Le Chateau Inc. reported unaudited consolidated earnings results for the third quarter and nine months ended October 27, 2012. For the third quarter, the company reported sales of CAD 63,736,000 against CAD 70,412,000 a year ago. Negative results from operating activities were CAD 4,746,000 against CAD 5,405,000 a year ago. Loss before income taxes was CAD 5,565,000 against CAD 5,833,000 a year ago. Net loss was CAD 3,625,000 or CAD 0.14 per basic and diluted share against CAD 4,143,000 or CAD 0.17 per basic and diluted share a year ago. Negative cash flows related to operating activities was CAD 5,756,000 against CAD 16,003,000 a year ago. Additions to property and equipment and intangible assets were CAD 1,292,000 against CAD 6,166,000 a year ago. Comparable store sales decreased 9.3% for the third quarter versus the same period a year ago and continue to be impacted by the emphasis on inventory reduction strategy resulting in lower average selling prices. In addition, store traffic continued to be impacted by consumers remaining cautious with discretionary spending.

For the nine months, the company reported sales of CAD 194,027,000 against CAD 220,181,000 a year ago. Negative results from operating activities were CAD 10,216,000 against CAD 3,736,000 a year ago. Loss before income taxes was CAD 12,595,000 against CAD 4,968,000 a year ago. Net loss was CAD 8,875,000 or CAD 0.35 per basic and diluted share against CAD 3,528,000 or CAD 0.15 per basic and diluted share a year ago. Negative cash flows related to operating activities was CAD 12,550,000 against CAD 17,643,000 a year ago. Additions to property and equipment and intangible assets were CAD 8,265,000 against CAD 19,327,000 a year ago. EBITDA for the first nine months amounted to CAD 5.5 million or 2.9% of sales, compared to CAD 11.4 million or 5.2% of sales last year.

The company also announced that Andrew M. Cohen and Michael Pesner have been appointed to the board of directors. Mr. Cohen and Mr. Pesner are replacing Neil Kravitz and Max Mendelsohn who have left the board. Mr. Cohen has more than 25 years of experience as a lawyer and is a partner at Heenan Blaikie. Michael Pesner, CPA, CA, has been President of Hermitage Canada Finance Inc.

For the first five weeks ended December 1, 2012, total retail sales decreased 5.8% and comparable store sales decreased 4.8% compared to the same period last year.