Edelbrock Reports Strong Gain in Sales and Earnings for Fiscal 2002 Third Quarter.Business Editors TORRANCE, Calif.--(BUSINESS WIRE)--May 7, 2002 Edelbrock Corporation (Nasdaq:EDEL EDEL Electronic Deliverable ) today reported that it achieved strong gains in sales and earnings for the third quarter and first nine months of its 2002 fiscal year ended March 25, 2002. For the third quarter of fiscal 2002, revenues increased 8.6% to $28.2 million from revenues of $26.0 million in the same period of fiscal 2001. Net income for the fiscal 2002 quarter improved to $1.1 million, or $0.23 per basic and diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, from $54,000, or $0.01 per basic and diluted share, a year ago. Revenues for the first nine months of fiscal 2002 increased 6.2% to $84.3 million from revenues of $79.3 million in the same period of fiscal 2001. Net income for the first nine months of fiscal 2002 totaled $3.1 million, or $0.62 per basic and diluted share, versus net income of $2.7 million, or $0.53 per basic and diluted share, a year ago. Edelbrock attributed its improved quarterly results to favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. weather across the country that enabled enthusiasts to perform desired upgrades; strong, growing customer acceptance of both new and established product lines; and its success in controlling operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. . Edelbrock said that the growth in revenues it experienced during the third quarter of fiscal 2002 came from a broad range of established and emerging product lines. Sales of Edelbrock's popular aluminum automotive cylinder heads increased a strong 37.9% on the quarter, while sales of the Company's chrome (jargon) chrome - (From automotive slang via wargaming) Showy features added to attract users but contributing little or nothing to the power of a system. "The 3D icons in Motif are just chrome, but they certainly are *pretty* chrome!" Pro Flo air cleaners and Elite products improved 13.3%. Sales of exhaust system Noun 1. exhaust system - system consisting of the parts of an engine through which burned gases or steam are discharged exhaust automobile engine - the engine that propels an automobile and suspension products, which include mufflers, trailing arms A trailing-arm suspension is an automobile suspension design in which one or more arms (or "links") are connected between (and perpendicular to and forward of) the axle and the chassis. It is usually used on rear axles. , tubular tubular /tu·bu·lar/ (too´bu-lar) 1. shaped like a tube. 2. of or pertaining to a tubule. tubular 1. pertaining to renal tubules. 2. pertaining to fallopian tube. exhaust Exhaust may refer to: In mathematics:
See: Circuit breakers , including its advanced Performer IAS See iPlanet Application Server. 1. (computer) IAS - The first modern computer. It had main registers, processing circuits, information paths within the central processing unit, and used Von Neumann's fetch-execute cycle. (TM) shocks, improved 24.1% on the quarter, while sales of its computerized computerized adapted for analysis, storage and retrieval on a computer. computerized axial tomography see computed tomography. fuel injection systems increased 15.6%. Among emerging lines, Edelbrock reported continued strong performance from its new Russell Performance Products division, which it acquired in December 2000. Russell is a leading manufacturer of more than 3,000 street-legal aftermarket Aftermarket See: Secondary market. aftermarket See secondary market. brake lines, oil lines, fuel lines, and filters for automotive and motorcycle motorcycle, motor vehicle whose design is based on the bicycle. The German inventor Gottlieb Daimler is generally credited with building the first practical motorcycle in 1885. The motorcycle did not become dependable and popular, however, until after 1900. applications. Edelbrock also experienced a strong surge in demand for its line of performance-enhancing nitrous oxide nitrous oxide or nitrogen (I) oxide, chemical compound, N2O, a colorless gas with a sweetish taste and odor. Its density is 1.977 grams per liter at STP. It is soluble in water, alcohol, ether, and other solvents. systems, sales of which rose nearly 200% from the year-ago period. The Company reported similar gains from its new line of performance products for import cars. Selling, general and administrative (SG&A) expenses, as a percentage of sales, decreased during the third quarter of fiscal 2002 to 27.2% from 30.6% a year ago. Overall, SG&A declined 3.6%, or $285,000, to $7.7 million, over the third quarter of last year. The decrease in SG&A as a percentage of sales was primarily attributable to expansion of Edelbrock's sales base and the Company's effectiveness in managing costs. For the first nine months of fiscal 2002, SG&A expenses decreased to 27.2% of sales from 28.4% for the same period of 2001. For the nine month period, SG&A increased 1.7%, or $380,000, from the same period of the previous year. Research and development (R&D) expenses for the third quarter of fiscal 2002 increased 5.2%, or $45,000, to $912,000 over the year ago period. As a percent of sales, R&D expenses decreased to 3.2% for the three months ended March 25, 2002 from 3.3% for the same period of 2001. For the first nine months of fiscal 2002, R&D expenses rose 5.1% to $2.6 million, from $2.5 million in the comparable prior year period. As a percentage of sales, R&D expenses remained relatively unchanged at 3.1%. Commenting on the Company's results, Edelbrock Chairman and Chief Executive Officer Vic Edelbrock O. Victor Edelbrock, Sr. (1913 - 1962) was an American automotive aftermarket performance parts engineer and racer. Victor, known as "Vic", established Edelbrock Corporation in Beverly Hills in 1938. , said, "We're very pleased with the way Edelbrock performed during the third quarter. The nation's economy and California's energy situation began to improve, and a prolonged pro·long tr.v. pro·longed, pro·long·ing, pro·longs 1. To lengthen in duration; protract. 2. To lengthen in extent. period of good weather enabled enthusiasts to perform the upgrades they desired. We also began to see very visibly how well our new Russell Performance Products division fits in with our pre-existing lines. Russell has had an almost immediate, positive impact on our bottom line, and we look for even greater contributions from them in the future. "When you combine positive influences like these with the fact that America's interest in motor sports has never been stronger, and that enthusiasts recognize Edelbrock products as among the best that can be purchased anywhere, the results are predictably going to be very positive for us," Mr. Edelbrock concluded. 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 au·to·mate v. au·to·mat·ed, au·to·mat·ing, au·to·mates v.tr. 1. To convert to automatic operation: automate a factory. 2. distribution center in Torrance, the Company owns and operates a state-of-the-art aluminum foundry A semiconductor manufacturer that makes chips for third parties. It may be a large chip maker that sells its excess manufacturing capacity or one that makes chips exclusively for other companies. and its QwikSilver division for motorcycle aftermarket parts in San Jacinto San Jacinto, river, c.130 mi (210 km) long, rising in SE Texas as the West Fork and flowing S to Galveston Bay. Its chief tributary is Buffalo Bayou, and both the bayou and the lower river are used for the Houston ship channel. , Calif., at which it manufactures many of its quality products. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Statement Under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995: Any statements set forth above that are not historical facts are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that involve known and unknown risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Potential risks and uncertainties include such factors as the financial strength and competitive pricing environment of the automotive and motorcycle aftermarket industries; product demand; market acceptance; manufacturing efficiencies; new product development; the success of planned advertising, marketing and promotional campaigns; and other risks identified herein and in other documents filed by the Company with the Securities and Exchange Commission.
EDELBROCK CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three months ended Nine months ended
March 25, March 25,
2002 2001 2002 2001
Revenues $28,194,000 $25,968,000 $84,261,000 $79,337,000
Cost of sales 17,783,000 16,955,000 53,781,000 50,094,000
Gross profit 10,411,000 9,013,000 30,480,000 29,243,000
Operating expenses
Selling, general and
administrative 7,674,000 7,959,000 22,949,000 22,569,000
Research and
development 912,000 867,000 2,577,000 2,451,000
Total operating
expenses 8,586,000 8,826,000 25,526,000 25,020,000
Operating income 1,825,000 187,000 4,954,000 4,223,000
Interest expense 31,000 111,000 51,000 206,000
Interest income 2,000 9,000 38,000 219,000
Income before
taxes on income 1,796,000 85,000 4,941,000 4,236,000
Taxes on income 664,000 31,000 1,828,000 1,567,000
Net income $1,132,000 $54,000 $3,113,000 $2,669,000
Basic net income
per share $0.23 $0.01 $0.62 $0.53
Diluted net income
per share $0.23 $0.01 $0.62 $0.53
Basic weighted average
number of shares
outstanding 4,954,000 5,077,000 5,007,000 5,077,000
Effect of diluted
stock options and
warrants - - - -
Diluted weighted average
number of shares
outstanding 4,954,000 5,077,000 5,007,000 5,077,000
EDELBROCK CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
March 25, June 30,
2002 2001
(Unaudited)
ASSETS
Current assets
Cash and cash equivalents - $ 5,995,000
Accounts receivable, net 32,564,000 26,928,000
Inventories 24,646,000 22,899,000
Prepaid expenses and other 2,407,000 1,968,000
Total current assets 59,617,000 57,790,000
Property, plant and equipment, net 39,042,000 40,913,000
Goodwill 1,172,000 1,172,000
License agreement 758,000 758,000
Other 1,345,000 1,285,000
Total assets $101,934,000 $101,918,000
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable $12,185,000 $13,981,000
Accrued expenses 3,650,000 4,165,000
Line of Credit 525,000 -
Current portion of long-term debt 62,000 63,000
Total current liabilities 16,422,000 18,209,000
Long-term debt 542,000 563,000
Deferred income taxes 3,064,000 3,122,000
Shareholders' equity 81,906,000 80,024,000
Total liabilities and shareholders'
equity $101,934,000 $101,918,000
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