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, 1995
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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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 August 10, 1995 there were outstanding 3,640,540 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 Six Months Ended
June 30 June 30
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1995 1994 1995 1994
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Sales $6,142,455 $6,109,655 $13,658,704 $13,351,481
Cost of sales 5,499,330 5,239,085 12,087,243 11,436,739
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643,125 870,570 1,571,461 1,914,742
Selling, general and
administrative
expenses 552,350 656,151 1,258,976 1,389,262
INCOME FROM OPERATIONS 90,775 214,419 312,485 525,480
Non-operating income
(expense):
Interest expense (134,280) ( 95,581) (255,524) (201,531)
Other 105 16,852 8,929 14,349
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(134,175) (78,729) (246,595) (187,182)
INCOME (LOSS) BEFORE
INCOME TAXES (43,400) 135,690 65,890 338,298
Income tax expense
(benefit) (5,604) 30,499 4,900 99,461
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NET INCOME (LOSS) $ (37,796) $ 105,191 $ 60,990 $ 238,837
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Weighted average number
of shares of common
shares and equivalent
shares outstanding 3,770,497 3,684,524 3,763,003 3,684,524
Net income per share $ (0.01) $ 0.03 $ 0.02 $ 0.06
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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
June 30 December 31
1995 1994
(Unaudited) (Note)
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ASSETS
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CURRENT ASSETS:
Cash $ 74,756 $ 86,260
Trade accounts receivable 2,807,880 1,487,150
Inventories:
Finished goods 999,232 1,114,575
Work in process and raw materials 9,379,966 8,709,074
Deferred income taxes 671,000 671,000
Prepaid expenses and other 104,632 102,317
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TOTAL CURRENT ASSETS 14,037,466 12,170,376
PROPERTY, PLANT, AND EQUIPMENT 11,346,927 10,076,780
less-accumulated depreciation 6,709,694 6,306,302
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4,637,233 3,770,478
OTHER ASSETS 226,991 384,946
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$18,901,690 $16,325,800
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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.
EDAC TECHNOLOGIES CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30 December 31
1995 1994
(Unaudited) (Note)
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LIABILITIES AND SHAREHOLDERS' EQUITY
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CURRENT LIABILITIES:
Revolving line of credit $ 3,382,251 $ 1,595,367
Current portion of long-term debt 251,207 245,383
Trade accounts payable 3,101,726 2,083,701
Employee compensation and
amounts withheld 736,540 638,068
Accrued expenses 719,213 760,533
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TOTAL CURRENT LIABILITIES 8,190,937 5,323,052
LONG-TERM DEBT,
less current portion 3,696,776 3,824,061
OTHER LIABILITIES 12,564 296,840
DEFERRED INCOME TAXES 710,000 710,000
SHAREHOLDERS' EQUITY:
Common stock, par value $.0025 per
share; 10,000,000 shares authorized;
issued and outstanding--3,630,540
in 1995 and 3,595,539 in 1994 9,076 8,989
Additional paid-in-capital 8,580,272 8,560,672
Accumulated deficit (1,854,226) (1,915,216)
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6,735,122 6,654,445
Less guaranty of Employee Stock
Ownership Plan debt (311,111) (350,000)
Less unfunded accrued
pension costs (132,598) (132,598)
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6,291,413 6,171,847
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$18,901,690 $16,325,800
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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.
EDAC TECHNOLOGIES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Six Months Ended
June 30
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1995 1994
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Operating Activities:
Net income $ 60,990 $ 238,837
Depreciation and amortization 541,391 485,990
Changes in working capital items (1,087,697) 507,951
Other (5,800) 3,858
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Net cash provided by (used in)
operating activities (491,116) 1,236,636
Investing Activities:
Additions to property, plant
and equipment (1,531,611) (321,019)
Proceeds from sales of property
plant and equipment 168,155
Other 157,958 (10,748)
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Net cash used in investing
activities (1,205,498) (331,767)
Financing Activities:
Increase (decrease) in revolving
line of credit 1,786,884 (763,510)
Payments of long term debt (121,461) (139,328)
Proceeds from exercise of options
for common stock 19,687 --
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Net cash provided by (used in)
investing activities 1,685,110 (902,838)
Increase (decrease) in cash (11,504) 2,031
Cash at the beginning of year 86,260 111,754
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Cash at end of period $ 74,756 $ 113,785
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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)
JUNE 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 six month period ending June 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.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
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Sales. The Company's sales increased $32,800 or 0.5% for the three months and
$307,223 or 2.2% for the six months ended June 30, 1995 compared to the
comparable periods of 1994. The loss of our principal medical customer in 1994
reduced the medical sales by $992,000 for the six months ended June 30, 1995
compared to the comparable period in 1994. This reduction was offset by
increased sales to aerospace customers.
Cost of Sales. Cost of sales as a percent of total sales for the three and six
month periods ended June 30, 1995 were 89.5% and 88.5% compared to 85.8% and
85.7% for the comparable three and six month periods ended June 30, 1994.
Higher costs of sales as a percentage of sales are due to pricing reductions and
to significant training for the new graphics and computer aided design systems.
Selling, General & Administrative. Selling, general and administrative costs
decreased by $103,801 or 15.8% for the three month period and by $130,286 or
9.4% for the six month period ended June 30, 1995 compared to the comparable
periods in 1994. These decreases are due to reductions in compensation expense.
Interest. Interest expense for the six months ended June 30, 1995 was
$255,524, an increase of $53,993 from the comparable period of 1994. This
reflects an increase in the average borrowings and interest rates.
Liquidity and Capital Expenditures. The Company has proceeded with its planned
capital expenditures for 1995 (Reference the Company's 1994 Annual Report). The
Company has financed its equipment 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 also is obtaining a permanent mortgage for the additional building
currently under construction and due to be completed by October, 1995. (See
Note C of 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.
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
August 10, 1995 By /S/ Glenn L. 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