Back to GetFilings.com
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 April 2, 2005
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period _____________ 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, 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 an accelerated
filer (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]
APPLICABLE ONLY TO CORPORATE ISSUERS:
On April 25, 2005 there were outstanding 4,489,203 shares of the
Registrant's Common Stock, $0.0025 par value per share.
PART I FINANCIAL INFORMATION
ITEM 1 FINANCIAL STATEMENTS
EDAC TECHNOLOGIES CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
April 2, January 1,
2005 2005
(Unaudited) (Audited)
----------- -----------
ASSETS
CURRENT ASSETS:
Cash $ 315,952 $ 549,198
Trade accounts receivable, net 6,012,572 6,573,114
Inventories, net 4,900,692 4,454,937
Prepaid expense and other 367,352 57,290
Refundable income taxes - 330,869
Deferred income taxes 733,583 733,583
----------- -----------
TOTAL CURRENT ASSETS 12,330,151 12,698,991
----------- -----------
PROPERTY, PLANT, AND EQUIPMENT 26,093,436 25,877,359
less-accumulated depreciation 17,645,994 17,297,856
----------- -----------
8,447,442 8,579,503
----------- -----------
OTHER ASSETS:
Deferred income taxes 766,417 766,417
Other 148,634 102,183
----------- -----------
$21,692,644 $22,147,094
=========== ===========
The accompanying notes are an integral part of these condensed consolidated
financial statements.
EDAC TECHNOLOGIES CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
April 2, January 1,
2005 2005
(Unaudited) (Audited)
------------ ------------
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Revolving line of credit $ 600,000 $ 580,555
Current portion of long-term debt 1,124,452 1,030,282
Trade accounts payable 2,847,471 3,249,892
Accrued employee compensation
and amounts withheld 1,256,393 1,228,975
Other accrued expenses 722,282 502,450
Customer advances 85,167 363,745
------------ ------------
TOTAL CURRENT LIABILITIES 6,635,765 6,955,899
------------ ------------
LONG-TERM DEBT,
less current portion 7,447,659 8,564,927
------------ ------------
OTHER LONG-TERM LIABILITIES 1,423,054 1,423,054
------------ ------------
SHAREHOLDERS' EQUITY:
Common stock, par value $.0025 per
share; 10,000,000 shares authorized;
issued - 4,489,203 on April 2, 2005
and 4,444,438 on January 1, 2005 11,223 11,111
Additional paid-in capital 9,397,481 9,377,508
Accumulated deficit (1,319,342) (2,282,044)
------------ ------------
8,089,362 7,106,575
Less: accumulated other
comprehensive loss 1,903,196 1,903,196
treasury stock, 0 shares on
April 2, 2005 and 235 shares
on January 1, 2005 - 165
------------ ------------
6,186,166 5,203,214
------------ ------------
$ 21,692,644 $ 22,147,094
============ ============
The accompanying notes are an integral part of these condensed consolidated
financial statements.
EDAC TECHNOLOGIES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
For the quarter ended
--------------------------
April 2, April 3,
2005 2004
----------- -----------
Sales $ 8,016,174 $ 7,306,493
Cost of sales 6,668,892 6,461,993
----------- -----------
Gross profit 1,347,282 844,500
Selling, general and
administrative expenses 726,891 637,669
----------- -----------
Income from operations 620,391 206,831
Non-operating income (expense):
Interest expense (160,335) (159,093)
Gain on debt forgiveness 750,000 250,000
Other 13,646 -
----------- -----------
Income before income taxes 1,223,702 297,738
Provision for income taxes 261,000 9,000
----------- -----------
Net income $ 962,702 $ 288,738
----------- -----------
Income per share data (Note A):
Basic income per share $ 0.22 $ 0.06
----------- -----------
Diluted income per share $ 0.20 $ 0.06
----------- -----------
The accompanying notes are an integral part of these condensed consolidated
financial statements.
EDAC TECHNOLOGIES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the quarter ended
--------------------------
April 2, April 3,
2005 2004
----------- -----------
Operating Activities:
Net income $ 962,702 $ 288,738
Depreciation and amortization 506,991 468,506
Gain on debt forgiveness (750,000) (250,000)
Gain on sale of property, plant & equipment (10,000) -
Changes in working capital items (298,155) (1,196,409)
----------- -----------
Net cash provided by (used in)
operating activities 411,538 (689,165)
----------- -----------
Investing Activities:
Additions to property, plant and equipment (352,214) (76,886)
Proceeds from sale of property,
plant and equipment 10,000 -
----------- -----------
Net cash used in investing activities (342,214) (76,886)
----------- -----------
Financing Activities:
Increase in revolving line of credit 19,445 1,612,995
Repayments of long-term debt (273,098) (2,311,972)
Borrowings on long-term debt - 1,659,000
Deferred loan fees (69,167) (30,783)
Proceeds from exercise of options
and issuance of common stock 20,250 -
----------- -----------
Net cash (used in) provided by
financing activities (302,570) 929,240
----------- -----------
(Decrease) increase in cash (233,246) 163,189
Cash at beginning of period 549,198 94,151
----------- -----------
Cash at end of period $ 315,952 $ 257,340
=========== ===========
Supplemental Disclosure of
Cash Flow Information:
Interest paid $ 188,678 $ 169,902
Income taxes refunded, net of payments 299,387 -
The accompanying notes are an integral part of these condensed consolidated
financial statements.
EDAC TECHNOLOGIES CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
APRIL 2, 2005
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 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 quarter ended April 2, 2005 are not necessarily
indicative of the results that may be expected for the year ending December 31,
2005. For further information, refer to the financial statements and footnotes
thereto included in the Company's annual report on Form 10-K for the fiscal year
ended January 1, 2005.
Inventories: Inventories are stated at the lower of cost (first-in, first-out
method) or market. As of April 2, 2005 and January 1, 2005, inventories
consisted of the following:
April 2, January 1,
2005 2005
----------- -----------
Raw materials $ 1,038,265 $ 893,452
Work-in-progress 2,910,960 2,812,222
Finished goods 1,590,854 1,392,283
----------- -----------
5,540,079 5,097,957
Reserve for excess and obsolete (639,387) (643,020)
----------- -----------
Inventories, net $ 4,900,692 $ 4,454,937
=========== ===========
Income per share: The number of shares used in the income per common share
computations for the quarters ended April 2, 2005 and April 3, 2004 are as
follows:
For the quarter ended
--------------------------
April 2, April 3,
2005 2004
--------- ---------
Basic:
Average common
shares outstanding 4,459,203 4,444,438
Diluted:
Dilutive effect of stock options 259,026 172,043
--------- ---------
Average common shares diluted 4,718,229 4,616,481
========= =========
Options excluded since anti-dilutive 42,000 97,000
========= =========
The Company uses the intrinsic value method of accounting for stock options. Had
compensation cost for the Company's employee stock option plans been determined
based on the fair value at the grant dates of awards under these plans
consistent with the methodology prescribed by SFAS No. 123, the Company's net
income would have been adjusted to reflect the following pro forma amounts:
For the quarter ended
--------------------------
April 2, April 3,
2005 2004
----------- -----------
Income:
As reported $ 962,702 $ 288,738
Effect of stock-based employee
compensation expense determined under
fair valuation method for all awards,
net of any related tax effects (1,906) (15,538)
----------- -----------
Pro forma $ 960,796 $ 273,200
=========== ===========
Income per common share:
Basic:
As reported $ 0.22 $ 0.06
Pro forma 0.22 0.06
Diluted:
As reported $ 0.20 $ 0.06
Pro forma 0.20 0.06
Comprehensive Income: Comprehensive income is the same as net income for the
three month periods ended April 2, 2005 and April 3, 2004 since the valuation
used in connection with determining the amount of the change in the minimum
pension liability is determined at the end of the year.
Income Taxes: The effective income tax rate of 21.3% for the three month period
ended April 2, 2005, reflects the alternative minimum tax. The effective income
tax rate of 3.0% for the three month period ended April 3, 2004 reflects minimum
federal and state taxes and the utilization of alternative minimum tax net
operating loss carryforwards.
Treasury stock: On October 11, 2002, the Company terminated its Employee Stock
Ownership Plan and distributed the accounts of all participants in the form of
shares of the Company. The fractional share portion of each account was paid in
cash by the Company. The fractional shares totaling 235 shares were transferred
back to the Company as treasury stock in 2003. The Company reissued the 235
shares of treasury stock in connection with the exercise of a stock option in
the first quarter of 2005.
New Accounting Standards: In December 2004, the Financial Accounting Standards
Board issued SFAS No. 123 (revised 2004), "Share-Based Payment".
SFAS 123 (revised 2004) requires companies to recognize in the statement of
operations the grant-date fair value of stock options and other equity-based
compensation. That cost will be recognized over the period during which an
employee is required to provide service in exchange for the award, usually the
vesting period. Subsequent changes in fair value during the requisite service
period, measured at each reporting date, will be recognized as compensation cost
over that period. In April 2005, the SEC extended the effective date for SFAS
No. 123 (revised 2004) for public companies, to the beginning of a registrant's
next fiscal year that begins after June 15, 2005. The Company will be required
to adopt SFAS No. 123 (revised 2004) in its first quarter of fiscal 2006. The
Company is evaluating the impact of the adoption of SFAS No. 123 (revised 2004)
on the Company's financial position and results of operations.
NOTE B -- FINANCING ARRANGEMENTS
Notes payable and long-term debt consist of the following:
April 2, January 1,
2005 2005
----------- -----------
Revolving line of credit (1) $ 600,000 $ 4,585,024
Term loans payable to Banknorth N.A. (1) 4,784,945 -
Term loans payable to former primary lender (1) - 995,531
Note payable to former lender (2) - 750,000
Mortgage loan to Banknorth N.A 1,617,497 1,628,509
Mortgage loan to other lender 1,827,893 1,842,653
Equipment notes payable - 675
Capital lease obligations 341,776 373,372
----------- -----------
9,172,111 10,175,764
Less - revolving line of credit 600,000 (1) 580,555
Less - current portion of long-term debt 1,124,452 (1) 1,030,282
----------- -----------
$ 7,447,659 $ 8,564,927
=========== ===========
(1) On January 3, 2005, the Company refinanced all of its loan facilities with
its former primary lender with financing from Banknorth N.A. (the "January 2005
Refinancing"). The new credit facility includes a revolving line of credit which
provides for borrowings up to $5,000,000, a term loan of $5,000,000 and an
equipment line of credit which provides for borrowings up to $1,500,000. The
revolving line of credit is limited to an amount determined by a formula based
on percentages of receivables and inventories and bears interest at the rate of
the lender's prime lending rate plus 1%, adjusted daily (6.75%
at April 2, 2005). The revolving line of credit expires on July 31, 2005. The
Company anticipates that Banknorth N.A. will renew the credit facility prior to
that date. The term loan is payable in 60 monthly payments of $97,560 including
interest at 6.3%. The equipment line of credit will provide advances to purchase
eligible equipment and bears interest at the rate of the lender's prime lending
rate plus 1%, adjusted daily (6.75% at April 2, 2005). The equipment line of
credit will convert to a term note on July 31, 2005, 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 2.5%. The new credit facility gives
Banknorth N.A. a first security interest in accounts receivable, inventories,
equipment and other assets and prohibits the Company from paying cash dividends.
As of April 2, 2005, the Company was in compliance with the related debt
covenants. The classification of long-term and revolving debt has been
determined in the accompanying January 1, 2005 condensed consolidated balance
sheet after consideration of the January 2005 Refinancing.
(2) On April 1, 2005, in accordance with an April 3, 2003 agreement with the
Company's former lender, the balance of the $1 million non-interest bearing note
payable to the former lender (which had been reduced by $250,000 to $750,000 on
April 1, 2004) was forgiven in its entirety since certain events, including a
change of control, sale of the Company or liquidation, had not occurred or been
initiated as of that date. This forgiveness of debt of $750,000 was recorded by
the Company as a gain in the first quarter of 2005.
NOTE C - EMPLOYMENT CONTRACT
Effective February 13, 2005, the Company entered into an amended and restated
employment contract with the Company's Chief Executive Officer which extended
the term of the contract through December 31, 2005.
NOTE D - DEFINED BENEFIT PENSION PLAN
The following table sets forth the components of net periodic benefit cost (in
thousands):
For the quarter ended
---------------------
April 2, April 3,
2005 2004
--------- --------
Components of net periodic benefit cost:
Interest cost $ 89 $ 91
Expected return on plan assets (74) (70)
Amortization of actuarial loss 35 32
---- ----
Net periodic pension expense $ 50 $ 53
==== ====
Company contributions paid to the plan for the three months ended April 2, 2005
totaled $67,280.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Sales.
Sales for first quarter of 2005 to non-aerospace customers exceeded sales to
aerospace customers, whereas in prior fiscal years and for the quarter ended
April 3, 2004, sales to aerospace customers exceeded sales to non-aerospace
customers.
Sales to the Company's principal markets are as follows (in thousands):
For the quarter ended
----------------------
April 2, April 3,
2005 2004
------- --------
Non-aerospace customers..... $4,397 $3,534
Aerospace customers......... 3,619 3,772
------ ------
$8,016 $7,306
====== ======
The Company's sales increased $710,000, or 9.7%, for the three months ended
April 2, 2005, as compared to the three month period ended April 3, 2004. Sales
to non-aerospace customers increased $863,000, or 24.4% for the three months
ended April 2, 2005, as compared to the three month period ended April 3, 2004,
primarily because of increased sales to machine tool customers. Sales to
aerospace customers decreased $153,000, or 4.2% for the three months ended April
2, 2005, as compared to the three month period ended April 3, 2004, due to
decreased sales of non-jet engine parts offset slightly by an increase in sales
of jet engine parts
As of April 2, 2005, sales backlog was approximately $20,600,000 compared to
$18,300,000 as of January 1, 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 complete approximately $13,400,000 of
its April 2, 2005 backlog during the remainder of the 2005 fiscal year. The
remaining $7,200,000 of backlog is deliverable in fiscal year 2006 and beyond.
Cost of Sales. Cost of sales as a percentage of sales decreased to 83.2% from
88.4%, for the three month period ended April 2, 2005, compared to the three
month period ended April 3, 2004. The decrease was due to (i) sales levels
increasing in 2005 greater than manufacturing costs due to the fixed element of
certain manufacturing costs and (ii) improved production management resulting in
increased production efficiency and cost control. The decrease was partially
offset by higher maintenance and expendable tooling costs.
Selling, General & Administrative Expenses. Selling, general and administrative
expenses increased by approximately $89,000, or 14.0%, for the three month
period ended April 2, 2005, compared to the three month period ended April 3,
2004. The increase in these costs was
mainly the result of increased bonus and profit sharing expense, commission
expense and amortization expense.
Interest Expense. Interest expense increased by approximately $1,000, or 0.8%,
for the three month period ended April 2, 2005, compared to the three month
period ended April 3, 2004. This slight increase was due to lower debt levels
offset by increased interest rates.
Gain on Debt Forgiveness. The Company recorded a gain of $750,000 in the first
quarter of 2005 and $250,000 in the first quarter of 2004 reflecting the
forgiveness of the non-interest bearing note with a former lender. This
reduction was in accordance with the Company's April 3, 2003 agreement with the
former lender. (See Note B to condensed consolidated financial statements).
Income Taxes: The effective income tax rate of 21.3% for the three month period
ended April 2, 2005, reflects the alternative minimum tax. The effective income
tax rate of 3.0% for the three month period ended April 3, 2004 reflects minimum
federal and state taxes and the utilization of alternative minimum tax net
operating loss carryforwards.
Liquidity and Capital Resources.
Net cash provided by operating activities of $412,000 for the three months ended
April 2, 2005 resulted primarily from net income adjusted for non-cash expenses,
a decrease in accounts receivable and the collection of refundable income taxes
partially offset by an increase in inventory and prepaid expenses and decreases
in accounts payable and customer advances. Accounts receivable decreased
$561,000 since January 1, 2005 due to the collection of several large contracts
delivered in December 2004, while accounts payable decreased $402,000 reflecting
slightly quicker payment. Customer advances decreased $279,000 since January 1,
2005, due to shipment on certain large contracts in the first quarter of 2005.
The Company is able to borrow against eligible accounts receivable through its
revolving line of credit.
Net cash used in investing activities of $342,000 for the three months ended
April 2, 2005, consisted of expenditures for machinery and computer equipment.
Net cash used in financing activities of $303,000 for the three months ended
April 2, 2005, resulted from repayments of debt with cash generated from
operating activities.
Net cash used in operating activities of $689,000 for the three months ended
April 3, 2004, resulted primarily from increases in accounts receivable,
inventory and prepaid expenses partially offset by an increase in accounts
payable.
Net cash used in investing activities of $77,000 for the three months ended
April 3, 2004, consisted of expenditures for machinery and computer equipment.
Net cash provided by financing activities of $929,000 for the three months ended
April 3, 2004 resulted primarily from borrowings on the Company's revolving line
of credit partially offset by repayments of long-term debt.
On January 3, 2005, the Company refinanced all of its loan facilities with its
former primary lender with financing from Banknorth N.A. (the "January 2005
Refinancing"). The new credit facility includes a revolving line of credit which
provides for borrowings up to $5,000,000, a term loan of $5,000,000 and an
equipment line of credit which provides for borrowings up to $1,500,000. The
revolving line of credit is limited to an amount determined by a formula based
on percentages of receivables and inventories and bears interest at the rate of
the lender's prime lending rate plus 1%, adjusted daily (6.75% at April 2,
2005). The revolving line of credit expires on July 31, 2005. The Company
anticipates that Banknorth N.A. will renew the credit facility prior to that
date. The term loan is payable in 60 monthly payments of $97,560 including
interest at 6.3%. The equipment line of credit will provide advances to purchase
eligible equipment and bears interest at the rate of the lender's prime lending
rate plus 1%, adjusted daily (6.75% at April 2, 2005). The equipment line of
credit will convert to a term note on July 31, 2005, 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 2.5%. The new credit facility gives
Banknorth N.A. a first security interest in accounts receivable, inventories,
equipment and other assets and prohibits the Company from paying cash dividends.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Preparation of the Company's 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 2004,
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 customers' 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 will 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. The reserve for inventory decreased by $3,633 at April
2, 2005 compared to January 1, 2005 due to the sale of certain previously
reserved parts.
Pension- The Company maintains a defined benefit pension plan. Assumptions used
in the accounting for the plan include the discount rate and expected 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 net periodic
pension costs.
Income Taxes - The Company will only recognize a deferred tax asset when, based
upon available evidence, realization is more likely than not. In making this
determination, the Company has considered both available positive and negative
evidence including but not limited to cumulative losses in recent years, future
taxable income and prudent and feasible tax planning strategies. As of April 2,
2005 and January 1, 2005, the Company had concluded that it is more likely than
not that the Company will realize $1,500,000 in deferred tax assets.
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
January 1, 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. After the
Company's 2005 Refinancing, the only variable rate debt instrument is the
revolving line of credit. A hypothetical increase of 1% in the interest rate
applied to the revolving line of credit balance would increase annual interest
expense by approximately $6,000.
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 2006 adjustment date for the first
mortgage will increase annual interest expense at that time by approximately
$18,000. A hypothetical increase of 1% in the interest rate at the April 2009
adjustment date for the Banknorth N.A. mortgage will increase annual interest
expense at that time by approximately $14,000.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of disclosure 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 April 2, 2005 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 fiscal quarter ended April 2, 2005, that have materially affected, or
are reasonably likely to materially affect, the Company's internal control over
financial reporting.
PART II -- OTHER INFORMATION
ITEM 6. EXHIBITS
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.
* Incorporated by reference
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
May 12, 2005 By /s/ Glenn L. Purple
---------------------------------
Glenn L. Purple, Chief Financial
Officer and duly authorized officer
EXHIBIT INDEX
NUMBER DESCRIPTION
- --------- --------------------------------------------------------------------
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.
(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.