EXHIBIT 99.1
FOR IMMEDIATE RELEASE CONTACT: Peg Lupton
Ethan Allen Interiors Inc.
(203)743-8234
ETHAN ALLEN REPORTS RECORD ANNUAL SALES;
RESULTS FOR THE QUARTER AND FISCAL YEAR ENDED JUNE 30, 2003
DANBURY, CT., July 31, 2003 -- Ethan Allen Interiors Inc. (NYSE:ETH) today
reported sales and earnings for the fourth quarter and fiscal year ended June
30, 2003.
The Company achieved record annual sales totaling $907.3 million, an increase of
1.7%, from $892.3 million in the prior year. Annual delivered sales for the
Company's Retail division increased 14.5% to $526.4 million from $459.6 million
in the prior year, while written sales increased 15.4% over that same period.
Comparable Ethan Allen store delivered sales and written sales for the year
decreased 3.5% and 3.1%, respectively, as compared to the prior year.
For the year ended June 30, 2003, earnings per share, including pre-tax
restructuring and impairment charges of $13.2 million, amounted to $1.95 on net
income of $75.4 million. This compares to $2.06 and $82.3 million, respectively,
for the prior year, which includes pre-tax restructuring and impairment charges
of $5.1 million. Excluding the impact of the restructuring and impairment
charges in both periods, earnings per share and net income amounted to $2.17 and
$83.6 million, respectively, for the current year as compared to $2.14 and $85.4
million, respectively, for the prior year.
Net delivered sales for the fourth quarter ended June 30, 2003 increased 0.7% to
$236.4 million from $234.8 million in the prior year comparable period. Fourth
quarter delivered sales for the Company's Retail division increased 8.8% to
$139.3 million from $128.1 million in the prior year, and written sales
increased 10.3% over that same period. Comparable Ethan Allen store delivered
sales and written sales for the quarter decreased 2.8% and 2.6%, respectively,
as compared to the prior year.
For the fourth quarter ended June 30, 2003, earnings per share amounted to $0.54
on net income of $20.5 million. This compares to $0.54 and $21.4 million,
respectively, recorded in the prior year fourth quarter, which includes pre-tax
restructuring and impairment charges of $5.1 million. Excluding the impact of
these restructuring and
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impairment charges, earnings per share for the prior year quarter amounted to
$0.62 and net income totaled $24.5 million.
Farooq Kathwari, Chairman and CEO, commented, "The last twelve months have
proven to be one of the more challenging periods we have experienced in our
industry. Still, despite difficult times in which we have endured war and an
economic downturn, both of which negatively impacted consumer confidence, we
have achieved record sales levels while maintaining healthy margins, earnings
and cash flow. We have used this period as an opportunity to turn our focus
within toward improving operating efficiencies and strengthening the array of
solutions we offer our customers. On the operating side, we consolidated three
manufacturing facilities in order to improve production efficiencies and sustain
our margins, which remain among the highest in the industry. During the fiscal
year, we generated operating cash flows of $100.5 million which was used to fund
capital expenditures, acquisitions, and $43.5 million in stock repurchases. In
addition, in April 2003 we announced a 17% increase in our quarterly dividend."
"With regard to customer solutions, we continue to develop stylish products that
offer great value to the consumer. The Spring introductions of our Tuscany and
Leather Expressions collections, as well as the Ethan Allen Kids program, which
is being marketed this Summer, all serve to expand our consumer reach. Also,
just last month we introduced yet another exciting new collection to our retail
network. New Country by Ethan Allen, which will be available to consumers in the
Fall, promises to add to the line of our recent product successes. We are
updating the design, and continually re-evaluating the location, of Ethan Allen
stores with the intention of making the shopping experience more enjoyable. To
assist consumers in the home decorating process, we strengthened our design
assistance program through the introduction of the Ethan Allen Style book and
our on-line room planning resource which is available through the Company's
website. Lastly, we continued efforts to make our products more accessible by
simplifying and improving our consumer financing options. All of these solutions
help to make the home decorating process fun and easy."
Commenting on expected future business results, Mr. Kathwari stated, "The
initiatives we have undertaken in the last twelve months have positioned us well
to respond to an anticipated economic recovery. While it is difficult to predict
when such an
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economic recovery will occur, we are working under the assumption that positive
trends will begin to emerge during our second fiscal quarter and that fiscal
year increases in sales and earnings per share of approximately 5-7% and 10-12%,
respectively, are attainable."
Ethan Allen Interiors Inc. is a leading manufacturer and retailer of quality
home furnishings. The Company sells a full range of furniture products and
decorative accessories through an exclusive network of 309 retail locations in
the United States and abroad, of which 119 are Company-owned. Ethan Allen has 14
manufacturing facilities, which include 3 sawmills, located throughout the
United States.
The Company will conduct a Conference Call at 11:00 AM (Eastern) on Thursday,
July 31st to be broadcast live over the Internet through the Company's website
at www.ethanallen.com (click on Investor Information under the "About Us" tab).
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The information contained in this press release should be read in conjunction
with the Company's Quarterly Report on Form 10-Q for the quarter ended March 31,
2003 and other reports filed with the Securities and Exchange Commission,
including the Company's Report of Form 10-K for the year ended June 30, 2002.
Management's discussion in this release contains forward-looking statements
relating to future results of the Company. These forward-looking statements are
subject to various assumptions, risk and uncertainties, and accordingly, actual
results could differ materially from those contemplated by the forward-looking
statements.
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ETHAN ALLEN INTERIORS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
THREE MONTHS FISCAL YEAR
ENDED JUNE 30, ENDED JUNE 30,
2003 2002 2003 2002
-------- -------- -------- --------
(unaudited) (unaudited)
Net sales $236,448 $234,789 $907,264 $892,288
Cost of sales 121,533 119,261 457,880 470,975
-------- -------- -------- --------
Gross profit 114,915 115,528 449,384 421,313
Operating expenses:
Selling 46,586 42,937 178,608 163,122
General and administrative 35,622 33,311 136,970 123,168
Restructuring and impairment charge -- 5,123 13,223 5,123
-------- -------- -------- --------
Total operating expenses 82,208 81,371 328,801 291,413
-------- -------- -------- --------
Operating income 32,707 34,157 120,583 129,900
Interest and other miscellaneous income 455 363 1,254 2,984
Interest and other related financing costs 138 178 645 640
-------- -------- -------- --------
Income before income tax expense 33,024 34,342 121,192 132,244
Income tax expense 12,483 12,981 45,811 49,988
-------- -------- -------- --------
Net income $ 20,541 $ 21,361 $ 75,381 $ 82,256
======== ======== ======== ========
Earnings per basic share $ 0.55 $ 0.55 $ 2.00 $ 2.12
======== ======== ======== ========
Basic weighted average shares outstanding 37,117 38,674 37,607 38,828
Earnings per diluted share $ 0.54 $ 0.54 $ 1.95 $ 2.06
======== ======== ======== ========
Diluted weighted average shares outstanding 38,033 39,816 38,569 39,942
RECONCILIATION OF GAAP TO NON-GAAP INFORMATION:
Net income $ 20,541 $ 21,361 $ 75,381 $ 82,256
Add: Restructuring and impairment charge,
net of related tax effect -- 3,187 8,225 3,187
-------- -------- -------- --------
Net income (excluding restructuring and
impairment charge) $ 20,541 $ 24,548 $ 83,606 $ 85,443
======== ======== ======== ========
Earnings per basic share (excluding
restructuring and impairment charge) $ 0.55 $ 0.63 $ 2.22 $ 2.20
======== ======== ======== ========
Basic weighted average shares outstanding 37,117 38,674 37,607 38,828
Earnings per diluted share (excluding
restructuring and impairment charge) $ 0.54 $ 0.62 $ 2.17 $ 2.14
======== ======== ======== ========
Diluted weighted average shares outstanding 38,033 39,816 38,569 39,942
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ETHAN ALLEN INTERIORS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
June 30, June 30,
2003 2002
----------- ---------
(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $ 81,856 $ 75,688
Accounts receivable, net 26,439 32,845
Inventories, net 198,212 174,147
Prepaid expenses and other current assets 53,755 37,921
--------- ---------
Total current assets 360,262 320,601
Property, plant, and equipment, net 289,423 293,626
Intangible assets, net 78,939 69,708
Other assets 2,944 4,820
--------- ---------
Total Assets $ 731,568 $ 688,755
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current maturities of long-term debt
and capital lease obligations $ 996 $ 107
Customer deposits 55,939 42,966
Accounts payable 25,375 38,027
Accrued expenses and other current liabilities 52,116 48,028
--------- ---------
Total current liabilities 134,426 129,128
Long-term debt 9,222 9,214
Other long-term liabilities 2,682 2,066
Deferred income taxes 47,539 37,158
Total shareholders' equity 537,699 511,189
--------- ---------
Total Liabilities and Shareholders' Equity $ 731,568 $ 688,755
========= =========
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