Edelbrock Reports Strong Gain in Sales and Earnings for Fiscal 2002 Third Quarter
TORRANCE, Calif.--May 7, 2002--Edelbrock Corporation today reported that it achieved strong gains in sales and earnings for the third quarter and first nine months of its 2002 fiscal year ended March 25, 2002.For the third quarter of fiscal 2002, revenues increased 8.6% to $28.2 million from revenues of $26.0 million in the same period of fiscal 2001. Net income for the fiscal 2002 quarter improved to $1.1 million, or $0.23 per basic and diluted share, from $54,000, or $0.01 per basic and diluted share, a year ago.
Revenues for the first nine months of fiscal 2002 increased 6.2% to $84.3 million from revenues of $79.3 million in the same period of fiscal 2001. Net income for the first nine months of fiscal 2002 totaled $3.1 million, or $0.62 per basic and diluted share, versus net income of $2.7 million, or $0.53 per basic and diluted share, a year ago.
Edelbrock attributed its improved quarterly results to favorable weather across the country that enabled enthusiasts to perform desired upgrades; strong, growing customer acceptance of both new and established product lines; and its success in controlling operating expenses.
Edelbrock said that the growth in revenues it experienced during the third quarter of fiscal 2002 came from a broad range of established and emerging product lines. Sales of Edelbrock's popular aluminum automotive cylinder heads increased a strong 37.9% on the quarter, while sales of the Company's chrome Pro Flo air cleaners and Elite products improved 13.3%. Sales of exhaust system and suspension products, which include mufflers, trailing arms, tubular exhaust and cat-back systems for domestic and import vehicles, grew a combined 21.7%. Sales of the Company's high-performance water pumps and camshafts increased 30.6% and 17.7%, respectively, over the year-ago period. Sales of Edelbrock's continually expanding line of high-performance shock absorbers, including its advanced Performer IAS(TM) shocks, improved 24.1% on the quarter, while sales of its computerized fuel injection systems increased 15.6%.
Among emerging lines, Edelbrock reported continued strong performance from its new Russell Performance Products division, which it acquired in December 2000. Russell is a leading manufacturer of more than 3,000 street-legal aftermarket brake lines, oil lines, fuel lines, and filters for automotive and motorcycle applications. Edelbrock also experienced a strong surge in demand for its line of performance-enhancing nitrous oxide systems, sales of which rose nearly 200% from the year-ago period. The Company reported similar gains from its new line of performance products for import cars.
Selling, general and administrative (SG&A) expenses, as a percentage of sales, decreased during the third quarter of fiscal 2002 to 27.2% from 30.6% a year ago. Overall, SG&A declined 3.6%, or $285,000, to $7.7 million, over the third quarter of last year. The decrease in SG&A as a percentage of sales was primarily attributable to expansion of Edelbrock's sales base and the Company's effectiveness in managing costs. For the first nine months of fiscal 2002, SG&A expenses decreased to 27.2% of sales from 28.4% for the same period of 2001. For the nine month period, SG&A increased 1.7%, or $380,000, from the same period of the previous year.
Research and development (R&D) expenses for the third quarter of fiscal 2002 increased 5.2%, or $45,000, to $912,000 over the year ago period. As a percent of sales, R&D expenses decreased to 3.2% for the three months ended March 25, 2002 from 3.3% for the same period of 2001. For the first nine months of fiscal 2002, R&D expenses rose 5.1% to $2.6 million, from $2.5 million in the comparable prior year period. As a percentage of sales, R&D expenses remained relatively unchanged at 3.1%.
Commenting on the Company's results, Edelbrock Chairman and Chief Executive Officer Vic Edelbrock, said, "We're very pleased with the way Edelbrock performed during the third quarter. The nation's economy and California's energy situation began to improve, and a prolonged period of good weather enabled enthusiasts to perform the upgrades they desired. We also began to see very visibly how well our new Russell Performance Products division fits in with our pre-existing lines. Russell has had an almost immediate, positive impact on our bottom line, and we look for even greater contributions from them in the future.
"When you combine positive influences like these with the fact that America's interest in motor sports has never been stronger, and that enthusiasts recognize Edelbrock products as among the best that can be purchased anywhere, the results are predictably going to be very positive for us," Mr. Edelbrock concluded.
Founded in 1938, Torrance, California-based Edelbrock Corp. is recognized as one of the nation's premier designers, manufacturers and distributors of performance replacement parts for the automotive and motorcycle aftermarkets. In addition to three production facilities and an automated distribution center in Torrance, the Company owns and operates a state-of-the-art aluminum foundry and its QwikSilver division for motorcycle aftermarket parts in San Jacinto, Calif., at which it manufactures many of its quality products.
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995:
Any statements set forth above that are not historical facts are forward-looking statements that involve known and unknown risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Potential risks and uncertainties include such factors as the financial strength and competitive pricing environment of the automotive and motorcycle aftermarket industries; product demand; market acceptance; manufacturing efficiencies; new product development; the success of planned advertising, marketing and promotional campaigns; and other risks identified herein and in other documents filed by the Company with the Securities and Exchange Commission.
EDELBROCK CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three months ended Nine months ended
March 25, March 25,
2002 2001 2002 2001
Revenues $28,194,000 $25,968,000 $84,261,000 $79,337,000
Cost of sales 17,783,000 16,955,000 53,781,000 50,094,000
Gross profit 10,411,000 9,013,000 30,480,000 29,243,000
Operating expenses
Selling, general and
administrative 7,674,000 7,959,000 22,949,000 22,569,000
Research and
development 912,000 867,000 2,577,000 2,451,000
Total operating
expenses 8,586,000 8,826,000 25,526,000 25,020,000
Operating income 1,825,000 187,000 4,954,000 4,223,000
Interest expense 31,000 111,000 51,000 206,000
Interest income 2,000 9,000 38,000 219,000
Income before
taxes on income 1,796,000 85,000 4,941,000 4,236,000
Taxes on income 664,000 31,000 1,828,000 1,567,000
Net income $1,132,000 $54,000 $3,113,000 $2,669,000
Basic net income
per share $0.23 $0.01 $0.62 $0.53
Diluted net income
per share $0.23 $0.01 $0.62 $0.53
Basic weighted average
number of shares
outstanding 4,954,000 5,077,000 5,007,000 5,077,000
Effect of diluted
stock options and
warrants - - - -
Diluted weighted average
number of shares
outstanding 4,954,000 5,077,000 5,007,000 5,077,000
EDELBROCK CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
March 25, June 30,
2002 2001
(Unaudited)
ASSETS
Current assets
Cash and cash equivalents - $ 5,995,000
Accounts receivable, net 32,564,000 26,928,000
Inventories 24,646,000 22,899,000
Prepaid expenses and other 2,407,000 1,968,000
Total current assets 59,617,000 57,790,000
Property, plant and equipment, net 39,042,000 40,913,000
Goodwill 1,172,000 1,172,000
License agreement 758,000 758,000
Other 1,345,000 1,285,000
Total assets $101,934,000 $101,918,000
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable $12,185,000 $13,981,000
Accrued expenses 3,650,000 4,165,000
Line of Credit 525,000 -
Current portion of long-term debt 62,000 63,000
Total current liabilities 16,422,000 18,209,000
Long-term debt 542,000 563,000
Deferred income taxes 3,064,000 3,122,000
Shareholders' equity 81,906,000 80,024,000
Total liabilities and shareholders'
equity $101,934,000 $101,918,000