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, 2012

DANBURY, CT., July 25, 2012 – 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, 2012.

Farooq Kathwari, Chairman and CEO commented, “We are pleased with our results for the fiscal year ended June 30, 2012 and the continued progress to position us for growth. For the fiscal year ended June 30, net sales increased by 7.4% to $729.4 million. Our net income per diluted share excluding special items was $0.94 compared with $0.58 in the previous year; an increase of 62%. In addition, we absorbed costs associated with liquidation of inventory to make room for major new product introductions.”

Mr. Kathwari further stated, “For our fourth quarter ended June 30, 2012 net sales increased by 4.1% and our net income per diluted share excluding special items was $0.27 compared to $0.21 in the prior year quarter. As previously discussed, we completed the introduction of the final phase of new products during the quarter. We absorbed $0.03 per diluted share due to incremental impacts from display inventory liquidations to make room for new products. This impact is not adjusted from our non-GAAP numbers. This major initiative positions us well for growth going forward.”

Three Months Ended June 30, 2012
Net sales for the quarter ended June 30, 2012 increased 4.1% over the prior year to $185.3 million. The Company’s Retail division net sales increased 5.0% to $143.7 million including comparable design center net sales growth of 3.6%. Retail division written orders recorded during the fourth quarter increased 2.3% over 14.6% growth the prior year’s fourth quarter. Comparable design center written orders grew 0.6% over 12.9% growth the prior year.

Net income for the quarter ended June 30, 2012 was $7.3 million or $0.25 per diluted share compared with the prior year of $7.2 million or $0.25 per diluted share. Excluding special items in both periods, net income for the quarter ended June 30, 2012 was $7.8 million or $0.27 per diluted share compared with $6.1 million or $0.21 per diluted share in the prior year period.

Twelve Months Ended June 30, 2012
Net sales for the twelve months ended June 30, 2012 increased 7.4% over the prior year to $729.4 million. The Company’s Retail division net sales increased 10.6% to $559.4 million including comparable design center net sales growth of 8.4%. Written orders booked during the twelve month period by the Retail division were 8.9% greater than the prior year quarter including comparable design center order growth of 6.4%.

Net income for the twelve months ended June 30, 2012 was $49.7 million or $1.71 per diluted share compared with the prior year of $29.3 million or $1.01 per diluted share. During the third quarter the Company reversed deferred tax asset valuation allowances and certain other tax reserves resulting in $23.9 million in non-cash tax benefits.  Excluding these benefits and other special items in both periods, net income for the twelve months ended June 30, 2012 was $27.5 million or $0.94 per diluted share compared with $16.9 million or $0.58 per diluted share in the prior year period.
 
 
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Mr. Kathwari concluded, “We are well positioned to grow. We have substantially strengthened the main areas of our vertically integrated structure including our product offerings, our advertising and communications, our interior design Retail network, our manufacturing and logistics operations, and in the technology employed throughout our business. We will discuss our many initiatives further on our conference call on Thursday.”

Analyst Conference Call
The Company will conduct a conference call at 11:00 AM (Eastern) on Thursday, July 26th 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 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 eight manufacturing facilities including five manufacturing plants and one sawmill in the United States plus two plants in Mexico and Honduras. Approximately seventy percent of its products are made in its North American 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, 2011 (the “2011 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 2011 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.
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Ethan Allen Interiors Inc.
Selected Financial Information
Unaudited
(in millions)
                         
Selected Consolidated Financial Data:
                        
                         
   
Three Months Ended
    
Twelve Months Ended
  
   
06/30/12
    
06/30/11
    
06/30/12
    
06/30/11
  
                         
Net sales
   $ 185.3     $ 178.0     $ 729.4     $ 679.0  
Gross margin
     53.9 %     52.9 %     53.5 %     51.5 %
Operating margin
     7.7 %     6.4 %     6.8 %     4.7 %
Operating margin (excluding special items*)
     7.7 %     6.8 %     7.1 %     5.0 %
Net income
   $ 7.3     $ 7.2     $ 49.7     $ 29.3  
Net income (excluding special items* and
                                
unusual income tax effects)
   $ 7.8     $ 6.1     $ 27.5     $ 16.9  
Operating cash flow
   $ 9.9     $ 22.6     $ 37.7     $ 63.2  
Capital expenditures
   $ 3.0     $ 3.4     $ 22.9     $ 9.1  
Acquisitions
   $ 0.0     $ 2.3     $ 0.5     $ 3.0  
Treasury stock repurchases (settlement
                                
date basis)
   $ 0.5     $ 0.0     $ 1.4     $ 5.4  
                                 
EBITDA
   $ 18.9     $ 15.9     $ 68.3     $ 57.3  
EBITDA as % of net sales
     10.2 %     8.9 %     9.4 %     8.4 %
                                 
EBITDA (excluding special items*)
   $ 18.8     $ 16.6     $ 70.4     $ 57.6  
EBITDA as % of net sales (excluding special items*)
     10.1 %     9.4 %     9.6 %     8.5 %
                                 
                                 
                                 
Selected Financial Data by Business Segment:
                                
   
Three Months Ended
    
Twelve Months Ended
  
   
06/30/12
    
06/30/11
    
06/30/12
    
06/30/11
  
Retail
                                
Net sales
   $ 143.7     $ 136.8     $ 559.4     $ 505.9  
Operating margin
     -0.7 %     -1.9 %     -2.1 %     -3.0 %
Operating margin (excluding special items*)
     -0.7 %     -1.3 %     -1.7 %     -2.8 %
                                 
                                 
Wholesale
                                
Net sales
   $ 112.8     $ 110.5     $ 456.9     $ 422.9  
Operating margin
     13.2 %     13.4 %     14.1 %     11.8 %
Operating margin (excluding special items*)
     13.2 %     13.4 %     14.1 %     12.0 %
                                 
* Special items consist of restructuring, impairment, transition charges and other certain items.
                  
Related tax effects are calculated using a normalized income tax rate.
                          
 
 
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Ethan Allen Interiors Inc.
Condensed Consolidated Income Statements
Unaudited
(in thousands)
                         
   
Three Months Ended
    
Twelve Months Ended
  
   
06/30/12
    
06/30/11
    
06/30/12
    
06/30/11
  
                         
Net sales
   $ 185,316     $ 177,952     $ 729,373     $ 678,960  
Cost of sales
     85,407       83,803       339,085       329,500  
Gross profit
     99,909       94,149       390,288       349,460  
Operating expenses:
                                
Selling
     43,716       43,067       173,863       161,609  
General and administrative
     41,949       39,034       166,813       154,792  
Restructuring and impairment charge
     (90 )     733       (85 )     1,126  
Total operating expenses
     85,575       82,834       340,591       317,527  
Operating income
     14,334       11,315       49,697       31,933  
Interest and other income
     200       111       562       5,564  
Interest expense
     2,206       2,477       9,020       11,126  
Income before income taxes
     12,328       8,949       41,239       26,371  
Income tax expense (benefit)
     5,029       1,774       (8,455 )     (2,879 )
Net income
   $ 7,299     $ 7,175     $ 49,694     $ 29,250  
                                 
Basic earnings per common share:
                                
Net income per basic share
   $ 0.25     $ 0.25     $ 1.72     $ 1.02  
Basic weighted average shares outstanding
     28,856       28,772       28,824       28,758  
                                 
Diluted earnings per common share:
                                
Net income per diluted share
   $ 0.25     $ 0.25     $ 1.71     $ 1.01  
Diluted weighted average shares outstanding
     29,179       29,007       29,109       28,966  
 
 
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Ethan Allen Interiors Inc.
Condensed Consolidated Balance Sheets
Unaudited
(in thousands)
             
   
June 30,
    
June 30,
  
   
2012
    
2011
  
             
Assets
            
Current assets:
            
Cash and cash equivalents
   $ 79,721     $ 78,519  
Marketable securities
     9,005       12,909  
Accounts receivable, net
     14,919       15,036  
Inventories
     155,739       141,692  
Prepaid expenses & other current assets
     21,261       20,372  
Deferred income taxes
     2,147       -  
Total current assets
     282,792       268,528  
                 
Property, plant and equipment, net
     295,695       294,853  
Intangible assets, net
     45,128       45,128  
Restricted cash and investments
     15,416       16,391  
Other assets
     5,757       3,425  
                 
Total Assets
   $ 644,788     $ 628,325  
                 
                 
                 
Liabilities and Shareholders' Equity
                
Current liabilities:
                
Current maturities of long-term debt
     250       19  
Customer deposits
     65,465       62,649  
Accounts payable
     27,315       26,958  
Accrued expenses & other current liabilities
     58,047       64,990  
Total current liabilities
     151,077       154,616  
                 
Long-term debt
     154,250       165,013  
Other long-term liabilities
     17,593       18,975  
Deferred income taxes
     -       8,034  
Total liabilities
     322,920       346,638  
                 
Shareholders' equity
     321,868       281,687  
                 
Total Liabilities and Shareholders' Equity
   $ 644,788     $ 628,325  
 
 
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Ethan Allen Interiors Inc.
  
GAAP Reconciliation
  
Three and Twelve Months Ended June 30, 2012 and 2011
  
Unaudited
  
(in thousands, except per share amounts)
  
   
   
Three Months Ended
    
Twelve Months Ended
  
   
June 30,
    
June 30,
  
   
2012
    
2011
    
2012
    
2011
  
Net Income / Earnings Per Share
                        
Net income
   $ 7,299     $ 7,175     $ 49,694     $ 29,250  
Special items net of related tax effects *
     (57 )     465       1,318       194  
Unusual income tax effects
     529       (1,492 )     (23,508 )     (12,505 )
Net income (excluding special items* and unusual income tax effects)
   $ 7,771     $ 6,148     $ 27,504     $ 16,939  
Basic weighted average shares outstanding
     28,856       28,772       28,824       28,758  
Earnings per basic share
   $ 0.25     $ 0.25     $ 1.72     $ 1.02  
Earnings per basic share (excluding special items* and unusual income tax effects)
   $ 0.27     $ 0.21     $ 0.95     $ 0.59  
                                 
Diluted weighted average shares outstanding
     29,179       29,007       29,109       28,966  
Earnings per diluted share
   $ 0.25     $ 0.25     $ 1.71     $ 1.01  
Earnings per diluted share (excluding special items* and unusual income tax effects)
   $ 0.27     $ 0.21     $ 0.94     $ 0.58  
                                 
Consolidated Operating Income / Operating Margin
                                
Operating income
   $ 14,334     $ 11,315     $ 49,697     $ 31,933  
Add: special items *
     (90 )     733       2,075       1,805  
Operating income (excluding special items*)
   $ 14,244     $ 12,048     $ 51,772     $ 33,738  
Net sales
   $ 185,316     $ 177,952     $ 729,373     $ 678,960  
Operating margin
     7.7 %     6.4 %     6.8 %     4.7 %
Operating margin (excluding special items*)
     7.7 %     6.8 %     7.1 %     5.0 %
                                 
Wholesale Operating Income / Operating Margin
                                
Wholesale operating income
   $ 14,852     $ 14,822     $ 64,436     $ 49,898  
Add: special items
     -       -       131       679  
Wholesale operating income (excluding special items*)
   $ 14,852     $ 14,822     $ 64,567     $ 50,577  
Wholesale net sales
   $ 112,846     $ 110,479     $ 456,915     $ 422,946  
Wholesale operating margin
     13.2 %     13.4 %     14.1 %     11.8 %
Wholesale operating margin (excluding special items*)
     13.2 %     13.4 %     14.1 %     12.0 %
                                 
Retail Operating Income / Operating Margin
                                
Retail operating income (loss)
   $ (944 )   $ (2,577 )   $ (11,522 )   $ (15,344 )
Add: special items
     (90 )     733       1,944       1,126  
Retail operating income (loss) (excluding special items*)
   $ (1,034 )   $ (1,844 )   $ (9,578 )   $ (14,218 )
Retail net sales
   $ 143,730     $ 136,844     $ 559,417     $ 505,910  
Retail operating margin
     -0.7 %     -1.9 %     -2.1 %     -3.0 %
Retail operating margin (excluding special items*)
     -0.7 %     -1.3 %     -1.7 %     -2.8 %
 
 
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Ethan Allen Interiors Inc.
GAAP Reconciliation
Three and Twelve Months Ended June 30, 2012 and 2011
Unaudited
(in thousands, except per share amounts)
 
   
Three Months Ended
    
Twelve Months Ended
  
   
June 30,
    
June 30,
  
   
2012
    
2011
    
2012
    
2011
  
EBITDA
                        
Net income
   $ 7,299     $ 7,175     $ 49,694     $ 29,250  
Add:  interest expense, net
     2,059       2,269       8,478       10,076  
Add: income tax expense (benefit)
     5,029       1,774       (8,455 )     (2,879 )
Add:  depreciation and amortization
     4,489       4,696       18,581       20,816  
EBITDA
   $ 18,876     $ 15,914     $ 68,298     $ 57,263  
Net sales
   $ 185,316     $ 177,952     $ 729,373     $ 678,960  
EBITDA as % of net sales
     10.2 %     8.9 %     9.4 %     8.4 %
                                 
EBITDA
   $ 18,876     $ 15,914     $ 68,298     $ 57,263  
Add: special items*
     (90 )     733       2,075       305  
Adjusted EBITDA
   $ 18,786     $ 16,647     $ 70,373     $ 57,568  
Net sales
   $ 185,316     $ 177,952     $ 729,373     $ 678,960  
Adjusted EBITDA as % of net sales
     10.1 %     9.4 %     9.6 %     8.5 %
                                 
* Special items consist of restructuring, impairment, transition charges and certain other items.
                  
Related tax effects are calculated using a normalized income tax rate.
                
 
 
 
 
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