EDAC TECHNOLOGIES CORP 
By FARMINGTON, Conn., November 1, 2012 - EDAC Technologies Corporation (NASDAQ: EDAC), a diversified designer, manufacturer and servicer of precision components for aerospace and industrial applications, reported today that sales for the third quarter of fiscal 2012 were $27.5 million, a record for EDAC and an increase of 26% from the third quarter of fiscal 2011. The 2012 third quarter included a full quarter of sales from EBTEC Corporation, which the Company acquired on June 1, 2012, totaling $3.2 million. Before including EBTEC, the Company's sales increased 11% from the prior year third quarter.
Both the Company's Aerospace Segment, which includes EBTEC,
and its Industrial Segment contributed to EDAC's
year-over-year sales growth and higher profitability.
Gross profit for the third quarter of 2012 increased 50% from
the third quarter of 2011 to $5.8 million, and represented
21.2% of third quarter 2012 sales versus 17.8% of sales in
the third quarter of 2011.
Operating income increased 69%, to $3.0 million, compared
with the third quarter of last year, yielding an operating
margin of 10.8% of sales compared with 8.1% in the third
quarter of 2011.
Net income for the third quarter of 2012 increased 64% to
$1.7 million, or $0.29 per diluted share, compared with $1.0
million, or $0.19 per diluted share, reported for the third
quarter of 2011. There were more diluted shares in the 2012
third quarter, including 150,523 shares issued as part of the
EBTEC purchase.
The Company's total long-term debt, including current
portion, at September 29, 2012 was $30.5 million. This
includes mortgages on all its current facilities in
Connecticut, including Plainville, which is in the process of
being sold. The Company plans to sell other of its
Connecticut facilities as it consolidates them into a
recently-acquired world-class facility in Cheshire, Conn. and
use the proceeds to retire the mortgage debt associated with
each facility as it is sold.
The Company's total sales backlog at September 29, 2012
increased to $313.7 million from $304.3 million at June 30,
2012 and included a previously announced long-term agreement
(LTA) with an OEM customer to produce a major case assembly
for a military engine program with U.S. and export
applications.
Segment Review
The Company has two business segments: the Aerospace Segment,
which consists of its EDAC AERO and EBTEC product lines; and
the Industrial Segment, which includes the APEX Machine Tool
and EDAC Machinery product lines.
Aerospace Segment sales for the third quarter of 2012 were
$19.2 million, an increase of 30% from the third quarter of
2011. This included the sales of EBTEC as well as a 9%
increase in the sales of the Company's legacy EDAC AERO
business.
Aerospace Segment operating income increased 81% from the
third quarter of 2011 to $1.9 million and represented 9.7% of
Aerospace Segment sales versus 7.0% of sales in the third
quarter of 2011.
Industrial Segment sales for the third quarter of 2012
increased 17% to $8.3 million compared with the third quarter
of 2011. A 24% increase in the sales of Apex Machine Tool
more than offset 2% lower sales for EDAC Machinery in
comparison to the third quarter of 2011.
Industrial Segment operating income increased 51% to $1.1
million, compared with the third quarter of
2011, and represented 13.5% of Industrial Segment sales
versus 10.4% of segment sales in the 2011 third quarter.
Subsequent Event
As announced on October 11, 2012, EDAC acquired certain assets of Smith-Renaud, Inc., a privately- owned developer and remanufacturer of centerless grinding systems and a designer, manufacturer and rebuilder of custom precision spindles.
Summary and Outlook
Dominick Pagano, President and Chief Executive Officer,
stated: "We continued to achieve record sales and profits in
the third quarter as we made further progress in executing
our plan for growth. Third quarter results benefitted from
the diversity of our business with prime and top-tier
aerospace customers, the transition of our industrial
business to more full-scale programs and complex parts, and
the broadening of our capabilities through selective
acquisitions.
"In our aerospace segment, demand was especially strong in
the third quarter for legacy aircraft engine parts and
ground-based turbine components. One area of ongoing focus is
to complete the customer approval process for parts produced
under a program won last year for Trent 800 and 900 engines.
We are working towards full production ramp-up of approved
parts in the 2013 first quarter. EBTEC has proven to be an
ideal fit for our business overall. Its performance in the
first full quarter of being part of EDAC was on-target and
accretive to the quarter.
"In our industrial segment, our Apex Machine Tool business
continued to benefit from its migration to producing complex
ground-based turbine parts for power generation. The
performance of our EDAC Machinery product line was also
on-target in the third quarter. The recent acquisition of
Smith-Renaud assets is an important strategic addition to our
core machinery product line, giving us technologies that
improve centerless grinding as well as adding proprietary
spindle products.
"We are on-schedule with our plan to relocate our Connecticut
operations to our new Cheshire, Conn. facility, with
individual equipment foundations poured and the movement of
some machinery underway. APEX Machine Tool is the first of
our product lines to be relocated and its full start-up in
Cheshire is set to be completed in the 2013 first quarter.
The move to this world-class manufacturing facility is a
major initiative in supporting our substantial backlog, which
is up 24% year-to-date, and accommodating our current and
future growth.
"For the first nine months of this year, we have realized a
22% increase in our sales and an 82% increase in our net
income compared with same period last year. Our business,
backlog and opportunities remain very strong as we enter the
fourth quarter. Based on our current shipment schedule, we
expect fourth quarter sales to be in-line with our third
quarter, which is consistent with our prior guidance. We have
made important progress on several strategic fronts in 2012
and are looking forward to additional progress and growth in
2013."
Conference Call and Webcast
The Company will host a conference call to review third
quarter 2012 results today, November 1st, at
10:00 a.m.
(Eastern Time). The call will be broadcast simultaneously
over the Internet. Listeners can access a webcast of the
conference call live over the Internet at www.edactechnologies.com.
Please allow 10 minutes prior to the call to visit the site
to download and install any necessary audio software. After
the call has taken place, its archived version will be
available at this web site.
About EDAC Technologies Corporation
EDAC Technologies Corporation is a diversified manufacturing company serving the aerospace and industrial markets. In the aerospace sector, EDAC offers design and manufacturing services for commercial and military aircraft, in such areas as jet engine parts, special tooling, equipment, gauges and components used in the manufacture, assembly and inspection of jet engines. Industrial applications include high-precision fixtures, gauges, dies and molds, as well as the design, manufacture and repair of precision grinders and precision spindles, which are an integral part of machine tools found in virtually every manufacturing environment. EDAC's core competencies include extensive in-house design and engineering capabilities, and facilities equipped with the latest enabling machine tools and manufacturing technologies. EDAC's acquisition earlier this year of EBTEC Corporation expands its services to the aerospace and industrial markets to include electron beam welding, laser welding, laser cutting and laser drilling, EDM, vacuum heat treating and abrasive waterjet cutting as well as expanding its markets to include semiconductors and medical devices.
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; including forward-looking statements regarding
future profitability, expected sales and other matters that
are subject to risks and uncertainties. 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.
CONTACTS: EDAC Technologies Corporation
Glenn L. Purple
Vice President-Finance
860-677-2603
Comm-Counsellors, LLC Edward Nebb
203-972-8350
June Filingeri
203-972-0186
(Financial Tables Follow)
EDAC TECHNOLOGIES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
(in thousands except per share amounts)For the three months ended For the nine months ended
September 29, | October 1, | September 29, | October 1, | |
2012 | 2011 | 2012 | 2011 |
Sales $ 27,455 $ 21,841 $ 78,029 $ 63,920
Cost of sales 21,641 17,964 62,612 53,603
Gross profit 5,814 3,877 15,417 10,317
Selling, general and administrative
expenses 2,840 2,116 7,850 5,964
Income from operations 2,974 1,761 7,567 4,353
Interest expense (401) (252) (908) (777)
Income before income taxes 2,573 1,509 6,659 3,576
Provision for income taxes 909 497 2,298 1,179
Net income $ 1,664 $ 1,012 $ 4,361 $ 2,397
Comprehensive income $ 1,632 $ 994 $ 4,430 $ 2,386
Net income per common share data:
Basic income per share | $0.32 | $0.20 | $0.85 | $0.49 |
Diluted income per share | $0.29 | $0.19 | $0.78 | $0.46 |
Weighted average shares outstanding:
Basic | 5,249 | 4,968 | 5,145 | 4,936 |
Diluted | 5,740 | 5,303 | 5,618 | 5,169 |
EDAC TECHNOLOGIES CORPORATION MARKET SEGMENT INFORMATION (UNAUDITED)
(in thousands)For the three months ended For the nine months ended
Sales
EDAC TECHNOLOGIES CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in thousands)ASSETS
September 29,
2012
December 31,
2011
CURRENT ASSETS:
Cash $ 2,508 $ 1,564
Accounts receivable, net 22,580 17,905
Inventories 24,596 20,235
Prepaid expenses and other current assets 543 230
Land & building held for sale 2,695 - Deferred income taxes 2,1551,951
Total current assets 55,07741,885
PROPERTY, PLANT AND EQUIPMENT 73,609 55,464
Less: accumulated depreciation 33,99131,410
39,618 24,054
OTHER ASSETS
Goodwill 3,815 - Other assets 170114
TOTAL ASSETS $98,680 $66,053
CURRENT LIABILITIES:
LIABILITIES AND SHAREHOLDERS' EQUITY
Line of credit $ 10,250 $ 2,023
Current portion of long-term debt 5,510 2,450
Trade accounts payable 8,483 8,449
Employee compensation and amounts withheld 2,809 2,449
Accrued expenses 2,674 1,754
Customer advances 365708
Total current liabilities 30,09117,833
Long-term debt, less current portion 25,011 12,145
Pension liabilities, less current portion 2,120 2,469
Deferred income taxes 6,2294,990
Total long-term liabilities 33,36019,604
Total liabilities 63,45137,437
SHAREHOLDERS' EQUITY:
Common stock | 13 | 13 |
Additional paid-in capital | 14,705 | 12,522 |
Retained earnings | 23,541 | 19,180 |
Accumulated other comprehensive loss | (3,030) | (3,099) |
Total shareholders' equity | 35,229 | 28,616 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $98,680 $66,053
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