Edelbrock Sales, Earnings Drop
Edelbrock Corporation (Nasdaq:EDEL), Torrance, Calif., reported sharply lower sales and earnings for its fiscal 2003 fourth quarter and year ended June 30, 2003.
For the quarter ended June 30, 2003, revenues totaled $32,678,000, down from $39,318,000 in the same period of fiscal 2002. Net income for the fourth quarter of fiscal 2003 was $709,000, or 13 cents per basic and diluted share, compared to net income of $2,247,000, or 41 cents per basic and diluted share, for the fourth quarter of fiscal 2002.
For the year ended June 30, 2003, revenues were $115,225,000, down from $123,579,000 in fiscal 2002. Net income for fiscal 2003 was $2,970,000, or 54 cents per basic and diluted share, compared to net income of $5,360,000, or 98 cents per basic and diluted share, a year ago.
Edelbrock attributed its decrease in sales for both the fourth quarter and fiscal 2003 to a prolonged period of unseasonable inclement weather that affected many parts of the United States, consumer concerns related to the war in Iraq, and the sluggish national economy. Edelbrock also pointed to significant increases in workers’ compensation and general insurance costs during the year and continued investment in its advertising programs as factors that contributed to the reduction in the company’s earnings for the quarter and the fiscal year.
Edelbrock reported that for the fourth quarter ended June 30, 2003, sales of Edelbrock Performer Series automotive carburetors decreased by 13.8% and sales of aluminum automotive intake manifolds decreased 25.2%.
While revenues for the fourth quarter declined across a majority of Edelbrock product lines, the company said revenues increased in such lines as camshaft kits (up 21.8%), remanufactured carburetors (up 7.7%), and water pumps (up 5.8%). In addition, Edelbrock reported an increase in third-party casting work at its aluminum foundry, sales of which improved 165.5% from the fourth quarter of 2002.
Research and development (R&D) expenses for the fourth quarter of fiscal 2003 decreased 7.1%, or $90,000, over the year-ago period, totaling $1,185,000. As a percentage of revenues, R&D expenses increased to 3.6% from 3.2% in the same quarter of fiscal 2002.
“The performance products industry as a whole continued to be impacted by such uncontrollable environmental factors as adverse weather, uncertainties related to the national economy, and ongoing turmoil in the Middle East,” said Vic Edelbrock, the company’s chairman and CEO, “all of which have combined to make enthusiasts hesitant to perform the upgrades they otherwise would have during the spring and summer months of the year. Of these three factors, the weather had the biggest impact on our industry. Both the Midwest and the East Coast had experienced a miserable spring, weekends had been washouts, and tourism/business had consequently suffered.”
Edelbrock said “it’s critical to understand that there has been no drop-off in excitement for motorsports among consumers, which remains at an all-time high.”
NADA Partners with E*TRADE Bank
NADAguides.com says it entered a partnership with E*TRADE Bank, a subsidiary of E*TRADE FINANCIAL Corp.
Through this partnership, E*TRADE Bank becomes the exclusive provider of automotive and motorcycle financing for NADAguides.com and its extensive consumer base. Consumers visiting NADAguides.com Web site will have access to E*TRADE Bank's full suite of financial services for new and used vehicles, as well as loan refinancing programs.
Each month, NADAguides.com registers approximately 2.6 million unique visitors and over 50 million page views and these numbers are growing on a weekly basis, said Len Sims, vice president of NADAguides.com. “A significant majority of these online customers have special financing needs,” he said, “and we need a partner who can meet this demand by providing top-shelf financial products and excellent customer service. E*TRADE Bank fits this mold perfectly.”
UK Motorcycle Sales Slip
New bike sales in the UK fell by 20% in August, reports the Motor Cycle Industry Association (MCI). Sales of two-wheelers over 125cc dropped from 8,908 units in August 2002 to 7,109 this year. Sport-touring machines took the biggest hit, falling 35%, while sales of mid-sized scooters fell 27% and sport bikes were down by 17%.
The MCI says 117,000 two-wheelers were purchased during the first eight months of 2003, 4% above sales for the same period 2002.
Dover buys Warn Winch
Dover Corporation’s Dover Resources subsidiary has acquired Warn Industries Inc. for approximately $325 million in cash.
Warn, with annual sales in excess of $150 million, will be a stand alone operating company within the Dover Resources segment.
“This transaction is consistent with our long term strategy of acquiring market leaders with a history of outstanding financial performance,” said Thomas L. Reece, Dover’s chairman and CEO. “Warn’s strong brand name, intellectual property and broad product offering combine to create an outstanding company and an exciting addition to Dover.”
Dover Corporation is a diversified industrial manufacturer with over $4 billion in annual revenues and is comprised of over 50 operating companies that manufacture specialized industrial products and manufacturing equipment.
“This is a record year for Warn and forecasts from our customers continue to be positive,” said Jon Kreitz, president and chief executive officer of Warn Industries Inc.
Warn, based in Portland, Ore., designs, manufactures and markets high-performance winches for use on light trucks, four-wheel drive recreational vehicles and ATVs. In addition, the company supplies hub locks and patented, technologically advanced four wheel and all-wheel drive powertrain systems for automotive OEMs including Ford’s new F-150 series line of pick-up trucks.
Warn was founded in Seattle, Wash., in 1948 by Arthur Warn, and produced locking hubs for surplus World War II Jeeps. The Warn winch, developed in 1959, was the first recreational winch. In 1988, the company patented the industry's first ATV winch.
In 1986, Michael Warn, Arthur Warn's grandson, became chairman and CEO of Warn. In 2000, he sold 100% of the company in a management buyout led by Jon Kreitz, Endeavour Capital of Portland and Norwest Equity Partners, Minneapolis, Minn.
Corbin-Pacific, Inc., of Hollister, California pled guilty to three counts of failure to file a tax return, in New Hampshire. The charges arose out of the Motorcycle Week events in Laconia, NH.
Corbin-Pacific, Inc., a vendor of motorcycle parts and accessories with gross receipts nationwide in excess of $15 million dollars per year, conducted business at Motorcycle Week during the years 1999, 2000 and 2001, but failed to file tax returns with the state of New Hampshire for those years, according to the complaint.
Judge George L. Manias accepted the guilty pleas in Merrimack County Superior Court, and immediately sentenced the defendants to criminal fines of $10,000 per count, with a portion of the fines suspended.