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Harvey Q4 Sales Decline 10.5%

1/29/2002 02:13:00 PM Eastern

Lyndhurst, N.J. - Harvey Electronics recorded a 10.5 percent drop in sales for its fiscal fourth quarter, ended Oct. 27, with sales reaching $7.2 million, down from the $8 million reported in the year-ago fourth quarter.

Comp-store sales in the fourth quarter decreased by 20.8 percent, or nearly $1.7 million, from the same quarter in 2000.

The retailer's net loss before income tax benefit in the fourth quarter was a bit over $1 million, up from a loss of about $566,000 in the same three months the previous year.

'Sales for the company's first quarter of fiscal 2002 were stronger than anticipated,' said Franklin Karp, president, who cited the retailer's flagship Manhattan store and others in New Jersey and Long Island for helping to carry the load. Karp said he expects Harvey to return to profitability in the first quarter of fiscal 2002, which ends in January.

'The sale of plasma flat-screen, LCD flat panel, high-definition digital televisions and DVD has been very successful for Harvey,' continued Karp. 'I believe the strong demand for the purchase and custom installation of these new digital video and home theater products will continue for the remainder of fiscal 2002.'

Harvey, which registered a net loss for the 12 months, attributed much of this to operating losses and pre-opening expenses related to two new stores and the launch of its web site. The company also said its fourth quarter and annual results were materially affected by the loss of revenue from the Sept. 11 attacks.

Additionally, the U.S. economic slowdown, which affected Harvey much later than other consumer electronics retailers, according to the company, and the total renovation of its Manhattan flagship store, had a negative effect on sales, particularly in the company's third and fourth quarters.

Overall sales for the 12 months hit $36.7 million, a 6.8 percent increase over the $34.4 million reported in the previous 12 months. Comp-store sales for the 12 months were down less than 1 percent.

Harvey's net loss for the 12 months was $1.3 million, up from income of $316.7 million in the previous year. The most recent quarter's loss included about $650,000 in operating losses and pre-opening expenses for new stores and the web site. Additionally, the company said the shortfall in expected sales after Sept. 11 was between $1.1 million and $1.3 million, which contributed to the loss.

Harvey said its gross profit margin in fiscal 2001 was 38.5 percent, while its high margin custom installation business represented about 41 percent of net sales for the year, up from 33 percent in fiscal 2000.

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