LYNDHURST, N.J. -Benefiting from strong customer demand for HDTV, HD-ready projection sets, plasma flat-screen televisions, DVD and DSS, among other factors, Harvey Electronics reported strong profitability in fiscal 2000.
Net income for the fiscal year ended Oct. 28 reached $316,659, compared with a loss of $845, 519 in fiscal 1999. Net loss for the fourth quarter was reduced to $360,533, down from a net loss of $590,591 in the same three months of last year.
"Fiscal 2000 was a remarkable year for Harvey," said president Franklin Karp. "Our business plan, expansion efforts and marketing campaign were all extremely successful, as Harvey returned to profitability for fiscal 2000. This success has carried into 2001, as we expect to have a profitable first fiscal quarter. Sales results for the first fiscal quarter ended Jan. 27 have exceeded our expectations."
Net sales for the year were $34.4 million, up about 60 percent from the $21.5 million recorded in 1999. For the quarter, net sales were $8 million, a 56 percent hike, compared with the $5.1 million reported in the year-ago fourth quarter.
Harvey said that all stores open for at least one year were "very profitable" in fiscal 2000. The company's gross profit margin for fiscal 2000 climbed 60 basis points to 39.4 percent. In the fourth quarter, gross profit margin jumped 80 basis points to 38.7 percent.
Gross margins have continued to improve despite the increased sale of video products, which typically have lower margins than audio products, Harvey said. Improved margins at Harvey's newest stores and increased margins from new digital products, coupled with increased custom installation sales and related custom labor income, which typically have higher margins, have helped the retailer increase overall gross profit margin.
Custom-installation services, including labor and equipment, more than doubled in fiscal 2000 to $11.3 million, up from $5.5 million in 1999, the retailer said. Custom-installation sales of equipment and labor income represented 33 percent of Harvey's net sales in fiscal 2000, compared with 26 percent in 1999.
Harvey, which currently operates six Harvey units and two Bang & Olufsen stores in the New York metropolitan area, said it expects to open another Harvey site in March. It also will renovate its flagship Manhattan location, beginning in March.