EDAC Technologies Reports Fiscal 2009 Fourth Quarter And Full Year Results
FARMINGTON, Conn., March 2 /PRNewswire-FirstCall/ -- EDAC Technologies Corporation (Nasdaq: EDAC), a diversified designer, manufacturer and servicer of precision components for aerospace and industrial applications, today reported sales for the fourth quarter of fiscal 2009 of $16.3 million, up from $12.1 million for the same period of 2008 and $15.1 million in the 2009 third quarter. Net income for the 2009 fourth quarter was $113,000, or $0.02 per diluted share, versus a net loss of ($279,000), or ($0.06) per diluted share in the 2008 fourth quarter and net income of $80,000 or $0.02 in the third quarter of 2009.
For the full year fiscal 2009 ended January 2, 2010, EDAC's sales increased to $54.6 million from $44.7 million for 2008. Net income was $7.6 million, or $1.54 per diluted share, for 2009, and included other income of $11.9 million due to a net gain on the acquisition of the manufacturing business unit of MTU Aero Engines North America, Inc. (AERO) completed on May 27, 2009. This compares with net income of $1.1 million, or $0.23 per diluted share, for 2008. There were 52 weeks in fiscal 2009 versus 53 weeks in fiscal 2008.
Results for the fourth quarter of fiscal 2009 primarily reflected the following factors:
- Sales increased 34.7% from the fourth quarter of 2008 and 7.7% sequentially. This was mainly due to the contribution of AERO, which represented $5.8 million of fourth quarter 2009 sales and $5.4 million of 2009 third quarter sales. As a result of this contribution, fourth quarter 2009 sales from EDAC AERO, which also includes the Precision Aerospace product line, rose to $12.1 million, which was 148% higher than in the fourth quarter of 2008 and 8.7% higher sequentially, also reflecting organic growth due to an increase in shipments of certain jet engine parts. The increase in aerospace sales more than offset a 45% decrease in sales from the Apex Machine Tool product line compared with the fourth quarter of 2008, reflecting the continued impact of the recession on industrial tooling. Apex sales totaled $3.3 million in the fourth quarter of 2009, which were approximately level with the 2009 third quarter. Sales from the Gros-Ite Spindles product line totaled $812,000 in the fourth quarter of 2009 and included $281,000 of sales from Service Network International (SNI), the assets of which EDAC acquired from Bankruptcy Court on August 10, 2009. Gros-Ite Spindles sales were down 25% from the fourth quarter of 2008, but rose 38% sequentially, due to the inclusion of SNI and a pickup in production in the automotive industry.
- The fourth quarter 2009 gross profit of $1.4 million rose 144% from the fourth quarter of 2008, but it was 21% below the third quarter of 2009 primarily due to the absorption of one-time costs of $252,000 related to the re-start of the SNI operations, which had ceased prior to being purchased by the Company.
- SG&A costs for the fourth quarter of 2009 increased 84% from the fourth quarter of 2008 and 15% sequentially, primarily due to pension expense, year-end adjustments to the bad debt reserve and transitional expenses related to acquisitions. The increase in SG&A and re-start costs associated with SNI contributed to an operating loss for the 2009 fourth quarter.
"2009 was a building year for EDAC", said Dominick A. Pagano, President and Chief Executive Officer. "We completed the acquisitions of AERO, which increased our presence in aerospace programs, and SNI, which added new grinder product lines. As a result, we rebalanced our business mix to generate higher margins and positioned the Company to be a more valuable partner to our customers. We also invested in developing jet engine parts for the Joint Strike Fighter and for GE engines, as well as in other products and capabilities. While these investments resulted in the need to absorb additional costs during the year, they have expanded our capabilities and provided a solid platform for future profitable growth."Backlog and Outlook EDAC's total sales backlog at the end of fiscal 2009 was approximately $125.9 million compared with $52.4 million at the end of fiscal 2008 and $134.0 million at the end of the 2009 third quarter. The backlog increased by approximately $8 million from year-end to reach $134 million as of February 28, 2010, as new orders replaced sales from backlog in the fourth quarter. The recent orders were for an expanding range of parts for aircraft engines, the addition of a significant contract to supply structural aerospace products, and several new contracts to provide components for new military and commercial aircraft programs. These included:
- Additional parts for the IAE V2500;
- Additional parts for the Joint Strike Fighter;
- Development parts for the Gear Turbo Fan;
- Development parts for the Leap-X;
- First time orders for mature engine programs, including rotating components for rotor aircraft, compressor cases, stators, and large fan cases; and
- First time orders for landing gear components.
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