Redline Performance Products Reports Third Quarter Results; Rollout of 800 Revolt Snowmobiles Underway
SAN DIEGO & MINNEAPOLIS--Feb. 13, 2004--Redline Performance Products, Inc. ("Redline(TM)" or "the Company") (AMEX:RED) today reported financial results for its fiscal 2004 third quarter ended December 31, 2003. The Company also announced that the rollout of its first product, the 800 Revolt(R) snowmobile, is underway.ROLLOUT OF 800 REVOLT SNOWMOBILE CONTINUES
On January 29, Redline started production of the 800 Revolt snowmobile, with shipments scheduled to begin in February 2004. Production levels are expected to ramp up significantly through March 2004, to facilitate the Company's anticipated delivery of a total of 600-700 snowmobiles during the 2003-2004 winter season.
"We are making significant progress toward our goal of shipping snowmobiles," says Mark Payne, President and Chief Financial Officer of Redline. "With production underway, a strong dealer network and continued consumer interest, we expect our snowmobiles will soon be quickening pulses -- and turning heads -- on trails across North America."
Redline recently launched the Redline Owners' Club, or R.O.C., to reward owners and build a community of Redline enthusiasts. The first 500 people to place a qualifying deposit on an 800 Revolt snowmobile will be enrolled in the exclusive 1st Brigade. Members will receive a limited-edition Redline snowmobile suit, priority sled delivery, interaction with Redline's design and engineering team, and a lifetime R.O.C. membership.
FINANCIAL RESULTS
As a development-stage company, Redline reported no revenues for the three- and nine-month periods ended December 31, 2003 and December 31, 2002.
The net loss for the third quarter of Fiscal 2004 was $1.9 million, or $0.40 per diluted share, versus a net loss of $934,055, or $0.82 per diluted share, for the same period last year. The net loss for the first nine months of Fiscal 2004 was $5.4 million, or $1.32 per diluted share, versus a net loss of $2.2 million, or $1.67 per diluted share, for the same period one year ago.
Weighted average shares outstanding for the three and nine months ended December 31, 2003 increased by 333% and 213%, 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 nine-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 introduction of the 800 Revolt snowmobile. Interest expense decreased significantly in the third quarter of Fiscal 2004 from the prior year's third 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, 200403 initial public offering.
ABOUT THE 800 REVOLT
Redline's 800 Revolt is a high-performance, 800cc snowmobile designed for trail riding. It is being introduced to select dealers during 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 provides 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, manufactures and sells snowmobiles under the Redline(TM) brand name. The Company maintains its principal executive offices in San Diego and also has an office in Minneapolis. To learn more, please visit 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 our ability to obtain high-quality parts and subassemblies in a timely and cost-effective manner, the timely and successful assembly of snowmobiles by our contract assembler and the assembler's ability to quickly ramp up production, having sufficient capital on hand to fund our production and other operations, compliance with the terms of our loan and related agreements, the overall quality and performance of Redline snowmobiles and the level of any warranty expenses, timely compliance with applicable regulations, the number of dealers engaged by us, the number of purchase orders received from dealers, the demand for our snowmobiles from potential purchasers, 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.
SELECTED BALANCE SHEET DATA
March 31, 2003 Dec. 31, 2003
(Audited) (Unaudited)
-------------- -------------
Assets
Cash $37,305 $296,393
Inventories, Net 393,720 2,272,609
Other Current Assets 9,158 145,456
Property and Equipment, Net 694,545 896,811
Other Assets 690,058 101,324
-------------- -------------
Total Assets $1,824,786 $3,712,593
============== =============
Liabilities and Shareholders' Equity (Deficit)
Total Short Term Debt $2,396,446 $564,977
Accounts Payable 912,073 920,507
Other Current Liabilities 615,281 134,564
Long Term Liabilities 36,405 183,359
-------------- -------------
Total Liabilities 3,960,205 1,803,407
-------------- -------------
Total Shareholders' Equity (Deficit) (2,135,419) 1,909,186
-------------- -------------
Total Liabilities and Shareholders' Equity
(Deficit) $1,824,786 $3,712,593
============== =============
REDLINE PERFORMANCE PRODUCTS, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
For the For the
three months ended nine months ended
December 31, December 31,
---------------------- -----------------------
2002 2003 2002 2003
---------- ----------- ----------- -----------
Revenues $-- $-- $-- $--
---------- ----------- ----------- -----------
Operating Expenses
Selling, general and
administrative 393,602 950,058 961,519 2,448,851
Research and
development 143,956 663,830 319,701 1,179,920
Loss on impairment of
property and
equipment -- 262,195 -- 262,195
---------- ----------- ----------- -----------
Total Operating
Expenses 537,558 1,876,083 1,281,220 3,890,966
---------- ----------- ----------- -----------
Loss from
Operations (537,558) (1,876,083) (1,281,220) (3,890,966)
---------- ----------- ----------- -----------
Other Income (Expense)
Interest expense (405,071) (70,067) (911,155) (1,598,803)
Interest income 1,772 3,941 1,775 17,245
Other Income 6,802 -- 8,409 32,724
---------- ----------- ----------- -----------
Net Other Expense (396,497) (66,126) (900,971) (1,548,834)
---------- ----------- ----------- -----------
Net Loss (934,055) (1,942,209) (2,182,191) (5,439,800)
Preferred stock
dividends -- -- (23,341) --
---------- ----------- ----------- -----------
Loss Attributable to
Common
Shareholders $(934,055)$(1,942,209)$(2,205,532)$(5,439,800)
========== =========== =========== ===========
Loss per Common Share -
Basic and
Diluted $(0.82) $(0.40) $(1.67) $(1.32)
========== =========== =========== ===========
Weighted Average Common
Shares Outstanding -
Basic and Diluted 1,132,625 4,905,473 1,319,717 4,124,732