We have retained the investment banking firm of TM Capital to assist us in the evaluation of our strategic alternatives.
Harley J Greenfield, CEO, Jennifer Convertibles

Jennifer Convertibles, Inc. (AMEX:JEN) reported a net loss for the most recent quarter of $1.5 million on revenue down 21.9% versus the same period in 2008. CEO Harley Greenfield said in a statement that the company has "retained the investment banking firm of TM Capital Corp. to assist us in the evaluation of our strategic alternatives." TM Capital Corp. is an independent investment banking firm based in New York, Boston and Atlanta, which has completed over 200 mergers, acquisitions and financings.

During the quarter, Jennifer Convertibles closed one store in Illinois, one store in Arizona and one store in New York compared to three stores in Ohio and one store in New York the same period last year.

Harley J Greenfield, Chief Executive Officer of Jennifer said, "While our results for the quarter continue to be disappointing, we began to see some impact of the cost reductions we have made. Compared to the second fiscal quarter, we reduced our loss by approximately $800,000, despite recording about $700,000 less in revenue."

Greenfield added, "We are still very optimistic about the future. When either the economy begins to strengthen or our new marketing initiatives take hold, we have positioned ourselves to quickly resume sales momentum with a highly efficient infrastructure and a very competitive product mix. Our Ashley division continues to grow, producing about 15% of revenues and increased profitability from the second fiscal quarter."

On July 10, 2009, the Company entered into a letter agreement with Caye, the major supplier for the Company, pursuant to which it agreed to pay down its debt to Caye by approximately $400,000 in exchange for Caye releasing their security interest in all of the Company's assets and terminating all obligations under the Credit Facility. In connection with the release, the $1,000,000 that was required to be maintained by the Company in a restricted deposit account is unrestricted and available for operating purposes. In exchange for this release, Caye has provided the Company with $500,000 of trade credit. Neither Caye nor the Company will incur any termination costs or penalties as a result of the termination of the Credit Facility.

During January 2009, the Company began a transition from Caye to the Chinese supplier which currently manufactures approximately 95% of the merchandise ordered through Caye. On April 13, 2009, the terms of this agreement were restated to provide, effective August 1, 2009, vendor terms of 150 days without interest for up to a balance of $10,000,000 in purchases though September 2010. There is no security interest connected with this extension of credit and certain terms will be reviewed October 31, 2009.

Commenting on the changes to the Credit Facility, Greenfield said, "We have been able to release $1,000,000 that had been restricted which now can be used for general corporate purposes, extend the terms for payments, and reduce potential interest expense, all without encumbering our assets. This should provide additional liquidity during this difficult economic period."

Jennifer Convertibles is the owner and licensor of the largest group of sofabed specialty retail stores in the United States, with 149 Jennifer Convertibles stores and is the largest specialty retailer of leather furniture with 14 Jennifer Leather stores. As of July 14, 2009, the Company owned 142 stores and licensed 21 stores (including 19 owned and operated by a related company on a royalty free basis) and operates two licensed Ashley Furniture HomeStores.