Edelbrock Reports Results for First Quarter of Fiscal 2001
3 November 2000
Edelbrock Corporation Reports Results for First Quarter of Fiscal 2001
TORRANCE, Calif.--Nov. 3, 2000--Edelbrock Corporation today reported financial results for the first quarter of its 2001 fiscal year.For the quarter ended Sept. 25, 2000, sales increased to $25.7 million from $25.6 million in the first quarter of fiscal 2000. Net income for the fiscal 2001 quarter was approximately $1.37 million, or $0.27 per basic and diluted share, compared to net income of approximately $1.41 million, or $0.27 per basic and diluted share, a year ago.
Edelbrock said that sales for the 2001 quarter were adversely affected by unseasonable extremes in weather through much of the nation, which reduced demand for product from performance enthusiasts and, to a lesser extent, by an increase in fuel prices nationwide.
Sales for the first quarter of fiscal 2001 were highlighted by gains in a range of the company's emerging product lines. Sales of Edelbrock's line of Performer IAS shock absorbers improved 24.8% over the year-ago quarter; sales of the company's electronic fuel injection systems improved 41.5%; camshafts and camshaft kits increased 21.1%; water pumps improved 11.8%; and tubular exhaust product sales rose 7.0% versus the first quarter of fiscal 2000. Among more established lines, sales of automotive carburetors manufactured to Edelbrock specifications by Magneti Marelli USA, Inc. increased 4.3% for the fiscal 2001 quarter.
The company reported that selling, general and administrative (SG&A) expenses, as a percentage of sales, increased during the first quarter of fiscal 2001 to 27.7% from 26.6% in the comparable quarter of fiscal 2000. Overall, SG&A expenses increased 4.2%, or $287,000, to $7.1 million, from the first quarter of last year. The year-to-year increase in SG&A is primarily attributable to increased advertising and promotional activities in support of Edelbrock's growing base of products, expansion of the company's operations, and higher utility costs. Research and development expenses for the quarter decreased slightly over the year-ago period, totaling approximately $800,000 for both periods, or 3.0% of revenues versus 3.1% of revenues for the same period last year.
Commenting on the company's results, Edelbrock Chairman and Chief Executive Officer Vic Edelbrock said, "We're pleased to have been able to deliver again consistent quarterly earnings, despite the presence of some abnormal external influences that exaggerated the slowing in sales we historically expect to see this time of year.
"Some softening of sales in the first and second fiscal quarters is quite normal for us because the enthusiasts who comprise the bulk of our customer base prefer to perform the majority of their discretionary upgrades when the weather is good during the warmer spring and summer months," Edelbrock explained. "This quarter, however, much of the nation was beset by extremely adverse weather -- triple-digit heat throughout the middle of the country and torrential rain up and down the Eastern seaboard. The reason why weather impacts our sales is very simple. If an enthusiast either can't work in the garage because of intense heat, or go out and drive his or her vehicle after upgrading it because the streets are slick, it eliminates the great sense of excitement that attracts them to the hobby in the first place. That's exactly what took place this quarter," he said.
"In the months ahead, we will continue to aggressively pursue the same proven strategy that has enabled us to grow sales consistently since we first opened our doors in 1938," Edelbrock said. "That includes maintaining the trust of our customers by guaranteeing that each Edelbrock product delivers superior performance and reliability; supporting our products with what I believe is one of the industry's most effective marketing programs; and by continuing to capitalize on opportunities to expand into new market niches where we can use the power of the Edelbrock brand name to establish new sales channels.
"The scope of those opportunities is most evident in the breadth of new products we're now rolling-out," Edelbrock said. "Just a few days ago, at the annual SEMA (Specialty Equipment Market Association) convention in Las Vegas, we distributed an eight-page brochure featuring twice the number of new products or new applications of existing products than we generally introduce at this event," he noted.
"One of the most exciting of the products we unveiled at SEMA was an oil-filled, twin-tube version of our revolutionary Performer IAS shock absorber," Edelbrock said. "Like our other Performer IAS shocks, the twin-tube will deliver exceptional handling and stability, but it will be mass-marketed, under the Edelbrock name, at a price virtually anyone can afford.
"The tremendous excitement we saw generated by this and the many other new Edelbrock products we introduced at SEMA is not only very gratifying to all of us who attended, it gave us powerful evidence that the market for performance products remains exceptional, and that we remain right on target with the products we're selecting for development," Edelbrock said.
"Along with our highly positive reception at the SEMA show, we also were very pleased to be recently selected, for the second consecutive year, by Forbes magazine as one of the '200 Best Small Companies' in America. This is a tremendous honor for each hard-working Edelbrock employee and another highly positive milestone for us as a company," Edelbrock added.
Edelbrock Corporation
Consolidated Statements of Income
(Unaudited)
Three months ended
September 25,
2000 1999
Revenues $25,682,000 $25,644,000
Cost of sales 15,687,000 15,899,000
Gross profit 9,995,000 9,745,000
Operating expenses
Selling, general
and administrative 7,114,000 6,827,000
Research and development 782,000 784,000
Total operating expenses 7,896,000 7,611,000
Operating income 2,099,000 2,134,000
Interest expense 48,000 50,000
Interest income 121,000 149,000
Income before taxes on income 2,172,000 2,233,000
Taxes on income 804,000 826,000
Net income $1,368,000 $1,407,000
Basic net income per share $0.27 $0.27
Diluted net income per share $0.27 $0.27
Basic weighted average number
of shares outstanding 5,077,000 5,222,000
Effect of dilutive
stock options and warrants - 39,000
Diluted weighted average number
of shares outstanding 5,077,000 5,261,000
Edelbrock Corporation
Condensed Consolidated Balance Sheets
September 25, June 30,
2000 2000
(Unaudited)
ASSETS
Current assets
Cash and cash equivalents $6,062,000 $9,883,000
Accounts receivable, net 23,885,000 27,228,000
Inventories 19,018,000 17,157,000
Prepaid expenses and other 1,770,000 1,576,000
Total current assets 50,735,000 55,844,000
Property, plant and equipment, net 41,697,000 42,156,000
Other 2,426,000 2,247,000
Total assets $94,858,000 $100,247,000
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable 8,899,000 15,076,000
Accrued expenses 4,030,000 4,574,000
Current portion
of long-term debt 1,921,000 1,921,000
Total current liabilities 14,850,000 21,571,000
Long-term debt 130,000 148,000
Deferred income taxes 3,067,000 3,085,000
Shareholders' equity 76,811,000 75,443,000
Total liabilities
and shareholders' equity $94,858,000 $100,247,000