<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________
FORM 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 June 30, 1996
----------------
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
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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 August 12, 1996 there were outstanding 3,675,373 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 Six Months Ended
June 30 June 30
------------------------------- --------------------------
1996 1995 1996 1995
----------- ------------ ----------- -----------
<S> <C> <C> <C> <C>
Sales $ 8,041,730 $ 6,142,455 $16,055,704 $13,658,704
Cost of sales 7,113,285 5,499,330 14,250,225 12,087,243
----------- ----------- ----------- -----------
928,445 643,125 1,805,479 1,571,461
Selling, general and
and administrative
expenses 702,598 552,350 1,318,870 1,258,976
INCOME FROM OPERATIONS 225,847 90,775 486,609 312,485
Non-operating income
(expense):
Interest expense (205,971) (134,280) (413,996) (255,524)
Other 3,299 105 8,710 8,929
----------- ----------- ----------- -----------
(202,672) (134,175) (405,286) (246,595)
INCOME (LOSS) BEFORE
INCOME TAXES 23,175 (43,400) 81,323 65,890
Income tax expense
(benefit) - (5,604) - 4,900
----------- ----------- ----------- -----------
NET INCOME (LOSS) $ 23,175 $ (37,796) $ 81,323 $ 60,990
=========== =========== =========== ===========
Weighted average number
of shares of common
shares and equivalent
shares outstanding 3,792,911 3,770,497 3,790,013 3,763,003
Net income per share $ 0.01 $ (0.01) $ 0.02 $ 0.02
=========== =========== =========== ============
</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>
June 30 December 31
1996 1995
(Unaudited) (Note)
------------- -------------
ASSETS
- ------
<S> <C> <C>
CURRENT ASSETS:
Cash $ 97,773 $ 158,077
Trade accounts receivable 3,108,853 1,650,840
Refundable income taxes 22,877 106,000
Inventories
Finished goods 1,041,699 935,825
Work in process and raw materials 7,933,942 10,344,212
Prepaid expenses and other 100,288 103,197
Deferred income taxes 917,000 917,000
----------- ------------
TOTAL CURRENT ASSETS 13,222,432 14,215,151
PROPERTY, PLANT, AND EQUIPMENT 12,918,112 12,733,254
less-accumulated depreciation 7,242,429 6,850,794
----------- -----------
5,675,683 5,882,460
OTHER ASSETS 250,749 254,519
----------- -----------
$19,148,864 $20,352,130
=========== ===========
</TABLE>
Note: The balance sheet at December 31, 1995 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>
June 30 December 31
1996 1995
(Unaudited) (Note)
------------- ------------
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
- -----------------------------------
CURRENT LIABILITIES:
Revolving line of credit $ 3,525,422 $ 4,651,484
Current portion of long-term debt 392,052 387,366
Trade accounts payable 2,666,573 2,730,256
Employee compensation and
amounts withheld 661,036 613,815
Accrued expenses 787,838 783,561
------------- ------------
TOTAL CURRENT LIABILITIES 8,032,921 9,166,482
LONG-TERM DEBT,
less current portion 4,718,696 4,919,019
OTHER LIABILITIES 18,000 18,000
DEFERRED INCOME TAXES 917,000 917,000
SHAREHOLDERS' EQUITY:
Common stock, par value $.0025 per
share; 10,000,000 shares authorized;
issued and outstanding--3,672,040
in 1996 and 3,653,540 in 1995 9,180 9,134
Additional paid-in-capital 8,603,512 8,593,152
Accumulated deficit (2,917,112) (2,998,435)
------------- ------------
5,695,580 5,603,851
Less guaranty of Employee Stock
Ownership Plan debt (233,333) (272,222)
------------- ------------
5,462,247 5,331,629
$ 19,148,864 $ 20,352,130
============= ============
</TABLE>
Note: The balance sheet at December 31, 1995 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>
Six Months Ended
June 30
------------------------------
1996 1995
----------- -----------
<S> <C> <C>
Operating Activities:
Net income $ 81,323 $ 60,990
Depreciation and amortization 434,294 541,391
Changes in working capital items 920,230 (1,087,697)
Other (5,800)
----------- -----------
Net cash provided by (used in)
operating activities 1,435,847 (491,116)
Investing Activities:
Additions to property, plant
and equipment (184,858) (1,531,611)
Proceeds from sales of property
plant and equipment 168,155
Other 157,958
----------- -----------
Net cash used in investing
activities (184,858) (1,205,498)
Financing Activities:
Increase (decrease) in revolving
line of credit (1,126,062) 1,786,884
Payments of long term debt (195,637) (121,461)
Proceeds from exercise of options
for common stock 10,406 19,687
----------- -----------
Net cash provided by (used in)
investing activities (1,311,293) 1,685,110
Increase (decrease) in cash (60,304) (11,504)
Cash at the beginning of year 158,077 86,260
----------- -----------
Cash at end of period $ 97,773 $ 74,756
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
EDAC TECHNOLOGIES CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
JUNE 30, 1996
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 six month period ending June 30, 1996 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 1996. 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, 1995.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
- ---------------------------------------------
Sales. The Company's sales increased $1,899,275 or 30.9% for the three months
- ------
and $2,397,000 or 17.5% for the six months ended June 30, 1996 compared to the
comparable periods of 1995. These increases are mainly due to significant
increases in large turning and spindle sales over the prior year.
Cost of Sales. Cost of sales as a percent of total sales for the three and six
- --------------
month periods ended June 30, 1996 were 88.5% and 88.8% compared to 89.5% and
88.5% for the comparable three and six month periods ended June 30, 1995. This
reduction for the three months is due to the higher absorption of fixed overhead
expenses resulting from the significant increase in sales. The slight increase
in the six month percentage is due to an increase in the Company's accrual for
loss jobs in the first quarter
Selling, General & Administrative. Selling, general and administrative costs
- ----------------------------------
increased $59,894 or 4.8% for the six month period ended June 30, 1996 compared
to the comparable period in 1995. The increase is due primarily to increased
personnel cost offset somewhat by reduced travel expenses.
Interest. Interest expense for the six months ended June 30, 1996 was $413,996,
- ---------
an increase of $158,472 from the comparable period of 1995. The higher interest
cost is due to borrowings made during 1995 for the construction of the Company's
new building and for the purchase of additional machinery. Additionally,
interest rates charged by the Company's bank are higher in 1996 than they were
in 1995. (Reference the Company's 1995 Annual Report).
Liquidity and Capital Expenditures. Working capital has increased by $140,843
- -----------------------------------
since December 31, 1995. Capital expenditures of $184,858 for the six months
ended June 30, 1996 were funded out of operating activities.
Management believes that the funds generated from operations and its credit
facilities will be sufficient to meet the Company's cash requirements for 1996.
<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
August 12, 1996 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
27 Financial Data Schedule
<PAGE>
(11)--STATEMENT RE: COMPUTATION OF EARNINGS PER SHARE
EDAC TECHNOLOGIES CORPORATION
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
---------------------- ----------------------
1996 1995 1996 1995
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Primary:
Average shares outstanding 3,667,040 3,618,318 3,660,290 3,606,928
Net effect of dilutive
stock options based on
the treasury stock method
using average market price 121,208 140,320 117,317 132,139
---------- ---------- ---------- ----------
TOTALS 3,788,248 3,758,638 3,777,607 3,739,067
========== ========== ========== ==========
Net income $ 23,175 $ (37,796) $ 81,232 $ 60,990
========== ========== ========== ==========
Net income
per share $ 0.01 $ (0.01) $ 0.02 $ 0.02
========== ========== ========== ==========
Fully diluted:
Average shares outstanding 3,667,040 3,618,318 3,660,290 3,606,928
Net effect of dilutive
stock options based on
the treasury stock method
using quarter end market
price if higher than
average market price 125,871 152,179 129,723 156,075
---------- ---------- ---------- ----------
TOTALS 3,792,911 3,770,497 3,790,013 3,763,003
========== ========== ========== ==========
Net income $ 23,175 $ (37,796) $ 81,323 $ 60,990
========== ========== ========== ==========
Net income
per share $ 0.01 $ (0.01) $ 0.02 $ 0.02
========== ========== ========== ==========
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 97,773
<SECURITIES> 0
<RECEIVABLES> 3,108,853
<ALLOWANCES> 40,000
<INVENTORY> 8,975,641
<CURRENT-ASSETS> 13,222,433
<PP&E> 12,918,112
<DEPRECIATION> 7,242,429
<TOTAL-ASSETS> 19,148,864
<CURRENT-LIABILITIES> 8,032,921
<BONDS> 4,718,696
0
0
<COMMON> 9,180
<OTHER-SE> 5,453,067
<TOTAL-LIABILITY-AND-EQUITY> 19,148,864
<SALES> 15,100,059
<TOTAL-REVENUES> 16,055,704
<CGS> 14,250,225
<TOTAL-COSTS> 14,250,225
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 413,996
<INCOME-PRETAX> 81,323
<INCOME-TAX> 0
<INCOME-CONTINUING> 81,323
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 81,323
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
