LMI expects to report up to $29 million charge ahead of earnings results
LMI Aerospace said Monday it expects to take a $24 million to $29 million impairment charge to its engineering services business in its fourth quarter 2014 results.
The St. Louis-based company that operates two facilities in Wichita said in a news release that the charge stems from a write-down in its engineering services business “attributable to a sustained decline in sales and lower overall demand for engineering services.”
“Demand for aerospace structural design engineering has slowed as a result of a decrease in the number of new development programs currently in process,” the company said in the release. “Further, competition from lower cost competitors and customers choosing to keep design work in house rather than outsourcing has also contributed to reduced demand as well as lower profitability for such services.”
LMI said it is finalizing the actual amount of the impairment charge before it releases its fourth quarter and year-end 2014 financial results.
The company said it has appointed Brian Olsen, executive director of business development, as acting president of engineering services, and Jay Inman as acting chief operating officer of the unit.
“The Engineering Services business needs to focus heavily on revenue generation and business development in the coming year,” Dan Korte, LMI’s chief executive, said in the release. “Brian possesses the skills and experience required to actively seek out new opportunities for both the design and after-market portions of our services business.”
In a separate release Monday, the company announced it signed an agreement with Wichita-based Spirit AeroSystems to a become strategically aligned partner, which LMI said “supports a longer relationship for the two companies.”
In Wichita, the aerospace and defense parts supplier operates a machining center and a fabrication and composites center and employs about 151 people.
Reach Jerry Siebenmark at 316-268-6576 or jsiebenmark@wichitaeagle.com. Follow him on Twitter: @jsiebenmark.
This story was originally published February 9, 2015 at 11:15 AM with the headline "LMI expects to report up to $29 million charge ahead of earnings results."