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Whitehall Jewellers announces financial results for Q3

10 Dec '05

3 min read

Nation's specialty jewelry headquarter Whitehall Jewellers Inc reported financial results for the third quarter ended October 31, 2005.

As previously disclosed, the Company plans to close 77 unprofitable stores and to liquidate approximately $44 million of primarily unproductive inventory in those stores. The Company expects these stores to close by February 2006. In connection with store closings and other restructuring activities, the Company recorded certain expenses in the third quarter of 2005.

The four most significant accounting entries impacting third quarter results were:

(i) a $17.9 million inventory valuation allowance primarily associated with inventory liquidation sales being conducted in 77 closing stores,

(ii) a $5.4 million non-cash charge related to the impairment of long-lived store fixed assets of the 77 closing stores, and a $0.5 million non-cash impairment charge for stores that will remain open,

(iii) higher professional fees and interest expense associated primarily with the bridge loan agreement and the extension of the senior credit facility, both entered into on October 3, 2005 and

(iv) the Company did not record an income tax benefit associated with the pre-tax loss for the third quarter of fiscal 2005.

The Company reported total third quarter sales of $58.9 million compared to $63.3 million for the third quarter last year. Net loss for the third fiscal quarter of 2005 was $42.9 million compared to net loss of $8.3 million for the same period a year ago. Net loss per share of $3.07 in the third quarter compares to net loss per share of $0.60 for the third quarter of last year.

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