For further information, please contact:
Glenn L. Purple
Vice President-Finance
Tel: (860) 677-2603
FOR IMMEDIATE RELEASE
EDAC TECHNOLOGIES REPORTS THIRD CONSECUTIVE QUARTERLY PROFIT
FARMINGTON, Conn., November 2, 2004 -- EDAC Technologies Corporation (OTC
Bulletin Board: EDAC.OB), a designer and manufacturer of tools, fixtures, jet
engine components, injection molds and spindles, today reported results for the
third quarter of 2004.
Sales for the third quarter of 2004 were $7,542,000 and net income was $298,000
or $0.06 per diluted share versus sales of $6,438,000 and a net loss of $52,000
or a loss of $0.01 per diluted share for the third quarter of 2003. The third
quarter benefited from the determination of an income tax refund of $331,000.
For the nine months ended October 2, 2004, sales were $23,616,000 and net income
was $850,000 (including a gain of $250,000 from debt forgiveness and the
determination of an income tax refund of $331,000) or $0.18 per diluted share
versus sales of $19,685,000 and net income of $6,686,000 or $1.49 per diluted
share for the nine months ended September 27, 2003. The nine months ended
September 27, 2003 benefited from a gain of $7,253,000 from debt restructuring.
Without the gain, the net loss for the nine months ended September 27, 2003
would have been $567,000 or a loss of $(0.13) per diluted share.
Commenting on the third quarter, Dominick A. Pagano, President and Chief
Executive Officer, said, "We are very pleased with the $1,105,000 increase in
sales for the 3rd quarter over the 3rd quarter of 2003 and the $3,931,000
increase for the nine months over the 9 months of 2003. Our sales backlog of
$21,100,000 at the end of the third quarter represents increases of $1,300,000
in the third quarter and $3,100,000 since the start of the fiscal year. Our
operating profit increased by $50,000 for the quarter as compared to the third
quarter of 2003, and $904,000 for the first nine months in the current year
compared with the first nine months of 2003. Since the fourth quarter of 2001,
this was the third consecutive quarter that EDAC has generated a positive net
income exclusive of gains on debt restructuring. In September we reached a major
milestone by making the final of 18 monthly payments on a note resulting from
the 2003 debt restructuring, thereby reducing our monthly debt service going
forward by $75,000. We remain optimistic about the 4th quarter and the coming
year and continue to pursue opportunities that will strengthen EDAC for the long
term."
ABOUT EDAC TECHNOLOGIES CORPORATION
EDAC Technologies Corporation is a diversified manufacturing company primarily
offering (i) design and manufacturing 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 2, Sept. 27, October 2, Sept. 27,
2004 2003 2004 2003
------------ ------------ ------------ ------------
Sales $ 7,542,469 $ 6,437,696 $ 23,615,853 $ 19,684,841
Cost of sales 6,764,848 5,655,411 20,923,863 17,640,983
------------ ------------ ------------ ------------
Gross profit 777,621 782,285 2,691,990 2,043,858
Selling, general and
administrative
expenses 608,481 663,023 1,880,767 2,136,584
------------ ------------ ------------ ------------
Income (loss)
from operations 169,140 119,262 811,223 (92,726)
Non-operating income
(expense):
Interest (152,684) (171,474) (474,998) (518,407)
Gain on debt forgiveness -- -- 250,000 --
Gain on debt restructuring -- -- -- 7,253,203
Other -- 500 -- 43,713
------------ ------------ ------------ ------------
Income (loss) before
income taxes 16,456 (51,712) 586,225 6,685,783
Benefit from income taxes 281,154 -- 264,154 --
------------ ------------ ------------ ------------
Net income (loss) $ 297,610 $ (51,712) $ 850,379 $ 6,685,783
============ ============ ============ ============
Income (loss) per common share data:
Basic $ 0.07 $ (0.01) $ 0.19 $ 1.51
============ ============ ============ ============
Diluted $ 0.06 $ (0.01) $ 0.18 $ 1.49
============ ============ ============ ============
Weighted average shares outstanding:
Basic 4,444,438 4,425,270 4,444,438 4,419,011
Diluted 4,661,848 4,425,270 4,638,506 4,491,919
EDAC TECHNOLOGIES CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
October 2, January 3,
2004 2004
(Unaudited) (Note)
------------ ------------
ASSETS
CURRENT ASSETS:
Cash $ 711,806 $ 94,151
Trade accounts receivable, net 5,504,954 3,154,498
Inventories, net 4,558,271 4,611,253
Prepaid expenses and other 270,215 60,424
Refundable income taxes 331,154 --
------------ ------------
TOTAL CURRENT ASSETS 11,376,400 7,920,326
------------ ------------
PROPERTY, PLANT, AND EQUIPMENT 25,842,995 25,485,628
less-accumulated depreciation 16,921,660 15,542,501
------------ ------------
8,921,335 9,943,127
------------ ------------
OTHER ASSETS:
Deferred income taxes 258,608 258,608
Other 60,588 43,751
------------ ------------
$ 20,616,931 $ 18,165,812
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Revolving line of credit $ 4,388,965 $ 2,550,832
Current portion of long-term debt 1,477,864 2,254,142
Trade accounts payable 3,635,924 2,098,415
Accrued employee compensation
and amounts withheld 988,339 972,630
Other accrued expenses 371,551 412,201
Customer advances 354,581 77,138
Deferred income taxes 258,959 258,959
------------ ------------
TOTAL CURRENT LIABILITIES 11,476,183 8,624,317
------------ ------------
LONG-TERM DEBT,
less current portion 4,420,064 5,671,190
OTHER LONG-TERM LIABILITIES 1,125,063 1,125,063
------------ ------------
SHAREHOLDERS' EQUITY:
Common stock, par value $.0025 per
share; 10,000,000 shares authorized;
4,444,438 shares issued 11,111 11,111
Additional paid-in capital 9,377,508 9,377,508
Accumulated deficit (4,293,630) (5,144,009)
------------ ------------
5,094,989 4,244,610
Less: accumulated other
comprehensive loss 1,499,203 1,499,203
treasury stock, 235 shares 165 165
------------ ------------
3,595,621 2,745,242
------------ ------------
$ 20,616,931 $ 18,165,812
============ ============
Note: The balance sheet at January 3, 2004 has been derived from the audited
consolidated financial statements at that date.