EXHIBIT 99.1
| FOR IMMEDIATE RELEASE | Ethan Allen Interiors Inc. |
| Investor Contact: | Peg Lupton | |
| (203) 743-8234 | ||
| Media Contact: | Kelly Maicon | |
| (203) 743-8575 |
DANBURY, CT., October 19, 2004 -- Ethan Allen Interiors Inc. (NYSE:ETH) today reported sales and earnings for the first quarter ended September 30, 2004.
Net delivered sales for the first quarter ended September 30, 2004 increased 3.4% to $230.3 million from $222.8 million in the prior year quarter. Net delivered sales for the Company’s Retail division increased 6.8% to $141.7 million, while Wholesale sales increased 1.5% to $161.3 million during that same period. Comparable Ethan Allen store delivered sales increased 4.9% over the prior year quarter. During that same period, Retail division written sales decreased 0.2% while comparable store written sales decreased 1.7%.
For the first quarter ended September 30, 2004, earnings per share amounted to $0.51 as compared to $0.50 in the prior year quarter. Operating income increased 9.3% to $31.2 million from $28.6 million in the prior year period and net income in both periods amounted to $18.9 million.
Farooq Kathwari, Chairman and CEO, commented: “We are pleased with our results for the quarter. Despite continued uncertainty on the part of consumers and poor weather conditions in the South and Southeast regions of the country during the period, our sales increased by 3.4% and, more importantly, our operating earnings increased by 9.3%. We generated operating cash in excess of $37.0 million and returned more than $20.0 million to our shareholders through the repurchase of stock and the payment of quarterly dividends.”
Mr. Kathwari further stated: “We continue to strengthen all facets of our marketing and operations. After introducing major new products in our formal lifestyle offerings during
EXHIBIT 99.1
the last two years, we are now in the process of introducing casual and contemporary product offerings which will be launched to the consumer later this year and in the first half of next year.” He further commented: “The Ethan Allen direct mail magazine remains one of our major competitive advantages. We have started to substantially increase the distribution of the magazine and expect to reach over 70 million households during the next twelve months.”
On the question of business trends, Mr. Kathwari stated: “There continue to be many factors outside of our control that could affect consumer confidence in the months ahead. However, due to the many strategic initiatives that we have undertaken, we believe we have the opportunity to grow sales and earnings per share at a rate equal to or above the current consensus estimates of 5% and 8%, respectively, for the fiscal year ended June 30, 2005.”
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 315 retail stores in the United States and abroad, of which 127 are Company-owned. Ethan Allen has 12 manufacturing facilities, which include 2 sawmills, located throughout the United States.
The Company will conduct a Conference Call at 11:00 AM (Eastern) on Tuesday, October 19th. 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, 2004 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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EXHIBIT 99.1
Ethan Allen Interiors Inc.
Selected Financial Information
Unaudited
(In millions)
Selected Consolidated Financial Data:
| Three Months Ended | ||||||||
|---|---|---|---|---|---|---|---|---|
| 9/30/04 |
9/30/03 | |||||||
| Net Sales | $ | 230 | .3 | $ | 222 | .8 | ||
| Gross Margin | 47 | .9% | 48 | .7% | ||||
| Operating Margin | 13 | .6% | 12 | .8% | ||||
| Net Income | $ | 18 | .9 | $ | 18 | .9 | ||
| Operating Cash Flow | $ | 37 | .4 | $ | 50 | .0 | ||
| Capital Expenditures | $ | 7 | .5 | $ | 4 | .0 | ||
| Treasury Stock Repurchases | $ | 18 | .6 | $ | -- | |||
| (settlement date basis) | ||||||||
| EBITDA | $ | 36 | .4 | $ | 36 | .0 | ||
| EBITDA as % of Net Sales | 15 | .8% | 16 | .2% | ||||
Selected Financial Data by Business Segment:
| Three Months Ended | ||||||||
|---|---|---|---|---|---|---|---|---|
| Retail |
9/30/04 |
9/30/03 | ||||||
| Net Sales | $ | 141 | .7 | $ | 132 | .7 | ||
| Operating Margin | 2 | .3% | 0 | .2% | ||||
| Three Months Ended | ||||||||
|---|---|---|---|---|---|---|---|---|
| Wholesale |
9/30/04 |
9/30/03 | ||||||
| Net Sales | $ | 161 | .3 | $ | 158 | .9 | ||
| Operating Margin | 17 | .5% | 17 | .0% | ||||
EXHIBIT 99.1
Ethan Allen Interiors Inc.
Condensed Consolidated Statements of Operations
Unaudited
(In thousands, except per share amounts)
| Three Months Ended September 30, | ||||||||
|---|---|---|---|---|---|---|---|---|
| |
2004 |
2003 | ||||||
| Net sales | $ | 230,346 | $ | 222,765 | ||||
| Cost of sales | 119,953 | 114,322 | ||||||
| Gross Profit | 110,393 | 108,443 | ||||||
| Operating Expenses: | ||||||||
| Selling | 43,213 | 44,609 | ||||||
| General and administrative | 36,112 | 35,522 | ||||||
| Restructuring and impairment charges | (167 | ) | (264 | ) | ||||
| Total operating expenses | 79,158 | 79,867 | ||||||
| Operating Income | 31,235 | 28,576 | ||||||
| Interest and other miscellaneous income (loss) | (55 | ) | 2,211 | |||||
| Interest and other related financing costs | 149 | 141 | ||||||
| Income before income tax expense | 31,031 | 30,646 | ||||||
| Income tax expense | 12,102 | 11,707 | ||||||
| Net Income | $ | 18,929 | $ | 18,939 | ||||
| Basic earnings per share: | ||||||||
| Net income per share | $ | 0.52 | $ | 0.51 | ||||
| Basic weighted average shares outstanding | 36,211 | 37,227 | ||||||
Diluted earnings per share: | ||||||||
| Net income per share | $ | 0.51 | $ | 0.50 | ||||
| Diluted weighted average shares outstanding | 37,098 | 38,247 | ||||||
Reconciliation of GAAP to Non-GAAP Information: | ||||||||
| Net income | $ | 18,929 | $ | 18,939 | ||||
| Add: interest expense | 122 | 106 | ||||||
| Add: income tax expense | 12,102 | 11,707 | ||||||
| Add: depreciation and amortization | 5,250 | 5,265 | ||||||
| EBITDA | $ | 36,403 | $ | 36,017 | ||||
| Net Sales | $ | 230,346 | $ | 222,765 | ||||
| EBITDA as % of Net Sales | 15.8% | 16.2% | ||||||
EXHIBIT 99.1
Ethan Allen Interiors Inc.
Condensed Consolidated Balance Sheets
(In thousands)
| September 30, 2004 |
June 30, 2004 | |||||||
|---|---|---|---|---|---|---|---|---|
| (unaudited) | ||||||||
| Assets | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | 35,960 | $ | 27,528 | ||||
| Accounts receivable, net | 25,932 | 26,967 | ||||||
| Inventories | 179,194 | 186,895 | ||||||
| Prepaid expenses and other current assets | 56,681 | 54,192 | ||||||
| Total current assets | 297,767 | 295,582 | ||||||
Property, plant, and equipment, net | 274,794 | 277,021 | ||||||
| Intangible assets, net | 80,181 | 80,038 | ||||||
| Other assets | 2,549 | 1,790 | ||||||
| Total Assets | $ | 655,291 | $ | 654,431 | ||||
| Liabilities and Shareholders' Equity | ||||||||
| Current Liabilities: | ||||||||
| Current maturities of long-term debt | ||||||||
| and capital lease obligations | $ | 4,693 | $ | 4,712 | ||||
| Customer deposits | 59,973 | 56,026 | ||||||
| Accounts payable | 28,387 | 22,222 | ||||||
| Accrued expenses and other current liabilities | 50,933 | 53,729 | ||||||
| Total current liabilities | 143,986 | 136,689 | ||||||
Long-term debt | 4,490 | 4,509 | ||||||
| Other long-term liabilities | 1,154 | 1,205 | ||||||
| Deferred income taxes | 52,287 | 51,248 | ||||||
| Total liabilities | 201,917 | 193,651 | ||||||
Shareholders' equity | 453,374 | 460,780 | ||||||
| Total Liabilities and Shareholders' Equity | $ | 655,291 | $ | 654,431 | ||||