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CONDENSED CONSOLIDATING FINANCIAL STATEMENTS (Notes)
12 Months Ended
Dec. 31, 2015
Condensed Financial Information of Parent Company Only Disclosure [Abstract]  
Condensed Consolidating Financial Information
CONDENSED CONSOLIDATING FINANCIAL INFORMATION

LMI Aerospace, Inc. excluding its subsidiaries (“LMIA”) is the parent company, issuer and obligor of the second-priority senior notes due July 15, 2019 (the “Notes”). The payment obligations of LMIA under the Notes are guaranteed and secured by LMIA and all of its subsidiaries other than minor subsidiaries as further described below.

These Notes are guaranteed on a second-priority senior secured basis, jointly and severally, by LMIA (“Guarantor Parent”) and all of its existing and future 100% owned subsidiaries (collectively, the “Guarantor Subsidiaries”) other than minor subsidiaries. Such guaranties are full and unconditional. LMIA conducts substantially all of its business through and derives virtually all of its income from its subsidiaries. Therefore, its ability to make required principal and interest payments with respect to its indebtedness depends on the earnings of subsidiaries and its ability to receive funds from its subsidiaries.

The Notes are secured on a second-priority basis by liens on substantially all of LMIA’s and the Guarantor Subsidiaries’ assets, subject to certain exceptions and permitted liens. The liens securing the Notes are contractually subordinated to the liens that secure indebtedness under the revolving credit facility as a result of the lien subordination provisions of the intercreditor agreement to the extent of the value of the collateral securing such indebtedness as well as being subordinated by other existing indebtedness, including industrial revenue bonds, capital leases and other notes payable, to the extent of the value of the collateral that secures such existing indebtedness. As a consequence of this lien subordination and existing indebtedness the notes and the guarantees are effectively subordinated to the extent of the value of the collateral that secures them. Decisions regarding the maintenance and release of the collateral secured by the collateral agreement are made by the lenders under the modified revolving credit facility, and neither the indenture trustee nor the holders of the Notes have control of decisions regarding the release of collateral.
We have not presented separate financial statements and separate disclosures have not been provided concerning the Guarantor Subsidiaries due to the presentation of condensed consolidating financial information set forth in this Note, consistent with the Securities and Exchange Commission (the “SEC”) rules governing reporting on guarantor financial information.
Supplemental condensed consolidating financial information of the Company, including such information for the Guarantor Subsidiaries, is presented below. Investments in subsidiaries are presented using the equity method of accounting. The principal elimination entries eliminate investments in subsidiaries and inter-company balances and transactions.

CONDENSED CONSOLIDATING BALANCE SHEET
December 31, 2015
(Amounts in thousands)
 
LMIA(Guarantor Parent)
 
Guarantor Subsidiaries
 
Consolidating/Eliminating Entries
 
Consolidated
Assets
 
 
 
 
 
 

Current assets:
 
 
 
 
 
 
 
Cash and cash equivalents
$
10,251

 
$
253

 
$
—

 
$
10,504

Trade accounts receivable, net
1,220

 
47,271

 
—

 
48,491

Intercompany receivables
196,496

 
203,128

 
(399,624
)
 
—

Inventories
—

 
114,775

 
—

 
114,775

Prepaid expenses and other current assets
2,224

 
1,923

 
—

 
4,147

Total current assets
210,191

 
367,350

 
(399,624
)
 
177,917

 
 
 
 
 
 
 
 
Property, plant and equipment, net
5,430

 
95,539

 
—

 
100,969

Investments in subsidiaries
387,868

 
—

 
(387,868
)
 
—

Goodwill
—

 
86,784

 
—

 
86,784

Intangible assets, net
—

 
46,582

 
—

 
46,582

Other assets
2,135

 
1,593

 
—

 
3,728

Total assets
$
605,624

 
$
597,848

 
$
(787,492
)
 
$
415,980

 
 
 
 
 
 
 
 
Liabilities and shareholders’ equity
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
Accounts payable
$
1,393

 
$
11,763

 
$
—

 
$
13,156

Accrued expenses
17,009

 
13,006

 
—

 
30,015

Intercompany Payables
237,548

 
162,076

 
(399,624
)
 
$
—

Current installments of long-term debt and capital lease obligations
85

 
2,277

 
—

 
2,362

Total current liabilities
256,035

 
189,122

 
(399,624
)
 
45,533

 
 
 
 
 
 
 
 
Long-term debt and capital lease obligations, less current installments
229,752

 
17,881

 
—

 
247,633

Other long-term liabilities
1,881

 
2,441

 
—

 
4,322

Deferred income taxes


 
536

 
—

 
536

Total long-term liabilities
231,633

 
20,858

 
—

 
252,491

 
 
 
 
 
 
 
 
Total shareholders’ equity
117,956

 
387,868

 
(387,868
)
 
117,956

Total liabilities and shareholders’ equity
$
605,624

 
$
597,848

 
$
(787,492
)
 
$
415,980



CONDENSED CONSOLIDATING BALANCE SHEET
December 31, 2014
(Amounts in thousands)
 
LMIA(Guarantor Parent)
 
Guarantor Subsidiaries
 
Consolidating/Eliminating Entries
 
Consolidated
Assets
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
Cash and cash equivalents
7,058

 
869

 
—

 
7,927

Trade accounts receivable, net
1,310

 
56,924

 
—

 
58,234

Intercompany receivables
145,980

 
145,223

 
(291,203
)
 
—

Inventories
—

 
114,279

 
—

 
114,279

Prepaid expenses and other current assets
8,325

 
1,930

 
—

 
10,255

Total current assets
162,673

 
319,225

 
(291,203
)
 
190,695

 
 
 
 
 
 
 
 
Property, plant and equipment, net
3,148

 
96,334

 
—

 
99,482

Investments in subsidiaries
368,587

 

 
(368,587
)
 
—

Goodwill
—

 
86,784

 
—

 
86,784

Intangible assets, net
—

 
50,940

 
—

 
50,940

Other assets
2,876

 
1,837

 
—

 
4,713

Total assets
$
537,284

 
$
555,120

 
$
(659,790
)
 
$
432,614

 
 
 
 
 
 
 
 
Liabilities and shareholders’ equity
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
Accounts payable
1,339

 
20,416

 
—

 
$
21,755

Accrued expenses
13,679

 
12,393

 
—

 
26,072

Intercompany Payables
164,158

 
127,045

 
(291,203
)
 
$
—

Current installments of long-term debt and capital lease obligations
335

 
3,089

 
—

 
3,424

Total current liabilities
179,511

 
162,943

 
(291,203
)
 
51,251

 
 
 
 
 
 
 
 
Long-term debt and capital lease obligations, less current installments
239,307

 
20,338

 
—

 
259,645

Other long-term liabilities
331

 
2,958

 
—

 
3,289

Deferred income taxes
—

 
294

 
—

 
294

Total long-term liabilities
239,638

 
23,590

 
—

 
263,228

 
 
 
 
 
 
 
 
Total shareholders’ equity
118,135

 
368,587

 
(368,587
)
 
118,135

Total liabilities and shareholders’ equity
$
537,284

 
$
555,120

 
$
(659,790
)
 
$
432,614


CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
December 31, 2015
(Amounts in thousands, except share and per share data)
 
LMIA(Guarantor Parent)
 
Guarantor Subsidiaries
 
Consolidating/Eliminating Entries
 
Consolidated
Sales and service revenue
 
 
 
 
 
 
 
Product sales
239

 
323,337

 
35

 
$
323,611

Service revenues
36,184

 
51,720

 
(36,419
)
 
51,485

Net sales
36,423

 
375,057

 
(36,384
)
 
375,096

Cost of sales and service revenue
 
 
 
 
 
 
 

Cost of product sales
248

 
259,327

 
35

 
259,610

Cost of service revenues
35,952

 
47,166

 
(36,418
)
 
46,700

Cost of sales
36,200

 
306,493

 
(36,383
)
 
306,310

Gross profit
223

 
68,564

 
(1
)
 
68,786

Selling, general and administrative expenses
—

 
45,678

 
—

 
45,678

Restructuring expense
340

 
1,982

 
—

 
2,322

(Loss) income from operations
(117
)
 
20,904

 
(1
)
 
20,786

Other income (expense):
 
 
 
 
 
 
 

Interest expense
(21,449
)
 
(990
)
 
—

 
(22,439
)
Other, net
—

 
(236
)
 
—

 
(236
)
Income (loss) from equity investments in subsidiaries
19,284

 
—

 
(19,284
)
 
—

Total other expense
(2,165
)
 
(1,226
)
 
(19,284
)
 
(22,675
)
(Loss) income before income taxes
(2,282
)
 
19,678

 
(19,285
)
 
(1,889
)
Provision for income taxes
—

 
352

 
—

 
352

Net (loss) income
(2,282
)
 
19,326

 
(19,285
)
 
(2,241
)
Other comprehensive (loss) income:

 

 

 
 
Change in foreign currency translation adjustment
—

 
(41
)
 
—

 
(41
)
Total comprehensive (loss) income
$
(2,282
)
 
$
19,285

 
$
(19,285
)
 
$
(2,282
)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
December 31, 2014
(Amounts in thousands, except share and per share data)
 
LMIA(Guarantor Parent)
 
Guarantor Subsidiaries
 
Consolidating/Eliminating Entries
 
Consolidated
Sales and service revenue
 
 
 
 
 
 
 
Product sales
466

 
321,286

 
(468
)
 
$
321,284

Service revenues
36,181

 
66,543

 
(36,191
)
 
66,533

Net sales
36,647

 
387,829

 
(36,659
)
 
387,817

Cost of sales and service revenue
 
 
 
 
 
 
 

Cost of product sales
699

 
254,544

 
(468
)
 
254,775

Cost of service revenues
35,998

 
57,864

 
(36,190
)
 
57,672

Cost of sales
36,697

 
312,408

 
(36,658
)
 
312,447

Gross profit
(50
)
 
75,421

 
(1
)
 
75,370

Selling, general and administrative expenses
792

 
54,412

 
—

 
55,204

Goodwill and intangible asset impairment
—

 
26,439

 
—

 
26,439

Restructuring expense
1,012

 
1,573

 
—

 
2,585

Loss from operations
(1,854
)
 
(7,003
)
 
(1
)
 
(8,858
)
Other income (expense):
 
 
 
 
 
 
 

Interest expense
(28,224
)
 
(1,056
)
 
—

 
(29,280
)
Other, net
11

 
212

 
—

 
223

(Loss) Income from equity investments in subsidiaries
(8,860
)
 
—

 
8,860

 
—

Total other (expense) income
(37,073
)
 
(844
)
 
8,860

 
(29,057
)
(Loss) income before income taxes
(38,927
)
 
(7,847
)
 
8,859

 
(37,915
)
(Benefit) provision for income taxes
(9,867
)
 
914

 
—

 
(8,953
)
Net (loss) income
(29,060
)
 
(8,761
)
 
8,859

 
(28,962
)
Other comprehensive (loss) income:
 
 
 
 
 
 
 
Change in foreign currency translation adjustment
—

 
(98
)
 
—

 
(98
)
Reclassification adjustment for losses on interest rate hedges included in net earnings
278

 
—

 
—

 
278

Total comprehensive (loss) income
$
(28,782
)
 
$
(8,859
)
 
$
8,859

 
$
(28,782
)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
December 31, 2013
(Amounts in thousands, except share and per share data)
 
LMIA(Guarantor Parent)
 
Guarantor Subsidiaries
 
Consolidating/Eliminating Entries
 
Consolidated
Sales and service revenue
 
 
 
 
 
 
 
Product sales
4,388

 
324,455

 
(4,710
)
 
$
324,133

Service revenues
41,578

 
88,141

 
(41,295
)
 
88,424

Net sales
45,966

 
412,596

 
(46,005
)
 
412,557

Cost of sales and service revenue
 
 
 
 
 
 
 

Cost of product sales
4,290

 
255,681

 
(4,710
)
 
255,261

Cost of service revenues
41,533

 
77,124

 
(41,223
)
 
77,434

Cost of sales
45,823

 
332,805

 
(45,933
)
 
332,695

Gross profit
143

 
79,791

 
(72
)
 
79,862

Selling, general and administrative expenses
—

 
55,934

 
(72
)
 
55,862

Goodwill and intangible asset impairment
—

 
77,750

 
—

 
77,750

Contingent consideration write-off
(7,950
)
 
—

 
—

 
(7,950
)
Restructuring expense
4

 
3,069

 
—

 
3,073

Acquisitions expense
229

 
18

 
—

 
247

Income (loss) from operations
7,860

 
(56,980
)
 
—

 
(49,120
)
Other (expense) income:
 
 
 
 
 
 
 

Interest expense
(15,887
)
 
(1,075
)
 
—

 
(16,962
)
Other, net
95

 
523

 
—

 
618

Income (loss) from equity investments in subsidiaries
(52,278
)
 
—

 
52,278

 
—

Total other expense
(68,070
)
 
(552
)
 
52,278

 
(16,344
)
(Loss) income before income taxes
(60,210
)
 
(57,532
)
 
52,278

 
(65,464
)
Benefit for income taxes
(1,702
)
 
(5,277
)
 
—

 
(6,979
)
Net (loss) income
(58,508
)
 
(52,255
)
 
52,278

 
(58,485
)
Other comprehensive (loss) income:
 
 
 
 
 
 
 
Change in foreign currency translation adjustment
—

 
(23
)
 
—

 
(23
)
Unrealized loss on interest rate hedges
(278
)
 
—

 
—

 
(278
)
Total comprehensive (loss) income
$
(58,786
)
 
$
(52,278
)
 
$
52,278

 
$
(58,786
)

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
For the Year ended December 31, 2015
(Amounts in thousands)
 
LMIA(Guarantor Parent)
 
Guarantor Subsidiaries
 
Consolidating/Eliminating Entries
 
Consolidated
Operating activities:
 
 
 
 
 
 
 
Net (loss)/income
$
(2,282
)
 
$
19,326

 
$
(19,285
)
 
$
(2,241
)
Adjustments for non-cash items
(14,546
)
 
18,416

 
19,285

 
23,155

Net changes in operating assets and liabilities, net of acquired businesses
10,420

 
1,028

 
—

 
11,448

Intercompany activity
22,874

 
(22,874
)
 
—

 
—

Net cash provided by operating activities
16,466

 
15,896

 
—

 
32,362

Investing activities:
 

 
 

 
 

 
 

Additions to property, plant and equipment
(1,903
)
 
(14,696
)
 
—

 
(16,599
)
Proceeds from sale of equipment
—

 
285

 
—

 
285

Net cash used by investing activities
(1,903
)
 
(14,411
)
 
—

 
(16,314
)
Financing activities:
 

 
 

 
 

 
 

Principal payments on long-term debt and notes payable
(11,160
)
 
(2,116
)
 
—

 
(13,276
)
Advances on revolving line of credit
99,000

 
—

 
—

 
99,000

Payments on revolving line of credit
(99,000
)
 
—

 
—

 
(99,000
)
Payments for debt issuance cost
(210
)
 
15

 
—

 
(195
)
Net cash used by financing activities
(11,370
)
 
(2,101
)
 
—

 
(13,471
)
Net increase (decrease) in cash and cash equivalents
3,193

 
(616
)
 
—

 
2,577

Cash and cash equivalents, beginning of year
7,058

 
869

 
—

 
7,927

Cash and cash equivalents, end of year
$
10,251

 
$
253

 
$
—

 
$
10,504

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
For the Year ended December 31, 2014
(Amounts in thousands)
 
LMIA(Guarantor Parent)
 
Guarantor Subsidiaries
 
Consolidating/Eliminating Entries
 
Consolidated
Operating activities:
 
 
 
 
 
 
 
Net (loss)/income
$
(29,060
)
 
$
(8,761
)
 
$
8,859

 
$
(28,962
)
Adjustments for non-cash items
21,714

 
46,496

 
(8,859
)
 
59,351

Net changes in operating assets and liabilities, net of acquired businesses
19,977

 
(1,249
)
 
—

 
18,728

Intercompany activity
17,663

 
(17,663
)
 
—

 
—

Net cash provided by operating activities
30,294

 
18,823

 
—

 
49,117

Investing activities:
 

 
 

 
 

 
 

Additions to property, plant and equipment
(715
)
 
(15,975
)
 
—

 
(16,690
)
Proceeds from sale of equipment
2,558

 
1,021

 
—

 
3,579

Net cash provided (used) by investing activities
1,843

 
(14,954
)
 
—

 
(13,111
)
Financing activities:
 

 
 

 
 

 
 

Proceeds from issuance of debt
250,000

 
—

 
—

 
250,000

Principal payments on long-term debt and notes payable
(231,466
)
 
(4,167
)
 
—

 
(235,633
)
Advances on revolving line of credit
66,000

 
—

 
—

 
66,000

Payments on revolving line of credit
(102,000
)
 
—

 
—

 
(102,000
)
Payments for debt issuance cost
(8,018
)
 
—

 
—

 
(8,018
)
Other, net
—

 
—

 
—

 
—

Net cash used by financing activities
(25,484
)
 
(4,167
)
 
—

 
(29,651
)
Net increase (decrease) in cash and cash equivalents
6,653

 
(298
)
 
—

 
6,355

Cash and cash equivalents, beginning of year
405

 
1,167

 
—

 
1,572

Cash and cash equivalents, end of year
$
7,058

 
$
869

 
$
—

 
$
7,927

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
For the Year ended December 31, 2013
(Amounts in thousands)
 
LMIA(Guarantor Parent)
 
Guarantor Subsidiaries
 
Consolidating/Eliminating Entries
 
Consolidated
Operating activities:
 
 
 
 
 
 
 
Net (loss)/income
$
(58,508
)
 
$
(52,255
)
 
$
52,278

 
$
(58,485
)
Adjustments for non-cash items
46,788

 
90,985

 
(52,278
)
 
85,495

Net changes in operating assets and liabilities, net of acquired businesses
696

 
(36,055
)
 
—

 
(35,359
)
Intercompany activity
(12,974
)
 
12,974

 
—

 
—

Net cash (used)/provided by operating activities
(23,998
)
 
15,649

 
—

 
(8,349
)
Investing activities:
 

 
 

 
 

 
 

Additions to property, plant and equipment
(4,623
)
 
(19,115
)
 
—

 
(23,738
)
Acquisitions, net of cash acquired
(504
)
 
—

 
—

 
(504
)
Proceeds from sale of equipment
—

 
1,989

 
—

 
1,989

Net cash used by investing activities
(5,127
)
 
(17,126
)
 
—

 
(22,253
)
Financing activities:
 

 
 

 
 

 
 

Proceeds from issuance of debt
3,551

 
2,200

 
—

 
5,751

Principal payments on long-term debt and notes payable
(5,767
)
 
(96
)
 
—

 
(5,863
)
Advances on revolving line of credit
107,000

 
—

 
—

 
107,000

Payments on revolving line of credit
(77,236
)
 
—

 
—

 
(77,236
)
Payments for debt issuance cost
(1,780
)
 
(37
)
 
—

 
(1,817
)
Other, net
(8
)
 
—

 
—

 
(8
)
Net cash provided by financing activities
25,760

 
2,067

 
—

 
27,827

Net (decrease) increase in cash and cash equivalents
(3,365
)
 
590

 
—

 
(2,775
)
Cash and cash equivalents, beginning of year
3,770

 
577

 
—

 
4,347

Cash and cash equivalents, end of year
$
405

 
$
1,167

 
$
—

 
$
1,572