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Saturday, September 10, 2005

Edac Technologies (EDAC) 10-Q

Quarter ending July 2, 2005

Cash is up to $800K from $549K.
AR is down to $6.1 million from $6.6 million
Inventories,net up to $4.9 million from $4.5 million

Revolver paid down
AP fairly steady at $3.3 million

Current ratio is $12.6 million / $6.8 million
Equity is up to $7.5 million

Revenues up only slightly. COGS down slightly (more sales, better mgmt). SG&A up significantly (bonus and profit sharing).
Income from ops $689K.
Huge benefit from income taxes of $787K

Excluding the benefit from taxes, net income per share would be about 12 cents.

For 6 months, cash flow from ops is only $1.9 million due to $750K gain on forgiveness of debt and $900K deferred tax offset somewhat by $969K deprec and $300K changes in working capital.

Capex was $925K for 6 months. $900K free cash flow for 6 months.

4.8 million totally diluted shares.

July 2, 2005, Company concluded it will more than likely realize all of deferred tax assets. After 2005, the tailwind goes away and the company will have normal taxes.

Non-aerospace customers: $5.1 million revenues
Aerospace customers: $3.8 million revs

Apex machine tool: $5.4 million revs, up 7.4% (demand should continue)
Precision aerospace: $2.4 million revs, down 17.4% due to a one-time deal in 2004, should increase going forward
Spindles: $1.1 million revs, up 32%, should continue

Backlog is up to $21.7 million from $18.3 millon in Jan.

I would assume a roughly $2.5 million annual free cash flow for the business going forward. So I figure the stock is worth about $7.80 per share, making it a BLAMMO investment on the Ricktor scale.

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