Performance Industry Mainstay Edelbrock Reports Improved Sales

Edelbrock Corporation reported improved sales for the second quarter of its 2003 fiscal year and for the six months ended December 25, 2002.
For the three months ended December 25, 2002, revenues increased to $31.0 million from revenues of $30.6 million in the same period of fiscal 2002. Net income for the second quarter of fiscal 2003 totalled $1.2 million, or $0.22 per basic and diluted share, compared to net income of $1.3 million, or $0.23 per basic and diluted share, for the comparable period a year ago. All figures in U.S. dollars.
For the six months ended December 25, 2002, revenues improved to $56.9 million from revenues of $56.1 million in the comparable period a year ago. Net income for the first six months of fiscal 2003 increased to $2.1 million, or $0.38 per basic and diluted share, from net income of $2.0 million, or $0.36 per basic and diluted share, in the same period of fiscal 2002.
“We were pleased with our overall performance in the second quarter. Sales grew and earnings remained strong despite the continued weakness of the national economy and a sustained period of poor weather, particularly in the East, that may have prevented enthusiasts from performing their desired upgrades," said, Edelbrock Chairman and Chief Executive Officer Vic Edelbrock. "One thing we’ve always done here at Edelbrock, which I firmly believe has been key to our great success over the years, is to keep in very close touch with our customers.
“Because we do this, we know that demand for Edelbrock products remains strong. I am very encouraged by the tremendous excitement we see for our products, and I remain confident that, as the conditions I spoke of earlier improve, this excitement will translate into more vigorous growth for Edelbrock and its shareholders.”
Edelbrock attributed its improved revenues for the three and six-month periods to the continued popularity of its more than 7,500 automotive and motorcycle products among enthusiasts. The company said that the continued strength of the Edelbrock brand among performance enthusiasts, combined with effective management of operating costs, enabled it to maintain strong sales and earnings for both the three and six-month periods despite constrained discretionary spending caused by continued weakness in the national economy, a sustained period of adverse weather that also hampered sales growth, and a sharp increase in worker’s compensation, liability and general medical insurance costs.
Edelbrock said that the growth in revenues it achieved during the second quarter of fiscal 2003 was led by its proven line of high-performance aluminum automotive cylinder heads, sales of which improved 23.7% over the year-ago period. The Company also pointed to its emerging line of performance parts for sport compact vehicles, up over 60%; performance-enhancing nitrous oxide systems, up 21.2%; and water pumps, up 5.9%, as key contributors to its growth in sales for the quarter. Edelbrock also reported that sales from its Russell Performance Products division remained extremely strong, improving substantially over the second quarter of fiscal 2002.
Edelbrock reported that selling, general and administrative (SG&A) expense, as a percentage of sales, increased only marginally during the second quarter of fiscal 2003, rising to 26.6% from 26.2% for the second quarter of fiscal 2002. Overall, SG&A increased 3.0%, or $242,000, to $8.3 million from $8.0 million, for the second quarter of fiscal 2002. The year-to-year increase in SG&A was primarily attributable to expanded advertising and promotional activities required to support Edelbrock’s growing line of products, and increased worker’s compensation, liability and general medical insurance costs. Research and development expenses for the second quarter of fiscal 2003 increased 10.6%, or $90,000, to $942,000, or 3.0% of sales, from $852,000, or 2.8% of sales, in the second quarter of fiscal 2002.
Founded in 1938, Torrance-based Edelbrock Corporation 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, California, at which it manufactures many of its products.