x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March 31, 2017. |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from _________ to __________ |
Missouri | 43-1309065 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
411 Fountain Lakes Blvd. | ||
St. Charles, Missouri | 63301 | |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer | o | Accelerated filer | x | |
Non-accelerated filer | o | Smaller reporting company | o | |
Emerging growth company | o |
Page No. | ||
Item 1. | Financial Statements (Unaudited). | |
Item 2. | ||
Item 3. | ||
Item 4. | ||
PART II. OTHER INFORMATION | ||
Item 1. | ||
Item1A. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 5. | ||
Item 6. | ||
Item 1. | Financial Statements. |
LMI Aerospace, Inc. Condensed Consolidated Balance Sheets (Amounts in thousands, except share and per share data) (Unaudited) | |||||||
March 31, 2017 | December 31, 2016 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 723 | $ | 2,491 | |||
Accounts receivable, net | 59,117 | 51,269 | |||||
Inventories | 130,259 | 122,761 | |||||
Prepaid expenses and other current assets | 4,566 | 3,586 | |||||
Total current assets | 194,665 | 180,107 | |||||
Property, plant and equipment, net | 101,175 | 99,515 | |||||
Goodwill | 62,482 | 62,482 | |||||
Intangible assets, net | 38,064 | 38,852 | |||||
Other assets | 2,454 | 2,676 | |||||
Total assets | $ | 398,840 | $ | 383,632 | |||
Liabilities and shareholders’ equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 31,859 | $ | 29,378 | |||
Accrued expenses | 20,594 | 25,543 | |||||
Current installments of long-term debt and capital lease obligations | 2,725 | 2,655 | |||||
Total current liabilities | 55,178 | 57,576 | |||||
Long-term liabilities: | |||||||
Long-term debt and capital lease obligations, less current installments | 260,479 | 237,398 | |||||
Other long-term liabilities | 2,412 | 3,117 | |||||
Total long-term liabilities | 262,891 | 240,515 | |||||
Shareholders’ equity: | |||||||
Common stock, $0.02 par value per share; authorized 28,000,000 shares; issued 13,701,350 and 13,625,205 shares at March 31, 2017 and December 31, 2016, respectively | 274 | 273 | |||||
Preferred stock, $0.02 par value per share; authorized 2,000,000 shares; none issued at either date | — | — | |||||
Additional paid-in capital | 101,630 | 99,955 | |||||
Accumulated other comprehensive loss | (260 | ) | (282 | ) | |||
Accumulated deficit | (20,873 | ) | (14,405 | ) | |||
Total shareholders’ equity | 80,771 | 85,541 | |||||
Total liabilities and shareholders’ equity | $ | 398,840 | $ | 383,632 |
LMI Aerospace, Inc. Condensed Consolidated Statements of Comprehensive Income (Loss) (Amounts in thousands, except share and per share data) (Unaudited) | |||||||
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
Sales and service revenue | |||||||
Product sales | $ | 78,572 | $ | 75,862 | |||
Service revenue | 5,248 | 11,469 | |||||
Net sales | 83,820 | 87,331 | |||||
Cost of sales and service revenue | |||||||
Cost of product sales | 65,363 | 60,336 | |||||
Cost of service revenue | 6,016 | 10,765 | |||||
Cost of sales | 71,379 | 71,101 | |||||
Gross profit | 12,441 | 16,230 | |||||
Selling, general and administrative expenses: | |||||||
Selling, general and administrative expenses | 10,834 | 11,853 | |||||
Merger expense | 2,534 | — | |||||
Restructuring expense | (20 | ) | 947 | ||||
Total selling, general and administrative expenses | 13,348 | 12,800 | |||||
(Loss) income from operations | (907 | ) | 3,430 | ||||
Other (expense) income: | |||||||
Interest expense | (5,218 | ) | (5,263 | ) | |||
Other, net | (333 | ) | (90 | ) | |||
Total other expense | (5,551 | ) | (5,353 | ) | |||
Loss before income taxes | (6,458 | ) | (1,923 | ) | |||
Provision (benefit) for income taxes | 10 | (164 | ) | ||||
Net loss | (6,468 | ) | (1,759 | ) | |||
Other comprehensive income (loss): | |||||||
Change in foreign currency translation adjustment | 22 | (13 | ) | ||||
Total comprehensive loss | $ | (6,446 | ) | $ | (1,772 | ) | |
Amounts per common share: | |||||||
Net loss per common share | $ | (0.49 | ) | $ | (0.14 | ) | |
Net loss per common share assuming dilution | $ | (0.49 | ) | $ | (0.14 | ) | |
Weighted average common shares outstanding | 13,213,051 | 12,975,485 | |||||
Weighted average dilutive common shares outstanding | 13,213,051 | 12,975,485 |
LMI Aerospace, Inc. Condensed Consolidated Statements of Cash Flows (Amounts in thousands) (Unaudited) | |||||||
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
Operating activities: | |||||||
Net loss | $ | (6,468 | ) | $ | (1,759 | ) | |
Adjustments to reconcile net loss to net cash used by operating activities: | |||||||
Depreciation and amortization | 4,462 | 4,900 | |||||
Amortization of debt issuance cost | 469 | 478 | |||||
Stock based compensation | 273 | 345 | |||||
Other non-cash items | (47 | ) | (65 | ) | |||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | (7,862 | ) | (6,475 | ) | |||
Inventories | (7,654 | ) | (4,740 | ) | |||
Prepaid expenses and other assets | (910 | ) | (387 | ) | |||
Current income taxes | 5 | (38 | ) | ||||
Accounts payable | 4,781 | 7,388 | |||||
Accrued expenses | (3,419 | ) | (6,891 | ) | |||
Net cash used by operating activities | (16,370 | ) | (7,244 | ) | |||
Investing activities: | |||||||
Additions to property, plant and equipment | (8,101 | ) | (2,418 | ) | |||
Proceeds from sale of property, plant and equipment | — | 6 | |||||
Net cash used by investing activities | (8,101 | ) | (2,412 | ) | |||
Financing activities: | |||||||
Proceeds from issuance of debt | — | 1,465 | |||||
Principal payments on long-term debt and notes payable | (666 | ) | (874 | ) | |||
Advances on revolving line of credit | 53,000 | 2,000 | |||||
Payments on revolving line of credit | (29,500 | ) | (2,000 | ) | |||
Other, net | (131 | ) | — | ||||
Net cash provided by financing activities | 22,703 | 591 | |||||
Net decrease in cash and cash equivalents | (1,768 | ) | (9,065 | ) | |||
Cash and cash equivalents, beginning of period | 2,491 | 10,504 | |||||
Cash and cash equivalents, end of period | $ | 723 | $ | 1,439 | |||
Supplemental disclosure of non-cash transactions: | |||||||
Defined contribution plan funding in Company stock | $ | 1,535 | $ | 1,472 |
1. | Summary of Significant Accounting Policies |
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. |
2017 | |||||||||||||||||||
Assets and Liabilities at Fair Value | Total | ||||||||||||||||||
as of March 31, 2017 | Gains | ||||||||||||||||||
Total | (Level 1) | (Level 2) | (Level 3) | (Losses) | |||||||||||||||
Non-recurring Fair Value Measurements: | |||||||||||||||||||
Asset: | |||||||||||||||||||
Intangible assets, net | $ | 38,064 | $ | — | $ | — | $ | 38,064 | $ | — | |||||||||
Goodwill (1) | $ | 62,482 | $ | — | $ | — | $ | 62,482 | $ | — |
2016 | |||||||||||||||||||
Assets and Liabilities at Fair Value | Total | ||||||||||||||||||
as of December 31, 2016 | Gains | ||||||||||||||||||
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 | ) |
3. | Accounts Receivable, Net |
March 31, 2017 | December 31, 2016 | ||||||
Trade receivables | $ | 54,454 | $ | 44,927 | |||
Unbilled revenue | 3,310 | 4,318 | |||||
Other receivables | 1,736 | 2,372 | |||||
59,500 | 51,617 | ||||||
Less: Allowance for doubtful accounts | (383 | ) | (348 | ) | |||
Accounts receivable, net | $ | 59,117 | $ | 51,269 |
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
Favorable adjustments | $ | 303 | $ | 83 | |||
Unfavorable adjustments | (282 | ) | (168 | ) | |||
Net favorable (unfavorable) operating income adjustments | $ | 21 | $ | (85 | ) |
4. | Inventories |
March 31, 2017 | December 31, 2016 | ||||||
Raw materials | $ | 17,050 | $ | 12,822 | |||
Work in progress | 25,855 | 23,795 | |||||
Manufactured and purchased components | 22,585 | 20,922 | |||||
Finished goods | 27,897 | 28,346 | |||||
Product inventory | 93,387 | 85,885 | |||||
Capitalized contract costs | 36,872 | 36,876 | |||||
Total inventories | $ | 130,259 | $ | 122,761 |
March 31, 2017 | December 31, 2016 | ||||||
Large commercial aircraft | $ | 10,693 | $ | 10,852 | |||
Corporate and regional aircraft | 21,179 | 21,081 | |||||
Military | 5,000 | 4,943 | |||||
Total capitalized contract cost | $ | 36,872 | $ | 36,876 |
5. | Goodwill and Intangible Assets |
Aerostructures | Engineering Services | Total | |||||||||||||||||||||
March 31, | December 31, | March 31, | December 31, | March 31, | December 31, | ||||||||||||||||||
2017 | 2016 | 2017 | 2016 | 2017 | 2016 | ||||||||||||||||||
Balance at: | |||||||||||||||||||||||
Gross Goodwill | $ | 141,953 | $ | 141,953 | $ | 50,741 | $ | 50,741 | $ | 192,694 | $ | 192,694 | |||||||||||
Accumulated impairment loss | (79,471 | ) | (79,471 | ) | (50,741 | ) | (50,741 | ) | (130,212 | ) | (130,212 | ) | |||||||||||
Net Goodwill | $ | 62,482 | $ | 62,482 | $ | — | $ | — | $ | 62,482 | $ | 62,482 |
March 31, 2017 | December 31, 2016 | ||||||
Trademarks | $ | 778 | $ | 778 | |||
Customer intangible assets | 68,991 | 68,991 | |||||
Other | 1,274 | 1,274 | |||||
Accumulated amortization and impairment | (32,979 | ) | (32,191 | ) | |||
Intangible assets, net | $ | 38,064 | $ | 38,852 |
6. | Long-term Debt and Capital Lease Obligations |
March 31, 2017 | December 31, 2016 | ||||||
Second priority senior secured notes at a fixed rate of 7.375% at March 31, 2017 | $ | 224,175 | $ | 224,175 | |||
Revolver under credit agreement, variable rate | 23,500 | — | |||||
Industrial Revenue Bonds at a fixed rate of 2.80% at March 31, 2017 and December 31, 2016 | 6,342 | 6,456 | |||||
Capital leases, at fixed rates ranging from 3.00% to 4.50% at March 31, 2017 and December 31, 2016 | 9,925 | 10,293 | |||||
Notes payable, principal and interest payable monthly, at fixed rates ranging from 2.45% to 5.00% at March 31, 2017 and December 31, 2016 | 2,194 | 2,377 | |||||
Debt issuance cost | (2,932 | ) | (3,248 | ) | |||
Total debt | $ | 263,204 | $ | 240,053 | |||
Less current installments | 2,725 | 2,655 | |||||
Total long-term debt and capital lease obligations | $ | 260,479 | $ | 237,398 |
7. | Earnings Per Common Share |
Three Months Ended | ||||||||
March 31, | ||||||||
2017 | 2016 | |||||||
Numerators | ||||||||
Net loss | $ | (6,468 | ) | $ | (1,759 | ) | ||
Denominators | ||||||||
Weighted average common shares - basic | 13,213,051 | 12,975,485 | ||||||
Dilutive effect of restricted stock | — | — | ||||||
Weighted average common shares - diluted | 13,213,051 | 12,975,485 | ||||||
Basic loss per share | $ | (0.49 | ) | $ | (0.14 | ) | ||
Diluted loss per share | $ | (0.49 | ) | $ | (0.14 | ) |
8. | Stock-Based Compensation |
Restricted Stock Awards | Shares | Weighted Average Grant Date Fair Value | |||||
Outstanding at January 1, 2017 | 168,550 | $ | 13.53 | ||||
Granted | — | — | |||||
Vested | (27,767 | ) | 13.98 | ||||
Forfeited | (18,912 | ) | 14.53 | ||||
Outstanding at March 31, 2017 | 121,871 | $ | 13.08 |
Restricted Stock Awards | Shares | Weighted Average Grant Date Fair Value | |||||
Outstanding at January 1, 2017 (1) | 274,128 | $ | 8.46 | ||||
Granted | 9,098 | 8.62 | |||||
Vested | — | — | |||||
Forfeited | (15,774 | ) | 9.04 | ||||
Outstanding at March 31, 2017 (1) | 267,452 | $ | 8.46 |
9. | Business Segment Information |
Three months ended March 31, | |||||||
2017 | 2016 | ||||||
Net sales: | |||||||
Aerostructures | $ | 79,236 | $ | 76,954 | |||
Engineering Services | 4,881 | 11,059 | |||||
Eliminations | (297 | ) | (682 | ) | |||
$ | 83,820 | $ | 87,331 | ||||
Income from operations: | |||||||
Aerostructures | $ | 598 | $ | 3,465 | |||
Engineering Services | (1,430 | ) | 191 | ||||
Eliminations | (75 | ) | (226 | ) | |||
$ | (907 | ) | $ | 3,430 |
10. | Customer Concentration |
11. | Income Taxes |
12. | Restructuring |
Three months ended | |||||||
March 31, | |||||||
2017 | 2016 | ||||||
Wichita, Kansas sheet-metal operations relocation | (20 | ) | — | ||||
Other employment separation activities | — | 947 | |||||
Total | $ | (20 | ) | $ | 947 | ||
Expense incurred by segment: | |||||||
Aerostructures | $ | (20 | ) | $ | 947 | ||
Engineering Services | — | — | |||||
Total | $ | (20 | ) | $ | 947 |
Employee | ||||
Severance | ||||
Accrued restructuring balance as of December 31, 2016 | $ | 285 | ||
Accrual reversals | (20 | ) | ||
Cash payments | (203 | ) | ||
Accrued restructuring balance as of March 31, 2017 | $ | 62 |
13. | Legal Contingencies |
14. | Condensed Consolidating Financial Statements |
LMIA(Guarantor Parent) | Guarantor Subsidiaries | Consolidating/Eliminating Entries | Consolidated | ||||||||||||
Assets | |||||||||||||||
Current assets: | |||||||||||||||
Cash and cash equivalents | $ | 607 | $ | 116 | $ | — | $ | 723 | |||||||
Trade accounts receivable, net | 715 | 58,402 | — | 59,117 | |||||||||||
Intercompany receivables | 53,796 | 12,400 | (66,196 | ) | — | ||||||||||
Inventories | — | 130,259 | — | 130,259 | |||||||||||
Prepaid expenses and other current assets | 2,219 | 2,347 | — | 4,566 | |||||||||||
Total current assets | 57,337 | 203,524 | (66,196 | ) | 194,665 | ||||||||||
Property, plant and equipment, net | 8,009 | 93,166 | — | 101,175 | |||||||||||
Investments in subsidiaries | 285,650 | — | (285,650 | ) | — | ||||||||||
Goodwill | — | 62,482 | — | 62,482 | |||||||||||
Intangible assets, net | — | 38,064 | — | 38,064 | |||||||||||
Other assets | 1,641 | 813 | — | 2,454 | |||||||||||
Total assets | $ | 352,637 | $ | 398,049 | $ | (351,846 | ) | $ | 398,840 | ||||||
Liabilities and shareholders’ equity | |||||||||||||||
Current liabilities: | |||||||||||||||
Accounts payable | $ | 1,572 | $ | 30,287 | $ | — | $ | 31,859 | |||||||
Accrued expenses | 11,866 | 8,728 | — | 20,594 | |||||||||||
Intercompany payables | 12,400 | 53,796 | (66,196 | ) | — | ||||||||||
Current installments of long-term debt and capital lease obligations | 67 | 2,658 | — | 2,725 | |||||||||||
Total current liabilities | 25,905 | 95,469 | (66,196 | ) | 55,178 | ||||||||||
Long-term debt and capital lease obligations, less current installments | 244,912 | 15,567 | — | 260,479 | |||||||||||
Other long-term liabilities | 1,049 | 1,363 | — | 2,412 | |||||||||||
Deferred income taxes | — | — | — | — | |||||||||||
Total long-term liabilities | 245,961 | 16,930 | — | 262,891 | |||||||||||
Total shareholders’ equity | 80,771 | 285,650 | (285,650 | ) | 80,771 | ||||||||||
Total liabilities and shareholders’ equity | $ | 352,637 | $ | 398,049 | $ | (351,846 | ) | $ | 398,840 |
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 | ||||||||||||
Sales and service revenue | |||||||||||||||
Product sales | $ | (24 | ) | $ | 78,572 | $ | 24 | $ | 78,572 | ||||||
Service revenues | 10,890 | 5,248 | (10,890 | ) | 5,248 | ||||||||||
Net sales | 10,866 | 83,820 | (10,866 | ) | 83,820 | ||||||||||
Cost of sales and service revenue | |||||||||||||||
Cost of product sales | — | 65,363 | 65,363 | ||||||||||||
Cost of service revenues | 10,803 | 6,079 | (10,866 | ) | 6,016 | ||||||||||
Cost of sales | 10,803 | 71,442 | (10,866 | ) | 71,379 | ||||||||||
Gross profit | 63 | 12,378 | — | 12,441 | |||||||||||
Selling, general and administrative expenses | — | 10,834 | — | 10,834 | |||||||||||
Merger Expense | 2,534 | — | — | 2,534 | |||||||||||
Restructuring expense | — | (20 | ) | — | (20 | ) | |||||||||
(Loss) income from operations | (2,471 | ) | 1,564 | — | (907 | ) | |||||||||
Other income (expense): | |||||||||||||||
Interest expense | (4,998 | ) | (220 | ) | — | (5,218 | ) | ||||||||
Other, net | 5 | (338 | ) | — | (333 | ) | |||||||||
Income (loss) from equity investments in subsidiaries | 1,018 | — | (1,018 | ) | — | ||||||||||
Total other expense | (3,975 | ) | (558 | ) | (1,018 | ) | (5,551 | ) | |||||||
(Loss) income before income taxes | (6,446 | ) | 1,006 | (1,018 | ) | (6,458 | ) | ||||||||
Provision for income taxes | — | 10 | — | 10 | |||||||||||
Net (loss) income | (6,446 | ) | 996 | (1,018 | ) | (6,468 | ) | ||||||||
Other comprehensive income (expense): | |||||||||||||||
Change in foreign currency translation adjustment | — | 22 | — | 22 | |||||||||||
Total comprehensive (loss) income | $ | (6,446 | ) | $ | 1,018 | $ | (1,018 | ) | $ | (6,446 | ) |
LMIA(Guarantor Parent) | Guarantor Subsidiaries | Consolidating/Eliminating Entries | Consolidated | ||||||||||||
Sales and service revenue | |||||||||||||||
Product sales | $ | 58 | $ | 75,804 | $ | — | $ | 75,862 | |||||||
Service revenues | 11,378 | 11,527 | (11,436 | ) | 11,469 | ||||||||||
Net sales | 11,436 | 87,331 | (11,436 | ) | 87,331 | ||||||||||
Cost of sales and service revenue | |||||||||||||||
Cost of product sales | 59 | 60,277 | — | 60,336 | |||||||||||
Cost of service revenues | 11,395 | 10,836 | (11,466 | ) | 10,765 | ||||||||||
Cost of sales | 11,454 | 71,113 | (11,466 | ) | 71,101 | ||||||||||
Gross profit | (18 | ) | 16,218 | 30 | 16,230 | ||||||||||
Selling, general and administrative expenses | — | 11,853 | — | 11,853 | |||||||||||
Restructuring expense | 451 | 496 | — | 947 | |||||||||||
(Loss) income from operations | (469 | ) | 3,869 | 30 | 3,430 | ||||||||||
Other income (expense): | |||||||||||||||
Interest expense | (5,030 | ) | (233 | ) | — | (5,263 | ) | ||||||||
Other, net | 2 | (92 | ) | — | (90 | ) | |||||||||
Income (loss) from equity investments in subsidiaries | 3,695 | — | (3,695 | ) | — | ||||||||||
Total other expense | (1,333 | ) | (325 | ) | (3,695 | ) | (5,353 | ) | |||||||
(Loss) income before income taxes | (1,802 | ) | 3,544 | (3,665 | ) | (1,923 | ) | ||||||||
(Benefit) provision for income taxes | — | (164 | ) | — | (164 | ) | |||||||||
Net (loss) income | (1,802 | ) | 3,708 | (3,665 | ) | (1,759 | ) | ||||||||
Other comprehensive income (expense): | |||||||||||||||
Change in foreign currency translation adjustment | — | (13 | ) | — | (13 | ) | |||||||||
Total comprehensive (loss) income | $ | (1,802 | ) | $ | 3,695 | $ | (3,665 | ) | $ | (1,772 | ) |
LMIA(Guarantor Parent) | Guarantor Subsidiaries | Consolidating/Eliminating Entries | Consolidated | ||||||||||||
Operating activities: | |||||||||||||||
Net (loss)/income | $ | (6,446 | ) | $ | 996 | $ | (1,018 | ) | $ | (6,468 | ) | ||||
Adjustments for non-cash items | 1,638 | 2,501 | 1,018 | 5,157 | |||||||||||
Net changes in operating assets and liabilities, net of acquired businesses | (510 | ) | (14,549 | ) | — | (15,059 | ) | ||||||||
Intercompany activity | (17,750 | ) | 17,750 | — | — | ||||||||||
Net cash (used)/provided by operating activities | (23,068 | ) | 6,698 | — | (16,370 | ) | |||||||||
Investing activities: | |||||||||||||||
Additions to property, plant and equipment | (2,070 | ) | (6,031 | ) | — | (8,101 | ) | ||||||||
Proceeds from sale of equipment | — | — | |||||||||||||
Net cash used by investing activities | (2,070 | ) | (6,031 | ) | — | (8,101 | ) | ||||||||
Financing activities: | |||||||||||||||
Principal payments on long-term debt and notes payable | (24 | ) | (642 | ) | — | (666 | ) | ||||||||
Advances on revolving line of credit | 53,000 | — | — | 53,000 | |||||||||||
Payments on revolving line of credit | (29,500 | ) | — | — | (29,500 | ) | |||||||||
Other, net | (113 | ) | (18 | ) | — | (131 | ) | ||||||||
Net cash provided (used)/provided by financing activities | 23,363 | (660 | ) | — | 22,703 | ||||||||||
Net (decrease) increase in cash and cash equivalents | (1,775 | ) | 7 | — | (1,768 | ) | |||||||||
Cash and cash equivalents, beginning of period | 2,382 | 109 | — | 2,491 | |||||||||||
Cash and cash equivalents, end of period | $ | 607 | $ | 116 | $ | — | $ | 723 |
LMIA(Guarantor Parent) | Guarantor Subsidiaries | Consolidating/Eliminating Entries | Consolidated | ||||||||||||
Operating activities: | |||||||||||||||
Net (loss)/income | $ | (1,802 | ) | $ | 3,708 | $ | (3,665 | ) | $ | (1,759 | ) | ||||
Adjustments for non-cash items | (2,526 | ) | 4,519 | 3,665 | 5,658 | ||||||||||
Net changes in operating assets and liabilities, net of acquired businesses | (8,787 | ) | (2,356 | ) | — | (11,143 | ) | ||||||||
Intercompany activity | 4,776 | (4,776 | ) | — | — | ||||||||||
Net cash (used)/provided by operating activities | (8,339 | ) | 1,095 | — | (7,244 | ) | |||||||||
Investing activities: | |||||||||||||||
Additions to property, plant and equipment | (778 | ) | (1,640 | ) | — | (2,418 | ) | ||||||||
Proceeds from sale of equipment | — | 6 | — | 6 | |||||||||||
Net cash used by investing activities | (778 | ) | (1,634 | ) | — | (2,412 | ) | ||||||||
Financing activities: | |||||||||||||||
Proceeds from issuance of debt | — | 1,465 | — | 1,465 | |||||||||||
Principal payments on long-term debt and notes payable | (22 | ) | (852 | ) | — | (874 | ) | ||||||||
Advances on revolving line of credit | 2,000 | — | — | 2,000 | |||||||||||
Payments on revolving line of credit | (2,000 | ) | — | — | (2,000 | ) | |||||||||
Payments for debt issuance cost | — | — | — | — | |||||||||||
Net cash provided (used) by financing activities | (22 | ) | 613 | — | 591 | ||||||||||
Net (decrease) increase in cash and cash equivalents | (9,139 | ) | 74 | — | (9,065 | ) | |||||||||
Cash and cash equivalents, beginning of period | 10,251 | 253 | — | 10,504 | |||||||||||
Cash and cash equivalents, end of period | $ | 1,112 | $ | 327 | $ | — | $ | 1,439 |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
Three Months Ended March 31, 2017 | |||||||||||||||
($ in millions) | |||||||||||||||
Aerostructures | Engineering Services | Elimination | Total | ||||||||||||
Net sales | $ | 79.2 | $ | 4.9 | $ | (0.3 | ) | $ | 83.8 | ||||||
Cost of sales | 66.2 | 5.4 | (0.2 | ) | 71.4 | ||||||||||
Gross profit | 13.0 | (0.5 | ) | (0.1 | ) | 12.4 | |||||||||
S, G, & A | 12.4 | 0.9 | — | 13.3 | |||||||||||
Income from operations | $ | 0.6 | $ | (1.4 | ) | $ | (0.1 | ) | $ | (0.9 | ) |
Three Months Ended March 31, 2016 | |||||||||||||||
($ in millions) | |||||||||||||||
Aerostructures | Engineering Services | Elimination | Total | ||||||||||||
Net sales | $ | 77.0 | $ | 11.1 | $ | (0.8 | ) | $ | 87.3 | ||||||
Cost of sales | 62.2 | 9.4 | (0.5 | ) | 71.1 | ||||||||||
Gross profit | 14.8 | 1.7 | (0.3 | ) | 16.2 | ||||||||||
S, G, & A | 11.3 | 1.5 | — | 12.8 | |||||||||||
Income from operations | $ | 3.5 | $ | 0.2 | $ | (0.3 | ) | $ | 3.4 |
Three Months Ended March 31, | ||||||||||||||
Category | 2017 | % of Total | 2016 | % of Total | ||||||||||
($ in millions) | ||||||||||||||
Large commercial aircraft | $ | 45.0 | 56.8 | % | $ | 44.8 | 58.2 | % | ||||||
Corporate and regional aircraft | 19.4 | 24.5 | % | 17.3 | 22.5 | % | ||||||||
Military | 9.2 | 11.6 | % | 8.9 | 11.6 | % | ||||||||
Other | 5.6 | 7.1 | % | 6.0 | 7.7 | % | ||||||||
Total | $ | 79.2 | 100.0 | % | $ | 77.0 | 100.0 | % |
Three Months Ended March 31, | ||||||||||||||
Category | 2017 | % of Total | 2016 | % of Total | ||||||||||
($ in millions) | ||||||||||||||
Large commercial aircraft | $ | 1.4 | 28.6 | % | $ | 5.9 | 53.2 | % | ||||||
Corporate and regional aircraft | 1.7 | 34.7 | % | 2.6 | 23.4 | % | ||||||||
Military | 1.5 | 30.6 | % | 2.2 | 19.8 | % | ||||||||
Other | 0.3 | 6.1 | % | 0.4 | 3.6 | % | ||||||||
Total | $ | 4.9 | 100.0 | % | $ | 11.1 | 100.0 | % |
• | They do not reflect the Company’s cash expenditures, future expenditures for capital expenditures or contractual commitments; |
• | They do not reflect changes in, or cash requirements for, working capital needs; |
• | They do not reflect the significant interest expense or the cash requirements necessary to service interest or principal payments on debt; |
• | Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements; |
• | They are not adjusted for all non-cash income or expense items that are reflected in the statement of cash flows; |
• | They do not reflect the impact on earnings of charges resulting from matters unrelated to ongoing operations; and |
• | Other companies in the Company’s industry may calculate EBITDA and Adjusted EBITDA differently, limiting their usefulness as comparative measures. |
• | Are widely used by investors to measure a company’s operating performance without regard to items excluded from the calculation of such terms, which can vary substantially from company to company depending upon accounting methods and book value of assets, capital structure and the method by which assets were acquired, among other factors; |
• | Help investors to evaluate and compare the results of operations from period to period by removing the effect of the capital structure from operating performance; and |
• | Are used by the management team for various other purposes in presentations to the Board of Directors as a basis for strategic planning and forecasting. |
• | Interest expense; |
• | Income tax expense; |
• | Depreciation; and |
• | Amortization. |
• | Stock-based compensation; |
• | Merger expenses; |
• | Integration-related expenses; |
• | Restructuring expenses; |
• | Other (net). |
(In Thousands) | Three Months Ended March 31, | ||||||
2017 | 2016 | ||||||
Net loss | $ | (6,468 | ) | $ | (1,759 | ) | |
Depreciation and amortization (1) | 4,462 | 4,900 | |||||
Interest expense | 5,218 | 5,263 | |||||
Income tax expense (benefit) | 10 | (164 | ) | ||||
EBITDA | 3,222 | 8,240 | |||||
Merger expense (2) | 2,534 | — | |||||
Stock-based compensation (3) | 762 | 752 | |||||
Integration expenses | 58 | 31 | |||||
Restructuring expenses (4) | (20 | ) | 947 | ||||
Other, net | 310 | 170 | |||||
Adjusted EBITDA | $ | 6,866 | $ | 10,140 |
(1) | Includes amortization of intangibles, amortization of long-term supply agreement consideration and depreciation expense. |
(2) | Includes legal and other transaction costs incurred in association with the Company's pending merger with Sonaca. |
(3) | Includes shared-based expense associated with the LMI Aerospace, Inc. 2005 Long-term Incentive Plan, the LMI Aerospace, Inc. 2015 Incentive Compensation Plan and the LMI Profit Sharing and Savings Plan. |
(4) | The three months ended March 31, 2017 includes an adjustment related to the relocation of the Company's Wichita, Kansas sheet metal fabrication facility. The three months ended March 31, 2016 includes expenses associated with general employment separation activities. |
Item 3. | Quantitative and Qualitative Disclosures about Market Risk. |
Item 4. | Controls and Procedures. |
Item 1. | Legal Proceedings. |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds. |
Item 3. | Defaults upon Senior Securities. |
Item 4. | Mine Safety Disclosures. |
Item 5. | Other Information. |
Item 6. | Exhibits. |
LMI AEROSPACE, INC. | |
/s/ Daniel G. Korte | |
Daniel G. Korte | |
Chief Executive Officer | |
(Principal Executive Officer) | |
/s/ Clifford C. Stebe, Jr. | |
Clifford C. Stebe, Jr. | |
Chief Financial Officer and Secretary | |
(Principal Financial Officer and Principal Accounting Officer) |
Exhibit No. | 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 Incorporation of the Company previously filed as Exhibit 3.1 to the Company’s Form S-1 (File No. 333-51357) filed on April 29, 1998 (the “Form S-1”) and incorporated herein by reference. | |
3.2 | Amended and Restated By-Laws of the Company previously filed as Exhibit 3.2 to the Form S-1 and incorporated herein by reference. | |
3.3 | Amendment to Restated Articles of Incorporation dated as of July 9, 2001 filed as Exhibit 3.3 to the Company’s Form 10-K for the fiscal year ended December 31, 2001 and filed April 1, 2002 and incorporated herein by reference. | |
3.4 | Amendment to the Company’s Amended and Restated Bylaws filed as Exhibit 3.1 to the Company’s Form 8-K filed June 26, 2009 and incorporated herein by reference. | |
3.5 | Amendment to the Company’s Amended and Restated Bylaws filed as Exhibit 3.1 to the Company’s Form 8-K filed May 6, 2015 and incorporated herein by reference. | |
3.6 | Amendment to the Company’s Amended and Restated Bylaws filed as Exhibit 3.1 to the Company’s Form 8-K filed February 17, 2017 and incorporated herein by reference. | |
4.1 | Indenture dated as of June 19, 2014, by and among the Company, the Guarantors named therein, and U.S. Bank National Association, as Indenture Trustee and as Collateral Agent (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8‑K filed on June 20, 2014). | |
4.2 | Forms of 7.375% Senior Secured Notes due 2019 (included as exhibits to the Indenture identified in Exhibit 4.1 above) (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8‑K filed on June 20, 2014). | |
4.3 | Notes Collateral Agreement dated as of June 19, 2014, by and among the Company, the domestic Guarantors, and U.S. Bank National Association, as Collateral Agent, incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8‑K filed on June 20, 2014. | |
4.4 | Notes Intellectual Property Security Agreement dated as of June 19, 2014, by and among the Company, certain Guarantors named therein, and U.S. Bank National Association, as Collateral Agent, incorporated by reference to Exhibit 4.4 to the Company’s Current Report on Form 8‑K filed on June 20, 2014. | |
4.5 | Registration Rights Agreement dated as of June 19, 2014, by and among the Company, the Guarantors named therein and RBC Capital Markets, LLC, on behalf of itself and as representative of the other initial purchasers named therein, incorporated by reference to Exhibit 4.5 to the Company’s Current Report on Form 8‑K filed on June 20, 2014. | |
4.6 | Intercreditor Agreement dated as of June 19, 2014, by and between Royal Bank of Canada, as First-Lien Collateral Agent, and U.S. Bank National Association, as Second-Lien Collateral Agent, incorporated by reference to Exhibit 4.6 to the Company’s Current Report on Form 8‑K filed on June 20, 2014. | |
10.1 | Form of Employment Agreement dated as of December 30, 2016, and effective as of January 1, 2017, for Daniel G. Korte, Clifford C. Stebe, Jr., Jennifer Alfaro, Jay P. Inman, Jr., and Keith M. Schrader, filed as Exhibit 10.1 to the Company's Form 8-K filed January 6, 2017 and incorporated herein by reference. | |
10.2 | Form of Employment Agreement for Daniel G. Korte filed as Exhibit 10.1 to the Company's Form 8-K filed February 17, 2017 and incorporated herein by reference. | |
10.3 | Form of Employment Agreement for Clifford C. Stebe, Jr. filed as Exhibit 10.2 to the Company's Form 8-K filed February 17, 2017 and incorporated herein by reference. | |
31.1 | Rule 13a-14(a) Certification of Daniel G. Korte, Chief Executive Officer filed herewith. | |
31.2 | Rule 13a-14(a) Certification of Clifford C. Stebe, Jr., Chief Financial Officer filed herewith. | |
32.1 | Certification of Daniel G. Korte, Chief Executive Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 filed herewith. | |
32.2 | Certification of Clifford C. Stebe, Jr., Chief Financial Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 filed herewith. | |
101.ins | Instance Document | |
101.sch | XBRL Taxonomy Extension Schema Document | |
101.cal | XBRL Taxonomy Extension Calculation Linkbase Document | |
101.def | XBRL Taxonomy Extension Definition Linkbase Document | |
101.lab | XBRL Taxonomy Extension Label Linkbase Document | |
101.pre | XBRL Taxonomy Extension Presentation Linkbase Document |
Date: May 10, 2017 | /s/ Daniel G. Korte |
Daniel G. Korte Chief Executive Officer (Principal Executive Officer) |
Date: May 10, 2017 | /s/ Clifford C. Stebe, Jr. |
Clifford C. Stebe, Jr. Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: May 10, 2017 | /s/ Daniel G. Korte |
Daniel G. Korte | |
Chief Executive Officer (Principal Executive Officer) |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: May 10, 2017 | /s/ Clifford C. Stebe, Jr. |
Clifford C. Stebe, Jr. | |
Chief Financial Officer | |
(Principal Financial Officer and Principal Accounting Officer) |
Document and Entity Information - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
May 01, 2017 |
|
Document and Entity Information [Abstract] | ||
Entity Registrant Name | LMI AEROSPACE INC | |
Entity Central Index Key | 0001059562 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 13,694,093 | |
Document Fiscal Year Focus | 2017 | |
Document Fiscal Period Focus | Q1 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2017 |
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
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) | 13,701,350 | 13,625,205 |
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 | 0 |
Summary of Significant Accounting Policies |
3 Months Ended |
---|---|
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. The year-end condensed balance sheet data was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America. In the opinion of management, all recurring adjustments considered necessary for a fair statement have been included. Operating results for the three months ended March 31, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. These financial statements should be read in conjunction with the consolidated financial statements and accompanying footnotes included in the Annual Report on Form 10-K, as amended, of LMI Aerospace, Inc. (the "Company”, "us", "we", "our") for the year ended December 31, 2016, as filed with the Securities and Exchange Commission on April 4, 2017. 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. Pending Merger On February 16, 2017, the Company entered into a Merger Agreement with Sonaca S.A. relating to the proposed acquisition of the Company. As a result of the pending merger, the Company incurred $2,534 in legal and other transaction costs in the first quarter of 2017. These costs were reflected in the selling, general, and administrative section on a separate line of the Condensed Consolidated Statements of Comprehensive Income (Loss). Additional information regarding the merger transaction may be found in the Company's definitive proxy statement and form of proxy filed with the SEC on Schedule 14A on April 24, 2017, which was also mailed to shareholders of the Company on or about April 28, 2017. Recent Accounting Standards In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, "Revenue from Contracts with Customers" (Topic 606). 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 has 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 adopted the new standard on January 1, 2017 which did not result in a material impact to our financial statements. 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 adopted the new standard on January 1, 2017. The adoption of this standard did not result in a material impact to our financial statements. All other issued but not yet effective accounting pronouncements are not expected to have a material impact on our Condensed Consolidated Financial Statements. |
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 March 31, 2017. There were no transfers between levels during 2017 and 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 fully 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. |
Accounts Receivable, Net |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Receivable, Net | Accounts Receivable, Net Accounts receivable, net consists of the following:
Under contract accounting, unbilled revenues arise when the sales or revenues based on performance attainment, though appropriately recognized, cannot be billed yet under terms of the contract as of the balance sheet date. Included in unbilled revenue at March 31, 2017 and December 31, 2016 are $1,009 and $926, respectively, related to unpriced change orders or claims that are subject to negotiation. The final resolution of these unpriced items could result in either a favorable or unfavorable change in the revenue recognized to date on the associated contracts. Accounts receivable expected to be collected after one year is not material. The Company records changes in contract estimates using the cumulative catch-up method in accordance with the Revenue Recognition topic of the FASB Accounting Standards Codification. Cumulative catch-up adjustments had the following impacts to operating income for the periods presented:
At March 31, 2017 and December 31, 2016, the Company had recognized a loss reserve of $3,938 and $3,895, respectively, on the Mitsubishi Regional Jet design-build program. Adjustments related to this program were recorded as a reduction to revenue in the Consolidated Statements of Comprehensive Income (Loss). |
Inventories |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Inventories Inventories consist of the following:
Inventories include capitalized contract costs relating to programs and contracts with long-term production cycles. The Company believes these amounts will be fully recovered over the life of the contracts. In accordance with ASC 605-35-45-1&2, the provisions for anticipated losses on contracts are accounted for as additional contract cost and recognized as part of cost of sales. Provisions for losses are recorded as a reduction of related contract costs recorded in inventory. At March 31, 2017 and December 31, 2016, the Company had no contracts with loss reserves accounted for as a reduction of inventory. The following table illustrates the market to which capitalized contract cost at March 31, 2017 and December 31, 2016 related:
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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 March 31, 2017 and December 31, 2016, respectively:
The carrying value of goodwill is assessed annually, during the fourth quarter, unless a triggering event occurs. Following an assessment, an impairment charge is recorded if appropriate. A triggering event did not occur in the first quarter of 2017 that would require the Company to perform an impairment evaluation. Intangible Assets Intangible assets primarily consist of trademarks and customer intangibles. The carrying values were as follows:
Intangibles amortization expense was $788 and $1,036 for the three months ended March 31, 2017 and 2016, respectively. The accumulated amortization balances at March 31, 2017 and December 31, 2016, respectively, were $778 and $778 for trademarks, $31,155 and $30,399 for customer intangible assets, and $1,046 and $1,014 for other intangible assets. Intangible assets related to the acquisition of Valent Aerostructures, LLC are amortized on the straight-line method as this approximates the pattern of economic benefit of each intangible asset. All other remaining intangible assets are not material. |
Long-term Debt and Capital Lease Obligations |
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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:
At March 31, 2017, the Company had $224,175 in outstanding second-priority senior secured notes maturing on July 15, 2019. The Company records these notes at cost. The fair value of these notes, based on the last market price transaction in the quarter ended March 31, 2017 of 1.03625, was $232,301. Obligations under these notes are secured by substantially all of the Company’s assets and bear interest at 7.375%, paid semi-annually in January and July. The Company's revolving credit agreement provides for a revolving credit facility of up to $90,000. At March 31, 2017, the Company had $23,500 in outstanding borrowings under the facility. Under the agreement, the co-collateral agents may establish a reserve against the facility. At March 31, 2017, the reserve established was $15,000, which reduced the maximum availability to $75,000. Based on the amount of eligible assets at March 31, 2017, reduced by outstanding revolving credit borrowings and outstanding letters of credit of $1,325, the remaining amount available for revolving credit facility borrowings was $50,175. The maximum amount, less reserves, available for borrowing at levels below $30,000 is based on a sum of 45% of eligible receivables, 30% of eligible inventories and an additional amount of eligible equipment up to 20% of total borrowings under the facility. The maximum amount, less reserves, available for borrowing at levels above $30,000 is based on a sum of 75% of eligible receivables, 45% of eligible inventories and an additional amount of eligible equipment up to 20% of total borrowings under the facility. Borrowings under the facility are secured by a first lien on substantially all of the Company’s assets and bear interest at either the LIBOR rate plus a margin of 3.00% to 3.50% or the alternate base rate, which is the highest of the following plus a margin of 2.00% to 2.50%, respectively, with the applicable margins for the revolving credit facility subject to a grid based on the average availability ratio of the Company for the most recently completed quarter: •Prime rate, •Federal funds rate plus 0.5%, or, •The adjusted Eurodollar rate for an interest period of one month plus 1.0%. For the three months ended March 31, 2017, the actual interest rate incurred for the revolving credit facility was 4.8% on average outstanding borrowings of $18,267. 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 March 31, 2017, the commitment fee was 0.5%. The revolving credit facility matures on the earlier of July 15, 2019 or the date that is 91 days prior to the maturity date of the senior secured notes unless the notes are repaid, refinanced or otherwise satisfied in full. The maturity dates are subject to acceleration upon occurrence of an event of default. An event of default under the revolving credit agreement includes, among other things, failure to pay any material indebtedness, acceleration of payments by any lender prior to scheduled maturity, or judgments rendered against the Company requiring payments at or above certain levels. The credit agreement contains a covenant that requires us to comply with a maximum first priority debt to EBITDA ratio on a quarterly basis. In addition, the agreement also contains certain restrictive covenants that limit and in some circumstances prohibit our ability to, among other things, incur additional debt, sell, lease or transfer our assets, make investments, guarantee debt or obligations, create liens, and enter into certain merger, consolidation or other reorganization transactions. These restrictive covenants prohibit the Company from paying dividends. These restrictions could limit our ability to obtain future financing, make acquisitions or needed capital expenditures, withstand any current or future downturns in our business or the economy in general, conduct operations or otherwise take advantage of business opportunities that may arise, any of which could place us at a competitive disadvantage relative to our competitors that have less debt and are not subject to such restrictions. At March 31, 2017, the Company was in compliance with all of its covenants and expects to be in compliance with its covenants in future periods. If the Company fails to meet any covenants in the credit agreement, the Company would not be in compliance with the credit agreement and the lenders would be entitled to exercise various rights, including causing the amounts outstanding under the revolving credit facility to become immediately due and payable. |
Earnings Per Common Share |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Common Share | Earnings Per Common Share Basic net income per common share is based upon the weighted average number of common shares outstanding. Diluted net income per common share is based upon the weighted average number of common shares outstanding, including the dilutive effect of restricted stock, using the treasury stock method. The following table shows a reconciliation of the numerators and denominators used in calculating basic and diluted earnings per share.
For the three months ended March 31, 2017 and March 31, 2016, restricted shares of 256,793 and 83,603, respectively, were not included in the calculation of diluted earnings per share, as their inclusion would have been anti-dilutive. These securities could be dilutive in future periods. |
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 were subject to a time-based vesting schedule. All outstanding share-based grants under the 2005 Plan are in the form of restricted stock. A summary of the activity for non-vested restricted stock awards under the 2005 Plan is presented below:
Common stock compensation expense related to restricted stock awards granted under the 2005 Plan was $70 and $161 for the three months ended March 31, 2017 and 2016, respectively. Total unrecognized compensation costs related to non-vested, share-based awards granted or awarded under the 2005 Plan were $291 and $513 at March 31, 2017 and December 31, 2016, respectively. These costs are expected to be recognized over a weighted average period of 0.9 years at March 31, 2017. As of July 7, 2015 the Company was no longer able to grant new awards under the 2005 Plan. On June 24, 2015, the Company's shareholders approved the LMI Aerospace, Inc. 2015 Incentive Compensation Plan (the “2015 Plan”), which became effective on July 1, 2015. Under the 2015 Plan, the Company, through the Compensation Committee of the Board of Directors, may, at its discretion, grant stock options, restricted shares of common stock, and other various stock-based awards to directors, officers, employees and consultants. A total of 750,000 shares of the Company’s common stock have been reserved for issuance under the 2015 Plan. All outstanding share-based grants under the 2015 Plan are in the form of restricted stock. A summary of the activity for non-vested restricted stock awards under the 2015 Plan is presented below:
(1) Includes 6,129 shares for which service requirements are met that remain subject to deferral at March 31, 2017 pursuant to the LMI Aerospace, Inc. Non-Qualified Deferred Compensation Plan for Senior Executives and Outside Directors. Common stock compensation expense related to restricted stock awards granted under the 2015 Plan was $196 and $174 for the three months ended March 31, 2017 and 2016, respectively. Total unrecognized compensation costs related to non-vested, share-based awards granted or awarded under the 2015 Plan were $991 and $1,510 at March 31, 2017 and December 31, 2016, respectively. These costs are expected to be recognized over a weighted average period of 1.7 years at March 31, 2017. |
Business Segment Information |
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Business Segment Information | Business Segment Information The Company is organized into two reportable segments: the Aerostructures segment and the Engineering Services segment. Through its Aerostructures segment, the Company primarily fabricates, machines, finishes, integrates, assembles and kits formed close tolerance aluminum, specialty alloy and composite components and higher level assemblies for use by the aerospace and defense industries. This segment manufactures more than 40,000 products for integration into a variety of aircraft platforms manufactured by leading original equipment manufacturers and Tier 1 aerospace suppliers. Through its Engineering Services segment, the Company provides a complete range of design, engineering and program management services, supporting aircraft product lifecycles from conceptual design, analysis and certification through production support, fleet support and service life extensions via a complete turnkey engineering solution. Corporate assets, liabilities and expenses related to the Company's corporate offices, except for interest expense and income taxes, primarily support, and are recorded in, the Aerostructures segment. The table below presents information about reported segments on the same basis used internally to evaluate segment performance:
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Customer Concentration |
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Mar. 31, 2017 | |
Risks and Uncertainties [Abstract] | |
Customer Concentration | Customer Concentration Direct sales, through both of the Company’s business segments, to our largest customer, Spirit Aerosystems (“Spirit”), accounted for 41.3% and 36.6% of the Company’s total revenues for the three months ended March 31, 2017 and 2016, respectively. Accounts receivable balances related to Spirit were 38.4% and 31.8% of the Company’s total accounts receivable balance at March 31, 2017 and December 31, 2016, respectively. Direct sales, through both of the Company’s business segments, to our second largest customer, Gulfstream Aerospace Corporation, a General Dynamics company (“Gulfstream”), accounted for 11.7% and 11.5% of the Company’s total revenues for the three months ended March 31, 2017 and 2016, respectively. Accounts receivable balances resulting from direct sales to Gulfstream were 10.7% and 12.3% of the Company’s total accounts receivable balance at March 31, 2017 and December 31, 2016, respectively. Direct sales, through both of the Company’s business segments, to our third largest customer, The Boeing Company (“Boeing”), accounted for 11.2% and 10.9% of the Company’s total revenues for the three months ended March 31, 2017 and 2016, respectively. Accounts receivable balances related to Boeing were 11.7% and 8.5% of the Company’s total accounts receivable balance at March 31, 2017 and December 31, 2016, respectively. |
Income Taxes |
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Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company records income tax expense or benefit each quarter based on its estimated full-year effective tax rate. An income tax expense of $10 and and income tax benefit of $164 were recognized in the three months ended March 31, 2017 and March 31, 2016, respectively. The Company continues to carry a full valuation allowance on its net deferred tax assets, which totaled $21,540 and $21,027 at March 31, 2017 and December 31, 2016, respectively. |
Restructuring |
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Restructuring | Restructuring The Company committed to and implemented various restructuring plans in 2016 and 2017. Included in those plans were the relocation of the sheet-metal fabrication operation in Wichita, Kansas to other facilities within the Company. 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 (reversals) associated with these restructuring activities:
The Company does not expect to recognize any additional restructuring expenses related to these plans, as all have been completed. Cash payments were made associated with restructuring plans of $203 and $235 in the three months ended March 31, 2017 and 2016, respectively. The following table summarizes the Company's restructuring activities during the three months ended March 31, 2017:
Accrued restructuring of $62 at March 31, 2017 is expected to be paid in the second quarter of 2017. |
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Commitments and Contingencies Disclosure [Abstract] | |
Legal Contingencies | Legal Contingencies The Company is not named as a defendant in a lawsuit that is outside the normal course of business that it deems material. In accordance with generally accepted accounting principles, management discloses the amount or range of reasonably possible losses in a lawsuit in which the Company is a named defendant. In the opinion of management, after consulting with legal counsel, any losses resulting from lawsuits in the normal course of business should not have a material effect on the Company’s financial position, cash flows or results of operations. |
Condensed Consolidating Financial Statements |
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Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Consolidating Financial Statements | Condensed Consolidating Financial Statements LMI Aerospace, Inc. excluding its subsidiaries (“LMIA”) is the parent company, issuer and obligor of the second-priority senior notes due July 15, 2019 (the “Notes”). The payment obligations of LMIA under the Notes are guaranteed and secured by LMIA and all of its subsidiaries other than minor subsidiaries as further described below. These Notes are guaranteed on a second-priority senior secured basis, jointly and severally, by LMIA (“Guarantor Parent”) and all of its existing and future 100% owned subsidiaries (collectively, the “Guarantor Subsidiaries”) other than minor subsidiaries. Such guaranties are full and unconditional. LMIA conducts substantially all of its business through and derives virtually all of its income from its subsidiaries. Therefore, its ability to make required principal and interest payments with respect to its indebtedness depends on the earnings of subsidiaries and its ability to receive funds from its subsidiaries. The Notes are secured on a second-priority basis by liens on substantially all of LMIA’s and the Guarantor Subsidiaries’ assets, subject to certain exceptions and permitted liens. The liens securing the Notes are contractually subordinated to the liens that secure indebtedness under the revolving credit facility as a result of the lien subordination provisions of the intercreditor agreement to the extent of the value of the collateral securing such indebtedness as well as being subordinated by other existing indebtedness, including industrial revenue bonds, capital leases and other notes payable, to the extent of the value of the collateral that secures such existing indebtedness. As a consequence of this lien subordination and existing indebtedness the notes and the guarantees are effectively subordinated to the extent of the value of the collateral that secures them. Decisions regarding the maintenance and release of the collateral secured by the collateral agreement are made by the lenders under the modified revolving credit facility, and neither the indenture trustee nor the holders of the Notes have control of decisions regarding the release of collateral. We have not presented separate financial statements and separate disclosures have not been provided concerning the Guarantor Subsidiaries due to the presentation of condensed consolidating financial information set forth in this Note, consistent with the Securities and Exchange Commission (the “SEC”) rules governing reporting on guarantor financial information. Supplemental condensed consolidating financial information of the Company, including such information for the Guarantor Subsidiaries, is presented below. Investments in subsidiaries are presented using the equity method of accounting. The principal elimination entries eliminate investments in subsidiaries and inter-company balances and transactions. CONDENSED CONSOLIDATING BALANCE SHEET as of March 31, 2017
CONDENSED CONSOLIDATING BALANCE SHEET as of December 31, 2016
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) For the three Months Ended March 31, 2017
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) For the three Months Ended March 31, 2016
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS For the three Months Ended March 31, 2017
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS For the three Months Ended March 31, 2016
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Summary of Significant Accounting Policies (Policies) |
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Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. The year-end condensed balance sheet data was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America. In the opinion of management, all recurring adjustments considered necessary for a fair statement have been included. Operating results for the three months ended March 31, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. These financial statements should be read in conjunction with the consolidated financial statements and accompanying footnotes included in the Annual Report on Form 10-K, as amended, of LMI Aerospace, Inc. (the "Company”, "us", "we", "our") for the year ended December 31, 2016, as filed with the Securities and Exchange Commission on April 4, 2017. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions. These estimates and assumptions affect the reported amounts in the financial statements and accompanying notes. Actual results could differ from these estimates. |
Recent Accounting Standards | Recent Accounting Standards In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, "Revenue from Contracts with Customers" (Topic 606). 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 has 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 adopted the new standard on January 1, 2017 which did not result in a material impact to our financial statements. 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 adopted the new standard on January 1, 2017. The adoption of this standard did not result in a material impact to our financial statements. All other issued but not yet effective accounting pronouncements are not expected to have a material impact on our Condensed Consolidated Financial Statements. |
Assets and Liabilities Measured at Fair Value (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Non-recurring Fair Value Measurements |
(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 fully 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. |
Accounts Receivable, Net (Tables) |
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Schedule of Change in Accounting Estimate [Table Text Block] | Cumulative catch-up adjustments had the following impacts to operating income for the periods presented:
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Schedule of accounts receivable, net | Accounts receivable, net consists of the following:
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Impact of operating income | Cumulative catch-up adjustments had the following impacts to operating income for the periods presented:
At March 31, 2017 and December 31, 2016, the Company had recognized a loss reserve of $3,938 and $3,895, respectively, on the Mitsubishi Regional Jet design-build program. Adjustments related to this program were recorded as a reduction to revenue in the Consolidated Statements of Comprehensive Income (Loss). |
Inventories (Tables) |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Deferred Cost in Inventory by Market [Table Text Block] | The following table illustrates the market to which capitalized contract cost at March 31, 2017 and December 31, 2016 related:
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Inventories | Inventories consist of the following:
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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 March 31, 2017 and December 31, 2016, respectively:
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Finite and infinite lived intangible assets | Intangible assets primarily consist of trademarks and customer intangibles. The carrying values were as follows:
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Long-term Debt and Capital Lease Obligations (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term debt | Long-term debt and capital lease obligations consist of the following:
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Earnings Per Common Share (Tables) |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Calculation of basic and diluted earnings per share | The following table shows a reconciliation of the numerators and denominators used in calculating basic and diluted earnings per share.
|
Stock-Based Compensation (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LMI Aerospace, Inc. 2005 Long-Term Incentive Plan [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of the activity for non-vested restricted stock awards | A summary of the activity for non-vested restricted stock awards under the 2005 Plan is presented below:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LMI Aerospace, Inc. 2015 Long-term Incentive Plan [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of the activity for non-vested restricted stock awards | A summary of the activity for non-vested restricted stock awards under the 2015 Plan is presented below:
(1) Includes 6,129 shares for which service requirements are met that remain subject to deferral at March 31, 2017 pursuant to the LMI Aerospace, Inc. Non-Qualified Deferred Compensation Plan for Senior Executives and Outside Directors. |
Business Segment Information (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Information about reported segments on the basis used internally to evaluate segment performance | The table below presents information about reported segments on the same basis used internally to evaluate segment performance:
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Restructuring (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring costs | The following table summarizes the incurred charges (reversals) associated with these restructuring activities:
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Schedule of restructuring activity | The following table summarizes the Company's restructuring activities during the three months ended March 31, 2017:
|
Condensed Consolidating Financial Statements (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 |
Mar. 31, 2016 |
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Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Consolidating Balance Sheet | CONDENSED CONSOLIDATING BALANCE SHEET as of March 31, 2017
|
CONDENSED CONSOLIDATING BALANCE SHEET as of December 31, 2016
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Condensed Consolidating Statements of Comprehensive Income (Loss) | CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) For the three Months Ended March 31, 2017
|
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) For the three Months Ended March 31, 2016
|
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Condensed Consolidating Cash Flow Statement | CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS For the three Months Ended March 31, 2017
|
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS For the three Months Ended March 31, 2016
|
Assets and Liabilities Measured at Fair Value (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2017 |
Dec. 31, 2016 |
|||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||
Intangible assets, net | $ 38,064 | $ 38,852 | ||||||||
Goodwill | 62,482 | [1] | 62,482 | |||||||
Finite-Lived Intangible Assets [Member] | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||
Goodwill and Intangible Asset Impairment | 0 | 4,066 | [2] | |||||||
Goodwill [Member] | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||
Goodwill and Intangible Asset Impairment | 0 | 24,302 | [3] | |||||||
Fair Value, Inputs, Level 1 [Member] | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||
Intangible assets, net | 0 | 0 | ||||||||
Goodwill | 0 | 0 | ||||||||
Fair Value, Inputs, Level 2 [Member] | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||
Intangible assets, net | 0 | 0 | ||||||||
Goodwill | 0 | 0 | ||||||||
Fair Value, Inputs, Level 3 [Member] | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||
Intangible assets, net | 38,064 | 38,852 | ||||||||
Goodwill | $ 62,482 | $ 62,482 | ||||||||
|
Accounts Receivable, Net (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
Dec. 31, 2016 |
|
Receivables [Abstract] | |||
Loss reserve on long-term production contract | $ 3,938 | $ 3,895 | |
Trade receivables | 54,454 | 44,927 | |
Unbilled revenue | 3,310 | 4,318 | |
Other receivables | 1,736 | 2,372 | |
Accounts receivable, gross | 59,500 | 51,617 | |
Less: Allowance for doubtful accounts | (383) | (348) | |
Accounts receivable, net | 59,117 | 51,269 | |
Inventory Amount, Unpriced Change Orders for Long-term Contracts or Programs | 1,009 | $ 926 | |
Change in Accounting Estimate [Abstract] | |||
Favorable adjustments | 303 | $ 83 | |
Unfavorable adjustments | (282) | (168) | |
Net operating income adjustments | $ 21 | $ (85) |
Inventories (Details) - USD ($) $ in Thousands |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Inventories [Abstract] | ||
Raw materials | $ 17,050 | $ 12,822 |
Work in progress | 25,855 | 23,795 |
Manufactured and purchased components | 22,585 | 20,922 |
Finished goods | 27,897 | 28,346 |
Product inventory | 93,387 | 85,885 |
Capitalized contract costs | 36,872 | 36,876 |
Total inventories | $ 130,259 | $ 122,761 |
Inventories Capitalized Contract Cost (Details) - USD ($) $ in Thousands |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Inventory [Line Items] | ||
Total capitalized contract cost | $ 36,872 | $ 36,876 |
Military [Member] | ||
Inventory [Line Items] | ||
Gross capitalized contract costs | 5,000 | 4,943 |
Corporate and Regional Aircraft [Member] | ||
Inventory [Line Items] | ||
Gross capitalized contract costs | 21,179 | 21,081 |
Large Commercial Aircraft [Member] | ||
Inventory [Line Items] | ||
Gross capitalized contract costs | $ 10,693 | $ 10,852 |
Goodwill and Intangible Assets, Goodwill (Details) - USD ($) $ in Thousands |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Goodwill [Line Items] | ||
Goodwill, Gross | $ 192,694 | $ 192,694 |
Goodwill, Impaired, Accumulated Impairment Loss | (130,212) | (130,212) |
Goodwill | 62,482 | 62,482 |
Aerostructures [Member] | ||
Goodwill [Line Items] | ||
Goodwill, Gross | 141,953 | 141,953 |
Goodwill, Impaired, Accumulated Impairment Loss | (79,471) | (79,471) |
Goodwill | 62,482 | 62,482 |
Engineering Services [Member] | ||
Goodwill [Line Items] | ||
Goodwill, Gross | 50,741 | 50,741 |
Goodwill, Impaired, Accumulated Impairment Loss | (50,741) | (50,741) |
Goodwill | $ 0 | $ 0 |
Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
Dec. 31, 2016 |
|
Intangible Assets [Abstract] | |||
Trademarks | $ 778 | $ 778 | |
Customer intangible assets | 68,991 | 68,991 | |
Other | 1,274 | 1,274 | |
Accumulated amortization | (32,979) | (32,191) | |
Intangible assets, net | 38,064 | 38,852 | |
Amortization expense on intangible assets | 788 | $ 1,036 | |
Trademarks [Member] | |||
Intangible Assets [Abstract] | |||
Accumulated amortization | (778) | (778) | |
Customer Intangible Assets [Member] | |||
Intangible Assets [Abstract] | |||
Accumulated amortization | (31,155) | (30,399) | |
Other [Member] | |||
Intangible Assets [Abstract] | |||
Accumulated amortization | $ (1,046) | $ (1,014) |
Earnings Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Numerators [Abstract] | ||
Net loss | $ (6,468) | $ (1,759) |
Denominators [Abstract] | ||
Weighted average common shares - basic (in shares) | 13,213,051 | 12,975,485 |
Dilutive effect of restricted stock (in shares) | 0 | 0 |
Weighted average common shares - diluted (in shares) | 13,213,051 | 12,975,485 |
Basic loss per share | $ (0.49) | $ (0.14) |
Diluted loss per share | $ (0.49) | $ (0.14) |
Antidilutive securities excluded from computation of earnings per share (in shares) | 256,793 | 83,603 |
Business Segment Information (Details) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2017
USD ($)
segment
|
Mar. 31, 2016
USD ($)
|
|
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 | $ 83,820 | $ 87,331 |
Income from operations | (907) | 3,430 |
Aerostructures [Member] | ||
Information about reported segments on the basis used internally to evaluate segment performance [Abstract] | ||
Net sales | 79,236 | 76,954 |
Income from operations | 598 | 3,465 |
Engineering Services [Member] | ||
Information about reported segments on the basis used internally to evaluate segment performance [Abstract] | ||
Net sales | 4,881 | 11,059 |
Income from operations | (1,430) | 191 |
Eliminations [Member] | ||
Information about reported segments on the basis used internally to evaluate segment performance [Abstract] | ||
Net sales | (297) | (682) |
Income from operations | $ (75) | $ (226) |
Customer Concentration (Details) |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
Dec. 31, 2016 |
|
Spirit [Member] | Revenue [Member] | |||
Revenue and Accounts Receivable, Major Customer [Line Items] | |||
Percentage attributable to customer (in hundredths) | 41.30% | 36.60% | |
Spirit [Member] | Accounts Receivable [Member] | |||
Revenue and Accounts Receivable, Major Customer [Line Items] | |||
Percentage attributable to customer (in hundredths) | 38.40% | 31.80% | |
The Boeing Company [Member] | Revenue [Member] | |||
Revenue and Accounts Receivable, Major Customer [Line Items] | |||
Percentage attributable to customer (in hundredths) | 11.20% | 10.90% | |
The Boeing Company [Member] | Accounts Receivable [Member] | |||
Revenue and Accounts Receivable, Major Customer [Line Items] | |||
Percentage attributable to customer (in hundredths) | 11.70% | 8.50% | |
Gulfstream [Member] | Revenue [Member] | |||
Revenue and Accounts Receivable, Major Customer [Line Items] | |||
Percentage attributable to customer (in hundredths) | 11.70% | 11.50% | |
Gulfstream [Member] | Accounts Receivable [Member] | |||
Revenue and Accounts Receivable, Major Customer [Line Items] | |||
Percentage attributable to customer (in hundredths) | 10.70% | 12.30% |
Income Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
Dec. 31, 2016 |
|
Income Tax Disclosure [Abstract] | |||
Operating Loss Carryforwards, Valuation Allowance | $ 21,540 | $ 21,027 | |
Provision (benefit) for income taxes | $ 10 | $ (164) |
Restructuring (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Restructuring Cost and Reserve [Line Items] | ||
Payments for Restructuring | $ 203 | $ 235 |
Employee Severance [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Payments for Restructuring | 203 | |
Selling, General and Administrative Expenses [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring related expenses | (20) | 947 |
Selling, General and Administrative Expenses [Member] | Employee Severance [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring related expenses | (20) | 947 |
Selling, General and Administrative Expenses [Member] | Employee Severance [Member] | Relocation of Sheet Metal Operations from Wichita [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring related expenses | (20) | 0 |
Selling, General and Administrative Expenses [Member] | Employee Severance [Member] | Other Expense [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring related expenses | 0 | 947 |
Aerostructures [Member] | Selling, General and Administrative Expenses [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring related expenses | (20) | 947 |
Engineering Services [Member] | Selling, General and Administrative Expenses [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring related expenses | $ 0 | $ 0 |
Restructuring - Restructuring Reserve (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Restructuring Reserve [Roll Forward] | ||
Accrual reversals | $ (20) | $ 947 |
Cash payments | (203) | $ (235) |
Accrued restructuring balance as of March 31, 2017 | 62 | |
Employee Severance [Member] | ||
Restructuring Reserve [Roll Forward] | ||
Accrued restructuring balance as of December 31, 2016 | 285 | |
Accrual reversals | (20) | |
Cash payments | (203) | |
Accrued restructuring balance as of March 31, 2017 | $ 62 |
Condensed Consolidated Balance Sheets (Details) - USD ($) $ in Thousands |
Mar. 31, 2017 |
Dec. 31, 2016 |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|---|---|
Condensed Balance Sheet Statements, Captions [Line Items] | ||||
Cash and cash equivalents | $ 723 | $ 2,491 | $ 1,439 | $ 10,504 |
Accounts receivable, net | 59,117 | 51,269 | ||
Intercompany receivables | 0 | 0 | ||
Inventories | 130,259 | 122,761 | ||
Inventories | 4,566 | 3,586 | ||
Total current assets | 194,665 | 180,107 | ||
Property, plant and equipment, net | 101,175 | 99,515 | ||
Investments in subsidiaries | 0 | 0 | ||
Goodwill | 62,482 | 62,482 | ||
Intangible assets, net | 38,064 | 38,852 | ||
Other assets | 2,454 | 2,676 | ||
Total assets | 398,840 | 383,632 | ||
Accounts payable | 31,859 | 29,378 | ||
Accrued expenses | 20,594 | 25,543 | ||
Intercompany payables | 0 | 0 | ||
Current installments of long-term debt and capital lease obligations | 2,725 | 2,655 | ||
Total current liabilities | 55,178 | 57,576 | ||
Long-term debt and capital lease obligations, less current installments | 260,479 | 237,398 | ||
Other long-term liabilities | 2,412 | 3,117 | ||
Deferred income taxes | 0 | |||
Total long-term liabilities | 262,891 | 240,515 | ||
Total shareholders’ equity | 80,771 | 85,541 | ||
Total liabilities and shareholders' equity | 398,840 | 383,632 | ||
LMIA(Guarantor Parent) | ||||
Condensed Balance Sheet Statements, Captions [Line Items] | ||||
Cash and cash equivalents | 607 | 2,382 | 1,112 | 10,251 |
Accounts receivable, net | 715 | 660 | ||
Intercompany receivables | 53,796 | 244,792 | ||
Inventories | 0 | 0 | ||
Inventories | 2,219 | 1,548 | ||
Total current assets | 57,337 | 249,382 | ||
Property, plant and equipment, net | 8,009 | 6,490 | ||
Investments in subsidiaries | 285,650 | 375,738 | ||
Goodwill | 0 | 0 | ||
Intangible assets, net | 0 | 0 | ||
Other assets | 1,641 | 1,790 | ||
Total assets | 352,637 | 633,400 | ||
Accounts payable | 1,572 | 410 | ||
Accrued expenses | 11,866 | 13,912 | ||
Intercompany payables | 12,400 | 310,644 | ||
Current installments of long-term debt and capital lease obligations | 67 | 89 | ||
Total current liabilities | 25,905 | 325,055 | ||
Long-term debt and capital lease obligations, less current installments | 244,912 | 221,101 | ||
Other long-term liabilities | 1,049 | 1,703 | ||
Deferred income taxes | 0 | |||
Total long-term liabilities | 245,961 | 222,804 | ||
Total shareholders’ equity | 80,771 | 85,541 | ||
Total liabilities and shareholders' equity | 352,637 | 633,400 | ||
Guarantor Subsidiaries | ||||
Condensed Balance Sheet Statements, Captions [Line Items] | ||||
Cash and cash equivalents | 116 | 109 | 327 | 253 |
Accounts receivable, net | 58,402 | 50,609 | ||
Intercompany receivables | 12,400 | 312,332 | ||
Inventories | 130,259 | 122,761 | ||
Inventories | 2,347 | 2,038 | ||
Total current assets | 203,524 | 487,849 | ||
Property, plant and equipment, net | 93,166 | 93,025 | ||
Investments in subsidiaries | 0 | 0 | ||
Goodwill | 62,482 | 62,482 | ||
Intangible assets, net | 38,064 | 38,852 | ||
Other assets | 813 | 886 | ||
Total assets | 398,049 | 683,094 | ||
Accounts payable | 30,287 | 28,968 | ||
Accrued expenses | 8,728 | 11,631 | ||
Intercompany payables | 53,796 | 246,480 | ||
Current installments of long-term debt and capital lease obligations | 2,658 | 2,566 | ||
Total current liabilities | 95,469 | 289,645 | ||
Long-term debt and capital lease obligations, less current installments | 15,567 | 16,297 | ||
Other long-term liabilities | 1,363 | 1,414 | ||
Deferred income taxes | 0 | |||
Total long-term liabilities | 16,930 | 17,711 | ||
Total shareholders’ equity | 285,650 | 375,738 | ||
Total liabilities and shareholders' equity | 398,049 | 683,094 | ||
Consolidating/Eliminating Entries | ||||
Condensed Balance Sheet Statements, Captions [Line Items] | ||||
Cash and cash equivalents | 0 | 0 | $ 0 | $ 0 |
Accounts receivable, net | 0 | 0 | ||
Intercompany receivables | (66,196) | (557,124) | ||
Inventories | 0 | 0 | ||
Inventories | 0 | 0 | ||
Total current assets | (66,196) | (557,124) | ||
Property, plant and equipment, net | 0 | 0 | ||
Investments in subsidiaries | (285,650) | (375,738) | ||
Goodwill | 0 | 0 | ||
Intangible assets, net | 0 | 0 | ||
Other assets | 0 | 0 | ||
Total assets | (351,846) | (932,862) | ||
Accounts payable | 0 | 0 | ||
Accrued expenses | 0 | 0 | ||
Intercompany payables | (66,196) | (557,124) | ||
Current installments of long-term debt and capital lease obligations | 0 | 0 | ||
Total current liabilities | (66,196) | (557,124) | ||
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 | (285,650) | (375,738) | ||
Total liabilities and shareholders' equity | $ (351,846) | $ (932,862) |
Condensed Consolidating Statements of Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Condensed Income Statements, Captions [Line Items] | ||
Product sales | $ 78,572 | $ 75,862 |
Service revenue | 5,248 | 11,469 |
Net sales | 83,820 | 87,331 |
Cost of product sales | 65,363 | 60,336 |
Cost of service revenue | 6,016 | 10,765 |
Cost of sales | 71,379 | 71,101 |
Gross profit | 12,441 | 16,230 |
Selling, general and administrative expenses | 10,834 | 11,853 |
Goodwill and Intangible Asset Impairment | 2,534 | 0 |
Restructuring expense | (20) | 947 |
(Loss) income from operations | (907) | 3,430 |
Interest expense | (5,218) | (5,263) |
Other, net | (333) | (90) |
Income (loss) from equity investments in subsidiaries | 0 | 0 |
Total other expense | (5,551) | (5,353) |
Loss before income taxes | (6,458) | (1,923) |
Provision (benefit) for income taxes | 10 | (164) |
Net loss | (6,468) | (1,759) |
Change in foreign currency translation adjustment | 22 | (13) |
Total comprehensive loss | (6,446) | (1,772) |
LMIA(Guarantor Parent) | ||
Condensed Income Statements, Captions [Line Items] | ||
Product sales | (24) | 58 |
Service revenue | 10,890 | 11,378 |
Net sales | 10,866 | 11,436 |
Cost of product sales | 0 | 59 |
Cost of service revenue | 10,803 | 11,395 |
Cost of sales | 10,803 | 11,454 |
Gross profit | 63 | (18) |
Selling, general and administrative expenses | 0 | 0 |
Goodwill and Intangible Asset Impairment | 2,534 | |
Restructuring expense | 0 | 451 |
(Loss) income from operations | (2,471) | (469) |
Interest expense | (4,998) | (5,030) |
Other, net | 5 | 2 |
Income (loss) from equity investments in subsidiaries | 1,018 | 3,695 |
Total other expense | (3,975) | (1,333) |
Loss before income taxes | (6,446) | (1,802) |
Provision (benefit) for income taxes | 0 | 0 |
Net loss | (6,446) | (1,802) |
Change in foreign currency translation adjustment | 0 | 0 |
Total comprehensive loss | (6,446) | (1,802) |
Guarantor Subsidiaries | ||
Condensed Income Statements, Captions [Line Items] | ||
Product sales | 78,572 | 75,804 |
Service revenue | 5,248 | 11,527 |
Net sales | 83,820 | 87,331 |
Cost of product sales | 65,363 | 60,277 |
Cost of service revenue | 6,079 | 10,836 |
Cost of sales | 71,442 | 71,113 |
Gross profit | 12,378 | 16,218 |
Selling, general and administrative expenses | 10,834 | 11,853 |
Goodwill and Intangible Asset Impairment | 0 | |
Restructuring expense | (20) | 496 |
(Loss) income from operations | 1,564 | 3,869 |
Interest expense | (220) | (233) |
Other, net | (338) | (92) |
Income (loss) from equity investments in subsidiaries | 0 | 0 |
Total other expense | (558) | (325) |
Loss before income taxes | 1,006 | 3,544 |
Provision (benefit) for income taxes | 10 | (164) |
Net loss | 996 | 3,708 |
Change in foreign currency translation adjustment | 22 | (13) |
Total comprehensive loss | 1,018 | 3,695 |
Consolidating/Eliminating Entries | ||
Condensed Income Statements, Captions [Line Items] | ||
Product sales | 24 | 0 |
Service revenue | (10,890) | (11,436) |
Net sales | (10,866) | (11,436) |
Cost of product sales | 0 | |
Cost of service revenue | (10,866) | (11,466) |
Cost of sales | (10,866) | (11,466) |
Gross profit | 0 | 30 |
Selling, general and administrative expenses | 0 | 0 |
Goodwill and Intangible Asset Impairment | 0 | |
Restructuring expense | 0 | 0 |
(Loss) income from operations | 0 | 30 |
Interest expense | 0 | 0 |
Other, net | 0 | 0 |
Income (loss) from equity investments in subsidiaries | (1,018) | (3,695) |
Total other expense | (1,018) | (3,695) |
Loss before income taxes | (1,018) | (3,665) |
Provision (benefit) for income taxes | 0 | 0 |
Net loss | (1,018) | (3,665) |
Change in foreign currency translation adjustment | 0 | 0 |
Total comprehensive loss | $ (1,018) | $ (3,665) |
Condensed Consolidating Statements of Cash Flows (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Condensed Cash Flow Statements, Captions [Line Items] | ||
Net loss | $ (6,468) | $ (1,759) |
Adjustments for non-cash items | 5,157 | 5,658 |
Net changes in operating assets and liabilities, net of acquired businesses | (15,059) | (11,143) |
Intercompany activity | 0 | 0 |
Net cash used by operating activities | (16,370) | (7,244) |
Additions to property, plant and equipment | (8,101) | (2,418) |
Proceeds from sale of property, plant and equipment | 0 | 6 |
Net cash used by investing activities | (8,101) | (2,412) |
Proceeds from Issuance of Secured Debt | 0 | 1,465 |
Repayments of Long-term Debt, Long-term Capital Lease Obligations, and Capital Securities | (666) | (874) |
Advances on revolving line of credit | 53,000 | 2,000 |
Repayments of Lines of Credit | (29,500) | (2,000) |
Proceeds from (Payments for) Other Financing Activities | 131 | |
Payments of Debt Issuance Costs | 131 | 0 |
Net cash (used) provided by financing activities | (22,703) | (591) |
Net decrease in cash and cash equivalents | (1,768) | (9,065) |
Cash and cash equivalents, beginning of period | 2,491 | 10,504 |
Cash and cash equivalents, end of period | 723 | 1,439 |
LMIA(Guarantor Parent) | ||
Condensed Cash Flow Statements, Captions [Line Items] | ||
Net loss | (6,446) | (1,802) |
Adjustments for non-cash items | 1,638 | (2,526) |
Net changes in operating assets and liabilities, net of acquired businesses | (510) | (8,787) |
Intercompany activity | (17,750) | 4,776 |
Net cash used by operating activities | (23,068) | (8,339) |
Additions to property, plant and equipment | (2,070) | (778) |
Proceeds from sale of property, plant and equipment | 0 | |
Net cash used by investing activities | (2,070) | (778) |
Proceeds from Issuance of Secured Debt | 0 | |
Repayments of Long-term Debt, Long-term Capital Lease Obligations, and Capital Securities | (24) | (22) |
Advances on revolving line of credit | 53,000 | 2,000 |
Repayments of Lines of Credit | (29,500) | (2,000) |
Proceeds from (Payments for) Other Financing Activities | 113 | |
Payments of Debt Issuance Costs | 0 | |
Net cash (used) provided by financing activities | (23,363) | 22 |
Net decrease in cash and cash equivalents | (1,775) | (9,139) |
Cash and cash equivalents, beginning of period | 2,382 | 10,251 |
Cash and cash equivalents, end of period | 607 | 1,112 |
Guarantor Subsidiaries | ||
Condensed Cash Flow Statements, Captions [Line Items] | ||
Net loss | 996 | 3,708 |
Adjustments for non-cash items | 2,501 | 4,519 |
Net changes in operating assets and liabilities, net of acquired businesses | (14,549) | (2,356) |
Intercompany activity | 17,750 | (4,776) |
Net cash used by operating activities | 6,698 | 1,095 |
Additions to property, plant and equipment | (6,031) | (1,640) |
Proceeds from sale of property, plant and equipment | 6 | |
Net cash used by investing activities | (6,031) | (1,634) |
Proceeds from Issuance of Secured Debt | 1,465 | |
Repayments of Long-term Debt, Long-term Capital Lease Obligations, and Capital Securities | (642) | (852) |
Advances on revolving line of credit | 0 | 0 |
Repayments of Lines of Credit | 0 | 0 |
Proceeds from (Payments for) Other Financing Activities | 18 | |
Payments of Debt Issuance Costs | 0 | |
Net cash (used) provided by financing activities | 660 | (613) |
Net decrease in cash and cash equivalents | 7 | 74 |
Cash and cash equivalents, beginning of period | 109 | 253 |
Cash and cash equivalents, end of period | 116 | 327 |
Consolidating/Eliminating Entries | ||
Condensed Cash Flow Statements, Captions [Line Items] | ||
Net loss | (1,018) | (3,665) |
Adjustments for non-cash items | 1,018 | 3,665 |
Net changes in operating assets and liabilities, net of acquired businesses | 0 | 0 |
Intercompany activity | 0 | 0 |
Net cash used by operating activities | 0 | 0 |
Additions to property, plant and equipment | 0 | 0 |
Proceeds from sale of property, plant and equipment | 0 | 0 |
Net cash used by investing activities | 0 | 0 |
Proceeds from Issuance of Secured Debt | 0 | |
Repayments of Long-term Debt, Long-term Capital Lease Obligations, and Capital Securities | 0 | 0 |
Advances on revolving line of credit | 0 | 0 |
Repayments of Lines of Credit | 0 | 0 |
Proceeds from (Payments for) Other Financing Activities | 0 | |
Payments of Debt Issuance Costs | 0 | |
Net cash (used) provided by financing activities | 0 | 0 |
Net decrease in cash and cash equivalents | 0 | 0 |
Cash and cash equivalents, beginning of period | 0 | 0 |
Cash and cash equivalents, end of period | $ 0 | $ 0 |
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