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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 April 2, 2011
 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: 001-33507
 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
 o o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company þ(Do not check if a smaller reporting company)
  o þ




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TABLE OF CONTENTS  PART I FINANCIAL INFORMATIONITEM 1 FINANCIAL STATEMENTSITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKITEM 4. CONTROLS AND PROCEDURESPART II  OTHER INFORMATIONITEM 6. EXHIBITSSIGNATURESEXHIBIT INDEXEX-31.1EX-31.2EX-32.1    Table of Contents  
  
  
 April 2,
    
    
    January 1,2011
    
    
    2011(in thousands)
    
    (Unaudited)
    
    
    (Audited)ASSETSCURRENT ASSETS:Cash
    
    $
    1,279
    
    
    $
    975Accounts receivable (net of allowance for
for doubtful accounts of $175 as of
April 2, 2011 and $121 as of
January 1, 2011)
    
    
    17,448
    
    
    
    14,955Inventories, net
    
    
    22,008
    
    
    
    20,219Prepaid expenses and other current
assets
    
    
    354
    
    
    
    184Refundable income taxes
    
    
    80
    
    
    
    80Deferred income taxes
    
    
    1,613
    
    
    
    1,613Total current assets
    
    
    42,782
    
    
    
    38,026PROPERTY, PLANT AND EQUIPMENT, at cost
    
    
    52,564
    
    
    
    51,818Less: accumulated depreciation
    
    
    29,232
    
    
    
    28,59523,332
    
    
    
    23,223OTHER ASSETS
    
    
    143
    
    
    
    155TOTAL ASSETS
    
    $
    66,257
    
    
    $
    61,404
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April 2,
    
    
    January 1,2011
    
    
    2011(in thousands)
    
    (Unaudited)
    
    
    (Audited)LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIES:Lines of credit
    
    $
    7,405
    
    
    $
    4,793Current portion of long-term debt
    
    
    4,259
    
    
    
    4,370Trade accounts payable
    
    
    8,887
    
    
    
    7,336Employee
compensation and amounts withheld
    
    
    1,595
    
    
    
    1,212Accrued expenses
    
    
    2,395
    
    
    
    2,136Customer advances
    
    
    840
    
    
    
    857Total current liabilities
    
    
    25,381
    
    
    
    20,704LONG-TERM DEBT, less current portion
    
    
    9,456
    
    
    
    9,858PENSION LIABILITIES
    
    
    1,526
    
    
    
    1,526DEFERRED INCOME TAXES
    
    
    4,455
    
    
    
    4,473SHAREHOLDERS EQUITY:Common stock, par value $.0025 per
share; issued and outstanding :4,924,469 on April 2, 2011 and
4,869,469 on January 1, 2011
    
    
    12
    
    
    
    12Additional paid-in capital
    
    
    11,830
    
    
    
    11,690Retained earnings
    
    
    16,038
    
    
    
    15,63027,880
    
    
    
    27,332Less: accumulated other comprehensive loss
    
    
    2,441
    
    
    
    2,489Total shareholders equity
    
    
    25,439
    
    
    
    24,843TOTAL LIABILITIES AND
SHAREHOLDERS EQUITY
    
    $
    66,257
    
    
    $
    61,404
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For the three months endedApril 2,
    
    
    April 3,(in thousands except per share amounts)
    
    2011
    
    
    2010Sales
    
    $
    20,199
    
    
    $
    17,787Cost of Sales
    
    
    17,390
    
    
    
    15,646Gross Profit
    
    
    2,809
    
    
    
    2,141Selling, General and Administrative Expenses
    
    
    1,945
    
    
    
    1,730Income from Operations
    
    
    864
    
    
    
    410Non-Operating Income (Expense):Interest Expense
    
    
    (260
    )
    
    
    (226
    )Other
    
    
    5
    
    
    
    360Income before Provision For Income Taxes
    
    
    609
    
    
    
    544Provision for Income Taxes
    
    
    201
    
    
    
    184Net Income
    
    $
    408
    
    
    $
    360Income per share data (Note A):Basic Income Per Common Share
    
    $
    0.08
    
    
    $
    0.07Diluted Income Per Common Share
    
    $
    0.08
    
    
    $
    0.07
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##### Table of Contents



For the three months endedApril 2,
    
    
    April 3,(in thousands)
    
    2011
    
    
    2010Operating Activities:Net income
    
    $
    408
    
    
    $
    360Adjustments
to reconcile net income to net cash provided by (used in) operating activities:Depreciation and amortization
    
    
    675
    
    
    
    661Deferred income taxes
    
    
    (18
    )
    
    
    82Gain on acquisition of business
    
    
    
    
    
    
    (350
    )Gain on sale of property, plant and equipment
    
    
    (5
    )
    
    
    Compensation expense pursuant to stock options
    
    
    68
    
    
    
    108Provision for doubtful accounts receivable
    
    
    
    
    
    
    31Excess tax benefit from share-based compensation
    
    
    (52
    )
    
    
    Changes in working capital items
    
    
    (2,228
    )
    
    
    (2,271
    )Net cash used in
operating activities
    
    
    (1,152
    )
    
    
    (1,379
    )Investing Activities:Additions to property, plant and equipment
    
    
    (772
    )
    
    
    (394
    )Proceeds from sales of property, plant and equipment
    
    
    5
    
    
    
    Net cash used in investing activities
    
    
    (767
    )
    
    
    (394
    )Financing Activities:Increase in lines of credit
    
    
    2,612
    
    
    
    1,900Repayments of long-term debt
    
    
    (513
    )
    
    
    (470
    )Proceeds from exercise of stock options
    
    
    72
    
    
    
    9Excess tax benefit from share-based compensation
    
    
    52
    
    
    
    Net cash provided by financing activities
    
    
    2,223
    
    
    
    1,439Increase (decrease) in cash
    
    
    304
    
    
    
    (334
    )Cash at beginning of period
    
    
    975
    
    
    
    1,100Cash at end of period
    
    $
    1,279
    
    
    $
    766Supplemental Disclosure of
Cash Flow Information:Interest paid
    
    $
    260
    
    
    $
    226Income taxes paid
    
    
    10
    
    
    
    39
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(in thousands)
  BASIS OF PRESENTATION
   April 2, 2011
    
    
    January 1, 2011Raw materials
    
    $
    3,101
    
    
    $
    2,624Work-in-progress
    
    
    17,662
    
    
    
    16,163Finished goods
    
    
    1,281
    
    
    
    1,46822,044
    
    
    
    20,255Less: reserve forexcess and obsolete
    
    
    (36
    )
    
    
    (36
    )Inventories, net
    
    $
    22,008
    
    
    $
    20,219
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April 2,
    
    April 3,2011
    
    2010Basic:Weighted average common shares outstanding
    
    
    4,911
    
    
    
    4,842Diluted:Dilutive effect of stock options
    
    
    82
    
    
    
    116Weighted average shares diluted
    
    
    4,993
    
    
    
    4,958Options excluded since antidilutive
    
    
    586
    
    
    
    575
     April 2, 2011
    
    
    January 1, 2011Lines of credit
    
    $
    7,405
    
    
    $
    4,793Term notes
    
    
    8,512
    
    
    
    8,967Mortgage loans
    
    
    5,203
    
    
    
    5,26121,120
    
    
    
    19,021Less  equipment line of credit
    
    
    1,675
    
    
    
    743Less  revolving line of credit
    
    
    5,730
    
    
    
    4,050Less  current portion of long-term debt
    
    
    4,259
    
    
    
    4,370$
    9,456
    
    
    $
    9,858
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For the quarter endedApril 2,
    
    
    April 3,2011
    
    
    2010Components of net periodic benefit cost:Interest cost
    
    $
    80
    
    
    $
    79Expected return on plan assets
    
    
    (77
    )
    
    
    (71
    )Amortization of acturial loss
    
    
    32
    
    
    
    30Net periodic pension expense
    
    $
    35
    
    
    $
    38
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For the quarter endedApril 2,
    
    
    April 3,2011
    
    
    2010Current provision
    
    $
    219
    
    
    $
    82Deferred
    
    
    (18
    )
    
    
    102Total provision
    
    $
    201
    
    
    $
    184
     
 ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 (in thousands)
 Sales.
  For the quarter endedApril 2,
    
    
    April 3,Product Line
    
    2011
    
    
    2010
    
    
    ChangeEDAC Aero
    
    $
    13,716
    
    
    $
    12,554
    
    
    $
    1,162Apex Machine Tool
    
    
    4,673
    
    
    
    3,987
    
    
    
    686EDAC Machinery
    
    
    1,810
    
    
    
    1,246
    
    
    
    564Total
    
    $
    20,199
    
    
    $
    17,787
    
    
    $
    2,412
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For the quarter endedApril 2,
    
    
    April 3,2011
    
    
    2010Aerospace customers
    
    $
    14,456
    
    
    $
    13,597Other
    
    
    5,743
    
    
    
    4,190Total
    
    $
    20,199
    
    
    $
    17,787
   Cost of Sales.
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Selling, General and Administrative Expenses.
 Interest Expense.
 Other Income.
 Income Taxes.
 Liquidity and Capital Resources.
  Three Months EndedApril 2,
    
    April 3,2011
    
    2010Net cash flows used in
operating activities:
    
    
    ($1,152
    )
    
    
    ($1,379
    )
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Three Months EndedApril 2,
    
    April 3,2011
    
    2010Net cash flows used in
investing activities:
    
    
    ($767
    )
    
    
    ($394
    )
   Three Months EndedApril 2,
    
    April 3,2011
    
    2010Net cash flows provided by
financing activities:
    
    $
    2,223
    
    
    $
    1,439
    CRITICAL ACCOUNTING POLICIES AND ESTIMATES
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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
  
  
 ITEM 6. EXHIBITS
 3.1*
    
    EDACs Amended and Restated Articles of Incorporation.3.2*
    
    Articles of Amendment to EDACs Amended and Restated Articles of Incorporation.3.3*
    
    EDACs Amended and Restated By-laws .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.
 
 *
    
    Incorporated by reference 14




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EDAC TECHNOLOGIES CORPORATIONApril 28, 2011
    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
    
    Articles of Amendment to EDACs Amended and Restated Articles of Incorporation.
(2)3.3
    
    EDACs Amended and Restated By-laws. (3)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 10-Q dated July 30, 2008.(3)
    
    Exhibit incorporated by reference to the Companys Report
on Form 8-K dated February 19, 2002.*
    
    Filed herewith. 16