Exhibit 99.1
Ethan Allen Reports Results for Quarter Ended December 31, 2009
DANBURY, Conn.--(BUSINESS WIRE)--January 28, 2010--Ethan Allen Interiors Inc. (“Ethan Allen” or the “Company”) (NYSE:ETH) today reported operating results for the three and six months ended December 31, 2009.
Three Months Ended December 31, 2009
Net delivered sales for the quarter ended December 31, 2009 amounted to $143.3 million as compared to $189.6 million in the prior year quarter. Net delivered sales for the Company’s Retail division were $107.1 million compared with $147.2 million the prior year quarter. Wholesale net sales were $84.5 million versus $108.8 million the prior year quarter. Comparable Ethan Allen design center net delivered sales were 25.3% lower than the prior year quarter while comparable written orders were 6.1% lower. The Company’s Retail backlog has increased 34% and the Wholesale backlog is up 54% from the prior year second quarter.
For the quarter ended December 31, 2009, diluted loss per share amounted to $0.12 on a loss of $3.3 million, which includes $3.9 million in transition costs and a $0.8 million restructuring and impairment charge for previously announced actions. This compares to diluted earnings per share and net income of $0.19 and $5.5 million, respectively, for the prior year. Excluding the impact of the transition costs and restructuring and impairment charges and the impact of tax valuation allowances recorded, diluted loss per share amounted to $0.06 for the current quarter.
Six Months Ended December 31, 2009
For the six months ended December 31, 2009, net delivered sales totaled $279.5 million as compared to $395.4 million in the prior year comparable period. Net delivered sales for the Company’s Retail division were $210.3 million compared with $303.1 million the prior year. Wholesale net sales were $165.8 million versus $230.1 million the prior year.
For the six months ended December 31, 2009, diluted loss per share amounted to $0.58 on a loss of $16.9 million, which includes $12.4 million in transition costs and a $1.6 million restructuring and impairment charges for previously announced actions. This compares to diluted earnings per share and net income of $0.45 and $12.9 million, respectively, for the prior year, which included a restructuring benefit of $1.6 million due to the gain on the sale of properties closed in fiscal 2008. Excluding the impact of the transition costs and restructuring and impairment charges in both periods and the impact of tax valuation allowances recorded, diluted loss per share amounted to $0.25 in the current period compared to diluted earnings per share of $0.41 in the prior year comparable period.
Farooq Kathwari, Chairman, President and CEO commented, “The challenges of the past year have provided us an opportunity to significantly strengthen many elements of our vertically integrated enterprise while at the same time increasing our cash position from June 30 by 44% to $76 million at December 31, 2009.”
Mr. Kathwari continued, “The consolidation and restructuring initiatives did result in lower delivered sales in the December quarter while increasing our backlogs. Our plants, retail and logistics have absorbed most of the operational changes and transition costs during the last six months. This includes the training of 274 new upholstery associates and the conversion of our case goods products to custom. We expect to significantly lower these costs in the third and fourth quarters of this fiscal year."
Mr. Kathwari added, “We have strong marketing initiatives in place. While we need to remain cautious, we are continuing with our plans to increase production in both our domestic wood and upholstery products. We will discuss these efforts as well as our other initiatives in detail during our conference call.”
Analyst Conference Call
The Company will conduct a Conference Call at 11:00 AM (Eastern) on Thursday, January 28th. The live webcast and replay are accessible via the Company’s website at http://ethanallen.com/investors.
About Ethan Allen
Ethan Allen Interiors Inc. 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/A for the year ended June 30, 2009 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 thousands, except per share amounts) | |||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||
| 12/31/09 |
12/31/08 |
12/31/09 |
12/31/08 |
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| Net sales | $ | 143,302 | $ | 189,558 | $ | 279,492 | $ | 395,399 | |||||||||
| Cost of sales | 74,278 | 87,757 | 152,159 | 181,657 | |||||||||||||
| Gross profit | 69,024 | 101,801 | 127,333 | 213,742 | |||||||||||||
| Operating expenses: | |||||||||||||||||
| Selling | 33,801 | 48,721 | 67,406 | 104,023 | |||||||||||||
| General and administrative | 39,729 | 42,967 | 79,709 | 89,025 | |||||||||||||
| Restructuring and impairment charge | 777 | 26 | 1,589 | (1,604 | ) | ||||||||||||
| Total operating expenses | 74,307 | 91,714 | 148,704 | 191,444 | |||||||||||||
| Operating income (loss) | (5,283 | ) | 10,087 | (21,371 | ) | 22,298 | |||||||||||
| Interest and other miscellaneous income | 1,020 | 1,113 | 1,817 | 2,213 | |||||||||||||
| Interest expense and other related financing costs | 2,978 | 2,932 | 5,959 | 5,833 | |||||||||||||
| Income (loss) before income taxes | (7,241 | ) | 8,268 | (25,513 | ) | 18,678 | |||||||||||
| Income tax expense (benefit) | (3,903 | ) | 2,780 | (8,596 | ) | 5,768 | |||||||||||
| Net income (loss) | $ | (3,338 | ) | $ | 5,488 | $ | (16,917 | ) | $ | 12,910 | |||||||
| Basic earnings per common share: | |||||||||||||||||
| Net income (loss) per basic share | $ | (0.12 | ) | $ | 0.19 | $ | (0.58 | ) | $ | 0.45 | |||||||
| Basic weighted average shares outstanding | 28,917 | 28,739 | 28,922 | 28,721 | |||||||||||||
| Diluted earnings per common share: | |||||||||||||||||
| Net income (loss) per diluted share | $ | (0.12 | ) | $ | 0.19 | $ | (0.58 | ) | $ | 0.45 | |||||||
| Diluted weighted average shares outstanding | 28,917 | 28,739 | 28,922 | 28,793 | |||||||||||||
| Ethan Allen Interiors Inc. | ||||||||||
| Condensed Consolidated Balance Sheets | ||||||||||
| Unaudited | ||||||||||
| (in thousands) | ||||||||||
| December 31, | June 30, | |||||||||
|
2009 |
2009 |
|||||||||
| Assets | ||||||||||
| Current assets: | ||||||||||
| Cash and cash equivalents | $ | 76,138 | $ | 52,960 | ||||||
| Accounts receivable, net | 12,581 | 13,086 | ||||||||
| Inventories | 141,991 | 156,519 | ||||||||
| Prepaid expenses & other current assets | 10,536 | 21,060 | ||||||||
| Deferred income taxes | 14,899 | 8,077 | ||||||||
| Total current assets | 256,145 | 251,702 | ||||||||
| Property, plant and equipment, net | 313,528 | 333,599 | ||||||||
| Intangible assets, net | 45,128 | 45,128 | ||||||||
| Other assets | 17,669 | 16,056 | ||||||||
| Total Assets | $ | 632,470 | $ | 646,485 | ||||||
| Liabilities and Shareholders' Equity | ||||||||||
| Current liabilities: | ||||||||||
| Current maturities of long-term debt | $ | 43 | $ | 42 | ||||||
| Customer deposits | 36,573 | 31,691 | ||||||||
| Accounts payable | 23,236 | 22,199 | ||||||||
| Accrued expenses & other current liabilities | 56,251 | 58,531 | ||||||||
| Total current liabilities | 116,103 | 112,463 | ||||||||
| Long-term debt | 203,165 | 203,106 | ||||||||
| Other long-term liabilities | 25,323 | 24,993 | ||||||||
| Total liabilities | 344,591 | 340,562 | ||||||||
| Shareholders' equity | 287,879 | 305,923 | ||||||||
| Total Liabilities and Shareholders' Equity | $ | 632,470 | $ | 646,485 | ||||||
| Ethan Allen Interiors Inc. | |||||||||||||||||
| Selected Financial Information | |||||||||||||||||
| Unaudited | |||||||||||||||||
| (in millions) | |||||||||||||||||
|
Selected Consolidated Financial Data: |
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| Three Months Ended | Six Months Ended | ||||||||||||||||
| 12/31/09 |
12/31/08 |
12/31/09 |
12/31/08 |
||||||||||||||
| Net sales | $ | 143.3 | $ | 189.6 | $ | 279.5 | $ | 395.4 | |||||||||
| Gross margin | 48.2% | 53.7% | 45.6% | 54.1% | |||||||||||||
| Operating margin | -3.7% | 5.3% | -7.6% | 5.6% | |||||||||||||
| Operating margin (ex restructuring, impairment & | |||||||||||||||||
| plant transition charges ) | -0.4% | 5.3% | -2.6% | 5.2% | |||||||||||||
| Net income (loss) | ($3.3) | $ | 5.5 | ($16.9) | $ | 12.9 | |||||||||||
| Net income (loss) (ex restructuring, impairment & | |||||||||||||||||
| plant transition charges ) | ($1.6) | $ | 5.5 | ($7.3) | $ | 11.8 | |||||||||||
| Operating cash flow | $ | 3.9 | ($2.4) | $ | 20.8 | $ | 15.7 | ||||||||||
| Capital expenditures | $ | 2.8 | $ | 5.1 | $ | 5.3 | $ | 16.1 | |||||||||
| Acquisitions | $ | 0.0 | $ | 0.3 | $ | 0.0 | $ | 0.6 | |||||||||
| Treasury stock repurchases (settlement | |||||||||||||||||
| date basis) | $ | 0.0 | $ | 0.0 | $ | 0.0 | $ | 0.0 | |||||||||
| EBITDA | $ | 1.1 | $ | 17.3 | ($1.7) | $ | 36.6 | ||||||||||
| EBITDA as % of net sales | 0.8% | 9.1% | -0.6% | 9.2% | |||||||||||||
| EBITDA (ex restructuring, impairment and | |||||||||||||||||
| plant transition charges ) | $ | 5.8 | $ | 17.3 | $ | 5.7 | $ | 35.0 | |||||||||
| EBITDA as % of net sales (ex restructuring, | |||||||||||||||||
| impairment and plant transition charges ) | 4.0% | 9.2% | 2.0% | 8.8% | |||||||||||||
|
Selected Financial Data by Business Segment: |
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| Three Months Ended | Six Months Ended | ||||||||||||||||
| 12/31/09 |
12/31/08 |
12/31/09 |
12/31/08 |
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|
Retail |
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| Net sales | $ | 107.1 | $ | 147.2 | $ | 210.3 | $ | 303.1 | |||||||||
| Operating margin | -9.1% | -2.2% | -10.1% | -2.1% | |||||||||||||
| Operating margin (ex restructuring, impairment & | |||||||||||||||||
| plant transition charges ) | -8.1% | -2.1% | -9.2% | -2.7% | |||||||||||||
|
Wholesale |
|||||||||||||||||
| Net sales | $ | 84.5 | $ | 108.8 | $ | 165.8 | $ | 230.1 | |||||||||
| Operating margin | 1.2% | 7.9% | -2.2% | 8.9% | |||||||||||||
| Operating margin (ex restructuring, impairment & | |||||||||||||||||
| plant transition charges ) | 5.4% | 7.9% | 5.2% | 9.1% | |||||||||||||
| Ethan Allen Interiors Inc. | ||||||||||||||||||
| GAAP Reconciliation | ||||||||||||||||||
| Three and Six Months Ended December 31, 2009 and 2008 | ||||||||||||||||||
| Unaudited | ||||||||||||||||||
| (in thousands, except per share amounts) | ||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||
| December 31, | December 31, | |||||||||||||||||
| 2009 | 2008 | 2009 | 2008 | |||||||||||||||
|
Net Income / Earnings Per Share |
||||||||||||||||||
| Net income (loss) | $ | (3,338) | $ | 5,488 | $ | (16,917) | $ | 12,910 | ||||||||||
| Add: restructuring, impairment and plant transition charges | ||||||||||||||||||
| (credit), net of related tax effect | 1,710 | 17 | 9,603 |
|
(1,109) | |||||||||||||
| Net income (loss) (excluding restructuring impairment and | ||||||||||||||||||
| plant transition charges) | $ | (1,628) | $ | 5,505 | $ | (7,314) | $ | 11,801 | ||||||||||
| Earnings (loss) per basic share | $ | (0.12) | $ | 0.19 | $ | (0.58) | $ | 0.45 | ||||||||||
| Earnings (loss) per basic share (excluding restructuring, | ||||||||||||||||||
| impairment and plant transition charges (credit)) | $ | (0.06) | $ | 0.19 | $ | (0.25) | $ | 0.41 | ||||||||||
| Basic weighted average shares outstanding | 28,917 | 28,739 | 28,922 | 28,721 | ||||||||||||||
| Earnings (loss) per diluted share | $ | (0.12) | $ | 0.19 | $ | (0.58) | $ | 0.45 | ||||||||||
| Earnings (loss) per diluted share (excluding restructuring, | ||||||||||||||||||
| impairment and plant transition charges (credit)) | $ | (0.06) | $ | 0.19 | $ | (0.25) | $ | 0.41 | ||||||||||
| Diluted weighted average shares outstanding | 28,917 | 28,739 | 28,922 | 28,793 | ||||||||||||||
|
Consolidated Operating Income / Operating Margin |
||||||||||||||||||
| Operating income (loss) | $ | (5,283) | $ | 10,087 | $ | (21,371) | $ | 22,298 | ||||||||||
| Add: restructuring, impairment and plant transition | ||||||||||||||||||
| charges (credit) | 4,677 | 26 | 13,995 | (1,604) | ||||||||||||||
| Operating income (loss) (excluding restructuring, | ||||||||||||||||||
| impairment and plant transition charges) | $ | (606) | $ | 10,113 | $ | (7,376) | $ | 20,694 | ||||||||||
| Net sales | $ | 143,302 | $ | 189,558 | $ | 279,492 | $ | 395,399 | ||||||||||
| Operating margin | -3.7% | 5.3% | -7.6% | 5.6% | ||||||||||||||
| Operating margin (excluding restructuring, impairment | ||||||||||||||||||
| and plant transition charges) | -0.4% | 5.3% | -2.6% | 5.2% | ||||||||||||||
|
Wholesale Operating Income / Operating Margin |
||||||||||||||||||
| Wholesale operating income (loss) | $ | 1,022 | $ | 8,580 | $ | (3,638) | $ | 20,465 | ||||||||||
| Add: restructuring, impairment and plant transition | ||||||||||||||||||
| charges (credit) | 3,523 | - | 12,179 | 408 | ||||||||||||||
| Wholesale operating income (excluding restructuring, | ||||||||||||||||||
| impairment and plant transition charges) | $ | 4,545 | $ | 8,580 | $ | 8,541 | $ | 20,873 | ||||||||||
| Wholesale net sales | $ | 84,499 | $ | 108,848 | $ | 165,780 | $ | 230,143 | ||||||||||
| Wholesale operating margin | 1.2% | 7.9% | -2.2% | 8.9% | ||||||||||||||
| Wholesale operating margin (excluding restructuring, | ||||||||||||||||||
| impairment and plant transition charges) | 5.4% | 7.9% | 5.2% | 9.1% | ||||||||||||||
|
Retail Operating Income / Operating Margin |
||||||||||||||||||
| Retail operating income (loss) | $ | (9,792) | $ | (3,185) | $ | (21,141) | $ | (6,237) | ||||||||||
| Add: restructuring, impairment and plant transition | ||||||||||||||||||
| charges (credit) | 1,154 | 26 | 1,816 | (2,012) | ||||||||||||||
| Retail operating income (loss) (excluding restructuring, | ||||||||||||||||||
| impairment and plant transition charges (credit)) | $ | (8,638) | $ | (3,159) | $ | (19,325) | $ | (8,249) | ||||||||||
| Retail net sales | $ | 107,123 | $ | 147,183 | $ | 210,273 | $ | 303,053 | ||||||||||
| Retail operating margin | -9.1% | -2.2% | -10.1% | -2.1% | ||||||||||||||
| Retail operating margin (excluding restructuring, | ||||||||||||||||||
| impairment and plant transition charges) | -8.1% | -2.1% | -9.2% | -2.7% | ||||||||||||||
| Ethan Allen Interiors Inc. | |||||||||||||||||
| GAAP Reconciliation | |||||||||||||||||
| Three and Six Months Ended December 31, 2009 and 2008 | |||||||||||||||||
| Unaudited | |||||||||||||||||
| (in thousands, except per share amounts) | |||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||
| December 31, | December 31, | ||||||||||||||||
| 2009 | 2008 | 2009 | 2008 | ||||||||||||||
|
EBITDA |
|||||||||||||||||
| Net income (loss) | $ | (3,338) | $ | 5,488 | $ | (16,917) | $ | 12,910 | |||||||||
| Add: interest expense (income), net | 2,731 | 2,565 | 5,497 | 5,073 | |||||||||||||
| Add: income tax expense (benefit) | (3,903) | 2,780 | (8,596) | 5,768 | |||||||||||||
| Add: depreciation and amortization (including plant | |||||||||||||||||
| accelerated depreciation) | 5,633 | 6,490 | 18,330 | 12,808 | |||||||||||||
| EBITDA | $ | 1,123 | $ | 17,323 | $ | (1,686) | $ | 36,559 | |||||||||
| Net sales | $ | 143,302 | $ | 189,558 | $ | 279,492 | $ | 395,399 | |||||||||
| EBITDA as % of net sales | 0.8% | 9.1% | -0.6% | 9.2% | |||||||||||||
| EBITDA | $ | 1,123 | $ | 17,323 | $ | (1,686) | $ | 36,559 | |||||||||
| Add: restructuring, impairment and plant transition | |||||||||||||||||
| charges (credit) | 4,677 | 26 | 7,365 | (1,604) | |||||||||||||
| Adjusted EBITDA | $ | 5,800 | $ | 17,349 | $ | 5,679 | $ | 34,955 | |||||||||
| Net sales | $ | 143,302 | $ | 189,558 | $ | 279,492 | $ | 395,399 | |||||||||
| Adjusted EBITDA as % of net sales | 4.0% | 9.2% | 2.0% | 8.8% | |||||||||||||
CONTACT:
Ethan Allen Interiors Inc.
Investor / Media:
David R.
Callen, 203-743-8305
Vice President Finance & Treasurer