Edelbrock Corp. Reports Results for Fourth Quarter and Fiscal Year 2004
TORRANCE, Calif.--Sept. 10, 2004--Edelbrock Corporation today reported sales and earnings for its fiscal 2004 fourth quarter and year ended June 30, 2004.For the quarter ended June 30, 2004, revenues totaled $38,030,000 as compared to revenues of $32,678,000 in the same period of fiscal 2003. Net income for the fourth quarter of fiscal 2004 was $1,320,000, or $0.24 per diluted share, compared to net income of $709,000, or $0.13 per diluted share, for the fourth quarter of fiscal 2003. Results for the quarter ended June 30, 2004 reflected professional fees and similar costs associated with the proposed "going-private" transaction totaling $496,000.
For the year ended June 30, 2004, revenues totaled $125,980,000 compared to revenues of $115,225,000 in fiscal 2003. Net income for fiscal 2004 was $3,979,000, or $0.72 per diluted share, compared to net income of $2,970,000, or $0.54 per diluted share, for fiscal 2003. Results for the year ended June 30, 2004 reflected gains on the sale of real estate assets totaling $445,000 (approximately $282,000 or $0.05 per diluted share, after tax) and professional fees related to the proposed "going-private" transaction totaling $496,000.
Edelbrock attributed its increase in sales for both the fourth quarter and fiscal 2004 to improvements in the national economy, favorable weather conditions that encouraged enthusiasts to perform desired upgrades, and continued strong customer acceptance of the Edelbrock brand and products, reinforced by Edelbrock's marketing program. Despite Edelbrock's strong performance in the fiscal 2004 periods, however, management noted that earnings growth continued to be hampered by continuing increases in worker's compensation, utilities, and overall insurance costs.
Edelbrock reported that revenues for the fourth quarter were strong across a broad range of product categories. Sales of Edelbrock's high-performance aluminum automotive cylinder heads rose $1.4 million, or 32.1% over the year-ago period, while sales of Edelbrock's aluminum automotive intake manifolds improved $1.2 million, or 17.2%. Other lines that made notable contributions to Edelbrock's quarterly sales growth included its popular automotive carburetors, up 4.7%; exhaust systems, up 20.0%; and shock absorbers rose 7.8% for the quarter. Edelbrock also received a $798,000, or 49.6% quarterly sales increase from its Russell Performance Products division. The Edelbrock Russell brand is a leading provider of performance plumbing and brake lines which includes street legal brake lines, oil lines, fuel lines, and filters for both automotive and motorcycle use, as well as other products for domestic and imported vehicles. In addition, Edelbrock reported an increase in third party casting work at its aluminum foundry, sales from which improved $263,000, or 25.9% from the fourth quarter of 2003.
Edelbrock reported that selling, general and administrative (SG&A) expense, as a percentage of revenues, decreased to 28.0% for the fourth quarter of fiscal 2004 from 29.0% in the year-ago period. Overall, SG&A increased 12.3%, or $1.2 million, to $10.7 million for the fourth quarter of fiscal 2004 compared to $9.5 million for the year-ago period. The quarterly and year-to-year increase in SG&A was primarily attributable to increased commissions, other variable selling expenses associated with higher revenues, and professional fees and similar costs associated with the proposed "going-private" transaction. Research and development (R&D) expenses for the fourth quarter of fiscal 2004 increased 5.1%, or $61,000, over the year-ago period, totaling $1.2 million. As a percent of revenues, R&D expenses decreased to 3.3% for the fourth quarter of fiscal 2004 from 3.6% in the same quarter of fiscal 2003.
About Edelbrock Corporation:
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 motorcycle carburetor division 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:
EDELBROCK CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three months ended Fiscal Year ended
June 30, June 30,
2004 2003 2004 2003
----------- ----------- ------------- -------------
Revenues $38,030,000 $32,678,000 $125,980,000 $115,225,000
Cost of sales 23,976,000 21,248,000 80,462,000 73,409,000
------------ ------------ ------------- -------------
Gross profit 14,054,000 11,430,000 45,518,000 41,816,000
------------ ------------ ------------- -------------
Operating expenses
Selling, general
and
administrative 10,661,000 9,492,000 35,740,000 33,671,000
Research and
development 1,246,000 1,185,000 3,891,000 3,827,000
------------ ------------ ------------- -------------
Total
operating
expenses 11,907,000 10,677,000 39,631,000 37,498,000
------------ ------------ ------------- -------------
Operating income 2,147,000 753,000 5,887,000 4,318,000
Interest expense - (10,000) (6,000) (48,000)
Interest income 1,000 8,000 31,000 54,000
Gain on sale of
assets and other
(loss) income (4,000) 7,000 453,000 23,000
------------ ------------ ------------- -------------
Income before
taxes on income 2,144,000 758,000 6,365,000 4,347,000
Taxes on income 824,000 49,000 2,386,000 1,377,000
------------ ------------ ------------- -------------
Net income $1,320,000 $709,000 $3,979,000 $2,970,000
============ ============ ============= =============
Basic net income
per share $0.24 $0.13 $0.73 $0.54
============ ============ ============= =============
Diluted net
income per share $0.24 $0.13 $0.72 $0.54
============ ============ ============= =============
Basic weighted
average number
of shares
outstanding 5,484,000 5,452,000 5,465,000 5,452,000
Effect of
dilutive stock
options and
warrants 109,000 1,000 52,000 6,000
------------ ------------ ------------- -------------
Diluted weighted
average number
of shares
outstanding 5,593,000 5,453,000 5,517,000 5,458,000
============ ============ ============= =============
Certain prior period amounts have been reclassified for comparison
with the 2004 presentation.
EDELBROCK CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, June 30,
2004 2003
------------- -------------
(Unaudited)
ASSETS
Current assets
Cash and cash equivalents $12,540,000 $8,707,000
Accounts receivable, net 27,825,000 26,858,000
Inventories 28,399,000 26,398,000
Prepaid expenses and other 3,247,000 3,835,000
------------- -------------
Total current assets 72,011,000 65,798,000
Property, plant and equipment, net 36,588,000 37,965,000
Real estate properties, net 229,000 266,000
Goodwill and license agreement 1,852,000 1,930,000
Other 599,000 1,441,000
------------- -------------
Total assets $111,279,000 $107,400,000
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable $10,344,000 $12,038,000
Accrued expenses 5,503,000 4,692,000
Current portion of long-term debt 35,000 48,000
------------- -------------
Total current liabilities 15,882,000 16,778,000
Long-term debt 179,000 494,000
Deferred income taxes 3,984,000 3,090,000
Shareholders' equity 91,234,000 87,038,000
------------- -------------
Total liabilities and shareholders' equity $111,279,000 $107,400,000
============= =============