NEW YORK — A large year-ago tax credit bore the lion’s share of responsibility for an 87.1 percent drop in Loehmann’s Holdings’ fourth-quarter net income.

The retailer of off-price apparel and accessories reported that net income for the three months ended Feb. 1 dropped to $409,000, or 5 cents a diluted share from $3.2 million, or 46 cents, in the final quarter of fiscal 2001. The most recent figures include pre-tax charges totaling $55,000 for store closings and the sale of its Bronx headquarters facility. Last year’s numbers, in addition to a tax credit of $2.5 million, include a $500,000 pretax charge for the closure of a store.

Assuming an equal tax rate in both periods and excluding the one-time charges, income in the 2002 quarter would have been $800,000, or 11 cents a diluted share, compared with $700,000, or 10 cents, for the 2001 quarter.

The opening of two new stores helped sales for the period notch up 1.6 percent to $85.6 million over year-ago sales of $84.2 million. However, comparable-store sales slipped 0.4 percent. The retailer currently operates 45 stores.

"In the face of weak consumer spending, we effectively managed our inventory and were able to preserve our gross margins and achieve earnings before interest, taxes, depreciation and amortization for the fourth quarter of $4.2 million versus $4.5 million last year," Robert N. Friedman, Loehmann’s chief executive, said in a statement.

He also noted that, during the year, the firm had redeemed $15 million of its 11 percent senior notes, which will help reduce interest expense going forward, and boosted gross margin to 38.4 percent from 37.1 percent a year ago.

For the year, net income rose 77.6 percent to $12.6 million, or $1.71 per diluted share, including a one-time gain, net of tax, of $2.3 million, or 31 cents a diluted share, related to the sale of its Bronx facility. Last year’s income was $7.1 million, or $1.04. Assuming the equal tax rate and excluding the charges relating to the store’s closing and the Bronx facility sale, income in 2002 would have been $10.3 million, or $1.41, compared with $4.5 million, or 66 cents, in 2001.Total sales for the 12 months increased 8.2 percent to $349 million over $322.5 million in the year-ago period and grew 7.4 percent on a comp basis. EBITDA increased 36 percent to $29 million, or 8.3 percent of sales.

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