Exhibit 99.1
 
Ethan Allen Interiors Inc.
Investor / Media Contact:
David R. Callen
Vice President Finance & Treasurer
203-743-8305
 
ETHAN ALLEN REPORTS RESULTS FOR QUARTER
AND FISCAL YEAR ENDED JUNE 30, 2011

DANBURY, CT., August 3, 2011 – Ethan Allen Interiors Inc. (“Ethan Allen”, the “Company”, “We”, or “Our”) (NYSE:ETH) reported operating results for the three and twelve months ended June 30, 2011.

Mr. Farooq Kathwari, Chairman, President and CEO commenting on the results stated, “We are pleased at the growth in sales and net income during the fourth quarter and fiscal year ended June 30, 2011. Our fourth quarter net sales increased 9.0% and net income, excluding special items, increased 32.7%. During the same period our written (booked) orders for the retail division increased by 14.6%.  We ended the year with $107.8 million of cash and securities after reducing our debt during the 2011 fiscal year by $38.2 million.”
 
Mr. Kathwari continued, “We had strong results for our fiscal year ending June 30, 2011. Net sales increased by 15.1% and our net income, excluding special items improved to $16.9 million compared to a loss of $4.2 million in fiscal 2010. Our improving trends in written business, especially in the second half of our fiscal year, resulted in stronger retail and wholesale backlogs than this time last year. We also made major progress in improving our vertically integrated enterprise during fiscal 2011.”
 
Three Months Ended June 30, 2011
Net sales for the quarter ended June 30, 2011 were $178.0 million, an increase of 9.0% compared with the prior year quarter.  The Company’s Retail division net sales were $136.8 million, an increase of 13.0% from the prior year quarter. Written orders booked during the quarter by the Retail division were 14.6% greater than the prior year quarter including comparable design center orders which grew 12.9%.

Net income for the quarter ended June 30, 2011 was $7.2 million or $0.25 earnings per diluted share compared with a net loss the prior year of $26.5 million or $0.91 per diluted share. Excluding special items in both periods, net income for the quarter ended June 30, 2011 was $6.1 million or $0.21 per diluted share compared with $4.6 million or $0.16 per diluted share in the prior year period.

Twelve Months Ended June 30, 2011
For the twelve months ended June 30, 2011, net sales were $679.0 million, up 15.1% from the prior year comparable period. Net income year to date was $29.3 million or $1.01 per diluted share compared with a year to date net loss of $44.3 million or $1.53 loss per diluted share the prior year. Excluding special items, earnings were $0.58 per diluted share for fiscal year 2011 compared with a net loss per diluted share of $0.15 for fiscal year 2010.

Mr. Kathwari concluded, “Our focus on our Five Priorities: projecting a relevant message, accelerating the development of stylish and attainable products, strengthening our retail network, investing in technology, and developing relevant sourcing and logistics, continues to position us well. We are pleased that our written business in July continued to be ahead of the previous year. While we are operating in an uncertain economic environment, we remain cautiously optimistic of the opportunity to continue our progress and increase both sales and profitability.”

 
 

 
Analyst Conference Call
The Company will conduct a conference call at 11:00 AM (Eastern) on Thursday, August 4th to discuss the financial results and its 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 a manufacturer and retailer of quality home furnishings. Ethan Allen offers free interior design service to its clients and sells a full range of furniture products and decorative accessories through ethanallen.com and through a network of approximately 300 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. Over seventy percent of its products are made in our 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 (the “2010 Form 10-K”) 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 including specifically, and without limitation, those set forth in Part I, Item 1A “Risk Factors” of the 2010 Form 10-K. 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)
 
Selected Consolidated Financial Data:
                       
                         
   
Three Months Ended
   
Twelve Months Ended
 
   
06/30/11
   
06/30/10
   
06/30/11
   
06/30/10
 
                         
Net sales
  $ 178.0     $ 163.3     $ 679.0     $ 590.1  
Gross margin
    52.9 %     49.5 %     51.5 %     47.5 %
Operating margin
    6.4 %     7.6 %     4.7 %     -2.0 %
Operating margin (excluding special items*)
    6.8 %     5.6 %     5.0 %     0.2 %
Net income (loss)
  $ 7.2     $ (26.5 )   $ 29.3     $ (44.3 )
Net income (loss) (excluding special items* and unusual income tax effects)
  $ 6.1     $ 4.6     $ 16.9     $ (4.2 )
Operating cash flow
  $ 22.6     $ 17.7     $ 63.2     $ 51.3  
Capital expenditures
  $ 3.4     $ 2.3     $ 9.1     $ 9.9  
Acquisitions
  $ 2.3     $ 0.1     $ 3.0     $ 0.1  
Treasury stock repurchases (settlement date basis)
  $ 0.0     $ 0.0     $ 5.4     $ 0.0  
                                 
EBITDA
  $ 15.9     $ 19.8     $ 57.3     $ 21.5  
EBITDA as % of net sales
    8.9 %     12.2 %     8.4 %     3.6 %
                                 
EBITDA (excluding special items*)
  $ 16.6     $ 15.5     $ 57.6     $ 27.0  
EBITDA as % of net sales (excluding special items*)
    9.4 %     9.5 %     8.5 %     4.6 %
                                 
                                 
Selected Financial Data by Business Segment:
                               
   
Three Months Ended
   
Twelve Months Ended
 
   
06/30/11
   
06/30/10
   
06/30/11
   
06/30/10
 
Retail
                               
Net sales
  $ 136.8     $ 121.2     $ 505.9     $ 438.5  
Operating margin
    -1.4 %     2.3 %     -2.9 %     -6.6 %
Operating margin (excluding special items*)
    -0.9 %     -1.6 %     -2.7 %     -7.1 %
                                 
                                 
Wholesale
                               
Net sales
  $ 110.5     $ 100.1     $ 422.9     $ 362.5  
Operating margin
    12.8 %     11.1 %     11.6 %     3.9 %
Operating margin (excluding special items*)
    12.8 %     12.5 %     11.8 %     8.2 %
 
* Special items consist of restructuring, impairment, transition charges and certain other 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
   
Twelve Months Ended
 
   
06/30/11
   
06/30/10
   
06/30/11
   
06/30/10
 
                         
Net sales
  $ 177,952     $ 163,304     $ 678,960     $ 590,054  
Cost of sales
    83,803       82,387       329,500       309,777  
Gross profit
    94,149       80,917       349,460       280,277  
Operating expenses:
                               
Selling
    43,067       33,021       161,609       142,562  
General and administrative
    39,034       34,989       154,792       147,013  
Restructuring and impairment charge
    733       448       1,126       2,437  
Total operating expenses
    82,834       68,458       317,527       292,012  
Operating income (loss)
    11,315       12,459       31,933       (11,735 )
Interest and other income
    111       2,161       5,564       4,872  
Interest expense
    2,477       2,986       11,126       11,924  
Income (loss) before income taxes
    8,949       11,634       26,371       (18,787 )
Income tax expense (benefit)
    1,774       38,178       (2,879 )     25,529  
Net income (loss)
  $ 7,175     $ (26,544 )   $ 29,250     $ (44,316 )
                                 
Basic earnings per common share:
                               
Net income (loss) per basic share
  $ 0.25     $ (0.91 )   $ 1.02     $ (1.53 )
Basic weighted average shares outstanding
    28,772       29,069       28,758       28,982  
                                 
Diluted earnings per common share:
                               
Net income (loss) per diluted share
  $ 0.25     $ (0.91 )   $ 1.01     $ (1.53 )
Diluted weighted average shares outstanding
    29,007       29,069       28,966       28,982  
 
 
 
 

 
Ethan Allen Interiors Inc.
Condensed Consolidated Balance Sheets
Unaudited
(in thousands)
 
 
   
June 30,
2011
   
June 30,
2010
 
             
Assets
           
Current assets:
           
Cash and cash equivalents
  $ 78,519     $ 73,852  
Marketable securities
    12,909       11,075  
Accounts receivable, net
    15,036       17,105  
Inventories
    141,692       134,040  
Prepaid expenses & other current assets
    20,372       23,620  
Total current assets
    268,528       259,692  
                 
Property, plant and equipment, net
    294,853       305,747  
Intangible assets, net
    45,128       45,128  
Restricted cash and investments
    16,391       17,318  
Other assets
    3,425       3,892  
                 
Total Assets
  $ 628,325     $ 631,777  
                 
                 
Liabilities and Shareholders' Equity
               
Current liabilities:
               
Current maturities of long-term debt
    19       3,898  
Customer deposits
    62,649       52,605  
Accounts payable
    26,958       23,952  
Accrued expenses & other current liabilities
    64,990       65,287  
Total current liabilities
    154,616       145,742  
                 
Long-term debt
    165,013       199,369  
Other long-term liabilities
    18,975       19,123  
Deferred income taxes
    8,034       9,084  
Total liabilities
    346,638       373,318  
                 
Shareholders' equity
    281,687       258,459  
                 
Total Liabilities and Shareholders' Equity
  $ 628,325     $ 631,777  
 
 
 

 
Ethan Allen Interiors Inc.
GAAP Reconciliation
Three and Twelve Months Ended June 30, 2011 and 2010
Unaudited
(in thousands, except per share amounts)
 
   
Three Months Ended
June 30,
   
Twelve Months Ended
June 30,
 
   
2011
   
2010
   
2011
   
2010
 
Net Income / Earnings Per Share
                       
Net income (loss)
  $ 7,175     $ (26,544 )   $ 29,250     $ (44,316 )
Special items net of related tax effects *
    465       (2,756 )     194       7,722  
Unusual income tax effects
    (1,492 )     33,932       (12,505 )     32,386  
Net income (loss) (excluding special items* and unusual income tax effects)
  $ 6,148     $ 4,632     $ 16,939     $ (4,208 )
Basic weighted average shares outstanding
    28,772       29,069       28,758       28,982  
Earnings (loss) per basic share
  $ 0.25     $ (0.91 )   $ 1.02     $ (1.53 )
Earnings (loss) per basic share (excluding special items* and unusual income tax effects)
  $ 0.21     $ 0.16     $ 0.59     $ (0.15 )
                                 
Diluted weighted average shares outstanding
    29,007       29,069       28,966       28,982  
Earnings (loss) per diluted share
  $ 0.25     $ (0.91 )   $ 1.01     $ (1.53 )
Earnings (loss) per diluted share (excluding special items* and unusual income tax effects)
  $ 0.21     $ 0.16     $ 0.58     $ (0.15 )
                                 
                                 
Consolidated Operating Income / Operating Margin
                               
Operating income (loss)
  $ 11,315     $ 12,459     $ 31,933     $ (11,735 )
Add: special items *
    733       (3,340 )     1,805       13,161  
Operating income (loss) (excluding special items*)
  $ 12,048     $ 9,119     $ 33,738     $ 1,426  
Net sales
  $ 177,952     $ 163,304     $ 678,960     $ 590,054  
Operating margin
    6.4 %     7.6 %     4.7 %     -2.0 %
Operating margin (excluding special items*)
    6.8 %     5.6 %     5.0 %     0.2 %
                                 
Wholesale Operating Income / Operating Margin
                               
Wholesale operating income (loss)
  $ 14,147     $ 11,102     $ 49,223     $ 14,201  
Add: special items
    -       1,374       679       15,661  
Wholesale operating income (excluding special items*)
  $ 14,147     $ 12,476     $ 49,902     $ 29,862  
Wholesale net sales
  $ 110,479     $ 100,094     $ 422,946     $ 362,468  
Wholesale operating margin
    12.8 %     11.1 %     11.6 %     3.9 %
Wholesale operating margin (excluding special items*)
    12.8 %     12.5 %     11.8 %     8.2 %
                                 
Retail Operating Income / Operating Margin
                               
Retail operating income (loss)
  $ (1,902 )   $ 2,743     $ (14,669 )   $ (28,764 )
Add: special items
    733       (4,714 )     1,126       (2,500 )
Retail operating income (loss) (excluding special items*)
  $ (1,169 )   $ (1,971 )   $ (13,543 )   $ (31,264 )
Retail net sales
  $ 136,844     $ 121,153     $ 505,910     $ 438,539  
Retail operating margin
    -1.4 %     2.3 %     -2.9 %     -6.6 %
Retail operating margin (excluding special items*)
    -0.9 %     -1.6 %     -2.7 %     -7.1 %
 
* Special items consist of restructuring, impairment, transition charges and certain other items.
Related tax effects are calculated using a normalized income tax rate.
     
 
 
 

 
Ethan Allen Interiors Inc.
GAAP Reconciliation
Three and Twelve Months Ended June 30, 2011 and 2010
Unaudited
(in thousands, except per share amounts)
 
   
Three Months Ended
June 30,
   
Twelve Months Ended
June 30,
 
   
2011
   
2010
   
2011
   
2010
 
                         
EBITDA
                       
Net income (loss)
  $ 7,175     $ (26,544 )   $ 29,250     $ (44,316 )
Add: interest expense (income), net
    2,269       2,665       10,076       10,907  
Less: income tax expense (benefit)
    1,774       38,178       (2,879 )     25,529  
Add: depreciation and amortization (including accelerated depreciation)
    4,696       5,549       20,816       29,398  
EBITDA
  $ 15,914     $ 19,848     $ 57,263     $ 21,518  
Net sales
  $ 177,952     $ 163,304     $ 678,960     $ 590,054  
EBITDA as % of net sales
    8.9 %     12.2 %     8.4 %     3.6 %
EBITDA
  $ 15,914     $ 19,848     $ 57,263     $ 21,518  
Add: special items*
    733       (4,340 )     305       5,531  
Adjusted EBITDA
  $ 16,647     $ 15,508     $ 57,568     $ 27,049  
Net sales
  $ 177,952     $ 163,304     $ 678,960     $ 590,054  
Adjusted EBITDA as % of net sales
    9.4 %     9.5 %     8.5 %     4.6 %
 
* Special items consist of restructuring, impairment, transition charges and certain other items.
 
Related tax effects are calculated using a normalized income tax rate.