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Harvey Q2 Sales Jump 13.5%

6/12/2002 11:48:00 AM Eastern

Lyndhurst, N.J. - Harvey Electronics enjoyed a 13.5 percent increase in sales in its fiscal second quarter, reaching $10.4 million, compared with $9.1 million in the year-ago period, resulting in the chain posting a profit for the period.

Driven by strong demand for custom installation services, flat-panel plasma and LCD televisions, DVD and home theater products, net income for the second quarter, ended April 27, increased to $90,609, erasing a net loss of $147,430 in the same period last year. Comp-store sales climbed 5.7 percent.

Earnings before interest taxes, depreciation and amortization (EBITDA) in the second three months jumped to $477,000, up from EBITDA of $67,000 for the same quarter last year.

Pre-tax income climbed 165 percent in the second quarter, hitting $160,609, compared with a pre-tax loss of $246,430 in the second quarter of 2001.

'Our pre-tax income and EBITDA benefited from reduced operating losses associated with the opening of two new stores and the company's Web site,' said Franklin Karp, president. 'Our net income should continue to benefit as these new stores mature.'

Harvey reported that custom installation services have increased to almost $11 million, or almost 48 percent of net sales for the first six months of fiscal 2002, compared with $7.6 million and 37 percent of net sales for the same period last year.

The increase in higher margin custom installation sales of equipment and labor income has driven Harvey's overall gross margin for the second quarter up 60 basis points, to 39.7 percent. For the six months, gross margin rose 50 basis points, to 39.5 percent.

Harvey said it has reduced its selling, general and administrative costs for both the second quarter and six months.

Sales for the six months climbed 10.1 percent, reaching $22.8 million, up from $20.7 million in the year-ago period. Comp-store sales for the six months increased 1.1 percent.

Net income for the six months soared to $481,057, up 176 percent from $175,169 year over year.

EBITDA for the six months rose 68 percent to $1.4 million, compared with $855,000 in the same period in 2001.

Pre-tax income climbed 176 percent in the first six months, to $801,057, up from $290,169 in the same period last year.

Looking ahead to the remainder of the year, Harvey said it will focus on improving overall store profitability and custom installation services, while expanding the scope of home installation services by converging home entertainment and computer technology.