Edelbrock Performance Hits High RPM

Edelbrock Corporation 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 share, from $54,000, or $0.01 per basic and diluted share, a year ago. All figures in U.S. dollars.
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 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.
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 Pro Flo air cleaners and Elite products improved 13.3%. Sales of exhaust system and suspension products, which include mufflers, trailing arms, tubular exhaust and cat-back systems for domestic and import vehicles, grew a combined 21.7%. Sales of the Company’s high-performance water pumps and camshafts increased 30.6% and 17.7%, respectively, over the year-ago period.
Sales of Edelbrock’s continually expanding line of high-performance shock absorbers, including its advanced Performer IAS shocks, improved 24.1% on the quarter, while sales of its computerized 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 brake lines, oil lines, fuel lines, and filters for automotive and motorcycle applications. Edelbrock also experienced a strong surge in demand for its line of performance-enhancing nitrous oxide 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, said, “We’re very pleased with the way Edelbrock performed during the third quarter. 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."