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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO SECTIONS
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 28, 2002.
[ ] 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)
Wisconsin 39-1515599
- ------------------------------- -------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization Identification No.)
1806 New Britain Avenue, Farmington, Connecticut 06032
- ---------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (860) 677-2603
Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange
Title of Each Class on Which Registered
------------------- ---------------------
N/A N/A
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.0025 par value
------------------------------
(Title of class)
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 if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2). Yes [ ] No [X].
As of June 28, 2002, 4,416,038 shares of Common Stock were outstanding, and
the aggregate market value of the Common Stock (based upon the $0.84 closing
price on that date on the OTC Bulletin Board) held by nonaffiliates (excludes
shares reported as beneficially owned by directors and officers - does not
constitute an admission as to affiliate status) was approximately $2,741,911.
DOCUMENTS INCORPORATED BY REFERENCE
Part of Form 10-K
Into Which Portions of
DOCUMENT Document are Incorporated
-------- -------------------------
Annual Report to Shareholders for the
fiscal year ended December 28, 2002 Part I and Part II
Proxy Statement relating to
2003 Annual Meeting of Shareholders Part III
All statements other than historical statements contained in this annual report
on Form 10-K or deemed to be contained herein due to incorporation by reference
to a different document 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 actions 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 reduce costs; 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. 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.
PART I
ITEM 1. BUSINESS.
General
The accompanying consolidated financial statements include EDAC Technologies
Corporation ("We", "EDAC" or the "Company") and its wholly-owned subsidiaries,
Gros-Ite Industries, Inc. and Apex Machine Tool Company, Inc. We provide
complete design, manufacture and service meeting the precision requirements of
some of the most exacting customers in the world for tooling, fixtures, molds,
jet engine components and machine spindles.
Information relating to our four business segments is contained in
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and in Note I to the Consolidated Financial Statements in our 2002
Annual Report to Shareholders incorporated by reference herein.
Products
We currently offer design and manufacturing services for a wide range of
industries in areas such as special tooling, equipment and gauges, and
components used in the manufacture, assembly and inspection of jet engines. We
also specialize in the design and repair of precision spindles. Spindles are an
integral part of numerous machine tools which are found in virtually any type of
manufacturing environment.
We maintain manufacturing facilities with computerized, numerically
controlled machining centers, and grinding, welding, painting and assembly
capabilities. Products manufactured by us include precision rings, and other
components for jet engines, industrial spindles and specialized machinery
designed by us or others and other assemblies requiring close tolerances.
Patents and Trademarks
We currently hold no patents or registered trademarks, tradenames or similar
intellectual property. We believe that the nature of our business presently does
not require the development of patentable products or registered tradenames or
trademarks.
Marketing and Competition
The Company developed its high skill level serving the aerospace industry
for over 50 years. For 2002, approximately 54% of our sales were to United
Technologies Corporation ("UTC"). We provide a range of components, tooling,
fixtures and design services for UTC's Pratt & Whitney and other divisions. In
addition, we have expanded our commitment to serving the manufacturing needs of
a broad base of industrial customers. The loss of UTC as a customer, or a
significant decrease in the amount of business we do with UTC, would have a
material adverse effect on our business.
The competition for design, manufacturing and service in precision machining
and machine tools consists of independent firms, many of which are smaller than
us. This allows us to bring a broader spectrum of support to our customers who
are consistently looking for ways to consolidate their vendor base. We also
compete against the in-house manufacturing and service capability of our larger
customers. We believe that the trend by large manufacturers to outsource
activities that are outside their core competency is an opportunity for us.
The market for our products and precision machining capabilities continues
to change with the development of more sophisticated use of business-to-business
tools on the internet. We are actively involved in securing new business leads
on the internet and have participated in internet auctions and research for
quoting opportunities.
We believe that we have a distinct competitive advantage in our ability to
provide high quality, high precision, quick turnaround support to customers from
design to delivery. Our experience and reputation in the demanding aerospace
business provides an extra level of expertise in meeting our customers'
requirements. We believe our commitment to continuous improvement and the latest
technology will generate productivity improvements required to respond to the
increasing price pressure in the competitive marketplace.
Backlog
Our backlog as of December 28, 2002, was approximately $18,500,000 compared
to $29,000,000 as of December 29, 2001. The decrease is primarily due to the
sales backlog decrease in the Engineered Precision Components group. Backlog
consists of accepted purchase orders that are cancelable by the customer without
penalty, except for payment of costs incurred, and may involve delivery times
that extend over periods as long as three years. We presently expect to complete
approximately $9,000,000 of our December 28, 2002 backlog during the 2003 fiscal
year.
We maintain a website with the address www.edactechnologies.com. We are not
including the information contained on our website as part of, or incorporating
it by reference into, this Annual Report on Form 10-K.
Employees
As of February 18, 2003, we had approximately 194 employees.
ITEM 2. PROPERTIES.
The following table describes the location and general character of our
principal plants and other materially important physical properties. The
properties at 1790 and 1798 New Britain Avenue were renovated in 1997 to improve
production, increase capacity and improve the appearance of both the interior
and exterior. The building at 1806 New Britain Avenue was constructed in 1995
for our Large Machining operation.
Square Owned or Principal
Address Feet Leased Activity
- ------- ------ -------- ---------
1790 New Britain Ave. 47,000 Owned Manufacturing
Farmington, CT. 06032 (1) Design engineering
services
1798 New Britain Ave. 20,800 Owned Design and manufacture
Farmington, CT. 06032 (1) of spindles
1806 New Britain Ave. 19,200 Owned Manufacturing
Farmington, CT. 06032 (1)
21 Spring Lane 44,000 Owned Vacated and listed
Farmington, CT 06032 (1)(2) for sale
1838 New Britain Ave. 3,000 Leased Warehouse
Farmington, CT. 06032
(1) Property subject to mortgage securing certain corporate indebtedness.
(2) Property held for sale as a result of restructuring activities discussed in
Note A to the Consolidated Financial Statements.
ITEM 3. LEGAL PROCEEDINGS.
We are not a party to any material pending legal proceedings.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
On October 22, 2002, we held our annual meeting of shareholders. The following
directors were elected at the meeting.
Votes Cast
Votes Against or
Director Cast For Withheld
-------- -------- ----------
John Kucharik 3,318,067 920,606
John Moses 3,871,458 367,215
Dominick A. Pagano 3,725,373 513,300
Stephen J. Raffay 3,332,268 906,405
Ross C. Towne 3,871,458 367,215
Daniel C. Tracy 3,828,218 410,455
At the same meeting the appointment of Deloitte & Touche LLP as auditors for the
Company for the fiscal year ending December 28, 2002 was ratified with a vote of
3,292,773 for, 945,735 against and 115,000 abstained.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
Information in response to this item is incorporated herein by reference to
"Market Information" on page 3 of our 2002 Annual Report to Shareholders.
ITEM 6. SELECTED FINANCIAL DATA.
Information in response to this item is incorporated herein by reference to
"Selected Financial Information" on page 4 of our 2002 Annual Report to
Shareholders.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
Information in response to this item is incorporated herein by reference to
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" on pages 5 through 14 of our 2002 Annual Report to Shareholders.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.
We do not invest in derivative financial instruments, other financial
instruments or derivative commodity instruments. Information in response to this
item is incorporated herein by reference to "Management's Discussion and
Analysis of Financial Condition and Results of Operations" on pages 5 through 14
of our 2002 Annual Report to Shareholders and to Note C to the Consolidated
Financial Statements included therein.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Information in response to this item is incorporated herein by reference to
pages 15 through 37 of our 2002 Annual Report to Shareholders.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
Information in response to this item was previously reported by the
Company in a Current Report on Form 8-K filed by the Company on May 21, 2002.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Information in response to this item is incorporated herein by reference to
"Election of Directors" in our definitive Proxy Statement for our 2003 Annual
Meeting of Shareholders ("EDAC's 2003 Proxy Statement"), which will be filed
within 120 days after the end of our fiscal year ended December 28, 2002.
We have adopted a written code of ethics that applies to all of our
employees, including but not limited to, our principal executive officer,
principal financial officer, and principal accounting officer or controller, or
persons performing similar functions. A copy of our code of ethics is available
without charge by writing to: Glenn L. Purple, Secretary, EDAC Technologies
Corporation, 1806 New Britain Avenue, Farmington, Connecticut 06032.
ITEM 11. EXECUTIVE COMPENSATION.
Information in response to this item is incorporated herein by reference to
"Executive Compensation" in our 2003 Proxy Statement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Information in response to this item is incorporated herein by reference to
"Security Ownership" in our 2003 Proxy Statement.
The following table sets forth certain information regarding our equity
compensation plans as of December 28, 2002.
EQUITY COMPENSATION PLAN INFORMATION
Number of securities
remaining available for
future issuance under
Number of securities to Weighted-average equity compensation
be issued upon exercise exercise price of plans (excluding
of outstanding options, outstanding options, securities reflected in
warrants and rights warrants and rights column (a))
Plan category (a) (b) (c)
------------- ----------------------- -------------------- ------------------------
Equity compensation plans
approved by security
holders -- -- --
Equity compensation plans
not approved by
security holders(1) 644,200(2) $1.36 664,300(3)
------- ----- -------
Total 644,200 $1.36 664,300
======= ===== =======
(1) Consists of the following equity compensation plans: the 1996 Stock Option
Plan (the "1996 Plan"), the 1998 Stock Option Plan (the "1998 Plan"), the
2000 Employee Stock Option Plan (the "2000 Plan") and the 2000-B Employee
Stock Option Plan (the "2000-B Plan" and, together with the 1996 Plan, the
1998 Plan and the 2000-B Plan, the "Plans"). Each of the Plans provides for
the grant of stock options to any director, officer or employee of the
Company or any of its subsidiaries. The 2000 Plan also provides for the
grant of stock options to consultants of the Company and its subsidiaries.
Each of the Plans is administered by the Compensation Committee of the
Company's Board of Directors. Options are generally granted for a term of
ten years. The exercise price of options granted under each of the Plans
must not be less than the fair market value of the Company's common stock on
the date of grant. The 1996 Plan, the 1998 Plan and the 2000 Plan each
provide for the issuance of up to 329,500, 330,000 and 300,000 shares of
common stock, respectively, upon the exercise of options granted under such
plans. The 2000-B Plan provides for the issuance of up to 500,000 shares of
common stock upon the exercise of options granted under such plan.
(2) Consists of outstanding options to purchase 90,200 shares under the 1996
Plan, 71,600 shares under the 1998 Plan, 178,000 shares under the 2000 Plan
and 304,400 shares under the 2000-B Plan.
(3) Includes 228,300 shares issuable under the 1996 Plan, 138,400 shares
issuable under the 1998 Plan, 102,000 shares issuable under the 2000 Plan
and 195,600 shares issuable under the 2000-B Plan.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Information in response to this item is incorporated herein by reference to
"Certain Relationships and Related Transactions" in our 2003 Proxy Statement.
ITEM 14. CONTROLS AND PROCEDURES
(a) Evaluation of disclosure and procedures
The Chief Executive Officer and Chief Financial Officer of the Company
evaluated the Company's disclosure controls and procedures (as defined in Rules
13a-14(c) under the Securities Exchange Act of 1934 (the "Exchange Act")) as of
a date within 90 days of the filing date of this Annual Report on Form 10-K and
concluded that the Company's disclosure controls and procedures are functioning
in an effective manner to ensure 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.
(b) Change in internal controls
There were no significant changes in internal controls or in other factors
that could significantly affect the internal controls subsequent to the date of
their evaluation.
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULE, AND REPORTS ON FORM 8-K.
(a) Documents filed:
1. Financial Statements.
The financial statements required to be filed by Item 8 hereof have
been incorporated by reference to EDAC's 2002 Annual Report to
Shareholders and consist of the following:
Independent Auditors' Report
Report of Independent Public Accountants
Consolidated Statements of Operations--Years Ended December 28,
2002, December 29, 2001 and December 30, 2000.
Consolidated Balance Sheets--As of December 28, 2002 and
December 29, 2001.
Consolidated Statements of Cash Flows--Years Ended December 28,
2002, December 29, 2001 and December 30, 2000.
Consolidated Statements of Changes in Shareholders' Equity
(Deficit) and Comprehensive Income (Loss)--Years Ended December
28, 2002, December 29, 2001 and December 30, 2000.
Notes to Consolidated Financial Statements.
2. Financial statement schedule.
The following financial statement schedule of EDAC is included in
Item 15(d) hereof:
Independent Auditors' Report on Schedule
Report of Independent Public Accountants on Schedule
Schedule II: Valuation and qualifying accounts
All other schedules for which provisions are made in the applicable
accounting regulation of the Securities and Exchange Commission are not required
under the related instructions or are inapplicable, and therefore have been
omitted.
(b) Reports on Form 8-K
EDAC did not file any reports on Form 8-K during the last quarter of the
period covered by this Form 10-K.
(c) Exhibits
See Exhibit Index included as the last part of this Report, which Index
is incorporated herein by this reference.
(d) Financial Statements and Schedules
Refer to Item 15(a) above for listing of financial statements and
schedule.
INDEPENDENT AUDITORS' REPORT ON SCHEDULE
To the Shareholders of
EDAC Technologies Corporation
Farmington, Connecticut
We have audited the consolidated financial statements of EDAC Technologies
Corporation and subsidiaries as of December 28, 2002, and for the year then
ended, and have issued our report thereon dated February 7, 2003 (except with
respect to the matters discussed in Note C and the third paragraph of Note A as
to which the date is April 10, 2003, which report expresses an unqualified
opinion and includes explanatory paragraphs relating to (i) the adoption of
Statement of Financial Accounting Standards No. 142, "Goodwill and Other
Intangible Assets" and (ii) the transitional disclosures for 2001 and 2000
related to the adoption of SFAS No. 142); such consolidated financial statements
and report are included in your 2002 annual report to shareholders and are
incorporated herein by reference. Our audit also included the 2002 financial
statement schedule of EDAC Technologies Corporation. This financial statement
schedule is the responsibility of the Company's management. Our responsibility
is to express an opinion based on our audit. In our opinion, the 2002 financial
statement schedule, when considered in relation to the 2002 basic consolidated
financial statements taken as a whole, presents fairly, in all material
respects, the information set forth therein. The financial statement schedule
for the years ended December 29, 2001 and December 30, 2000 was audited by other
auditors who have ceased operations. Those auditors expressed an opinion, in
their report dated February 8, 2002, that such 2001 and 2000 financial statement
schedule, when considered in relation to the 2001 and 2000 basic consolidated
financial statements taken as a whole, presented fairly, in all material
respects, the information set forth therein.
/s/ Deloitte & Touche LLP
Deloitte & Touche LLP
Hartford, Connecticut
February 7, 2003 (except with respect to the matters discussed in Note C and the
third paragraph of Note A as to which the date is April 10, 2003)
COPY
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON SCHEDULE
To the Shareholders and Board of Directors of
Edac Technologies Corporation:
We have audited in accordance with auditing standards generally accepted in the
United States, the consolidated financial statements included in Edac
Technologies Corporation's annual report to shareholders incorporated by
reference in this Form 10-K, and have issued our report thereon dated February
8, 2002 (except with respect to the matters discussed in Notes A and K, as to
which the date is April 11, 2002). Our audit was made for the purpose of forming
an opinion on those statements taken as a whole. The schedule presented on
Schedule II of this Form 10-K is the responsibility of the Company's management
and is presented for purposes of complying with the Securities and Exchange
Commission's rules and is not part of the basic financial statements. This
schedule has been subjected to the auditing procedures applied in the audit of
the basic financial statements and, in our opinion, fairly states in all
material respects the financial data required to be set forth therein in
relation to the basic financial statements taken as a whole.
/s/ Arthur Andersen LLP
Hartford, Connecticut
February 8, 2002 (except with respect to the matters discussed in Notes A and K,
as to which the date is April 11, 2002)
READERS OF THIS SCHEDULE SHOULD BE AWARE THAT THIS REPORT IS A COPY OF A
PREVIOUSLY ISSUED ARTHUR ANDERSEN LLP REPORT AND THAT THIS REPORT HAS NOT BEEN
REISSUED OR UPDATED SINCE FEBRUARY 8, 2002 AND ARTHUR ANDERSEN LLP COMPLETED ITS
LAST POST-AUDIT REVIEW OF DECEMBER 29, 2001 CONSOLIDATED FINANCIAL INFORMATION
ON APRIL 11, 2002. ARTHUR ANDERSEN LLP HAS CEASED OPERATIONS AND HAS NOT
CONSENTED TO THE INCORPORATION BY REFERENCE OF THIS REPORT INTO THE COMPANY'S
FORM 10-K.
COL. A COL. B COL. C COL. D COL. E
- --------------------------------- ---------- ------------------------------ ---------- -----------
ADDITIONS
Balance at Charged to Charged to
Beginning Costs and Other Accounts- Deductions Balance at
DESCRIPTION of Year Expenses Describe Describe End of Year
- --------------------------------- ---------- ---------- --------------- ---------- -----------
YEAR ENDED DECEMBER 28, 2002:
Reserves and allowances deducted
from asset accounts:
Allowance for
doubtful accounts $ 332,000 $ 73,780 $ 0 132,965(1) $ 272,815
Allowance for excess and obsolete
inventory 1,034,182 423,212 0 691,000(2) 766,394
YEAR ENDED DECEMBER 29, 2001:
Reserves and allowances deducted
from asset accounts:
Allowance for
doubtful accounts $ 200,000 $ 132,000 $ 0 $ 0 $ 332,000
Allowance for excess and obsolete
inventory 1,055,000 0 0 20,818(2) 1,034,182
YEAR ENDED DECEMBER 30, 2000:
Reserves and allowances deducted
from asset accounts:
Allowance for
doubtful accounts 207,000 13,474 0 20,474(1) 200,000
Allowance for excess and obsolete
inventory 1,029,000 56,498 0 30,498(2) 1,055,000
(1) Represents write-off of specific accounts receivable.
(2) Represents disposition of inventory reserved against.
SIGNATURES
Pursuant to the requirements of section 13 or 15(d) 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
BY /s/ Dominick A. Pagano
-----------------------
Dominick A. Pagano
President and Chief
Executive Officer
Date: April 14, 2003
Each person whose signature appears below hereby appoints Dominick A. Pagano and
Glenn L. Purple, and each of them individually, his true and lawful
attorney-in-fact, with power to act with or without the other and with full
power of substitution and resubstitution, in any and all capacities, to sign any
and all amendments to the Form 10-K and file the same with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or their substitutes, may lawfully cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
Signatures Title Date
/s/ Dominick A. Pagano President, Chief Executive April 9, 2003
- -------------------------------------------- Officer and Director
Dominick A. Pagano (Principal Executive Officer)
/s/ Glenn L. Purple Chief Financial Officer, Vice April 9, 2003
- -------------------------------------------- President-Finance and Secretary
Glenn L. Purple (Principal Financial and Accounting
Officer)
/s/ John M. Kucharik Director April 10, 2003
- --------------------------------------------
John M. Kucharik
/s/ John Moses Director April 11, 2003
- --------------------------------------------
John Moses
/s/ Stephen J. Raffay Director April 9, 2003
- --------------------------------------------
Stephen J. Raffay
/s/ Ross C. Towne Director April 9, 2003
- --------------------------------------------
Ross C. Towne
/s/ Daniel C. Tracy Director, Chairman of the Board April 9, 2003
- --------------------------------------------
Daniel C. Tracy
CERTIFICATION
OF CHIEF EXECUTIVE OFFICER
EDAC TECHNOLOGIES CORPORATION
PURSUANT TO SECTION 302 OF THE SARBANES OXLEY ACT OF
2002 (CHAPTER 63, TITLE 18 U.S.C. SECTION 1350 (A) AND (B))
I, Dominick A. Pagano, President and Chief Executive Officer of EDAC
Technologies Corporation, certify that:
1. I have reviewed this annual report on Form 10-K of EDAC Technologies
Corporation;
2. Based on my knowledge, this annual report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this
annual report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
(a) designed such disclosure controls and procedures to ensure
that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this annual report is being prepared;
(b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the filing date of
this annual report (the "Evaluation Date"); and
(c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;
5. The registrant's other certifying officer and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):
(a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
(b) any fraud, whether or not material, that involves
management or other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officer and I have indicated in
this annual report whether there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Date: April 14, 2003
/s/ Dominick A. Pagano
----------------------
Dominick A. Pagano
President and Chief Executive Officer
CERTIFICATION
OF CHIEF FINANCIAL OFFICER, VICE PRESIDENT - FINANCE
EDAC TECHNOLOGIES CORPORATION
PURSUANT TO SECTION 302 OF THE SARBANES OXLEY ACT OF
2002 (CHAPTER 63, TITLE 18 U.S.C. SECTION 1350 (A) AND (B))
I, Glenn L. Purple, Chief Financial Officer, Vice President-Finance of EDAC
Technologies Corporation, certify that:
1. I have reviewed this annual report on Form 10-K of EDAC Technologies
Corporation;
2. Based on my knowledge, this annual report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this
annual report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
(a) designed such disclosure controls and procedures to ensure
that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this annual report is being prepared;
(b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the filing date of
this annual report (the "Evaluation Date"); and
(c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;
5. The registrant's other certifying officer and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):
(a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
(b) any fraud, whether or not material, that involves
management or other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officer and I have indicated in
this annual report whether there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Date: April 14, 2003
/s/ Glenn L. Purple
-------------------
Glenn L. Purple
Chief Financial Officer, Vice President-Finance
EXHIBIT INDEX
Exhibit SEQUENTIAL
Number PAGE NUMBER
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3.1 EDAC's Amended and Restated Articles of incorporation (1)
3.2 EDAC's Amended and Restated By-Laws (14)
4.1 EDAC's Amended and Restated Articles of incorporation (1)
4.2 Sections of EDAC's By-Laws (14)
10.1 Gros-Ite division Pension Plan (1)
10.2 EDAC Technologies Corporation Employee Stock Ownership Trust, (2)
effective May 1, 1989
10.3 EDAC Technologies Corporation 1996 Stock Option Plan (3)
10.4 Asset Purchase Agreement dated as of May 13, 1998 by and among EDAC, (4)
Apex Acquisition Corp., Apex Machine Tool Company, Inc., Gerald S.
Biondi, James G. Biondi and Michael Biondi.
10.5 Purchase Agreement dated as of May 13, 1998 by and between EDAC, (4)
Gerald S. Biondi, James G. Biondi and Michael Biondi providing for
the acquisition of the real estate located at 17 and 21 Spring Lane,
Farmington, Connecticut.
10.6 Guaranty Agreement dated as of June 30, 1998 by and among EDAC, as (4)
guarantor, Apex Acquisition Corporation, Gerald S. Biondi, James G.
Biondi and Michael Biondi pursuant to which EDAC has guaranteed all
of the obligations of Apex Acquisition Corporation under the real
estate purchase agreement.
10.7 Promissory note payable by Apex Acquisition Corporation to Gerald S. (4)
Biondi, James G. Biondi and Michael Biondi under the real estate
purchase agreement.
10.8 Purchase agreement dated as of May 13, 1998 by and between EDAC, (4)
Gerald S. Biondi and James G. Biondi providing for the acquisition,
after the satisfaction
of certain pre-closing conditions, by EDAC Technologies Corporation
or its wholly-owned subsidiary of the property located at 55 Spring
Lane, Farmington, Connecticut.
10.9 Agreement Regarding Purchase Price Adjustments dated September 24, (5)
1998 by and between EDAC, Apex Machine Tool Company, Inc., Biondi
Tool Company, Inc., Gerald S. Biondi, James G. Biondi and Michael
Biondi.
10.10 EDAC Technologies Corporation 1998 Stock Option Plan (6)
10.11 Employment contract, dated November 20, 1998, between EDAC and Edward (6)
J. McNerney
10.12 Change of Control Agreement, dated January 29, 1999, between EDAC (7)
Technologies Corporation and Ronald G. Popolizio
10.13 Employment contract, dated June 23, 1999, between EDAC and Ronald G. (8)
Popolizio
10.14 Termination and Release Agreement, dated October 22, 1999, between (9)
EDAC and Edward J. McNerney
10.15 Intentionally omitted
10.16 Consulting Agreement between John DiFrancesco and EDAC dated June 1, (10)
2000
10.17 Loan and Security Agreement dated September 29, 2000 among General (11)
Electric Capital Corp., EDAC and Apex Machine Tool Company Inc. as
borrowers
10.18 Leading Borrower's and Second Borrower's Revolving Credit Notes dated (11)
as of September 29, 2000 by and between General Electric Capital
Corporation and EDAC
10.19 Term Note A-1 dated September 29, 2000 by and between General (11)
Electric Capital Corporation and EDAC Technologies Corporation
10.20 Term Note A-2 dated September 29, 2000 by and between General (11)
Electric Capital Corporation and Apex Machine Tool Company, Inc.
10.21 Pledge Agreement dated September 29, 2000 by and between General (11)
Electric Capital Corporation and EDAC
10.22A Escrow and Forbearance Agreement dated September 29, 2000 by and (11)
between Fleet National Bank and EDAC
10.22B Amended and Restated Term Note dated September 29, 2000 by and (11)
between Fleet National Bank and EDAC
10.22C Security Agreement dated September 29, 2000 by and between Fleet (11)
National Bank and EDAC
10.22D Mortgage Modification Agreement dated September 29, 2000 by and (11)
between Fleet National Bank and EDAC
10.23 Intercreditor and Subordination Agreement dated September 29, 2000 by (11)
and between Fleet National Bank, General Electric Capital Corp. and
EDAC
10.24 Agreement for the Purchase and Sale of Real Estate Dated September (12)
28, 2000 by and between EDAC and Globe Corporation
10.25 EDAC Technologies Corporation 2000 Stock Option Plan (12)
10.26 EDAC Technologies Corporation 2000-B Stock Option Plan (12)
10.27 Employment contract between EDAC and Richard A. Dandurand dated (12)
December 1, 2000
10.28 Change of Control Agreement dated December 1, 2000 between EDAC and (12)
Richard A. Dandurand
10.29 Second Amendment of Note dated December 28, 2000 by and among Apex (12)
Acquisition Corp. and Gerald S. Biondi, James G. Biondi and Michael
Biondi.
10.30 Loan Agreement dated February 5, 2001 by and between Farmington (13)
Savings Bank and EDAC.
10.31 Commercial Mortgage Note dated February 5, 2001 by and between (13)
Farmington Savings Bank and EDAC.
10.32 Open-End Mortgage Deed and Security Agreement dated February 5, 2001 (13)
by and between Farmington Savings Bank and EDAC.
10.33 Environmental Indemnification Agreement dated February 5, 2001 by and (13)
between Farmington Savings Bank and EDAC.
10.34 Letter dated May 14, 2002 regarding the Change of Control Agreement (15)
dated January 29, 1999 between EDAC and Ronald G. Popolizio.
10.35 Letter dated May 14, 2002 regarding the Change of Control Agreement (15)
dated December 1, 2000 between EDAC and Richard A. Dandurand.
10.36 Form of Agreements regarding Indemnification between EDAC and each of (15)
its directors and executive officers.
10.37 Consulting Agreement dated July 18, 2002 between EDAC and Dominick A. (16)
Pagano.
10.38 Separation Agreement and General Release dated July 29, 2002 between (16)
EDAC and Richard A. Dandurand.
10.39 Employment Agreement dated August 13, 2002 between EDAC and Dominick (16)
A. Pagano.
10.40* Forbearance Agreement dated November 26, 2002 by and between EDAC and
General Electric Capital Corp.
10.41 Separation Agreement and General Release dated July 29, 2002 between
EDAC and Ronald G. Popolizio
11 Earnings per share information has been incorporated by reference to
EDAC's 2002 Annual Report to Shareholders
13 EDAC's 2002 Annual Report to Shareholders
21 Subsidiaries
23.1 Consent of Deloitte & Touche LLP
23.2 Notice of Inability to Obtain Consent of Arthur Andersen LLP
99.1 Certification Pursuant to 18 U.S.C. Section 1350
As Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
99.2 Certification Pursuant to 18 U.S.C. Section 1350
As Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
(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 Annual Report on Form
10-K for the year ended December 31, 1989.
(3) Exhibit incorporated by reference to the Company's Annual Report on Form
10-K for the year ended December 31, 1996.
(4) Exhibit incorporated by reference to the Company's Current Report on Form
8-K dated June 30, 1998.
(5) Exhibit incorporated by reference to the Company's Quarterly Report on Form
10-Q for the quarter ended October 3, 1998.
(6) Exhibit incorporated by reference to the Company's Annual Report on Form
10-K for the year ended January 2, 1999.
(7) Exhibit incorporated by reference to the Company's Quarterly Report on Form
10-Q for the quarter ended April 3, 1999.
(8) Exhibit incorporated by reference to the Company's Quarterly Report on Form
10-Q for the quarter ended July 3, 1999.
(9) Exhibit incorporated by reference to the Company's Quarterly Report on Form
10-Q for the quarter ended October 2, 1999.
(10) Exhibit incorporated by reference to the Company's Quarterly Report on Form
10-Q for the quarter ended July 1, 2000.
(11) Exhibit incorporated by reference to the Company's Quarterly Report on Form
10-Q for the quarter ended September 30, 2000.
(12) Exhibit incorporated by reference to the Company's Annual Report on Form
10-K for the year ended December 30, 2000.
(13) Exhibit incorporated by reference to the Company's Quarterly Report on Form
10-Q for the quarter ended March 31, 2001.
(14) Exhibit incorporated by reference to the Company's Current Report on Form
8-K dated February 19, 2002.
(15) Exhibit incorporated by reference to the Company's Quarterly Report on Form
10-Q dated June 30, 2002.
(16) Exhibit incorporated by reference to the Company's Quarterly Report on Form
10-Q dated September 28, 2002.
* Confidential treatment requested as to certain portions.