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LNT first-quarter loss widens

Clifton, N.J. – Linens ’n Thing this afternoon reported that it posted a net loss of $130.6 million for the first quarter vs. a net loss of $58.2 million in the previous year’s first quarter.

The loss, for the period ended March 29, incorporates $36.4 million in impairment charges to write down property, equipment and assets related to the recently announced closure of 120 stores.

Based on preliminary results, which LNT cautioned could be amended upon further review, first quarter gross margin increased 180 basis points to 39.2% of sales from 37.4% in the year ago period. The jump was driven by an improvement in mark-on as well as lower net markdowns, according to the filing.

EBITDA (earnings before interest, income taxes, depreciation and amortization) was negative $38.2 million compared to negative $33.0 million in last year’s first quarter. LNT attributed the result to higher selling, general and administrative expenses generated by a larger marketing spend as well as a broader store base.

Among the strategic alternatives the company is pursuing, LNT listed the sale of company assets, including inventory; sale of the company; additional equity financing; or some other recapitalization offer.

In its filing with the Securities and Exchange Commission, LNT also notes that the grace period it was granted to defer approximately $16.1 million in quarterly interest to holders of $650 million in senior secured floating notes ends today. “Thereafter the interest nonpayment will constitute an event of default under the indenture and, under the terms of the indenture, the trustee or holders of at least 25% in principal amount of the notes could cause the obligations under the notes to be accelerated.”

Two days ago, LNT reported first quarter sales of $566.9 million, down 0.8%, and a comp decline of 5.7%. The company filed for Chapter for Chapter 11 bankruptcy protection May 2

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