Edelbrock Reports Strong Gain in Earnings for First Quarter of Fiscal 2003
TORRANCE, Calif.--Nov. 1, 2002--Edelbrock Corporation today reported a double-digit percentage improvement in earnings for the first quarter of its 2003 fiscal year ended September 25, 2002.For the first quarter of fiscal 2003, revenues increased to $25.9 million from revenues of $25.4 million in the same period of fiscal 2002. Net income for the fiscal 2003 quarter improved 23.2% to $854,000, or $0.16 per basic and diluted share, from $693,000, or $0.12 per basic and diluted share, a year ago.
Edelbrock attributed the improvement in its quarterly sales and earnings to the continued popularity of its approximately 7,500 high performance automotive and motorcycle products among enthusiasts. Sales were also positively influenced by Edelbrock's January 2002 price increase. The price increase ranged from 0% to 5%, which resulted in an effective price increase of 3.5% overall.
Edelbrock said that the growth in revenues it achieved during the fiscal 2003 quarter was led by its proven line of automotive carburetors, sales of which improved 6.3% on the quarter and its popular line of aluminum automotive intake manifolds, up 6.6%. Among emerging lines, sales of Edelbrock's line of performance-enhancing nitrous oxide systems increased 41.2% on the quarter, while sales of the Company's performance products designed specifically for sport compact vehicles also improved significantly over the year-ago period.
Edelbrock reported that selling, general and administrative (SG&A) expenses, as a percentage of sales, increased during the first quarter of fiscal 2003 to 30.3% from 28.5% a year ago. Overall, SG&A increased 8.1%, or $590,000, to $7.8 million, over the first quarter of last year. The year-to-year increase in SG&A was primarily attributable to expanded advertising and promotional activities required to support Edelbrock's growing line of products, and increased salaries, personnel, and shipping costs. Research and development expenses for the first quarter of fiscal 2003 increased 2.7%, or $22,000, over the year-ago period, totaling $835,000. As a percentage of sales, R & D expenses remain unchanged at 3.2% for both fiscal quarters.
Commenting on the Company's results, Edelbrock Chairman and Chief Executive Officer Vic Edelbrock, said, "This was a very solid earnings quarter for Edelbrock, which continued to perform well despite lingering weakness in the overall economy. Our success within such an environment indicates that the market for performance products remains strong and that Edelbrock continues to be regarded by the enthusiasts who drive that market as one of the preeminent manufacturers serving it. We've earned that position by giving enthusiasts the products they're looking for and by aggressively supporting those products with one of the strongest and most comprehensive marketing programs in the industry. I believe those ongoing efforts, together with the quality and performance that we design and build into each one of our products, have enabled Edelbrock to continue to grow consistently, during good times and bad, over the last sixty-four years.
"We're now gearing up to present a range of exciting new products at the annual "SEMA" (Specialty Equipment Market Association) convention in Las Vegas, which takes place in early November," Mr. Edelbrock added. "We're confident that the new products we'll be introducing, which include nearly 300 new part numbers incorporated in our record 12 page New Product Brochure to be distributed at the show will add some real horsepower to our sales mix and help Edelbrock continue to perform well through the balance of fiscal 2003."
EDELBROCK CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three months ended
September 25,
2002 2001
Revenues $25,874,000 $25,425,000
Cost of sales 15,839,000 16,282,000
Gross profit 10,035,000 9,143,000
Operating expenses
Selling, general and administrative 7,844,000 7,254,000
Research and development 835,000 813,000
Total operating expenses 8,679,000 8,067,000
Operating income 1,356,000 1,076,000
Interest expense 20,000 9,000
Interest income 20,000 33,000
Income before taxes on income 1,356,000 1,100,000
Taxes on income 502,000 407,000
Net income $854,000 $693,000
Basic net income per share(a) $0.16 $0.12
Diluted net income per share(a) $0.16 $0.12
Basic weighted average number of shares
outstanding(a) 5,452,000 5,584,000
Effect of dilutive stock options and warrants 12,000 --
Diluted weighted average number of shares
outstanding(a) 5,464,000 5,584,000
(a) Earnings per share and share amounts for September 25, 2001
have been retroactively adjusted to account for the Company's 10%
stock dividend distributed in June 2002.
EDELBROCK CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
September 25, June 30,
2002 2002
(Unaudited)
ASSETS
Current assets
Cash and cash equivalents $5,113,000 $7,682,000
Accounts receivable, net 24,846,000 31,892,000
Inventories 26,775,000 23,359,000
Prepaid expenses and other 2,977,000 2,869,000
Total current assets 59,711,000 65,802,000
Property, plant and equipment, net 38,651,000 38,564,000
Goodwill 1,172,000 1,172,000
License agreement 758,000 758,000
Other 1,252,000 1,266,000
Total assets $101,544,000 $107,562,000
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable $8,857,000 $14,519,000
Accrued expenses 3,814,000 4,954,000
Current portion of long-term debt 60,000 67,000
Total current liabilities 12,731,000 19,540,000
Long-term debt 519,000 527,000
Deferred income taxes 3,263,000 3,318,000
Shareholders' equity 85,031,000 84,177,000
Total liabilities and shareholders' equity $101,544,000 $107,562,000