Exhibit 99.1
Ethan Allen Reports Results for Quarter Ended December 31, 2010
DANBURY, Conn.--(BUSINESS WIRE)--January 24, 2011--Ethan Allen Interiors Inc. (“Ethan Allen” or the “Company”) (NYSE:ETH) reported operating results for the three and six months ended December 31, 2010.
Mr. Farooq Kathwari, Chairman, President and CEO commenting on the results stated, “We are pleased with continued increases in revenues and profitability during the quarter ended December 31, 2010. With a sales increase of 21% and operating income of $10.5 million, we have benefited from the many initiatives we have taken to improve our marketing and operations. We also continue to maintain strong liquidity, ending the quarter with cash and securities of $85.6 million. Fiscal year to date, we have retired $6.9 million of our bonds and repurchased $5.4 million of our common stock. Later this year, we also expect to receive a federal tax refund of approximately $17 million.”
Three Months Ended December 31, 2010
Net sales for the quarter ended December 31, 2010 were $173.3 million, an increase of 21.0% compared with the prior year quarter. The Company’s Retail division net sales were $131.0 million, an increase of 22.3% from the prior year quarter. Written orders booked during the quarter by the Retail division were 5.7% greater than the prior year quarter including comparable design center orders which grew 10.7%.
Net income for the quarter ended December 31, 2010 was $14.7 million or $0.51 earnings per diluted share compared with a net loss the prior year of $3.3 million or a $0.12 loss per diluted share. Excluding special items in both periods, net income for the quarter ended December 31, 2010 was $5.6 million or $0.19 per diluted share compared with a net loss the prior year quarter of $1.6 million or $0.06 loss per diluted share.
Six Months Ended December 31, 2010
For the six months ended December 31, 2010, net sales were $338.2 million, up 21.0% from the prior year comparable period. Net income year to date was $18.6 million or $0.64 per diluted share compared with a year to date net loss of $16.9 million or $0.58 loss per diluted share the prior year. Excluding special items in both periods for the six months, current year earnings were $0.30 per diluted share compared with a net loss per diluted share of $0.25 the prior year.
Commenting on future prospects, Mr. Kathwari continued, “The ‘Great Recession’ has afforded us an opportunity to reinvent and restructure many aspects of our vertically integrated enterprise. While the economic recovery is still in the early stages, we remain cautiously optimistic and continue to take steps to grow our business. In our third quarter ending March 31, 2011, we plan to invest to increase our direct mail advertising by approximately 50% over the prior year. We look forward to discussing in greater detail our initiatives during our upcoming conference call.”
Analyst Conference Call
The Company will conduct a conference call at 11:00 AM (Eastern) on Tuesday, January 25th to discuss the financial results and our business initiatives. 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-five 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 for the year ended June 30, 2010 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) | ||||||||||||||||
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Selected Consolidated Financial Data: |
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Three Months Ended |
Six Months Ended |
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12/31/10 |
12/31/09 |
12/31/10 |
12/31/09 |
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| Net sales | $ | 173.3 | $ | 143.3 | $ | 338.2 | $ | 279.5 | ||||||||
| Gross margin | 51.8 | % | 48.2 | % | 50.9 | % | 45.6 | % | ||||||||
| Operating margin | 6.0 | % | -3.7 | % | 4.7 | % | -7.6 | % | ||||||||
| Operating margin (excluding special items*) | 6.1 | % | -0.4 | % | 5.0 | % | -2.6 | % | ||||||||
| Net income (loss) | $ | 14.7 | ($3.3 | ) | $ | 18.6 | ($16.9 | ) | ||||||||
|
Net income (loss) (excluding special items* and unusual income tax effects) |
$ | 5.6 | ($1.6 | ) | $ | 8.7 | ($7.3 | ) | ||||||||
| Operating cash flow | $ | 3.7 | $ | 3.9 | $ | 2.8 | $ | 20.8 | ||||||||
| Capital expenditures | $ | 2.5 | $ | 2.8 | $ | 4.0 | $ | 5.3 | ||||||||
| Acquisitions | $ | 0.2 | $ | 0.0 | $ | 0.2 | $ | 0.0 | ||||||||
|
Treasury stock repurchases (settlement date basis) |
$ | 0.0 | $ | 0.0 | $ | 5.4 | $ | 0.0 | ||||||||
| EBITDA | $ | 16.7 | $ | 1.1 | $ | 30.5 | ($1.7 | ) | ||||||||
| EBITDA as % of net sales | 9.6 | % | 0.8 | % | 9.0 | % | -0.6 | % | ||||||||
| EBITDA (excluding special items*) | $ | 16.7 | $ | 5.8 | $ | 30.0 | $ | 5.7 | ||||||||
| EBITDA as % of net sales (excluding special items*) | 9.6 | % | 4.0 | % | 8.9 | % | 2.0 | % | ||||||||
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Selected Financial Data by Business Segment: |
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Three Months Ended |
Six Months Ended |
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12/31/10 |
12/31/09 |
12/31/10 |
12/31/09 |
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Retail |
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| Net sales | $ | 131.0 | $ | 107.1 | $ | 252.0 | $ | 210.3 | ||||||||
| Operating margin | -0.9 | % | -9.1 | % | -2.2 | % | -10.1 | % | ||||||||
| Operating margin (excluding special items*) | -0.9 | % | -8.1 | % | -2.1 | % | -9.2 | % | ||||||||
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Wholesale |
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| Net sales | $ | 100.8 | $ | 84.5 | $ | 208.3 | $ | 165.8 | ||||||||
| Operating margin | 9.8 | % | 1.2 | % | 10.5 | % | -2.2 | % | ||||||||
| Operating margin (excluding special items*) | 9.8 | % | 5.4 | % | 10.8 | % | 5.2 | % | ||||||||
| * Special items consist of restructuring, impairment, transition charges and other certain items. | ||||||||||||||||
| Related tax effects are calculated using a normalized income tax rate. | ||||||||||||||||
| Ethan Allen Interiors Inc. | ||||||||||||||||
| Condensed Consolidated Income Statements | ||||||||||||||||
| Unaudited | ||||||||||||||||
| (in thousands) | ||||||||||||||||
|
Three Months Ended |
Six Months Ended |
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12/31/10 |
12/31/09 |
12/31/10 |
12/31/09 |
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| Net sales | $ | 173,345 | $ | 143,302 | $ | 338,186 | $ | 279,492 | ||||||||
| Cost of sales | 83,484 | 74,278 |
165,944 |
152,159 | ||||||||||||
| Gross profit | 89,861 | 69,024 | 172,242 | 127,333 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Selling | 40,068 | 36,286 | 79,395 | 72,220 | ||||||||||||
| General and administrative | 39,259 | 37,244 | 76,702 | 74,895 | ||||||||||||
| Restructuring and impairment charge | 59 | 777 | 284 | 1,589 | ||||||||||||
| Total operating expenses | 79,386 | 74,307 | 156,381 | 148,704 | ||||||||||||
| Operating income (loss) | 10,475 | (5,283 | ) | 15,861 | (21,371 | ) | ||||||||||
| Interest and other income | 1,168 | 1,020 | 4,325 | 1,817 | ||||||||||||
| Interest expense | 2,902 | 2,978 | 5,876 | 5,959 | ||||||||||||
| Income (loss) before income taxes | 8,741 | (7,241 | ) | 14,310 | (25,513 | ) | ||||||||||
| Income tax expense (benefit) | (6,003 | ) | (3,903 | ) | (4,247 | ) | (8,596 | ) | ||||||||
| Net income (loss) | $ | 14,744 | $ | (3,338 | ) | $ | 18,557 | $ | (16,917 | ) | ||||||
| Basic earnings per common share: | ||||||||||||||||
| Net income (loss) per basic share | $ | 0.51 | $ | (0.12 | ) | $ | 0.65 | $ | (0.58 | ) | ||||||
| Basic weighted average shares outstanding | 28,728 | 28,917 | 28,753 | 28,922 | ||||||||||||
| Diluted earnings per common share: | ||||||||||||||||
| Net income (loss) per diluted share | $ | 0.51 | $ | (0.12 | ) | $ | 0.64 | $ | (0.58 | ) | ||||||
| Diluted weighted average shares outstanding | 28,921 | 28,917 | 28,936 | 28,922 | ||||||||||||
| Ethan Allen Interiors Inc. | |||||||
| Condensed Consolidated Balance Sheets | |||||||
| Unaudited | |||||||
| (in thousands) | |||||||
| December 31, | June 30, | ||||||
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2010 |
2010 |
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| Assets | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 53,031 | $ | 73,852 | |||
| Marketable securities | 16,258 | 11,075 | |||||
| Accounts receivable, net | 14,732 | 17,105 | |||||
| Inventories | 137,045 | 134,040 | |||||
| Prepaid expenses & other current assets | 35,939 | 23,620 | |||||
| Deferred income taxes | - | - | |||||
| Total current assets | 257,005 | 259,692 | |||||
| Property, plant and equipment, net | 298,403 | 305,747 | |||||
| Intangible assets, net | 45,128 | 45,128 | |||||
| Restricted cash and investments | 16,306 | 17,318 | |||||
| Other assets | 3,342 | 3,892 | |||||
| Total Assets | $ | 620,184 | $ | 631,777 | |||
| Liabilities and Shareholders' Equity | |||||||
| Current liabilities: | |||||||
| Current maturities of long-term debt | 3,891 | 3,898 | |||||
| Customer deposits | 39,633 | 52,605 | |||||
| Accounts payable | 19,326 | 23,952 | |||||
| Accrued expenses & other current liabilities | 62,789 | 65,287 | |||||
| Total current liabilities | 125,639 | 145,742 | |||||
| Long-term debt | 192,596 | 199,369 | |||||
| Other long-term liabilities | 17,903 | 19,123 | |||||
| Deferred income taxes | 11,939 | 9,084 | |||||
| Total liabilities | 348,077 | 373,318 | |||||
| Shareholders' equity | 272,107 | 258,459 | |||||
| Total Liabilities and Shareholders' Equity | $ | 620,184 | $ | 631,777 | |||
| Ethan Allen Interiors Inc. | ||||||||||||||||||
| GAAP Reconciliation | ||||||||||||||||||
| Three and Six Months Ended December 31, 2010 and 2009 | ||||||||||||||||||
| Unaudited | ||||||||||||||||||
| (in thousands, except per share amounts) | ||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||
| December 31, | December 31, | |||||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||||
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Net Income / Earnings Per Share |
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| Net income (loss) | $ | 14,744 | $ | (3,338 | ) | $ | 18,557 | $ | (16,917 | ) | ||||||||
| Special items net of related tax effects * | 37 | 1,710 | (341 | ) | 9,603 | |||||||||||||
| Unusual income tax impacts | (9,193 | ) | - | (9,470 | ) | - | ||||||||||||
| Net income (loss) (excluding special items* and | ||||||||||||||||||
| unusual income tax impacts) | $ | 5,588 | $ | (1,628 | ) | $ | 8,746 | $ | (7,314 | ) | ||||||||
| Basic weighted average shares outstanding | 28,728 | 28,917 | 28,753 | 28,922 | ||||||||||||||
| Earnings (loss) per basic share | $ | 0.51 | $ | (0.12 | ) | $ | 0.65 | $ | (0.58 | ) | ||||||||
| Earnings (loss) per basic share (excluding special items* | ||||||||||||||||||
| and unusual income tax impacts) | $ | 0.19 | $ | (0.06 | ) | $ | 0.30 | $ | (0.25 | ) | ||||||||
| Diluted weighted average shares outstanding | 28,921 | 28,917 | 28,936 | 28,922 | ||||||||||||||
| Earnings (loss) per diluted share | $ | 0.51 | $ | (0.12 | ) | $ | 0.64 | $ | (0.58 | ) | ||||||||
| Earnings (loss) per diluted share (excluding special | ||||||||||||||||||
| items* and unusual income tax impacts) | $ | 0.19 | $ | (0.06 | ) | $ | 0.30 | $ | (0.25 | ) | ||||||||
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Consolidated Operating Income / Operating Margin |
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| Operating income (loss) | $ | 10,475 | $ | (5,283 | ) | $ | 15,861 | $ | (21,371 | ) | ||||||||
| Add: special items * | 59 | 4,677 | 963 | 13,995 | ||||||||||||||
| Operating income (loss) (excluding special items*) | $ | 10,534 | $ | (606 | ) | $ | 16,824 | $ | (7,376 | ) | ||||||||
| Net sales | $ | 173,345 | $ | 143,302 | $ | 338,186 | $ | 279,492 | ||||||||||
| Operating margin | 6.0 | % | -3.7 | % | 4.7 | % | -7.6 | % | ||||||||||
| Operating margin (excluding special items*) | 6.1 | % | -0.4 | % | 5.0 | % | -2.6 | % | ||||||||||
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Wholesale Operating Income / Operating Margin |
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| Wholesale operating income (loss) | $ | 9,884 | $ | 1,022 | $ | 21,823 | $ | (3,638 | ) | |||||||||
| Add: special items | - | 3,523 | 679 | 12,179 | ||||||||||||||
| Wholesale operating income (excluding special items*) | $ | 9,884 | $ | 4,545 | $ | 22,502 | $ | 8,541 | ||||||||||
| Wholesale net sales | $ | 100,793 | $ | 84,499 | $ | 208,348 | $ | 165,780 | ||||||||||
| Wholesale operating margin | 9.8 | % | 1.2 | % | 10.5 | % | -2.2 | % | ||||||||||
| Wholesale operating margin (excluding special items*) | 9.8 | % | 5.4 | % | 10.8 | % | 5.2 | % | ||||||||||
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Retail Operating Income / Operating Margin |
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| Retail operating income (loss) | $ | (1,206 | ) | $ | (9,792 | ) | $ | (5,496 | ) | $ | (21,141 | ) | ||||||
| Add: special items | 59 | 1,154 | 284 | 1,816 | ||||||||||||||
| Retail operating income (loss) (excluding special items*) | $ | (1,147 | ) | $ | (8,638 | ) | $ | (5,212 | ) | $ | (19,325 | ) | ||||||
| Retail net sales | $ | 131,014 | $ | 107,123 | $ | 252,037 | $ | 210,273 | ||||||||||
| Retail operating margin | -0.9 | % | -9.1 | % | -2.2 | % | -10.1 | % | ||||||||||
| Retail operating margin (excluding special items*) | -0.9 | % | -8.1 | % | -2.1 | % | -9.2 | % | ||||||||||
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EBITDA |
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| Net income (loss) | $ | 14,744 | $ | (3,338 | ) | $ | 18,557 | $ | (16,917 | ) | ||||||||
| Add: interest expense (income), net | 2,605 | 2,731 | 5,280 | 5,497 | ||||||||||||||
| Add: income tax expense (benefit) | (6,003 | ) | (3,903 | ) | (4,247 | ) | (8,596 | ) | ||||||||||
| Add: depreciation and amortization (including | ||||||||||||||||||
| accelerated depreciation) | 5,322 | 5,633 | 10,929 | 18,330 | ||||||||||||||
| EBITDA | $ | 16,668 | $ | 1,123 | $ | 30,519 | $ | (1,686 | ) | |||||||||
| Net sales | $ | 173,345 | $ | 143,302 | $ | 338,186 | $ | 279,492 | ||||||||||
| EBITDA as % of net sales | 9.6 | % | 0.8 | % | 9.0 | % | -0.6 | % | ||||||||||
| EBITDA | $ | 16,668 | $ | 1,123 | $ | 30,519 | $ | (1,686 | ) | |||||||||
| Add: special items* | 59 | 4,677 | (537 | ) | 7,365 | |||||||||||||
| Adjusted EBITDA | $ | 16,727 | $ | 5,800 | $ | 29,982 | $ | 5,679 | ||||||||||
| Net sales | $ | 173,345 | $ | 143,302 | $ | 338,186 | $ | 279,492 | ||||||||||
| Adjusted EBITDA as % of net sales | 9.6 | % | 4.0 | % | 8.9 | % | 2.0 | % | ||||||||||
| * Special items consist of restructuring, impairment, transition charges and certain other items. | ||||||||||||||||||
| Related tax effects are calculated using a normalized income tax rate. | ||||||||||||||||||
CONTACT:
Ethan Allen Interiors Inc.
Investors/Media:
David R.
Callen, 203-743-8305
Vice President Finance & Treasurer