redline announces fiscal results

In announcing its financial results for its fiscal 2004 second quarter ended this past September, Redline Performance Products, Inc. stated that it still expects to introduce its 800 Revolt snowmobile in time for the 2003-2004 snowmobile season.

Production and limited dealer delivery is scheduled to commence in mid-December 2003 under the previously announced contract assembly agreement with Interstate Companies, Inc. If this production and limited delivery schedule is met, Redline would expect to begin reporting revenues in the current fiscal 2004 third quarter ending December 31, 2003. Redline expects that production of 600-700 units of the 800 Revolt snowmobile will be completed in early 2004.

Mark Payne, President and Chief Financial Officer of Redline, stated, "We are very pleased with the level of dealer and consumer interest that we have received to date. At this time we have entered into definitive agreements with 44 dealers and are negotiating with more than 60 additional dealers. From this group, we expect to select approximately 50 percent to be Redline dealers for a first-year dealer network comprised of approximately 75 dealers. We believe that this initial dealer network will be sufficient to distribute the 600-700 snowmobiles we expect to produce this season.

All of these dealers have met Redline's sales, service, reputation and financial criteria. We will continue to expand our dealer network by soliciting dealer interest and increasing customer awareness of our snowmobiles through an integrated sales, marketing and public relations effort."

As a development stage Company, Redline reported no revenues for the three- and six-month periods ended September 30, 2003 and September 30, 2002.
A net loss for Redline's second quarter of Fiscal 2004 was $1.2 million, or $.25 per diluted share, versus a net loss of $622,416, or $.44 per diluted share, for the same period last year. The net loss for the first six months of Fiscal 2004 was $3.5 million, or $.94 per diluted share, versus a net loss of $1.3 million, or $.90 per diluted share, for the same period one year ago.

Redline explained that the increased net losses for the Fiscal 2004 three- and six-month periods are due primarily to higher selling, general and administrative expenses, (primarily personnel) and higher research and development costs. These increases are related to the scheduled introduction of the 800 Revolt snowmobile. Interest expense decreased significantly in the second quarter of Fiscal 2004 from the prior year's second quarter as a result of the Company repaying substantially all of its long and short-term debt with the proceeds generated from its May 2003 initial public offering.

"We are very pleased with our progress to date and are confident in our business plan," concluded Payne. "Our efforts regarding the introduction of the 800 Revolt snowmobile are supported by the addition of experienced personnel and an adherence to prudent fiscal management practices."

Redline views its snowmobile product as a high-performance, 800cc snowmobile designed for trail riding. The Redline 800 Revolt is scheduled for introduction to select dealers for the 2003-2004 snowmobile season and is said to incorporate patented and patent-pending technology - including a T-15 rear suspension system and clutch isolation drivetrain system - to produce a snowmobile that Redline believes will provide better handling, a smoother ride, more power, greater durability and more attractive styling.