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Fedders Q1 Sales Flat, Loss Follows Charge

4/26/2004 08:57:00 AM Eastern

Liberty Corner, N.J. — Air conditioner-maker Fedders reported flat sales in the first quarter, hitting $122.6 million, compared with $123.4 million in the year-ago period. Sales in the company’s AC/air treatment products segment totaled $111.4 million, compared with $114.9 million in the prior-year period.

Fedders recorded a decline in room air conditioner sales for the three months, ended March 31, due to a major U.S. customer’s change in invoicing terms from FOB China in the prior year, to be delivered to the customer’s U.S. distribution centers. The effect of this timing change is to shift sales to Fedders’ second quarter.

Higher selling and warehousing expenses, due to increased sales activity globally and warehousing costs to support higher seasonal inventory requirements, reduced Fedders’ operating income to $4.8 million in the first quarter, down from $12.8 million year-on-year.

Fedders recorded a net loss in the first quarter, reaching $4.3 million, compared with net income of $5.1 million in the same three months in 2003. The loss was incurred as a result of a $7.4 million charge for extinguishing debt, namely to account for the early retirement of the company’s 10-year notes and the issuance of new 10-year notes.

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