Monroe, Ga.-based textile mill Avondale Inc. blamed the strength of the dollar versus Asian currencies and general lackluster demand in the apparel business for seeing its earnings slide to the break-even level in its third quarter.

The company said in a recent filing with the Securities and Exchange Commission that its break-even results for the quarter ended May 30 compared with net income of $4.3 million a year earlier. Sales were off 16.5 percent to $152.3 million compared with $182.5 million, according to the 8-K filing.

Among the factors hurting its results, the company said, were “weak consumer demand; the imbalance of global supply and demand for textile and apparel products, and the strength of the U.S. dollar compared to the Chinese yuan and currencies of other Asian countries.”

Avondale also noted that it took a $2.5 million charge in the quarter, related to its closing of a yarn-spinning facility in Alabama.

In a separate filing, privately owned Avondale, which reports its results to the SEC because of public bonds, said it has commenced a private offering of $150 million in senior subordinated notes due 2013, which are not registered with the SEC. The company said it plans to use them to redeem its $127.1 million in outstanding 10.25 percent bonds due 2006, as well as to pay down other debt.

Moody’s Investors Service on Tuesday assigned an initial rating of “B3” to those bonds, with a stable outlook. The agency said: “Avondale’s cost and operational rationalization programs should provide sufficient profit margins and cash levels in the near term,” but warned that the company still has “significant leverage.”

Avondale said its total outstanding debt is $166.9 million.

For the nine months, the denim and twill mill reported net income of $1.1 million compared with a net loss of $5.8 million a year ago. Sales were down 3 percent to $461.1 million.

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