Exhibit 99.1
| FOR IMMEDIATE RELEASE | Ethan Allen Interiors Inc. Investor Contact: Peg Lupton (203) 743-8234 Media Contact: Josie Bielmeier (203) 743-8503 |
DANBURY, CT., January 20, 2004 — Ethan Allen Interiors Inc. (NYSE:ETH) today reported sales and earnings for the three and sixmonths ended December 31, 2003.
Net sales for the quarter ended December 31, 2003 increased 5.0% to $241.2 million from $229.7 million in the prior year quarter. Net delivered sales for the Company’s Retail division increased 7.4% to $149.6 million, while Wholesale sales increased 3.4% to $163.7 million during that same period. For the quarter, comparable Ethan Allen store delivered sales increased 1.8%. Ethan Allen sells through an exclusive network of 311 retail locations, of which 121 are Company-owned.
For the six months ended December 31, 2003, net sales increased 4.0% to $463.9 million from $446.2 million in the prior year. Net delivered sales for the Company’s Retail division increased 8.7% to $282.3 million, while Wholesale sales increased 2.0% to $322.6 million during that same period. Year-to-date, comparable Ethan Allen store delivered sales increased 1.3%.
Earnings per share for the quarter increased 6.7% to $0.64 on net income of $24.4 million as compared to $0.60 and $23.1 million, respectively, in the prior year period. Earnings per share for the six month period totaled $1.13 as compared to $1.11 in the prior year comparable period.
Total written orders decreased 0.5% as compared to the prior year quarter. At the Wholesale level, net orders booked decreased 3.2%, while at the Retail level, written sales increased 8.1% and comparable store written sales increased 2.5%. Eliminating the effects of floor sample orders placed for new products introduced at the Company’s Retail Conferences in October 2003 and 2002, net orders booked at the Wholesale level increased 1.9%.
On a year-to-date basis, total written orders increased 5.3% as compared to the prior year. Within that same period, Wholesale net orders booked increased 4.3%, while Retail written sales increased 8.2% and comparable store written sales increased 0.5%.
Farooq Kathwari, Chairman and CEO, commented: “We are pleased with our results for the quarter. The Company’s performance reflects a further strengthening of consumer confidence and its resultant impact on the U.S. economy, which continues to have a positive effect on the incoming order rate, written sales and backlog.”
Mr. Kathwari continued: “Improvements made during the recent economic downturn, including strengthening our marketing programs, steps taken toward establishing more efficient U.S. manufacturing operations, and improving our capacity of sourcing both domestically and abroad, have prepared us for the next phase of growth. Initiatives such as these and others have allowed us to continue providing our customers with a very comprehensive complement of home furnishing solutions.”
On the question of business trends, Mr. Kathwari stated: “In July, we were working under the assumption that positive trends would begin to emerge during our second fiscal quarter. Today, we remain optimistic that the business growth we have experienced in recent months is indicative of further economic expansion in 2004. Assuming no unexpected deterioration in the economy or consumer confidence, we continue to believe we have the opportunity to generate fiscal year sales and earnings per share increases of approximately 5% and 10%, respectively.”
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 311 retail stores (309 full-line and 2 Ethan Allen Kids) in the United States and abroad. 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 Tuesday, January 20th. The live webcast and replay are accessible via the Company’s website at www.ethanallen.com/investors.
This press release should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended June 30, 2003 and other reports filed with the Securities and Exchange Commission. 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.
Selected Financial Information
Unaudited
(In millions)
Selected Consolidated Financial Data:
| Three Months Ended |
Six Months Ended | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 12/31/03 |
12/31/02 |
12/31/03 |
12/31/02 | |||||||||||
| Net Sales | $ | 241.2 | $ | 229.7 | $ | 463.9 | $ | 446.2 | ||||||
| Gross Margin | 48.2 | % | 50.4 | % | 48.4 | % | 49.9 | % | ||||||
| Operating Margin | 16.2 | % | 16.2 | % | 14.6 | % | 15.5 | % | ||||||
| Net Income | $ | 24.4 | $ | 23.1 | $ | 43.3 | $ | 43.2 | ||||||
| Operating Cash Flow | $ | 26.5 | $ | 14.7 | $ | 76.5 | $ | 56.0 | ||||||
| Capital Expenditures | $ | 5.2 | $ | 7.6 | $ | 9.2 | $ | 16.9 | ||||||
| Treasury Stock Repurchases | $ | -- | $ | -- | $ | -- | $ | 29.6 | ||||||
| EBITDA | $ | 45.1 | $ | 42.6 | $ | 81.1 | $ | 80.1 | ||||||
| EBITDA as % of Net Sales | 18.7 | % | 18.6 | % | 17.5 | % | 17.9 | % | ||||||
Selected Financial Data by Business Segment:
| Three Months Ended |
Six Months Ended | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 12/31/03 |
12/31/02 |
12/31/03 |
12/31/02 | |||||||||||
| Retail | ||||||||||||||
| Net Sales | $ | 149 | .6 | $ | 139 | .3 | $ | 282 | .3 | $ | 259 | .8 | ||
| Operating Margin | 4 | .0% | 5 | .8% | 2 | .2% | 4 | .3% | ||||||
| Three Months Ended |
Six Months Ended | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 12/31/03 |
12/31/02 |
12/31/03 |
12/31/02 | |||||||||||
| Wholesale | ||||||||||||||
| Net Sales | $ | 163 | .7 | $ | 158 | .4 | $ | 322 | .6 | $ | 316 | .2 | ||
| Operating Margin | 18 | .5% | 17 | .7% | 17 | .7% | 18 | .0% | ||||||
Ethan Allen Interiors Inc.
Condensed Consolidated Statements of Operations
Unaudited
(In thousands, except per share amounts)
| Three Months Ended December 31, |
Six Months Ended December 31, | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2003 |
2002 |
2003 |
2002 | |||||||||||
| Net sales | $ | 241,150 | $ | 229,713 | $ | 463,915 | $ | 446,242 | ||||||
| Cost of sales | 124,871 | 113,909 | 239,193 | 223,723 | ||||||||||
| Gross profit | 116,279 | 115,804 | 224,722 | 222,519 | ||||||||||
| Operating expenses: | ||||||||||||||
| Selling | 41,221 | 43,875 | 85,830 | 86,765 | ||||||||||
| General and administrative | 35,946 | 34,734 | 71,468 | 66,716 | ||||||||||
| Restructuring and impairment charges | -- | -- | (264 | ) | (92 | ) | ||||||||
| Total operating expenses | 77,167 | 78,609 | 157,034 | 153,389 | ||||||||||
| Operating income | 39,112 | 37,195 | 67,688 | 69,130 | ||||||||||
| Interest and other miscellaneous income | 737 | 125 | 2,948 | 649 | ||||||||||
| Interest and other related financing costs | 167 | 204 | 308 | 377 | ||||||||||
| Income before income tax expense | 39,682 | 37,116 | 70,328 | 69,402 | ||||||||||
| Income tax expense | 15,284 | 14,030 | 26,991 | 26,234 | ||||||||||
| Net income | $ | 24,398 | $ | 23,086 | $ | 43,337 | $ | 43,168 | ||||||
| Basic earnings per share: | ||||||||||||||
| Net income per share | $ | 0.65 | $ | 0.61 | $ | 1.16 | $ | 1.14 | ||||||
| Basic weighted average shares outstanding | 37,269 | 37,767 | 37,248 | 37,876 | ||||||||||
Diluted earnings per share: | ||||||||||||||
| Net income per share | $ | 0.64 | $ | 0.60 | $ | 1.13 | $ | 1.11 | ||||||
| Diluted weighted average shares outstanding | 38,420 | 38,793 | 38,333 | 38,854 | ||||||||||
Reconciliation of GAAP to Non-GAAP Information: | ||||||||||||||
| Net income | $ | 24,398 | $ | 23,086 | $ | 43,337 | $ | 43,168 | ||||||
| Add: interest expense | 132 | 169 | 238 | 307 | ||||||||||
| Add: income tax expense | 15,284 | 14,030 | 26,991 | 26,234 | ||||||||||
| Add: depreciation and amortization | 5,240 | 5,334 | 10,505 | 10,367 | ||||||||||
| EBITDA | $ | 45,054 | $ | 42,619 | $ | 81,071 | $ | 80,076 | ||||||
| Net Sales | $ | 241,150 | $ | 229,713 | $ | 463,915 | $ | 446,242 | ||||||
| EBITDA as % of Net Sales | 18.7 | % | 18.6 | % | 17.5 | % | 17.9 | % | ||||||
Ethan Allen Interiors Inc.
Condensed Consolidated Balance Sheets
(In thousands)
| December 31, 2003 (unaudited) |
June 30, 2003 | |||||||
|---|---|---|---|---|---|---|---|---|
| Assets | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | 148,474 | $ | 81,856 | ||||
| Accounts receivable, net | 22,539 | 26,439 | ||||||
| Inventories, net | 185,583 | 198,212 | ||||||
| Prepaid expenses and other current assets | 51,963 | 53,755 | ||||||
| Total current assets | 408,559 | 360,262 | ||||||
| Property, plant, and equipment, net | 281,618 | 289,423 | ||||||
| Intangible assets, net | 79,052 | 78,939 | ||||||
| Other assets | 2,285 | 2,944 | ||||||
| Total Assets | $ | 771,514 | $ | 731,568 | ||||
| Liabilities and Shareholders' Equity | ||||||||
| Current Liabilities: | ||||||||
| Current maturities of long-term debt | ||||||||
| and capital lease obligations | $ | 4,793 | $ | 996 | ||||
| Customer deposits | 54,481 | 55,939 | ||||||
| Accounts payable | 28,267 | 25,375 | ||||||
| Accrued expenses | 53,394 | 52,116 | ||||||
| Total current liabilities | 140,935 | 134,426 | ||||||
| Long-term debt | 4,557 | 9,222 | ||||||
| Deferred income taxes | 47,795 | 47,539 | ||||||
| Other long-term liabilities | 2,223 | 2,682 | ||||||
| Total shareholders' equity | 576,004 | 537,699 | ||||||
| Total Liabilities and Shareholders' Equity | $ | 771,514 | $ | 731,568 | ||||