March 26, 2009 / 3:59 PM / 9 years ago

UPDATE 1-Richlieu earnings fall, to freeze salaries

* EPS C$0.20 vs average forecast of C$0.27

* Revenue drops to C$94.2 million

* Shares down 2.8 percent at C$16.00 (Adds details)

TORONTO, March 26 (Reuters) - Richelieu Hardware Ltd RCH.TO said on Thursday it plans to cut costs and freeze executive salaries as it reported a 34 percent drop in first-quarter earnings.

The distributor of specialty hardware said it earned C$4.3 million ($3.5 million), or 20 Canadian cents a share for the quarter, ended Feb. 28, down from C$6.6 million, or 29 Canadian cents a share for the year earlier quarter.

Richelieu, which also produces kitchen cabinets and doors, said revenue fell 2 percent to C$94.2 million from C$96.1 million.

On average, analysts had expected the company to report earnings of 27 Canadian cents a share before items and revenue of C$96.3 million.

The company said a slowdown in sales in Central and Western Canada, and the United States, more than offset growth in Eastern Canada.

Although the company said it remains “in a most healthy and solid financial position,” it said it plans to introduce a number of cost-saving measures, including control of its gross margins and a freeze on officers’ and managers’ salaries.

Richelieu shares, which have fallen 19.1 percent in the past year, were down 2.8 percent at C$16.00 on the Toronto Stock Exchange.

$1=$1.23 Canadian Reporting by Scott Anderson; editing by Rob Wilson

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