For further information, please contact:
Glenn L. Purple
Vice President-Finance
Tel: (860) 677-2603
FOR IMMEDIATE RELEASE
EDAC TECHNOLOGIES REPORTS INCREASE OF 31% IN 3RD QUARTER NET INCOME
FARMINGTON, Conn., November 7, 2005 - 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 2005.
Sales for the third quarter of 2005 were $8,688,000 and net income was $390,000
or $0.08 per diluted share, versus sales of $7,542,000 and net income of
$298,000 or $0.06 per diluted share for the third quarter of 2004. The third
quarter of 2004 included an income tax benefit of $281,000. Income before income
taxes increased from $16,000 in the third quarter of 2004 to $496,000 in the
third quarter of 2005.
For the nine months ended October 1, 2005, sales were $25,603,000 and net income
was $2,668,000 or $0.56 per diluted share versus sales of $23,616,000 and net
income of $850,000 or $0.18 per diluted share for the nine months ended October
2, 2004. The nine months ended October 1, 2005 included an income tax benefit of
$420,000 and debt forgiveness of $750,000. The nine months ended October 2, 2004
included an income tax benefit of $264,000 and debt forgiveness of $250,000.
Commenting on the third quarter, Dominick A. Pagano, President and Chief
Executive Officer, said, "Our third quarter results have improved significantly
over the 3rd quarter of 2004. Sales increased $1,145,000, while our operating
profit increased $480,000 compared to the 3rd quarter of 2004. Sales backlog
increased to $22.1 million, an increase by $389,000 for the quarter and $3.8
million for the 9 months. We have taken delivery of over $1.7 million of new
machinery and equipment this year to increase our production capacity and
improve our productivity. Our balance sheet continues to improve with
shareholders' equity increasing by $2,706,000 and long-term debt and outstanding
borrowings on lines of credit decreasing by $1,384,000 since January 1, 2005. We
will continue to pursue opportunities that we believe 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
<Table>
<Caption>
For the three months ended For the nine months ended
--------------------------- -----------------------------
October 1, October 2, October 1, October 2,
2005 2004 2005 2004
---------- ---------- ----------- -----------
Sales $8,687,688 $7,542,469 $25,603,200 $23,615,853
Cost of sales 7,213,060 6,764,848 21,245,563 20,923,863
---------- ---------- ----------- -----------
Gross profit 1,474,628 777,621 4,357,637 2,691,990
Selling, general and
administrative expenses 825,480 608,481 2,398,262 1,880,767
---------- ---------- ----------- -----------
Income from operations 649,148 169,140 1,959,375 811,223
Non-operating income
(expense):
Gain on debt forgiveness -- -- 750,000 250,000
Interest expense (156,082) (152,684) (477,473) (474,998)
Other 2,739 -- 16,385 --
---------- ---------- ----------- -----------
Income before
income taxes 495,805 16,456 2,248,287 586,225
Provision for (Benefit
from) income taxes 106,000 (281,154) (420,000) (264,154)
---------- ---------- ----------- -----------
Net income $ 389,805 $ 297,610 $ 2,668,287 $ 850,379
========== ========== =========== ===========
Income per common share data:
Basic $ 0.09 $ 0.07 $ 0.60 $ 0.19
========== ========== =========== ===========
Diluted $ 0.08 $ 0.06 $ 0.56 $ 0.18
========== ========== =========== ===========
Weighted average shares outstanding:
Basic 4,503,920 4,444,438 4,481,923 4,444,438
Diluted 4,822,287 4,661,848 4,773,006 4,638,506
EDAC TECHNOLOGIES CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
<Table>
<Caption>
(Unaudited) (Audited)
October 1, January 1,
2005 2005
----------- -----------
ASSETS
CURRENT ASSETS:
Cash $ 1,665,600 $ 549,198
Accounts receivable, net 5,498,269 6,573,114
Inventories, net 5,192,202 4,454,937
Prepaid expenses and other current assets 293,500 57,290
Refundable income taxes -- 330,869
Deferred income taxes 469,135 733,583
----------- -----------
Total current assets 13,118,706 12,698,991
----------- -----------
PROPERTY, PLANT AND EQUIPMENT 27,513,193 25,877,359
Less: accumulated depreciation 18,574,544 17,297,856
----------- -----------
8,938,649 8,579,503
----------- -----------
DEFERRED INCOME TAXES 1,930,865 766,417
OTHER 103,202 102,183
----------- -----------
TOTAL ASSETS $24,091,422 $22,147,094
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Revolving line of credit $ -- $ 580,555
Current portion of long-term debt 1,274,849 1,030,282
Trade accounts payable 3,812,552 3,249,892
Employee compensation and amounts withheld 1,386,281 1,228,975
Accrued expenses 648,937 502,450
Customer advances 118,880 363,745
----------- -----------
Total current liabilities 7,241,499 6,955,899
----------- -----------
LONG-TERM DEBT, less current portion 7,517,212 8,564,927
----------- -----------
OTHER LONG-TERM LIABILITIES 1,423,054 1,423,054
----------- -----------
SHAREHOLDERS' EQUITY:
Common stock 11,261 11,111
Additional paid-in capital 9,415,349 9,377,508
Retained earnings/(accumulated deficit) 386,243 (2,282,044)
Accumulated other comprehensive loss (1,903,196) (1,903,196)
Treasury stock -- (165)
----------- -----------
Total shareholders' equity 7,909,657 5,203,214
----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $24,091,422 $22,147,094
=========== ===========
</Table>