Miami, FL -- 2012 was a rough year for some suppliers in the aerospace sector of the market as they came under pressure from the looming fiscal cliff, but for some suppliers, demand has remained firm. Edac Technology Corporation (NASDAQ: EDAC) is one of those companies. The company posted extremely strong numbers for all of 2012 and is unlikely to stop in 2013. Neither the threat of the fiscal cliff or the election of a president that has promised to cut government defense spending has made a dent in this micro-cap’s numbers to date. However, The Company has developed strategic partnerships with larger companies in the aerospace market that include the likes of the Boeing Company (NYSE: BA) and Embraer SA (NYSE: ERJ). Look for continued growth here. EDAC Technologies Corporation, along with its subsidiaries, designs, manufactures, and services fixtures, tools, machine spindles and jet engine components in the aerospace and industrial markets. The company has a market cap of $70 million and shares are selling for $13.27.
Sales for Q3 2012 were $27.5 million, a record for Edac and a 26 percent increase from Q3 of 2011. Gross profit for Q3 of 2012 was up year-over-year by 50 percent.Operating income was also up by a tidy 69 percent to $3.0 million compared with the third quarter of last year, yielding an operating margin of 10.8 percent of sales compared with 8.1 percent in Q3 of 2011. Net income for the third quarter of 2012 jumped 64 percent to $1.7 million, or $0.29 per diluted share, compared with $1.0 million, or $0.19 per diluted share, reported for the same quarter of the prior year. Edac’s total long-term debt was $30.5 million. This includes mortgages on all its current facilities in Connecticut. The company plans to sell its Connecticut facilities as it merges them into a recently acquired facility in Cheshire, Connecticut. Edac will use the proceeds from the sales to retire the mortgage debt it holds on each facility.
Edac stock has had a respectable move up of about 40 percent over the past year. Analysts forecast that the company will experience at least 20 percent growth in 2013, which is in line with backlog growth over the past year. Edac’s total sales backlog increased to $313.7 million in 2012. This includes a previously announced long-term agreement with an OEM customer to manufacture a case assembly for a military engine program with United States and export applications. The backlog is roughly equivalent to three times 2012 revenue, providing guarantee of near-term stability.
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