EDAC Technologies Reports Third Quarter Results
On 5:37 pm EDT, Tuesday October 27, 2009
FARMINGTON, Conn., Oct. 27 /PRNewswire-FirstCall/ -- EDAC Technologies Corporation (Nasdaq: EDAC - News), a designer and manufacturer of jet engine components, tools, fixtures, injection molds and spindles, today reported results for the third quarter of 2009.
Sales for the third quarter of 2009 were $15,132,000 and net income was $80,000 or $0.02 per diluted share, versus sales of $10,547,000 and net income of $255,000 or $0.05 per diluted share for the third quarter of 2008.
For the nine months ended October 3, 2009, sales were $38,345,000 and net income was $7,513,000 or $1.53 per diluted share versus sales of $32,577,000 and net income of $1,418,000 or $0.28 per diluted share for the nine months ended September 27, 2008.
Dominick A. Pagano, President and Chief Executive Officer, said, "Our results include the operations of our EDAC Aero acquisition since May 27th. EDAC Aero contributed sales of $5,386,000 for the third quarter and $7,755,000 since the acquisition date. Among its domestic and international aerospace customers, EDAC Aero continues as a supplier to MTU Aero Engines in Germany. The third quarter was a challenging one for our other operations. Organically, our sales decreased by $1,514,000 from the second quarter of 2009 due to the down turn in the aerospace and machine tool product lines. Results were further impacted by costs associated with the development of new components for the JSF-135 and other emerging engine programs."
"We also acquired substantially all of the assets of Service Network Incorporated, a manufacturer and rebuilder of precision grinders, as previously announced on August 10th. The new product lines and technologies represent a strategic acquisition that will further broaden our Spindle product line."
As previously announced, EDAC acquired the assets of the manufacturing unit of MTU AENA, located in Newington, Connecticut on May 27, 2009. Operating now as EDAC Aero, the new operation primarily manufactures rotating components such as disks, rings and shafts for the aerospace industry. As prescribed by generally accepted accounting principles, the net assets acquired were recorded at fair value, which exceeded the purchase price by approximately $11,600,000 and has been reflected as a gain in other income in the financial statements.
Pagano added, "To date the EDAC Aero transaction has been accretive to our earnings per share and we fully expect that it will continue to be accretive. It is consistent with our long term strategic plan of incorporating growth through organic operations and acquisitions. The new product lines, customers and technologies have complemented our existing business, and will provide us with a platform to further leverage our assets and resources to enhance shareholder value."
"As always, our strategy is to pursue those long-term opportunities by investing in skilled personnel and state-of-the-art machinery and equipment, and committing to continuous improvement throughout our organization. We will incur costs in the short-term, but in the long-term we believe this will build the financial and operating strength of our company, to the benefit of our shareholders."
About EDAC Technologies Corporation
EDAC Technologies Corporation is a diversified manufacturing company primarily offering (i) manufacturing and design services for the aerospace industry in such areas as jet engine parts, special tooling, equipment, gauges and components used in the manufacture, assembly and inspection of jet engines, (ii) high-precision fixtures, gauges, dies and molds and (iii) the design, manufacture and repair of precision spindles, which are an integral part of numerous machine tools found in virtually every manufacturing environment.
Cautionary Statement Regarding Forward-Looking Statements - This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The Company uses words such as "plans," "seeks," "projects," "expects," "believes," "may," "anticipates," "estimates," "should," and similar expressions to identify these forward- looking statements. These statements are subject to risks and uncertainties and are based upon the Company's beliefs and assumptions. There are a number of important factors that may affect the Company's actual performance and results and the accuracy of its forward-looking statements, many of which are beyond the control of the Company and are difficult to predict. These important factors include, without limitation, factors which could affect demand for the Company's products and services such as general economic conditions and economic conditions in the aerospace industry and the other industries in which the Company competes; competition from the Company's competitors; and the Company's ability to enter into satisfactory financing arrangements. These and other factors are described in the Company's annual and quarterly reports filed from time to time with the Securities and Exchange Commission. In addition, the forward-looking statements included in this press release represent the Company's expectations and beliefs as of the date of this release. The Company anticipates that subsequent events and developments may cause these expectations and beliefs to change. However, while the Company may elect to update these forward-looking statements at some point in the future, it specifically disclaims any obligation or intention to do so.
EDAC TECHNOLOGIES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
UNAUDITED
For the three months ended For the nine months ended
October 3, Sept. 27 October 3, Sept. 27
2009 2008 2009 2008
---- ---- ---- ----
Sales $15,132,120 $10,547,124 $38,344,712 $32,577,388
Cost of sales 13,370,287 9,161,877 33,806,646 27,276,156
---------- --------- ---------- ----------
Gross profit 1,761,833 1,385,247 4,538,066 5,301,232
Selling, general and
administrative
expenses 1,305,763 842,868 3,347,624 2,676,232
--------- ------- --------- ---------
Income from
operations 456,070 542,379 1,190,442 2,625,000
Non-operating income
(expense):
Interest expense (262,388) (158,885) (592,813) (478,510)
Other income (73,431) 8,425 11,673,022 62,354
------- ----- ---------- ------
Income before
income taxes 120,251 391,919 12,270,651 2,208,844
Provision for income
taxes 39,803 137,000 4,757,627 791,000
------ ------- --------- -------
Net income $80,448 $254,919 $7,513,024 $1,417,844
======= ======== ========== ==========
Income per common share
data:
Basic income per share $0.02 $0.05 $1.56 $0.30
===== ===== ===== =====
Diluted income per share $0.02 $0.05 $1.53 $0.28
===== ===== ===== =====
Weighted average shares
outstanding:
Basic 4,837,803 4,746,137 4,830,803 4,693,020
Diluted 5,010,661 5,139,922 4,915,047 5,152,739
EDAC TECHNOLOGIES CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited) (Audited)
October 3, January 3,
2009 2009
---- ----
ASSETS
------
CURRENT ASSETS:
Cash $851,475 $1,311,092
Accounts receivable, net 11,380,063 7,931,550
Inventories, net 20,406,862 7,961,788
Prepaid expenses and other current assets 357,049 107,333
Refundable income taxes - 686,708
Deferred income taxes 918,567 983,298
------- -------
Total current assets 33,914,016 18,981,769
---------- ----------
PROPERTY, PLANT AND EQUIPMENT 48,359,259 35,347,124
Less: accumulated depreciation 25,498,519 23,992,878
---------- ----------
22,860,740 11,354,246
---------- ----------
DEFERRED INCOME TAXES - 105,971
--- -------
OTHER ASSETS 228,921 1,021,638
------- ---------
TOTAL ASSETS $57,003,677 $31,463,624
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Lines of credit $1,891,190 $1,674,990
Current portion of long-term debt 2,135,023 2,376,018
Trade accounts payable 7,274,442 3,485,192
Employee compensation and amounts withheld 1,726,089 1,112,006
Accrued expenses 1,216,434 361,252
Customer advances 685,901 261,643
------- -------
Total current liabilities 14,929,079 9,271,101
---------- ---------
LONG-TERM DEBT, less current portion 12,060,592 4,827,697
---------- ---------
OTHER LONG-TERM LIABILITIES 1,698,233 1,698,233
--------- ---------
DEFERRED INCOME TAXES 4,411,868 -
--------- ---
SHAREHOLDERS' EQUITY:
Common stock 12,095 12,063
Additional paid-in capital 11,118,990 10,934,736
Retained earnings 14,671,626 7,158,600
Accumulated other comprehensive loss 2,438,806 2,438,806
--------- ---------
Total shareholders' equity 23,363,905 15,666,593
---------- ----------
TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY $57,003,677 $31,463,624
=========== ===========
Contact: Glenn L. Purple, Vice President-Finance, 860-677-2603
