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

ENDED DECEMBER 31, 2012

 

DANBURY, CT - January 22, 2013 – Ethan Allen Interiors Inc. (NYSE: ETH) today reported operating results for the three months ended December 31, 2012. Net sales in the quarter increased 4.4% over the prior year to $191.3 million. The Company's Retail division net sales increased 6.1% to $151.8 million including comparable design center growth of 4.9%. Retail division written orders recorded during the second quarter increased 1.2% over the 10.3% growth the prior year second quarter. Comparable design center written orders increased 0.1% over the 6.7% growth the prior year.

 

Excluding special items in both periods, net income for the quarter ended December 31, 2012 was $11.4 million or $0.39 per diluted share compared with $8.6 million or $0.30 per diluted share in the prior year period. US GAAP net income for the quarter ended December 31, 2012 was $9.8 million or $0.34 per diluted share compared with the prior year of $8.1 million or $0.28 per diluted share. A reconciliation of this GAAP to non-GAAP measure is provided in the attached table.

 

Farooq Kathwari, Chairman and CEO commented, “We are pleased with our results for the quarter ended December 31, 2012. Despite the challenging economic / political environment and the impact of Hurricane Sandy, our adjusted earnings per share increased 30%. Hurricane Sandy negatively impacted our written orders, delivered sales, and our manufacturing margins during the quarter. Twenty eight of our Retail division design centers and eight independent retailer locations were affected. No adjustment to earnings per share was made to reflect the impact of Hurricane Sandy which we estimate may have been approximately $0.02 to $0.03 per diluted share.”

 

Mr. Kathwari continued, “During the quarter we expanded our international operations by entering the European and Montreal markets. We opened design centers in Brussels, Belgium and in Montreal, Canada and invested in start up costs which negatively impacted earnings by $0.02 per diluted share. We also wrote down the carrying value of two vacant manufacturing plants which resulted in a charge of $0.03 per diluted share. We expect to exit both these vacant properties during our third fiscal quarter. These start up costs and write down charges are treated as special items in the adjusted results for the quarter.”

 

"We will discuss our many initiatives during the earnings call on Wednesday January 23rd. We have the opportunity to continue to grow our sales and earnings", Mr. Kathwari concluded.

 

Analyst Conference Call

Ethan Allen will conduct a conference call at 11:00 AM (Eastern) on Wednesday, January 23rd 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. To participate on the call, dial 866-814-1915 with conference ID# 1599997.

 

 
Page 1 of 7

 

 

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, 2012 (the “2012 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 2012 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.

 

 

#######

 

 
Page 2 of 7

 

 

 

Ethan Allen Interiors Inc.

Selected Financial Information

Unaudited

(in millions)


Selected Consolidated Financial Data:

                       
                         
 

Three Months Ended

 

Six Months Ended

 
 

12/31/12

12/31/11

12/31/12

12/31/11

                         

Net sales

  $191.3   $183.3   $378.7   $368.2

Gross margin

  54.4 %   53.6 %   55.0 %   53.3 %

Operating margin

  9.1 %   7.6 %   9.3 %   7.5 %

Operating margin (excluding special items*)

  10.5 %   8.5 %   10.5 %   7.9 %

Net income

  $9.8   $8.1   $19.9   $14.8

Net income (excluding special items* and unusual income tax effects)

  $11.4   $8.6   $22.5   $15.8

Operating cash flow

  $11.5   $4.7   $18.2   $11.0

Capital expenditures

  $5.2   $8.0   $13.6   $11.4

Acquisitions

  $0.0   $0.0   $0.6   $0.0

Treasury stock repurchases (settlement date basis)

  $0.0   $0.0   $0.0   $0.8
                         

EBITDA

  $21.7   $18.5   $44.2   $37.1

EBITDA as % of net sales

  11.3 %   10.1 %   11.7 %   10.1 %
                         

EBITDA (excluding special items*)

  $24.4   $20.2   $48.5   $38.8

EBITDA as % of net sales (excluding special items*)

  12.7 %   11.0 %   12.8 %   10.5 %


Selected Financial Data by Business Segment:

                       
 

Three Months Ended

 

Six Months Ended

 
 

12/31/12

12/31/11

12/31/12

12/31/11

Retail

                       

Net sales

  $151.8   $143.1   $300.9   $284.3

Operating margin

  4.0 %   -1.8 %   2.3 %   -1.4 %

Operating margin (excluding special items*)

  4.6 %   -0.3 %   3.2 %   -0.7 %
                         
                         

Wholesale

                       

Net sales

  $108.2   $106.6   $219.6   $223.0

Operating margin

  8.2 %   14.7 %   11.3 %   14.1 %

Operating margin (excluding special items*)

  9.9 %   14.4 %   12.1 %   13.9 %

* Special items consist of restructuring, impairment, transition charges and other certain items.

Related tax effects are calculated using a normalized income tax rate.

 

 
Page 3 of 7

 

 

Ethan Allen Interiors Inc.

Condensed Consolidated Statements of Comprehensive Income

Unaudited

(in thousands)


 

Three Months Ended

 

Six Months Ended

 
 

12/31/12

12/31/11

12/31/12

12/31/11

                                 

Net sales

  $ 191,251   $ 183,275   $ 378,688   $ 368,196

Cost of sales

    87,284     85,056     170,468     172,092

Gross profit

    103,967     98,219     208,220     196,104

Selling general and administrative expenses

    86,610     84,281     172,909     168,528

Operating income

    17,357     13,938     35,311     27,576

Interest and other income

    128     145     202     205

Interest expense

    2,198     2,274     4,397     4,625

Income before income taxes

    15,287     11,809     31,116     23,156

Income tax expense

    5,441     3,732     11,206     8,309

Net income

  $ 9,846   $ 8,077   $ 19,910   $ 14,847
                                 

Basic earnings per common share:

                               

   Net income per basic share

  $ 0.34   $ 0.28   $ 0.69   $ 0.52

   Basic weighted average shares outstanding

    28,846     28,823     28,841     28,791
                                 

Diluted earnings per common share:

                               

   Net income per diluted share

  $ 0.34   $ 0.28   $ 0.68   $ 0.51

   Diluted weighted average shares outstanding

    29,223     29,069     29,182     29,010
                                 

Comprehensive income:

                               

Net income

  $ 9,846   $ 8,077   $ 19,910   $ 14,847

Other comprehensive income

                               

   Currency translation adjustment

    (20 )     (543 )     140     (2,241 )

   Other

    15     (10 )     40     (1 )

Other comprehensive income (loss) net of tax

    (5 )     (553 )     180     (2,242 )

Comprehensive income

  $ 9,841   $ 7,524   $ 20,090   $ 12,605

 
Page 4 of 7

 

 

Ethan Allen Interiors Inc.

Condensed Consolidated Balance Sheets

Unaudited

(in thousands)


 

December 31,

June 30,

 

2012

2012

                 

Assets

               

Current assets:

               

   Cash and cash equivalents

  $ 57,267   $ 79,721

   Marketable securities

    17,869     9,005

   Accounts receivable, net

    11,137     14,919

   Inventories

    142,385     155,739

   Prepaid expenses & other current assets

    20,258     23,408

      Total current assets

    248,916     282,792
                 

Property, plant and equipment, net

    299,153     295,695

Intangible assets, net

    45,128     45,128

Restricted cash and investments

    15,427     15,416

Other assets

    6,752     5,757
                 

     Total Assets

  $ 615,376   $ 644,788
                 
                 
                 

Liabilities and Shareholders' Equity

               

Current liabilities:

               

   Current maturities of long-term debt

    466     250

   Customer deposits

    46,676     65,465

   Accounts payable

    16,334     27,315

   Accrued expenses & other current liabilities

    52,882     58,047

      Total current liabilities

    116,358     151,077
                 

Long-term debt

    154,871     154,250

Other long-term liabilities

    18,486     17,593

      Total liabilities

    289,715     322,920
                 

Shareholders' equity

    325,661     321,868
                 

         Total Liabilities and Shareholders' Equity

  $ 615,376   $ 644,788

 
Page 5 of 7

 

 

Ethan Allen Interiors Inc.

GAAP Reconciliation

Three and Six Months Ended December 31, 2012 and 2011

Unaudited

(in thousands, except per share amounts)



 

Three Months Ended

 

Six Months Ended

 
 

December 31,

 

December 31,

 
 

2012

2011

2012

2011

Net Income / Earnings Per Share

                               

Net income

  $ 9,846   $ 8,077   $ 19,910   $ 14,847

    Special items net of related tax effects *

    1,693     1,073     2,715     1,048

    Unusual income tax effects

    (139 )     (568 )     (151 )     (133 )

Net income (excluding special items* and unusual income tax effects)

  $ 11,400   $ 8,582   $ 22,474   $ 15,762

Basic weighted average shares outstanding

    28,846     28,823     28,841     28,791

Earnings per basic share

  $ 0.34   $ 0.28   $ 0.69   $ 0.52

Earnings per basic share (excluding special items* and unusual income tax effects)

  $ 0.40   $ 0.30   $ 0.78   $ 0.55
                                 

Diluted weighted average shares outstanding

    29,223     29,069     29,182     29,010

Earnings per diluted share

  $ 0.34   $ 0.28   $ 0.68   $ 0.51

Earnings per diluted share (excluding special items* and unusual income tax effects)

  $ 0.39   $ 0.30   $ 0.77   $ 0.54
                                 
                                 

Consolidated Operating Income / Operating Margin

                               

Operating income

  $ 17,357   $ 13,938   $ 35,311   $ 27,576

Add: special items *

    2,666     1,690     4,276     1,650

Operating income (excluding special items*)

  $ 20,023   $ 15,628   $ 39,587   $ 29,226

Net sales

  $ 191,251   $ 183,275   $ 378,688   $ 368,196

Operating margin

    9.1 %     7.6 %     9.3 %     7.5 %

Operating margin (excluding special items*)

    10.5 %     8.5 %     10.5 %     7.9 %
                                 

Wholesale Operating Income / Operating Margin

                               

Wholesale operating income

  $ 8,892   $ 15,702   $ 24,897   $ 31,393

Add: special items

    1,774     (368 )     1,774     (368 )

Wholesale operating income (excluding special items*)

  $ 10,666   $ 15,334   $ 26,671   $ 31,025

Wholesale net sales

  $ 108,172   $ 106,631   $ 219,589   $ 223,025

Wholesale operating margin

    8.2 %     14.7 %     11.3 %     14.1 %

Wholesale operating margin (excluding special items*)

    9.9 %     14.4 %     12.1 %     13.9 %
                                 

Retail Operating Income / Operating Margin

                               

Retail operating income (loss)

  $ 6,017   $ (2,532 )   $ 7,065   $ (4,029 )

Add: special items

    892     2,058     2,502     2,018

Retail operating income (loss) (excluding special items*)

  $ 6,909   $ (474 )   $ 9,567   $ (2,011 )

Retail net sales

  $ 151,827   $ 143,104   $ 300,906   $ 284,285

Retail operating margin

    4.0 %     -1.8 %     2.3 %     -1.4 %

Retail operating margin (excluding special items*)

    4.6 %     -0.3 %     3.2 %     -0.7 %

* Special items consist of restructuring, impairment, transition charges and certain other items.

Related tax effects are calculated using a normalized income tax rate.

 

 
Page 6 of 7

 

 

Ethan Allen Interiors Inc.

GAAP Reconciliation

Three and Six Months Ended December 31, 2012 and 2011

Unaudited

(in thousands, except per share amounts)

 

Three Months Ended

 

Six Months Ended

 
 

December 31,

 

December 31,

 
 

2012

2011

2012

2011

                                 

EBITDA

                               

Net income

  $ 9,846   $ 8,077   $ 19,910   $ 14,847

Add:  interest expense, net

    2,056     2,124     4,111     4,382

           income tax expense

    5,441     3,732     11,206     8,309

           depreciation and amortization

    4,360     4,593     8,966     9,582

EBITDA

  $ 21,703   $ 18,526   $ 44,193   $ 37,120

Net sales

  $ 191,251   $ 183,275   $ 378,688   $ 368,196

EBITDA as % of net sales

    11.3 %     10.1 %     11.7 %     10.1 %
                                 

EBITDA

  $ 21,703   $ 18,526   $ 44,193   $ 37,120

Add: special items*

    2,666     1,690     4,276     1,650

EBITDA (excluding special items)

  $ 24,369   $ 20,216   $ 48,469   $ 38,770

Net sales

  $ 191,251   $ 183,275   $ 378,688   $ 368,196

EBITDA as % of net sales (excluding special items)

    12.7 %     11.0 %     12.8 %     10.5 %

* Special items consist of restructuring, impairment, transition charges and certain other items.

Related tax effects are calculated using a normalized income tax rate.

 

 

Page 7 of 7