Redline Performance Products Reports Second Quarter Results; Introduction of 800 Revolt Snowmobile Remains on Plan
SAN DIEGO & MINNEAPOLIS--Nov. 12, 2003--Redline Performance Products, Inc. ("Redline(TM)" or "the Company") (AMEX:RED) today provided an update regarding the introduction of its initial product, the 800 Revolt(R) snowmobile, and announced financial results for its fiscal 2004 second quarter ended September 30, 2003 (see attached tables).INTRODUCTION OF 800 REVOLT SNOWMOBILE ON PLAN
Redline expects to introduce the 800 Revolt snowmobile in time for the 2003-2004 snowmobile season. Production and limited dealer delivery is scheduled to commence in mid-December 2003 under the previously announced contract assembly agreement with Interstate Companies, Inc. If this production and limited delivery schedule is met, Redline would expect to begin reporting revenues in the current fiscal 2004 third quarter ending December 31, 2003. Redline expects that production of 600-700 units of the 800 Revolt snowmobile will be completed in early 2004.
Mark Payne, President and Chief Financial Officer of Redline, stated, "We are very pleased with the level of dealer and consumer interest that we have received to date. At this time we have entered into definitive agreements with 44 dealers and are negotiating with more than 60 additional dealers. From this group, we expect to select approximately 50% to be Redline dealers for a first-year dealer network comprised of approximately 75 dealers. We believe that this initial dealer network will be sufficient to distribute the 600-700 snowmobiles we expect to produce this season. All of these dealers have met Redline's sales, service, reputation and financial criteria. We will continue to expand our dealer network by soliciting dealer interest and increasing customer awareness of our snowmobiles through an integrated sales, marketing and public relations effort."
FINANCIAL RESULTS
As a development stage Company, Redline reported no revenues for the three- and six-month periods ended September 30, 2003 and September 30, 2002.
The net loss for the second quarter of Fiscal 2004 was $1.2 million, or $.25 per diluted share, versus a net loss of $622,416, or $.44 per diluted share, for the same period last year. The net loss for the first six months of Fiscal 2004 was $3.5 million, or $.94 per diluted share, versus a net loss of $1.3 million, or $.90 per diluted share, for the same period one year ago.
Weighted average shares outstanding for the three and six months ended September 30, 2003 increased by 242% and 164%, respectively, from the comparable prior year periods due primarily to the effect of the shares issued in conjunction with the Company's initial public offering in May 2003.
The increased net losses for the Fiscal 2004 three- and six-month periods are due primarily to higher selling, general and administrative expenses, (primarily personnel) and higher research and development costs. These increases are related to the scheduled introduction of the 800 Revolt snowmobile. Interest expense decreased significantly in the second quarter of Fiscal 2004 from the prior year's second quarter as a result of the Company repaying substantially all of its long and short-term debt with the proceeds generated from the May 20, 200303 initial public offering.
Mr. Payne concluded, "We are very pleased with our progress to date and are confident in our business plan. Our efforts regarding the introduction of the 800 Revolt snowmobile are supported by the addition of experienced personnel and an adherence to prudent fiscal management practices."
ABOUT THE 800 REVOLT
Redline's 800 Revolt is a high-performance, 800cc snowmobile designed for trail riding. It is scheduled for introduction to select dealers for the 2003-2004 snowmobile season. The 800 Revolt incorporates patented and patent-pending technology - including a T-15 rear suspension system and clutch isolation drivetrain system -- to produce a snowmobile that Redline believes will provide better handling, a smoother ride, more power, greater durability and more attractive styling. For downloadable images of the 800 Revolt, please visit www.1redline.com/pages/press2.html.
ABOUT REDLINE PERFORMANCE PRODUCTS, INC.
Redline Performance Products, Inc. designs, engineers, markets, and intends to manufacture and sell, snowmobiles under the Redline(TM) brand name. The Company maintains its principal executive offices in San Diego, CA, and also has an office in Minneapolis, MN. Learn more at www.1redline.com.
FORWARD-LOOKING STATEMENTS
This news release includes "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995 as set forth in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts included or incorporated herein may constitute forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "expects," "plans," "anticipates," "believes," "estimates," "intends," "proposed," "scheduled," "continue," or the negative of these terms or other comparable terminology. Forward-looking statements are estimates and projections reflecting the Company's judgment and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. Although the Company believes the forward-looking statements made in this news release are reasonable, the Company's expectations may prove to be incorrect. The Company cautions you to not place undue reliance on these forward-looking statements, which reflect management's view only as of the date of this news release. Important factors that could cause the Company's actual results to differ materially from estimates or projections contained in the forward-looking statements include the timely completion of our snowmobile design, obtaining high quality parts in a timely and cost effective manner, the timely commencement of snowmobile assembly by the Company's assembly partner, the overall quality and performance of Redline snowmobiles, the number of dealers engaged by the Company, the number of purchase orders received from dealers, and other factors described in the Company's Annual Report on Form 10-KSB for the fiscal year ended March 31, 2003, and other documents, filed with the Securities and Exchange Commission.
REDLINE PERFORMANCE PRODUCTS, INC.
STATEMENTS OF OPERATIONS
(UNAUDITED)
For the three months For the six months
ended ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2003 2002 2003 2002
Revenues $ - $ - $ - $ -
------------ ---------- ------------ ------------
Operating Expenses
Selling, general
and administrative 929,221 272,317 1,498,793 567,917
Research and
development 304,279 64,922 516,090 175,745
------------ ---------- ------------ ------------
Total operating
expenses 1,233,500 337,239 2,014,883 743,662
------------ ---------- ------------ ------------
Loss from
operations (1,233,500) (337,239) (2,014,883) (743,662)
------------ ---------- ------------ ------------
Other Income
(Expense)
Interest expense (3,564) (262,743) (1,528,736) (506,084)
Interest income 8,581 3 13,304 3
Other income - 904 32,724 1,607
------------ ---------- ------------ ------------
Net other
expense
(income) 5,017 (261,836) (1,482,708) (504,474)
------------ ---------- ------------ ------------
Net Loss (1,228,483) (599,075) (3,497,591) (1,248,136)
Preferred
stock
dividends - (23,341) - (23,341)
------------ ---------- ------------ ------------
Loss Attributable to
Common Shareholders $(1,228,483) $(622,416) $(3,497,591) $(1,271,477)
============ ========== ============ ============
Loss per Common
Share - Basic and
Diluted $ (0.25) $ (0.44) $ (0.94) $ (0.90)
============ ========== ============ ============
Weighted Average
Common Shares
Outstanding - Basic
and Diluted 4,826,604 1,411,575 3,732,229 1,413,777
============ ========== ============ ============
REDLINE PERFORMANCE PRODUCTS, INC.
SELECTED BALANCE SHEET DATA
September 30, March 31,
2003 2003
(Unaudited) (Audited)
-------------- -----------------
Assets
------
Cash $2,597,268 $37,305
Other Current Assets 1,383,812 402,878
Property and Equipment, Net 911,445 694,545
Other Assets 99,089 690,058
-------------- -----------------
Total Assets $4,991,614 $1,824,786
============== =================
Liabilities and Shareholders' Equity
(Deficit)
-------------------------------------
Total Short Term Debt $157,634 $2,396,446
Accounts Payable 733,571 912,073
Other Current Liabilities 184,038 615,281
Long Term Liabilities 96,896 36,405
-------------- -----------------
Total Liabilities 1,172,139 3,960,205
-------------- -----------------
Total Shareholders' Equity (Deficit) 3,819,475 (2,135,419)
-------------- -----------------
Total Liabilities and Shareholders'
Equity $4,991,614 $1,824,786
============== =================