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Fedders Q4 Sales Flat, Erases Loss

Liberty Corners, N.J. – Favorable seasonal weather in North America resulted in a slight improvement in fiscal fourth quarter sales at air treatment products manufacturer Fedders.

The company, which makes air conditioners and dehumidifiers, among other products, said sales in the three months hit $91.8 million, flat, when compared with $90.7 million in the year-ago period.

The warmer weather boosted sales of room air conditioners and helped reduce industry inventory following the two previous cool summers. Sales for the quarter were affected by a continuation of reduced demand in all other product categories, said Fedders.

Operating income for the quarter ended Aug. 31 was $1.5 million, compared with an operating loss of $27.9 million in the prior year quarter, which included $24.9 million in restructuring and other charges. Net income for the quarter was $4.3 million, which included a $6 million decrease in accrued tax liabilities, compared to a loss of $21.6 million in the fourth quarter of 2001.

Lower sales in all categories due to the weak global economic environment resulted in a 7.9 percent decrease in sales at Fedders for the 12 months. The company said year-end sales reached $373.7 million, down from $405.7 million a year ago.

Despite the lower sales, 12-month operating income improved to $20.3 million, compared with an operating loss of $15 million, which included $24.9 million in restructuring and other charges, in the year-ago 12 months. Net income in the fiscal year improved to $8 million, including a benefit from a decrease in accrued tax liabilities of $6 million, compared with a loss of $22.5 million in the same 12 months a year ago.

Gross profit margin for the 12 months improved by 530 basis points, reaching 22.2 percent, up from 16.9 percent in the past year.