Lyndhurst, N.J. - Strong consumer demand for new digital products, such as plasma and LCD televisions, as well as related home theater products, boosted fiscal fourth quarter sales at Harvey Electronics by 27.6 percent, reaching $9.1 million, compared with $7.2 million the previous year.
However, fourth quarter 2002 sales have the benefit of being compared to the year-earlier three months, which saw results negatively affected by the events of 9/11 as well as disruption caused by renovation of the retailer's flagship Manhattan store.
Harvey significantly reduced its net loss for the fourth quarter, ending last Oct. 26, down to $219,663, compared with a net loss of $1 million in the same quarter the previous year.
Sales for the 12 months jumped 13.1 percent, hitting $41.5 million, up from $36.7 million in the same period in 2001. Comp-store sales increased 8 in fiscal 2002.
Net income moved into the black in 2002, with the retailer earning $180,471 over the 12 months, compared with a net loss of $1.3 million in the year-ago period.
Net income in 2002 was impacted negatively by operating losses of about $245,000, which related primarily to the administration of the retailer's web site and depreciation of web site-related assets. The net loss for 2001 was increased by about $650,000, relating to both pre-opening expenses and operating losses from two new stores and the company's web site.
'Demand for sophisticated custom installation services continue to grow and differentiates our company from its competitors in the market,' said Franklin Karp, Harvey president. Custom installation services, which include both labor income and equipment sales, rose to about 51 percent of net sales in 2002, an increase of 43 percent, or more than $6.4 million from the prior year.
Gross profit margin in 2002 increased 90 basis points in 2002, reaching 39.4 percent, from 38.5 percent the previous year. This primarily was the result of a 39 percent increase in higher-margin custom installation labor revenue in 2002, year over year.
Net advertising expense in 2002 was about cut in half, down to $632,000, from $1.2 million in the previous year. This was the result of the retailer's refined advertising plan, coupled with additional cooperative advertising income earned from vendors.