##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
 For the quarterly period ended March 31, 2007
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
 COMMISSION FILE NUMBER 1-8831
 FEDDERS CORPORATION
  DELAWARE
(State of incorporation)
    
    22-2572390
(I.R.S. Employer Identification No.)505 MARTINSVILLE ROAD, LIBERTY CORNER, NJ
(Address of principal executive offices)
    
    07938-0813
(Zip Code)
    þ o
  o þ o
  o þ




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##### 



PAGENUMBERPART I FINANCIAL INFORMATION
    
    
    3ITEM 1. FINANCIAL STATEMENTS
    
    
    3CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2007 AND 2006
    
    
    3CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 2007, DECEMBER 31, 2006 AND MARCH 31, 2006
    
    
    4CONSOLIDATED STATEMENTS OF CASH FLOWS
 FOR THE THREE MONTHS ENDED MARCH 31, 2007 AND 2006
    
    
    5CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY/(DEFICIT)
AS OF MARCH 31, 2007, DECEMBER 31, 2006 AND MARCH 31, 2006
    
    
    6NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
    
    
    7-19ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION
    
    
    20-23ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    24ITEM 4. CONTROLS AND PROCEDURES
    
    
    24-25PART II OTHER INFORMATION
    
    
    26ITEM 1. LEGAL PROCEEDINGS
    
    
    26ITEM 1A. RISK FACTORS
    
    
    26ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
    
    
    26ITEM 3. DEFAULTS ON SENIOR SECURITIES
    
    
    26ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    
    
    26ITEM 5. OTHER INFORMATION
    
    
    26ITEM 6. EXHIBITS
    
    
    26-27SIGNATURE
    
    
    28CERTIFICATIONS
    
    
    29-33EX-31.1: CERTIFICATIONSEX-31.2: CERTIFICATIONSEX-32.1: CERTIFICATIONSEX-32.2: CERTIFICATIONS
  2




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
   
 
 Three Months EndedMarch 31,(amounts in thousands, except per share data)
    
    2007
    
    
    2006Net sales
    
    $
    30,140
    
    
    $
    99,701Cost of sales
    
    
    27,982
    
    
    
    87,006Gross profit
    
    
    2,158
    
    
    
    12,695Selling, general and administrative expense
    
    
    13,939
    
    
    
    15,040Operating income/(loss)
    
    
    (11,781
    )
    
    
    (2,345
    )(Income)/loss from minority interest and net
interest in unconsolidated subsidiaries
    
    
    (418
    )
    
    
    147Interest expense, net
    
    
    6,185
    
    
    
    5,473Other (income)/expense
    
    
    224
    
    
    
    559Income/(loss) before income taxes
    
    
    (17,772
    )
    
    
    (8,524
    )Provision/(benefit) for income taxes
    
    
    15
    
    
    
    277Net income/(loss)
    
    
    (17,787
    )
    
    
    (8,801
    )Preferred stock dividends
    
    
    1,143
    
    
    
    1,143Net income/(loss) applicable to common stockholders
    
    $
    (18,930
    )
    
    $
    (9,944
    )Income/(loss) per common share:Basic net income/(loss) per common share
    
    $
    (0.56
    )
    
    $
    (0.32
    )Diluted net income/(loss) per common share
    
    
    (0.56
    )
    
    
    (0.32
    )Weighted average shares:Basic
    
    
    33,882
    
    
    
    30,832Diluted
    
    
    33,882
    
    
    
    30,832Dividends per share declared:Common and Class B Stock
    
    $
    
    
    
    $
    Preferred Stock
    
    
    
    
    
    
    
  3




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##### Table of Contents



March 31
    
    
    December 31,
    
    
    March 312007
    
    
    2006
    
    
    2006(amounts in thousands, except par value data)
    
    (Unaudited)
    
    
    
    
    
    
    (Unaudited)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    12,096
    
    
    $
    4,789
    
    
    $
    10,135Accounts receivable (net of allowance of $3,918, $3,761 and $3,698 at March 31,
2007, December 31, 2006 and March 31, 2006, respectively)
    
    
    27,808
    
    
    
    27,525
    
    
    
    65,310Inventories:Finished goods
    
    
    18,531
    
    
    
    23,633
    
    
    
    54,367Work-in-process
    
    
    1,976
    
    
    
    1,316
    
    
    
    2,716Raw materials and supplies
    
    
    19,111
    
    
    
    16,524
    
    
    
    20,923Net inventories
    
    
    39,618
    
    
    
    41,473
    
    
    
    78,006Deferred income taxes
    
    
    
    
    
    
    
    
    
    
    3,904Other current assets
    
    
    8,910
    
    
    
    12,429
    
    
    
    10,746Total current assets
    
    
    88,432
    
    
    
    86,216
    
    
    
    168,101Net property, plant and equipment:Land and improvements
    
    
    3,907
    
    
    
    3,636
    
    
    
    4,900Buildings and leasehold improvements
    
    
    35,656
    
    
    
    35,606
    
    
    
    35,150Machinery and equipment
    
    
    73,888
    
    
    
    73,695
    
    
    
    72,891Gross property, plant and equipment
    
    
    113,451
    
    
    
    112,937
    
    
    
    112,941Less accumulated depreciation
    
    
    74,845
    
    
    
    73,595
    
    
    
    69,041Net property, plant and equipment
    
    
    38,606
    
    
    
    39,342
    
    
    
    43,900Deferred income taxes
    
    
    
    
    
    
    
    
    
    
    21,629Goodwill
    
    
    27,493
    
    
    
    27,493
    
    
    
    88,052Other intangible assets
    
    
    3,546
    
    
    
    3,727
    
    
    
    4,544Other assets
    
    
    28,201
    
    
    
    24,582
    
    
    
    30,469Total assets
    
    $
    186,278
    
    
    $
    181,360
    
    
    $
    356,695LIABILITIES AND STOCKHOLDERS EQUITY/(DEFICIT)Current liabilities:Short-term notes
    
    $
    14,398
    
    
    $
    17,777
    
    
    $
    55,989Current portion of long-term debt
    
    
    743
    
    
    
    2,487
    
    
    
    2,508Accounts payable
    
    
    48,272
    
    
    
    40,795
    
    
    
    79,551Accrued expenses
    
    
    34,364
    
    
    
    41,086
    
    
    
    38,763Total current liabilities
    
    
    97,777
    
    
    
    102,145
    
    
    
    176,811Long-term debt
    
    
    201,721
    
    
    
    177,479
    
    
    
    158,052Other long-term liabilities
    
    
    18,031
    
    
    
    18,251
    
    
    
    25,086Partners net interest in joint venture
    
    
    4,519
    
    
    
    4,841
    
    
    
    4,751Total liabilities
    
    
    322,048
    
    
    
    302,726
    
    
    
    364,700Stockholders equity/(deficit):Preferred Stock, $0.01 par value, 15,000 shares authorized and 2,127 shares issued
    
    
    21
    
    
    
    21
    
    
    
    21Common Stock, $0.01 par value, 70,000 shares authorized, 37,299, 37,299, and
36,916 issued at March 31, 2007, December 31, 2006, and March 31, 2006,
respectively
    
    
    373
    
    
    
    373
    
    
    
    369Class B Stock, $0.01 par value, 5,000 shares authorized and 2,492 shares issued
    
    
    25
    
    
    
    25
    
    
    
    25Warrants
    
    
    1,000
    
    
    
    
    
    
    
    Additional paid-in capital
    
    
    115,548
    
    
    
    115,487
    
    
    
    115,118Retained earnings/(deficit)
    
    
    (230,055
    )
    
    
    (205,571
    )
    
    
    (85,036
    )Accumulated other comprehensive income/(loss)
    
    
    1,594
    
    
    
    1,272
    
    
    
    686Treasury stock, at cost, 5,278, 7,169, and 8,521 shares of Common Stock at March
31, 2007, December 31, 2006 and March 31, 2006, respectively
    
    
    (24,276
    )
    
    
    (32,973
    )
    
    
    (39,188
    )Total stockholders equity/(deficit)
    
    
    (135,770
    )
    
    
    (121,366
    )
    
    
    (8,005
    )Total liabilities and stockholders equity/(deficit)
    
    $
    186,278
    
    
    $
    181,360
    
    
    $
    356,695
  4




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##### Table of Contents



Three Months EndedMarch 31,2007
    
    
    2006(amounts in thousands, except par value data)
    
    (Unaudited)Cash flows from operating activities:Net loss
    
    $
    (17,787
    )
    
    $
    (8,801
    )Adjustments to reconcile net loss to net cash used in operating activities:Depreciation and amortization
    
    
    1,590
    
    
    
    1,846Deferred income taxes
    
    
    
    
    
    
    (22
    )Amortization of deferred financing costs
    
    
    253
    
    
    
    221Stock compensation expense
    
    
    58
    
    
    
    Partners net interest in joint venture results
    
    
    (418
    )
    
    

    147Changes in operating assets and liabilities, net of acquisition:Accounts receivable
    
    
    (283
    )
    
    
    (23,153
    )Inventories
    
    
    1,855
    
    
    
    (3,693
    )Other current assets
    
    
    (579
    )
    
    
    (4,413
    )Other assets
    
    
    (3,757
    )
    
    
    35Accounts payable
    
    
    7,477
    
    
    
    35,590Accrued expenses
    
    
    (6,722
    )
    
    
    (1,755
    )Other long-term liabilities
    
    
    (131
    )
    
    
    133Other-net
    
    
    
    
    
    
    1Net cash provided by/(used in) operating activities
    
    
    (18,444
    )
    
    
    (3,864
    )Cash flows from investing activities:Additions to property, plant, and equipment
    
    
    (673
    )
    
    
    (1,182
    )Proceeds
from prior-year sale of Walkersville, MD and sale of Columbia, TN
real estate
    
    
    4,098
    
    
    
    843Net cash provided by/(used in) investing activities
    
    
    3,425
    
    
    
    (339
    )Cash flows from financing activities:Net (repayments) of short-term notes
    
    
    (5,123
    )
    
    
    (751
    )Proceeds received from long-term debt
    
    
    50,000
    
    
    
    Net (repayments) of long-term debt
    
    
    (24,873
    )
    
    
    (106
    )Proceeds received from sale of treasury shares
    
    
    2,000
    
    
    
    Net cash provided by/(used in) financing activities
    
    
    22,004
    
    
    
    (857
    )Effect of exchange rate changes
    
    
    322
    
    
    
    778Net increase/(decrease) in cash and cash equivalents
    
    
    7,307
    
    
    
    (4,282
    )Cash and cash equivalents at beginning of period
    
    
    4,789
    
    
    
    14,417Cash and cash equivalents at end of period
    
    $
    12,096
    
    
    $
    10,135Supplemental disclosure:Interest paid
    
    $
    8,041
    
    
    $
    9,223Income taxes paid
    
    
    129
    
    
    
    95Non-cash disclosure:Warrants issued
    
    $
    1,000
    
    
    $
    
    5




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##### Table of Contents



Three Months
    
    
    Twelve Months
    
    
    Three MonthsEnded
    
    
    Ended
    
    
    EndedMarch 31,
    
    
    December 31,
    
    
    March 31,2007
    
    
    2006
    
    
    2006(Amounts in thousands except per share data)
    
    (Unaudited)
    
    
    
    
    
    
    (Unaudited)PREFERRED STOCKBalance at beginning of period
    
    $
    21
    
    
    $
    21
    
    
    $
    21Issuance of shares upon exchange offer
    
    
    
    
    
    
    
    
    
    
    Stock rights subscribed
    
    
    
    
    
    
    
    
    
    
    Issuance of shares in Islandaire acquisition
    
    
    
    
    
    
    
    
    
    
    Balance at end of period
    
    $
    21
    
    
    $
    21
    
    
    $
    21COMMON STOCKBalance at beginning of period
    
    $
    373
    
    
    $
    367
    
    
    $
    367Stock options exercised
    
    
    
    
    
    
    
    
    
    
    Restricted stock granted
    
    
    
    
    
    
    6
    
    
    
    1Issuance of shares in Islandaire acquisition
    
    
    
    
    
    
    
    
    
    
    Exchange of shares upon Preferred Stock exchange offer
    
    
    
    
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    
    
    
    
    1Balance at end of period
    
    $
    373
    
    
    $
    373
    
    
    $
    369CLASS B STOCKBalance at beginning and end of period
    
    $
    25
    
    
    $
    25
    
    
    $
    25WARRANTSBalance at beginning of period
    
    $
    
    
    
    $
    
    
    
    $
    Issuance of warrants to Goldman Sachs Partners
    
    
    1,000
    
    
    
    
    
    
    
    Balance at end of period
    
    $
    1,000
    
    
    $
    
    
    
    $
    ADDITIONAL PAID-IN CAPITALBalance at beginning of period
    
    $
    115,487
    
    
    $
    115,523
    
    
    $
    115,523Stock options exercised
    
    
    
    
    
    
    
    
    
    
    Restricted stock granted
    
    
    
    
    
    
    
    
    
    
    Cost of offerings
    
    
    
    
    
    
    
    
    
    
    Stock option re-pricing and valuation
    
    
    
    
    
    
    
    
    
    
    Amortization of restricted stock
grants
    
    
    58
    
    
    
    415
    
    
    
    78Proceeds from rights offering
    
    
    
    
    
    
    
    
    
    
    Issuance of shares in Islandaire acquisition
    
    
    
    
    
    
    
    
    
    
    Transfer from deferred compensation
    
    
    
    
    
    
    (483
    )
    
    
    (483
    )Other
    
    
    3
    
    
    
    32
    
    
    
    Balance at end of period
    
    $
    115,548
    
    
    $
    115,487
    
    
    $
    115,118RETAINED EARNINGS (DEFICIT)Balance at beginning of period
    
    $
    (205,571
    )
    
    $
    (76,232
    )
    
    $
    (76,235
    )Net (loss) income
    
    
    (17,787
    )
    
    
    (124,624
    )
    
    
    (8,801
    )Treasury stock sold for less than carrying value
    
    
    (6,697
    )
    
    
    (4,715
    )
    
    
    Dividends
    
    
    
    
    
    
    
    
    
    
    Balance at end of period
    
    $
    (230,055
    )
    
    $
    (205,571
    )
    
    $
    (85,036
    )ACCUMULATED OTHER COMPREHENSIVE LOSSBalance at beginning of period
    
    $
    1,272
    
    
    $
    (92
    )
    
    $
    (92
    )Foreign currency translation adjustment, net of tax
    
    
    322
    
    
    
    1,364
    
    
    
    778Balance at end of period
    
    $
    1,594
    
    
    $
    1,272
    
    
    $
    686DEFERRED COMPENSATIONBalance at beginning of period
    
    $
    
    
    
    $
    (483
    )
    
    $
    (483
    )Restricted stock granted
    
    
    
    
    
    
    
    
    
    
    Amortization of deferred compensation
    
    
    
    
    
    
    
    
    
    
    Re-classed to additional paid in capital
    
    
    
    
    
    
    483
    
    
    
    483Balance at end of period
    
    $
    
    
    
    $
    
    
    
    $
    TREASURY STOCKBalance at beginning of period
    
    $
    (32,973
    )
    
    $
    (39,188
    )
    
    $
    (39,188
    )Shares sold/(purchased)
    
    
    8,697
    
    
    
    6,215
    
    
    
    Balance at end of period
    
    $
    (24,276
    )
    
    $
    (32,973
    )
    
    $
    (39,188
    )
  6




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##### Table of Contents



Three Months EndedMarch 31,2007
    
    
    2006Net income/(loss)
    
    $
    (17,787
    )
    
    $
    (8,801
    )Other comprehensive income/(loss):Foreign currency translation
    
    
    322
    
    
    
    778Comprehensive income/(loss)
    
    $
    (17,465
    )
    
    $
    (8,023
    )
     7




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##### Table of Contents



Three Months EndedMarch 31,2007
    
    
    2006Restricted
stock
    
    $
    58
    
    
    $
    80Stock
options
    
    
    
    
    
    
    Total share-based compensation
expense
    
    
    58
    
    
    
    80Tax effect on share-based compensation
expense
    
    
    
    
    
    
    Net effect on income from continuing
operations
    
    
    58
    
    
    
    80Effect on basic and diluted earnings per
share
    
    $
    
    
    
    $
    
  Weighted
    
    
    
    
    
    
    WeightedAverage
    
    
    
    
    
    
    Average Grant-Grant-Date
    
    
    
    
    
    
    DateRestricted stock shares
    
    2007
    
    
    Fair Value
    
    
    2006
    
    
    Fair ValueBalance at January 1
    
    
    500,000
    
    
    $
    2.30
    
    
    
    250,000
    
    
    $
    4.35Granted
    
    
    
    
    
    
    
    
    
    
    100,000
    
    
    
    1.39Cancelled or
expired
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Balance at March 31
    
    
    500,000
    
    
    $
    2.30
    
    
    
    350,000
    
    
    $
    3.52
  Weighted
    
    
    
    
    
    
    WeightedOptions
    
    
    Average Grant-
    
    
    Options
    
    
    Average Grant-Outstanding
    
    
    Date
    
    
    Outstanding
    
    
    DateStock options
    
    2007
    
    
    Fair Value
    
    
    2006
    
    
    Fair ValueOutstanding at
January 1
    
    
    1,028,750
    
    
    $
    4.18
    
    
    
    1,128,750
    
    
    $
    4.25Granted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Cancelled or
expired
    
    
    
    
    
    
    
    
    
    
    (15,000
    )
    
    
    5.65Exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Outstanding at
March 31
    
    
    1,028,750
    
    
    $
    4.18
    
    
    
    1,113,750
    
    
    $
    4.25Exercisable at
March 31
    
    
    1,028,750
    
    
    $
    4.18
    
    
    
    1,113,750
    
    
    $
    4.25Exercise price per
share
    
    $
    3.02-$5.65
    
    
    
    
    
    
    $
    3.02 - $5.65
  Expected dividend yield
    
    
    2.1
    %Risk-free rate
    
    
    3.0
    %Expected life in years
    
    
    5Volatility
    
    
    39
    %
 8




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##### Table of Contents



Options Outstanding
                    
    
    Options ExercisableNumber
    
    
    Contractual
    
    
    Exercise
    
    
    Number
    
    
    ExerciseExercise Prices
    
    Outstanding
    
    
    Life Remaining (1)
    
    
    Price(1)
    
    
    Exercisable
    
    
    Price(1)$3.02
    
    
    573,750
    
    
    
    0.24
    
    
    $
    3.02
    
    
    
    573,750
    
    
    $
    3.02$5.65
    
    
    455,000
    
    
    
    1.58
    
    
    $
    5.65
    
    
    
    455,000
    
    
    $
    5.65(1) weighted average
    
    
    1,028,750
    
    
    
    0.83
    
    
    $
    4.18
    
    
    
    1,028,750
    
    
    $
    4.18
      EngineeredHVAC
    
    
    Products
    
    
    TotalGoodwill balance as of December 31, 2006
    
    $
    19,104
    
    
    $
    8,389
    
    
    $
    27,493Effect of foreign currency change
    
    
    
    
    
    
    
    
    
    
    Goodwill balance as of March 31, 2007
    
    $
    19,104
    
    
    $
    8,389
    
    
    $
    27,493
 March 31,
    
    
    December 31,
    
    
    March 31,2007
    
    
    2006
    
    
    2006Other intangible assets
    
    $
    3,727
    
    
    $
    6,854
    
    
    $
    6,484Accumulated amortization
    
    
    (181
    )
    
    
    (3,127
    )
    
    
    (1,564
    )Other intangible assets  net
    
    $
    3,546
    
    
    $
    3,727
    
    
    $
    4,920
    9




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##### Table of Contents



Three Months EndedMarch 312007
    
    
    2006Net sales:HVAC
    
    $
    23,597
    
    
    $
    93,299Engineered Products
    
    
    6,543
    
    
    
    6,402Net sales
    
    $
    30,140
    
    
    $
    99,701Income/(loss) by segment:HVAC
    
    $
    (8,398
    )
    
    $
    (1,925
    )Engineered Products
    
    
    384
    
    
    
    61Segment operating income/(loss)
    
    
    (8,014
    )
    
    
    (1,864
    )Non-allocated expense/(income)
    
    
    3,573
    
    
    
    1,187Interest expense, net
    
    
    6,185
    
    
    
    5,473Income tax expense/(benefit)
    
    
    15
    
    
    
    277Net income/(loss)
    
    $
    (17,787
    )
    
    $
    (8,801
    )
 March 31,
    
    
    December 31,
    
    
    March 31,2007
    
    
    2006
    
    
    2006Total assets:HVAC
    
    $
    110,345
    
    
    $
    113,269
    
    
    $
    264,825Engineered Products
    
    
    25,484
    
    
    
    27,666
    
    
    
    38,886Non-allocated assets
    
    
    50,449
    
    
    
    40,425
    
    
    
    52,984$
    186,278
    
    
    $
    181,360
    
    
    $
    356,695
  10




---



##### Table of Contents



Three Months EndedMarch 31,2007
    
    
    2006Change in benefit obligationBenefit obligation at beginning of year
    
    $
    7,597
    
    
    $
    10,280Interest cost
    
    
    135
    
    
    
    138Actuarial changes and other
    
    
    
    
    
    
    (90
    )Benefits paid
    
    
    (413
    )
    
    
    (418
    )Benefit obligation at end of period
    
    $
    7,319
    
    
    $
    9,910Weighted-average assumptions as of March 31:Discount rate
    
    
    8.03
    %
    
    
    5.75
    %
     2007
    
    
    2006Warranty balance at beginning of period
    
    $
    6,978
    
    
    $
    7,552Accrual for warranty based on revenue during the period
    
    
    1,110
    
    
    
    3,531Settlements made during the period
    
    
    (1,053
    )
    
    
    (1,833
    )Warranty balance at end of period
    
    $
    7,035
    
    
    $
    9,250
   .
 11




---



##### Table of Contents



March 31
    
    
    December 312007
    
    
    20069 7/8% Senior Subordinated Notes due in 2014 ($155,000 principal
amount less unamortized discount of $3,761 and $3,854 as of March 31,
2007 and December 31, 2006, respectively)
    
    $
    151,239
    
    
    $
    151,146Promissory note payable to the State of Illinois
    
    
    467
    
    
    
    561Trion Industrial Revenue Bond
    
    
    
    
    
    
    3,200Eubank Manufacturing Enterprises, Inc. mortgage
    
    
    269
    
    
    
    321Fedders Addison Company mortgage
    
    
    
    
    
    
    1,902Wachovia debt reclassified to long-term
    
    
    
    
    
    
    20,277Goldman
Sachs Credit Partners Note, net of $977 unamortized warrants cost
    
    
    49,023
    
    
    
    Capital lease obligations
    
    
    1,466
    
    
    
    2,559Total debt
    
    
    202,464
    
    
    
    179,966Less current maturities
    
    
    743
    
    
    
    2,487Total long-term debt
    
    $
    201,721
    
    
    $
    177,479
   12




---



##### Table of Contents



13




---



##### Table of Contents



Three Months Ended March 31, 2007FeddersNorth
    
    
    Other
    
    
    Corporate
    
    
    Eliminating
    
    
    FeddersAmerica
    
    
    Fedders
    
    
    Parent
    
    
    Entries
    
    
    CorporationNet sales
    
    $
    26,324
    
    
    $
    3,816
    
    
    $
    
    
    
    $
    
    
    
    $
    30,140Cost of sales
    
    
    22,993
    
    
    
    4,989
    
    
    
    
    
    
    
    
    
    
    
    27,982Gross profit
    
    
    3,331
    
    
    
    (1,173
    )
    
    
    
    
    
    
    
    
    
    
    2,158Selling, general and administrative expense (a)
    
    
    8,433
    
    
    
    1,227
    
    
    
    4,279
    
    
    
    
    
    
    
    13,939Asset impairment, employee severance and other
restructuring charges/(credits)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Operating income/(loss)
    
    
    (5,102
    )
    
    
    (2,400
    )
    
    
    (4,279
    )
    
    
    
    
    
    
    (11,781
    )(Income)/loss from minority interest and net
interest in unconsolidated subsidiaries
    
    
    (3
    )
    
    
    (415
    )
    
    
    
    
    
    
    
    
    
    
    (418
    )Equity income in investment
    
    
    
    
    
    
    
    
    
    
    13,532
    
    
    
    (13,532
    )
    
    
    Interest expense, net (b)
    
    
    5,890
    
    
    
    295
    
    
    
    
    
    
    
    
    
    
    
    6,185Other (income)/expense
    
    
    (28
    )
    
    
    276
    
    
    
    (24
    )
    
    
    
    
    
    
    224Income/(loss) before income taxes
    
    
    (10,961
    )
    
    
    (2,556
    )
    
    
    (17,787
    )
    
    
    13,532
    
    
    
    (17,772
    )Provision/(benefit) for income taxes
    
    
    4
    
    
    
    11
    
    
    
    
    
    
    
    
    
    
    
    15Income/(loss) from continuing operations
    
    
    (10,965
    )
    
    
    (2,567
    )
    
    
    (17,787
    )
    
    
    13,532
    
    
    
    (17,787
    )Preferred stock dividend
    
    
    
    
    
    
    
    
    
    
    1,143
    
    
    
    
    
    
    
    1,143Net income/(loss) applicable to common stockholders
    
    $
    (10,965
    )
    
    $
    (2,567
    )
    
    $
    (18,930
    )
    
    $
    13,532
    
    
    $
    (18,930
    )
 Three Months Ended March 31, 2006FeddersNorth
    
    
    Other
    
    
    Corporate
    
    
    Eliminating
    
    
    FeddersAmerica
    
    
    Fedders
    
    
    Parent
    
    
    Entries
    
    
    CorporationNet sales
    
    $
    91,223
    
    
    $
    75,208
    
    
    $
    
    
    
    $
    (66,730
    )
    
    $
    99,701Cost of sales
    
    
    84,686
    
    
    
    69,050
    
    
    
    
    
    
    
    (66,730
    )
    
    
    87,006Gross profit
    
    
    6,537
    
    
    
    6,158
    
    
    
    
    
    
    
    
    
    
    
    12,695Selling, general and administrative expense (a)
    
    
    11,334
    
    
    
    3,405
    
    
    
    301
    
    
    
    
    
    
    
    15,040Asset impairment, employee severance and other
restructuring charges/(credits)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Operating income/(loss)
    
    
    (4,797
    )
    
    
    2,753
    
    
    
    (301
    )
    
    
    
    
    
    
    (2,345
    )(Income)/loss from minority interest and net
interest in unconsolidated subsidiaries
    
    
    29
    
    
    
    118
    
    
    
    
    
    
    
    
    
    
    
    147Equity income in investment
    
    
    
    
    
    
    
    
    
    
    (8,500
    )
    
    
    8,500
    
    
    
    Interest expense, net (b)
    
    
    4,806
    
    
    
    667
    
    
    
    
    
    
    
    
    
    
    
    5,473Other (income)/expense
    
    
    254
    
    
    
    305
    
    
    
    
    
    
    
    
    
    
    
    559Income/(loss) from continuing operations before
income taxes
    
    
    (9,886
    )
    
    
    1,663
    
    
    
    (8,801
    )
    
    
    8,500
    
    
    
    (8,524
    )Provision/(benefit) for income taxes
    
    
    9
    
    
    
    268
    
    
    
    
    
    
    
    
    
    
    
    277Income/(loss) from continuing operations
    
    
    (9,895
    )
    
    
    1,395
    
    
    
    (8,801
    )
    
    
    8,500
    
    
    
    (8,801
    )Preferred stock dividends
    
    
    
    
    
    
    
    
    
    
    1,143
    
    
    
    
    
    
    
    1,143Net income/(loss) applicable to common stockholders
    
    $
    (9,895
    )
    
    $
    1,395
    
    
    $
    (9,944
    )
    
    $
    8,500
    
    
    $
    (9,944
    )
 14




---



##### Table of Contents



March 31, 2007FeddersNorth
    
    
    Other
    
    
    Corporate
    
    
    Eliminating
    
    
    FeddersAmerica
    
    
    Fedders
    
    
    Parent
    
    
    Entries
    
    
    CorporationASSETSCurrent assets:Cash and cash equivalents
    
    $
    1,376
    
    
    $
    2,982
    
    
    $
    7,738
    
    
    $
    
    
    
    $
    12,096Net accounts receivable
    
    
    21,312
    
    
    
    6,496
    
    
    
    
    
    
    
    
    
    
    
    27,808Net inventories
    
    
    26,214
    
    
    
    13,404
    
    
    
    
    
    
    
    
    
    
    
    39,618Other current assets
    
    
    2,785
    
    
    
    6,090
    
    
    
    35
    
    
    
    
    
    
    
    8,910Total current assets
    
    
    51,687
    
    
    
    28,972
    
    
    
    7,773
    
    
    
    
    
    
    
    88,432Investments in subsidiaries
    
    
    
    
    
    
    
    
    
    
    (198,778
    )
    
    
    198,778
    
    
    
    Net property, plant and equipment
    
    
    24,064
    
    
    
    14,478
    
    
    
    64
    
    
    
    
    
    
    
    38,606Goodwill
    
    
    27,493
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    27,493Other intangible assets
    
    
    3,546
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,546Other assets
    
    
    4,815
    
    
    
    5,960
    
    
    
    17,426
    
    
    
    
    
    
    
    28,201Total assets
    
    $
    111,605
    
    
    $
    49,410
    
    
    $
    (173,515
    )
    
    $
    198,778
    
    
    $
    186,278LIABILITIES AND
STOCKHOLDERS EQUITY/(DEFICIT)Current liabilities:Short-term notes
    
    $
    
    
    
    $
    14,398
    
    
    $
    
    
    
    $
    
    
    
    $
    14,398Current portion of long-term debt
    
    
    743
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    743Accounts payable
    
    
    13,897
    
    
    
    27,150
    
    
    
    7,225
    
    
    
    
    
    
    
    48,272Accrued expenses
    
    
    18,648
    
    
    
    8,731
    
    
    
    6,985
    
    
    
    
    
    
    
    34,364Total current liabilities
    
    
    33,288
    
    
    
    50,279
    
    
    
    14,210
    
    
    
    
    
    
    
    97,777Long-term debt
    
    
    201,721
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    201,721Other long-term liabilities
    
    
    5,561
    
    
    
    3,505
    
    
    
    13,484
    
    
    
    
    
    
    
    22,550Net due to (from) affiliates
    
    
    31,249
    
    
    
    34,190
    
    
    
    (65,439
    )
    
    
    
    
    
    
    Total liabilities
    
    
    271,819
    
    
    
    87,974
    
    
    
    (37,745
    )
    
    
    
    
    
    
    322,048Stockholders equity/(deficit):Preferred Stock
    
    
    5
    
    
    
    
    
    
    
    21
    
    
    
    (5
    )
    
    
    21Common and Class B Stock
    
    
    
    
    
    
    
    
    
    
    398
    
    
    
    
    
    
    
    398Warrants
    
    
    
    
    
    
    
    
    
    
    1,000
    
    
    
    
    
    
    
    1,000Additional paid-in capital
    
    
    26,938
    
    
    
    27,403
    
    
    
    115,548
    
    
    
    (54,341
    )
    
    
    115,548Retained earnings/(deficit)
    
    
    (187,327
    )
    
    
    (67,273
    )
    
    
    (230,055
    )
    
    
    254,600
    
    
    
    (230,055
    )Treasury stock
    
    
    
    
    
    
    
    
    
    
    (24,276
    )
    
    
    
    
    
    
    (24,276
    )Accumulated other comprehensive loss
    
    
    170
    
    
    
    1,306
    
    
    
    1,594
    
    
    
    (1,476
    )
    
    
    1,594Total stockholders equity/(deficit)
    
    
    (160,214
    )
    
    
    (38,564
    )
    
    
    (135,770
    )
    
    
    198,778
    
    
    
    (135,770
    )Total liabilities and stockholders
equity/(deficit)
    
    $
    111,605
    
    
    $
    49,410
    
    
    $
    (173,515
    )
    
    $
    198,778
    
    
    $
    186,278
 15




---



##### Table of Contents



As of December 31, 2006FeddersNorth
    
    
    Other
    
    
    
    
    
    
    Eliminating
    
    
    FeddersAmerica
    
    
    Fedders
    
    
    Corporate
    
    
    Entries
    
    
    CorporationASSETSCurrent assets:Cash and cash equivalents
    
    $
    1,490
    
    
    $
    2,597
    
    
    $
    702
    
    
    $
    
    
    
    $
    4,789Net accounts receivable
    
    
    20,982
    
    
    
    6,543
    
    
    
    
    
    
    
    
    
    
    
    27,525Inventories
    
    
    30,604
    
    
    
    10,869
    
    
    
    
    
    
    
    
    
    
    
    41,473Other current assets
    
    
    5,356
    
    
    
    6,356
    
    
    
    717
    
    
    
    
    
    
    
    12,429Total current assets
    
    
    58,432
    
    
    
    26,365
    
    
    
    1,419
    
    
    
    
    
    
    
    86,216Investments in subsidiaries
    
    
    
    
    
    
    
    
    
    
    (185,804
    )
    
    
    185,804
    
    
    
    Net property, plant and equipment
    
    
    24,544
    
    
    
    14,733
    
    
    
    65
    
    
    
    
    
    
    
    39,342Goodwill
    
    
    27,493
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    27,493Other intangible assets
    
    
    3,727
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,727Other assets
    
    
    3,821
    
    
    
    5,373
    
    
    
    15,388
    
    
    
    
    
    
    
    24,582Total assets
    
    $
    118,017
    
    
    $
    46,471
    
    
    $
    (168,932
    )
    
    $
    185,804
    
    
    $
    181,360LIABILITIES AND
STOCKHOLDERS EQUITY/(DEFICIT)Current liabilities:Short-term notes
    
    $
    
    
    
    $
    17,777
    
    
    $
    
    
    
    $
    
    
    
    $
    17,777Current portion of long-term debt
    
    
    2,487
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,487Accounts payable
    
    
    13,124
    
    
    
    23,218
    
    
    
    4,453
    
    
    
    
    
    
    
    40,795Accrued expenses
    
    
    24,545
    
    
    
    7,322
    
    
    
    9,219
    
    
    
    
    
    
    
    41,086Total current liabilities
    
    
    40,156
    
    
    
    48,317
    
    
    
    13,672
    
    
    
    
    
    
    
    102,145Long-term debt
    
    
    177,479
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    177,479Other long-term liabilities
    
    
    5,171
    
    
    
    3,829
    
    
    
    14,102
    
    
    
    
    
    
    
    23,102Net due to (from) affiliates
    
    
    44,450
    
    
    
    30,887
    
    
    
    (75,337
    )
    
    
    
    
    
    
    Total liabilities
    
    
    267,256
    
    
    
    83,033
    
    
    
    (47,563
    )
    
    
    
    
    
    
    302,726Stockholders equity/(deficit):Preferred Stock
    
    
    5
    
    
    
    
    
    
    
    21
    
    
    
    (5
    )
    
    
    21Common and Class B Stock
    
    
    
    
    
    
    
    
    
    
    398
    
    
    
    
    
    
    
    398Additional paid-in capital
    
    
    26,938
    
    
    
    27,403
    
    
    
    115,487
    
    
    
    (54,341
    )
    
    
    115,487Retained earnings/(deficit)
    
    
    (176,364
    )
    
    
    (64,935
    )
    
    
    (205,574
    )
    
    
    241,302
    
    
    
    (205,571
    )Deferred compensation and treasury stock
    
    
    
    
    
    
    
    
    
    
    (32,973
    )
    
    
    
    
    
    
    (32,973
    )Accumulated other comprehensive loss
    
    
    182
    
    
    
    970
    
    
    
    1,272
    
    
    
    (1,152
    )
    
    
    1,272Total stockholders equity/(deficit)
    
    
    (149,239
    )
    
    
    (36,562
    )
    
    
    (121,369
    )
    
    
    185,804
    
    
    
    (121,366
    )Total liabilities and stockholders
equity/(deficit)
    
    $
    118,017
    
    
    $
    46,471
    
    
    $
    (168,932
    )
    
    $
    185,804
    
    
    $
    181,360
 16




---



##### Table of Contents



March 31, 2006FeddersNorth
    
    
    Other
    
    
    Corporate
    
    
    Eliminating
    
    
    FeddersAmerica
    
    
    Fedders
    
    
    Parent
    
    
    Entries
    
    
    CorporationASSETSCurrent assets:Cash and cash equivalents
    
    $
    5,052
    
    
    $
    4,142
    
    
    $
    941
    
    
    $
    
    
    
    $
    10,135Net accounts receivable
    
    
    55,510
    
    
    
    9,800
    
    
    
    
    
    
    
    
    
    
    
    65,310Net inventories
    
    
    58,969
    
    
    
    19,037
    
    
    
    
    
    
    
    
    
    
    
    78,006Other current assets
    
    
    3,117
    
    
    
    7,763
    
    
    
    9,110
    
    
    
    (5,340
    )
    
    
    14,650Total current assets
    
    
    122,648
    
    
    
    40,742
    
    
    
    10,051
    
    
    
    (5,340
    )
    
    
    168,101Investments in subsidiaries
    
    
    
    
    
    
    
    
    
    
    (116,655
    )
    
    
    116,655
    
    
    
    Net property, plant and equipment
    
    
    26,891
    
    
    
    16,928
    
    
    
    81
    
    
    
    
    
    
    
    43,900Goodwill
    
    
    72,980
    
    
    
    15,072
    
    
    
    
    
    
    
    
    
    
    
    88,052Other intangible assets
    
    
    4,534
    
    
    
    10
    
    
    
    
    
    
    
    
    
    
    
    4,544Other assets
    
    
    4,245
    
    
    
    6,801
    
    
    
    41,052
    
    
    
    
    
    
    
    52,098Total assets
    
    $
    231,298
    
    
    $
    79,553
    
    
    $
    (65,471
    )
    
    $
    111,315
    
    
    $
    356,695LIABILITIES AND STOCKHOLDERS
EQUITY/(DEFICIT)Current liabilities:Short-term notes
    
    $
    35,785
    
    
    $
    20,204
    
    
    $
    
    
    
    $
    
    
    
    $
    55,989Current portion of long-term debt
    
    
    2,389
    
    
    
    119
    
    
    
    
    
    
    
    
    
    
    
    2,508Accounts and income taxes payable
    
    
    12,864
    
    
    
    64,644
    
    
    
    3,429
    
    
    
    
    
    
    
    80,937Accrued expenses
    
    
    21,258
    
    
    
    9,145
    
    
    
    6,974
    
    
    
    
    
    
    
    37,377Total current liabilities
    
    
    72,296
    
    
    
    94,112
    
    
    
    10,403
    
    
    
    
    
    
    
    176,811Long-term debt
    
    
    156,729
    
    
    
    1,323
    
    
    
    
    
    
    
    
    
    
    
    158,052Other long-term liabilities
    
    
    4,182
    
    
    
    9,951
    
    
    
    21,044
    
    
    
    (5,340
    )
    
    
    29,837Net due to (from) affiliates
    
    
    93,910
    
    
    
    (4,997
    )
    
    
    (88,913
    )
    
    
    
    
    
    
    Total liabilities
    
    
    327,117
    
    
    
    100,389
    
    
    
    (57,466
    )
    
    
    5,340
    )
    
    
    364,700Stockholders equity/(deficit):Preferred Stock
    
    
    
    
    
    
    
    
    
    
    21
    
    
    
    
    
    
    
    21Common and Class B Stock
    
    
    5
    
    
    
    
    
    
    
    394
    
    
    
    (5
    )
    
    
    394Additional paid-in capital
    
    
    4,727
    
    
    
    29,106
    
    
    
    115,118
    
    
    
    (33,833
    )
    
    
    115,118Retained earnings/(deficit)
    
    
    (100,615
    )
    
    
    (50,564
    )
    
    
    (85,036
    )
    
    
    151,179
    
    
    
    (85,036
    )Deferred compensation and treasury stock
    
    
    
    
    
    
    
    
    
    
    (39,188
    )
    
    
    
    
    
    
    (39,188
    )Accumulated other comprehensive loss
    
    
    64
    
    
    
    622
    
    
    
    686
    
    
    
    (686
    )
    
    
    686Total stockholders equity/(deficit)
    
    
    (95,819
    )
    
    
    (20,836
    )
    
    
    (8,005
    )
    
    
    116,655
    
    
    
    (8,005
    )Total liabilities and stockholders
equity/(deficit)
    
    $
    231,298
    
    
    $
    79,553
    
    
    $
    (65,471
    )
    
    $
    111,315
    
    
    $
    356,695
 17




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##### Table of Contents



For The Three Months Ended March 31, 2007FeddersNorth
    
    
    Other
    
    
    Corporate
    
    
    Eliminating
    
    
    FeddersAmerica
    
    
    Fedders
    
    
    Parent
    
    
    Entries
    
    
    CorporationNet cash (used in) provided by operating activities
    
    $
    (13,025
    )
    
    $
    416
    
    
    $
    (5,835
    )
    
    $
    
    
    
    $
    (18,444
    )Net additions to property, plant and equipment
    
    
    (357
    )
    
    
    (291
    )
    
    
    (25
    )
    
    
    
    
    
    
    (673
    )Proceeds from prior year Walkersville sale
    
    
    4,098
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,098Net cash
(used in) provided by investing activities
    
    
    3,741
    
    
    
    (291
    )
    
    
    (25
    )
    
    
    
    
    
    
    3,425Repayments of short-term notes
    
    
    (1,744
    )
    
    
    (3,379
    )
    
    
    
    
    
    
    
    
    
    
    (5,123
    )Warrants issued
    
    
    (1,000
    )
    
    
    
    
    
    
    1,000
    
    
    
    
    
    
    
    Proceeds from long-term debt
    
    
    50,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    50,000Repayments of long-term borrowings
    
    
    (24,873
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (24,873
    )Proceeds from sale of treasury stock
    
    
    
    
    
    
    
    
    
    
    2,000
    
    
    
    
    
    
    
    2,000Change in net due to (from ) affiliate
    
    
    (13,201
    )
    
    
    3,303
    
    
    
    9,898
    
    
    
    
    
    
    
    Net cash (used in) provided by financing activities
    
    
    9,182
    
    
    
    (76
    )
    
    
    12,898
    
    
    
    
    
    
    
    22,004Effect of exchange rates
    
    
    (12
    )
    
    
    336
    
    
    
    (2
    )
    
    
    
    
    
    
    322Net (decrease) increase in cash and cash equivalents
    
    
    (114
    )
    
    
    385
    
    
    
    7,036
    
    
    
    
    
    
    
    7,307Cash and cash equivalents at beginning of period
    
    
    1,490
    
    
    
    2,597
    
    
    
    702
    
    
    
    
    
    
    
    4,789Cash and cash equivalents at end of period
    
    $
    1,376
    
    
    $
    2,982
    
    
    $
    7,738
    
    
    $
    
    
    
    $
    12,096
 For The Three Months Ended March 31, 2006FeddersNorth
    
    
    Other
    
    
    Corporate
    
    
    Eliminating
    
    
    FeddersAmerica
    
    
    Fedders
    
    
    Parent
    
    
    Entries
    
    
    CorporationNet cash (used in) provided by operating activities
    
    $
    (18,379
    )
    
    $
    30,956
    
    
    $
    (16,441
    )
    
    $
    
    
    
    $
    (3,864
    )Net additions to property, plant and equipment
    
    
    (536
    )
    
    
    (632
    )
    
    
    (14
    )
    
    
    
    
    
    
    (1,182
    )Disposal of property, plant and equipment
    
    
    843
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    843Acquisition of business, net of cash acquired
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net cash (used in) provided by investing activities
    
    
    307
    
    
    
    (632
    )
    
    
    (14
    )
    
    
    
    
    
    
    (339
    )Proceeds (repayments) of short-term notes
    
    
    1,186
    
    
    
    (1,937
    )
    
    
    
    
    
    
    
    
    
    
    (751
    )Net repayments of long-term debt
    
    
    (80
    )
    
    
    (26
    )
    
    
    
    
    
    
    
    
    
    
    (106
    )Change in net due to (from) affiliate
    
    
    15,563
    
    
    
    (31,297
    )
    
    
    15,734
    
    
    
    
    
    
    
    Net cash provided by (used in) financing activities
    
    
    16,669
    
    
    
    (33,260
    )
    
    
    15,734
    
    
    
    
    
    
    
    (857
    )Effect of exchange rates
    
    
    
    
    
    
    778
    
    
    
    
    
    
    
    
    
    
    
    778Net (decrease) increase in cash and cash equivalents
    
    
    (1,403
    )
    
    
    (2,158
    )
    
    
    (721
    )
    
    
    
    
    
    
    (4,282
    )Cash and cash equivalents at beginning of period
    
    
    6,455
    
    
    
    6,300
    
    
    
    1,662
    
    
    
    
    
    
    
    14,417Cash and cash equivalents at end of period
    
    $
    5,052
    
    
    $
    4,142
    
    
    $
    941
    
    
    $
    
    
    
    $
    10,135
 18




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19




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##### Table of Contents



Overview
      Development of the Business
  20




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##### Table of Contents



Results of Operations
  Operating Results as a Percent of Net Sales
 Three Months EndedMarch 31,2007
    
    
    2006Net sales
    
    $
    30,140
    
    
    $
    99,701Gross profit
    
    
    7.2
    %
    
    
    12.7
    %Selling, general, and administrative expense
    
    
    (46.2
    )
    
    
    (15.1
    )Operating income/(loss)
    
    
    (39.1
    )
    
    
    (2.4
    )Net interest expense
    
    
    (20.5
    )
    
    
    (5.5
    )Pre-tax loss
    
    
    (59.0
    )
    
    
    (8.4
    )
 Three Months Ended March 31, 2007 versus the Three Months Ended March 31, 2006
       21




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Liquidity and Capital Resources
        22




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23




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.
 .
 An Audit of
Internal Control Over Financial Reporting Performed in Conjunction with an Audit of Financial
Statements
 Changes in Internal Control Over Financial Reporting
 Changes In Internal Control Over Financial Reporting.
 24




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##### Table of Contents



a.)
    
    The Company established a work plan to develop new, more efficient accounting
processes and scheduled meeting dates in the second quarter of 2007 to complete this
initiative that will free up resources to accelerate the closing process and reconcile
accounts.b.)
    
    The Company required that operating units submit to the Corporate office balance
sheet reconciliations with evidence of appropriate review and approval.c.)
    
    The Company required that operating units submit to the Corporate office an
analytical review of the income statement and balance sheet as well as a reconciliation of
the unit trial balance to its financial statements.d.)
    
    The Company identified additional potential risks and drafted improved controls for
information technology based on COBIT.e.)
    
    The Company communicated the remediation log from the year-end testing for each
operating entity and established a framework for remediation in the second quarter.
 Limitations on the Effectiveness of Controls.
   25




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##### Table of Contents



PART II  OTHER INFORMATION
 
   
   
   
   
   
   
  EXHIBITNUMBER
    
    DESCRIPTION10.1
    
    Revolving Loan and Guaranty Agreement dated as of March 20, 2007 among Fedders North America, Inc.,
Emerson Quiet Kool Corporation, Columbia Specialties, Inc., Trion, Inc., Envirco Corporation,
Eubank Coil Company, Fedders Addison Company, Inc., Fedders Islandaire, Inc. and Island Metal
Fabricating, Inc., (each individually a Borrower and collectively, Borrowers), Fedders
Corporation, as Holdings and a Guarantor, certain subsidiaries of Fedders Corporation, as
Guarantors, Lenders party hereto from time to time, Bank of America, N.A. as Administrative Agent
and as Collateral Agent and General Electric Capital Corporation as Documentation Agent, and
Goldman Sachs Credit Partners L.P., as Sole Lead Arranger, Sole Bookrunner and Sole Syndication
Agent, filed as Exhibit 10.1 to the Companys Current Report on Form 8-K dated March 26, 2007 and
incorporated herein by reference.10.2
    
    Term Loan and Guaranty Agreement dated as of March 20, 2007 among Fedders North America, Inc.,
Fedders Corporation as Holdings and a Guarantor, Certain Subsidiaries of Fedders Corporation, as
Guarantors, Lenders party hereto from time to time, and Goldman Sachs Credit Partners L.P. as Sole
Lead Arranger, Sole Bookrunner and Sole Syndication Agent, as Administrative Agent and as
Collateral Agent, filed as Exhibit 10.2 to the Companys Current Report on Form 8-K dated March 26,
2007 and incorporated herein by reference.10.3
    
    Pledge and Security Agreement dated as of March 20, 2007 among Fedders Corporation, as Grantor,
Fedders North America, Inc., as Grantor, each of the other Grantors from time to time party hereto
and Bank of America, N.A., as Collateral Agent and Administrative Agent, filed as Exhibit 10.3 to
the Companys Current Report on Form 8-K dated March 26, 2007 and incorporated herein by reference.10.4
    
    Pledge and Security Agreement dated as of March 20, 2007 among Fedders Corporation, as Grantor,
Fedders North America, Inc., as Grantor, each of the other Grantors from time to time party hereto
and Goldman Sachs Credit Partners L.P., as Collateral Agent, filed as Exhibit 10.4 to the Companys
Current Report on Form 8-K dated March 26, 2007 and incorporated herein by reference.
 26




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EXHIBITNUMBER
    
    DESCRIPTION31.1
    
    Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2
    
    Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 200232.1
    
    Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 200232.2
    
    Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
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FEDDERS CORPORATIONBy:
    ROBERT L. LAURENT, JR.Chief Financial Officer   28