Exhibit 99.1
Ethan Allen Reports Results for Quarter and Fiscal Year Ended June 30, 2009
DANBURY, Conn.--(BUSINESS WIRE)--August 11, 2009--Ethan Allen Interiors Inc. (“Ethan Allen” or the “Company”) (NYSE:ETH) today reported operating results for the three and twelve months ended June 30, 2009.
Three Months Ended June 30, 2009
Net delivered sales for the quarter ended June 30, 2009 amounted to $138.7 million as compared to $235.9 million in the prior year quarter. Net delivered sales for the Company’s Retail division were $102.3 million compared with $176.5 million the prior year quarter. Wholesale sales were $85.2 million versus $147.7 million the prior year quarter. Comparable Ethan Allen design center delivered sales were down 43.5% as compared to the prior year quarter.
For the quarter ended June 30, 2009, diluted loss per share amounted to $0.58 on a loss of $16.9 million, which includes a $12.9 million restructuring and impairment charge for previously announced actions. Also included in the current quarter results was $1.5 million ($0.05 per diluted share) of tax expense for the recording of reserves on certain deferred tax assets. This compares to diluted earnings per share and net income of $0.39 and $11.1 million, respectively, for the prior year, which included a restructuring and impairment charge of $2.8 million. Excluding the impact of the restructuring and impairment charges in both periods and the tax entries in the current quarter, diluted loss per share amounted to $0.23 in the current period compared to diluted earnings per share of $0.45 in the prior year comparable period.
Year Ended June 30, 2009
For the twelve months ended June 30, 2009, net delivered sales totaled $674.3 million as compared to $980.0 million in the prior year comparable period. Net delivered sales for the Company’s Retail division were $508.6 million compared with $724.6 million the prior year. Wholesale sales were $403.4 million versus $616.2 million the prior year. Comparable Ethan Allen design center delivered sales were down 32.5% as compared to the prior year comparable period.
For the twelve months ended June 30, 2009, which includes a $48.4 million goodwill impairment charge and $18.6 million of restructuring and impairment costs, diluted loss per share amounted to $1.83 on a net loss of $52.7 million. As noted above, the results for the fiscal year include $1.5 million tax expense booked in the fourth quarter ($0.05 per diluted share). This compares to diluted earnings per share and net income of $1.97 and $58.1 million respectively, for the prior year, which included a $6.8 million restructuring and impairment charge. Excluding the impact of the goodwill impairment and the tax expense noted above from the current year and the restructuring and impairment charges in both fiscal years, diluted loss per share amounted to $0.31 on a net loss of $8.9 million in the current year period as compared to diluted earnings per share of $2.12 on net income of $62.4 million in the prior year comparable period.
Farooq Kathwari, Chairman and CEO, commented, “Fiscal 2009, while extremely challenging, provided us the opportunity to accelerate our process of reinvention. We focused on two major initiatives. First: to bring our expense and cost structure down. On an annualized basis we reduced about $120 million in operating expenses and about $30 million in manufacturing costs. We will see most of the reductions benefiting our fiscal 2010. Second: to implement many initiatives that will create a strong competitive difference and help grow our sales and profitability. Our move toward custom production in our case goods manufacturing and the launch of the new Interior Design Affiliate program are just the latest examples of these initiatives.”
Mr. Kathwari further stated, “Our focus was also to maintain a strong cash position. As of June 30, 2009 we had $53 million in cash which has grown to $63 million. While business conditions remain very difficult, the rates of decline that we experienced in the last six months were substantially reduced in July.”
Analyst Conference Call
The Company will conduct a Conference Call at 11:00 AM (Eastern) on Wednesday, August 12th. The live webcast and replay are accessible via the Company’s website at http://ethanallen.com/investors.
About Ethan Allen
Ethan Allen Interiors Inc. ("Ethan Allen" or the "Company"; NYSE:ETH) is a leading interior design company and manufacturer and retailer of quality home furnishings. The Company offers free interior design service to its clients and sells a full range of furniture products and decorative accessories through ethanallen.com and a network of approximately 300 Design Centers in the United States and abroad. Ethan Allen owns and operates six manufacturing facilities in the United States, which includes one sawmill, and one manufacturing facility in Mexico, and manufactures approximately sixty-five percent of its products in its United States plants. For more information on Ethan Allen’s products and services, visit ethanallen.com.
This press release should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended June 30, 2008 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.
| Ethan Allen Interiors Inc. | ||||||||||||||||
| Selected Financial Information | ||||||||||||||||
| Unaudited | ||||||||||||||||
| (in millions) | ||||||||||||||||
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Selected Consolidated Financial Data: |
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| Three Months Ended | Twelve Months Ended | |||||||||||||||
| 06/30/09 | 06/30/08 | 06/30/09 | 06/30/08 | |||||||||||||
| Net sales | $ | 138.7 | $ | 235.9 | $ | 674.3 | $ | 980.0 | ||||||||
| Gross margin | 48.7 | % | 54.2 | % | 51.5 | % | 53.7 | % | ||||||||
| Operating margin | -14.7 | % | 8.1 | % | -10.8 | % | 9.8 | % | ||||||||
| Operating margin (ex restructuring & | ||||||||||||||||
| impairment charges ) | -5.4 | % | 9.3 | % | -0.9 | % | 10.5 | % | ||||||||
| Net income (loss) | ($16.9 | ) | $ | 11.1 | ($52.7 | ) | $ | 58.1 | ||||||||
| Net income (loss) (ex restructuring & | ||||||||||||||||
| impairment charges) | ($6.8 | ) | $ | 12.9 | ($8.9 | ) | $ | 62.4 | ||||||||
| Operating cash flow | $ | 8.1 | $ | 18.9 | $ | 21.9 | $ | 86.1 | ||||||||
| Capital expenditures | $ | 2.1 | $ | 13.7 | $ | 22.5 | $ | 60.0 | ||||||||
| Acquisitions | $ | 0.6 | $ | 1.0 | $ | 1.4 | $ | 7.8 | ||||||||
| Treasury stock repurchases (settlement | ||||||||||||||||
| date basis) | $ | 0.0 | $ | 0.0 | $ | 0.0 | $ | 73.2 | ||||||||
| EBITDA | ($13.9 | ) | $ | 26.6 | ($45.1 | ) | $ | 124.5 | ||||||||
| EBITDA as % of net sales | -10.0 | % | 11.3 | % | -6.7 | % | 12.7 | % | ||||||||
| EBITDA (ex restructuring & impairment | ||||||||||||||||
| charges ) | ($1.0 | ) | $ | 29.4 | $ | 21.9 | $ | 131.3 | ||||||||
| EBITDA as % of net sales (ex | ||||||||||||||||
| restructuring & impairment charges ) | -0.7 | % | 12.5 | % | 3.3 | % | 13.4 | % | ||||||||
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Selected Financial Data by Business Segment: |
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| Three Months Ended | Twelve Months Ended | |||||||||||||||
| 06/30/09 | 06/30/08 | 06/30/09 | 06/30/08 | |||||||||||||
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Retail |
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| Net sales | $ | 102.3 | $ | 176.5 | $ | 508.6 | $ | 724.6 | ||||||||
| Operating margin | -13.6 | % | -0.9 | % | -18.1 | % | -0.4 | % | ||||||||
| Operating margin (ex restructuring & | ||||||||||||||||
| impairment charges ) | -12.3 | % | 0.8 | % | -8.4 | % | 0.6 | % | ||||||||
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Wholesale |
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| Net sales | $ | 85.2 | $ | 147.7 | $ | 403.4 | $ | 616.2 | ||||||||
| Operating margin | -9.1 | % | 13.9 | % | 1.7 | % | 16.3 | % | ||||||||
| Operating margin (ex restructuring & | ||||||||||||||||
| impairment charges ) | 4.5 | % | 13.9 | % | 6.0 | % | 16.3 | % | ||||||||
| Ethan Allen Interiors Inc. | ||||||||||||||
| Selected Financial Information | ||||||||||||||
| Unaudited | ||||||||||||||
| (in thousands, except per share amounts) | ||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||
| 06/30/09 | 06/30/08 | 06/30/09 | 06/30/08 | |||||||||||
| Net sales | $ | 138,657 | $ | 235,907 | $ | 674,277 | $ | 980,045 | ||||||
| Cost of sales | 71,107 | 107,939 | 326,935 | 453,980 | ||||||||||
| Gross profit | 67,550 | 127,968 | 347,342 | 526,065 | ||||||||||
| Operating expenses: | ||||||||||||||
| Selling | 36,526 | 58,300 | 182,800 | 229,590 | ||||||||||
| General and administrative | 38,506 | 47,699 | 170,312 | 193,639 | ||||||||||
| Goodwill impairment | - | - | 48,400 | - | ||||||||||
| Restructuring and impairment charge | 12,880 | 2,843 | 18,601 | 6,836 | ||||||||||
| Total operating expenses | 87,912 | 108,842 | 420,113 | 430,065 | ||||||||||
| Operating income (loss) | (20,362 | ) | 19,126 | (72,771 | ) | 96,000 | ||||||||
| Interest and other miscellaneous income | 336 | 1,413 | 3,355 | 7,891 | ||||||||||
| Interest expense and other related financing costs | 2,946 | 2,920 | 11,764 | 11,713 | ||||||||||
| Income (loss) before income taxes | (22,972 | ) | 17,619 | (81,180 | ) | 92,178 | ||||||||
| Income tax expense (benefit) | (6,049 | ) | 6,519 | (28,493 | ) | 34,106 | ||||||||
| Net income (loss) | $ | (16,923 | ) | $ | 11,100 | $ | (52,687 | ) | $ | 58,072 | ||||
| Basic earnings per common share: | ||||||||||||||
| Net income (loss) per basic share | $ | (0.58 | ) | $ | 0.39 | $ | (1.83 | ) | $ | 1.98 | ||||
| Basic weighted average shares outstanding | 28,954 | 28,686 | 28,814 | 29,267 | ||||||||||
| Diluted earnings per common share: | ||||||||||||||
| Net income (loss) per diluted share | $ | (0.58 | ) | $ | 0.39 | $ | (1.83 | ) | $ | 1.97 | ||||
| Diluted weighted average shares outstanding | 28,954 | 28,826 | 28,814 | 29,470 | ||||||||||
| Ethan Allen Interiors Inc. | ||||||
| Condensed Consolidated Balance Sheets | ||||||
| Unaudited | ||||||
| (in thousands) | ||||||
| June 30, | June 30, | |||||
| 2009 | 2008 | |||||
| Assets | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | $ | 52,960 | $ | 74,376 | ||
| Accounts receivable, net | 13,086 | 12,672 | ||||
| Inventories | 156,519 | 186,265 | ||||
| Prepaid expenses & other current assets | 21,060 | 32,860 | ||||
| Deferred income taxes | 5,873 | 4,005 | ||||
| Total current assets | 249,498 | 310,178 | ||||
| Property, plant and equipment, net | 333,599 | 350,432 | ||||
| Intangible assets, net | 45,128 | 96,823 | ||||
| Other assets | 13,003 | 7,080 | ||||
| Total Assets | $ | 641,228 | $ | 764,513 | ||
| Liabilities and Shareholders' Equity | ||||||
| Current liabilities: | ||||||
| Current maturities of long-term debt | $ | 42 | $ | 41 | ||
| Customer deposits | 31,691 | 47,297 | ||||
| Accounts payable | 22,199 | 26,444 | ||||
| Accrued expenses & other current liabilities | 54,829 | 61,720 | ||||
| Total current liabilities | 108,761 | 135,502 | ||||
| Long-term debt | 203,106 | 202,988 | ||||
| Other long-term liabilities | 23,438 | 22,923 | ||||
| Deferred income taxes | - | 27,327 | ||||
| Total liabilities | 335,305 | 388,740 | ||||
| Shareholders' equity | 305,923 | 375,773 | ||||
| Total Liabilities and Shareholders' Equity | $ | 641,228 | $ | 764,513 | ||
| Ethan Allen Interiors Inc. | ||||||||||||||
| GAAP Reconciliation | ||||||||||||||
| Three and Twelve Months Ended June 30, 2009 and 2008 | ||||||||||||||
| Unaudited | ||||||||||||||
| (in thousands, except per share amounts) | ||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||
| June 30, | June 30, | |||||||||||||
| 2009 | 2008 | 2009 | 2008 | |||||||||||
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Net Income / Earnings Per Share |
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| Net income (loss) | $ | (16,923 | ) | $ | 11,100 | $ | (52,687 | ) | $ | 58,072 | ||||
| Add: restructuring and impairment charge, net of | ||||||||||||||
| related tax effect | 10,150 | 1,791 | 43,748 | 4,307 | ||||||||||
| Net income (loss) (excluding restructuring and | ||||||||||||||
| impairment charge) | $ | (6,773 | ) | $ | 12,891 | $ | (8,939 | ) | $ | 62,379 | ||||
| Earnings (loss) per basic share | $ | (0.58 | ) | $ | 0.39 | $ | (1.83 | ) | $ | 1.98 | ||||
| Earnings (loss) per basic share (excluding | ||||||||||||||
| restructuring and impairment charge) | $ | (0.23 | ) | $ | 0.45 | $ | (0.31 | ) | $ | 2.13 | ||||
| Basic weighted average shares outstanding | 28,954 | 28,686 | 28,814 | 29,267 | ||||||||||
| Earnings (loss) per diluted share | $ | (0.58 | ) | $ | 0.39 | $ | (1.83 | ) | $ | 1.97 | ||||
| Earnings (loss) per diluted share (excluding | ||||||||||||||
| restructuring and impairment charge) | $ | (0.23 | ) | $ | 0.45 | $ | (0.31 | ) | $ | 2.12 | ||||
| Diluted weighted average shares outstanding | 28,954 | 28,826 | 28,814 | 29,470 | ||||||||||
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Consolidated Operating Income / Operating Margin |
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| Operating income (loss) | $ | (20,362 | ) | $ | 19,126 | $ | (72,771 | ) | $ | 96,000 | ||||
| Add: restructuring and impairment charge | 12,880 | 2,843 | 67,001 | 6,836 | ||||||||||
| Operating income (loss) (excluding restructuring | ||||||||||||||
| and impairment charge) | $ | (7,482 | ) | $ | 21,969 | $ | (5,770 | ) | $ | 102,836 | ||||
| Net sales | $ | 138,657 | $ | 235,907 | $ | 674,277 | $ | 980,045 | ||||||
| Operating margin | -14.7 | % | 8.1 | % | -10.8 | % | 9.8 | % | ||||||
| Operating margin (excluding restructuring and impairment | ||||||||||||||
| charge) | -5.4 | % | 9.3 | % | -0.9 | % | 10.5 | % | ||||||
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Wholesale Operating Income / Operating Margin |
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| Wholesale operating income (loss) | $ | (7,726 | ) | $ | 20,492 | $ | 6,670 | $ | 100,324 | |||||
| Add: restructuring and impairment charge | 11,539 | - | 17,420 | - | ||||||||||
| Wholesale operating income (excluding restructuring and | ||||||||||||||
| impairment charge) | $ | 3,813 | $ | 20,492 | $ | 24,090 | $ | 100,324 | ||||||
| Wholesale net sales | $ | 85,163 | $ | 147,708 | $ | 403,378 | $ | 616,230 | ||||||
| Wholesale operating margin | -9.1 | % | 13.9 | % | 1.7 | % | 16.3 | % | ||||||
| Wholesale operating margin (excluding restructuring and | ||||||||||||||
| impairment charge) | 4.5 | % | 13.9 | % | 6.0 | % | 16.3 | % | ||||||
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Retail Operating Income / Operating Margin |
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| Retail operating income (loss) | $ | (13,944 | ) | $ | (1,506 | ) | $ | (92,100 | ) | $ | (2,800 | ) | ||
| Add: restructuring and impairment charge | 1,341 | 2,843 | 49,581 | 6,836 | ||||||||||
| Retail operating income (loss) (excluding | ||||||||||||||
| restructuring and impairment charge) | $ | (12,603 | ) | $ | 1,337 | $ | (42,519 | ) | $ | 4,036 | ||||
| Retail net sales | $ | 102,263 | $ | 176,474 | $ | 508,621 | $ | 724,586 | ||||||
| Retail operating margin | -13.6 | % | -0.9 | % | -18.1 | % | -0.4 | % | ||||||
| Retail operating margin (excluding restructuring and | ||||||||||||||
| impairment charge) | -12.3 | % | 0.8 | % | -8.4 | % | 0.6 | % | ||||||
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EBITDA |
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| Net income (loss) | $ | (16,923 | ) | $ | 11,100 | $ | (52,687 | ) | $ | 58,072 | ||||
| Add: interest expense (income), net | 2,703 | 2,357 | 10,480 | 7,613 | ||||||||||
| Add: income tax expense (benefit) | (6,049 | ) | 6,519 | (28,493 | ) | 34,106 | ||||||||
| Add: depreciation and amortization | 6,350 | 6,593 | 25,635 | 24,670 | ||||||||||
| EBITDA | $ | (13,919 | ) | $ | 26,569 | $ | (45,065 | ) | $ | 124,461 | ||||
| Net sales | $ | 138,657 | $ | 235,907 | $ | 674,277 | $ | 980,045 | ||||||
| EBITDA as % of net sales | -10.0 | % | 11.3 | % | -6.7 | % | 12.7 | % | ||||||
| EBITDA | $ | (13,919 | ) | $ | 26,569 | $ | (45,065 | ) | $ | 124,461 | ||||
| Add: restructuring and impairment charge | 12,880 | 2,843 | 67,001 | 6,836 | ||||||||||
| EBITDA (excluding restructuring and impairment charge) | $ | (1,039 | ) | $ | 29,412 | $ | 21,936 | $ | 131,297 | |||||
| Net sales | $ | 138,657 | $ | 235,907 | $ | 674,277 | $ | 980,045 | ||||||
| EBITDA as % of net sales excluding restructuring and | ||||||||||||||
| impairment charge) | -0.7 | % | 12.5 | % | 3.3 | % | 13.4 | % | ||||||
CONTACT:
Ethan Allen Interiors Inc.
Investor / Media:
David
R. Callen, 203-743-8305
Vice President Finance & Treasurer