Dear Richard,
If you examine the graph of this stock's performance over the past year, note that it has experienced periodic pull-backs, but more interesting is to examine what can been seen from their financial statements.
If you look at the company over its history (I beleive that financial statements exist on it back into the late 1980's, it has only become profitable in the past year or two. The advantages that it holds over other stocks that I've seen on SI is inherent in that fact. EDAC is not a newcomer to the world, and is actually a company with real products and established clients, unlike the fly-by-night operations that are "investment opportunities," offering stock, but no real company. I have examined the financial statements that are available from EDGARS, etc. and it appears to me that a number of individuals hold large positions in this company, including an institutional investor and a bank. Also, I beleive that there are less than 4 million shares outstanding, another good sign. This may account for the relatively small float and volume. Anyhow, I disagree with the person who beleives that this stock will suffer a significant pull-back in the near future. In early January, I think it went down to around $7 for a few days, but given the current and just released 4th Quarter report, I see EDAC continuing to grow as a company, and I see its stock price going up as well.
I would attribute the "lack of news," to a company that is concerned with more important things; operating well, and turning a profit, not in trying to manipulate its stock prices; to me this is the sign of a solid company. Always remember that too much news is often bad news; a shell company with no products or value can set up a PR firm and sell stock all day long, but only a growing and diversified company such as this one can succeed over the long-term.
The following is a copy of their earnings released 3/3...
EDAC Technologies Reports 4th Quarter/Year End Results; Net Income, Earnings Per Share Set Records for Year
FARMINGTON, Conn.--(BUSINESS WIRE)--March 3, 1998--EDAC
Technologies Corporation (NASDAQ SmallCap: EDAC), which designs and
manufactures tools, fixtures, special machines, jet engine components
and spindles, today reported record results for the fourth quarter and
year ended December 31, 1997.
Fourth quarter net income was $666,000, or 16 cents per diluted
share, compared to a loss of $23,000, or one cent per diluted share
for the comparable period of 1996. Sales for the quarter rose to
$9,975,000 from $7,418,000 for the same period of 1996.
Net income for the year climbed to a record $1,696,148, or 43
cents per diluted share, approximately 240 times the net income of
$7,077 or less than one cent per diluted share, for 1996. Sales rose
26.4 percent, to $38,229,389 for 1997 from $30,249,085 for the prior
year.
Edward J. McNerney, EDAC's president and CEO, attributed the
company's recent gains to successful business strategies implemented
by a new management team that joined EDAC in 1996 and 1997. "We have
created four distinct business units, focused on growth and
profitability, invested in state-of-the-art manufacturing equipment
and increased production capacity. These strategies, coupled with our
implementation of the employee-empowered management philosophy of
Kaizen, or continuous improvement, have enabled EDAC to move from a
net loss of more than $1 million for 1995 to this year's record
earnings," McNerney said.
Noting that revenues for the Large Machining and Precision
Engineered Components business units increased 99.7 percent and 31.5
percent respectively, McNerney attributed the gains in part to
"productivity improvements that have been realized from implementation
of lean thinking concepts" as well as "improved quality, delivery and
lower total cost."
"We are encouraged by the excellent outlook for our markets. The
Aerospace market remains strong, and we are participating in new
long-term aerospace projects with life cycles out to the year 2027.
We are also pleased that during the fourth quarter of 1997, we added
a number of new non-aerospace customers including Gillette, SVG and
Kamatics, who service consumer, semiconductor and industrial bearings
markets.
"We anticipate strong sales and increased market share for our
products in 1998 and beyond," McNerney concluded.
EDAC Technologies Corp., also known as Gros-Ite Industries,
primarily offers design and manufacturing services for the aerospace
industry in areas such as jet engine parts, special tooling, equipment
and gauges and components used in the manufacture, assembly and
inspection of jet engines. Gros-Ite Spindle specializes in the
design, manufacture and repair of precision spindles, which are an
integral part of numerous machine tools which are found in virtually
any type of manufacturing environment.
Certain matters described in this report are forward-looking
statements and are subject to risks and uncertainties that could cause
actual results to differ materially from those projected.
EDAC TECHNOLOGIES CORPORATION
Consolidated Statement of Operations
For the Three Months Ended For the Year-Ended
12/31/97 12/31/96 12/31/97 12/31/96
Sales $9,975,000 $7,418,000 $38,229,000 $30,249,000
Net income 666,000(a) (23,000) 1,696,000(a) 7,000
Diluted Earnings
Per Share $.16(a) ($.01) $.43(a) $.00
Weighted average
number of Shares and
Equivalent Shares
Outstanding 4,038,187 3,873,049 3,980,133 3,799,951
(a)Due to prior year losses, EDAC was required to provide only minimum
income taxes in 1996 and 1997. EDAC anticipates providing for income
taxes at a rate of 32 percent in 1998. Pro forma earnings for the
year and fourth quarter ended Dec. 31, 1997, assuming the company had
been required to provide income taxes at 32 percent, would have been
$1,153,000 or 29 cents per share and $453,000, or 11 cents per share,
respectively.
CONTACT:
Ronald G. Popolizio, CFO
860/677-2603
KEYWORD: CONNECTICUT
BW1184 MAR 03,1998
|
