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UPDATE 2-Ethan Allen posts loss, sees retail improving
April 30, 2009 / 11:47 AM / in 9 years

UPDATE 2-Ethan Allen posts loss, sees retail improving

* Q3 adj loss 46 cts in line w/forecast, below Street view

* Q3 sales fall more than 40 pct to $140.2 mln

* Replacing unsecured revolver w/secured credit line

* Sees signs of retail improvement (Adds details on credit revolver, marketing campaign)

NEW YORK, April 30 (Reuters) - Ethan Allen Interiors Inc (ETH.N), hurt by weak sales and charges, posted a quarterly loss on Thursday that was deeper than analysts had expected, but in line with its forecast.

The furniture maker and retailer also said it would replace its unsecured credit revolver with a secured facility.

Ethan Allen, which already consolidated its manufacturing operations and retail service centers amid the industrywide slump in furniture sales, said it saw some bright spots.

“Although the economic environment remains very difficult, we are pleased that the retail environment seems to show some indications of improvement,” Chief Executive Farooq Kathwari said in a statement.

As a result, the company has launched a marketing campaign that includes reintroducing new, eco-friendly and other selected products at special prices.

The company lost $48.7 million, or $1.69 per share, in its fiscal third quarter that ended on March 31, compared with a net profit of $8.8 million, or 30 cents per share, a year ago.

Excluding restructuring and impairment charges, the company’s loss was 46 cents per share.

Ethan Allen warned earlier this month that its loss would range from 43 cents to 47 cents per share, excluding items. Nonetheless, analysts on average were expecting an adjusted loss of 34 cents per share, according to Reuters Estimates.

Sales declined more than 40 percent to $140.2 million.

The company said it was terminating its $100 million unsecured revolving credit facility, expiring in July 2010. It is replacing it in coming weeks with a secure, asset-based three-year facility of about $60 million.

While the new facility should give it greater flexibility, Ethan Allen said it has no plans to use it in the near term. (Reporting by Martinne Geller, editing by Maureen Bavdek)

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