LMI Q3 Profit Declines, Misses Estimates; Guides Revenue Below View

(RTTNews) - LMI Aerospace, Inc (LMIA), a provider of design engineering services and structural assemblies, kits and components, Tuesday reported a drop in earnings for the third quarter. The company cited dilution from the Valent acquisition and weakness in Engineering Services revenues and profits as primary reasons for this decline. The company also trimmed its 2013 sales outlook.

While the company's recent acquistion Valent Aerostructures, LLC chipped in to grow the sales of the company, the SG&A expenses of $3.8 million associated with Valent played a major role in decline of earnings to $2.1 million, or $0.16 per share, from $5.6 million, or $0.48 per share, a year earlier.

Four analysts polled by Thomson Reuters estimated the company's earnings to be $0.22 for the quarter. Analysts' estimates typically exclude one-time items.

For the three months to September, adjusted EBITDA rose to $12.8 million from $11.4 million a year earlier.

The company's recent acquisition, Valent, significantly contributed to the 48.2 percent increase in sales to $104.7 million from $70.6 million a year earlier.

"During the third quarter, Valent and Engineering Services orders continued to decline, resulting in full year 2013 sales now expected to be below the estimates discussed in our second quarter press release," said Ronald Saks, CEO. The company lowered its sale forecast for 2013 to the range of $421 million to $425.5 million. The street view for 2013 sales is $433.1 million.

LMI projects operating income for 2013 to be in the range of $28.3 million to $29.1 million. Also, capital expenditures for the year are expected to be in the range of $25 million to $27 million.

Looking ahead to 2014, LMI forecast sales in the range of $418 million to $439 million and capital expenditures of $16 million and $20 million. The street view for 2014 sales is $463.2 million. The company projects operating income for 2014 to be $35 million to $40.5 million.

Monday, the stock closed at $14.78 on the Nasdaq.