<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   ----------

                                    FORM 10-Q

(Mark One)

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

For the quarterly period ended July 1, 2006

                                       OR

[ ]  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
             (Exact name of registrant as specified in its charter)

<TABLE>
<S>                                                          <C>
           Wisconsin                                              39-1515599
(State or other jurisdiction of                                (I.R.S. employer
 incorporation or organization)                              Identification No.)
</TABLE>

                  1806 New Britain Avenue, Farmington, CT 06032
                    (Address of principal executive offices)

                                 (860) 677-2603
              (Registrant's telephone number, including area code)

          Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15 (d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes  X  No
                                              ---    ---

          Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, or a non-accelerated filer. See definition of
"accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange
Act. (check one):

Large accelerated filer       Accelerated filer       Non-accelerated filer  X
                        ---                     ---                         ---

          Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act).

Yes     No  X
    ---    ---

          On July 24, 2006 there were outstanding 4,518,437 shares of the
registrant's Common Stock, $0.0025 par value per share.

<PAGE>

                          PART I FINANCIAL INFORMATION
                           ITEM 1 FINANCIAL STATEMENTS

                          EDAC TECHNOLOGIES CORPORATION
                      CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                          July 1,     December 31,
                                            2006          2005
                                        (Unaudited)     (Audited)
                                        -----------   ------------
<S>                                     <C>           <C>
ASSETS

CURRENT ASSETS:
   Cash                                 $ 1,298,358    $ 2,468,964
   Trade accounts receivable, (net of
      allowance for doubtful accounts
      of $184,000 as of July 1, 2006
      and December 31, 2005)              6,752,311      5,587,305
   Inventories, net                       4,223,000      4,296,839
   Prepaid expenses and other               223,666         81,210
   Refundable income taxes                   54,984         54,984
   Deferred income taxes                    695,864        769,864
                                        -----------    -----------
      TOTAL CURRENT ASSETS               13,248,183     13,259,166
                                        -----------    -----------
PROPERTY, PLANT, AND EQUIPMENT           29,461,561     27,829,014
   less-accumulated depreciation         19,625,944     18,861,156
                                        -----------    -----------
                                          9,835,617      8,967,858
                                        -----------    -----------
DEFERRED INCOME TAXES                     1,440,989      1,440,989
                                        -----------    -----------
OTHER ASSETS                                 97,415        108,833
                                        -----------    -----------
   TOTAL ASSETS                         $24,622,204    $23,776,846
                                        ===========    ===========
</TABLE>

The accompanying notes are an integral part of these condensed consolidated
financial statements.


                                       2

<PAGE>

                          EDAC TECHNOLOGIES CORPORATION
                      CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                          July 1,     December 31,
                                            2006          2005
                                        (Unaudited)     (Audited)
                                        -----------   ------------
<S>                                     <C>           <C>
LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
   Current portion of long-term debt    $ 1,573,719    $ 1,404,053
   Trade accounts payable                 2,981,258      2,427,866
   Accrued employee compensation
      and amounts withheld                1,391,672      1,397,897
   Other accrued expenses                   411,866        706,861
   Customer advances                         61,462        284,671
                                        -----------    -----------
      TOTAL CURRENT LIABILITIES           6,419,977      6,221,348
                                        -----------    -----------
LONG-TERM DEBT,
   less current portion                   7,702,900      7,791,530
                                        -----------    -----------
OTHER LONG-TERM LIABILITIES                 965,823        965,823
                                        -----------    -----------

SHAREHOLDERS' EQUITY:
   Common stock, par value $.0025 per
      share; 10,000,000 shares
      authorized; issued - 4,518,437
      on July 1, 2006 and 4,504,270
      on December 31, 2005                   11,296         11,261
   Additional paid-in capital             9,481,049      9,452,525
   Retained earnings                      1,723,584      1,016,784
                                        -----------    -----------
                                         11,215,929     10,480,570
   Less: accumulated other
      comprehensive loss                  1,682,425      1,682,425
                                        -----------    -----------
      TOTAL SHAREHOLDERS' EQUITY          9,533,504      8,798,145
                                        -----------    -----------
   TOTAL LIABILITIES AND SHAREHOLDERS'
      EQUITY                            $24,622,204    $23,776,846
                                        ===========    ===========
</TABLE>

The accompanying notes are an integral part of these condensed consolidated
financial statements.


                                       3
<PAGE>

                          EDAC TECHNOLOGIES CORPORATION
           CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

<TABLE>
<CAPTION>
                                                    For the three               For the six
                                                     months ended               months ended
                                               -----------------------   -------------------------
                                                 July 1,      July 2,      July 1,       July 2,
                                                  2006         2005          2006          2005
                                               ----------   ----------   -----------   -----------
<S>                                            <C>          <C>          <C>           <C>
Sales                                          $9,580,774   $8,899,338   $19,176,353   $16,915,512
Cost of sales                                   7,816,023    7,363,611    15,786,957    14,032,503
                                               ----------   ----------   -----------   -----------
   Gross profit                                 1,764,751    1,535,727     3,389,396     2,883,009
Selling, general and administrative expenses      970,278      845,891     1,984,143     1,572,782
                                               ----------   ----------   -----------   -----------
   Income from operations                         794,473      689,836     1,405,253     1,310,227

Non-operating income (expense):
   Interest expense                              (165,076)    (161,056)     (318,475)     (321,391)
   Gain on debt forgiveness                            --           --            --       750,000
   Other income                                    41,634           --        56,022        13,646
                                               ----------   ----------   -----------   -----------
   Income before income taxes                     671,031      528,780     1,142,800     1,752,482
Provision for (benefit from) income taxes         257,000     (787,000)      436,000      (526,000)
                                               ----------   ----------   -----------   -----------
   Net income                                  $  414,031   $1,315,780   $   706,800   $ 2,278,482
                                               ==========   ==========   ===========   ===========
Income per share data (Note A):
   Basic                                       $     0.09   $     0.29   $      0.16   $      0.51
                                               ==========   ==========   ===========   ===========
   Diluted                                     $     0.09   $     0.27   $      0.15   $      0.48
                                               ==========   ==========   ===========   ===========
</TABLE>

The accompanying notes are an integral part of these condensed consolidated
financial statements.


                                       4

<PAGE>

                          EDAC TECHNOLOGIES CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                               For the six months ended
                                               ------------------------
                                                 July 1,       July 2,
                                                   2006         2005
                                               -----------   ----------
<S>                                            <C>           <C>
Operating Activities:
   Net income                                  $   706,800   $2,278,482
   Adjustments to reconcile net income to
      net cash provided by operating
      activities:
      Depreciation and amortization              1,019,688      968,982
      Gain on debt forgiveness                          --     (750,000)
      Deferred income taxes                         74,000     (900,000)
      Gain on sale of property, plant &
         equipment                                 (25,540)     (10,000)
      Stock compensation cost                       18,401           --
      Excess tax benefit from share-based
         compensation                               (4,000)          --
   Changes in working capital items             (1,204,660)     307,043
                                               -----------   ----------
      Net cash provided by operating
         activities                                584,689    1,894,507
                                               -----------   ----------

Investing Activities:
   Additions to property, plant and
      equipment                                 (1,900,889)    (925,609)
   Proceeds from sale of property, plant and
      equipment                                     50,400       10,000
                                               -----------   ----------
      Net cash used in investing
         activities                             (1,850,489)    (915,609)
                                               -----------   ----------

Financing Activities:
   Increase in revolving line of credit                 --     (580,555)
   Repayments of long-term debt                   (737,841)    (549,792)
   Borrowing on long-term debt                     818,877      435,457
   Deferred loan fees                                   --      (69,167)
   Proceeds from exercise of options and
      issuance of common stock                      10,158       37,525
   Excess tax benefit from share-based
      compensation                                   4,000           --
                                               -----------   ----------
      Net cash provided by (used in)
         financing activities                       95,194     (726,532)
                                               -----------   ----------
(Decrease)/increase in cash                     (1,170,606)     252,366
Cash at beginning of period                      2,468,964      549,198
                                               -----------   ----------
Cash at end of period                          $ 1,298,358   $  801,564
                                               ===========   ==========

Supplemental Disclosure of Cash Flow
Information:
   Interest paid                               $   318,475   $  349,734
   Income taxes paid (refunded)                    316,025     (299,387)
Non-Cash Transaction:
   Capital lease obligation and equipment
      financing                                         --       19,547
</TABLE>

The accompanying notes are an integral part of these condensed consolidated
financial statements.


                                       5
<PAGE>

EDAC TECHNOLOGIES CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
July 1, 2006

NOTE A -- BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and in accordance with the instructions to Form 10-Q and
Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals and adjustments to previously
established loss provisions) considered necessary for a fair presentation have
been included. Operating results for the three and six months ended July 1, 2006
are not necessarily indicative of the results that may be expected for the year
ending December 30, 2006. For further information, refer to the consolidated
financial statements and footnotes thereto included in the Company's annual
report on Form 10-K for the fiscal year ended December 31, 2005.

Inventories: Inventories are stated at the lower of cost (first-in, first-out
method) or market. The Company has specifically identified certain inventory as
obsolete or slow moving and has provided a full reserve for these parts. As of
July 1, 2006 and December 31, 2005, inventories consisted of the following:

<TABLE>
<CAPTION>
                       July 1,    December 31,
                        2006          2005
                     ----------   ------------
<S>                  <C>          <C>
Raw materials        $1,368,783    $  998,300
Work-in-progress      2,428,384     2,880,942
Finished goods        1,101,331     1,098,339
                     ----------    ----------
                      4,898,498     4,977,581
Reserve for excess
   and obsolete        (675,498)     (680,742)
                     ----------    ----------
Inventories, net     $4,223,000    $4,296,839
                     ==========    ==========
</TABLE>

Income per share: The number of shares used in the income per common share
computations for the three and six month periods ended July 1, 2006 and July 2,
2005 are as follows:

<TABLE>
<CAPTION>
                           For the three months ended   For the six months ended
                           --------------------------   ------------------------
                               July 1,     July 2,         July 1,     July 2,
                                 2006        2005            2006        2005
                              ---------   ---------       ---------   ---------
<S>                        <C>            <C>              <C>        <C>
Basic:
   Average common
      shares outstanding      4,515,104   4,494,870       4,511,175   4,477,037
Diluted:
   Dilutive effect of
      stock options             285,792     296,373         284,934     268,170
                              ---------   ---------       ---------   ---------
   Average common
      shares diluted          4,800,896   4,791,243       4,796,109   4,745,207
                              =========   =========       =========   =========
Options excluded
   since anti-dilutive           37,000      42,000          47,000      42,000
                              =========   =========       =========   =========
</TABLE>


                                        6

<PAGE>

Comprehensive Income: Comprehensive income is the same as net income for the
three and six month periods ended July 1, 2006 and July 2, 2005, since the
valuation used in connection with determining the amount of the change in the
Company's minimum pension liability is determined at the end of the year.

New Accounting Standards: In September 2005, the Financial Accounting Standards
Board (FASB) issued a Proposed Statement of Financial Accounting Standards which
amends FASB Statement No. 128, "Earnings per Share". The proposed statement is
intended to clarify guidance on the computation of earnings per share for
certain items such as mandatorily convertible instruments, the treasury stock
method, and contingently issuable shares. We have evaluated the proposed
statement as presently drafted and have determined that if adopted in its
current form it would not have a significant impact on the computation of our
earnings per share.

In June 2006, the FASB issued FASB Interpretation No. 48 "Accounting for
Uncertainty in Income Taxes (an interpretation of FASB Statement No. 109)" which
is effective for fiscal years beginning after December 15, 2006 with earlier
adoption encouraged. This interpretation was issued to clarify the accounting
for uncertainty in income taxes recognized in the financial statements by
prescribing a recognition threshold and measurement attribute for the financial
statement recognition and measurement of a tax position taken or expected to be
taken in a tax return. We are currently evaluating the potential impact of this
interpretation.

NOTE B - STOCK BASED COMPENSATION

Effective January 1, 2006, the Company adopted the provisions of Statement of
Financial Accounting Standards No. 123R, ("SFAS 123R") "Share-Based Payment,"
which establishes accounting for equity instruments exchanged for employee
services. Under the provisions of SFAS No. 123R, share-based compensation cost
is measured at the grant date, based on the calculated fair value of the award,
and is recognized as an expense over the employee's requisite service period
(generally the vesting period of the equity grant). Prior to January 1, 2006,
the Company accounted for share-based compensation to employees in accordance
with Accounting Principles Board Opinion ("APB") No. 25, "Accounting for Stock
Issued to Employees," and related interpretations. The Company also followed the
disclosure requirements of SFAS No. 123, "Accounting for Stock-Based
Compensation", as amended by SFAS 148, "Accounting for Stock-Based
Compensation--Transition and Disclosure". The Company elected to adopt the
modified prospective transition method as provided by SFAS No. 123R and,
accordingly, financial statement amounts for the prior periods presented in this
Form 10-Q have not been restated to reflect the fair value method of expensing
share-based compensation. Under this application, we are required to record
compensation cost for all share-based payments granted after the date of
adoption based on the grant date fair value estimated in accordance with the
provisions of SFAS 123R and for the unvested portion of all share-based payments
previously granted that remain outstanding which were based on the grant date
fair value estimated in accordance with the original provisions of


                                        7

<PAGE>

SFAS 123. The majority of our share-based compensation arrangements vest over
three years. The Company expenses its share-based compensation under the
straight-line method.

The following table presents share-based compensation expenses for continuing
operations included in the Company's unaudited condensed consolidated statements
of operations:

<TABLE>
<CAPTION>
                                              THREE MONTHS ENDED   SIX MONTHS ENDED
                                                 JULY 1, 2006        JULY 1, 2006
                                              ------------------   ----------------
<S>                                           <C>                  <C>
Selling, general and administrative:
Share-based compensation expense before tax         $9,216              $18,401
Income tax benefit                                   3,501                6,991
                                                    ------              -------
Net share-based compensation expense                $5,715              $11,410
                                                    ======              =======
</TABLE>

There was no change in basic and diluted earnings per share for the three and
six months ended July 1, 2006 in connection with the adoption of FAS 123(R).

Prior to the adoption of SFAS 123R, the Company presented all tax benefits
resulting from the exercise of stock options as operating cash flows in the
Condensed Consolidated Statements of Cash Flows. SFAS 123R requires that the
cash flows resulting from tax deductions in excess of compensation cost
recognized for the options (excess tax benefits) be classified as financing cash
flows. The $4,000 excess tax benefit classified as a financing cash inflow would
have been classified as an operating cash inflow if the Company had not adopted
SFAS 123R.

The Company estimates the fair value of stock options using the Black-Scholes
valuation model. Key input assumptions used to estimate the fair value of stock
options include the expected option term, the expected volatility of the
Company's stock over the option's expected term, the risk-free interest rate
over the option's expected term, and the Company's expected annual dividend
yield. The Company believes that the valuation technique and the approach
utilized to develop the underlying assumptions are appropriate in calculating
the fair values of the Company's stock options granted during the three and six
months ended July 1, 2006. Estimates of fair value are not intended to predict
actual future events or the value ultimately realized by persons who receive
equity awards.

The fair value of each option grant was estimated on the grant date using the
Black-Scholes option-pricing model with the following assumptions:

<TABLE>
<CAPTION>
                                 THREE AND SIX
                                  MONTHS ENDED
                                  JULY 1, 2006
                                 -------------
<S>                              <C>
Expected option term (1)            6 years
Expected volatility factor (2)           35%
Risk-free interest rate (3)             4.3%
Expected annual dividend yield            0%
</TABLE>


                                        8

<PAGE>

----------
(1)  The option term was determined using the simplified method for estimating
     expected option life, which qualify as "plain-vanilla" options.

(2)  The stock volatility for each grant is measured using the weighted average
     of historical monthly price changes of the Company's common stock over the
     most recent period equal to the expected option life of the grant, adjusted
     for activity which is not expected to occur in the future.

(3)  The risk-free interest rate for periods equal to the expected term of the
     share option is based on the U.S. Treasury yield curve in effect at the
     time of grant.

The Company did not recognize compensation expense for employee share-based
awards for the three and six months ended July 2, 2005, when the exercise price
of the Company's employee stock awards equaled the market price of the
underlying stock on the date of grant.

The Company had previously adopted the provisions of Statement of Financial
Accounting Standards No. 123, "Accounting for Stock-Based Compensation," ("SFAS
123"), as amended by SFAS No. 148, "Accounting for Stock-Based
Compensation--Transition and Disclosure" through disclosure only. The following
table illustrates the effects on net income and earnings per share for the three
and six months ended July 2, 2005 as if the Company had applied the fair value
recognition provisions of SFAS 123 to share-based employee awards.

<TABLE>
<CAPTION>
                                                                    THREE MONTHS ENDED   SIX MONTHS ENDED
                                                                        JULY 2, 2005       JULY 2, 2005
                                                                    ------------------   ----------------
<S>                                                                 <C>                  <C>
Net income as reported:                                                 $1,315,780          $2,278,482
Stock-based compensation expense included in reported net income
   under APB 25                                                                 --                  --
Stock-based compensation expense that would have been included in
   reported net income if the fair value provisions of FAS
   123 had been applied to all awards                                        1,897               3,803
                                                                        ----------          ----------
Pro forma net income                                                    $1,313,883          $2,274,679
                                                                        ----------          ----------
Income per share:
Basic - as reported                                                     $     0.29          $     0.51
   -- pro forma                                                               0.29                0.51
Diluted - as reported                                                   $     0.27          $     0.48
   -- pro forma                                                               0.27                0.48
</TABLE>

The fair value of each option grant was estimated on the grant date using the
Black-Scholes option pricing model with the following assumptions:

<TABLE>
<CAPTION>
                                 THREE MONTHS ENDED   SIX MONTHS ENDED
                                    JULY 2, 2005        JULY 2, 2005
                                 ------------------   ----------------
<S>                              <C>                  <C>
Expected option term                   3 years             3 years
Expected volatility factor                49.0%               64.3%
Risk-free interest rate                    3.9%                3.9%
Expected annual dividend yield               0%                  0%
</TABLE>

STOCK INCENTIVE PLANS


                                       9
<PAGE>

The Company has issued stock options from the 1996 Stock Option Plan, the 1998
Employee Stock Option Plan, the 2000 Employee Stock Option Plan and the 2000-B
Employee Stock Option Plan. The terms of the options and vesting requirements
shall be for such period as the Compensation Committee designates. The option
price is not less than the fair market value of the shares on the date of the
grant.

As of July 1, 2006, 725,333 shares were reserved for future issuance for stock
options including 236,500 shares for the 1996 Stock Option Plan, 183,400 shares
for the 1998 Employee Stock Option Plan, 134,000 shares for the 2000 Employee
Stock Option Plan, and 171,433 shares for the 2000-B Employee Stock Option Plan.

Stock option activity under all of the Company's stock plans since December 31,
2005 is summarized as follows:

<TABLE>
<CAPTION>
                                   NUMBER OF   WEIGHTED AVERAGE
                                     SHARES     EXERCISE PRICE
                                   ---------   ----------------
<S>                                <C>         <C>
Outstanding at December 31, 2005    489,700          $1.62
                                    -------          -----
Options granted                       5,000           3.92
Options exercised                    (2,500)          1.29
Options canceled                         --             --
                                    -------          -----
Outstanding at April 1, 2006        492,200          $1.65
                                    -------          -----
Options granted                          --             --
Options exercised                   (11,667)          0.59
Options canceled                         --             --
                                    -------          -----
Outstanding at July 1, 2006         480,533          $1.67
                                    -------          -----
</TABLE>

The following table summarizes information about stock options outstanding at
July 1, 2006:

<TABLE>
<CAPTION>
                          OPTIONS OUTSTANDING
                  ----------------------------------       VESTED OPTIONS
                                 WEIGHTED              ----------------------
                                 AVERAGE    WEIGHTED                 WEIGHTED
                   NUMBER OF    REMAINING    AVERAGE                  AVERAGE
    RANGE OF         SHARES      CONTRACT   EXERCISE      NUMBER     EXERCISE
EXERCISE PRICES   OUTSTANDING      LIFE       PRICE    EXERCISABLE     PRICE
---------------   -----------   ---------   --------   -----------   --------
<S>               <C>           <C>         <C>        <C>           <C>
$0.51--$1.00        230,200        5.37       $0.70      230,200       $0.70
$1.01--$2.00        103,333        5.33       $1.34       90,833       $1.32
$2.01--$5.91        147,000        4.55       $3.42      102,000       $3.48
                    -------        ----       -----      -------       -----
$0.51--$5.91        480,533        5.11       $1.67      423,033       $1.50
                    -------        ----       -----      -------       -----
</TABLE>

The aggregate intrinsic value of outstanding options as of July 1, 2006 was
$978,024. The intrinsic value of options exercised during the three and six
month periods ended July 1, 2006 was $35,818 and $41,843, respectively. The
intrinsic value of options vested during the three and six month periods ended
July 1, 2006 was $0 and $2,166, respectively.


                                       10

<PAGE>

The following table summarizes the status of the Company's non-vested shares
since December 31, 2005:

<TABLE>
<CAPTION>
                                    NON-VESTED OPTIONS
                                  ----------------------
                                               WEIGHTED
                                  NUMBER OF     AVERAGE
                                    SHARES    FAIR VALUE
                                  ---------   ----------
<S>                               <C>         <C>
NON-VESTED AT DECEMBER 31, 2005    58,333        $1.36
Granted                             5,000         1.68
Vested                               (833)        0.42
Forfeited                              --           --
                                   ------        -----
NON-VESTED AT APRIL 1, 2006        62,500        $1.40
                                   ------        -----
Granted                                --           --
Vested                             (5,000)        1.68
Forfeited                              --           --
                                   ------        -----
NON-VESTED AT JULY 1, 2006         57,500        $1.37
                                   ------        -----
</TABLE>

As of July 1, 2006, there was $68,580 of total unrecognized compensation cost
related to nonvested share-based compensation arrangements granted under the
Company's stock plans. That cost is expected to be recognized over a
weighted-average period of 2.5 years.

Cash received from option exercises under all share based payment arrangements
for the three and six months ended July 1, 2006 was $6,934 and $10,158,
respectively. The actual tax benefit realized for the tax deductions from option
exercises of the share-based payment arrangements for the three and six months
ended July 1, 2006 totaled $2,000 and $4,000, respectively.

NOTE C -- FINANCING ARRANGEMENTS

Notes payable and long-term debt consist of the following:

<TABLE>
<CAPTION>
                                               July 1,    December 31,
                                                2006          2005
                                             ----------   ------------
<S>                                          <C>          <C>
Term loans payable to TD Banknorth N.A.(1)   $5,105,618    $4,843,765
Mortgage loan payable to TD Banknorth N.A     1,561,546     1,584,876
Mortgage loan payable to bank (2)             1,751,626     1,783,642
Equipment notes payable                          13,014        16,099
Capital lease obligations                       844,815       967,201
                                             ----------    ----------
                                              9,276,619     9,195,583
Less - current portion of long-term debt      1,573,719     1,404,053
                                             ----------    ----------
                                             $7,702,900    $7,791,530
                                             ==========    ==========
</TABLE>

(1)  On March 30, 2006, the Company borrowed $818,877 under its equipment line
     of credit with TD Banknorth N.A. to finance the purchase price of
     previously acquired equipment. On April 6,


                                       11

<PAGE>

     2006, the Company converted the borrowing into a term note which is payable
     in 60 payments of $16,338 including interest at 7.21%.

(2)  The mortgage provides that the payment will be adjusted by the bank every 5
     years commencing on March 1, 2006 to reflect interest at the Five year
     Federal Home Loan Bank "Classic Credit Rate" plus 2.75%. On March 1, 2006,
     the interest rate was adjusted by the bank to 7.625%.

On July 26, 2006, the Company's equipment line of credit with TD Banknorth N.A.
was amended to provide up to $4,700,000 for eligible equipment purchases during
the period August 1, 2006 through July 31, 2007. Amounts advanced on the
equipment line of credit will convert to a term note on July 31, 2007, unless
converted earlier at the option of the Company, with monthly payments of
principal and interest in an amount to amortize the then existing principal
balance in 60 equal monthly payments including interest at the then FHLBB 5 year
Regular Amortizing Advance Rate plus 2%.

NOTE D - DEFINED BENEFIT PENSION PLAN

The following table sets forth the components of net periodic benefit cost (in
thousands):

<TABLE>
<CAPTION>
                                             For the three        For the six
                                              months ended        months ended
                                           -----------------   -----------------
                                           July 1,   July 2,   July 1,   July 2,
                                             2006      2005      2006      2005
                                           -------   -------   -------   -------
<S>                                        <C>       <C>       <C>       <C>
Components of net periodic benefit cost:
   Interest cost                            $ 85     $  89      $ 170    $  178
   Expected return on plan assets            (81)      (74)      (162)     (148)
   Amortization of actuarial loss             28        35         56        70
                                            ----     -----      -----    ------
   Net periodic pension expense             $ 32     $  50      $  64    $  100
                                            ====     =====      =====    ======
</TABLE>

Company contributions paid to the plan for the three and six month periods ended
July 1, 2006 totaled $154,258 and $225,822, respectively.

NOTE E - INCOME TAXES

The provision for (benefit from) income taxes is as follows
(in thousands):

<TABLE>
<CAPTION>
                                             For the three        For the six
                                              months ended        months ended
                                           -----------------   -----------------
                                           July 1,   July 2,   July 1,   July 2,
                                             2006      2005      2006      2005
                                           -------   -------   -------   -------
<S>                                        <C>       <C>       <C>       <C>
Current provision                            $213     $ 113      $362     $ 374
Deferred provision (benefit)                   44      (900)       74      (900)
                                             ----     -----      ----     -----
Total provision (benefit)                    $257     ($787)     $436     ($526)
                                             ====     =====      ====     =====
</TABLE>

The provision for the three month and six month periods ended July 1, 2006, was
calculated using an effective rate of 38%. The current provision for the three
month and six month periods ended July 2, 2005,


                                       12
<PAGE>

was calculated using an effective rate of 21.3% which reflected the alternative
minimum tax.

As of July 2, 2005, the Company had concluded that it was more likely than not
that the Company would realize all of its deferred tax assets and reversed its
valuation allowance by $900,000.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

Sales.

Sales to the Company's principal markets are as follows (in thousands):

<TABLE>
<CAPTION>
                          For the three months ended   For the six months ended
                          --------------------------   ------------------------
                               July 1,   July 2,           July 1,   July 2,
                                 2006      2005              2006      2005
                               -------   -------           -------   -------
<S>                       <C>            <C>           <C>           <C>
Aerospace customers             $6,148    $3,810           $12,018   $ 7,429
Non-aerospace customers          3,433     5,089             7,158     9,487
                                ------    ------           -------   -------
                                $9,581    $8,899           $19,176   $16,916
                                ======    ======           =======   =======
</TABLE>

The Company's sales increased $682,000, or 7.7%, and $2,260,000, or 13.4%, for
the three and six month periods ended July 1, 2006, respectively, as compared to
the three and six month periods ended July 2, 2005. Sales to aerospace customers
increased $2,338,000, or 61.4%, and $4,589,000, or 61.8%, for the three and six
month periods ended July 1, 2006, respectively, as compared to the three and six
month periods ended July 2, 2005, due primarily to the increase in shipments of
commercial and military jet engine parts. Sales to non-aerospace customers
decreased $1,656,000, or 32.5%, and $2,329,000, or 24.5%, for the three and six
month periods ended July 1, 2006, respectively, as compared to the three and six
month periods ended July 2, 2005, primarily due to decreased sales in the Apex
product line.

Sales and sales increases (decreases) by product line for the three and six
month periods ended July 1, 2006 compared to the three and six month periods
ended July 2, 2005 were as follows (in thousands):

<TABLE>
<CAPTION>
                      For the Three Months Ended
                      --------------------------
                      July 1,   July 2,
    Product Line        2006      2005    Change
    ------------      -------   -------   ------
<S>                   <C>       <C>       <C>
Apex Machine Tool      $4,724   $5,412    $ (688)
Precision Aerospace     3,709    2,398     1,311
Gros-Ite Spindles       1,148    1,089        59
                       ------   ------    ------
   Total               $9,581   $8,899    $  682
                       ======   ======    ======
</TABLE>

<TABLE>
<CAPTION>
                       For the Six Months Ended
                      --------------------------
                      July 1,   July 2,
    Product Line        2006      2005    Change
    ------------      -------   -------   ------
<S>                   <C>       <C>       <C>
Apex Machine Tool     $ 9,566   $10,457   $ (891)
Precision Aerospace     7,324     4,404    2,920
Gros-Ite Spindles       2,286     2,055      231
                      -------   -------   ------
   Total              $19,176   $16,916   $2,260
                      =======   =======   ======
</TABLE>


                                       13

<PAGE>

Sales for the Apex Machine Tool product line decreased $688,000, or 12.7%, and
$891,000, or 8.5%, for the three and six months ended July 1, 2006,
respectively, compared to the three and six months ended July 2, 2005. This
decrease was due to decreased demand on certain tooling programs from a customer
in the consumer products industry, partially offset by an increase in demand for
tooling from aerospace customers. Based on projections from this consumer
products customer for the remainder of 2006, the Company anticipates a demand at
a reduced level from the first six months ended July 1, 2006. Based on
projections from its other customers, the Company anticipates the demand from
such customers for the remainder of 2006 will be at least as strong as the first
six months of 2006 for its Apex Machine Tool product line.

Sales for the Precision Aerospace product line increased $1,311,000, or 54.7%,
and $2,920,000, or 66.3%, for the three and six month periods ended July 1,
2006, compared to the three and six month periods ended July 2, 2005. The
increase was due to increased shipments of jet engine parts to its major
aerospace customers. The Company's sales backlog for Precision Aerospace
increased by $6.9 million from December 31, 2005 to July 1, 2006. The Company
believes that aerospace industry demand for large commercial engines will
continue to increase. The Company took delivery of a $500,000 machine in the 2nd
quarter and has another $500,000 machine on order for delivery in the 3rd
quarter of 2006 to increase its machining capacity for large commercial jet
engine parts. The Company also has on order 3 machines at a total cost of $1
million to be delivered in the third quarter for production of both commercial
and military jet engine parts.

Sales for the Gros-Ite Spindles product line increased $59,000, or 5.4%, and
$231,000, or 11.2%, for the three and six month periods ended July 1, 2006,
respectively, compared to the three and six month periods ended July 2, 2005.
The increase in sales was due to increased demand for new spindles, as well as
the increased demand for the repair of all brands of spindles. The Company
believes that the increased demand will continue for the remainder of 2006,
based on indications from its customers.

As of July 1, 2006, sales backlog was approximately $28,300,000 compared to
$21,700,000 as of December 31, 2005. Backlog consists of accepted purchase
orders that are cancelable by the customer without penalty, except for payment
of costs incurred. The Company presently expects to


                                       14

<PAGE>

complete approximately $14,000,000 of its July 1, 2006 backlog during the
remainder of the 2006 fiscal year. The remaining $14,300,000 of backlog is
deliverable in fiscal year 2007 and beyond.

Cost of Sales. Cost of sales as a percentage of sales decreased to 81.6% from
82.7%, for the three months ended July 1, 2006, compared to the three month
period ended July 2, 2005. Cost of sales as a percentage of sales decreased to
82.3% from 83.0%, for the six months ended July 1, 2006, compared to the six
month period ended July 2, 2005. The decreases were due primarily to a more
profitable mix of product produced and sold in the Precision Aerospace product
line and sales levels increasing in 2006 greater than manufacturing costs due to
the fixed element or semi-variable element of certain manufacturing costs.

Selling, General & Administrative Expenses. Selling, general and administrative
expenses increased approximately $124,000, or 14.7%, and $411,000 or 26.2%, for
the three and six month periods ended July 1, 2006, compared to the three and
six month periods ended July 2, 2005.

Selling, general and administrative expenses for the three and six months ended
July 1, 2006 include the following costs which were not incurred during the
three and six months ended July 2, 2005 (in thousands):

<TABLE>
<CAPTION>
                                Three months   Six months
                                    ended         ended
                                   July 1,       July 1,
                                    2006          2006
                                ------------   ----------
<S>                             <C>            <C>
Plant reconditioning & moving       $ 26          $115
Professional fees                     --           112
Bonuses                               90           115
                                    ----          ----
                                    $116          $342
                                    ====          ====
</TABLE>

Interest Expense. Interest expense increased approximately $4,000, or 2.5%, and
decreased by $3,000, or 0.9%, for the three and six month periods ended July 1,
2006, respectively, compared to the three and six month periods ended July 2,
2005. The increase for the three month period was due to increased debt levels
while the decrease for the six month period was due to lower debt levels in the
1st quarter partially offset by increased debt levels in the 2nd quarter.

Income Taxes. The provision for the three month period ended July 1, 2006, was
calculated using an effective rate of 38.0%. The current provision for the three
month period ended July 2, 2005, reflects the alternative minimum tax at 21.3%.

Liquidity and Capital Resources.

Net cash provided by operating activities of $585,000 for the six months ended
July 1, 2006, resulted primarily from cash earnings and an increase in accounts
payable, partially offset by increases in accounts receivable and decreases in
accrued liabilities and customer advances. Accounts receivable increased by
$1,165,000 since December 31, 2005, due to the increase in sales to certain
aerospace customers. Payment terms for these aerospace customers are longer than
for other customers.


                                       15
<PAGE>

Accounts payable increased $553,000, reflecting an increase in material
purchases for the Precision Aerospace product line.

Net cash used in investing activities of $1,850,000 for the six months ended
July 1, 2006, consisted primarily of expenditures for machinery and equipment.

Net cash provided by financing activities of $95,000 for the six months ended
July 1, 2006, resulted from a borrowing for machinery and equipment financing,
partially offset by the repayment of long-term bank debt.

Net cash provided by operating activities of $1,895,000 for the six months ended
July 2, 2005, resulted primarily from cash earnings, a decrease in accounts
receivable and the collection of refundable income taxes, partially offset by an
increase in inventory and prepaid expenses and a decrease in customer advances.
Accounts receivable decreased $491,000 since January 1, 2005, due to the
collection of several large contracts delivered in December 2004, while
inventories and prepaid expense increased $440,000 and $281,000, respectively.
Customer advances decreased $200,000 since January 1, 2005, due to shipment on
certain large contracts in the first six months of 2005.

Net cash used in investing activities of $916,000 for the six months ended July
2, 2005, consisted of expenditures for machinery and computer equipment.

Net cash used in financing activities of $727,000 for the six months ended July
2, 2005, resulted from repayments of debt with cash generated from operating
activities.

On March 30, 2006, the Company borrowed $818,877 under its equipment line of
credit with TD Banknorth N.A. to finance the purchase price of previously
acquired equipment. On April 6, 2006, the Company converted the borrowing into a
term note which is payable in 60 payments of $16,338 including interest at
7.21%.

On July 26, 2006, the Company's equipment line of credit with TD Banknorth N.A.
was amended to provide up to $4,700,000 for eligible equipment purchases during
the period August 1, 2006 through July 31, 2007. Amounts advanced on the
equipment line of credit will convert to a term note on July 31, 2007, unless
converted earlier at the option of the Company, with monthly payments of
principal and interest in an amount to amortize the then existing principal
balance in 60 equal monthly payments including interest at the then FHLBB 5 year
Regular Amortizing Advance Rate plus 2%.


                                       16

<PAGE>

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Preparation of the Company's consolidated financial statements requires
management to make estimates and assumptions that affect the reported amounts of
assets, liabilities, revenues and expenses. Management's Discussion and Analysis
and Note A to the Consolidated Financial Statements in the Company's Annual
Report, incorporated by reference in Form 10-K for the Company's fiscal year
2005, describe the significant accounting policies used in preparation of the
Consolidated Financial Statements. Actual results in these areas could differ
from management's estimates.

Accounts receivable- The Company evaluates its allowance for doubtful accounts
by considering the age of each invoice, the financial strength of the customer,
the customer's past payment record and subsequent payments.

Inventories- The Company has specifically identified certain inventory as
obsolete or slow moving and provided a full reserve for these parts. The
assumption is that these parts may not be sold. The assumptions and the
resulting reserve have been accurate in the past, and are not likely to change
materially in the future.

Stock-Based Compensation Expense- Effective January 1, 2006, we account for
employee stock-based compensation costs in accordance with Statement of
Financial Accounting Standards No. 123R, "Share-Based Payment" ("SFAS 123R"). We
utilize the Black-Scholes option pricing model to estimate the fair value of
employee stock based compensation at the date of grant, which requires the input
of highly subjective assumptions, including expected volatility and expected
life. Further, as required under SFAS 123R, we now estimate forfeitures for
options granted, which are not expected to vest. Changes in these assumptions
can materially affect the measure of estimated fair value of our share-based
compensation. Estimates of fair value are not intended to predict actual future
events or the value ultimately realized by persons who receive equity awards.

Pension- The Company maintains a defined benefit pension plan. Assumptions used
in accounting for the plan include the discount rate and expected rate of return
on plan assets. The assumptions are determined based on appropriate market
indicators and are evaluated each year as of the Plan's measurement date. A
change in either of these assumptions would have an effect on the Company's net
periodic benefit cost.

Income Taxes - The Company recognizes deferred tax assets when, based upon
available evidence, realization is more likely than not.


                                       17

<PAGE>

All statements other than historical statements contained in this Form 10-Q
constitute "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Without limitation, these forward
looking statements include statements regarding the Company's business strategy
and plans, statements about the adequacy of the Company's working capital and
other financial resources, statements about the Company's bank agreements,
statements about the Company's backlog, statements about the Company's action to
improve operating performance, and other statements herein that are not of a
historical nature. These forward-looking statements rely on a number of
assumptions concerning future events and are subject to a number of
uncertainties and other factors, many of which are outside of the Company's
control, that could cause actual results to differ materially from such
statements. These include, but are not limited to, 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; the Company's ability to effectively use business-to-business tools
on the Internet to improve operating results; the adequacy of the Company's
revolving credit facility and other sources of capital; and other factors
discussed in the Company's annual report on Form 10-K for the fiscal year ended
December 31, 2005. The Company disclaims any intention or obligation to update
or revise any forward-looking statements, whether as a result of new
information, future events or otherwise.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest rate risk related to its notes payable and long-term debt is the
primary source of financial market risk to the Company.

The interest rate risk is limited, however, to the exposure related to those
debt instruments and credit facilities which are tied to market rates. The
Company's only variable rate debt instruments are the revolving line of credit
and the equipment line of credit. A hypothetical increase of 1% in the interest
rate would have no effect on the revolving line of credit or the equipment line
of credit since the current balances are $0.

The Company also maintains two mortgage loans at fixed interest rates, however,
the interest rates are adjusted every five years to reflect a current index rate
plus certain percentages. See Note C to the Condensed Consolidated Financial
Statements. A hypothetical increase of 1% in the interest rate at the March 2011
adjustment date for the first mortgage will increase annual interest expense at
that time by approximately $14,000. A hypothetical increase of 1% in the
interest rate at the April 2009 adjustment date for the TD Banknorth N.A.
mortgage will increase annual interest expense at that time by approximately
$14,000.


                                       18

<PAGE>

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of disclosure controls and procedures

The Company's management, with the participation of the Chief Executive Officer
and Chief Financial Officer of the Company, evaluated the effectiveness of the
Company's disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) as of July 1, 2006 and, based on this evaluation,
concluded that the Company's disclosure controls and procedures are functioning
in an effective manner in that they provide reasonable assurance that the
information required to be disclosed by the Company in the reports that it files
or submits under the Exchange Act, is recorded, processed, summarized and
reported, within the time periods specified in the SEC's rules and forms.

Change in internal controls

No changes in the Company's internal control over financial reporting occurred
during the six months ended July 1, 2006, that have materially affected, or are
reasonably likely to materially affect, the Company's internal control over
financial reporting.


                                       19

<PAGE>

                          PART II -- OTHER INFORMATION

ITEM 1A. RISK FACTORS

There have been no material changes to the factors disclosed in Item 1A. Risk
Factors in our Annual Report on Form 10-K for the year ended December 31, 2005.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

On June 7, 2006 the Company held its annual meeting of shareholders. The
following directors were elected at the meeting:

<TABLE>
<CAPTION>
                       Votes       Votes
     Director         Cast For    Withheld
     --------        ---------   ---------
<S>                  <C>         <C>
Joseph Lebel         2,587,270   1,487,543
Dominick A. Pagano   2,636,281   1,438,532
Stephen J. Raffay    2,587,270   1,487,543
Ross C. Towne        2,636,070   1,438,743
Daniel C. Tracy      2,587,267   1,487,546
</TABLE>

At the same meeting the appointment of Carlin, Charron & Rosen LLP as auditors
for the Company for the fiscal year ending December 30, 2006 was ratified with a
vote of 3,355,312 for, 157,503 against and 561,998 abstained.

ITEM 6. EXHIBITS

<TABLE>
<S>    <C>
3.1*   EDAC's Amended and Restated Articles of Incorporation

3.2*   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.
</TABLE>

*    Incorporated by reference


                                       20

<PAGE>

                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                        EDAC TECHNOLOGIES CORPORATION


August 1, 2006                          By /s/ Glenn L. Purple
                                           -------------------------------------
                                           Glenn L. Purple, Chief Financial
                                           Officer and duly authorized officer


                                       21

<PAGE>

                                  EXHIBIT INDEX

<TABLE>
<CAPTION>
NUMBER                           DESCRIPTION
------                           -----------
<S>      <C>
 3.1     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.
</TABLE>

(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.


                                       22