**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**Washington,      D.C. 20549**

**FORM      10-Q**

| ý | Quarterly                Report pursuant to Section 13 or 15(d) of the Securities Exchange                Act of                1934. For                the quarterly period ended June 30,                2006. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  ̈ | Transition                  Report pursuant to Section 13 or 15(d) of the Securities Exchange                  Act of                  1934. For                  the transition period from                        to                       . |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**LMI      AEROSPACE, INC.**

| **Missouri**(State                or other jurisdiction ofincorporation                or organization)                             | **43-1309065**(I.R.S.                EmployerIdentification                No.) |
|-------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------|
|                                                                                                                                |                                                                            |
| **3600                Mueller Road****St.                Charles, Missouri**(Address                of principal executive offices) |  **63302-0900**(Zip                Code)                                   |

**(636)      946-6525**

**LMI      AEROSPACE, INC.**

**QUARTERLY      REPORT ON FORM 10-Q**

**FOR      THE FISCAL QUARTER ENDING JUNE 30, 2006**

|                                                                                                                                       |                                                                                                                                                                 | Page                  No. |
|--------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------|
| **Item                  1. Financial Statements (unaudited).**                                                                             |                                                                                                                                                                 |
|                                                                                                                                       |                                                                                                                                                                 |                      |
|                                                                                                                                       | Condensed                  Consolidated Balance Sheets as of June 30, 2006 and December 31,                  2005.                                                   | 3                         |
|                                                                                                                                       |                                                                                                                                                                 |                      |
|                                                                                                                                       | Condensed                  Consolidated Statements of Operations for the three months and                  six months                  ended June 30, 2006 and 2005. | 4                         |
|                                                                                                                                       |                                                                                                                                                                 |                      |
|                                                                                                                                       | Condensed                  Consolidated Statements of Cash Flows for the six months ended                  June 30,                  2006 and 2005.                  | 5                         |
|                                                                                                                                       |                                                                                                                                                                 |                      |
|                                                                                                                                       | Notes                  to Condensed Consolidated Financial Statements.                                                                                               | 6                         |
|                                                                                                                                       |                                                                                                                                                                 |                      |
| **Item                  2. Management’s Discussion and Analysis of Financial Condition and Results                  of Operations.** | 13                                                                                                                                                                   |
|                                                                                                                                       |                                                                                                                                                                 |                      |
| **Item                  3. Quantitative and Qualitative Disclosures About Market                  Risk.**                                  | 19                                                                                                                                                                   |
|                                                                                                                                       |                                                                                                                                                                 |                      |
| **Item                  4. Controls and Procedures.**                                                                                      | 19                                                                                                                                                                   |
|                                                                                                                                       |                                                                                                                                                                 |                      |
|                                                                                                                                       |                                                                                                                                                                 |                      |
|                                                                                                                                       | PART                  II. OTHER INFORMATION                                                                                                                          |                      |
|                                                                                                                                       |                                                                                                                                                                 |                      |
| **Item                  1. Legal Proceedings.**                                                                                            | 20                                                                                                                                                                   |
|                                                                                                                                       |                                                                                                                                                                 |                      |
| **Item                  1A. Risk Factors.**                                                                                                | 20                                                                                                                                                                   |
|                                                                                                                                       |                                                                                                                                                                 |                      |
| **Item                  2. Unregistered Sales of Equity Securities and Use of                  Proceeds.**                                 | 20                                                                                                                                                                   |
|                                                                                                                                       |                                                                                                                                                                 |                      |
| **Item                  3. Defaults Upon Senior Securities.**                                                                              | 20                                                                                                                                                                   |
|                                                                                                                                       |                                                                                                                                                                 |                      |
| **Item                  4. Submission of Matters to a Vote of Security                  Holders.**                                         | 21                                                                                                                                                                   |
|                                                                                                                                       |                                                                                                                                                                 |                      |
| **Item                  5. Other Information**                                                                                             | 21                                                                                                                                                                   |
|                                                                                                                                       |                                                                                                                                                                 |                      |
| **Item                  6. Exhibits.**                                                                                                     | 21                                                                                                                                                                   |
|                                                                                                                                       |                                                                                                                                                                 |                      |
| SIGNATURE                  PAGE                                                                                                            | 22                                                                                                                                                                   |
|                                                                                                                                       |                                                                                                                                                                 |                      |
| EXHIBIT                  INDEX                                                                                                             | 23                                                                                                                                                                   |

----

**PART      I**

**FINANCIAL      INFORMATION**

**LMI      Aerospace, Inc.**

**Condensed      Consolidated Balance Sheets**

*(Amounts      in thousands, except share and per share data)*

|                                                                                                                                                                                                                                 |   |   | (Unaudited)                   June 30, 2006  |   |   | December                31, 2005 |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|------------------------------------------------------------------|--------|--------|----------------------------------|--------|
| Assets                                                                                                                                                                                                                               |   |   |                                                             |   |   |                             |   |
| Current                assets:                                                                                                                                                                                                       |   |   |                                                             |   |   |                             |   |
| Cash                and cash equivalents                                                                                                                                                                                             |   | $      | 16,941                                                           |   | $      | 35                               |   |
| Short-term                investments                                                                                                                                                                                                |   |   | 6,342                                                            |   |   | -                                |   |
| Trade                accounts receivable, net of allowance of $225 at June 30, 2006 and                $244 at                December 31, 2005                                                                                      |   |   | 17,416                                                           |   |   | 16,088                           |   |
| Inventories                                                                                                                                                                                                                          |   |   | 30,279                                                           |   |   | 25,333                           |   |
| Prepaid                expenses and other current assets                                                                                                                                                                             |   |   | 1,335                                                            |   |   | 1,205                            |   |
| Deferred                income taxes                                                                                                                                                                                                 |   |   | 1,610                                                            |   |   | 1,610                            |   |
| Total                current assets                                                                                                                                                                                                  |   |   | 73,923                                                           |   |   | 44,271                           |   |
|                                                                                                                                                                                                                                 |   |   |                                                             |   |   |                             |   |
|                                                                                                                                                                                                                                 |   |   |                                                             |   |   |                             |   |
| Property,                plant and equipment, net                                                                                                                                                                                    |   |   | 18,915                                                           |   |   | 18,162                           |   |
| Goodwill                                                                                                                                                                                                                             |   |   | 5,653                                                            |   |   | 5,653                            |   |
| Customer                intangible assets, net                                                                                                                                                                                       |   |   | 3,609                                                            |   |   | 3,114                            |   |
| Other                assets                                                                                                                                                                                                          |   |   | 707                                                              |   |   | 757                              |   |
| Total                assets                                                                                                                                                                                                          |   | $      | 102,807                                                          |   | $      | 71,957                           |   |
|                                                                                                                                                                                                                                 |   |   |                                                             |   |   |                             |   |
| Liabilities                and stockholders’ equity                                                                                                                                                                            |   |   |                                                             |   |   |                             |   |
| Current                liabilities:                                                                                                                                                                                                  |   |   |                                                             |   |   |                             |   |
| Accounts                payable                                                                                                                                                                                                      |   | $      | 8,892                                                            |   | $      | 7,407                            |   |
| Accrued                expenses                                                                                                                                                                                                      |   |   | 3,987                                                            |   |   | 6,077                            |   |
| Current                installments of long-term debt and capital lease                obligations                                                                                                                                   |   |   | 1,460                                                            |   |   | 1,846                            |   |
| Total                current liabilities                                                                                                                                                                                             |   |   | 14,339                                                           |   |   | 15,330                           |   |
|                                                                                                                                                                                                                                 |   |   |                                                             |   |   |                             |   |
| Long-term                debt and capital lease obligations, less current installments                                                                                                                                               |   |   | 2,442                                                            |   |   | 14,462                           |   |
| Subordinated                debt                                                                                                                                                                                                     |   |   | -                                                                |   |   | 1,000                            |   |
| Deferred                income taxes                                                                                                                                                                                                 |   |   | 1,333                                                            |   |   | 1,333                            |   |
| Total                long-term liabilities                                                                                                                                                                                           |   |   | 3,775                                                            |   |   | 16,795                           |   |
|                                                                                                                                                                                                                                 |   |   |                                                             |   |   |                             |   |
| Stockholders’                equity:                                                                                                                                                                                           |   |   |                                                             |   |   |                             |   |
| Common                stock, $.02 par value per share; authorized 28,000,000 shares; issued                11,570,681 shares and 8,797,909 shares at June 30, 2006 and December                31,                2005, respectively |   |   | 231                                                              |   |   | 176                              |   |
| Preferred                stock, $.02 par value per share; authorized 2,000,000 shares; none                issued                in both periods                                                                                     |   |   | -                                                                |   |   | -                                |   |
| Additional                paid-in capital                                                                                                                                                                                            |   |   | 65,746                                                           |   |   | 26,307                           |   |
| Treasury                stock, at cost, 406,332 shares at June 30, 2006 and 433,972 share                at                December 31, 2005                                                                                         |   |   | (1,928                                                           | )      |   | (2,059                           | )      |
| Retained                earnings                                                                                                                                                                                                     |   |   | 20,644                                                           |   |   | 15,408                           |   |
| Total                stockholders’ equity                                                                                                                                                                                      |   |   | 84,693                                                           |   |   | 39,832                           |   |
| Total                liabilities and stockholders’ equity                                                                                                                                                                      |   | $      | 102,807                                                          |   | $      | 71,957                           |   |

*See      accompanying notes*

----

**LMI      Aerospace, Inc.**

**Condensed      Consolidated Statements of Operations**

*(Amounts      in thousands, except share and per share data)*

*(Unaudited)*

|                                                                                |   | Three                Months Ended June                30,  | Six                Months Ended June                30, |
|-------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------|---------------------------------------------------------|
|                                                                                |   |                                                            | 2006                                                    |   |   | 2005 |   |   | 2006 |   |   | 2005 |   |
|                                                                                |   |                                                            |                                                    |   |   |   |   |   |   |   |   |   |   |
| Net                sales                                                            |   | $                                                               | 32,768                                                  |   | $ | 24,008 |   | $ | 62,010 |   | $ | 47,981 |   |
| Cost                of sales                                                        |   |                                                            | 23,921                                                  |   |   | 18,383 |   |   | 44,842 |   |   | 37,134 |   |
| Gross                profit                                                         |   |                                                            | 8,847                                                   |   |   | 5,625 |   |   | 17,168 |   |   | 10,847 |   |
|                                                                                |   |                                                            |                                                    |   |   |   |   |   |   |   |   |   |   |
| Selling,                general and administrative expenses                         |   |                                                            | 4,170                                                   |   |   | 3,486 |   |   | 8,371 |   |   | 6,940 |   |
| Income                from operations                                               |   |                                                            | 4,677                                                   |   |   | 2,139 |   |   | 8,797 |   |   | 3,907 |   |
|                                                                                |   |                                                            |                                                    |   |   |   |   |   |   |   |   |   |   |
| Other                income (expense):                                              |   |                                                            |                                                    |   |   |   |   |   |   |   |   |   |   |
| Interest                income (expense), net                                       |   |                                                            | 77                                                      |   |   | (422 | ) |   | (350 | ) |   | (842 | ) |
| Other,                net                                                           |   |                                                            | (1                                                      | ) |   | (4 | ) |   | 1 |   |   | (1 | ) |
| Income                before income taxes                                           |   |                                                            | 4,753                                                   |   |   | 1,713 |   |   | 8,448 |   |   | 3,064 |   |
|                                                                                |   |                                                            |                                                    |   |   |   |   |   |   |   |   |   |   |
| Provision                for income taxes                                           |   |                                                            | 1,796                                                   |   |   | 664 |   |   | 3,182 |   |   | 1,171 |   |
| Net                income                                                           |   | $                                                               | 2,957                                                   |   | $ | 1,049 |   | $ | 5,266 |   | $ | 1,893 |   |
|                                                                                |   |                                                            |                                                    |   |   |   |   |   |   |   |   |   |   |
| Amounts                per common share: Net                income per common share |   | $                                                               | 0.27                                                    |   | $ | 0.13 |   | $ | 0.54 |   | $ | 0.23 |   |
|                                                                                |   |                                                            |                                                    |   |   |   |   |   |   |   |   |   |   |
|  Net                income per common share assuming                dilution   |   | $                                                               | 0.26                                                    |   | $ | 0.13 |   | $ | 0.53 |   | $ | 0.23 |   |
|                                                                                |   |                                                            |                                                    |   |   |   |   |   |   |   |   |   |   |
| Weighted                average common shares outstanding                           |   |                                                            | 11,112,507                                              |   |   | 8,239,942 |   |   | 9,837,038 |   |   | 8,238,866 |   |
|                                                                                |   |                                                            |                                                    |   |   |   |   |   |   |   |   |   |   |
| Weighted                average dilutive common shares outstanding                  |   |                                                            | 11,239,257                                              |   |   | 8,335,764 |   |   | 9,961,988 |   |   | 8,345,763 |   |
|  *See                accompanying notes.**.*                                   |   |                                                            |                                                    |   |   |   |   |   |   |   |   |   |   |

----

**LMI      Aerospace, Inc.**

**Condensed      Consolidated Statements of Cash Flows**

*(Amounts      in thousands)*

*(Unaudited)*

|                                                                  |   | Six                Months Ended June 30,  |
|-----------------------------------------------------------------------|--------|------------------------------------------------|
|                                                                  |   |                                           | 2006 |   |   | 2005 |   |
| Operating                activities:                                  |   |                                           |   |   |   |   |   |
| Net                income                                             |   | $                                              | 5,266 |   | $ | 1,893 |   |
| Adjustments                to reconcile net income to                 |   |                                           |   |   |   |   |   |
| net                cash provided by operating activities:             |   |                                           |   |   |   |   |   |
| Depreciation                and amortization                          |   |                                           | 1,905 |   |   | 2,241 |   |
| Charges                for inventory obsolescence and valuation       |   |                                           | 352 |   |   | 706 |   |
| Restricted                stock compensation                          |   |                                           | 86 |   |   | -- |   |
| Changes                in operating assets and liabilities:           |   |                                           |   |   |   |   |   |
| Trade                accounts receivable                              |   |                                           | (1,328 | ) |   | (1,699 | ) |
| Inventories                                                           |   |                                           | (5,298 | ) |   | (613 | ) |
| Prepaid                expenses and other assets                      |   |                                           | (97 | ) |   | (320 | ) |
| Income                taxes                                           |   |                                           | (2,618 | ) |   | 964 |   |
| Accounts                payable                                       |   |                                           | 1,485 |   |   | (306 | ) |
| Accrued                expenses                                       |   |                                           | 528 |   |   | 115 |   |
| Net                cash provided by operating activities              |   |                                           | 281 |   |   | 2,981 |   |
|                                                                  |   |                                           |   |   |   |   |   |
| Investing                activities:                                  |   |                                           |   |   |   |   |   |
| Additions                to property, plant and equipment             |   |                                           | (1,846 | ) |   | (570 | ) |
| Proceeds                from sale of equipment                        |   |                                           | 2 |   |   | 21 |   |
| Purchase                of debt securities                            |   |                                           | (6,342 | ) |   | -- |   |
| Acquisition                of Technical Change Associates             |   |                                           | (614 | ) |   | -- |   |
| Net                cash used by investing activities                  |   |                                           | (8,800 | ) |   | (549 | ) |
|                                                                  |   |                                           |   |   |   |   |   |
| Financing                activities:                                  |   |                                           |   |   |   |   |   |
| Proceeds                from public offering                          |   |                                           | 39,249 |   |   | -- |   |
| Net                payments on revolving line of credit               |   |                                           | (8,898 | ) |   | (1,590 | ) |
| Principal                payments on long-term debt and notes payable |   |                                           | (5,036 | ) |   | (1,075 | ) |
| Proceeds                from exercise of stock options                |   |                                           | 110 |   |   | 14 |   |
| Net                cash provided (used) by financing activities       |   |                                           | 25,425 |   |   | (2,651 | ) |
|                                                                  |   |                                           |   |   |   |   |   |
| Net                increase (decrease) in cash and cash equivalents   |   |                                           | 16,906 |   |   | (219 | ) |
|  Cash                and cash equivalents, beginning of year     |   |                                           | 35 |   |   | 414 |   |
| Cash                and cash equivalents, end of quarter              |   | $                                              | 16,941 |   | $ | 195 |   |

| Supplemental                disclosures of cash flow information: |   |   |       |   |   |     |   |
|-------------------------------------------------------------------|--------|--------|-------|--------|--------|-----|--------|
| Interest                paid                                      |   | $      | 120   |   | $      | 856 |   |
| Income                taxes paid (refunded), net                  |   | $      | 5,800 |   | $      | 190 |   |

*See        accompanying notes.*

----

**LMI          Aerospace, Inc.**

**Notes          to Condensed Consolidated Financial Statements**

*(Dollar          amounts in thousands, except share and per share data)*

*(Unaudited)*

**1.      Accounting Policies**

**Description      of Business**

**Basis      of Presentation**

**Customer      Concentration**

----

**LMI            Aerospace, Inc.**

**Notes            to Condensed Consolidated Financial Statements**

*(Dollar            amounts in thousands, except share and per share data)*

*(Unaudited)*

**Income      Taxes**

**Use      of Estimates**

**2.      Short-term Investments**

|                                                                                                                             |   | **June                  30,****2006** |   | **December                  31, 2005** |   |
|----------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------|--------|----------------------------------------|--------|
|                                                                                                                             |   |                                  |   |                                   |   |   |   |
| Debt                  securities issued by U.S. Treasury and other U.S. government corporations                  and agencies    |   | $                                     | 4,983  |                                   | $      | - |   |
| Debt                  securities issued by states of the United States and political                  subdivisions of the states |   |                                  | 1,359  |                                   |   | - |   |
|                                                                                                                             |   | $                                     | 6,342  |                                   | $      | - |   |

----

**LMI            Aerospace, Inc.**

**Notes            to Condensed Consolidated Financial Statements**

*(Dollar            amounts in thousands, except share and per share data)*

*(Unaudited)*

**3.      Inventories**

|                             |   |   | **June                30,  2006** |   |   | **December                31, 2005** |   |
|----------------------------------|--------|--------|----------------------------------------|--------|--------|--------------------------------------|--------|
|                             |   |   |                                   |   |   |                                 |   |
| Raw                materials     |   | $      | 6,038                                  |   | $      | 5,209                                |   |
| Work                in progress  |   |   | 8,972                                  |   |   | 6,480                                |   |
| Finished                goods    |   |   | 15,269                                 |   |   | 13,644                               |   |
| Total                inventories |   | $      | 30,279                                 |   | $      | 25,333                               |   |

**4.      **
**Goodwill      and Intangible Assets**

**Customer-Related      Intangible Assets**

|                                      |   | **June                  30, 2006** |   | **December                  31, 2005** |   |
|-------------------------------------------|--------|------------------------------------|--------|----------------------------------------|--------|
|                                      |   |                               |   |                                   |   |   |   |
| Gross                  Amount             |   | $                                  | 4,672  |                                   | $      | 3,975 |   |
|                                      |   |                               |   |                                   |   |   |   |
| Accumulated                  Amortization |   |                               | (1,063 | )                                      |   | (861 | ) |
|                                      |   |                               |   |                                   |   |   |   |
| Intangible                  assets, net   |   |                               | 3,609  |                                   | $      | 3,114 |   |

----

**LMI            Aerospace, Inc.**

**Notes            to Condensed Consolidated Financial Statements**

*(Dollar            amounts in thousands, except share and per share data)*

*(Unaudited)*

**5.      Long-Term Debt and Revolving Line of Credit**

|                                                                                                                                                 |   |   | **June                  30,** |   |   | **December                31,** |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-------------------------------|--------|--------|---------------------------------|--------|
|                                                                                                                                            |   |   | **2005**                      |   |   | **2005**                        |   |
| Term                Loans:                                                                                                                      |   |   |                          |   |   |                            |   |
| Real                Estate                                                                                                                      |   | $      | -                             |   | $      | 3,280                           |   |
| Equipment                                                                                                                                       |   |   | 2,950                         |   |   | 3,540                           |   |
| Revolving                line of credit                                                                                                         |   |   | -                             |   |   | 8,899                           |   |
| Notes                payable, principal and interest payable monthly, at fixed rates,                ranging                from 6.99% to 7.20% |   |   | 952                           |   |   | 589                             |   |
| Total                debt                                                                                                                       |   |   | 3,902                         |   |   | 16,308                          |   |
| Less                current installments                                                                                                        |   |   | 1,460                         |   |   | 1,846                           |   |
| Total                                                                                                                                           |   |   | 2,442                         |   | $      | 14,462                          |   |
| Subordinated                notes due December 2007 payable to certain directors, interest payable                monthly at 12%                |   | $      | -                             |   | $      | 1,000                           |   |

**Credit      Facility**

| ·   | A                revolving line of credit (the “Revolver”) of up to $23,250, subject to a                borrowing base calculation. The borrowing base calculation at June                30,                2006 allowed the Company to borrow up to $23,150. The Revolver requires                monthly payments of interest at Wells Fargo’s prime lending rate (8.25% at                June 30, 2006) and matures on November 15, 2009. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | An                equipment term loan (the “Equipment Loan”) of $4,720 payable monthly over                three years in equal monthly principal installments of $98. The Equipment                Loan requires monthly interest payments at Wells Fargo’s prime lending                rate plus 4%. In January 2006, the rate was reduced to Wells Fargo’s prime                lending rate plus 0.5% when the Company paid a fee of $50. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | A                real estate term loan (the “Real Estate Loan”) of $3,645 payable in equal                monthly principal installments of $30 over three years, using a ten                year                amortization table. The Real Estate Loan requires interest at Wells                Fargo’s prime lending rate plus 4%. In January 2006, the rate was reduced                to Wells Fargo’s prime lending rate plus 0.5% when the Company was able to                maintain sufficient liquidity and reduce the borrowing base calculation                by                $1,800 over the first year of the agreement. On March 29, 2006, the                remaining balance was repaid with proceeds from the Company’s secondary                public offering completed on March 29, 2006. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**LMI            Aerospace, Inc.**

**Notes            to Condensed Consolidated Financial Statements**

*(Dollar            amounts in thousands, except share and per share data)*

*(Unaudited)*

**Other      Notes **

**6.      Earnings Per Common Share**

**7.      Stock-Based Compensation**

----

**LMI            Aerospace, Inc.**

**Notes            to Condensed Consolidated Financial Statements**

*(Dollar            amounts in thousands, except share and per share data)*

*(Unaudited)*

|                                             |   |   |       |    |   |                                                     |   |    |                                                        |
|--------------------------------------------------|--------|--------|------------|--------------|--------|----------------------------------------------------------|--------|--------------|-------------------------------------------------------------|
| **Stock                Options**                 |   |   | **Shares** |         |   | **Weighted****Average****Exercise                Price** |   |         | **Weighted****Average****Remaining****Contractual****Life** |   |   | **Aggregate****Intrinsic****Value** |   |
| Outstanding                at January 1, 2006    |   |   | 198,024    |         | $      | 3.30                                                     |   |         |                                                        |   |   |   |   |
| Granted                                          |   |   | -          |         | $      | -                                                        |   |         |                                                        |   |   |   |   |
| Exercised                                        |   |   | (30,640    | )            | $      | 3.61                                                     |   |         |                                                        |   |   |   |   |
| Forfeited                or expired              |   |   | (8,800     | )            | $      | 4.06                                                     |   |         |                                                        |   |   |   |   |
|                                             |   |   |            |         |   |                                                     |   |         |                                                             |   |   |  |   |   |   |   |   |  |   |
| Outstanding                at June 30, 2006 |   |   | 158,584    |         | $      | 3.20                                                     |   |         | 4.5                yrs                                      |   | $ | 2,079 |   |
|                                             |   |   |            |         |   |                                                     |   |         |                                                             |   |   |  |   |   |   |   |   |  |   |
| Exercisable                at June 30, 2006 |   |   | 158,209    |         | $      | 3.20                                                     |   |         | 4.5                yrs                                      |   | $ | 2,073 |   |
|                                             |   |   |            |         |   |                                                     |   |         |                                                             |   |   |  |   |   |   |   |   |  |   |

|  **Range                of****Exercise****Prices** |  **Number                of****Outstanding****Options** |  **Weighted                Average Remaining Contractual Life** |  **Weighted****Average****Exercise                Price** |   **Number                Exercisable** |  **Weighted****Average****Exercise                Price** |
|---------------------------------------------------------|--------------------------------------------------------------|----------------------------------------------------------------------|----------------------------------------------------------------|---------------------------------------------------|----------------------------------------------------------------|
| $1.31                - $1.95                            | 15,000                                                       | 8.0                                                                  | $                1.31                                          | 15,000                                            | $                1.31                                          |
| $1.96                - $2.90                            | 89,084                                                       | 4.2                                                                  | 2.58                                                           | 88,709                                            | 2.58                                                           |
| $2.91                - $4.35                            | 18,600                                                       | 4.2                                                                  | 3.41                                                           | 18,600                                            | 3.41                                                           |
| $4.36                - $6.06                            | 35,900                                                       | 4.1                                                                  | 5.41                                                           | 35,900                                            | 5.41                                                           |
| Total                                                   | 158,584                                                      | 4.5                                                                  | $                3.20                                          | 158,209                                           | $                3.20                                          |

----

|                                                |   |   |       |   |   |                                                                              |   |
|-----------------------------------------------------|--------|--------|------------|--------|--------|-----------------------------------------------------------------------------------|--------|
| **Restricted                Stock Awards**     |   |   | **Shares** |   |   | **Weighted****Average****Grant                Date****Fair                Value** |   |
|  Outstanding                at January 1, 2006 |   |   | 15,750     |   | $      | 9.06                                                                              |   |
| Granted                                             |   |   | 23,750     |   |   | 15.47                                                                        |   |   |   |   |
| Vested                                              |   |   | —    |   |   | —                                                                      |   |   |   |   |
| Forfeited                                           |   |   | —    |   |   | —                                                                      |   |   |   |   |
|                                                |   |   |            |   |   |                                                                              |   |   |  |   |
|  Outstanding                at June 30, 2006   |   |   | 39,500     |   | $      | 12.91                                                                             |   |
|                                                |   |   |            |   |   |                                                                              |   |   |  |   |

|                                                                                                                                                           |   | **Three                  Months Ended** |   | **Six                  Months Ended** |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------|--------|---------------------------------------|--------|
|                                                                                                                                                           |   | **June                  30, 2005**      |   | **June                  30, 2005**    |   |
|                                                                                                                                                           |   |                                    |   |                                  |   |   |   |
| Net                  income                                                                                                                                    |   | $                                       | 1,049  |                                  | $      | 1,893 |   |
| Total                  stock-based employee compensation expense determined under fair                  value                  based method, net of tax effect |   |                                    | (2     | )                                     |   | (18 | ) |
| Pro                  forma net income                                                                                                                          |   | $                                       | 1,047  |                                  | $      | 1,875 |   |
|                                                                                                                                                           |   |                                    |   |                                  |   |   |   |
| Net                  income per common share - basic and assuming dilution1                                                                                    |   |                                    |   |                                  |   |   |   |
| As                  reported                                                                                                                                   |   | $                                       | 0.13   |                                  | $      | 0.23 |   |
| Pro                  forma                                                                                                                                     |   | $                                       | 0.13   |                                  | $      | 0.23 |   |

| 1 | Options                  to purchase 37,000 shares of common stock were outstanding at June,                  2005,                  but were not included in the computations of diluted EPS because                  the                  options’ exercise price was greater than the Year-to-Date average market                  price of the common shares. |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**Item      2. Management’s Discussion and Analysis of Financial Condition and Results of      Operations.**

----

**OVERVIEW**

----

**RESULTS      OF OPERATIONS**

*Three      months ended June 30, 2006 compared to June 30, 2005*

|                                          | Three                Months EndedJune                30, 2006 |   | Three                Months EndedJune                30, 2005 |
|-----------------------------------------------|---------------------------------------------------------------|--------|---------------------------------------------------------------|
|                                          | ($                in millions)                                |
| Net                sales                      | $                32.8                                         |   | $                24.0                                         |
| Cost                of sales                  | 23.9                                                          |   | 18.4                                                          |
| Gross                profit                   | 8.9                                                           |   | 5.6                                                           |
| S,G                & A                    | 4.2                                                           |   | 3.5                                                           |
| Income                from operations         | 4.7                                                           |   | 2.1                                                           |
| Interest                income (expense), net | 0.1                                                           |   | (0.4)                                                         |
| Income                before income taxes     | 4.8                                                           |   | 1.7                                                           |
| Provision                for income taxes     | 1.8                                                           |   | 0.7                                                           |
| Net                Income                     | $                3.0                                          |   | $                1.0                                          |

**Net      Sales.**

| Category                                       |   | Six                MonthsEnded                June 30,2006 |   | %                ofTotal |   | Six                  MonthsEnded                  June 30,2005 |   | %                ofTotal |   |
|------------------------------------------------|--------|------------------------------------------------------------|--------|--------------------------|--------|----------------------------------------------------------------|--------|--------------------------|--------|
| Corporate                and Regional Aircraft |   | $                                                          | 12.5   |                     |   | 38.1                                                           | %      | $                        | 9.9    |   |   | 41.3 | % |
| Large                Commercial Aircraft       |   |                                                       | 9.5    |                     |   | 28.9                                                           |   |                     | 6.7    |   |   | 27.9 |   |
| Military                                       |   |                                                       | 7.8    |                     |   | 23.8                                                           |   |                     | 4.1    |   |   | 17.1 |   |
| Technology                                     |   |                                                       | 1.9    |                     |   | 5.8                                                            |   |                     | 1.1    |   |   | 4.5 |   |
| Other                (1)                       |   |                                                       | 1.1    |                     |   | 3.4                                                            |   |                     | 2.2    |   |   | 9.2 |   |
| Total                                          |   | $                                                          | 32.8   |                     |   | 100.0                                                          | %      | $                        | 24.0   |   |   | 100.0 | % |

----

**Gross      Profit.**

**Selling,      General and Administrative Expenses. **

**Net      Interest Income (Expense).**

**Income      Tax Expense.**

*Six      months ended June 30, 2006 compared to June 30, 2005*

|                                               |   | Six                Months EndedJune                30, 2006 |   | Six                Months EndedJune                30, 2005 |
|-----------------------------------------------|--------|-------------------------------------------------------------|--------|-------------------------------------------------------------|
|                                          |   | ($                in millions)                              |
| Net                sales                      |   | $                62.0                                       |   | $                48.0                                       |
| Cost                of sales                  |   | 44.8                                                        |   | 37.2                                                        |
| Gross                profit                   |   | 17.2                                                        |   | 10.8                                                        |
| S,G                & A                    |   | 8.4                                                         |   | 6.9                                                         |
| Income                from operations         |   | 8.8                                                         |   | 3.9                                                         |
| Interest                income (expense), net |   | (0.3)                                                       |   | (0.8)                                                       |
| Income                before income taxes     |   | 8.5                                                         |   | 3.1                                                         |
| Provision                for income taxes     |   | 3.2                                                         |   | 1.2                                                         |
| Net                Income                     |   | $                5.3                                        |   | $                1.9                                        |
|                                          |   |                                                        |   |                                                        |

----

**Net      Sales.**

| Category                                       |   | Six                Months Ended June 30,2006 |   | %                ofTotal |   | Six                Months Ended June 30,2005 |   | %                ofTotal |   |
|------------------------------------------------|--------|----------------------------------------------|--------|--------------------------|--------|----------------------------------------------|--------|--------------------------|--------|
| Corporate                and Regional Aircraft |   | $                                            | 23.9   |                     |   | 38.6                                         | %      | $                        | 20.1   |   |   | 41.9 | % |
| Large                Commercial Aircraft       |   |                                         | 18.6   |                     |   | 30.0                                         |   |                     | 12.9   |   |   | 26.9 |   |
| Military                                       |   |                                         | 12.8   |                     |   | 20.6                                         |   |                     | 8.5    |   |   | 17.7 |   |
| Technology                                     |   |                                         | 3.9    |                     |   | 6.2                                          |   |                     | 1.9    |   |   | 4.0 |   |
| Other                (1)                       |   |                                         | 2.8    |                     |   | 4.6                                          |   |                     | 4.6    |   |   | 9.5 |   |
| Total                                          |   | $                                            | 62.0   |                     |   | 100.0                                        | %      | $                        | 48.0   |   |   | 100.0 | % |

**Gross      Profit.**

**Selling,      General and Administrative Expenses. **

----

**Net      Interest Income (Expense).**

**Income      Tax Expense.**

**LIQUIDITY      AND CAPITAL RESOURCES**

**CONTRACTUAL      OBLIGATIONS AND COMMITMENTS**

----

**Item      3.**
**      Quantitative and Qualitative Disclosures About Market Risk.**

**Item      4. Controls and Procedures.**

----

**PART      II**

**OTHER      INFORMATION**

**Item      1. Legal Proceedings.**

**Item      1A. Risk Factors.**

**Item      2. Unregistered Sale of Equity, Securities and Use of      Proceeds.**

**Item      3. Defaults Upon Senior Securities.**

----

**Item      4. Submission of Matters to a Vote of Security      Holders.**

| (a) | The                    annual meeting of the shareholders of the Company was held on                    June 28,                    2006. Of the 11,558,538                    shares entitled to vote at such meeting, 10,848,817                    shares were present at the meeting in person or by                    proxy. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b) | The                  individuals listed below were elected as Class II Directors of                  the Company                  at the meeting, and the number of shares voted for, against and                  withheld                  were as follows: |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Name                             |   | Number                  of Shares Voted |
|----------------------------------|--------|-----------------------------------------|
|                             |   | For                                     | Withheld |
| Thomas                  G. Under |   | 10,361,918                              | 486,899 |
| John                  M. Roeder  |   | 10,361,238                              | 487,579 |

| (c) | In                  addition to the election of Class II Directors, the shareholders                  ratified                  the appointment of BDO Seidman, LLP as the Company’s independent auditor                  for the fiscal year ending December 31, 2006. The number of shares                  voted                  for, against and withheld were as                  follows: |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|       | Number                  of Shares Voted |    |
|------------|-----------------------------------------|---------|
| For        | Against                                 | Abstain |
| 10,791,679 | 35,792                                  | 13,316  |

| (d) | None. |
|-----|-------|

**Item          5. Other Information.**

**Item      6. Exhibits.**

----

**SIGNATURES**

|   | LMI                AEROSPACE, INC. |
|--------|------------------------------------|
|   |                               |
|   |                               |
|   | By:                                | /s/                Ronald S. Saks |
|   |                               | Ronald                S. SaksPresident                and Chief Executive Officer(Principal                Executive Officer) |
|   |                               |
|   |                               |
|   |                               |
|   | By:                                | /s/                Lawrence E. Dickinson |
|   |                               | Lawrence                E. DickinsonChief                Financial Officer and Secretary(Principal                Financial and Principal AccountingOfficer) |

----

**EXHIBIT      INDEX**

| ExhibitNumber |   |  Description                                                                                                                                                                                                                                                                                                                                 |   |
|---------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|  10.1    |   |  Standard                  Industrial Lease Agreement dated June 9, 2006 between Welsh Fountain                  Lakes, L.L.C., as landlord and Leonard’s Metal, Inc., as tenant, filed as                  Exhibit 10.1 to the Registrant’s Form 8-K filed June 15, 2006 and                  incorporated herein by reference. |
|          |   |                                                                                                                                                                                                                                                                                                                                              |
| 31.1          |   | Rule                  13a-14(a) Certification of Ronald S. Saks, President and Chief                  Executive                  Officer.                                                                                                                                                                                                         |
|          |   |                                                                                                                                                                                                                                                                                                                                              |
| 31.2          |   | Rule                  13a-14(a) Certification of Lawrence E. Dickinson, Chief Financial                  Officer.                                                                                                                                                                                                                                 |
|          |   |                                                                                                                                                                                                                                                                                                                                              |
| 32            |   | Certification                  pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section                  906 of                  Sarbanes-Oxley Act of 2002.                                                                                                                                                                             |