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8-K - FORM 8-K - EDAC TECHNOLOGIES CORP | c54295e8vk.htm |
Exhibit 99.1
EDAC TECHNOLOGIES Reports Third Quarter Results.
FARMINGTON, Conn., October 27, 2009 EDAC Technologies Corporation (NASDAQ: EDAC), a designer and
manufacturer of jet engine components, tools, fixtures, injection molds and spindles, today
reported results for the third quarter of 2009.
Sales for the third quarter of 2009 were $15,132,000 and net income was $80,000 or $0.02 per
diluted share, versus sales of $10,547,000 and net income of $255,000 or $0.05 per diluted share
for the third quarter of 2008.
For the nine months ended October 3, 2009, sales were $38,345,000 and net income was $7,513,000 or
$1.53 per diluted share versus sales of $32,577,000 and net income of $1,418,000 or $0.28 per
diluted share for the nine months ended September 27, 2008.
Dominick A. Pagano, President and Chief Executive Officer, said, Our results include the
operations of our EDAC Aero acquisition since May 27th. EDAC Aero contributed sales of $5,386,000
for the third quarter and $7,755,000 since the acquisition date. Among its domestic and
international aerospace customers, EDAC Aero continues as a supplier to MTU Aero Engines in
Germany. The third quarter was a challenging one for our other operations. Organically, our sales
decreased by $1,514,000 from the second quarter of 2009 due to the down turn in the aerospace and
machine tool product lines. Results were further impacted by costs associated with the development
of new components for the JSF-135 and other emerging engine programs.
We also acquired substantially all of the assets of Service Network Incorporated, a manufacturer
and rebuilder of precision grinders, as previously announced on August 10th. The new product lines
and technologies represent a strategic acquisition that will further broaden our Spindle product
line.
As previously announced, EDAC acquired the assets of the manufacturing unit of MTU AENA, located in
Newington, Connecticut on May 27, 2009. Operating now as EDAC Aero, the new operation primarily
manufactures rotating components such as disks, rings and shafts for the aerospace industry. As
prescribed by generally accepted accounting principles, the net assets acquired were recorded at
fair value, which exceeded the purchase price by approximately $11,600,000 and has been reflected
as a gain in other income in the financial statements.
Pagano added, To date the EDAC Aero transaction has been accretive to our earnings per share and
we fully expect that it will continue to be accretive. It is consistent with our long term
strategic plan of incorporating growth through organic operations and acquisitions. The new
product lines, customers and technologies have complemented our existing business, and will provide
us with a platform to further leverage our assets and resources to enhance shareholder value.
As always, our strategy is to pursue those long-term opportunities by investing in skilled
personnel and state-of-the-art machinery and equipment, and committing to continuous
improvement throughout our organization. We will incur costs in the short-term, but in the
long-term we believe this will build the financial and operating strength of our company, to the
benefit of our shareholders.
About EDAC Technologies Corporation
EDAC Technologies Corporation is a diversified manufacturing company primarily offering (i)
manufacturing and design 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
Companys beliefs and assumptions. There are a number of important factors that may affect the
Companys 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 Companys 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 Companys competitors;
and the Companys ability to enter into satisfactory financing arrangements. These and other
factors are described in the Companys 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 Companys 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
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
UNAUDITED
For the three months ended | For the nine months ended | |||||||||||||||
October 3, | Sept. 27 | October 3, | Sept. 27 | |||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Sales |
$ | 15,132,120 | $ | 10,547,124 | $ | 38,344,712 | $ | 32,577,388 | ||||||||
Cost of sales |
13,370,287 | 9,161,877 | 33,806,646 | 27,276,156 | ||||||||||||
Gross profit |
1,761,833 | 1,385,247 | 4,538,066 | 5,301,232 | ||||||||||||
Selling, general and
administrative expenses |
1,305,763 | 842,868 | 3,347,624 | 2,676,232 | ||||||||||||
Income from operations |
456,070 | 542,379 | 1,190,442 | 2,625,000 | ||||||||||||
Non-operating income (expense): |
||||||||||||||||
Interest expense |
(262,388 | ) | (158,885 | ) | (592,813 | ) | (478,510 | ) | ||||||||
Other income |
(73,431 | ) | 8,425 | 11,673,022 | 62,354 | |||||||||||
Income before income taxes |
120,251 | 391,919 | 12,270,651 | 2,208,844 | ||||||||||||
Provision for income taxes |
39,803 | 137,000 | 4,757,627 | 791,000 | ||||||||||||
Net income |
$ | 80,448 | $ | 254,919 | $ | 7,513,024 | $ | 1,417,844 | ||||||||
Income per common share data: |
||||||||||||||||
Basic income per share |
$ | 0.02 | $ | 0.05 | $ | 1.56 | $ | 0.30 | ||||||||
Diluted income per share |
$ | 0.02 | $ | 0.05 | $ | 1.53 | $ | 0.28 | ||||||||
Weighted average shares
outstanding: |
||||||||||||||||
Basic |
4,837,803 | 4,746,137 | 4,830,803 | 4,693,020 | ||||||||||||
Diluted |
5,010,661 | 5,139,922 | 4,915,047 | 5,152,739 |
EDAC TECHNOLOGIES CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited) | (Audited) | |||||||
October 3, | January 3, | |||||||
2009 | 2009 | |||||||
ASSETS |
||||||||
CURRENT ASSETS: |
||||||||
Cash |
$ | 851,475 | $ | 1,311,092 | ||||
Accounts receivable, net |
11,380,063 | 7,931,550 | ||||||
Inventories, net |
20,406,862 | 7,961,788 | ||||||
Prepaid expenses and other current assets |
357,049 | 107,333 | ||||||
Refundable income taxes |
| 686,708 | ||||||
Deferred income taxes |
918,567 | 983,298 | ||||||
Total current assets |
33,914,016 | 18,981,769 | ||||||
PROPERTY, PLANT AND EQUIPMENT |
48,359,259 | 35,347,124 | ||||||
Less: accumulated depreciation |
25,498,519 | 23,992,878 | ||||||
22,860,740 | 11,354,246 | |||||||
DEFERRED INCOME TAXES |
| 105,971 | ||||||
OTHER ASSETS |
228,921 | 1,021,638 | ||||||
TOTAL ASSETS |
$ | 57,003,677 | $ | 31,463,624 | ||||
LIABILITIES AND SHAREHOLDERS EQUITY |
||||||||
CURRENT LIABILITIES: |
||||||||
Lines of credit |
$ | 1,891,190 | $ | 1,674,990 | ||||
Current portion of long-term debt |
2,135,023 | 2,376,018 | ||||||
Trade accounts payable |
7,274,442 | 3,485,192 | ||||||
Employee compensation and amounts withheld |
1,726,089 | 1,112,006 | ||||||
Accrued expenses |
1,216,434 | 361,252 | ||||||
Customer advances |
685,901 | 261,643 | ||||||
Total current liabilities |
14,929,079 | 9,271,101 | ||||||
LONG-TERM DEBT, less current portion |
12,060,592 | 4,827,697 | ||||||
OTHER LONG-TERM LIABILITIES |
1,698,233 | 1,698,233 | ||||||
DEFERRED INCOME TAXES |
4,411,868 | | ||||||
SHAREHOLDERS EQUITY: |
||||||||
Common stock |
12,095 | 12,063 | ||||||
Additional paid-in capital |
11,118,990 | 10,934,736 | ||||||
Retained earnings |
14,671,626 | 7,158,600 | ||||||
Accumulated other comprehensive loss |
2,438,806 | 2,438,806 | ||||||
Total shareholders equity |
23,363,905 | 15,666,593 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS EQUITY |
$ | 57,003,677 | $ | 31,463,624 | ||||
Contact: Glenn L. Purple, Vice President-Finance, 860-677-2603