##### 



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 29, 2008
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission file number: 0-14275
 EDAC Technologies Corporation
  Wisconsin
    
    39-1515599(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. employer
Identification No.)
 1806 New Britain Avenue, Farmington, CT 06032
 (Registrants telephone number, including area code)
 þ o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company þ
 o þ




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March 29,
    
    
    December 29,2008
    
    
    2007(Unaudited)
    
    
    (Audited)ASSETSCURRENT ASSETS:Cash
    
    $
    2,371,539
    
    
    $
    3,286,203Trade accounts receivable, (net
of allowance for doubtful accounts
of $186,000 as of March 29, 2008
and December 29, 2007)
    
    
    7,690,524
    
    
    
    7,638,573Inventories, net
    
    
    7,353,123
    
    
    
    6,598,111Prepaid expenses and other
    
    
    205,606
    
    
    
    51,339Refundable income taxes
    
    
    284,577
    
    
    
    284,577Deferred income taxes
    
    
    908,124
    
    
    
    933,124TOTAL CURRENT ASSETS
    
    
    18,813,493
    
    
    
    18,791,927PROPERTY, PLANT, AND EQUIPMENT
    
    
    34,806,858
    
    
    
    34,869,219less-accumulated depreciation
    
    
    22,721,927
    
    
    
    22,390,41712,084,931
    
    
    
    12,478,802OTHER ASSETS:Deposits on equipment
    
    
    317,395
    
    
    
    Other
    
    
    486,342
    
    
    
    492,051TOTAL ASSETS
    
    $
    31,702,161
    
    
    $
    31,762,780
  2




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##### 



March 29,
    
    December 29,2008
    
    2007(Unaudited)
    
    (Audited)LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIES:Current portion of long-term debt
    
    $
    2,315,334
    
    
    $
    2,285,704Trade accounts payable
    
    
    4,214,692
    
    
    
    4,021,827Accrued employee compensation
and amounts withheld
    
    
    1,262,077
    
    
    
    1,800,390Other accrued expenses
    
    
    562,931
    
    
    
    395,950Customer advances
    
    
    369,601
    
    
    
    424,439TOTAL CURRENT LIABILITIES
    
    
    8,724,635
    
    
    
    8,928,310LONG-TERM DEBT,
less current portion
    
    
    6,614,855
    
    
    
    7,204,769DEFERRED INCOME TAXES
    
    
    448,660
    
    
    
    448,660SHAREHOLDERS EQUITY:Common stock, par value $.0025 per
share; 10,000,000 shares authorized;
issued  4,666,970 on March
29, 2008 and 4,636,303 on
December 29, 2007
    
    
    11,668
    
    
    
    11,591Additional paid-in capital
    
    
    10,348,903
    
    
    
    10,245,877Retained earnings
    
    
    6,650,109
    
    
    
    6,020,24217,010,680
    
    
    
    16,277,710Less: accumulated other
comprehensive loss
    
    
    1,096,669
    
    
    
    1,096,669TOTAL SHAREHOLDERS EQUITY
    
    
    15,914,011
    
    
    
    15,181,041TOTAL LIABILITIES AND
SHAREHOLDERS EQUITY
    
    $
    31,702,161
    
    
    $
    31,762,780
  3




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For the quarter endedMarch 29,
    
    
    March 31,2008
    
    
    2007Sales
    
    $
    11,181,103
    
    
    $
    12,315,638Cost of sales
    
    
    9,095,094
    
    
    
    9,968,094Gross profit
    
    
    2,086,009
    
    
    
    2,347,544Selling, general and
administrative expenses
    
    
    969,120
    
    
    
    917,625Income from operations
    
    
    1,116,889
    
    
    
    1,429,919Non-operating income (expense):Interest expense
    
    
    (164,577
    )
    
    
    (194,436
    )Other
    
    
    44,555
    
    
    
    4,795Income before income taxes
    
    
    996,867
    
    
    
    1,240,278Provision for income taxes
    
    
    367,000
    
    
    
    459,000Net income
    
    $
    629,867
    
    
    $
    781,278Income per share data (Note A):Basic income per share
    
    $
    0.14
    
    
    $
    0.17Diluted income per share
    
    $
    0.13
    
    
    $
    0.16
  4




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For the three months endedMarch 29,
    
    
    March 31,2008
    
    
    2007Operating Activities:Net income
    
    $
    629,867
    
    
    $
    781,278Adjustments to reconcile net income
to net cash (used in) provided by
operating activities:Depreciation and amortization
    
    
    546,209
    
    
    
    563,709Deferred income taxes
    
    
    25,000
    
    
    
    226,000Gain on sale of property,
plant & equipment
    
    
    (20,350
    )
    
    
    Stock compensation expense
pursuant to stock options
    
    
    55,749
    
    
    
    13,806Excess tax benefit from
share-based compensation
    
    
    (81,836
    )
    
    
    (8,000
    )Changes in working capital items
    
    
    (1,194,535
    )
    
    
    (702,180
    )Net cash (used in) provided by
operating activities
    
    
    (39,896
    )
    
    
    874,613Investing Activities:Additions to property, plant
and equipment
    
    
    (146,629
    )
    
    
    (282,428
    )Equipment deposits
    
    
    (317,395
    )
    
    
    (296,600
    )Proceeds from sale of property,
plant and equipment
    
    
    20,350
    
    
    
    Net cash used in investing
activities
    
    
    (443,674
    )
    
    
    (579,028
    )Financing Activities:Decrease in line of credit
    
    
    
    
    
    
    (150,000
    )Repayments of long-term debt
    
    
    (560,284
    )
    
    
    (464,098
    )Proceeds from exercise of options
and issuance of common stock
    
    
    47,354
    
    
    
    22,757Excess tax benefit from
share-based compensation
    
    
    81,836
    
    
    
    8,000Net cash used in
financing activities
    
    
    (431,094
    )
    
    
    (583,341
    )Decrease in cash
    
    
    (914,664
    )
    
    
    (287,756
    )Cash at beginning of period
    
    
    3,286,203
    
    
    
    925,197Cash at end of period
    
    $
    2,371,539
    
    
    $
    637,441Supplemental Disclosure of
Cash Flow Information:Interest paid
    
    $
    164,577
    
    
    $
    194,436Income taxes paid
    
    
    31,000
    
    
    
    38,973
  5




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March 29,
    
    
    December 29,2008
    
    
    2007Raw materials
    
    $
    1,375,652
    
    
    $
    1,530,440Work-in-progress
    
    
    5,398,303
    
    
    
    4,635,437Finished goods
    
    
    1,246,447
    
    
    
    1,110,9578,020,402
    
    
    
    7,276,834Reserve for excess
and obsolete
    
    
    (667,279
    )
    
    
    (678,723
    )Inventories, net
    
    $
    7,353,123
    
    
    $
    6,598,111
  For the quarter endedMarch 29,
    
    March 31,2008
    
    2007Basic:Average common shares outstanding
    
    
    4,652,928
    
    
    
    4,532,687Diluted:Dilutive effect of
stock options
    
    
    323,987
    
    
    
    296,791Average common shares diluted
    
    
    4,976,915
    
    
    
    4,829,478Options excluded since anti-dilutive
    
    
    188,500
    
    
    
    32,000
 6




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7




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8




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March 29,
    
    
    December 29,2008
    
    
    2007Term notes
    
    $
    5,366,226
    
    
    $
    5,834,479Mortgage loans
    
    
    3,106,960
    
    
    
    3,138,313Equipment note payable
    
    
    1,211
    
    
    
    2,999Capital lease obligations
    
    
    455,792
    
    
    
    514,6828,930,189
    
    
    
    9,490,473Less  current portion of long-term debt
    
    
    2,315,334
    
    
    
    2,285,704$
    6,614,855
    
    
    $
    7,204,769
   For the quarter endedMarch 29,
    
    
    March 31,2008
    
    
    2007Components of net periodic benefit cost:Interest cost
    
    $
    91
    
    
    $
    88Expected return on plan assets
    
    
    (103
    )
    
    
    (90
    )Amortization of actuarial loss
    
    
    12
    
    
    
    10Net periodic pension expense
    
    $
    0
    
    
    $
    8
    For the quarter endedMarch 29,
    
    
    March 31,2008
    
    
    2007Current provision
    
    $
    342
    
    
    $
    233Deferred
    
    
    25
    
    
    
    226Total provision
    
    $
    367
    
    
    $
    459
  9




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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  For the Three Months EndedMarch 29,
    
    
    March 31,Product Line
    
    2008
    
    
    2007
    
    
    ChangePrecision Aerospace
    
    $
    5,283
    
    
    $
    6,366
    
    
    $
    (1,083
    )Apex Machine Tool
    
    
    5,046
    
    
    
    5,101
    
    
    
    (55
    )Gros-Ite Spindles
    
    
    852
    
    
    
    849
    
    
    
    3Total
    
    $
    11,181
    
    
    $
    12,316
    
    
    $
    (1,135
    )
     10




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For the quarter endedMarch 29,
    
    
    March 31,2008
    
    
    2007Aerospace customers
    
    $
    8,445
    
    
    $
    9,180Non-aerospace customers
    
    
    2,736
    
    
    
    3,136$
    11,181
    
    
    $
    12,316
  Cost of Sales.
 Selling, General & Administrative Expenses.
 Interest Expense.
 Income Taxes.
 Liquidity and Capital Resources.
  Three Months EndedMarch 29,
    
    March 31,2008
    
    2007Net cash flows (used in) provided by
operating activities:
    
    $
    (40,000
    )
    
    $
    875,000
 11




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Three Months EndedMarch 29,
    
    March 31,2008
    
    2007Net cash flows used in investing activities:
    
    $
    444,000
    
    
    $
    579,000
   Three Months EndedMarch 29,
    
    March 31,2008
    
    2007Net cash flows used in financing activities:
    
    $
    431,000
    
    
    $
    583,000
   CRITICAL ACCOUNTING POLICIES AND ESTIMATES
  12




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13




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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
  ITEM 4. CONTROLS AND PROCEDURES
 Evaluation of disclosure and procedures
  Changes in internal control over financial reporting
    3.1*
    
    EDACs Amended and Restated Articles of Incorporation3.2*
    
    EDACs Amended and Restated By-laws31.1
    
    Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the
Securities Exchange Act of 1934, as amended.31.2
    
    Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the
Securities Exchange Act of 1934, as amended.
 14




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32.1
    
    Certification of Chief Executive Officer and Chief Financial Officer pursuant to
Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended.
 
 *
    
    Incorporated by reference   EDAC TECHNOLOGIES CORPORATIONApril 30, 2008

By /s/ Glenn L. PurpleGlenn L. Purple, Chief FinancialOfficer and duly authorized officer 15




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NUMBER
    
    DESCRIPTION3.1
    
    EDACs Amended and Restated Articles of Incorporation (1)3.2
    
    EDACs Amended and Restated By-laws (2)31.1*
    
    Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the
Securities Exchange Act of 1934, as amended.31.2*
    
    Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the
Securities Exchange Act of 1934, as amended.32.1*
    
    Certification of Chief Executive Officer and Chief Financial Officer pursuant to
Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended.
 (1)
    
    Exhibit incorporated by reference to the Companys registration
statement on Form S-1 dated August 6, 1985, commission file
No. 2-99491, Amendment No.1.
 (2)
    
    Exhibit incorporated by reference to the Companys Report
on Form 8-K dated February 19, 2002.
 
 *
    
    Filed herewith. 16