07 Aug 14. LMI Aerospace, Inc. (LMIA), a leading provider of design engineering services and supplier of structural assemblies, kits and components to the aerospace and defense markets, announced its financial results for the second quarter ended June 30, 2014.
Second Quarter Results
For the second quarter 2014, net sales were $105.9m, compared to $105.5m in the second quarter of 2013. A net loss of $7.4m, or $0.58 per diluted share, was realized in the second quarter of 2014, compared to net income of $4.7m, or $0.37 per diluted share, in the second quarter of 2013. Second quarter 2014 results included a $9.1m charge related to debt refinancing, $1.1m for restructuring, $0.5m in environmental expenses and $0.2m in integration expenses. Pre-tax income for the second quarter of 2014, excluding non-recurring, unusual items was $1.8m, compared to $0.3m in the first quarter of 2014 and $3.8m in the second quarter of 2013. The second quarter of 2014 also included a discrete income tax benefit of $2.5m. Diluted earnings per share, excluding the impact of non-recurring, unusual items, was $0.13 in the second quarter of 2014.
Aerostructures Segment
Aerostructures revenue increased 4.4 percent from $84.8m in the second quarter of 2013 to $88.5m in the second quarter of 2014, driven primarily by growth in our sales in both corporate and regional and large commercial aircraft, partially offset by a decrease in sales in our military programs.
Net sales of large commercial aircraft products increased 3.9 percent during the second quarter of 2014. Growth in the Boeing 737 and 787 platforms contributed increases of $3.0m and $2.0m over the prior year quarter. These increases were partially offset by decreases in the sale of Boeing 767 wing modification products and Boeing 747 platform of $1.6m and $2.4m, respectively. Our largest sector growth was the $4.5m for corporate and regional aircraft, which was primarily due to increased tooling revenue related to a development program of $2.0m in addition to a $2.0m increase in revenues on the Gulfstream G650 aircraft. Net sales of military products declined $1.5m due to lower demand on the Black Hawk program.
The segment generated gross profit of $15.9m, or 18.0 percent of net sales, in the second quarter of 2014 versus $19.1m, or 22.5 percent of net sales, in the second quarter of 2013. Increased tooling revenue at low margins contributed to the decline in gross profit margin. Additionally, unfavorable product sales mix and lower production levels adversely impacted gross profit in the quarter.
Selling, general and administrative expenses were $12.7m in the second quarter of 2014 versus $3.4m in the second quarter of 2013. The difference in selling, general and administrative expenses year over year was primarily related to a favorable one-time write off of a contingent consideration liability of $8.0m in the second quarter of 2013. The second quarter of 2014 included restructuring charges of $1.1m and environmental expenses of $0.5m. Excluding these unusual costs, selling, general and administrative expenses would have declined $0.2m in the second quarter of 2014 versus the prior-year period.
Engineering Services Segment
Engineering Services revenue decreased 17.2 percent from $21.5m in the second quarter of 2013 to $17.8m in the second quarter of 2014, driven primarily by reductions in sales in our military and other programs.
Net sales for large commercial aircraft declined $0.4m from the prior year quarter, as a result of a decline of $1.5m in revenues on the Nacelle program, partially offset by increases in maintenance, repair, and overhaul revenue of $0.8m. Net sales of services related to corporate and regional aircraft increased 15.9 percent, primarily related to support of the Bombardier L-85 program. Net sales of services for military programs were down $2.5m versus the prior year quarter due to the maturation of the Boeing Tanker program. Net sales related to design and deli