HVAC manufacturer Fedders Corporation filed its Annual Report for the year ended Dec. 31, 2004 and for the 4-month transition period ended Dec. 31, 2003.
Net sales for the year ended Dec. 31, 2004 of U.S. $413.0 million decreased 3.5 percent from sales of $428.0 million for the 12 months ended Dec. 31, 2003.
Net sales in the HVAC/R segment of $372.0 million in 2004 decreased 5.8 percent from $394.8 million in 2003 due to a cooler than normal summer in North American markets, which not only prevented in-season sales re-orders but also resulted in customer returns. Partially offsetting the lower sales of room air-conditioners in North America was the sales growth of residential air conditioner products globally and sales of all air conditioner products in Asia.
Gross profit declined to $60.2 million, or 14.6 percent of net sales, compared to $91.2 million, or 21.3 percent of net sales in 2003. Gross profit and margin percentage were adversely affected by higher component and raw material costs due to increases in commodity prices, the decrease of value-added tax (VAT) rebates of approximately $9.2 million, and by unabsorbed manufacturing costs of $5.0 million associated with the transfer of production from several U.S. factories to China.
Sales in the 2004 fourth quarter of $46.4 million increased 18.4 percent from $39.2 million in the prior-year quarter as a result of higher sales of commercial HVAC/R equipment and engineered products. Gross profit in the 2004 fourth quarter was $2.0 million, or 4.3 percent of net sales, compared to $3.7 million, or 9.4 percent of net sales, in the prior-year period.
On August 26, 2003, Fedders changed its fiscal year from August 31 to Dec. 31. Results for the fourth quarter and fiscal year ended Dec. 31, 2003 are unaudited and are presented for comparison purposes.
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