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, 2016.

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 3, 2016, there were 13,632,641 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, 2016

PART I.  FINANCIAL INFORMATION

		Page No.
Item 1.	Financial Statements (Unaudited).
	Condensed Consolidated Balance Sheets as of September 30, 2016 and December 31, 2015.	3
	Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended September 30, 2016 and 2015.	4
	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2016 and 2015.	5
	Notes to Condensed Consolidated Financial Statements.	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	25
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	35
Item 4.	Controls and Procedures.	35
	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, 2016			December 31, 2015
Assets
Current assets:
Cash and cash equivalents	$	1,803		$	10,504
Accounts receivable, net	54,815			48,491
Inventories	123,779			114,775
Prepaid expenses and other current assets	3,733			4,147
Total current assets	184,130			177,917
Property, plant and equipment, net	96,354			100,969
Goodwill	62,482			86,784
Intangible assets, net	39,648			46,582
Other assets	2,824			3,728
Total assets	$	385,438		$	415,980
Liabilities and shareholders’ equity
Current liabilities:
Accounts payable	$	21,892		$	13,156
Accrued expenses	21,122			30,015
Current installments of long-term debt and capital lease obligations	2,587			2,362
Total current liabilities	45,601			45,533
Long-term liabilities:
Long-term debt and capital lease obligations, less current installments	247,801			247,633
Other long-term liabilities	3,179			4,322
Deferred income taxes	—			536
Total long-term liabilities	250,980			252,491
Shareholders’ equity:
Common stock, $0.02 par value per share; authorized 28,000,000 shares; issued 13,632,641 and 13,287,688 shares at September 30, 2016 and December 31, 2015, respectively	273			266
Preferred stock, $0.02 par value per share; authorized 2,000,000 shares; none issued at either date	—			—
Additional paid-in capital	99,563			97,617
Accumulated other comprehensive loss	(332		)	(211		)
Treasury stock, at cost, 39,419 shares at December 31, 2015	—			(418		)
Retained (deficit) earnings	(10,647		)	20,702
Total shareholders’ equity	88,857			117,956
Total liabilities and shareholders’ equity	$	385,438		$	415,980

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,
	2016			2015			2016			2015
Sales and service revenue
Product sales	$	79,840		$	84,114		$	230,182		$	246,730
Service revenue	9,833			11,519			30,815			38,928
Net sales	89,673			95,633			260,997			285,658
Cost of sales and service revenue
Cost of product sales	64,839			67,514			184,520			197,211
Cost of service revenue	8,988			11,493			28,865			35,853
Cost of sales	73,827			79,007			213,385			233,064
Gross profit	15,846			16,626			47,612			52,594
Selling, general and administrative expenses	10,143			8,979			33,764			33,980
Goodwill and intangible asset impairment	—			—			28,368			—
Restructuring expense	3			1,575			1,190			2,368
Income (loss) from operations	5,700			6,072			(15,710		)	16,246
Other (expense) income:
Interest expense	(5,591		)	(5,653		)	(16,067		)	(16,802		)
Other, net	41			(136		)	(306		)	(89		)
Total other expense	(5,550		)	(5,789		)	(16,373		)	(16,891		)
(Loss) income before income taxes	150			283			(32,083		)	(645		)
(Benefit) provision for income taxes	(159		)	249			(734		)	408
Net income (loss)	309			34			(31,349		)	(1,053		)
Other comprehensive income (loss):
Change in foreign currency translation adjustment	(33		)	(32		)	(121		)	(31		)
Total comprehensive income (loss)	$	276		$	2		$	(31,470	)	$	(1,084	)
Amounts per common share:
Net income (loss) per common share	$	0.02		$	—		$	(2.39	)	$	(0.08	)
Net income (loss) per common share assuming dilution	$	0.02		$	—		$	(2.39	)	$	(0.08	)
Weighted average common shares outstanding	13,176,538			12,907,938			13,092,869			12,851,456
Weighted average dilutive common shares outstanding	13,233,926			13,050,238			13,092,869			12,851,456

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,
	2016			2015
Operating activities:
Net loss	$	(31,349	)	$	(1,053	)
Adjustments to reconcile net loss to net cash (used) provided by operating activities:
Depreciation and amortization	14,536			15,018
Amortization of debt issuance cost	1,432			1,479
Goodwill and intangible asset impairment	28,368			—
Stock based compensation	1,089			1,424
Deferred taxes	(723		)	(78		)
Other non-cash items	31			(94		)
Changes in operating assets and liabilities:
Accounts receivable	(6,514		)	(3,238		)
Inventories	(9,472		)	(4,993		)
Prepaid expenses and other assets	831			435
Current income taxes	180			(75		)
Accounts payable	9,032			(1,754		)
Accrued expenses	(7,758		)	(1,354		)
Net cash (used) provided by operating activities	(317		)	5,717
Investing activities:
Additions to property, plant and equipment	(7,671		)	(15,305		)
Proceeds from sale of property, plant and equipment	27			260
Net cash used by investing activities	(7,644		)	(15,045		)
Financing activities:
Proceeds from issuance of debt	1,465			—
Principal payments on long-term debt and notes payable	(12,108		)	(1,814		)
Advances on revolving line of credit	38,500			93,500
Payments on revolving line of credit	(28,500		)	(89,500		)
Payments for debt issuance cost	(97		)	(309		)
Net cash (used) provided by financing activities	(740		)	1,877
Net decrease in cash and cash equivalents	(8,701		)	(7,451		)
Cash and cash equivalents, beginning of period	10,504			7,927
Cash and cash equivalents, end of period	$	1,803		$	476
Supplemental disclosure of non-cash transactions:
Defined contribution plan funding in Company stock	$	1,472		$	710

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, 2016

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 recurring adjustments considered necessary for a fair statement have been included.  Operating results for the nine months ended September 30, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016. 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, as amended, of LMI Aerospace, Inc. (the "Company”, "us", "we", "our") for the year ended December 31, 2015, as filed with the Securities and Exchange Commission on March 17, 2016.

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 has engaged external subject-matter experts and continues to evaluate the transition method to be used and the impact of adoption of this standard on its consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, "Leases." The standard requires lessees to recognize a lease liability and a lease asset for all leases, including operating leases, with a term greater than 12 months on its balance sheet. The new standard also expands the required quantitative and qualitative disclosures surrounding leases. The provisions of this new guidance are effective as of the beginning of the Company’s first quarter of 2019. This new standard will be applied using a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The Company is currently evaluating the effect of this standard on its consolidated financial statements.

In March 2016, the FASB issued ASU 2016-09, "Improvements to Employee Share-Based Payment Accounting," which amends Accounting Standards Codification (“ASC”) Topic 718, Compensation – Stock Compensation. The standard requires excess tax benefits or deficiencies for share-based payments be recorded in the period shares vest as income tax expense or benefit, rather than within Additional Paid-in Capital. Cash flows related to excess tax benefits will be included in operating activities and will no longer be separately classified as a financing activity. As the Company carries a full valuation allowance against its net deferred tax assets, we do not expect that this standard will have a material impact on our financial statements. The new standard is effective for reporting periods beginning after December 15, 2016 and early adoption is permitted. The Company plans to adopt the new standard effective January 1, 2017.

6

LMI Aerospace, Inc.

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

September 30, 2016

In August 2016, the FASB issued ASU 2016-15, "Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments." The guidance addresses the classification of cash flow related to (1) debt prepayment or extinguishment costs, (2) settlement of zero-coupon debt instruments or other debt instruments with coupon rates that are insignificant in relation to the effective interest rate of the borrowing, (3) contingent consideration payments made after a business combination, (4) proceeds from the settlement of insurance claims, (5) proceeds from the settlement of corporate-owned life insurance, including bank-owned life insurance, (6) distributions received from equity method investees and (7) beneficial interests in securitization transactions. The guidance also clarifies how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows. The guidance will generally be applied retrospectively and is effective for financial statements issued for annual reporting periods beginning after December 15, 2017. Early application is permitted. We are currently evaluating the impact of this standard on our consolidated statement of cash flows.

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

2. Assets and Liabilities Measured at Fair Value

Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  A fair value hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements).  The three levels of the fair value hierarchy are described below:

Level 1: Quoted prices in active markets for identical assets or liabilities.

Level 2: Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The asset or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.  The valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.  There have been no changes in the methodologies used at September 30, 2016.  There were no transfers between levels during 2016 and 2015.

									2016
	Assets and Liabilities at Fair Value								Total
	as of September 30, 2016								Gains
	Total		(Level 1)		(Level 2)		(Level 3)		(Losses)
Non-recurring Fair Value Measurements:
Asset:
Intangible assets, net (1)	$	39,648	$	—	$	—	$	39,648	$	4,066
Goodwill (1)	$	62,482	$	—	$	—	$	62,482	$	24,302

(1) The fair value of goodwill is tested at least annually for impairment. During the quarter ended June 30, 2016, a triggering event occurred that required the Company to perform an interim impairment analysis for the goodwill and intangible assets within the Engineering Services reporting unit. This analysis determined the related goodwill and intangible assets were impaired and a loss of $28,368 was recorded in the quarter.

7

LMI Aerospace, Inc.

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

September 30, 2016

									2015
	Assets and Liabilities at Fair Value								Total
	as of December 31, 2015								Gains
	Total		(Level 1)		(Level 2)		(Level 3)		(Losses)
Non-recurring Fair Value Measurements:
Asset:
Intangible assets, net	$	46,582	$	—	$	—	$	46,582	$	—
Goodwill (1)	$	86,784	$	—	$	—	$	86,784	$	—

(1) The Company performed its annual impairment analysis of goodwill during the fourth quarter of 2015 and determined no adjustments to the carrying value were necessary.

3. Accounts Receivable, Net

Accounts receivable, net consists of the following:

	September 30, 2016			December 31, 2015
Trade receivables	$	48,905		$	42,307
Unbilled revenue	4,435			4,869
Other receivables	1,776			1,561
	55,116			48,737
Less: Allowance for doubtful accounts	(301		)	(246		)
Accounts receivable, net	$	54,815		$	48,491

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, 2016 and December 31, 2015 are $872 and $858, 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,
	2016			2015			2016			2015
Favorable adjustments	$	436		$	96		$	726		$	554
Unfavorable adjustments	(377		)	(2,183		)	(590		)	(2,214		)
Net favorable operating income adjustments	$	59		$	(2,087	)	$	136		$	(1,660	)

At September 30, 2016 and December 31, 2015, the Company had recognized a loss reserve of $2,154 and $1,992, respectively, on the Mitsubishi Regional Jet design-build program. Adjustments related to this program were recorded as a reduction to revenue in the Consolidated Statements of Comprehensive Income (Loss).

4. Inventories

Inventories consist of the following:

8

LMI Aerospace, Inc.

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

September 30, 2016

	September 30, 2016		December 31, 2015
Raw materials	$	13,579	$	12,513
Work in progress	25,528		22,681
Manufactured and purchased components	22,584		19,224
Finished goods	27,355		28,169
Product inventory	89,046		82,587
Capitalized contract costs	34,733		32,188
Total inventories	$	123,779	$	114,775

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. In accordance with ASC 605-35-45-1&2, the provisions for anticipated losses on contracts are accounted for as additional contract cost and recognized as part of cost of sales. Provisions for losses are recorded as a reduction of related contract costs recorded in inventory. At September 30, 2016 and December 31, 2015, the Company had no contracts with loss reserves accounted for as a reduction of inventory.

Capitalized contract costs at September 30, 2016 and December 31, 2015 include $5,522 and $5,970 respectively, related to an agreement the Company signed with Spirit Aerosystems ("Spirit".) This agreement extended the performance period of the statements of work for certain contracts with Spirit and gave the Company preferred supplier status on certain future contracts. This consideration is being amortized as a reduction to revenue over the life of the related contracts. The remaining capitalized contract costs relate primarily to four early-stage long-term contracts. The Company expects these costs will not be realized within one year but believes these amounts will be fully recovered over the life of the related contracts.

The following table illustrates the market to which capitalized contract cost at September 30, 2016 and December 31, 2015 related:

	September 30, 2016		December 31, 2015
Large commercial aircraft	$	9,787	$	11,528
Corporate and regional aircraft	20,368		16,721
Military	4,578		3,939
Total capitalized contract cost	$	34,733	$	32,188

5. Goodwill and Intangible Assets

Goodwill

The following table summarizes the net carrying amount of goodwill by segment at September 30, 2016 and December 31, 2015, respectively:

							Engineering
	Aerostructures						Services						Total
	September 30,			December 31,			September 30,			December 31,			September 30,			December 31,
	2016			2015			2016			2015			2016			2015
Balance at:
Gross Goodwill	$	141,953		$	141,953		$	50,741		$	50,741		$	192,694		$	192,694
Accumulated impairment loss	(79,471		)	(79,471		)	(50,741		)	(26,439		)	(130,212		)	(105,910		)
Net Goodwill	$	62,482		$	62,482		$	—		$	24,302		$	62,482		$	86,784

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. A triggering event did not occur in the third quarter of 2016 that would require the Company to perform an impairment evaluation.

9

LMI Aerospace, Inc.

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

September 30, 2016

In the second quarter of 2016, the Company significantly downgraded the full-year 2016 sales and operating income forecast for its Engineering Services business due to continued decline in demand. This downward adjustment to the forecast, combined with lower than expected operating results for the second quarter of 2016, was deemed to be a triggering event requiring an interim impairment evaluation for the Engineering Services reporting unit in accordance with ASC 350. The interim step one analysis performed, which used a combination of discounted cash flows and market value approaches to determine the fair value of the Engineering Services reporting unit, indicated the fair value was less than the carrying value of its net assets. The required step two valuation analysis, prepared as of June 30, 2016, indicated that the $24,302 of goodwill related to Engineering Services was fully impaired. The resulting impairment charge was recorded in the quarter ended June 30, 2016 and is reflected in the Engineering Services segment within the Goodwill and Intangible Asset Impairment line of the Condensed Consolidated Statements of Comprehensive Income (Loss) for the nine months ended September 30, 2016.

Intangible Assets

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

	September 30, 2016			December 31, 2015
Trademarks	$	778		$	778
Customer intangible assets	68,991			68,991
Other	1,274			1,274
Accumulated amortization and impairment	(31,395		)	(24,461		)
Intangible assets, net	$	39,648		$	46,582

Intangibles amortization expense was $796 and $1,089 for the three months ended September 30, 2016 and 2015, respectively, and $2,868 and $3,269 for the nine months ended September 30, 2016 and 2015, respectively. The accumulated amortization balances at September 30, 2016 and December 31, 2015, respectively, were $778 and $778 for trademarks, $29,636 and $22,816 for customer intangible assets, and $981 and $867 for other intangible assets.

In conjunction with the interim impairment analysis conducted during the current-year as discussed above, the Company also evaluated the recoverability of the customer intangible assets related to the Engineering Services reporting unit under ASC 360. As a result of this analysis, an impairment charge of $4,066 was recognized in the Engineering Services segment within the Goodwill and Intangible Asset Impairment line of the Condensed Consolidated Statements of Comprehensive Income (Loss) for the nine months ended September 30, 2016.

Intangible assets related to the acquisition of Valent Aerostructures, LLC 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.

10

LMI Aerospace, Inc.

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

September 30, 2016

6. Long-term Debt and Capital Lease Obligations

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

	September 30, 2016			December 31, 2015
Second priority senior secured notes at a fixed rate of 7.375% at September 30, 2016	$	224,175		$	234,175
Revolver under credit agreement, variable	10,000			—
Industrial Revenue Bonds at fixed rates of 2.80% to 5.00% at September 30, 2016 and December 31, 2015	6,569			6,901
Capital leases, at fixed rates ranging from 3.00% to 4.50% and 3.00% to 7.73% at September 30, 2016 and December 31, 2015	10,657			11,708
Notes payable, principal and interest payable monthly, at fixed rates ranging from 2.45% to 2.56% at September 30, 2016 and December 31, 2015	2,491			1,750
Debt issuance cost	(3,504		)	(4,539		)
Total debt	$	250,388		$	249,995
Less current installments	2,587			2,362
Total long-term debt and capital lease obligations	$	247,801		$	247,633

At September 30, 2016, the Company had $224,175 in outstanding second-priority senior secured notes maturing on July 15, 2019. The Company records these notes at cost. The fair value of these notes, based on the last market price transaction in the quarter ended September 30, 2016 of 1.0075, was $225,856. During the quarter ended September 30, 2016, the Company repurchased and retired $10,000 of the outstanding notes at a premium of 1.01875 plus accrued interest. 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.  At September 30, 2016, the Company had $10,000 in outstanding borrowings under the facility. Under the agreement, the co-collateral agents may establish a reserve against the facility. At September 30, 2016, the reserve established was $15,000, which reduced the maximum availability to $75,000. Based on the amount of eligible assets at September 30, 2016 and outstanding letters of credit of $1,525, available borrowings were further reduced to $44,291. 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 the nine months ended September 30, 2016, the actual interest rate incurred for the revolving credit facility was 5.8% on average outstanding borrowings of $1,821.

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, 2016, the commitment fee was 0.5%.

11

LMI Aerospace, Inc.

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

September 30, 2016

The revolving credit facility matures on the earlier of July 15, 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, 2016, 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 the 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. 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 treasury stock method.  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,
	2016		2015		2016			2015
Numerators
Net income (loss)	$	309	$	34	$	(31,349	)	$	(1,053	)
Denominators
Weighted average common shares - basic	13,176,538		12,907,938		13,092,869			12,851,456
Dilutive effect of restricted stock	57,388		142,300		—			—
Weighted average common shares - diluted	13,233,926		13,050,238		13,092,869			12,851,456
Basic earnings (loss) per share	$	0.02	$	—	$	(2.39	)	$	(0.08	)
Diluted earnings (loss) per share	$	0.02	$	—	$	(2.39	)	$	(0.08	)

For the nine months ended September 30, 2016, 81,734 restricted shares were 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, 2016

8. 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 under the 2005 Plan 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, 2016	253,434		$	14.54
Granted	—		—
Vested	(53,846	)	17.89
Forfeited	(18,580	)	14.21
Outstanding at September 30, 2016	181,008		$	13.58

Common stock compensation expense related to restricted stock awards granted under the 2005 Plan was $58 and $224 for the three months ended September 30, 2016 and 2015, respectively, and $401 and $1,154 for the nine months ended September 30, 2016 and 2015, respectively.

Total unrecognized compensation costs related to non-vested, share-based awards granted or awarded under the 2005 Plan were $1,254 and $1,762 at September 30, 2016 and December 31, 2015, respectively.  These costs are expected to be recognized over a weighted average period of 1.3 years and 1.6 years, at September 30, 2016 and December 31, 2015, respectively.

As of July 7, 2015 the Company was no longer able to grant new 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 under the 2015 Plan 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, 2016	61,801		$	9.79
Granted	269,875		8.51
Vested (1)	(55,672	)	9.79
Forfeited	(6,899	)	9.43
Outstanding at September 30, 2016	269,105		$	8.52

(1) Excludes 6,129 shares for which service requirements are met that remain subject to deferral at September 30, 2016 pursuant to the LMI Aerospace, Inc. Non-Qualified Deferred Compensation Plan for Senior Executives and Outside Directors.

13

LMI Aerospace, Inc.

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

September 30, 2016

Common stock compensation expense related to restricted stock awards granted under the 2015 Plan was $271 and $151 for the three months ended September 30, 2016 and 2015, respectively, and $695 and $151 for the nine months ended September 30, 2016 and 2015, respectively.

Total unrecognized compensation costs related to non-vested, share-based awards granted or awarded under the 2015 Plan were $1,223 and $303 at September 30, 2016 and December 31, 2015, respectively.  These costs are expected to be recognized over a weighted average period of 1.9 years and 0.5 years at September 30, 2016 and December 31, 2015, respectively.

9. 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. This segment 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,
	2016			2015			2016			2015
Net sales:
Aerostructures	$	80,433		$	85,119		$	232,846		$	249,661
Engineering Services	9,474			10,826			29,239			36,818
Eliminations	(234		)	(312		)	(1,088		)	(821		)
	$	89,673		$	95,633		$	260,997		$	285,658
Income from operations:
Aerostructures	$	5,667		$	8,918		$	13,193		$	20,063
Engineering Services (1)	89			(2,805		)	(28,570		)	(3,803		)
Eliminations	(56		)	(41		)	(333		)	(14		)
	$	5,700		$	6,072		$	(15,710	)	$	16,246

(1) The nine months ended September 30, 2016 include a charge of $23,402 related to goodwill impairment and a charge of $4,066 related to intangible asset impairment. (See Note 4, Goodwill and Intangible Assets, to the Condensed Consolidated Financial Statements)

10. Customer Concentration

Direct sales, through both of the Company’s business segments, to our largest customer, Spirit Aerosystems (“Spirit”), accounted for 40.7% and 34.4% of the Company’s total revenues for the three months ended September 30, 2016 and 2015, respectively. Direct sales to Spirit accounted for 38.6% and 34.8% of the Company’s total revenues for the nine months ended September 30, 2016 and 2015, respectively. Accounts receivable balances related to Spirit were 33.9% and 28.6% of the Company’s total accounts receivable balance at September 30, 2016 and December 31, 2015, 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 13.5% and 15.9% of the Company’s total revenues for the three months ended September 30, 2016 and 2015, respectively. Direct sales to Gulfstream accounted for 11.6% and 14.3% of the Company’s total revenues for the nine months ended September 30, 2016 and 2015, respectively. Accounts

14

LMI Aerospace, Inc.

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

September 30, 2016

receivable balances resulting from direct sales to Gulfstream were 13.3% and 15.5% of the Company’s total accounts receivable balance at September 30, 2016 and December 31, 2015, respectively.

Direct sales, through both of the Company’s business segments, to our third largest customer, The Boeing Company, (“Boeing”), accounted for 12.1% and 12.6% of the Company’s total revenues for the three months ended September 30, 2016 and 2015, respectively.  Direct sales to Boeing accounted for 11.4% and 11.4% of the Company’s total revenues for the nine months ended September 30, 2016 and 2015, respectively. Accounts receivable balances related to Boeing were 9.4% and 10.2% of the Company’s total accounts receivable balance at September 30, 2016 and December 31, 2015, respectively.

11. Income Taxes

The Company records income tax expense or benefit each quarter based on its estimated full-year effective tax rate. Income tax benefits of $159 and $734 were recognized in the three and nine months ended September 30, 2016, respectively. Income tax expense of $249 and $408 were recognized in the three and nine months ended September 30, 2015, respectively. The Company continues to carry a full valuation allowance on its net deferred tax assets, which totaled $20,273 and $14,461 at September 30, 2016 and December 31, 2015, respectively.

12. Restructuring

The Company committed to and implemented various restructuring plans in 2015 and 2016. Included in those plans were the 2016 relocation of its sheet-metal fabrication operation in Wichita, Kansas and the 2015 relocation of its machining operations in St. Charles, Missouri to other facilities within the Company. In 2015, the Company also closed its Coweta, Oklahoma manufacturing facility in addition to Engineering offices in Greenville, South Carolina and Melbourne, Australia. In addition, the Company implemented other employment separation activities as part of the Company's overall reorganization and cost reduction initiatives. 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,					September 30,
	2016			2015		2016			2015
St. Charles machine parts operations relocation	$	—		$	—	$	—		$	378
Wichita, Kansas sheet-metal operations relocation	49			—		296			—
Coweta machining facility closure	—			64		—			64
Greenville office closure	—			501		(26		)	501
Australia office closure	—			34		—			34
Other employment separation activities	(46		)	976		920			1,391
Total	$	3		$	1,575	$	1,190		$	2,368
Expense incurred by segment:
Aerostructures	$	3		$	336	$	1,216		$	1,114
Engineering Services	—			1,239		(26		)	1,254
Total	$	3		$	1,575	$	1,190		$	2,368

The Company expects to recognize an additional $22 of restructuring expenses in the fourth quarter of 2016 related to the Wichita, Kansas sheet-metal operations relocation.

15

LMI Aerospace, Inc.

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

September 30, 2016

Cash payments were made associated with restructuring plans of $188 and $1,165 in the three months ended September 30, 2016 and 2015, respectively, and $870 and $2,175 in the nine months ended September 30, 2016 and 2015, respectively.

The following table summarizes the Company's restructuring activities during the nine months ended September 30, 2016:

	Employee
	Severance			Other			Total
Accrued restructuring balance as of December 31, 2015	$	162		$	93		$	255
Accrual additions	1,216			(26		)	1,190
Cash payments	(803		)	(67		)	(870		)
Accrued restructuring balance as of September 30, 2016	$	575		$	—		$	575

Accrued restructuring of $575 at September 30, 2016 is expected to be paid over the next two quarters.

13. Legal Contingencies

The Company is not named as a defendant in a lawsuit that is outside the normal course of business.  In accordance with generally accepted accounting principles, management discloses the amount or range of reasonably possible losses in a lawsuit in which the Company is a named defendant.  In the opinion of management, after consulting with legal counsel, any losses resulting from lawsuits in the normal course of business should not have a material effect on the Company’s financial position, cash flows or results of operations.

14. 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 July 15, 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”) rules governing reporting on guarantor financial information.

16

LMI Aerospace, Inc.

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

September 30, 2016

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.

17

LMI Aerospace, Inc.

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

September 30, 2016

CONDENSED CONSOLIDATING BALANCE SHEET

as of September 30, 2016

	LMIA(Guarantor Parent)		Guarantor Subsidiaries		Consolidating/Eliminating Entries			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	1,590	$	213	$	—		$	1,803
Trade accounts receivable, net	631		54,184		—			54,815
Intercompany receivables	284,892		277,828		(562,720		)	—
Inventories	—		123,779		—			123,779
Prepaid expenses and other current assets	1,512		2,221		—			3,733
Total current assets	288,625		458,225		(562,720		)	184,130
Property, plant and equipment, net	6,343		90,011		—			96,354
Investments in subsidiaries	370,244		—		(370,244		)	—
Goodwill	—		62,482		—			62,482
Intangible assets, net	—		39,648		—			39,648
Other assets	1,651		1,173		—			2,824
Total assets	$	666,863	$	651,539	$	(932,964	)	$	385,438
Liabilities and shareholders’ equity
Current liabilities:
Accounts payable	$	653	$	21,239	$	—		$	21,892
Accrued expenses	8,572		12,550		—			21,122
Intercompany payables	336,966		225,754		(562,720		)	—
Current installments of long-term debt and capital lease obligations	88		2,499		—			2,587
Total current liabilities	346,279		262,042		(562,720		)	45,601
Long-term debt and capital lease obligations, less current installments	230,813		16,988		—			247,801
Other long-term liabilities	914		2,265		—			3,179
Deferred income taxes	—		—		—			—
Total long-term liabilities	231,727		19,253		—			250,980
Total shareholders’ equity	88,857		370,244		(370,244		)	88,857
Total liabilities and shareholders’ equity	$	666,863	$	651,539	$	(932,964	)	$	385,438

18

LMI Aerospace, Inc.

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

September 30, 2016

CONDENSED CONSOLIDATING BALANCE SHEET

as of December 31, 2015

	LMIA(Guarantor Parent)		Guarantor Subsidiaries		Consolidating/Eliminating Entries			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	10,251	$	253	$	—		$	10,504
Trade accounts receivable, net	1,220		47,271		—			48,491
Intercompany receivables	196,496		203,128		(399,624		)	$	—
Inventories	—		114,775		—			114,775
Prepaid expenses and other current assets	2,224		1,923		—			4,147
Total current assets	210,191		367,350		(399,624		)	177,917
Property, plant and equipment, net	5,430		95,539		—			100,969
Investments in subsidiaries	387,868		—		(387,868		)	—
Goodwill	—		86,784		—			86,784
Intangible assets, net	—		46,582		—			46,582
Other assets	2,135		1,593		—			3,728
Total assets	$	605,624	$	597,848	$	(787,492	)	$	415,980
Liabilities and shareholders’ equity
Current liabilities:
Accounts payable	$	1,393	$	11,763	$	—		$	13,156
Accrued expenses	17,009		13,006		—			30,015
Intercompany payables	237,548		162,076		(399,624		)	—
Current installments of long-term debt and capital lease obligations	85		2,277		—			2,362
Total current liabilities	256,035		189,122		(399,624		)	45,533
Long-term debt and capital lease obligations, less current installments	229,752		17,881		—			247,633
Other long-term liabilities	1,881		2,441		—			4,322
Deferred income taxes	—		536		—			536
Total long-term liabilities	231,633		20,858		—			252,491
Total shareholders’ equity	117,956		387,868		(387,868		)	117,956
Total liabilities and shareholders’ equity	$	605,624	$	597,848	$	(787,492	)	$	415,980

19

LMI Aerospace, Inc.

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

September 30, 2016

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Three Months Ended September 30, 2016

	LMIA(Guarantor Parent)			Guarantor Subsidiaries			Consolidating/Eliminating Entries			Consolidated
Sales and service revenue
Product sales	$	(19	)	$	79,841		$	18		$	79,840
Service revenues	9,767			9,831			(9,765		)	9,833
Net sales	9,748			89,672			(9,747		)	89,673
Cost of sales and service revenue
Cost of product sales	—			64,857			(18		)	64,839
Cost of service revenues	9,492			9,054			(9,558		)	8,988
Cost of sales	9,492			73,911			(9,576		)	73,827
Gross profit	256			15,761			(171		)	15,846
Selling, general and administrative expenses	—			10,143			—			10,143
Goodwill and intangible	—			—			—			—
Restructuring expense	(47		)	50			—			3
(Loss) income from operations	303			5,568			(171		)	5,700
Other income (expense):
Interest expense	(5,369		)	(222		)	—			(5,591		)
Other, net	—			41			—			41
Income (loss) from equity investments in subsidiaries	5,513			—			(5,513		)	—
Total other expense	144			(181		)	(5,513		)	(5,550		)
(Loss) income before income taxes	447			5,387			(5,684		)	150
(Benefit) provision for income taxes	—			(159		)	—			(159		)
Net (loss) income	447			5,546			(5,684		)	309
Other comprehensive income (expense):
Change in foreign currency translation adjustment	—			(33		)	—			(33		)
Total comprehensive (loss) income	$	447		$	5,513		$	(5,684	)	$	276

20

LMI Aerospace, Inc.

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

September 30, 2016

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 (expense):
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, 2016

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Nine Months Ended September 30, 2016

	LMIA(Guarantor Parent)			Guarantor Subsidiaries			Consolidating/Eliminating Entries			Consolidated
Sales and service revenue
Product sales	$	43		$	230,153		$	(14	)	$	230,182
Service revenues	31,952			30,836			(31,973		)	30,815
Net sales	31,995			260,989			(31,987		)	260,997
Cost of sales and service revenue
Cost of product sales	80			184,426			14			184,520
Cost of service revenues	32,017			28,849			(32,001		)	28,865
Cost of sales	32,097			213,275			(31,987		)	213,385
Gross profit	(102		)	47,714			—			47,612
Selling, general and administrative expenses	—			33,764			—			33,764
Goodwill and intangible asset impairment	—			28,368			—			28,368
Restructuring expense	404			786			—			1,190
(Loss) income from operations	(506		)	(15,204		)	—			(15,710		)
Other income (expense):
Interest expense	(15,415		)	(652		)	—			(16,067		)
Other, net	4			(310		)	—			(306		)
Income (loss) from equity investments in subsidiaries	(15,553		)	—			15,553			—
Total other expense	(30,964		)	(962		)	15,553			(16,373		)
(Loss) income before income taxes	(31,470		)	(16,166		)	15,553			(32,083		)
(Benefit) provision for income taxes	—			(734		)	—			(734		)
Net (loss) income	(31,470		)	(15,432		)	15,553			(31,349		)
Other comprehensive income (expense):
Change in foreign currency translation adjustment	—			(121		)	—			(121		)
Total comprehensive (loss) income	$	(31,470	)	$	(15,553	)	$	15,553		$	(31,470	)

22

LMI Aerospace, Inc.

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

September 30, 2016

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
(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 (expense):
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, 2016

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

For the Nine Months Ended September 30, 2016

	LMIA(Guarantor Parent)			Guarantor Subsidiaries			Consolidating/Eliminating Entries			Consolidated
Operating activities:
Net (loss)/income	$	(31,470	)	$	(15,432	)	$	15,553		$	(31,349	)
Adjustments for non-cash items	21,104			39,181			(15,553		)	44,732
Net changes in operating assets and liabilities, net of acquired businesses	(7,466		)	(6,234		)	—			(13,700		)
Intercompany activity	11,022			(11,022		)	—			—
Net cash (used)/provided by operating activities	(6,810		)	6,493			—			(317		)
Investing activities:
Additions to property, plant and equipment	(1,790		)	(5,881		)	—			(7,671		)
Proceeds from sale of equipment	3			24			—			27
Net cash used by investing activities	(1,787		)	(5,857		)	—			(7,644		)
Financing activities:
Proceeds from issuance of debt	—			1,465			—			1,465
Principal payments on long-term debt and notes payable	(10,064		)	(2,044		)	—			(12,108		)
Advances on revolving line of credit	38,500			—			—			38,500
Payments on revolving line of credit	(28,500		)	—			—			(28,500		)
Payments for debt issuance cost	—			(97		)	—			(97		)
Net cash provided (used)/provided by financing activities	(64		)	(676		)	—			(740		)
Net (decrease) increase in cash and cash equivalents	(8,661		)	(40		)	—			(8,701		)
Cash and cash equivalents, beginning of period	10,251			253			—			10,504
Cash and cash equivalents, end of period	$	1,590		$	213		$	—		$	1,803

24

LMI Aerospace, Inc.

Notes to Condensed Consolidated Financial Statements

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

(Unaudited)

September 30, 2016

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

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, as amended, for the fiscal year ended December 31, 2015 (the “2015 Form 10-K”) and otherwise described in the Company’s periodic filings and current reports filed with the Securities and Exchange Commission (the “SEC”).

25

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 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 2015 Form 10-K, as amended, 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 2015 Form 10-K, as amended.

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. This segment 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.

In the second quarter of 2016, the Company significantly downgraded the full-year 2016 sales and operating income forecast for its Engineering Services business due to continued decline in demand. This downward adjustment to the forecast, combined with lower than expected operating results for the second quarter of 2016, led the Company to conduct an interim impairment test. This analysis resulted in the Company recording a goodwill impairment charge of $24.3 million and an intangible asset impairment charge of $4.1 million in the second quarter of 2016. This non-cash impairment charge is not expected to result in any impact to the Company's liquidity, future operations or ability to comply with its debt covenants.

Results of Operations

Three months ended September 30, 2016 compared to three months ended September 30, 2015

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.

26

The following table is a summary of the Company's operating results for the three months ended September 30, 2016 and 2015, respectively:

	Three Months Ended   September 30, 2016
	($ in millions)
	Aerostructures		Engineering Services		Elimination			Total
Net sales	$	80.4	$	9.5	$	(0.2	)	$	89.7
Cost of sales	65.7		8.3		(0.1		)	73.9
Gross profit	14.7		1.2		(0.1		)	15.8
S, G, & A	9.0		1.1		—			10.1
Income from operations	$	5.7	$	0.1	$	(0.1	)	$	5.7

	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

Aerostructures Segment

Net Sales.  Net sales were $80.4 million for the third quarter of 2016, a 5.5%decrease from $85.1 million in the third quarter of 2015.  The following table specifies the amount of the Aerostructures segment’s net sales by category for the third quarter of 2016 and 2015 and the percentage of the segment’s total net sales for each period represented by each category:

	Three Months Ended September 30,
Category	2016		% of Total		2015		% of Total
	($ in millions)
Large commercial aircraft	$	47.2	58.7	%	$	45.1	53.0	%
Corporate and regional aircraft	18.9		23.5	%	23.6		27.7	%
Military	8.8		10.9	%	8.9		10.5	%
Other	5.5		6.9	%	7.5		8.8	%
Total	$	80.4	100.0	%	$	85.1	100.0	%

Net sales of large commercial aircraft products increased4.7% in the third quarter of 2016 when compared to the third quarter of 2015. The most significant increase in revenue in the category was attributable to sales on the Bombardier C-Series platform which contributed $2.1 million in additional sales volume when compared to the prior-year period. Increased content and higher production rates on the Boeing 787 platform, which generated $8.1 million in the third quarter of 2016 compared to $7.0 million in the third quarter of 2015, also contributed to the increase in sales. We expect the Bombardier C-Series and Boeing 787 platforms to generate similar levels of revenue throughout 2016. These increases in revenue were partially offset by a decline in sales on the Boeing 747 platform to $1.5 million in the third quarter of 2016 from $2.7 million in the third quarter of 2015.

Net sales of components for corporate and regional aircraft decreased 19.9% during the third quarter of 2016. The decline in sales in the corporate and regional jet market was primarily attributable to lower tooling demand of $3.1 million on the Gulfstream G500/600 program and lower overall demand of $2.5 million on the Gulfstream G450/550 program, from $5.5 million and $6.1 million, respectively, in the third quarter of 2015 to $2.4 million and $3.6 million, respectively in the third quarter of 2016. Sales on a new Honda Jet program partially offset these decreases and contributed $1.5 million in the third quarter of 2016.

27

Net sales of military products decreased 1.1% during the third quarter of 2016.  The decrease is primarily due to a $0.7 million reduction in revenue on the Sikorsky Blackhawk program which was partially offset by a $0.5 million increase in sales on the Boeing Apache program in the third quarter of 2016 when compared to the third quarter of 2015.

Cost of Goods Sold.  Cost of goods sold for the third quarter of 2016 was $65.7 million compared to $68.5 million for the third quarter of 2015. The reduction in cost of goods sold in the third quarter of 2016 was primarily attributable to lower sales volume and a $0.6 million reduction in incentive compensation expense.

Gross Profit.  Gross profit for the third quarter of 2016 was $14.7 million (18.3% of net sales) compared to $16.6 million (19.5% of net sales) in the third quarter of 2015. The reduction in gross profit margin in the second quarter of 2016 was primarily attributable to lower sales and unfavorable product mix, partially offset by a reduction in incentive compensation expense of $0.6 million and benefits realized from restructuring and cost savings activities completed during 2015.

Selling, General and Administrative Expenses.  Selling, general and administrative expenses were $9.0 million (11.2% of net sales) for the third quarter of 2016, compared to $7.7 million (9.0% of net sales) for the third quarter of 2015.  The change in selling, general and administrative expenses was primarily due to a net gain of $3.3 million recorded in the third quarter of 2015 related to the settlement of a lawsuit. In addition, incentive compensation costs and salaries and related fringes were lower in the third quarter of 2016 by $0.9 million and $0.4 million, respectively, when compared to the prior-year period.

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 $9.5 million for the third quarter of 2016 as compared to $10.8 million for the third quarter of 2015, a decrease of 12.0%.  The following table specifies the amount of the Engineering Services segment’s net sales by category for the third quarter in each of 2016 and 2015 and the percentage of the segment’s total net sales represented by each category.

	Three Months Ended September 30,
Category	2016		% of Total		2015		% of Total
	($ in millions)
Large commercial aircraft	$	3.0	31.6	%	$	6.4	59.3	%
Corporate and regional aircraft	2.8		29.5	%	0.8		7.4	%
Military	2.9		30.5	%	2.9		26.9	%
Other	0.8		8.4	%	0.7		6.4	%
Total	$	9.5	100.0	%	$	10.8	100.0	%

Net sales of services for large commercial aircraft were $3.0 million in the third quarter of 2016, down53.1% from $6.4 million in the third quarter of 2015. The decrease in this category was primarily attributable to the completion of the Bombardier C-series program in the first quarter of 2016, which contributed $1.8 million of revenue in the third quarter of 2015 compared to no revenue in the third quarter of 2016. In addition, sales related to maintenance and repair services declined to $2.8 million in the third quarter of 2016 compared to $4.0 million in the third quarter of 2015.

Net sales of services related to corporate and regional aircraft were $2.8 million in the third quarter of 2016 compared to $0.8 million for the third quarter of 2015, up250.0%.  The change in revenue was primarily related to an unfavorable cumulative catchup adjustment of $1.9 million on the Mitsubishi Regional Jet program in the third quarter of 2015. Revenue on the Bombardier Global 7000/8000 program increased $1.0 million to $1.5 million in the third quarter of 2016 compared to $0.5 million in the third quarter of 2015. The Aerion AS2 program contributed $0.6 million in the third quarter of 2015 compared to $0.1 million in the third quarter of 2016.

Net sales of services for military programs were $2.9 million in both the third quarter of 2016 and the third quarter of 2015.  

Net sales of services related to the design and delivery of tooling on various programs supporting commercial and military aircraft were $0.8 million for the third quarter of 2016 compared to $0.7 million in the third quarter of 2015.

28

Cost of Goods Sold. Cost of goods sold for the third quarter of 2016 was $8.3 million compared to $10.8 million for the third quarter of 2015.  The decrease in cost of goods sold was primarily due to reductions in direct labor, indirect labor and related fringe benefits totaling $2.2 million resulting from lower demand for this segment and cost reduction activities completed in 2015.

Gross Profit.  Gross profit for the third quarter of 2016 was $1.2 million (12.6% of net sales) compared to $0.0 million (0.0% of net sales) in the third quarter of 2015.  The change in gross profit was attributable to the unfavorable cumulative catchup adjustment of $1.9 million recorded the third quarter of 2015.

Selling, General and Administrative Expenses.  Selling, general and administrative expenses for the third quarter of 2016 were $1.1 million, or 11.6% of net sales, compared to $2.8 million, or 25.9% of net sales, for the third quarter of 2015. The decrease in selling, general and administrative expenses was primarily attributable to restructuring expenses of $1.2 million incurred in the third quarter of 2015 associated with the closure of the Company's Greenville, South Carolina and Melbourne, Australia offices and the elimination of other management positions within the segment. In addition, lower intangible asset amortization and salary and wage expenses of $0.3 million and $0.2 million, respectively, contributed to the reduction in selling, general and administrative expenses in the third quarter of 2016 when compared to the prior-year period.

Non-segment Expenses

Interest Expense.  Interest expense decreased to $5.6 million for the third quarter of 2016 from $5.7 million for the third quarter of 2015.  The reduction in interest expense was attributable to lower average borrowings and was partially offset by a $0.2 million write-off of debt issuance cost related to the retirement of certain of the outstanding senior secured notes during the third quarter of 2016.

Income Tax Expense.  During the third quarter of 2016, the Company recorded an income tax benefit of $0.2 million compared to income expense of $0.2 million in the third quarter of 2015.  

Results of Operations

Nine months endedSeptember 30, 2016 compared to nine months ended September 30, 2015

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.

The following table is a summary of the Company's operating results for the nine months ended September 30, 2016 and 2015, respectively:

	Nine Months Ended   September 30, 2016
	($ in millions)
	Aerostructures		Engineering Services			Elimination			Total
Net sales	$	232.9	$	29.2		$	(1.1	)	$	261.0
Cost of sales	188.7		25.5			(0.8		)	213.4
Gross profit	44.2		3.7			(0.3		)	47.6
S, G, & A	31.0		32.3			—			63.3
Income from operations	$	13.2	$	(28.6	)	$	(0.3	)	$	(15.7	)

29

	Nine Months Ended   September 30, 2015
	($ in millions)
	Aerostructures		Engineering Services			Elimination			Total
Net sales	$	249.7	$	36.8		$	(0.8	)	$	285.7
Cost of sales	200.2		33.7			(0.8		)	233.1
Gross profit	49.5		3.1			—			52.6
S, G, & A	29.5		6.9			—			36.4
Income from operations	$	20.0	$	(3.8	)	$	—		$	16.2

Aerostructures Segment

Net Sales.  Net sales were $232.9 million for the first nine months of 2016, a 6.7%decrease from $249.7 million in the first nine months of 2015.  The following table specifies the amount of the Aerostructures segment’s net sales by category for the first nine months of 2016 and 2015 and the percentage of the segment’s total net sales for each period represented by each category:

	Nine months ended September 30,
Category	2016		% of Total		2015		% of Total
	($ in millions)
Large commercial aircraft	$	138.0	59.3	%	$	132.7	53.1	%
Corporate and regional aircraft	52.8		22.7	%	65.4		26.2	%
Military	26.6		11.4	%	30.8		12.3	%
Other	15.5		6.6	%	20.8		8.4	%
Total	$	232.9	100.0	%	$	249.7	100.0	%

Net sales of large commercial aircraft products increased4.0% in the first nine months of 2016 when compared to the first nine months of 2015. The most significant increase in revenue in the category was attributable to sales on the Bombardier C-Series platform which contributed $5.5 million in additional sales volume when compared to the prior-year period. Increased content and higher production rates on the Boeing 787 platform, which generated $24.8 million in the first nine months of 2016 compared to $20.9 million in the first nine months of 2015, also contributed to the increase in sales. These increases were partially offset by a decrease in sales on the Boeing 747 platform from $9.1 million in the first nine months of 2015 to $4.2 million in the first nine months of 2016.

Net sales of components for corporate and regional aircraft decreased19.3% during the first nine months of 2016. The decrease in revenue was primarily attributable to overall sales on the Gulfstream G450/G550 and tooling on the G500/600 programs, which generated sales of $19.3 million and $9.5 million, respectively, in the first nine months of 2015 compared to $10.0 million and $5.5 million, respectively, in the first nine months of 2016.

Net sales of military products decreased13.6% during the first nine months of 2016.  The decrease is primarily due to reductions in revenue on the Boeing F-18 and Lockheed Martin F-35 programs of $1.5 million and $1.3 million, respectively, from $3.3 million and $2.0 million, respectively, in the first nine months of 2015 to $1.8 million and $0.7 million, respectively, in the first nine months of 2016. Sales on the Sikorsky Blackhawk program also declined from $14.4 million in the first nine months of 2015 to $13.2 million in the first nine months of 2016.

Cost of Goods Sold.  Cost of goods sold for the first nine months of 2016 was $188.7 million compared to $200.2 million for the first nine months of 2015. The reduction in cost of goods sold in the first nine months of 2016 was primarily attributable to lower sales volumes, a reduction in incentive compensation expense of $1.4 million and the benefits of lower manufacturing overhead expenses realized from cost savings initiatives implemented in prior periods.

Gross Profit.  Gross profit for the first nine months of 2016 was $44.2 million (19.0% of net sales) compared to $49.5 million (19.8% of net sales) in the first nine months of 2015. Unfavorable product mix and the impact of lower sales contributed to the reduction in gross profit margin in the first nine months of 2016. This decline in gross profit margin was partially offset by benefits

30

realized from restructuring and cost savings activities completed during 2015 and 2016 in addition to lower incentive compensation costs of $1.4 million.

Selling, General and Administrative Expenses.  Selling, general and administrative expenses were $31.0 million (13.3% of net sales) for the first nine months of 2016, compared to $29.5 million (11.8% of net sales) for the first nine months of 2015.  The change in selling, general and administrative expenses was primarily due to a net gain of $3.3 million recorded in the first nine months of 2015 related to the settlement of a lawsuit. In addition, incentive compensation costs and salaries and related fringes were lower in the first nine months of 2016 by $1.3 million and $1.7 million, respectively, when compared to the prior-year period.

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 $29.2 million for the first nine months of 2016 compared to 36.8 million for the first nine months of 2015, a decrease of 20.7%.  The following table specifies the amount of the Engineering Services segment’s net sales by category for the first nine months in each of 2016 and 2015 and the percentage of the segment’s total net sales represented by each category.

	Nine Months Ended September 30,
Category	2016		% of Total		2015		% of Total
	($ in millions)
Large commercial aircraft	$	10.5	36.0	%	$	16.7	45.4	%
Corporate and regional aircraft	9.7		33.2	%	10.6		28.8	%
Military	7.6		26.0	%	7.9		21.5	%
Other	1.4		4.8	%	1.6		4.3	%
Total	$	29.2	100.0	%	$	36.8	100.0	%

Net sales of services for large commercial aircraft were $10.5 million in the first nine months of 2016, down37.1% from $16.7 million in the first nine months of 2015. The decrease in this category is partially attributable to a decline in sales related to maintenance and repair services, which contributed $11.4 million in revenue for the first nine months of 2015 compared to $8.8 million in revenue for the first nine months of 2016. In addition, revenues on the Bombardier C-series and Boeing 747 programs decreased to $1.2 million and $0.0 million, respectively, in the first nine months of 2016 from $4.0 million and $0.5 million, respectively in the first nine months of 2015.

Net sales of services related to corporate and regional aircraft were $9.7 million in the first nine months of 2016, compared to $10.6 million for the first nine months of 2015, a decrease of 8.5%.  The decrease in this category was primarily attributable to the Aerion AS2 program, which contributed revenue of $0.6 million in the first nine months of 2016 compared to $2.1 million in the first nine months of 2015. Sales on the Arrowhead Global Wing program contributed $1.1 million in the first nine months of 2015 and was completed in that year. Revenues in the first nine months of 2015 were impacted by an unfavorable cumulative catch up adjustment of $1.9 million.

Net sales of services for military programs were $7.6 million in the third quarter of 2016, compared to $7.9 million in the third quarter of 2015. In the first nine months of 2015 the Lockheed Martin HAVOC and the Bell V280 programs contributed revenues of $0.9 million and $0.6 million, respectively. These programs were completed in 2015. These decreases in revenue were partially offset by an increase of $1.1 million on a new military trainer program.

Net sales of services related to design and delivery of tooling on various programs supporting commercial and military aircraft were $1.4 million for the first nine months of 2016 compared to $1.6 million in the first nine months of 2015. This decrease is primarily related to tooling sales on various Boeing programs which declined $0.2 million in the first nine months of 2016 when compared to the prior-year period.

Cost of Goods Sold. Cost of goods sold for the first nine months of 2016 was $25.5 million compared to $33.7 million for the first nine months of 2015.  The decrease in cost of goods sold was primarily due to reductions in direct labor, indirect labor and related fringe benefits of $7.6 million resulting from lower demand for this segment and cost reduction activities completed in 2015.

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Gross Profit.  Gross profit for the first nine months of 2016 was $3.7 million (12.7% of net sales) compared to $3.1 million (8.4% of net sales) in the first nine months of 2015.  The change in gross profit was attributable to the unfavorable cumulative catchup adjustment of $1.9 million recorded the first nine months of 2015. The decline in sales the first nine months of 2016 contributed to the lower gross profit dollars but was partially offset by a decline in wages and related expenses resulting from cost reduction activities completed in 2015.

Selling, General and Administrative Expenses.  Selling, general and administrative expenses for the first nine months of 2016 were $32.3 million, or 110.6% of net sales, compared to $6.9 million, or 18.8% of net sales, for the first nine months of 2015. The increase in selling, general and administrative expenses was primarily attributable to a $24.3 million charge for goodwill impairment and a $4.1 million charge for intangible asset impairment. These charges were partially offset by a decline in restructuring expenses of $1.3 million and salary and related expenses of $1.1 million in the first nine months of 2016 when compared to the prior-year period. These decreases in expense relate to cost reduction activities completed in 2015. Excluding the impairment and restructuring charges, selling, general, and administrative expenses were lower in the first nine month of 2016 by $1.6 million when compared to the first nine months of 2015.

Non-segment Expenses

Interest Expense.  Interest expense decreased to $16.1 million for the first nine months of 2016 from $16.8 million for the first nine months of 2015, the result of lower outstanding borrowings.  

Income Tax Expense.  During the first nine months of 2016, the Company recorded an income tax benefit of $0.7 million compared to an expense of $0.4 million in the first nine months of 2015.  Income taxes in the first nine months of 2016 were favorably impacted by $0.5 million related to the impairment of goodwill and intangible assets in our Engineering Services reporting unit. Income tax expense in the first nine months of 2015 includes the recognition of a $0.5 million adjustment resulting from an audit of the Company's 2012 and 2013 tax returns by the Internal Revenue Service.

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;

• 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;

32

• 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;

• Goodwill and intangible asset impairment;

• 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 (loss) to EBITDA and Adjusted EBITDA were as follows:

(In Thousands)	Three Months Ended September 30,						Nine months ended September 30,
	2016			2015			2016			2015
Net income (loss)	$	309		$	34		$	(31,349	)	$	(1,053	)
Depreciation and amortization (1)	4,706			5,098			14,536			15,018
Goodwill and intangible asset impairment (2)	—			—			28,368			—
Interest expense	5,591			5,653			16,067			16,802
Income tax (benefit) expense	(159		)	249			(734		)	408
EBITDA	10,447			11,034			26,888			31,175
Stock-based compensation (3)	639			828			2,161			2,588
Integration expenses	13			175			61			348
Restructuring expenses (4)	3			1,575			1,190			2,368
Other, net (5)	55			(1,934		)	536			(1,974		)
Adjusted EBITDA	$	11,157		$	11,678		$	30,836		$	34,505

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

(2) An interim impairment evaluation for the Engineering Services reporting unit resulted in a goodwill impairment charge of $24.3 million and an intangible asset impairment charge of $4.1 million for the nine months ended September 30, 2016.

(3) Includes shared-based expense associated with the LMI Aerospace, Inc. 2005 Long-term Incentive Plan, the LMI Aerospace, Inc. 2015 Incentive Compensation Plan and the LMI Profit Sharing and Savings Plan. The three and nine months ended September 30, 2015 also includes share-based expense associated with the Valent Aerostructures, LLC 401(k) Plan. In addition, the nine months ended September 30, 2015 include expenses associated with share-based payments to settle obligations under a consulting agreement.

(4) Includes expenses related to general employment separation activities. The nine months ended September 30, 2015 also include expenses related to the closure of the Company's St. Louis machining facility. The three and nine months ended September 30, 2015 also include expenses related to the closure of the Company's Coweta, OK, Greenville, SC and Melbourne, Australia facilities. The three and nine months ended September 30, 2016 also include expenses related to the closure of the Company's Wichita sheet-metal operations.

(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.

Liquidity and Capital Resources

At September 30, 2016, the Company's primary source of outstanding indebtedness was second priority senior secured notes that mature in July of 2019. These notes accrue interest at 7.375% and require semi-annual interest payments. The Company believes that cash generated from operations combined with its cash and cash equivalent assets, 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 5 - 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.

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During the first nine months of 2016 and 2015, the Company's operating activities used cash of $0.3 million and provided cash of $5.7 million, respectively. Net cash used by operating activities for the first nine months of 2016 was unfavorably impacted by an increase of $6.5 million in accounts receivable related to the timing of customer payments. Inventory also increased in the first nine months by $9.5 million, as the Company prepares for anticipated higher demand in subsequent quarters. We expect inventory to decline in the fourth quarter of 2016. In addition, in the first nine months of 2016, the Company made both payments totaling $17.3 million for the semi-annual interest due on its outstanding notes. Operating cash flow in the first nine months of 2016 was favorably impacted by an increase in accounts payable of $9.0 million, primarily due to the growth in inventory and the timing of vendor payments.

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. 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 the first nine months of 2015, the Company made interest payments of $19.4 million associated with its outstanding notes.

Net cash used for investing activities was $7.6 million for the first nine months of 2016, compared to $15.0 million for the first nine months of 2015. Capital spending in the first nine months of 2016 included $2.1 million of purchases to support our increasing content on the Boeing 737 MAX platform at our Washington, Missouri manufacturing facility. 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 for environmental compliance at our Cuba, Missouri plant.

In the nine months ended September 30, 2016, the Company borrowed $1.5 million to fund equipment purchases at our Washington, Missouri facility in support of the Boeing 737 MAX program. In addition, the Company made principal payments of $2.1 million on outstanding debt and used $10.0 million in borrowings on its revolving credit facility to retire higher-rate senior notes. In the nine months ended September 30, 2015, the Company borrowed $4.0 million on its revolving credit facility to fund operating and investing activities, primarily the semi-annual interest on outstanding senior notes and capital purchases, and made principal payments on other long-term debt of $1.8 million.

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 2015 Form 10-K, as amended.

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 2015 Form 10-K, as amended.

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, 2016. 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

35

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. 

36

PART II

OTHER INFORMATION

Item 1. Legal Proceedings.

We are involved in various legal proceedings that arise in the ordinary course of our business but are not involved in any legal proceedings that we deem to be material to the Company or its business.

37

Risk Factors.

This Form 10-Q should be read together with Part I, Item 1A “RISK FACTORS” in our 2015 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, as amended, for the fiscal year ended December 31, 2015 filed with the Securities and Exchange Commission on March 17, 2016.

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.

None.

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 7th day of November, 2016.

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)

39

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+	Form of Restricted Stock Award Agreement for employees of Registrant, pursuant to the LMI Aerospace, Inc. 2015 Incentive Compensation Plan previously filed as Exhibit 10.1 in the Registrant’s Form 10-Q filed August 8, 2016, filed herewith.
31.1	Rule 13a-14(a) Certification of Daniel G. Korte, Chief Executive Officer filed herewith.
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.

40

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

+    Management contract or compensatory plan or arrangement required to be filed as an exhibit to this report.

41

EX-10.1

EXHIBIT 10.1

Employee (Non-Director) Form for Time & Performance Based Vesting Schedule

Restricted Stock Agreement: #XXX

Fair value per share on Grant Date XX/XX/XXXX - $XX.XX

THE RESTRICTED SHARES AWARDED UNDER THIS RESTRICTED STOCK AWARD AGREEMENTARE SUBJECT TO A SUBSTANTIAL RISK OF FORFEITURE UNTIL VESTED.

LMI AEROSPACE, INC.

RESTRICTED STOCK AWARD AGREEMENT

TO: XXXXXX

For the purposes set forth in the LMI Aerospace, Inc. (the "Company") 2015 Long-Term Incentive Plan, as the same may be amended from time to time (the "Plan"), you have been awarded by the Committee shares in words (XXXXX) shares of the common stock of the Company, $0.02 par value per share (the "Restricted Shares"), which award (the "Award") is subject to and conditioned upon your acceptance of this Restricted Stock Award Agreement (this "Agreement").

The terms of the Award are as set forth in this Agreement and in the Plan. The Plan is incorporated into this Agreement by reference, which means that this Agreement is limited by and subject to the express terms and provisions of the Plan. In the event of a conflict between the terms of this Agreement and the terms of the Plan, the terms of the Plan shall control. Capitalized terms that are not defined in this Agreement have the meanings given to them in the Plan. The more salient terms of the Award are summarized as follows:

1.Grant Date:XX/XX/XXXX    (the “Grant Date”)

2.Number of Restricted Shares Subject to this Award: XXXXX (the “Restricted Shares”)

3.Vesting Provisions.

(a)    Subject to the terms and conditions herein, (i) XXXXXof the Restricted Shares (the “Milestone Shares”) shall remain unvested and restricted unless and until both the Company achieves one or more of the milestones referenced in Exhibit A (the “Milestones”) as assessed by the Committee following the end of the fiscal year XXXX and you have not experienced a Termination Event (as defined below) by the end of such fiscal year, and (ii) the remaining XXXXX of the Restricted Shares (the “Time Shares”) shall remain unvested and restricted unless and until the period of time commencing on the Grant Date and ending at the close of business on XXXXXX, XXXX (the “Time Period”) expires without you experiencing a Termination Event.

(b)    In furtherance of and without limiting the authority of the Committee to adjust the terms of the Award pursuant to Section 17 of the Plan, the Committee may adjust the vesting requirements of this Award to account for any of the events identified in such Section.

(c)    If one or more of the Milestones have been met and you have not experienced a Termination Event during the Time Period, then the number of the Restricted Shares associated with the Milestones that have been met as set forth in Exhibit A shall vest and become unrestricted for purposes of vesting hereunder. A “Termination Event” means the termination of your status as an Employee of the Company and its Affiliates for any reason other than your death or Permanent Disability.

(d)    Prior to vesting, the Restricted Shares shall not be sold, assigned, transferred or otherwise disposed of, or mortgaged, pledged or otherwise encumbered except as provided in this Agreement or in the Plan.

4.Termination. All of the Milestone Shares shall terminate and be forfeited to the Company immediately upon the failure of the Company to achieve the Milestones as set forth in Section 3(a)(i). All of the Time Shares shall terminate and be forfeited to the Company immediately upon the occurrence of a Termination Event at any time prior to the expiration of the Time Period, other than for your death or permanent disability, as set forth in Section 3(a)(ii).

5.Rights as a Shareholder. The Restricted Shares, when vested, will be represented by a stock certificate or certificates registered in your name upon your request. If requested by the Company, such certificate shall bear a legend in substantially the following form:

"The shares represented by this certificate are subject to the terms and conditions (including forfeiture and restrictions against transfer) contained in the LMI Aerospace, Inc. 2015 Long-Term incentive Plan. A copy of such Plan is on file in the office of LMI Aerospace, Inc."

You will deposit such certificates with the Company or its designee, together with stock powers or other instruments of assignment, each endorsed in blank, which will permit transfer to the Company of all or any portion of the Restricted Shares that shall have been forfeited. The Restricted Shares shall constitute issued and outstanding shares of Common Stock for all corporate purposes other than the right to receive and retain dividends or other distributions in respect of such shares ("Retained Distributions"). You will have the right to vote such Restricted Shares and to exercise all other rights, powers and privileges of a holder of Common Stock with respect to such shares, with the exception that (i) you will not be entitled to delivery of the stock certificate or certificates representing such Restricted Shares unless and until they are vested; (ii) the Company will retain custody of the stock certificate or certificates representing the Restricted Stock before vesting; (iii) the Company will retain custody of all distributions made or declared in respect of the Restricted Shares (and such Retained Distributions will be subject to the same restrictions, terms and conditions as are applicable to the Restricted Shares until such time, if ever, as the Restricted Shares with respect to which such Retained Distributions shall have been made, paid or declared shall have become vested, and such Retained Distributions shall not bear interest or be segregated in separate accounts); (iv) you may not sell, assign, transfer or otherwise dispose of, or mortgage, pledge, or otherwise encumber any Restricted Shares or any Retained Distributions unless and until the Restricted Shares vest; and (v) a breach of any restrictions, terms or conditions provided in the Plan or established by the Committee with respect to any Restricted Shares or Retained Distributions will cause a forfeiture of such Restricted Shares and any Retained Distributions with respect thereto.

6.Company Actions upon Vesting. Upon the vesting of Restricted Shares in accordance with paragraph 3 above and the satisfaction of any other applicable restrictions, terms and conditions, all such Restricted Shares issued to you and any Retained Distributions with respect to such Restricted Shares shall be deemed vested and no longer subject to forfeiture. Upon your request, the Company shall promptly thereafter issue and deliver to you new stock certificates or instruments representing such Restricted Shares and other distributions registered in your name or, if deceased or disabled, your legatee, personal representative or distribute, which do not contain the legend set forth in Section 5 hereof. All such Retained Distributions, if any, less any amounts as are required to be withheld by law, shall be paid to you as of a date no later than two and ½ months after the year in which the Restricted Shares vest.

7.Beneficiary Designation. You may designate a beneficiary for each outstanding grant of Restricted Shares in the event of your death. If no beneficiary is designated or the beneficiary does not survive you, the award shall be made to your surviving spouse, or, if there is none, to your estate.

8.Section 83(b) Election. If you decide to file an election with the Internal Revenue Service to include the Fair Market Value of any of the Restricted Shares awarded hereunder in your gross income as of the date of this Award, you shall promptly furnish to the Company a copy of such election, together with the amount of any federal, state, local or other taxes required to be withheld, to enable the Company to claim an income tax deduction with respect to such election.

9.Taxes. Unless you have filed a Section 83(b) election as described in paragraph 8 above, the vesting of the Restricted Shares will trigger a taxable event. You are ultimately liable and responsible for all taxes owed in connection with the Award, regardless of any action the Company or any of its subsidiaries takes with respect to any tax withholding obligations that arise in connection with the Award. Neither the Company nor any of its subsidiaries makes any representation or undertaking regarding the treatment of any tax withholding in connection with the grant or vesting of the Award or the subsequent sale of Restricted Shares after the Restricted Shares have vested. The Company and its subsidiaries do not commit and are under no obligation to structure the Award to reduce or eliminate your tax liability.

10.Registration. The Company currently has an effective registration statement on file with the Securities and Exchange Commission with respect to the Restricted Shares. The Company intends to maintain this registration but has no obligation to do so. If the registration ceases to be effective, you will not be able to transfer or sell the Restricted Shares even after the restrictions lapse unless exemptions from registration under applicable securities laws are available. Such exemptions from registration are limited and might be unavailable. You agree that any resale by you of Restricted Shares shall comply in all respects with the requirements of all applicable securities laws, rules and regulations (including, without limitation, the provisions of the Securities Act, the Exchange Act and the respective rules and regulations promulgated thereunder) and any other law, rule or regulation applicable thereto, as such laws, rules and regulations may be amended from time to time. The Company shall not be obligated to either issue the Restricted Shares or permit the resale of any shares following vesting, if such issuance or resale would violate any such requirements.

11.Limitation on Rights; No Right to Future Grants. By entering into this Agreement and accepting the Award, you acknowledge that: (a) the Plan is discretionary and may be modified, suspended or terminated by the

Board at any time as provided in the Plan; (b) the grant of the Award is a one-time benefit and does not create any contractual or other right to receive future grants of awards or benefits in lieu of awards; (c) all determinations with respect to any such future grants, including, but not limited to, the times when awards will be granted, the number of shares of Common Stock subject to each award, the award price, if any, and the time or times when each award will be settled, will be at the sole discretion of the Company; (d) your participation in the Plan is voluntary; (e) the Award is not part of normal or expected compensation for any purpose, including without limitation for calculating any benefits, severance, resignation, termination, redundancy, end of service payments, bonuses, long-term service awards, pension or retirement benefits or similar payments; (f) the future value of the common stock subject to the Award is unknown and cannot be predicted with certainty; and (g) neither the Plan, the Award nor the issuance of the Restricted Shares confers upon you any right to any relationship with the Company or any subsidiary other than as expressly provided hereby or thereby.

12.Execution of Award Agreement. Please acknowledge your acceptance of the terms and conditions of the Award by signing the original of this Agreement and returning it to the Corporate Secretary of the Company at the principal corporate offices of the Company at 411 Fountain Lakes Blvd., St. Charles, Missouri 63301. If you do not sign and return this Agreement, the Company is not obligated to provide you any benefit hereunder and may refuse to issue the Restricted Shares to you.

13.Governing Law. The validity, construction, and effect of this Agreement and regulations relating to this Agreement, shall be determined in accordance with the internal laws, and not the law of conflicts, of the State of Missouri.

14.Rights and Remedies Cumulative. All rights and remedies of the Company and you enumerated in this Agreement shall be cumulative and, except as expressly provided otherwise in this Agreement, none shall exclude any other rights or remedies allowed by law or in equity, and each of said rights or remedies may be exercised and enforced concurrently.

15.Headings. Headings are given to the sections and subsections of this Agreement solely as a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction-or interpretation of this Agreement or any provision thereof.

16.Entire Agreement. This Agreement and the Plan constitute the entire agreement between the Company and you in respect of the subject matter of this Agreement, and this Agreement supersedes all prior and contemporaneous agreements between the parties hereto in connection with the subject matter of this Agreement. No officer, employee or other servant or agent of the Company, and no servant or agent of you is authorized to make any representation, warranty or other promise not contained in this Agreement. No change, termination or attempted waiver of any of the provisions of this Agreement shall be binding upon any party hereto unless contained in a writing signed by the party to be charged.

17.Successors and Assigns. At the option of the Company, the rights of the Company under this Agreement may be transferable to any one or more persons or entities, and all covenants and agreements hereunder so transferred shall inure to the benefit of, and be enforceable by, such transferees.

Very truly yours,

LMI AEROSPACE, INC.

By: ________________________

Name: ______________________

Title: _______________________

ACCEPTANCE AND ACKNOWLEDGMENT

I, ___________________, a resident of _____________, accept and agree to the terms of the Award described in this Agreement and in the Plan, acknowledge receipt of a copy of this Agreement, the Plan and the applicable Plan Summary, and acknowledge that I have read them carefully and that I fully understand their contents.

Dated: __________, 20XX

XXX

XXX

XXX

Tax Payer ID: XXX-XX-XXXX

EXHIBIT A

MILESTONES

TO BE UPDATED WITH EACH GRANT

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 7, 2016	/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 7, 2016	/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, 2016, 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 7, 2016	/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, 2016, 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 7, 2016	/s/ Clifford C. Stebe, Jr.
	Clifford C. Stebe, Jr.
	Chief Financial Officer
	(Principal Financial Officer and Principal Accounting Officer)

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2016	Nov. 03, 2016
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		13,632,641
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q3
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2016

XML

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 1,803	$ 10,504
Accounts receivable, net	54,815	48,491
Inventories	123,779	114,775
Prepaid expenses and other current assets	3,733	4,147
Total current assets	184,130	177,917
Property, plant and equipment, net	96,354	100,969
Goodwill	62,482	86,784
Intangible assets, net	39,648	46,582
Other assets	2,824	3,728
Total assets	385,438	415,980
Current liabilities:
Accounts payable	21,892	13,156
Accrued expenses	21,122	30,015
Current installments of long-term debt and capital lease obligations	2,587	2,362
Total current liabilities	45,601	45,533
Long-term liabilities:
Long-term debt and capital lease obligations, less current installments	247,801	247,633
Other long-term liabilities	3,179	4,322
Deferred income taxes	0	536
Total long-term liabilities	250,980	252,491
Shareholders’ equity:
Common stock, $0.02 par value per share; authorized 28,000,000 shares; issued 13,632,641 and 13,287,688 shares at September 30, 2016 and December 31, 2015, respectively	273	266
Preferred stock, $0.02 par value per share; authorized 2,000,000 shares; none issued at either date	0	0
Additional paid-in capital	99,563	97,617
Accumulated other comprehensive loss	(332)	(211)
Treasury stock, at cost, 39,419 shares at December 31, 2015	0	(418)
Retained (deficit) earnings	(10,647)	20,702
Total shareholders’ equity	88,857	117,956
Total liabilities and shareholders' equity	$ 385,438	$ 415,980

XML

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Sep. 30, 2016	Dec. 31, 2015
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)	13,632,641	13,287,688
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)	0	39,419

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Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Sales and service revenue
Product sales	$ 79,840	$ 84,114	$ 230,182	$ 246,730
Service revenue	9,833	11,519	30,815	38,928
Net sales	89,673	95,633	260,997	285,658
Cost of sales and service revenue
Cost of product sales	64,839	67,514	184,520	197,211
Cost of service revenue	8,988	11,493	28,865	35,853
Cost of sales	73,827	79,007	213,385	233,064
Gross profit	15,846	16,626	47,612	52,594
Selling, general and administrative expenses	10,143	8,979	33,764	33,980
Goodwill and Intangible Asset Impairment	0	0	28,368	0
Restructuring expense	3	1,575	1,190	2,368
Income (loss) from operations	5,700	6,072	(15,710)	16,246
Other (expense) income:
Interest expense	(5,591)	(5,653)	(16,067)	(16,802)
Other, net	41	(136)	(306)	(89)
Total other expense	(5,550)	(5,789)	(16,373)	(16,891)
(Loss) income before income taxes	150	283	(32,083)	(645)
(Benefit) provision for income taxes	159	(249)	734	(408)
Net income (loss)	309	34	(31,349)	(1,053)
Other comprehensive income (loss):
Change in foreign currency translation adjustment	(33)	(32)	(121)	(31)
Total comprehensive income (loss)	$ 276	$ 2	$ (31,470)	$ (1,084)
Amounts per common share:
Net income (loss) per common share	$ 0.02	$ 0.00	$ (2.39)	$ (0.08)
Net income (loss) per common share assuming dilution	$ 0.02	$ 0.00	$ (2.39)	$ (0.08)
Weighted average common shares (in shares)	13,176,538	12,907,938	13,092,869	12,851,456
Weighted average dilutive common shares outstanding (in shares)	13,233,926	13,050,238	13,092,869	12,851,456

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Operating activities:
Net loss	$ (31,349)	$ (1,053)
Adjustments to reconcile net loss to net cash (used) provided by operating activities:
Depreciation and amortization	14,536	15,018
Amortization of debt issuance cost	1,432	1,479
Goodwill and Intangible Asset Impairment	28,368	0
Stock based compensation	1,089	1,424
Deferred taxes	(723)	(78)
Other non-cash items	31	(94)
Changes in operating assets and liabilities:
Accounts receivable	(6,514)	(3,238)
Inventories	(9,472)	(4,993)
Prepaid expenses and other assets	831	435
Current income taxes	180	(75)
Accounts payable	9,032	(1,754)
Accrued expenses	(7,758)	(1,354)
Net cash (used) provided by operating activities	(317)	5,717
Investing activities:
Additions to property, plant and equipment	(7,671)	(15,305)
Proceeds from sale of property, plant and equipment	27	260
Net cash used by investing activities	(7,644)	(15,045)
Financing activities:
Proceeds from issuance of debt	1,465	0
Principal payments on long-term debt and notes payable	(12,108)	(1,814)
Advances on revolving line of credit	38,500	93,500
Payments on revolving line of credit	(28,500)	(89,500)
Payments for debt issuance cost	(97)	(309)
Net cash (used) provided by financing activities	(740)	1,877
Net decrease in cash and cash equivalents	(8,701)	(7,451)
Cash and cash equivalents, beginning of period	10,504	7,927
Cash and cash equivalents, end of period	1,803	476
Supplemental disclosure of non-cash transactions:
Defined contribution plan funding in Company stock	$ 1,472	$ 710

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Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2016

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 recurring adjustments considered necessary for a fair statement have been included.  Operating results for the nine months ended September 30, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016. 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, as amended, of LMI Aerospace, Inc. (the "Company”, "us", "we", "our") for the year ended December 31, 2015, as filed with the Securities and Exchange Commission on March 17, 2016.

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 has engaged external subject-matter experts and continues to evaluate the transition method to be used and the impact of adoption of this standard on its consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, "Leases." The standard requires lessees to recognize a lease liability and a lease asset for all leases, including operating leases, with a term greater than 12 months on its balance sheet. The new standard also expands the required quantitative and qualitative disclosures surrounding leases. The provisions of this new guidance are effective as of the beginning of the Company’s first quarter of 2019. This new standard will be applied using a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The Company is currently evaluating the effect of this standard on its consolidated financial statements.

In March 2016, the FASB issued ASU 2016-09, "Improvements to Employee Share-Based Payment Accounting," which amends Accounting Standards Codification (“ASC”) Topic 718, Compensation – Stock Compensation. The standard requires excess tax benefits or deficiencies for share-based payments be recorded in the period shares vest as income tax expense or benefit, rather than within Additional Paid-in Capital. Cash flows related to excess tax benefits will be included in operating activities and will no longer be separately classified as a financing activity. As the Company carries a full valuation allowance against its net deferred tax assets, we do not expect that this standard will have a material impact on our financial statements. The new standard is effective for reporting periods beginning after December 15, 2016 and early adoption is permitted. The Company plans to adopt the new standard effective January 1, 2017.

In August 2016, the FASB issued ASU 2016-15, "Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments." The guidance addresses the classification of cash flow related to (1) debt prepayment or extinguishment costs, (2) settlement of zero-coupon debt instruments or other debt instruments with coupon rates that are insignificant in relation to the effective interest rate of the borrowing, (3) contingent consideration payments made after a business combination, (4) proceeds from the settlement of insurance claims, (5) proceeds from the settlement of corporate-owned life insurance, including bank-owned life insurance, (6) distributions received from equity method investees and (7) beneficial interests in securitization transactions. The guidance also clarifies how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows. The guidance will generally be applied retrospectively and is effective for financial statements issued for annual reporting periods beginning after December 15, 2017. Early application is permitted. We are currently evaluating the impact of this standard on our consolidated statement of cash flows.

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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Assets and Liabilities Measured at Fair Value

9 Months Ended

Sep. 30, 2016

Fair Value Disclosures [Abstract]

Assets and Liabilities Measured at Fair Value

Assets and Liabilities Measured at Fair Value

Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  A fair value hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements).  The three levels of the fair value hierarchy are described below:

Level 1: Quoted prices in active markets for identical assets or liabilities.

Level 2: Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The asset or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.  The valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.  There have been no changes in the methodologies used at September 30, 2016.  There were no transfers between levels during 2016 and 2015.

									2016
	Assets and Liabilities at Fair Value								Total
	as of September 30, 2016								Gains
	Total		(Level 1)		(Level 2)		(Level 3)		(Losses)
Non-recurring Fair Value Measurements:
Asset:
Intangible assets, net (1)	$	39,648	$	—	$	—	$	39,648	$	4,066
Goodwill (1)	$	62,482	$	—	$	—	$	62,482	$	24,302

(1) The fair value of goodwill is tested at least annually for impairment. During the quarter ended June 30, 2016, a triggering event occurred that required the Company to perform an interim impairment analysis for the goodwill and intangible assets within the Engineering Services reporting unit. This analysis determined the related goodwill and intangible assets were impaired and a loss of $28,368 was recorded in the quarter.

									2015
	Assets and Liabilities at Fair Value								Total
	as of December 31, 2015								Gains
	Total		(Level 1)		(Level 2)		(Level 3)		(Losses)
Non-recurring Fair Value Measurements:
Asset:
Intangible assets, net	$	46,582	$	—	$	—	$	46,582	$	—
Goodwill (1)	$	86,784	$	—	$	—	$	86,784	$	—

(1) The Company performed its annual impairment analysis of goodwill during the fourth quarter of 2015 and determined no adjustments to the carrying value were necessary.

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Accounts Receivable, Net

9 Months Ended

Sep. 30, 2016

Receivables [Abstract]

Accounts Receivable, Net

Accounts Receivable, Net

Accounts receivable, net consists of the following:

	September 30, 2016			December 31, 2015
Trade receivables	$	48,905		$	42,307
Unbilled revenue	4,435			4,869
Other receivables	1,776			1,561
	55,116			48,737
Less: Allowance for doubtful accounts	(301		)	(246		)
Accounts receivable, net	$	54,815		$	48,491

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, 2016 and December 31, 2015 are $872 and $858, 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,
	2016			2015			2016			2015
Favorable adjustments	$	436		$	96		$	726		$	554
Unfavorable adjustments	(377		)	(2,183		)	(590		)	(2,214		)
Net favorable operating income adjustments	$	59		$	(2,087	)	$	136		$	(1,660	)

At September 30, 2016 and December 31, 2015, the Company had recognized a loss reserve of $2,154 and $1,992, respectively, on the Mitsubishi Regional Jet design-build program. Adjustments related to this program were recorded as a reduction to revenue in the Consolidated Statements of Comprehensive Income (Loss).

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Inventories

9 Months Ended

Sep. 30, 2016

Inventory Disclosure [Abstract]

Inventories

Inventories

Inventories consist of the following:

	September 30, 2016		December 31, 2015
Raw materials	$	13,579	$	12,513
Work in progress	25,528		22,681
Manufactured and purchased components	22,584		19,224
Finished goods	27,355		28,169
Product inventory	89,046		82,587
Capitalized contract costs	34,733		32,188
Total inventories	$	123,779	$	114,775

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. In accordance with ASC 605-35-45-1&2, the provisions for anticipated losses on contracts are accounted for as additional contract cost and recognized as part of cost of sales. Provisions for losses are recorded as a reduction of related contract costs recorded in inventory. At September 30, 2016 and December 31, 2015, the Company had no contracts with loss reserves accounted for as a reduction of inventory.

Capitalized contract costs at September 30, 2016 and December 31, 2015 include $5,522 and $5,970 respectively, related to an agreement the Company signed with Spirit Aerosystems ("Spirit".) This agreement extended the performance period of the statements of work for certain contracts with Spirit and gave the Company preferred supplier status on certain future contracts. This consideration is being amortized as a reduction to revenue over the life of the related contracts. The remaining capitalized contract costs relate primarily to four early-stage long-term contracts. The Company expects these costs will not be realized within one year but believes these amounts will be fully recovered over the life of the related contracts.

The following table illustrates the market to which capitalized contract cost at September 30, 2016 and December 31, 2015 related:

	September 30, 2016		December 31, 2015
Large commercial aircraft	$	9,787	$	11,528
Corporate and regional aircraft	20,368		16,721
Military	4,578		3,939
Total capitalized contract cost	$	34,733	$	32,188

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Goodwill and Intangible Assets

9 Months Ended

Sep. 30, 2016

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, 2016 and December 31, 2015, respectively:

							Engineering
	Aerostructures						Services						Total
	September 30,			December 31,			September 30,			December 31,			September 30,			December 31,
	2016			2015			2016			2015			2016			2015
Balance at:
Gross Goodwill	$	141,953		$	141,953		$	50,741		$	50,741		$	192,694		$	192,694
Accumulated impairment loss	(79,471		)	(79,471		)	(50,741		)	(26,439		)	(130,212		)	(105,910		)
Net Goodwill	$	62,482		$	62,482		$	—		$	24,302		$	62,482		$	86,784

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. A triggering event did not occur in the third quarter of 2016 that would require the Company to perform an impairment evaluation.

In the second quarter of 2016, the Company significantly downgraded the full-year 2016 sales and operating income forecast for its Engineering Services business due to continued decline in demand. This downward adjustment to the forecast, combined with lower than expected operating results for the second quarter of 2016, was deemed to be a triggering event requiring an interim impairment evaluation for the Engineering Services reporting unit in accordance with ASC 350. The interim step one analysis performed, which used a combination of discounted cash flows and market value approaches to determine the fair value of the Engineering Services reporting unit, indicated the fair value was less than the carrying value of its net assets. The required step two valuation analysis, prepared as of June 30, 2016, indicated that the $24,302 of goodwill related to Engineering Services was fully impaired. The resulting impairment charge was recorded in the quarter ended June 30, 2016 and is reflected in the Engineering Services segment within the Goodwill and Intangible Asset Impairment line of the Condensed Consolidated Statements of Comprehensive Income (Loss) for the nine months ended September 30, 2016.

Intangible Assets

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

	September 30, 2016			December 31, 2015
Trademarks	$	778		$	778
Customer intangible assets	68,991			68,991
Other	1,274			1,274
Accumulated amortization and impairment	(31,395		)	(24,461		)
Intangible assets, net	$	39,648		$	46,582

Intangibles amortization expense was $796 and $1,089 for the three months ended September 30, 2016 and 2015, respectively, and $2,868 and $3,269 for the nine months ended September 30, 2016 and 2015, respectively. The accumulated amortization balances at September 30, 2016 and December 31, 2015, respectively, were $778 and $778 for trademarks, $29,636 and $22,816 for customer intangible assets, and $981 and $867 for other intangible assets.

In conjunction with the interim impairment analysis conducted during the current-year as discussed above, the Company also evaluated the recoverability of the customer intangible assets related to the Engineering Services reporting unit under ASC 360. As a result of this analysis, an impairment charge of $4,066 was recognized in the Engineering Services segment within the Goodwill and Intangible Asset Impairment line of the Condensed Consolidated Statements of Comprehensive Income (Loss) for the nine months ended September 30, 2016.

Intangible assets related to the acquisition of Valent Aerostructures, LLC 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

9 Months Ended

Sep. 30, 2016

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, 2016			December 31, 2015
Second priority senior secured notes at a fixed rate of 7.375% at September 30, 2016	$	224,175		$	234,175
Revolver under credit agreement, variable	10,000			—
Industrial Revenue Bonds at fixed rates of 2.80% to 5.00% at September 30, 2016 and December 31, 2015	6,569			6,901
Capital leases, at fixed rates ranging from 3.00% to 4.50% and 3.00% to 7.73% at September 30, 2016 and December 31, 2015	10,657			11,708
Notes payable, principal and interest payable monthly, at fixed rates ranging from 2.45% to 2.56% at September 30, 2016 and December 31, 2015	2,491			1,750
Debt issuance cost	(3,504		)	(4,539		)
Total debt	$	250,388		$	249,995
Less current installments	2,587			2,362
Total long-term debt and capital lease obligations	$	247,801		$	247,633

At September 30, 2016, the Company had $224,175 in outstanding second-priority senior secured notes maturing on July 15, 2019. The Company records these notes at cost. The fair value of these notes, based on the last market price transaction in the quarter ended September 30, 2016 of 1.0075, was $225,856. During the quarter ended September 30, 2016, the Company repurchased and retired $10,000 of the outstanding notes at a premium of 1.01875 plus accrued interest. 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.  At September 30, 2016, the Company had $10,000 in outstanding borrowings under the facility. Under the agreement, the co-collateral agents may establish a reserve against the facility. At September 30, 2016, the reserve established was $15,000, which reduced the maximum availability to $75,000. Based on the amount of eligible assets at September 30, 2016 and outstanding letters of credit of $1,525, available borrowings were further reduced to $44,291. 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 the nine months ended September 30, 2016, the actual interest rate incurred for the revolving credit facility was 5.8% on average outstanding borrowings of $1,821.

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, 2016, the commitment fee was 0.5%.

The revolving credit facility matures on the earlier of July 15, 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, 2016, 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 the 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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Earnings Per Common Share

9 Months Ended

Sep. 30, 2016

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 treasury stock method.  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,
	2016		2015		2016			2015
Numerators
Net income (loss)	$	309	$	34	$	(31,349	)	$	(1,053	)
Denominators
Weighted average common shares - basic	13,176,538		12,907,938		13,092,869			12,851,456
Dilutive effect of restricted stock	57,388		142,300		—			—
Weighted average common shares - diluted	13,233,926		13,050,238		13,092,869			12,851,456
Basic earnings (loss) per share	$	0.02	$	—	$	(2.39	)	$	(0.08	)
Diluted earnings (loss) per share	$	0.02	$	—	$	(2.39	)	$	(0.08	)

For the nine months ended September 30, 2016, 81,734 restricted shares were 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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Stock-Based Compensation

9 Months Ended

Sep. 30, 2016

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 under the 2005 Plan 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, 2016	253,434		$	14.54
Granted	—		—
Vested	(53,846	)	17.89
Forfeited	(18,580	)	14.21
Outstanding at September 30, 2016	181,008		$	13.58

Common stock compensation expense related to restricted stock awards granted under the 2005 Plan was $58 and $224 for the three months ended September 30, 2016 and 2015, respectively, and $401 and $1,154 for the nine months ended September 30, 2016 and 2015, respectively.

Total unrecognized compensation costs related to non-vested, share-based awards granted or awarded under the 2005 Plan were $1,254 and $1,762 at September 30, 2016 and December 31, 2015, respectively.  These costs are expected to be recognized over a weighted average period of 1.3 years and 1.6 years, at September 30, 2016 and December 31, 2015, respectively.

As of July 7, 2015 the Company was no longer able to grant new 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 under the 2015 Plan 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, 2016	61,801		$	9.79
Granted	269,875		8.51
Vested (1)	(55,672	)	9.79
Forfeited	(6,899	)	9.43
Outstanding at September 30, 2016	269,105		$	8.52

(1) Excludes 6,129 shares for which service requirements are met that remain subject to deferral at September 30, 2016 pursuant to the LMI Aerospace, Inc. Non-Qualified Deferred Compensation Plan for Senior Executives and Outside Directors.

Common stock compensation expense related to restricted stock awards granted under the 2015 Plan was $271 and $151 for the three months ended September 30, 2016 and 2015, respectively, and $695 and $151 for the nine months ended September 30, 2016 and 2015, respectively.

Total unrecognized compensation costs related to non-vested, share-based awards granted or awarded under the 2015 Plan were $1,223 and $303 at September 30, 2016 and December 31, 2015, respectively.  These costs are expected to be recognized over a weighted average period of 1.9 years and 0.5 years at September 30, 2016 and December 31, 2015, respectively.

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Business Segment Information

9 Months Ended

Sep. 30, 2016

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. This segment 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,
	2016			2015			2016			2015
Net sales:
Aerostructures	$	80,433		$	85,119		$	232,846		$	249,661
Engineering Services	9,474			10,826			29,239			36,818
Eliminations	(234		)	(312		)	(1,088		)	(821		)
	$	89,673		$	95,633		$	260,997		$	285,658
Income from operations:
Aerostructures	$	5,667		$	8,918		$	13,193		$	20,063
Engineering Services (1)	89			(2,805		)	(28,570		)	(3,803		)
Eliminations	(56		)	(41		)	(333		)	(14		)
	$	5,700		$	6,072		$	(15,710	)	$	16,246

(1) The nine months ended September 30, 2016 include a charge of $23,402 related to goodwill impairment and a charge of $4,066 related to intangible asset impairment. (See Note 4, Goodwill and Intangible Assets, to the Condensed Consolidated Financial Statements)

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Customer Concentration

9 Months Ended

Sep. 30, 2016

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 40.7% and 34.4% of the Company’s total revenues for the three months ended September 30, 2016 and 2015, respectively. Direct sales to Spirit accounted for 38.6% and 34.8% of the Company’s total revenues for the nine months ended September 30, 2016 and 2015, respectively. Accounts receivable balances related to Spirit were 33.9% and 28.6% of the Company’s total accounts receivable balance at September 30, 2016 and December 31, 2015, 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 13.5% and 15.9% of the Company’s total revenues for the three months ended September 30, 2016 and 2015, respectively. Direct sales to Gulfstream accounted for 11.6% and 14.3% of the Company’s total revenues for the nine months ended September 30, 2016 and 2015, respectively. Accounts receivable balances resulting from direct sales to Gulfstream were 13.3% and 15.5% of the Company’s total accounts receivable balance at September 30, 2016 and December 31, 2015, respectively.

Direct sales, through both of the Company’s business segments, to our third largest customer, The Boeing Company, (“Boeing”), accounted for 12.1% and 12.6% of the Company’s total revenues for the three months ended September 30, 2016 and 2015, respectively.  Direct sales to Boeing accounted for 11.4% and 11.4% of the Company’s total revenues for the nine months ended September 30, 2016 and 2015, respectively. Accounts receivable balances related to Boeing were 9.4% and 10.2% of the Company’s total accounts receivable balance at September 30, 2016 and December 31, 2015, respectively.

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Income Taxes

9 Months Ended

Sep. 30, 2016

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 benefits of $159 and $734 were recognized in the three and nine months ended September 30, 2016, respectively. Income tax expense of $249 and $408 were recognized in the three and nine months ended September 30, 2015, respectively. The Company continues to carry a full valuation allowance on its net deferred tax assets, which totaled $20,273 and $14,461 at September 30, 2016 and December 31, 2015, respectively.

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Restructuring

9 Months Ended

Sep. 30, 2016

Restructuring and Related Activities [Abstract]

Restructuring

Restructuring

The Company committed to and implemented various restructuring plans in 2015 and 2016. Included in those plans were the 2016 relocation of its sheet-metal fabrication operation in Wichita, Kansas and the 2015 relocation of its machining operations in St. Charles, Missouri to other facilities within the Company. In 2015, the Company also closed its Coweta, Oklahoma manufacturing facility in addition to Engineering offices in Greenville, South Carolina and Melbourne, Australia. In addition, the Company implemented other employment separation activities as part of the Company's overall reorganization and cost reduction initiatives. 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,					September 30,
	2016			2015		2016			2015
St. Charles machine parts operations relocation	$	—		$	—	$	—		$	378
Wichita, Kansas sheet-metal operations relocation	49			—		296			—
Coweta machining facility closure	—			64		—			64
Greenville office closure	—			501		(26		)	501
Australia office closure	—			34		—			34
Other employment separation activities	(46		)	976		920			1,391
Total	$	3		$	1,575	$	1,190		$	2,368
Expense incurred by segment:
Aerostructures	$	3		$	336	$	1,216		$	1,114
Engineering Services	—			1,239		(26		)	1,254
Total	$	3		$	1,575	$	1,190		$	2,368

The Company expects to recognize an additional $22 of restructuring expenses in the fourth quarter of 2016 related to the Wichita, Kansas sheet-metal operations relocation.

Cash payments were made associated with restructuring plans of $188 and $1,165 in the three months ended September 30, 2016 and 2015, respectively, and $870 and $2,175 in the nine months ended September 30, 2016 and 2015, respectively.

The following table summarizes the Company's restructuring activities during the nine months ended September 30, 2016:

	Employee
	Severance			Other			Total
Accrued restructuring balance as of December 31, 2015	$	162		$	93		$	255
Accrual additions	1,216			(26		)	1,190
Cash payments	(803		)	(67		)	(870		)
Accrued restructuring balance as of September 30, 2016	$	575		$	—		$	575

Accrued restructuring of $575 at September 30, 2016 is expected to be paid over the next two quarters.

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Legal Contingencies

9 Months Ended

Sep. 30, 2016

Commitments and Contingencies Disclosure [Abstract]

Legal Contingencies

Legal Contingencies

The Company is not named as a defendant in a lawsuit that is outside the normal course of business.  In accordance with generally accepted accounting principles, management discloses the amount or range of reasonably possible losses in a lawsuit in which the Company is a named defendant.  In the opinion of management, after consulting with legal counsel, any losses resulting from lawsuits in the normal course of business should not have a material effect on the Company’s financial position, cash flows or results of operations.

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Condensed Consolidating Financial Statements

9 Months Ended

Sep. 30, 2016

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 July 15, 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”) rules governing reporting on guarantor 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, 2016

	LMIA(Guarantor Parent)		Guarantor Subsidiaries		Consolidating/Eliminating Entries			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	1,590	$	213	$	—		$	1,803
Trade accounts receivable, net	631		54,184		—			54,815
Intercompany receivables	284,892		277,828		(562,720		)	—
Inventories	—		123,779		—			123,779
Prepaid expenses and other current assets	1,512		2,221		—			3,733
Total current assets	288,625		458,225		(562,720		)	184,130
Property, plant and equipment, net	6,343		90,011		—			96,354
Investments in subsidiaries	370,244		—		(370,244		)	—
Goodwill	—		62,482		—			62,482
Intangible assets, net	—		39,648		—			39,648
Other assets	1,651		1,173		—			2,824
Total assets	$	666,863	$	651,539	$	(932,964	)	$	385,438
Liabilities and shareholders’ equity
Current liabilities:
Accounts payable	$	653	$	21,239	$	—		$	21,892
Accrued expenses	8,572		12,550		—			21,122
Intercompany payables	336,966		225,754		(562,720		)	—
Current installments of long-term debt and capital lease obligations	88		2,499		—			2,587
Total current liabilities	346,279		262,042		(562,720		)	45,601
Long-term debt and capital lease obligations, less current installments	230,813		16,988		—			247,801
Other long-term liabilities	914		2,265		—			3,179
Deferred income taxes	—		—		—			—
Total long-term liabilities	231,727		19,253		—			250,980
Total shareholders’ equity	88,857		370,244		(370,244		)	88,857
Total liabilities and shareholders’ equity	$	666,863	$	651,539	$	(932,964	)	$	385,438

CONDENSED CONSOLIDATING BALANCE SHEET

as of December 31, 2015

	LMIA(Guarantor Parent)		Guarantor Subsidiaries		Consolidating/Eliminating Entries			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	10,251	$	253	$	—		$	10,504
Trade accounts receivable, net	1,220		47,271		—			48,491
Intercompany receivables	196,496		203,128		(399,624		)	$	—
Inventories	—		114,775		—			114,775
Prepaid expenses and other current assets	2,224		1,923		—			4,147
Total current assets	210,191		367,350		(399,624		)	177,917
Property, plant and equipment, net	5,430		95,539		—			100,969
Investments in subsidiaries	387,868		—		(387,868		)	—
Goodwill	—		86,784		—			86,784
Intangible assets, net	—		46,582		—			46,582
Other assets	2,135		1,593		—			3,728
Total assets	$	605,624	$	597,848	$	(787,492	)	$	415,980
Liabilities and shareholders’ equity
Current liabilities:
Accounts payable	$	1,393	$	11,763	$	—		$	13,156
Accrued expenses	17,009		13,006		—			30,015
Intercompany payables	237,548		162,076		(399,624		)	—
Current installments of long-term debt and capital lease obligations	85		2,277		—			2,362
Total current liabilities	256,035		189,122		(399,624		)	45,533
Long-term debt and capital lease obligations, less current installments	229,752		17,881		—			247,633
Other long-term liabilities	1,881		2,441		—			4,322
Deferred income taxes	—		536		—			536
Total long-term liabilities	231,633		20,858		—			252,491
Total shareholders’ equity	117,956		387,868		(387,868		)	117,956
Total liabilities and shareholders’ equity	$	605,624	$	597,848	$	(787,492	)	$	415,980

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Three Months Ended September 30, 2016

	LMIA(Guarantor Parent)			Guarantor Subsidiaries			Consolidating/Eliminating Entries			Consolidated
Sales and service revenue
Product sales	$	(19	)	$	79,841		$	18		$	79,840
Service revenues	9,767			9,831			(9,765		)	9,833
Net sales	9,748			89,672			(9,747		)	89,673
Cost of sales and service revenue
Cost of product sales	—			64,857			(18		)	64,839
Cost of service revenues	9,492			9,054			(9,558		)	8,988
Cost of sales	9,492			73,911			(9,576		)	73,827
Gross profit	256			15,761			(171		)	15,846
Selling, general and administrative expenses	—			10,143			—			10,143
Goodwill and intangible	—			—			—			—
Restructuring expense	(47		)	50			—			3
(Loss) income from operations	303			5,568			(171		)	5,700
Other income (expense):
Interest expense	(5,369		)	(222		)	—			(5,591		)
Other, net	—			41			—			41
Income (loss) from equity investments in subsidiaries	5,513			—			(5,513		)	—
Total other expense	144			(181		)	(5,513		)	(5,550		)
(Loss) income before income taxes	447			5,387			(5,684		)	150
(Benefit) provision for income taxes	—			(159		)	—			(159		)
Net (loss) income	447			5,546			(5,684		)	309
Other comprehensive income (expense):
Change in foreign currency translation adjustment	—			(33		)	—			(33		)
Total comprehensive (loss) income	$	447		$	5,513		$	(5,684	)	$	276

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 (expense):
Change in foreign currency translation adjustment	—			(32		)	—			(32		)
Total comprehensive (loss) income	$	4		$	3,541		$	(3,543	)	$	2

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Nine Months Ended September 30, 2016

	LMIA(Guarantor Parent)			Guarantor Subsidiaries			Consolidating/Eliminating Entries			Consolidated
Sales and service revenue
Product sales	$	43		$	230,153		$	(14	)	$	230,182
Service revenues	31,952			30,836			(31,973		)	30,815
Net sales	31,995			260,989			(31,987		)	260,997
Cost of sales and service revenue
Cost of product sales	80			184,426			14			184,520
Cost of service revenues	32,017			28,849			(32,001		)	28,865
Cost of sales	32,097			213,275			(31,987		)	213,385
Gross profit	(102		)	47,714			—			47,612
Selling, general and administrative expenses	—			33,764			—			33,764
Goodwill and intangible asset impairment	—			28,368			—			28,368
Restructuring expense	404			786			—			1,190
(Loss) income from operations	(506		)	(15,204		)	—			(15,710		)
Other income (expense):
Interest expense	(15,415		)	(652		)	—			(16,067		)
Other, net	4			(310		)	—			(306		)
Income (loss) from equity investments in subsidiaries	(15,553		)	—			15,553			—
Total other expense	(30,964		)	(962		)	15,553			(16,373		)
(Loss) income before income taxes	(31,470		)	(16,166		)	15,553			(32,083		)
(Benefit) provision for income taxes	—			(734		)	—			(734		)
Net (loss) income	(31,470		)	(15,432		)	15,553			(31,349		)
Other comprehensive income (expense):
Change in foreign currency translation adjustment	—			(121		)	—			(121		)
Total comprehensive (loss) income	$	(31,470	)	$	(15,553	)	$	15,553		$	(31,470	)

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
(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 (expense):
Change in foreign currency translation adjustment	—			(31		)	—			(31		)
Total comprehensive (loss) income	$	(1,083	)	$	9,914		$	(9,915	)	$	(1,084	)

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

For the Nine Months Ended September 30, 2016

	LMIA(Guarantor Parent)			Guarantor Subsidiaries			Consolidating/Eliminating Entries			Consolidated
Operating activities:
Net (loss)/income	$	(31,470	)	$	(15,432	)	$	15,553		$	(31,349	)
Adjustments for non-cash items	21,104			39,181			(15,553		)	44,732
Net changes in operating assets and liabilities, net of acquired businesses	(7,466		)	(6,234		)	—			(13,700		)
Intercompany activity	11,022			(11,022		)	—			—
Net cash (used)/provided by operating activities	(6,810		)	6,493			—			(317		)
Investing activities:
Additions to property, plant and equipment	(1,790		)	(5,881		)	—			(7,671		)
Proceeds from sale of equipment	3			24			—			27
Net cash used by investing activities	(1,787		)	(5,857		)	—			(7,644		)
Financing activities:
Proceeds from issuance of debt	—			1,465			—			1,465
Principal payments on long-term debt and notes payable	(10,064		)	(2,044		)	—			(12,108		)
Advances on revolving line of credit	38,500			—			—			38,500
Payments on revolving line of credit	(28,500		)	—			—			(28,500		)
Payments for debt issuance cost	—			(97		)	—			(97		)
Net cash provided (used)/provided by financing activities	(64		)	(676		)	—			(740		)
Net (decrease) increase in cash and cash equivalents	(8,661		)	(40		)	—			(8,701		)
Cash and cash equivalents, beginning of period	10,251			253			—			10,504
Cash and cash equivalents, end of period	$	1,590		$	213		$	—		$	1,803

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

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Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2016

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 recurring adjustments considered necessary for a fair statement have been included.  Operating results for the nine months ended September 30, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016. 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, as amended, of LMI Aerospace, Inc. (the "Company”, "us", "we", "our") for the year ended December 31, 2015, as filed with the Securities and Exchange Commission on March 17, 2016.

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 has engaged external subject-matter experts and continues to evaluate the transition method to be used and the impact of adoption of this standard on its consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, "Leases." The standard requires lessees to recognize a lease liability and a lease asset for all leases, including operating leases, with a term greater than 12 months on its balance sheet. The new standard also expands the required quantitative and qualitative disclosures surrounding leases. The provisions of this new guidance are effective as of the beginning of the Company’s first quarter of 2019. This new standard will be applied using a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The Company is currently evaluating the effect of this standard on its consolidated financial statements.

In March 2016, the FASB issued ASU 2016-09, "Improvements to Employee Share-Based Payment Accounting," which amends Accounting Standards Codification (“ASC”) Topic 718, Compensation – Stock Compensation. The standard requires excess tax benefits or deficiencies for share-based payments be recorded in the period shares vest as income tax expense or benefit, rather than within Additional Paid-in Capital. Cash flows related to excess tax benefits will be included in operating activities and will no longer be separately classified as a financing activity. As the Company carries a full valuation allowance against its net deferred tax assets, we do not expect that this standard will have a material impact on our financial statements. The new standard is effective for reporting periods beginning after December 15, 2016 and early adoption is permitted. The Company plans to adopt the new standard effective January 1, 2017.

In August 2016, the FASB issued ASU 2016-15, "Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments." The guidance addresses the classification of cash flow related to (1) debt prepayment or extinguishment costs, (2) settlement of zero-coupon debt instruments or other debt instruments with coupon rates that are insignificant in relation to the effective interest rate of the borrowing, (3) contingent consideration payments made after a business combination, (4) proceeds from the settlement of insurance claims, (5) proceeds from the settlement of corporate-owned life insurance, including bank-owned life insurance, (6) distributions received from equity method investees and (7) beneficial interests in securitization transactions. The guidance also clarifies how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows. The guidance will generally be applied retrospectively and is effective for financial statements issued for annual reporting periods beginning after December 15, 2017. Early application is permitted. We are currently evaluating the impact of this standard on our consolidated statement of cash flows.

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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Assets and Liabilities Measured at Fair Value (Tables)

9 Months Ended

Sep. 30, 2016

Fair Value Disclosures [Abstract]

Schedule of Non-recurring Fair Value Measurements

									2016
	Assets and Liabilities at Fair Value								Total
	as of September 30, 2016								Gains
	Total		(Level 1)		(Level 2)		(Level 3)		(Losses)
Non-recurring Fair Value Measurements:
Asset:
Intangible assets, net (1)	$	39,648	$	—	$	—	$	39,648	$	4,066
Goodwill (1)	$	62,482	$	—	$	—	$	62,482	$	24,302

(1) The fair value of goodwill is tested at least annually for impairment. During the quarter ended June 30, 2016, a triggering event occurred that required the Company to perform an interim impairment analysis for the goodwill and intangible assets within the Engineering Services reporting unit. This analysis determined the related goodwill and intangible assets were impaired and a loss of $28,368 was recorded in the quarter.

									2015
	Assets and Liabilities at Fair Value								Total
	as of December 31, 2015								Gains
	Total		(Level 1)		(Level 2)		(Level 3)		(Losses)
Non-recurring Fair Value Measurements:
Asset:
Intangible assets, net	$	46,582	$	—	$	—	$	46,582	$	—
Goodwill (1)	$	86,784	$	—	$	—	$	86,784	$	—

(1) The Company performed its annual impairment analysis of goodwill during the fourth quarter of 2015 and determined no adjustments to the carrying value were necessary.

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Accounts Receivable, Net (Tables)

9 Months Ended

Sep. 30, 2016

Receivables [Abstract]

Schedule of Change in Accounting Estimate [Table Text Block]

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,
	2016			2015			2016			2015
Favorable adjustments	$	436		$	96		$	726		$	554
Unfavorable adjustments	(377		)	(2,183		)	(590		)	(2,214		)
Net favorable operating income adjustments	$	59		$	(2,087	)	$	136		$	(1,660	)

Schedule of accounts receivable, net

Accounts receivable, net consists of the following:

	September 30, 2016			December 31, 2015
Trade receivables	$	48,905		$	42,307
Unbilled revenue	4,435			4,869
Other receivables	1,776			1,561
	55,116			48,737
Less: Allowance for doubtful accounts	(301		)	(246		)
Accounts receivable, net	$	54,815		$	48,491

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,
	2016			2015			2016			2015
Favorable adjustments	$	436		$	96		$	726		$	554
Unfavorable adjustments	(377		)	(2,183		)	(590		)	(2,214		)
Net favorable operating income adjustments	$	59		$	(2,087	)	$	136		$	(1,660	)

At September 30, 2016 and December 31, 2015, the Company had recognized a loss reserve of $2,154 and $1,992, respectively, on the Mitsubishi Regional Jet design-build program. Adjustments related to this program were recorded as a reduction to revenue in the Consolidated Statements of Comprehensive Income (Loss).

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Inventories (Tables)

9 Months Ended

Sep. 30, 2016

Inventory Disclosure [Abstract]

Schedule of Deferred Cost in Inventory by Market [Table Text Block]

The following table illustrates the market to which capitalized contract cost at September 30, 2016 and December 31, 2015 related:

	September 30, 2016		December 31, 2015
Large commercial aircraft	$	9,787	$	11,528
Corporate and regional aircraft	20,368		16,721
Military	4,578		3,939
Total capitalized contract cost	$	34,733	$	32,188

Inventories

Inventories consist of the following:

	September 30, 2016		December 31, 2015
Raw materials	$	13,579	$	12,513
Work in progress	25,528		22,681
Manufactured and purchased components	22,584		19,224
Finished goods	27,355		28,169
Product inventory	89,046		82,587
Capitalized contract costs	34,733		32,188
Total inventories	$	123,779	$	114,775

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Goodwill and Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill

The following table summarizes the net carrying amount of goodwill by segment at September 30, 2016 and December 31, 2015, respectively:

							Engineering
	Aerostructures						Services						Total
	September 30,			December 31,			September 30,			December 31,			September 30,			December 31,
	2016			2015			2016			2015			2016			2015
Balance at:
Gross Goodwill	$	141,953		$	141,953		$	50,741		$	50,741		$	192,694		$	192,694
Accumulated impairment loss	(79,471		)	(79,471		)	(50,741		)	(26,439		)	(130,212		)	(105,910		)
Net Goodwill	$	62,482		$	62,482		$	—		$	24,302		$	62,482		$	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, 2016			December 31, 2015
Trademarks	$	778		$	778
Customer intangible assets	68,991			68,991
Other	1,274			1,274
Accumulated amortization and impairment	(31,395		)	(24,461		)
Intangible assets, net	$	39,648		$	46,582

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Long-term Debt and Capital Lease Obligations (Tables)

9 Months Ended

Sep. 30, 2016

Debt Disclosure [Abstract]

Long-term debt

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

	September 30, 2016			December 31, 2015
Second priority senior secured notes at a fixed rate of 7.375% at September 30, 2016	$	224,175		$	234,175
Revolver under credit agreement, variable	10,000			—
Industrial Revenue Bonds at fixed rates of 2.80% to 5.00% at September 30, 2016 and December 31, 2015	6,569			6,901
Capital leases, at fixed rates ranging from 3.00% to 4.50% and 3.00% to 7.73% at September 30, 2016 and December 31, 2015	10,657			11,708
Notes payable, principal and interest payable monthly, at fixed rates ranging from 2.45% to 2.56% at September 30, 2016 and December 31, 2015	2,491			1,750
Debt issuance cost	(3,504		)	(4,539		)
Total debt	$	250,388		$	249,995
Less current installments	2,587			2,362
Total long-term debt and capital lease obligations	$	247,801		$	247,633

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Earnings Per Common Share (Tables)

9 Months Ended

Sep. 30, 2016

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,
	2016		2015		2016			2015
Numerators
Net income (loss)	$	309	$	34	$	(31,349	)	$	(1,053	)
Denominators
Weighted average common shares - basic	13,176,538		12,907,938		13,092,869			12,851,456
Dilutive effect of restricted stock	57,388		142,300		—			—
Weighted average common shares - diluted	13,233,926		13,050,238		13,092,869			12,851,456
Basic earnings (loss) per share	$	0.02	$	—	$	(2.39	)	$	(0.08	)
Diluted earnings (loss) per share	$	0.02	$	—	$	(2.39	)	$	(0.08	)

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Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2016

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, 2016	253,434		$	14.54
Granted	—		—
Vested	(53,846	)	17.89
Forfeited	(18,580	)	14.21
Outstanding at September 30, 2016	181,008		$	13.58

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, 2016	61,801		$	9.79
Granted	269,875		8.51
Vested (1)	(55,672	)	9.79
Forfeited	(6,899	)	9.43
Outstanding at September 30, 2016	269,105		$	8.52

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Business Segment Information (Tables)

9 Months Ended

Sep. 30, 2016

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,
	2016			2015			2016			2015
Net sales:
Aerostructures	$	80,433		$	85,119		$	232,846		$	249,661
Engineering Services	9,474			10,826			29,239			36,818
Eliminations	(234		)	(312		)	(1,088		)	(821		)
	$	89,673		$	95,633		$	260,997		$	285,658
Income from operations:
Aerostructures	$	5,667		$	8,918		$	13,193		$	20,063
Engineering Services (1)	89			(2,805		)	(28,570		)	(3,803		)
Eliminations	(56		)	(41		)	(333		)	(14		)
	$	5,700		$	6,072		$	(15,710	)	$	16,246

(1) The nine months ended September 30, 2016 include a charge of $23,402 related to goodwill impairment and a charge of $4,066 related to intangible asset impairment. (See Note 4, Goodwill and Intangible Assets, to the Condensed Consolidated Financial Statements)

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Restructuring (Tables)

9 Months Ended

Sep. 30, 2016

Restructuring and Related Activities [Abstract]

Restructuring costs

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

	Three months ended					Nine months ended
	September 30,					September 30,
	2016			2015		2016			2015
St. Charles machine parts operations relocation	$	—		$	—	$	—		$	378
Wichita, Kansas sheet-metal operations relocation	49			—		296			—
Coweta machining facility closure	—			64		—			64
Greenville office closure	—			501		(26		)	501
Australia office closure	—			34		—			34
Other employment separation activities	(46		)	976		920			1,391
Total	$	3		$	1,575	$	1,190		$	2,368
Expense incurred by segment:
Aerostructures	$	3		$	336	$	1,216		$	1,114
Engineering Services	—			1,239		(26		)	1,254
Total	$	3		$	1,575	$	1,190		$	2,368

Schedule of restructuring activity

The following table summarizes the Company's restructuring activities during the nine months ended September 30, 2016:

	Employee
	Severance			Other			Total
Accrued restructuring balance as of December 31, 2015	$	162		$	93		$	255
Accrual additions	1,216			(26		)	1,190
Cash payments	(803		)	(67		)	(870		)
Accrued restructuring balance as of September 30, 2016	$	575		$	—		$	575

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Condensed Consolidating Financial Statements (Tables)

9 Months Ended

Sep. 30, 2016

Sep. 30, 2015

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Condensed Consolidating Balance Sheet

CONDENSED CONSOLIDATING BALANCE SHEET

as of September 30, 2016

	LMIA(Guarantor Parent)		Guarantor Subsidiaries		Consolidating/Eliminating Entries			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	1,590	$	213	$	—		$	1,803
Trade accounts receivable, net	631		54,184		—			54,815
Intercompany receivables	284,892		277,828		(562,720		)	—
Inventories	—		123,779		—			123,779
Prepaid expenses and other current assets	1,512		2,221		—			3,733
Total current assets	288,625		458,225		(562,720		)	184,130
Property, plant and equipment, net	6,343		90,011		—			96,354
Investments in subsidiaries	370,244		—		(370,244		)	—
Goodwill	—		62,482		—			62,482
Intangible assets, net	—		39,648		—			39,648
Other assets	1,651		1,173		—			2,824
Total assets	$	666,863	$	651,539	$	(932,964	)	$	385,438
Liabilities and shareholders’ equity
Current liabilities:
Accounts payable	$	653	$	21,239	$	—		$	21,892
Accrued expenses	8,572		12,550		—			21,122
Intercompany payables	336,966		225,754		(562,720		)	—
Current installments of long-term debt and capital lease obligations	88		2,499		—			2,587
Total current liabilities	346,279		262,042		(562,720		)	45,601
Long-term debt and capital lease obligations, less current installments	230,813		16,988		—			247,801
Other long-term liabilities	914		2,265		—			3,179
Deferred income taxes	—		—		—			—
Total long-term liabilities	231,727		19,253		—			250,980
Total shareholders’ equity	88,857		370,244		(370,244		)	88,857
Total liabilities and shareholders’ equity	$	666,863	$	651,539	$	(932,964	)	$	385,438

CONDENSED CONSOLIDATING BALANCE SHEET

as of December 31, 2015

	LMIA(Guarantor Parent)		Guarantor Subsidiaries		Consolidating/Eliminating Entries			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	10,251	$	253	$	—		$	10,504
Trade accounts receivable, net	1,220		47,271		—			48,491
Intercompany receivables	196,496		203,128		(399,624		)	$	—
Inventories	—		114,775		—			114,775
Prepaid expenses and other current assets	2,224		1,923		—			4,147
Total current assets	210,191		367,350		(399,624		)	177,917
Property, plant and equipment, net	5,430		95,539		—			100,969
Investments in subsidiaries	387,868		—		(387,868		)	—
Goodwill	—		86,784		—			86,784
Intangible assets, net	—		46,582		—			46,582
Other assets	2,135		1,593		—			3,728
Total assets	$	605,624	$	597,848	$	(787,492	)	$	415,980
Liabilities and shareholders’ equity
Current liabilities:
Accounts payable	$	1,393	$	11,763	$	—		$	13,156
Accrued expenses	17,009		13,006		—			30,015
Intercompany payables	237,548		162,076		(399,624		)	—
Current installments of long-term debt and capital lease obligations	85		2,277		—			2,362
Total current liabilities	256,035		189,122		(399,624		)	45,533
Long-term debt and capital lease obligations, less current installments	229,752		17,881		—			247,633
Other long-term liabilities	1,881		2,441		—			4,322
Deferred income taxes	—		536		—			536
Total long-term liabilities	231,633		20,858		—			252,491
Total shareholders’ equity	117,956		387,868		(387,868		)	117,956
Total liabilities and shareholders’ equity	$	605,624	$	597,848	$	(787,492	)	$	415,980

Condensed Consolidating Statements of Comprehensive Income (Loss)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Three Months Ended September 30, 2016

	LMIA(Guarantor Parent)			Guarantor Subsidiaries			Consolidating/Eliminating Entries			Consolidated
Sales and service revenue
Product sales	$	(19	)	$	79,841		$	18		$	79,840
Service revenues	9,767			9,831			(9,765		)	9,833
Net sales	9,748			89,672			(9,747		)	89,673
Cost of sales and service revenue
Cost of product sales	—			64,857			(18		)	64,839
Cost of service revenues	9,492			9,054			(9,558		)	8,988
Cost of sales	9,492			73,911			(9,576		)	73,827
Gross profit	256			15,761			(171		)	15,846
Selling, general and administrative expenses	—			10,143			—			10,143
Goodwill and intangible	—			—			—			—
Restructuring expense	(47		)	50			—			3
(Loss) income from operations	303			5,568			(171		)	5,700
Other income (expense):
Interest expense	(5,369		)	(222		)	—			(5,591		)
Other, net	—			41			—			41
Income (loss) from equity investments in subsidiaries	5,513			—			(5,513		)	—
Total other expense	144			(181		)	(5,513		)	(5,550		)
(Loss) income before income taxes	447			5,387			(5,684		)	150
(Benefit) provision for income taxes	—			(159		)	—			(159		)
Net (loss) income	447			5,546			(5,684		)	309
Other comprehensive income (expense):
Change in foreign currency translation adjustment	—			(33		)	—			(33		)
Total comprehensive (loss) income	$	447		$	5,513		$	(5,684	)	$	276

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Nine Months Ended September 30, 2016

	LMIA(Guarantor Parent)			Guarantor Subsidiaries			Consolidating/Eliminating Entries			Consolidated
Sales and service revenue
Product sales	$	43		$	230,153		$	(14	)	$	230,182
Service revenues	31,952			30,836			(31,973		)	30,815
Net sales	31,995			260,989			(31,987		)	260,997
Cost of sales and service revenue
Cost of product sales	80			184,426			14			184,520
Cost of service revenues	32,017			28,849			(32,001		)	28,865
Cost of sales	32,097			213,275			(31,987		)	213,385
Gross profit	(102		)	47,714			—			47,612
Selling, general and administrative expenses	—			33,764			—			33,764
Goodwill and intangible asset impairment	—			28,368			—			28,368
Restructuring expense	404			786			—			1,190
(Loss) income from operations	(506		)	(15,204		)	—			(15,710		)
Other income (expense):
Interest expense	(15,415		)	(652		)	—			(16,067		)
Other, net	4			(310		)	—			(306		)
Income (loss) from equity investments in subsidiaries	(15,553		)	—			15,553			—
Total other expense	(30,964		)	(962		)	15,553			(16,373		)
(Loss) income before income taxes	(31,470		)	(16,166		)	15,553			(32,083		)
(Benefit) provision for income taxes	—			(734		)	—			(734		)
Net (loss) income	(31,470		)	(15,432		)	15,553			(31,349		)
Other comprehensive income (expense):
Change in foreign currency translation adjustment	—			(121		)	—			(121		)
Total comprehensive (loss) income	$	(31,470	)	$	(15,553	)	$	15,553		$	(31,470	)

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 (expense):
Change in foreign currency translation adjustment	—			(32		)	—			(32		)
Total comprehensive (loss) income	$	4		$	3,541		$	(3,543	)	$	2

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
(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 (expense):
Change in foreign currency translation adjustment	—			(31		)	—			(31		)
Total comprehensive (loss) income	$	(1,083	)	$	9,914		$	(9,915	)	$	(1,084	)

Condensed Consolidating Cash Flow Statement

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

For the Nine Months Ended September 30, 2016

	LMIA(Guarantor Parent)			Guarantor Subsidiaries			Consolidating/Eliminating Entries			Consolidated
Operating activities:
Net (loss)/income	$	(31,470	)	$	(15,432	)	$	15,553		$	(31,349	)
Adjustments for non-cash items	21,104			39,181			(15,553		)	44,732
Net changes in operating assets and liabilities, net of acquired businesses	(7,466		)	(6,234		)	—			(13,700		)
Intercompany activity	11,022			(11,022		)	—			—
Net cash (used)/provided by operating activities	(6,810		)	6,493			—			(317		)
Investing activities:
Additions to property, plant and equipment	(1,790		)	(5,881		)	—			(7,671		)
Proceeds from sale of equipment	3			24			—			27
Net cash used by investing activities	(1,787		)	(5,857		)	—			(7,644		)
Financing activities:
Proceeds from issuance of debt	—			1,465			—			1,465
Principal payments on long-term debt and notes payable	(10,064		)	(2,044		)	—			(12,108		)
Advances on revolving line of credit	38,500			—			—			38,500
Payments on revolving line of credit	(28,500		)	—			—			(28,500		)
Payments for debt issuance cost	—			(97		)	—			(97		)
Net cash provided (used)/provided by financing activities	(64		)	(676		)	—			(740		)
Net (decrease) increase in cash and cash equivalents	(8,661		)	(40		)	—			(8,701		)
Cash and cash equivalents, beginning of period	10,251			253			—			10,504
Cash and cash equivalents, end of period	$	1,590		$	213		$	—		$	1,803

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

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Assets and Liabilities Measured at Fair Value (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended			12 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016		Sep. 30, 2015	Dec. 31, 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Intangible assets, net	$ 39,648		$ 39,648			$ 46,582
Goodwill	62,482		62,482			86,784
Goodwill and Intangible Asset Impairment	0	$ 0	28,368		$ 0
Finite-Lived Intangible Assets [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Goodwill and Intangible Asset Impairment			4,066	[1]		0
Goodwill [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Goodwill and Intangible Asset Impairment			24,302	[1]		0	[2]
Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Intangible assets, net	0		0			0
Goodwill	0		0			0
Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Intangible assets, net	0		0			0
Goodwill	0		0			0
Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Intangible assets, net	39,648		39,648			46,582
Goodwill	$ 62,482		$ 62,482			$ 86,784

[1] The fair value of goodwill is tested at least annually for impairment. During the quarter ended June 30, 2016, a triggering event occurred that required the Company to perform an interim impairment analysis for the goodwill and intangible assets within the Engineering Services reporting unit. This analysis determined the related goodwill and intangible assets were impaired and a loss of $28,368 was recorded in the quarter.

[2] The Company performed its annual impairment analysis of goodwill during the fourth quarter of 2015 and determined no adjustments to the carrying value were necessary.

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Accounts Receivable, Net (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Receivables [Abstract]
Loss reserve on long-term production contract	$ 2,154		$ 2,154		$ 1,992
Trade receivables	48,905		48,905		42,307
Unbilled revenue	4,435		4,435		4,869
Other receivables	1,776		1,776		1,561
Accounts receivable, gross	55,116		55,116		48,737
Less: Allowance for doubtful accounts	(301)		(301)		(246)
Accounts receivable, net	54,815		54,815		48,491
Inventory Amount, Unpriced Change Orders for Long-term Contracts or Programs	872		872		$ 858
Change in Accounting Estimate [Abstract]
Favorable adjustments	436	$ 96	726	$ 554
Unfavorable adjustments	(377)	(2,183)	(590)	(2,214)
Net operating income adjustments	$ 59	$ (2,087)	$ 136	$ (1,660)

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Inventories (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Schedule of Deferred Cost in Inventory by Market [Line Items]
Other Inventory, Capitalized Costs, Net	$ 5,522	$ 5,970
Deferred Cost in Inventory Long-Term Production Contracts	34,733	32,188
Inventories [Abstract]
Raw materials	13,579	12,513
Work in progress	25,528	22,681
Manufactured and purchased components	22,584	19,224
Finished goods	27,355	28,169
Product inventory	89,046	82,587
Capitalized contract costs	34,733	32,188
Total inventories	123,779	114,775
Large Commercial Aircraft [Member]
Schedule of Deferred Cost in Inventory by Market [Line Items]
Deferred Cost in Inventory Long-Term Production Contracts	9,787	11,528
Corporate and Regional Aircraft [Member]
Schedule of Deferred Cost in Inventory by Market [Line Items]
Deferred Cost in Inventory Long-Term Production Contracts	20,368	16,721
Military [Member]
Schedule of Deferred Cost in Inventory by Market [Line Items]
Deferred Cost in Inventory Long-Term Production Contracts	$ 4,578	$ 3,939

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Inventories Capitalized Contract Cost (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Inventory Disclosure [Abstract]
Other Inventory, Capitalized Costs, Net	$ 5,522	$ 5,970

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Goodwill and Intangible Assets, Goodwill (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2016	Dec. 31, 2015
Goodwill [Line Items]
Goodwill, Gross	$ 192,694	$ 192,694	$ 192,694
Goodwill, Impaired, Accumulated Impairment Loss	(130,212)	(130,212)	(105,910)
Goodwill	62,482	62,482	86,784
Aerostructures [Member]
Goodwill [Line Items]
Goodwill, Gross	141,953	141,953	141,953
Goodwill, Impaired, Accumulated Impairment Loss	(79,471)	(79,471)	(79,471)
Goodwill	62,482	62,482	62,482
Engineering Services [Member]
Goodwill [Line Items]
Goodwill, Impairment Loss	24,302	23,402
Goodwill, Gross	50,741	50,741	50,741
Goodwill, Impaired, Accumulated Impairment Loss	(50,741)	(50,741)	(26,439)
Goodwill	$ 0	$ 0	$ 24,302

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Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
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	(31,395)		(31,395)		(24,461)
Intangible assets, net	39,648		39,648		46,582
Amortization expense on intangible assets	796	$ 1,089	2,868	$ 3,269
Trademarks [Member]
Intangible Assets [Abstract]
Accumulated amortization	(778)		(778)		(778)
Customer Intangible Assets [Member]
Intangible Assets [Abstract]
Accumulated amortization	(29,636)		(29,636)		(22,816)
Other [Member]
Intangible Assets [Abstract]
Accumulated amortization	(981)		(981)		$ (867)
Engineering Services [Member]
Intangible Assets [Abstract]
Impairment of Intangible Assets, Finite-lived	$ 4,066		$ 4,066

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Long-term Debt and Capital Lease Obligations (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended	12 Months Ended
	Sep. 30, 2016	Dec. 31, 2015	Sep. 30, 2016	Dec. 31, 2015
Debt Instrument [Line Items]
Letters of Credit Outstanding, Amount	$ 1,525		$ 1,525
Long-term debt gross	250,388	$ 249,995	250,388	$ 249,995
Debt Issuance Costs, Net	(3,504)	(4,539)	(3,504)	(4,539)
Less current installments	2,587	2,362	2,587	2,362
Long-term debt and capital lease obligations, less current installments	247,801	247,633	247,801	247,633
Line of Credit Facility, Fair Value of Amount Outstanding	10,000	0	10,000	0
Second Priority Senior Secured Notes [Member]
Debt Instrument [Line Items]
Long-term debt gross	224,175	234,175	224,175	234,175
Long-term Debt, Fair Value	$ 225,856		$ 225,856
Fixed interest rate (in hundredths)	7.375%		7.375%
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Long-term debt gross	$ 10,000	0	$ 10,000	0
Missouri IRBs [Member]
Debt Instrument [Line Items]
Long-term debt gross	$ 6,569	$ 6,901	$ 6,569	$ 6,901
Missouri IRBs [Member] | Minimum [Member]
Debt Instrument [Line Items]
Fixed interest rate (in hundredths)	2.80%	2.80%	2.80%	2.80%
Missouri IRBs [Member] | Maximum [Member]
Debt Instrument [Line Items]
Fixed interest rate (in hundredths)	5.00%	5.00%	5.00%	5.00%
Capital Leases [Member]
Debt Instrument [Line Items]
Long-term debt gross	$ 10,657	$ 11,708	$ 10,657	$ 11,708
Capital Leases [Member] | Minimum [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate During Period			3.00%	3.00%
Capital Leases [Member] | Maximum [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate During Period			4.50%	7.73%
Notes Payable [Member]
Debt Instrument [Line Items]
Long-term debt gross	2,491	$ 1,750	$ 2,491	$ 1,750
Notes Payable [Member] | Minimum [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate During Period			2.45%	2.45%
Notes Payable [Member] | Maximum [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate During Period		2.56%	2.56%
Second Priority Senior Secured Notes [Member]
Debt Instrument [Line Items]
Extinguishment of Debt, Amount	$ 10,000

XML

Long-term Debt and Capital Lease Obligations, Line of Credit Facility (Details) - USD ($)	9 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Line of Credit Facility [Line Items]
Line of Credit Facility, Fair Value of Amount Outstanding	$ 10,000,000	$ 0
Maximum borrowing capacity	90,000,000
Debt and Capital Lease Obligations	250,388,000	249,995,000
Reserve Against line of Credit	15,000,000
Line of Credit Facility, Remaining Borrowing Capacity	75,000,000
Letters of Credit Outstanding, Amount	1,525,000
Line of Credit Facility, Current Borrowing Capacity	$ 44,291,000
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	5.80%
Line of Credit Facility, Average Outstanding Amount	$ 1,821,000
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%
Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Debt and Capital Lease Obligations	$ 10,000,000	$ 0

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Earnings Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Numerators [Abstract]
Net loss	$ 309	$ 34	$ (31,349)	$ (1,053)
Denominators [Abstract]
Weighted average common shares - basic (in shares)	13,176,538	12,907,938	13,092,869	12,851,456
Dilutive effect of restricted stock (in shares)	57,388	142,300	0	0
Weighted average common shares - diluted (in shares)	13,233,926	13,050,238	13,092,869	12,851,456
Basic earnings (loss) per share	$ 0.02	$ 0.00	$ (2.39)	$ (0.08)
Diluted earnings (loss) per share	$ 0.02	$ 0.00	$ (2.39)	$ (0.08)
Antidilutive securities excluded from computation of earnings per share (in shares)			81,734

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Stock-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended			9 Months Ended
	Sep. 30, 2016	Dec. 31, 2015	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
LMI Aerospace, Inc. 2005 Long-Term Incentive Plan [Member] | Restricted Stock Awards [Member]
Shares
Outstanding beginning balance (in shares)				253,434
Granted (in shares)				0
Vested (in shares)				(53,846)
Forfeited (in shares)				(18,580)
Outstanding ending balance (in shares)	181,008	253,434		181,008
Weighted Average Grant Date Fair Value
Outstanding beginning balance (in dollars per share)				$ 14.54
Granted (in dollars per share)				0.00
Vested (in dollars per share)				17.89
Forfeited (in dollars per share)				14.21
Outstanding ending balance (in dollars per share)	$ 13.58	$ 14.54		$ 13.58
Compensation expense	$ 58		$ 224	$ 401	$ 1,154
Unrecognized compensation costs	$ 1,254	$ 1,762		$ 1,254
Costs are expected to be recognized over a weighted average period	1 year 3 months 26 days	1 year 6 months 22 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)				61,801
Granted (in shares)				269,875
Vested (in shares)				(55,672)
Forfeited (in shares)				(6,899)
Outstanding ending balance (in shares)	269,105	61,801		269,105
Weighted Average Grant Date Fair Value
Outstanding beginning balance (in dollars per share)				$ 9.79
Granted (in dollars per share)				8.51
Vested (in dollars per share)				9.79
Forfeited (in dollars per share)				9.43
Outstanding ending balance (in dollars per share)	$ 8.52	$ 9.79		$ 8.52
Compensation expense	$ 271		$ 151	$ 695	$ 151
Unrecognized compensation costs	$ 1,223	$ 303		$ 1,223
Costs are expected to be recognized over a weighted average period	1 year 11 months 12 days		6 months 4 days
LMI Aerospace, Inc. 2015 Long-term Incentive Plan - Non Qualified Deferred Compensation Plan for Senior Executives and Outside Directors [Member] | Restricted Stock Awards [Member]
Shares
Outstanding ending balance (in shares)	6,129			6,129

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Business Segment Information (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016 USD ($)	Sep. 30, 2015 USD ($)	Sep. 30, 2016 USD ($) segment		Sep. 30, 2015 USD ($)
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	$ 89,673	$ 95,633	$ 260,997		$ 285,658
Income from operations	5,700	6,072	(15,710)		16,246
Aerostructures [Member]
Information about reported segments on the basis used internally to evaluate segment performance [Abstract]
Net sales	80,433	85,119	232,846		249,661
Income from operations	5,667	8,918	13,193		20,063
Engineering Services [Member]
Segment Reporting Information [Line Items]
Goodwill, Impairment Loss	24,302		23,402
Information about reported segments on the basis used internally to evaluate segment performance [Abstract]
Net sales	9,474	10,826	29,239		36,818
Income from operations	89	(2,805)	(28,570)	[1]	(3,803)
Impairment of Intangible Assets, Finite-lived	4,066		4,066
Eliminations [Member]
Information about reported segments on the basis used internally to evaluate segment performance [Abstract]
Net sales	(234)	(312)	(1,088)		(821)
Income from operations	$ (56)	$ (41)	$ (333)		$ (14)

[1] The nine months ended September 30, 2016 include a charge of $23,402 related to goodwill impairment and a charge of $4,066 related to intangible asset impairment. (See Note 4, Goodwill and Intangible Assets, to the Condensed Consolidated Financial Statements)

XML

Customer Concentration (Details)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Spirit [Member] | Revenue [Member]
Revenue and Accounts Receivable, Major Customer [Line Items]
Percentage attributable to customer (in hundredths)	40.70%	34.40%	38.60%	34.80%
Spirit [Member] | Accounts Receivable [Member]
Revenue and Accounts Receivable, Major Customer [Line Items]
Percentage attributable to customer (in hundredths)			33.90%		28.60%
The Boeing Company [Member] | Revenue [Member]
Revenue and Accounts Receivable, Major Customer [Line Items]
Percentage attributable to customer (in hundredths)	12.10%	12.60%	11.40%	11.40%
The Boeing Company [Member] | Accounts Receivable [Member]
Revenue and Accounts Receivable, Major Customer [Line Items]
Percentage attributable to customer (in hundredths)			9.40%		10.20%
Gulfstream [Member] | Revenue [Member]
Revenue and Accounts Receivable, Major Customer [Line Items]
Percentage attributable to customer (in hundredths)	13.50%	15.90%	11.60%	14.30%
Gulfstream [Member] | Accounts Receivable [Member]
Revenue and Accounts Receivable, Major Customer [Line Items]
Percentage attributable to customer (in hundredths)			13.30%		15.50%

XML

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Income Tax Disclosure [Abstract]
Operating Loss Carryforwards, Valuation Allowance	$ 20,273		$ 20,273		$ 14,461
(Benefit) provision for income taxes	$ (159)	$ 249	$ (734)	$ 408

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Restructuring (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Restructuring Cost and Reserve [Line Items]
Payments for Restructuring	$ 188	$ 1,165	$ 870	$ 2,175
Relocation of Sheet Metal Operations from Wichita [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Cost Remaining	22		22
Employee Severance [Member]
Restructuring Cost and Reserve [Line Items]
Payments for Restructuring			803
Other Restructuring [Member]
Restructuring Cost and Reserve [Line Items]
Payments for Restructuring			67
Selling, General and Administrative Expenses [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring related expenses	3	1,575	1,190	2,368
Selling, General and Administrative Expenses [Member] | Employee Severance [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring related expenses	3	1,575	1,190	2,368
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	0	378
Selling, General and Administrative Expenses [Member] | Employee Severance [Member] | Relocation of Sheet Metal Operations from Wichita [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring related expenses	49	0	296	0
Selling, General and Administrative Expenses [Member] | Employee Severance [Member] | Coweta Facility Closure [Member] [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring related expenses	0	64	0	64
Selling, General and Administrative Expenses [Member] | Employee Severance [Member] | Other Expense [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring related expenses	(46)	976	920	1,391
Selling, General and Administrative Expenses [Member] | Other Restructuring [Member] | Greenville Facility Closure [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring related expenses	0	501	(26)	501
Selling, General and Administrative Expenses [Member] | Other Restructuring [Member] | Melbourne Australia Office Closure [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring related expenses	0	34	0	34
Aerostructures [Member] | Selling, General and Administrative Expenses [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring related expenses	3	336	1,216	1,114
Engineering Services [Member] | Selling, General and Administrative Expenses [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring related expenses	$ 0	$ 1,239	$ (26)	$ 1,254

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Restructuring - Restructuring Reserve (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Restructuring Reserve [Roll Forward]
Accrued restructuring balance as of December 31, 2015			$ 255
Accrual additions	$ 3	$ 1,575	1,190	$ 2,368
Cash payments	(188)	$ (1,165)	(870)	$ (2,175)
Accrued restructuring balance as of September 30, 2016	575		575
Employee Severance [Member]
Restructuring Reserve [Roll Forward]
Accrued restructuring balance as of December 31, 2015			162
Accrual additions			1,216
Cash payments			(803)
Accrued restructuring balance as of September 30, 2016	575		575
Other Restructuring [Member]
Restructuring Reserve [Roll Forward]
Accrued restructuring balance as of December 31, 2015			93
Accrual additions			(26)
Cash payments			(67)
Accrued restructuring balance as of September 30, 2016	0		0
Relocation of Sheet Metal Operations from Wichita [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Cost Remaining	$ 22		$ 22

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Condensed Consolidated Balance Sheets (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015	Sep. 30, 2015	Dec. 31, 2014
Condensed Balance Sheet Statements, Captions [Line Items]
Cash and cash equivalents	$ 1,803	$ 10,504	$ 476	$ 7,927
Accounts receivable, net	54,815	48,491
Intercompany receivables	0	0
Inventories	123,779	114,775
Inventories	3,733	4,147
Total current assets	184,130	177,917
Property, plant and equipment, net	96,354	100,969
Investments in subsidiaries	0	0
Goodwill	62,482	86,784
Intangible assets, net	39,648	46,582
Other assets	2,824	3,728
Total assets	385,438	415,980
Accounts payable	21,892	13,156
Accrued expenses	21,122	30,015
Intercompany payables	0	0
Current installments of long-term debt and capital lease obligations	2,587	2,362
Total current liabilities	45,601	45,533
Long-term debt and capital lease obligations, less current installments	247,801	247,633
Other long-term liabilities	3,179	4,322
Deferred income taxes	0	536
Total long-term liabilities	250,980	252,491
Total shareholders’ equity	88,857	117,956
Total liabilities and shareholders' equity	385,438	415,980
LMIA(Guarantor Parent)
Condensed Balance Sheet Statements, Captions [Line Items]
Cash and cash equivalents	1,590	10,251	0	7,058
Accounts receivable, net	631	1,220
Intercompany receivables	284,892	196,496
Inventories	0	0
Inventories	1,512	2,224
Total current assets	288,625	210,191
Property, plant and equipment, net	6,343	5,430
Investments in subsidiaries	370,244	387,868
Goodwill	0	0
Intangible assets, net	0	0
Other assets	1,651	2,135
Total assets	666,863	605,624
Accounts payable	653	1,393
Accrued expenses	8,572	17,009
Intercompany payables	336,966	237,548
Current installments of long-term debt and capital lease obligations	88	85
Total current liabilities	346,279	256,035
Long-term debt and capital lease obligations, less current installments	230,813	229,752
Other long-term liabilities	914	1,881
Deferred income taxes	0	0
Total long-term liabilities	231,727	231,633
Total shareholders’ equity	88,857	117,956
Total liabilities and shareholders' equity	666,863	605,624
Guarantor Subsidiaries
Condensed Balance Sheet Statements, Captions [Line Items]
Cash and cash equivalents	213	253	476	869
Accounts receivable, net	54,184	47,271
Intercompany receivables	277,828	203,128
Inventories	123,779	114,775
Inventories	2,221	1,923
Total current assets	458,225	367,350
Property, plant and equipment, net	90,011	95,539
Investments in subsidiaries	0	0
Goodwill	62,482	86,784
Intangible assets, net	39,648	46,582
Other assets	1,173	1,593
Total assets	651,539	597,848
Accounts payable	21,239	11,763
Accrued expenses	12,550	13,006
Intercompany payables	225,754	162,076
Current installments of long-term debt and capital lease obligations	2,499	2,277
Total current liabilities	262,042	189,122
Long-term debt and capital lease obligations, less current installments	16,988	17,881
Other long-term liabilities	2,265	2,441
Deferred income taxes	0	536
Total long-term liabilities	19,253	20,858
Total shareholders’ equity	370,244	387,868
Total liabilities and shareholders' equity	651,539	597,848
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	(562,720)	(399,624)
Inventories	0	0
Inventories	0	0
Total current assets	(562,720)	(399,624)
Property, plant and equipment, net	0	0
Investments in subsidiaries	(370,244)	(387,868)
Goodwill	0	0
Intangible assets, net	0	0
Other assets	0	0
Total assets	(932,964)	(787,492)
Accounts payable	0	0
Accrued expenses	0	0
Intercompany payables	(562,720)	(399,624)
Current installments of long-term debt and capital lease obligations	0	0
Total current liabilities	(562,720)	(399,624)
Long-term debt and capital lease obligations, less current installments	0	0
Other long-term liabilities	0	0
Deferred income taxes	0	0
Total long-term liabilities	0	0
Total shareholders’ equity	(370,244)	(387,868)
Total liabilities and shareholders' equity	$ (932,964)	$ (787,492)

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Condensed Consolidating Statements of Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Condensed Income Statements, Captions [Line Items]
Product sales	$ 79,840	$ 84,114	$ 230,182	$ 246,730
Service revenue	9,833	11,519	30,815	38,928
Net sales	89,673	95,633	260,997	285,658
Cost of product sales	64,839	67,514	184,520	197,211
Cost of service revenue	8,988	11,493	28,865	35,853
Cost of sales	73,827	79,007	213,385	233,064
Gross profit	15,846	16,626	47,612	52,594
Selling, general and administrative expenses	10,143	8,979	33,764	33,980
Goodwill and Intangible Asset Impairment	0	0	28,368	0
Restructuring expense	3	1,575	1,190	2,368
Income (loss) from operations	5,700	6,072	(15,710)	16,246
Interest expense	(5,591)	(5,653)	(16,067)	(16,802)
Other, net	41	(136)	(306)	(89)
Income (loss) from equity investments in subsidiaries	0	0	0	0
Total other expense	(5,550)	(5,789)	(16,373)	(16,891)
(Loss) income before income taxes	150	283	(32,083)	(645)
(Benefit) provision for income taxes	(159)	249	(734)	408
Net loss	309	34	(31,349)	(1,053)
Change in foreign currency translation adjustment	(33)	(32)	(121)	(31)
Total comprehensive income (loss)	276	2	(31,470)	(1,084)
LMIA(Guarantor Parent)
Condensed Income Statements, Captions [Line Items]
Product sales	(19)	4	43	207
Service revenue	9,767	7,640	31,952	26,729
Net sales	9,748	7,644	31,995	26,936
Cost of product sales	0	27	80	214
Cost of service revenue	9,492	7,991	32,017	27,440
Cost of sales	9,492	8,018	32,097	27,654
Gross profit	256	(374)	(102)	(718)
Selling, general and administrative expenses	0	0	0	0
Goodwill and Intangible Asset Impairment	0		0
Restructuring expense	(47)	0	404	318
Income (loss) from operations	303	(374)	(506)	(1,036)
Interest expense	(5,369)	(5,389)	(15,415)	(16,029)
Other, net	0	(1)	4	(1)
Income (loss) from equity investments in subsidiaries	5,513	3,541	(15,553)	9,914
Total other expense	144	(1,849)	(30,964)	(6,116)
(Loss) income before income taxes	447	(2,223)	(31,470)	(7,152)
(Benefit) provision for income taxes	0	(2,227)	0	(6,069)
Net loss	447	4	(31,470)	(1,083)
Change in foreign currency translation adjustment	0	0	0	0
Total comprehensive income (loss)	447	4	(31,470)	(1,083)
Guarantor Subsidiaries
Condensed Income Statements, Captions [Line Items]
Product sales	79,841	84,099	230,153	246,699
Service revenue	9,831	11,545	30,836	38,942
Net sales	89,672	95,644	260,989	285,641
Cost of product sales	64,857	67,476	184,426	197,173
Cost of service revenue	9,054	11,166	28,849	35,155
Cost of sales	73,911	78,642	213,275	232,328
Gross profit	15,761	17,002	47,714	53,313
Selling, general and administrative expenses	10,143	8,979	33,764	33,980
Goodwill and Intangible Asset Impairment	0		28,368
Restructuring expense	50	1,575	786	2,050
Income (loss) from operations	5,568	6,448	(15,204)	17,283
Interest expense	(222)	(264)	(652)	(773)
Other, net	41	(135)	(310)	(88)
Income (loss) from equity investments in subsidiaries	0	0	0	0
Total other expense	(181)	(399)	(962)	(861)
(Loss) income before income taxes	5,387	6,049	(16,166)	16,422
(Benefit) provision for income taxes	(159)	2,476	(734)	6,477
Net loss	5,546	3,573	(15,432)	9,945
Change in foreign currency translation adjustment	(33)	(32)	(121)	(31)
Total comprehensive income (loss)	5,513	3,541	(15,553)	9,914
Consolidating/Eliminating Entries
Condensed Income Statements, Captions [Line Items]
Product sales	18	11	(14)	(176)
Service revenue	(9,765)	(7,666)	(31,973)	(26,743)
Net sales	(9,747)	(7,655)	(31,987)	(26,919)
Cost of product sales	(18)	11	14	(176)
Cost of service revenue	(9,558)	(7,664)	(32,001)	(26,742)
Cost of sales	(9,576)	(7,653)	(31,987)	(26,918)
Gross profit	(171)	(2)	0	(1)
Selling, general and administrative expenses	0	0	0	0
Goodwill and Intangible Asset Impairment	0		0
Restructuring expense	0	0	0	0
Income (loss) from operations	(171)	(2)	0	(1)
Interest expense	0	0	0	0
Other, net	0	0	0	0
Income (loss) from equity investments in subsidiaries	(5,513)	(3,541)	15,553	(9,914)
Total other expense	(5,513)	(3,541)	15,553	(9,914)
(Loss) income before income taxes	(5,684)	(3,543)	15,553	(9,915)
(Benefit) provision for income taxes	0	0	0	0
Net loss	(5,684)	(3,543)	15,553	(9,915)
Change in foreign currency translation adjustment	0	0	0	0
Total comprehensive income (loss)	$ (5,684)	$ (3,543)	$ 15,553	$ (9,915)

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Condensed Consolidating Statements of Cash Flows (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Condensed Cash Flow Statements, Captions [Line Items]
Net loss	$ 309	$ 34	$ (31,349)	$ (1,053)
Adjustments for non-cash items			44,732	16,270
Net changes in operating assets and liabilities, net of acquired businesses			(13,700)	(9,500)
Intercompany activity			0	0
Net cash (used) provided by operating activities			(317)	5,717
Additions to property, plant and equipment			(7,671)	(15,305)
Proceeds from sale of property, plant and equipment			27	260
Net cash used by investing activities			(7,644)	(15,045)
Proceeds from Issuance of Secured Debt			1,465	0
Repayments of Long-term Debt, Long-term Capital Lease Obligations, and Capital Securities			(12,108)	(1,814)
Advances on revolving line of credit			38,500	93,500
Repayments of Lines of Credit			(28,500)	(89,500)
Payments of Debt Issuance Costs			97	309
Net cash (used) provided by financing activities			(740)	1,877
Net decrease in cash and cash equivalents			(8,701)	(7,451)
Cash and cash equivalents, beginning of period			10,504	7,927
Cash and cash equivalents, end of period	1,803	476	1,803	476
LMIA(Guarantor Parent)
Condensed Cash Flow Statements, Captions [Line Items]
Net loss	447	4	(31,470)	(1,083)
Adjustments for non-cash items			21,104	(7,572)
Net changes in operating assets and liabilities, net of acquired businesses			(7,466)	(1,616)
Intercompany activity			11,022	1,379
Net cash (used) provided by operating activities			(6,810)	(8,892)
Additions to property, plant and equipment			(1,790)	(1,606)
Proceeds from sale of property, plant and equipment			3	0
Net cash used by investing activities			(1,787)	(1,606)
Proceeds from Issuance of Secured Debt			0
Repayments of Long-term Debt, Long-term Capital Lease Obligations, and Capital Securities			(10,064)	(251)
Advances on revolving line of credit			38,500	93,500
Repayments of Lines of Credit			(28,500)	(89,500)
Payments of Debt Issuance Costs				309
Net cash (used) provided by financing activities			(64)	3,440
Net decrease in cash and cash equivalents			(8,661)	(7,058)
Cash and cash equivalents, beginning of period			10,251	7,058
Cash and cash equivalents, end of period	1,590	0	1,590	0
Guarantor Subsidiaries
Condensed Cash Flow Statements, Captions [Line Items]
Net loss	5,546	3,573	(15,432)	9,945
Adjustments for non-cash items			39,181	13,927
Net changes in operating assets and liabilities, net of acquired businesses			(6,234)	(7,884)
Intercompany activity			(11,022)	(1,379)
Net cash (used) provided by operating activities			6,493	14,609
Additions to property, plant and equipment			(5,881)	(13,699)
Proceeds from sale of property, plant and equipment			24	260
Net cash used by investing activities			(5,857)	(13,439)
Proceeds from Issuance of Secured Debt			1,465
Repayments of Long-term Debt, Long-term Capital Lease Obligations, and Capital Securities			(2,044)	(1,563)
Advances on revolving line of credit			0	0
Repayments of Lines of Credit			0	0
Payments of Debt Issuance Costs				0
Net cash (used) provided by financing activities			(676)	(1,563)
Net decrease in cash and cash equivalents			(40)	(393)
Cash and cash equivalents, beginning of period			253	869
Cash and cash equivalents, end of period	213	476	213	476
Consolidating/Eliminating Entries
Condensed Cash Flow Statements, Captions [Line Items]
Net loss	(5,684)	(3,543)	15,553	(9,915)
Adjustments for non-cash items			(15,553)	9,915
Net changes in operating assets and liabilities, net of acquired businesses			0	0
Intercompany activity			0	0
Net cash (used) provided by operating activities			0	0
Additions to property, plant and equipment			0	0
Proceeds from sale of property, plant and equipment			0	0
Net cash used by investing activities			0	0
Proceeds from Issuance of Secured Debt			0
Repayments of Long-term Debt, Long-term Capital Lease Obligations, and Capital Securities			0	0
Advances on revolving line of credit			0	0
Repayments of Lines of Credit			0	0
Payments of Debt Issuance Costs				0
Net cash (used) provided by financing activities			0	0
Net decrease 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