Edelbrock Corp. Reports Results for Q2 and First Six Months of 2001
TORRANCE, Calif.--Feb. 6, 2001--Edelbrock Corporation today reported sales and earnings for its fiscal 2001 second quarter and first six months ended December 25, 2000.For the second quarter of fiscal 2001, Edelbrock achieved sales of $27.7 million compared to sales of $28.5 million in the second quarter of last year. Net income for the fiscal 2001 quarter was $1.2 million, or $0.25 per basic and diluted share, versus net income of $1.8 million, or $0.34 per basic and diluted share, in the second quarter of fiscal 2000.
For the first six months of fiscal 2001, Edelbrock generated sales of $53.4 million compared to sales of $54.2 million in the same period a year ago. Net income for the first half of fiscal 2001 was $2.6 million, or $0.52 per basic and diluted share, versus net income of $3.2 million, or $0.61 per basic share and $0.60 per diluted share, in fiscal 2000.
Edelbrock said that its results for the second quarter of fiscal 2001 continued to be adversely affected by unseasonable extremes in weather and, to a lesser extent, by higher fuel prices and an overall slowing of the national economy that together reduced demand for product among performance enthusiasts.
The company said that, while down from the year-ago period, quarterly sales remained strong behind contributions from a mix of both established and emerging product lines.
Edelbrock reported that sales of its line of highly regarded aluminum automotive cylinder heads improved 8.4 percent from last year, while sales of its popular automotive carburetors for Q-Jet applications climbed 26.5 percent from a year ago.
Sales of fuel injection systems and water pumps increased 29.3 percent and 12.1 percent, respectively, while sales of the company's Performer IAS shock absorbers rose a strong 10.5 percent over the second quarter of fiscal 2000.
Quarterly sales also included a first-time contribution from Edelbrock's new line of high-performance nitrous oxide systems. During the same period, sales of automotive Performer Series carburetors and manifolds decreased by 9.0 percent and 7.0 percent, respectively.
Selling, general and administrative expenses for the second quarter of fiscal 2001 reflected Edelbrock's continued emphasis on controlling costs while maintaining necessary investments in advertising and infrastructure to enhance its competitive position.
For the quarter, SG&A increased to 27.1 percent of sales from 26.2 percent of sales in the second quarter of fiscal 2000. Overall, SG&A for the quarter remained virtually unchanged from the year-ago period at $7.5 million.
For the first half of fiscal 2001, SG&A expenses increased to 27.4 percent of sales from 26.4 percent for the same period of 1999, representing an overall 2.2 percent increase from a year ago.
Research and development expenses for the second quarter declined 7.8 percent over fiscal 2000 as Edelbrock focused on addressing a range of market opportunities by leveraging existing product designs to expand established lines.
For the quarter, R&D expenses totalled $802,000, or 2.9 percent of sales, compared to $870,000, or 3.1 percent of sales, a year ago. For the first six months of fiscal 2001, R&D expenses declined 4.2 percent to $1.6 million, or 3.0 percent of sales, from $1.7 million, or 3.1 percent of sales, in the same period a year ago.
Commenting on the company's results, Edelbrock Chairman and Chief Executive Officer Vic Edelbrock said, "While this quarter was challenging for us, it's important to keep it in the proper context. Over the 63 years that Edelbrock has been in business there have been other episodes of economic uncertainty, and each time we've emerged from them stronger and more competitive than we were before. This situation is no different, and as always, America's excitement about motorsports has never been greater and Edelbrock, now solidly established as one of the undisputed leaders in aftermarket performance, has never been better prepared to take advantage of that popularity.
"As the bad weather that's been keeping enthusiasts off the road abates and the nation's economy, we trust, stabilizes under a new administration, we'll be ready and able to seize the many opportunities that come before us," Mr. Edelbrock said.
"I'm also pleased to announce that in late December 2000, Edelbrock completed the acquisition of substantially all of the assets of Russell Performance Products Inc. Russell is a leading manufacturer of performance plumbing products for both automotive and motorcycle use and we believe will be a great addition to the Edelbrock product line. The operations are currently located in Daytona Beach, Fla., and in early May of this year, we plan on moving the operations to the company's location in Torrance, Calif.
"In the meantime, we'll continue to keep a tight grip on our expenses while developing the high-quality, performance-enhancing products we know our customers are looking for," he continued. "A great example of one of those products is the all-new line of nitrous oxide systems we introduced just last quarter that's proving to be a real hit with enthusiasts. This product really captures the essence of what Edelbrock is all about. Designed and manufactured entirely in house, it's a self-contained system that injects nitrous oxide gas directly into the manifold, giving the driver a dramatic surge of power on demand. It delivers a sustainable burst of anywhere from 50 to 250 horsepower, depending on the system.
"I'm also very pleased with the ever-growing popularity of our line of Performer IAS shock absorbers -- a shock that delivers, in a single product, the highly desirable combination of smooth ride and crisp, responsive handling," Mr. Edelbrock added. "We're continually adding applications, including the twin tube line scheduled for release at the end of our fiscal third quarter, to keep up with the tremendous demand we're seeing for this product. Additionally, our record number of over 50 new products introduced at the 2000-2001 SEMA show are presently on track for shipment to our customers in our fiscal 2001 third and fourth quarters."
EDELBROCK CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three months ended Six months ended
December 25, December 25,
2000 1999 2000 1999
Revenues $27,687,000 $28,522,000 $53,369,000 $54,166,000
Cost of sales 17,452,000 17,498,000 33,139,000 33,397,000
Gross profit 10,235,000 11,024,000 20,230,000 20,769,000
Operating expenses
Selling, general
and
administrative 7,496,000 7,475,000 14,610,000 14,302,000
Research and
development 802,000 870,000 1,584,000 1,654,000
Total operating
expenses 8,298,000 8,345,000 16,194,000 15,956,000
Operating
income 1,937,000 2,679,000 4,036,000 4,813,000
Interest
expense 47,000 49,000 95,000 99,000
Interest
income 89,000 151,000 210,000 300,000
Income before
taxes on
income 1,979,000 2,781,000 4,151,000 5,014,000
Taxes on
income 732,000 1,029,000 1,536,000 1,855,000
Net income $ 1,247,000 $ 1,752,000 $ 2,615,000 $ 3,159,000
Basic net
income per
share $0.25 $0.34 $0.52 $0.61
Diluted net
income per
share $0.25 $0.34 $0.52 $0.60
Basic weighted
average
number of
shares
outstanding 5,077,000 5,191,000 5,077,000 5,206,000
Diluted
weighted
average
number of
shares
outstanding 5,077,000 5,214,000 5,077,000 5,257,000
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EDELBROCK CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
December 25, June 30,
2000 2000
(Unaudited)
ASSETS
Current assets
Cash and cash equivalents $ 367,000 $ 9,883,000
Accounts receivable, net 30,913,000 27,228,000
Inventories 20,674,000 17,157,000
Prepaid expenses and other 1,893,000 1,576,000
Total current assets 53,847,000 55,844,000
Property, plant and equipment, net 41,425,000 42,156,000
Other 3,297,000 2,247,000
Total assets $98,569,000 $100,247,000
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable $ 8,132,000 $ 15,076,000
Accrued expenses 4,079,000 4,574,000
Line of credit 3,200,000 --
Current portion of long-term debt 1,903,000 1,921,000
Total current liabilities 17,314,000 21,571,000
Long-term debt 251,000 148,000
Deferred income taxes 3,051,000 3,085,000
Shareholders' equity 77,953,000 75,443,000
Total liabilities and shareholders'
equity $98,569,000 $100,247,000