Fedders Corporation, a global manufacturer of air-conditioners, air cleaners, dehumidifiers, humidifiers, and thermal technology products, today reported sales of U.S. $373.7 million for the fiscal year ended Aug. 31, 2002, compared to $405.7 million in the prior fiscal year. The company says the 7.9-percent decline in sales was primarily due to lower sales in all categories due to the weak global economic environment.
Despite the lower sales, the company posted improvements in operating results, which it attributes to the restructuring plan enacted 1 year ago. Gross profit margins improved to 22.2 percent in fiscal 2002 compared to 16.9 percent in fiscal 2001. Operating income improved to $20.3 million from an operating loss in 2001 of $15.0 million, which included $24.9 million in restructuring and other charges. Net income in fiscal 2002 improved to $8.0 million, or 25 cents per diluted share and included a benefit from a decrease in accrued tax liabilities of $6.0 million compared to a loss in fiscal 2001 of $22.5 million, or 71 cents per diluted share.
Adjusted EBITDA improved to $35.1 million in fiscal 2002 from $24.7 million in the previous year. Cash at year-end also improved from $51.2 million at the end of fiscal 2001 to $67.4 million at August 31, 2002, which included a federal tax refund of $8.3 million received in the fourth quarter.
Fourth Quarter Fiscal 2002 Results
Sales of $373.7 million.
For the fourth quarter ended August 31, 2002, sales were $91.8 million compared to $90.7 million in the previous year's quarter. The slight improvement in sales was attributed to favorable seasonal weather in North America, which 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, the company said.
Operating income for the fiscal 2002 fourth quarter was $1.5 million compared to 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 or 13 cents per share which included the $6.0 million decrease in accrued tax liabilities, compared to a net loss of $21.6 million or 70 cents per diluted share in the fiscal 2001 fourth quarter.
Adjusted EBITDA for the quarter was $5.2 million compared to $423 thousand in the prior year quarter.
Fedders Corporation reported the following highlights for fiscal year 2002:
Gross profit margins of 22.2 percent
Operating income of $20.3 million.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $35.1 million.
Cash at August 31, 2002 of $67.4 million.
In October 2001, the company entered into a joint venture with Voltas Limited, India's premier air-conditioning and engineering services company, to produce room air-conditioners in India.
In October 2001, the company acquired an air-conditioner manufacturing operation in Shanghai, China.
In November 2001, the company's subsidiary, Melcor Corporation, formed a joint venture with Quanzhou Hua Yu Electrical Component Factory to manufacture thermoelectric modules in China.
In January 2002, the company's Rotorex subsidiary and Dong Fang Electromechanical entered into an agreement to form a joint venture to manufacture rotary compressors for air-conditioners, in Xi'an, China.
In February 2002, the company's Indoor Air Quality division signed an agreement to lease a facility in Suzhou Industrial Park in Suzhou, China, to manufacture residential, commercial and industrial air-cleaner products.
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