þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
LMI AEROSPACE, INC. |
(Exact Name of Registrant as Specified in Its Charter) |
Missouri | 43-1309065 | |
(State or Other Jurisdiction of Incorporation or Organization) | (IRS Employer Identification No.) | |
411 Fountain Lakes Blvd., | ||
St. Charles, Missouri | 63301 | |
(Address of Principal Executive Offices) | (Zip Code) |
Title of Each Class | Name of Each Exchange On Which Registered | |
Common stock, $0.02 par value per share | NASDAQ Global Market |
None |
(Title of Class) |
Large accelerated filer ¨ | Accelerated filer þ |
Non-accelerated filer ¨ (Do not check if a smaller reporting company) | Smaller reporting company ¨ |
Item No. | Page | |
PART I | ||
1 | ||
1A | ||
1B | ||
2 | ||
3 | ||
4 | ||
PART II | ||
5 | ||
6 | ||
7 | ||
7A | ||
8 | ||
9 | ||
9A | ||
9B | ||
PART III | ||
10 | ||
11 | ||
12 | ||
13 | ||
14 | ||
PART IV | ||
15 | ||
• | the uncertainties and risks that result from both the announcement of the Transaction (as defined below) and any delay, inability to recover costs associated with the Transaction or the failure to consummate the Transaction; |
• | difficulties with the implementation of the Company’s growth strategy, particularly resulting from unanticipated costs relating to the Company’s manufacture of new parts for its current customers and/or new customers; |
• | effective operational execution to record high production rates, including integrating new people, equipment and processes; |
• | continued decline in demand for design engineering services and continued insourcing of such services by our customers; |
• | the potential impact of changes in United States policies regarding trade partnerships and treaties as well as any tax law changes negatively impacting interest and certain other deductions due to the Company’s foreign production of goods; |
• | competitive pressures, such as pricing, relating to low-cost foreign labor, capital investment to secure new work, and customers requiring discounts to achieve program extensions; |
• | the Company’s ability to accurately estimate its costs under long-term, fixed-price contracts including contracts for design-build programs; |
• | the Company’s ability to comply with its debt covenants and the significant leverage of the Company; |
• | the Company’s ability to stay current with technological changes, such as the development of alternative aerospace materials, changes in manufacturing techniques and new engineering software; |
• | a reduction in the number of suppliers and increases in competition resulting from consolidation within the aerospace industry; |
• | inability to timely deliver new products and within quality specifications; |
• | supply chain performance and support; |
• | the Company’s ability to successfully negotiate asserted and unasserted claims, and in particular claims relating to cost over-runs of work performed under certain customer contracts; |
• | access to and retention of qualified workers and management; |
• | our ability to avoid or recover from cyber-based or other security attacks, information technology failures or other disruptions; |
• | the Company's ability to generate sufficient cash flow to fund interest payments and investment in working capital needs; |
• | changes in accounting principles or new accounting standards; |
• | changes in the quality, costs and availability of the Company's raw materials, principally aluminum; |
• | the political environment in Mexico, where the Company has manufacturing operations; |
• | governmental funding for certain military programs that utilize the Company’s products; and |
• | compliance with laws and regulations. |
ITEM 1. | BUSINESS |
• | Building critical mass and enhanced capabilities to win larger and more complex assembly business as a trusted and aligned supplier to our customers. |
• | Making operational excellence the cornerstone of our competitive advantage. |
• | Providing unique integrated solutions to our aerospace customers through creative and value driven processes throughout the product lifecycle. |
• | Achieving organic growth by executing our long-term business development strategy so that we continue to grow our expertise and sales. |
• | Investing in additional capacity and technology to accommodate customer growth. |
• | Striving for more balance within our various markets, customers and platforms. |
• | Placing the highest priority on serving our external and internal customers with consistent emphasis on quality, delivery performance, integrity, ethical behavior and responsibility to our communities. |
• | Grow our low cost sources of supply through ownership or use of our supply chain to complement the engineering and build capabilities provided by our U.S. offices and factories, thus enabling us to better market to global customers. |
• | Enhancing those business processes necessary to effectively execute complex new development programs. |
• | Deploying an industry leading enterprise resource planning system. |
• | Improving information and facility security, with emphasis on export control requirements. |
• | Investing in developing our work force by providing formal education support, skill training to provide flexibility and capability, and leadership training to enable us to reach our revenue growth targets and provide added management depth. |
Product & Services | Models |
Aerostructures Segment | |
Leading edge assemblies, wing slats and flap skins/components, ailerons, verticals, vanes | Gulfstream Aerospace Corporation: G-280, G-450, G-500, G-550, G-600, G-650 The Boeing Company: 737, 777, 787 Bombardier, Inc.: Learjet 45 & 60, CRJ200/700/900/1000, Global Express Triumph: Gulfstream G-280, G-650 Embraer: KC-390 Honda Jet: HA-420 |
Winglet leading edges and modification kits | Aviation Partners Boeing: 737, 757, 767 FACC AG: Boeing 737, 757 |
Fuselage and wing skin | Gulfstream Aerospace Corporation: G-450, G-500, G-550, G600, G-650 The Boeing Company: 737, 747, 767, 777, 787 Bombardier, Inc.: Learjet 45 & 60, Q400, CRJ200/700/900/1000, Challenger 604/605 |
Helicopter cabin and aft section components and assemblies | Sikorsky Aircraft: UH-60 Black Hawk, MH-60 Seahawk Triumph Group: UH-60 Black Hawk, MH-60 Seahawk |
Wing panels | The Boeing Company: 747 Bombardier, Inc.: CRJ 200/700/900/1000 |
Tail cone assembly | Mitsubishi Aircraft Corporation (“MITAC”): Mitsubishi Regional Jet (“MRJ”) |
Thrust reversers and engine nacelles/cowlings | Gulfstream Aerospace Corporation: G-450, G-650 Boeing Commercial: 737, 747, 777 Boeing Defense: B-52 Buffalo General Electric: Airbus A320 |
Door components, assemblies and floor beams | Gulfstream Aerospace Corporation: G-450 The Boeing Company: 737, 747 Bombardier, Inc.: CRJ1000, C-Series |
Cockpit window frames and landing light lens assemblies | Gulfstream Aerospace Corporation: G-650 The Boeing Company: 737, 747, 767, 777, KC-10 |
Cockpit crew floor and bulkhead structure assemblies | Spirit Aerosystems: Boeing 737 |
Wheel well assemblies | The Boeing Company: 737 Spirit Aerosystems: Boeing 737 |
Detail interior components | Gulfstream Aerospace Corporation: G-450, G-550 The Boeing Company: 737, 747, 767, 777 |
Structural sheet metal, machined, milled and extruded components | Gulfstream Aerospace Corporation: G-280,G-450, G-500, G-550, G600, G-650 Triumph Aerostructures – Vought Aircraft Division: Boeing 737, 747, 767, 777, Gulfstream G-450, G-550 Boeing Commercial: 737, 747, 767, 777 Boeing Defense: F-15 Eagle, F/A-18 Hornet, C-17 Globemaster, V-22 Bombardier, Inc.: CRJ 200/700/900/1000, Challenger 604/605, C-Series Spirit AeroSystems: Boeing 737, 777, 787 |
Housings and assemblies for gun turrets | The Boeing Company: AH-64 Apache Alliant Techsystems, Inc .: AH-64 Apache |
Auxiliary power unit components | Gulfstream Aerospace Corporation: G-550 The Boeing Company: V-22 Osprey |
Pylon structures | Honda Jet: HA-420 Boeing Commercial: 737 Spirit Aerosystems: MITAC MRJ, Bombardier C-Series |
Electronic rack assembly | Spirit Aerosystems: Boeing 787 |
Fans, heat exchangers and various assemblies | Cymer, Inc.: ELS 7000, ELS 6010, XLA 100 |
Assemblies and components for rail yard switching equipment | Alstom Signaling |
Engineering Services Segment | |
Models | |
Structural design and analysis | |
Wing/wingbox, fixed and moveable leading edges/trailing edges, fuselage, empennage, tail cone design | Boeing Commercial : 777, 747-8, 787-8/-9 Spirit AeroSystems: Boeing 747-8, 787-8, Gulfstream G-280, G-650, Airbus A-350 Triumph Aerostructures - Vought Aircraft Division: Boeing 787-8, Bombardier Global 7000/8000 Lockheed Martin Aeronautics Company: JSF F-35 Bombardier, Inc.: Learjet L-85, C-Series MITAC: MRJ The Spaceship Company: Spaceship II, White Knight II General Dynamics OTS: Gulfstream G650 |
Winglet/wing mod design | Aviation Partners Boeing: 757, 767 Spirit AeroSystems: Gulfstream G-280, G-650 |
Nacelle, engine cowl, thrust reverser design | NORDAM: PD427 Fan Cowl (Hawker 400), Boeing 737 MAX |
Weight improvement engineering | Boeing Commercial: 747-8, 787-8 Spirit AeroSystems: Boeing 787-8, Gulfstream G-280, G-650 Triumph Aerostructures - Vought Aircraft Division: Bombardier Global Express Wing |
Helicopter fuselage, cockpit, cabin frames, skins, longerons, beams | Spirit AeroSystems: Sikorsky CH53K |
Aircraft modification engineering | Boeing Commercial: 747-LCF, 777-F Boeing Defense: F/A-18A/B/C/D Hornet, F/A-18E/F Super Hornet, EA-18G Growler Go-Go: In-flight entertainment Jet2: Structural modifications |
Systems design and integration | Boeing Commercial: 747-8, 787 The Spaceship Company: Spaceship II, White Knight II Arrowhead: COMAC C919, Bombardier Global Express |
Tool design and fabrication | Boeing Commercial: 777, 747-8, 787 Boeing Defense: MMA, P-8A Spirit AeroSystems: Boeing 747-8 Triumph Aerostructures - Vought Aircraft Division: Boeing 787, 747-8, C-17, Northrop Grumman Global Hawk NORDAM: Boeing 737 |
After-market engineering and support services | Boeing Commercial and certain other airlines |
Aviation training system | Northrop Grumman: C-2A Greyhound, E-2C Hawkeye, E-2D Advanced Hawkeye |
Aviation maintenance engineering | Naval Air Station: Coronado, CA |
• | fluid cell press; |
• | sheet metal and extrusion stretch; |
• | skin stretch; |
• | stretch draw; |
• | hot joggle; |
• | machining and turning; |
• | computer numerical control ("CNC") brake forming and turret punch; and |
• | roll forming. |
• | finishing; |
• | assembly; |
• | kitting; |
• | distribution; |
• | composite testing services; |
• | integrated testing services; |
• | engineered tool design, fabrication and repair; and |
• | prototyping and manufacturing producibility design. |
As of December 31, | |||||||
2016 | 2015 | ||||||
($ in millions) | |||||||
Aerostructures | $ | 389.2 | $ | 395.5 | |||
Engineering Services | 1.8 | 2.8 | |||||
Total | $ | 391.0 | $ | 398.3 | |||
Portion deliverable within 12 months | $ | 329.7 | $ | 322.9 |
• | regulate the handling, transportation and disposal of hazardous materials generated or used by us during the normal course of our operations; |
ITEM 1A. | RISK FACTORS |
• | market reaction to the announcement of the Transaction; |
• | disruption to our business, including the continued diversion of significant management and other resources towards the completion of the Transaction; |
• | changes in the respective business, operations, financial position and prospects of either company during the Transaction process; |
• | market assessments of the likelihood that the Transaction will be consummated; |
• | the impact of any legal proceedings that have been or may be instituted against us, our directors, executive officers and others relating to the Transaction; and |
• | our incurrence and continued incurrence of significant costs, expenses and fees for professional services and other costs in connection with the Transaction, many of which are payable by us regardless of whether the Transaction is consummated. |
• | the approval of the Merger Agreement by the affirmative vote of the holders of at least two-thirds of the outstanding shares of common stock of the Company; |
• | the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended; |
• | clearance by the Committee on Foreign Investment in the United States and by the Directorate of Defense Trade Controls under the International Traffic in Arms Regulations; |
• | the absence of any order, injunction or law preventing or prohibiting the consummation of the Transaction; |
• | the accuracy of the representations and warranties contained in the Merger Agreement (subject to certain materiality qualifiers); |
• | compliance with covenants and agreements in the Merger Agreement in all material respects; and |
• | the absence of a material adverse effect on the Company. |
• | we could be required to pay a termination fee of up to $15 million to the Sonaca Entities under certain circumstances as described in the Merger Agreement; |
• | we would have incurred significant costs in connection with the Transaction that we would be unable to recover; |
• | we may be subject to negative publicity or be negatively perceived by the investment or business communities; |
• | we would not realize any or all of the potential benefits of the Transaction and our shareholders would not realize the 52% premium to the closing price of our common stock on February 16, 2017, which was a factor among many in our board’s decisions to approve the Merger Agreement; |
• | we may be subject to legal proceedings related to any delay or failure to complete the Transaction; |
• | any disruptions to our business resulting from the announcement and pendency of the Transaction, including any adverse changes in our relationships with our customers, suppliers, other business partners and employees, may continue or intensify in the event the Transaction is not consummated; and |
• | we may not be able to take advantage of alternative business opportunities or effectively respond to competitive pressures. |
• | the ability to adapt more quickly to changes in customer requirements and industry conditions or trends; |
• | greater access to capital; |
• | stronger relationships with customers and suppliers; |
• | greater name recognition; and |
• | purchased (or in the future, may purchase) critical suppliers and make them captive causing delays and potential price increases. |
• | the relative state of the aerospace industry’s business cycle; |
• | new programs in commercial, military, and general aviation, which have historically experienced significant delays and engineering changes that adversely impact our sales, results of operations and cash flow; |
• | fluctuating fuel and labor costs; |
• | intense price competition and regulatory scrutiny; |
• | certain trends, including a decrease in outsourcing by aircraft manufacturers or the failure of projected market growth to materialize or continue; |
• | changes in military budgeting, sequestration and procurement for certain military aircraft; and |
• | military trend toward utilizing more Unmanned Aerial Vehicles, reducing the demand for more traditional military aircraft (e.g. Boeing F-18, General Dynamics F-16 and Lockheed Martin F-35). |
• | regulate the operation, handling, transportation and disposal of hazardous materials generated or used by us during the normal course of our operations; |
• | govern the health and safety of our employees; and |
• | require that we meet standards and licensing requirements for aerospace components. |
• | we must use a substantial portion of our cash flow from operations to pay interest on the notes and our other indebtedness, which reduces the funds available to use for operations and other purposes including our other financial obligations; |
• | our ability to obtain additional financing for working capital, capital expenditures, strategic acquisitions or general corporate purposes may be impaired; |
• | we could be at a competitive disadvantage compared to our competitors that may have proportionately less debt; |
• | our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate may be limited; |
• | our ability to fund a change of control offer may be limited; and |
• | we may be more vulnerable to economic downturns and adverse developments in our business. |
• | incur or guarantee additional indebtedness or issue certain preferred stock; |
• | make certain investments or acquisitions; |
• | issue stock of subsidiaries; |
• | grant or permit certain liens on our assets; |
• | enter into certain transactions with affiliates; |
• | pay dividends, redeem subordinated debt or make other restricted payments; |
• | merge, consolidate or transfer substantially all of our assets; |
• | transfer, sell or acquire assets, including capital stock of our subsidiaries; and |
• | change the business we conduct. |
ITEM 1B. | UNRESOLVED STAFF COMMENTS. |
ITEM 2. | PROPERTIES. |
Location | Primary Operations Performed | |
St. Charles, Missouri | Assembly | |
Cottonwood Falls, Kansas | Assembly | |
Lenexa, Kansas | Assembly | |
St. Charles, Missouri | Fabrication | |
Auburn, Washington | Fabrication | |
Everett, Washington | Fabrication | |
Mexicali, Mexico | Fabrication | |
Vista, California | Fabrication | |
Wichita, Kansas | Fabrication | |
Tulsa, Oklahoma | Finishing | |
Cuba, Missouri | Finishing | |
Fredonia, Kansas | Machining | |
Sun Valley, California | Machining | |
Washington, Missouri | Machining | |
Wichita, Kansas | Machining | |
Tulsa, Oklahoma | Distribution | |
Savannah, Georgia | Kitting, Distribution | |
Dallas/Fort Worth, Texas | Engineering Services | |
Everett, Washington | Engineering Services | |
San Diego, California | Engineering Services | |
Stansted, Essex, England | Engineering Services | |
Negombo, Sri Lanka | Engineering Services | |
St. Charles, Missouri | Offices |
ITEM 3. | LEGAL PROCEEDINGS. |
ITEM 4. | MINE SAFETY DISCLOSURES. |
ITEM 5. | MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. |
Period | High | Low | ||||||
Fiscal Year 2016 | ||||||||
1st quarter | $ | 9.89 | $ | 8.51 | ||||
2nd quarter | 8.94 | 7.66 | ||||||
3rd quarter | 8.12 | 7.13 | ||||||
4th quarter | 9.20 | 7.05 | ||||||
Fiscal Year 2015 | ||||||||
1st quarter | 14.62 | 11.95 | ||||||
2nd quarter | 12.43 | 9.85 | ||||||
3rd quarter | 12.08 | 9.68 | ||||||
4th quarter | 11.25 | 9.30 |
Plan Category | Number of securities that remain available for future issuance under equity compensation plans | ||
Equity compensation plans approved by security holders: | |||
2005 Long-Term Incentive Plan | — | ||
2015 Long-Term Incentive Plan | 420,200 | ||
Equity compensation plans not approved by security holders | — | ||
Total | 420,200 |
ITEM 6. | SELECTED FINANCIAL DATA. |
2016 | 2015 | 2014 | 2013 | 2012 (1) | |||||||||||||||
Statement of Operations Data: | |||||||||||||||||||
Net sales | $ | 346,180 | $ | 375,096 | $ | 387,817 | $ | 412,557 | $ | 278,629 | |||||||||
Cost of sales | 286,377 | 306,310 | 312,447 | 332,695 | 210,321 | ||||||||||||||
Gross profit | 59,803 | 68,786 | 75,370 | 79,862 | 68,308 | ||||||||||||||
Selling, general & administrative expenses (2) | 44,541 | 45,678 | 55,204 | 55,862 | 36,891 | ||||||||||||||
Impairment expense (3) | 28,368 | — | 26,439 | 77,750 | — | ||||||||||||||
Contingent consideration write-off (4) | — | — | — | (7,950 | ) | — | |||||||||||||
Acquisition expense (5) | — | — | — | 247 | 5,362 | ||||||||||||||
Restructuring expense (6) | 1,212 | 2,322 | 2,585 | 3,073 | — | ||||||||||||||
(Loss) income from operations | (14,318 | ) | 20,786 | (8,858 | ) | (49,120 | ) | 26,055 | |||||||||||
Other income (expense): | |||||||||||||||||||
Interest expense (7) | (21,171 | ) | (22,439 | ) | (29,280 | ) | (16,962 | ) | (1,771 | ) | |||||||||
Other (expense) income, net | (352 | ) | (236 | ) | 223 | 618 | 356 | ||||||||||||
Total other expense | (21,523 | ) | (22,675 | ) | (29,057 | ) | (16,344 | ) | (1,415 | ) | |||||||||
(Loss) income before income taxes | (35,841 | ) | (1,889 | ) | (37,915 | ) | (65,464 | ) | 24,640 | ||||||||||
(Benefit) provision for income taxes (8) | (734 | ) | 352 | (8,953 | ) | (6,979 | ) | 8,153 | |||||||||||
Net (loss) income | $ | (35,107 | ) | $ | (2,241 | ) | $ | (28,962 | ) | $ | (58,485 | ) | $ | 16,487 | |||||
Amounts per common share: | |||||||||||||||||||
Net (loss) income - per common share | $ | (2.68 | ) | $ | (0.17 | ) | $ | (2.28 | ) | $ | (4.64 | ) | $ | 1.41 | |||||
Net (loss) income - assuming dilution | $ | (2.68 | ) | $ | (0.17 | ) | $ | (2.28 | ) | $ | (4.64 | ) | $ | 1.39 | |||||
Weighted average common shares outstanding | 13,113,901 | 12,869,353 | 12,716,976 | 12,607,833 | 11,701,607 | ||||||||||||||
Weighted average dilutive common shares outstanding | 13,113,901 | 12,869,353 | 12,716,976 | 12,607,833 | 11,839,182 | ||||||||||||||
Other Financial Data: | |||||||||||||||||||
Capital expenditures | $ | 11,813 | $ | 16,599 | $ | 16,690 | $ | 24,149 | $ | 19,529 | |||||||||
Cash provided (used) by operating activities | 14,551 | 32,362 | 49,117 | (8,349 | ) | 8,799 | |||||||||||||
Cash used by investing activities | (11,174 | ) | (16,314 | ) | (13,111 | ) | (22,253 | ) | (235,000 | ) | |||||||||
Cash (used) provided by financing activities | (11,390 | ) | (13,471 | ) | (29,651 | ) | 27,827 | 222,680 | |||||||||||
Gross profit margin | 17.3 | % | 18.3 | % | 19.4 | % | 19.4 | % | 24.5 | % | |||||||||
Balance Sheet Data: | |||||||||||||||||||
Cash and cash equivalents | $ | 2,491 | $ | 10,504 | $ | 7,927 | $ | 1,572 | $ | 4,347 | |||||||||
Working capital | 122,531 | 132,384 | 139,444 | 148,302 | 109,394 | ||||||||||||||
Total assets | 383,632 | 415,980 | 432,614 | 469,691 | 514,768 | ||||||||||||||
Long-term debt, excluding current portion | 237,398 | 247,633 | 259,645 | 277,702 | 245,710 | ||||||||||||||
Shareholders' equity | 85,541 | 117,956 | 118,135 | 144,144 | 200,954 |
(1) | Includes the operating results of TASS and Valent subsequent to their acquisition dates of August 7, 2012 and December 28, 2012, respectively and includes related purchase accounting adjustments and debt acquired to finance these acquisitions. |
(2) | In the third quarter of 2015, the Company recorded a net gain of $3,347 related to a legal settlement. |
(3) | In the second quarter of 2016, a triggering event occurred when 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. An impairment analysis was performed and determined that the carrying value of related goodwill and intangible assets exceeded its fair value. As a result, a non-cash impairment charge of $28,368 was recorded in the second quarter of 2016. |
(4) | In the second quarter of 2013, the Company realized a $7,950 non-cash benefit related to the write-off of the contingent consideration associated with the December 2012 purchase of Valent. The earnings levels required to be achieved by Valent in order for the former owners of Valent to be paid contingent consideration were deemed not likely to be achieved by the required date of December 31, 2013. |
(5) | Includes investment banking, accounting, legal, tax and valuation expenses primarily as a direct result of the TASS and Valent acquisitions. |
(6) | The year ended December 31, 2016 includes $265 related to the relocation of the Wichita sheet metal fabrication operation and $947 related to other employment separation activities. The year ended December 31, 2015 includes $150 related to the closure of the St. Charles machine parts operations, $94 related to the closure of the Coweta, OK manufacturing facility, $496 related to the closure of engineering offices in Greenville, SC and Melbourne Australia, $718 related to other reductions in the engineering services segment and $864 related to other employment separation activities. The year ended December 31, 2014 includes $287 related to the closure of the Precise Machine facility in Forth Worth, TX, $47 related to the relocation of the Savannah machining operations, $228 related to the closure of the St. Charles machine parts operations and $2,023 related to other employment separation activities. The year ended December 31, 2013 includes $453 related to the closure of the Precise Machine facility in Fort Worth, TX and $2,620 related to the separation agreement reached with key members of Valent. |
(7) | The years ended December 31, 2016, 2015, 2014 and 2012 include $156, $215, $8,466 and $580, respectively, for the write-off of debt financing costs related to the modification and termination of certain debt instruments. The year ended December 31, 2014 also includes a charge of $793 related to the termination and settlement interest rate derivatives. |
(8) | The year ended December 31, 2014 includes $8,931 of income tax benefits generated from income tax losses for 2013 and 2014 that the Company decided in 2014 to carry back to prior years. The year ended December 31, 2013 includes a $17,718 valuation charge against deferred tax assets at December 31, 2013 related to the goodwill impairment at Valent noted in (3) above. |
ITEM 7. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. |
Market | 2016 | 2015 | 2014 | |||||
Large commercial aircraft | 57.0 | % | 52.9 | % | 50.1 | % | ||
Corporate and regional aircraft | 23.2 | % | 26.0 | % | 26.1 | % | ||
Military | 13.2 | % | 13.4 | % | 15.1 | % | ||
Other (1) | 6.6 | % | 7.7 | % | 8.7 | % | ||
Total | 100.0 | % | 100.0 | % | 100.0 | % |
2016 | |||||||||||||||
Aerostructures | Engineering Services | Elimination | Total | ||||||||||||
($ in millions) | |||||||||||||||
Net sales | $ | 311.1 | $ | 36.3 | $ | (1.2 | ) | $ | 346.2 | ||||||
Cost of sales | 254.4 | 32.9 | (0.9 | ) | 286.4 | ||||||||||
Gross profit | 56.7 | 3.4 | (0.3 | ) | 59.8 | ||||||||||
S, G, & A and other charges (1) | 40.6 | 33.5 | — | 74.1 | |||||||||||
Income (loss) from operations | $ | 16.1 | $ | (30.1 | ) | $ | (0.3 | ) | $ | (14.3 | ) |
2015 | |||||||||||||||
Aerostructures | Engineering Services | Elimination | Total | ||||||||||||
($ in millions) | |||||||||||||||
Net sales | $ | 327.2 | $ | 49.1 | $ | (1.2 | ) | $ | 375.1 | ||||||
Cost of sales | 263.6 | 43.8 | (1.1 | ) | 306.3 | ||||||||||
Gross profit | 63.6 | 5.3 | (0.1 | ) | 68.8 | ||||||||||
S, G, & A and other charges | 39.6 | 8.4 | — | 48.0 | |||||||||||
Income (loss) from operations | $ | 24.0 | $ | (3.1 | ) | $ | (0.1 | ) | $ | 20.8 |
Category | 2016 | % of Total | 2015 | % of Total | ||||||||||
($ in millions) | ||||||||||||||
Large commercial aircraft | $ | 184.5 | 59.3 | % | $ | 176.2 | 53.9 | % | ||||||
Corporate and regional aircraft | 70.3 | 22.6 | % | 84.7 | 25.9 | % | ||||||||
Military | 36.0 | 11.6 | % | 39.2 | 12.0 | % | ||||||||
Other | 20.3 | 6.5 | % | 27.1 | 8.2 | % | ||||||||
Total | $ | 311.1 | 100.0 | % | $ | 327.2 | 100.0 | % |
Category | 2016 | % of Total | 2015 | % of Total | ||||||||||
($ in millions) | ||||||||||||||
Large commercial aircraft | $ | 12.9 | 35.5 | % | $ | 22.4 | 45.6 | % | ||||||
Corporate and regional aircraft | 10.7 | 29.5 | % | 13.4 | 27.3 | % | ||||||||
Military | 9.8 | 27.0 | % | 11.1 | 22.6 | % | ||||||||
Other | 2.9 | 8.0 | % | 2.2 | 4.5 | % | ||||||||
Total | $ | 36.3 | 100.0 | % | $ | 49.1 | 100.0 | % |
2015 | |||||||||||||||
Aerostructures | Engineering Services | Elimination | Total | ||||||||||||
($ in millions) | |||||||||||||||
Net sales | $ | 327.2 | $ | 49.1 | $ | (1.2 | ) | $ | 375.1 | ||||||
Cost of sales | 263.6 | 43.8 | (1.1 | ) | 306.3 | ||||||||||
Gross profit | 63.6 | 5.3 | (0.1 | ) | 68.8 | ||||||||||
S, G, & A and other charges | 39.6 | 8.4 | — | 48.0 | |||||||||||
Income (loss) from operations | $ | 24.0 | $ | (3.1 | ) | $ | (0.1 | ) | $ | 20.8 |
2014 | |||||||||||||||
Aerostructures | Engineering Services | Elimination | Total | ||||||||||||
($ in millions) | |||||||||||||||
Net sales | $ | 326.0 | $ | 63.4 | $ | (1.6 | ) | $ | 387.8 | ||||||
Cost of sales | 259.0 | 54.9 | (1.5 | ) | 312.4 | ||||||||||
Gross profit | 67.0 | 8.5 | (0.1 | ) | 75.4 | ||||||||||
S, G, & A and other charges (1) | 48.1 | 36.2 | — | 84.3 | |||||||||||
Income (loss) from operations | $ | 18.9 | $ | (27.7 | ) | $ | (0.1 | ) | $ | (8.9 | ) |
Category | 2015 | % of Total | 2014 | % of Total | ||||||||||
($ in millions) | ||||||||||||||
Large commercial aircraft | $ | 176.2 | 53.9 | % | $ | 162.5 | 49.8 | % | ||||||
Corporate and regional aircraft | 84.7 | 25.9 | % | 87.5 | 26.8 | % | ||||||||
Military | 39.2 | 12.0 | % | 49.1 | 15.1 | % | ||||||||
Other | 27.1 | 8.2 | % | 26.9 | 8.3 | % | ||||||||
Total | $ | 327.2 | 100.0 | % | $ | 326.0 | 100.0 | % |
Category | 2015 | % of Total | 2014 | % of Total | ||||||||||
($ in millions) | ||||||||||||||
Large commercial aircraft | $ | 22.4 | 45.6 | % | $ | 31.6 | 49.8 | % | ||||||
Corporate and regional aircraft | 13.4 | 27.3 | % | 13.8 | 21.8 | % | ||||||||
Military | 11.1 | 22.6 | % | 10.1 | 15.9 | % | ||||||||
Other | 2.2 | 4.5 | % | 7.9 | 12.5 | % | ||||||||
Total | $ | 49.1 | 100.0 | % | $ | 63.4 | 100.0 | % |
• | They do not reflect our cash expenditures, future expenditures for capital expenditures or contractual commitments; |
• | They do not reflect changes in, or cash requirements for, our working capital needs; |
• | They do not reflect the significant interest expense or the cash requirements necessary to service interest or principal payments on our debt; |
• | Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements; |
• | They are not adjusted for all non-cash income or expense items that are reflected in our statement of cash flows; |
• | They do not reflect the impact on earnings of charges resulting from matters unrelated to our ongoing operations; and |
• | Other companies in our industry may calculate EBITDA and Adjusted EBITDA differently, limiting their usefulness as comparative 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 evaluate and compare the results of our operations from period to period by removing the effect of our capital structure from our operating performance; and |
• | Are used by our management team for various other purposes in presentations to our Board of Directors as a basis for strategic planning and forecasting. |
• | Depreciation; |
• | Amortization expense; |
• | Goodwill and intangible asset impairment; |
• | Interest expense; and |
• | Income tax expense. |
• | Stock-based compensation; |
• | Integration expenses; |
• | Restructuring expenses; |
• | Gains related to the settlement of a lawsuit; and |
• | Other (net). |
(In Thousands) | Years Ended December 31, | ||||||||||
2016 | 2015 | 2014 | |||||||||
Net loss | $ | (35,107 | ) | $ | (2,241 | ) | $ | (28,962 | ) | ||
Depreciation and amortization (1) | 19,043 | 20,404 | 22,459 | ||||||||
Goodwill and intangible asset impairment (2) | 28,368 | — | 26,439 | ||||||||
Interest expense (3) | 21,171 | 22,439 | 29,280 | ||||||||
Income tax (benefit) expense (4) | (734 | ) | 352 | (8,953 | ) | ||||||
EBITDA | 32,741 | 40,954 | 40,263 | ||||||||
Stock-based compensation (5) | 2,932 | 3,236 | 2,748 | ||||||||
Restructuring expense (6) | 1,212 | 2,322 | 2,585 | ||||||||
Integration expense | 295 | 526 | 818 | ||||||||
Other (net) (7) | 595 | (1,619 | ) | 1,173 | |||||||
Adjusted EBITDA | $ | 37,775 | $ | 45,419 | $ | 47,587 |
(1) | Includes amortization of intangibles and depreciation expense. 2016 and 2015 also include amortization of consideration paid under a long-term supply agreement. |
(2) | In 2016, a triggering event occurred which resulted in the impairment of the goodwill and intangible assets in the Engineering Services reporting unit of $28,368. In 2014, the annual impairment test conducted by the Company resulted in an impairment of goodwill associated with the Engineering Services segment of $26,439. |
(3) | Includes the write-off of deferred financing costs in connection with retirement of senior secured notes of $156 and $215 in 2016 and 2015, respectively. Includes the write-off of deferred financing costs in connection with refinanced credit facilities in 2014 of $8,340. |
(4) | Includes $8,931 of income tax benefits generated from income tax losses for 2013 and 2014 that the Company decided in 2014 to carry back to prior years. |
(6) | In 2016, restructuring includes costs associated with the relocation of the Wichita, KS sheet metal fabrication operation in addition to other employment separation activities. In 2015, restructuring includes costs associated with the closure of the St. Charles, MO machining operation, Coweta, OK manufacturing facility, and engineering offices in Melbourne, Australia and Greenville, SC, in addition to other employment separation activities. In 2014, restructuring includes costs associated with the Precise Machine facility closure, Savannah, GA machining operations relocation, St. Charles, MO machining operations closure, and other employment separation activities. |
Total | Less Than 1 year | 1-3 years | 3 - 5 years | More than 5 years | |||||||||||||||
($ in thousands) | |||||||||||||||||||
Debt (1) | $ | 243,301 | $ | 2,603 | $ | 230,373 | $ | 8,707 | $ | 1,618 | |||||||||
Interest on Long-term debt (2) | $ | 42,966 | 17,158 | 25,233 | 344 | 231 | |||||||||||||
Operating Leases | $ | 40,769 | 7,636 | 13,127 | 9,761 | 10,245 | |||||||||||||
Purchase commitments | $ | 2,754 | 541 | 2,213 | — | — | |||||||||||||
Total | $ | 329,790 | $ | 27,938 | $ | 270,946 | $ | 18,812 | $ | 12,094 |
(1) | Includes obligations under capital leases |
(2) | Interest expense based on balances of long-term debt at the end of the period and current effective interest rate. |
• | Discount rate: The discount rate used in determining the fair value of the reporting unit was 15.4% which was higher than rate of 12.2% used in 2015. The discount rate increase in 2016 was primarily due to the historical earnings volatility of the unit in the last three fiscal periods. |
• | Revenue growth assumptions: Projected annual growth assumptions are based on the Company’s and its peers historical operating performance adjusted for current and expected competitive and economic factors surrounding the aerospace and defense industry (the “industry”). The growth rates used approximated 2.5% per year. The Company used a terminal growth rate of 2.0% to calculate the terminal value in the discounted cash flow analysis. |
• | Operating profit margin assumptions: The forecasted operating profit used in the income approach is expected to decline in the future years as sales growth would not offset inflation. |
• | Working Capital assumptions and capital expenditures: Working capital requirements were forecasted based on the reporting unit’s historical performance. Capital expenditures were forecasted based on current spending plans for the forecast period and are expected to moderate as sales growth slows in the terminal year. |
• | Discount rate: The discount rate used in determining the fair value of the reporting unit was 11.5%. The the discount rate reflects the use of corporate bond yield rates for securities with a debt rating similar to that of the Company's senior secured notes at December 31, 2016. This corporate bond yield rate was used in the calculation of the risk-free rate. Any discount rate below 12.25% would indicate that the fair value of the reporting unit remains in excess of the carrying value of the unit. |
• | Revenue growth assumptions: Projected annual growth assumptions are based on the Company and its peers historical operating performance adjusted for current and expected competitive and economic factors surrounding the aerospace and defense industry (the “industry”). The growth rate used for the reporting unit approximated 9.9% per year primarily driven by expected increased demand for large commercial aircraft. The Company used a terminal growth rate of 3.0% to calculate the terminal value in the discounted cash flow analysis. |
• | Operating profit margin assumptions: The forecasted operating profit used in the income approach is expected to improve in the future years as a result of leveraging additional sales. |
• | Working Capital assumptions and capital expenditures: Working capital requirements were forecasted based on the reporting unit’s historical performance. Capital expenditures were forecasted based on current spending plans for the forecast period and are expected to moderate as sales growth slows in the terminal year. |
• | Discount rate: The discount rate used in determining the fair value of the reporting unit was 12.5%. The discount rate reflects the use of corporate bond yield rates for securities with a debt rating similar to that of the Company's senior secured notes at December 31, 2016. This corporate bond yield rate was used in the calculation of the risk-free rate. |
• | Revenue growth assumptions: Projected annual growth assumptions are based on the Company and its peers historical operating performance adjusted for current and expected competitive and economic factors surrounding the aerospace and defense industry (the “industry”). The growth rate used for the reporting unit approximated 8.6% per year primarily |
• | Operating profit margin assumptions: The forecasted operating profit used in the income approach is expected to improve in the future years as a result of leveraging additional sales. |
• | Working Capital assumptions and capital expenditures: Working capital requirements were forecasted based on the reporting unit’s historical performance. Capital expenditures were forecasted based on current spending plans for the forecast period and are expected to moderate as sales growth slows in the terminal year. |
• | Discount rate: The discount rate used in determining the fair value of the reporting unit was 12.2% which was higher than rate of 11.7% used in 2014. The discount rate increase in 2015 was primarily due to the historical earnings volatility of the unit in the last three fiscal periods. |
• | Revenue growth assumptions: Projected annual growth assumptions are based on the Company’s and its peers historical operating performance adjusted for current and expected competitive and economic factors surrounding the aerospace and defense industry (the “industry”). The growth rates used approximated 4.1% per year. The Company used a terminal growth rate of 3.0% to calculate the terminal value in the discounted cash flow analysis. |
• | Operating profit margin assumptions: The forecasted operating profit used in the income approach is expected to improve in the future years as a result of sales growth and a reduction in operating costs resulting from restructuring activities completed in fiscal year 2015. |
• | Working Capital assumptions and capital expenditures: Working capital requirements were forecasted based on the reporting unit’s historical performance. Capital expenditures were forecasted based on current spending plans for the forecast period and are expected to moderate as sales growth slows in the terminal year. |
• | Discount rate: The discount rate used in determining the fair value of the reporting unit was 12.0% which was slightly higher than rate of 11.5% used in 2014. The increase in the discount rate reflects the use of corporate bond yield rates for securities with a debt rating similar to that of the Company's senior secured notes at December 31, 2015. This corporate bond yield rate was used in the calculation of the risk-free rate. |
• | Revenue growth assumptions: Projected annual growth assumptions are based on the Company’s and its peers historical operating performance adjusted for current and expected competitive and economic factors surrounding the aerospace and defense industry (the “industry”). The growth rates used approximated 8.1% per year primarily driven by expected |
• | Operating profit margin assumptions: The forecasted operating profit used in the income approach is expected to improve in the future years as a result of leveraging additional sales. |
• | Working Capital assumptions and capital expenditures: Working capital requirements were forecasted based on the reporting unit’s historical performance. Capital expenditures were forecasted based on current spending plans for the forecast period and are expected to moderate as sales growth slows in the terminal year. |
ITEM 8. | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. |
Financial Statements | Page |
December 31, | |||||||
2016 | 2015 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 2,491 | $ | 10,504 | |||
Trade accounts receivable, net | 51,269 | 48,491 | |||||
Inventories | 122,761 | 114,775 | |||||
Prepaid expenses and other current assets | 3,586 | 4,147 | |||||
Total current assets | 180,107 | 177,917 | |||||
Property, plant and equipment, net | 99,515 | 100,969 | |||||
Goodwill | 62,482 | 86,784 | |||||
Intangible assets, net | 38,852 | 46,582 | |||||
Other assets | 2,676 | 3,728 | |||||
Total assets | $ | 383,632 | $ | 415,980 | |||
Liabilities and shareholders’ equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 29,378 | $ | 13,156 | |||
Accrued expenses | 25,543 | 30,015 | |||||
Current installments of long-term debt and capital lease obligations | 2,655 | 2,362 | |||||
Total current liabilities | 57,576 | 45,533 | |||||
Long-term debt and capital lease obligations, less current installments | 237,398 | 247,633 | |||||
Other long-term liabilities | 3,117 | 4,322 | |||||
Deferred income taxes | — | 536 | |||||
Total long-term liabilities | 240,515 | 252,491 | |||||
Shareholders’ equity: | |||||||
Common stock, $0.02 par value per share; authorized 28,000,000 shares; issued 13,625,205 and 13,287,688 shares at December 31, 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 | 99,955 | 97,617 | |||||
Accumulated other comprehensive loss | (282 | ) | (211 | ) | |||
Treasury stock, at cost, 39,419 shares at December 31, 2015 | — | (418 | ) | ||||
Retained (deficit) earnings | (14,405 | ) | 20,702 | ||||
Total shareholders’ equity | 85,541 | 117,956 | |||||
Total liabilities and shareholders’ equity | $ | 383,632 | $ | 415,980 |
Year Ended December 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
Sales and service revenue | |||||||||||
Product sales | $ | 308,089 | $ | 323,611 | $ | 321,284 | |||||
Service revenues | 38,091 | 51,485 | 66,533 | ||||||||
Net sales | 346,180 | 375,096 | 387,817 | ||||||||
Cost of sales and service revenue | |||||||||||
Cost of product sales | 249,227 | 259,610 | 254,775 | ||||||||
Cost of service revenues | 37,150 | 46,700 | 57,672 | ||||||||
Cost of sales | 286,377 | 306,310 | 312,447 | ||||||||
Gross profit | 59,803 | 68,786 | 75,370 | ||||||||
Selling, general and administrative expenses | 44,541 | 45,678 | 55,204 | ||||||||
Goodwill and intangible asset impairment | 28,368 | — | 26,439 | ||||||||
Restructuring expense | 1,212 | 2,322 | 2,585 | ||||||||
(Loss) income from operations | (14,318 | ) | 20,786 | (8,858 | ) | ||||||
Other income (expense): | |||||||||||
Interest expense | (21,171 | ) | (22,439 | ) | (29,280 | ) | |||||
Other, net | (352 | ) | (236 | ) | 223 | ||||||
Total other expense | (21,523 | ) | (22,675 | ) | (29,057 | ) | |||||
Loss before income taxes | (35,841 | ) | (1,889 | ) | (37,915 | ) | |||||
(Benefit) provision for income taxes | (734 | ) | 352 | (8,953 | ) | ||||||
Net loss | (35,107 | ) | (2,241 | ) | (28,962 | ) | |||||
Other comprehensive income (loss): | |||||||||||
Change in foreign currency translation adjustment | (71 | ) | (41 | ) | (98 | ) | |||||
Reclassification adjustment for losses on interest rate hedges included in net earnings, net of tax of $0, $0 and $157 | — | — | 278 | ||||||||
Total comprehensive loss | $ | (35,178 | ) | $ | (2,282 | ) | $ | (28,782 | ) | ||
Amounts per common share: | |||||||||||
Net loss per common share | $ | (2.68 | ) | $ | (0.17 | ) | $ | (2.28 | ) | ||
Net loss per common share assuming dilution | $ | (2.68 | ) | $ | (0.17 | ) | $ | (2.28 | ) | ||
Weighted average common shares outstanding | 13,113,901 | 12,869,353 | 12,716,976 | ||||||||
Weighted average dilutive common shares outstanding | 13,113,901 | 12,869,353 | 12,716,976 |
Common Stock | Additional Paid-In Capital | Treasury Stock | Retained Earnings (Deficit) | Accumulated Other Comprehensive Income (Loss) | Total Share- holders' Equity | ||||||||||||||||||
Balance at December 31, 2013 | $ | 257 | $ | 92,692 | $ | (202 | ) | $ | 51,904 | $ | (507 | ) | $ | 144,144 | |||||||||
Net loss | — | — | — | (28,962 | ) | — | (28,962 | ) | |||||||||||||||
Other comprehensive gain | — | — | — | — | 337 | 337 | |||||||||||||||||
Issuance of stock | |||||||||||||||||||||||
142,588 shares of restricted stock, net of forfeitures | 4 | (38 | ) | (215 | ) | — | — | (249 | ) | ||||||||||||||
12,175 shares - other share based payments | — | 109 | 58 | — | — | 167 | |||||||||||||||||
401K plan contribution | 1 | 847 | — | — | — | 848 | |||||||||||||||||
Restricted stock compensation | — | 1,850 | — | — | — | 1,850 | |||||||||||||||||
Balance at December 31, 2014 | 262 | 95,460 | (359 | ) | 22,942 | (170 | ) | 118,135 | |||||||||||||||
Net loss | — | — | — | (2,241 | ) | — | (2,241 | ) | |||||||||||||||
Other comprehensive loss | — | — | — | — | (41 | ) | (41 | ) | |||||||||||||||
Issuance of stock | |||||||||||||||||||||||
131,063 shares of restricted stock, net of forfeitures | 3 | (178 | ) | (150 | ) | — | — | (325 | ) | ||||||||||||||
6,791 shares - other share based payments | (7 | ) | 91 | 84 | |||||||||||||||||||
401K plan contribution | 1 | 709 | — | — | — | 710 | |||||||||||||||||
Restricted stock compensation | — | 1,633 | — | — | — | 1,633 | |||||||||||||||||
Other | — | — | — | 1 | — | 1 | |||||||||||||||||
Balance at December 31, 2015 | 266 | 97,617 | (418 | ) | 20,702 | (211 | ) | 117,956 | |||||||||||||||
Net loss | — | — | — | (35,107 | ) | — | (35,107 | ) | |||||||||||||||
Other comprehensive loss | — | — | — | — | (71 | ) | (71 | ) | |||||||||||||||
Issuance of stock | |||||||||||||||||||||||
212,890 shares of restricted stock, net of forfeitures | 4 | (612 | ) | 418 | — | — | (190 | ) | |||||||||||||||
401k plan contribution | 3 | 1,469 | — | — | — | 1,472 | |||||||||||||||||
Restricted stock compensation | — | 1,481 | — | — | — | 1,481 | |||||||||||||||||
Balance at December 31, 2016 | $ | 273 | $ | 99,955 | $ | — | $ | (14,405 | ) | $ | (282 | ) | $ | 85,541 |
Year Ended December 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
Operating activities: | |||||||||||
Net loss | $ | (35,107 | ) | $ | (2,241 | ) | $ | (28,962 | ) | ||
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 19,043 | 20,404 | 22,459 | ||||||||
Amortization of debt issuance cost | 1,899 | 1,961 | 2,155 | ||||||||
Goodwill and intangible asset impairment | 28,368 | — | 26,439 | ||||||||
Stock-based compensation | 1,481 | 1,717 | 2,018 | ||||||||
Debt issuance cost write-off | — | — | 8,466 | ||||||||
Payments to settle interest rate derivatives | — | — | (793 | ) | |||||||
Deferred taxes | (723 | ) | 78 | 76 | |||||||
Other non-cash items | (84 | ) | (1,005 | ) | 686 | ||||||
Changes in operating assets and liabilities, net of acquired businesses: | |||||||||||
Trade accounts receivable | (2,965 | ) | 9,624 | 14,270 | |||||||
Inventories | (8,610 | ) | (1,047 | ) | (1,101 | ) | |||||
Prepaid expenses and other assets | 975 | 325 | 109 | ||||||||
Current income taxes | 181 | 6,506 | (5,908 | ) | |||||||
Accounts payable | 13,433 | (8,427 | ) | 307 | |||||||
Accrued expenses | (3,340 | ) | 4,467 | 8,896 | |||||||
Net cash provided by operating activities | 14,551 | 32,362 | 49,117 | ||||||||
Investing activities: | |||||||||||
Additions to property, plant and equipment | (11,813 | ) | (16,599 | ) | (16,690 | ) | |||||
Proceeds from sale of equipment | 639 | 285 | 3,579 | ||||||||
Net cash used by investing activities | (11,174 | ) | (16,314 | ) | (13,111 | ) | |||||
Financing activities: | |||||||||||
Proceeds from issuance of debt | 1,465 | — | 250,000 | ||||||||
Principal payments on long-term debt and notes payable | (12,699 | ) | (13,276 | ) | (235,633 | ) | |||||
Advances on revolving line of credit | 60,000 | 99,000 | 66,000 | ||||||||
Payments on revolving line of credit | (60,000 | ) | (99,000 | ) | (102,000 | ) | |||||
Debt issuance costs | (156 | ) | (195 | ) | (8,018 | ) | |||||
Net cash used by financing activities | (11,390 | ) | (13,471 | ) | (29,651 | ) | |||||
Net (decrease) increase in cash and cash equivalents | (8,013 | ) | 2,577 | 6,355 | |||||||
Cash and cash equivalents, beginning of year | 10,504 | 7,927 | 1,572 | ||||||||
Cash and cash equivalents, end of year | $ | 2,491 | $ | 10,504 | $ | 7,927 | |||||
Cash payments for: | |||||||||||
Interest paid | $ | 18,657 | $ | 21,336 | $ | 7,388 | |||||
Income tax refunds received, net | $ | (228 | ) | $ | (6,370 | ) | $ | (3,037 | ) |
1. | ACCOUNTING POLICIES |
2016 | 2015 | 2014 | |||||||||
Favorable adjustments | $ | 1,342 | $ | 1,308 | $ | 5,720 | |||||
Unfavorable adjustments | (2,483 | ) | (2,954 | ) | (1,719 | ) | |||||
Net operating income adjustments | $ | (1,141 | ) | $ | (1,646 | ) | $ | 4,001 |
2. | ASSETS AND LIABILITIES MEASURED AT FAIR VALUE |
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. |
Assets and Liabilities at Fair Value | 2016 | ||||||||||||||||||
as of December 31, 2016 | Total | ||||||||||||||||||
Total | (Level 1) | (Level 2) | (Level 3) | Losses | |||||||||||||||
Non-recurring Fair Value Measurements: | |||||||||||||||||||
Asset: | |||||||||||||||||||
Intangible assets, net (1) | $ | 38,852 | $ | — | $ | — | $ | 38,852 | $ | (4,066 | ) | ||||||||
Goodwill (2) | $ | 62,482 | $ | — | $ | — | $ | 62,482 | $ | (24,302 | ) |
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 (1) | $ | 46,582 | $ | — | $ | — | $ | 46,582 | $ | — | |||||||||
Goodwill (2) | $ | 86,784 | $ | — | $ | — | $ | 86,784 | $ | — |
3. | ACCOUNTS RECEIVABLE NET |
December 31, | |||||||
2016 | 2015 | ||||||
Trade receivables | $ | 44,927 | $ | 42,307 | |||
Unbilled revenue | 4,318 | 4,869 | |||||
Other receivables | 2,372 | 1,561 | |||||
51,617 | 48,737 | ||||||
Less: Allowance for doubtful accounts | (348 | ) | (246 | ) | |||
Accounts receivable, net | $ | 51,269 | $ | 48,491 |
4. | INVENTORIES |
December 31, | |||||||
2016 | 2015 | ||||||
Raw materials | $ | 12,822 | $ | 12,513 | |||
Work in progress | 23,795 | 22,681 | |||||
Manufactured and purchased components | 20,922 | 19,224 | |||||
Finished goods | 28,346 | 28,169 | |||||
Product inventory | 85,885 | 82,587 | |||||
Capitalized contract costs | 36,876 | 32,188 | |||||
Total inventories | $ | 122,761 | $ | 114,775 |
December 31, | |||||||
2016 | 2015 | ||||||
Large commercial aircraft | $ | 10,852 | $ | 11,528 | |||
Corporate and regional aircraft | 21,081 | 16,721 | |||||
Military | 4,943 | 3,939 | |||||
Total capitalized contract cost | $ | 36,876 | $ | 32,188 |
5. | PROPERTY, PLANT AND EQUIPMENT |
December 31, | |||||||
2016 | 2015 | ||||||
Land | $ | 960 | $ | 1,108 | |||
Buildings and improvements | 27,567 | 27,779 | |||||
Machinery and equipment | 137,899 | 129,222 | |||||
Leasehold improvements | 13,748 | 13,373 | |||||
Software and other | 8,510 | 8,507 | |||||
Construction in progress | 13,569 | 11,687 | |||||
Total gross property, plant and equipment | 202,253 | 191,676 | |||||
Less accumulated depreciation | (102,738 | ) | (90,707 | ) | |||
Total net property, plant and equipment | $ | 99,515 | $ | 100,969 |
6. | GOODWILL AND INTANGIBLE ASSETS |
Engineering | |||||||||||||||||||||||
Aerostructures | Services | Total | |||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | 2016 | 2015 | ||||||||||||||||||
Balance at December 31, | |||||||||||||||||||||||
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 |
December 31, | |||||||
2016 | 2015 | ||||||
Trademarks | $ | 778 | $ | 778 | |||
Customer intangible assets | 68,991 | 68,991 | |||||
Other | 1,274 | 1,274 | |||||
Accumulated amortization | (32,191 | ) | (24,461 | ) | |||
Intangible assets, net | $ | 38,852 | $ | 46,582 |
Year ending December 31, | |||
2017 | $ | 3,087 | |
2018 | 2,854 | ||
2019 | 2,627 | ||
2020 | 2,531 | ||
2021 | 2,482 | ||
Thereafter | 25,271 | ||
$ | 38,852 |
7. | ACCRUED EXPENSES |
December 31, | |||||||
2016 | 2015 | ||||||
Accrued interest | $ | 7,792 | $ | 8,020 | |||
Receipts in excess of cost on long-term production contracts | 4,782 | 5,097 | |||||
Accrued payroll | 2,367 | 2,481 | |||||
Accrued bonus | 570 | 3,698 | |||||
Accrued vacation | 1,886 | 1,913 | |||||
Accrued employee benefits | 2,863 | 3,075 | |||||
Accrued operating lease obligations | 2,350 | 2,475 | |||||
Accrued professional fees | 767 | 1,104 | |||||
Accrued restructuring | 285 | 255 | |||||
Other | 1,881 | 1,897 | |||||
Total accrued expenses | $ | 25,543 | $ | 30,015 |
8. | LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS |
December 31, | |||||||
2016 | 2015 | ||||||
Second priority senior secured notes at a fixed rate of 7.375% at December 31, 2016 and December 31, 2015 | $ | 224,175 | $ | 234,175 | |||
Missouri IRBs at fixed rate of 2.80% at December 31, 2016 and December 31, 2015 | 6,456 | 6,901 | |||||
Capital Leases, at fixed rates ranging from 3.00% to 4.50% at December 31, 2016 and 3.00% to 7.73% at December 31, 2015 | 10,293 | 11,708 | |||||
Notes payable, principal and interest payable monthly, at fixed rates, from 2.45% to 5.00% at December 31, 2016 and from 2.45% to 2.56% at December 31, 2015 | 2,377 | 1,750 | |||||
Debt issuance cost | (3,248 | ) | (4,539 | ) | |||
Total debt | 240,053 | 249,995 | |||||
Less current installments | 2,655 | 2,362 | |||||
Total long-term debt and capital lease obligations | $ | 237,398 | $ | 247,633 |
Year ending December 31, | Long-Term Debt (1) | Capital Leases | |||||
2017 | $ | 1,061 | $ | 1,915 | |||
2018 | 1,094 | 2,176 | |||||
2019 | 225,183 | 2,450 | |||||
2020 | 5,211 | 2,304 | |||||
2021 | 177 | 1,208 | |||||
Thereafter | 282 | 1,554 | |||||
Total | 233,008 | 11,607 | |||||
Less: imputed interest | — | (1,314 | ) | ||||
Total | $ | 233,008 | $ | 10,293 |
9. | DERIVATIVE FINANCIAL INSTRUMENTS |
Net of Tax | ||||||||
Derivatives in Cash Flow Hedging Relationship | Effective portion of (Gain) Loss Recognized in AOCI on Derivative | Effective Portion of (Gain) Loss Reclassified from AOCI into Earnings | ||||||
Year ended December 31, 2016 | ||||||||
Interest rate derivatives | $ | — | $ | — | ||||
Year ended December 31, 2015 | ||||||||
Interest rate derivatives | $ | — | $ | — | ||||
Year ended December 31, 2014 | ||||||||
Interest rate derivatives | $ | — | $ | 278 |
10. | (LOSS) EARNINGS PER COMMON SHARE |
Year ended December 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
Numerators | |||||||||||
Net loss | $ | (35,107 | ) | $ | (2,241 | ) | $ | (28,962 | ) | ||
Denominators | |||||||||||
Weighted average common shares - basic | 13,113,901 | 12,869,353 | 12,716,976 | ||||||||
Dilutive effect of restricted stock | — | — | — | ||||||||
Weighted average common shares - diluted | 13,113,901 | 12,869,353 | 12,716,976 | ||||||||
Basic earnings per share | $ | (2.68 | ) | $ | (0.17 | ) | $ | (2.28 | ) | ||
Diluted earnings per share | $ | (2.68 | ) | $ | (0.17 | ) | $ | (2.28 | ) |
11. | COMMITMENTS AND CONTINGENCIES |
2017 | $ | 7,636 | |
2018 | 7,255 | ||
2019 | 5,872 | ||
2020 | 5,057 | ||
2021 | 4,704 | ||
Thereafter | 10,245 | ||
Total | $ | 40,769 |
12. | DEFINED CONTRIBUTION PLANS |
13. | STOCK-BASED COMPENSATION |
2016 | ||||||
Restricted Stock Awards | Shares | Weighted Average Grant Date Fair Value | ||||
Outstanding at January 1 | 253,434 | $ | 14.54 | |||
Granted | — | — | ||||
Vested | (53,846 | ) | 17.89 | |||
Forfeited | (31,038 | ) | 14.19 | |||
Outstanding at December 31 | 168,550 | $ | 13.53 |
2016 | ||||||
Restricted Stock Awards | Shares | Weighted Average Grant Date Fair Value | ||||
Outstanding at January 1 | 61,801 | $ | 9.79 | |||
Granted | 277,552 | 8.50 | ||||
Vested (1) | (55,672 | ) | 9.79 | |||
Forfeited | (9,553 | ) | 9.43 | |||
Outstanding at December 31 | 274,128 | $ | 8.46 |
14. | INCOME TAXES |
December 31, | |||||||
2016 | 2015 | ||||||
Deferred tax assets | $ | 42,336 | $ | 35,730 | |||
Deferred tax liabilities | (21,309 | ) | (21,625 | ) | |||
Valuation allowance | (21,027 | ) | (14,641 | ) | |||
Net deferred tax liabilities | $ | — | $ | (536 | ) |
December 31, | |||||||
2016 | 2015 | ||||||
Goodwill and intangible assets | $ | 13,812 | $ | 13,267 | |||
Inventories | 2,658 | 2,569 | |||||
NOL carry forwards | 17,808 | 10,529 | |||||
Tax credit carry forwards | 2,904 | 2,354 | |||||
Stock award | 819 | 827 | |||||
Gain on sale of real estate | 698 | 783 | |||||
Obligation under operating leases | 822 | 835 | |||||
Accrued vacation | 504 | 504 | |||||
Accrued bonus | 64 | 649 | |||||
Other | 710 | 426 | |||||
Long-term contract costs | (13,496 | ) | (11,781 | ) | |||
Depreciation | (6,276 | ) | (6,857 | ) | |||
Valuation allowance | (21,027 | ) | (14,641 | ) | |||
Net deferred tax liabilities | $ | — | $ | (536 | ) |
2016 | 2015 | 2014 | |||||||||
Federal: | |||||||||||
Current | $ | (24 | ) | $ | 304 | $ | (9,173 | ) | |||
Deferred | (676 | ) | (14 | ) | 155 | ||||||
(700 | ) | 290 | (9,018 | ) | |||||||
State: | |||||||||||
Current | (11 | ) | 55 | 21 | |||||||
Deferred | (23 | ) | 7 | 44 | |||||||
(34 | ) | 62 | 65 | ||||||||
(Benefit) provision for income taxes | $ | (734 | ) | $ | 352 | $ | (8,953 | ) |
2016 | 2015 | 2014 | |||||||||
Federal tax benefit | $ | (12,544 | ) | $ | (661 | ) | $ | (13,270 | ) | ||
State and local taxes, net of federal benefit | (464 | ) | (114 | ) | 358 | ||||||
Non-deductible goodwill impairment | 6,296 | — | 9,254 | ||||||||
Valuation allowance | 6,386 | 1,809 | (5,294 | ) | |||||||
Tax audit adjustment | (24 | ) | 306 | — | |||||||
Research and experimental and other tax credits | (550 | ) | (1,174 | ) | (503 | ) | |||||
Other | 166 | 186 | 502 | ||||||||
(Benefit) provision for income taxes | $ | (734 | ) | $ | 352 | $ | (8,953 | ) |
15. | RESTRUCTURING |
Year ended December 31, | ||||||||||||
2016 | 2015 | 2014 | ||||||||||
Fort Worth facility closure | $ | — | $ | — | $ | 287 | ||||||
Savannah machining operations relocation | — | — | 47 | |||||||||
St. Charles machine parts operations relocation | — | 150 | 228 | |||||||||
Coweta machining facility closure | — | 94 | — | |||||||||
Greenville office closure | (26 | ) | 449 | — | ||||||||
Australia office closure | — | 47 | — | |||||||||
Wichita sheet metal fabrication operations relocation | 265 | — | — | |||||||||
Other employment separation activities | 973 | 1,582 | 2,023 | |||||||||
Total | $ | 1,212 | $ | 2,322 | $ | 2,585 | ||||||
Expense incurred by segment: | ||||||||||||
Aerostructures | $ | 1,218 | $ | 1,108 | $ | 2,074 | ||||||
Engineering Services | (6 | ) | 1,214 | 511 | ||||||||
Total | $ | 1,212 | $ | 2,322 | $ | 2,585 |
Employee | |||||||||||
Severance | Other | Total | |||||||||
Accrued restructuring balance as of December 31, 2014 | $ | 739 | $ | — | $ | 739 | |||||
Accrual additions | 2,194 | 128 | 2,322 | ||||||||
Cash payments | (2,771 | ) | (35 | ) | (2,806 | ) | |||||
Accrued restructuring balance as of December 31, 2015 | $ | 162 | $ | 93 | $ | 255 | |||||
Accrual additions | 1,238 | (26 | ) | 1,212 | |||||||
Cash payments | (1,115 | ) | (67 | ) | (1,182 | ) | |||||
Accrued restructuring balance as of December 31, 2016 | $ | 285 | $ | — | $ | 285 |
16. | CUSTOMER AND SUPPLIER CONCENTRATION |
17. | BUSINESS SEGMENT INFORMATION |
December 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
Net sales: | |||||||||||
Aerostructures | $ | 311,131 | $ | 327,230 | $ | 326,025 | |||||
Engineering Services | 36,301 | 49,096 | 63,404 | ||||||||
Eliminations | (1,252 | ) | (1,230 | ) | (1,612 | ) | |||||
$ | 346,180 | $ | 375,096 | $ | 387,817 | ||||||
Gross profit: | |||||||||||
Aerostructures | $ | 56,774 | $ | 63,584 | $ | 67,042 | |||||
Engineering Services | 3,372 | 5,286 | 8,428 | ||||||||
Eliminations | (343 | ) | (84 | ) | (100 | ) | |||||
$ | 59,803 | $ | 68,786 | $ | 75,370 | ||||||
(Loss) income from operations: | |||||||||||
Aerostructures | $ | 16,153 | $ | 23,993 | $ | 18,977 | |||||
Engineering Services (1) | (30,128 | ) | (3,123 | ) | (27,731 | ) | |||||
Eliminations | (343 | ) | (84 | ) | (104 | ) | |||||
$ | (14,318 | ) | $ | 20,786 | $ | (8,858 | ) | ||||
Depreciation, amortization and certain other non-cash charges (credits): | |||||||||||
Aerostructures | $ | 18,069 | $ | 18,551 | $ | 20,223 | |||||
Engineering Services (1) | 29,342 | 1,853 | 28,675 | ||||||||
$ | 47,411 | $ | 20,404 | $ | 48,898 |
December 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
Interest expense: | |||||||||||
Aerostructures | $ | 807 | $ | 957 | $ | 1,041 | |||||
Engineering Services | 33 | 43 | 41 | ||||||||
Corporate (1) | 20,331 | 21,439 | 28,198 | ||||||||
$ | 21,171 | $ | 22,439 | $ | 29,280 |
December 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
Capital expenditures: | |||||||||||
Aerostructures | $ | 11,748 | $ | 16,348 | $ | 16,504 | |||||
Engineering Services | 65 | 251 | 186 | ||||||||
$ | 11,813 | $ | 16,599 | $ | 16,690 |
December 31, | |||||||
2016 | 2015 | ||||||
Total assets: | |||||||
Aerostructures | $ | 377,214 | $ | 379,873 | |||
Engineering | 6,418 | 36,107 | |||||
$ | 383,632 | $ | 415,980 |
18. | QUARTERLY FINANCIAL DATA (UNAUDITED) |
2016 | First (1) | Second (2) | Third | Fourth (3) | |||||||||||
Net sales | $ | 87,331 | $ | 83,993 | $ | 89,673 | $ | 85,183 | |||||||
Gross profit (3) | $ | 16,230 | $ | 15,535 | $ | 15,846 | $ | 12,192 | |||||||
Net (loss) income (1,2,3) | $ | (1,759 | ) | $ | (29,900 | ) | $ | 309 | $ | (3,757 | ) | ||||
Amounts per common share: | |||||||||||||||
Net (loss) income | $ | (0.14 | ) | $ | (2.28 | ) | $ | 0.02 | $ | (0.29 | ) | ||||
Net (loss) income - assuming dilution | $ | (0.14 | ) | $ | (2.28 | ) | $ | 0.02 | $ | (0.29 | ) | ||||
2015 | First (4) | Second (5) | Third (6) | Fourth (7) | |||||||||||
Net sales | $ | 92,475 | $ | 97,550 | $ | 95,633 | $ | 89,438 | |||||||
Gross profit (6,7) | $ | 17,197 | $ | 18,770 | $ | 16,626 | $ | 16,193 | |||||||
Net (loss) income (4,5,6,7) | $ | (1,465 | ) | $ | 378 | $ | 34 | $ | (1,188 | ) | |||||
Amounts per common share: | |||||||||||||||
Net (loss) income | $ | (0.11 | ) | $ | 0.03 | $ | — | $ | (0.09 | ) | |||||
Net (loss) income - assuming dilution | $ | (0.11 | ) | $ | 0.03 | $ | — | $ | (0.09 | ) |
(2) | Included in the net loss for the the second quarter of 2016 was a $28,368 charge for goodwill and intangible asset impairment related to the Engineering Services reporting unit and $241 of restructuring expenses. |
(3) | Gross profit in the fourth quarter of 2016 includes an unfavorable cumulative catch-up adjustment of $1,741 related to a long-term contract. |
(5) | Included in the net income for the the second quarter of 2015 were $518 of restructuring expenses. |
(6) | Gross profit in the third quarter of 2015 includes an unfavorable adjustment of $1,738 related to a long-term contract for which a forward loss reserve was established. Net income for the the third quarter of 2015 also included a net gain of $3,325 related to a legal settlement and $1,575 of restructuring expenses. |
LMIA(Guarantor Parent) | Guarantor Subsidiaries | Consolidating/Eliminating Entries | Consolidated | ||||||||||||
Assets | |||||||||||||||
Current assets: | |||||||||||||||
Cash and cash equivalents | $ | 2,382 | $ | 109 | $ | — | $ | 2,491 | |||||||
Trade accounts receivable, net | 660 | 50,609 | — | 51,269 | |||||||||||
Intercompany receivables | 244,792 | 312,332 | (557,124 | ) | — | ||||||||||
Inventories | — | 122,761 | — | 122,761 | |||||||||||
Prepaid expenses and other current assets | 1,548 | 2,038 | — | 3,586 | |||||||||||
Total current assets | 249,382 | 487,849 | (557,124 | ) | 180,107 | ||||||||||
Property, plant and equipment, net | 6,490 | 93,025 | — | 99,515 | |||||||||||
Investments in subsidiaries | 375,738 | — | (375,738 | ) | — | ||||||||||
Goodwill | — | 62,482 | — | 62,482 | |||||||||||
Intangible assets, net | — | 38,852 | — | 38,852 | |||||||||||
Other assets | 1,790 | 886 | — | 2,676 | |||||||||||
Total assets | $ | 633,400 | $ | 683,094 | $ | (932,862 | ) | $ | 383,632 | ||||||
Liabilities and shareholders’ equity | |||||||||||||||
Current liabilities: | |||||||||||||||
Accounts payable | $ | 410 | $ | 28,968 | $ | — | $ | 29,378 | |||||||
Accrued expenses | 13,912 | 11,631 | — | 25,543 | |||||||||||
Intercompany Payables | 310,644 | 246,480 | (557,124 | ) | — | ||||||||||
Current installments of long-term debt and capital lease obligations | 89 | 2,566 | — | 2,655 | |||||||||||
Total current liabilities | 325,055 | 289,645 | (557,124 | ) | 57,576 | ||||||||||
Long-term debt and capital lease obligations, less current installments | 221,101 | 16,297 | — | 237,398 | |||||||||||
Other long-term liabilities | 1,703 | 1,414 | — | 3,117 | |||||||||||
Total long-term liabilities | 222,804 | 17,711 | — | 240,515 | |||||||||||
Total shareholders’ equity | 85,541 | 375,738 | (375,738 | ) | 85,541 | ||||||||||
Total liabilities and shareholders’ equity | $ | 633,400 | $ | 683,094 | $ | (932,862 | ) | $ | 383,632 |
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 |
LMIA(Guarantor Parent) | Guarantor Subsidiaries | Consolidating/Eliminating Entries | Consolidated | ||||||||||||
Sales and service revenue | |||||||||||||||
Product sales | $ | (170 | ) | $ | 307,954 | $ | 305 | $ | 308,089 | ||||||
Service revenues | 40,864 | 38,217 | (40,990 | ) | 38,091 | ||||||||||
Net sales | 40,694 | 346,171 | (40,685 | ) | 346,180 | ||||||||||
Cost of sales and service revenue | |||||||||||||||
Cost of product sales | 86 | 248,836 | 305 | 249,227 | |||||||||||
Cost of service revenues | 42,749 | 35,391 | (40,990 | ) | 37,150 | ||||||||||
Cost of sales | 42,835 | 284,227 | (40,685 | ) | 286,377 | ||||||||||
Gross profit | (2,141 | ) | 61,944 | — | 59,803 | ||||||||||
Selling, general and administrative expenses | — | 44,541 | — | 44,541 | |||||||||||
Restructuring expense | 431 | 781 | — | 1,212 | |||||||||||
Goodwill and intangible asset impairment | — | 28,368 | — | 28,368 | |||||||||||
Loss from operations | (2,572 | ) | (11,746 | ) | — | (14,318 | ) | ||||||||
Other income (expense): | |||||||||||||||
Interest expense | (20,336 | ) | (835 | ) | — | (21,171 | ) | ||||||||
Other, net | 5 | (357 | ) | — | (352 | ) | |||||||||
(Loss) income from equity investments in subsidiaries | (12,275 | ) | — | 12,275 | — | ||||||||||
Total other (expense) income | (32,606 | ) | (1,192 | ) | 12,275 | (21,523 | ) | ||||||||
(Loss) income before income taxes | (35,178 | ) | (12,938 | ) | 12,275 | (35,841 | ) | ||||||||
Benefit for income taxes | — | (734 | ) | — | (734 | ) | |||||||||
Net (loss) income | (35,178 | ) | (12,204 | ) | 12,275 | (35,107 | ) | ||||||||
Other comprehensive (loss) income: | |||||||||||||||
Change in foreign currency translation adjustment | — | (71 | ) | — | (71 | ) | |||||||||
Total comprehensive (loss) income | $ | (35,178 | ) | (12,275 | ) | $ | 12,275 | $ | (35,178 | ) |
LMIA(Guarantor Parent) | Guarantor Subsidiaries | Consolidating/Eliminating Entries | Consolidated | ||||||||||||
Sales and service revenue | |||||||||||||||
Product sales | $ | 239 | $ | 323,337 | $ | 35 | $ | 323,611 | |||||||
Service revenues | 36,184 | 51,720 | (36,419 | ) | 51,485 | ||||||||||
Net sales | 36,423 | 375,057 | (36,384 | ) | 375,096 | ||||||||||
Cost of sales and service revenue | |||||||||||||||
Cost of product sales | 248 | 259,327 | 35 | 259,610 | |||||||||||
Cost of service revenues | 35,952 | 47,166 | (36,418 | ) | 46,700 | ||||||||||
Cost of sales | 36,200 | 306,493 | (36,383 | ) | 306,310 | ||||||||||
Gross profit | 223 | 68,564 | (1 | ) | 68,786 | ||||||||||
Selling, general and administrative expenses | — | 45,678 | — | 45,678 | |||||||||||
Restructuring expense | 340 | 1,982 | — | 2,322 | |||||||||||
(Loss) income from operations | (117 | ) | 20,904 | (1 | ) | 20,786 | |||||||||
Other income (expense): | |||||||||||||||
Interest expense | (21,449 | ) | (990 | ) | — | (22,439 | ) | ||||||||
Other, net | — | (236 | ) | — | (236 | ) | |||||||||
Income (loss) from equity investments in subsidiaries | 19,284 | — | (19,284 | ) | — | ||||||||||
Total other expense | (2,165 | ) | (1,226 | ) | (19,284 | ) | (22,675 | ) | |||||||
(Loss) income before income taxes | (2,282 | ) | 19,678 | (19,285 | ) | (1,889 | ) | ||||||||
Provision for income taxes | — | 352 | — | 352 | |||||||||||
Net (loss) income | (2,282 | ) | 19,326 | (19,285 | ) | (2,241 | ) | ||||||||
Other comprehensive (loss) income: | |||||||||||||||
Change in foreign currency translation adjustment | — | (41 | ) | — | (41 | ) | |||||||||
Total comprehensive (loss) income | $ | (2,282 | ) | $ | 19,285 | $ | (19,285 | ) | $ | (2,282 | ) |
LMIA(Guarantor Parent) | Guarantor Subsidiaries | Consolidating/Eliminating Entries | Consolidated | ||||||||||||
Sales and service revenue | |||||||||||||||
Product sales | $ | 466 | $ | 321,286 | $ | (468 | ) | $ | 321,284 | ||||||
Service revenues | 36,181 | 66,543 | (36,191 | ) | 66,533 | ||||||||||
Net sales | 36,647 | 387,829 | (36,659 | ) | 387,817 | ||||||||||
Cost of sales and service revenue | |||||||||||||||
Cost of product sales | 699 | 254,544 | (468 | ) | 254,775 | ||||||||||
Cost of service revenues | 35,998 | 57,864 | (36,190 | ) | 57,672 | ||||||||||
Cost of sales | 36,697 | 312,408 | (36,658 | ) | 312,447 | ||||||||||
Gross profit | (50 | ) | 75,421 | (1 | ) | 75,370 | |||||||||
Selling, general and administrative expenses | 792 | 54,412 | — | 55,204 | |||||||||||
Goodwill and intangible asset impairment | — | 26,439 | — | 26,439 | |||||||||||
Restructuring expense | 1,012 | 1,573 | — | 2,585 | |||||||||||
Loss from operations | (1,854 | ) | (7,003 | ) | (1 | ) | (8,858 | ) | |||||||
Other (expense) income: | |||||||||||||||
Interest expense | (28,224 | ) | (1,056 | ) | — | (29,280 | ) | ||||||||
Other, net | 11 | 212 | — | 223 | |||||||||||
(Loss) income from equity investments in subsidiaries | (8,860 | ) | — | 8,860 | — | ||||||||||
Total other (expense) income | (37,073 | ) | (844 | ) | 8,860 | (29,057 | ) | ||||||||
(Loss) income before income taxes | (38,927 | ) | (7,847 | ) | 8,859 | (37,915 | ) | ||||||||
(Benefit) provision for income taxes | (9,867 | ) | 914 | — | (8,953 | ) | |||||||||
Net (loss) income | (29,060 | ) | (8,761 | ) | 8,859 | (28,962 | ) | ||||||||
Other comprehensive (loss) income: | |||||||||||||||
Change in foreign currency translation adjustment | — | (98 | ) | — | (98 | ) | |||||||||
Reclassification adjustment for losses on interest rate hedges included in net earnings | 278 | — | — | 278 | |||||||||||
Total comprehensive (loss) income | $ | (28,782 | ) | $ | (8,859 | ) | $ | 8,859 | $ | (28,782 | ) |
LMIA(Guarantor Parent) | Guarantor Subsidiaries | Consolidating/Eliminating Entries | Consolidated | ||||||||||||
Operating activities: | |||||||||||||||
Net (loss) income | $ | (35,178 | ) | $ | (12,204 | ) | $ | 12,275 | $ | (35,107 | ) | ||||
Adjustments for non-cash items | 16,955 | 45,304 | (12,275 | ) | 49,984 | ||||||||||
Net changes in operating assets and liabilities, net of acquired businesses | (1,566 | ) | 1,240 | — | (326 | ) | |||||||||
Intercompany activity | 24,800 | (24,800 | ) | — | — | ||||||||||
Net cash provided by operating activities | 5,011 | 9,540 | — | 14,551 | |||||||||||
Investing activities: | |||||||||||||||
Additions to property, plant and equipment | (2,639 | ) | (9,174 | ) | — | (11,813 | ) | ||||||||
Proceeds from sale of equipment | — | 639 | — | 639 | |||||||||||
Net cash used by investing activities | (2,639 | ) | (8,535 | ) | — | (11,174 | ) | ||||||||
Financing activities: | |||||||||||||||
Proceeds from issuance of debt | — | 1,465 | — | 1,465 | |||||||||||
Principal payments on long-term debt and notes payable | (10,085 | ) | (2,614 | ) | — | (12,699 | ) | ||||||||
Advances on revolving line of credit | 60,000 | — | — | 60,000 | |||||||||||
Payments on revolving line of credit | (60,000 | ) | — | — | (60,000 | ) | |||||||||
Payments for debt issuance cost | (156 | ) | — | — | (156 | ) | |||||||||
Net cash used by financing activities | (10,241 | ) | (1,149 | ) | — | (11,390 | ) | ||||||||
Net (decrease) in cash and cash equivalents | (7,869 | ) | (144 | ) | — | (8,013 | ) | ||||||||
Cash and cash equivalents, beginning of year | 10,251 | 253 | — | 10,504 | |||||||||||
Cash and cash equivalents, end of year | $ | 2,382 | $ | 109 | $ | — | $ | 2,491 |
LMIA(Guarantor Parent) | Guarantor Subsidiaries | Consolidating/Eliminating Entries | Consolidated | ||||||||||||
Operating activities: | |||||||||||||||
Net (loss) income | $ | (2,282 | ) | $ | 19,326 | $ | (19,285 | ) | $ | (2,241 | ) | ||||
Adjustments for non-cash items | (14,546 | ) | 18,416 | 19,285 | 23,155 | ||||||||||
Net changes in operating assets and liabilities, net of acquired businesses | 10,420 | 1,028 | — | 11,448 | |||||||||||
Intercompany activity | 22,874 | (22,874 | ) | — | — | ||||||||||
Net cash provided by operating activities | 16,466 | 15,896 | — | 32,362 | |||||||||||
Investing activities: | |||||||||||||||
Additions to property, plant and equipment | (1,903 | ) | (14,696 | ) | — | (16,599 | ) | ||||||||
Proceeds from sale of equipment | — | 285 | — | 285 | |||||||||||
Net cash (used) by investing activities | (1,903 | ) | (14,411 | ) | — | (16,314 | ) | ||||||||
Financing activities: | |||||||||||||||
Principal payments on long-term debt and notes payable | (11,160 | ) | (2,116 | ) | — | (13,276 | ) | ||||||||
Advances on revolving line of credit | 99,000 | — | — | 99,000 | |||||||||||
Payments on revolving line of credit | (99,000 | ) | — | — | (99,000 | ) | |||||||||
Payments for debt issuance cost | (210 | ) | 15 | — | (195 | ) | |||||||||
Net cash used by financing activities | (11,370 | ) | (2,101 | ) | — | (13,471 | ) | ||||||||
Net increase (decrease) in cash and cash equivalents | 3,193 | (616 | ) | — | 2,577 | ||||||||||
Cash and cash equivalents, beginning of year | 7,058 | 869 | — | 7,927 | |||||||||||
Cash and cash equivalents, end of year | $ | 10,251 | $ | 253 | $ | — | $ | 10,504 |
LMIA(Guarantor Parent) | Guarantor Subsidiaries | Consolidating/Eliminating Entries | Consolidated | ||||||||||||
Operating activities: | |||||||||||||||
Net (loss) income | $ | (29,060 | ) | $ | (8,761 | ) | $ | 8,859 | $ | (28,962 | ) | ||||
Adjustments for non-cash items | 21,714 | 46,496 | (8,859 | ) | 59,351 | ||||||||||
Net changes in operating assets and liabilities, net of acquired businesses | 19,977 | (1,249 | ) | — | 18,728 | ||||||||||
Intercompany activity | 17,663 | (17,663 | ) | — | — | ||||||||||
Net cash used by operating activities | 30,294 | 18,823 | — | 49,117 | |||||||||||
Investing activities: | |||||||||||||||
Additions to property, plant and equipment | (715 | ) | (15,975 | ) | — | (16,690 | ) | ||||||||
Proceeds from sale of equipment | 2,558 | 1,021 | — | 3,579 | |||||||||||
Net cash provided (used) by investing activities | 1,843 | (14,954 | ) | — | (13,111 | ) | |||||||||
Financing activities: | |||||||||||||||
Proceeds from issuance of debt | 250,000 | — | — | 250,000 | |||||||||||
Principal payments on long-term debt and notes payable | (231,466 | ) | (4,167 | ) | — | (235,633 | ) | ||||||||
Advances on revolving line of credit | 66,000 | — | — | 66,000 | |||||||||||
Payments on revolving line of credit | (102,000 | ) | — | — | (102,000 | ) | |||||||||
Payments for debt issuance cost | (8,018 | ) | — | — | (8,018 | ) | |||||||||
Net cash used by financing activities | (25,484 | ) | (4,167 | ) | — | (29,651 | ) | ||||||||
Net increase (decrease) in cash and cash equivalents | 6,653 | (298 | ) | — | 6,355 | ||||||||||
Cash and cash equivalents, beginning of year | 405 | 1,167 | — | 1,572 | |||||||||||
Cash and cash equivalents, end of year | $ | 7,058 | $ | 869 | $ | — | $ | 7,927 |
Beginning Balance | Charge to Cost/ Expense | Other Charge to Cost/ Expense | Write-offs net of Recoveries | Ending Balance | ||||||||||||||||
Reserve for Accounts Receivable | ||||||||||||||||||||
Year ended December 31, 2014 | $ | 180 | $ | 309 | $ | — | $ | (25 | ) | $ | 464 | |||||||||
Year ended December 31, 2015 | $ | 464 | $ | 53 | $ | — | $ | (271 | ) | $ | 246 | |||||||||
Year ended December 31, 2016 | $ | 246 | $ | 116 | $ | — | $ | (14 | ) | $ | 348 | |||||||||
Income Tax Valuation Allowance | ||||||||||||||||||||
Year ended December 31, 2014 (1) | $ | 18,137 | $ | — | $ | (5,461 | ) | $ | — | $ | 12,676 | |||||||||
Year ended December 31, 2015 (2) | $ | 12,676 | $ | 1,965 | $ | — | $ | — | $ | 14,641 | ||||||||||
Year ended December 31, 2016 (2) | $ | 14,641 | $ | 6,386 | $ | — | $ | — | $ | 21,027 |
ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. |
ITEM 9A. | CONTROLS AND PROCEDURES. |
ITEM 9B. | OTHER INFORMATION. |
ITEM 10. | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE. |
Name | Age | Position |
Daniel G. Korte | 56 | Chief Executive Officer, President and Director |
Clifford C. Stebe, Jr. | 40 | Chief Financial Officer, Vice President |
Jay P. Inman, Jr. | 58 | President, Engineering Services |
Keith M. Schrader | 44 | Vice President, Operations |
Jennifer L. Alfaro | 44 | Chief Human Resources Officer |
Renée Skonier | 40 | General Counsel, Chief Compliance Officer and Secretary |
David J. Wright | 48 | Vice President, Corporate and Business Development |
Gerald E. Daniels | 71 | Chairman of the Board and Director |
Sanford S. Neuman | 81 | Director |
John S. Eulich | 66 | Director |
Judith W. Northup | 66 | Director |
John M. Roeder | 74 | Director |
Gregory L. Summe | 60 | Director |
Steven K. Schaffer | 65 | Director |
Lawrence J. Resnick | 59 | Director |
ITEM 11. | EXECUTIVE COMPENSATION. |
• | provide fair and reasonable compensation that meets the competitive environment for executive talent; |
• | help motivate the members of our executive team to achieve excellent performance on both a short-term and a long-term basis; and |
• | align the interests of our executive team members with those of our shareholders in order to promote the long-term success of the Company. |
Daniel G. Korte | Chief Executive Officer and President |
Clifford C. Stebe, Jr. | Chief Financial Officer and Vice President |
Jennifer L. Alfaro | Chief Human Resources Officer |
Renée Skonier | General Counsel, Chief Compliance Officer and Secretary |
David J. Wright | Vice President, Corporate and Business Development (1) |
Joseph DeMartino | Chief Operating Officer (2) |
Brian P. Olsen | President, Engineering Services (3) |
• | Provides a mix of guaranteed compensation and incentive-based compensation; |
• | Utilizes, in some cases, different performance measures for short-term incentives and long-term incentives; |
• | Uses incentives that are consistent with our strategic initiatives; |
• | Bases bonus payments on Company performance; |
• | Uses vesting of restricted stock awards that requires long-term commitment and performance on the part of our executives; |
• | Was developed, approved and is monitored by, our Compensation Committee; |
• | Includes a compensation recovery (clawback) policy; and |
• | Establishes caps on the amount of performance bonus and performance shares that can be awarded. |
Named Executive Officer | 2015 Salary | 2016 Salary | 2017 Salary | 2017 Increase/(Decrease) | |||||||||||
Daniel G. Korte | $ | 500,000 | $ | 500,000 | $ | 500,000 | — | % | |||||||
Clifford C. Stebe, Jr. | $ | 250,000 | $ | 257,500 | $ | 265,225 | 3.0 | % | |||||||
Jennifer L. Alfaro | $ | 250,000 | $ | 257,500 | $ | 265,225 | 3.0 | % | |||||||
Renée Skonier | $ | 243,595 | $ | 250,903 | $ | 258,430 | 3.0 | % | |||||||
David J. Wright (1) | $ | — | $ | 230,000 | $ | 234,600 | 2.0 | % |
• | 50% based upon the annual net operating income of the Company, and 50% based upon the annual free cash flow goal of the Company; and |
Named Executive Officer | Bonus paid at Threshold | Bonus paid at Target | Bonus paid at Maximum | 2016 Cash Bonus | Cash Bonus as a Percentage of Annual Base Salary in 2016 | ||||||||||||||
Daniel G. Korte | $ | 212,500 | $ | 425,000 | $ | 637,500 | $ | — | — | % | |||||||||
Clifford C. Stebe, Jr. | $ | 38,625 | $ | 77,250 | $ | 115,875 | $ | — | — | % | |||||||||
Jennifer L. Alfaro | $ | 38,625 | $ | 77,250 | $ | 115,875 | $ | — | — | % | |||||||||
Renée Skonier | $ | 37,635 | $ | 75,271 | $ | 112,906 | $ | — | — | % | |||||||||
David J. Wright | $ | 26,538 | $ | 53,077 | $ | 79,615 | $ | — | — | % |
• | 50% will be based upon the annual net operating income of the Company or applicable business segment relative to target, and 50% will be based upon the annual free cash flow of the Company or applicable business segment relative to target; |
• | Each named executive officer will be eligible to receive a bonus targeted at 30% of his/her salary with the potential for additional bonus based upon individual performance and Company or business segment performance that exceeds budgeted targets in either operating income or free cash flow; and |
• | The Company or applicable business segment must achieve at least 80% of target in either operating income or free cash flow for any bonus to be paid. |
Named Executive Officer | Bonus paid at Target | |||
Daniel G. Korte | $ | 425,000 | ||
Clifford C. Stebe, Jr. | $ | 79,568 | ||
Jennifer L. Alfaro | $ | 79,568 | ||
Renée Skonier | $ | 77,529 | ||
David J. Wright | $ | 70,380 |
Named Executive Officer | Target Value of Eligible 2017 Grant | |||
Daniel G. Korte | $ | 500,000 | ||
Clifford C. Stebe, Jr. | $ | 70,000 | ||
Jennifer L. Alfaro | $ | 70,000 | ||
Renée Skonier | $ | 70,000 | ||
David J. Wright | $ | 70,000 |
Respectfully submitted, | |
COMPENSATION COMMITTEE OF THE | |
BOARD OF DIRECTORS OF | |
LMI AEROSPACE, INC. | |
Judith W. Northup, Chair of the Compensation Committee | |
Gregory L. Summe, Member | |
John S. Eulich, Member | |
Steven K. Schaffer, Member |
Name and Principal Position | Year | Salary ($) | Stock Awards Granted ($) (1) | Non-Equity Incentive Plan ($) (2) | All Other Compensation ($) (3) | Total ($) | ||||||||||||||||
Daniel G. Korte, Chief Executive Officer and President (4) | 2016 | $ | 500,000 | $ | 500,007 | $ | — | $ | 8,935 | $ | 1,008,942 | |||||||||||
2015 | $ | 500,000 | $ | 550,005 | $ | 371,450 | $ | 8,350 | $ | 1,429,805 | ||||||||||||
2014 | $ | 405,449 | $ | 470,325 | $ | 300,000 | $ | 6,318 | $ | 1,182,092 | ||||||||||||
Clifford C. Stebe, Jr., Chief Financial Officer and Vice President (5) | 2016 | $ | 257,500 | $ | 90,001 | $ | — | $ | 7,450 | $ | 354,951 | |||||||||||
2015 | $ | 236,313 | $ | 60,200 | $ | 70,570 | $ | 7,312 | $ | 374,395 | ||||||||||||
2014 | $ | 225,000 | $ | 53,200 | $ | 33,926 | $ | 7,398 | $ | 319,524 | ||||||||||||
Jennifer L. Alfaro, Chief Human Resources Officer (6) | 2016 | $ | 257,500 | $ | 80,003 | $ | — | $ | 7,450 | $ | 344,953 | |||||||||||
2015 | $ | 250,000 | $ | 60,008 | $ | 74,625 | $ | 87,026 | $ | 471,659 | ||||||||||||
2014 | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
Renée Skonier, General Counsel & Chief Compliance Officer (7) | 2016 | $ | 250,791 | $ | 50,003 | $ | — | $ | 7,450 | $ | 308,244 | |||||||||||
2015 | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
2014 | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
David J. Wright, Vice President, Corporate & Business Development (8) | 2016 | $ | 176,923 | $ | 60,000 | $ | — | $ | 61,477 | $ | 298,400 | |||||||||||
2015 | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
2014 | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
Joseph DeMartino, Chief Operating Officer (9) | 2016 | $ | 180,167 | $ | — | $ | — | $ | 80,191 | $ | 260,358 | |||||||||||
2015 | $ | 300,000 | $ | 60,200 | $ | 89,550 | $ | 4,117 | $ | 453,867 | ||||||||||||
2014 | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
Brian P. Olsen, President, Engineering Services (10) | 2016 | $ | 223,205 | $ | — | $ | — | $ | 7,082 | $ | 230,287 | |||||||||||
2015 | $ | 260,165 | $ | 42,001 | $ | 78,000 | $ | 39,467 | $ | 419,633 | ||||||||||||
2014 | $ | — | $ | — | $ | — | $ | — | $ | — |
(1) | This column represents the aggregate grant date fair value of restricted shares awarded to each officer during the each fiscal year computed in accordance with FASB ASC Topic 718. A portion of the awards granted in 2016 were performance based and the targeted aggregate fair value of those awards is reflected above. The maximum aggregate grant date fair value |
(2) | The amounts in this column represent the cash bonuses awarded under our annual incentive cash bonus program and our named executive officers’ employment agreements for the year reported. |
(3) | The amounts in this column represent compensation for items that are not reportable elsewhere in the Summary Compensation Table, including but not limited to, perquisites and other personal benefits; “gross-ups’ or other amounts reimbursed for the payment of taxes; the amount paid or due in connection with any retirement, resignation, severance, or other termination; the Company’s contributions to defined contribution plans; the dollar value of any insurance premiums paid by, or on behalf of, the Company with respect to life insurance for the benefit of a named executive officer; and the dollar value of any dividends or other earnings paid on stock or option awards, when those amounts were not factored into the grant date fair value required to be reported for such award. |
(4) | Mr. Korte joined the Company in 2014 and was appointed to the position of Chief Executive Officer effective on March 18, 2014. |
(5) | Mr. Stebe 2015 salary was increased to $250,000 on October 5, 2015. |
(6) | Ms. Alfaro joined the Company on February 2, 2015 as Chief Human Resources Officer. |
(7) | Ms. Skonier was not a named executive officer in 2015 or 2014. |
(8) | Mr. Wright joined the Company on March 21, 2016 as Vice President, Corporate & Business Development. |
(9) | Mr. DeMartino separated from the Company on July 25, 2016. The "All Other Compensation" column with respect to Mr. DeMartino includes $77,500 paid directly to Mr. DeMartino in connection with his separation from the Company. Mr. DeMartino was not a named executive officer in 2014. |
(10) | Mr. Olsen separated from the Company on October 7, 2016. Mr. Olsen was not a named executive officer in 2014. |
(1) | |||||||||
Name | Grant Date of Stock Awards | All Other Stock Awards: Number of Shares of Stock or Units Granted in 2016 (2) | Grant Date Fair Value of Stock and Option Awards in 2016 | ||||||
Daniel G. Korte | August 3, 2016 | 70,969 | $ | 550,010 | |||||
Clifford C. Stebe, Jr. | August 3, 2016 | 12,775 | $ | 99,006 | |||||
Jennifer L. Alfaro | August 3, 2016 | 11,356 | $ | 88,009 | |||||
Renée Skonier | August 3, 2016 | 7,098 | $ | 55,010 | |||||
David J. Wright (3) | March 21, 2016 | 6,476 | $ | 60,000 |
Option Awards | Stock Awards | ||||||||||
Name | Number of Securities Underlying Unexercised Options Exercisable (#) (1) | Option Exercise Price ($) | Option Exercise Date | Number of Shares or Units of Stock That Have Not Vested (#) (2) | Market Value of Shares or Units of Stock That Have Not Vested ($) (3) | ||||||
Daniel G. Korte | — | — | — | 150,026 | $ | 1,293,224 | |||||
Clifford C. Stebe, Jr. | — | — | — | 20,777 | $ | 179,098 | |||||
Jennifer L. Alfaro | — | — | — | 15,573 | $ | 134,239 | |||||
Renée Skonier | — | — | — | 12,530 | $ | 108,009 | |||||
David J. Wright | — | — | — | 6,476 | $ | 55,823 |
(1) | There were no option awards outstanding as of December 31, 2016. This column does not include any shares of restricted stock granted to executive officers. |
(2) | Amounts shown in this column represent the number of time-based and performance-based restricted shares or units granted to each named executive officer that had not vested as of December 31, 2016. These awards are generally scheduled to vest on the third anniversary of the grant date. Subsequent to December 31, 2016, 23,021 time-based restricted shares awarded to Mr. Korte vested and 8,334 performance-based shares awarded to Mr. Korte were forfeited. The remaining time-based restricted shares are scheduled to vest as follows: Mr. Korte: 21,684 shares on April 30, 2018 and 32,259 shares on March 3, 2019; Mr. Stebe: 3,801 shares on May 13, 2017, 4,201 shares on February 18, 2018 and 5,807 shares on March 3, 2019; Ms. Alfaro: 4,217 shares on February 2, 2018 and 5,162 shares on March 3, 2019; Ms. Skonier: 2,501 shares on May 13, 2017, 2,931 shares on February 18, 2018 and 3,226 shares on March 3, 2019; Mr. Wright: 6,476 shares on March 21, 2019. The remaining performance-based restricted shares vest as follows: Mr. Korte: 26,018 shares on December 31, 2017 and 38,710 shares on January 1, 2019; Mr. Stebe: 6,968 shares on January 1, 2019; Ms. Alfaro: 6,194 shares on January 1, 2019; Ms. Skonier 3,872 shares on January 1, 2019. |
(3) | Market value of unvested shares is based on closing market price of $8.62 per share on December 30, 2016. |
Stock Awards | |||||
Name | Number of Shares Acquired on Vesting (#) (1) | Value Realized on Vesting ($) (2) | |||
Clifford C. Stebe, Jr. | 1,200 | $ | 11,346 | ||
Renée Skonier | 1,500 | $ | 14,183 |
(1) | Represents restricted stock that was granted in 2013 and vested in accordance with the terms of the grant. |
(2) | Represents the aggregate market value of the restricted stock at vesting. |
Name | Benefit (1) | Termination:Voluntary or For Cause, Death or Disability ($) | Termination: Without Cause ($) (2) | Change in Control: Involuntary or for Good Reason ($) (3) | Change in Control: Voluntary ($) | ||||
Daniel G. Korte | Restricted Stock (4) | — | — | 1,293,224 | 1,293,224 | ||||
Cash Severance (5) | — | 500,000 | 1,250,000 | 500,000 | |||||
Total | — | 500,000 | 2,543,224 | 1,793,224 | |||||
Clifford C. Stebe, Jr. | Restricted Stock (4) | — | — | 179,098 | 179,098 | ||||
Cash Severance (5) | — | 265,225 | 663,063 | 265,225 | |||||
Total | — | 265,225 | 842,161 | 444,323 | |||||
Jennifer L. Alfaro | Restricted Stock (4) | — | — | 134,239 | 134,239 | ||||
Cash Severance (5) | — | 265,225 | 663,063 | 265,225 | |||||
Total | — | 265,225 | 797,302 | 399,464 | |||||
Renée Skonier | Restricted Stock (4) | — | — | 108,009 | 108,009 | ||||
Cash Severance (6) | — | 258,430 | 646,075 | 258,430 | |||||
Total | — | 258,430 | 754,084 | 366,439 | |||||
David J. Wright | Restricted Stock (4) | — | — | 55,823 | 55,823 | ||||
Cash Severance (5) | — | 234,600 | 586,500 | 234,600 | |||||
Total | — | 234,600 | 642,323 | 290,423 | |||||
Joseph DeMartino | Restricted Stock (4) | — | — | — | |||||
Cash Severance (6) | 77,500 | — | — | ||||||
Total | 77,500 | — | — | ||||||
(1) | The amounts shown in this column do not include accrued salary, earned but unpaid bonuses, value of Company paid fringe benefits or reimbursement of reasonable business expenses. Those amounts are payable to the executive officer upon any termination of employment, including an involuntary termination with cause and a resignation without good reason. No accelerated benefit will be paid to the extent that it would constitute an excess parachute payment under Section 280G(b)(3) of the Internal Revenue Code. As of December 31, 2016, there were no named executive officers who would have received payments that would constitute excess parachute payments. |
(2) | A termination without cause is any termination by the Company other than for cause or in connection with a change in control. |
(3) | This amount represents two and one-half times the executive’s base salary as of December 31, 2016. Also includes the executive’s reasonably anticipated performance bonus for the year, which for 2016 was $0 for each of the named executive officers. |
(4) | The restricted stock value is calculated using the closing market price of $8.62 per share on December 30, 2016, multiplied by the number of shares that would have become vested as a result of the change in control on that date. |
(5) | These amounts are based on the executive’s base salary in effect as of December 31, 2016. |
(6) | This amount represents severance-related payments paid to Mr. DeMartino in connection with his separation from the Company. |
Name | Fees Earned or Paid in Cash ($) | Stock Awards Granted ($) | Total ($) | ||||||
Gerald E. Daniels | $ | 31,000 | $ | 128,004 | $ | 159,004 | |||
Judith W. Northup | $ | 40,000 | $ | 70,001 | $ | 110,001 | |||
John M. Roeder (1) | $ | — | $ | 115,007 | $ | 115,007 | |||
John S. Eulich | $ | 20,000 | $ | 110,008 | $ | 130,008 | |||
Ronald Saks (2) | $ | 20,000 | $ | — | $ | 20,000 | |||
Sanford S. Neuman | $ | 40,000 | $ | 60,003 | $ | 100,003 | |||
Gregory L. Summe | $ | 40,000 | $ | 60,003 | $ | 100,003 | |||
Steven K. Schaffer | $ | 20,000 | $ | 100,002 | $ | 120,002 | |||
Lawrence J. Resnick (3) | $ | 104,500 | $ | — | $ | 104,500 |
▪ | Independent Chairman: $50,000 |
▪ | Chair of Audit Committee $15,000 |
▪ | Chair of Compensation Committee: $10,000 |
▪ | Chair of Corporate Governance & Nominating Committee: $10,000 |
ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS. |
• | each of our directors (including the nominees for election as directors); |
• | each of our named executive officers; |
• | each holder of 5% or more of each class of our shares; and |
• | all of our directors and executive officers as a group |
• | all shares of Common Stock the investor actually owns beneficially or of record; |
• | all shares of Common Stock over which the investor has or shares voting or dispositive control (such as in the capacity as a general partner of an investment fund); and |
• | all shares of Common Stock the investor has the right to acquire within 60 days (such as an option or warrant which is scheduled to vest within 60 days). |
Name of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Class (1) | ||||
Gregory L. Summe | 1,440,339 | (2) | 10.6 | % | ||
Sanford S. Neuman | 273,575 | (3) | 2.0 | % | ||
Daniel G. Korte | 189,013 | (4) | 1.4 | % | ||
John M. Roeder | 61,160 | (5) | * | |||
John S. Eulich | 52,299 | (6) | * | |||
Judith W. Northup | 43,217 | (7) | * |
Gerald E. Daniels | 35,615 | (8) | * | |||
Clifford C. Stebe, Jr. | 33,563 | (9) | * | |||
Steven K. Schaffer | 19,063 | (10) | * | |||
Renée Skonier | 16,591 | (11) | * | |||
Jennifer L. Alfaro | 15,792 | (12) | * | |||
Keith M. Schrader | 9,441 | (13) | * | |||
David J. Wright | 6,476 | (14) | * | |||
Lawrence J. Resnick | 6,363 | (15) | * | |||
Jay P. Inman, Jr. | 5,939 | (16) | * | |||
All Directors and Executive Officers as a group (15 persons) | 2,208,446 | (17) | 16.2 | % | ||
Gregory L. Summe | 1,422,789 | (18) | 10.4 | % | ||
Glen Capital Partners GP LLC | ||||||
800 South Street, Suite 160 | ||||||
Waltham, Massachusetts 02453 | ||||||
Royce & Associates, L.P. | 1,407,435 | (19) | 10.3 | % | ||
745 5th Avenue | ||||||
New York, New York 10151 | ||||||
Alexis P. Michas | 1,327,083 | (20) | 9.7 | % | ||
Juniper Investment Company, LLC | ||||||
940 Winter Street | ||||||
Waltham, Massachusetts 02451 | ||||||
Adage Capital Partners, L.P. | 1,162,766 | (21) | 8.5 | % | ||
200 Clarendon Street, 52nd Floor | ||||||
Boston, Massachusetts 02116 | ||||||
Paradigm Capital Management Inc. | 863,663 | (22) | 6.3 | % | ||
9 Elk Street | ||||||
Albany, New York 12207 | ||||||
Rutabaga Capital Management LLC | 696,593 | (23) | 5.1 | % | ||
64 Broad Street, 3rd Floor | ||||||
Boston, Massachusetts 02109 | ||||||
Dimensional Fund Advisors LP | 679,768 | (24) | 5.0 | % | ||
6300 Bee Cave Road | ||||||
Austin, Texas, 78746 |
1. | Percentages are based on 13,621,267 shares of Common Stock outstanding as of March 1, 2017. |
2. | Includes 1,422,789 shares of common stock owned by Glen Capital Partners Focus Fund, L.P. (the “Fund”). Mr. Summe is the sole member of Glen Capital Partners, LLC and the control person of Glen Capital Partners GP I LLC, the advisor and general partner of Fund, respectively, and therefore Mr. Summe may be deemed to beneficially own the shares owned |
3. | Includes 6,800 shares of Common Stock held in various trusts for which Mr. Neuman, as trustee but not as beneficiary, maintains sole voting and investment authority. Also includes 7,022 shares of restricted stock that are scheduled to vest in June 2017. |
4. | Includes 737 shares of Common Stock held of record by Charles Schwab Trust Company as trustee of the Company’s Profit Sharing Plan for the benefit of Mr. Korte and 150,026 shares of restricted stock vesting between March 2017 and March 2020. |
5. | Includes 13,459 shares of restricted stock held by Mr. Roeder vesting in June 2017. |
6. | Includes 12,874 shares of restricted stock held by Mr. Eulich vesting in June 2017. |
7. | Includes 8,192 shares of restricted stock held by Ms. Northup vesting in June 2017. |
8. | Includes 14,980 shares of restricted stock held by Mr. Daniels vesting in June 2017. |
9. | Includes 955 shares of Common Stock held of record by Charles Schwab Trust Company as trustee of the Company’s Profit Sharing Plan for the benefit of Mr. Stebe and 20,777 shares of restricted stock vesting between May 2017 and March 2019. Also includes 1,500 shares of Common Stock held by Mr. Stebe’s spouse. |
10. | Includes 17,832 shares that Mr. Schaffer elected to defer pursuant to the Company’s Non-Qualified Deferred Compensation Plan under which he has a right to acquire such shares within 30 days of certain triggering events as specified therein. |
11. | Includes 1,645 shares of Common Stock held of record by Charles Schwab Trust Company as trustee of the Company’s Profit Sharing Plan for the benefit of Ms. Skonier and 12,530 shares of restricted stock vesting between May 2017 and March 2019. |
12. | Includes 219 shares of Common Stock held of record by Charles Schwab Trust Company as trustee of the Company’s Profit Sharing Plan for the benefit of Ms. Alfaro and 15,573 shares of restricted stock vesting between February 2018 and March 2019. |
13. | Includes 175 shares of Common Stock held of record by Charles Schwab Trust Company as trustee of the Company’s Profit Sharing Plan for the benefit of Mr. Schrader and 6,015 shares of restricted stock vesting between January 2018 and February 2019. |
14. | Includes 6,476 shares of restricted stock held by Mr. Wright vesting in March 2019. |
15. | Includes 3,483 shares that Mr. Resnick elected to defer pursuant to the Company’s Non-Qualified Deferred Compensation Plan under which he has a right to acquire such shares within 30 days of certain triggering events as specified therein. |
16. | Includes 700 shares of Common Stock held of record by Charles Schwab Trust Company as trustee of the Company’s Profit Sharing Plan for the benefit of Mr. Inman and 5,239 shares of restricted stock vesting in January 2018. |
17. | Includes (a) 4,431 shares of Common Stock held of record by Charles Schwab Trust Company as trustee of the Company’s Profit Sharing Plan for the benefit of executive officers of the Company, and (b) 301,500 shares of restricted stock held by executive officers and directors of the Company. |
18. | The 1,422,789 shares of common stock are the same shares as indicated in the indirect beneficial ownership table for Mr. Summe. As the sole member of Glen Capital Partners, LLC and the control person of Glen Capital Partners GP I LLC, the advisor and general partner of the Fund, respectively, Mr. Summe is deemed to beneficially own the shares owned by the Fund. |
19. | As reported on Schedule 13G/A filed with the SEC on January 31, 2017 by Royce & Associates, L.P. |
20. | As reported on Schedule 13D/A filed with the SEC on February 15, 2017 by Alexis P. Michas. |
21. | As reported on Schedule 13G/A filed with the SEC on February 9, 2017 by Adage Capital Partners, L.P., Adage Capital Partners GP, L.L.C., Adage Capital Advisors, L.L.C., Robert Atchinson and Phillip Gross. |
22. | As reported on Schedule 13G filed with the SEC on February 14, 2017 by Paradigm Capital Management, Inc. |
23. | As reported on Schedule 13G/A filed with the SEC on February 15, 2017 by Rutabaga Capital Management, LLC. |
ITEM 13. | CERTAIN RELATIONSHIPS, RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE. |
ITEM 14. | PRINCIPAL ACCOUNTANT FEES AND SERVICES. |
2016 | 2015 | |||||||
Audit fees (1) | $ | 915,000 | $ | 933,000 | ||||
Tax fees (2) | 334,999 | 417,062 | ||||||
All other fees (3) | 30,190 | 5,800 | ||||||
Total Fees | $ | 1,280,189 | $ | 1,355,862 |
1. | Includes annual financial statement audit, audit of the Company’s internal control over financial reporting and quarterly review services. |
2. | Includes fees associated with federal, state and international tax compliance and consulting services. |
3. | Includes fees billed for assurance and related services that are reasonably related to the performance of the audit or review of the Company's consolidated financial statements that are not reported under "Audit fees." |
ITEM 15. | EXHIBITS AND FINANCIAL STATEMENT SCHEDULES. |
1. | For a list of the Consolidated Financial Statements of the Company included as part of this report, see the index at Item 8. |
2. | Other than Schedule II - Valuation and Qualifying Accounts, all schedules have been omitted as the required information is not present in sufficient amounts or the required information is included elsewhere in the Consolidated Financial Statement or notes thereto. |
3. | Exhibits: |
(a.) | See Exhibit Index (each management contract or compensatory plan or arrangement listed therein is identified). |
(b) | See Exhibit Index below. |
(c) | Other than Schedule II - Valuation and Qualifying Accounts, all schedules have been omitted as the required information is not present in sufficient amounts or the required information is included elsewhere in the Consolidated Financial Statement or notes thereto. |
LMI AEROSPACE, INC. | ||
By: | /s/ Daniel G. Korte | |
Daniel G. Korte | ||
Chief Executive Officer |
Signature | Title | Date | ||
/s/ Daniel G. Korte | April 3, 2017 | |||
Daniel G. Korte | President, Chief Executive Officer and Director (Principal Executive Officer) | |||
/s/ Clifford C. Stebe, Jr. | April 3, 2017 | |||
Clifford C. Stebe, Jr. | Chief Financial Officer and Chief Accounting Officer | |||
/s/ Gerald E. Daniels | April 3, 2017 | |||
Gerald E. Daniels | Chairman of the Board and Director | |||
/s/ Sanford S. Neuman | April 4, 2017 | |||
Sanford S. Neuman | Director | |||
/s/ Gregory L. Summe | April 3, 2017 | |||
Gregory L. Summe | Director | |||
/s/ Lawrence J. Resnick | April 3, 2017 | |||
Lawrence J. Resnick | Director | |||
/s/ John M. Roeder | April 3, 2017 | |||
John M. Roeder | Director | |||
/s/ John S. Eulich | April 3, 2017 | |||
John S. Eulich | Director | |||
/s/ Judith W. Northup | April 3, 2017 | |||
Judith W. Northup | Director | |||
/s/ Steven K. Schaffer | April 3, 2017 | |||
Steven K. Schaffer | Director |
Exhibit Number | Description | |
2.1 | Agreement and Plan of Merger dated February 16, 2017, among the Registrant, Sonaca S.A, Sonaca USA Inc., and Luminance Merger Sub, Inc. dated as of February 16, 2017, previously filed as Exhibit 2.1 to the Registrant's Form 8-K filed on February 17, 2017 and incorporated herein by reference. | |
3.1 | Restated Articles of the Registrant previously filed as Exhibit 3.1 to the Registrant’s Form S-1 (File No. 333-51357) dated as of April 29, 1998 (the “Form S-1”) and incorporated herein by reference. | |
3.2 | Amended and Restated By-Laws of the Registrant 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 previously filed as Exhibit 3.3 to the Registrant’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 Registrant’s Amended and Restated Bylaws previously filed as Exhibit 3.1 to the Registrant’s Form 8-K filed June 26, 2009 and incorporated herein by reference. | |
3.5 | Amendment to the Registrant’s Amended and Restated Bylaws previously filed as Exhibit 3.1 to the Registrant’s Form 8-K filed May 6, 2015 and incorporated herein by reference. | |
3.6 | Amendment to the Registrant’s Amended and Restated Bylaws previously filed as Exhibit 3.1 to the Registrant’s Form 8-K filed February 17, 2017 and incorporated herein by reference. | |
4.1 | Form of the Registrant’s Common Stock Certificate previously filed as Exhibit 4.1 to the Form S-1 and incorporated herein by reference. | |
4.2 | 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 previously filed as Exhibit 4.1 to the Registrant’s Form 8-K filed on June 20, 2014 and incorporated herein by reference. | |
4.3 | Forms of 7.375% Senior Secured Notes due 2019 (included as exhibits to the Indenture identified in Exhibit 4.2). | |
4.4 | 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, previously filed as Exhibit 4.3 to the Registrant’s Form 8-K filed on June 20, 2014 and incorporated herein by reference. | |
4.5 | 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, previously filed as Exhibit 4.4 to the Registrant’s Form 8-K filed on June 20, 2014 and incorporated herein by reference. | |
4.6 | 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, previously filed as Exhibit 4.5 to the Registrant’s Form 8-K filed on June 20, 2014 and incorporated herein by reference. | |
4.7 | 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 previously filed as Exhibit 4.6 to the Registrant’s Form 8-K filed on June 20, 2014 and incorporated herein by reference. |
10.1 | Lease Agreement dated December 7, 2005 between Inmobiliaria LA Rumorosa S.A. de C.V. and Ivemsa S.A. de C.V., including all amendments, for the premises located at A.V. Eucalipto, #2351, Col. Rivera, Modulo Cy D, C.P. 21259, Mexicali, Baja California, Mexico and previously filed as Exhibit 10.2 to the Registrant’s Form 10-K for the fiscal year ended December 31, 2008 and filed March 16, 2009 and incorporated herein by reference. | |
10.2 | Lease Agreement dated May 19, 2008 between Precise Machine Company and Acquiport DFWIP, Inc. for the premises located at 14813 Trinity Blvd., Fort Worth, Texas and previously filed as Exhibit 10.3 to the Registrant’s Form 10-K for the fiscal year ended December 31, 2008 and filed March 16, 2009 and incorporated herein by reference. | |
10.3 | Lease Agreement dated May 2, 2006 between LMI Finishing, Inc. and Port Partnership, LLP for the premises located at 5270 N. Skiatook, Catoosa, Oklahoma and filed as Exhibit 10.4 to the Registrant’s Form 10-K for the fiscal year ended December 31, 2008 and filed March 16, 2009 and incorporated herein by reference. | |
10.4 | Lease Agreement dated September 4, 2003 between Registrant and Kole Warehouses, including all amendments, for the premises located at 101 Coleman, Savannah, Georgia and previously filed as Exhibit 10.5 to the Registrant’s Form 10-K for the fiscal year ended December 31, 2008 and filed March 16, 2009 and incorporated herein by reference, as restated by that certain Restated Lease Agreement dated as of September 14, 2012 between Kole Warehouses, Inc. and LMI Kitting, LLC. | |
10.5 | Lease Agreement dated March 24, 1997, including all amendments, between D3 Technologies, Inc. and H.G. Fenton Company for the premises located at 4838 Ronson Court, San Diego, California and previously filed as Exhibit 10.6 to the Registrant’s Form 10-K for the fiscal year ended December 31, 2008 and filed March 16, 2009 and incorporated herein by reference. | |
10.6 | Lease Agreement dated February 13, 2007 between LMI Finishing, Inc. and Angelo Gordon, successor in interest to CIT CRE LLC, for the premises located at 2104 N. 170 th St. East, Tulsa, Oklahoma and previously filed as Exhibit 10.8 to the Registrant’s Form 10-K for the fiscal year ended December 31, 2008 and filed March 16, 2009 and incorporated herein by reference. | |
10.7 | Lease Agreement dated May 6, 1997 between the Registrant and Victor Enterprises, LLC, including all amendments, for the premises located at 101 Western Avenue S., Auburn, Washington previously filed as Exhibit 10.10 to the Form S-1/A and incorporated herein by reference. | |
10.8 | Lease Agreement dated February 1, 1995 between the Registrant and RFS Investments for the premises located at 2621 West Esthner Court, Wichita, Kansas previously filed as Exhibit 10.11 to the Form S-1/A and incorporated herein by reference. | |
10.9+ | Profit Sharing and Savings Plan and Trust, restated effective January 1, 2009, including amendments previously filed as Exhibit 10.12 to the Form S-1/A and incorporated herein by reference. | |
10.10 | Business Reformation Agreement between Leonard’s Metal, Inc. and Lockheed Martin Aeronautics Company dated September 21, 2001 previously filed as Exhibit 10.1 to the Registrant’s Form 10-Q filed November 14, 2001 and incorporated by reference. | |
10.11 | Lease Agreement dated April 2, 2001 between Peter Holz and Anna L. Holz, Trustees of the Peter and Anna L. Holz Trust dated 2/8/89, including all amendments, as to an undivided one-half interest, and Ernest R. Star and Linda Ann Zoettl, Trustees under the Ernest L. Star and Elizabeth H. Star 1978 Trust dated August 25, 1978, as to an undivided one-half interest, and Metal Corporation (now Tempco Engineering, Inc.) for the premises located at 11011-11021 Olinda Street, Sun Valley, California previously filed as Exhibit 10.27 to the Registrant’s Form 10-K for the fiscal year ended December 31, 2001 filed April 1, 2002 and incorporated herein by reference. | |
10.12 | Lease Agreement dated April 2, 2001 between Tempco Engineering, Inc. and Metal Corporation for the premises located at 8866 Laurel Canyon Blvd., Sun Valley, California previously filed as Exhibit 10.28 to the Registrant’s Form 10-K for the fiscal year ended December 31, 2001 filed April 1, 2002 and incorporated herein by reference. | |
10.13 | Lease Agreement between Versaform Corp. and Nonar Enterprises, including all amendments, dated September 12, 2003 for the premises located at 1345 Specialty Drive Suites A-E, 1391 Specialty Drive Suite B, 1351 Specialty Drive and 1377 Specialty Drive, Suites A, B, and C, Vista, California previously filed as Exhibit 10.1 to the Registrant’s Form 10-Q filed November 14, 2003 and incorporated herein by reference. | |
10.14+ | LMI Aerospace, Inc. 2005 Long-Term Incentive Plan previously filed as Exhibit 10.1 in the Registrant’s Form 8-K filed July 13, 2005 and incorporated herein by reference. | |
10.15 | General Terms Agreement between Spirit AeroSystems, Inc. (Tulsa Facility) and Registrant dated October 14, 2005 previously filed as Exhibit 10.1 to the Registrant’s Form 10-Q filed May 18, 2006 and incorporated herein by reference. | |
10.16 | Special Business Provisions between Spirit AeroSystems, Inc. and Registrant dated April 19, 2006 previously filed as Exhibit 10.2 to the Registrant’s Form 10-Q filed May 18, 2006 and incorporated herein by reference | |
10.17 | Lease Agreement between Leonard’s Metal, Inc. and Welsh Fountain Lakes, L.L.C., including all amendments dated June 9, 2006, for the premises located at 401-411 Fountain Lakes Blvd., St. Charles, Missouri previously filed as Exhibit 10.1 to the Registrant’s Form 8-K filed June 15, 2006 and incorporated herein by reference. | |
10.18 | Memorandum of Agreement effective as of December 22, 2010 between Registrant and Gulfstream Aerospace Corporation previously filed as Exhibit 10.1 to the Registrant’s Form 10-Q filed November 13, 2006 and incorporated herein by reference. | |
10.19 | Lease Agreement between Leonard’s Metal, Inc. and Angelo Gordon, successor in interest to CIT CRE LLC, dated as of December 28, 2006, including all amendments, for the premises located at 2629-2635 Esthner Court, Wichita, Kansas, 3600 Mueller Road, St. Charles, Missouri, and 3030-3050 North Highway 94, St. Charles, Missouri previously filed as Exhibit 10.3 to the Registrant’s Form 8-K filed January 3, 2007 and incorporated herein by reference. | |
10.20 | Lease Agreement dated January 16, 2009 between Integrated Holdings, LLC and Integrated Technologies, Inc. for the premises located at 1910 Merrill Creek Parkway, Everett, WA 98203 and previously filed as Exhibit 10.2 of the Registrant’s Form 10-Q filed May 11, 2009 and incorporated herein by reference. | |
10.21 | Lease Agreement dated August 19, 2011 between D3 Technologies Inc. and JLM & Associates, LLC for the premises located at 1045 Keys Drive, Greenville, South Carolina, 29615, and filed herewith. | |
10.22 | Lease Agreement dated July 15, 2012 between the City of Coweta and Accu-Tec Enterprises, Ltd., regarding the real property commonly referred to as 26730 East 111th Street South, Coweta, Oklahoma including the Estoppel Certificate, dated November 9, 2009, executed by the city of Coweta. | |
10.23 | Lease Agreement dated April 1, 2012 between City of Fredonia, KS and Valent Aerostructures, LLC, previously filed as Exhibit 10.38 to the Registrant’s Form 10-K filed March 15, 2013 and incorporated herein by reference. | |
10.24 | Lease, dated October 11, 2001, as amended by the First Amendment to Lease, dated July 17, 2003, the Second Amendment to Lease, dated November 15, 2003, the Third Amendment to Lease, dated December 31, 2008, the Fourth Amendment to Lease, dated March 1, 2010, and the Fifth Amendment to Lease, dated May 24, 2011, between College Crossing Associates, LLC (as successor to Welsh Lenexa II, LLC) and Valent Aerostructures-Lenexa, LLC (as successor to CT Systems, L.LC. as successor to Cable-Tech Industries, L.L.C.), regarding certain real property located at 11064 Strang Line Road, Lenexa, Kansas. | |
10.25 | Sublease Agreement dated September 3, 2010 between Washington Civic Industrial Corp. and Valent Aerostructures, LLC, regarding certain real property located at 6325 Avantha Drive, Washington, Missouri 63090. | |
10.26 | General contract provisions of Spirit Aerosystems, Inc and Master Order Agreements, Special Business Provisions, Customer Specific Supplemental Terms and other contracts that contain additional general terms between Spirit Aerosystems, Inc and Valent Aerostructures, LLC or a subsidiary thereof. | |
10.27+ | Form of Incentive Restricted Stock Award Agreement between LMI. Aerospace, Inc. and Daniel J. Korte previously filed as Exhibit 10.1 to the Registrant’s Form 8-K filed March 20, 2014 and incorporated herein by reference. | |
10.28+ | LTI Restricted Stock Award Agreement dated March 14, 2014 between Registrant and Daniel J. Korte previously filed as Exhibit 10.2 to the Registrant’s Form 8-K filed March 20, 2014 and incorporated herein by reference. | |
10.29 | Credit Agreement dated as of June 19, 2014, by and among the Company, the Guarantors named therein, the lenders party thereto, Royal Bank of Canada, as Administrative Agent and Co-Collateral Agent, and Wells Fargo Bank, National Association, as Syndication Agent and Co-Collateral Agent (including the forms of Revolver Collateral Agreement, Guarantee Agreement and Revolver Intellectual Property Security Agreement attached as exhibits thereto), previously filed as Exhibit 10.1 to the Registrant’s Form 8-K filed on June 20, 2014 and incorporated herein by reference. | |
10.30 | Amendment No. 1, dated as of September 18, 2014, to the Credit Agreement dated as of June 19, 2014, by and among the Company, the Guarantors named therein, the lenders party thereto, Royal Bank of Canada, as Administrative Agent and Co-Collateral Agent, and Wells Fargo Bank, National Association, as Syndication Agent and Co-Collateral Agent, previously filed as Exhibit 10.1 to the Registrant’s Form 8-K filed on September 18, 2014 and incorporated herein by reference. | |
10.31+ | Employment Agreement between Registrant and Joseph DeMartino, dated July 31, 2014, previously filed as Exhibit 10.1 to the Registrant’s Form 8-K filed on August 6, 2014 and incorporated herein by reference. | |
10.32+ | Restricted Stock Award Agreement between Registrant and Jennifer Alfaro dated February 2, 2015, previously filed as Exhibit 10.2 to the Registrant’s Form 8-K filed on February 9, 2015 and incorporated herein by reference. | |
10.33+ | LMI Aerospace, Inc. 2015 Incentive Plan previously filed as Exhibit 10.1 in the Registrant’s Form 8-K filed June 30, 2015 and incorporated herein by reference. | |
10.34+* | Restricted Stock Award Agreement between Registrant and Daniel G. Korte dated July 1, 2015 (performance based vesting), previously filed as Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q filed on August 7, 2015, and incorporated herein by reference. | |
10.35+ | Restricted Stock Award Agreement between Registrant and Daniel G. Korte dated July 1, 2015 (time based vesting), previously filed as Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q filed on August 7, 2015, and incorporated herein by reference. | |
10.36 | Confidential Settlement Agreement and Mutual Release dated November 5, 2015 by and among Tech Investments, LLC, Tech Investments II, LLC, Charles M. Newell, individually and as the Sellers’ Representative for and on behalf of the former members of Valent Aerostructures, LLC, and the Registrant filed herewith. | |
10.37+ | Employment Agreement between Registrant and Daniel G. Korte effective January 1, 2017, the form of which was previously filed as Exhibit 10.1 to the Registrant’s Form 8-K filed on January 6, 2017 and incorporated herein by reference. | |
10.38+ | Employment Agreement between Registrant and Clifford C. Stebe, effective January 1, 2017, the form of which was previously filed as Exhibit 10.1 to the Registrant’s Form 8-K filed on January 6, 2017 and incorporated herein by reference. | |
10.39+ | Employment Agreement between Registrant and Jay P. Inman, effective January 1, 2017, the form of which was previously filed as Exhibit 10.1 to the Registrant’s Form 8-K filed on January 6, 2017 and incorporated herein by reference. |
10.40+ | Employment Agreement between Registrant and Keith M. Schrader, effective January 1, 2017, the form of which was previously filed as Exhibit 10.1 to the Registrant’s Form 8-K filed on January 6, 2017 and incorporated herein by reference. | |
10.41+ | Employment Agreement between Registrant and Jennifer Alfaro, effective January 1, 2017, the form of which was previously filed as Exhibit 10.1 to the Registrant’s Form 8-K filed on January 6, 2017 and incorporated herein by reference. | |
14 | Code of Ethics and Business Conduct, previously filed as Exhibit 14 to the Registrant’s Form 10-Q filed November 6, 2015 and incorporated by reference. | |
21.1 | List of Subsidiaries of the Registrant filed herewith. | |
23.1 | Consent of PricewaterhouseCoopers LLP filed herewith. | |
31.1 | Rule 13a-14(a) Certification of the Chief Executive Officer filed herewith. | |
31.2 | Rule 13a-14(a) Certification of the Chief Financial Officer filed herewith. | |
32.1 | Certification of the Chief Executive Officer, pursuant to 18 U.S.C Section 1350 as adopted pursuant to Section 906 of Sarbanes-Oxley Act of 2002 filed herewith. | |
32.2 | Certification of the Chief Financial Officer, pursuant to 18 U.S.C Section 1350 as adopted pursuant to Section 906 of Sarbanes-Oxley Act of 2002 filed herewith. | |
101 | Financial information from the Company’s Form 10-K for the fiscal year ended December 31, 2016, formatted in XBRL (Extensible Business Reporting Language) | |
+ | Management contract or compensatory plan or arrangement required to be filed as exhibit to this report. |
* | The Company has received confidential treatment of the redacted portions of this exhibit pursuant to Rule 24b-2, under the Exchange Act and has separately filed a complete copy of this exhibit with the SEC. |
Subsidiary | Jurisdiction |
LMI Finishing, Inc. | Missouri |
LMI Kitting, LLC | Delaware |
Leonard’s Metal, Inc. | Missouri |
Integrated Technologies, Inc. | Washington |
Tempco Engineering, Inc. | Missouri |
Versaform Corporation | California |
D3 Technologies, Inc. | California |
TASS, Inc. | Washington |
TASS European Union Ltd. | United Kingdom |
TASS Asia Pacific Pty. Ltd. | Australia |
L.M.I. Aerospace Asia Pacific (Private) Limited | Sri Lanka |
Valent Aerostructures, LLC | Delaware |
Valent Aerostructures - Wichita, LLC | Delaware |
Valent Aerostructures - Washington, LLC | Delaware |
Valent Aerostructures - Lenexa, LLC | Kansas |
Ozark Mountain Technologies, LLC | Delaware |
Date: April 3, 2017 | /s/ Daniel G. Korte |
Daniel G. Korte | |
Chief Executive Officer |
Date: April 3, 2017 | /s/ Clifford C. Stebe, Jr. |
Clifford C. Stebe, Jr. | |
Chief Financial Officer |
(1) | The Annual 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: April 3, 2017 | /s/ Daniel G. Korte |
Daniel G. Korte | |
Chief Executive Officer | |
(Principal Executive Officer) |
(1) | The Annual 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: April 3, 2017 | /s/ Clifford C. Stebe, Jr. |
Clifford C. Stebe, Jr. | |
Chief Financial Officer | |
(Principal Financial Officer and Principal Accounting Officer) |
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Document and Entity Information - USD ($) |
12 Months Ended | ||
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Dec. 31, 2016 |
Mar. 01, 2017 |
Jun. 30, 2016 |
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Document and Entity Information [Abstract] | |||
Entity Registrant Name | LMI AEROSPACE INC | ||
Entity Central Index Key | 0001059562 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 91,404,316 | ||
Entity Common Stock, Shares Outstanding | 13,621,267 | ||
Document Fiscal Year Focus | 2016 | ||
Document Fiscal Period Focus | FY | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2016 |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Dec. 31, 2016 |
Dec. 31, 2015 |
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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) | 13,625,205 | 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 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | ||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2015 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
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Sales and service revenue | ||||||||||||||||||||||||||||||||||||||
Product sales | $ 308,089 | $ 323,611 | $ 321,284 | |||||||||||||||||||||||||||||||||||
Service revenues | 38,091 | 51,485 | 66,533 | |||||||||||||||||||||||||||||||||||
Net sales | $ 85,183 | $ 89,673 | $ 83,993 | $ 87,331 | $ 89,438 | $ 95,633 | $ 97,550 | $ 92,475 | 346,180 | 375,096 | 387,817 | |||||||||||||||||||||||||||
Cost of sales and service revenue | ||||||||||||||||||||||||||||||||||||||
Cost of product sales | 249,227 | 259,610 | 254,775 | |||||||||||||||||||||||||||||||||||
Cost of service revenues | 37,150 | 46,700 | 57,672 | |||||||||||||||||||||||||||||||||||
Cost of sales | 286,377 | 306,310 | 312,447 | |||||||||||||||||||||||||||||||||||
Gross profit | 12,192 | [1] | 15,846 | 15,535 | 16,230 | 16,193 | [2] | 16,626 | [3] | 18,770 | 17,197 | 59,803 | 68,786 | 75,370 | ||||||||||||||||||||||||
Selling, general and administrative expenses | 44,541 | 45,678 | 55,204 | |||||||||||||||||||||||||||||||||||
Goodwill and intangible asset impairment | 28,368 | 0 | 26,439 | |||||||||||||||||||||||||||||||||||
Restructuring expense | 1,212 | 2,322 | 2,585 | |||||||||||||||||||||||||||||||||||
(Loss) income from operations | (14,318) | [4] | 20,786 | (8,858) | [4] | |||||||||||||||||||||||||||||||||
Other income (expense): | ||||||||||||||||||||||||||||||||||||||
Interest expense | (21,171) | (22,439) | (29,280) | [5] | ||||||||||||||||||||||||||||||||||
Other, net | (352) | (236) | 223 | |||||||||||||||||||||||||||||||||||
Total other expense | (21,523) | (22,675) | (29,057) | |||||||||||||||||||||||||||||||||||
Loss before income taxes | (35,841) | (1,889) | (37,915) | |||||||||||||||||||||||||||||||||||
(Benefit) provision for income taxes | (734) | 352 | (8,953) | |||||||||||||||||||||||||||||||||||
Net loss | $ (3,757) | [1] | $ 309 | $ (29,900) | [6] | $ (1,759) | [7] | $ (1,188) | [2] | $ 34 | [3] | $ 378 | [8] | $ (1,465) | [9] | (35,107) | (2,241) | (28,962) | ||||||||||||||||||||
Other comprehensive income (loss): | ||||||||||||||||||||||||||||||||||||||
Change in foreign currency translation adjustment | (71) | (41) | (98) | |||||||||||||||||||||||||||||||||||
Reclassification adjustment for losses on interest rate hedges included in net earnings, net of tax of $0, $0 and $157 | 0 | 0 | 278 | |||||||||||||||||||||||||||||||||||
Unrealized gain/(loss) arising during period from interest rate hedges, net of tax of $0, $0 and $(157) | 278 | |||||||||||||||||||||||||||||||||||||
Total comprehensive loss | $ (35,178) | $ (2,282) | $ (28,782) | |||||||||||||||||||||||||||||||||||
Amounts per common share: | ||||||||||||||||||||||||||||||||||||||
Net (loss) income per common share (in dollars per share) | $ (0.29) | $ 0.02 | $ (2.28) | $ (0.14) | $ (0.09) | $ 0.00 | $ 0.03 | $ (0.11) | $ (2.68) | $ (0.17) | $ (2.28) | |||||||||||||||||||||||||||
Net (loss) income per common share assuming dilution (in dollars per share) | $ (0.29) | $ 0.02 | $ (2.28) | $ (0.14) | $ (0.09) | $ 0.00 | $ 0.03 | $ (0.11) | $ (2.68) | $ (0.17) | $ (2.28) | |||||||||||||||||||||||||||
Weighted average common shares outstanding (in shares) | 13,113,901 | 12,869,353 | 12,716,976 | |||||||||||||||||||||||||||||||||||
Weighted average dilutive common shares outstanding (in shares) | 13,113,901 | 12,869,353 | 12,716,976 | |||||||||||||||||||||||||||||||||||
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CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical) - shares |
12 Months Ended | ||
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Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
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Statement of Stockholders' Equity [Abstract] | |||
Stock Issued During Period, Shares, Issued for Services | 0 | 6,791 | 12,175 |
Issuance of stock | |||
Shares of restricted stock (in shares) | 212,890 | 131,063 | 142,588 |
ACCOUNTING POLICIES |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACCOUNTING POLICIES | ACCOUNTING POLICIES Principles of Consolidation The Consolidated Financial Statements included in this report have been prepared by management of LMI Aerospace, Inc. All significant intercompany balances and transactions have been eliminated in consolidation. 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. Revenue and Profit Recognition Except as described below, the Company recognizes revenue for sales of products and related services in accordance with Financial Accounting Standards Board, (“FASB”) Accounting Standards Codification (“ASC”) Topic 605-15 Products and Topic 605-20 Services. The Company sells products under long term supply contracts and purchase orders where the product is built to the customer specifications based on firm purchase orders from the customer. The purchase orders tend to be of a relatively short duration and customers place orders on a periodic basis. The pricing is generally fixed for some length of time and the quantities are based on individual purchase orders. Revenue is recognized when title passes and services are rendered, the price is fixed or determinable, and collection is reasonably assured. Approximately 80.0% to 90.0% of the total revenue the Company recognized in any given year is accounted for in accordance with Topics 15 and 20. The remainder of the revenue is accounted for using methods consistent with ASC Topic 605-35 Construction-Type and Production-Type Contracts. The percentage of completion method used to account for contracts depends on the nature of the products provided under the contract. For example, for contracts that require us to perform a significant level of development effort, in comparison to the total value of the contract, sales are recorded using the cost-to-cost method to measure progress toward completion. Under the cost-to-cost method of accounting, we recognize sales and estimated profit as costs are incurred based on the proportion that the incurred costs represent of total estimated costs. For contracts that require us to provide a substantial number of similar items without a significant level of development, we record sales and estimated profit using units of delivery as the basis to measure progress toward completing the contract. Under both methods, profit recognized is based on the total expected profit margin percentage multiplied by revenue recognized to date. The Company periodically reviews all estimates to complete as required by the authoritative guidance and the estimated total cost and expected gross profit are revised as required over the life of the contract. Any revisions to the estimated total revenue or cost are accounted for as a change in estimate. A cumulative catch-up adjustment is recorded in the period the change in estimated cost to complete the contract is determined. In addition, should total estimated costs at completion exceed the estimated total revenue, any anticipated loss is recognized in the period in which the anticipated loss is determined. The loss is reported either as a reduction of revenue or as a component of cost of sales. During 2016 and 2015, the Company recorded losses on a cost-to-cost program of $1,903 and $2,763, respectively, which included provisions for anticipated future loss of $722 and $476, respectively. At December 31, 2013, the Company had a contract accounted for using the units of delivery method which was acquired during the Valent acquisition and where estimated costs exceeded the total contract revenue. The provision for anticipated loss was established in 2013 for $5,267 and was treated as a measurement period change and as such increased the goodwill related to the Valent acquisition. During the third quarter of 2014, a change was agreed to that resulted in the favorable settlement of an unpriced change order related to this contract. In addition, the Company secured more favorable future material pricing with respect to this contract as engineering changes to the related assemblies had stabilized. As a result, contract costs were no longer expected to exceed revenue and the remaining related loss reserve was reversed, resulting in a favorable cumulative catch up adjustment of $5,267 in the year ended December 31, 2014. The reversal was recorded in the cost of goods sold section of the Consolidated Statements of Comprehensive Income (Loss). Cumulative catch-up adjustments had the following impact to operating income in the years presented:
Unfavorable cumulative catch-up adjustments of $1,903, $2,763 and $1,479 were recorded in 2016, 2015 and 2014, respectively, related to the Mitsubishi Regional Jet design build program which has experienced higher than expected development costs. A loss provision for this contract was established in 2015 and the contract remains in a loss position at December 31, 2016. The adjustments related to this program was recorded as a reduction to revenue in the Consolidated Statements of Comprehensive Income (Loss). Favorable adjustments recorded in 2014 are primarily associated with the aforementioned Valent contract of $5,267. The adjustments related to this program was recorded as a reduction to cost of sales in the Consolidated Statements of Comprehensive Income (Loss). Contract accounting requires management to estimate contract revenues and costs, and make assumptions related to production schedule and total units to be produced, among other matters. Due to the size, length of time and nature of many of our contracts, the estimation of total sales and cost is very complicated and subject to many variables, including development program delays and the expected recovery of deferred cost. Claims and unpriced change orders can also impact the estimate of total revenues and profits. In the ordinary course of business, the Company may receive requests from its customers to perform tasks not specified in its contracts. When this occurs on a long-term contract using the cost-to-cost method of percentage of completion accounting, the Company may record revenue for claims or unpriced change orders to be negotiated with customers. The Company's revenue recognized in 2016 contained $933 that represented amounts associated with claims and unpriced change orders. The development of a contract revenue and gross margin percentage involves utilization of detailed procedures by a team of operational and financial personnel that provides information on the status of the contracts. Total contract cost estimates are largely based our current cost of production, purchase order terms negotiated or estimated by our supply chain. Estimates of revenue and costs associated with each significant contract are reviewed and approved by the team on a quarterly basis. Due to the significance of the judgment in the estimation process described above, it is possible that materially different margins could be recorded if we used different assumptions or if the underlying circumstances were to change. Pre-Production Costs under Long-Term Supply Contracts The Company may incur design and development costs prior to the production phase of contracts that are outside the scope of the contract accounting method. These pre-production costs are generally related to costs the Company incurs to design and build tooling that is owned by the customer. The Company receives the non-cancellable right to use these tools to build the parts as specified in a contractual agreement and therefore has capitalized these costs. In certain instances, the Company enters into agreements with its customers that provide it a contractual guarantee for reimbursement of design and engineering services incurred prior to the production phase of a contract. Due to the contractual guarantee, the Company capitalizes the costs of these services. The pre-production costs are amortized to cost of sales over the shorter of the life of the contractual agreement or the related tooling. Cash and Cash Equivalents Cash and cash equivalents include cash on hand, deposits in transit and all highly liquid investment instruments with an initial maturity of three months or less. Inventories The Company’s inventories are stated at the lower of cost or market and utilize actual costs for raw materials and average or standard cost (which approximates actual cost) for work in process, manufactured and purchased components and finished goods. The Company evaluates the inventory carrying value and reduces the carrying costs based on customer activity, estimated future demand, price deterioration, and other relevant information. The Company’s customer demand is unpredictable and may fluctuate due to factors beyond the Company’s control. In addition, inventoried costs include capitalized contract costs relating to programs and contracts with long-term production cycles, a portion of which is not expected to be realized within one year. See further discussion regarding deferred long-term contract costs under “Revenue and Profit Recognition” and “Pre-Contract and Pre-Production Costs under Long-Term Supply Contracts.” Allowance for Doubtful Accounts The allowance for doubtful accounts receivable reflects the Company’s best estimate of probable losses inherent in its accounts receivable. The basis used to determine this value is derived from historical experience, specific allowances for known troubled customers and other known information. Property, Plant and Equipment Property, plant and equipment are stated at cost. Depreciation is calculated using the straight-line method over the estimated useful lives of the related assets. Leasehold improvements are amortized using the straight-line method over the shorter of the lease term or the estimated useful lives of the assets. Estimated useful lives for buildings, machinery and equipment, and purchased software are 20 to 40 years, 3 to 20 years and 3 to 10 years, respectively. Amortization incurred under capital leases is reported with depreciation expense. Long Lived Assets Long lived assets held and used are reviewed for impairment based on future undiscounted cash flows whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Goodwill and Intangible Assets The Company’s acquisitions involve the purchase of tangible and intangible assets and the assumption of certain liabilities. As part of the purchase price allocation, the Company allocates the purchase price to the tangible assets acquired and liabilities assumed based on estimated fair market values, and the remainder of the purchase price is allocated to intangibles and goodwill. Goodwill and intangible assets with indefinite lives are not amortized but are subject to an impairment assessment at least annually in relation to their fair value. Under guidelines established by FASB ASC Topic 280, the Company operates in two operating segments. However, the Company has recorded its goodwill and conducts testing for potential goodwill impairment at a reporting unit level. The reporting units represent a business for which discrete financial information is available, and segment management regularly reviews the operating results. As part of this process, the Company first assesses qualitatively whether it is necessary to perform the quantitative test. The qualitative assessment involves evaluating relevant events or circumstances to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. If it is, the Company can bypass the quantitative assessment of goodwill. If it is not, or if the Company has elected to bypass the qualitative assessment process, the quantitative assessment of goodwill utilizes a two-step process, where the carrying value of the reporting unit is compared to its fair value. If the carrying value is less than the fair value, no impairment exists, and the second step is not performed. However, if the carrying value is greater than the fair value, the second step is performed. An impairment charge would be recognized for the amount that the carrying value of the goodwill exceeds its fair value. The fair values for goodwill testing are estimated using a combination of the income and market approach unless circumstances indicate that a better estimate of fair value is available. The income approach utilizes the discounted cash flow model (“DCF model”) and the market approach is based on the market data for a group of guideline companies. Deferred Gain on Sale of Real Estate In December 2006, the Company entered into an agreement with a third party to sell and lease back certain of its real estate properties for $10,250. The amount of the sale price in excess of book value for these properties of $4,242 was deferred and is being amortized to rent expense over the 18 year term of the leases on a straight-line basis. At December 31, 2016 and 2015, the unamortized deferred gain of $1,906 and $2,140, respectively, was reflected in Accrued Expenses and Other Long-Term Liabilities in the Consolidated Balance Sheet. Share-Based Compensation The Company recognizes compensation expense for share-based payment transactions in the financial statements at their fair value. The expense is measured at the grant date, based on the calculated fair value of the share-based award, and is recognized over the requisite service period (generally the vesting period of the equity award). Income Taxes Provisions for federal and state income taxes are calculated on reported net income/loss before income taxes based on current tax law and also include, in the current period, the cumulative effect of any changes in tax rates from those used previously in determining deferred tax assets and liabilities. Such provisions differ from the amounts currently receivable or payable because certain items of income and expense are recognized in different time periods for financial reporting purposes than for income tax purposes. Significant judgment is required in determining income tax provisions and evaluating tax positions. A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized. When determining the amount of net deferred tax assets that are more likely than not to be realized, management assesses all available positive and negative evidence. This evidence includes, but is not limited to, prior earnings history, expected future earnings, carry-back and carry-forward periods and the feasibility of ongoing tax strategies that could potentially enhance the likelihood of the realization of a deferred tax asset. The weight given to the positive and negative evidence is commensurate with the extent the evidence may be objectively verified. As such, it is generally difficult for positive evidence regarding projected future taxable income exclusive of reversing taxable temporary differences to outweigh objective negative evidence of recent financial reporting losses. Based on these criteria and the relative weighting of both the positive and negative evidence available, and in particular the activity surrounding the Company's significant loss in 2013, management determined that it was necessary to establish a valuation allowance against all of its net U.S. deferred tax assets at December 31, 2013. This determination was made as the Company entered into a cumulative loss position over the three year period ended December 31, 2013 primarily due to recording a goodwill impairment of $73,528 related to Valent. Once the Company entered into a cumulative loss position it had passed the threshold after which there is a presumption that a company should no longer rely solely on projected future income in determining whether the deferred tax asset is more likely than not to be realized. The Company has remained in a cumulative loss position at December 31, 2016, 2015 and 2014. The Company will continue to monitor its deferred tax position and may adjust the valuation allowance, if necessary, for utilization of the underlying deferred tax assets through current taxable income or as available evidence changes. At December 31, 2016, 2015 and 2014, the Company's deferred tax assets remained under a valuation allowance. The accounting for uncertainty in income taxes requires a more-likely-than-not threshold for financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. The Company records a liability for the difference between the benefit recognized and measured for financial statement purposes and the tax position taken or expected to be taken on our tax return. To the extent that management’s assessment of such tax positions changes, the change in estimate is recorded in the period in which the determination is made. The Company’s unrecognized tax benefits as of December 31, 2016 and 2015 are immaterial. The Company expects no significant increases or decreases in unrecognized tax benefits due to changes in tax positions within one year of December 31, 2016. The Company has no material interest or penalties relating to income taxes recognized in the Consolidated Statement of Comprehensive Income (Loss) as of December 31, 2016, 2015 or 2014. As of December 31, 2016, returns for calendar 2015 remain subject to examination by the Internal Revenue Service and returns for 2013 through 2015 remain subject to examination by various state tax jurisdictions. Financial Instruments Fair values of the Company’s long-term obligations approximate their carrying values as the applicable interest rates approximate the current market rates or have variable rate characteristics. The Company’s other financial instruments have fair values that approximate their respective carrying values due to their short maturities. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606). The new standard is effective for reporting periods beginning after December 15, 2017 and the Company plans to adopt the standard in the first quarter of 2018. The standard supersedes existing revenue recognition guidance, including industry-specific guidance, and provides 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. 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 adoption of the new standard may have a material impact on our income statement and balance sheet but we have not completed the quantification of that impact at this time. The Company performed a preliminary review of its significant contracts and have identified differences that would result from applying the new standard to those contracts. Based on this review, we currently expect that the timing of the recognition of revenue and related costs may change for a significant portion of our business. Some of our contracts on which we currently recognize revenue when risk of loss is transferred to the customer may recognize revenue as costs are incurred under the new standard. In addition, some long-term production contracts for which we currently recognize cost at an average expected margin over the life of the contract may recognize costs attributable to each individual unit as control is transferred to the customer. under the new standard. Adoption of the new standard will not change the total amount of revenue recognized on these contracts, only the timing of when revenue is recognized. These changes also have the potential to significantly alter the amount of deferred contract costs in inventory reported on our balance sheet. The Company is currently evaluating the transition method to be used and is implementing changes to business processes, systems and controls to support adoption of the standard. 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. 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 and no material impact on our financial statements is expected. 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 and the Company plans to adopt the new standard effective January 1, 2017. 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 Consolidated Financial Statements. |
ASSETS AND LIABILITIES MEASURED AT FAIR VALUE |
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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:
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 December 31, 2016. There were no transfers between levels during 2016 and 2015.
(1) The fair values of intangibles relating to the acquisition of Valent was determined by third parties in connection with the purchase and recorded at those values. The intangibles relating to the Engineering Services reporting unit were deemed impaired during 2016 and a $4,066 impairment charge was recorded in the Consolidated Statements of Comprehensive Income (Loss) for the year ended December 31, 2016. (2) The Company performed its annual impairment analysis of goodwill related to the Aerostructures reporting units during the fourth quarter of 2016 and determined no adjustments to the carrying value were necessary. The value of the goodwill relating to the Engineering Services reporting unit was deemed impaired during 2016 and a $24,302 impairment charge was recorded in the Consolidated Statements of Comprehensive Income (Loss) for the year ended December 31, 2016.
(1) The fair values of intangibles relating to the acquisitions of TASS and Valent were determined by third parties in connection with the purchase and recorded at those values. (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. |
ACCOUNTS RECEIVABLE NET |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACCOUNTS RECEIVABLE NET | ACCOUNTS RECEIVABLE NET Accounts receivable, net consists of the following:
Under long-term contract accounting unbilled revenue on long-term contracts 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. Accounts receivable which the Company expects to collect after December 31, 2017 are not material. |
INVENTORIES |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVENTORIES | INVENTORIES Inventories consist of the following:
Capitalized contract costs include $5,373 and $5,970 at December 31, 2016 and 2015, respectively, related to an agreement the Company signed with Spirit Aerostructures ("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. In accordance with the contract terms, the Company made $6,500 in cash payments of consideration to Spirit in 2015 which was recorded as an increase to capitalized contract costs in inventory in the Consolidated Balance Sheet. This consideration is being amortized as a reduction to revenue over the life of the related contracts. The increase in capitalized contract costs in 2016 relates 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 December 31, 2016 and December 31, 2015 related:
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 December 31, 2016 and 2015, the Company had no contracts with loss reserves accounted for as a reduction of inventory. |
PROPERTY, PLANT AND EQUIPMENT |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PROPERTY PLANT AND EQUIPMENT | PROPERTY, PLANT AND EQUIPMENT Depreciation expense (including amortization expense on software) recorded by the Company totaled $14,755, $15,494 and $17,934 for 2016, 2015 and 2014, respectively.
See discussion in Note 8 to the Consolidated Financial Statements regarding property, plant and equipment recorded associated with capital leases. |
GOODWILL AND INTANGIBLE ASSETS |
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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 December 31, 2016 and 2015, respectively:
The net goodwill balance in the Aerostructures segment is related to the acquisitions of Valent and Intec, which account for $56,288 and $6,194, respectively, at both December 31, 2016 and 2015. The annual impairment analysis performed in the fourth quarter of 2016 determined that the fair value for the goodwill in Aerostructures exceeded its carrying value. In the second quarter of 2016, a triggering event occurred when 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. An impairment analysis was performed and determined that the carrying value of related goodwill was fully impaired. As a result, a non-cash impairment charge of $24,302 was recorded in the second quarter of 2016, which brought the goodwill associated with the reporting unit to $0. During the fourth quarter of fiscal 2014, in accordance with the Company's accounting policy as described in Note 1 to the Consolidated Financial Statements, the Company performed its annual impairment analysis on the Engineering Services reporting unit and determined that the carrying value of goodwill was above its fair value. As a result, a goodwill impairment charge of $26,439 was recorded. Of the gross goodwill recorded by the Company, 26.3% is not deductible for tax purposes. Intangible Assets Intangible assets primarily consist of trademarks and customer intangibles resulting from the acquisitions of Versaform Corporation, D3, Intec, TASS, and Valent. The trademarks resulted from the acquisitions of Intec, TASS, and Valent are fully amortized at December 31, 2016. Customer intangibles have a remaining weighted average useful life of 15.9 years and other intangible assets have a remaining weighted average useful life of 2.1 years. The carrying values were as follows:
The aforementioned triggering event within the Engineering Services reporting unit related to goodwill also resulted an impairment charge of $4,066 related to customer intangible assets in 2016. Intangibles amortization expense for 2016, 2015 and 2014 was $3,664, $4,359 and $4,524, respectively. The estimated annual amortization expense for intangible assets is as follows:
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ACCRUED EXPENSES |
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Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACCRUED EXPENSES | ACCRUED EXPENSES Accrued expenses consist of the following:
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LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS Long Term Debt and Capital Lease Obligations (Notes) |
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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:
On June 19, 2014, the Company issued $250,000 in second-priority senior secured notes maturing on July 15, 2019. The Company recorded these notes at cost. The estimated fair value of these notes, based on the last market price transaction in the year ended December 31, 2016 of 1.0075, was $225,856. During 2014, 2015, and 2016 the Company repurchased and retired $5,000, $10,825, and $10,000 respectively, of the outstanding notes at a premium of 1.125%, 0.0%, and 1.875% respectively, 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. In addition, on June 19, 2014, the Company modified its revolving credit agreement. The modified agreement provides for a revolving credit facility of up to $90,000. Under the agreement, the co-collateral agents may establish a reserve against the facility. At December 31, 2016, the reserve established was $15,000, which reduced the maximum availability to $75,000. Based on the amount of eligible assets at December 31, 2016 and considering outstanding letters of credit of $1,525, available borrowings were further reduced to $49,728. The maximum amount, less reserves, available for borrowing at levels below $30,000 are 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 are 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 (“ABR”) 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%. For the year ended December 31, 2016, the average debt outstanding on the revolving credit facility was $164 which accrued interest at an average rate of 5.80%. No amounts were outstanding on the revolving credit facility at December 31, 2016 or December 31, 2015. 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 December 31, 2016, the commitment fee required was 0.5%. The revolving credit loan facility matures on the earlier of the fifth year anniversary date, 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 the 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 December 31, 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 facility, the Company would not be in compliance with its credit agreement and the lenders would be entitled to exercise various rights, including causing the amounts outstanding under the revolving credit facility to become immediately due and payable. A portion of the Company's debt and capital leases related to buildings and equipment that were underwritten to service underlying Industrial Revenue Bonds (“IRBs”) with the City of Washington, Missouri and Fredonia, Kansas. Monthly payments are scheduled in an amount sufficient to service the total principal and interest of the underlying bonds. Interest ranges from 2.80% to 4.50% and mature between September 2020 and June 2032. In addition, the Company's debt at December 31, 2015 includes a capital lease of $232 related to the building in Coweta, Oklahoma. This capital lease was settled in cash in January of 2016. In 2015, a debt of the Company of $1,167 was assumed by a third-party as the result of a lawsuit settlement. The Company has also entered into various notes payable and capital lease agreements for the purchase of certain equipment. The notes are secured by certain equipment and payable in monthly installments including interest ranging from 2.45% to 5.00% through February 2023. The gross amount of assets recorded under capital leases totaled $14,558 as of December 31, 2016 and is included in the related property, plant and equipment categories. The long-term debt and capital lease payment obligations including the current portion thereof required in each of the next five years and thereafter are as follows:
(1) Includes principal only Debt issuance costs of $8,348 were incurred as a result of the 2014 refinancing transactions and are being amortized over the term of the notes and revolving credit agreement, which is five years. The Company has appropriately split the deferred financing fees incurred in connection with its debt and will amortize the fees over their respective terms. As the Company repurchases and retires second-priority senior secured notes, the associated unamortized debt issuance costs are written-off and amortized as interest expense. |
DERIVATIVE FINANCIAL INSTRUMENTS |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DERIVATIVE FINANCIAL INSTRUMENTS | DERIVATIVE FINANCIAL INSTRUMENTS On June 19, 2014, the Company terminated and settled its interest rate derivatives in conjunction with the settlement of its then existing credit agreement, which had a variable interest rate. This settlement resulted in a charge of $793 to interest expense in the Consolidated Statements of Comprehensive Income (Loss) in the year ended December 31, 2014. Prior to this termination and in compliance with the credit agreement, the Company purchased option and swap derivative contracts to hedge against the potential impact on earnings from an increase in market interest rates associated with the interest payments on its variable rate term credit facility. The objective of the hedge transactions was to reduce the variability of cash flows due to changes in the designated benchmark interest rate on the term debt. The Company had no derivative financial instruments recorded in the Consolidated Balance Sheet at December 31, 2016, 2015 or 2014. The Company designated and accounted for these swaps and purchased options as cash flow hedges of interest rate risk. The Company reported the gain or loss, net of taxes, from the effective portion of the hedge as a component of Accumulated Other Comprehensive Income (“AOCI”) deferring it and reclassifying it into earnings in the same period or periods in which the hedged transaction affects earnings and in the same line item on the Consolidated Statements of Comprehensive Income (Loss) as the impact of the hedged transaction. The cumulative amounts reported in AOCI related to these derivatives were reclassified from AOCI to interest expense on the Consolidated Statements of Comprehensive Income (Loss) in the quarter ended June 30, 2014. The Company did not use these derivative instruments for trading or speculative purposes. The following amounts are included in AOCI and earnings for the years ended December 31, 2016, December 31, 2015 and December 31, 2014:
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(LOSS) EARNINGS PER COMMON SHARE |
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EARNINGS PER COMMON SHARE | (LOSS) 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.
For the twelve months ended December 31, 2016, December 31, 2015 and December 31, 2014, 94,408, 159,875 and 153,249 shares, respectively, are not included in the calculation of diluted earnings per share, as their inclusion would have been anti-dilutive. These securities could be dilutive in future periods. |
COMMITMENTS AND CONTINGENCIES |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES The Company leases certain facilities and equipment under various non-cancelable operating lease agreements that expire at various dates through 2025. At December 31, 2016, the future minimum lease payments under operating leases with initial non-cancelable terms in excess of one year are as follows:
Rent expense totaled $7,479, $7,753 and $8,396 in 2016, 2015 and 2014, respectively. The Company has entered into employment agreements with certain members of senior management, the terms of which expire on December 31, 2019. The terms of these agreements include non-compete and non-disclosure provisions, and provide for defined severance payments in the event of termination without cause and termination or resignation with good reason following a change in control. Legal Contingencies The Company has been named as a defendant in certain pending lawsuits in the normal course of business (the “Pending Lawsuits”). In the opinion of management, after consulting with legal counsel, the losses, if any, resulting from the Pending Lawsuits is not expected to have a material effect on the Company’s future financial position, results of operations or cash flows. In the quarter ended June 30, 2015, Ozark Mountain Technologies, LLC, a wholly-owned subsidiary of the Company (“OMT”), settled allegations of low pH wastewater releases by its facility between 2009 and 2013. As part of a plea agreement, OMT pled guilty to one count of negligently violating the Clean Water Act and paid a criminal fine of $694. In the quarter ended June 30, 2015, OMT settled allegations made by the Attorney General of the State of Missouri of pollution of state waters, violation of pretreatment regulations and violation of water quality standards claimed to have occurred in 2011 and in July 2015, paid civil penalties of $175. The fine and civil penalties paid in connection with both settlements were equal to the loss contingencies recorded by the Company at December 31, 2014. In the third quarter of 2015, the Company resolved a lawsuit (the “Tech Lawsuit”) filed by the former owners of Valent Aerostructures, LLC (“Valent”) and affiliates of such owners (collectively, “Tech Investments”) against the Company for declaratory judgment on various matters resulting from the acquisition of Valent by the Company in December 2012, including the environmental charges against OMT. On November 5, 2015, the parties to the Tech Lawsuit executed the definitive settlement documents. As a result of the settlement: (a) the Tech Lawsuit was dismissed with prejudice on January 12, 2016, (b) $3,109 of the funds that remained in escrow from the sale were disbursed to the Company and the remaining amount of escrow funds was retained by Tech Investments, (c) Tech Investments assumed an approximate $1,167 payment obligation of the Company to a predecessor owner of OMT that remained under a purchase agreement the Company acquired as part of the Company’s acquisition of Valent; (d) locked-up shares representing partial consideration for the purchase price paid by the Company were released to Tech Investments; and (e) all parties entered into a mutual release of certain claims and disputes. The settlement also resulted in the Company assuming other liabilities of $500, collecting a previously recorded receivable of $389 and recording other expenses of $40. The net impact of the settlement resulted in a gain of $3,347 which is recorded in selling, general and administrative expenses in the accompanying Consolidated Statements of Operations, for the year ended December 31, 2015. |
DEFINED CONTRIBUTIONS PLANS |
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Dec. 31, 2016 | |
Defined Contribution Pension and Other Postretirement Plans Disclosure [Abstract] | |
DEFINED CONTRIBUTIONS PLANS | DEFINED CONTRIBUTION PLANS The Company sponsors the LMI Profit Sharing and Savings Plan (the "Plan"), which covers virtually all of its employees. The Plan includes both 401(k) and profit sharing components under which the Company may make discretionary contributions. The Company’s contributions to the Plan are determined and approved by the Board of Directors and may be settled in cash or shares of LMI common stock. In 2016, 2015, and 2014, Company contributions under the Plan were made in stock. Matching contributions under the 401(k) component of the Plan are based upon a percentage of employee contributions. For the years ended December 31, 2016 and 2015, the Company made 401(k) contributions up to a maximum of 3.0% or 5.0% of eligible annual wages per employee. The applicable percent of eligible wages for each participant was determined by the operating segment to which the employee belonged. Matching contributions to the Plan made in 2016 and 2015 are vested to the employee over four years at 25% per annum. For the year ended December 31, 2014, the Company made matching contributions of 50% for each one dollar contributed by each participant up to a maximum employer matching contribution of $1 per employee. Matching contributions made in 2014 were immediately vested. Profit sharing contributions made by the Company vest over time and are fully vested after six years. No profit sharing contributions were made in 2016, 2015, or 2014. The Company recognized costs for 401(k) matching contributions under the Plan totaling $1,451, $1,519, and $729 in 2016, 2015, and 2014, respectively. At December 31, 2014, the Company also sponsored the Valent 401(k) plan (the "Valent Plan.") The Valent Plan was merged into the Plan effective June 4, 2015 and was subsequently terminated. Under the Valent Plan, the Company could contribute a discretionary matching contribution. The exact percentage, if any, was determined each year and could not exceed 3.0% of a participant’s compensation for the year. During 2014, the Company recognized expense under the Valent Plan of $848, equating to 100% of the first 3.0% of participant compensation. |
STOCK BASED COMPENSATION |
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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 issued under the 2005 Plant are subject to a time-based vesting schedule. As of July 7, 2015 the Company was no longer able to grant awards under the 2005 Plan. All outstanding share-based grants are in the form of restricted stock. A summary of the activity for non-vested awards under the 2005 Plan is presented below:
Stock compensation expense related to awards granted under the 2005 Plan was $485, $1,284 and $1,850 for the years ended December 31, 2016, 2015 and 2014, respectively. Total unrecognized compensation costs related to non-vested share-based awards granted under the 2005 Plan were $513 and $1,762 as of December 31, 2016 and December 31, 2015, respectively. These costs were expected to be recognized over a weighted average period of 1.2 and 1.6 years as of December 31, 2016 and 2015, respectively. The fair value of awards that vested during the years ended December 31, 2016, 2015 and 2014, based on the market price on vesting date, was $527, $1,559 and $1,083, respectively. On June 24, 2015, the Company's shareholders approved the LMI Aerospace, Inc. 2015 Incentive Compensation Plan (the “2015 Plan”), which became effective on July 1, 2015. Under the 2015 Plan, the Company, through the Compensation Committee of the Board of Directors, may, at its discretion, grant stock options, restricted shares of common stock, and other various stock-based awards to directors, officers, employees and consultants. A total of 750,000 shares of the Company’s common stock have been reserved for issuance under the 2015 Plan. All outstanding share-based grants are in the form of restricted stock. A summary of the activity for non-vested awards under the 2015 Plan is presented below:
(1) Excludes 6,129 shares for which service requirements are met that remain subject to deferral at December 31, 2016 pursuant to the LMI Aerospace, Inc. Non-Qualified Deferred Compensation Plan for Senior Executives and Outside Directors. Compensation expense related to awards granted under the 2015 Plan was $992 and $303 for the years ended December 31, 2016 and 2015, respectively. Total unrecognized compensation costs related to non-vested share-based awards granted under the 2015 Plan were $1,510 and $303 as of December 31, 2016 and 2015, respectively. These costs were expected to be recognized over a weighted average period of 1.8 and 0.5 years as of December 31, 2016 and 2015, respectively. The fair value of awards that vested during the years ended December 31, 2016 and 2015, based on the market price on vesting date, was $528 and $0, respectively. |
INCOME TAXES |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES | INCOME TAXES Net deferred tax (liabilities)/assets at December 31, were as follows:
Based on our current and anticipated future pre-tax earnings, we believe it is more likely than not that our federal and state deferred tax assets, including benefits related to net operating loss carry forwards, will not be realized based on the measurement standards required under ASC 740, Accounting for Income Taxes. We evaluated all significant available positive and negative evidence, including the existence of losses in the current and prior year in assessing the continuing need for a valuation allowance. The temporary differences between the tax basis of assets and liabilities and their financial reporting amounts that give rise to the deferred income tax assets and liabilities are as follows:
The Company’s income tax (benefit) provision attributable to income before taxes consisted of the following for the years ended December 31, 2016, 2015 and 2014.
The current federal benefit in 2014 reflects the Company's decision to carry back its 2013 and 2014 tax losses to prior years in order to obtain tax refunds. The Company collected an income tax receivable of $6,527 in the fourth quarter of 2015 related to this carry back. The reconciliation of income tax provision (benefit) computed at the U.S. federal statutory tax rates to income tax (benefit) provision is presented below:
At December 31, 2016, the Company had federal and state net operating loss and tax credit carry forwards with values of $17,044 and $3,668, respectively. The federal net operating losses begin to expire in the year 2034 and the state net operating losses expire in the years 2023 through 2035. |
RESTRUCTURING |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RESTRUCTURING | RESTRUCTURING The Company committed to and implemented various restructuring plans in 2014, 2015 and 2016. Included in those plans were the the relocation of the machining operations in Savannah, Georgia and St. Charles, Missouri, and the relocation of the sheet-metal fabrication operation in Wichita, Kansas to other facilities within the Company. In addition, the Company closed its Melbourne, Australia and Greenville, South Carolina engineering offices, eliminated additional management positions within the Engineering Services segment and closed its Coweta, Oklahoma and Fort Worth, Texas manufacturing facilities. Other employment separation activities, which were primarily severance related, were also implemented 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:
The Company expects to incur no additional expenses associated with the above restructuring activities. In addition to the expenses detailed in the table above, the Company incurred additional project expenses of $295, $1,265 and $1,361 in the years ended December 31, 2016, 2015 and 2014, respectively, related to the integration of work affected by these restructuring plans and accelerated depreciation of assets disposed of at affected facilities. Cash payments associated with these restructuring plans of $1,182, $2,806 and $2,268 were made in the years ended December 31, 2016, 2015 and 2014, respectively.
Accrued restructuring of $285 at December 31, 2016 is expected to be paid in the first quarter of 2017. |
CUSTOMER AND SUPPLIER CONCENTRATION |
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Dec. 31, 2016 | |
Risks and Uncertainties [Abstract] | |
CUSTOMER AND SUPPLIER CONCENTRATION | CUSTOMER AND SUPPLIER CONCENTRATION Direct sales to our top three customers, Spirit AeroSystems, Gulfstream Aerospace Corporation, and The Boeing Company accounted for 38.4%, 11.7% and 11.2% of our total revenues in 2016, respectively. These revenues are reported by both the Aerostructures and Engineering Services segments. Accounts receivable balances related to these customers were 31.8%, 12.3%, and 8.5%, of the accounts receivable balance at December 31, 2016, respectively. Direct sales to our top three customers, Spirit AeroSystems, Gulfstream Aerospace Corporation and The Boeing Company, accounted for 34.7%, 14.2% and 11.6% of our total revenues in 2015, respectively. These revenues are reported by both the Aerostructures and Engineering Services segments. Accounts receivable balances related to these customers were 28.6%, 15.5% and 10.2% of the accounts receivable balance at December 31, 2015, respectively. Direct sales to our top three customers, Spirit AeroSystems, Gulfstream Aerospace Corporation, and The Boeing Company, accounted for 34.3%, 15.0%, and 10.6% of our total revenues in 2014, respectively. These revenues are reported by both the Aerostructures and Engineering Services segments. Accounts receivable balances related to these customers were 33.3%, 13.1% and 7.4% of the accounts receivable balance at December 31, 2014, respectively. The Company did not have any sales to a foreign country greater than 10% of its total sales in 2016, 2015 and 2014. The amounts of profitability and identifiable assets attributable to foreign sales activity are not material when compared with revenue, profitability, and identifiable assets attributed to United States domestic operations during 2016, 2015 and 2014. The Company purchased approximately 45.5%, 45.9% and 49.6% of the raw materials and procured parts from its largest six suppliers in 2016, 2015, and 2014, respectively. |
BUSINESS SEGMENT INFORMATION |
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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. The Aerostructures segment fabricates, machines, finishes, integrates, assembles and kits formed and machined close tolerance aluminum, specialty alloy and composite components for use by the aerospace and defense industries. The Engineering Services segment provides a complete range of design, engineering and program management services supporting aircraft 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, with the exception of interest expense and income taxes, primarily support the Aerostructures segment. The table below presents information by segment on the same basis used within the Company to evaluate segment performance:
(1) Includes charges of $4,066 for intangible asset impairment and $24,302 for goodwill impairment in 2016. Includes charges of $26,439 for goodwill impairment in 2014.
(1) Includes $8,466 related to the write-off of deferred financing costs and $793 related to the settlement of debt derivatives associated with the Company's refinancing of its debt in 2014.
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QUARTERLY FINANCIAL DATA (UNAUDITED) |
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Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
QUARTERLY FINANCIAL DATA (UNAUDITED) | QUARTERLY FINANCIAL DATA (UNAUDITED) The results of any single quarter are not necessarily indicative of the Company’s results for the full year. Earnings per share data is computed independently for each of the periods presented. As a result, the sum of the earnings per share amounts for each quarter may not equal earnings per share for the year.
(1) Included in the net loss for the the first quarter of 2016 were $947 of restructuring expenses.
(4) Included in the net loss for the the first quarter of 2015 were $275 of restructuring expenses.
(7) Gross profit in the fourth quarter of 2015 includes an unfavorable cumulative catch-up adjustment of $1,010 related to a long-term contract. Net loss for the fourth quarter of 2015 also includes a restructuring benefit of $46. |
CONDENSED CONSOLIDATING FINANCIAL STATEMENTS (Notes) |
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Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Consolidating Financial Information | CONDENSED CONSOLIDATING FINANCIAL INFORMATION 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 December 31, 2016 (Amounts in thousands)
CONDENSED CONSOLIDATING BALANCE SHEET December 31, 2015 (Amounts in thousands)
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) December 31, 2016 (Amounts in thousands, except share and per share data)
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) December 31, 2015 (Amounts in thousands, except share and per share data)
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) December 31, 2014 (Amounts in thousands, except share and per share data)
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS For the Year ended December 31, 2016 (Amounts in thousands)
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS For the Year ended December 31, 2015 (Amounts in thousands)
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS For the Year ended December 31, 2014 (Amounts in thousands)
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SUBSEQUENT EVENTS |
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Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS On February 16, 2017, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Sonaca S.A., a limited liability company validly existing under the laws of Belgium (the “Parent”), Sonaca USA Inc., a Delaware corporation and direct, wholly-owned subsidiary of Parent (“Intermediate Co”), and Luminance Merger Sub, Inc., a Missouri corporation and an indirect, wholly-owned subsidiary of the Parent (the “Sub,” and collectively with Parent and Intermediate Co, the “Parent Entities”), relating to the proposed acquisition of the Company by Parent. The Merger Agreement provides that, subject to the terms and conditions thereof, Sub will be merged with and into the Company (the “Merger”) with the Company continuing as the surviving corporation in the Merger (the “Surviving Corporation”). At the effective time of the Merger (the “Effective Time”) each outstanding share of common stock of the Company (other than shares owned by the Company or the Parent Entities, and shares whose holders seek appraisal and comply with all related statutory requirements of the General and Business Corporation Law of Missouri) will cease to be outstanding and will be converted into the right to receive $14.00 in cash, without interest and subject to any applicable tax withholding (the “Merger Consideration”). Shareholders of the Company will be asked to vote on the approval of the Merger Agreement at a special shareholders’ meeting that will be held on a date to be announced. The closing of the Merger is subject to the approval of the Merger Agreement by the affirmative vote of the holders of at least two-thirds of the outstanding shares of common stock of the Company (the “Shareholder Approval”). In addition to the Shareholder Approval condition, consummation of the Merger is subject to various customary conditions, including (a) the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, (b) clearance by the Committee on Foreign Investment in the United States and by the Directorate of Defense Trade Controls under the International Traffic in Arms Regulations, (c) the absence of any order, injunction or law preventing or prohibiting the consummation of the Merger, (d) the accuracy of the representations and warranties contained in the Merger Agreement (subject to certain materiality qualifiers), (e) compliance with covenants and agreements in the Merger Agreement in all material respects, and (f) the absence of a material adverse effect on the Company. The Merger Agreement contains certain termination rights for both the Company and the Parent Entities, and provides that, upon termination of the Merger Agreement by the Company or Parent upon specified conditions, the Company may be required to pay the Parent a termination fee of either $10,000 or $15,000, depending upon the reason for and timing of the termination, and any costs of collection. In addition, subject to certain exceptions and limitations, either party may terminate the Merger Agreement if the Merger is not consummated by August 16, 2017, subject to possible extension until September 29, 2017 to allow for the completion of certain regulatory approvals or if the Shareholder Approval has not yet been obtained. The Merger Agreement also contains a “go-shop” provision that, in general, allows the Company to initiate, solicit and encourage, and engage in discussions or negotiations with respect to, an acquisition proposal for the 30-day period after execution of the Merger Agreement. The Company may continue discussions after the go-shop period with any party who made an acquisition proposal during the go-shop period that the Company determines in good faith is or could reasonably be expected to result in a superior proposal. Following the expiration of the go-shop period, the Company will be subject to a customary “no-shop” provision. The Transaction, if it were to be completed, could further limit the Company’s utilization of accumulated net operating losses, for federal income tax purposes. The Company has not performed a Section 382 study to determine if its net operating loss carryforwards could be adversely impacted by the Transaction. |
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS |
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Valuation and Qualifying Accounts [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | LMI AEROSPACE, INC. SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (Dollar amounts in thousands) December 31, 2016
(1) Favorable adjustment of $5,461 resulted from the Company's decision to carry back the 2013 net operating tax loss to prior years. (2) Expected net operating losses on federal and state income tax returns resulted in increases in the income tax valuation allowance. |
ACCOUNTING POLICIES (Policies) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Principles of Consolidation | Principles of Consolidation The Consolidated Financial Statements included in this report have been prepared by management of LMI Aerospace, Inc. All significant intercompany balances and transactions have been eliminated in consolidation. |
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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. |
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Revenue Recognition | Revenue and Profit Recognition Except as described below, the Company recognizes revenue for sales of products and related services in accordance with Financial Accounting Standards Board, (“FASB”) Accounting Standards Codification (“ASC”) Topic 605-15 Products and Topic 605-20 Services. The Company sells products under long term supply contracts and purchase orders where the product is built to the customer specifications based on firm purchase orders from the customer. The purchase orders tend to be of a relatively short duration and customers place orders on a periodic basis. The pricing is generally fixed for some length of time and the quantities are based on individual purchase orders. Revenue is recognized when title passes and services are rendered, the price is fixed or determinable, and collection is reasonably assured. Approximately 80.0% to 90.0% of the total revenue the Company recognized in any given year is accounted for in accordance with Topics 15 and 20. The remainder of the revenue is accounted for using methods consistent with ASC Topic 605-35 Construction-Type and Production-Type Contracts. The percentage of completion method used to account for contracts depends on the nature of the products provided under the contract. For example, for contracts that require us to perform a significant level of development effort, in comparison to the total value of the contract, sales are recorded using the cost-to-cost method to measure progress toward completion. Under the cost-to-cost method of accounting, we recognize sales and estimated profit as costs are incurred based on the proportion that the incurred costs represent of total estimated costs. For contracts that require us to provide a substantial number of similar items without a significant level of development, we record sales and estimated profit using units of delivery as the basis to measure progress toward completing the contract. Under both methods, profit recognized is based on the total expected profit margin percentage multiplied by revenue recognized to date. The Company periodically reviews all estimates to complete as required by the authoritative guidance and the estimated total cost and expected gross profit are revised as required over the life of the contract. Any revisions to the estimated total revenue or cost are accounted for as a change in estimate. A cumulative catch-up adjustment is recorded in the period the change in estimated cost to complete the contract is determined. In addition, should total estimated costs at completion exceed the estimated total revenue, any anticipated loss is recognized in the period in which the anticipated loss is determined. The loss is reported either as a reduction of revenue or as a component of cost of sales. During 2016 and 2015, the Company recorded losses on a cost-to-cost program of $1,903 and $2,763, respectively, which included provisions for anticipated future loss of $722 and $476, respectively. At December 31, 2013, the Company had a contract accounted for using the units of delivery method which was acquired during the Valent acquisition and where estimated costs exceeded the total contract revenue. The provision for anticipated loss was established in 2013 for $5,267 and was treated as a measurement period change and as such increased the goodwill related to the Valent acquisition. During the third quarter of 2014, a change was agreed to that resulted in the favorable settlement of an unpriced change order related to this contract. In addition, the Company secured more favorable future material pricing with respect to this contract as engineering changes to the related assemblies had stabilized. As a result, contract costs were no longer expected to exceed revenue and the remaining related loss reserve was reversed, resulting in a favorable cumulative catch up adjustment of $5,267 in the year ended December 31, 2014. The reversal was recorded in the cost of goods sold section of the Consolidated Statements of Comprehensive Income (Loss). Cumulative catch-up adjustments had the following impact to operating income in the years presented:
Unfavorable cumulative catch-up adjustments of $1,903, $2,763 and $1,479 were recorded in 2016, 2015 and 2014, respectively, related to the Mitsubishi Regional Jet design build program which has experienced higher than expected development costs. A loss provision for this contract was established in 2015 and the contract remains in a loss position at December 31, 2016. The adjustments related to this program was recorded as a reduction to revenue in the Consolidated Statements of Comprehensive Income (Loss). Favorable adjustments recorded in 2014 are primarily associated with the aforementioned Valent contract of $5,267. The adjustments related to this program was recorded as a reduction to cost of sales in the Consolidated Statements of Comprehensive Income (Loss). Contract accounting requires management to estimate contract revenues and costs, and make assumptions related to production schedule and total units to be produced, among other matters. Due to the size, length of time and nature of many of our contracts, the estimation of total sales and cost is very complicated and subject to many variables, including development program delays and the expected recovery of deferred cost. Claims and unpriced change orders can also impact the estimate of total revenues and profits. In the ordinary course of business, the Company may receive requests from its customers to perform tasks not specified in its contracts. When this occurs on a long-term contract using the cost-to-cost method of percentage of completion accounting, the Company may record revenue for claims or unpriced change orders to be negotiated with customers. The Company's revenue recognized in 2016 contained $933 that represented amounts associated with claims and unpriced change orders. The development of a contract revenue and gross margin percentage involves utilization of detailed procedures by a team of operational and financial personnel that provides information on the status of the contracts. Total contract cost estimates are largely based our current cost of production, purchase order terms negotiated or estimated by our supply chain. Estimates of revenue and costs associated with each significant contract are reviewed and approved by the team on a quarterly basis. Due to the significance of the judgment in the estimation process described above, it is possible that materially different margins could be recorded if we used different assumptions or if the underlying circumstances were to change. |
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Pre-Contract and Pre-Production Costs under Long-Term Supply Contracts | Pre-Production Costs under Long-Term Supply Contracts The Company may incur design and development costs prior to the production phase of contracts that are outside the scope of the contract accounting method. These pre-production costs are generally related to costs the Company incurs to design and build tooling that is owned by the customer. The Company receives the non-cancellable right to use these tools to build the parts as specified in a contractual agreement and therefore has capitalized these costs. In certain instances, the Company enters into agreements with its customers that provide it a contractual guarantee for reimbursement of design and engineering services incurred prior to the production phase of a contract. Due to the contractual guarantee, the Company capitalizes the costs of these services. The pre-production costs are amortized to cost of sales over the shorter of the life of the contractual agreement or the related tooling. |
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Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include cash on hand, deposits in transit and all highly liquid investment instruments with an initial maturity of three months or less. |
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Inventories | Inventories The Company’s inventories are stated at the lower of cost or market and utilize actual costs for raw materials and average or standard cost (which approximates actual cost) for work in process, manufactured and purchased components and finished goods. The Company evaluates the inventory carrying value and reduces the carrying costs based on customer activity, estimated future demand, price deterioration, and other relevant information. The Company’s customer demand is unpredictable and may fluctuate due to factors beyond the Company’s control. In addition, inventoried costs include capitalized contract costs relating to programs and contracts with long-term production cycles, a portion of which is not expected to be realized within one year. See further discussion regarding deferred long-term contract costs under “Revenue and Profit Recognition” and “Pre-Contract and Pre-Production Costs under Long-Term Supply Contracts.” |
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Allowance for Doubtful Accounts | Allowance for Doubtful Accounts The allowance for doubtful accounts receivable reflects the Company’s best estimate of probable losses inherent in its accounts receivable. The basis used to determine this value is derived from historical experience, specific allowances for known troubled customers and other known information. |
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Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment are stated at cost. Depreciation is calculated using the straight-line method over the estimated useful lives of the related assets. Leasehold improvements are amortized using the straight-line method over the shorter of the lease term or the estimated useful lives of the assets. Estimated useful lives for buildings, machinery and equipment, and purchased software are 20 to 40 years, 3 to 20 years and 3 to 10 years, respectively. Amortization incurred under capital leases is reported with depreciation expense. |
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Long-Lived Assets | Long Lived Assets Long lived assets held and used are reviewed for impairment based on future undiscounted cash flows whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. |
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Goodwill and Intangible Assets | Goodwill and Intangible Assets The Company’s acquisitions involve the purchase of tangible and intangible assets and the assumption of certain liabilities. As part of the purchase price allocation, the Company allocates the purchase price to the tangible assets acquired and liabilities assumed based on estimated fair market values, and the remainder of the purchase price is allocated to intangibles and goodwill. Goodwill and intangible assets with indefinite lives are not amortized but are subject to an impairment assessment at least annually in relation to their fair value. Under guidelines established by FASB ASC Topic 280, the Company operates in two operating segments. However, the Company has recorded its goodwill and conducts testing for potential goodwill impairment at a reporting unit level. The reporting units represent a business for which discrete financial information is available, and segment management regularly reviews the operating results. As part of this process, the Company first assesses qualitatively whether it is necessary to perform the quantitative test. The qualitative assessment involves evaluating relevant events or circumstances to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. If it is, the Company can bypass the quantitative assessment of goodwill. If it is not, or if the Company has elected to bypass the qualitative assessment process, the quantitative assessment of goodwill utilizes a two-step process, where the carrying value of the reporting unit is compared to its fair value. If the carrying value is less than the fair value, no impairment exists, and the second step is not performed. However, if the carrying value is greater than the fair value, the second step is performed. An impairment charge would be recognized for the amount that the carrying value of the goodwill exceeds its fair value. The fair values for goodwill testing are estimated using a combination of the income and market approach unless circumstances indicate that a better estimate of fair value is available. The income approach utilizes the discounted cash flow model (“DCF model”) and the market approach is based on the market data for a group of guideline companies. |
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Deferred Gain on Sale of Real Estate | Deferred Gain on Sale of Real Estate In December 2006, the Company entered into an agreement with a third party to sell and lease back certain of its real estate properties for $10,250. The amount of the sale price in excess of book value for these properties of $4,242 was deferred and is being amortized to rent expense over the 18 year term of the leases on a straight-line basis. At December 31, 2016 and 2015, the unamortized deferred gain of $1,906 and $2,140, respectively, was reflected in Accrued Expenses and Other Long-Term Liabilities in the Consolidated Balance Sheet. |
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Share-based Compensation | Share-Based Compensation The Company recognizes compensation expense for share-based payment transactions in the financial statements at their fair value. The expense is measured at the grant date, based on the calculated fair value of the share-based award, and is recognized over the requisite service period (generally the vesting period of the equity award). |
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Income Taxes | Income Taxes Provisions for federal and state income taxes are calculated on reported net income/loss before income taxes based on current tax law and also include, in the current period, the cumulative effect of any changes in tax rates from those used previously in determining deferred tax assets and liabilities. Such provisions differ from the amounts currently receivable or payable because certain items of income and expense are recognized in different time periods for financial reporting purposes than for income tax purposes. Significant judgment is required in determining income tax provisions and evaluating tax positions. A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized. When determining the amount of net deferred tax assets that are more likely than not to be realized, management assesses all available positive and negative evidence. This evidence includes, but is not limited to, prior earnings history, expected future earnings, carry-back and carry-forward periods and the feasibility of ongoing tax strategies that could potentially enhance the likelihood of the realization of a deferred tax asset. The weight given to the positive and negative evidence is commensurate with the extent the evidence may be objectively verified. As such, it is generally difficult for positive evidence regarding projected future taxable income exclusive of reversing taxable temporary differences to outweigh objective negative evidence of recent financial reporting losses. Based on these criteria and the relative weighting of both the positive and negative evidence available, and in particular the activity surrounding the Company's significant loss in 2013, management determined that it was necessary to establish a valuation allowance against all of its net U.S. deferred tax assets at December 31, 2013. This determination was made as the Company entered into a cumulative loss position over the three year period ended December 31, 2013 primarily due to recording a goodwill impairment of $73,528 related to Valent. Once the Company entered into a cumulative loss position it had passed the threshold after which there is a presumption that a company should no longer rely solely on projected future income in determining whether the deferred tax asset is more likely than not to be realized. The Company has remained in a cumulative loss position at December 31, 2016, 2015 and 2014. The Company will continue to monitor its deferred tax position and may adjust the valuation allowance, if necessary, for utilization of the underlying deferred tax assets through current taxable income or as available evidence changes. At December 31, 2016, 2015 and 2014, the Company's deferred tax assets remained under a valuation allowance. The accounting for uncertainty in income taxes requires a more-likely-than-not threshold for financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. The Company records a liability for the difference between the benefit recognized and measured for financial statement purposes and the tax position taken or expected to be taken on our tax return. To the extent that management’s assessment of such tax positions changes, the change in estimate is recorded in the period in which the determination is made. The Company’s unrecognized tax benefits as of December 31, 2016 and 2015 are immaterial. The Company expects no significant increases or decreases in unrecognized tax benefits due to changes in tax positions within one year of December 31, 2016. The Company has no material interest or penalties relating to income taxes recognized in the Consolidated Statement of Comprehensive Income (Loss) as of December 31, 2016, 2015 or 2014. As of December 31, 2016, returns for calendar 2015 remain subject to examination by the Internal Revenue Service and returns for 2013 through 2015 remain subject to examination by various state tax jurisdictions. |
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Financial Instruments | Financial Instruments Fair values of the Company’s long-term obligations approximate their carrying values as the applicable interest rates approximate the current market rates or have variable rate characteristics. The Company’s other financial instruments have fair values that approximate their respective carrying values due to their short maturities. |
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Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606). The new standard is effective for reporting periods beginning after December 15, 2017 and the Company plans to adopt the standard in the first quarter of 2018. The standard supersedes existing revenue recognition guidance, including industry-specific guidance, and provides 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. 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 adoption of the new standard may have a material impact on our income statement and balance sheet but we have not completed the quantification of that impact at this time. The Company performed a preliminary review of its significant contracts and have identified differences that would result from applying the new standard to those contracts. Based on this review, we currently expect that the timing of the recognition of revenue and related costs may change for a significant portion of our business. Some of our contracts on which we currently recognize revenue when risk of loss is transferred to the customer may recognize revenue as costs are incurred under the new standard. In addition, some long-term production contracts for which we currently recognize cost at an average expected margin over the life of the contract may recognize costs attributable to each individual unit as control is transferred to the customer. under the new standard. Adoption of the new standard will not change the total amount of revenue recognized on these contracts, only the timing of when revenue is recognized. These changes also have the potential to significantly alter the amount of deferred contract costs in inventory reported on our balance sheet. The Company is currently evaluating the transition method to be used and is implementing changes to business processes, systems and controls to support adoption of the standard. 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. 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 and no material impact on our financial statements is expected. 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 and the Company plans to adopt the new standard effective January 1, 2017. 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 Consolidated Financial Statements. |
ACCOUNTING POLICIES (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of catch-up adjustments | Cumulative catch-up adjustments had the following impact to operating income in the years presented:
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ASSETS AND LIABILITIES MEASURED AT FAIR VALUE (Tables) |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Valuation methodologies used for assets measured at fair value |
(1) The fair values of intangibles relating to the acquisition of Valent was determined by third parties in connection with the purchase and recorded at those values. The intangibles relating to the Engineering Services reporting unit were deemed impaired during 2016 and a $4,066 impairment charge was recorded in the Consolidated Statements of Comprehensive Income (Loss) for the year ended December 31, 2016. (2) The Company performed its annual impairment analysis of goodwill related to the Aerostructures reporting units during the fourth quarter of 2016 and determined no adjustments to the carrying value were necessary. The value of the goodwill relating to the Engineering Services reporting unit was deemed impaired during 2016 and a $24,302 impairment charge was recorded in the Consolidated Statements of Comprehensive Income (Loss) for the year ended December 31, 2016. |
(1) The fair values of intangibles relating to the acquisitions of TASS and Valent were determined by third parties in connection with the purchase and recorded at those values. (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. |
ACCOUNTS RECEIVABLE NET (Tables) |
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Schedule of accounts receivable, net | Accounts receivable, net consists of the following:
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INVENTORIES (Tables) |
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Inventories | Inventories consist of the following:
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Schedule of Capitalized Contract Cost by Market [Table Text Block] | The following table illustrates the market to which capitalized contract cost at December 31, 2016 and December 31, 2015 related:
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PROPERTY, PLANT AND EQUIPMENT (Tables) |
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Schedule of property, plant and equipment | Depreciation expense (including amortization expense on software) recorded by the Company totaled $14,755, $15,494 and $17,934 for 2016, 2015 and 2014, respectively.
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GOODWILL AND INTANGIBLE ASSETS (Tables) |
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Schedule of goodwill | The following table summarizes the net carrying amount of goodwill by segment at December 31, 2016 and 2015, respectively:
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Finite and infinite lived intangible assets | Intangible assets primarily consist of trademarks and customer intangibles resulting from the acquisitions of Versaform Corporation, D3, Intec, TASS, and Valent. The trademarks resulted from the acquisitions of Intec, TASS, and Valent are fully amortized at December 31, 2016. Customer intangibles have a remaining weighted average useful life of 15.9 years and other intangible assets have a remaining weighted average useful life of 2.1 years. The carrying values were as follows:
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Estimated annual amortization expense | The estimated annual amortization expense for intangible assets is as follows:
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ACCRUED EXPENSES (Tables) |
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Schedule of accrued expenses | Accrued expenses consist of the following:
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LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS Long-term Debt and Capital Lease Obligations (Tables) |
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Long-term debt | Long-term debt and capital lease obligations consist of the following:
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Five year maturities of long-term debt | The long-term debt and capital lease payment obligations including the current portion thereof required in each of the next five years and thereafter are as follows:
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DERIVATIVE FINANCIAL INSTRUMENTS (Tables) |
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Derivatives recognized in AOCI and earnings | The following amounts are included in AOCI and earnings for the years ended December 31, 2016, December 31, 2015 and December 31, 2014:
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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.
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COMMITMENTS AND CONTINGENCIES (Tables) |
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||
Schedule of future minimum lease payments under operating leases | At December 31, 2016, the future minimum lease payments under operating leases with initial non-cancelable terms in excess of one year are as follows:
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STOCK BASED COMPENSATION (Tables) |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of the activity for non-vested restricted stock awards | A summary of the activity for non-vested awards under the 2005 Plan is presented below:
A summary of the activity for non-vested awards under the 2015 Plan is presented below:
(1) Excludes 6,129 shares for which service requirements are met that remain subject to deferral at December 31, 2016 pursuant to the LMI Aerospace, Inc. Non-Qualified Deferred Compensation Plan for Senior Executives and Outside Directors. |
INCOME TAXES (Tables) |
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of deferred tax assets and liabilities | Net deferred tax (liabilities)/assets at December 31, were as follows:
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Components of the net deferred tax liability or asset recognized [Table Text Block] | The temporary differences between the tax basis of assets and liabilities and their financial reporting amounts that give rise to the deferred income tax assets and liabilities are as follows:
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Schedule of income tax provision attributable to income before income taxes | The Company’s income tax (benefit) provision attributable to income before taxes consisted of the following for the years ended December 31, 2016, 2015 and 2014.
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Schedule of effective income tax rate reconciliation | The reconciliation of income tax provision (benefit) computed at the U.S. federal statutory tax rates to income tax (benefit) provision is presented below:
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RESTRUCTURING (Tables) |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of incurred and expected restructuring charges | The following table summarizes the incurred charges associated with these restructuring activities:
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Summary of restructuring activity |
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BUSINESS SEGMENT INFORMATION (Tables) |
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Segment Reporting Information [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting Disclosure [Text Block] | BUSINESS SEGMENT INFORMATION The Company is organized into two reportable segments: the Aerostructures segment and the Engineering Services segment. The Aerostructures segment fabricates, machines, finishes, integrates, assembles and kits formed and machined close tolerance aluminum, specialty alloy and composite components for use by the aerospace and defense industries. The Engineering Services segment provides a complete range of design, engineering and program management services supporting aircraft 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, with the exception of interest expense and income taxes, primarily support the Aerostructures segment. The table below presents information by segment on the same basis used within the Company to evaluate segment performance:
(1) Includes charges of $4,066 for intangible asset impairment and $24,302 for goodwill impairment in 2016. Includes charges of $26,439 for goodwill impairment in 2014.
(1) Includes $8,466 related to the write-off of deferred financing costs and $793 related to the settlement of debt derivatives associated with the Company's refinancing of its debt in 2014.
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Information about reported segments on the basis used internally to evaluate segment performance | The table below presents information by segment on the same basis used within the Company to evaluate segment performance:
(1) Includes charges of $4,066 for intangible asset impairment and $24,302 for goodwill impairment in 2016. Includes charges of $26,439 for goodwill impairment in 2014.
(1) Includes $8,466 related to the write-off of deferred financing costs and $793 related to the settlement of debt derivatives associated with the Company's refinancing of its debt in 2014.
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QUARTERLY FINANCIAL DATA (UNAUDITED) (Tables) |
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Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of quarterly financial data | The results of any single quarter are not necessarily indicative of the Company’s results for the full year. Earnings per share data is computed independently for each of the periods presented. As a result, the sum of the earnings per share amounts for each quarter may not equal earnings per share for the year.
(1) Included in the net loss for the the first quarter of 2016 were $947 of restructuring expenses.
(4) Included in the net loss for the the first quarter of 2015 were $275 of restructuring expenses.
(7) Gross profit in the fourth quarter of 2015 includes an unfavorable cumulative catch-up adjustment of $1,010 related to a long-term contract. Net loss for the fourth quarter of 2015 also includes a restructuring benefit of $46. |
CONDENSED CONSOLIDATING FINANCIAL STATEMENTS (Tables) |
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Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Consolidating Balance Sheet | CONDENSED CONSOLIDATING BALANCE SHEET December 31, 2016 (Amounts in thousands)
CONDENSED CONSOLIDATING BALANCE SHEET December 31, 2015 (Amounts in thousands)
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Condensed Consolidating Income Statement | CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) December 31, 2016 (Amounts in thousands, except share and per share data)
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) December 31, 2015 (Amounts in thousands, except share and per share data)
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) December 31, 2014 (Amounts in thousands, except share and per share data)
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Condensed Consolidating Cash Flow Statement | CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS For the Year ended December 31, 2016 (Amounts in thousands)
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS For the Year ended December 31, 2015 (Amounts in thousands)
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS For the Year ended December 31, 2014 (Amounts in thousands)
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ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2006 |
Dec. 31, 2015 |
Dec. 28, 2006 |
|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue recognition, percentage of revenue subject to guidance in ASC 605-15 and 605-20, minimum | 80.00% | |||
Revenue recognition, percentage of revenue subject to guidance in ASC 605-15 and 605-20, maximum | 90.00% | |||
Sell and lease back of real estate properties | $ 10,250 | |||
Amount of the sale price in excess of book value | $ 1,906 | $ 2,140 | $ 4,242 | |
Lease term of property | 18 years |
ACCOUNTING POLICIES, CHANGE IN ACCOUNTING ESTIMATE (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2014 |
Dec. 31, 2013 |
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|||||||
Change in Accounting Estimate [Line Items] | ||||||||||||
Impairment loss on goodwill | $ 24,302 | [1] | $ 0 | [2] | ||||||||
revenue from claims and unpriced change orders | 933 | |||||||||||
Contracts Accounted for under Percentage of Completion [Member] | ||||||||||||
Change in Accounting Estimate [Line Items] | ||||||||||||
Favorable adjustments | 1,342 | 1,308 | $ 5,720 | |||||||||
Unfavorable adjustments | (2,483) | (2,954) | (1,719) | |||||||||
Change in Accounting Estimate, Amount, Unfavorable Financial Effect on Operating Income, Net | (1,141) | (1,646) | ||||||||||
Change in Accounting Estimate, Amount, Favorable Financial Effect on Operating Income, Net | 4,001 | |||||||||||
Mitsubishi Regional Jet [Member] [Member] | Contracts Accounted for under Percentage of Completion [Member] | ||||||||||||
Change in Accounting Estimate [Line Items] | ||||||||||||
Unfavorable adjustments | (1,903) | (2,763) | (1,479) | |||||||||
Anticipated Forward Loss on Long-term Contract | $ 722 | $ 476 | ||||||||||
B-737 [Member] | Contracts Accounted for under Percentage of Completion [Member] | ||||||||||||
Change in Accounting Estimate [Line Items] | ||||||||||||
Favorable adjustments | $ 5,267 | $ 5,267 | ||||||||||
Valent Aerostructures, LLC [Member] | ||||||||||||
Change in Accounting Estimate [Line Items] | ||||||||||||
Impairment loss on goodwill | [2] | $ 73,528 | ||||||||||
Adjustment to loss provision on long-term production contract | $ 5,267 | |||||||||||
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ACCOUNTING POLICIES ACCOUNTING POLICIES, PROPERTY, PLANT AND EQUIPMENT (Details) |
12 Months Ended |
---|---|
Dec. 31, 2016 | |
Building [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 40 years |
Building [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 20 years |
Machinery and Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 20 years |
Machinery and Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 3 years |
Computer Software, Intangible Asset [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 10 years |
Computer Software, Intangible Asset [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 3 years |
ACCOUNTING POLICIES Deferred Gain on Sales Lease-back Transaction (Details) - USD ($) $ in Thousands |
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 28, 2006 |
---|---|---|---|
Deferred Gain on Sale Leaseback Transaction [Abstract] | |||
Sale Leaseback Transaction, Deferred Gain, Net | $ 1,906 | $ 2,140 | $ 4,242 |
ASSETS AND LIABILITIES MEASURED AT FAIR VALUE (Details) - USD ($) $ in Thousands |
12 Months Ended | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
|||||||||||
Assets at Fair Value [Abstract] | ||||||||||||
Impairment loss on intangible assets | $ 4,066 | [1] | $ 0 | [2] | ||||||||
Impairment loss on goodwill | 24,302 | [3] | 0 | [4] | ||||||||
Non-recurring Fair Value Measurement [Member] | ||||||||||||
Assets at Fair Value [Abstract] | ||||||||||||
Intangible assets, net | 38,852 | [1] | 46,582 | [2] | ||||||||
Goodwill | 62,482 | [3] | 86,784 | [4] | ||||||||
Non-recurring Fair Value Measurement [Member] | Level 1 [Member] | ||||||||||||
Assets at Fair Value [Abstract] | ||||||||||||
Intangible assets, net | 0 | [1] | 0 | [2] | ||||||||
Goodwill | 0 | [3] | 0 | [4] | ||||||||
Non-recurring Fair Value Measurement [Member] | Level 2 [Member] | ||||||||||||
Assets at Fair Value [Abstract] | ||||||||||||
Intangible assets, net | 0 | [1] | 0 | [2] | ||||||||
Goodwill | 0 | [3] | 0 | [4] | ||||||||
Non-recurring Fair Value Measurement [Member] | Level 3 [Member] | ||||||||||||
Assets at Fair Value [Abstract] | ||||||||||||
Intangible assets, net | 38,852 | [1] | 46,582 | [2] | ||||||||
Goodwill | 62,482 | [3] | $ 86,784 | [4] | ||||||||
Engineering Services [Member] | ||||||||||||
Assets at Fair Value [Abstract] | ||||||||||||
Impairment loss on intangible assets | 4,066 | |||||||||||
Impairment loss on goodwill | $ 24,302 | |||||||||||
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ACCOUNTS RECEIVABLE NET (Details) - USD ($) $ in Thousands |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Accounts Receivable, Net [Abstract] | ||
Trade receivables | $ 44,927 | $ 42,307 |
Unbilled revenue | 4,318 | 4,869 |
Other receivables | 2,372 | 1,561 |
Accounts receivable, gross | 51,617 | 48,737 |
Less: Allowance for doubtful accounts | (348) | (246) |
Accounts receivable, net | $ 51,269 | $ 48,491 |
INVENTORIES (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2016 |
|
Inventory [Line Items] | ||
Inventory for Long-term Contracts or Programs, Gross | $ 32,188 | $ 36,876 |
Inventories [Abstract] | ||
Raw materials | 12,513 | 12,822 |
Work in progress | 22,681 | 23,795 |
Manufactured and purchased components | 19,224 | 20,922 |
Finished goods | 28,169 | 28,346 |
Product inventory | 82,587 | 85,885 |
Total inventories | 114,775 | 122,761 |
paymentofcashconsideration | 6,500 | |
Spirit [Member] | ||
Inventories [Abstract] | ||
Capitalized contract costs | 5,970 | 5,373 |
Large Commercial Aircraft [Member] | ||
Inventory [Line Items] | ||
Other Inventory, Capitalized Costs, Gross | 11,528 | 10,852 |
Corporate and Regional Aircraft [Member] | ||
Inventory [Line Items] | ||
Other Inventory, Capitalized Costs, Gross | 16,721 | 21,081 |
Military [Member] | ||
Inventory [Line Items] | ||
Other Inventory, Capitalized Costs, Gross | $ 3,939 | $ 4,943 |
GOODWILL AND INTANGIBLE ASSETS, GOODWILL (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2013 |
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|||||||||
Goodwill [Line Items] | |||||||||||||
Gross Goodwill | $ 192,694 | $ 192,694 | |||||||||||
Accumulated impairment loss | (130,212) | (105,910) | |||||||||||
Net Goodwill | 62,482 | 86,784 | |||||||||||
Impairment loss on goodwill | $ 24,302 | [1] | 0 | [2] | |||||||||
Business Acquisition, Goodwill, Expected Tax Deductible Amount | 26.30% | ||||||||||||
Aerostructures [Member] | |||||||||||||
Goodwill [Line Items] | |||||||||||||
Gross Goodwill | $ 141,953 | 141,953 | |||||||||||
Accumulated impairment loss | (79,471) | (79,471) | |||||||||||
Net Goodwill | 62,482 | 62,482 | |||||||||||
Engineering Services [Member] | |||||||||||||
Goodwill [Line Items] | |||||||||||||
Gross Goodwill | 50,741 | 50,741 | |||||||||||
Accumulated impairment loss | (50,741) | (26,439) | |||||||||||
Net Goodwill | 0 | $ 24,302 | |||||||||||
Impairment loss on goodwill | 24,302 | ||||||||||||
Valent Aerostructures, LLC [Member] | |||||||||||||
Goodwill [Line Items] | |||||||||||||
Adjustment to loss provision on long-term production contract | $ 5,267 | ||||||||||||
Impairment loss on goodwill | [2] | $ 73,528 | |||||||||||
Valent Aerostructures, LLC [Member] | Aerostructures [Member] | |||||||||||||
Goodwill [Line Items] | |||||||||||||
Net Goodwill | 56,288 | ||||||||||||
Engineering Services [Member] | |||||||||||||
Goodwill [Line Items] | |||||||||||||
Net Goodwill | 0 | ||||||||||||
Impairment loss on goodwill | 24,302 | [3] | $ 26,439 | ||||||||||
Integrated Technologies, Inc., TASS, Inc. and Valent Aerostructures, LLC [Member] | Aerostructures [Member] | |||||||||||||
Goodwill [Line Items] | |||||||||||||
Net Goodwill | $ 6,194 | ||||||||||||
|
GOODWILL AND INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands |
12 Months Ended | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|||||||||
Goodwill and Intangible Assets [Line Items] | ||||||||||||
Goodwill, Impairment Loss | $ 24,302 | [1] | $ 0 | [2] | ||||||||
Intangible Assets [Abstract] | ||||||||||||
Trademarks | 778 | 778 | ||||||||||
Customer intangible assets | 68,991 | 68,991 | ||||||||||
Other | 1,274 | 1,274 | ||||||||||
Accumulated amortization | (32,191) | (24,461) | ||||||||||
Intangible assets, net | 38,852 | 46,582 | ||||||||||
Amortization expense on intangible assets | 3,664 | 4,359 | $ 4,524 | |||||||||
Estimated annual amortization expense for these intangibles [Abstract] | ||||||||||||
2016 | 3,087 | |||||||||||
2017 | 2,854 | |||||||||||
2018 | 2,627 | |||||||||||
2019 | 2,531 | |||||||||||
2020 | 2,482 | |||||||||||
Thereafter | 25,271 | |||||||||||
Intangible assets, net | $ 38,852 | $ 46,582 | ||||||||||
Customer Intangible Assets [Member] | ||||||||||||
Intangible Assets [Abstract] | ||||||||||||
Weighted average estimated useful life | 15 years 10 months 24 days | |||||||||||
Other [Member] | ||||||||||||
Intangible Assets [Abstract] | ||||||||||||
Weighted average estimated useful life | 2 years 29 days | |||||||||||
Engineering Services [Member] | ||||||||||||
Goodwill and Intangible Assets [Line Items] | ||||||||||||
Goodwill, Impairment Loss | $ 24,302 | [3] | $ 26,439 | |||||||||
Intangible Assets [Abstract] | ||||||||||||
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill) | $ 4,066 | |||||||||||
Valent Aerostructures, LLC [Member] | ||||||||||||
Goodwill and Intangible Assets [Line Items] | ||||||||||||
Goodwill, Impairment Loss | [2] | $ 73,528 | ||||||||||
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ACCRUED EXPENSES (Details) - USD ($) $ in Thousands |
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|---|
Payables and Accruals [Abstract] | |||
Interest Payable | $ 7,792 | $ 8,020 | |
Accrued Liabilities [Abstract] | |||
Accrued payroll | 2,367 | 2,481 | |
Accrued bonus | 570 | 3,698 | |
Accrued vacation & holiday | 1,886 | 1,913 | |
Accrued employee benefits | 2,863 | 3,075 | |
Accrued operating lease obligations | 2,350 | 2,475 | |
Accrued professional fees | 767 | 1,104 | |
Restructuring Reserve | 285 | 255 | $ 739 |
Receipts in excess of cost on long-term production contracts | 4,782 | 5,097 | |
Other | 1,881 | 1,897 | |
Total accrued expenses | $ 25,543 | $ 30,015 |
ACCRUED EXPENSES, ACQUISITION-RELATED (Details) $ in Thousands |
3 Months Ended |
---|---|
Dec. 31, 2013
USD ($)
| |
Valent Aerostructures, LLC [Member] | |
Business Acquisition [Line Items] | |
Adjustment to loss provision on long-term production contract | $ 5,267 |
LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS, LINE OF CREDIT FACILITY (Details) $ in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2016
USD ($)
| |
Line of Credit Facility [Line Items] | |
Line of Credit Facility, Remaining Borrowing Capacity | $ 75,000 |
Letters of Credit Outstanding, Amount | 1,525 |
Maximum borrowing capacity | 90,000 |
Reserve Against line of Credit | 15,000 |
Line of Credit Facility, Average Outstanding Amount | $ 164 |
Line of Credit Facility, Interest Rate During Period | 5.80% |
Commitment fee (in hundredths) | 0.50% |
Line of Credit Facility, Current Borrowing Capacity | $ 49,728 |
Line of Credit Facility, Borrowing Capacity, Description | The maximum amount, less reserves, available for borrowing at levels below $30,000 are 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 are 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. |
Minimum [Member] | |
Line of Credit Facility [Line Items] | |
Commitment fee (in hundredths) | 0.375% |
Maximum [Member] | |
Line of Credit Facility [Line Items] | |
Commitment fee (in hundredths) | 0.50% |
London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member] | |
Line of Credit Facility [Line Items] | |
Spread over reference rate (in hundredths) | 3.00% |
London Interbank Offered Rate (LIBOR) [Member] | Maximum [Member] | |
Line of Credit Facility [Line Items] | |
Spread over reference rate (in hundredths) | 3.50% |
Base Rate [Member] | Minimum [Member] | |
Line of Credit Facility [Line Items] | |
Spread over reference rate (in hundredths) | 2.00% |
Base Rate [Member] | Maximum [Member] | |
Line of Credit Facility [Line Items] | |
Spread over reference rate (in hundredths) | 2.50% |
Eurodollar [Member] | |
Line of Credit Facility [Line Items] | |
Spread over reference rate (in hundredths) | 1.00% |
Federal funds rate [Member] | |
Line of Credit Facility [Line Items] | |
Spread over reference rate (in hundredths) | 0.50% |
DERIVATIVE FINANCIAL INSTRUMENTS (Details) $ in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2014
USD ($)
| |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative, Loss on Derivative | $ 793 |
DERIVATIVE FINANCIAL INSTRUMENTS, FAIR VALUE BY INCOME STATEMENT LOCATION (Details) - Interest Rate Swap [Member] - Cash Flow Hedging [Member] - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Derivative Instruments, Gain (Loss) [Line Items] | |||
Effective portion of (Gain) Loss Recognized in AOCI on Derivative | $ 0 | $ 0 | $ 0 |
Effective Portion of (Gain) Loss Reclassified from AOCI into Earnings | $ 0 | $ 0 | $ 278 |
(LOSS) EARNINGS PER COMMON SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | ||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2015 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
||||||||||||||||||||||
Numerators [Abstract] | ||||||||||||||||||||||||||||||||
Net loss | $ (3,757) | [1] | $ 309 | $ (29,900) | [2] | $ (1,759) | [3] | $ (1,188) | [4] | $ 34 | [5] | $ 378 | [6] | $ (1,465) | [7] | $ (35,107) | $ (2,241) | $ (28,962) | ||||||||||||||
Denominators [Abstract] | ||||||||||||||||||||||||||||||||
Weighted average common shares - basic (in shares) | 13,113,901 | 12,869,353 | 12,716,976 | |||||||||||||||||||||||||||||
Dilutive effect of restricted stock (in shares) | 0 | 0 | 0 | |||||||||||||||||||||||||||||
Weighted average common shares - diluted (in shares) | 13,113,901 | 12,869,353 | 12,716,976 | |||||||||||||||||||||||||||||
Basic earnings per share (in dollars per share) | $ (0.29) | $ 0.02 | $ (2.28) | $ (0.14) | $ (0.09) | $ 0.00 | $ 0.03 | $ (0.11) | $ (2.68) | $ (0.17) | $ (2.28) | |||||||||||||||||||||
Diluted earnings per share (in dollars per share) | $ (0.29) | $ 0.02 | $ (2.28) | $ (0.14) | $ (0.09) | $ 0.00 | $ 0.03 | $ (0.11) | $ (2.68) | $ (0.17) | $ (2.28) | |||||||||||||||||||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 94,408 | 159,875 | 153,249 | |||||||||||||||||||||||||||||
|
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Loss Contingencies [Line Items] | |||
Lease Expiration Date | Dec. 31, 2025 | ||
Future minimum lease payments under operating leases [Abstract] | |||
2016 | $ 7,636 | ||
2017 | 7,255 | ||
2018 | 5,872 | ||
2019 | 5,057 | ||
2020 | 4,704 | ||
Thereafter | 10,245 | ||
Total | 40,769 | ||
Operating lease rent expense | $ 7,479 | $ 7,753 | $ 8,396 |
COMMITMENTS AND CONTINGENCIES, LOSS CONTINGENCIES (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Sep. 30, 2015 |
Jun. 30, 2015 |
Dec. 31, 2015 |
|
Loss Contingencies [Line Items] | |||
Loss Contingency, Settlement Agreement, Terms | As a result of the settlement: (a) the Tech Lawsuit was dismissed with prejudice on January 12, 2016, (b) $3,109 of the funds that remained in escrow from the sale were disbursed to the Company and the remaining amount of escrow funds was retained by Tech Investments, (c) Tech Investments assumed an approximate $1,167 payment obligation of the Company to a predecessor owner of OMT that remained under a purchase agreement the Company acquired as part of the Company’s acquisition of Valent; (d) locked-up shares representing partial consideration for the purchase price paid by the Company were released to Tech Investments; and (e) all parties entered into a mutual release of certain claims and disputes. The settlement also resulted in the Company assuming other liabilities of $500, collecting a previously recorded receivable of $389 and recording other expenses of $40. | ||
Gain (Loss) Related to Litigation Settlement | $ 3,325 | $ 3,347 | |
Environmental Protection Agency [Member] | |||
Loss Contingencies [Line Items] | |||
Environmental Penalties Paid | $ 694 | ||
Unfavorable Regulatory Action [Member] | |||
Loss Contingencies [Line Items] | |||
Environmental Penalties Paid | $ 175 |
DEFINED CONTRIBUTIONS PLANS (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Defined Contribution Plan Disclosure [Line Items] | |||
Defined Contribution Plan, Employers Matching Contribution, Annual Vesting Percentage | 25.00% | ||
LMI Profit Sharing and Savings Plan [Member] | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Maximum annual contribution per employee amount | $ 1 | ||
Recognized cost for matching contributions | $ 1,451 | $ 1,519 | $ 729 |
Employer matching contribution percentage (in hundredths) | 50.00% | ||
Valent Plans [Member] | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Recognized cost for matching contributions | $ 848 | ||
Employer matching contribution percentage (in hundredths) | 3.00% | ||
Employer matching contribution threshold | 3.00% | ||
Engineering Services [Member] | LMI Profit Sharing and Savings Plan [Member] | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Employer matching contribution threshold | 3.00% | ||
Aerostructures [Member] | LMI Profit Sharing and Savings Plan [Member] | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Employer matching contribution threshold | 5.00% |
STOCK BASED COMPENSATION (Details) - USD ($) $ / shares in Units, $ in Thousands |
12 Months Ended | ||||
---|---|---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|||
Weighted Average Grant Date Fair Value | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Exercise Price | $ 528,000 | $ 0 | |||
Restricted Stock Awards [Member] | |||||
Weighted Average Grant Date Fair Value | |||||
Costs are expected to be recognized over a weighted average period | 1 year 2 months 1 day | 1 year 6 months 22 days | |||
LMI Aerospace, Inc. 2005 Long-Term Incentive Plan [Member] | |||||
Weighted Average Grant Date Fair Value | |||||
Compensation expense | $ 485 | $ 1,284 | $ 1,850 | ||
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) | (31,038) | ||||
Outstanding ending balance (in shares) | 168,550 | 253,434 | |||
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) | 14.19 | ||||
Outstanding ending balance (in dollars per share) | $ 13.53 | $ 14.54 | |||
Unrecognized compensation costs | $ 513 | $ 1,762 | |||
Fair value of restricted stock awards that vested | $ 527 | 1,559 | $ 1,083 | ||
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 | ||||
LMI Aerospace, Inc. 2015 Long-term Incentive Plan [Member] | |||||
Weighted Average Grant Date Fair Value | |||||
Compensation expense | $ 992 | $ 303 | |||
LMI Aerospace, Inc. 2015 Long-term Incentive Plan [Member] | Restricted Stock Awards [Member] | |||||
Shares | |||||
Outstanding beginning balance (in shares) | 61,801 | ||||
Granted (in shares) | 277,552 | ||||
Vested (in shares) | [1] | (55,672) | |||
Forfeited (in shares) | (9,553) | ||||
Outstanding ending balance (in shares) | 274,128 | 61,801 | |||
Weighted Average Grant Date Fair Value | |||||
Outstanding beginning balance (in dollars per share) | $ 9.79 | ||||
Granted (in dollars per share) | 8.50 | ||||
Vested (in dollars per share) | 9.79 | ||||
Forfeited (in dollars per share) | 9.43 | ||||
Outstanding ending balance (in dollars per share) | $ 8.46 | $ 9.79 | |||
Unrecognized compensation costs | $ 1,510 | $ 303 | |||
Costs are expected to be recognized over a weighted average period | 1 year 9 months 18 days | 6 months 4 days | |||
|
INCOME TAXES (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Income Tax Disclosure [Abstract] | |||
Deferred Tax Assets, Gross | $ 42,336 | $ 35,730 | |
Deferred Tax Liabilities, Gross | (21,309) | (21,625) | |
Deferred Tax Assets, Valuation Allowance | (21,027) | (14,641) | |
Deferred Tax Liabilities, Net | 0 | (536) | |
Components of Deferred Tax Assets and Liabilities [Abstract] | |||
Goodwill and intangible assets | 13,812 | 13,267 | |
Inventories | 2,658 | 2,569 | |
NOL carry forwards | 17,808 | 10,529 | |
Tax credit carry forwards | 2,904 | 2,354 | |
Stock award | 819 | 827 | |
Gain on sale of real estate | 698 | 783 | |
Obligation under operating leases | 822 | 835 | |
Accrued vacation | 504 | 504 | |
Accrued bonus | 64 | 649 | |
Other | 710 | 426 | |
Long-term contract costs | (13,496) | (11,781) | |
Depreciation | (6,276) | (6,857) | |
Valuation allowance | (21,027) | (14,641) | |
Income Tax Expense (Benefit), Continuing Operations, by Jurisdiction [Abstract] | |||
Increase (Decrease) in Income Taxes Receivable | 6,527 | ||
Deferred Tax Assets, Operating Loss Carryforwards, Domestic | 17,044 | ||
Deferred Tax Assets, Operating Loss Carryforwards, State and Local | 3,668 | ||
Federal [Abstract] | |||
Current | (24) | 304 | $ (9,173) |
Deferred | (676) | (14) | 155 |
Provision for federal income taxes | (700) | 290 | (9,018) |
State [Abstract] | |||
Current | (11) | 55 | 21 |
Deferred | (23) | 7 | 44 |
Provision for state income taxes | (34) | 62 | 65 |
Income Tax Reconciliation [Abstract] | |||
Federal taxes | (12,544) | (661) | (13,270) |
State and local taxes, net of federal benefit | (464) | (114) | 358 |
Nondeductible goodwill impairment | 6,296 | 0 | 9,254 |
Valuation allowance | 6,386 | 1,809 | (5,294) |
Effective Income Tax Rate Reconciliation, Other Reconciling Items, Amount | (24) | 306 | 0 |
Research and experimental and other tax credits | (550) | (1,174) | (503) |
Other | 166 | 186 | 502 |
Provision (benefit) for income taxes | $ (734) | $ 352 | $ (8,953) |
RESTRUCTURING (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2015 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Restructuring Cost and Reserve [Line Items] | |||||||||
Restructuring and Related Cost, Accelerated Depreciation | $ 295 | $ 1,265 | $ 1,361 | ||||||
Restructuring expense | 1,212 | 2,322 | 2,585 | ||||||
Restructuring and Related Cost, Incurred Cost | $ 241 | $ 947 | $ (46) | $ 1,575 | $ 518 | $ 275 | |||
Unfavorable impact to operating cash flow | 1,182 | 2,806 | 2,268 | ||||||
Restructuring Reserve | 255 | 285 | 255 | 739 | |||||
Employee Severance [Member] | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Restructuring expense | 1,238 | 2,194 | |||||||
Unfavorable impact to operating cash flow | 1,115 | 2,771 | |||||||
Restructuring Reserve | 162 | 285 | 162 | 739 | |||||
Employee Severance [Member] | Precise Machine [Member] | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Restructuring expense | 0 | 0 | 287 | ||||||
Employee Severance [Member] | Greenville, South Carolina [Member] | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Restructuring expense | (26) | 449 | 0 | ||||||
Employee Severance [Member] | Engineering Services Melbourne, Australia Closure [Member] | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Restructuring expense | 0 | 47 | 0 | ||||||
Employee Severance [Member] | Relocation of Machining Operations from Savannah Facility [Member] | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Restructuring expense | 0 | 0 | 47 | ||||||
Employee Severance [Member] | Relocation of Machining Parts Operations from St. Charles Facility [Member] | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Restructuring expense | 0 | 150 | 228 | ||||||
Employee Severance [Member] | Coweta, Oklahoma Closure [Member] | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Restructuring expense | 0 | 94 | 0 | ||||||
Employee Severance [Member] | Other Expense [Member] | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Restructuring expense | 973 | 1,582 | 2,023 | ||||||
Other [Member] | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Restructuring expense | (26) | 128 | |||||||
Unfavorable impact to operating cash flow | 67 | 35 | |||||||
Restructuring Reserve | $ 93 | 0 | 93 | 0 | |||||
Selling, General and Administrative Expenses [Member] | Employee Severance [Member] | Relocation of Sheet Metal Operations from Wichita [Member] | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Restructuring and Related Cost, Incurred Cost | 265 | 0 | 0 | ||||||
Aerostructures [Member] | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Restructuring expense | 1,218 | 1,108 | 2,074 | ||||||
Engineering Services [Member] | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Restructuring expense | $ (6) | $ 1,214 | $ 511 |
RESTRUCTURING, ROLLFORWARD (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Restructuring Reserve [Roll Forward] | |||
Accrued restructuring balance, beginning | $ 255 | $ 739 | |
Accrual additions | 1,212 | 2,322 | $ 2,585 |
Cash payments | (1,182) | (2,806) | (2,268) |
Accrued restructuring balance, ending | 285 | 255 | 739 |
Employee Severance [Member] | |||
Restructuring Reserve [Roll Forward] | |||
Accrued restructuring balance, beginning | 162 | 739 | |
Accrual additions | 1,238 | 2,194 | |
Cash payments | (1,115) | (2,771) | |
Accrued restructuring balance, ending | 285 | 162 | 739 |
Other [Member] | |||
Restructuring Reserve [Roll Forward] | |||
Accrued restructuring balance, beginning | 93 | 0 | |
Accrual additions | (26) | 128 | |
Cash payments | (67) | (35) | |
Accrued restructuring balance, ending | $ 0 | $ 93 | $ 0 |
CUSTOMER AND SUPPLIER CONCENTRATION (Details) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016
supplier
customer
|
Dec. 31, 2015 |
Dec. 31, 2014
customer
|
|
Revenue and Accounts Receivable, Major Customer [Line Items] | |||
Number of top customers | 3 | 3 | 3 |
Supplier Concentration Risk [Member] | |||
Revenue and Accounts Receivable, Major Customer [Line Items] | |||
Number of suppliers | 6 | ||
Percentage of materials attributable to supplier (in hundredths) | 45.50% | 45.90% | 49.60% |
Spirit [Member] | Sales Revenue, Goods, Net [Member] | |||
Revenue and Accounts Receivable, Major Customer [Line Items] | |||
Percentage attributable to customer (in hundredths) | 38.38% | 34.70% | 34.32% |
Spirit [Member] | Accounts Receivable [Member] | |||
Revenue and Accounts Receivable, Major Customer [Line Items] | |||
Percentage attributable to customer (in hundredths) | 31.84% | 28.60% | 33.30% |
Gulfstream [Member] | Sales Revenue, Goods, Net [Member] | |||
Revenue and Accounts Receivable, Major Customer [Line Items] | |||
Percentage attributable to customer (in hundredths) | 11.69% | 14.20% | 15.00% |
Gulfstream [Member] | Accounts Receivable [Member] | |||
Revenue and Accounts Receivable, Major Customer [Line Items] | |||
Percentage attributable to customer (in hundredths) | 12.27% | 15.50% | 13.10% |
Boeing [Member] | Sales Revenue, Goods, Net [Member] | |||
Revenue and Accounts Receivable, Major Customer [Line Items] | |||
Percentage attributable to customer (in hundredths) | 11.21% | 11.60% | 10.60% |
Boeing [Member] | Accounts Receivable [Member] | |||
Revenue and Accounts Receivable, Major Customer [Line Items] | |||
Percentage attributable to customer (in hundredths) | 8.48% | 10.20% | 7.40% |
BUSINESS SEGMENT INFORMATION (Details) $ in Thousands |
3 Months Ended | 12 Months Ended | ||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2016
USD ($)
|
Sep. 30, 2016
USD ($)
|
Jun. 30, 2016
USD ($)
|
Mar. 31, 2016
USD ($)
|
Dec. 31, 2015
USD ($)
|
Sep. 30, 2015
USD ($)
|
Jun. 30, 2015
USD ($)
|
Mar. 31, 2015
USD ($)
|
Dec. 31, 2016
USD ($)
segment
|
Dec. 31, 2015
USD ($)
|
Dec. 31, 2014
USD ($)
|
Dec. 31, 2013
USD ($)
|
|||||||||||||||||||||||||
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 | $ 85,183 | $ 89,673 | $ 83,993 | $ 87,331 | $ 89,438 | $ 95,633 | $ 97,550 | $ 92,475 | $ 346,180 | $ 375,096 | $ 387,817 | |||||||||||||||||||||||||
Gross profit | 12,192 | [1] | $ 15,846 | $ 15,535 | $ 16,230 | 16,193 | [2] | $ 16,626 | [3] | $ 18,770 | $ 17,197 | 59,803 | 68,786 | 75,370 | ||||||||||||||||||||||
(Loss) income from operations | (14,318) | [4] | 20,786 | (8,858) | [4] | |||||||||||||||||||||||||||||||
Other Depreciation and Amortization | 47,411 | [4] | 20,404 | 48,898 | [4] | |||||||||||||||||||||||||||||||
Interest expense | 21,171 | 22,439 | 29,280 | [5] | ||||||||||||||||||||||||||||||||
Capital expenditures | 11,813 | 16,599 | 16,690 | |||||||||||||||||||||||||||||||||
Total assets | 383,632 | 415,980 | 383,632 | 415,980 | ||||||||||||||||||||||||||||||||
Impairment loss on goodwill | 24,302 | [6] | 0 | [7] | ||||||||||||||||||||||||||||||||
Impairment loss on intangible assets | 4,066 | [8] | 0 | [9] | ||||||||||||||||||||||||||||||||
Debt issuance cost write-off | 0 | 0 | 8,466 | |||||||||||||||||||||||||||||||||
Aerostructures [Member] | ||||||||||||||||||||||||||||||||||||
Information about reported segments on the basis used internally to evaluate segment performance [Abstract] | ||||||||||||||||||||||||||||||||||||
Net sales | 311,131 | 327,230 | 326,025 | |||||||||||||||||||||||||||||||||
Gross profit | 56,774 | 63,584 | 67,042 | |||||||||||||||||||||||||||||||||
(Loss) income from operations | 16,153 | 23,993 | 18,977 | |||||||||||||||||||||||||||||||||
Other Depreciation and Amortization | 18,069 | 18,551 | 20,223 | |||||||||||||||||||||||||||||||||
Interest expense | 807 | 957 | 1,041 | |||||||||||||||||||||||||||||||||
Capital expenditures | 11,748 | 16,348 | 16,504 | |||||||||||||||||||||||||||||||||
Total assets | 377,214 | 379,873 | 377,214 | 379,873 | ||||||||||||||||||||||||||||||||
Engineering Services [Member] | ||||||||||||||||||||||||||||||||||||
Information about reported segments on the basis used internally to evaluate segment performance [Abstract] | ||||||||||||||||||||||||||||||||||||
Net sales | 36,301 | 49,096 | 63,404 | |||||||||||||||||||||||||||||||||
Gross profit | 3,372 | 5,286 | 8,428 | |||||||||||||||||||||||||||||||||
(Loss) income from operations | (30,128) | [4] | (3,123) | (27,731) | [4] | |||||||||||||||||||||||||||||||
Other Depreciation and Amortization | 29,342 | [4] | 1,853 | 28,675 | [4] | |||||||||||||||||||||||||||||||
Interest expense | 33 | 43 | 41 | |||||||||||||||||||||||||||||||||
Capital expenditures | 65 | 251 | 186 | |||||||||||||||||||||||||||||||||
Total assets | $ 6,418 | $ 36,107 | 6,418 | 36,107 | ||||||||||||||||||||||||||||||||
Impairment loss on goodwill | 24,302 | |||||||||||||||||||||||||||||||||||
Impairment loss on intangible assets | 4,066 | |||||||||||||||||||||||||||||||||||
Eliminations [Member] | ||||||||||||||||||||||||||||||||||||
Information about reported segments on the basis used internally to evaluate segment performance [Abstract] | ||||||||||||||||||||||||||||||||||||
Net sales | (1,252) | (1,230) | (1,612) | |||||||||||||||||||||||||||||||||
Gross profit | (343) | (84) | (100) | |||||||||||||||||||||||||||||||||
(Loss) income from operations | (343) | (84) | (104) | |||||||||||||||||||||||||||||||||
Corporate [Member] | ||||||||||||||||||||||||||||||||||||
Information about reported segments on the basis used internally to evaluate segment performance [Abstract] | ||||||||||||||||||||||||||||||||||||
Interest expense | 20,331 | $ 21,439 | 28,198 | [5] | ||||||||||||||||||||||||||||||||
Engineering Services [Member] | ||||||||||||||||||||||||||||||||||||
Information about reported segments on the basis used internally to evaluate segment performance [Abstract] | ||||||||||||||||||||||||||||||||||||
Impairment loss on goodwill | 24,302 | [4] | $ 26,439 | |||||||||||||||||||||||||||||||||
Impairment loss on intangible assets | $ 4,066 | |||||||||||||||||||||||||||||||||||
Valent Aerostructures, LLC [Member] | ||||||||||||||||||||||||||||||||||||
Information about reported segments on the basis used internally to evaluate segment performance [Abstract] | ||||||||||||||||||||||||||||||||||||
Impairment loss on goodwill | [7] | $ 73,528 | ||||||||||||||||||||||||||||||||||
|
QUARTERLY FINANCIAL DATA (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | ||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2015 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
||||||||||||||||||||||||||||
Restructuring and Related Cost, Incurred Cost | $ (241) | $ (947) | $ 46 | $ (1,575) | $ (518) | $ (275) | ||||||||||||||||||||||||||||||||
Goodwill and Intangible Asset Impairment | 28,368 | $ 28,368 | ||||||||||||||||||||||||||||||||||||
Loss on Contracts | $ 1,741 | 1,010 | 1,738 | |||||||||||||||||||||||||||||||||||
Gain (Loss) Related to Litigation Settlement | 3,325 | $ 3,347 | ||||||||||||||||||||||||||||||||||||
Impairment loss on goodwill | 24,302 | [1] | 0 | [2] | ||||||||||||||||||||||||||||||||||
Derivative, Loss on Derivative | $ 793 | |||||||||||||||||||||||||||||||||||||
Debt issuance cost write-off | 0 | 0 | 8,466 | |||||||||||||||||||||||||||||||||||
Income Tax Expense (Benefit) | 734 | (352) | 8,953 | |||||||||||||||||||||||||||||||||||
Selected Quarterly Financial Information [Abstract] | ||||||||||||||||||||||||||||||||||||||
Net sales | 85,183 | $ 89,673 | 83,993 | 87,331 | 89,438 | 95,633 | 97,550 | 92,475 | 346,180 | 375,096 | 387,817 | |||||||||||||||||||||||||||
Gross profit | 12,192 | [3] | 15,846 | 15,535 | 16,230 | 16,193 | [4] | 16,626 | [5] | 18,770 | 17,197 | 59,803 | 68,786 | 75,370 | ||||||||||||||||||||||||
Net income (loss) | $ (3,757) | [3] | $ 309 | $ (29,900) | [6] | $ (1,759) | [7] | $ (1,188) | [4] | $ 34 | [5] | $ 378 | [8] | $ (1,465) | [9] | $ (35,107) | $ (2,241) | $ (28,962) | ||||||||||||||||||||
Amounts per common share: | ||||||||||||||||||||||||||||||||||||||
Net income (loss) (in dollars per share) | $ (0.29) | $ 0.02 | $ (2.28) | $ (0.14) | $ (0.09) | $ 0.00 | $ 0.03 | $ (0.11) | $ (2.68) | $ (0.17) | $ (2.28) | |||||||||||||||||||||||||||
Net income (loss) - assuming dilution (in dollars per share) | $ (0.29) | $ 0.02 | $ (2.28) | $ (0.14) | $ (0.09) | $ 0.00 | $ 0.03 | $ (0.11) | $ (2.68) | $ (0.17) | $ (2.28) | |||||||||||||||||||||||||||
|
CONDENSED CONSOLIDATING BALANCE SHEET (Details) - USD ($) $ in Thousands |
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
---|---|---|---|---|
Condensed Balance Sheet Statements, Captions [Line Items] | ||||
Cash and cash equivalents | $ 2,491 | $ 10,504 | $ 7,927 | $ 1,572 |
Trade accounts receivable, net | 51,269 | 48,491 | ||
Intercompany receivables | 0 | 0 | ||
Inventories | 122,761 | 114,775 | ||
Prepaid expenses and other current assets | 3,586 | 4,147 | ||
Total current assets | 180,107 | 177,917 | ||
Property, plant and equipment, net | 99,515 | 100,969 | ||
Investments in subsidiaries | 0 | 0 | ||
Goodwill | 62,482 | 86,784 | ||
Intangible assets, net | 38,852 | 46,582 | ||
Other assets | 2,676 | 3,728 | ||
Total assets | 383,632 | 415,980 | ||
Accounts payable | 29,378 | 13,156 | ||
Accrued expenses | 25,543 | 30,015 | ||
Intercompany payables | 0 | 0 | ||
Current installments of long-term debt and capital lease obligations | 2,655 | 2,362 | ||
Total current liabilities | 57,576 | 45,533 | ||
Long-term debt and capital lease obligations, less current installments | 237,398 | 247,633 | ||
Other long-term liabilities | 3,117 | 4,322 | ||
Deferred income taxes | 0 | 536 | ||
Total long-term liabilities | 240,515 | 252,491 | ||
Total shareholders’ equity | 85,541 | 117,956 | 118,135 | 144,144 |
Total liabilities and shareholders’ equity | 383,632 | 415,980 | ||
LMIA(Guarantor Parent) | ||||
Condensed Balance Sheet Statements, Captions [Line Items] | ||||
Cash and cash equivalents | 2,382 | 10,251 | 7,058 | 405 |
Trade accounts receivable, net | 660 | 1,220 | ||
Intercompany receivables | 244,792 | 196,496 | ||
Inventories | 0 | 0 | ||
Prepaid expenses and other current assets | 1,548 | 2,224 | ||
Total current assets | 249,382 | 210,191 | ||
Property, plant and equipment, net | 6,490 | 5,430 | ||
Investments in subsidiaries | 375,738 | 387,868 | ||
Goodwill | 0 | 0 | ||
Intangible assets, net | 0 | 0 | ||
Other assets | 1,790 | 2,135 | ||
Total assets | 633,400 | 605,624 | ||
Accounts payable | 410 | 1,393 | ||
Accrued expenses | 13,912 | 17,009 | ||
Intercompany payables | 310,644 | 237,548 | ||
Current installments of long-term debt and capital lease obligations | 89 | 85 | ||
Total current liabilities | 325,055 | 256,035 | ||
Long-term debt and capital lease obligations, less current installments | 221,101 | 229,752 | ||
Other long-term liabilities | 1,703 | 1,881 | ||
Deferred income taxes | 0 | |||
Total long-term liabilities | 222,804 | 231,633 | ||
Total shareholders’ equity | 85,541 | 117,956 | ||
Total liabilities and shareholders’ equity | 633,400 | 605,624 | ||
Guarantor Subsidiaries | ||||
Condensed Balance Sheet Statements, Captions [Line Items] | ||||
Cash and cash equivalents | 109 | 253 | 869 | 1,167 |
Trade accounts receivable, net | 50,609 | 47,271 | ||
Intercompany receivables | 312,332 | 203,128 | ||
Inventories | 122,761 | 114,775 | ||
Prepaid expenses and other current assets | 2,038 | 1,923 | ||
Total current assets | 487,849 | 367,350 | ||
Property, plant and equipment, net | 93,025 | 95,539 | ||
Investments in subsidiaries | 0 | 0 | ||
Goodwill | 62,482 | 86,784 | ||
Intangible assets, net | 38,852 | 46,582 | ||
Other assets | 886 | 1,593 | ||
Total assets | 683,094 | 597,848 | ||
Accounts payable | 28,968 | 11,763 | ||
Accrued expenses | 11,631 | 13,006 | ||
Intercompany payables | 246,480 | 162,076 | ||
Current installments of long-term debt and capital lease obligations | 2,566 | 2,277 | ||
Total current liabilities | 289,645 | 189,122 | ||
Long-term debt and capital lease obligations, less current installments | 16,297 | 17,881 | ||
Other long-term liabilities | 1,414 | 2,441 | ||
Deferred income taxes | 536 | |||
Total long-term liabilities | 17,711 | 20,858 | ||
Total shareholders’ equity | 375,738 | 387,868 | ||
Total liabilities and shareholders’ equity | 683,094 | 597,848 | ||
Consolidating/Eliminating Entries | ||||
Condensed Balance Sheet Statements, Captions [Line Items] | ||||
Cash and cash equivalents | 0 | 0 | $ 0 | $ 0 |
Trade accounts receivable, net | 0 | 0 | ||
Intercompany receivables | (557,124) | (399,624) | ||
Inventories | 0 | 0 | ||
Prepaid expenses and other current assets | 0 | 0 | ||
Total current assets | (557,124) | (399,624) | ||
Property, plant and equipment, net | 0 | 0 | ||
Investments in subsidiaries | (375,738) | (387,868) | ||
Goodwill | 0 | 0 | ||
Intangible assets, net | 0 | 0 | ||
Other assets | 0 | 0 | ||
Total assets | (932,862) | (787,492) | ||
Accounts payable | 0 | 0 | ||
Accrued expenses | 0 | 0 | ||
Intercompany payables | (557,124) | (399,624) | ||
Current installments of long-term debt and capital lease obligations | 0 | 0 | ||
Total current liabilities | (557,124) | (399,624) | ||
Long-term debt and capital lease obligations, less current installments | 0 | 0 | ||
Other long-term liabilities | 0 | 0 | ||
Deferred income taxes | 0 | |||
Total long-term liabilities | 0 | 0 | ||
Total shareholders’ equity | (375,738) | (387,868) | ||
Total liabilities and shareholders’ equity | $ (932,862) | $ (787,492) |
CONDENSED CONSOLIDATING STATEMENTS OF COMREHENSIVE INCOME (LOSS) (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | ||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2015 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
||||||||||||||||||||||||||||
Condensed Income Statements, Captions [Line Items] | ||||||||||||||||||||||||||||||||||||||
Product sales | $ 308,089 | $ 323,611 | $ 321,284 | |||||||||||||||||||||||||||||||||||
Service revenues | 38,091 | 51,485 | 66,533 | |||||||||||||||||||||||||||||||||||
Net sales | $ 85,183 | $ 89,673 | $ 83,993 | $ 87,331 | $ 89,438 | $ 95,633 | $ 97,550 | $ 92,475 | 346,180 | 375,096 | 387,817 | |||||||||||||||||||||||||||
Cost of product sales | 249,227 | 259,610 | 254,775 | |||||||||||||||||||||||||||||||||||
Cost of service revenues | 37,150 | 46,700 | 57,672 | |||||||||||||||||||||||||||||||||||
Cost of sales | 286,377 | 306,310 | 312,447 | |||||||||||||||||||||||||||||||||||
Gross profit | 12,192 | [1] | 15,846 | 15,535 | 16,230 | 16,193 | [2] | 16,626 | [3] | 18,770 | 17,197 | 59,803 | 68,786 | 75,370 | ||||||||||||||||||||||||
Selling, general and administrative expenses | 44,541 | 45,678 | 55,204 | |||||||||||||||||||||||||||||||||||
Goodwill and intangible asset impairment | 28,368 | 0 | 26,439 | |||||||||||||||||||||||||||||||||||
Restructuring expense | 1,212 | 2,322 | 2,585 | |||||||||||||||||||||||||||||||||||
Goodwill and Intangible Asset Impairment | 28,368 | 28,368 | ||||||||||||||||||||||||||||||||||||
(Loss) income from operations | (14,318) | [4] | 20,786 | (8,858) | [4] | |||||||||||||||||||||||||||||||||
Interest expense | (21,171) | (22,439) | (29,280) | [5] | ||||||||||||||||||||||||||||||||||
Other, net | (352) | (236) | 223 | |||||||||||||||||||||||||||||||||||
Income (loss) from equity investments in subsidiaries | 0 | 0 | 0 | |||||||||||||||||||||||||||||||||||
Total other expense | (21,523) | (22,675) | (29,057) | |||||||||||||||||||||||||||||||||||
Loss before income taxes | (35,841) | (1,889) | (37,915) | |||||||||||||||||||||||||||||||||||
(Benefit) provision for income taxes | (734) | 352 | (8,953) | |||||||||||||||||||||||||||||||||||
Net loss | $ (3,757) | [1] | $ 309 | $ (29,900) | [6] | $ (1,759) | [7] | $ (1,188) | [2] | $ 34 | [3] | $ 378 | [8] | $ (1,465) | [9] | (35,107) | (2,241) | (28,962) | ||||||||||||||||||||
Change in foreign currency translation adjustment | (71) | (41) | (98) | |||||||||||||||||||||||||||||||||||
Reclassification adjustment for losses on interest rate hedges included in net earnings | 0 | 0 | 278 | |||||||||||||||||||||||||||||||||||
Unrealized gain/(loss) arising during period from interest rate hedges, net of tax of $0, $0 and $(157) | 278 | |||||||||||||||||||||||||||||||||||||
Total comprehensive loss | (35,178) | (2,282) | (28,782) | |||||||||||||||||||||||||||||||||||
LMIA(Guarantor Parent) | ||||||||||||||||||||||||||||||||||||||
Condensed Income Statements, Captions [Line Items] | ||||||||||||||||||||||||||||||||||||||
Product sales | (170) | 239 | 466 | |||||||||||||||||||||||||||||||||||
Service revenues | 40,864 | 36,184 | 36,181 | |||||||||||||||||||||||||||||||||||
Net sales | 40,694 | 36,423 | 36,647 | |||||||||||||||||||||||||||||||||||
Cost of product sales | 86 | 248 | 699 | |||||||||||||||||||||||||||||||||||
Cost of service revenues | 42,749 | 35,952 | 35,998 | |||||||||||||||||||||||||||||||||||
Cost of sales | 42,835 | 36,200 | 36,697 | |||||||||||||||||||||||||||||||||||
Gross profit | (2,141) | 223 | (50) | |||||||||||||||||||||||||||||||||||
Selling, general and administrative expenses | 0 | 0 | 792 | |||||||||||||||||||||||||||||||||||
Goodwill and intangible asset impairment | 0 | |||||||||||||||||||||||||||||||||||||
Restructuring expense | 431 | 340 | 1,012 | |||||||||||||||||||||||||||||||||||
Goodwill and Intangible Asset Impairment | 0 | |||||||||||||||||||||||||||||||||||||
(Loss) income from operations | (2,572) | (117) | (1,854) | |||||||||||||||||||||||||||||||||||
Interest expense | (20,336) | (21,449) | (28,224) | |||||||||||||||||||||||||||||||||||
Other, net | 5 | 0 | 11 | |||||||||||||||||||||||||||||||||||
Income (loss) from equity investments in subsidiaries | (12,275) | 19,284 | (8,860) | |||||||||||||||||||||||||||||||||||
Total other expense | (32,606) | (2,165) | (37,073) | |||||||||||||||||||||||||||||||||||
Loss before income taxes | (35,178) | (2,282) | (38,927) | |||||||||||||||||||||||||||||||||||
(Benefit) provision for income taxes | 0 | 0 | (9,867) | |||||||||||||||||||||||||||||||||||
Net loss | (35,178) | (2,282) | (29,060) | |||||||||||||||||||||||||||||||||||
Change in foreign currency translation adjustment | 0 | 0 | 0 | |||||||||||||||||||||||||||||||||||
Unrealized gain/(loss) arising during period from interest rate hedges, net of tax of $0, $0 and $(157) | 278 | |||||||||||||||||||||||||||||||||||||
Total comprehensive loss | (35,178) | (2,282) | (28,782) | |||||||||||||||||||||||||||||||||||
Guarantor Subsidiaries | ||||||||||||||||||||||||||||||||||||||
Condensed Income Statements, Captions [Line Items] | ||||||||||||||||||||||||||||||||||||||
Product sales | 307,954 | 323,337 | 321,286 | |||||||||||||||||||||||||||||||||||
Service revenues | 38,217 | 51,720 | 66,543 | |||||||||||||||||||||||||||||||||||
Net sales | 346,171 | 375,057 | 387,829 | |||||||||||||||||||||||||||||||||||
Cost of product sales | 248,836 | 259,327 | 254,544 | |||||||||||||||||||||||||||||||||||
Cost of service revenues | 35,391 | 47,166 | 57,864 | |||||||||||||||||||||||||||||||||||
Cost of sales | 284,227 | 306,493 | 312,408 | |||||||||||||||||||||||||||||||||||
Gross profit | 61,944 | 68,564 | 75,421 | |||||||||||||||||||||||||||||||||||
Selling, general and administrative expenses | 44,541 | 45,678 | 54,412 | |||||||||||||||||||||||||||||||||||
Goodwill and intangible asset impairment | 26,439 | |||||||||||||||||||||||||||||||||||||
Restructuring expense | 781 | 1,982 | 1,573 | |||||||||||||||||||||||||||||||||||
Goodwill and Intangible Asset Impairment | 28,368 | |||||||||||||||||||||||||||||||||||||
(Loss) income from operations | (11,746) | 20,904 | (7,003) | |||||||||||||||||||||||||||||||||||
Interest expense | (835) | (990) | (1,056) | |||||||||||||||||||||||||||||||||||
Other, net | (357) | (236) | 212 | |||||||||||||||||||||||||||||||||||
Income (loss) from equity investments in subsidiaries | 0 | 0 | 0 | |||||||||||||||||||||||||||||||||||
Total other expense | (1,192) | (1,226) | (844) | |||||||||||||||||||||||||||||||||||
Loss before income taxes | (12,938) | 19,678 | (7,847) | |||||||||||||||||||||||||||||||||||
(Benefit) provision for income taxes | (734) | 352 | 914 | |||||||||||||||||||||||||||||||||||
Net loss | (12,204) | 19,326 | (8,761) | |||||||||||||||||||||||||||||||||||
Change in foreign currency translation adjustment | (71) | (41) | (98) | |||||||||||||||||||||||||||||||||||
Unrealized gain/(loss) arising during period from interest rate hedges, net of tax of $0, $0 and $(157) | 0 | |||||||||||||||||||||||||||||||||||||
Total comprehensive loss | (12,275) | 19,285 | (8,859) | |||||||||||||||||||||||||||||||||||
Consolidating/Eliminating Entries | ||||||||||||||||||||||||||||||||||||||
Condensed Income Statements, Captions [Line Items] | ||||||||||||||||||||||||||||||||||||||
Product sales | 305 | 35 | (468) | |||||||||||||||||||||||||||||||||||
Service revenues | (40,990) | (36,419) | (36,191) | |||||||||||||||||||||||||||||||||||
Net sales | (40,685) | (36,384) | (36,659) | |||||||||||||||||||||||||||||||||||
Cost of product sales | 305 | 35 | (468) | |||||||||||||||||||||||||||||||||||
Cost of service revenues | (40,990) | (36,418) | (36,190) | |||||||||||||||||||||||||||||||||||
Cost of sales | (40,685) | (36,383) | (36,658) | |||||||||||||||||||||||||||||||||||
Gross profit | 0 | (1) | (1) | |||||||||||||||||||||||||||||||||||
Selling, general and administrative expenses | 0 | 0 | 0 | |||||||||||||||||||||||||||||||||||
Goodwill and intangible asset impairment | 0 | |||||||||||||||||||||||||||||||||||||
Restructuring expense | 0 | 0 | 0 | |||||||||||||||||||||||||||||||||||
Goodwill and Intangible Asset Impairment | 0 | |||||||||||||||||||||||||||||||||||||
(Loss) income from operations | 0 | (1) | (1) | |||||||||||||||||||||||||||||||||||
Interest expense | 0 | 0 | 0 | |||||||||||||||||||||||||||||||||||
Other, net | 0 | 0 | 0 | |||||||||||||||||||||||||||||||||||
Income (loss) from equity investments in subsidiaries | 12,275 | (19,284) | 8,860 | |||||||||||||||||||||||||||||||||||
Total other expense | 12,275 | (19,284) | 8,860 | |||||||||||||||||||||||||||||||||||
Loss before income taxes | 12,275 | (19,285) | 8,859 | |||||||||||||||||||||||||||||||||||
(Benefit) provision for income taxes | 0 | 0 | 0 | |||||||||||||||||||||||||||||||||||
Net loss | 12,275 | (19,285) | 8,859 | |||||||||||||||||||||||||||||||||||
Change in foreign currency translation adjustment | 0 | 0 | 0 | |||||||||||||||||||||||||||||||||||
Unrealized gain/(loss) arising during period from interest rate hedges, net of tax of $0, $0 and $(157) | 0 | |||||||||||||||||||||||||||||||||||||
Total comprehensive loss | $ 12,275 | $ (19,285) | $ 8,859 | |||||||||||||||||||||||||||||||||||
|
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
[2] | Mar. 31, 2016 |
Dec. 31, 2015 |
Sep. 30, 2015 |
[5] | Jun. 30, 2015 |
[6] | Mar. 31, 2015 |
Jun. 30, 2014 |
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|||||||||||||||||||
Condensed Cash Flow Statements, Captions [Line Items] | |||||||||||||||||||||||||||||||||
Net loss | $ (3,757) | [1] | $ 309 | $ (29,900) | $ (1,759) | [3] | $ (1,188) | [4] | $ 34 | $ 378 | $ (1,465) | [7] | $ (35,107) | $ (2,241) | $ (28,962) | ||||||||||||||||||
Adjustments for non-cash items | 49,984 | 23,155 | 59,351 | ||||||||||||||||||||||||||||||
Net changes in operating assets and liabilities, net of acquired businesses | (326) | 11,448 | 18,728 | ||||||||||||||||||||||||||||||
Intercompany activity | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Net cash provided by operating activities | 14,551 | 32,362 | 49,117 | ||||||||||||||||||||||||||||||
Additions to property, plant and equipment | (11,813) | (16,599) | (16,690) | ||||||||||||||||||||||||||||||
Proceeds from sale of equipment | 639 | 285 | 3,579 | ||||||||||||||||||||||||||||||
Net cash used by investing activities | (11,174) | (16,314) | (13,111) | ||||||||||||||||||||||||||||||
Proceeds from issuance of debt | 1,465 | 0 | 250,000 | ||||||||||||||||||||||||||||||
Principal payments on long-term debt and notes payable | (12,699) | (13,276) | (235,633) | ||||||||||||||||||||||||||||||
Advances on revolving line of credit | 60,000 | 99,000 | 66,000 | ||||||||||||||||||||||||||||||
Payments on revolving line of credit | (60,000) | (99,000) | (102,000) | ||||||||||||||||||||||||||||||
Payments for debt issuance cost | $ (8,348) | (156) | (195) | (8,018) | |||||||||||||||||||||||||||||
Net cash used by financing activities | (11,390) | (13,471) | (29,651) | ||||||||||||||||||||||||||||||
Net (decrease) increase in cash and cash equivalents | (8,013) | 2,577 | 6,355 | ||||||||||||||||||||||||||||||
Cash and cash equivalents, beginning of year | 10,504 | 7,927 | 10,504 | 7,927 | 1,572 | ||||||||||||||||||||||||||||
Cash and cash equivalents, end of year | 2,491 | 10,504 | 2,491 | 10,504 | 7,927 | ||||||||||||||||||||||||||||
LMIA(Guarantor Parent) | |||||||||||||||||||||||||||||||||
Condensed Cash Flow Statements, Captions [Line Items] | |||||||||||||||||||||||||||||||||
Net loss | (35,178) | (2,282) | (29,060) | ||||||||||||||||||||||||||||||
Adjustments for non-cash items | 16,955 | (14,546) | 21,714 | ||||||||||||||||||||||||||||||
Net changes in operating assets and liabilities, net of acquired businesses | (1,566) | 10,420 | 19,977 | ||||||||||||||||||||||||||||||
Intercompany activity | 24,800 | 22,874 | 17,663 | ||||||||||||||||||||||||||||||
Net cash provided by operating activities | 5,011 | 16,466 | 30,294 | ||||||||||||||||||||||||||||||
Additions to property, plant and equipment | (2,639) | (1,903) | (715) | ||||||||||||||||||||||||||||||
Proceeds from sale of equipment | 0 | 0 | 2,558 | ||||||||||||||||||||||||||||||
Net cash used by investing activities | (2,639) | (1,903) | 1,843 | ||||||||||||||||||||||||||||||
Proceeds from issuance of debt | 0 | 250,000 | |||||||||||||||||||||||||||||||
Principal payments on long-term debt and notes payable | (10,085) | (11,160) | (231,466) | ||||||||||||||||||||||||||||||
Advances on revolving line of credit | 60,000 | 99,000 | 66,000 | ||||||||||||||||||||||||||||||
Payments on revolving line of credit | (60,000) | (99,000) | (102,000) | ||||||||||||||||||||||||||||||
Payments for debt issuance cost | (156) | (210) | (8,018) | ||||||||||||||||||||||||||||||
Net cash used by financing activities | (10,241) | (11,370) | (25,484) | ||||||||||||||||||||||||||||||
Net (decrease) increase in cash and cash equivalents | (7,869) | 3,193 | 6,653 | ||||||||||||||||||||||||||||||
Cash and cash equivalents, beginning of year | 10,251 | 7,058 | 10,251 | 7,058 | 405 | ||||||||||||||||||||||||||||
Cash and cash equivalents, end of year | 2,382 | 10,251 | 2,382 | 10,251 | 7,058 | ||||||||||||||||||||||||||||
Guarantor Subsidiaries | |||||||||||||||||||||||||||||||||
Condensed Cash Flow Statements, Captions [Line Items] | |||||||||||||||||||||||||||||||||
Net loss | (12,204) | 19,326 | (8,761) | ||||||||||||||||||||||||||||||
Adjustments for non-cash items | 45,304 | 18,416 | 46,496 | ||||||||||||||||||||||||||||||
Net changes in operating assets and liabilities, net of acquired businesses | 1,240 | 1,028 | (1,249) | ||||||||||||||||||||||||||||||
Intercompany activity | (24,800) | (22,874) | (17,663) | ||||||||||||||||||||||||||||||
Net cash provided by operating activities | 9,540 | 15,896 | 18,823 | ||||||||||||||||||||||||||||||
Additions to property, plant and equipment | (9,174) | (14,696) | (15,975) | ||||||||||||||||||||||||||||||
Proceeds from sale of equipment | 639 | 285 | 1,021 | ||||||||||||||||||||||||||||||
Net cash used by investing activities | (8,535) | (14,411) | (14,954) | ||||||||||||||||||||||||||||||
Proceeds from issuance of debt | 1,465 | 0 | |||||||||||||||||||||||||||||||
Principal payments on long-term debt and notes payable | (2,614) | (2,116) | (4,167) | ||||||||||||||||||||||||||||||
Advances on revolving line of credit | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Payments on revolving line of credit | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Payments for debt issuance cost | 0 | 15 | 0 | ||||||||||||||||||||||||||||||
Net cash used by financing activities | (1,149) | (2,101) | (4,167) | ||||||||||||||||||||||||||||||
Net (decrease) increase in cash and cash equivalents | (144) | (616) | (298) | ||||||||||||||||||||||||||||||
Cash and cash equivalents, beginning of year | 253 | 869 | 253 | 869 | 1,167 | ||||||||||||||||||||||||||||
Cash and cash equivalents, end of year | 109 | 253 | 109 | 253 | 869 | ||||||||||||||||||||||||||||
Consolidating/Eliminating Entries | |||||||||||||||||||||||||||||||||
Condensed Cash Flow Statements, Captions [Line Items] | |||||||||||||||||||||||||||||||||
Net loss | 12,275 | (19,285) | 8,859 | ||||||||||||||||||||||||||||||
Adjustments for non-cash items | (12,275) | 19,285 | (8,859) | ||||||||||||||||||||||||||||||
Net changes in operating assets and liabilities, net of acquired businesses | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Intercompany activity | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Net cash provided by operating activities | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Additions to property, plant and equipment | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Proceeds from sale of equipment | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Net cash used by investing activities | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Proceeds from issuance of debt | 0 | 0 | |||||||||||||||||||||||||||||||
Principal payments on long-term debt and notes payable | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Advances on revolving line of credit | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Payments on revolving line of credit | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Payments for debt issuance cost | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Net cash used by financing activities | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Net (decrease) increase in cash and cash equivalents | 0 | 0 | 0 | ||||||||||||||||||||||||||||||
Cash and cash equivalents, beginning of year | $ 0 | $ 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||
Cash and cash equivalents, end of year | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | ||||||||||||||||||||||||||||
|
SUBSEQUENT EVENTS (Details) $ / shares in Units, $ in Thousands |
Dec. 31, 2016
USD ($)
$ / shares
|
---|---|
Subsequent Event [Line Items] | |
Business Acquisition, Share Price | $ / shares | $ 14.00 |
Minimum [Member] | |
Subsequent Event [Line Items] | |
Termination Fee Payable if Merger Not Completed | $ 10,000 |
Maximum [Member] | |
Subsequent Event [Line Items] | |
Termination Fee Payable if Merger Not Completed | $ 15,000 |
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS (Details) - USD ($) $ in Thousands |
12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
||||||||
Reserve for Accounts Receivable [Member] | ||||||||||
Movement in Valuation Allowances and Reserves [Roll Forward] | ||||||||||
Beginning Balance | $ 246 | $ 464 | $ 180 | |||||||
Charge to Cost/Expense | 116 | 53 | 309 | |||||||
Other Charge to Cost/Expense | 0 | 0 | 0 | |||||||
Write-offs net of Recoveries | (14) | (271) | (25) | |||||||
Ending Balance | 348 | 246 | 464 | |||||||
Valuation Allowance of Deferred Tax Assets [Member] | ||||||||||
Movement in Valuation Allowances and Reserves [Roll Forward] | ||||||||||
Beginning Balance | 14,641 | 12,676 | 18,137 | |||||||
Charge to Cost/Expense | 6,386 | [1] | 1,965 | [1] | 0 | |||||
Other Charge to Cost/Expense | 0 | 0 | 5,461 | [2] | ||||||
Write-offs net of Recoveries | 0 | 0 | 0 | |||||||
Ending Balance | $ 21,027 | $ 14,641 | $ 12,676 | |||||||
|
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