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Harvey Reports $49K Loss In Fiscal 2nd Qtr.

7/07/2003 02:00:00 AM Eastern

Negatively impacted by restrained consumer spending prior to and during the war with Iraq, as well as the extreme winter weather conditions, regional consumer electronics specialty retailer and custom installer Harvey Electronics reported a $48,636 net loss for its fiscal second quarter. This compares with net income of $90,609 in the year-ago period.

As reported, sales for the second quarter, ended May 3, dipped about 3.5 percent, to $10 million, down from $10.4 million in the same three months last year (TWICE, June 9, p. 22). Comp-store sales also were off 3.5 percent in the period.

"Despite [the second quarter drop in sales and earnings], our comparable store sales for the first half were down only slightly, and compared favorably to other reporting consumer electronics specialty retailers in the industry," said president Franklin Karp.

Harvey noted its fiscal first half includes 27 weeks, compared with 26 weeks for the same period in 2002.

Harvey recorded a pretax loss for the second quarter of $85,636, compared with pretax income of $160,609 year over year. Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) for the second quarter reached $199,000, compared with EBITDA of $477,000 in the same three months the previous year.

Sales for the six months edged upward 1.6 percent, reaching $23.1 million, compared with $22.8 million in the same period a year ago. Net income for the first half hit $372,007, down from net income of $481,057 year over year.

Karp said gross profit margin for the first half, "already one of the highest in the industry," increased 50 basis points, to 40 percent, compared with 39.5 percent in the same period a year ago. Selling, general and administrative expenses increased by 3.3 percent, or about $260,000, in the first six months, and Karp said the retailer "will continue to diligently control these expenses" in the third and fourth quarters.

"Our comparable sales results for the third quarter, to date, have somewhat improved and are now flat with the same quarter to date last year," continued Karp. Harvey said it continues to focus on expanding its custom installation services, and is maintaining its planned advertising expenditures for the remainder of the year.