Exhibit 99.1
Ethan Allen Reports Results for Quarter Ended March 31, 2010
DANBURY, Conn.--(BUSINESS WIRE)--April 28, 2010--Ethan Allen Interiors Inc. (“Ethan Allen” or the “Company”) (NYSE:ETH) today reported operating results for the three and nine months ended March 31, 2010.
Three Months Ended March 31, 2010
Net delivered sales for the quarter ended March 31, 2010 were $147.3 million, up 5.0% from the prior year quarter. The Company’s Retail division delivered net sales of $107.1 million, increased 3.7% and the Wholesale division delivered net sales of $96.6 million, increased 9.7% from the prior year quarter. Total orders booked for the Retail division increased 18.6% while comparable design center orders were 23.7% higher than the prior year quarter.
The reported loss in the quarter was $0.9 million or a diluted loss per share of $0.03 compared with a loss the prior year quarter of $48.7 million or $1.69 per diluted share. Excluding restructuring, impairments, transition charges, and unusual income tax impacts in both periods, the current quarter loss was $1.5 million or $0.05 per diluted share compared to $13.4 million loss or $0.46 per diluted share the prior year quarter.
Nine Months Ended March 31, 2010
For the nine months ended March 31, 2010, net delivered sales totaled $426.8 million as compared to $535.6 million the prior year to date. Net delivered sales for the Company’s Retail division were $317.4 million versus $406.4 million the prior year. Wholesale net sales were $262.4 million versus $318.2 million the prior year.
The year to date loss as reported was $17.8 million or $0.61 per diluted share. This compares to the reported loss the prior year to date of $35.8 million or $1.24 per diluted share. Excluding restructuring, impairments, transition charges, and unusual income tax impacts in both periods, the diluted loss per share was $0.31 in the current year to date compared to $0.06 the prior year comparable period.
Farooq Kathwari, Chairman, President and CEO commented, “I am pleased that consolidated booked orders during the quarter ended March 31, 2010 totaled approximately $176 million and reflect a 20% increase from the depressed booked orders from the prior year quarter. Our backlogs at both retail and wholesale have substantially increased to more normal levels. The increase in orders reflects an improvement in consumer confidence and is due to the many initiatives we have taken including offering special savings from our everyday best prices. We are also pleased that during the last six months, we have added nearly 300 associates in our manufacturing and retail operations as we increase our capacity to meet the improved demand.”
Mr. Kathwari continued, “The ‘Great Recession’ has provided us an opportunity to examine every aspect of our business and undertake major improvements to all aspects of our vertically integrated structure. We have also focused on improving our liquidity. Our total cash, investments, and restricted cash at March 31, 2010 was $85 million; an increase of 61% since June 30, 2009.”
Mr. Kathwari further stated, “While we are gratified with the increase in booked orders during the quarter, the major progress in our initiatives, and the positive news of consumer confidence, we remain cautious as the improvement in the economy is still at an early stage with many uncertainties on the horizon.”
Analyst Conference Call
The Company will conduct a Conference Call at 11:00 AM (Eastern) on Wednesday, April 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 280 Design Centers in the United States and abroad. Ethan Allen owns and operates seven manufacturing facilities in North America, including five manufacturing plants and one sawmill in the United States and one manufacturing plant in Mexico. Approximately seventy percent of its products are made 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. | ||||||||||||||||||
| Condensed Consolidated Income Statements | ||||||||||||||||||
| Unaudited | ||||||||||||||||||
| (in thousands, except per share amounts) | ||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||
| 03/31/10 | 03/31/09 | 03/31/10 | 03/31/09 | |||||||||||||||
| Net sales | $ | 147,258 | $ | 140,221 | $ | 426,750 | $ | 535,620 | ||||||||||
| Cost of sales | 75,231 | 74,171 | 227,390 | 255,828 | ||||||||||||||
| Gross profit | 72,027 | 66,050 | 199,360 | 279,792 | ||||||||||||||
| Operating expenses: | ||||||||||||||||||
| Selling | 37,321 | 42,251 | 109,541 | 146,274 | ||||||||||||||
| General and administrative | 37,129 | 42,781 | 112,024 | 131,806 | ||||||||||||||
| Restructuring and impairment charge | 400 | 55,725 | 1,989 | 54,121 | ||||||||||||||
| Total operating expenses | 74,850 | 140,757 | 223,554 | 332,201 | ||||||||||||||
| Operating income (loss) | (2,823 | ) | (74,707 | ) | (24,194 | ) | (52,409 | ) | ||||||||||
| Interest and other miscellaneous income | 894 | 806 | 2,711 | 3,019 | ||||||||||||||
| Interest expense and other related financing costs | 2,979 | 2,985 | 8,938 | 8,818 | ||||||||||||||
| Income (loss) before income taxes | (4,908 | ) | (76,886 | ) | (30,421 | ) | (58,208 | ) | ||||||||||
| Income tax expense (benefit) | (4,053 | ) | (28,212 | ) | (12,649 | ) | (22,444 | ) | ||||||||||
| Net income (loss) | $ | (855 | ) | $ | (48,674 | ) | $ | (17,772 | ) | $ | (35,764 | ) | ||||||
| Basic earnings per common share: | ||||||||||||||||||
| Net income (loss) per basic share | $ | (0.03 | ) | $ | (1.69 | ) | $ | (0.61 | ) | $ | (1.24 | ) | ||||||
| Basic weighted average shares outstanding | 29,016 | 28,861 | 28,953 | 28,768 | ||||||||||||||
| Diluted earnings per common share: | ||||||||||||||||||
| Net income (loss) per diluted share | $ | (0.03 | ) | $ | (1.69 | ) | $ | (0.61 | ) | $ | (1.24 | ) | ||||||
| Diluted weighted average shares outstanding | 29,016 | 28,861 | 28,953 | 28,768 | ||||||||||||||
| Ethan Allen Interiors Inc. | ||||||||
| Condensed Consolidated Balance Sheets | ||||||||
| Unaudited | ||||||||
| (in thousands) | ||||||||
| March 31, | June 30, | |||||||
| 2010 | 2009 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 71,925 | $ | 52,960 | ||||
| Marketable securities | 2,023 | - | ||||||
| Accounts receivable, net | 15,725 | 13,086 | ||||||
| Inventories | 140,369 | 156,519 | ||||||
| Prepaid expenses & other current assets | 12,163 | 21,060 | ||||||
| Deferred income taxes | 16,442 | 8,077 | ||||||
| Total current assets | 258,647 | 251,702 | ||||||
| Property, plant and equipment, net | 310,578 | 333,599 | ||||||
| Intangible assets, net | 45,128 | 45,128 | ||||||
| Restricted cash and investments | 11,300 | - | ||||||
| Other assets | 18,733 | 16,056 | ||||||
| Total Assets | $ | 644,386 | $ | 646,485 | ||||
| Liabilities and Shareholders' Equity | ||||||||
| Current liabilities: | ||||||||
| Current maturities of long-term debt | 43 | 42 | ||||||
| Customer deposits | 49,278 | 31,691 | ||||||
| Accounts payable | 23,862 | 22,199 | ||||||
| Accrued expenses & other current liabilities | 55,642 | 58,531 | ||||||
| Total current liabilities | 128,825 | 112,463 | ||||||
| Long-term debt | 203,194 | 203,106 | ||||||
| Other long-term liabilities | 23,817 | 24,993 | ||||||
| Total liabilities | 355,836 | 340,562 | ||||||
| Shareholders' equity | 288,550 | 305,923 | ||||||
| Total Liabilities and Shareholders' Equity | $ | 644,386 | $ | 646,485 | ||||
| Ethan Allen Interiors Inc. | ||||||||||||||||||
| Selected Financial Information | ||||||||||||||||||
| Unaudited | ||||||||||||||||||
| (in millions) | ||||||||||||||||||
|
Selected Consolidated Financial Data: |
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| Three Months Ended | Nine Months Ended | |||||||||||||||||
| 03/31/10 | 03/31/09 | 03/31/10 | 03/31/09 | |||||||||||||||
| Net sales | $ | 147.3 | $ | 140.2 | $ | 426.8 | $ | 535.6 | ||||||||||
| Gross margin | 48.9 | % | 47.1 | % | 46.7 | % | 52.2 | % | ||||||||||
| Operating margin | -1.9 | % | -53.3 | % | -5.7 | % | -9.8 | % | ||||||||||
| Operating margin (ex restructuring, impairment & | ||||||||||||||||||
| transition charges ) | -0.2 | % | -13.5 | % | -1.8 | % | 0.3 | % | ||||||||||
| Net income (loss) | ($0.9 | ) | ($48.7 | ) | ($17.8 | ) | ($35.8 | ) | ||||||||||
| Net income (loss) (ex restructuring, impairment & | ||||||||||||||||||
| transition charges ) | ($1.5 | ) | ($13.4 | ) | ($8.8 | ) | ($1.6 | ) | ||||||||||
| Operating cash flow | $ | 12.8 | ($1.9 | ) | $ | 33.6 | $ | 13.8 | ||||||||||
| Capital expenditures | $ | 2.3 | $ | 4.3 | $ | 7.6 | $ | 20.5 | ||||||||||
| Acquisitions | $ | 0.0 | $ | 0.1 | $ | 0.0 | $ | 0.7 | ||||||||||
| Treasury stock repurchases (settlement | ||||||||||||||||||
| date basis) | $ | 0.0 | $ | 0.0 | $ | 0.0 | $ | 0.0 | ||||||||||
| EBITDA | $ | 3.4 | ($67.7 | ) | $ | 1.7 | ($31.1 | ) | ||||||||||
| EBITDA as % of net sales | 2.3 | % | -48.3 | % | 0.4 | % | -5.8 | % | ||||||||||
| EBITDA (ex restructuring, impairment and | ||||||||||||||||||
| transition charges ) | $ | 5.9 | ($12.0 | ) | $ | 11.5 | $ | 23.0 | ||||||||||
| EBITDA as % of net sales (ex restructuring, | ||||||||||||||||||
| impairment and transition charges ) | 4.0 | % | -8.5 | % | 2.7 | % | 4.3 | % | ||||||||||
|
Selected Financial Data by Business Segment: |
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| Three Months Ended | Nine Months Ended | |||||||||||||||||
| 03/31/10 | 03/31/09 | 03/31/10 | 03/31/09 | |||||||||||||||
|
Retail |
||||||||||||||||||
| Net sales | $ | 107.1 | $ | 103.3 | $ | 317.4 | $ | 406.4 | ||||||||||
| Operating margin | -9.7 | % | -69.6 | % | -9.9 | % | -19.2 | % | ||||||||||
| Operating margin (ex restructuring, impairment & | ||||||||||||||||||
| transition charges ) | -9.3 | % | -21.0 | % | -9.2 | % | -7.4 | % | ||||||||||
|
Wholesale |
||||||||||||||||||
| Net sales | $ | 96.6 | $ | 88.1 | $ | 262.4 | $ | 318.2 | ||||||||||
| Operating margin | 7.0 | % | -6.9 | % | 1.2 | % | 4.5 | % | ||||||||||
| Operating margin (ex restructuring, impairment & | ||||||||||||||||||
| transition charges ) | 9.2 | % | -0.7 | % | 6.6 | % | 6.4 | % | ||||||||||
| Ethan Allen Interiors Inc. | ||||||||||||||||||
| GAAP Reconciliation | ||||||||||||||||||
| Three and Nine Months Ended March 31, 2010 and 2009 | ||||||||||||||||||
| Unaudited | ||||||||||||||||||
| (in thousands, except per share amounts) | ||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||
| March 31, | March 31, | |||||||||||||||||
|
2010 |
2009 | 2010 | 2009 | |||||||||||||||
|
Net Income / Earnings Per Share |
||||||||||||||||||
| Net income (loss) | $ | (855 | ) | $ | (48,674 | ) | $ | (17,772 | ) | $ | (35,764 | ) | ||||||
| Add: restructuring, impairment and transition charges | ||||||||||||||||||
| (credit), net of related tax effect | 1,591 | 35,278 | 10,478 | 34,156 | ||||||||||||||
| Unusual income tax impacts | (2,261 | ) | - | (1,545 | ) | - | ||||||||||||
| Net income (loss) (excluding restructuring impairment and | ||||||||||||||||||
| transition charges) | $ | (1,525 | ) | $ | (13,396 | ) | $ | (8,839 | ) | $ | (1,608 | ) | ||||||
| Earnings (loss) per basic share | $ | (0.03 | ) | $ | (1.69 | ) | $ | (0.61 | ) | $ | (1.24 | ) | ||||||
| Earnings (loss) per basic share (excluding restructuring, | ||||||||||||||||||
| impairment and transition charges (credit)) | $ | (0.05 | ) | $ | (0.46 | ) | $ | (0.31 | ) | $ | (0.06 | ) | ||||||
| Basic weighted average shares outstanding | 29,016 | 28,861 | 28,953 | 28,768 | ||||||||||||||
| Earnings (loss) per diluted share | $ | (0.03 | ) | $ | (1.69 | ) | $ | (0.61 | ) | $ | (1.24 | ) | ||||||
| Earnings (loss) per diluted share (excluding restructuring, | ||||||||||||||||||
| impairment and transition charges (credit)) | $ | (0.05 | ) | $ | (0.46 | ) | $ | (0.31 | ) | $ | (0.06 | ) | ||||||
| Diluted weighted average shares outstanding | 29,016 | 28,861 | 28,953 | 28,768 | ||||||||||||||
|
Consolidated Operating Income / Operating Margin |
||||||||||||||||||
| Operating income (loss) | $ | (2,823 | ) | $ | (74,707 | ) | $ | (24,194 | ) | $ | (52,409 | ) | ||||||
| Add: restructuring, impairment and transition | ||||||||||||||||||
| charges (credit) | 2,506 | 55,725 | 16,501 | 54,121 | ||||||||||||||
| Operating income (loss) (excluding restructuring, | ||||||||||||||||||
| impairment and transition charges) | $ | (317 | ) | $ | (18,982 | ) | $ | (7,693 | ) | $ | 1,712 | |||||||
| Net sales | $ | 147,258 | $ | 140,221 | $ | 426,750 | $ | 535,620 | ||||||||||
| Operating margin | -1.9 | % | -53.3 | % | -5.7 | % | -9.8 | % | ||||||||||
| Operating margin (excluding restructuring, impairment | ||||||||||||||||||
| and transition charges) | -0.2 | % | -13.5 | % | -1.8 | % | 0.3 | % | ||||||||||
|
Wholesale Operating Income / Operating Margin |
||||||||||||||||||
| Wholesale operating income (loss) | $ | 6,737 | $ | (6,068 | ) | $ | 3,099 | $ | 14,396 | |||||||||
| Add: restructuring, impairment and transition | ||||||||||||||||||
| charges (credit) | 2,108 | 5,473 | 14,287 | 5,881 | ||||||||||||||
| Wholesale operating income (excluding restructuring, | ||||||||||||||||||
| impairment and transition charges) | $ | 8,845 | $ | (595 | ) | $ | 17,386 | $ | 20,277 | |||||||||
| Wholesale net sales | $ | 96,594 | $ | 88,072 | $ | 262,374 | $ | 318,215 | ||||||||||
| Wholesale operating margin | 7.0 | % | -6.9 | % | 1.2 | % | 4.5 | % | ||||||||||
| Wholesale operating margin (excluding restructuring, | ||||||||||||||||||
| impairment and transition charges) | 9.2 | % | -0.7 | % | 6.6 | % | 6.4 | % | ||||||||||
|
Retail Operating Income / Operating Margin |
||||||||||||||||||
| Retail operating income (loss) | $ | (10,366 | ) | $ | (71,920 | ) | $ | (31,507 | ) | $ | (78,156 | ) | ||||||
| Add: restructuring, impairment and transition | ||||||||||||||||||
| charges (credit) | 398 | 50,252 | 2,214 | 48,240 | ||||||||||||||
| Retail operating income (loss) (excluding restructuring, | ||||||||||||||||||
| impairment and transition charges (credit)) | $ | (9,968 | ) | $ | (21,668 | ) | $ | (29,293 | ) | $ | (29,916 | ) | ||||||
| Retail net sales | $ | 107,113 | $ | 103,305 | $ | 317,386 | $ | 406,358 | ||||||||||
| Retail operating margin | -9.7 | % | -69.6 | % | -9.9 | % | -19.2 | % | ||||||||||
| Retail operating margin (excluding restructuring, | ||||||||||||||||||
| impairment and transition charges) | -9.3 | % | -21.0 | % | -9.2 | % | -7.4 | % | ||||||||||
| Ethan Allen Interiors Inc. | ||||||||||||||||||
| GAAP Reconciliation | ||||||||||||||||||
| Three and Nine Months Ended March 31, 2010 and 2009 | ||||||||||||||||||
| Unaudited | ||||||||||||||||||
| (in thousands, except per share amounts) | ||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||
| March 31, | March 31, | |||||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||||
|
EBITDA |
||||||||||||||||||
| Net income (loss) | $ | (855 | ) | $ | (48,674 | ) | $ | (17,772 | ) | $ | (35,764 | ) | ||||||
| Add: interest expense (income), net | 2,745 | 2,704 | 8,242 | 7,777 | ||||||||||||||
| Add: income tax expense (benefit) | (4,053 | ) | (28,212 | ) | (12,649 | ) | (22,444 | ) | ||||||||||
| Add: depreciation and amortization (including | ||||||||||||||||||
| accelerated depreciation) | 5,519 | 6,477 | 23,849 | 19,285 | ||||||||||||||
| EBITDA | $ | 3,356 | $ | (67,705 | ) | $ | 1,670 | $ | (31,146 | ) | ||||||||
| Net sales | $ | 147,258 | $ | 140,221 | $ | 426,750 | $ | 535,620 | ||||||||||
| EBITDA as % of net sales | 2.3 | % | -48.3 | % | 0.4 | % | -5.8 | % | ||||||||||
| EBITDA | $ | 3,356 | $ | (67,705 | ) | $ | 1,670 | $ | (31,146 | ) | ||||||||
| Add: restructuring, impairment and transition | ||||||||||||||||||
| charges (credit) | 2,506 | 55,725 | 9,871 | 54,121 | ||||||||||||||
| Adjusted EBITDA | $ | 5,862 | $ | (11,980 | ) | $ | 11,541 | $ | 22,975 | |||||||||
| Net sales | $ | 147,258 | $ | 140,221 | $ | 426,750 | $ | 535,620 | ||||||||||
| Adjusted EBITDA as % of net sales | 4.0 | % | -8.5 | % | 2.7 | % | 4.3 | % | ||||||||||
CONTACT:
Ethan Allen Interiors Inc.
Investor / Media:
David R.
Callen, 203-743-8305
Vice President Finance & Treasurer