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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 
 FORM 10-Q
  ý
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 March 31, 2007
  o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
  0-14275
 EDAC Technologies Corporation
  Wisconsin
    
    39-1515599(State or other jurisdiction of
    
    (I.R.S. employerincorporation or organization)
    
    Identification No.)
 1806 New Britain Avenue, Farmington, CT 06032
  (860) 677-2603
 X
  X
 X




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March 31,
    
    
    December 30,2007
    
    
    2006(Unaudited)
    
    
    (Audited)ASSETSCURRENT ASSETS:Cash
    
    $
    637,441
    
    
    $
    925,197Trade accounts receivable, (net
of allowance for doubtful accounts
of $110,000 as of March 31, 2007
and December 30, 2006)
    
    
    7,215,186
    
    
    
    7,331,226Inventories, net
    
    
    8,632,477
    
    
    
    8,234,866Prepaid expenses and other
    
    
    244,227
    
    
    
    56,438Refundable income taxes
    
    
    140,650
    
    
    
    140,650Deferred income taxes
    
    
    211,394
    
    
    
    211,394TOTAL CURRENT ASSETS
    
    
    17,081,375
    
    
    
    16,899,771PROPERTY, PLANT, AND EQUIPMENT
    
    
    31,225,772
    
    
    
    30,646,744less-accumulated depreciation
    
    
    20,873,938
    
    
    
    20,315,93810,351,834
    
    
    
    10,330,806DEFERRED INCOME TAXES
    
    
    1,022,786
    
    
    
    1,248,786OTHER ASSETS
    
    
    80,292
    
    
    
    86,001TOTAL ASSETS
    
    $
    28,536,287
    
    
    $
    28,565,364
  2




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March 31,
    
    
    December 30,2007
    
    
    2006(Unaudited)
    
    
    (Audited)LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIES:Revolving line of credit
    
    $
    850,000
    
    
    $
    1,000,000Current portion of long-term debt
    
    
    1,926,779
    
    
    
    1,895,436Trade accounts payable
    
    
    4,541,348
    
    
    
    4,806,090Accrued employee compensation
and amounts withheld
    
    
    1,454,907
    
    
    
    1,511,820Other accrued expenses
    
    
    509,640
    
    
    
    355,415Customer advances
    
    
    55,377
    
    
    
    120,767TOTAL CURRENT LIABILITIES
    
    
    9,338,051
    
    
    
    9,689,528LONG-TERM DEBT,
less current portion
    
    
    7,586,279
    
    
    
    8,081,720OTHER LONG-TERM LIABILITIES
    
    
    163,981
    
    
    
    163,981SHAREHOLDERS EQUITY:Common stock, par value $.0025 per
share; 10,000,000 shares authorized;
issued  4,538,103 on March
31, 2007 and 4,526,437 on
December 30, 2006
    
    
    11,345
    
    
    
    11,316Additional paid-in capital
    
    
    9,567,222
    
    
    
    9,530,688Retained earnings
    
    
    3,352,450
    
    
    
    2,571,17212,931,017
    
    
    
    12,113,176Less: accumulated other
comprehensive loss
    
    
    1,483,041
    
    
    
    1,483,041TOTAL SHAREHOLDERS EQUITY
    
    
    11,447,976
    
    
    
    10,630,135TOTAL LIABILITIES AND
SHAREHOLDERS EQUITY
    
    $
    28,536,287
    
    
    $
    28,565,364
  3




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For the quarter endedMarch 31,
    
    April 1,2007
    
    
    2006Sales
    
    $
    12,315,638
    
    
    $
    9,595,579Cost of sales
    
    
    9,968,094
    
    
    
    7,970,934Gross profit
    
    
    2,347,544
    
    
    
    1,624,645Selling, general and
administrative expenses
    
    
    917,625
    
    
    
    1,013,865Income from operations
    
    
    1,429,919
    
    
    
    610,780Non-operating income (expense):Interest expense
    
    
    (194,436
    )
    
    
    (153,399
    )Other
    
    
    4,795
    
    
    
    14,388Income before income taxes
    
    
    1,240,278
    
    
    
    471,769Provision for income taxes
    
    
    459,000
    
    
    
    179,000Net income
    
    $
    781,278
    
    
    $
    292,769Income per share data (Note A):Basic income per share
    
    $
    0.17
    
    
    $
    0.06Diluted income per share
    
    $
    0.16
    
    
    $
    0.06
  4




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For the three months endedMarch 31,
    
    
    April 1,2007
    
    
    2006Operating Activities:Net income
    
    $
    781,278
    
    
    $
    292,769Adjustments to reconcile net income
to net cash provided by (used in)
operating activities:Depreciation and amortization
    
    
    563,709
    
    
    
    494,708Deferred income taxes
    
    
    226,000
    
    
    
    Compensation expense pursuant
to stock options
    
    
    13,806
    
    
    
    9,185Excess tax benefit from
share-based compensation
    
    
    (8,000
    )
    
    
    (2,000
    )Changes in working capital items
    
    
    (702,180
    )
    
    
    (892,718
    )Net cash provided by (used in)
operating activities
    
    
    874,613
    
    
    
    (98,056
    )Investing Activities:Additions to property, plant
and equipment
    
    
    (579,028
    )
    
    
    (1,023,009
    )Net cash used in investing
activities
    
    
    (579,028
    )
    
    
    (1,023,009
    )Financing Activities:Decrease in revolving
line of credit
    
    
    (150,000
    )
    
    
    Repayments of long-term debt
    
    
    (464,098
    )
    
    
    (354,742
    )Borrowing on long-term debt
    
    
    
    
    
    
    818,877Proceeds from exercise of options
and issuance of common stock
    
    
    22,757
    
    
    
    3,224Excess tax benefit from
share-based compensation
    
    
    8,000
    
    
    
    2,000Net cash (used in) provided by
financing activities
    
    
    (583,341
    )
    
    
    469,359Decrease in cash
    
    
    (287,756
    )
    
    
    (651,706
    )Cash at beginning of period
    
    
    925,197
    
    
    
    2,468,964Cash at end of period
    
    $
    637,441
    
    
    $
    1,817,258Supplemental Disclosure of
Cash Flow Information:Interest paid
    
    $
    194,436
    
    
    $
    153,399Income taxes paid
    
    
    38,973
    
    
    
    105,025
  5




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Regulation S-X
  March 31,
    
    
    December 30,2007
    
    
    2006Raw materials
    
    $
    2,089,669
    
    
    $
    1,972,871Work-in-progress
    
    
    5,933,017
    
    
    
    5,636,354Finished goods
    
    
    1,259,765
    
    
    
    1,271,2089,282,451
    
    
    
    8,880,433Reserve for excess
and obsolete
    
    
    (649,974
    )
    
    
    (645,567
    )Inventories, net
    
    $
    8,632,477
    
    
    $
    8,234,866
  For the quarter endedMarch 31,
    
    
    April 1,2007
    
    
    2006Basic:Average common shares outstanding
    
    
    4,532,687
    
    
    
    4,506,145Diluted:Dilutive effect of
stock options
    
    
    296,791
    
    
    
    285,590Average common shares diluted
    
    
    4,829,478
    
    
    
    4,791,735Options excluded since anti-dilutive
    
    
    32,000
    
    
    
    92,000
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March 31,
    
    
    December 30,2007
    
    
    2006Revolving line of credit
    
    $
    850,000
    
    
    $
    1,000,000Term notes
    
    
    5,592,451
    
    
    
    5,970,644Mortgage loans
    
    
    3,227,840
    
    
    
    3,257,660Equipment note payable
    
    
    8,154
    
    
    
    9,806Capital lease obligations
    
    
    684,613
    
    
    
    739,04610,363,058
    
    
    
    10,977,156Less  revolving line of credit
    
    
    850,000
    
    
    
    1,000,000Less  current portion of long-term
debt
    
    
    1,926,779
    
    
    
    1,895,436$
    7,586,279
    
    
    $
    8,081,720
   For the quarter endedMarch 31,
    
    
    April 1,2007
    
    
    2006Components of net periodic benefit cost:Interest cost
    
    $
    88
    
    
    $
    85Expected return on plan assets
    
    
    (90
    )
    
    
    (81
    )Amortization of actuarial loss
    
    
    10
    
    
    
    28Net periodic pension expense
    
    $
    8
    
    
    $
    32
    For the quarter endedMarch 31,
    
    
    April 1,2007
    
    
    2006Current provision
    
    $
    233
    
    
    $
    179Deferred provision
    
    
    226
    
    
    
    Total provision
    
    $
    459
    
    
    $
    179
  8




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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 Sales.
  For the quarter endedMarch 31,
    
    
    April 1,2007
    
    
    2006Aerospace customers
    
    $
    9,180
    
    
    $
    5,870Non-aerospace customers
    
    
    3,136
    
    
    
    3,726$
    12,316
    
    
    $
    9,596
   For the Three Months EndedMar. 31,
    
    
    Apr. 1,Product Line
    
    2007
    
    
    2006
    
    
    ChangePrecision Aerospace
    
    $
    6,366
    
    
    $
    3,615
    
    
    $
    2,751Apex Machine Tool
    
    
    5,101
    
    
    
    4,843
    
    
    
    258Gros-Ite Spindles
    
    
    849
    
    
    
    1,138
    
    
    
    (289
    )Total
    
    $
    12,316
    
    
    $
    9,596
    
    
    $
    2,720
  9




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Cost of Sales.
 Selling, General & Administrative Expenses.
 Interest Expense.
 Income Taxes.
 10




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Liquidity and Capital Resources.
       CRITICAL ACCOUNTING POLICIES AND ESTIMATES
    11




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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  12




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ITEM 4. CONTROLS AND PROCEDURES
 Evaluation of disclosure and procedures
  ITEM 4T. CONTROLS AND PROCEDURES
 Changes in internal control over financial reporting
   ITEM 1A. RISK FACTORS
  13




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ITEM 6.
    
    EXHIBITS3.1
    
    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.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.
    EDAC TECHNOLOGIES CORPORATIONMay 3, 2007
    By:
    /s/ Glenn L. PurpleGlenn L. Purple, Chief FinancialOfficer and duly authorized officer 14




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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.
  15