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 March 31, 1996
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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
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(Exact name of registrant as specified in its charter)
Wisconsin 39-1515599
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(State or other jurisdiction of (I.R.S. employer
incorporation or organization) Identification No.)
1790 New Britain Avenue, Farmington, CT 06032
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(Address of principal executive offices)
(203) 677-2603
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(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 ____
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APPLICABLE ONLY TO CORPORATE ISSUERS:
On May 14, 1996 there were outstanding 3,662,040 shares of the
Registrant's Common Stock, $0.0025 par value per share.
EDAC TECHNOLOGIES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Three Months Ended
March 31
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1996 1995
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Sales $8,013,974 $7,516,249
Cost of sales 7,136,940 6,587,913
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877,034 928,336
Selling, general and
administrative expenses 616,272 706,626
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INCOME FROM OPERATIONS 260,762 221,710
Non-operating income
(expense):
Interest expense (208,025) (121,244)
Other 5,411 8,824
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(202,614) (112,420)
INCOME BEFORE INCOME TAXES 58,148 109,290
Provision for income taxes - 10,504
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NET INCOME $ 58,148 $ 98,786
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Weighted average number of
common shares and equivalent
shares outstanding 3,773,256 3,720,247
Earnings per share $ 0.02 $ 0.03
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The accompanying notes are an integral part of these financial statements.
PART 1 FINANCIAL INFORMATION
ITEM 1 FINANCIAL STATEMENTS
EDAC TECHNOLOGIES CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31 December 31
1996 1995
(Unaudited) (Note)
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ASSETS
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CURRENT ASSETS:
Cash $ 75,702 $ 158,077
Trade accounts receivable 3,094,907 1,650,840
Refundable income taxes 106,000 106,000
Inventories:
Finished goods 1,120,450 935,825
Work in process and raw materials 8,897,001 10,344,212
Prepaid expenses and other 97,983 103,197
Deferred income taxes 917,000 917,000
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TOTAL CURRENT ASSETS 14,309,043 14,215,151
PROPERTY, PLANT, AND EQUIPMENT 12,765,439 12,733,254
less-accumulated depreciation 7,046,612 6,850,794
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5,718,827 5,882,460
OTHER ASSETS 252,634 254,519
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$20,280,504 $20,352,130
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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.
EDAC TECHNOLOGIES CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31 December 31
1996 1995
(Unaudited) (Note)
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LIABILITIES AND SHAREHOLDERS' EQUITY
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CURRENT LIABILITIES:
Revolving line of credit $ 4,485,748 $ 4,651,484
Current portion of long-term debt 387,635 387,366
Trade accounts payable 2,610,809 2,730,256
Employee compensation and
amounts withheld 790,242 613,815
Accrued expenses 836,689 783,561
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TOTAL CURRENT LIABILITIES 9,111,123 9,166,482
LONG-TERM DEBT,
less current portion 4,825,160 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--3,653,540
in 1996 and in 1995 9,134 9,134
Additional paid-in-capital 8,593,152 8,593,152
Accumulated deficit (2,940,287) (2,998,435)
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5,661,999 5,603,851
Less guaranty of Employee Stock
Ownership Plan debt (252,778) (272,222)
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5,409,221 5,331,629
$ 20,280,504 $ 20,352,130
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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.
EDAC TECHNOLOGIES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three Months Ended
March 31
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1996 1995
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Operating Activities:
Net income $ 58,148 $ 98,786
Depreciation and amortization 217,151 270,695
Changes in working capital items (66,163) 254,066
Other - (5,800)
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Net cash provided by
operating activities 209,136 617,747
Investing Activities:
Additions to property, plant
and equipment (32,185) (856,736)
Proceeds from sales of property
plant and equipment - 98,155
Other - 197,741
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Net cash used in investing
activities (32,185) (560,840)
Financing Activities:
Increase (decrease) in revolving
line of credit (165,736) 67,664
Payments of long term debt (93,590) (61,101)
Net cash provided by (used in) --------- ---------
financing activities (259,326) 6,563
Increase (decrease) in cash (82,375) 63,470
Cash at the beginning of year 158,077 86,260
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Cash at end of period $ 75,702 $ 149,730
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The accompanying notes are an integral part of these financial statements.
EDAC TECHNOLOGIES CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
MARCH 31, 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 three month period ending March 31, 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.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
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Sales. The Company's sales in the first quarter of 1996 increased $498,000 or
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6.6% compared to the first quarter of 1995. This increase is due mainly to the
spindle and large machining sales increasing significantly over the
corresponding quarter of 1995.
Cost of Sales. Cost of sales as a percentage of sales increased by 1.5% of
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sales compared to the first quarter of 1995. This is due to an increase in the
Company's accrual for loss jobs.
Selling, General & Administrative. Selling, general and administrative costs
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decreased from $707,000 to $616,000 or 12.8% for the first quarter of 1996
compared to the first quarter of 1995. This is due to decreased compensation
expense.
Interest. Interest expense for the quarter ended March 31, 1996 was
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$208,000 an increase of $87,000 from the corresponding quarter of 1995. The
higher interest cost is due to the additional borrowing made last year to fund
the Company's new building and additional equipment.
Liquidity and Capital Expenditures. Working capital has increased by $149,000
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since December 31, 1995. Capital expenditures of $32,185 for the first quarter
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.
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
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
May 14, 1996 By /s/ Glenn Purple
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Glenn L. Purple, Chief Financial Officer
and duly authorized officer
EXHIBIT INDEX
Page Number
in Sequential
NUMBER DESCRIPTION Numbering System
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11 Statement Regarding Computation of
Per Share Earnings