Cycle Country Announces Full Capacity Production LevelsMILFORD, Iowa--Aug. 29, 2002--Cycle Country Accessories Corp. (OTCBB:CYCY), the recognized leader in developing and manufacturing custom-fitted accessories for the all-terrain vehicle (ATV), is pleased to announce that manufacturing and production operations at their plant facilities in Iowa are running at near full capacity during the Company's fiscal 4th quarter ending September 30, 2002. This impressive capacity achievement reflects full production mode or ramp-up activities from all division categories. Regarding the Company's ATV accessories, key distributors' consistent strong order demand for the popular snowplow blades are leading the way. The increase in orders is expected to continue through calendar year-end, as low inventory levels must be replenished for the coming winter season.
The Company's acquisition of Perf-form Products in March 2002 is also pushing production levels higher to fulfill record demand from motorcycle and ATV dealers throughout North America. With Cycle Country's much greater distribution network to over 8,000 dealerships, increased orders for Perf-form's premium oil filters has already surpassed last year's production numbers for this time period. The Company is addressing additional production capacity as new orders from dealers continue to arrive from all geographical areas of the U.S.
With Cycle Country also targeting the Lawn & Garden market, the Company has increased their production operations. The recent acquisition of Weekend Warrior in June has added several well-established heavy-duty garden equipment products to the production mix. These high quality garden equipment attachments will augment several new and re-engineered accessory products developed by Cycle Country for garden trailers and ATVs.
Some of the Company's other ATV accessories and Wheel Cover sales to OEMs continue to show quarter-to-quarter increases. Additionally, the Company's Wheel Cover segment should produce greater profit margins through gains in labor efficiency and better manufacturing processes. Overall, Cycle Country anticipates significant revenue increases for the 4th quarter of fiscal 2002 as compared to the previously reported 3rd and 2nd quarters, respectively.
Cycle Country president, Ron Hickman stated: "The stronger than anticipated order flow for Perf-Form's high-performance motorcycle and ATV oil filters has been a pleasant surprise. With continuous new orders coming in from our distributors nationwide, the successful completion of acquiring them has been that much more rewarding. This is a very exciting time for Cycle Country as we continue to ramp-up production for lawn & garden products from our most recent acquisition of Weekend Warrior. Solid demand for our Wheel Covers from OEMs worldwide and our introduction of new or improved ATV accessory products continue to keep us at high production levels."
Mr. Hickman further commented: "In fact, we have already addressed the need for expansion of our production and manufacturing facilities here in northwest Iowa. The management and employees deserve an awful lot of credit. Their work ethic, commitment to the customer and production of the highest quality products continue to make our Company grow and prosper. For the fourth quarter, we expect greater revenues and stronger earnings. With our fiscal 2003 beginning on October 1st, we all have very high expectations with the addition of two solid acquisitions contributing to our profitability during all four quarters."
As announced earlier, revenues for the three-month period ending June 30, 2002 totaled $2,286,391. This represented a 1.8% increase compared with revenues of $2,246,879 for the same period in 2001. Gross profit of $797,791 equaled a 30% increase for the third quarter compared to $611,430 in gross profit for the same period in 2001. Income from operations for the 3rd quarter totaled $197,344 as compared to $58,641 during the corresponding period last year. Net income after taxes from the most recent quarter totaled $91,214, which represents a 56% increase from the net income of $58,588 for the 3rd quarter of 2001. Fully diluted earnings per share (EPS) for the quarter ending June 30, 2002 were $0.03 compared with EPS of $0.01 for the same quarter in 2001.
For further financial review, please see accompanying notes to the condensed consolidated financial statements associated with the Company's Form 10-QSB filing with the S.E.C. for the most recent quarter ending June 30th.
The results of operations for the interim periods (3-months & 9-months respectively) ended June 30, 2002 and 2001 are not necessarily indicative of the results to be expected for the full year. These interim consolidated financial statements should be read in conjunction with the September 30, 2001 consolidated financial statements and related notes included in the Company's Annual Report on Form 10-KSB for the year ended September 30, 2001.
About Cycle Country Accessories Corp.
Cycle Country, http://www.cyclecountry.com, with over 50% of the worldwide market in several product categories, is the industry leader in the design, engineering and manufacturing of custom-fitting accessories for the utility all-terrain vehicle (ATV). Since 1981, Cycle Country has developed an extensive line of branded products of mowers, plows, spreaders, sprayers, hitches and many other utility equipment items along with recreational accessories. The Company's products custom fit virtually every brand of ATV on the market. Cycle Country's ATV accessories are distributed throughout the U.S. and Canada by a group of 16 distributors who sell their products to essentially all ATV and motorcycle dealers in North America.
The Company has also developed 19 international distributors that have sold Cycle Country products in 40 countries throughout Asia, Europe, Central and South America. Additionally, Cycle Country dominates the golf car wheel cover market by manufacturing approximately 90% of all wheel covers sold to original equipment manufacturers (OEM's) worldwide. Cycle Country also sells high-performance premium oil filters for motorcycles and ATVs throughout the U.S. under the brand name Perf-form Products. With Cycle Country's most recent acquisition of Weekend Warrior and their superior garden equipment attachments for Trailers and ATVs, Cycle Country has begun marketing heavy-duty farm equipment for the Lawn & Garden market.
For the complete 10-QSB filing, go to the company's website at http://www.cyclecountry.com and click on the Investor Relations heading. Please direct any financial questions to Scott Gibson at Veritas Capital Group via e-mail to CYCY@veritascap.com or phone 407.772.7723 from 9am until 5pm (EST). Cycle Country Accessories Corporation Headquarters: 2188 Highway 86 - Milford, Iowa 51351 - 800.841.2222.
This press release does not constitute an offer to sell or the solicitation of any offer to buy any securities of Cycle Country Accessories Corporation, nor shall there be any sale of any such security in any state in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state. Forward looking statements: This press release and other statements by Cycle Country may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act with respect to the outlook for earnings and revenues, other future financial or business performance, strategies and expectations. Forward-looking statements are typically identified by words or phrases such as "believe," "expect," "estimate," "potential," or future/conditional verbs such as "will," "should" and "could."
Cycle Country Accessories Corp. and Subsidiaries Condensed Consolidated Statements of Income Three Months Ended June 30, 2002 2001 ---------- --------- (Unaudited) (Unaudited) Revenues: Net sales $ 2,256,472 $ 2,222,460 Freight income 29,919 24,420 -------------- ----------- Total revenues 2,286,391 2,246,880 -------------- ----------- Cost of goods sold (1,488,600) (1,635,450) -------------- ----------- Gross profit 797,791 611,430 -------------- ----------- Selling, general, and administrative expenses (600,447) (552,789) -------------- ----------- Income from operations 197,344 58,641 -------------- ----------- Other Income (Expense): Interest expense (64,741) - Interest income 724 6,221 Miscellaneous 6,101 (6,274) -------------- ----------- Total other expense (57,916) (53) -------------- ----------- Income before provision for income taxes 139,428 58,588 -------------- ----------- Provision for income taxes as a C corporation (48,214) - -------------- ----------- Net income $ 91,214 $ 58,588 ============== =========== Weighted average shares outstanding: Basic 3,704,019 3,698,250 ============== =========== Diluted 3,704,019 4,098,250 ============== =========== Earnings per share: Basic $ 0.03 $ 0.02 ============== =========== Diluted $ 0.03 $ 0.01 ============== ===========