<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________
FROM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1995
---------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period _____________ to _______________
Commission file number: 0-14275
-------
Edac Technologies Corporation
-----------------------------
(Exact name of registrant as specified in its charter)
Wisconsin 39-1515599
--------- ----------
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) Identification No.)
1790 New Britain Avenue, Farmington, CT 06032
-----------------------------------------------
(Address of principal executive offices)
(203) 677-2603
--------------
(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
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS:
On November 9, 1995 there were outstanding 3,650,540 shares of the
Registrant's Common Stock, $0.0025 par value per share.
<PAGE>
EDAC TECHNOLOGIES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
------------------------ -------------------------
1995 1994 1995 1994
---------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Sales $6,273,982 $4,704,033 $19,932,686 $18,055,514
Cost of sales 5,554,174 4,031,297 17,641,417 15,468,036
---------- ---------- ----------- -----------
719,808 672,736 2,291,269 2,587,478
Selling, general and
and administrative
expenses 615,203 534,683 1,874,179 1,923,945
INCOME FROM OPERATIONS 104,605 138,053 417,090 663,533
Non-operating income
(expense):
Interest expense (176,402) (103,920) (431,926) (305,451)
Other 25,567 (1,794) 34,496 12,555
---------- ---------- ----------- -----------
(150,835) (105,714) (397,430) (292,896)
INCOME (LOSS) BEFORE
INCOME TAXES (46,230) 32,339 19,660 370,637
Income tax expense
(benefit) 0 8,537 4,900 107,998
---------- ---------- ----------- -----------
NET INCOME (LOSS) $ (46,230) $ 23,802 $ 14,760 $ 262,639
========== ========== =========== ===========
Weighted average number
of shares of common
shares and equivalent
shares outstanding 3,787,023 3,670,106 3,780,145 3,674,075
Net income per share $ (0.01) $ 0.01 $ 0.00 $ 0.07
========== ========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
PART 1 FINANCIAL INFORMATION
ITEM 1 FINANCIAL STATEMENTS
EDAC TECHNOLOGIES CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
September 30 December 31
1995 1994
(Unaudited) (Note)
------------- -------------
<S> <C> <C>
ASSETS
- ------
CURRENT ASSETS:
Cash $ 164,989 $ 86,260
Trade accounts receivable 2,932,840 1,487,150
Inventories:
Finished goods 910,162 1,114,575
Work in process and raw materials 9,468,515 8,709,074
Deferred income taxes 671,000 671,000
Prepaid expenses and other 99,631 102,317
----------- -----------
TOTAL CURRENT ASSETS 14,247,137 12,170,376
PROPERTY, PLANT, AND EQUIPMENT 12,709,145 10,076,780
less-accumulated depreciation 6,957,483 6,306,302
----------- -----------
5,751,662 3,770,478
OTHER ASSETS 238,888 384,946
----------- -----------
$20,237,687 $16,325,800
=========== ===========
</TABLE>
Note: The balance sheet at December 31, 1994 has been derived from the audited
financial statements at that date.
The accompanying notes are an integral part of these financial statements.
<PAGE>
EDAC TECHNOLOGIES CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
September 30 December 31
1995 1994
(Unaudited) (Note)
------------- ------------
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
CURRENT LIABILITIES:
Revolving line of credit $ 4,057,753 $ 1,595,367
Current portion of long-term debt 324,369 245,383
Trade accounts payable 2,408,978 2,083,701
Employee compensation and
amounts withheld 815,478 638,068
Accrued expenses 698,598 760,533
----------- -----------
TOTAL CURRENT LIABILITIES 8,305,176 5,323,052
LONG-TERM DEBT,
less current portion 4,939,699 3,824,061
OTHER LIABILITIES 12,560 296,840
DEFERRED INCOME TAXES 710,000 710,000
SHAREHOLDERS' EQUITY:
Common stock, par value $.0025 per
share; 10,000,000 shares authorized;
issued and outstanding--3,650,540
in 1995 and 3,595,539 in 1994 9,101 8,989
Additional paid-in-capital 8,585,872 8,560,672
Accumulated deficit (1,900,456) (1,915,216)
----------- -----------
6,694,517 6,654,445
Less guaranty of Employee Stock
Ownership Plan debt (291,667) (350,000)
Less unfunded accrued
pension costs (132,598) (132,598)
----------- -----------
6,270,252 6,171,847
----------- -----------
$ 20,237,687 $ 16,325,800
============= ============
</TABLE>
Note: The balance sheet at December 31, 1994 has been derived from the audited
financial statements at that date.
The accompanying notes are an integral part of these financial statements.
<PAGE>
EDAC TECHNOLOGIES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Ended
September 30
--------------------------------
1995 1994
------------ --------------
<S> <C> <C>
Operating Activities:
Net income $ 14,760 $ 262,639
Depreciation and amortization 812,086 728,985
Changes in working capital items (1,841,560) 118,578
Other (8,488) 3,858
------------ --------------
Net cash provided by (used in)
operating activities (1,023,202) 1,114,060
Investing Activities:
Additions to property, plant
and equipment (2,914,604) (567,951)
Proceeds from sales of property
plant and equipment 188,155
Other 146,058 (85,749)
------------ --------------
Net cash used in investing
activities (2,580,391) (653,700)
Financing Activities:
Increase (decrease) in revolving
lines of credit 2,462,386 (280,859)
Payments of long-term debt (182,633) (220,584)
Advance on construction loan 915,411 --
Issuance of long-term debt 461,846 --
Proceeds from exercise of options
for common stock 25,312 --
------------ --------------
Net cash provided by (used in)
investing activities 3,682,322 (501,443)
Increase (decrease) in cash 78,729 (41,083)
Cash at the beginning of year 86,260 111,754
------------ --------------
Cash at end of period $ 164,989 $ 70,671
=========== ==============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
EDAC TECHNOLOGIES CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
SEPTEMBER 30, 1995
NOTE A -- BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been prepared
in accordance with the generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Rule 10-01 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals and adjustments to previously established loss
provisions) considered necessary for a fair presentation have been included.
Operating results for the nine month period ending September 30, 1995 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 1995. For further information, refer to the financial statements
and footnotes thereto included in the Company's annual report on Form 10-K for
the year ended December 31, 1994.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
- ---------------------------------------------
Sales. The Company's sales increased $1,569,949 or 33.4% for the three months
- ------
and $1,877,172 or 10.4% for the nine months ended September 30, 1995 compared to
the comparable periods of 1994. Increased sales are attributable to:
Sales to aerospace customers increased by $622,000 and $1,146,676 for the three
and nine month periods ended September 30, 1995 compared with comparable periods
of 1994.
Cost of Sales. Cost of sales as a percent of total sales for the three and
- --------------
nine month periods ended September 30, 1995 were 88.5% and 88.5% compared to
85.7% and 85.7% for the comparable three and nine month periods ended September
30, 1994. Higher cost of sales percentages are due to pricing reductions,
significant training for the new graphics and computer aided design systems, and
to the moving and set-up of our larger machines in the new building.
Selling, General & Administrative. Selling, general and administrative costs
- ----------------------------------
increased by $80,520 or 15.1% for the three month period and decreased by
$49,766 or 2.6% for the nine month period ended September 30, 1995 compared to
the comparable periods in 1994. The decrease is due to reductions in
compensation expense.
Interest. Interest expense for the nine months ended September 30, 1995 was
- ---------
$431,926, an increase of $126,475 from the comparable period of 1994. This
reflects an increase in borrowings for equipment purchased and for the building
construction.
Liquidity and Capital Expenditures. The Company believes that there are sales
- -----------------------------------
opportunities in providing larger machining capabilities to the aerospace engine
industry, as airframe manufacturers are demanding larger engines. This year,
the Company purchased several used large machines capable of producing parts for
the larger engines. One machine costing $690,000 is being financed by the
machine manufacturer requiring a down payment of $103,000 and minimum quarterly
payments of $12,500. Any unpaid balance will be due in 1998. The Company has
financed its other equipment additions by taking advances on its equipment lines
of credit and with funds generated by operations. Although classified as
current liabilities, both equipment lines are payable in 60 equal monthly
payments, one commencing February 1, 1995 and the other commencing February 1,
1996. The Company completed construction of its additional 20,000 square foot
building in October. The construction was financed by a construction loan
provided by the Company's bank. In November the construction loan converts to a
permanent 5-year mortgage with payments based on a 15-year amortization. (See
Management's Discussion and Analysis in the Company's 1994 Annual Report).
Management believes that the funds generated from operations and its credit
facilities will be sufficient to meet the Company's cash requirements for 1995.
<PAGE>
PART 11 -- OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
(11) Statement re: computation of earnings per share
(b) Reports on Form 8-K
None
<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.
EDAC TECHNOLOGIES CORPORATION
November 10, 1995 By /S/ Glenn L. Purple
---------------------
Glenn L. Purple,
Chief Financial Officer and duly
authorized officer
<PAGE>
EXHIBIT INDEX
Page Number
in Sequential
NUMBER DESCRIPTION Numbering System
- ------ ----------- ----------------
11 Statement Regarding Computation of
Per Share Earnings
<PAGE>
(11)--STATEMENT RE: COMPUTATION OF EARNINGS PER SHARE
EDAC TECHNOLOGIES CORPORATION
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
----------------------- ----------------------
1995 1994 1995 1994
---------- ----------- ---------- ----------
Primary:
<S> <C> <C> <C> <C>
Average shares outstanding 3,647,207 3,566,205 3,620,354 3,566,205
Net effect of dilutive
stock options based on
the treasury stock method
using average market price 129,020 103,895 159,791 107,870
---------- ---------- ---------- ----------
TOTALS 3,776,227 3,670,100 3,780,145 3,674,075
========== ========== ========== ==========
Net income $ (46,230) $ 23,802 $ 14,760 $ 262,639
========== ========== ========== ==========
Net income
per share $ (0.01) $ 0.01 $ 0.00 $ 0.07
========== ========== ========== ==========
Fully diluted:
Average shares outstanding 3,647,207 3,566,205 3,620,354 3,566,205
Net effect of dilutive
stock options based on
the treasury stock method
using quarter end market
price if higher than
average market price 139,816 103,895 145,174 107,870
---------- ---------- ---------- ----------
TOTALS 3,787,023 3,670,106 3,765,528 3,674,075
========== ========== ========== ==========
Net income $ (46,230) $ 23,802 $ 14,760 $ 262,639
========== ========== ========== ==========
Net income
per share $ (0.01) $ 0.01 $ 0.00 $ 0.07
========== ========== ========== ==========
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 164,989
<SECURITIES> 0
<RECEIVABLES> 2,932,840
<ALLOWANCES> 40,000
<INVENTORY> 10,378,677
<CURRENT-ASSETS> 14,247,137
<PP&E> 12,709,145
<DEPRECIATION> 6,957,483
<TOTAL-ASSETS> 20,237,687
<CURRENT-LIABILITIES> 8,305,176
<BONDS> 4,939,699
<COMMON> 9,101
0
0
<OTHER-SE> 6,261,151
<TOTAL-LIABILITY-AND-EQUITY> 20,237,687
<SALES> 0
<TOTAL-REVENUES> 19,932,686
<CGS> 17,641,417
<TOTAL-COSTS> 17,641,417
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 431,926
<INCOME-PRETAX> 19,660
<INCOME-TAX> 4,900
<INCOME-CONTINUING> 14,760
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 14,760
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
