UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

|X|      Quarterly Report pursuant to Section 13 or 15(d) of the Securities
         Exchange Act of 1934. For the quarterly period ended June 30, 2004.


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

Commission file number: 000-24293

                               LMI AEROSPACE, INC.
             (Exact name of registrant as specified in its charter)

                   Missouri                               43-1309065
       (State or other jurisdiction of                 (I.R.S. Employer
        incorporation or organization)                Identification No.)

                3600 Mueller Road
               St. Charles, Missouri                      63302-0900
       (Address of principal executive offices)           (Zip Code)

                                 (636) 946-6525
              (Registrant's telephone number, including area code)

     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.
Yes _X_  No ___

     Indicate by check mark whether the registrant is an  accelerated  filer (as
defined in Rule 12b-2 of the Exchange Act).
Yes No _X_

     Indicate the number of shares  outstanding of each of the issuer's  classes
of common stock, as of the latest practicable date.

                                                Number of shares oustanding
      Title of class of common stock               as of August 16, 2004.
      ------------------------------            ---------------------------

  Common Stock, par value $.02 per share                 8,181,786

<PAGE>

                               LMI AEROSPACE, INC.

                          QUARTERLY REPORT ON FORM 10-Q
                   FOR THE FISCAL QUARTER ENDING JUNE 30, 2004

                          PART I. FINANCIAL INFORMATION

                                                                     Page No.
Item 1.  Financial Statements (unaudited).

         Condensed Consolidated Balance Sheets as of June 30, 2004
         and December 31, 2003.                                          3

         Condensed Consolidated Statements of Operations for the
         three months and six months ended June 30, 2004 and 2003.       4

         Condensed Consolidated Statements of Cash Flows for the
         six months ended June 30, 2004 and 2003.                        5

         Notes to Condensed Consolidated Financial Statements.           6

Item 2.  Management's Discussion and Analysis of Financial Condition
         and Results of Operations.                                     16

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.    24

Item 4.  Controls and Procedures.                                       24

                           PART II. OTHER INFORMATION

Item 1.  Legal Proceedings.                                             26

Item 4.  Submission of Matters to a Vote of Security Holders.           26

Item 6.  Exhibits and Reports on Form 8-K.                              27


SIGNATURE PAGE                                                          28

EXHIBIT INDEX                                                           29


<PAGE>


                               LMI Aerospace, Inc.
                      Condensed Consolidated Balance Sheets
             (Amounts in thousands, except share and per share data)
<TABLE>
<CAPTION>
                                                                            (Unaudited)
                                                                           June 30, 2004        December 31, 2003
                                                                  -------------------------------------------------------
<S>                                                                      <C>                     <C>
Assets
Current assets:
   Cash and cash equivalents                                                 $   945                $   441
   Trade accounts receivable, net of allowance of $284 at June
     2004 and $245 at December 31, 2003                                        9,781                  9,158
   Inventories                                                                24,043                 24,159
   Prepaid expenses                                                            1,102                    787
   Deferred income taxes                                                       2,206                  2,206
   Income taxes receivable                                                       718                  1,933
                                                                  -------------------------------------------------------
Total current assets                                                          38,795                 38,684

Property, plant and equipment, net                                            20,789                 22,248
   Goodwill                                                                    5,653                  5,653
   Customer intangible assets, net                                             3,600                  3,792
   Other assets                                                                  489                    142
                                                                  -------------------------------------------------------
Total assets                                                                 $69,326                $70,519
                                                                  =======================================================

Liabilities and stockholders' equity Current liabilities:
   Accounts payable                                                          $ 6,198                $ 4,570
   Accrued expenses                                                            2,977                  2,126
   Current installments of long-term debt and capital lease
     obligations                                                              18,457                  6,069
                                                                  -------------------------------------------------------
Total current liabilities                                                     27,632                 12,765

Long-term debt and capital lease obligations, less current
   installments                                                                7,108                 21,756
Deferred income taxes                                                          2,206                  2,206
                                                                  -------------------------------------------------------
Total long-term liabilities                                                    9,314                 23,962

Stockholders' equity:
   Common stock, $.02 par value per share; authorized 28,000,000 shares; issued
     8,736,427 shares in both
     periods                                                                     175                    175
   Preferred stock, $.02 par value per share; authorized
     2,000,000 shares; none issued in both periods                                -                      -
   Additional paid-in capital                                                 26,171                 26,171
   Treasury stock, at cost, 554,641 shares in both periods                    (2,632)                (2,632)
   Accumulated other comprehensive income (loss)                                  (8)                    20
   Retained earnings                                                           8,674                 10,058
                                                                  -------------------------------------------------------
Total stockholders' equity                                                    32,380                 33,792
                                                                  -------------------------------------------------------
Total liabilities and stockholders' equity                                   $69,326                $70,519
                                                                  =======================================================
</TABLE>
See accompanying notes.

<PAGE>

                               LMI Aerospace, Inc.
                 Condensed Consolidated Statements of Operations
           (Amounts in thousands, except per share and per share data)
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                          Three Months Ended                 Six Months Ended
                                                                June 30,                         June 30,
                                                        2004              2003           2004               2003
                                                  -------------------------------------------------------------------
<S>                                              <C>              <C>              <C>              <C>
Net sales                                           $   21,875       $   18,865       $   40,415       $   39,707
Cost of sales                                           17,548           16,436           33,417           35,059
                                                  -------------------------------------------------------------------
Gross profit                                             4,327            2,429            6,998            4,648

Selling, general and administrative expenses             3,406            3,249            6,622            6,559
Restructuring charges                                      156                -              685                -
                                                  -------------------------------------------------------------------
   Income (loss) from operations                           765             (820)            (309)          (1,911)

Other income (expense):
    Interest expense                                      (563)            (387)          (1,008)            (827)
    Other, net                                               8               30                8               29
                                                  -------------------------------------------------------------------
Income (loss) before income taxes                          210           (1,177)          (1,309)          (2,709)

Provision for (benefit of) income taxes                     75             (438)              75           (1,012)
                                                  -------------------------------------------------------------------
Net income (loss)                                   $      135       $     (739)      $   (1,384)      $   (1,697)
                                                  ===================================================================

Amounts per common share basic and dilutive:
   Net income (loss) per common share               $     0.02       $    (0.09)      $    (0.17)      $    (0.21)
                                                  ===================================================================

Weighted average common shares outstanding           8,181,786        8,181,786        8,181,786        8,181,786
                                                  ===================================================================
</TABLE>
See accompanying notes.

<PAGE>

                               LMI Aerospace, Inc.
                 Condensed Consolidated Statements of Cash Flows
                             (Amounts in thousands)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                    Six Months Ended June 30,

                                                                   2004                   2003
                                                              ---------------------------------------
<S>                                                          <C>                 <C>
Operating activities:
Net loss                                                        $ (1,384)            $  (1,697)
Adjustments to reconcile net loss to
   net cash provided by operating activities:
     Depreciation and amortization                                 2,320                 2,457
     Non-cash loss on sale of equipment                               18                     -
     Changes in operating assets and liabilities:
         Trade accounts receivable                                  (623)                3,370
         Inventories                                                 116                (1,935)
         Prepaid expenses and other assets                          (688)                   29
         Income taxes                                              1,254                  (450)
         Accounts payable                                          1,628                (1,324)
         Accrued expenses                                            812                  (378)
                                                              ---------------------------------------
Net cash provided by operating activities                          3,453                    72


Investing activities:
Additions to property, plant and equipment                          (666)                 (636)
Proceeds from sale of equipment                                        5                   301
                                                              ---------------------------------------
Net cash used by investing activities                               (661)                 (335)


Financing activities:
Net borrowings on revolving line of credit                         1,093                 3,241
Principal payments on long-term debt                              (3,353)               (2,510)
                                                              ---------------------------------------
Net cash (used by) provided by financing activities               (2,260)                  731

Effect of exchange rate changes on cash                              (28)                    -
                                                              ---------------------------------------
Net increase (decrease) in cash and cash equivalents                 504                   468
Cash and cash equivalents, beginning of year                         441                 1,182
                                                              ---------------------------------------
Cash and cash equivalents, end of quarter                       $    945             $   1,650
                                                              =======================================

Supplemental disclosures of cash flow information:
Interest paid                                                   $    869             $     859
Income taxes paid (refunded), net                               $ (1,187)            $    (550)
</TABLE>
See accompanying notes.


<PAGE>


                               LMI Aerospace, Inc.
              Notes to Condensed Consolidated Financial Statements
         (Dollar amounts in thousands, except share and per share data)
                                   (Unaudited)
                                  June 30, 2004


1. Accounting Policies

Description of Business

LMI Aerospace, Inc. (the "Company") fabricates,  machines and integrates formed,
close tolerance aluminum and specialty alloy components for use by the aerospace
and laser  equipment  industries.  The  Company is a Missouri  corporation  with
headquarters in St. Charles,  Missouri.  The Company maintains facilities in St.
Charles, Missouri; Auburn, Washington; Tulsa, Oklahoma; Wichita, Kansas; Irving,
Texas;  Sun Valley and  Oceanside,  California;  Pooler,  Georgia;  and Langley,
British Columbia.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance  with  accounting  principles  generally  accepted in the
United States for interim  financial  information  and with the  instructions to
Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all
of the information  and footnotes  required by accounting  principles  generally
accepted in the United States for complete financial statements.  In the opinion
of  management,  all  adjustments  (consisting  of  normal  recurring  accruals)
considered  necessary for a fair  representation  have been included.  Operating
results for the six months ending June 30, 2004 are not  necessarily  indicative
of the results that may be expected for the year ending December 31, 2004. These
financial   statements   should  be  read  in  conjunction  with  the  condensed
consolidated  financial  statements and accompanying  footnotes  included in the
Company's  Annual  Report on Form 10-K for the year ended  December 31, 2003, as
filed with the Securities and Exchange Commission.

The Company's losses from operations in recent years together with its inability
to meet certain covenants under its loan agreement have raised substantial doubt
about the  Company's  ability to  continue  as a going  concern.  The  Company's
ability to continue as a going concern is ultimately dependent on its ability to
improve  operating  performance  such that it can  operate  profitably,  sustain
positive operating cash flows and support its required financial  covenants with
its primary  lender.  Management  is  currently  seeking  alternative  financing
arrangements  and  pursuing  the sale of certain  assets to replace  its current
lender and secure  additional  funds.  However,  there is no assurance  that the
Company  will be  successful  in  improving  its  operating  results,  obtaining
alternative  financing  or  consummating  the  sale  of  assets.  The  financial
statements do not include any adjustments to reflect the possible future effects
on  the   recoverability  and  classification  of  assets  or  the  amounts  and
classification of liabilities that may result from the possible inability of the
Company to continue as a going concern.

The accompanying unaudited condensed consolidated financial statements have been
prepared on the going concern  basis,  which  contemplates  the  realization  of
assets and the  satisfaction  of  liabilities  in the normal course of business,
although the report of our  independent  accountant as of and for the year ended
December 31, 2003  expresses  substantial  doubt as to the Company's  ability to
continue  as a going  concern.  The  financial  statements  do not  include  any
adjustments that might result from the outcome of this uncertainty.


<PAGE>


Operating Results and Management's Plan

In response to the substantial  doubt about the Company's ability to continue as
a going concern,  management has reduced the Company's cost structure,  improved
the Company's processes and systems and implemented strict controls over capital
spending.  Management  believes  these  activities  will continue to improve the
Company's  results of  operations,  cash flows  from  operations  and its future
prospects.  As a result of all the  factors  cited,  management  of the  Company
believes that the Company  should be able to sustain its operations and continue
as a going concern.  However, the ultimate outcome of this uncertainty cannot be
presently determined. Accordingly, there remains doubt as to whether the Company
will be able to continue as a going concern.

As  discussed  in the  Company's  Annual  Report on Form 10-K,  the  Company has
undertaken a plan to reduce operating expenses,  increase efficiencies and align
its cost structure  with current levels of demand for its products.  On July 23,
2003, as outlined in Note 7 of the Condensed  Consolidated  Financial Statements
included as part of this Quarterly  Report on Form 10-Q,  the Company  announced
the  details  of a  restructuring  plan for its St.  Charles  operations,  which
includes  the  rationalization  of the work force and the  closure of two of the
four St.  Charles  facilities.  In  addition,  in  December  2003,  the  Company
announced an  additional  restructuring  program at its Wichita  facility  which
included the  reduction of workforce  and the sale of an LMI owned  building and
excess equipment.

On March 30, 2004, the Company and Union Planters Bank N.A.  ("Union  Planters")
entered into a Thirteenth Amendment to Loan Agreement ("Thirteenth  Amendment"),
amending the Loan Agreement  dated as of August 15, 1996 (the "Loan  Agreement")
between Leonard's Metal,  Inc., the predecessor in interest to the Company,  and
Magna Bank, National Association, the predecessor in interest to Union Planters.
The primary purposes of the Thirteenth Amendment were to (a) extend the maturity
of the Company's  Revolving  Line of Credit  provided  under the Loan  Agreement
("Revolving Credit Loan") from March 31, 2004 to March 31, 2005, and (b) waive a
default  arising under the Loan  Agreement  providing for the  maintenance  of a
minimum  consolidated EBITDA amount (the "EBITDA Covenant") for the period ended
December 31, 2003. The Thirteenth  Amendment  contemplates the full repayment of
all indebtedness  under the Loan Agreement by March 31, 2005 through the sale of
one or more  businesses of the Company  and/or the  procurement  of  alternative
financing.

Please see Note 4 of the Condensed Consolidated Financial Statements included as
part of this  Quarterly  Report  on Form  10-Q  for  more  detailed  information
relating to the Company's debt and the Thirteenth Amendment.

Use of Estimates

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United  States  requires  management  to make certain
estimates and assumptions.  These estimates and assumptions  affect the reported
amounts in the financial statements and accompanying notes. Actual results could
differ from those estimates.


<PAGE>


Stock-Based Compensation

The  Company  accounts  for its  stock-based  compensation  in  accordance  with
Accounting  Principles Board ("APB") Opinion No. 25, Accounting for Stock Issued
to Employees, and related interpretations and provides the pro forma disclosures
required by  Statements  of Financial  Accounting  Standards  No.  ("SFAS") 123,
Accounting  for  Stock-Based  Compensation,  and SFAS No.  148,  Accounting  for
Stock-Based  Compensation - Transition and Disclosure.  No stock-based  employee
compensation  expense is  recognized  in the  statement  of  operations,  as all
options  granted had an exercise price equal to the fair value of the underlying
common stock on the date of grant. Had the Company determined  compensation cost
based on the fair value of the  underlying  common stock at the grant date under
SFAS No.  123,  net income and  earnings  per share  amounts  would have been as
follows:
<TABLE>
<CAPTION>
                                                      Three Months Ended                 Six Months Ended
                                                           June 30,                          June 30,
                                                 -----------------------------------------------------------------
                                                     2004            2003             2004             2003
<S>                                             <C>            <C>             <C>             <C>
Net income (loss)                                  $   135        $   (739)       $  (1,384)      $   (1,697)
   Total stock-based employee compensation
     expense determined under fair value based
     method, net of tax effect                           2             (23)              12              (37)
                                                 -----------------------------------------------------------------
   Pro forma net income (loss)                     $   137        $   (762)       $  (1,372)      $   (1,734)
                                                 =================================================================

Net income (loss) per common share - basic and
   assuming dilution
   As reported                                     $  0.02        $  (0.09)       $   (0.17)      $    (0.21)
   Pro forma                                       $  0.02        $  (0.09)       $   (0.17)      $    (0.21)

</TABLE>
2.  Inventories

Inventories consist of the following:
<TABLE>
<CAPTION>
                                                        June 30, 2004                 December 31, 2003
                                                 ---------------------------    ---------------------------
<S>                                                   <C>                             <C>
        Gross inventory
             Raw materials                               $   4,036                         $  3,877
             Work in progress                                6,901                            6,238
             Finished goods                                 16,032                           16,864
                                                ----------------------------    ---------------------------
        Total gross inventory                               26,969                           26,979
        Reserves
             Lower of cost or market                          (314)                            (647)
             Obsolescence & slow moving                     (2,612)                          (2,173)
                                                ----------------------------    ---------------------------
        Total reserves                                      (2,926)                          (2,820)

        Net inventory                                    $  24,043                         $ 24,159
                                                ============================    ===========================
</TABLE>

<PAGE>


The Company  performed an in-depth  analysis of inventory  obsolescence and slow
moving  products at the end of the fourth  quarter of 2003.  This  analysis  was
based on the current  markets for the  Company's  products and the change in the
buying  patterns of the Company's major  customers.  The result of this analysis
was the recording in the fourth  quarter of 2003 of an  additional  obsolescence
reserve of $1,421.  The  Company's  reserve  for  obsolescence  and slow  moving
products totaled $2,612 at June 30, 2004 and $2,173 at December 31, 2003.

In the fourth quarter of 2002, the Company established a lower of cost or market
(LOCOM)  reserve to accrue losses on components  which had  inadequate  pricing,
high levels of scrap and high amounts of inefficient labor; on June 30, 2004 and
December 31, 2003, this reserve was at $314 and $647, respectively.

The total for both the reserve for obsolescence and slow moving products and the
reserve for LOCOM was $2,926 and $2,820 for June 30, 2004 and December 31, 2003,
respectively.

3.  Goodwill and Intangibles

As required by SFAS No. 142,  Goodwill and Other Intangible Assets ("SFAS 142"),
the Company performs an annual goodwill  impairment test on a reporting  segment
basis. A fair value approach is utilized by management  regarding projected cash
flows and other factors to determine the fair value of the respective assets. If
required,  an  impairment  charge  is  recognized  for the  amount  by which the
carrying amount of goodwill exceeds its fair value.

In the  fourth  quarter of 2003,  the  Company  performed  the  required  annual
impairment  test under SFAS No. 142 and concluded  that the  remaining  goodwill
balance,  which relates to the Machining and  Technology  segment only,  was not
further  impaired.  The  remaining  goodwill  was  $5,653  at June 30,  2004 and
December 31, 2003.

Customer Related Intangibles

The  carrying  amount  of  customer  related  intangibles  at June 30,  2004 and
December 31, 2003 were as follows:
<TABLE>
<CAPTION>
                                                       Gross       Accumulated             Useful
                                                      Amount      Amortization               Life
                                             ---------------- ----------------- ------------------
<S>                                               <C>                  <C>           <C>
Versaform                                            $ 3,975              $464           15 years
Stretch Forming Corp.                                    329               240          3.5 years
                                             ---------------- -----------------
         June 30, 2004                               $ 4,304              $704
                                             ================ =================

Versaform                                            $ 3,975              $332
Stretch Forming Corp.                                    329               180
                                            ---------------- -----------------
         December 31, 2003                           $ 4,304              $512
                                             ================ =================
</TABLE>
Customer related  intangibles  amortization  expense was $192 for the six months
ended  both  June 30,  2004 and  June 30,  2003 and was $385 for the year  ended
December 31, 2003.


<PAGE>


4.  Long-Term Debt and Revolving Line of Credit

Long-term debt and revolving line of credit consists of the following:
<TABLE>
<CAPTION>
                                                                        June 30,     December 31,
                                                                          2004           2003
                                                                    ------------------------------
<S>                                                                 <C>            <C>
  Term Loans:
    Tempco                                                             $ 7,458        $ 9,670
    Versaform                                                            8,381          9,167
  Revolving line of credit                                               8,777          7,684
  Note payable to director, principal and interest payable
     monthly at 7%                                                         397            614
  Notes payable, principal and interest payable monthly, at
     fixed rates, ranging from 6.99% to 10.00%                             552            679
  Capital lease obligations                                                  -             11
                                                                    ------------------------------
         Total debt                                                     25,565         27,825
  Less current installments                                             18,457          6,069
                                                                    ------------------------------
         Total long term debt                                          $ 7,108        $21,756
                                                                    ==============================
</TABLE>
The Loan Agreement with Union Planters  consists of the Revolving Credit Loan, a
term loan to finance the Company's purchase of Tempco ("Tempco Term Loan") and a
term loan to finance  the  Company's  purchase  of  Versaform  ("Versaform  Term
Loan").  The Loan Agreement is secured by all the domestic assets of the Company
and requires  compliance  with certain  non-financial  and financial  covenants,
including minimum levels of tangible net worth and the EBITDA Covenant.

On January 5, 2004 the Company  extended the term of its Loan Agreement to March
31, 2004, received a waiver for certain non-financial  covenants and agreed to a
fee of $75.  Subsequently,  on March 30,  2004,  the Company and Union  Planters
entered into the Thirteenth  Amendment.  The primary  purposes of the Thirteenth
Amendment were to (a) extend the maturity of the Company's Revolving Credit Loan
from March 31, 2004 to March 31, 2005 and (b) waive a default  arising under the
EBITDA Covenant for the period ended December 31, 2003.

In addition, under the terms of the Thirteenth Amendment:

     o    The  maximum  principal  amount  of  the  Revolving  Credit  Loan  was
          increased from  approximately  $9,088 to $9,700 through  September 30,
          2004, subject to a borrowing base calculation and further subject to a
          newly established inventory reserve requirement and a more restrictive
          requirement  for  eligible  receivables,  which,  notwithstanding  the
          increased   borrowing   maximum  amount  provided  by  the  Thirteenth
          Amendment,  could reduce the amount of borrowing  available  under the
          Revolving Credit Loan.

     o    The interest rate on the Revolving  Credit Loan was changed from LIBOR
          plus 2.5% to prime  plus  1.0%.  (The  prime rate was 4.0% at June 30,
          2004.) Moreover,  because the Company had not executed and delivered a
          letter  of  intent  regarding  (i) the sale of the  stock or of all or
          substantially all of the assets of certain of its subsidiaries, and/or
          (ii) the  procurement by the Company of debt  financing  providing the
          Company  with  sufficient   funds  to  repay  in  full  the  Company's
          obligations to Union  Planters  ("Letter of Intent") on or before June
          30, 2004, the interest rate on the Revolving Credit Loan was increased
          to prime plus 1.5% and will be further increased to prime plus 2.0% if
          the Company has not paid all of its  obligations  to Union Planters in
          full on or before  September 30, 2004. The interest rate on the Tempco
          Term Loan provided  under the Loan  Agreement,  which,  as of June 30,
          2004,  had a total  outstanding  principal  balance  of  approximately
          $7,458,  was changed from LIBOR plus 3.0%,  subject to a floor of 7.0%
          and a ceiling of 8.5%, to prime plus 2.0%, subject to a floor of 7.0%.
          The interest rate on the Versaform  Term Loan provided  under the Loan
          Agreement,  which,  as of  June  30,  2004,  had a  total  outstanding
          principal balance of approximately $8,381, was changed from LIBOR plus
          3.0% to  prime  plus  2.0%.  Moreover,  because  the  Company  had not
          executed and  delivered a Letter of Intent on or before June 30, 2004,
          the interest rate on the Tempco Term Loan and the Versaform  Term Loan
          was  increased  to prime  plus 2.5% and will be further  increased  to
          prime plus 3.0% if the Company has not paid all of its  obligations to
          Union Planters in full on or before  September 30, 2004.

     o    Because the  Company did not enter into one or more  Letters of Intent
          by June 30,  2004,  a fee of $125 will be payable on the  earliest  of
          March 31, 2005, the date the Company repays all of its  obligations to
          Union Planters or the date on which Union Planters  accelerates all of
          the Company's  obligations.  This fee has been accrued and recorded by
          the Company in interest expense in the second quarter of 2004.

     o    If the Company  fails to pay all of its  obligations  in full to Union
          Planters by September 30, 2004, a fee of $350 will be payable to Union
          Planters  ($100 on October 1, 2004 and $250 on the  earliest  of March
          31, 2005, the date the Company repays all of its  obligations to Union
          Planters or the date on which Union  Planters  accelerates  all of the
          Company's obligations).

     o    If the Company  fails to pay all of its  obligations  in full to Union
          Planters by December  30, 2004, a fee of $200 will be payable to Union
          Planters  ($100 on December 31, 2004 and $100 on the earliest of March
          31, 2005, the date the Company repays all of its  obligations to Union
          Planters or the date on which Union  Planters  accelerates  all of the
          Company's obligations).

Thus,  increased  interest  rates and  additional  fees will  apply  during  the
remaining  term  of  the  Loan  Agreement   (through  March  31,  2005)  if  the
indebtedness under the Loan Agreement is not repaid in full through  alternative
financing  and/or sales of assets by certain  prescribed  dates. The Company has
engaged Lincoln Partners LLC, a Chicago, Illinois based investment banking firm,
to assist in these efforts.

At December 31, 2003, the Company's  Revolving  Credit Loan allowed for a $9,088
line of  credit,  subject  to a  borrowing  base  calculation,  to fund  various
corporate  needs.  Interest was payable monthly based on a ninety day LIBOR plus
2.25% and was 3.67% at December 31, 2003. The Company had $7,684  outstanding on
this line at December  31,  2003.  This  facility was amended in January 2004 to
extend  maturities  to March 31,  2004 and  included  an increase in interest to
LIBOR plus  2.5%.  On March 30,  2004,  the  Company  further  amended  the Loan
Agreement  to extend the  Revolving  Credit Loan  maturity to March 31, 2005 and
establish the Revolving Credit Loan line at $9,700 until September 30, 2004, and
$9,000  thereafter,  each subject to a borrowing base. The Revolving Credit Loan
interest was amended to prime plus 1.0% with possible  adjustments  as described
above.  This increase was due to the net loss in the first quarter of 2004.  The
Company's  revolving  credit  line at  June  30,  2004  was at  $8,777,  with an
additional line capacity of $923. The credit  facility  prohibits the payment of
cash  dividends  on common  stock  without  the prior  written  consent of Union
Planters.

The Company  borrowed $14,250 (Tempco Term Loan) on April 2, 2001 to finance the
Tempco acquisition. The Tempco Term Loan required monthly principal and interest
payments over three years using a seven-year  amortization  and bearing interest
at the ninety day LIBOR plus 3.0%, subject to a cap of 8.5% and a floor of 7.0%.
On March 30, 2004 the Company amended this note establishing a maturity of March
31, 2005 and interest at prime plus 2.0% with possible  adjustments as described
above. The interest rate was 7.0% at June 30, 2004 and December 31, 2003.

The  Versaform  Term Loan was issued for $11,000 on May 15, 2002.  The Versaform
Term Loan  required  monthly  principal  and interest  payments over three years
using a seven-year  amortization and bears interest at the ninety-day LIBOR plus
3.0%. The interest rate was 6.0% at June 30, 2004 and 4.2% at December 31, 2003.
On March 30, 2004 the Company  amended  this note  increasing  interest to prime
plus 2.0% with  possible  adjustments  as  described  above.  The March 30, 2004
amendment did not change the original  maturity of October 15, 2005 as stated in
the Versaform Term Loan agreement.

The  Company  entered  into a note  payable  for $1,300  with the prior owner of
Versaform in connection with the acquisition. The prior owner has since become a
member of the board of directors of the  Company.  This note is payable  monthly
over three years and bears interest at 7.0%.  This note is secured by 65% of the
stock of the Company's Canadian subsidiary.

The Company entered into other various notes payable for the purchase of certain
equipment.  The notes are  payable in monthly  installments  including  interest
ranging from 6.99% - 10.0% through  November 2006. The notes payable are secured
by equipment.

5. Business Segment Information

As set forth in the criteria of SFAS No. 131,  Disclosures  about Segments of an
Enterprise and Related Information, the Company is organized into two reportable
segments:  the Sheet Metal segment and the Machining and Technology segment. The
Sheet Metal segment fabricates, finishes and integrates close tolerance aluminum
and  specialty  alloy  components  primarily  for the  aerospace  industry.  The
Machining and Technology segment machines close tolerance aluminum and specialty
alloy  components  for  the  aerospace,   semiconductor   and  medical  products
industries.

The accounting  policies of the segments are the same as those described in Note
1 of the Condensed  Consolidated  Financial  Statements included as part of this
Quarterly  Report  on Form  10-Q.  Sales  between  segments  are  insignificant.
Corporate  assets,  liabilities and expenses related to the Company's  corporate
offices are allocated to the segments,  except for income taxes. The table below
presents  information  about reported  segments on the basis used  internally to
evaluate segment performance:


<PAGE>


<TABLE>
<CAPTION>
                                              Three Months Ended            Six Months Ended
                                                     June 30,                    June 30,
                                              2004          2003          2004            2003
                                          ---------------------------------------------------------
<S>                                     <C>           <C>           <C>           <C>
Net sales:
   Sheet Metal                             $ 17,472      $ 16,037      $ 32,222      $   33,201
   Machining and Technology                   4,403         2,828         8,193           6,506
                                          ---------------------------------------------------------
                                           $ 21,875      $ 18,865      $ 40,415      $   39,707
                                          =========================================================
Income (loss) from operations:
    Sheet Metal                            $    103      $   (608)     $ (1,375)     $   (1,880)
    Machining and Technology                    662          (212)        1,066             (31)
                                          ---------------------------------------------------------
                                           $    765      $   (820)     $   (309)     $   (1,911)
                                          =========================================================
Interest expense:
    Sheet Metal                            $    145      $    117      $    257      $      275
    Machining and Technology                    144           188           311             395
    Corporate                                   274            82           440             157
                                          ---------------------------------------------------------
                                           $    563      $    387      $  1,008      $      827
                                          =========================================================
Depreciation and amortization:
    Sheet Metal                            $  1,013      $  1,022      $  1,897      $    2,035
    Machining and Technology                     99            99           196             196
    Corporate                                    45           110           227             226
                                          ---------------------------------------------------------
                                           $  1,157      $  1,231      $  2,320      $    2,457
                                          =========================================================
Capital expenditures:
    Sheet Metal                            $    362      $    175      $    629      $      464
    Machining and Technology                      7            50            16              76
    Corporate                                     7             3            21              96
                                          ---------------------------------------------------------
                                           $    376      $    228      $    666      $      636
                                          =========================================================

</TABLE>

<TABLE>
<CAPTION>
                                                             June 30, 2004       December 31,2003
                                                         --------------------------------------------
<S>                                                       <C>                   <C>
Goodwill:
    Sheet Metal                                                  $       -            $       -
    Machining and Technology                                         5,653                5,653
    Corporate                                                            -                    -
                                                         --------------------------------------------
                                                                 $   5,653            $   5,653
                                                         ============================================
Total assets:
    Sheet Metal                                                  $  49,239               49,896
    Machining and Technology                                        14,971               15,016
    Corporate                                                        5,116                5,607
                                                         --------------------------------------------
                                                                 $  69,326            $  70,519
                                                         ============================================
</TABLE>

6. Comprehensive Loss

Comprehensive  loss includes  adjustments  to net loss for the change in foreign
currency translations as follows:

<TABLE>
<CAPTION>
                                               Three Months Ended               Six Months Ended
                                                     June 30,                        June 30,
                                               2004          2003             2004            2003
                                          ---------------------------------------------------------------
<S>                                     <C>            <C>               <C>            <C>
Net income (loss)                          $   135        $  (739)          $  (1,384)     $  (1,697)
Other comprehensive income (loss):
       Foreign currency translation
       adjustments                             (25)            42                 (28)            73
                                          ---------------------------------------------------------------
Comprehensive loss                         $   110        $  (697)          $  (1,412)     $  (1,624)
                                          ===============================================================
</TABLE>


7. Restructuring Charges

The Company adopted SFAS No. 146,  Accounting for Costs Associated with Exit and
Disposal Activities, in 2003. SFAS No. 146 requires companies to recognize costs
associated with exit and disposal  activities when they are incurred rather than
at the date of commitment  to an exit or disposal  plan.  Costs covered  include
lease termination  costs,  costs to consolidate  facilities and certain employee
severance  costs  that  are  associated  with  a   restructuring,   discontinued
operation, plant closing or other exit or disposal activity.

On July 23, 2003, the Company  announced the details of a restructuring  plan to
reduce operating expenses and increase efficiencies at its St. Charles, Missouri
location,  which included a reduction of work force of  approximately 30 people,
the exit of two leased facilities and relocation of a significant  amount of its
manufacturing  equipment.  In December 2003, the Company announced an additional
restructuring program at the Wichita, Kansas plant, including a staged reduction
in workforce of  approximately  60  employees,  and the sale of a  Company-owned
building and excess equipment. The Wichita restructuring program is scheduled to
occur over a nine-month  period  during which the Company plans to transfer from
its Wichita  facility all extrusion  stretch work to its Auburn,  Washington and
Vista, California locations and its milling work packages to its Tulsa, Oklahoma
and  Auburn,  Washington  facilities  and plans to  transfer  its high  pressure
forming work currently produced in Auburn to the Wichita, Kansas plant. Employee
severance costs for the Wichita plant restructuring will be paid upon completion
of the service  term in 2004 and,  therefore,  were not accrued in 2003 per SFAS
No. 146. The costs  incurred for these  restructuring  plans as of June 30, 2004
were $685,  incurred as  follows:  $539 for moving and  relocation  and $146 for
severance costs. The Company expects to incur total restructuring costs for both
of  these  programs  of  $910  for  the  year  ending  December  31,  2004.  All
restructuring  costs  are  attributable  to the  Sheet  Metal  Segment  and  are
classified  as a separate  component  of  Selling,  General  and  Administrative
expenses.


<PAGE>


8.  Income Taxes

The Company  accounts  for income  taxes under the  provisions  of SFAS No. 109,
"Accounting for Income Taxes." The objectives of accounting for income taxes are
to recognize the amount of taxes payable or refundable  for the current year and
deferred tax  liabilities  and assets for the future tax  consequences of events
that have been recognized in the Company's financial  statements or tax returns.
SFAS No. 109 also  requires  that  deferred tax assets be reduced by a valuation
allowance if it is more likely than not that some portion or all of the deferred
tax asset will not be realized.

The Company currently has significant  deferred tax assets, which are subject to
periodic  recoverability  assessments.  Pursuant  to  FASB  109,  and due to the
uncertainty  of future taxable  income,  the Company has recorded a deferred tax
asset and corresponding  valuation  reserve allowance  relating to the Company's
loss in the first half of 2004.

As of June 30,  2004,  the  Company  had a  deferred  tax asset of $2,206 and an
offsetting deferred tax liability of $2,206.

Differences between the effective rate of taxes recorded and income taxes at the
statutory  rates are due to  anticipated  utilization of available net operating
loss carryforwards.


<PAGE>


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

The Private  Securities  Litigation  Reform Act of 1995 provides a "safe harbor"
for forward-looking  statements. The Company makes forward-looking statements in
the "Management's  Discussion and Analysis of Financial Condition and Results of
Operations"  section of this Quarterly  Report on Form 10-Q, which represent the
Company's expectations or beliefs about future events and financial performance.
When used in this report, the words "expect," "believe,"  "anticipate,"  "goal,"
"plan,"  "intend,"  "estimate,"  "may,"  "will" or similar words are intended to
identify  forward-looking  statements.   These  forward-looking  statements  are
subject to known and unknown risks,  uncertainties  and  assumptions,  including
those referred to in the "Risk Factors"  section of the Company's  Annual Report
on Form 10-K for the year ended  December 31, 2003, as filed with the Securities
and Exchange Commission on April 15, 2004.

In light of these risks,  uncertainties  and  assumptions,  the  forward-looking
events  discussed  may not occur.  In  addition,  actual  results  could  differ
materially from those suggested by the forward-looking statements.  Accordingly,
investors  are  cautioned  not to place undue  reliance  on the  forward-looking
statements.  Except as required by law, the Company  undertakes no obligation to
publicly update or revise any forward-looking statements, whether as a result of
new information,  future events or otherwise.  Investors should, however, review
additional  disclosures  made by the Company  from time to time in its  periodic
filings with the Securities and Exchange Commission.

This  Quarterly  Report on Form  10-Q  should  be read  completely  and with the
understanding  that  the  Company's  actual  future  results  may be  materially
different from what the Company expects. All forward-looking  statements made by
the  Company  in this  Form 10-Q and in the  Company's  other  filings  with the
Securities and Exchange Commission are qualified by these cautionary statements.

The condensed  consolidated financial statements are prepared in accordance with
accounting principles generally accepted in the United States, which require the
Company  to  make  estimates  and  assumptions.  (See  Note 1 of  the  Condensed
Consolidated  Financial  Statements included as part of this Quarterly Report on
Form 10-Q).

The Company  believes  that certain  significant  accounting  policies  have the
potential to have a more significant  impact on the financial  statements either
because of the significance of the financial  statements to which they relate or
because they involve a higher  degree of judgment and  complexity.  A summary of
such  critical  accounting  policies  can  be  found  in  the  section  entitled
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operation"  contained in the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 2003.


OVERVIEW

The Company is a leader in  fabricating,  machining,  finishing and  integrating
formed,  close tolerance aluminum and specialty alloy components and sheet metal
products  for  use by the  aerospace,  technology  and  commercial  sheet  metal
industries.  Aerospace  components  manufactured  by the Company include leading
edge wing slats,  flaps and lens  assemblies;  cockpit window frame  assemblies;
fuselage  skins and supports;  and passenger and cargo door frames and supports.
The Company  manufactures more than 20,000 aerospace  components for integration
into a variety of civilian  and  military  aircraft  platforms  manufactured  by
leading original equipment manufacturers and prime subcontractors.  In addition,
the Company  produces  components  and  assemblies  for laser  equipment used by
semiconductor  and medical equipment  manufacturers in the technology  industry.
The Company also  produces  sheet metal  products  for various  companies in the
commercial  sheet  metal  industry.   In  addition  to   manufacturing   quality
components, the Company provides its customers with value-added services related
to the design, production and finishing of its components.



Historically,  the Company's business was primarily  dependent on the commercial
aircraft market,  with Boeing Company as the Company's  principal  customer.  In
order to diversify its products and customer  base,  the Company  implemented an
acquisition  and  marketing  strategy in the late 1990's that has  broadened the
number of industries to which the Company sells its components,  and, within the
aerospace  industry,  diversified  its  customer  base to reduce  the  Company's
dependence on Boeing Company.  The following table specifies the Company's sales
by market as a percentage  of total sales for the six months ended June 30, 2004
as compared to the six months ended June 30, 2003:
<TABLE>
<CAPTION>
                                              Six Months Ended        Six Months Ended
      Market                                      June 2004               June 2003
     ----------------------------------------------------------------------------------
<S>                                           <C>                     <C>
        Commercial aircraft                       27.9  %                 27.8  %
        Corporate and regional aircraft           30.2                    27.8
        Military products                         20.2                    24.3
        Technology products                       13.1                     9.7
        Other (1)                                  8.6                    10.4
                                          ---------------------------------------------
        Total                                    100.0  %                100.0  %
                                          =============================================
</TABLE>
         (1) Includes commercial sheet metal and various aerospace products.

Beginning in 2001,  the Company  began an aggressive  acquisition  campaign that
resulted in the consummation of four  transactions  through 2002. In April 2001,
the Company  acquired  Tempco  Engineering  Inc.  ("Tempco") and its affiliates,
which expanded the Company's  aerospace  product line and introduced the Company
to  the  technology  industry.   The  Company  acquired  Versaform   Corporation
("Versaform")  and its affiliates on May 16, 2002,  Stretch Forming  Corporation
("SFC") on June 12, 2002 and  Southern  Stretch  Forming and  Fabrication,  Inc.
("SSFF")  on  September  30,  2002.  The  Versaform  acquisition   significantly
increased the Company's  presence in the corporate and regional  aircraft market
while adding various  military  products to the Company's  product line. The SFC
acquisition  further  supplemented the Company's military product line. Finally,
the  Company's  acquisition  of SSFF  increased  the  Company's  business in the
corporate and regional aircraft market.

Unlike the other  acquisitions,  Tempco operates and is managed as an autonomous
unit.  Accordingly,  it is  treated  as a  business  segment  separate  from the
Company's other businesses. The Tempco business, which sells machined components
to  both  the  aerospace  and  technology  industries,  is  referred  to in this
discussion as the  Machining and  Technology  segment,  and the Company's  other
businesses are referred to as the Sheet Metal segment.

RESULTS OF OPERATIONS

Three months ended June 30, 2004 compared to June 30, 2003

The  following  table is a summary of the  Company's  operating  results for the
three months ended June 30, 2004 and June 30, 2003:
<TABLE>
<CAPTION>
($ in millions)                        Three Months Ended                               Three Months Ended
                                         June 30, 2004                                     June 30, 2003
                             Sheet       Machining &                          Sheet        Machining &
                             Metal       Technology         Total             Metal         Technology        Total
                          ------------ ---------------- ---------------    ------------- ----------------- ------------
<S>                       <C>           <C>              <C>               <C>            <C>             <C>
Net sales                    $ 17.5        $  4.4           $ 21.9            $  16.0        $  2.8          $ 18.8
Cost of sales                  14.2           3.3             17.5               13.8           2.6            16.4
                          ------------ ---------------- ---------------    ------------- ----------------- ------------
Gross profit                    3.3           1.1              4.4                2.2            .2             2.4
S,G & A                         3.0            .4              3.4                2.8            .4             3.2
Restructuring
   expenses                      .2             -               .2                  -             -               -
                          ------------ ---------------- ---------------    ------------- ----------------- ------------
Income (loss) from
   operations                 $  .1        $   .7           $   .8             $  (.6)       $  (.2)         $  (.8)
                          ============ ================ ===============    ============= ================= ============
</TABLE>
Sheet Metal Segment

Net Sales. The following table specifies the amount of Sheet Metal segment's net
sales by category for the second quarters of 2004 and 2003 and the percentage of
the segment's total net sales for each period represented by each category:

($ in millions)
<TABLE>
<CAPTION>
                                     2nd Qtr       % of        2nd Qtr      % of
       Category                         2004      Total           2003     Total
      ----------------------------------------------------------------------------
<S>                               <C>         <C>             <C>        <C>
       Commercial aircraft             $ 5.7       32.6  %       $ 5.8      36.3 %
       Military products                 3.0       17.1            4.6      28.8
       Corporate and regional            7.3       41.7            5.3      33.1
       Other                             1.5        8.6             .3       1.8
                                 -------------------------------------------------
       Total                           $17.5      100.0  %       $16.0     100.0 %
                                 =================================================
</TABLE>
Net sales for the Sheet Metal  segment  were $17.5  million for the three months
ended June 30,  2004,  $1.5  million  higher than net sales for the three months
ended June 30, 2003. Corporate and Regional sales of $7.3 million for the second
quarter of 2004 were $2.0 million 37.7% higher than corporate and regional sales
for the comparable  period of the prior year primarily due to strong  Gulfstream
shipments.  Partly  offsetting were military sales in the second quarter of 2004
at $3.0 million, $1.6 million lower than military sales in the second quarter of
2003 due to reduced demand by Lockheed Martin  Corporation for the F-16 program.
Commercial  aircraft sales were $5.7 million in the second quarter of 2004, $0.1
million lower than commercial  aircraft sales in the second quarter of the prior
year,  primarily  reflecting lower demand from Boeing for components and the 747
and 767 programs,  which were partly offset by higher sales  relating to the 737
program.

Gross Profit.  Gross profit for the quarter ended June 30, 2004 was $3.3 million
(18.9% of net sales), an increase from $2.2 million (13.8% of net sales) for the
quarter ended June 30, 2003. Gross profit increased  primarily due to the higher
volume leverage and cost reductions and restructuring  efforts during the second
half of 2003 and the first half of 2004 at the  Company's  St.  Charles,  MO and
Wichita, KS facilities.

The Company continues to encounter  production  difficulties on certain products
for the C-130 for which it is  preparing  a claim to attempt  to recover  losses
incurred.  No benefit from any potential claim for the C-130 components has been
accrued. The benefit of a claim, if any, will not be recorded until such time as
the customer and the Company agree on a settlement.  Components  responsible for
the majority of these  production  inefficiencies  will be  transferred to other
suppliers in the third quarter of 2004.

Selling,  General and Administrative  Expenses ("SGA"). SGA expenses,  excluding
restructuring  charges,  for the second quarter of 2004 were $3.0 million (17.1%
of net  sales),  up $0.2  million  compared  to the  second  quarter of 2003 due
primarily  to the higher legal fees  associated  with the DOD  investigation  at
Versaform. (See Part II, Item 1. Legal Proceedings.)

Restructuring Charges.  During the second quarter of 2004, the Company continued
its plans of transferring  specific forming  capabilities and related production
out of its Wichita operation and into other locations within the Company. During
the second quarter,  the Company  incurred total  restructuring  charges of $0.2
million for moving and relocation.

Interest  Expense.  Interest  expense for the second quarter of 2004 was at $0.1
million, even with interest expense in the prior year's second quarter.

Machining and Technology Segment

Net Sales.  The following table specifies the amount of Machining and Technology
segment's net sales by category for the second quarters of 2004 and 2003 and the
percentage of the segment's total net sales for each period  represented by each
category:

($ in millions)
<TABLE>
<CAPTION>
                                  2nd Qtr        % of       2nd Qtr     % of
      Category                    of 2004       Total       of 2003    Total
     --------------------------------------------------------------------------
<S>                              <C>         <C>          <C>       <C>
      Technology products           $ 3.1        70.5  %      $1.6      57.1  %
      Aerospace products              1.0        22.7           .9      32.1
      Other                            .3         6.8           .3      10.8
                               ------------------------------------------------
      Total                         $ 4.4       100.0  %      $2.8     100.0  %
                               ================================================
</TABLE>
Net sales for the  Machining  and  Technology  segment  were $4.4 million in the
second  quarter of 2004,  up 57.1% from $2.8 million in the prior year's  second
quarter.  Net sales of  technology  products  were $3.1  million  in the  second
quarter of 2004,  up $1.5  million from the prior year's  second  quarter.  This
increase is primarily attributable to a rebound in the demand for equipment used
in the production of  semiconductors.  Aerospace products sales were also higher
with sales of $1.0 million in the second  quarter of 2004,  up from $0.9 million
in the second quarter of 2003,  reflecting  increased  defense  spending for the
Apache Helicopter program.

The above described net sales  increases,  together with the net sales increases
experienced by the Sheet Metal segment, contributed to the $1.6 million increase
in the Company's  income from operations in the second quarter of 2004 over that
in the second quarter of 2003.

Gross  Profit.  The gross profit for the segment was $1.1 million  (24.4% of net
sales) in the second quarter of 2004, an increase from $0.2 million (7.1% of net
sales) in the second quarter of 2003. The increase in gross profit in the second
quarter of 2004 was due to higher volume,  favorable leverage of fixed costs and
implemented cost containment programs.

Selling, General and Administrative Expenses. SGA expenses for the quarter ended
June 30, 2004 of $0.4 million were unchanged from the prior year's quarter.

Interest  Expense.  Interest  expense  for the  second  quarter of 2004 was $0.1
million for the segment, unchanged from the prior year's second quarter.

Non-Segment Expenses

Interest  Expense.  Interest  expense not assigned to a segment is primarily the
result of the Company's  revolving credit agreement,  which is used to fund both
segments'  cash  needs.  Interest  expense  not  assigned  to a segment was $0.3
million in the second  quarter of 2004,  compared to $0.1  million in the second
quarter of 2003,  primarily  due to an accrual of a $0.1 million fee relating to
the  Company's  debt  obligation  with Union  Planters.  (See the  Liquidity and
Capital Resources section in this Item 2.)

Income Taxes.  During the second quarter of 2004, the Company recorded an income
tax expense  relating to its Canadian  Operation  and other state taxes that did
not have  offsetting loss carry forward  provisions.  The Company did not record
any income tax benefit in the second  quarter of 2004,  compared to a benefit of
$0.4  million  in the second  quarter  of 2003.  In 2003,  the  Company  had net
operating loss carrybacks available, which were fully utilized in 2003.

Six months ended June 30, 2004 compared to June 30, 2003

The following table is a summary of the Company's operating results for the six
months ended June 30, 2004 and June 30, 2003:

($ in millions)
<TABLE>
<CAPTION>
                                         June 30, 2004                              June 30, 2003
                          ---------------------------------------    ---------------------------------------------
                               Sheet     Machining &                      Sheet     Machining &           Total
                               Metal      Technology       Total          Metal      Technology
                          ---------------------------------------    ---------------------------------------------
<S>                        <C>             <C>         <C>             <C>              <C>           <C>
Net sales                     $ 32.2          $  8.2      $ 40.4          $33.3            $6.5           $39.8
Cost of sales                   27.2             6.2        33.4           29.5             5.7            35.2
                          ---------------------------------------    ---------------------------------------------
Gross profit                     5.0             2.0         7.0            3.8              .8             4.6
S, G & A                         5.7              .9         6.6            5.7              .8             6.5
Restructuring expenses
                                  .7               -          .7              -               -               -
                          ---------------------------------------    ---------------------------------------------
Income (loss) from
   operations                 $ (1.4)          $ 1.1       $ (.3)        $ (1.9)           $  -          $ (1.9)
                          =======================================    =============================================
</TABLE>
Sheet Metal Segment

Net Sales. The following table specifies the amount of Sheet Metal segment's net
sales by category for the first half of each of 2004 and 2003 and the percentage
of the segment's total net sales for each period represented by each category:

($ in millions)
<TABLE>
<CAPTION>
                                        1st Half         % of               1st Half        % of
         Category                        of 2004         Total               of 2003       Total
        -----------------------------------------------------------     -------------------------------
<S>                                     <C>            <C>                  <C>         <C>
         Commercial aircraft               $11.3           35.1  %             $11.1        33.3  %
         Military products                   6.1           18.9                  8.4        25.2
         Corporate and regional             12.2           37.9                 12.0        36.0
         Other                               2.6            8.1                  1.8         5.5
         ----------------------------------------------------------     -------------------------------
         Total                             $32.2          100.0  %             $33.3       100.0  %
         ==========================================================     ===============================
</TABLE>
Net sales for the Sheet  Metal  segment  were $32.2  million  for the six months
ended June 30, 2004,  $1.1 million lower than net sales for the six months ended
June 30, 2003.  Military  sales in the first half of 2004 were at $6.1  million,
$2.0 million lower than military sales in the first half of 2003, due to reduced
demand by Lockheed Martin  Corporation for the F-16 program.  Partly  offsetting
were:  increased  commercial  aircraft  sales of $11.3 million in the first half
2004,  $0.2 million higher than  commercial  aircraft sales in the first half of
the prior year,  primarily reflecting increased Boeing Company volume in the 737
program;  corporate  and regional  sales of $12.2  million for the first half of
2004,  $0.2 million  higher than corporate and regional sales for the comparable
period of the prior year, primarily due to higher Gulfstream shipments.

Gross Profit. Gross profit for the first half of 2004 was $5.0 million (15.5% of
net sales),  an increase  from $3.8  million  (11.4% of net sales) for the first
half of  2003.  Gross  profit  increased  primarily  due to cost  reduction  and
restructuring  efforts during the second half of 2003 and the first half of 2004
at the Company's St. Charles, MO and Wichita, KS facilities.

The Company continues to encounter  production  difficulties on certain products
for the C-130 for which it is  preparing  a claim to attempt  to recover  losses
incurred.  No benefit from any potential claim for the C-130 components has been
accrued. The benefit of a claim, if any, will not be recorded until such time as
the customer and the Company agree on a settlement.  Components  responsible for
the majority of these  production  inefficiencies  will be  transferred to other
suppliers  in the  third  quarter  of  2004.  Also,  additional  costs  hindered
performance on the B-52 refurbishment  program, which was substantially complete
at the end of the second quarter 2004.

Selling,  General and  Administrative  Expenses ("SGA").  SGA expenses excluding
restructuring  charges,  for the first half of 2004 were $5.7 million  (17.5% of
net sales),  even with expenses for the first half of 2003 as lower salaries and
depreciation  expenses  were  offset  by  higher  legal  fees  relating  to  the
Department of Defense investigation. (See Part II, Item 1. Legal Proceedings.)

Restructuring Charges.  During the first half of 2004, the Company continued its
plans of reducing  employment levels at its St. Charles and Wichita  operations.
During the first half of 2004 the Company incurred total  restructuring  charges
of $0.7 million: severance costs of $0.1 million and moving and relocation costs
of $0.6 million. The Company expects to spend a total of $0.9 million in 2004 to
complete this restructuring.

Interest Expense.  Interest expense for the first half of 2004 was $0.3 million,
even with interest expense reported in the first quarter of the prior year.

Machining and Technology Segment

Net Sales.  The following table specifies the amount of Machining and Technology
segment's  net sales by category for the first half of each of 2004 and 2003 and
the percentage of the segment's  total net sales for each period  represented by
each category:

($ in millions)
<TABLE>
<CAPTION>
                                 1st Half        % of              1st Half        % of
     Category                     of 2004       Total               of 2003       Total
     -----------------------------------------------------       ----------------------------
<S>                             <C>          <C>                    <C>        <C>
     Technology products             $5.3        64.6  %               $4.1        63.1  %
     Aerospace products               2.1        25.6                   1.6        24.6
     Other                             .8         9.8                    .8        12.3
     -----------------------------------------------------       ----------------------------
     Total                           $8.2       100.0  %               $6.5       100.0  %
     =====================================================       ============================
</TABLE>
Net sales for the Machining and Technology segment were $8.2 million for the six
months ended June 30,  2004,  up 26.2% from $6.5 million in the prior year's six
month period.  Net sales of  technology  products were $5.3 million in the first
half of 2004, up $1.2 million from the prior year's first half. This increase is
primarily  attributable  to the  additional  demand  for  equipment  used in the
production  of  semicondutors  and an  increase  in  medical  lasers.  Aerospace
products  sales of $2.1 million in the first half of 2004 were also up from $1.6
million in the first half of 2003,  reflecting increased defense spending on the
Apache Helicopter program.

Gross  Profit.  The gross profit for the segment was $2.0 million  (24.6% of net
sales) in the first half of 2004,  increased from a gross profit of $0.8 million
(12.3% of net sales) in the first half of 2003.  The increase in gross profit in
the first half of 2004 was due to the higher volume and the  favorable  leverage
of fixed costs.

Selling,  General and Administrative  Expenses.  SGA expenses for the first half
ended June 30, 2004 were $0.9  million,  slightly  higher than the $0.8  million
reported  in the  first  half of last  year due to  higher  corporate  allocated
expenses.

Interest  Expense.  Interest expense for the first half of 2004 was $0.3 million
for the segment,  $0.1  million  lower than the prior year's first half due to a
lower debt level.

Non-Segment Expenses

Interest  Expense.  Interest  expense not assigned to a segment is primarily the
result of the Company's  revolving credit agreement,  which is used to fund both
segments'  cash  needs.  Interest  expense  not  assigned  to a segment was $0.4
million in the second half of 2004,  compared to $0.2 million in the second half
of 2003,  due  primarily  to the accrual of a $0.1  million fee  relating to the
Company's debt obligation with Union Planters.

Income  Taxes.  In the first half of 2004,  the  Company  recorded an income tax
expense  relating to its Canadian  Operations  and state taxes that did not have
offsetting loss  carryforward  provisions.  The Company did not record an income
tax benefit in the second half of 2004, compared to a benefit of $1.0 million in
the second half of 2003. In 2003, the Company had net operating loss  carrybacks
available, which were fully utilized in 2003.

Liquidity and Capital Resources

Primarily as a result of our continuing losses,  inability to meet our covenants
and lack of liquidity,  our independent  certified public  accountants  modified
their  opinion  on  the  Company's  December  31,  2003  Consolidated  Financial
Statement to contain a paragraph  wherein  they  expressed a  substantial  doubt
about our ability to continue as a going concern. The Company has taken steps to
improve our current liquidity and provide the capital necessary to fund our plan
for future  growth.  The Company  believes that the effect of these steps can be
seen in the $1.4  million  increase  in net  income  (loss)  between  the second
quarter of 2004 and 2003 and the first six months of 2004 and 2003.  Our efforts
to raise alternative capital are discussed below, and additional  information is
included in the Company's Annual Report on Form 10-K for the year ended December
31, 2003.

The Company's  balance of cash and  equivalents  was $0.9 million as of June 30,
2004,  compared to a balance of $0.4 million as of December 31, 2003.  Cash flow
generated by operating  activities  for the first half of 2004 was $3.5 million,
reflecting non-cash depreciation and amortization, higher accounts payable and a
collection  of an income tax  receivable;  offsetting  were the  Company's  $1.4
million net loss,  higher prepaid  expenses and higher trade  receivables.  Cash
used by  investing  activities  was $0.6  million  in the first half of 2004 and
reflected capital expenditures. The Company's financing activities in 2004 was a
use of $2.3  million,  reflecting  the pay  down of  long-term  debt  and  notes
payable,  which was partly  offset by  additional  borrowings  on the  Company's
revolving credit line.

The  Company's  ratio of total debt to  capitalization  (debt plus  stockholders
equity) was 44.1% as of June 30, 2004 and 45.2% as of December  31,  2003.  This
decrease  was  primarily  due to the  paydown  in the first  half of 2004 of the
long-term debt and notes payable.  The Company's  revolving  credit line at June
30, 2004 was at $8.8 million with an additional line capacity of $0.9 million.

In 2003,  the Company's  failure to meet certain  financial  covenants  with its
primary lender resulted in a  renegotiation  of its Loan Agreement on January 5,
2004 and again on March 30, 2004.

On March 30, 2004,  the Company and Union  Planters  entered into the Thirteenth
Amendment,  amending the Loan Agreement.  The primary purposes of the Thirteenth
Amendment were to (a) extend the maturity of the Company's Revolving Credit Loan
provided  under the Loan Agreement from March 31, 2004 to March 31, 2005 and (b)
waive a default  arising under the Loan Agreement of the EBITDA Covenant for the
period ended December 31, 2003.

In addition, under the terms of the Thirteenth Amendment to Loan Agreement:

     o    The  maximum  principal  amount  of  the  Revolving  Credit  Loan  was
          increased  from $9.1 million to $9.7  million  through  September  30,
          2004, subject to a borrowing base calculation and further subject to a
          newly established inventory reserve requirement and a more restrictive
          requirement for eligible receivables, which could reduce the amount of
          borrowing availability under the Revolving Credit Loan.

     o    The interest rate on the Revolving  Credit Loan was changed from LIBOR
          plus 2.5% to prime plus 1.0%.  Moreover,  because  the Company had not
          executed and  delivered a Letter of Intent on or before June 30, 2004,
          the interest rate on the Revolving  Credit Loan was increased to prime
          plus  1.5% and will be  further  increased  to prime  plus 2.0% if the
          Company has not paid all of its  obligations to Union Planters in full
          on or before  September 30, 2004. The interest rate on the Tempco Term
          Loan provided under the Loan  Agreement,  which,  as of June 30, 2004,
          had a total outstanding principal balance of $7.5 million, was changed
          from  LIBOR  plus  3.0%,  subject  to a floor of 7.0% and a ceiling of
          8.5%,  to prime plus 2.0%,  subject to a floor of 7.0%.  The  interest
          rate on the  Versaform  Term Loan provided  under the Loan  Agreement,
          which, as of June 30, 2004, had a total outstanding  principal balance
          of $8.4 million,  was changed from LIBOR plus 3.0% to prime plus 2.0%.
          Moreover,  because the Company had not executed and delivered a Letter
          of Intent on or before June 30, 2004,  the interest rate on the Tempco
          Term Loan and the  Versaform  Term Loan was be increased to prime plus
          2.5% and will be further  increased  to prime plus 3.0% if the Company
          has not paid all of its  obligations  to Union  Planters in full on or
          before  September  30,  2004.  Based on the  amount  of the  Company's
          outstanding  debt as of June 30, 2004,  the  aforementioned  effective
          interest rate increases will result in additional  interest expense of
          approximately $29,000 per quarter.

     o    Because the  Company did not enter into one or more  Letters of Intent
          by June  30,  2004,  a fee of $0.1  million  will  be  payable  on the
          earliest of March 31,  2005,  the date the  Company  repays all of its
          obligations  to Union  Planters  or the date on which  Union  Planters
          accelerates  all of the  Company's  obligations.  This  fee  has  been
          accrued and recorded by the Company in interest  expense in the second
          quarter of 2004.

     o    If the Company  fails to pay all of its  obligations  in full to Union
          Planters by September  30, 2004, a fee of $0.1 million will be payable
          to Union Planters ($0.1 million on October 1, 2004 and $0.3 million on
          the earliest of March 31, 2005, the date the Company repays all of its
          obligations  to Union  Planters  or the date on which  Union  Planters
          accelerates all of the Company's obligations).

     o    If the Company  fails to pay all of its  obligations  in full to Union
          Planters by December  30,  2004, a fee of $0.2 million will be payable
          to Union  Planters ($0.1 million on December 31, 2004 and $0.1 million
          on the earliest of March 31, 2005,  the date the Company repays all of
          its  obligations to Union Planters or the date on which Union Planters
          accelerates all of the Company's obligations).

In  addition,  the Company has executed a $1.3 million note in favor of a former
owner of  Versaform,  now a director  of the  Company,  in  connection  with the
Company's purchase of Versaform.  This note is secured by a pledge of 65% of the
Company's  interest in its Canadian  subsidiary,  and as part of its obligations
under  this  note,  the  Company's  Canadian  subsidiary  is  subject to various
restrictive covenants relating to its financial performance.  This note, payable
monthly  over three  years,  had a balance at June 30, 2004 of $0.4  million and
bears interest at 7.0%.

The Company has entered  into other  various  notes  payable for the purchase of
certain  equipment.  The notes are  payable in monthly  installments,  including
interest  ranging from 6.99% - 10.0%,  through  November 2006. The notes payable
are secured by  equipment.  The  Company  also has entered  into  capital  lease
agreements  for the  purchase  of certain  equipment.  The leases are payable in
monthly  installments,  including  interest ranging from 4.98% - 9.15%,  through
August 2005.

Please see Note 4 of the Condensed Consolidated Financial Statements included as
part of this  Quarterly  Report  on Form  10-Q  for  more  detailed  information
relating to the Company's debt and the Thirteenth Amendment.

As a result of the  above-described  debt,  the Company is required to utilize a
significant  portion  of its cash  generated  from  operations  to meet its debt
service obligations.  Furthermore,  if the Company were to fail in the future to
comply with the restrictive covenants in the Loan Agreement or in the promissory
note, the Company's  operations  could be negatively  impacted and the Company's
ability to take  advantage of  potential  business  opportunities  as they arise
could  be  limited.  Moreover,  the  Company's  failure  to  comply  with  these
restrictive financial and other covenants could result in a default that, if not
cured or waived,  could cause the Company to be required to repay its borrowings
before  their due dates.  If the Company  were unable to make this  repayment or
otherwise refinance these borrowings, the Company's creditors could foreclose on
the assets securing its borrowings.  Although in the Thirteenth  Amendment Union
Planters  waived the default  arising  from a failure of the Company to meet the
EBITDA  Covenant,  such  waiver was  limited to and valid only for the  specific
purposes given.  Union Planters is not obligated solely by reason of such waiver
to agree to any additional waivers.

In addition to the cash requirements for debt service,  the Company  anticipates
that it will incur  significant  additional  costs in 2004 to meet the increased
requirements of Section 404 of the Sarbanes-Oxley Act of 2002 regarding internal
controls and procedures.  Please see Part II, Item 4. Controls and Procedures of
this Quarterly Report on Form 10-Q for more detailed information relating to the
Company's internal controls and procedures.

Based upon forecasted operating results and cash flows,  management believes the
current  lending  agreement  is  sufficient  to meet  its  cash  needs  in 2004.
Management  has also  developed a plan that includes  restructuring  or possibly
disposing of segments of our business,  increasing sales and raising alternative
capital. However, the Company's losses from operations in recent years, together
with its inability to meet the EBITDA Covenant and certain other covenants under
the Loan Agreement, have raised substantial doubt about the Company's ability to
continue as a going concern.

If the Company fails to meet its covenants, fails to comply with the refinancing
or sale of assets  contemplated in the Loan Agreement,  or is unable to fund its
operations  within the limits of the Loan  Agreement,  no assurance can be given
that additional  and/or  replacement  financing can be obtained on reasonable or
acceptable  terms  or that  the  Company  will be  able to  continue  as a going
concern.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company will continue as a going concern  although the report of our independent
accountant as of and for the year ended December 31, 2003 expresses  substantial
doubt as to the Company's ability to continue as a going concern.  The financial
statements do not include any adjustments  that might result from the outcome of
this uncertainty.

Item 3.    Quantitative and Qualitative Disclosures About Market Risk.

Market  risk  represents  the risk of loss  that  may  impact  the  consolidated
financial  position,  results of  operations  or cash flows of the Company.  The
Company is exposed to market  risk  primarily  due to  fluctuations  in interest
rates.  The Company does not utilize any  particular  strategy or instruments to
manage its interest rate risk.

The Company's  outstanding  credit facility carries an interest rate that varies
in  accordance  with the  prime  rate.  The  Company  is  subject  to  potential
fluctuations in its debt service as the prime rate changes.  Based on the amount
of the Company's  outstanding debt as of June 30, 2004, a hypothetical 1% change
in the interest rate of the Company's  outstanding  credit facility would result
in a change in annual interest expense of approximately $0.3 million.

Item 4.    Controls and Procedures.

As of end of the  fiscal  quarter  ended  June 30,  2004,  the  Company's  Chief
Executive  Officer and Chief Financial  Officer carried out an evaluation,  with
the  participation  of other members of the Company's  management as they deemed
appropriate,  of the  effectiveness of the design and operation of the Company's
disclosure  controls and procedures (as defined in Exchange Act Rules  13a-15(e)
and  15d-15(e)  under  the  Securities  Exchange  Act of  1934).  Based on their
evaluation of these  disclosure  controls and  procedures,  the Chief  Executive
Officer and Chief  Financial  Officer  concluded  that the Company's  disclosure
controls and procedures were effective in all material respects in ensuring that
material  information  required  to be  disclosed  in the  periodic  reports the
Company  files  with  the  Securities  and  Exchange   Commission  is  recorded,
processed, summarized and reported in a timely manner.

This  portion  of our  Quarterly  Report on Form 10-Q is our  disclosure  of the
conclusions of our management,  including our Chief Executive  Officer and Chief
Financial  Officer,  regarding the effectiveness of our disclosure  controls and
procedures  as of the  end of the  period  covered  by  this  report,  based  on
management's evaluation of those disclosure controls and procedures.  You should
read this disclosure in conjunction with the certifications attached as Exhibits
31.1  and  31.2 to  this  Quarterly  Report  on Form  10-Q  for a more  complete
understanding of the topics presented.

In connection with its 2003 year-end audit,  our  independent  certified  public
accountant  identified a material weakness relating to our internal controls and
procedures.  While we are in the process of implementing a more effective system
of  controls  and  procedures,  we have  instituted  certain  interim  controls,
procedures and other changes to ensure that information required to be disclosed
in this Quarterly Report on Form 10-Q has been recorded,  processed,  summarized
and reported accurately.

The interim steps that we have taken as a result of the  aforementioned  control
deficiencies  to ensure  that all  material  information  about the  Company  is
accurately  disclosed  in this  Quarterly  Report  on  Form  10-Q  included  the
application  of  additional  methods and  techniques to evaluate the accuracy of
inventory costing and adequacy of inventory reserves.

Based in part on the steps listed  above,  our Chief  Executive  Officer and our
Chief  Financial  Officer  have  concluded  that  our  disclosure  controls  and
procedures are effective to ensure that the information  that we are required to
disclose in reports that we file or submit under the Securities  Exchange Act of
1934 is recorded, processed,  summarized and reported accurately within the time
periods specified in Securities and Exchange Commission rules and forms.

In addition, in order to address further the deficiencies described above and to
improve our internal  disclosure and control  procedures for future periods,  we
will:

     1.   Review,  select and implement  available  improvements  to information
          systems for inventory accounting;

     2.   Perform a review of internal  controls and  procedures  in  connection
          with Section 404 of Sarbanes Oxley legislative requirements;

     3.   Perform more detailed  quarterly  reconciliations  and analyses of the
          company's inventory accounts;

     4.   Continue  to enhance  staffing  to  provide  sufficient  resources  to
          accomplish the foregoing objectives.

These steps will constitute  significant  changes in internal controls.  We will
continue to evaluate the  effectiveness of our disclosure  controls and internal
controls and  procedures on an ongoing  basis,  and will take further  action as
appropriate.

Other than as discussed above, no significant changes were made in the Company's
internal  controls or in other  factors  that could  significantly  affect these
controls during the second quarter of 2004.


<PAGE>


                                     PART II

                                OTHER INFORMATION

Item 1.  Legal Proceedings.

On  February  6, 2004,  Versaform,  a  wholly-owned  subsidiary  of the  Company
acquired on May 16, 2002, was served a subpoena by the federal government.

The subpoena relates to the time period January 1, 1999 through February 6, 2004
and was  issued  in  connection  with an  investigation  by  certain  government
agencies  including  the  Department  of Defense,  Office of Inspector  General,
Defense Criminal  Investigative Service and the Federal Bureau of Investigation.
The subpoena refers to structural  components Versaform  manufactured for Nordam
Corporation  for B-52 engine  cowlings,  components  for  auxiliary  power units
Versaform  manufactured for Hamilton Sundstrand,  a United Technologies Company,
and certain tools Versaform manufactured for Lockheed Martin Corporation.

The Company has not been  served  with any notice of any  pending  legal  action
filed by any government agency. Accordingly, the Company has no knowledge of any
specific   allegations  of  wrongdoing   against  Versaform  by  any  regulatory
authority.

The Company intends to cooperate fully with the federal government in connection
with any investigation of this matter and has currently provided all information
and support of related manufacturing and sales activity requested.

Other than as noted above, the Company is not a party to any legal  proceedings,
other than  routine  claims and lawsuits  arising in the ordinary  course of its
business. The Company does not believe such claims and lawsuits, individually or
in the aggregate, will have a material adverse effect on the Company's business.

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

(a)  The annual meeting of the  stockholders of the Company was held on June 29,
     2004.  Of the  8,181,786  shares of common  stock  entitled to vote at such
     meeting,  7,843,204  shares  were  present  at the  meeting in person or by
     proxy.

(b)  The  individuals  listed below were  elected as Class III  directors of the
     Company at the meeting:

     Ronald S. Saks
     Joseph Burstein
     Brian Geary

     The term of office of each individual director listed below continued after
     the meeting:

     Sanford S. Neuman (Class I director)
     Duane E. Hahn (Class I director)
     Thomas Unger (Class II director)
     John M. Roeder (Class II director)
     Paul L. Miller, Jr. (Class II director)

(c)  The  stockholders  elected each of the following Class III directors at the
     meeting, and with respect to each director,  the number of shares voted for
     and withheld were as follows:
<TABLE>
<CAPTION>
                                                       Number of Shares Voted
         Name of Nominees                                For         Withheld
         -----------------------------------------------------------------------
<S>                                                 <C>            <C>
         Ronald S. Saks                                7,637,184      206,020
         Joseph Burstein                               7,793,734       49,470
         Brian Geary                                   7,297,457      545,747
</TABLE>
     The  stockholders  ratified  the  appointment  of BDO  Seidman,  LLP as the
     Company's  independent  auditors  with  7,807,114  shares  voting  for  the
     proposal,  32,790  shares  voting  against the  proposal  and 3,300  shares
     abstaining.

     There were no brokers' non-votes with respect to the above matters, and all
     abstentions with respect to the election of directors were treated as votes
     withheld.

(d)  None.

Item 6.  Exhibits and Report on Form 8-K.

     (a)  Exhibits:

          See Exhibit Index.

     (b)  The Company filed the following  report on Form 8-K during the quarter
          ended June 30, 2004 (excluding Items 9 and 12):

          On June 30,  2004,  the  Company  filed a Current  Report on Form 8-K,
          announcing its possible move to the Nasdaq Small Cap Market.


<PAGE>


                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned,  thereunto duly authorized,  in the County of St. Charles and State
of Missouri on the 16th day of August, 2004.

                               LMI AEROSPACE, INC.

                               /s/ Ronald S. Saks
                               -------------------------------------
                               Ronald S. Saks,
                               President and Chief Executive Officer

                               /s/ Lawrence E. Dickinson
                               -------------------------------------
                               Lawrence E. Dickinson
                               Chief Financial Officer and Secretary


<PAGE>


                                  EXHIBIT INDEX

Exhibit No.    Description

10.1           Employment  Agreement  between  the  Company  and  Robert T. Grah
               effective as of January 1, 2004.

10.2           Employment  Agreement  between  the  Company  and Brian P.  Olsen
               effective as of January 1, 2004.

10.3           Employment  Agreement  between  the  Company  and  Duane E.  Hahn
               effective as of January 1, 2004.

10.4           Employment   Agreement   between   the  Company  and  Michael  J.
               Biffignani effective as of January 1, 2004.

10.5           Employment  Agreement  between  the  Company  and  Ronald S. Saks
               effective as of January 1, 2004.

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,  Secretary
               and Chief Financial Officer.

32             Certification  pursuant  to 18  U.S.C.  Section  1350 as  adopted
               pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.