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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(Mark One)

For the fiscal year ended June 30, 2002

OR

For the transition period from ____to____

Commission file number 0-24802

EDELBROCK CORPORATION
(Exact name of Registrant as specified in its charter)

2700 California Street
Torrance, California 90503
(Address of principal executive offices, including Zip Code)
Registrant’s telephone number, including area code: (310) 781-2222

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, $.01 par value
(Title and Class)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes [X]          No [   ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in part II of this Form 10-K or any amendments to this Form 10-K. [   ]

The aggregate market value of voting stock held by non-affiliates of the Registrant, as of September 20, 2002 was approximately $21,102,000 (based upon the closing price for shares of the Registrant’s Common Stock as reported by the NASDAQ Stock Market for that date). For purposes of the foregoing calculation only, all directors and executive officers of the registrant and each person who may be deemed to beneficially own more than 5% of the registrant’s Common Stock have been deemed affiliates.

On September 20, 2002, 5,451,915 shares of the Registrant’s Common Stock, $.01 par value, were outstanding of which 1,935,974 were held by non-affiliates.

DOCUMENT INCORPORATED BY REFERENCE

Information required by Part III (Items 10, 11, 12 and 13) is incorporated by reference to the Company’s definitive proxy statement for its 2002 Annual Meeting of Shareholders.

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ANNUAL REPORT ON FORM 10-K

TABLE OF CONTENTS

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Part I

Item 1. Business

General

     Edelbrock Corporation (the “Company”) is one of America’s leading manufacturers and marketers of specialty performance automotive and motorcycle aftermarket parts. The Company designs, manufactures, distributes and markets a wide range of high quality performance products, including intake manifolds, carburetors, cylinder heads, camshafts, exhaust systems, and other components designed for most domestic V8 and selected V6 engines and sport compact 4 cylinder engines. The Company also manufactures shock absorbers utilizing the RICOR patented “Inertia Active System” that offers both a comfortable ride and superior handling. In addition to the above, the Company’s product line includes motorcycle brake rotors and plumbing type products such as fuel filters, fuel lines, and brake lines for both automotive and motorcycle applications. These products are designed to enhance street, off-road, recreational and competition vehicle performance through increased horsepower, torque and or drivability. The Company also designs and markets products to enhance engine and vehicle appearance, such as chrome and polished aluminum air cleaners, valve covers and breathers. In 1994, the Company introduced performance aluminum cylinder heads and intake manifolds for the Harley-Davidson Evolution engine. In 1995, the Company acquired substantially all of the assets of QwikSilver II, Inc. of Apple Valley, California, a manufacturer of aftermarket Harley-Davidson and other motorcycle carburetors and air cleaners.

     In 1998, the Company entered the performance shock absorber market for a range of all aftermarket applications with certain restrictions utilizing RICOR Racing and Development, L.P.’s (“RICOR”) patented “inertia active system.” In connection therewith, the Company entered into a licensing and royalty agreement with RICOR and issued warrants to purchase common stock of the Company. In September 2001, the Company converted its license agreement with RICOR from exclusive to non-exclusive. With this conversion, the Company no longer pays RICOR a minimum royalty of $62,500 a month but instead pays 6% of net sales for those products that utilize the RICOR patent.

     In November 1999, the Company paid its first cash dividend since going public in October 1994. The amount of the cash dividend was $105,000. The Company also paid cash dividends of $102,000, $105,000, $98,000, and $101,000 in June 2000, November 2000, June 2001, and November 2001, respectively. In June 2002, the Company paid a 10% stock dividend in lieu of a cash dividend.

     In June 2000, the Company entered into a Product Development and Distribution Agreement with JG Engine Dynamics, Inc. (“JG”) and Automotive Systems Group Inc. (collectively, the “Licensor”) whereby the Company pays the Licensor a percentage of net revenues derived from the sale of internal engine, exhaust, and suspension components for sub-compact aftermarket products under the “JG/Edelbrock” name. The Company paid to the Licensor cash of $144,000 and issued 8,000 shares of common stock and issued warrants to purchase 80,000 shares of the Company’s common stock. In addition, the Licensor has the right to purchase Licensed Products developed by the Company.

     In late December 2000, the Company purchased certain assets of Russell Performance Products, Inc. (“Russell”), a leading manufacturer of performance plumbing and brake lines located in Daytona Beach, Florida. In May 2001, the Company moved the Russell operations to Torrance, California. Russell’s current product offering of over 3,800 parts includes street-legal brake lines, oil lines, fuel lines, and filters for both automotive and motorcycle use.

     In January 2002, the Company had its first broad product line price increase to its customers in approximately seven years. The price increase ranged from 0%-5% which resulted in an effective price increase of approximately 3.5% overall.

     The Company’s business strategy is to capitalize on recognition of the Edelbrock brand name and strong distribution network to expand its leading position in the specialty performance automotive and motorcycle aftermarket parts market. The Company plans to achieve its business objective by pursuing the following business strategies:

	•		Broaden application of core products
	•		Expand market share in compatible product lines
	•		Expand presence in chain stores
	•		Introduce new products
	•		Expand production capacity
	•		Reduce manufacturing costs through vertical integration and automation
	•		Acquire other companies whose products will complement the Company’s existing product offering and make use of its management and infrastructure

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History

     The Company was founded in 1938 in Los Angeles by O. Victor Edelbrock, Sr. Mr. Edelbrock utilized his experience as a mechanic and a winning car racer to design and produce manifolds and cylinder heads. Upon his father’s death in 1962, O. Victor Edelbrock, Jr., also a racing enthusiast who began designing manifolds in the 1960’s, assumed his father’s position as President and Chief Executive Officer of the Company. In 1967, the Company moved its operations to El Segundo, California. The Company continued designing and marketing new generations of manifolds throughout the 1960’s and 1970’s. In the 1980’s, the Company expanded its product line to include camshaft kits, valvetrain parts, exhaust systems and other performance components, thus developing the “Total Power Package” line. In 1987, the Company moved to its present location in Torrance, California and in 1990 built its own sand-cast aluminum foundry in San Jacinto, California. In the 1990’s, the Company continued to expand its product lines to include carburetors, aluminum cylinder heads, aluminum water pumps, fuel-injected manifolds and aftermarket performance parts for Harley-Davidson motorcycles. In 1995, the Company completed the construction of a 37,000 square foot building in Torrance, California to house its exhaust products division and a 15,000 square foot facility to expand the Company’s Foundry warehouse space in San Jacinto, California. In late 1997, the Company completed construction of a 45,000 square foot facility adjacent to its existing exhaust facility, which is being utilized primarily for the manufacture of shock absorbers, as well as to accommodate its Russell Performance (“Russell”) division which was relocated from Daytona Beach, Florida in May 2001. In May 1998, the Company began producing a new line of performance aftermarket shock absorbers utilizing the patented RICOR inertia active system. In June 2000, the Company acquired the exclusive rights to manufacture and sell internal engine, exhaust, and suspension components to the import aftermarket under the “JG/Edelbrock” name. In December 2000, the Company purchased certain assets of the aforementioned Russell Performance Products, Inc., a manufacturer of performance plumbing and brake lines.

     In July 1997, the Company completed construction of two facilities on Company-owned property at its Foundry location in San Jacinto, California. A 12,000 square foot facility is being utilized for additional Foundry warehouse space and a 15,000 square foot facility houses the Company’s motorcycle carburetor parts division, which was relocated from Apple Valley, California.

     In October 1999, the Company completed construction of a 65,950 square foot distribution facility on Company-owned property adjacent to its exhaust system and shock absorber production facility in Torrance, California. The Company is utilizing the 30,000 square foot former distribution area at its Company headquarters in Torrance for additional manufacturing capacity.

     In July 2001, the Company purchased approximately 4 acres of improved land for $552,000. This property is adjacent to its aluminum foundry in San Jacinto, California and will be utilized for future corporate expansion.

Research and Development

     The Company seeks to develop new products to respond to consumer demand, to increase performance characteristics of existing product lines and to enter into new product lines. For the fiscal years ended June 30, 2000, 2001, and 2002 research and development expenditures totalled $3,688,000, $3,651,000, and $3,852,000, respectively.

Products

     The Company offers over 7,500 performance automotive and motorcycle aftermarket parts for street, off-road, recreational and competition use. The Company’s products are designed to enhance the engine’s performance through increased horsepower, torque and drivability primarily by improving induction of fuel and air into and exhaust out of the engine. The Company also designs and markets products to improve appearance or drivability of the vehicle.

     The Company’s present lines include, among other items, intake manifolds, which accounted for 28% of the Company’s revenues for fiscal year 2000, 25% for fiscal year 2001, and 23% for fiscal year 2002; and carburetors, which accounted for 41%, 40%, and 38% of the Company’s revenues for fiscal years 2000, 2001, and 2002, respectively.

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Distribution, Sales and Marketing

     The Company utilizes a balanced nationwide distribution network, which encompasses most major channels of distribution. The Company’s policy is to offer its products at the same price and under the same terms and conditions in each of its channels of distribution. The Company’s products are sold in all 50 states and Canada, as well as to a lesser degree in Australia, Europe, New Zealand and the Pacific Rim, and are primarily distributed through the following channels:

	•		Retail Automotive Chain Stores.
	•		Mail Order Catalog Houses.
	•		Warehouse Distributors and Performance Specialty Dealers.

     In addition to the foregoing channels of distribution, the Company supplies select component parts to original equipment manufacturers, including Ford Motor Company, Volvo-Penta of the Americas, Inc., General Motors Corporation, and Mercruiser, Inc., a division of Brunswick Corporation. In addition, the Company’s aluminum foundry, located in San Jacinto, California, casts components for a variety of third-party manufacturers.

     One customer, Auto Sales, Inc., accounted for 14.8%, 14.5%, and 15.5% of the Company’s revenues for fiscal years 2000, 2001, and 2002 respectively. Another customer, AutoZone, Inc. accounted for 10.2%, 10.5%, and 10.6% of the Company’s revenues for fiscal year 2000, 2001, and 2002.

Manufacturing

     The Company conducts manufacturing operations in its Torrance facilities and casting operations at its aluminum foundry in San Jacinto. The Company manufactures products such as manifolds, cylinder heads, water pumps, shock absorbers and exhaust systems. Approximately 50% of the Company’s revenues for fiscal year 2002 were attributable to products which were manufactured by third-party suppliers. Magneti Marelli, U.S.A., Inc., pursuant to an agreement with the Company, supplied the Company with all of the carburetors which it marketed in fiscal year 2002, representing approximately 38% of the Company’s revenue for that fiscal year. The agreement extends through 2009 and is renewable at the option of the parties. See Note 8 of Notes to Consolidated Financial Statements.

Competition

     There is significant competition in the manufacturing and sale of performance automotive and motorcycle parts for both the domestic and import industries. The Company competes with other companies and individuals in the manufacture and sale of performance automotive and motorcycle parts. The Company competes with, among others, Holley Performance Products, Inc. (“Holley”) in the manifold market, Holley and Federal-Mogul Corporation in the automotive carburetor market, Rancho Industries and Bilstein in the shock absorber market, Crane Cams and Competition Cams in the camshaft market, World Products and Trick Flow Specialties in the cylinder head market, Earl’s Performance Products and Aeroquip Inc. in the performance plumbing lines, and Mr. Gasket, TransDapt and Moroso in the specialty automotive accessories market. The Company competes primarily with Harley-Davidson, Inc., S&S Cycle, Incorporated, and Mikuni of America in the motorcycle aftermarket. The Company competes primarily on the basis of product quality, brand name recognition, service and price. Some of the Company’s competitors are substantially larger and have greater financial resources than the Company.

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Trademarks and Patents

     The Company owns over 35 trademarks and patents used in connection with the marketing of the Company’s products, including Edelbrock®, Russell®, Torker®, Torker II®, Tunnel Ram®, Signature Series®, Performer Series®, QwikSilver II®, Performer IAS® and Edelbrock Total Power Package®. The Company believes that its trademarks and patents and the associated recognition, reputation and customer loyalty contribute to the success of the Company’s business operations. The Company’s patents expire between 2005 and 2016.

Employees

     As of June 30, 2002, the Company employed 679 persons in the operation of its business. The Company believes that its ability to attract and retain qualified management personnel, skilled production technicians, and marketing and administrative employees will be a key determinant of the Company’s continued success. The Company has not entered into any collective bargaining agreements with any unions and believes that its overall relations with its employees are good.

Item 2. Properties

     The Company owns its headquarters, distribution and manufacturing facilities located in buildings of approximately 142,000, 65,590, 45,000 and 37,000 square feet, respectively, in Torrance, California, and three buildings for its foundry operations located in approximately 73,000, 15,000, and 12,000 square feet as well as a 15,000 square foot facility for its motorcycle carburetor parts division in San Jacinto, California. The Company also has 4 acres of improved land adjacent to its foundry facility in San Jacinto, California and will be utilized for future corporate expansion.

     The Company believes that its existing facilities are adequate to meet its current production requirements.

Item 3. Legal Proceedings

     None.

Item 4. Submission of Matters to a Vote of Security Holders.

     No matter was submitted, during the fourth quarter of the fiscal year covered by this report, to a vote of shareholders.

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Executive Officers of the Company

Executive Officers

     The following sets forth the name, age and business experience of the executive officers of the Company as of June 30, 2002:

     O. Victor Edelbrock has been Chairman, President and Chief Executive Officer of the Company since 1962. Mr. Edelbrock is the husband of Nancy Edelbrock and the father of Cathleen Edelbrock.

     Jeffrey L. Thompson has been the Executive Vice-President/General Manager and Chief Operating Officer of the Company since December 1988. He was also a six year member of the board of directors of the Specialty Equipment Market Association (SEMA) and was awarded the 1999 SEMA Person of the Year Award, the automotive aftermarket’s highest individual honor. Mr. Thompson has been a director of the Company since 1994.

     Aristedes T. Feles has been the Vice President of Finance since July 1997 and was previously Controller for the Company (since 1992). Prior to 1992, Mr. Feles was employed as a senior accountant at BDO Seidman, LLP (since 1989). Mr. Feles has been a director of the Company since July 1997.

     Steve Whipple served as Vice-President of Sales for the Company since September 2000. Mr. Whipple was previously the National Sales Manager for the Company (since 2000). Prior to joining the Company, Mr. Whipple was the Director of Sales & Marketing for Nitrous Oxide Systems, Inc. since 1998 and previously worked for Super Shops, Inc. in various capacities for 22 years.

     Wayne P. Murray has been employed in various positions by the Company since 1969 and has been Vice-President of Manufacturing for the Company since 1984.

     Jack B. Mayberry has been the Vice President of Research & Development for the Company since 1995. Prior to joining the Company, Mr. Mayberry was a captain in the U.S. Navy where he served for 25 years.

     Cathleen Edelbrock has been Vice-President of Advertising for the Company since 1993. Prior to 1993, Ms. Edelbrock was Director of Advertising (since 1987), and has served in various other capacities with the Company (since 1978). Ms. Edelbrock is a director of the Company. Ms. Edelbrock is the daughter of O. Victor Edelbrock Jr. and Nancy Edelbrock and the sister of Christina Edelbrock.

     Christina Edelbrock has been Vice-President of Purchasing for the Company since 2001. Prior to 2001, Ms. Edelbrock was Director of Purchasing (since 1998) and worked at the Company’s foundry division since 1991. Ms. Edelbrock is the daughter of O. Victor Edelbrock Jr. and Nancy Edelbrock and the sister of Cathleen Edelbrock.

     Nancy Edelbrock has been Treasurer of the Company since 1968 and has been involved in all facets of the business since 1962. Mrs. Edelbrock is the wife of O. Victor Edelbrock Jr. and the mother of Cathleen Edelbrock.

     Ronald L. Webb has been Executive Vice-President of Edelbrock Foundry Corp. since 1989. Prior to 1989, Mr. Webb served as Vice-President, Operations and in various other capacities for Buddy Bar Castings (since 1958).

     Rodney T. Teraishi has been Controller of the Company since August 1998. Mr. Teraishi is a Certified Public Accountant and was previously employed as a senior accountant at BDO Seidman, LLP and Deloitte & Touche, LLP (since 1990).

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Part II

Item 5. Market for Company’s Common Stock and Related Shareholder Matters.

     The Company’s Common Stock is traded over-the-counter on the Nasdaq Stock Market under the symbol EDEL. The following table sets forth the range of high and low closing sales prices, as reported on the Nasdaq Stock Market for fiscal years 2001 and 2002. On September 20, 2002, the Company had 103 holders of record of its Common Stock with 5,451,915 shares outstanding and a closing price of $10.90.

During fiscal year ended June 30, 2002, the Company paid a cash dividend in the amount of $.02 per share on November 11, 2001 and 10% stock dividend on June 7, 2002. All references to share amounts, per share amounts, and stock prices were adjusted to reflect this stock dividend. During fiscal year ended June 30, 2001, the Company paid a cash dividend in the amount of $.02 per share on November 11, 2000 and on June 15, 2001. See Note 9 of Notes to Consolidated Financial Statements of the Company.

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Item 6. Selected Consolidated Financial Data.

     The following Selected Consolidated Financial Data is qualified in its entirety by, and should be read in conjunction with, the Consolidated Financial Statements of the Company and the notes thereto and with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained elsewhere in this Form 10-K. The Balance Sheet Data at June 30, 2001 and 2002 and the Income Statement Data and the Other Data for each of the three fiscal years in the period ended June 30, 2002 have been derived from the audited Consolidated Financial Statements of the Company included elsewhere in this Form 10-K. The Balance Sheet Data at June 30, 1998, 1999, and 2000 and the Income Statement Data and the Other Data for each of the two fiscal years in the period ended June 30, 1999 have been derived from audited financial statements not included herein.

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation.

     The following is a discussion and analysis of the consolidated financial condition and results of operations of the Company for the fiscal years ended June 30, 2000, 2001, and 2002. The following should be read in conjunction with the Consolidated Financial Statements and related notes appearing elsewhere herein.

Overview

     The Company was founded in 1938, and is one of America’s leading manufacturers and marketers of specialty performance automotive and motorcycle aftermarket parts. The Company designs, manufactures, packages and markets performance automotive and motorcycle aftermarket parts, including intake manifolds, carburetors, shock absorbers, camshafts, cylinder heads, exhaust systems and other performance components for most domestic V8, selected V6, and selected import engines. In addition, the Company offers performance aftermarket manifolds, cylinder heads, camshafts, air cleaners, and carburetors for Harley-Davidson and off road motorcycles. The Company currently offers over 7,500 performance automotive and motorcycle aftermarket parts for street, off-road, recreational and competition use.

     In late December 2000, the Company purchased certain assets of Russell Performance Products, Inc. (“Russell”) and moved its operations to Torrance in May 2001. Russell is a leading manufacturer of performance plumbing and brake lines whose current product offering of over 3,800 parts includes street-legal brake lines, oil lines, fuel lines, and filters for both automotive and motorcycle use.

Manufacturing Capacity

     The Company used substantially all of its manufacturing capability for producing its specialty performance automotive and motorcycle aftermarket parts for fiscal years ended June 30, 2000, 2001, and 2002.

Product Mix

     The Company manufactures its own products and purchases other products designed to the Company’s specifications from third-party manufacturers for subsequent packaging and distribution to the Company’s customers. Generally, the Company can achieve a higher margin on those products which it manufactures, as compared to those purchased from third-party manufacturers. Accordingly, the Company’s results of operations in any given period are affected by product mix.

Product Concentration

     Historically, the Company has derived a substantial portion of its revenues from the sale of intake manifolds and carburetors. For the fiscal years ended June 30, 2000, 2001, and 2002 approximately 28%, 25%, and 23% of revenues were derived from the sales of intake manifolds and 41%, 40%, and 38% from the sales of carburetors, respectively. The Company sells automotive carburetors which are purchased from a sole supplier (See Note 8 of Notes to Consolidated Financial Statements).

Seasonality

     The Company’s sales are subject to seasonal variations. Customer orders and sales are greatest in the second, third and fourth quarters of the Company’s fiscal year in anticipation of and during the spring and summer months. Accordingly, revenues and operating income tend to be relatively higher in these quarters. This seasonality typically results in reduced earnings for the Company’s first fiscal quarter because a significant portion of operating expenses is fixed throughout the fiscal year.

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Results of Operations

     The following table sets forth, for the periods indicated, the percentage of revenues of certain items in the Company’s consolidated statements of income and the percentage change in each item from the prior period.

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Fiscal Year 2002 Compared to Fiscal Year 2001

Revenues

     Revenues increased 6.9% to $123.6 million in fiscal year 2002 from $115.6 million in fiscal year 2001. The increase was primarily the result of an increase of approximately $860,000, or 1.9%, in the sale of carburetors; an increase of $2.0 million, or 15.1%, in the sale of aluminum cylinder heads; and an increase of approximately $3.4 million, or 126.3%, in the sale of performance plumbing and brakes lines manufactured by its Russell division.

Cost of Sales

     Cost of sales increased 7.3% to $78.1 million in fiscal year 2002 from $72.7 million in fiscal year 2001. As a percent of revenues, cost of sales increased to 63.2% in fiscal year 2002 from 62.9% in fiscal year 2001. The increase in cost of sales was primarily due to an increase in sales. The increase in cost of sales as a percentage of sales was primarily due to increased labor rates and higher medical costs associated with the Company’s self-funded medical plan.

Selling, General and Administrative Expense

     Selling, general and administrative expenses increased 4.9% to $33.2 million in fiscal year 2002 from $31.6 million in fiscal year 2001. This increase resulted primarily from an increase in salaries mainly from increased sales commissions and advertising expenses associated with increased sales. As a percentage of revenues, selling, general and administrative expenses decreased to 26.8% in fiscal year 2002 from 27.3% in fiscal year 2001.

Research and Development Expense

     Research and development expense increased 5.5% to $3.9 million in fiscal 2002 from $3.7 million in fiscal year 2001. The Company attributes this increase to its continued efforts to develop new applications for existing and emerging product lines. As a percent of revenue, research and development expense decreased slightly to 3.1% in fiscal year 2002 versus 3.2% in fiscal year 2001.

Operating Income

     Operating income increased 11.3% to $8.5 million in fiscal year 2002 from $7.6 million in fiscal year 2001. This increase was mainly a result of increased revenues and lower operating expenses as a percentage of revenues.

Interest Expense

     Interest expense decreased 66.1% to $96,000 in fiscal year 2002 from $283,000 in fiscal year 2001. This decrease was primarily due to a decrease in the principal amount of average debt outstanding combined with a decrease in interest rates.

Interest Income

     Interest income decreased 76.7% to $53,000 in fiscal year 2002 from $227,000 in fiscal year 2001. This decrease was the result of a decrease in interest earned on invested cash due to lower interest rates and lower amounts of invested excess working capital during the year.

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Fiscal Year 2002 Compared to Fiscal Year 2001 (concluded)

Taxes on Income

     The provision for income taxes increased 11.1% to $3,099,000 in fiscal year 2002 from $2,790,000 in fiscal year 2001. The effective tax rates were 36.6% and 36.8% for fiscal years 2002 and 2001, respectively. The decrease in the effective tax rate resulted primarily from increases in research and development tax credits.

Net Income

     The Company’s net income increased 11.9% for fiscal year 2002 to $5.4 million in fiscal 2002 from $4.8 million in fiscal year 2001. This decrease was primarily due to the items mentioned above.

Fiscal Year 2001 Compared to Fiscal Year 2000

Revenues

     Revenues decreased 4.6% to $115.6 million in fiscal year 2001 from $121.2 million in fiscal year 2000. The decrease was primarily the result of a decrease in volume of approximately $3.5 million, or 7.1%, in the sale of carburetors and a decrease of $4.0 million, or 12.2%, in the sale of intake manifolds, offset by sales from the newly acquired Russell division which totaled approximately $2.7 million. Management attributes the decrease in revenues to a general economic slow down and a prolonged period of inclement weather.

Cost of Sales

     Cost of sales decreased 2.1% to $72.7 million in fiscal year 2001 from $74.3 million in fiscal year 2000. As a percent of revenues, cost of sales increased to 62.9% in fiscal year 2001 from 61.3% in fiscal year 2000. The decrease in cost of sales was primarily due to a decrease in sales. The increase in cost of sales as a percentage of sales was primarily due to a change in product mix toward lower margin products, and higher labor and energy costs.

Selling, General and Administrative Expense

     Selling, general and administrative expenses increased 2.7% to $31.6 million in fiscal year 2001 from $30.8 million in fiscal year 2000. This increase resulted primarily from the increase in salaries mainly from the Russell acquisition and an increase in utilities due to the energy crisis in California as well as increases in medical and workers’ compensation costs. In addition, the Company’s depreciation and maintenance type expenditures for its state-of-the-art distribution facility incurred costs for a full year in fiscal 2001 versus only a partial year for fiscal year 2000. As a percent of revenues, selling, general and administrative expenses increased to 27.3% in fiscal year 2001 from 25.4% in fiscal year 2000. This increase is mainly attributed to the above in addition to revenues being down for the current year versus prior year.

Research and Development Expense

     Research and development expense remained relatively unchanged in fiscal year 2001 versus 2000. As a percent of revenue, research and development expense was 3.2% in fiscal year 2001 versus 3.0% in fiscal year 2000. The Company plans on continuing to expand its research and development program, but through improved efficiency, expenditures may decrease as a percent of revenue in the future.

Operating Income

     Operating income decreased 38.4% to $7.6 million in fiscal year 2001 from $12.4 million in fiscal year 2000. This decrease was mainly a result of decreased revenues, higher operating expenses as a percent of revenues, and higher cost of goods sold as a percentage of revenues.

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Fiscal Year 2001 Compared to Fiscal Year 2000 (concluded)

Interest Expense

     Interest expense increased 44.4% to $283,000 in fiscal year 2001 from $196,000 in fiscal year 2000. This increase was primarily due to an increase in the principal amount of average debt outstanding mainly due to the Company utilizing its line of credit to partially fund the purchase of Russell assets as well as the Company incurring interest on the assumption of capital leases in connection with the Russell purchase.

Interest Income

     Interest income decreased 41.1% to $227,000 in fiscal year 2001 from $385,000 in fiscal year 2000. This decrease was the result of a decrease in interest earned on invested cash due to lower interest rates and lower amounts of invested excess working capital.

Taxes on Income

     The provision for income taxes decreased $1,759,000 to $2,790,000 in fiscal year 2001 from $4,549,000 in fiscal year 2000. The effective tax rates were 36.8% and 36.1% for fiscal years 2001 and 2000, respectively. The increase in the effective tax rate resulted primarily from decreases in the utilization of state and federal tax credits resulting from decreased capital equipment acquisitions and decreased research and development credits.

Net Income

     The Company’s net income decreased 40.5% for fiscal year 2001 to $4.8 million in fiscal 2001 from $8.0 million in fiscal year 2000. This decrease was primarily due to the items mentioned above.

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Quarterly Results

     The following table sets forth unaudited operating data for each of the specified quarters of fiscal years 2001 and 2002. This quarterly information has been prepared on the same basis as the annual consolidated financial statements and, in the opinion of management, contains all adjustments necessary to state fairly the information set forth herein. The sum of the four quarters earnings per share may not agree to the fiscal year earnings per share due to rounding.

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Liquidity and Capital Resources

     The Company’s liquidity requirements arise primarily from the funding of its seasonal working capital needs and capital expenditures. Historically, the Company has met these liquidity requirements through cash flow generated from operating activities and with borrowed funds under the Company’s $8.0 million revolving credit facility (“Revolving Credit Facility”). Due to the seasonal demand for the Company’s products, the Company builds inventory during the Company’s first fiscal quarter in advance of the typically stronger selling periods during the Company’s second, third and fourth fiscal quarters.

     The Revolving Credit Facility consists of an unsecured line of credit agreement with one bank, which provides a total loan commitment not to exceed $8.0 million, all of which was available to the Company as of September 23, 2002. The line of credit borrowings are at the bank’s prime rate (4.75% at June 30, 2002 and as of September 23, 2002). The line of credit agreement expires on February 1, 2003. Under the Revolving Credit Facility, the Company is subject to certain customary restrictive financial requirements. For all periods presented and as of September 23, 2002, the Company is in compliance with all such financial covenants.

     Net cash provided by operating activities was $9.4 million, $5.7 million and $6.7 million in fiscal years 2000, 2001, and 2002, respectively. Because of the seasonality of the Company’s business, more funds from operating activities are generated in its third and fourth fiscal quarters.

     Accounts payable increased $539,000 for fiscal year 2002 compared to fiscal year 2001 primarily as a result of timing of receipt of goods from a principal supplier.

     Accounts receivable increased by $5.0 million for fiscal year 2002 compared to fiscal year 2001, while sales increased $7.9 million for fiscal year 2002 compared to fiscal year 2001. The increase in accounts receivable in fiscal year 2002 was primarily due to the timing of payments from customers and increased sales.

     Inventories increased by $460,000 for fiscal year 2002 compared to fiscal year 2001 while cost of sales increased $5.3 million for fiscal year 2002 compared to fiscal year 2001. The increase in inventories from fiscal year 2002 versus fiscal year 2001 was primarily due to an increase in inventories related to Russell Performance Products.

     The Company’s total capital expenditures were $11.3 million in fiscal year 2000; $7.6 million, which included $3.3 million for the acquisition of Russell Performance Products, in fiscal year 2001; and $4.0 million in fiscal year 2002. The Company anticipates making capital expenditures of $4.5 — $6.0 million in fiscal year 2003 primarily for additional capital equipment to increase the Company’s production capacity.

     The Company believes that funds generated from operations and funds available under the Revolving Credit Facility will be adequate to meet its working capital, debt service and capital expenditure requirements through fiscal year 2003.

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Inflation

     General inflation over the last three years has not had a material effect on the Company’s cost of doing business and it is not expected to have a material effect in the foreseeable future.

"Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: Any statements set forth above which are not historical facts are forward-looking statements 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.

Item 7A. Quantitative and Qualitative Disclosure about Market Risk.

     The Company’s exposure to interest rate changes is primarily related to its variable rate debt which may be outstanding from time to time under the Company’s Revolving Credit Facility with Bank of America, NT&SA. The Company’s Revolving Credit Facility is an $8 million line of credit with an interest rate based on the bank’s prime rate (currently 4.75%). It expires on February 1, 2003. Because the interest rate on the Revolving Credit Facility is variable, the Company’s cash flow may be affected by increases in the prime rate. Management does not, however, believe that any risk inherent in the variable-rate nature of the loan is likely to have a material effect on the Company. As of fiscal year ended June 30, 2002 and as of September 20, 2002, the Company’s outstanding balance on the Revolving Credit Facility was zero. Even if the Company were to draw down on the line prior to its expiration and an unpredicted increase in the prime rate occurred, it would not be likely to have a material effect.

Item 8. Financial Statements and Supplementary Data.

     See Item 14 for an index to the consolidated financial statements and supplementary financial information which are included herewith.

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

     None.

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Part III

Item 10. Directors of the Company.

     The information required by Item 10 will be set forth in the Proxy Statement under the caption “Directors of the Company” and is incorporated herein by reference.

Item 11. Executive Compensation.

     The information required by Item 11 will be set forth on the Proxy Statement under the caption “Executive Compensation” and is incorporated herein by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management.

     The information required by Item 12 will be set forth on the Proxy Statement under the caption “Security Ownership of Certain Beneficial Owners and Management” and is incorporated herein by reference.

Item 13. Certain Relationships and Related Transactions.

     The information required by this Item is incorporated herein by reference from the information provided under the heading “Transactions and Legal Actions Involving Management” of its Proxy Statement.

Part IV

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.

     Financial Statements and Schedules. See Index to Financial Statements which appears on page 24 hereof.

     Other Financial Data. See Summary of Selected Financial Data, which appears in “Item 6. Selected Financial Data.”

     Reports on Form 8-K.

     The Company filed no Reports on Form 8-K during the last quarter of the 2002 fiscal year.

     Exhibits. The exhibits listed on the Exhibit Index following the signature page hereof are filed herewith in response to this Item.

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EDELBROCK CORPORATION
EXHIBIT INDEX

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EDELBROCK CORPORATION
EXHIBIT INDEX

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EDELBROCK CORPORATION
EXHIBIT INDEX

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SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on it behalf by the undersigned, thereunto duly authorized.

     Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

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SECTION 302 CERTIFICATIONS

     I, O. Victor Edelbrock, Chairman, President and Chief Executive Officer of Edelbrock Corporation, certify that:

	1.		I have reviewed this annual report on Form 10-K of Edelbrock Corporation;
	2.		Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
	3.		Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report.

Date: September 26, 2002

     I, Aristedes T. Feles, Vice-President of Finance and Chief Financial Officer of Edelbrock Corporation, certify that:

	1.		I have reviewed this annual report on Form 10-K of Edelbrock Corporation;
	2.		Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
	3.		Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report.

     Date: September 26, 2002

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EDELBROCK CORPORATION

INDEX TO FINANCIAL STATEMENTS