Ethan Allen Interiors Inc. (“Ethan Allen” or the “Company”) (NYSE:ETH) today reported operating results for the three months ended September 30, 2009.
Net delivered sales for the quarter ended September 30, 2009 amounted to $136.2 million as compared to $205.8 million in the prior year quarter. Net delivered sales for the Company''s Retail division were $103.2 million compared with $155.9 million the prior year quarter. Wholesale sales were $81.3 million versus $121.3 million the prior year quarter. Comparable Ethan Allen design center delivered sales were down 35.3% as compared to the prior year quarter.
For the quarter ended September 30, 2009, diluted loss per share amounted to $0.47 on a loss of $13.6 million, which includes $8.5 million in plant transition costs and a $0.8 million restructuring and impairment charge for previously announced actions. This compares to diluted earnings per share and net income of $0.26 and $7.4 million, respectively, for the prior year, which included a restructuring benefit of $1.6 million due to the gain on the sale of properties closed in fiscal 2008. Excluding the impact of the plant transition costs and restructuring and impairment charges in both periods and the impact of tax valuation allowances recorded in the current quarter, diluted loss per share amounted to $0.20 in the current period compared to diluted earnings per share of $0.22 in the prior year comparable period.
Farooq Kathwari, Chairman and CEO, commented, “The downturn has enabled us to reposition our business in all major areas. We have consolidated our US manufacturing and logistics to make it more efficient while we have reduced our cost structure in all areas of our enterprise during the last year. We have now started to selectively increase our associates both at manufacturing and at retail.”
Mr. Kathwari further stated, “Our focus during this period has been to increase our cash position, implement initiatives to help increase sales and also position us well as the economy starts to improve. We increased our cash by $19.5 million to $72.5 million during the quarter. In addition, we announced this week that we added an additional $20 million to our secured revolving credit facility increasing the line to $60 million.”
Commenting on the business, Mr. Kathwari continued, “While we have increased our written backlog by 19% during the quarter and reduced the decline in booked written orders by half to 19.5% in the quarter from a 38% decline from January to June 2009, we still remain cautious for the near term. As I mentioned earlier, we are well positioned as the economy improves to grow our sales and profitability.”
Analyst Conference Call
The Company will conduct a Conference Call at 11:00 AM (Eastern) on Thursday, October 29th. 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 six manufacturing facilities in the United States, which includes one sawmill, and one manufacturing facility in Mexico, and manufactures approximately sixty-five percent of its products 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. | ||||||||
| Selected Financial Information | ||||||||
| Unaudited | ||||||||
| (in thousands, except per share amounts) | ||||||||
| Three Months Ended | ||||||||
| 09/30/09 | 09/30/08 | |||||||
| Net sales | $ | 136,190 | $ | 205,841 | ||||
| Cost of sales | 77,881 | 93,900 | ||||||
| Gross profit | 58,309 | 111,941 | ||||||
| Operating expenses: | ||||||||
| Selling | 33,605 | 55,302 | ||||||
| General and administrative | 39,980 | 46,058 | ||||||
| Restructuring and impairment charge | 812 | (1,630 | ) | |||||
| Total operating expenses | 74,397 | 99,730 | ||||||
| Operating income (loss) | (16,088 | ) | 12,211 | |||||
| Interest and other miscellaneous income | 797 | 1,100 | ||||||
| Interest expense and other related financing costs | 2,981 | 2,901 | ||||||
| Income (loss) before income taxes | (18,272 | ) | 10,410 | |||||
| Income tax expense (benefit) | (4,693 | ) | 2,988 | |||||
| Net income (loss) | $ | (13,579 | ) | $ | 7,422 | |||
| Basic earnings per common share: | ||||||||
| Net income (loss) per basic share | $ | (0.47 | ) | $ | 0.26 | |||
| Basic weighted average shares outstanding | 28,926 | 28,703 | ||||||
| Diluted earnings per common share: | ||||||||
| Net income (loss) per diluted share | $ | (0.47 | ) | $ | 0.26 | |||
| Diluted weighted average shares outstanding | 28,926 | 28,847 | ||||||
| Ethan Allen Interiors Inc. | |||||||
| Condensed Consolidated Balance Sheets | |||||||
| Unaudited | |||||||
| (in thousands) | |||||||
| September 30, | June 30, | ||||||
| 2009 | 2009 | ||||||
| Assets | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 72,452 | $ | 52,960 | |||
| Accounts receivable, net | 13,053 | 13,086 | |||||
| Inventories | 146,661 | 156,519 | |||||
| Prepaid expenses & other current assets | 12,075 | 21,060 | |||||
| Deferred income taxes | 7,750 | 8,077 | |||||
| Total current assets | 251,991 | 251,702 | |||||
| Property, plant and equipment, net | 320,184 | 333,599 | |||||
| Intangible assets, net | 45,128 | 45,128 | |||||
| Other assets | 21,262 | 16,056 | |||||
| Total Assets | $ | 638,565 | $ | 646,485 | |||
| Liabilities and Shareholders'' Equity | |||||||
| Current liabilities: | |||||||
| Current maturities of long-term debt | $ | 42 | $ | 42 | |||
| Customer deposits | 38,885 | 31,691 | |||||
| Accounts payable | 21,077 | 22,199 | |||||
| Accrued expenses & other current liabilities | 58,192 | 58,531 | |||||
| Total current liabilities | 118,196 | 112,463 | |||||
| Long-term debt | 203,136 | 203,106 | |||||
| Other long-term liabilities | 25,449 | 24,993 | |||||
| Total liabilities | 346,781 | 340,562 | |||||
| Shareholders'' equity | 291,784 | 305,923 | |||||
| Total Liabilities and Shareholders'' Equity | $ | 638,565 | $ | 646,485 | |||
| Ethan Allen Interiors Inc. | |||||||||
| Selected Financial Information | |||||||||
| Unaudited | |||||||||
| (in millions) | |||||||||
Selected Consolidated Financial Data: | |||||||||
| Three Months Ended | |||||||||
| 09/30/09 | 09/30/08 | ||||||||
| Net sales | $ | 136.2 | $ | 205.8 | |||||
| Gross margin | 42.8 | % | 54.4 | % | |||||
| Operating margin | -11.8 | % | 5.9 | % | |||||
| Operating margin (ex restructuring, impairment & | |||||||||
| plant transition charges ) | -5.0 | % | 5.1 | % | |||||
| Net income (loss) | ($13.6 | ) | $ | 7.4 | |||||
| Net income (loss) (ex restructuring, impairment & | |||||||||
| plant transition charges ) | ($5.7 | ) | $ | 6.4 | |||||
| Operating cash flow | $ | 17.0 | $ | 18.1 | |||||
| Capital expenditures | $ | 2.5 | $ | 11.1 | |||||
| Acquisitions | $ | 0.0 | $ | 0.4 | |||||
| Treasury stock repurchases (settlement | |||||||||
| date basis) | $ | 0.0 | $ | 0.0 | |||||
| EBITDA | ($2.8 | ) | $ | 19.2 | |||||
| EBITDA as % of net sales | -2.1 | % | 9.3 | % | |||||
| EBITDA (ex restructuring, impairment and | |||||||||
| plant transition charges ) | ($0.1 | ) | $ | 17.6 | |||||
| EBITDA as % of net sales (ex restructuring, | |||||||||
| impairment and plant transition charges ) | -0.1 | % | 8.6 | % | |||||
| Selected Financial Data by Business Segment: | |||||||||
| Three Months Ended | |||||||||
| 09/30/09 | 09/30/08 | ||||||||
Retail | |||||||||
| Net sales | $ | 103.2 | $ | 155.9 | |||||
| Operating margin | -11.0 | % | -2.0 | % | |||||
| Operating margin (ex restructuring, impairment & | |||||||||
| plant transition charges ) | -10.4 | % | -3.3 | % | |||||
Wholesale | |||||||||
| Net sales | $ | 81.3 | $ | 121.3 | |||||
| Operating margin | -5.7 | % | 9.8 | % | |||||
| Operating margin (ex restructuring, impairment & | |||||||||
| plant transition charges ) | 4.9 | % | 10.1 | % | |||||
| Ethan Allen Interiors Inc. | ||||||||
| GAAP Reconciliation | ||||||||
| Three Months Ended September 30, 2009 and 2008 | ||||||||
| Unaudited | ||||||||
| (in thousands, except per share amounts) | ||||||||
| Three Months Ended | ||||||||
| September 30, | ||||||||
| 2009 | 2008 | |||||||
Net Income / Earnings Per Share | ||||||||
| Net income (loss) | $ | (13,579 | ) | $ | 7,422 | |||
| Add: restructuring, impairment and plant transition charges (credit), | ||||||||
| net of related tax effect | 7,893 | (1,037 | ) | |||||
| Net income (loss) (excluding restructuring impairment and | ||||||||
| plant transition charges) | $ | (5,686 | ) | $ | 6,385 | |||
| Earnings (loss) per basic share | $ | (0.47 | ) | $ | 0.26 | |||
| Earnings (loss) per basic share (excluding | ||||||||
| restructuring, impairment and plant transition charges (credit)) | $ | (0.20 | ) | $ | 0.22 | |||
| Basic weighted average shares outstanding | 28,926 | 28,703 | ||||||
| Earnings (loss) per diluted share | $ | (0.47 | ) | $ | 0.26 | |||
| Earnings (loss) per diluted share (excluding | ||||||||
| restructuring, impairment and plant transition charges (credit)) | $ | (0.20 | ) | $ | 0.22 | |||
| Diluted weighted average shares outstanding | 28,926 | 28,847 | ||||||
Consolidated Operating Income / Operating Margin | ||||||||
| Operating income (loss) | $ | (16,088 | ) | $ | 12,211 | |||
| Add: restructuring, impairment and plant transition charges (credit) | 9,318 | (1,630 | ) | |||||
| Operating income (loss) (excluding restructuring, impairment | ||||||||
| and plant transition charges) | $ | (6,770 | ) | $ | 10,581 | |||
| Net sales | $ | 136,190 | $ | 205,841 | ||||
| Operating margin | -11.8 | % | 5.9 | % | ||||
| Operating margin (excluding restructuring, impairment | ||||||||
| and plant transition charges) | -5.0 | % | 5.1 | % | ||||
Wholesale Operating Income / Operating Margin | ||||||||
| Wholesale operating income (loss) | $ | (4,660 | ) | $ | 11,885 | |||
| Add: restructuring, impairment and plant transition charges (credit) | 8,656 | 408 | ||||||
| Wholesale operating income (excluding restructuring, impairment | ||||||||
| and plant transition charges) | $ | 3,996 | $ | 12,293 | ||||
| Wholesale net sales | $ | 81,281 | $ | 121,295 | ||||
| Wholesale operating margin | -5.7 | % | 9.8 | % | ||||
| Wholesale operating margin (excluding restructuring, impairment | ||||||||
| and plant transition charges) | 4.9 | % | 10.1 | % | ||||
Retail Operating Income / Operating Margin | ||||||||
| Retail operating income (loss) | $ | (11,349 | ) | $ | (3,052 | ) | ||
| Add: restructuring, impairment and plant transition charges (credit) | 662 | (2,038 | ) | |||||
| Retail operating income (loss) (excluding | ||||||||
| restructuring, impairment and plant transition charges (credit)) | $ | (10,687 | ) | $ | (5,090 | ) | ||
| Retail net sales | $ | 103,150 | $ | 155,870 | ||||
| Retail operating margin | -11.0 | % | -2.0 | % | ||||
| Retail operating margin (excluding restructuring, impairment | ||||||||
| and plant transition charges) | -10.4 | % | -3.3 | % | ||||
EBITDA | ||||||||
| Net income (loss) | $ | (13,579 | ) | $ | 7,422 | |||
| Add: interest expense (income), net | 2,766 | 2,508 | ||||||
| Add: income tax expense (benefit) | (4,693 | ) | 2,988 | |||||
| Add: depreciation and amortization (including plant accelerated depreciation) | 12,697 | 6,318 | ||||||
| EBITDA | $ | (2,809 | ) | $ | 19,236 | |||
| Net sales | $ | 136,190 | $ | 205,841 | ||||
| EBITDA as % of net sales | -2.1 | % | 9.3 | % | ||||
| EBITDA | $ | (2,809 | ) | $ | 19,236 | |||
| Add: restructuring, impairment and plant transition charges (credit) | 2,688 | (1,630 | ) | |||||
| Adjusted EBITDA | $ | (121 | ) | $ | 17,606 | |||
| Net sales | $ | 136,190 | $ | 205,841 | ||||
| Adjusted EBITDA as % of net sales | -0.1 | % | 8.6 | % | ||||
Contacts:
Ethan Allen Interiors Inc.
Investor / Media:
David R.
Callen, 203-743-8305
Vice President Finance & Treasurer
