EXHIBIT 99.1
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FOR IMMEDIATE RELEASE |
Ethan Allen Interiors Inc. |
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Contact: Peg Lupton |
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(203) 743-8234 |
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ETHAN ALLEN ANNOUNCES SECOND QUARTER SALES AND EARNINGS
DANBURY, CT., January 23, 2008 – Ethan Allen Interiors Inc. (“Ethan Allen” or the “Company”) (NYSE:ETH) today reported operating results for the three and six months ended December 31, 2007.
Three Month Results
Net delivered sales for the quarter ended December 31, 2007 increased 0.8% to $259.5 million as compared to $257.4 million in the prior year quarter. Net delivered sales for the Company’s Retail division increased 8.6% to $192.6 million. Wholesale sales decreased 5.9% to $155.9 million during that same period. Comparable Ethan Allen design center delivered sales decreased 0.6% as compared to the prior year quarter.
For the quarter ended December 31, 2007, earnings per diluted share amounted to $0.70 on net income of $20.6 million. This compares to earnings per diluted share and net income of $0.70 and $22.8 million, respectively, in the prior year comparable period.
Six Month Results
For the six months ended December 31, 2007, net delivered sales increased 1.6% to $508.2 million as compared to $500.2 million in the prior year comparable period. Net delivered sales for the Company’s Retail division increased 9.3% to $375.3 million, while Wholesale sales decreased 2.8% to $312.3 million during that same period. Comparable Ethan Allen design center delivered sales were basically even with the prior year comparable period.
For the six months ended December 31, 2007, earnings per diluted share amounted to $1.27 on net income of $38.1 million. This compares to earnings per diluted share and net income of $0.96 and $31.2 million, respectively, in the prior year comparable period which included a September 2006 restructuring and impairment charge. Excluding the impact of this charge in the prior year period, earnings per diluted share amounted to $1.22 on net income of $39.8 million, respectively.
Farooq Kathwari, Chairman and CEO, commented, “We continue to show positive sales results both for the quarter and for the six months ended December 31, 2007. For the quarter ended December 31, 2007 our gross margin increased to 53.7% from 52%, our operating earnings remained very strong at 12.9%, and our earnings per share were $0.70, the same as in the prior year, and for the six months our earnings per share were $1.27 compared to $1.22 before restructure charges in the prior year. So far this fiscal year we have generated $47.4 million in operating cash, and utilized $30.3 million to fund capital expenditures oriented primarily toward opening new design centers and $64.8 million to repurchase shares of our common stock. In January 2008 we spent an additional $5.3 million to repurchase shares of our common stock, and as of January 23, 2008, we have remaining authorization to repurchase 1.7 million shares.”
Mr. Kathwari further stated, “Our positive results reflect the ongoing re-positioning of our Company to provide interior design solutions. This has involved numerous initiatives including strengthening our retail network by relocating design centers to stronger retail locations with ten new design centers opened during the last six months, the implementation of the project management program and intensive training programs, remerchandising about 80% of our product line to implement the new lifestyle projections, a strong regional and national advertising program, and investments in our manufacturing and logistics network.”
Commenting on the near term future outlook Mr. Kathwari said, "While we are operating in a difficult economic environment, especially for the home and home furnishing categories, we remain cautiously optimistic that we have the opportunity to continue to do well due to the above mentioned initiatives that positions Ethan Allen as a provider of style, quality, value and solutions."
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 a network of 305 design centers in the United States and abroad, of which 160 are Company-owned. Ethan Allen has 9 manufacturing facilities, which include 2 sawmills, located throughout the United States and 1 facility located in Mexico.
The Company will conduct a Conference Call at 11:00 AM (Eastern) on Wednesday, January 23rd. 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, 2007 and other reports filed with the Securities and Exchange Commission. This press release and related discussions contain forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements reflect management’s current expectations concerning future events and results of the Company, and are subject to various assumptions, risks and uncertainties. Accordingly, actual future events or results could differ materially from those contemplated by the forward-looking statements. The Company assumes no obligation to update or provide revision to any forward-looking statement at any time for any reason.
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EXHIBIT 99.1
Ethan Allen Interiors Inc.
Selected Financial Information
Unaudited
(In millions)
Selected Consolidated Financial Data:
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Three Months Ended |
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Six Months Ended |
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12/31/07 |
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12/31/06 |
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12/31/07 |
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12/31/06 |
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Net Sales |
$ |
259.5 |
$ |
257.4 |
$ |
508.2 |
$ |
500.2 |
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Gross Margin |
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53.7% |
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52.0% |
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53.7% |
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52.0% |
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Operating Margin |
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12.9% |
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14.2% |
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12.1% |
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10.1% |
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Operating Margin (ex restructuring & impairment charge (credit)) |
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12.9% |
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14.1% |
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12.1% |
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12.9% |
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Net Income |
$ |
20.6 |
$ |
22.8 |
$ |
38.1 |
$ |
31.2 |
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Net Income (ex restructuring & impairment charge (credit)) |
$ |
20.6 |
$ |
22.6 |
$ |
38.1 |
$ |
39.8 |
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Operating Cash Flow |
$ |
6.0 |
$ |
20.9 |
$ |
47.4 |
$ |
56.2 |
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Capital Expenditures |
$ |
17.8 |
$ |
19.3 |
$ |
30.3 |
$ |
34.9 |
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Treasury Stock Repurchases (settlement date basis) |
$ |
23.1 |
$ |
- |
$ |
64.8 |
$ |
17.7 |
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EBITDA |
$ |
40.6 |
$ |
42.9 |
$ |
75.7 |
$ |
62.9 |
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EBITDA as % of Net Sales |
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15.6% |
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16.7% |
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14.9% |
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12.6% |
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EBITDA (ex restructuring & impairment charge (credit)) |
$ |
40.6 |
$ |
42.6 |
$ |
75.7 |
$ |
76.5 |
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EBITDA as % of Net Sales (ex restructuring & impairment charge (credit)) |
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15.6% |
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16.5% |
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14.9% |
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15.3% |
Selected Financial Data by Business Segment:
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Three Months Ended |
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Six Months Ended |
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Retail |
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12/31/07 |
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12/31/06 |
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12/31/07 |
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12/31/06 |
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Net Sales |
$ |
192.6 |
$ |
177.4 |
$ |
375.3 |
$ |
343.4 |
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Operating Margin |
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3.3% |
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3.3% |
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1.9% |
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2.5% |
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Three Months Ended |
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Six Months Ended |
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Wholesale |
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12/31/07 |
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12/31/06 |
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12/31/07 |
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12/31/06 |
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Net Sales |
$ |
155.9 |
$ |
165.7 |
$ |
312.3 |
$ |
321.3 |
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Operating Margin |
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16.9% |
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18.2% |
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17.0% |
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12.9% |
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Operating Margin (ex restructuring & impairment charge (credit)) |
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16.9% |
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18.0% |
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17.0% |
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17.2% |
EXHIBIT 99.1
Ethan Allen Interiors Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
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Three Months |
Six
Months |
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2007 |
2006 |
2007 |
2006 |
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(unaudited) |
(unaudited) |
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Net sales |
$ 259,510 |
$ 257,419 |
$ 508,237 |
$ 500,242 |
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Cost of sales |
120,057 |
123,669 |
235,327 |
240,163 |
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Gross profit |
139,453 |
133,750 |
272,910 |
260,079 |
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Operating expenses: |
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Selling |
57,600 |
54,175 |
115,178 |
109,213 |
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General & administrative |
48,356 |
43,360 |
96,438 |
86,485 |
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Restructuring & impairment charge (credit) |
- |
(314) |
- |
13,622 |
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Total operating expenses |
105,956 |
97,221 |
211,616 |
209,320 |
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Operating income |
33,497 |
36,529 |
61,294 |
50,759 |
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Interest & other miscellaneous income |
2,181 |
2,575 |
5,103 |
4,807 |
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Interest & other related financing costs |
2,944 |
2,915 |
5,879 |
5,853 |
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Income before income tax expense |
32,734 |
36,189 |
60,518 |
49,713 |
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Income tax expense |
12,112 |
13,397 |
22,392 |
18,469 |
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Net income |
$ |
20,622 |
$ |
22,792 |
$ |
38,126 |
$ |
31,244 |
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Basic earnings per share: |
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Net income per share |
$ |
0.70 |
$ |
0.72 |
$ |
1.28 |
$ |
0.98 |
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Basic weighted average shares outstanding |
29,391 |
31,737 |
29,738 |
31,776 |
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Diluted earnings per share: |
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Net income per share |
$ |
0.70 |
$ |
0.70 |
$ |
1.27 |
$ |
0.96 |
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Diluted weighted average shares outstanding |
29,542 |
32,503 |
30,003 |
32,567 |
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EXHIBIT 99.1
Ethan Allen Interiors Inc.
Condensed Consolidated Balance Sheets
Unaudited
(In thousands)
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December 31, |
June 30, |
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Assets |
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| Current Assets: | ||||
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Cash and cash equivalents |
$ 86,268 |
$ 147,879 |
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Accounts receivable, net |
12,330 |
14,602 |
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Inventories |
184,353 |
181,884 |
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Prepaid expenses and other current assets |
30,464 |
33,104 |
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Deferred income taxes |
4,429 |
4,960 |
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Total current assets |
317,844 |
382,429 |
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Property, plant, and equipment, net |
341,019 |
322,185 |
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Intangible assets, net |
94,197 |
92,500 |
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Other assets |
5,034 |
5,484 |
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Total Assets |
$ |
758,094 |
$ |
802,598 |
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Liabilities and Shareholders’ Equity |
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Current Liabilities: |
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Current maturities of long-term debt |
$ 40 |
$ 40 |
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Customer deposits |
44,881 |
52,072 |
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Accounts payable |
23,886 |
26,650 |
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Accrued expenses and other current liabilities |
61,525 |
68,677 |
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Total current liabilities |
130,332 |
147,439 |
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Long-term debt |
202,928 |
202,868 |
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Other long-term liabilities |
20,542 |
12,003 |
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Deferred income taxes |
28,960 |
30,646 |
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Total liabilities |
382,762 |
392,956 |
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Shareholders’ equity |
375,332 |
409,642 |
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Total Liabilities and Shareholders’ Equity |
$ |
758,094 |
$ |
802,598 |