22,043			52,594			58,638
Selling, general and administrative expenses	8,979			14,615			33,980			41,770
Restructuring expense	1,575			765			2,368			2,288
Income from operations	6,072			6,663			16,246			14,580
Other (expense) income:
Interest expense	(5,653		)	(5,946		)	(16,802		)	(23,800		)
Other, net	(136		)	(75		)	(89		)	205
Total other expense	(5,789		)	(6,021		)	(16,891		)	(23,595		)
Income (loss) before income taxes	283			642			(645		)	(9,015		)
Provision (benefit) for income taxes	249			(754		)	408			(2,557		)
Net income (loss)	34			1,396			(1,053		)	(6,458		)
Other comprehensive income (loss):
Change in foreign currency translation adjustment	(32		)	(112		)	(31		)	(18		)
Reclassification adjustment for losses on interest rate hedges included in net earnings, net of tax of $0, $0, $0 and $157	—			—			—			278
Total comprehensive income (loss)	$	2		$	1,284		$	(1,084	)	$	(6,198	)
Amounts per common share:
Net income (loss) per common share	$	0.00		$	0.11		$	(0.08	)	$	(0.51	)
Net income (loss) per common share assuming dilution	$	0.00		$	0.11		$	(0.08	)	$	(0.51	)
Weighted average common shares outstanding	12,907,938			12,740,034			12,851,456			12,704,568
Weighted average dilutive common shares outstanding	13,050,238			12,887,363			12,851,456			12,704,568

See accompanying notes to condensed consolidated financial statements.

4

LMI Aerospace, Inc. Condensed Consolidated Statements of Cash Flows (Amounts in thousands) (Unaudited)
	Nine Months Ended   September 30,
	2015			2014
Operating activities:
Net loss	$	(1,053	)	$	(6,458	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	15,018			17,002
Stock based compensation	1,424			1,442
Debt issuance cost write-off	—			8,464
Payments to settle interest rate derivatives	—			(793		)
Deferred taxes	(78		)	147
Other non-cash items	(94		)	(87		)
Changes in operating assets and liabilities:
Accounts receivable	(3,238		)	8,187
Inventories	(4,993		)	2,079
Prepaid expenses and other assets	1,914			2,003
Current income taxes	(75		)	(2,899		)
Accounts payable	(1,754		)	785
Accrued expenses	(1,354		)	6,144
Net cash provided by operating activities	5,717			36,016
Investing activities:
Additions to property, plant and equipment	(15,305		)	(10,302		)
Proceeds from sale of property, plant and equipment	260			981
Net cash used by investing activities	(15,045		)	(9,321		)
Financing activities:
Proceeds from issuance of debt	—			250,000
Principal payments on long-term debt and notes payable	(1,814		)	(231,898		)
Advances on revolving line of credit	93,500			60,000
Payments on revolving line of credit	(89,500		)	(96,000		)
Payments for debt issuance cost	(309		)	(7,881		)
Other, net	—			(28		)
Net cash provided (used) by financing activities	1,877			(25,807		)
Net (decrease) increase in cash and cash equivalents	(7,451		)	888
Cash and cash equivalents, beginning of period	7,927			1,572
Cash and cash equivalents, end of period	$	476		$	2,460
Supplemental disclosure of noncash transactions:
Defined contribution plan funding in Company stock	$	710		$	848

See accompanying notes to condensed consolidated financial statements.

5

LMI Aerospace, Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except share and per share data)

(Unaudited)

September 30, 2015

1. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements.  The year-end condensed balance sheet data was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America.  In the opinion of management, all adjustments considered necessary for a fair representation have been included.  Operating results for the nine months ended September 30, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015.  These financial statements should be read in conjunction with the consolidated financial statements and accompanying footnotes included in the  Annual Report on Form 10-K of LMI Aerospace, Inc. (the "Company”) for the year ended December 31, 2014, as filed with the Securities and Exchange Commission on March 16, 2015.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions. These estimates and assumptions affect the reported amounts in the financial statements and accompanying notes.  Actual results could differ from these estimates.

Recent Accounting Standards

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606). On July 9, 2015 the FASB voted to approve a one year delay of the effective date and to permit companies to voluntarily adopt the new standard as of the original effective date. The new standard is effective for reporting periods beginning after December 15, 2017. The standard will supersede existing revenue recognition guidance, including industry-specific guidance, and will provide companies with a single revenue recognition model for recognizing revenue from contracts with customers. The standard requires revenue to be recognized when promised goods or services are transferred to customers in amounts that reflect the consideration to which the company expects to be entitled in exchange for those goods or services. Adoption of the new rules could affect the timing of revenue recognition for certain transactions. The two permitted transition methods under the new standard are the full retrospective method, in which case the standard would be applied to each prior reporting period presented, or the modified retrospective method, in which case the cumulative effect of applying the standard would be recognized at the date of initial application. The provisions of this new guidance are effective as of the beginning of the Company’s first quarter of 2018. The Company is currently evaluating the transition method to be used and the impact of adoption of this standard on its consolidated financial statements.

In April 2014, the FASB issued ASU 2014-08, "Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity." The amendments in this update change the requirements for reporting discontinued operations. A discontinued operation may include a component of an entity or a group of components of an entity, or a business or nonprofit activity. A disposal of a component of an entity or a group of components of an entity is required to be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity's operations and financial results and when the component or group of components meets the criteria to be classified as held for sale, is disposed by sale or is disposed of by other than by sale (for example, by abandonment or in a distribution to owners in a spinoff). ASU 2014-8 is effective prospectively for fiscal years, and interim reporting periods within those years, beginning after December 15, 2014.  The Company has no present activity that would be impacted by this new standard.

In April 2015, the FASB issued ASU 2015-03, "Interest-Imputation of Interest", which requires that debt issuance costs related to a debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. The recognition and measurement guidance of debt issuance costs are not affected by the amendments in this update. FASB ASU 2015-03 is effective for annual and interim periods beginning after December 15, 2015 and requires the Company to apply the new guidance on a retrospective basis upon adoption. The adoption of FASB ASU 2015-03 is not expected to have a material impact on the Company’s consolidated financial statements.

6

LMI Aerospace, Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except share and per share data)

(Unaudited)

September 30, 2015

All other issued but not yet effective accounting pronouncements are not expected to have a material impact on our Condensed Consolidated Financial Statements.

2. Accounts Receivable, Net

Accounts receivable, net consists of the following:

	September 30, 2015			December 31, 2014
Trade receivables	$	49,741		$	53,081
Unbilled revenue	6,004			4,036
Other receivables (1)	5,870			1,581
	61,615			58,698
Less: Allowance for doubtful accounts	(226		)	(464		)
Accounts receivable, net	$	61,389		$	58,234

(1) At September 30, 2015, includes $4,266 related to the settlement of a lawsuit in the third quarter of 2015. See Note 14, "Legal Contingencies," in the Notes to the Condensed Consolidated Financial Statements.

Under contract accounting, unbilled revenues arise when the sales or revenues based on performance attainment, though appropriately recognized, cannot be billed yet under terms of the contract as of the balance sheet date. Included in unbilled revenue at September 30, 2015 and December 31, 2014 are $195 and $549, respectively, related to unpriced change orders or claims that are subject to negotiation. The final resolution of these unpriced items could result in either a favorable or unfavorable change in the revenue recognized to date on the associated contracts.

Accounts receivable expected to be collected after one year is not material.

The Company records changes in contract estimates using the cumulative catch-up method in accordance with the Revenue Recognition topic of the FASB Accounting Standards Codification.  Cumulative catch-up adjustments had the following impacts to operating income for the periods presented:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
Favorable adjustments	$	96		$	4,898		$	554		$	5,620
Unfavorable adjustments	(2,183		)	(545		)	(2,214		)	(727		)
Net favorable (unfavorable) operating income adjustments	$	(2,087	)	$	4,353		$	(1,660	)	$	4,893

The unfavorable cumulative catch-up adjustments recorded in the third quarter of 2015 primarily related to higher projected engineering costs, identified in the third quarter of 2015, which are required to meet customer specifications on the Mitsubishi Regional Jet design-build program. The adjustment related to this program was $1,738 and was recorded as a reduction of revenue in the Consolidated Statements of Comprehensive Income (Loss).

The favorable cumulative adjustments recorded in the third quarter of 2014 related to the reversal of a loss reserve. This adjustment was recognized after the Company settlement of an unpriced change order and secured more favorable future material pricing with respect to this contract. The impact of reversing the loss reserve was $4,602 and $5,267 for the three and nine months ended September 30, 2014 and was recorded in the cost of goods sold section of the Consolidated Statements of Comprehensive Income (Loss).

3. Inventories

7

LMI Aerospace, Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except share and per share data)

(Unaudited)

September 30, 2015

Inventories consist of the following:

	September 30, 2015		December 31, 2014
Raw materials	$	14,606	$	16,712
Work in progress	23,915		22,960
Manufactured and purchased components	20,016		21,296
Finished goods	29,253		32,403
Product inventory	87,790		93,371
Capitalized contract costs	31,087		20,908
Total inventories	$	118,877	$	114,279

Inventories include capitalized contract costs relating to programs and contracts with long-term production cycles.  The Company believes these amounts will be fully recovered over the life of the contracts. Anticipated losses on contracts are recognized, when required, and reported as a reduction of related contract costs recorded in inventory or accounts receivable and as additional cost of sales or as a reduction to revenue. The company is engaged in a contract accounted for using the cost to cost method where estimated costs exceed the total contract revenue. A provision for the remaining estimated loss on this contract of $121 and $0 was reported as a reduction of accounts receivable in the Condensed Consolidated Balance Sheet at September 30, 2015 and December 31, 2014, respectively.

In January 2015, the Company signed an agreement with a key customer to form a strategically aligned partnership. This agreement extended the performance period of the statements of work for certain contracts with the customer and gives the Company preferred supplier status on certain future contracts. In accordance with the contract terms, the Company made cash consideration payments of $4,800 in January 2015 and $1,700 in June 2015. The payments were recorded as an increase to capitalized contract costs and are being amortized as a reduction to revenue over the life of the associated contracts.

4. Goodwill and Intangible Assets

Goodwill

The following table summarizes the net carrying amount of goodwill by segment at September 30, 2015 and December 31, 2014, respectively:

							Engineering
	Aerostructures						Services						Total
	September 30,			December 31,			September 30,			December 31,			September 30,			December 31,
	2015			2014			2015			2014			2015			2014
Balance at:
Gross Goodwill	$	141,953		$	141,953		$	50,741		$	50,741		$	192,694		$	192,694
Accumulated impairment loss	(79,471		)	(79,471		)	(26,439		)	(26,439		)	(105,910		)	(105,910		)
Net Goodwill	$	62,482		$	62,482		$	24,302		$	24,302		$	86,784		$	86,784

8

LMI Aerospace, Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except share and per share data)

(Unaudited)

September 30, 2015

A goodwill impairment charge of $26,439 was recorded in the fourth quarter of 2014 related to the Engineering Services reporting unit. The impairment charge resulted from a persistent decline in revenues and profitability in 2014. In the first nine months of 2015, the reporting unit generated positive cash flow but did not meet overall expectations in terms of revenues, profits or cash flow. On August 7, 2015, the Company committed to a restructuring plan that will result in the closing of its Melbourne, Australia and Greenville, South Carolina engineering offices in addition to the elimination of additional management positions within the Engineering Services reporting unit. See Note 13, Restructuring, to the Condensed Consolidated Financial Statements under Part I, Item 8, "Financial Statements," for additional disclosure related to these items. If, despite these additional cost reduction efforts, the reporting unit's revenue and profitability were to continue to decline, it could lead to a triggering event and additional potential impairment for intangible assets and goodwill for the reporting unit in the future.

The carrying value of goodwill is assessed annually, during the fourth quarter, unless a triggering event occurs. Following an assessment an impairment charge is recorded if appropriate.  In the three and nine months ended September 30, 2015, no triggering event occurred that would cause the Company to assess the carrying value of goodwill.

Intangible Assets

Intangible assets primarily consist of trademarks and customer intangibles.  The carrying values were as follows:

	September 30, 2015			December 31, 2014
Trademarks	$	778		$	778
Customer intangible assets	68,991			68,991
Other	1,274			1,274
Accumulated amortization	(23,372		)	(20,103		)
Intangible assets, net	$	47,671		$	50,940

Intangibles amortization expense was $1,089 and $1,131 for the three months ended September 30, 2015 and 2014, respectively and $3,269 and $3,393 for the nine months ended September 30, 2015 and 2014, respectively. The accumulated amortization balances at September 30, 2015 and December 31, 2014, respectively, were $753 and $679 for trademarks, $21,791 and $18,716 for customer intangible assets, and $828 and $708 for other intangible assets.

Intangible assets related to the acquisition of Valent are amortized on the straight-line method as this approximates the pattern of economic benefit of each intangible asset.  All other remaining intangible assets are not material.

5. Other Assets

Other assets consist of the following:

	September 30, 2015		December 31, 2014
Debt issuance cost, net	$	7,353	$	8,600
Other	1,618		2,022
Total other assets	$	8,971	$	10,622

In connection with the financing of its long-term indebtedness, the Company incurred debt issuance costs of $10,001. These costs are being amortized on a straight-line basis, which approximates the effective interest method, over the term of the indebtedness.

9

LMI Aerospace, Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except share and per share data)

(Unaudited)

September 30, 2015

6. Long-term Debt and Capital Lease Obligations

Long-term debt and capital lease obligations consist of the following:

	September 30, 2015		December 31, 2014
Second priority senior secured notes at a fixed rate of 7.375% at September 30, 2015	$	245,000	$	245,000
Revolver under credit agreement, variable	4,000		—
Missouri IRBs at fixed rate of 2.80% at September 30, 2015 and December 31, 2014	7,011		7,334
Capital leases, at fixed rates ranging from 2.04% to 7.73% at September 30, 2015 and December 31, 2014	12,125		13,288
Notes payable, principal and interest payable monthly, at fixed rates up to 2.56% at September 30, 2015 and December 31, 2014, respectively	3,028		3,356
Total debt	$	271,164	$	268,978
Less current installments	3,557		3,424
Total long-term debt and capital lease obligations	$	267,607	$	265,554

At September 30, 2015, the Company had $245,000 in outstanding second-priority senior secured notes maturing on June 19, 2019. Obligations under these notes are secured by substantially all of the Company’s assets and bear interest at 7.375%, paid semi-annually in January and July.

The Company's revolving credit agreement provides for a revolving credit facility of up to $90,000.  Under the agreement, the co-collateral agents may establish a reserve against the facility. At September 30, 2015, the reserve established was $15,000, which reduced the maximum availability to $75,000. Based on the amount of eligible assets at September 30, 2015 and outstanding letters of credit of $1,138, available borrowings were further reduced to $54,781. The maximum amount, less reserves, available for borrowing at levels below $30,000 is based on a sum of 45% of eligible receivables, 30% of eligible inventories and an additional amount of eligible equipment up to 20% of total borrowings under the facility. The maximum amount, less reserves, available for borrowing at levels above $30,000 is based on a sum of 75% of eligible receivables, 45% of eligible inventories and an additional amount of eligible equipment up to 20% of total borrowings under the facility. Borrowings under the facility are secured by a first lien on substantially all of the Company’s assets and bear interest at either the LIBOR rate plus a margin of 3.00% to 3.50% or the alternate base rate, which is the highest of the following plus a margin of 2.00% to 2.50%, respectively, with the applicable margins for the revolving credit facility subject to a grid based on the average availability ratio of the Company for the most recently completed quarter:

•Prime rate,

•Federal funds rate plus 0.5%, or,

•The adjusted Eurodollar rate for an interest period of one month plus 1.0%.

For both the three and the nine months ended September 30, 2015, the actual interest rate incurred for the revolving credit facility was 4.6%.

The Company is required to pay a commitment fee of between 0.375% and 0.5% per annum on the unused portion of the revolving credit facility, depending on the average revolver usage during the period as compared to the total available borrowings under the facility. At September 30, 2015, the commitment fee required was 0.5%.

The revolving credit loan facility matures on the earlier of the fifth year anniversary date of June 19, 2019 or the date that is 91 days prior to the maturity date of the senior secured notes unless the notes are repaid, refinanced or otherwise satisfied in full. The maturity dates are subject to acceleration upon occurrence of an event of default. An event of default under the revolving credit agreement includes, among other things, failure to pay any material indebtedness, acceleration of payments by any lender prior to scheduled maturity, or judgments rendered against the Company requiring payments at or above certain levels.

10

LMI Aerospace, Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except share and per share data)

(Unaudited)

September 30, 2015

The credit agreement contains a covenant that requires us to comply with a maximum first priority debt to EBITDA ratio on a quarterly basis. In addition, the agreement also contains certain restrictive covenants that limit and in some circumstances prohibit our ability to, among other things, incur additional debt, sell, lease or transfer our assets, make investments, guarantee debt or obligations, create liens, and enter into certain merger, consolidation or other reorganization transactions.  These restrictive covenants prohibit the Company from paying dividends. These restrictions could limit our ability to obtain future financing, make acquisitions or needed capital expenditures, withstand any current or future downturns in our business or the economy in general, conduct operations or otherwise take advantage of business opportunities that may arise, any of which could place us at a competitive disadvantage relative to our competitors that have less debt and are not subject to such restrictions.

At September 30, 2015, the Company was in compliance with all of its covenants and expects to be in compliance with its covenants in future periods.  If the Company fails to meet any covenants in the credit agreement, the Company would not be in compliance with its credit agreement and the lenders would be entitled to exercise various rights, including causing the amounts outstanding under the revolving credit facility to become immediately due and payable.

7. Derivative Financial Instruments

On June 19, 2014, the Company terminated and settled its interest rate derivatives in conjunction with the settlement of its then existing credit agreement, which had a variable interest rate. This settlement resulted in a charge of $793 to interest expense in the Condensed Consolidated Statements of Comprehensive Income (Loss) in the nine months ended September 30, 2014. Prior to this termination and in compliance with the credit agreement, the Company purchased option and swap derivative contracts to hedge against the potential impact on earnings from an increase in market interest rates associated with the interest payments on its variable rate term credit facility.  The objective of the hedge transactions was to reduce the variability of cash flows due to changes in the designated benchmark interest rate on the term debt.  As the derivatives were settled prior to December 31, 2014, no assets or liabilities were recognized in the Condensed Consolidated Balance Sheet at either date presented.

The Company designated and accounted for these swaps and purchased options as cash flow hedges of interest rate risk.  The Company reported the gain or loss, net of taxes, from the effective portion of the hedge as a component of Accumulated Other Comprehensive Income (“AOCI”) deferring it and reclassifying it into earnings in the same period or periods in which the hedged transaction affects earnings and in the same line item on the Condensed Consolidated Statements of Comprehensive Income (Loss) as the impact of the hedged transaction.  The cumulative amounts reported in AOCI related to these derivatives were reclassified from AOCI to interest expense on the Condensed Consolidated Statements of Comprehensive Income (Loss) in the nine months ended September 30, 2014. The Company did not use these derivative instruments for trading or speculative purposes.

The following amounts are included in OCI and earnings for the three and nine months ended September 30, 2015 and September 30, 2014:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
Interest Rate Derivatives in Cash Flow Hedging Relationship
Amount of Gain (Loss) Recognized in AOCI, net of tax, on Derivative (Effective Portion)	$	—	$	—	$	—	$	—
Amount of (Gain) Loss Reclassified from AOCI into Income (Effective Portion)	$	—	$	—	$	—	$	793

11

LMI Aerospace, Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except share and per share data)

(Unaudited)

September 30, 2015

8. Earnings Per Common Share

Basic net income per common share is based upon the weighted average number of common shares outstanding.  Diluted net income per common share is based upon the weighted average number of common shares outstanding, including the dilutive effect of restricted stock, using the if-converted methods.  The following table shows a reconciliation of the numerators and denominators used in calculating basic and diluted earnings per share.

	Three months ended				Nine months ended
	September 30,				September 30,
	2015		2014		2015			2014
Numerators
Net income (loss)	$	34	$	1,396	$	(1,053	)	$	(6,458	)
Denominators
Weighted average common shares - basic	12,907,938		12,740,034		12,851,456			12,704,568
Dilutive effect of restricted stock	142,300		147,329		—			—
Weighted average common shares - diluted	13,050,238		12,887,363		12,851,456			12,704,568
Basic earnings (loss) per share	$	0.00	$	0.11	$	(0.08	)	$	(0.51	)
Diluted earnings (loss) per share	$	0.00	$	0.11	$	(0.08	)	$	(0.51	)

For the nine months ended September 30, 2015 and September 30, 2014, 216,872 and 145,710 shares, respectively, are not included in the calculation of diluted earnings per share, as their inclusion would have been anti-dilutive. These securities could be dilutive in future periods.

12

LMI Aerospace, Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except share and per share data)

(Unaudited)

September 30, 2015

9. Stock-Based Compensation

On July 7, 2005, the Company’s shareholders approved the LMI Aerospace, Inc. 2005 Long-term Incentive Plan (the “ 2005 Plan”). The 2005 Plan provided for the grant of non-qualified stock options, incentive stock options, shares of restricted stock, restricted stock units, stock appreciation rights, performance awards and other share-based grants and cash bonus awards to employees and directors.  All share-based grants or awards were subject to a time-based vesting schedule.

All outstanding share-based grants are in the form of restricted stock. A summary of the activity for non-vested restricted stock awards under the 2005 Plan is presented below:

Restricted Stock Awards	Shares		Weighted Average Grant Date Fair Value
Outstanding at January 1, 2015	296,782		$	16.58
Granted	131,703		13.22
Vested	(131,986	)	17.57
Forfeited	(34,411	)	15.35
Outstanding at September 30, 2015	262,088		$	14.56

Common stock compensation expense related to restricted stock awards granted under the 2005 Plan was $224 and $765 for the three months ended September 30, 2015 and 2014, respectively and $1,154 and $1,442 for the nine months ended September 30, 2015 and 2014, respectively.

Total unrecognized compensation costs related to non-vested, share-based awards granted or awarded under the 2005 Plan were $2,023 and $2,036 at September 30, 2015 and December 31, 2014, respectively.  These costs are expected to be recognized over a weighted average period of 1.8 years and 1.2 years, at September 30, 2015 and December 31, 2014, respectively.

As of July 7, 2015 the Company was no longer able to grant awards under the 2005 Plan.

On June 24, 2015, the Company's shareholders approved the LMI Aerospace, Inc. 2015 Incentive Compensation Plan (the “2015 Plan”), which became effective on July 1, 2015. Under the 2015 Plan, the Company, through the Compensation Committee of the Board of Directors, may, at its discretion, grant stock options, restricted shares of common stock, and other various stock-based awards to directors, officers, employees and consultants. A total of 750,000 shares of the Company’s common stock have been reserved for issuance under the 2015 Plan.

All outstanding share-based grants are in the form of restricted stock. A summary of the activity for non-vested restricted stock awards under the 2015 Plan is presented below:

Restricted Stock Awards	Shares	Weighted Average Grant Date Fair Value
Outstanding at January 1, 2015	—	$	—
Granted	61,801	9.79
Vested	—	—
Forfeited	—	—
Outstanding at September 30, 2015	61,801	$	9.79

13

LMI Aerospace, Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except share and per share data)

(Unaudited)

September 30, 2015

Common stock compensation expense related to restricted stock awards granted under the 2015 Plan was $151 and $0 for the three months ended September 30, 2015 and 2014, respectively and $151 and $0 for the nine months ended September 30, 2015 and 2014, respectively.

Total unrecognized compensation costs related to non-vested, share-based awards granted or awarded under the 2015 Plan were $454 and $0 at September 30, 2015 and December 31, 2014, respectively.  These costs are expected to be recognized over a weighted average period of 0.8 years at September 30, 2015.

10. Business Segment Information

The Company is organized into two reportable segments: the Aerostructures segment and the Engineering Services segment.  Through its Aerostructures segment, the Company primarily fabricates, machines, finishes, integrates, assembles and kits formed close tolerance aluminum, specialty alloy and composite components and higher level assemblies for use by the aerospace and defense industries. It manufactures more than 40,000 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, the Company provides a complete range of design, engineering and program management services, supporting aircraft product lifecycles from conceptual design, analysis and certification through production support, fleet support and service life extensions via a complete turnkey engineering solution.

Corporate assets, liabilities and expenses related to the Company's corporate offices, except for interest expense and income taxes, primarily support, and are recorded in, the Aerostructures segment. The table below presents information about reported segments on the same basis used internally to evaluate segment performance:

	Three months ended September 30,						Nine months ended September 30,
	2015			2014			2015			2014
Net sales:
Aerostructures	$	85,119		$	82,914		$	249,661		$	249,101
Engineering Services	10,826			14,714			36,818			51,235
Eliminations	(312		)	(293		)	(821		)	(1,313		)
	$	95,633		$	97,335		$	285,658		$	299,023
Income from operations:
Aerostructures	$	8,918		$	7,888		$	20,063		$	14,010
Engineering Services	(2,805		)	(1,216		)	(3,803		)	666
Eliminations	(41		)	(9		)	(14		)	(96		)
	$	6,072		$	6,663		$	16,246		$	14,580

11. Customer Concentration

Direct sales, through both of the Company’s business segments, to our largest customer, Spirit Aerosystems (“Spirit”), accounted for 34.4% and 34.4% of the Company’s total revenues for the three months ended September 30, 2015 and 2014, respectively. Direct sales to Spirit accounted for 34.8% and 33.7% of the Company's total revenues for the nine months ended September 30, 2015 and 2014, respectively. Accounts receivable balances related to Spirit were 26.9% and 33.3% of the Company’s total accounts receivable balance at September 30, 2015 and December 31, 2014, respectively.

Direct sales, through both of the Company’s business segments, to our second largest customer, Gulfstream Aerospace Corporation, a General Dynamics company (“Gulfstream”), accounted for 15.9% and 14.3% of the Company’s total revenues for the three months ended September 30, 2015 and 2014, respectively.  Direct sales to Gulfstream accounted for 14.3% and 15.3% of the Company's total revenues for the nine months ended September 30, 2015 and 2014, respectively. Accounts receivable balances related to Gulfstream were 15.7% and 13.1% of the Company’s total accounts receivable balance at September 30, 2015 and December 31, 2014, respectively.

14

LMI Aerospace, Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except share and per share data)

(Unaudited)

September 30, 2015

Direct sales, through both of the Company’s business segments, to our third largest customer, The Boeing Company, (“Boeing”), accounted for 12.6% and 10.0% of the Company’s total revenues for the three months ended September 30, 2015 and 2014, respectively. Direct sales to Boeing accounted for 11.4% and 10.9% of the Company's total revenues for the nine months ended September 30, 2015 and 2014, respectively. Accounts receivable balances resulting from direct sales to Boeing were 6.2% and 7.4% of the Company’s total accounts receivable balance at September 30, 2015 and December 31, 2014, respectively.

12. Income Taxes

The Company records income tax expense or benefit each quarter based on its estimated full-year effective tax rate. Income tax expense of $249 and $408 were recognized in the three and nine months ended September 30, 2015, respectively. Income tax benefit of $754 and $2,557 were recognized in the three and nine months ended September 30, 2014, respectively. The Company's tax benefit in the three and nine months ended September 30, 2014 reflects a net tax benefit of $2,582 related to the decision to carry back the net operating loss recognized in 2013. The Company continues to carry a full valuation allowance on its net deferred tax assets, which totaled $13,588 and $12,676 at September 30, 2015 and December 31, 2014, respectively. At September 30, 2015, the Company has recorded a receivable of $7,069 primarily related to the filing of the 2014 federal tax return.

13. Restructuring

The Company committed to and implemented various restructuring plans in 2014 and 2015. Included in those plans were the closure of the Precise Machine facility in Fort Worth, Texas, and the relocation of the machining operations in both Savannah, Georgia and St. Charles, Missouri to other facilities within the Company. Other employment separation activities were also implemented as part of the Company's overall reorganization and cost reduction initiatives. In addition, in the third quarter of 2015, the Company committed to the closing of its Melbourne, Australia and Greenville, South Carolina engineering offices, the elimination of additional management positions within the Engineering Services segment and the closure of its Coweta, Oklahoma manufacturing facility. The expense associated with these plans was reflected in the selling, general, and administrative section on a separate line of the Condensed Consolidated Statements of Comprehensive Income (Loss). The following table summarizes the incurred charges associated with these restructuring activities:

	Three months ended					Nine months ended
	September 30, 2015		September 30, 2014			September 30, 2015		September 30, 2014
Precise Machine facility closure	$	—	$	(18	)	$	—	$	287
Savannah machining operations relocation	—		—			—		47
St. Charles machine parts operations relocation	—		—			378		—
Coweta machining facility closure	64		—			64		—
Greenville office closure	501		—			501		—
Australia office closure	34		—			34		—
Other employment separation activities	976		783			1,391		1,954
Total	$	1,575	$	765		$	2,368	$	2,288

The Savannah, Georgia and Precise plans were completed in the second quarter of 2014. The St. Charles and Greenville plans were completed in the second and third quarter of 2015, respectively. The Company expects the Coweta and Australia plans to be completed in the fourth quarter of 2015.

Cash payments were made associated with these restructuring plans of $1,165 and $253 in the three months ended September 30, 2015 and September 30, 2014, respectively and $2,175 and $1,441 in the nine months ended September 30, 2015 and September 30, 2014, respectively.

15

LMI Aerospace, Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except share and per share data)

(Unaudited)

September 30, 2015

The following table summarizes the incurred and expected charges associated with these restructuring activities:

	Expense		Remaining		Total Expense
	Incurred through		Expense to be		Expected to be
	September 30, 2015		Incurred		Incurred
Employee severance arrangement - Precise	$	615	$	—	$	615
Employee severance arrangement - Savannah	47		—		47
Employee severance arrangement - St. Charles	378		—		378
Employee severance arrangement - Coweta	64		28		92
Employee severance arrangement - Greenville	376		—		376
Employee severance arrangement - Australia	34		—		34
Other employee severance arrangements	3,529		—		3,529
Lease termination costs - Precise	124		—		124
Lease termination costs - Greenville	125		—		125
Other restructuring expenses	115		—		115
Total	$	5,407	$	28	$	5,435

The following table summarizes the Company's restructuring activities during the nine months ended September 30, 2015:

	Employee
	Severance
Accrued restructuring balance as of December 31, 2014	$	739
Accrual additions	2,368
Cash payments	(2,175		)
Accrued restructuring balance as of September 30, 2015	$	932

Accrued restructuring of $932 at September 30, 2015 is expected to be paid over the next three quarters.

14. Legal Contingencies

The Company has been named as a defendant in certain pending lawsuits in the normal course of business (collectively, the “Pending Lawsuits”).  It is the policy of management to disclose the amount or range of reasonably possible losses.  In the opinion of management, after consulting with legal counsel, any losses resulting from Pending Lawsuits should not have a material effect on the Company’s financial position, cash flows or results of operations. The Company is also the subject of other proceedings as further described below.

16

LMI Aerospace, Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except share and per share data)

(Unaudited)

September 30, 2015

Regulatory Actions

In August 2013, the Environmental Protection Agency (“EPA”) and the U.S. Dept. of Justice (“DoJ”) commenced an investigation into allegations of low pH wastewater releases claimed to have occurred between 2009 and 2013 at Ozark Mountain Technologies ("OMT"), a subsidiary of LMI (the “Waste Water Allegations”). On April 24, 2015, the Company settled the Waste Water Allegations pursuant to a settlement agreement with DoJ (“Plea Agreement”). Per the terms of the Plea Agreement, OMT plead guilty to one count of negligently violating the Federal Water Pollution Control Act and paid a fine of $694 in the quarter ended June 30, 2015. In connection with the Plea Agreement, DoJ agreed that no further federal criminal or civil prosecution will be brought against OMT relative to certain other possible instances of environmental non-compliance that the Company voluntarily reported to the EPA in December 2013 as part of the EPA’s Audit Policy.

In November, 2013, the Attorney General of the State of Missouri (the “Missouri AG”) contacted LMI regarding alleged violations of certain state environmental regulations involving the discharge of pollutants and water contaminants claimed to have occurred in 2011 by OMT (the “Missouri AG Matter”).  On February 25, 2015, the Missouri AG filed a Petition against OMT alleging pollution of state waters, violation of pretreatment regulations and violation of water quality standards.  In the quarter ended June 30, 2015, OMT settled the Missouri AG Matter and in July of 2015 paid civil penalties of $175.

The fine and civil penalties paid in connection with both settlements described above were consistent with the previously established, respective, loss contingencies as disclosed in the Company’s 2014 Form 10-K, Item 3 - Legal Proceedings.

Civil Action

In December 2012, OMT became an indirect subsidiary of LMI as a result of LMI’s acquisition of Valent Aerostructures, LLC (“Valent”) from the former equity owners of Valent, including Tech Investments, LLC and Tech Investments II, LLC (together, “Tech”). Also as a result of the transaction, Tech became the beneficial owners of approximately 5.5% of LMI’s common stock. Pursuant to the terms of the purchase agreement, as amended (the “Valent Purchase Agreement”), $5,000 of the purchase price remained subject to an indemnification escrow arrangement (the “Escrow Funds”) and 783,798 shares of LMI’s common stock issued as part of the purchase price were subject to indemnification lock-up agreements (the “Locked-Up Shares”). On September 22, 2015, LMI and the former equity owners of Valent (the “Parties”) submitted to mediation and executed an agreement setting forth terms of a settlement with respect to the resolution of certain indemnification claims and other disputes involving, among other things, the OMT matters discussed above, and on November 5, 2015, the Parties executed the definitive settlement documents (the agreement and documents collectively being referred to as the “Settlement Agreements”). The claims and disputes resolved by the settlement had become the subject of legal proceedings that commenced with the filing of a declaratory action by Tech in December 2014 (the “Tech Lawsuit”).  Pursuant to the terms of the Settlement Agreements, (a) the Tech Lawsuit will be dismissed with prejudice, (b) $3,109 of the Escrow Funds will be disbursed to the Company and the remaining amount of Escrow Funds will be retained by Tech, (c) Tech has assumed an approximate $1,167 payment obligation of the Company to a predecessor owner of OMT that remained under a purchase agreement the Company acquired as part of the Company’s acquisition of Valent; (d) the Locked-up Shares will be released to Tech, excluding any portion needed to secure Tech’s obligation described in subsection (c) above; and (e) all parties entered into a mutual release of claims and disputes other than those based on certain environmental representations of the former equity owners of Valent under the Valent Purchase Agreement. The settlement also resulted in the Company assuming other liabilities of $484, recording the write-off of a previously recorded receivable of $389 and recording other expenses of $68. The net impact of the settlement resulted in a gain of $3,325 which is recorded in selling, general and administrative expenses in the accompanying Condensed Consolidated Statements of Operations.

15. Condensed Consolidating Financial Statements

LMI Aerospace, Inc. excluding its subsidiaries (“LMIA”) is the parent company, issuer and obligor of the second-priority senior notes due June 19, 2019 (the “Notes”). The payment obligations of LMIA under the Notes are guaranteed and secured by LMIA and all of its subsidiaries other than minor subsidiaries as further described below.

17

LMI Aerospace, Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except share and per share data)

(Unaudited)

September 30, 2015

These Notes are guaranteed on a second-priority senior secured basis, jointly and severally, by LMIA (“Guarantor Parent”) and all of its existing and future 100% owned subsidiaries (collectively, the “Guarantor Subsidiaries”) other than minor subsidiaries. Such guaranties are full and unconditional. LMIA conducts substantially all of its business through and derives virtually all of its income from its subsidiaries. Therefore, its ability to make required principal and interest payments with respect to its indebtedness depends on the earnings of subsidiaries and its ability to receive funds from its subsidiaries.

The Notes are secured on a second-priority basis by liens on substantially all of LMIA’s and the Guarantor Subsidiaries’ assets, subject to certain exceptions and permitted liens. The liens securing the notes are contractually subordinated to the liens that secure indebtedness under the revolving credit facility as a result of the lien subordination provisions of the intercreditor agreement to the extent of the value of the collateral securing such indebtedness as well as being subordinated by other existing indebtedness, including industrial revenue bonds, capital leases and other notes payable, to the extent of the value of the collateral that secures such existing indebtedness. As a consequence of this lien subordination and existing indebtedness the Notes and the guarantees are effectively subordinated to the extent of the value of the collateral that secures them. Decisions regarding the maintenance and release of the collateral secured by the collateral agreement are made by the lenders under the modified revolving credit facility, and neither the indenture trustee nor the holders of the Notes have control of decisions regarding the release of collateral.

We have not presented separate financial statements and separate disclosures have not been provided concerning the Guarantor Subsidiaries due to the presentation of condensed consolidating financial information set forth in this Note, consistent with the Securities and Exchange Commission (the “SEC”) interpretations governing reporting of subsidiary financial information.

Supplemental condensed consolidating financial information of the Company, including such information for the Guarantor Subsidiaries, is presented below. Investments in subsidiaries are presented using the equity method of accounting. The principal elimination entries eliminate investments in subsidiaries and inter-company balances and transactions.

18

LMI Aerospace, Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except share and per share data)

(Unaudited)

September 30, 2015

CONDENSED CONSOLIDATING BALANCE SHEET

as of September 30, 2015

	LMIA(Guarantor Parent)		Guarantor Subsidiaries		Consolidating/Eliminating Entries			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	—	$	476	$	—		$	476
Trade accounts receivable, net	2,063		59,326		—			61,389
Intercompany receivables	178,197		156,183		(334,380		)	—
Inventories	—		118,877		—			118,877
Prepaid expenses and other current assets	8,342		2,488		—			10,830
Deferred income taxes	—		3,924		(149		)	3,775
Total current assets	188,602		341,274		(334,529		)	195,347
Property, plant and equipment, net	3,818		97,284		—			101,102
Investments in subsidiaries	378,500		—		(378,500		)	—
Goodwill	—		86,784		—			86,784
Intangible assets, net	—		47,671		—			47,671
Deferred income taxes	149		—		(149		)	—
Other assets	7,346		1,625		—			8,971
Total assets	$	578,415	$	574,638	$	(713,178	)	$	439,875
Liabilities and shareholders’ equity
Current liabilities:
Accounts payable	$	465	$	17,496	$	—		$	17,961
Accrued expenses	11,626		13,008		—			24,634
Intercompany Payables	197,753		136,627		(334,380		)	$	—
Deferred income taxes	149		—		(149		)	—
Current installments of long-term debt and capital lease obligations	148		3,409		—			3,557
Total current liabilities	210,141		170,540		(334,529		)	46,152
Long-term debt and capital lease obligations, less current installments	249,110		18,497		—			267,607
Other long-term liabilities	304		2,797		—			3,101
Deferred income taxes	—		4,304		(149		)	4,155
Total long-term liabilities	249,414		25,598		(149		)	274,863
Total shareholders’ equity	118,860		378,500		(378,500		)	118,860
Total liabilities and shareholders’ equity	$	578,415	$	574,638	$	(713,178	)	$	439,875

19

LMI Aerospace, Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except share and per share data)

(Unaudited)

September 30, 2015

CONDENSED CONSOLIDATING BALANCE SHEET

as of December 31, 2014

	LMIA(Guarantor Parent)		Guarantor Subsidiaries		Consolidating/Eliminating Entries			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	7,058	$	869	$	—		$	7,927
Trade accounts receivable, net	1,310		56,924		—			58,234
Intercompany receivables	145,980		145,223		(291,203		)	$	—
Inventories	—		114,279		—			114,279
Prepaid expenses and other current assets	8,325		1,930		—			10,255
Deferred income taxes	—		4,031		(118		)	3,913
Total current assets	162,673		323,256		(291,321		)	194,608
Property, plant and equipment, net	3,148		96,334		—			99,482
Investments in subsidiaries	368,587		—		(368,587		)	—
Goodwill	—		86,784		—			86,784
Intangible assets, net	—		50,940		—			50,940
Deferred income taxes	118		—		(118		)	—
Other assets	8,743		1,879		—			10,622
Total assets	$	543,269	$	559,193	$	(660,026	)	$	442,436
Liabilities and shareholders’ equity
Current liabilities:
Accounts payable	$	1,339	$	20,416	$	—		$	21,755
Accrued expenses	13,679		12,393		—			26,072
Intercompany Payables	164,158		127,045		(291,203		)	$	—
Deferred income taxes	118		—		(118		)	—
Current installments of long-term debt and capital lease obligations	335		3,089		—			3,424
Total current liabilities	179,629		162,943		(291,321		)	51,251
Long-term debt and capital lease obligations, less current installments	245,174		20,380		—			265,554
Other long-term liabilities	331		2,958		—			3,289
Deferred income taxes	—		4,325		(118		)	4,207
Total long-term liabilities	245,505		27,663		(118		)	273,050
Total shareholders’ equity	118,135		368,587		(368,587		)	118,135
Total liabilities and shareholders’ equity	$	543,269	$	559,193	$	(660,026	)	$	442,436

20

LMI Aerospace, Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except share and per share data)

(Unaudited)

September 30, 2015

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Three Months Ended September 30, 2015

	LMIA(Guarantor Parent)			Guarantor Subsidiaries			Consolidating/Eliminating Entries			Consolidated
Sales and service revenue
Product sales	$	4		$	84,099		$	11		$	84,114
Service revenues	7,640			11,545			(7,666		)	11,519
Net sales	7,644			95,644			(7,655		)	95,633
Cost of sales and service revenue
Cost of product sales	27			67,476			11			67,514
Cost of service revenues	7,991			11,166			(7,664		)	11,493
Cost of sales	8,018			78,642			(7,653		)	79,007
Gross profit	(374		)	17,002			(2		)	16,626
Selling, general and administrative expenses				8,979						8,979
Restructuring expense	—			1,575			—			1,575
(Loss) income from operations	(374		)	6,448			(2		)	6,072
Other income (expense):
Interest expense	(5,389		)	(264		)	—			(5,653		)
Other, net	(1		)	(135		)	—			(136		)
Income (loss) from equity investments in subsidiaries	3,541			—			(3,541		)	—
Total other expense	(1,849		)	(399		)	(3,541		)	(5,789		)
(Loss) income before income taxes	(2,223		)	6,049			(3,543		)	283
(Benefit) provision for income taxes	(2,227		)	2,476			—			249
Net (loss) income	4			3,573			(3,543		)	34
Other comprehensive income (loss):
Change in foreign currency translation adjustment	—			(32		)	—			(32		)
Total comprehensive (loss) income	$	4		$	3,541		$	(3,543	)	$	2

21

LMI Aerospace, Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except share and per share data)

(Unaudited)

September 30, 2015

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Three Months Ended September 30, 2014

	LMIA(Guarantor Parent)			Guarantor Subsidiaries			Consolidating/Eliminating Entries			Consolidated
Sales and service revenue
Product sales	$	(68	)	$	81,724		$	37		$	81,693
Service revenues	9,172			15,620			(9,150		)	15,642
Net sales	9,104			97,344			(9,113		)	97,335
Cost of sales and service revenue
Cost of product sales	40			61,458			37			61,535
Cost of service revenues	9,106			13,803			(9,152		)	13,757
Cost of sales	9,146			75,261			(9,115		)	75,292
Gross profit	(42		)	22,083			2			22,043
Selling, general and administrative expenses	421			14,194			—			14,615
Restructuring expense	533			232			—			765
(Loss) income from operations	(996		)	7,657			2			6,663
Other income (expense):
Interest expense	(5,662		)	(284		)	—			(5,946		)
Other, net	11			(86		)	—			(75		)
Income (loss) from equity investments in subsidiaries	4,874			—			(4,874		)	—
Total other expense	(777		)	(370		)	(4,874		)	(6,021		)
(Loss) income before income taxes	(1,773		)	7,287			(4,872		)	642
(Benefit) provision for income taxes	(3,054		)	2,300			—			(754		)
Net (loss) income	1,281			4,987			(4,872		)	1,396
Other comprehensive income (loss):
Change in foreign currency translation adjustment	—			(112		)	—			(112		)
Reclassification adjustment for losses on interest rate hedges included in net earnings	—			—			—			—
Total comprehensive (loss) income	$	1,281		$	4,875		$	(4,872	)	$	1,284

22

LMI Aerospace, Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except share and per share data)

(Unaudited)

September 30, 2015

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Nine Months Ended September 30, 2015

	LMIA(Guarantor Parent)			Guarantor Subsidiaries			Consolidating/Eliminating Entries			Consolidated
Sales and service revenue
Product sales	$	207		$	246,699		$	(176	)	$	246,730
Service revenues	26,729			38,942			(26,743		)	38,928
Net sales	26,936			285,641			(26,919		)	285,658
Cost of sales and service revenue
Cost of product sales	214			197,173			(176		)	197,211
Cost of service revenues	27,440			35,155			(26,742		)	35,853
Cost of sales	27,654			232,328			(26,918		)	233,064
Gross profit	(718		)	53,313			(1		)	52,594
Selling, general and administrative expenses	—			33,980			—			33,980
Restructuring expense	318			2,050			—			2,368
Acquisitions expense	—			—			—			—
(Loss) income from operations	(1,036		)	17,283			(1		)	16,246
Other income (expense):
Interest expense	(16,029		)	(773		)	—			(16,802		)
Other, net	(1		)	(88		)	—			(89		)
Income (loss) from equity investments in subsidiaries	9,914			—			(9,914		)	—
Total other expense	(6,116		)	(861		)	(9,914		)	(16,891		)
(Loss) income before income taxes	(7,152		)	16,422			(9,915		)	(645		)
(Benefit) provision for income taxes	(6,069		)	6,477			—			408
Net (loss) income	(1,083		)	9,945			(9,915		)	(1,053		)
Other comprehensive income (loss):
Change in foreign currency translation adjustment	—			(31		)	—			(31		)
Total comprehensive (loss) income	$	(1,083	)	$	9,914		$	(9,915	)	$	(1,084	)

23

LMI Aerospace, Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except share and per share data)

(Unaudited)

September 30, 2015

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Nine Months Ended September 30, 2014

	LMIA(Guarantor Parent)			Guarantor Subsidiaries			Consolidating/Eliminating Entries			Consolidated
Sales and service revenue
Product sales	$	617		$	245,327		$	(595	)	$	245,349
Service revenues	28,474			53,688			(28,488		)	53,674
Net sales	29,091			299,015			(29,083		)	299,023
Cost of sales and service revenue
Cost of product sales	699			195,066			(595		)	195,170
Cost of service revenues	28,330			45,372			(28,487		)	45,215
Cost of sales	29,029			240,438			(29,082		)	240,385
Gross profit	62			58,577			(1		)	58,638
Selling, general and administrative expenses	421			41,349			—			41,770
Restructuring expense	967			1,321			—			2,288
(Loss) income from operations	(1,326		)	15,907			(1		)	14,580
Other income (expense):
Interest expense	(22,972		)	(828		)	—			(23,800		)
Other, net	81			124			—			205
Income (loss) from equity investments in subsidiaries	9,571			—			(9,571		)	—
Total other expense	(13,320		)	(704		)	(9,571		)	(23,595		)
(Loss) income before income taxes	(14,646		)	15,203			(9,572		)	(9,015		)
(Benefit) provision for income taxes	(8,171		)	5,614			—			(2,557		)
Net (loss) income	(6,475		)	9,589			(9,572		)	(6,458		)
Other comprehensive income (loss):
Change in foreign currency translation adjustment	—			(18		)	—			(18		)
Reclassification adjustment for losses on interest rate hedges included in net earnings	278			—			—			278
Total comprehensive (loss) income	$	(6,197	)	$	9,571		$	(9,572	)	$	(6,198	)

24

LMI Aerospace, Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except share and per share data)

(Unaudited)

September 30, 2015

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

For the Nine Months Ended September 30, 2015

	LMIA(Guarantor Parent)			Guarantor Subsidiaries			Consolidating/Eliminating Entries			Consolidated
Operating activities:
Net (loss)/income	$	(1,083	)	$	9,945		$	(9,915	)	$	(1,053	)
Adjustments for non-cash items	(7,572		)	13,927			9,915			16,270
Net changes in operating assets and liabilities, net of acquired businesses	(1,616		)	(7,884		)	—			(9,500		)
Intercompany activity	1,379			(1,379		)	—			—
Net cash (used)/provided by operating activities	(8,892		)	14,609			—			5,717
Investing activities:
Additions to property, plant and equipment	(1,606		)	(13,699		)	—			(15,305		)
Proceeds from sale of equipment	—			260			—			260
Net cash used by investing activities	(1,606		)	(13,439		)	—			(15,045		)
Financing activities:
Principal payments on long-term debt and notes payable	(251		)	(1,563		)	—			(1,814		)
Advances on revolving line of credit	93,500			—			—			93,500
Payments on revolving line of credit	(89,500		)	—			—			(89,500		)
Payments for debt issuance cost	(309		)	—			—			(309		)
Net cash provided (used) by financing activities	3,440			(1,563		)	—			1,877
Net (decrease) increase in cash and cash equivalents	(7,058		)	(393		)	—			(7,451		)
Cash and cash equivalents, beginning of period	7,058			869			—			7,927
Cash and cash equivalents, end of period	$	—		$	476		$	—		$	476

25

LMI Aerospace, Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except share and per share data)

(Unaudited)

September 30, 2015

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

For the Nine Months Ended September 30, 2014

	LMIA(Guarantor Parent)			Guarantor Subsidiaries			Consolidating/Eliminating Entries			Consolidated
Operating activities:
Net (loss)/income	$	(6,475	)	$	9,589		$	(9,572	)	$	(6,458	)
Adjustments for non-cash items	2,195			14,408			9,572			26,175
Net changes in operating assets and liabilities, net of acquired businesses	21,296			(4,997		)	—			16,299
Intercompany activity	6,794			(6,794		)	—			—
Net cash (used)/provided by operating activities	23,810			12,206			—			36,016
Investing activities:
Additions to property, plant and equipment	(704		)	(9,598		)	—			(10,302		)
Acquisitions, net of cash acquired	—			—			—			—
Proceeds from sale of equipment	4			977			—			981
Net cash used by investing activities	(700		)	(8,621		)	—			(9,321		)
Financing activities:
Proceeds from issuance of debt	250,000			—			—			250,000
Principal payments on long-term debt and notes payable	(228,180		)	(3,718		)	—			(231,898		)
Advances on revolving line of credit	60,000			—			—			60,000
Payments on revolving line of credit	(96,000		)	—			—			(96,000		)
Payments for debt issuance cost	(7,881		)	—			—			(7,881		)
Other, net	(28		)	—			—			(28		)
Net cash provided (used) by financing activities	(22,089		)	(3,718		)	—			(25,807		)
Net (decrease) increase in cash and cash equivalents	1,021			(133		)	—			888
Cash and cash equivalents, beginning of period	405			1,167			—			1,572
Cash and cash equivalents, end of period	$	1,426		$	1,034		$	—		$	2,460

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements. The Company makes forward-looking statements in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of this Quarterly Report on Form 10-Q, which represent the Company’s expectations or beliefs about future events and financial performance.  When used in this report, the words “expect,” “believe,” “anticipate,” “goal,” “plan,” “intend,” “estimate,” “may,” “will” or similar words are intended to identify forward-looking statements.  These forward-looking statements are based on estimates, projections, beliefs and assumptions and are not guarantees of future events or results.  Such statements are subject to known and unknown risks, uncertainties and assumptions, including those referred to under “Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014 (the “2014 Form 10-K”) and otherwise described in the Company’s periodic filings and current reports filed with the Securities and Exchange Commission (the “SEC”).

In light of these risks, uncertainties and assumptions, the forward-looking events discussed may not occur.  In addition, actual results could differ materially from those suggested by the forward-looking statements.  Accordingly, investors are cautioned not to place undue reliance on the forward-looking statements.  Except as required by law, the Company undertakes no obligation to

26

publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.  Investors should, however, review additional disclosures made by the Company from time to time in its periodic filings with the SEC.

This Quarterly Report on Form 10-Q should be read completely, in conjunction with our 2014 Annual Report on Form 10-K and with the understanding that the Company’s actual future results may be materially different from what the Company expects.  All forward-looking statements made by the Company in this Quarterly Report on Form 10-Q and in the Company’s other filings with the SEC are qualified by these cautionary statements.

The condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America, which require the Company to make estimates and assumptions.  (See Note 1 of the Condensed Consolidated Financial Statements included as part of this Quarterly Report on Form 10-Q.)

The Company believes that certain significant accounting estimates have the potential to have a more significant impact on the financial statements either because of the significance of the financial statements to which they relate or because they involve a higher degree of judgment and complexity.  A summary of such critical accounting estimates can be found in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in the  2014 Form 10-K.

Overview

We are a leading supplier of structural assemblies, kits and components and design engineering services to the aerospace and defense markets.  We primarily sell our products and services to the large commercial, corporate and regional, and military aircraft markets.    We believe that OEMs and Tier 1 aerospace companies will continue the trend of selecting their suppliers based upon the breadth of more complex and sophisticated design and manufacturing capabilities and value-added services and the ability of their suppliers to manage large production programs.

The Company is organized into two reportable segments: the Aerostructures segment and the Engineering Services segment.  Through its Aerostructures segment, the Company primarily fabricates, machines, finishes, integrates, assembles and kits formed close tolerance aluminum, specialty alloy and composite components and higher level assemblies for use by the aerospace and defense industries. It manufactures more than 40,000 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, the Company provides a complete range of design, engineering and program management services, supporting aircraft product lifecycles from conceptual design, analysis and certification through production support, fleet support and service life extensions via a complete turnkey engineering solution.

Results of Operations

Three months ended September 30, 2015 compared to three months ended September 30, 2014

Consolidated Operations

Cost of goods sold for the Aerostructures segment consists primarily of direct labor, materials, subcontract costs and manufacturing overhead, including indirect labor costs, depreciation, rent, supplies and other indirect costs.  Cost of goods for the Engineering Services segment consists primarily of direct labor, subcontract costs and overhead, including rent, maintenance, and indirect costs. Selling, general, and administrative expenses for both segments consist primarily of labor, rent, depreciation and amortization, professional services and other administrative expenses.

27

The following table is a summary of the Company's operating results for the three months ended September 30, 2015 and 2014, respectively:

	Three Months Ended   September 30, 2015
	($ in millions)
	Aerostructures		Engineering Services			Elimination			Total
Net sales	$	85.1	$	10.8		$	(0.3	)	$	95.6
Cost of sales	68.5		10.8			(0.3		)	79.0
Gross profit	16.6		—			—			16.6
S, G, & A	7.7		2.8			—			10.5
Income from operations	$	8.9	$	(2.8	)	$	—		$	6.1

	Three Months Ended   September 30, 2014
	($ in millions)
	Aerostructures		Engineering Services			Elimination			Total
Net sales	$	82.9	$	14.7		$	(0.3	)	$	97.3
Cost of sales	62.5		13.1			(0.3		)	75.3
Gross profit	20.4		1.6			—			22.0
S, G, & A	12.5		2.8			—			15.3
Income from operations	$	7.9	$	(1.2	)	$	—		$	6.7

Aerostructures Segment

Net Sales.  Net sales were $85.1 million for the third quarter of 2015, a 2.7%increase from $82.9 million in the third quarter of 2014.  The following table specifies the amount of the Aerostructures segment’s net sales by category for the third quarter of 2015 and 2014 and the percentage of the segment’s total net sales for each period represented by each category:

	Three Months Ended September 30,
Category	2015		% of Total		2014		% of Total
	($ in millions)
Large commercial aircraft	$	45.1	53.0	%	$	41.6	50.2	%
Corporate and regional aircraft	23.6		27.7	%	21.4		25.8	%
Military	8.9		10.5	%	13.0		15.7	%
Other	7.5		8.8	%	6.9		8.3	%
Total	$	85.1	100.0	%	$	82.9	100.0	%

Net sales of large commercial aircraft products increased8.4% in the third quarter of 2015 when compared to the third quarter of 2014. The most significant increase in revenue in the category was attributable to increased content and higher production rates on the Boeing 787 platform, which generated $7.0 million in the third quarter of 2015 compared to $3.5 million in the third quarter of 2014. We expect the Boeing 787 platform to generate similar levels of revenue throughout 2015. In addition, sales on Boeing 737, 767 and 777 platforms increased $0.9 million, $0.6 million and $0.4 million, respectively to $25.0 million, $1.4 million, and $4.8 million, respectively, in the third quarter of 2015 from $24.1 million, $0.8 million and $4.4 million, respectively, in the third quarter of 2014. These increases were partially offset by decreases in the sale of wing modification products which generated revenue of $2.4 million in the third quarter of 2015 compared to $3.9 million in the third quarter of 2014.

Net sales of components for corporate and regional aircraft increased 10.3% during the third quarter of 2015. The increase in revenue was primarily attributable to an increase in tooling sales on the Gulfstream G600 programs of $3.4 million in the third quarter of 2015, which generated $5.5 million in sales in the third quarter of 2015 compared to $2.1 million in the third quarter of 2014. This increase was partially offset by a decrease in revenue on the Gulfstream G450/G550 program of $1.2 million, which generated sales of $6.1 million in the third quarter of 2015 compared to $7.3 million in the third quarter of 2014.

Net sales of military products decreased 31.5% during the third quarter of 2015.  The decrease is primarily due to reductions in revenues on the Boeing Apache and Sikorsky Black Hawk helicopter programs of $0.8 million and $1.4 million, respectively, from

28

$1.1 million and $6.0 million, respectively, in the third quarter of 2014 to $0.3 million and $4.6 million, respectively in the third quarter of 2015. Revenues related to the Lockheed F-35 and Boeing V-22 programs also decreased from $0.8 million and $1.1 million, respectively, in the third quarter of 2014 to $0.04 million and $0.5 million, respectively, in the third quarter of 2015.

Cost of Goods Sold.  Cost of goods sold for the third quarter of 2015 was $68.5 million compared to $62.5 million for the third quarter of 2014. In the third quarter of 2014, the Company reversed a loss reserve of $4.6 million due to price increases received for engineering changes and improved hardware costs. This reduction in cost of goods sold in the third quarter of 2014 was partially offset by accelerated depreciation on assets requiring replacement in our Cuba, Missouri facility of $0.5 million in addition to unfavorable product mix. Gross profit in the third quarter of 2015 was favorably impacted by increased sales volume.

Gross Profit.  Gross profit for the third quarter of 2015 was $16.6 million (19.5% of net sales) compared to $20.4 million (24.6% of net sales) in the third quarter of 2014. The change in gross profit margin was primarily the result of the favorable impact of a loss reserve reversal of $4.6 million on a long-term contract in the third quarter of 2014. Gross profit in the third quarter of 2015 was favorably impacted by realized cost savings related to restructuring plans implemented during 2014 and early 2015. In addition, an increase in third quarter 2015 sales volume, primarily related to tooling sales which were at higher margins when compared to those recognized in the third quarter of 2014, favorably impacted the quarter.

Selling, General and Administrative Expenses.  Selling, general and administrative expenses were $7.7 million (9.1% of net sales) for the third quarter of 2015, compared to $12.5 million (15.1% of net sales) for the third quarter of 2014.  The Company recorded a net gain in the third quarter of 2015 of $3.3 million related to the settlement of a lawsuit. See Note 14, "Legal Contingencies," in the Notes to the Condensed Consolidated Financial Statements. Additionally, salaries and related expenses resulting from previously implemented cost reduction plans declined $0.5 million in the third quarter of 2015. An impairment expense of $0.4 million related to an asset held for sale and environmental expenses of $0.5 million were recorded in the third quarter of 2014.

Engineering Services Segment

Net Sales.  The Engineering Services segment generates revenue primarily through the billing of employee time spent on customer projects.  Net sales for the Engineering Services segment were $10.8 million for the third quarter of 2015 as compared to $14.7 million for the third quarter of 2014, a decrease of 26.4%.  The following table specifies the amount of the Engineering Services segment’s net sales by category for the third quarter in each of 2015 and 2014 and the percentage of the segment’s total net sales represented by each category.

	Three Months Ended September 30,
Category	2015		% of Total		2014		% of Total
	($ in millions)
Large commercial aircraft	$	6.4	59.3	%	$	6.6	44.9	%
Corporate and regional aircraft	0.8		7.4	%	4.4		29.9	%
Military	2.9		26.9	%	2.7		18.4	%
Other	0.7		6.4	%	1.0		6.8	%
Total	$	10.8	100.0	%	$	14.7	100.0	%

Net sales of services for large commercial aircraft were $6.4 million in the third quarter of 2015, down 3.0% from $6.6 million in the third quarter of 2014. The decrease in this category was primarily attributable to a decline in sales on the Airbus 350 platform, which contributed $0.7 million of revenue in the third quarter of 2014 and $0.2 million in revenue in the third quarter of 2015.

Net sales of services related to corporate and regional aircraft were $0.8 million in the third quarter of 2015 compared to $4.4 million for the third quarter of 2014, a decrease of 81.8%.  The decrease in revenue was primarily related to the Bombardier Learjet L-85 program, which contributed $2.7 million in revenue and was canceled in late 2014. In addition, revenue on the Mitsubishi Regional Jet program was adversely impacted in the third quarter of 2015 by a cumulative catch up adjustment of $1.9 million.

Net sales of services for military programs were $2.9 million in the third quarter of 2015, up 7.4% from $2.7 million in the third quarter of 2014.  The Lockheed Martin HAVOC and a program with the U.S Navy contributed increases of $0.7 million and $0.3 million, respectively, in the third quarter of 2015 when compared to the third quarter of 2014. These increases were partially offset by a decrease in revenue of $0.9 million on the Bell V-280 program in the third quarter of 2015 when compared to the third quarter of 2014.

29

Net sales related to design and delivery of tooling on various programs supporting commercial and military aircraft were $0.7 million for the third quarter of 2015 compared to $1.0 million in the third quarter of 2014. Tooling sales on various Boeing programs decreased $0.1 million in the third quarter of 2015 when compared to the third quarter of 2014.

Cost of Goods Sold. Cost of goods sold for the third quarter of 2015 was $10.8 million compared to $13.1 million for the third quarter of 2014.  The decrease in cost of goods sold was primarily due to reductions in direct labor, which is the result of lower demand for this segment.

Gross Profit.  Gross profit for the third quarter of 2015 was $0.04 million (0.4% of net sales) compared to $1.6 million (10.9% of net sales) in the third quarter of 2014.  The decrease in gross profit was primarily attributable to unfavorable cumulative long-term revenue adjustments on the Mitsubishi Regional Jet program of $1.9 million identified in the third quarter of 2015 in addition to the decline in sales and fixed-cost utilization.

Selling, General and Administrative Expenses.  Selling, general and administrative expenses for the third quarter of 2015 were $2.8 million, or 26.3% of net sales, compared to $2.8 million, or 19.0% of net sales, for the third quarter of 2014. An increase of restructuring cost of $0.8 million in the third quarter of 2015 when compared to the third quarter of 2014 was offset by savings realized from prior cost reduction activities when compared to the third quarter of 2014. Restructuring expenses recognized in the third quarter of 2015 related to the closure of the Greenville, South Carolina and Melbourne, Australia offices in addition to the elimination of other management positions within this segment. Implementation of these plans is expected to generate annual savings of $3.0 million

Non-segment Expenses

Interest Expense.  Interest expense was $5.7 million for the third quarter of 2015 and $5.9 million for the third quarter of 2014.  

Income Tax Expense.  During the third quarter of 2015, the Company recorded an income tax expense of $0.2 million compared to an income tax benefit of $0.8 million in the third quarter of 2014.  The Company's tax expense in the three months ended September 30, 2015 primarily reflects the taxes due in states where the Company generated taxable income. The Company's tax benefit in the three months ended September 30, 2014 includes a tax benefit of approximately $0.3 million associated with the decision to carry back the net operating loss recognized in 2013.

Results of Operations

Nine months ended September 30, 2015 compared to nine months ended September 30, 2014

Consolidated Operations

The following table is a summary of the Company's operating results for the nine months ended September 30, 2015 and 2014, respectively:

	Nine Months Ended September 30, 2015
	($ in millions)
	Aerostructures		Engineering Services			Elimination			Total
Net sales	$	249.6	$	36.8		$	(0.8	)	$	285.6
Cost of sales	200.1		33.7			(0.8		)	233.0
Gross profit	49.5		3.1			—			52.6
S, G, & A	29.4		6.9			—			36.3
Income from operations	$	20.1	$	(3.8	)	$	—		$	16.3

30

	Nine Months Ended September 30, 2014
	($ in millions)
	Aerostructures		Engineering Services		Elimination			Total
Net sales	$	249.1	$	51.2	$	(1.3	)	$	299.0
Cost of sales	198.5		43.1		(1.2		)	240.4
Gross profit	50.6		8.1		(0.1		)	58.6
S, G, & A	36.6		7.4		—			44.0
Income from operations	$	14.0	$	0.7	$	(0.1	)	$	14.6

Aerostructures Segment

Net Sales.  Net sales were $249.6 million for the first nine months of 2015, a 0.2%increase from $249.1 million in the first nine months of 2014.  The following table specifies the amount of the Aerostructures segment’s net sales by category for the first nine months of 2015 and 2014 and the percentage of the segment’s total net sales for each period represented by each category:

	Nine Months Ended September 30,
Category	2015		% of Total		2014		% of Total
	($ in millions)
Large commercial aircraft	$	132.6	53.1	%	$	122.9	49.3	%
Corporate and regional aircraft	65.4		26.2	%	69.7		28.0	%
Military	30.8		12.3	%	36.8		14.8	%
Other	20.8		8.4	%	19.7		7.9	%
Total	$	249.6	100.0	%	$	249.1	100.0	%

Net sales of large commercial aircraft products increased7.9% in the first nine months of 2015 when compared to the first nine months of 2014. The most significant increase in revenue in the category was attributable to increased content and higher production rates on the Boeing 787 platform, which generated $20.9 million in the first nine months of 2015 compared to $11.0 million in the first nine months of 2014. We expect the Boeing 787 platform to generate similar levels of revenue throughout 2015. In addition, sales on Boeing 737, 747, and 767 platforms increased $3.3 million, $0.7 million and $1.2 million, respectively, to $75.4 million, $9.1 million and $3.6 million, respectively, in the first nine months of 2015 from $72.1 million, $8.4 million and $2.4 million, respectively, in the first nine months of 2014. These increases were partially offset by decreases in the sale of wing modification products, which generated revenue of $5.7 million in the first nine months of 2015 compared to $11.0 million in the first nine months of 2014.

Net sales of components for corporate and regional aircraft decreased6.2% during the first nine months of 2015. The decrease in revenue was primarily attributable to decreases in sales of $5.1 million and $1.4 million, respectively, on the Gulfstream G450/G550 and G280 programs from $24.4 million and $6.1 million, respectively in the first nine months of 2014 to $19.3 million and $4.7 million, respectively, in the first nine months of 2015. These decreases were partially offset by an increase sales on the Gulfstream G650 program, which generated revenue of $24.8 million in the first nine months of 2015 compared to $22.5 million in the first nine months of 2014.

Net sales of military products decreased16.3% during the first nine months of 2015.  The decrease is primarily due to reductions in revenues on the Boeing V-22, C-17 and Apache programs of $1.2 million, $1.2 million and $1.3 million, respectively, in the first nine months of 2015 compared to the first nine months of 2014. Revenues related to the Black Hawk helicopter also decreased from $16.5 million in the first nine months of 2014 to $14.4 million in the first nine months of 2015.

Cost of Goods Sold.  Cost of goods sold for the first nine months of 2015 was $200.1 million compared to $198.5 million for the first nine months of 2014. Cost of goods sold in 2015 was favorably impacted by cost reduction initiatives implemented throughout the last two years. In the first nine months of 2014, the Company reversed a loss reserve of $5.3 million due to price increases received for engineering changes and improved hardware costs. This reduction in cost of goods sold in 2014 was partially offset by accelerated depreciation of $1.0 million on assets disposed of at several facilities.

Gross Profit.  Gross profit for the first nine months of 2015 was $49.5 million (19.8% of net sales) compared to $50.6 million (20.3% of net sales) in the first nine months of 2014. Gross profit margin in the first nine months of 2014 was favorably impacted by a $5.3 million loss reserve reversal on a long-term contract which was partially offset by cost and inefficiencies related to

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restructuring activities. Higher production levels and favorable product mix contributed to improvements in gross profit margin in the first nine months of 2015. Gross profit in the first nine months of 2015 was also favorably impacted by realized cost savings related to restructuring plans implemented during 2014 and early 2015.

Selling, General and Administrative Expenses.  Selling, general and administrative expenses were $29.4 million (11.8% of net sales) for the first nine months of 2015 compared to $36.6 million (14.7% of net sales) for the first nine months of 2014. The change in selling, general and administrative expenses primarily relates to a net gain recorded in the first nine months of 2015 related to the settlement of a lawsuit of $3.3 million. See Note 14, "Legal Contingencies," in the Notes to the Condensed Consolidated Financial Statements. Professional services expense was lower in the first nine months of 2015 by $0.9 million when compared to the first nine months of 2014. In addition, the first nine months of 2015 included a $1.1 million reduction in salary and related fringes when compared to the first nine months of 2014, the result of previously implemented cost reduction plans. The first nine months of 2014 were unfavorably impacted by an impairment expense of $0.4 million related to an asset held for sale.

Engineering Services Segment

Net Sales.  The Engineering Services segment generates revenue primarily through the billing of employee time spent on customer projects.  Net sales for the Engineering Services segment were $36.8 million for the first nine months of 2015 as compared to $51.2 million for the first nine months of 2014, a decrease of 28.0%.  The following table specifies the amount of the Engineering Services segment’s net sales by category for the first nine months of 2015 and 2014 and the percentage of the segment’s total net sales represented by each category.

	Nine Months Ended September 30,
Category	2015		% of Total		2014		% of Total
	($ in millions)
Large commercial aircraft	$	16.7	45.4	%	$	25.1	49.0	%
Corporate and regional aircraft	10.6		28.8	%	12.8		25.0	%
Military	7.9		21.5	%	7.2		14.1	%
Other	1.6		4.3	%	6.1		11.9	%
Total	$	36.8	100.0	%	$	51.2	100.0	%

Net sales of services for large commercial aircraft were $16.7 million in the first nine months of 2015, down33.5% from $25.1 million in the first nine months of 2014. The decrease in this category was primarily attributable to a decline in sales related to the Airbus 350 platform which decreased from $4.7 million in the first nine months of 2014 to $0.2 million in the first nine months of 2015. In addition, sales on various Boeing programs, maintenance and repair revenues and sales on the Goodrich Nacelle program declined $1.2 million, $2.7 million and $1.3 million, respectively, in the first nine months of 2015 compared to the first nine months of 2014. These decreases were partially offset by an increase in revenue on the Bombardier C-Series program of $2.4 million, which contributed $4.0 million in the first nine months of 2015 compared to $1.6 million in the first nine months of 2014.

Net sales of services related to corporate and regional aircraft were $10.6 million in the first nine months of 2015 compared to $12.8 million for the first nine months of 2014, a decrease of 17.2%.  The decrease in sales is primarily attributable to a $7.9 million decrease in sales on the Bombardier Learjet L-85 program that was canceled in late 2014. This decrease was partially offset by an increase in sales is on the Bombardier Global 7000 program, which contributed $4.7 million in the first nine months of 2015 compared to $2.3 million in the first nine months of 2014. In addition, sales increased on the Aerion AS2 and Arrowhead Global Wing program by $1.5 million and $1.1 million, respectively, when compared to the prior-year period.

Net sales of services for military programs were $7.9 million in the first nine months of 2015, up9.7% from $7.2 million in the first nine months of 2014.  This increase was primarily attributable to sales on a program with the U.S. Navy of $5.8 million in the first nine months of 2015 compared to $4.5 million in the first nine months of 2014. This increase was partially offset by reductions on the Embraer KC-390 program of $0.9 million during the first nine months of 2015 when compared to the first nine months of 2014.

Net sales related to design and delivery of tooling on various commercial aircraft programs were $1.6 million for the first nine months of 2015, down73.8%, from $6.1 million in the first nine months of 2014. Tooling sales on various Boeing programs and sales on a space program decreased $0.8 million and $1.4 million, respectively, in the first nine months of 2015 when compared to the first nine months of 2014.

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Cost of Goods Sold. Cost of goods sold for the first nine months of 2015 was $33.7 million compared to $43.1 million for the first nine months of 2014.  The decrease in cost of goods sold was primarily due to reductions in direct labor, which is the result of lower demand for this segment.

Gross Profit.  Gross profit for the first nine months of 2015 was $3.1 million (8.5% of net sales) compared to $8.1 million (15.8% of net sales) in the first nine months of 2014.  The decrease in gross profit was primarily attributable to unfavorable cumulative long-term revenue adjustments of $1.9 million on the Mitsubishi Regional Jet program in the first nine months of 2015 in addition to the decline in sales and lower fixed- cost utilization.

Selling, General and Administrative Expenses.  Selling, general and administrative expenses for the first nine months of 2015 were $6.9 million, or 18.8% of net sales, compared to $7.4 million, or 14.5% of net sales, for the first nine months of 2014. The decrease in selling, general and administrative expenses primarily related to implemented cost reductions, which were partially offset by increases in restructuring expense of $0.8 million in the first nine months of 2015 when compared to the first nine months of 2014. Restructuring expenses recognized in the third quarter of 2015 related to the closure of the Greenville, South Carolina and Melbourne, Australia offices in addition to the elimination of other management positions within this segment. Implementation of these plans is expected to generate annual savings of $3.0 million

Non-segment Expenses

Interest Expense.  Interest expense was $16.8 million for the first nine months of 2015 and $23.8 million for the first nine months of 2014.  On June 19, 2014, the Company terminated its long-term credit agreement, modified its revolving credit agreement, and issued senior notes. As a result of these transactions, interest expense in the first nine months of 2014 included $9.1 million related to the write-off of debt financing cost and settlement of related interest rate derivatives. Interest expense related to outstanding borrowings has increased in the first nine months of 2015 when compared to the first six months of 2014 due to increased average interest rates. In the first nine months of 2015, the Company's primary indebtedness was senior notes accruing interest at 7.375%. Prior to June 19, 2014, the Company's primary indebtedness was a term loan accruing interest at 4.75%.

Income Tax Expense.  During the first nine months of 2015, the Company recorded an income tax expense of $0.4 million compared to a $2.6 million income tax benefit in the first nine months of 2014.  

The Company's tax benefit in the nine months ended September 30, 2014 primarily reflects a tax benefit of approximately $2.6 million associated with the decision to carry back the net operating loss recognized in 2013.

Non-GAAP Financial Measures

When viewed with the financial results prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and accompanying reconciliations, the Company believes earnings before interest, taxes, depreciation and amortization (“EBITDA”) and Adjusted EBITDA provide additional useful information to clarify and enhance the understanding of the factors and trends affecting past performance and future prospects. The Company defines these measures, explains how they are calculated and provides reconciliations of these measures to the most comparable GAAP measure in the tables below. EBITDA and Adjusted EBITDA, as presented in this Form 10-Q, are supplemental measures of performance that are not required by, or presented in accordance with, GAAP.  They are not measurements of financial performance under GAAP and should not be considered as alternatives to net income or any other performance measures derived in accordance with GAAP, or as alternatives to net cash provided by operating activities as measures of liquidity.  The presentation of these measures should not be interpreted to mean that future results will be unaffected by unusual or nonrecurring items.

The Company uses EBITDA and Adjusted EBITDA non-GAAP operating performance measures internally as complementary financial measures to evaluate the performance and trends of the business.  The Company presents EBITDA and Adjusted EBITDA because it believes that measures such as these provide useful information with respect to its ability to meet future debt service, capital expenditures, working capital requirements and overall operating performance.

EBITDA and Adjusted EBITDA have limitations as analytical tools, and you should not consider them in isolation or as substitutes for analysis of the Company’s results as reported under GAAP.  Some of these limitations are:

• They do not reflect the Company’s cash expenditures, future expenditures for capital expenditures or contractual commitments;

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• They do not reflect changes in, or cash requirements for, working capital needs;

• They do not reflect the significant interest expense or the cash requirements necessary to service interest or principal payments on debt;

• Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements;

• They are not adjusted for all non-cash income or expense items that are reflected in the statement of cash flows;

• They do not reflect the impact on earnings of charges resulting from matters unrelated to ongoing operations; and

• Other companies in the Company’s industry may calculate EBITDA and Adjusted EBITDA differently, limiting their usefulness as comparative measures.

Because of these limitations, EBITDA, Adjusted EBITDA and the related financial ratios should not be considered as measures of discretionary cash available to the Company to invest in the growth of the business or as a measure of cash that will be available to meet the Company’s obligations.  Furthermore, the definitions of EBITDA and adjusted EBITDA calculated here are different than those contained in the Company’s credit agreement.  You should compensate for these limitations by relying primarily on the GAAP results and using EBITDA and Adjusted EBITDA only supplementary.

However, in spite of the above stated limitations, the Company believes that EBITDA and Adjusted EBITDA are useful to an investor in evaluating the results of operations because these measures:

• Are widely used by investors to measure a company’s operating performance without regard to items excluded from the calculation of such terms, which can vary substantially from company to company depending upon accounting methods and book value of assets, capital structure and the method by which assets were acquired, among other factors;

• Help investors to evaluate and compare the results of operations from period to period by removing the effect of the capital structure from operating performance; and

• Are used by the management team for various other purposes in presentations to the Board of Directors as a basis for strategic planning and forecasting.

Adjusted EBITDA excludes acquisition and integration charges, as applicable, and provides meaningful information about the operating performance of the businesses apart from other non cash and non-recurring expenses, as well as interest and tax expense.

The following financial items have been added back to net income when calculating EBITDA:

• Interest expense;

• Income tax expense;

• Depreciation; and

• Amortization.

The following additional financial items have been added back to net income when calculating Adjusted EBITDA:

• Stock-based compensation;

• Integration–related expenses;

• Restructuring expenses;

• Other (net).

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Reconciliations of net income to EBITDA and Adjusted EBITDA were as follows:

	(In Thousands)						(In Thousands)
	Three Months Ended September 30,						Nine months ended September 30,
	2015			2014			2015			2014
Net income (loss)	$	34		$	1,396		$	(1,053	)	$	(6,458	)
Depreciation and amortization (1)	5,098			5,998			15,018			17,002
Interest expense (2)	5,653			5,946			16,802			23,800
Income tax (benefit) expense	249			(754		)	408			(2,557		)
EBITDA	11,034			12,586			31,175			31,787
Stock-based compensation (3)	828			1,007			2,588			2,031
Integration expenses	175			64			348			557
Restructuring expenses (4)	1,575			765			2,368			2,288
Other, net (5)	(1,934		)	537			(1,974		)	791
Adjusted EBITDA	$	11,678		$	14,959		$	34,505		$	37,454

(1) Includes amortization of intangibles, amortization of long-term supply agreement consideration and depreciation expense.

(2) The nine months ended September 30, 2014 includes $793 related to the termination of interest rate derivatives and $8,340 related to the write-off of debt issuance costs associated with the June 19, 2014 modification of the Company's revolving credit agreement and the termination of its long-term credit agreement.

(3) Includes share-based expense associated with the LMI Aerospace, Inc. 2005 Long-term Incentive Plan, the LMI Aerospace, Inc. 2015 Long-term Incentive Plan, the LMI Profit Sharing and Savings Plan and share-based payments to settle obligations under a consulting agreement.

(4) The nine months ended September 30, 2015 include expenses related to the relocation of the St. Charles, MO machine parts operations, closure of the Coweta, OK, Greenville, SC and Melbourne, Australia facilities in addition to other employment separation activities. The nine months ended September 30, 2014 include expenses related to the Precise Machine facility closure, relocation of the Savannah, Georgia machining operations, and other employment separation activities.

(5) In the three and nine months ended September 30, 2015, the Company recorded a net gain of $3.3 million related to a legal settlement. The gain realized from the settlement offsets expenses of $1.9 million that were recorded as a favorable adjustment to EBITDA when incurred in prior quarters.  For consistency, the above table reflects only $1.9 million of the net gain as an unfavorable EBITDA adjustment.  See Note 14, "Legal Contingencies," in the Notes to the Condensed Consolidated Financial Statements.

Liquidity and Capital Resources

At September 30, 2015, the Company's primary source of outstanding indebtedness was second priority senior secured notes that mature in June of 2019. These notes accrue interest at 7.375% and require semi-annual interest payments. The Company's believes that the borrowings under these notes, in addition to available borrowings under its revolving credit facility, will provide the financial flexibility necessary to achieve its long-range strategic goals. For more information on the Company's debt structure, please see Note 6 - Long-term Debt and Capital Lease Obligations in the Notes to the Condensed Consolidated Financial Statements under Part 1, Item 1 of this Quarterly Report on Form 10-Q.

During the first nine months of 2015, operating activities provided $5.7 million in cash, compared to $36.0 million in the first nine months of 2014.  Net cash provided by operating activities for the first nine months of 2015 was unfavorably impacted by a $6.5 million payment of cash consideration to a key customer pursuant to a strategic partnership agreement. In exchange for this payment, the performance period of the statements of work for certain contracts with this customer was extended and the Company was granted preferred supplier status on certain future contracts. In addition, in the nine months ended September 30, 2015, the Company made semi-annual interest payments totaling $19.4 million associated with its outstanding notes. Operating cash flow in the first nine months of 2014 was favorably impacted by collection of a $13.5 million milestone payment on the KC-390 program in addition to a decrease in inventory of $2.1 million primarily related to a reduction in overall inventory spend.

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Net cash used for investing activities was $15.0 million for the first nine months of 2015, compared to $9.3 million for the first nine months of 2014. Capital spending in the first nine months of 2015 primarily related to the purchase of machinery and equipment to support production contracts in addition to the purchase of equipment primarily for environmental compliance at our Cuba, Missouri plant. Cash used in the first nine months of 2014 included $4.2 million on machinery and equipment in support of new production contracts.

In the nine months ended September 30, 2015, the Company funded operating and investing activities through net borrowings on its revolving credit facility of $4.0 million in addition to making principal payments on long-term debt of $1.8 million. During the quarter ended September 30, 2014, the Company used net free cash flow of $25.7 million to decrease outstanding borrowings by $17.8 million and fund the payment of $8.7 million in debt financing costs related to its issuance of senior notes and the modification of its revolving credit facility.

The Company, in the ordinary course of business, evaluates strategies to enhance our results of operations, financial position, or liquidity. These strategies may include acquisitions, divestitures, opportunities to reduce costs or increase revenues, and other strategic initiatives to increase stockholder value. We are unable to predict which, if any, of these initiatives will be executed. The execution of these initiatives may have a material impact on our future results of operations, financial position, or liquidity.

Contractual Obligations and Commitments

For information concerning contractual obligations, see the caption “Contractual Obligations and Commitments” in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results” in the Company’s 2014 Form 10-K.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

No material changes have taken place in the quantitative and qualitative information about market risk since the end of the most recent fiscal year.  For further information, see Part II, Item 7A of the Company’s 2014 Form 10-K.

Item 4. Controls and Procedures.

Disclosure Controls and Procedures

Our management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined by Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), as of September 30, 2015. Based upon this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that such disclosure controls and procedures were effective to ensure that the information required to be disclosed by us in the reports that we file or submit under the Exchange Act (a) is recorded, processed, summarized and reported within the time period specified in the SEC’s rules and forms and (b) is accumulated and communicated to our management, including our principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

No change in our internal control over financial reporting occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. 

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PART II

OTHER INFORMATION

Item 1. Legal Proceedings.

We are involved in various legal proceedings that arise in the ordinary course of our business, as well as other matters that are or could become material under SEC regulations.  Information regarding these other matters, as well as all material developments with respect to such matters, are disclosed in Note 15 - Legal Contingencies in the Notes to the Condensed Consolidated Financial Statements under Part I, Item 1 of this Quarterly Report on Form 10-Q, which is incorporated herein by reference.

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Risk Factors.

This Form 10-Q should be read together with Part I, Item 1A “RISK FACTORS” in our 2014 Form 10-K, which describes various risks and uncertainties to which we are or may become subject. There have been no material changes to the risk factors as previously disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2014 filed with the Securities and Exchange Commission on March 16, 2015.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not Applicable.

Item 5. Other Information.

Settlement Agreement

On November 5, 2015, the Company and the former members of Valent Aerostructures, LLC entered into a definitive settlement agreement to resolve previously disclosed disputes and legal proceedings between the parties. The material terms of the settlement agreement are set forth in Note 15 - Legal Contingencies - Civil Action, in the Notes to the Condensed Consolidated Financial Statements under Part I, Item 1 of this Quarterly Report on Form 10-Q, which is incorporated herein by reference.

Code of Ethics

On November 5, 2015 the Board of Directors of the Company adopted amendments to certain provisions of the Code of Business Conduct and Ethics of the Company (the “Code of Ethics”). The amendments, among other things, served to enhance and clarify the Company’s policies regarding the reporting of illegal or unethical behavior, and the giving and acceptance of gifts by Company employees and representatives, and by adding provisions that identify and outline the Company’s policies regarding employee harassment and safety.

Item 6. Exhibits.

See Exhibit Index.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the County of St. Charles and State of Missouri on the 6th day of November, 2015.

LMI AEROSPACE, INC.

/s/ Daniel G. Korte

Daniel G. Korte

Chief Executive Officer

(Principal Executive Officer)

/s/ Clifford C. Stebe, Jr.

Clifford C. Stebe, Jr.

Chief Financial Officer and Secretary

(Principal Financial Officer and Principal Accounting Officer)

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EXHIBIT INDEX

Exhibit No.	Description
3.1	Restated Articles of Incorporation of the Company previously filed as Exhibit 3.1 to the Company’s Form S-1 (File No. 333-51357) filed on April 29, 1998 (the “Form S-1”) and incorporated herein by reference.
3.2	Amended and Restated By-Laws of the Company previously filed as Exhibit 3.2 to the Form S-1 and incorporated herein by reference.
3.3	Amendment to Restated Articles of Incorporation dated as of July 9, 2001 filed as Exhibit 3.3 to the Company’s Form 10-K for the fiscal year ended December 31, 2001 and filed April 1, 2002 and incorporated herein by reference.
3.4	Amendment to the Company’s Amended and Restated Bylaws filed as Exhibit 3.1 to the Company’s Form 8-K filed June 26, 2009 and incorporated herein by reference.
3.5	Amendment No. 2 to the Company’s Amended and Restated Bylaws filed as Exhibit 3.1 to the Company’s Form 8-K filed May 6, 2015 and incorporated herein by reference.
4.1	Indenture dated as of June 19, 2014, by and among the Company, the Guarantors named therein, and U.S. Bank National Association, as Indenture Trustee and as Collateral Agent (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8‑K filed on June 20, 2014).
4.2	Forms of 7.375% Senior Secured Notes due 2019 (included as exhibits to the Indenture identified in Exhibit 4.1 above) (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8‑K filed on June 20, 2014).
4.3	Notes Collateral Agreement dated as of June 19, 2014, by and among the Company, the domestic Guarantors, and U.S. Bank National Association, as Collateral Agent, incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8‑K filed on June 20, 2014.
4.4	Notes Intellectual Property Security Agreement dated as of June 19, 2014, by and among the Company, certain Guarantors named therein, and U.S. Bank National Association, as Collateral Agent, incorporated by reference to Exhibit 4.4 to the Company’s Current Report on Form 8‑K filed on June 20, 2014.
4.5	Registration Rights Agreement dated as of June 19, 2014, by and among the Company, the Guarantors named therein and RBC Capital Markets, LLC, on behalf of itself and as representative of the other initial purchasers named therein, incorporated by reference to Exhibit 4.5 to the Company’s Current Report on Form 8‑K filed on June 20, 2014.
4.6	Intercreditor Agreement dated as of June 19, 2014, by and between Royal Bank of Canada, as First-Lien Collateral Agent, and U.S. Bank National Association, as Second-Lien Collateral Agent, incorporated by reference to Exhibit 4.6 to the Company’s Current Report on Form 8‑K filed on June 20, 2014.
10.1 Ω	Restricted Stock Award Agreement between LMI Aerospace, Inc. and Daniel G. Korte dated July 1, 2015 (performance based vesting), incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q files on August 7, 2015.
10.2	Restricted Stock Award Agreement between LMI Aerospace, Inc. and Daniel G. Korte dated July 1, 2015 (time based vesting), incorporated by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q filed on August 7, 2015.
14	Code of Ethics, as amended, filed herewith
31.1	Rule 13a-14(a) Certification of Daniel G. Korte, Chief Executive Officer filed herewith.

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31.2	Rule 13a-14(a) Certification of Clifford C. Stebe, Jr., Chief Financial Officer filed herewith.
32.1	Certification of Daniel G. Korte, Chief Executive Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 filed herewith.
32.2	Certification of Clifford C. Stebe, Jr., Chief Financial Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 filed herewith.
101.ins	Instance Document
101.sch	XBRL Taxonomy Extension Schema Document
101.cal	XBRL Taxonomy Extension Calculation Linkbase Document
101.def	XBRL Taxonomy Extension Definition Linkbase Document
101.lab	XBRL Taxonomy Extension Label Linkbase Document
101.pre	XBRL Taxonomy Extension Presentation Linkbase Document

Ω Portions of this exhibit have been redacted and are subject to a confidential treatment request filed with the Secretary     of the Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities and Exchange Act of 1934, as amended

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EX-14

Exhibit 14

Revised November 5, 2015

CODE OF ETHICS AND BUSINESS CONDUCT

The Code of Ethics and Business Conduct (“Code”) outlines the expectations and ethical standards of LMI Aerospace (“LMI” or the “Company”) that each director, officer and employee must adhere to while acting on behalf of the Company. Each director, officer, and employee is required to read and become familiar with the ethical standards described in this Code, to comply with the Code at all times, and to certify, at least annually, his/her compliance with the Code. Any conduct or action that violates this Code will be subject to disciplinary action, up to and including termination of employment.

The Code is not intended to and does not in any way constitute an employment contract or assurance of continued employment, and does not create any rights in any director, officer, employee, client, supplier, competitor, shareholder or any other person or entity.

Administration

The Board of Directors (“Board”) is responsible for setting the standards of business conduct contained in this Code and updating these standards as it deems appropriate to reflect changes in the legal and regulatory framework applicable to us, the business practices within the industry, our own business practices, and the prevailing ethical standards of the communities in which the we operate.

The Company’s Chief Compliance Officer (“CCO”) is responsible for overseeing the procedures designed to implement this Code and ensure that they are operating effectively.

General Ethical Standards

LMI is comprised of talented and dedicated people committed to providing outstanding service to our customers. Our commitment includes adhering to all applicable laws and regulations and maintaining the highest ethical standards in all of our business endeavors.

Set forth below are the standards that must be met by all directors, officers and employees of LMI, however these standards are not necessarily the only obligations that apply to our directors, officers and employees. In general, all directors, officers and employees of LMI should avoid any conduct that could reasonably appear to be improper or might injure our reputation for honesty and integrity. If you are unsure if specific conduct meets our standards, consult with your supervisor or the CCO.

Reporting of Illegal or Unethical Behavior

Every director, officer and employee is obligated to promptly report any known or suspected Code violations.

LMI’s business and its reputation depend, in large measure, on strict adherence to the provisions of this Code. We take all complaints and concerns seriously and we expect you to report any suspected violations to us.

You may report any concerns to your manager or supervisor, to Human Resources, to the CCO or through the Company’s Ethics and Compliance Line. Reports submitted through the Ethics and Compliance Line may be made anonymously. We will investigate any matter reported and will take appropriate actions in the event a violation is discovered. All reports of concerns or complaints shall remain confidential to the extent possible.

Non-Retaliation Policy

LMI absolutely forbids retaliation of any kind against a director, officer or employee who, in good faith, reports known or suspected violations of this Code or other illegal or unethical conduct.

Because we expect all employees to report any potential violations of this Code or unethical business practices to us, we strictly prohibit any director, officer or employee from retaliating against any other director, officer or employee who has made a good faith complaint. “Good faith” does not mean that a violation has to have actually occurred, but that the person reasonably believes that there may have been a violation and has provided accurate and truthful information during an investigation. Anyone who makes a complaint simply to embarrass, harass or make trouble for a fellow employee or who provides false information in relation to a complaint may be subject to disciplinary action, up to and including termination of employment.

Business Relationships

At LMI, we expect all directors, officers and employees to maintain the highest ethical standards in any relationship that may be established in connection with our business. To that end, we will:

• Pursue our earnings objectives to maximize value for our shareholders, subject to the standards of ethical behavior.

• Provide quality products and services to our customers based on our contractual

requirements.

• Treat one another fairly, with dignity and respect.

• Compete fairly for our customers’ business and provide for fair competition in our supply base.

• Be good corporate citizens by acting responsibly and always remain aware of the economic and social impact we have in our communities.

Compliance With Laws, Rules, Regulations

All directors, officers and employees must comply with the laws and regulations that apply to our business as well as all Company policies designed to ensure compliance with those laws and regulations.

Although employees are expected to know the details of all laws applicable to our business, it is important to recognize when to seek guidance or help.

This Code does not summarize all laws, rules and regulations applicable to the Company and its directors, officers and employees. If you have a question regarding the applicability of any law or regulation, you should contact the General Counsel.

Harassment

Directors, officers and employees shall treat one another with dignity and respect and may not discriminate or harass one another.

LMI believes that work relationships based on mutual respect and an acknowledgement that diversity in backgrounds, experience, and beliefs bring valuable new ideas and new approaches to the workplace are at the core of our culture. Therefore, the Company is committed to maintaining a workplace that is free of harassment and discriminatory intimidation, including that which is based on race, color, religion, ancestry, sex, sexual orientation, age, national origin, disability, marital status, veteran status, or any other characteristic protected by law. Any harassment or discrimination, especially if in violation of federal, state, and/or local laws or Company policies, will not be tolerated.

If a director, officer or employee feels that he/she has been the subject of discrimination or harassment or witnesses harassing or discriminatory behavior by another, he/she should report it to a manager or supervisor, to Human Resources, to the CCO or through the Company’s Ethics and Compliance Line.

Safe Work Environment

All directors, officers and employees must comply with all safety and health regulations and Company policies regarding safety.

LMI wants to ensure a safe and healthy workplace for all employees, customers and suppliers. All directors, officers and employees have a responsibility to maintain a safe environment by complying will all applicable laws, regulations and Company policies as well and reporting accidents, injuries and any unsafe practices to management.

Conflicts of Interest

All directors, officers and employees should avoid conflicts of interest.

A conflict of interest exists when there is a conflict between an individual’s personal interests and his/her fiduciary obligations to the Company.

Some examples of conflicts of interest are:

• When a director, officer or employee, or a member of his/her family, receives improper personal benefits as a result of his or her position in the Company.

• Loans by the Company to its directors and officers.

• If an employee works simultaneously for both LMI and a customer or supplier or operates a business on the side that competes with the Company.

• If a director, officer or employee works for a competitor as a consultant or board member.

Conflicts of interest are prohibited unless approved in advance by the Board or the CCO. Where there is an actual or potential conflict of interest or even the perception of a conflict of interest, the director, officer or employee must fully disclose the conflict and must not participate in the conflicting activity, unless and until an exception is granted. He/she must refrain from participating and/or making decisions concerning any business that is related to the matter in which there is an actual or potential conflict of interest.

Any director, officer or employee who becomes aware of a conflict of interest or potential conflict of interest should bring it to the attention of the CCO. Failing to disclose known conflicts of interest is also a violation of this Code.

Corporate Opportunities

No director, officer or employee may: (a) take for him/herself personally, opportunities that are discovered through the use of Company property, information or position; (b) use Company property, information or position for personal gain; or (c) compete with the Company.

Directors, officers and employees owe a duty of loyalty to LMI, and must be committed to advance its legitimate interests when the opportunity to do so arises. Similar to a conflict of interest, taking a business opportunity away from LMI to benefit yourself or using Company information to advance your own interests is not permitted. Any director, officer or employee who becomes aware of a violation should bring it to the attention of the CCO.

Protection and Proper Use of Company Assets

All directors, officers and employees should protect the Company’s assets and ensure their efficient use.

Theft, carelessness, misuse and waste have a direct impact on our profitability. Any suspected incident of fraud or theft should be immediately reported for investigation to the CCO.

Company assets (such as laptops/computers, printers, copiers, office supplies, cell/desk phones and network/internet access) should be used only for legitimate business purposes. While incidental or very infrequent personal use of Company assets is generally acceptable, excessive use is prohibited. At no time may any Company asset be used for any unlawful purpose or for any conduct which violates either this Code or any Company policies or procedures.

Confidentiality

All directors, officers and employees must maintain the confidentiality of information entrusted to them by the Company, its business partners, suppliers and customers.

Confidential information includes all non-public information that might be of use to competitors or harmful to the Company, its customers or employees, if it were to be disclosed. It may also include highly sensitive information that is only available to certain directors, officers and employees of the Company, but should not be shared with Company employees as a whole. Common types of confidential information are: customer drawings/specifications; new product plans; business objectives and strategies; trade secrets; unpublished financial or pricing information; contract details; descriptions of manufacturing processes; computer programs/models; salary and benefits data; personal information about employees; and customer and supplier lists.

Generally, disclosure of confidential information outside the Company or within the Company to those who should not have access to the information violates Company policy and could result in disciplinary action. The obligation to protect LMI’s confidential information continues even after an employee leaves the Company. If any director, officer or employee believes they have an obligation to disclose confidential information outside the Company, he/she may contact the General Counsel.

Nothing in this section should be construed as to limit any employee’s rights under the National Labor Relations Act or the Securities Exchange Act of 1934.

Fair Dealing

Each director, officer and employee must deal fairly and in good faith with LMI’s customers, shareholders, employees, suppliers, regulators, business partners, competitors and others.

LMI considers its reputation for integrity and fairness one of its most valuable assets. We seek to outperform our competition fairly and honestly. We seek competitive advantages through superior performance, never through unethical or illegal business practices. No director, officer or employee shall take unfair advantage of anyone through manipulation, concealment, abuse of privileged or confidential information, misrepresentation, fraudulent behavior, the use of confidential information that was obtained without the owner’s consent or through any other unfair dealing practice. No actions should be taken by any director, officer or employee, which could undermine our relationships or tarnish our reputation.

Giving and Accepting Gifts/Gratuities

Private Sector

A director, officer or employee may not offer, nor accept any gift or business courtesy from any supplier, customer or anyone doing business, seeking to do business or competing with LMI if

that gift or business courtesy is excessive or if the purpose of that gift or business courtesy is to influence a business decision.

We are aware that the definition of “excessive” may vary; however, a director, officer or employee shall exercise good judgment in offering or accepting gratuities, including, but not limited to, gifts, hospitality (including food and drink) and tickets to cultural, sporting or other special events. Cash is NEVER acceptable. If you are in doubt as to whether a gratuity is acceptable or not, you may seek clarity from your supervisor or the CCO, as appropriate. As a general rule, if disclosure of a business courtesy given or accepted by an employee, officer or director would be embarrassing to LMI, or to the recipient, the courtesy is not appropriate.

Public Sector

A director, officer or employee may not offer or provide any “gift” to any federal or state government employee or any foreign government official.

U.S. Government employees are generally prohibited from accepting any gift, gratuity, favor, discount, entertainment, or any other item having monetary value, including services, transportation, lodging, and meals. There are some very specific and limited exceptions to this prohibition. State and local governments may have similar rules. If you have a specific question or believe it is appropriate to consider an exception, you must contact the CCO for approval.

The Foreign Corrupt Practices Act (FCPA) prohibits giving anything of value, either directly or indirectly, to officials of foreign governments or foreign political candidates in order to obtain or retain business. The analysis as to who constitutes a “foreign official” can be quite complicated and, in certain countries, can include employees of seemingly private companies. LMI may also be liable for the conduct of business consultants or agents acting on our behalf. If you are dealing with an international business entity or foreign government, you should contact the CCO for guidance on what activities are permissible.

International Trade Controls

All employees, directors and officers must comply with applicable export, import and foreign asset controls.

Several regulations govern the import, export and transfer of the Company’s products and services. Anytime you are working with a non-US entity or person, even other LMI offices, there may be export control concerns. All director, officers and employees must ensure that our materials, products and services are imported and exported in compliance with all applicable laws. If you are unsure whether your transaction requires an import or export license or may be a prohibited transaction, contact the Company’s Export Compliance Manager or the CCO.

Financial Integrity

All directors, officers and employees will support the full, fair, accurate, timely, and understandable disclosure in the periodic reports that LMI is required to file with, or submit to, the Securities Exchange Commission (the “SEC”) and in other public communications and no director, officer or employee may attempt to fraudulently influence, coerce, manipulate or mislead the Company’s independent auditor or take any other action for the purpose of rendering our financial statements materially misleading.

As a public company, LMI is committed to providing investors with full, fair, accurate, timely and understandable disclosure in our periodic reports and public communications.

To this end, LMI will:

Comply with generally accepted accounting principles;

• Maintain a system of disclosure controls and procedures that will provide reasonable assurances to management that material information about the Company is made known to management, particularly during the periods in which our periodic reports are being prepared;

Maintain a system of internal accounting controls that will provide reasonable assurances to management that all transactions are properly recorded;

Maintain books and records that accurately reflect and fairly reflect the Company’s transactions;

Prohibit the establishment of any undisclosed or unrecorded funds or assets; and

Present information in a clear and orderly manner.

We consider our disclosure obligations to be of critical importance. Depending on his or her position, a director, officer or employee may be asked to provide necessary information to assure that our public reports are complete, fair and understandable. We take public reporting very seriously and we expect our directors, officers and employees to provide prompt answers to inquiries related to public disclosure requirements.

If any director, officer or employee has concerns or complaints regarding questionable accounting or auditing matters, then he or she is encouraged to promptly submit those concerns or complaints through the Ethics and Compliance Line or directly to the Audit Committee of the Board. Such submissions may be directed in writing to the attention of the Chairman of the Audit Committee or to any director who is a member of the Audit Committee.

Insider Trading

Directors, officers and employees who have access to confidential information are not permitted to use or share that information to trade in the Company’s stock or for any other purpose except in the conduct of our business and in strict compliance with all applicable laws and SEC regulations.

All non-public information about the Company should be considered confidential information. To use non-public information for personal financial benefit or to “tip” others who might make an investment decision on the basis of this information is not only unethical, but also illegal. No director, officer, or employee of the Company may buy or sell securities of the Company when in possession of “material non-public information.” Directors, officers and employees are required to comply with the Company’s Insider Trading Policy, a copy of which is available online.

Records Retention; Books and Accounts

All of LMI’s books, records, accounts and financial statements must be maintained in reasonable detail to appropriately reflect our transactions and must conform both to applicable legal requirements and to our system of internal controls.

We require honest and accurate recording and reporting of information in order to make responsible business decisions. All directors, officers and employees are required to submit accurate and timely information on items such as invoices, timecards and expense reports. Unrecorded or “off the books” funds or assets, i.e. “off the balance sheet” transactions, should not be maintained unless permitted by applicable laws or regulations.

Directors, officers and employees are expected to become familiar with LMI’s policies on record retention. Records should be retained or destroyed according to the Company’s record retention policies, unless you are requested by the General Counsel to retain specific records or files for a longer period.

Political Contributions

No Company funds or assets will be loaned or contributed to any political party or organization, or to any individual who holds or is a candidate for public office, except when permitted by applicable law and prior written authorization is obtained from the CCO.

These restrictions cover direct contributions and indirect assistance. The following are examples of activities that are illegal under federal law and the laws of those states which prohibit corporate political contributions:

Contributions by an employee that are reimbursed by LMI;

Purchase by LMI of tickets for political dinners or fundraising events;

Contributions in kind, such as loaning employees to political party campaigns;

Indirect contributions by the Company through our suppliers, customers or agents.

Political contributions by corporations are permitted by the laws of some states and foreign countries. Such allowable contributions may include some of the activities mentioned above, but in all cases, require prior authorization of the CCO and, in some cases, the Board.

This policy is not intended to discourage or prevent an individual employee from engaging in political activities on his/her own time and at his/her own expense. It also does not prohibit employees from making political contributions from personal funds or expressing individual views on political matters.

Waivers

The provisions of this Code may be waived for directors or officers only by a resolution of the Company’s independent directors and such waivers will be disclosed publicly. The provisions of this Code may be waived for employees who are not directors or executive officers by the CCO.

Any director or officer requesting a waiver of any provision of this Code must submit such request,

in writing, to the CCO, who will present the request to the Board. Any waiver granted to a director or executive officer by the Board will be publicly disclosed as required by the federal securities laws and the applicable rules and regulations of the SEC and Nasdaq.

Any employee (who is not a director or officer) requesting a waiver of any provision of this Code must submit such request, in writing, to the CCO.

Other Company Policies

All directors, officers and employees should be familiar with the Company’s existing policies regarding the rights and obligations of the Company’s employees, which may amplify and expand on certain matters addressed in this Code.

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Daniel G. Korte, certify that:

1.I have reviewed this quarterly report on Form 10-Q of LMI Aerospace, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 6, 2015	/s/ Daniel G. Korte
	Daniel G. Korte Chief Executive Officer (Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Clifford C. Stebe, Jr., certify that:

1.I have reviewed this quarterly report on Form 10-Q of LMI Aerospace, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 6, 2015	/s/ Clifford C. Stebe, Jr.
	Clifford C. Stebe, Jr. Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with this quarterly report of LMI Aerospace, Inc. (the “Company”) on Form 10-Q for the quarter ended September 30, 2015, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Daniel G. Korte, Chief Executive Officer of the Company, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 6, 2015	/s/ Daniel G. Korte
	Daniel G. Korte
	Chief Executive Officer (Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with this quarterly report of LMI Aerospace, Inc. (the “Company”) on Form 10-Q for the quarter ended September 30, 2015, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Clifford C. Stebe, Jr., Chief Financial Officer of the Company, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 6, 2015	/s/ Clifford C. Stebe, Jr.
	Clifford C. Stebe, Jr.
	Chief Financial Officer
	(Principal Financial Officer and Principal Accounting Officer)

XML

Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Intangible Assets [Abstract]
Trademarks	$ 778		$ 778		$ 778
Customer intangible assets	68,991		68,991		68,991
Other	1,274		1,274		1,274
Accumulated amortization	(23,372)		(23,372)		(20,103)
Intangible assets, net	47,671		47,671		50,940
Amortization expense on intangible assets	1,089	$ 1,131	3,269	$ 3,393
Trademarks [Member]
Intangible Assets [Abstract]
Accumulated amortization	(753)		(753)		(679)
Customer Intangible Assets [Member]
Intangible Assets [Abstract]
Accumulated amortization	(21,791)		(21,791)		(18,716)
Other [Member]
Intangible Assets [Abstract]
Accumulated amortization	$ (828)		$ (828)		$ (708)

XML

Condensed Consolidating Statements of Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Condensed Income Statements, Captions [Line Items]
Product sales	$ 84,114	$ 81,693	$ 246,730	$ 245,349
Service revenue	11,519	15,642	38,928	53,674
Net sales	95,633	97,335	285,658	299,023
Cost of product sales	67,514	61,535	197,211	195,170
Cost of service revenue	11,493	13,757	35,853	45,215
Cost of sales	79,007	75,292	233,064	240,385
Gross profit	16,626	22,043	52,594	58,638
Selling, general and administrative expenses	8,979	14,615	33,980	41,770
Restructuring expense	1,575	765	2,368	2,288
Acquisitions expense			0
Income from operations	6,072	6,663	16,246	14,580
Interest expense	(5,653)	(5,946)	(16,802)	(23,800)
Other, net	(136)	(75)	(89)	205
Income (loss) from equity investments in subsidiaries	0	0	0	0
Total other expense	(5,789)	(6,021)	(16,891)	(23,595)
Income (loss) before income taxes	283	642	(645)	(9,015)
Provision (benefit) for income taxes	249	(754)	408	(2,557)
Net loss	34	1,396	(1,053)	(6,458)
Change in foreign currency translation adjustment	(32)	(112)	(31)	(18)
Reclassification adjustment for losses on interest rate hedges included in net earnings, net of tax of $0, $0, $0 and $157	0	0	0	278
Total comprehensive income (loss)	2	1,284	(1,084)	(6,198)
LMIA(Guarantor Parent)
Condensed Income Statements, Captions [Line Items]
Product sales	4	(68)	207	617
Service revenue	7,640	9,172	26,729	28,474
Net sales	7,644	9,104	26,936	29,091
Cost of product sales	27	40	214	699
Cost of service revenue	7,991	9,106	27,440	28,330
Cost of sales	8,018	9,146	27,654	29,029
Gross profit	$ (374)	(42)	(718)	62
Selling, general and administrative expenses		421	0	421
Restructuring expense	$ 0	533	318	967
Acquisitions expense			0
Income from operations	(374)	(996)	(1,036)	(1,326)
Interest expense	(5,389)	(5,662)	(16,029)	(22,972)
Other, net	(1)	11	(1)	81
Income (loss) from equity investments in subsidiaries	3,541	4,874	9,914	9,571
Total other expense	(1,849)	(777)	(6,116)	(13,320)
Income (loss) before income taxes	(2,223)	(1,773)	(7,152)	(14,646)
Provision (benefit) for income taxes	(2,227)	(3,054)	(6,069)	(8,171)
Net loss	4	1,281	(1,083)	(6,475)
Change in foreign currency translation adjustment	0	0	0	0
Reclassification adjustment for losses on interest rate hedges included in net earnings, net of tax of $0, $0, $0 and $157		0		278
Total comprehensive income (loss)	4	1,281	(1,083)	(6,197)
Guarantor Subsidiaries
Condensed Income Statements, Captions [Line Items]
Product sales	84,099	81,724	246,699	245,327
Service revenue	11,545	15,620	38,942	53,688
Net sales	95,644	97,344	285,641	299,015
Cost of product sales	67,476	61,458	197,173	195,066
Cost of service revenue	11,166	13,803	35,155	45,372
Cost of sales	78,642	75,261	232,328	240,438
Gross profit	17,002	22,083	53,313	58,577
Selling, general and administrative expenses	8,979	14,194	33,980	41,349
Restructuring expense	1,575	232	2,050	1,321
Acquisitions expense			0
Income from operations	6,448	7,657	17,283	15,907
Interest expense	(264)	(284)	(773)	(828)
Other, net	(135)	(86)	(88)	124
Income (loss) from equity investments in subsidiaries	0	0	0	0
Total other expense	(399)	(370)	(861)	(704)
Income (loss) before income taxes	6,049	7,287	16,422	15,203
Provision (benefit) for income taxes	2,476	2,300	6,477	5,614
Net loss	3,573	4,987	9,945	9,589
Change in foreign currency translation adjustment	(32)	(112)	(31)	(18)
Reclassification adjustment for losses on interest rate hedges included in net earnings, net of tax of $0, $0, $0 and $157		0		0
Total comprehensive income (loss)	3,541	4,875	9,914	9,571
Consolidating/Eliminating Entries
Condensed Income Statements, Captions [Line Items]
Product sales	11	37	(176)	(595)
Service revenue	(7,666)	(9,150)	(26,743)	(28,488)
Net sales	(7,655)	(9,113)	(26,919)	(29,083)
Cost of product sales	11	37	(176)	(595)
Cost of service revenue	(7,664)	(9,152)	(26,742)	(28,487)
Cost of sales	(7,653)	(9,115)	(26,918)	(29,082)
Gross profit	$ (2)	2	(1)	(1)
Selling, general and administrative expenses		0	0	0
Restructuring expense	$ 0	0	0	0
Acquisitions expense			0
Income from operations	(2)	2	(1)	(1)
Interest expense	0	0	0	0
Other, net	0	0	0	0
Income (loss) from equity investments in subsidiaries	(3,541)	(4,874)	(9,914)	(9,571)
Total other expense	(3,541)	(4,874)	(9,914)	(9,571)
Income (loss) before income taxes	(3,543)	(4,872)	(9,915)	(9,572)
Provision (benefit) for income taxes	0	0	0	0
Net loss	(3,543)	(4,872)	(9,915)	(9,572)
Change in foreign currency translation adjustment	0	0	0	0
Reclassification adjustment for losses on interest rate hedges included in net earnings, net of tax of $0, $0, $0 and $157		0		0
Total comprehensive income (loss)	$ (3,543)	$ (4,872)	$ (9,915)	$ (9,572)

XML

Customer Concentration (Details)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Spirit [Member] | Revenue [Member]
Revenue and Accounts Receivable, Major Customer [Line Items]
Percentage attributable to customer (in hundredths)	34.40%	34.40%	34.80%	33.70%
Spirit [Member] | Accounts Receivable [Member]
Revenue and Accounts Receivable, Major Customer [Line Items]
Percentage attributable to customer (in hundredths)			26.90%		33.30%
Gulfstream [Member] | Revenue [Member]
Revenue and Accounts Receivable, Major Customer [Line Items]
Percentage attributable to customer (in hundredths)	15.90%	14.30%	14.30%	15.30%
Gulfstream [Member] | Accounts Receivable [Member]
Revenue and Accounts Receivable, Major Customer [Line Items]
Percentage attributable to customer (in hundredths)			15.70%		13.10%
The Boeing Company [Member] | Revenue [Member]
Revenue and Accounts Receivable, Major Customer [Line Items]
Percentage attributable to customer (in hundredths)	12.60%	10.00%	11.40%	10.90%
The Boeing Company [Member] | Accounts Receivable [Member]
Revenue and Accounts Receivable, Major Customer [Line Items]
Percentage attributable to customer (in hundredths)			6.20%		7.40%

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Condensed Consolidating Statements of Cash Flows (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Condensed Cash Flow Statements, Captions [Line Items]
Net loss	$ 34	$ 1,396	$ (1,053)	$ (6,458)
Adjustments for non-cash items			16,270	26,175
Net changes in operating assets and liabilities, net of acquired businesses			(9,500)	16,299
Intercompany activity			0	0
Net cash provided by operating activities			5,717	36,016
Additions to property, plant and equipment			(15,305)	(10,302)
Acquisitions, net of cash acquired				0
Proceeds from sale of property, plant and equipment			260	981
Net cash used by investing activities			(15,045)	(9,321)
Proceeds from issuance of debt				250,000
Principal payments on long-term debt and notes payable			(1,814)	(231,898)
Advances on revolving line of credit			93,500	60,000
Payments on revolving line of credit			(89,500)	(96,000)
Payments for debt issuance cost			(309)	(7,881)
Other, net			0	(28)
Net cash provided (used) by financing activities			1,877	(25,807)
Net (decrease) increase in cash and cash equivalents			(7,451)	888
Cash and cash equivalents, beginning of period			7,927	1,572
Cash and cash equivalents, end of period	476	2,460	476	2,460
LMIA(Guarantor Parent)
Condensed Cash Flow Statements, Captions [Line Items]
Net loss	4	1,281	(1,083)	(6,475)
Adjustments for non-cash items			(7,572)	2,195
Net changes in operating assets and liabilities, net of acquired businesses			(1,616)	21,296
Intercompany activity			1,379	6,794
Net cash provided by operating activities			(8,892)	23,810
Additions to property, plant and equipment			(1,606)	(704)
Acquisitions, net of cash acquired				0
Proceeds from sale of property, plant and equipment			0	4
Net cash used by investing activities			(1,606)	(700)
Proceeds from issuance of debt				250,000
Principal payments on long-term debt and notes payable			(251)	(228,180)
Advances on revolving line of credit			93,500	60,000
Payments on revolving line of credit			(89,500)	(96,000)
Payments for debt issuance cost			(309)	(7,881)
Other, net				(28)
Net cash provided (used) by financing activities			3,440	(22,089)
Net (decrease) increase in cash and cash equivalents			(7,058)	1,021
Cash and cash equivalents, beginning of period			7,058	405
Cash and cash equivalents, end of period	0	1,426	0	1,426
Guarantor Subsidiaries
Condensed Cash Flow Statements, Captions [Line Items]
Net loss	3,573	4,987	9,945	9,589
Adjustments for non-cash items			13,927	14,408
Net changes in operating assets and liabilities, net of acquired businesses			(7,884)	(4,997)
Intercompany activity			(1,379)	(6,794)
Net cash provided by operating activities			14,609	12,206
Additions to property, plant and equipment			(13,699)	(9,598)
Acquisitions, net of cash acquired				0
Proceeds from sale of property, plant and equipment			260	977
Net cash used by investing activities			(13,439)	(8,621)
Proceeds from issuance of debt				0
Principal payments on long-term debt and notes payable			(1,563)	(3,718)
Advances on revolving line of credit			0	0
Payments on revolving line of credit			0	0
Payments for debt issuance cost			0	0
Other, net				0
Net cash provided (used) by financing activities			(1,563)	(3,718)
Net (decrease) increase in cash and cash equivalents			(393)	(133)
Cash and cash equivalents, beginning of period			869	1,167
Cash and cash equivalents, end of period	476	1,034	476	1,034
Consolidating/Eliminating Entries
Condensed Cash Flow Statements, Captions [Line Items]
Net loss	(3,543)	(4,872)	(9,915)	(9,572)
Adjustments for non-cash items			9,915	9,572
Net changes in operating assets and liabilities, net of acquired businesses			0	0
Intercompany activity			0	0
Net cash provided by operating activities			0	0
Additions to property, plant and equipment			0	0
Acquisitions, net of cash acquired				0
Proceeds from sale of property, plant and equipment			0	0
Net cash used by investing activities			0	0
Proceeds from issuance of debt				0
Principal payments on long-term debt and notes payable			0	0
Advances on revolving line of credit			0	0
Payments on revolving line of credit			0	0
Payments for debt issuance cost			0	0
Other, net				0
Net cash provided (used) by financing activities			0	0
Net (decrease) increase in cash and cash equivalents			0	0
Cash and cash equivalents, beginning of period			0	0
Cash and cash equivalents, end of period	$ 0	$ 0	$ 0	$ 0

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Stock-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended			9 Months Ended
	Sep. 30, 2015	Dec. 31, 2014	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
LMI Aerospace, Inc. 2005 Long-Term Incentive Plan [Member] | Restricted Stock Awards [Member]
Shares
Outstanding beginning balance (in shares)				296,782
Granted (in shares)				131,703
Vested (in shares)				(131,986)
Forfeited (in shares)				(34,411)
Outstanding ending balance (in shares)	262,088	296,782		262,088
Weighted Average Grant Date Fair Value
Outstanding beginning balance (in dollars per share)				$ 16.58
Granted (in dollars per share)				13.22
Vested (in dollars per share)				17.57
Forfeited (in dollars per share)				15.35
Outstanding ending balance (in dollars per share)	$ 14.56	$ 16.58		$ 14.56
Compensation expense	$ 224		$ 765	$ 1,154	$ 1,442
Unrecognized compensation costs	$ 2,023	$ 2,036		$ 2,023
Costs are expected to be recognized over a weighted average period	1 year 9 months 4 days	1 year 2 months 12 days
LMI Aerospace, Inc. 2015 Long-term Incentive Plan [Member]
Weighted Average Grant Date Fair Value
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized	750,000			750,000
LMI Aerospace, Inc. 2015 Long-term Incentive Plan [Member] | Restricted Stock Awards [Member]
Shares
Outstanding beginning balance (in shares)				0
Granted (in shares)				61,801
Vested (in shares)				0
Forfeited (in shares)				0
Outstanding ending balance (in shares)	61,801	0		61,801
Weighted Average Grant Date Fair Value
Outstanding beginning balance (in dollars per share)				$ 0.00
Granted (in dollars per share)				9.79
Vested (in dollars per share)				0.00
Forfeited (in dollars per share)				0.00
Outstanding ending balance (in dollars per share)	$ 9.79	$ 0.00		$ 9.79
Compensation expense	$ 151		$ 0	$ 151	$ 0
Unrecognized compensation costs	$ 454	$ 0		$ 454
Costs are expected to be recognized over a weighted average period	9 months 7 days

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Condensed Consolidating Financial Statements (Tables)

9 Months Ended

Sep. 30, 2015

Sep. 30, 2014

Condensed Income Statements, Captions [Line Items]

Condensed Consolidating Balance Sheet

	LMIA(Guarantor Parent)		Guarantor Subsidiaries		Consolidating/Eliminating Entries			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	—	$	476	$	—		$	476
Trade accounts receivable, net	2,063		59,326		—			61,389
Intercompany receivables	178,197		156,183		(334,380		)	—
Inventories	—		118,877		—			118,877
Prepaid expenses and other current assets	8,342		2,488		—			10,830
Deferred income taxes	—		3,924		(149		)	3,775
Total current assets	188,602		341,274		(334,529		)	195,347
Property, plant and equipment, net	3,818		97,284		—			101,102
Investments in subsidiaries	378,500		—		(378,500		)	—
Goodwill	—		86,784		—			86,784
Intangible assets, net	—		47,671		—			47,671
Deferred income taxes	149		—		(149		)	—
Other assets	7,346		1,625		—			8,971
Total assets	$	578,415	$	574,638	$	(713,178	)	$	439,875
Liabilities and shareholders’ equity
Current liabilities:
Accounts payable	$	465	$	17,496	$	—		$	17,961
Accrued expenses	11,626		13,008		—			24,634
Intercompany Payables	197,753		136,627		(334,380		)	$	—
Deferred income taxes	149		—		(149		)	—
Current installments of long-term debt and capital lease obligations	148		3,409		—			3,557
Total current liabilities	210,141		170,540		(334,529		)	46,152
Long-term debt and capital lease obligations, less current installments	249,110		18,497		—			267,607
Other long-term liabilities	304		2,797		—			3,101
Deferred income taxes	—		4,304		(149		)	4,155
Total long-term liabilities	249,414		25,598		(149		)	274,863
Total shareholders’ equity	118,860		378,500		(378,500		)	118,860
Total liabilities and shareholders’ equity	$	578,415	$	574,638	$	(713,178	)	$	439,875

CONDENSED CONSOLIDATING BALANCE SHEET

as of December 31, 2014

	LMIA(Guarantor Parent)		Guarantor Subsidiaries		Consolidating/Eliminating Entries			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	7,058	$	869	$	—		$	7,927
Trade accounts receivable, net	1,310		56,924		—			58,234
Intercompany receivables	145,980		145,223		(291,203		)	$	—
Inventories	—		114,279		—			114,279
Prepaid expenses and other current assets	8,325		1,930		—			10,255
Deferred income taxes	—		4,031		(118		)	3,913
Total current assets	162,673		323,256		(291,321		)	194,608
Property, plant and equipment, net	3,148		96,334		—			99,482
Investments in subsidiaries	368,587		—		(368,587		)	—
Goodwill	—		86,784		—			86,784
Intangible assets, net	—		50,940		—			50,940
Deferred income taxes	118		—		(118		)	—
Other assets	8,743		1,879		—			10,622
Total assets	$	543,269	$	559,193	$	(660,026	)	$	442,436
Liabilities and shareholders’ equity
Current liabilities:
Accounts payable	$	1,339	$	20,416	$	—		$	21,755
Accrued expenses	13,679		12,393		—			26,072
Intercompany Payables	164,158		127,045		(291,203		)	$	—
Deferred income taxes	118		—		(118		)	—
Current installments of long-term debt and capital lease obligations	335		3,089		—			3,424
Total current liabilities	179,629		162,943		(291,321		)	51,251
Long-term debt and capital lease obligations, less current installments	245,174		20,380		—			265,554
Other long-term liabilities	331		2,958		—			3,289
Deferred income taxes	—		4,325		(118		)	4,207
Total long-term liabilities	245,505		27,663		(118		)	273,050
Total shareholders’ equity	118,135		368,587		(368,587		)	118,135
Total liabilities and shareholders’ equity	$	543,269	$	559,193	$	(660,026	)	$	442,436

	LMIA(Guarantor Parent)		Guarantor Subsidiaries		Consolidating/Eliminating Entries			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	—	$	476	$	—		$	476
Trade accounts receivable, net	2,063		59,326		—			61,389
Intercompany receivables	178,197		156,183		(334,380		)	—
Inventories	—		118,877		—			118,877
Prepaid expenses and other current assets	8,342		2,488		—			10,830
Deferred income taxes	—		3,924		(149		)	3,775
Total current assets	188,602		341,274		(334,529		)	195,347
Property, plant and equipment, net	3,818		97,284		—			101,102
Investments in subsidiaries	378,500		—		(378,500		)	—
Goodwill	—		86,784		—			86,784
Intangible assets, net	—		47,671		—			47,671
Deferred income taxes	149		—		(149		)	—
Other assets	7,346		1,625		—			8,971
Total assets	$	578,415	$	574,638	$	(713,178	)	$	439,875
Liabilities and shareholders’ equity
Current liabilities:
Accounts payable	$	465	$	17,496	$	—		$	17,961
Accrued expenses	11,626		13,008		—			24,634
Intercompany Payables	197,753		136,627		(334,380		)	$	—
Deferred income taxes	149		—		(149		)	—
Current installments of long-term debt and capital lease obligations	148		3,409		—			3,557
Total current liabilities	210,141		170,540		(334,529		)	46,152
Long-term debt and capital lease obligations, less current installments	249,110		18,497		—			267,607
Other long-term liabilities	304		2,797		—			3,101
Deferred income taxes	—		4,304		(149		)	4,155
Total long-term liabilities	249,414		25,598		(149		)	274,863
Total shareholders’ equity	118,860		378,500		(378,500		)	118,860
Total liabilities and shareholders’ equity	$	578,415	$	574,638	$	(713,178	)	$	439,875

Condensed Consolidating Statements of Comprehensive Income (Loss)

	LMIA(Guarantor Parent)			Guarantor Subsidiaries			Consolidating/Eliminating Entries			Consolidated
Sales and service revenue
Product sales	$	207		$	246,699		$	(176	)	$	246,730
Service revenues	26,729			38,942			(26,743		)	38,928
Net sales	26,936			285,641			(26,919		)	285,658
Cost of sales and service revenue
Cost of product sales	214			197,173			(176		)	197,211
Cost of service revenues	27,440			35,155			(26,742		)	35,853
Cost of sales	27,654			232,328			(26,918		)	233,064
Gross profit	(718		)	53,313			(1		)	52,594
Selling, general and administrative expenses	—			33,980			—			33,980
Restructuring expense	318			2,050			—			2,368
Acquisitions expense	—			—			—			—
(Loss) income from operations	(1,036		)	17,283			(1		)	16,246
Other income (expense):
Interest expense	(16,029		)	(773		)	—			(16,802		)
Other, net	(1		)	(88		)	—			(89		)
Income (loss) from equity investments in subsidiaries	9,914			—			(9,914		)	—
Total other expense	(6,116		)	(861		)	(9,914		)	(16,891		)
(Loss) income before income taxes	(7,152		)	16,422			(9,915		)	(645		)
(Benefit) provision for income taxes	(6,069		)	6,477			—			408
Net (loss) income	(1,083		)	9,945			(9,915		)	(1,053		)
Other comprehensive income (loss):
Change in foreign currency translation adjustment	—			(31		)	—			(31		)
Total comprehensive (loss) income	$	(1,083	)	$	9,914		$	(9,915	)	$	(1,084	)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Three Months Ended September 30, 2015

	LMIA(Guarantor Parent)			Guarantor Subsidiaries			Consolidating/Eliminating Entries			Consolidated
Sales and service revenue
Product sales	$	4		$	84,099		$	11		$	84,114
Service revenues	7,640			11,545			(7,666		)	11,519
Net sales	7,644			95,644			(7,655		)	95,633
Cost of sales and service revenue
Cost of product sales	27			67,476			11			67,514
Cost of service revenues	7,991			11,166			(7,664		)	11,493
Cost of sales	8,018			78,642			(7,653		)	79,007
Gross profit	(374		)	17,002			(2		)	16,626
Selling, general and administrative expenses				8,979						8,979
Restructuring expense	—			1,575			—			1,575
(Loss) income from operations	(374		)	6,448			(2		)	6,072
Other income (expense):
Interest expense	(5,389		)	(264		)	—			(5,653		)
Other, net	(1		)	(135		)	—			(136		)
Income (loss) from equity investments in subsidiaries	3,541			—			(3,541		)	—
Total other expense	(1,849		)	(399		)	(3,541		)	(5,789		)
(Loss) income before income taxes	(2,223		)	6,049			(3,543		)	283
(Benefit) provision for income taxes	(2,227		)	2,476			—			249
Net (loss) income	4			3,573			(3,543		)	34
Other comprehensive income (loss):
Change in foreign currency translation adjustment	—			(32		)	—			(32		)
Total comprehensive (loss) income	$	4		$	3,541		$	(3,543	)	$	2

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Three Months Ended September 30, 2014

	LMIA(Guarantor Parent)			Guarantor Subsidiaries			Consolidating/Eliminating Entries			Consolidated
Sales and service revenue
Product sales	$	(68	)	$	81,724		$	37		$	81,693
Service revenues	9,172			15,620			(9,150		)	15,642
Net sales	9,104			97,344			(9,113		)	97,335
Cost of sales and service revenue
Cost of product sales	40			61,458			37			61,535
Cost of service revenues	9,106			13,803			(9,152		)	13,757
Cost of sales	9,146			75,261			(9,115		)	75,292
Gross profit	(42		)	22,083			2			22,043
Selling, general and administrative expenses	421			14,194			—			14,615
Restructuring expense	533			232			—			765
(Loss) income from operations	(996		)	7,657			2			6,663
Other income (expense):
Interest expense	(5,662		)	(284		)	—			(5,946		)
Other, net	11			(86		)	—			(75		)
Income (loss) from equity investments in subsidiaries	4,874			—			(4,874		)	—
Total other expense	(777		)	(370		)	(4,874		)	(6,021		)
(Loss) income before income taxes	(1,773		)	7,287			(4,872		)	642
(Benefit) provision for income taxes	(3,054		)	2,300			—			(754		)
Net (loss) income	1,281			4,987			(4,872		)	1,396
Other comprehensive income (loss):
Change in foreign currency translation adjustment	—			(112		)	—			(112		)
Reclassification adjustment for losses on interest rate hedges included in net earnings	—			—			—			—
Total comprehensive (loss) income	$	1,281		$	4,875		$	(4,872	)	$	1,284

	LMIA(Guarantor Parent)			Guarantor Subsidiaries			Consolidating/Eliminating Entries			Consolidated
Sales and service revenue
Product sales	$	4		$	84,099		$	11		$	84,114
Service revenues	7,640			11,545			(7,666		)	11,519
Net sales	7,644			95,644			(7,655		)	95,633
Cost of sales and service revenue
Cost of product sales	27			67,476			11			67,514
Cost of service revenues	7,991			11,166			(7,664		)	11,493
Cost of sales	8,018			78,642			(7,653		)	79,007
Gross profit	(374		)	17,002			(2		)	16,626
Selling, general and administrative expenses				8,979						8,979
Restructuring expense	—			1,575			—			1,575
(Loss) income from operations	(374		)	6,448			(2		)	6,072
Other income (expense):
Interest expense	(5,389		)	(264		)	—			(5,653		)
Other, net	(1		)	(135		)	—			(136		)
Income (loss) from equity investments in subsidiaries	3,541			—			(3,541		)	—
Total other expense	(1,849		)	(399		)	(3,541		)	(5,789		)
(Loss) income before income taxes	(2,223		)	6,049			(3,543		)	283
(Benefit) provision for income taxes	(2,227		)	2,476			—			249
Net (loss) income	4			3,573			(3,543		)	34
Other comprehensive income (loss):
Change in foreign currency translation adjustment	—			(32		)	—			(32		)
Total comprehensive (loss) income	$	4		$	3,541		$	(3,543	)	$	2

	LMIA(Guarantor Parent)			Guarantor Subsidiaries			Consolidating/Eliminating Entries			Consolidated
Sales and service revenue
Product sales	$	617		$	245,327		$	(595	)	$	245,349
Service revenues	28,474			53,688			(28,488		)	53,674
Net sales	29,091			299,015			(29,083		)	299,023
Cost of sales and service revenue
Cost of product sales	699			195,066			(595		)	195,170
Cost of service revenues	28,330			45,372			(28,487		)	45,215
Cost of sales	29,029			240,438			(29,082		)	240,385
Gross profit	62			58,577			(1		)	58,638
Selling, general and administrative expenses	421			41,349			—			41,770
Restructuring expense	967			1,321			—			2,288
(Loss) income from operations	(1,326		)	15,907			(1		)	14,580
Other income (expense):
Interest expense	(22,972		)	(828		)	—			(23,800		)
Other, net	81			124			—			205
Income (loss) from equity investments in subsidiaries	9,571			—			(9,571		)	—
Total other expense	(13,320		)	(704		)	(9,571		)	(23,595		)
(Loss) income before income taxes	(14,646		)	15,203			(9,572		)	(9,015		)
(Benefit) provision for income taxes	(8,171		)	5,614			—			(2,557		)
Net (loss) income	(6,475		)	9,589			(9,572		)	(6,458		)
Other comprehensive income (loss):
Change in foreign currency translation adjustment	—			(18		)	—			(18		)
Reclassification adjustment for losses on interest rate hedges included in net earnings	278			—			—			278
Total comprehensive (loss) income	$	(6,197	)	$	9,571		$	(9,572	)	$	(6,198	)

Condensed Consolidating Cash Flow Statement

	LMIA(Guarantor Parent)			Guarantor Subsidiaries			Consolidating/Eliminating Entries			Consolidated
Operating activities:
Net (loss)/income	$	(1,083	)	$	9,945		$	(9,915	)	$	(1,053	)
Adjustments for non-cash items	(7,572		)	13,927			9,915			16,270
Net changes in operating assets and liabilities, net of acquired businesses	(1,616		)	(7,884		)	—			(9,500		)
Intercompany activity	1,379			(1,379		)	—			—
Net cash (used)/provided by operating activities	(8,892		)	14,609			—			5,717
Investing activities:
Additions to property, plant and equipment	(1,606		)	(13,699		)	—			(15,305		)
Proceeds from sale of equipment	—			260			—			260
Net cash used by investing activities	(1,606		)	(13,439		)	—			(15,045		)
Financing activities:
Principal payments on long-term debt and notes payable	(251		)	(1,563		)	—			(1,814		)
Advances on revolving line of credit	93,500			—			—			93,500
Payments on revolving line of credit	(89,500		)	—			—			(89,500		)
Payments for debt issuance cost	(309		)	—			—			(309		)
Net cash provided (used) by financing activities	3,440			(1,563		)	—			1,877
Net (decrease) increase in cash and cash equivalents	(7,058		)	(393		)	—			(7,451		)
Cash and cash equivalents, beginning of period	7,058			869			—			7,927
Cash and cash equivalents, end of period	$	—		$	476		$	—		$	476

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

For the Nine Months Ended September 30, 2015

	LMIA(Guarantor Parent)			Guarantor Subsidiaries			Consolidating/Eliminating Entries			Consolidated
Operating activities:
Net (loss)/income	$	(1,083	)	$	9,945		$	(9,915	)	$	(1,053	)
Adjustments for non-cash items	(7,572		)	13,927			9,915			16,270
Net changes in operating assets and liabilities, net of acquired businesses	(1,616		)	(7,884		)	—			(9,500		)
Intercompany activity	1,379			(1,379		)	—			—
Net cash (used)/provided by operating activities	(8,892		)	14,609			—			5,717
Investing activities:
Additions to property, plant and equipment	(1,606		)	(13,699		)	—			(15,305		)
Proceeds from sale of equipment	—			260			—			260
Net cash used by investing activities	(1,606		)	(13,439		)	—			(15,045		)
Financing activities:
Principal payments on long-term debt and notes payable	(251		)	(1,563		)	—			(1,814		)
Advances on revolving line of credit	93,500			—			—			93,500
Payments on revolving line of credit	(89,500		)	—			—			(89,500		)
Payments for debt issuance cost	(309		)	—			—			(309		)
Net cash provided (used) by financing activities	3,440			(1,563		)	—			1,877
Net (decrease) increase in cash and cash equivalents	(7,058		)	(393		)	—			(7,451		)
Cash and cash equivalents, beginning of period	7,058			869			—			7,927
Cash and cash equivalents, end of period	$	—		$	476		$	—		$	476

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

For the Nine Months Ended September 30, 2014

	LMIA(Guarantor Parent)			Guarantor Subsidiaries			Consolidating/Eliminating Entries			Consolidated
Operating activities:
Net (loss)/income	$	(6,475	)	$	9,589		$	(9,572	)	$	(6,458	)
Adjustments for non-cash items	2,195			14,408			9,572			26,175
Net changes in operating assets and liabilities, net of acquired businesses	21,296			(4,997		)	—			16,299
Intercompany activity	6,794			(6,794		)	—			—
Net cash (used)/provided by operating activities	23,810			12,206			—			36,016
Investing activities:
Additions to property, plant and equipment	(704		)	(9,598		)	—			(10,302		)
Acquisitions, net of cash acquired	—			—			—			—
Proceeds from sale of equipment	4			977			—			981
Net cash used by investing activities	(700		)	(8,621		)	—			(9,321		)
Financing activities:
Proceeds from issuance of debt	250,000			—			—			250,000
Principal payments on long-term debt and notes payable	(228,180		)	(3,718		)	—			(231,898		)
Advances on revolving line of credit	60,000			—			—			60,000
Payments on revolving line of credit	(96,000		)	—			—			(96,000		)
Payments for debt issuance cost	(7,881		)	—			—			(7,881		)
Other, net	(28		)	—			—			(28		)
Net cash provided (used) by financing activities	(22,089		)	(3,718		)	—			(25,807		)
Net (decrease) increase in cash and cash equivalents	1,021			(133		)	—			888
Cash and cash equivalents, beginning of period	405			1,167			—			1,572
Cash and cash equivalents, end of period	$	1,426		$	1,034		$	—		$	2,460

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Goodwill and Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill [Table Text Block]

The following table summarizes the net carrying amount of goodwill by segment at September 30, 2015 and December 31, 2014, respectively:

							Engineering
	Aerostructures						Services						Total
	September 30,			December 31,			September 30,			December 31,			September 30,			December 31,
	2015			2014			2015			2014			2015			2014
Balance at:
Gross Goodwill	$	141,953		$	141,953		$	50,741		$	50,741		$	192,694		$	192,694
Accumulated impairment loss	(79,471		)	(79,471		)	(26,439		)	(26,439		)	(105,910		)	(105,910		)
Net Goodwill	$	62,482		$	62,482		$	24,302		$	24,302		$	86,784		$	86,784

Finite and infinite lived intangible assets

Intangible assets primarily consist of trademarks and customer intangibles.  The carrying values were as follows:

	September 30, 2015			December 31, 2014
Trademarks	$	778		$	778
Customer intangible assets	68,991			68,991
Other	1,274			1,274
Accumulated amortization	(23,372		)	(20,103		)
Intangible assets, net	$	47,671		$	50,940

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Restructuring (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Cost Remaining	$ 28		$ 28
Restructuring activities, total expense to be incurred	5,435		5,435
Restructuring and Related Cost, Cost Incurred to Date	5,407		5,407
Other Expense [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Cost Remaining	0		0
Restructuring activities, total expense to be incurred	115		115
Restructuring and Related Cost, Cost Incurred to Date	115		115
Employee Severance [Member]
Restructuring Cost and Reserve [Line Items]
Payments for Restructuring	1,165	$ 253	2,175	$ 1,441
Employee Severance [Member] | Precise Machine [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Cost Remaining	0		0
Restructuring activities, total expense to be incurred	615		615
Restructuring and Related Cost, Cost Incurred to Date	615		615
Employee Severance [Member] | Relocation of Machining Operations from Savannah Facility [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Cost Remaining	0		0
Restructuring activities, total expense to be incurred	47		47
Restructuring and Related Cost, Cost Incurred to Date	47		47
Employee Severance [Member] | Relocation of Machining Parts Operations from St. Charles Facility [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Cost Remaining	0		0
Restructuring activities, total expense to be incurred	378		378
Restructuring and Related Cost, Cost Incurred to Date	378		378
Employee Severance [Member] | Coweta Facility Closure [Member] [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Cost Remaining	28		28
Restructuring activities, total expense to be incurred	92		92
Restructuring and Related Cost, Cost Incurred to Date	64		64
Employee Severance [Member] | Greenville Facility Closure [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Cost Remaining	0		0
Restructuring activities, total expense to be incurred	376		376
Restructuring and Related Cost, Cost Incurred to Date	376		376
Employee Severance [Member] | Melbourne Australia Office Closure [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Cost Remaining	0		0
Restructuring activities, total expense to be incurred	34		34
Restructuring and Related Cost, Cost Incurred to Date	34		34
Employee Severance [Member] | Other Expense [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Cost Remaining	0		0
Restructuring activities, total expense to be incurred	3,529		3,529
Restructuring and Related Cost, Cost Incurred to Date	3,529		3,529
Lease Termination [Member] | Precise Machine [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Cost Remaining	0		0
Restructuring activities, total expense to be incurred	124		124
Restructuring and Related Cost, Cost Incurred to Date	124		124
Lease Termination [Member] | Greenville Facility Closure [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Cost Remaining	0		0
Restructuring activities, total expense to be incurred	125		125
Restructuring and Related Cost, Cost Incurred to Date	125		125
Selling, General and Administrative Expenses [Member] | Employee Severance [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring related expenses	1,575	765	2,368	2,288
Selling, General and Administrative Expenses [Member] | Employee Severance [Member] | Precise Machine [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring related expenses	0	(18)	0	287
Selling, General and Administrative Expenses [Member] | Employee Severance [Member] | Relocation of Machining Operations from Savannah Facility [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring related expenses	0	0	0	47
Selling, General and Administrative Expenses [Member] | Employee Severance [Member] | Relocation of Machining Parts Operations from St. Charles Facility [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring related expenses	0	0	378	0
Selling, General and Administrative Expenses [Member] | Employee Severance [Member] | Coweta Facility Closure [Member] [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring related expenses	64	0	64	0
Selling, General and Administrative Expenses [Member] | Employee Severance [Member] | Greenville Facility Closure [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring related expenses	501	0	501	0
Selling, General and Administrative Expenses [Member] | Employee Severance [Member] | Melbourne Australia Office Closure [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring related expenses	34	0	34	0
Selling, General and Administrative Expenses [Member] | Employee Severance [Member] | Other Expense [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring related expenses	$ 976	$ 783	$ 1,391	$ 1,954

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Long-term Debt and Capital Lease Obligations, Line of Credit Facility (Details)	3 Months Ended	9 Months Ended
	Sep. 30, 2015 USD ($)	Sep. 30, 2015 USD ($)
Line of Credit Facility [Line Items]
Maximum borrowing capacity	$ 90,000,000	$ 90,000,000
Reserve Against line of Credit	15,000,000	15,000,000
Line of Credit Facility, Remaining Borrowing Capacity	75,000,000	75,000,000
Letters of Credit Outstanding, Amount	1,138,000	1,138,000
Line of Credit Facility, Current Borrowing Capacity	$ 54,781,000	$ 54,781,000
Line of Credit Facility, Borrowing Capacity, Description	The maximum amount, less reserves, available for borrowing at levels below $30,000 is based on a sum of 45% of eligible receivables, 30% of eligible inventories and an additional amount of eligible equipment up to 20% of total borrowings under the facility. The maximum amount, less reserves, available for borrowing at levels above $30,000 is based on a sum of 75% of eligible receivables, 45% of eligible inventories and an additional amount of eligible equipment up to 20% of total borrowings under the facility.
Line of Credit Facility, Interest Rate During Period	4.60%
Commitment fee (in hundredths)		0.50%
Federal funds rate [Member]
Line of Credit Facility [Line Items]
Spread over reference rate (in hundredths)		0.50%
One Month Eurodollar [Member]
Line of Credit Facility [Line Items]
Spread over reference rate (in hundredths)		1.00%
Minimum [Member]
Line of Credit Facility [Line Items]
Commitment fee (in hundredths)		0.375%
Minimum [Member] | LIBOR [Member]
Line of Credit Facility [Line Items]
Spread over reference rate (in hundredths)		3.00%
Minimum [Member] | Alternate Base Rate [Member]
Line of Credit Facility [Line Items]
Spread over reference rate (in hundredths)		2.00%
Maximum [Member]
Line of Credit Facility [Line Items]
Commitment fee (in hundredths)		0.50%
Maximum [Member] | LIBOR [Member]
Line of Credit Facility [Line Items]
Spread over reference rate (in hundredths)		3.50%
Maximum [Member] | Alternate Base Rate [Member]
Line of Credit Facility [Line Items]
Spread over reference rate (in hundredths)		2.50%

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Inventories (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Mar. 31, 2015	Dec. 31, 2014
Inventories [Abstract]
Raw materials	$ 14,606		$ 16,712
Work in progress	23,915		22,960
Manufactured and purchased components	20,016		21,296
Finished goods	29,253		32,403
Product inventory	87,790		93,371
Capitalized contract costs	31,087		20,908
Total inventories	118,877		114,279
Loss Contingency, Estimate of Possible Loss	121		$ 0
paymentofcashconsideration	$ 1,700	$ 4,800

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Legal Contingencies (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Jun. 30, 2015	Sep. 30, 2015
Tech Lawsuit [Member]
Loss Contingencies [Line Items]
Loss Contingency, Settlement Agreement, Terms			Pursuant to the terms of the Settlement Agreements, (a) the Tech Lawsuit will be dismissed with prejudice, (b) $3,109 of the Escrow Funds will be disbursed to the Company and the remaining amount of Escrow Funds will be retained by Tech, (c) Tech has assumed an approximate $1,167 payment obligation of the Company to a predecessor owner of OMT that remained under a purchase agreement the Company acquired as part of the Company’s acquisition of Valent; (d) the Locked-up Shares will be released to Tech, excluding any portion needed to secure Tech’s obligation described in subsection (c) above; and (e) all parties entered into a mutual release of claims and disputes other than those based on certain environmental representations of the former equity owners of Valent under the Valent Purchase Agreement. The settlement also resulted in the Company assuming other liabilities of $484, recording the write-off of a previously recorded receivable of $389 and recording other expenses of $68.
Gain (Loss) Related to Litigation Settlement	$ 3,325
Missouri Attorney General [Member]
Loss Contingencies [Line Items]
Accrual for Environmental Loss Contingencies, Payments		$ 175
Environmental Protection Agency [Member]
Loss Contingencies [Line Items]
Accrual for Environmental Loss Contingencies, Payments		$ 694
Tech Investments LLC [Member]
Loss Contingencies [Line Items]
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners	5.50%		5.50%
Common Stock, Other Shares, Outstanding	783,798		783,798
Valent Aerostructures, LLC [Member]
Loss Contingencies [Line Items]
Escrow Deposit	$ 5,000		$ 5,000

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Business Segment Information (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015 USD ($)	Sep. 30, 2014 USD ($)	Sep. 30, 2015 USD ($) segment	Sep. 30, 2014 USD ($)
Segment Reporting [Abstract]
Number of reportable segments | segment			2
Information about reported segments on the basis used internally to evaluate segment performance [Abstract]
Net sales	$ 95,633	$ 97,335	$ 285,658	$ 299,023
Income from operations	6,072	6,663	16,246	14,580
Aerostructures [Member]
Information about reported segments on the basis used internally to evaluate segment performance [Abstract]
Net sales	85,119	82,914	249,661	249,101
Income from operations	8,918	7,888	20,063	14,010
Engineering Services [Member]
Information about reported segments on the basis used internally to evaluate segment performance [Abstract]
Net sales	10,826	14,714	36,818	51,235
Income from operations	(2,805)	(1,216)	(3,803)	666
Eliminations [Member]
Information about reported segments on the basis used internally to evaluate segment performance [Abstract]
Net sales	(312)	(293)	(821)	(1,313)
Income from operations	$ (41)	$ (9)	$ (14)	$ (96)

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Inventories

9 Months Ended

Sep. 30, 2015

Inventory Disclosure [Abstract]

Inventories

Inventories

Inventories consist of the following:

	September 30, 2015		December 31, 2014
Raw materials	$	14,606	$	16,712
Work in progress	23,915		22,960
Manufactured and purchased components	20,016		21,296
Finished goods	29,253		32,403
Product inventory	87,790		93,371
Capitalized contract costs	31,087		20,908
Total inventories	$	118,877	$	114,279

Inventories include capitalized contract costs relating to programs and contracts with long-term production cycles.  The Company believes these amounts will be fully recovered over the life of the contracts. Anticipated losses on contracts are recognized, when required, and reported as a reduction of related contract costs recorded in inventory or accounts receivable and as additional cost of sales or as a reduction to revenue. The company is engaged in a contract accounted for using the cost to cost method where estimated costs exceed the total contract revenue. A provision for the remaining estimated loss on this contract of $121 and $0 was reported as a reduction of accounts receivable in the Condensed Consolidated Balance Sheet at September 30, 2015 and December 31, 2014, respectively.

In January 2015, the Company signed an agreement with a key customer to form a strategically aligned partnership. This agreement extended the performance period of the statements of work for certain contracts with the customer and gives the Company preferred supplier status on certain future contracts. In accordance with the contract terms, the Company made cash consideration payments of $4,800 in January 2015 and $1,700 in June 2015. The payments were recorded as an increase to capitalized contract costs and are being amortized as a reduction to revenue over the life of the associated contracts.

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Derivative Financial Instruments (Details) $ in Thousands	3 Months Ended
	Sep. 30, 2014 USD ($)
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Derivative, Loss on Derivative	$ 793

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Earnings Per Common Share (Tables)

9 Months Ended

Sep. 30, 2015

Earnings Per Share [Abstract]

Calculation of basic and diluted earnings per share

The following table shows a reconciliation of the numerators and denominators used in calculating basic and diluted earnings per share.

	Three months ended				Nine months ended
	September 30,				September 30,
	2015		2014		2015			2014
Numerators
Net income (loss)	$	34	$	1,396	$	(1,053	)	$	(6,458	)
Denominators
Weighted average common shares - basic	12,907,938		12,740,034		12,851,456			12,704,568
Dilutive effect of restricted stock	142,300		147,329		—			—
Weighted average common shares - diluted	13,050,238		12,887,363		12,851,456			12,704,568
Basic earnings (loss) per share	$	0.00	$	0.11	$	(0.08	)	$	(0.51	)
Diluted earnings (loss) per share	$	0.00	$	0.11	$	(0.08	)	$	(0.51	)

For the nine months ended September 30, 2015 and September 30, 2014, 216,872 and 145,710 shares, respectively, are not included in the calculation of diluted earnings per share, as their inclusion would have been anti-dilutive. These securities could be dilutive in future periods.

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Derivative Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2015

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives Recognized in the AOCI and Earnings

The following amounts are included in OCI and earnings for the three and nine months ended September 30, 2015 and September 30, 2014:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
Interest Rate Derivatives in Cash Flow Hedging Relationship
Amount of Gain (Loss) Recognized in AOCI, net of tax, on Derivative (Effective Portion)	$	—	$	—	$	—	$	—
Amount of (Gain) Loss Reclassified from AOCI into Income (Effective Portion)	$	—	$	—	$	—	$	793

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Derivative Financial Instruments, Derivative Type (Details) - Interest Rate Swap [Member] - Cash Flow Hedging [Member] - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2015
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain (Loss) Recognized in AOCI, net of tax, on Derivative (Effective Portion)	$ 0	$ 0
Amount of (Gain) Loss Reclassified from AOCI into Income (Effective Portion)	$ 0	$ 0

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Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2015

LMI Aerospace, Inc. 2005 Long-Term Incentive Plan [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Summary of the activity for non-vested restricted stock awards

A summary of the activity for non-vested restricted stock awards under the 2005 Plan is presented below:

Restricted Stock Awards	Shares		Weighted Average Grant Date Fair Value
Outstanding at January 1, 2015	296,782		$	16.58
Granted	131,703		13.22
Vested	(131,986	)	17.57
Forfeited	(34,411	)	15.35
Outstanding at September 30, 2015	262,088		$	14.56

LMI Aerospace, Inc. 2015 Long-term Incentive Plan [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Summary of the activity for non-vested restricted stock awards

A summary of the activity for non-vested restricted stock awards under the 2015 Plan is presented below:

Restricted Stock Awards	Shares	Weighted Average Grant Date Fair Value
Outstanding at January 1, 2015	—	$	—
Granted	61,801	9.79
Vested	—	—
Forfeited	—	—
Outstanding at September 30, 2015	61,801	$	9.79

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Business Segment Information (Tables)

9 Months Ended

Sep. 30, 2015

Segment Reporting [Abstract]

Information about reported segments on the basis used internally to evaluate segment performance

The table below presents information about reported segments on the same basis used internally to evaluate segment performance:

	Three months ended September 30,						Nine months ended September 30,
	2015			2014			2015			2014
Net sales:
Aerostructures	$	85,119		$	82,914		$	249,661		$	249,101
Engineering Services	10,826			14,714			36,818			51,235
Eliminations	(312		)	(293		)	(821		)	(1,313		)
	$	95,633		$	97,335		$	285,658		$	299,023
Income from operations:
Aerostructures	$	8,918		$	7,888		$	20,063		$	14,010
Engineering Services	(2,805		)	(1,216		)	(3,803		)	666
Eliminations	(41		)	(9		)	(14		)	(96		)
	$	6,072		$	6,663		$	16,246		$	14,580

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Accounts Receivable, Net

9 Months Ended

Sep. 30, 2015

Receivables [Abstract]

Accounts Receivable, Net

Accounts Receivable, Net

Accounts receivable, net consists of the following:

	September 30, 2015			December 31, 2014
Trade receivables	$	49,741		$	53,081
Unbilled revenue	6,004			4,036
Other receivables (1)	5,870			1,581
	61,615			58,698
Less: Allowance for doubtful accounts	(226		)	(464		)
Accounts receivable, net	$	61,389		$	58,234

(1) At September 30, 2015, includes $4,266 related to the settlement of a lawsuit in the third quarter of 2015. See Note 14, "Legal Contingencies," in the Notes to the Condensed Consolidated Financial Statements.

Under contract accounting, unbilled revenues arise when the sales or revenues based on performance attainment, though appropriately recognized, cannot be billed yet under terms of the contract as of the balance sheet date. Included in unbilled revenue at September 30, 2015 and December 31, 2014 are $195 and $549, respectively, related to unpriced change orders or claims that are subject to negotiation. The final resolution of these unpriced items could result in either a favorable or unfavorable change in the revenue recognized to date on the associated contracts.

Accounts receivable expected to be collected after one year is not material.

The Company records changes in contract estimates using the cumulative catch-up method in accordance with the Revenue Recognition topic of the FASB Accounting Standards Codification.  Cumulative catch-up adjustments had the following impacts to operating income for the periods presented:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
Favorable adjustments	$	96		$	4,898		$	554		$	5,620
Unfavorable adjustments	(2,183		)	(545		)	(2,214		)	(727		)
Net favorable (unfavorable) operating income adjustments	$	(2,087	)	$	4,353		$	(1,660	)	$	4,893

The unfavorable cumulative catch-up adjustments recorded in the third quarter of 2015 primarily related to higher projected engineering costs, identified in the third quarter of 2015, which are required to meet customer specifications on the Mitsubishi Regional Jet design-build program. The adjustment related to this program was $1,738 and was recorded as a reduction of revenue in the Consolidated Statements of Comprehensive Income (Loss).

The favorable cumulative adjustments recorded in the third quarter of 2014 related to the reversal of a loss reserve. This adjustment was recognized after the Company settlement of an unpriced change order and secured more favorable future material pricing with respect to this contract. The impact of reversing the loss reserve was $4,602 and $5,267 for the three and nine months ended September 30, 2014 and was recorded in the cost of goods sold section of the Consolidated Statements of Comprehensive Income (Loss).

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Restructuring (Tables)

9 Months Ended

Sep. 30, 2015

Restructuring Cost and Reserve [Line Items]

Restructuring costs [Table Text Block]

	Three months ended					Nine months ended
	September 30, 2015		September 30, 2014			September 30, 2015		September 30, 2014
Precise Machine facility closure	$	—	$	(18	)	$	—	$	287
Savannah machining operations relocation	—		—			—		47
St. Charles machine parts operations relocation	—		—			378		—
Coweta machining facility closure	64		—			64		—
Greenville office closure	501		—			501		—
Australia office closure	34		—			34		—
Other employment separation activities	976		783			1,391		1,954
Total	$	1,575	$	765		$	2,368	$	2,288

Summary of incurred and expected restructuring charges

The following table summarizes the incurred and expected charges associated with these restructuring activities:

	Expense		Remaining		Total Expense
	Incurred through		Expense to be		Expected to be
	September 30, 2015		Incurred		Incurred
Employee severance arrangement - Precise	$	615	$	—	$	615
Employee severance arrangement - Savannah	47		—		47
Employee severance arrangement - St. Charles	378		—		378
Employee severance arrangement - Coweta	64		28		92
Employee severance arrangement - Greenville	376		—		376
Employee severance arrangement - Australia	34		—		34
Other employee severance arrangements	3,529		—		3,529
Lease termination costs - Precise	124		—		124
Lease termination costs - Greenville	125		—		125
Other restructuring expenses	115		—		115
Total	$	5,407	$	28	$	5,435

Schedule of restructuring activity

The following table summarizes the Company's restructuring activities during the nine months ended September 30, 2015:

	Employee
	Severance
Accrued restructuring balance as of December 31, 2014	$	739
Accrual additions	2,368
Cash payments	(2,175		)
Accrued restructuring balance as of September 30, 2015	$	932

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Other Assets (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Other Assets, Noncurrent [Abstract]
Deferred Finance Costs, Noncurrent, Net	$ 7,353	$ 8,600
Other Assets, Miscellaneous, Noncurrent	1,618	2,022
Other Assets, Noncurrent	8,971	$ 10,622
Debt Issuance Cost	$ 10,001

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Condensed Consolidated Balance Sheets (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014	Sep. 30, 2014	Dec. 31, 2013
Condensed Balance Sheet Statements, Captions [Line Items]
Cash and cash equivalents	$ 476	$ 7,927	$ 2,460	$ 1,572
Accounts receivable, net	61,389	58,234
Intercompany receivables	0	0
Inventories	118,877	114,279
Inventories	10,830	10,255
Deferred income taxes	3,775	3,913
Total current assets	195,347	194,608
Property, plant and equipment, net	101,102	99,482
Investments in subsidiaries	0	0
Goodwill	86,784	86,784
Intangible assets, net	47,671	50,940
Deferred income taxes	0	0
Other assets	8,971	10,622
Total assets	439,875	442,436
Accounts payable	17,961	21,755
Accrued expenses	24,634	26,072
Intercompany Payables	0	0
Deferred income taxes	0	0
Current installments of long-term debt and capital lease obligations	3,557	3,424
Total current liabilities	46,152	51,251
Long-term debt and capital lease obligations, less current installments	267,607	265,554
Other long-term liabilities	3,101	3,289
Deferred income taxes	4,155	4,207
Total long-term liabilities	274,863	273,050
Total shareholders’ equity	118,860	118,135
Total liabilities and shareholders' equity	439,875	442,436
LMIA(Guarantor Parent)
Condensed Balance Sheet Statements, Captions [Line Items]
Cash and cash equivalents	0	7,058	1,426	405
Accounts receivable, net	2,063	1,310
Intercompany receivables	178,197	145,980
Inventories	0	0
Inventories	8,342	8,325
Deferred income taxes	0	0
Total current assets	188,602	162,673
Property, plant and equipment, net	3,818	3,148
Investments in subsidiaries	378,500	368,587
Goodwill	0	0
Intangible assets, net	0	0
Deferred income taxes	149	118
Other assets	7,346	8,743
Total assets	578,415	543,269
Accounts payable	465	1,339
Accrued expenses	11,626	13,679
Intercompany Payables	197,753	164,158
Deferred income taxes	149	118
Current installments of long-term debt and capital lease obligations	148	335
Total current liabilities	210,141	179,629
Long-term debt and capital lease obligations, less current installments	249,110	245,174
Other long-term liabilities	304	331
Deferred income taxes	0	0
Total long-term liabilities	249,414	245,505
Total shareholders’ equity	118,860	118,135
Total liabilities and shareholders' equity	578,415	543,269
Guarantor Subsidiaries
Condensed Balance Sheet Statements, Captions [Line Items]
Cash and cash equivalents	476	869	1,034	1,167
Accounts receivable, net	59,326	56,924
Intercompany receivables	156,183	145,223
Inventories	118,877	114,279
Inventories	2,488	1,930
Deferred income taxes	3,924	4,031
Total current assets	341,274	323,256
Property, plant and equipment, net	97,284	96,334
Investments in subsidiaries	0	0
Goodwill	86,784	86,784
Intangible assets, net	47,671	50,940
Deferred income taxes	0	0
Other assets	1,625	1,879
Total assets	574,638	559,193
Accounts payable	17,496	20,416
Accrued expenses	13,008	12,393
Intercompany Payables	136,627	127,045
Deferred income taxes	0	0
Current installments of long-term debt and capital lease obligations	3,409	3,089
Total current liabilities	170,540	162,943
Long-term debt and capital lease obligations, less current installments	18,497	20,380
Other long-term liabilities	2,797	2,958
Deferred income taxes	4,304	4,325
Total long-term liabilities	25,598	27,663
Total shareholders’ equity	378,500	368,587
Total liabilities and shareholders' equity	574,638	559,193
Consolidating/Eliminating Entries
Condensed Balance Sheet Statements, Captions [Line Items]
Cash and cash equivalents	0	0	$ 0	$ 0
Accounts receivable, net	0	0
Intercompany receivables	(334,380)	(291,203)
Inventories	0	0
Inventories	0	0
Deferred income taxes	(149)	(118)
Total current assets	(334,529)	(291,321)
Property, plant and equipment, net	0	0
Investments in subsidiaries	(378,500)	(368,587)
Goodwill	0	0
Intangible assets, net	0	0
Deferred income taxes	(149)	(118)
Other assets	0	0
Total assets	(713,178)	(660,026)
Accounts payable	0	0
Accrued expenses	0	0
Intercompany Payables	(334,380)	(291,203)
Deferred income taxes	(149)	(118)
Current installments of long-term debt and capital lease obligations	0	0
Total current liabilities	(334,529)	(291,321)
Long-term debt and capital lease obligations, less current installments	0	0
Other long-term liabilities	0	0
Deferred income taxes	(149)	(118)
Total long-term liabilities	(149)	(118)
Total shareholders’ equity	(378,500)	(368,587)
Total liabilities and shareholders' equity	$ (713,178)	$ (660,026)

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Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Current assets:
Cash and cash equivalents	$ 476	$ 7,927
Accounts receivable, net	61,389	58,234
Inventories	118,877	114,279
Prepaid expenses and other current assets	10,830	10,255
Deferred income taxes	3,775	3,913
Total current assets	195,347	194,608
Property, plant and equipment, net	101,102	99,482
Goodwill	86,784	86,784
Intangible assets, net	47,671	50,940
Other assets	8,971	10,622
Total assets	439,875	442,436
Current liabilities:
Accounts payable	17,961	21,755
Accrued expenses	24,634	26,072
Current installments of long-term debt and capital lease obligations	3,557	3,424
Total current liabilities	46,152	51,251
Long-term liabilities:
Long-term debt and capital lease obligations, less current installments	267,607	265,554
Other long-term liabilities	3,101	3,289
Deferred income taxes	4,155	4,207
Total long-term liabilities	274,863	273,050
Shareholders’ equity:
Common stock, $0.02 par value per share; authorized 28,000,000 shares; issued 13,287,688 and 13,089,003 shares at September 30, 2015 and December 31, 2014, respectively	266	262
Preferred stock, $0.02 par value per share; authorized 2,000,000 shares; none issued at either date	0	0
Additional paid-in capital	97,239	95,460
Accumulated other comprehensive loss	(201)	(170)
Treasury stock, at cost, 30,767 and 28,396 shares at September 30, 2015 and December 31, 2014, respectively	(333)	(359)
Retained earnings	21,889	22,942
Total shareholders’ equity	118,860	118,135
Total liabilities and shareholders' equity	$ 439,875	$ 442,436

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Earnings Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Numerators [Abstract]
Net loss	$ 34	$ 1,396	$ (1,053)	$ (6,458)
Denominators [Abstract]
Weighted average common shares - basic (in shares)	12,907,938	12,740,034	12,851,456	12,704,568
Dilutive effect of restricted stock (in shares)	142,300	147,329	0	0
Weighted average common shares - diluted (in shares)	13,050,238	12,887,363	12,851,456	12,704,568
Basic earnings (loss) per share	$ 0.00	$ 0.11	$ (0.08)	$ (0.51)
Diluted earnings (loss) per share	$ 0.00	$ 0.11	$ (0.08)	$ (0.51)
Antidilutive securities excluded from computation of earnings per share (in shares)			216,872	145,710

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Operating activities:
Net loss	$ (1,053)	$ (6,458)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	15,018	17,002
Share-based Compensation	1,424	1,442
Write off of Deferred Debt Issuance Cost	0	8,464
Payments for Other Operating Activities	0	(793)
Deferred Income Tax Expense (Benefit)	(78)	147
Other non-cash items	(94)	(87)
Changes in operating assets and liabilities:
Accounts receivable	(3,238)	8,187
Inventories	(4,993)	2,079
Prepaid expenses and other assets	1,914	2,003
Current income taxes	(75)	(2,899)
Accounts payable	(1,754)	785
Accrued expenses	(1,354)	6,144
Net cash provided by operating activities	5,717	36,016
Investing activities:
Additions to property, plant and equipment	(15,305)	(10,302)
Proceeds from sale of property, plant and equipment	260	981
Net cash used by investing activities	(15,045)	(9,321)
Proceeds from Issuance of Secured Debt	0	250,000
Financing activities:
Principal payments on long-term debt and notes payable	(1,814)	(231,898)
Advances on revolving line of credit	93,500	60,000
Payments on revolving line of credit	(89,500)	(96,000)
Payments for debt issuance cost	(309)	(7,881)
Other, net	0	(28)
Net cash provided (used) by financing activities	1,877	(25,807)
Net (decrease) increase in cash and cash equivalents	(7,451)	888
Cash and cash equivalents, beginning of period	7,927	1,572
Cash and cash equivalents, end of period	476	2,460
Supplemental disclosure of noncash transactions:
Defined contribution plan funding in Company stock	$ 710	$ 848

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Condensed Consolidating Financial Statements statement of cash flows (Tables)

9 Months Ended

Sep. 30, 2015

Sep. 30, 2014

Statement of Cash Flows [Abstract]

Condensed Cash Flow Statement [Table Text Block]

	LMIA(Guarantor Parent)			Guarantor Subsidiaries			Consolidating/Eliminating Entries			Consolidated
Operating activities:
Net (loss)/income	$	(1,083	)	$	9,945		$	(9,915	)	$	(1,053	)
Adjustments for non-cash items	(7,572		)	13,927			9,915			16,270
Net changes in operating assets and liabilities, net of acquired businesses	(1,616		)	(7,884		)	—			(9,500		)
Intercompany activity	1,379			(1,379		)	—			—
Net cash (used)/provided by operating activities	(8,892		)	14,609			—			5,717
Investing activities:
Additions to property, plant and equipment	(1,606		)	(13,699		)	—			(15,305		)
Proceeds from sale of equipment	—			260			—			260
Net cash used by investing activities	(1,606		)	(13,439		)	—			(15,045		)
Financing activities:
Principal payments on long-term debt and notes payable	(251		)	(1,563		)	—			(1,814		)
Advances on revolving line of credit	93,500			—			—			93,500
Payments on revolving line of credit	(89,500		)	—			—			(89,500		)
Payments for debt issuance cost	(309		)	—			—			(309		)
Net cash provided (used) by financing activities	3,440			(1,563		)	—			1,877
Net (decrease) increase in cash and cash equivalents	(7,058		)	(393		)	—			(7,451		)
Cash and cash equivalents, beginning of period	7,058			869			—			7,927
Cash and cash equivalents, end of period	$	—		$	476		$	—		$	476

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

For the Nine Months Ended September 30, 2015

	LMIA(Guarantor Parent)			Guarantor Subsidiaries			Consolidating/Eliminating Entries			Consolidated
Operating activities:
Net (loss)/income	$	(1,083	)	$	9,945		$	(9,915	)	$	(1,053	)
Adjustments for non-cash items	(7,572		)	13,927			9,915			16,270
Net changes in operating assets and liabilities, net of acquired businesses	(1,616		)	(7,884		)	—			(9,500		)
Intercompany activity	1,379			(1,379		)	—			—
Net cash (used)/provided by operating activities	(8,892		)	14,609			—			5,717
Investing activities:
Additions to property, plant and equipment	(1,606		)	(13,699		)	—			(15,305		)
Proceeds from sale of equipment	—			260			—			260
Net cash used by investing activities	(1,606		)	(13,439		)	—			(15,045		)
Financing activities:
Principal payments on long-term debt and notes payable	(251		)	(1,563		)	—			(1,814		)
Advances on revolving line of credit	93,500			—			—			93,500
Payments on revolving line of credit	(89,500		)	—			—			(89,500		)
Payments for debt issuance cost	(309		)	—			—			(309		)
Net cash provided (used) by financing activities	3,440			(1,563		)	—			1,877
Net (decrease) increase in cash and cash equivalents	(7,058		)	(393		)	—			(7,451		)
Cash and cash equivalents, beginning of period	7,058			869			—			7,927
Cash and cash equivalents, end of period	$	—		$	476		$	—		$	476

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

For the Nine Months Ended September 30, 2014

	LMIA(Guarantor Parent)			Guarantor Subsidiaries			Consolidating/Eliminating Entries			Consolidated
Operating activities:
Net (loss)/income	$	(6,475	)	$	9,589		$	(9,572	)	$	(6,458	)
Adjustments for non-cash items	2,195			14,408			9,572			26,175
Net changes in operating assets and liabilities, net of acquired businesses	21,296			(4,997		)	—			16,299
Intercompany activity	6,794			(6,794		)	—			—
Net cash (used)/provided by operating activities	23,810			12,206			—			36,016
Investing activities:
Additions to property, plant and equipment	(704		)	(9,598		)	—			(10,302		)
Acquisitions, net of cash acquired	—			—			—			—
Proceeds from sale of equipment	4			977			—			981
Net cash used by investing activities	(700		)	(8,621		)	—			(9,321		)
Financing activities:
Proceeds from issuance of debt	250,000			—			—			250,000
Principal payments on long-term debt and notes payable	(228,180		)	(3,718		)	—			(231,898		)
Advances on revolving line of credit	60,000			—			—			60,000
Payments on revolving line of credit	(96,000		)	—			—			(96,000		)
Payments for debt issuance cost	(7,881		)	—			—			(7,881		)
Other, net	(28		)	—			—			(28		)
Net cash provided (used) by financing activities	(22,089		)	(3,718		)	—			(25,807		)
Net (decrease) increase in cash and cash equivalents	1,021			(133		)	—			888
Cash and cash equivalents, beginning of period	405			1,167			—			1,572
Cash and cash equivalents, end of period	$	1,426		$	1,034		$	—		$	2,460

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Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2015

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements.  The year-end condensed balance sheet data was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America.  In the opinion of management, all adjustments considered necessary for a fair representation have been included.  Operating results for the nine months ended September 30, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015.  These financial statements should be read in conjunction with the consolidated financial statements and accompanying footnotes included in the  Annual Report on Form 10-K of LMI Aerospace, Inc. (the "Company”) for the year ended December 31, 2014, as filed with the Securities and Exchange Commission on March 16, 2015.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions. These estimates and assumptions affect the reported amounts in the financial statements and accompanying notes.  Actual results could differ from these estimates.

Recent Accounting Standards

Recent Accounting Standards

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606). On July 9, 2015 the FASB voted to approve a one year delay of the effective date and to permit companies to voluntarily adopt the new standard as of the original effective date. The new standard is effective for reporting periods beginning after December 15, 2017. The standard will supersede existing revenue recognition guidance, including industry-specific guidance, and will provide companies with a single revenue recognition model for recognizing revenue from contracts with customers. The standard requires revenue to be recognized when promised goods or services are transferred to customers in amounts that reflect the consideration to which the company expects to be entitled in exchange for those goods or services. Adoption of the new rules could affect the timing of revenue recognition for certain transactions. The two permitted transition methods under the new standard are the full retrospective method, in which case the standard would be applied to each prior reporting period presented, or the modified retrospective method, in which case the cumulative effect of applying the standard would be recognized at the date of initial application. The provisions of this new guidance are effective as of the beginning of the Company’s first quarter of 2018. The Company is currently evaluating the transition method to be used and the impact of adoption of this standard on its consolidated financial statements.

In April 2014, the FASB issued ASU 2014-08, "Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity." The amendments in this update change the requirements for reporting discontinued operations. A discontinued operation may include a component of an entity or a group of components of an entity, or a business or nonprofit activity. A disposal of a component of an entity or a group of components of an entity is required to be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity's operations and financial results and when the component or group of components meets the criteria to be classified as held for sale, is disposed by sale or is disposed of by other than by sale (for example, by abandonment or in a distribution to owners in a spinoff). ASU 2014-8 is effective prospectively for fiscal years, and interim reporting periods within those years, beginning after December 15, 2014.  The Company has no present activity that would be impacted by this new standard.

In April 2015, the FASB issued ASU 2015-03, "Interest-Imputation of Interest", which requires that debt issuance costs related to a debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. The recognition and measurement guidance of debt issuance costs are not affected by the amendments in this update. FASB ASU 2015-03 is effective for annual and interim periods beginning after December 15, 2015 and requires the Company to apply the new guidance on a retrospective basis upon adoption. The adoption of FASB ASU 2015-03 is not expected to have a material impact on the Company’s consolidated financial statements.

All other issued but not yet effective accounting pronouncements are not expected to have a material impact on our Condensed Consolidated Financial Statements.

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Accounts Receivable, Net (Details) - USD ($) $ in Thousands	3 Months Ended			9 Months Ended
	Sep. 30, 2015		Sep. 30, 2014	Sep. 30, 2015		Sep. 30, 2014	Dec. 31, 2014
Entity Information [Line Items]
Litigation Settlement Receivable	$ 4,266			$ 4,266
Trade receivables	49,741			49,741			$ 53,081
Unbilled revenue	6,004			6,004			4,036
Other receivables	5,870	[1]		5,870	[1]		1,581
Accounts receivable, gross	61,615			61,615			58,698
Less: Allowance for doubtful accounts	(226)			(226)			(464)
Accounts receivable, net	61,389			61,389			58,234
Inventory Amount, Unpriced Change Orders for Long-term Contracts or Programs	195			195			$ 549
Change in Accounting Estimate [Abstract]
Favorable adjustments	96		$ 4,898	554		$ 5,620
Unfavorable adjustments	(2,183)		(545)	(2,214)		(727)
Net operating income adjustments	(2,087)		4,353	$ (1,660)		4,893
Mitsubishi Regional Jet [Member]
Change in Accounting Estimate [Abstract]
Unfavorable adjustments	$ 1,738
Valent Aerostructures, LLC [Member]
Change in Accounting Estimate [Abstract]
Favorable adjustments			$ 4,602			$ 5,267

[1] (1) At September 30, 2015, includes $4,266 related to the settlement of a lawsuit in the third quarter of 2015. See Note 14, "Legal Contingencies," in the Notes to the Condensed Consolidated Financial Statements.

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Inventories (Tables)

9 Months Ended

Sep. 30, 2015

Inventory Disclosure [Abstract]

Inventories

Inventories consist of the following:

	September 30, 2015		December 31, 2014
Raw materials	$	14,606	$	16,712
Work in progress	23,915		22,960
Manufactured and purchased components	20,016		21,296
Finished goods	29,253		32,403
Product inventory	87,790		93,371
Capitalized contract costs	31,087		20,908
Total inventories	$	118,877	$	114,279

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Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2015

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements.  The year-end condensed balance sheet data was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America.  In the opinion of management, all adjustments considered necessary for a fair representation have been included.  Operating results for the nine months ended September 30, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015.  These financial statements should be read in conjunction with the consolidated financial statements and accompanying footnotes included in the  Annual Report on Form 10-K of LMI Aerospace, Inc. (the "Company”) for the year ended December 31, 2014, as filed with the Securities and Exchange Commission on March 16, 2015.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions. These estimates and assumptions affect the reported amounts in the financial statements and accompanying notes.  Actual results could differ from these estimates.

Recent Accounting Standards

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606). On July 9, 2015 the FASB voted to approve a one year delay of the effective date and to permit companies to voluntarily adopt the new standard as of the original effective date. The new standard is effective for reporting periods beginning after December 15, 2017. The standard will supersede existing revenue recognition guidance, including industry-specific guidance, and will provide companies with a single revenue recognition model for recognizing revenue from contracts with customers. The standard requires revenue to be recognized when promised goods or services are transferred to customers in amounts that reflect the consideration to which the company expects to be entitled in exchange for those goods or services. Adoption of the new rules could affect the timing of revenue recognition for certain transactions. The two permitted transition methods under the new standard are the full retrospective method, in which case the standard would be applied to each prior reporting period presented, or the modified retrospective method, in which case the cumulative effect of applying the standard would be recognized at the date of initial application. The provisions of this new guidance are effective as of the beginning of the Company’s first quarter of 2018. The Company is currently evaluating the transition method to be used and the impact of adoption of this standard on its consolidated financial statements.

In April 2014, the FASB issued ASU 2014-08, "Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity." The amendments in this update change the requirements for reporting discontinued operations. A discontinued operation may include a component of an entity or a group of components of an entity, or a business or nonprofit activity. A disposal of a component of an entity or a group of components of an entity is required to be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity's operations and financial results and when the component or group of components meets the criteria to be classified as held for sale, is disposed by sale or is disposed of by other than by sale (for example, by abandonment or in a distribution to owners in a spinoff). ASU 2014-8 is effective prospectively for fiscal years, and interim reporting periods within those years, beginning after December 15, 2014.  The Company has no present activity that would be impacted by this new standard.

In April 2015, the FASB issued ASU 2015-03, "Interest-Imputation of Interest", which requires that debt issuance costs related to a debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. The recognition and measurement guidance of debt issuance costs are not affected by the amendments in this update. FASB ASU 2015-03 is effective for annual and interim periods beginning after December 15, 2015 and requires the Company to apply the new guidance on a retrospective basis upon adoption. The adoption of FASB ASU 2015-03 is not expected to have a material impact on the Company’s consolidated financial statements.

All other issued but not yet effective accounting pronouncements are not expected to have a material impact on our Condensed Consolidated Financial Statements.

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Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Sep. 30, 2015	Dec. 31, 2014
Shareholders’ equity:
Common stock, par value (in dollars per share)	$ 0.02	$ 0.02
Common stock, authorized shares (in shares)	28,000,000	28,000,000
Common stock, shares issued (in shares)	13,287,688	13,089,003
Preferred stock, par value (in dollars per share)	$ 0.02	$ 0.02
Preferred stock, authorized shares (in shares)	2,000,000	2,000,000
Preferred stock, shares issued (in shares)	0	0
Treasury stock, at cost (in shares)	30,767	28,396

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Customer Concentration

9 Months Ended

Sep. 30, 2015

Risks and Uncertainties [Abstract]

Customer Concentration

Customer Concentration

Direct sales, through both of the Company’s business segments, to our largest customer, Spirit Aerosystems (“Spirit”), accounted for 34.4% and 34.4% of the Company’s total revenues for the three months ended September 30, 2015 and 2014, respectively. Direct sales to Spirit accounted for 34.8% and 33.7% of the Company's total revenues for the nine months ended September 30, 2015 and 2014, respectively. Accounts receivable balances related to Spirit were 26.9% and 33.3% of the Company’s total accounts receivable balance at September 30, 2015 and December 31, 2014, respectively.

Direct sales, through both of the Company’s business segments, to our second largest customer, Gulfstream Aerospace Corporation, a General Dynamics company (“Gulfstream”), accounted for 15.9% and 14.3% of the Company’s total revenues for the three months ended September 30, 2015 and 2014, respectively.  Direct sales to Gulfstream accounted for 14.3% and 15.3% of the Company's total revenues for the nine months ended September 30, 2015 and 2014, respectively. Accounts receivable balances related to Gulfstream were 15.7% and 13.1% of the Company’s total accounts receivable balance at September 30, 2015 and December 31, 2014, respectively.

Direct sales, through both of the Company’s business segments, to our third largest customer, The Boeing Company, (“Boeing”), accounted for 12.6% and 10.0% of the Company’s total revenues for the three months ended September 30, 2015 and 2014, respectively. Direct sales to Boeing accounted for 11.4% and 10.9% of the Company's total revenues for the nine months ended September 30, 2015 and 2014, respectively. Accounts receivable balances resulting from direct sales to Boeing were 6.2% and 7.4% of the Company’s total accounts receivable balance at September 30, 2015 and December 31, 2014, respectively.

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Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2015	Nov. 02, 2015
Document and Entity Information [Abstract]
Entity Registrant Name	LMI AEROSPACE INC
Entity Central Index Key	0001059562
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		13,256,922
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q3
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2015

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Income Taxes

9 Months Ended

Sep. 30, 2015

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The Company records income tax expense or benefit each quarter based on its estimated full-year effective tax rate. Income tax expense of $249 and $408 were recognized in the three and nine months ended September 30, 2015, respectively. Income tax benefit of $754 and $2,557 were recognized in the three and nine months ended September 30, 2014, respectively. The Company's tax benefit in the three and nine months ended September 30, 2014 reflects a net tax benefit of $2,582 related to the decision to carry back the net operating loss recognized in 2013. The Company continues to carry a full valuation allowance on its net deferred tax assets, which totaled $13,588 and $12,676 at September 30, 2015 and December 31, 2014, respectively. At September 30, 2015, the Company has recorded a receivable of $7,069 primarily related to the filing of the 2014 federal tax return.

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Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Sales and service revenue
Product sales	$ 84,114	$ 81,693	$ 246,730	$ 245,349
Service revenue	11,519	15,642	38,928	53,674
Net sales	95,633	97,335	285,658	299,023
Cost of sales and service revenue
Cost of product sales	67,514	61,535	197,211	195,170
Cost of service revenue	11,493	13,757	35,853	45,215
Cost of sales	79,007	75,292	233,064	240,385
Gross profit	16,626	22,043	52,594	58,638
Selling, general and administrative expenses	8,979	14,615	33,980	41,770
Restructuring expense	1,575	765	2,368	2,288
Income from operations	6,072	6,663	16,246	14,580
Other (expense) income:
Interest expense	(5,653)	(5,946)	(16,802)	(23,800)
Other, net	(136)	(75)	(89)	205
Total other expense	(5,789)	(6,021)	(16,891)	(23,595)
Income (loss) before income taxes	283	642	(645)	(9,015)
Provision (benefit) for income taxes	249	(754)	408	(2,557)
Net income (loss)	34	1,396	(1,053)	(6,458)
Other comprehensive income (loss):
Change in foreign currency translation adjustment	(32)	(112)	(31)	(18)
Reclassification adjustment for losses on interest rate hedges included in net earnings, net of tax of $0, $0, $157 and $0	0	0	0	278
Total comprehensive income (loss)	$ 2	$ 1,284	$ (1,084)	$ (6,198)
Amounts per common share:
Net income (loss) per common share	$ 0.00	$ 0.11	$ (0.08)	$ (0.51)
Net income (loss) per common share assuming dilution	$ 0.00	$ 0.11	$ (0.08)	$ (0.51)
Weighted average common shares (in shares)	12,907,938	12,740,034	12,851,456	12,704,568
Weighted average dilutive common shares outstanding (in shares)	13,050,238	12,887,363	12,851,456	12,704,568

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Long-term Debt and Capital Lease Obligations

9 Months Ended

Sep. 30, 2015

Debt Disclosure [Abstract]

Long-term Debt and Capital Lease Obligations

Long-term Debt and Capital Lease Obligations

Long-term debt and capital lease obligations consist of the following:

	September 30, 2015		December 31, 2014
Second priority senior secured notes at a fixed rate of 7.375% at September 30, 2015	$	245,000	$	245,000
Revolver under credit agreement, variable	4,000		—
Missouri IRBs at fixed rate of 2.80% at September 30, 2015 and December 31, 2014	7,011		7,334
Capital leases, at fixed rates ranging from 2.04% to 7.73% at September 30, 2015 and December 31, 2014	12,125		13,288
Notes payable, principal and interest payable monthly, at fixed rates up to 2.56% at September 30, 2015 and December 31, 2014, respectively	3,028		3,356
Total debt	$	271,164	$	268,978
Less current installments	3,557		3,424
Total long-term debt and capital lease obligations	$	267,607	$	265,554

At September 30, 2015, the Company had $245,000 in outstanding second-priority senior secured notes maturing on June 19, 2019. Obligations under these notes are secured by substantially all of the Company’s assets and bear interest at 7.375%, paid semi-annually in January and July.

The Company's revolving credit agreement provides for a revolving credit facility of up to $90,000.  Under the agreement, the co-collateral agents may establish a reserve against the facility. At September 30, 2015, the reserve established was $15,000, which reduced the maximum availability to $75,000. Based on the amount of eligible assets at September 30, 2015 and outstanding letters of credit of $1,138, available borrowings were further reduced to $54,781. The maximum amount, less reserves, available for borrowing at levels below $30,000 is based on a sum of 45% of eligible receivables, 30% of eligible inventories and an additional amount of eligible equipment up to 20% of total borrowings under the facility. The maximum amount, less reserves, available for borrowing at levels above $30,000 is based on a sum of 75% of eligible receivables, 45% of eligible inventories and an additional amount of eligible equipment up to 20% of total borrowings under the facility. Borrowings under the facility are secured by a first lien on substantially all of the Company’s assets and bear interest at either the LIBOR rate plus a margin of 3.00% to 3.50% or the alternate base rate, which is the highest of the following plus a margin of 2.00% to 2.50%, respectively, with the applicable margins for the revolving credit facility subject to a grid based on the average availability ratio of the Company for the most recently completed quarter:

•Prime rate,

•Federal funds rate plus 0.5%, or,

•The adjusted Eurodollar rate for an interest period of one month plus 1.0%.

For both the three and the nine months ended September 30, 2015, the actual interest rate incurred for the revolving credit facility was 4.6%.

The Company is required to pay a commitment fee of between 0.375% and 0.5% per annum on the unused portion of the revolving credit facility, depending on the average revolver usage during the period as compared to the total available borrowings under the facility. At September 30, 2015, the commitment fee required was 0.5%.

The revolving credit loan facility matures on the earlier of the fifth year anniversary date of June 19, 2019 or the date that is 91 days prior to the maturity date of the senior secured notes unless the notes are repaid, refinanced or otherwise satisfied in full. The maturity dates are subject to acceleration upon occurrence of an event of default. An event of default under the revolving credit agreement includes, among other things, failure to pay any material indebtedness, acceleration of payments by any lender prior to scheduled maturity, or judgments rendered against the Company requiring payments at or above certain levels.

The credit agreement contains a covenant that requires us to comply with a maximum first priority debt to EBITDA ratio on a quarterly basis. In addition, the agreement also contains certain restrictive covenants that limit and in some circumstances prohibit our ability to, among other things, incur additional debt, sell, lease or transfer our assets, make investments, guarantee debt or obligations, create liens, and enter into certain merger, consolidation or other reorganization transactions.  These restrictive covenants prohibit the Company from paying dividends. These restrictions could limit our ability to obtain future financing, make acquisitions or needed capital expenditures, withstand any current or future downturns in our business or the economy in general, conduct operations or otherwise take advantage of business opportunities that may arise, any of which could place us at a competitive disadvantage relative to our competitors that have less debt and are not subject to such restrictions.

At September 30, 2015, the Company was in compliance with all of its covenants and expects to be in compliance with its covenants in future periods.  If the Company fails to meet any covenants in the credit agreement, the Company would not be in compliance with its credit agreement and the lenders would be entitled to exercise various rights, including causing the amounts outstanding under the revolving credit facility to become immediately due and payable.

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Other Assets (Notes)

9 Months Ended

Sep. 30, 2015

Other Assets, Noncurrent [Abstract]

Other Assets Disclosure [Text Block]

Other assets consist of the following:

	September 30, 2015		December 31, 2014
Debt issuance cost, net	$	7,353	$	8,600
Other	1,618		2,022
Total other assets	$	8,971	$	10,622

In connection with the financing of its long-term indebtedness, the Company incurred debt issuance costs of $10,001. These costs are being amortized on a straight-line basis, which approximates the effective interest method, over the term of the indebtedness.

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Accounts Receivable, Net (Tables)

9 Months Ended

Sep. 30, 2015

Receivables [Abstract]

Schedule of accounts receivable, net

Accounts receivable, net consists of the following:

	September 30, 2015			December 31, 2014
Trade receivables	$	49,741		$	53,081
Unbilled revenue	6,004			4,036
Other receivables (1)	5,870			1,581
	61,615			58,698
Less: Allowance for doubtful accounts	(226		)	(464		)
Accounts receivable, net	$	61,389		$	58,234

(1) At September 30, 2015, includes $4,266 related to the settlement of a lawsuit in the third quarter of 2015. See Note 14, "Legal Contingencies," in the Notes to the Condensed Consolidated Financial Statements.

Impact of operating income

Cumulative catch-up adjustments had the following impacts to operating income for the periods presented:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
Favorable adjustments	$	96		$	4,898		$	554		$	5,620
Unfavorable adjustments	(2,183		)	(545		)	(2,214		)	(727		)
Net favorable (unfavorable) operating income adjustments	$	(2,087	)	$	4,353		$	(1,660	)	$	4,893

The unfavorable cumulative catch-up adjustments recorded in the third quarter of 2015 primarily related to higher projected engineering costs, identified in the third quarter of 2015, which are required to meet customer specifications on the Mitsubishi Regional Jet design-build program. The adjustment related to this program was $1,738 and was recorded as a reduction of revenue in the Consolidated Statements of Comprehensive Income (Loss).

The favorable cumulative adjustments recorded in the third quarter of 2014 related to the reversal of a loss reserve. This adjustment was recognized after the Company settlement of an unpriced change order and secured more favorable future material pricing with respect to this contract. The impact of reversing the loss reserve was $4,602 and $5,267 for the three and nine months ended September 30, 2014 and was recorded in the cost of goods sold section of the Consolidated Statements of Comprehensive Income (Loss).

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Restructuring

9 Months Ended

Sep. 30, 2015

Restructuring and Related Activities [Abstract]

Restructuring

Restructuring

The Company committed to and implemented various restructuring plans in 2014 and 2015. Included in those plans were the closure of the Precise Machine facility in Fort Worth, Texas, and the relocation of the machining operations in both Savannah, Georgia and St. Charles, Missouri to other facilities within the Company. Other employment separation activities were also implemented as part of the Company's overall reorganization and cost reduction initiatives. In addition, in the third quarter of 2015, the Company committed to the closing of its Melbourne, Australia and Greenville, South Carolina engineering offices, the elimination of additional management positions within the Engineering Services segment and the closure of its Coweta, Oklahoma manufacturing facility. The expense associated with these plans was reflected in the selling, general, and administrative section on a separate line of the Condensed Consolidated Statements of Comprehensive Income (Loss). The following table summarizes the incurred charges associated with these restructuring activities:

	Three months ended					Nine months ended
	September 30, 2015		September 30, 2014			September 30, 2015		September 30, 2014
Precise Machine facility closure	$	—	$	(18	)	$	—	$	287
Savannah machining operations relocation	—		—			—		47
St. Charles machine parts operations relocation	—		—			378		—
Coweta machining facility closure	64		—			64		—
Greenville office closure	501		—			501		—
Australia office closure	34		—			34		—
Other employment separation activities	976		783			1,391		1,954
Total	$	1,575	$	765		$	2,368	$	2,288

The Savannah, Georgia and Precise plans were completed in the second quarter of 2014. The St. Charles and Greenville plans were completed in the second and third quarter of 2015, respectively. The Company expects the Coweta and Australia plans to be completed in the fourth quarter of 2015.

Cash payments were made associated with these restructuring plans of $1,165 and $253 in the three months ended September 30, 2015 and September 30, 2014, respectively and $2,175 and $1,441 in the nine months ended September 30, 2015 and September 30, 2014, respectively.

The following table summarizes the incurred and expected charges associated with these restructuring activities:

	Expense		Remaining		Total Expense
	Incurred through		Expense to be		Expected to be
	September 30, 2015		Incurred		Incurred
Employee severance arrangement - Precise	$	615	$	—	$	615
Employee severance arrangement - Savannah	47		—		47
Employee severance arrangement - St. Charles	378		—		378
Employee severance arrangement - Coweta	64		28		92
Employee severance arrangement - Greenville	376		—		376
Employee severance arrangement - Australia	34		—		34
Other employee severance arrangements	3,529		—		3,529
Lease termination costs - Precise	124		—		124
Lease termination costs - Greenville	125		—		125
Other restructuring expenses	115		—		115
Total	$	5,407	$	28	$	5,435

The following table summarizes the Company's restructuring activities during the nine months ended September 30, 2015:

	Employee
	Severance
Accrued restructuring balance as of December 31, 2014	$	739
Accrual additions	2,368
Cash payments	(2,175		)
Accrued restructuring balance as of September 30, 2015	$	932

Accrued restructuring of $932 at September 30, 2015 is expected to be paid over the next three quarters.

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Stock-Based Compensation

9 Months Ended

Sep. 30, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation

Stock-Based Compensation

On July 7, 2005, the Company’s shareholders approved the LMI Aerospace, Inc. 2005 Long-term Incentive Plan (the “ 2005 Plan”). The 2005 Plan provided for the grant of non-qualified stock options, incentive stock options, shares of restricted stock, restricted stock units, stock appreciation rights, performance awards and other share-based grants and cash bonus awards to employees and directors.  All share-based grants or awards were subject to a time-based vesting schedule.

All outstanding share-based grants are in the form of restricted stock. A summary of the activity for non-vested restricted stock awards under the 2005 Plan is presented below:

Restricted Stock Awards	Shares		Weighted Average Grant Date Fair Value
Outstanding at January 1, 2015	296,782		$	16.58
Granted	131,703		13.22
Vested	(131,986	)	17.57
Forfeited	(34,411	)	15.35
Outstanding at September 30, 2015	262,088		$	14.56

Common stock compensation expense related to restricted stock awards granted under the 2005 Plan was $224 and $765 for the three months ended September 30, 2015 and 2014, respectively and $1,154 and $1,442 for the nine months ended September 30, 2015 and 2014, respectively.

Total unrecognized compensation costs related to non-vested, share-based awards granted or awarded under the 2005 Plan were $2,023 and $2,036 at September 30, 2015 and December 31, 2014, respectively.  These costs are expected to be recognized over a weighted average period of 1.8 years and 1.2 years, at September 30, 2015 and December 31, 2014, respectively.

As of July 7, 2015 the Company was no longer able to grant awards under the 2005 Plan.

On June 24, 2015, the Company's shareholders approved the LMI Aerospace, Inc. 2015 Incentive Compensation Plan (the “2015 Plan”), which became effective on July 1, 2015. Under the 2015 Plan, the Company, through the Compensation Committee of the Board of Directors, may, at its discretion, grant stock options, restricted shares of common stock, and other various stock-based awards to directors, officers, employees and consultants. A total of 750,000 shares of the Company’s common stock have been reserved for issuance under the 2015 Plan.

All outstanding share-based grants are in the form of restricted stock. A summary of the activity for non-vested restricted stock awards under the 2015 Plan is presented below:

Restricted Stock Awards	Shares	Weighted Average Grant Date Fair Value
Outstanding at January 1, 2015	—	$	—
Granted	61,801	9.79
Vested	—	—
Forfeited	—	—
Outstanding at September 30, 2015	61,801	$	9.79

Common stock compensation expense related to restricted stock awards granted under the 2015 Plan was $151 and $0 for the three months ended September 30, 2015 and 2014, respectively and $151 and $0 for the nine months ended September 30, 2015 and 2014, respectively.

Total unrecognized compensation costs related to non-vested, share-based awards granted or awarded under the 2015 Plan were $454 and $0 at September 30, 2015 and December 31, 2014, respectively.  These costs are expected to be recognized over a weighted average period of 0.8 years at September 30, 2015.

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Derivative Financial Instruments

9 Months Ended

Sep. 30, 2015

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

Derivative Financial Instruments

On June 19, 2014, the Company terminated and settled its interest rate derivatives in conjunction with the settlement of its then existing credit agreement, which had a variable interest rate. This settlement resulted in a charge of $793 to interest expense in the Condensed Consolidated Statements of Comprehensive Income (Loss) in the nine months ended September 30, 2014. Prior to this termination and in compliance with the credit agreement, the Company purchased option and swap derivative contracts to hedge against the potential impact on earnings from an increase in market interest rates associated with the interest payments on its variable rate term credit facility.  The objective of the hedge transactions was to reduce the variability of cash flows due to changes in the designated benchmark interest rate on the term debt.  As the derivatives were settled prior to December 31, 2014, no assets or liabilities were recognized in the Condensed Consolidated Balance Sheet at either date presented.

The Company designated and accounted for these swaps and purchased options as cash flow hedges of interest rate risk.  The Company reported the gain or loss, net of taxes, from the effective portion of the hedge as a component of Accumulated Other Comprehensive Income (“AOCI”) deferring it and reclassifying it into earnings in the same period or periods in which the hedged transaction affects earnings and in the same line item on the Condensed Consolidated Statements of Comprehensive Income (Loss) as the impact of the hedged transaction.  The cumulative amounts reported in AOCI related to these derivatives were reclassified from AOCI to interest expense on the Condensed Consolidated Statements of Comprehensive Income (Loss) in the nine months ended September 30, 2014. The Company did not use these derivative instruments for trading or speculative purposes.

The following amounts are included in OCI and earnings for the three and nine months ended September 30, 2015 and September 30, 2014:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
Interest Rate Derivatives in Cash Flow Hedging Relationship
Amount of Gain (Loss) Recognized in AOCI, net of tax, on Derivative (Effective Portion)	$	—	$	—	$	—	$	—
Amount of (Gain) Loss Reclassified from AOCI into Income (Effective Portion)	$	—	$	—	$	—	$	793

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Earnings Per Common Share

9 Months Ended

Sep. 30, 2015

Earnings Per Share [Abstract]

Earnings Per Common Share

Earnings Per Common Share

Basic net income per common share is based upon the weighted average number of common shares outstanding.  Diluted net income per common share is based upon the weighted average number of common shares outstanding, including the dilutive effect of restricted stock, using the if-converted methods.  The following table shows a reconciliation of the numerators and denominators used in calculating basic and diluted earnings per share.

	Three months ended				Nine months ended
	September 30,				September 30,
	2015		2014		2015			2014
Numerators
Net income (loss)	$	34	$	1,396	$	(1,053	)	$	(6,458	)
Denominators
Weighted average common shares - basic	12,907,938		12,740,034		12,851,456			12,704,568
Dilutive effect of restricted stock	142,300		147,329		—			—
Weighted average common shares - diluted	13,050,238		12,887,363		12,851,456			12,704,568
Basic earnings (loss) per share	$	0.00	$	0.11	$	(0.08	)	$	(0.51	)
Diluted earnings (loss) per share	$	0.00	$	0.11	$	(0.08	)	$	(0.51	)

For the nine months ended September 30, 2015 and September 30, 2014, 216,872 and 145,710 shares, respectively, are not included in the calculation of diluted earnings per share, as their inclusion would have been anti-dilutive. These securities could be dilutive in future periods.

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Business Segment Information

9 Months Ended

Sep. 30, 2015

Segment Reporting [Abstract]

Business Segment Information

Business Segment Information

The Company is organized into two reportable segments: the Aerostructures segment and the Engineering Services segment.  Through its Aerostructures segment, the Company primarily fabricates, machines, finishes, integrates, assembles and kits formed close tolerance aluminum, specialty alloy and composite components and higher level assemblies for use by the aerospace and defense industries. It manufactures more than 40,000 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, the Company provides a complete range of design, engineering and program management services, supporting aircraft product lifecycles from conceptual design, analysis and certification through production support, fleet support and service life extensions via a complete turnkey engineering solution.

Corporate assets, liabilities and expenses related to the Company's corporate offices, except for interest expense and income taxes, primarily support, and are recorded in, the Aerostructures segment. The table below presents information about reported segments on the same basis used internally to evaluate segment performance:

	Three months ended September 30,						Nine months ended September 30,
	2015			2014			2015			2014
Net sales:
Aerostructures	$	85,119		$	82,914		$	249,661		$	249,101
Engineering Services	10,826			14,714			36,818			51,235
Eliminations	(312		)	(293		)	(821		)	(1,313		)
	$	95,633		$	97,335		$	285,658		$	299,023
Income from operations:
Aerostructures	$	8,918		$	7,888		$	20,063		$	14,010
Engineering Services	(2,805		)	(1,216		)	(3,803		)	666
Eliminations	(41		)	(9		)	(14		)	(96		)
	$	6,072		$	6,663		$	16,246		$	14,580

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Condensed Consolidating Financial Statements Balance Sheet (Tables)

9 Months Ended

Sep. 30, 2015

Statement of Financial Position [Abstract]

Condensed Balance Sheet [Table Text Block]

	LMIA(Guarantor Parent)		Guarantor Subsidiaries		Consolidating/Eliminating Entries			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	—	$	476	$	—		$	476
Trade accounts receivable, net	2,063		59,326		—			61,389
Intercompany receivables	178,197		156,183		(334,380		)	—
Inventories	—		118,877		—			118,877
Prepaid expenses and other current assets	8,342		2,488		—			10,830
Deferred income taxes	—		3,924		(149		)	3,775
Total current assets	188,602		341,274		(334,529		)	195,347
Property, plant and equipment, net	3,818		97,284		—			101,102
Investments in subsidiaries	378,500		—		(378,500		)	—
Goodwill	—		86,784		—			86,784
Intangible assets, net	—		47,671		—			47,671
Deferred income taxes	149		—		(149		)	—
Other assets	7,346		1,625		—			8,971
Total assets	$	578,415	$	574,638	$	(713,178	)	$	439,875
Liabilities and shareholders’ equity
Current liabilities:
Accounts payable	$	465	$	17,496	$	—		$	17,961
Accrued expenses	11,626		13,008		—			24,634
Intercompany Payables	197,753		136,627		(334,380		)	$	—
Deferred income taxes	149		—		(149		)	—
Current installments of long-term debt and capital lease obligations	148		3,409		—			3,557
Total current liabilities	210,141		170,540		(334,529		)	46,152
Long-term debt and capital lease obligations, less current installments	249,110		18,497		—			267,607
Other long-term liabilities	304		2,797		—			3,101
Deferred income taxes	—		4,304		(149		)	4,155
Total long-term liabilities	249,414		25,598		(149		)	274,863
Total shareholders’ equity	118,860		378,500		(378,500		)	118,860
Total liabilities and shareholders’ equity	$	578,415	$	574,638	$	(713,178	)	$	439,875

CONDENSED CONSOLIDATING BALANCE SHEET

as of December 31, 2014

	LMIA(Guarantor Parent)		Guarantor Subsidiaries		Consolidating/Eliminating Entries			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	7,058	$	869	$	—		$	7,927
Trade accounts receivable, net	1,310		56,924		—			58,234
Intercompany receivables	145,980		145,223		(291,203		)	$	—
Inventories	—		114,279		—			114,279
Prepaid expenses and other current assets	8,325		1,930		—			10,255
Deferred income taxes	—		4,031		(118		)	3,913
Total current assets	162,673		323,256		(291,321		)	194,608
Property, plant and equipment, net	3,148		96,334		—			99,482
Investments in subsidiaries	368,587		—		(368,587		)	—
Goodwill	—		86,784		—			86,784
Intangible assets, net	—		50,940		—			50,940
Deferred income taxes	118		—		(118		)	—
Other assets	8,743		1,879		—			10,622
Total assets	$	543,269	$	559,193	$	(660,026	)	$	442,436
Liabilities and shareholders’ equity
Current liabilities:
Accounts payable	$	1,339	$	20,416	$	—		$	21,755
Accrued expenses	13,679		12,393		—			26,072
Intercompany Payables	164,158		127,045		(291,203		)	$	—
Deferred income taxes	118		—		(118		)	—
Current installments of long-term debt and capital lease obligations	335		3,089		—			3,424
Total current liabilities	179,629		162,943		(291,321		)	51,251
Long-term debt and capital lease obligations, less current installments	245,174		20,380		—			265,554
Other long-term liabilities	331		2,958		—			3,289
Deferred income taxes	—		4,325		(118		)	4,207
Total long-term liabilities	245,505		27,663		(118		)	273,050
Total shareholders’ equity	118,135		368,587		(368,587		)	118,135
Total liabilities and shareholders’ equity	$	543,269	$	559,193	$	(660,026	)	$	442,436

	LMIA(Guarantor Parent)		Guarantor Subsidiaries		Consolidating/Eliminating Entries			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	—	$	476	$	—		$	476
Trade accounts receivable, net	2,063		59,326		—			61,389
Intercompany receivables	178,197		156,183		(334,380		)	—
Inventories	—		118,877		—			118,877
Prepaid expenses and other current assets	8,342		2,488		—			10,830
Deferred income taxes	—		3,924		(149		)	3,775
Total current assets	188,602		341,274		(334,529		)	195,347
Property, plant and equipment, net	3,818		97,284		—			101,102
Investments in subsidiaries	378,500		—		(378,500		)	—
Goodwill	—		86,784		—			86,784
Intangible assets, net	—		47,671		—			47,671
Deferred income taxes	149		—		(149		)	—
Other assets	7,346		1,625		—			8,971
Total assets	$	578,415	$	574,638	$	(713,178	)	$	439,875
Liabilities and shareholders’ equity
Current liabilities:
Accounts payable	$	465	$	17,496	$	—		$	17,961
Accrued expenses	11,626		13,008		—			24,634
Intercompany Payables	197,753		136,627		(334,380		)	$	—
Deferred income taxes	149		—		(149		)	—
Current installments of long-term debt and capital lease obligations	148		3,409		—			3,557
Total current liabilities	210,141		170,540		(334,529		)	46,152
Long-term debt and capital lease obligations, less current installments	249,110		18,497		—			267,607
Other long-term liabilities	304		2,797		—			3,101
Deferred income taxes	—		4,304		(149		)	4,155
Total long-term liabilities	249,414		25,598		(149		)	274,863
Total shareholders’ equity	118,860		378,500		(378,500		)	118,860
Total liabilities and shareholders’ equity	$	578,415	$	574,638	$	(713,178	)	$	439,875

XML

Restructuring - Restructuring Reserve (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Cost Incurred to Date	$ 5,407		$ 5,407
Restructuring Reserve [Roll Forward]
Accrual additions	1,575	$ 765	2,368	$ 2,288
Employee Severance [Member]
Restructuring Reserve [Roll Forward]
Accrued restructuring balance as of December 31, 2014			739
Accrual additions			2,368
Cash payments	(1,165)	$ (253)	(2,175)	$ (1,441)
Accrued restructuring balance as of September 30, 2015	932		932
Precise Machine [Member] | Employee Severance [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Cost Incurred to Date	615		615
Precise Machine [Member] | Lease Termination [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Cost Incurred to Date	124		124
Relocation of Machining Operations from Savannah Facility [Member] | Employee Severance [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Cost Incurred to Date	47		47
Other Expense [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Cost Incurred to Date	115		115
Other Expense [Member] | Employee Severance [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Cost Incurred to Date	$ 3,529		$ 3,529

XML

Condensed Consolidating Financial Statements (Notes)

9 Months Ended

Sep. 30, 2015

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Condensed Consolidating Financial Statements

Condensed Consolidating Financial Statements

LMI Aerospace, Inc. excluding its subsidiaries (“LMIA”) is the parent company, issuer and obligor of the second-priority senior notes due June 19, 2019 (the “Notes”). The payment obligations of LMIA under the Notes are guaranteed and secured by LMIA and all of its subsidiaries other than minor subsidiaries as further described below.

These Notes are guaranteed on a second-priority senior secured basis, jointly and severally, by LMIA (“Guarantor Parent”) and all of its existing and future 100% owned subsidiaries (collectively, the “Guarantor Subsidiaries”) other than minor subsidiaries. Such guaranties are full and unconditional. LMIA conducts substantially all of its business through and derives virtually all of its income from its subsidiaries. Therefore, its ability to make required principal and interest payments with respect to its indebtedness depends on the earnings of subsidiaries and its ability to receive funds from its subsidiaries.

The Notes are secured on a second-priority basis by liens on substantially all of LMIA’s and the Guarantor Subsidiaries’ assets, subject to certain exceptions and permitted liens. The liens securing the notes are contractually subordinated to the liens that secure indebtedness under the revolving credit facility as a result of the lien subordination provisions of the intercreditor agreement to the extent of the value of the collateral securing such indebtedness as well as being subordinated by other existing indebtedness, including industrial revenue bonds, capital leases and other notes payable, to the extent of the value of the collateral that secures such existing indebtedness. As a consequence of this lien subordination and existing indebtedness the Notes and the guarantees are effectively subordinated to the extent of the value of the collateral that secures them. Decisions regarding the maintenance and release of the collateral secured by the collateral agreement are made by the lenders under the modified revolving credit facility, and neither the indenture trustee nor the holders of the Notes have control of decisions regarding the release of collateral.

We have not presented separate financial statements and separate disclosures have not been provided concerning the Guarantor Subsidiaries due to the presentation of condensed consolidating financial information set forth in this Note, consistent with the Securities and Exchange Commission (the “SEC”) interpretations governing reporting of subsidiary financial information.

Supplemental condensed consolidating financial information of the Company, including such information for the Guarantor Subsidiaries, is presented below. Investments in subsidiaries are presented using the equity method of accounting. The principal elimination entries eliminate investments in subsidiaries and inter-company balances and transactions.

CONDENSED CONSOLIDATING BALANCE SHEET

as of September 30, 2015

	LMIA(Guarantor Parent)		Guarantor Subsidiaries		Consolidating/Eliminating Entries			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	—	$	476	$	—		$	476
Trade accounts receivable, net	2,063		59,326		—			61,389
Intercompany receivables	178,197		156,183		(334,380		)	—
Inventories	—		118,877		—			118,877
Prepaid expenses and other current assets	8,342		2,488		—			10,830
Deferred income taxes	—		3,924		(149		)	3,775
Total current assets	188,602		341,274		(334,529		)	195,347
Property, plant and equipment, net	3,818		97,284		—			101,102
Investments in subsidiaries	378,500		—		(378,500		)	—
Goodwill	—		86,784		—			86,784
Intangible assets, net	—		47,671		—			47,671
Deferred income taxes	149		—		(149		)	—
Other assets	7,346		1,625		—			8,971
Total assets	$	578,415	$	574,638	$	(713,178	)	$	439,875
Liabilities and shareholders’ equity
Current liabilities:
Accounts payable	$	465	$	17,496	$	—		$	17,961
Accrued expenses	11,626		13,008		—			24,634
Intercompany Payables	197,753		136,627		(334,380		)	$	—
Deferred income taxes	149		—		(149		)	—
Current installments of long-term debt and capital lease obligations	148		3,409		—			3,557
Total current liabilities	210,141		170,540		(334,529		)	46,152
Long-term debt and capital lease obligations, less current installments	249,110		18,497		—			267,607
Other long-term liabilities	304		2,797		—			3,101
Deferred income taxes	—		4,304		(149		)	4,155
Total long-term liabilities	249,414		25,598		(149		)	274,863
Total shareholders’ equity	118,860		378,500		(378,500		)	118,860
Total liabilities and shareholders’ equity	$	578,415	$	574,638	$	(713,178	)	$	439,875

CONDENSED CONSOLIDATING BALANCE SHEET

as of December 31, 2014

	LMIA(Guarantor Parent)		Guarantor Subsidiaries		Consolidating/Eliminating Entries			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	7,058	$	869	$	—		$	7,927
Trade accounts receivable, net	1,310		56,924		—			58,234
Intercompany receivables	145,980		145,223		(291,203		)	$	—
Inventories	—		114,279		—			114,279
Prepaid expenses and other current assets	8,325		1,930		—			10,255
Deferred income taxes	—		4,031		(118		)	3,913
Total current assets	162,673		323,256		(291,321		)	194,608
Property, plant and equipment, net	3,148		96,334		—			99,482
Investments in subsidiaries	368,587		—		(368,587		)	—
Goodwill	—		86,784		—			86,784
Intangible assets, net	—		50,940		—			50,940
Deferred income taxes	118		—		(118		)	—
Other assets	8,743		1,879		—			10,622
Total assets	$	543,269	$	559,193	$	(660,026	)	$	442,436
Liabilities and shareholders’ equity
Current liabilities:
Accounts payable	$	1,339	$	20,416	$	—		$	21,755
Accrued expenses	13,679		12,393		—			26,072
Intercompany Payables	164,158		127,045		(291,203		)	$	—
Deferred income taxes	118		—		(118		)	—
Current installments of long-term debt and capital lease obligations	335		3,089		—			3,424
Total current liabilities	179,629		162,943		(291,321		)	51,251
Long-term debt and capital lease obligations, less current installments	245,174		20,380		—			265,554
Other long-term liabilities	331		2,958		—			3,289
Deferred income taxes	—		4,325		(118		)	4,207
Total long-term liabilities	245,505		27,663		(118		)	273,050
Total shareholders’ equity	118,135		368,587		(368,587		)	118,135
Total liabilities and shareholders’ equity	$	543,269	$	559,193	$	(660,026	)	$	442,436

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Three Months Ended September 30, 2015

	LMIA(Guarantor Parent)			Guarantor Subsidiaries			Consolidating/Eliminating Entries			Consolidated
Sales and service revenue
Product sales	$	4		$	84,099		$	11		$	84,114
Service revenues	7,640			11,545			(7,666		)	11,519
Net sales	7,644			95,644			(7,655		)	95,633
Cost of sales and service revenue
Cost of product sales	27			67,476			11			67,514
Cost of service revenues	7,991			11,166			(7,664		)	11,493
Cost of sales	8,018			78,642			(7,653		)	79,007
Gross profit	(374		)	17,002			(2		)	16,626
Selling, general and administrative expenses				8,979						8,979
Restructuring expense	—			1,575			—			1,575
(Loss) income from operations	(374		)	6,448			(2		)	6,072
Other income (expense):
Interest expense	(5,389		)	(264		)	—			(5,653		)
Other, net	(1		)	(135		)	—			(136		)
Income (loss) from equity investments in subsidiaries	3,541			—			(3,541		)	—
Total other expense	(1,849		)	(399		)	(3,541		)	(5,789		)
(Loss) income before income taxes	(2,223		)	6,049			(3,543		)	283
(Benefit) provision for income taxes	(2,227		)	2,476			—			249
Net (loss) income	4			3,573			(3,543		)	34
Other comprehensive income (loss):
Change in foreign currency translation adjustment	—			(32		)	—			(32		)
Total comprehensive (loss) income	$	4		$	3,541		$	(3,543	)	$	2

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Three Months Ended September 30, 2014

	LMIA(Guarantor Parent)			Guarantor Subsidiaries			Consolidating/Eliminating Entries			Consolidated
Sales and service revenue
Product sales	$	(68	)	$	81,724		$	37		$	81,693
Service revenues	9,172			15,620			(9,150		)	15,642
Net sales	9,104			97,344			(9,113		)	97,335
Cost of sales and service revenue
Cost of product sales	40			61,458			37			61,535
Cost of service revenues	9,106			13,803			(9,152		)	13,757
Cost of sales	9,146			75,261			(9,115		)	75,292
Gross profit	(42		)	22,083			2			22,043
Selling, general and administrative expenses	421			14,194			—			14,615
Restructuring expense	533			232			—			765
(Loss) income from operations	(996		)	7,657			2			6,663
Other income (expense):
Interest expense	(5,662		)	(284		)	—			(5,946		)
Other, net	11			(86		)	—			(75		)
Income (loss) from equity investments in subsidiaries	4,874			—			(4,874		)	—
Total other expense	(777		)	(370		)	(4,874		)	(6,021		)
(Loss) income before income taxes	(1,773		)	7,287			(4,872		)	642
(Benefit) provision for income taxes	(3,054		)	2,300			—			(754		)
Net (loss) income	1,281			4,987			(4,872		)	1,396
Other comprehensive income (loss):
Change in foreign currency translation adjustment	—			(112		)	—			(112		)
Reclassification adjustment for losses on interest rate hedges included in net earnings	—			—			—			—
Total comprehensive (loss) income	$	1,281		$	4,875		$	(4,872	)	$	1,284

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Nine Months Ended September 30, 2015

	LMIA(Guarantor Parent)			Guarantor Subsidiaries			Consolidating/Eliminating Entries			Consolidated
Sales and service revenue
Product sales	$	207		$	246,699		$	(176	)	$	246,730
Service revenues	26,729			38,942			(26,743		)	38,928
Net sales	26,936			285,641			(26,919		)	285,658
Cost of sales and service revenue
Cost of product sales	214			197,173			(176		)	197,211
Cost of service revenues	27,440			35,155			(26,742		)	35,853
Cost of sales	27,654			232,328			(26,918		)	233,064
Gross profit	(718		)	53,313			(1		)	52,594
Selling, general and administrative expenses	—			33,980			—			33,980
Restructuring expense	318			2,050			—			2,368
Acquisitions expense	—			—			—			—
(Loss) income from operations	(1,036		)	17,283			(1		)	16,246
Other income (expense):
Interest expense	(16,029		)	(773		)	—			(16,802		)
Other, net	(1		)	(88		)	—			(89		)
Income (loss) from equity investments in subsidiaries	9,914			—			(9,914		)	—
Total other expense	(6,116		)	(861		)	(9,914		)	(16,891		)
(Loss) income before income taxes	(7,152		)	16,422			(9,915		)	(645		)
(Benefit) provision for income taxes	(6,069		)	6,477			—			408
Net (loss) income	(1,083		)	9,945			(9,915		)	(1,053		)
Other comprehensive income (loss):
Change in foreign currency translation adjustment	—			(31		)	—			(31		)
Total comprehensive (loss) income	$	(1,083	)	$	9,914		$	(9,915	)	$	(1,084	)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Nine Months Ended September 30, 2014

	LMIA(Guarantor Parent)			Guarantor Subsidiaries			Consolidating/Eliminating Entries			Consolidated
Sales and service revenue
Product sales	$	617		$	245,327		$	(595	)	$	245,349
Service revenues	28,474			53,688			(28,488		)	53,674
Net sales	29,091			299,015			(29,083		)	299,023
Cost of sales and service revenue
Cost of product sales	699			195,066			(595		)	195,170
Cost of service revenues	28,330			45,372			(28,487		)	45,215
Cost of sales	29,029			240,438			(29,082		)	240,385
Gross profit	62			58,577			(1		)	58,638
Selling, general and administrative expenses	421			41,349			—			41,770
Restructuring expense	967			1,321			—			2,288
(Loss) income from operations	(1,326		)	15,907			(1		)	14,580
Other income (expense):
Interest expense	(22,972		)	(828		)	—			(23,800		)
Other, net	81			124			—			205
Income (loss) from equity investments in subsidiaries	9,571			—			(9,571		)	—
Total other expense	(13,320		)	(704		)	(9,571		)	(23,595		)
(Loss) income before income taxes	(14,646		)	15,203			(9,572		)	(9,015		)
(Benefit) provision for income taxes	(8,171		)	5,614			—			(2,557		)
Net (loss) income	(6,475		)	9,589			(9,572		)	(6,458		)
Other comprehensive income (loss):
Change in foreign currency translation adjustment	—			(18		)	—			(18		)
Reclassification adjustment for losses on interest rate hedges included in net earnings	278			—			—			278
Total comprehensive (loss) income	$	(6,197	)	$	9,571		$	(9,572	)	$	(6,198	)

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

For the Nine Months Ended September 30, 2015

	LMIA(Guarantor Parent)			Guarantor Subsidiaries			Consolidating/Eliminating Entries			Consolidated
Operating activities:
Net (loss)/income	$	(1,083	)	$	9,945		$	(9,915	)	$	(1,053	)
Adjustments for non-cash items	(7,572		)	13,927			9,915			16,270
Net changes in operating assets and liabilities, net of acquired businesses	(1,616		)	(7,884		)	—			(9,500		)
Intercompany activity	1,379			(1,379		)	—			—
Net cash (used)/provided by operating activities	(8,892		)	14,609			—			5,717
Investing activities:
Additions to property, plant and equipment	(1,606		)	(13,699		)	—			(15,305		)
Proceeds from sale of equipment	—			260			—			260
Net cash used by investing activities	(1,606		)	(13,439		)	—			(15,045		)
Financing activities:
Principal payments on long-term debt and notes payable	(251		)	(1,563		)	—			(1,814		)
Advances on revolving line of credit	93,500			—			—			93,500
Payments on revolving line of credit	(89,500		)	—			—			(89,500		)
Payments for debt issuance cost	(309		)	—			—			(309		)
Net cash provided (used) by financing activities	3,440			(1,563		)	—			1,877
Net (decrease) increase in cash and cash equivalents	(7,058		)	(393		)	—			(7,451		)
Cash and cash equivalents, beginning of period	7,058			869			—			7,927
Cash and cash equivalents, end of period	$	—		$	476		$	—		$	476

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

For the Nine Months Ended September 30, 2014

	LMIA(Guarantor Parent)			Guarantor Subsidiaries			Consolidating/Eliminating Entries			Consolidated
Operating activities:
Net (loss)/income	$	(6,475	)	$	9,589		$	(9,572	)	$	(6,458	)
Adjustments for non-cash items	2,195			14,408			9,572			26,175
Net changes in operating assets and liabilities, net of acquired businesses	21,296			(4,997		)	—			16,299
Intercompany activity	6,794			(6,794		)	—			—
Net cash (used)/provided by operating activities	23,810			12,206			—			36,016
Investing activities:
Additions to property, plant and equipment	(704		)	(9,598		)	—			(10,302		)
Acquisitions, net of cash acquired	—			—			—			—
Proceeds from sale of equipment	4			977			—			981
Net cash used by investing activities	(700		)	(8,621		)	—			(9,321		)
Financing activities:
Proceeds from issuance of debt	250,000			—			—			250,000
Principal payments on long-term debt and notes payable	(228,180		)	(3,718		)	—			(231,898		)
Advances on revolving line of credit	60,000			—			—			60,000
Payments on revolving line of credit	(96,000		)	—			—			(96,000		)
Payments for debt issuance cost	(7,881		)	—			—			(7,881		)
Other, net	(28		)	—			—			(28		)
Net cash provided (used) by financing activities	(22,089		)	(3,718		)	—			(25,807		)
Net (decrease) increase in cash and cash equivalents	1,021			(133		)	—			888
Cash and cash equivalents, beginning of period	405			1,167			—			1,572
Cash and cash equivalents, end of period	$	1,426		$	1,034		$	—		$	2,460

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Other Assets Other Assets (Tables)

9 Months Ended

Sep. 30, 2015

Other Assets, Noncurrent [Abstract]

Schedule of Other Assets, Non current [Table Text Block]

Other assets consist of the following:

	September 30, 2015		December 31, 2014
Debt issuance cost, net	$	7,353	$	8,600
Other	1,618		2,022
Total other assets	$	8,971	$	10,622

In connection with the financing of its long-term indebtedness, the Company incurred debt issuance costs of $10,001. These costs are being amortized on a straight-line basis, which approximates the effective interest method, over the term of the indebtedness.

XML

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Operating Loss Carryforwards [Line Items]
Operating Loss Carryforwards, Valuation Allowance	$ 13,588		$ 13,588		$ 12,676
Income Taxes Receivable	7,069		7,069
(Benefit) provision for income taxes	(249)	$ 754	$ (408)	$ 2,557
Tax Adjustments, Settlements, and Unusual Provisions	$ 2,582

XML

Long-term Debt and Capital Lease Obligations (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended	12 Months Ended
	Sep. 30, 2015	Dec. 31, 2014	Sep. 30, 2015	Dec. 31, 2013
Debt Instrument [Line Items]
Letters of Credit Outstanding, Amount	$ 1,138		$ 1,138
Long-term debt gross	271,164	$ 268,978	271,164
Less current installments	3,557	3,424	3,557
Long-term debt and capital lease obligations, less current installments	267,607	265,554	267,607
Second Priority Senior Secured Notes [Member]
Debt Instrument [Line Items]
Long-term debt gross	$ 245,000	245,000	$ 245,000
Fixed interest rate (in hundredths)	7.375%		7.375%
Revolver Under Credit Agreement, Variable [Member]
Debt Instrument [Line Items]
Long-term debt gross	$ 4,000	0	$ 4,000
Missouri IRBs [Member]
Debt Instrument [Line Items]
Long-term debt gross	$ 7,011	$ 7,334	$ 7,011
Fixed interest rate (in hundredths)	2.80%	2.80%	2.80%
Capital Leases [Member]
Debt Instrument [Line Items]
Long-term debt gross	$ 12,125	$ 13,288	$ 12,125
Fixed interest rate, minimum (in hundredths)			2.04%	2.04%
Fixed interest rate, maximum (in hundredths)			7.73%	7.73%
Notes Payable [Member]
Debt Instrument [Line Items]
Long-term debt gross	$ 3,028	$ 3,356	$ 3,028
Fixed interest rate, maximum (in hundredths)	2.56%	2.56%

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Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Reclassification adjustment for losses on interest rate hedges included in net earnings, net of tax of $0, $0, $0 and $157	$ 0	$ 0	$ 0	$ 278

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Goodwill and Intangible Assets

9 Months Ended

Sep. 30, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

Goodwill and Intangible Assets

Goodwill

The following table summarizes the net carrying amount of goodwill by segment at September 30, 2015 and December 31, 2014, respectively:

							Engineering
	Aerostructures						Services						Total
	September 30,			December 31,			September 30,			December 31,			September 30,			December 31,
	2015			2014			2015			2014			2015			2014
Balance at:
Gross Goodwill	$	141,953		$	141,953		$	50,741		$	50,741		$	192,694		$	192,694
Accumulated impairment loss	(79,471		)	(79,471		)	(26,439		)	(26,439		)	(105,910		)	(105,910		)
Net Goodwill	$	62,482		$	62,482		$	24,302		$	24,302		$	86,784		$	86,784

A goodwill impairment charge of $26,439 was recorded in the fourth quarter of 2014 related to the Engineering Services reporting unit. The impairment charge resulted from a persistent decline in revenues and profitability in 2014. In the first nine months of 2015, the reporting unit generated positive cash flow but did not meet overall expectations in terms of revenues, profits or cash flow. On August 7, 2015, the Company committed to a restructuring plan that will result in the closing of its Melbourne, Australia and Greenville, South Carolina engineering offices in addition to the elimination of additional management positions within the Engineering Services reporting unit. See Note 13, Restructuring, to the Condensed Consolidated Financial Statements under Part I, Item 8, "Financial Statements," for additional disclosure related to these items. If, despite these additional cost reduction efforts, the reporting unit's revenue and profitability were to continue to decline, it could lead to a triggering event and additional potential impairment for intangible assets and goodwill for the reporting unit in the future.

The carrying value of goodwill is assessed annually, during the fourth quarter, unless a triggering event occurs. Following an assessment an impairment charge is recorded if appropriate.  In the three and nine months ended September 30, 2015, no triggering event occurred that would cause the Company to assess the carrying value of goodwill.

Intangible Assets

Intangible assets primarily consist of trademarks and customer intangibles.  The carrying values were as follows:

	September 30, 2015			December 31, 2014
Trademarks	$	778		$	778
Customer intangible assets	68,991			68,991
Other	1,274			1,274
Accumulated amortization	(23,372		)	(20,103		)
Intangible assets, net	$	47,671		$	50,940

Intangibles amortization expense was $1,089 and $1,131 for the three months ended September 30, 2015 and 2014, respectively and $3,269 and $3,393 for the nine months ended September 30, 2015 and 2014, respectively. The accumulated amortization balances at September 30, 2015 and December 31, 2014, respectively, were $753 and $679 for trademarks, $21,791 and $18,716 for customer intangible assets, and $828 and $708 for other intangible assets.

Intangible assets related to the acquisition of Valent are amortized on the straight-line method as this approximates the pattern of economic benefit of each intangible asset.  All other remaining intangible assets are not material.

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Long-term Debt and Capital Lease Obligations (Tables)

9 Months Ended

Sep. 30, 2015

Debt Disclosure [Abstract]

Long-term debt

Long-term debt and capital lease obligations consist of the following:

	September 30, 2015		December 31, 2014
Second priority senior secured notes at a fixed rate of 7.375% at September 30, 2015	$	245,000	$	245,000
Revolver under credit agreement, variable	4,000		—
Missouri IRBs at fixed rate of 2.80% at September 30, 2015 and December 31, 2014	7,011		7,334
Capital leases, at fixed rates ranging from 2.04% to 7.73% at September 30, 2015 and December 31, 2014	12,125		13,288
Notes payable, principal and interest payable monthly, at fixed rates up to 2.56% at September 30, 2015 and December 31, 2014, respectively	3,028		3,356
Total debt	$	271,164	$	268,978
Less current installments	3,557		3,424
Total long-term debt and capital lease obligations	$	267,607	$	265,554

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Goodwill and Intangible Assets, Goodwill (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2014	Sep. 30, 2015
Goodwill [Line Items]
Goodwill, Gross	$ 192,694	$ 192,694
Goodwill, Impaired, Accumulated Impairment Loss	(105,910)	(105,910)
Goodwill acquired	86,784	86,784
Engineering Services [Member]
Goodwill [Line Items]
Goodwill, Impairment Loss	26,439
Aerostructures [Member]
Goodwill [Line Items]
Goodwill, Gross	141,953	141,953
Goodwill, Impaired, Accumulated Impairment Loss	(79,471)	(79,471)
Goodwill acquired	62,482	62,482
Engineering Services [Member]
Goodwill [Line Items]
Goodwill, Gross	50,741	50,741
Goodwill, Impaired, Accumulated Impairment Loss	(26,439)	(26,439)
Goodwill acquired	$ 24,302	$ 24,302

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Legal Contingencies

9 Months Ended

Sep. 30, 2015

Commitments and Contingencies Disclosure [Abstract]

Legal Contingencies

Legal Contingencies

The Company has been named as a defendant in certain pending lawsuits in the normal course of business (collectively, the “Pending Lawsuits”).  It is the policy of management to disclose the amount or range of reasonably possible losses.  In the opinion of management, after consulting with legal counsel, any losses resulting from Pending Lawsuits should not have a material effect on the Company’s financial position, cash flows or results of operations. The Company is also the subject of other proceedings as further described below.

Regulatory Actions

In August 2013, the Environmental Protection Agency (“EPA”) and the U.S. Dept. of Justice (“DoJ”) commenced an investigation into allegations of low pH wastewater releases claimed to have occurred between 2009 and 2013 at Ozark Mountain Technologies ("OMT"), a subsidiary of LMI (the “Waste Water Allegations”). On April 24, 2015, the Company settled the Waste Water Allegations pursuant to a settlement agreement with DoJ (“Plea Agreement”). Per the terms of the Plea Agreement, OMT plead guilty to one count of negligently violating the Federal Water Pollution Control Act and paid a fine of $694 in the quarter ended June 30, 2015. In connection with the Plea Agreement, DoJ agreed that no further federal criminal or civil prosecution will be brought against OMT relative to certain other possible instances of environmental non-compliance that the Company voluntarily reported to the EPA in December 2013 as part of the EPA’s Audit Policy.

In November, 2013, the Attorney General of the State of Missouri (the “Missouri AG”) contacted LMI regarding alleged violations of certain state environmental regulations involving the discharge of pollutants and water contaminants claimed to have occurred in 2011 by OMT (the “Missouri AG Matter”).  On February 25, 2015, the Missouri AG filed a Petition against OMT alleging pollution of state waters, violation of pretreatment regulations and violation of water quality standards.  In the quarter ended June 30, 2015, OMT settled the Missouri AG Matter and in July of 2015 paid civil penalties of $175.

The fine and civil penalties paid in connection with both settlements described above were consistent with the previously established, respective, loss contingencies as disclosed in the Company’s 2014 Form 10-K, Item 3 - Legal Proceedings.

Civil Action

In December 2012, OMT became an indirect subsidiary of LMI as a result of LMI’s acquisition of Valent Aerostructures, LLC (“Valent”) from the former equity owners of Valent, including Tech Investments, LLC and Tech Investments II, LLC (together, “Tech”). Also as a result of the transaction, Tech became the beneficial owners of approximately 5.5% of LMI’s common stock. Pursuant to the terms of the purchase agreement, as amended (the “Valent Purchase Agreement”), $5,000 of the purchase price remained subject to an indemnification escrow arrangement (the “Escrow Funds”) and 783,798 shares of LMI’s common stock issued as part of the purchase price were subject to indemnification lock-up agreements (the “Locked-Up Shares”). On September 22, 2015, LMI and the former equity owners of Valent (the “Parties”) submitted to mediation and executed an agreement setting forth terms of a settlement with respect to the resolution of certain indemnification claims and other disputes involving, among other things, the OMT matters discussed above, and on November 5, 2015, the Parties executed the definitive settlement documents (the agreement and documents collectively being referred to as the “Settlement Agreements”). The claims and disputes resolved by the settlement had become the subject of legal proceedings that commenced with the filing of a declaratory action by Tech in December 2014 (the “Tech Lawsuit”).  Pursuant to the terms of the Settlement Agreements, (a) the Tech Lawsuit will be dismissed with prejudice, (b) $3,109 of the Escrow Funds will be disbursed to the Company and the remaining amount of Escrow Funds will be retained by Tech, (c) Tech has assumed an approximate $1,167 payment obligation of the Company to a predecessor owner of OMT that remained under a purchase agreement the Company acquired as part of the Company’s acquisition of Valent; (d) the Locked-up Shares will be released to Tech, excluding any portion needed to secure Tech’s obligation described in subsection (c) above; and (e) all parties entered into a mutual release of claims and disputes other than those based on certain environmental representations of the former equity owners of Valent under the Valent Purchase Agreement. The settlement also resulted in the Company assuming other liabilities of $484, recording the write-off of a previously recorded receivable of $389 and recording other expenses of $68. The net impact of the settlement resulted in a gain of $3,325 which is recorded in selling, general and administrative expenses in the accompanying Condensed Consolidated Statements of Operations.