Edac Technologies Corp. Reports Operating Results (10-Q)

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Oct 25, 2010
Edac Technologies Corp. (EDAC, Financial) filed Quarterly Report for the period ended 2010-10-02.

Edac Technologies Corp. has a market cap of $18.16 million; its shares were traded at around $3.73 with a P/E ratio of 20.72 and P/S ratio of 0.33. EDAC is in the portfolios of Jim Simons of Renaissance Technologies LLC.

Highlight of Business Operations:

Sales for the EDAC Aero product line increased $2,188 or 19.6%, and $13,949 or 56.8% for the three and nine month periods ended October 2, 2010, respectively, as compared to the three and nine month periods ended October 3, 2009. The increase for the nine month period was primarily due to the Companys May 27, 2009 acquisition of AERO which contributed $6,415 and $19,626 for the three and nine month periods ended October 2, 2010. AEROs contribution for both the three and nine

Sales for the EDAC Machinery product line increased $629, or 106.6%, and $2,025, or 109.2% for the three and nine month periods ended October 2, 2010 as compared to the three and nine month periods ended October 3, 2009 due to the Companys August 10, 2009 acquisition of certain assets of Service Network Incorporated (SNI), which contributed $197 and $1,051, respectively, for the three and nine month periods ended October 2, 2010 and due to increases in the Spindle product line. The Company has recently received orders totaling $1,800 for SNI machines which the company expects to deliver in the fourth quarter of 2010 and the first quarter of 2011.

As of October 2, 2010, the Companys total sales backlog was approximately $133,600 compared to $125,900, as of January 2, 2010. Backlog consists of accepted purchase orders and long-term contracts that are cancelable by the customer without penalty, except for payment of costs incurred. The Company presently expects to complete approximately $18,200 of its October 2, 2010 backlog during the remainder of the 2010 fiscal year. The remaining $115,400 of backlog is deliverable in fiscal year 2011 and beyond. The increase in backlog was mainly due to additional aerospace orders.

Impacting cash flow for the first nine months of 2010 was cash used by working capital items in the amount of $4,557, which consisted primarily of increases in accounts receivable and inventories of $4,644 and $770, respectively, due to the increases in sales and backlog. As of October 22, 2010, accounts receivable has decreased due to collections to $13,026.

Impacting cash flow for the first nine months of 2009 was cash provided by working capital items in the amount of $211 which consisted of cash provided by accounts payable/accrued expenses, accounts receivable and income tax refunds in the amounts of $1,742, $1,041, and $525, respectively, and cash used in inventory in the amount of $3,186.

During the nine months ended October 2, 2010, payments of $1,455 against term debt were offset by borrowings on the revolving line of credit totaling $2,509 and the issuance of long-term debt in the amount of $2,243. For the nine months ended October 3, 2009, cash flows provided by financing activities primarily reflect debt of $9,500 to finance the Companys acquisition of AERO and net borrowings on the lines of credit totaling $216, partially offset by payments of $1,968 against term debt.

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