EX-99 2 ex99-1.htm EXHIBIT 99.1 ex99-1.htm

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 SEPTEMBER 30, 2013

 

DANBURY, CT - October 23, 2013 – Ethan Allen Interiors Inc. (NYSE: ETH) today reported operating results for the three months ended September 30, 2013. Please refer to the accompanying financial statements and reconciliations to non-GAAP measures discussed below.

 

First Quarter Highlights:

 

●

Net sales of $181.7 million with adjusted operating profit margin of 9.2%

 

●

Retail division written orders increased 11.4% including an increase of 13.8% in comparable design center written orders on top of 9.1% comparable growth the prior year first quarter

 

●

Cash and securities of $120 million, an increase of $20 million over the prior year

 

●

Major focus on getting ready for the launch of our new initiative under the umbrella of “The New Eclecticism” starting in Fall 2013

 

Farooq Kathwari, Chairman and CEO commented, “We are pleased with our progress in re-positioning our brand from a leader in furniture to a leader in home fashion. Our written business by our retail division increased 11.4% with comparable written increasing 13.8% despite the uncertainty expressed by our clients as a result of the recent government shutdown.”

 

Mr. Kathwari continued, “Our net sales of $181.7 million compared to $187.4 million in the prior year reflected the lower backlogs we had at the beginning of the quarter this year, a comparison to a strong quarter the previous year, and higher clearance sales during this quarter to make room for new products for our October launch.”

 

Mr. Kathwari concluded, “We are very pleased with our progress of re-introducing Ethan Allen as a fashion brand and reaching a larger customer base. We have a strong marketing program that started in October. The “bickering” in Washington made consumers nervous otherwise we believe we would have had an opportunity to have even higher written business in the first quarter. We also saw continued hesitancy in the first two weeks of October. We now see our clients starting to get more focused on decorating their homes and as a result we remain cautiously optimistic as we move forward.”

 

Financial Results:

Net sales for the quarter ended September 30, 2013 decreased 3.1% over the prior year to $181.7 million. The Company’s Retail division net sales decreased 4.9% to $141.8 million including a comparable design center net sales decline of 3.0%. Retail division written orders recorded during the fourth quarter increased 11.4% including an increase of 13.8% in comparable design center written orders. Net income for the quarter ended September 30, 2013 was $9.0 million or $0.31 per diluted share compared with $10.1 million or $0.35 per diluted share in the prior year quarter. Adjusted earnings for the quarter were $0.33 per diluted share or $9.5 million compared to $0.38 per diluted share or $11.1 million in the prior year quarter.

 

 
 
 

 

Analyst Conference Call

Ethan Allen will conduct a conference call at 11:00 AM (Eastern) on Thursday, October 24th 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 866-244-4742 with conference ID# 1623314.

 

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, 2013 (the “2013 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 2013 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 millions)

 

Selected Consolidated Financial Data:

 

   

Three Months Ended

  
   

09/30/13

    

09/30/12

  
                 

Net sales

   $ 181.7     $ 187.4  

Gross margin

     54.4 %     55.6 %

Operating margin

     8.8 %     9.6 %

Operating margin (excluding special items*)

     9.2 %     10.4 %

Net income

   $ 9.0     $ 10.1  

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

   $ 9.5     $ 11.1  

Operating cash flow

   $ 21.1     $ 6.7  

Capital expenditures

   $ 3.3     $ 8.3  

Acquisitions

   $ 0.0     $ 0.6  

Treasury stock repurchases

   $ 0.0     $ 0.0  
                 

EBITDA

   $ 20.2     $ 22.5  

EBITDA as % of net sales

     11.1 %     12.0 %
                 

EBITDA (excluding special items*)

   $ 21.0     $ 24.1  

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

     11.6 %     12.9 %

 

Selected Financial Data by Business Segment:

 

   

Three Months Ended

  
   

09/30/13

    

09/30/12

  

Retail

                

Net sales

   $ 141.8     $ 149.1  

Operating margin

     -0.1 %     0.7 %

Operating margin (excluding special items*)

     0.4 %     1.8 %
                 
                 

Wholesale

                

Net sales

   $ 113.2     $ 111.4  

Operating margin

     14.3 %     14.4 %

Operating margin (excluding special items*)

     14.3 %     14.4 %

 

* 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 Statements of Comprehensive Income

Unaudited

(in thousands)

 

 

   

Three Months Ended

  
   

09/30/13

    

09/30/12

  
                 

Net sales

   $ 181,659     $ 187,437  

Cost of sales

     82,916       83,184  

Gross profit

    98,743       104,253  

Selling, general and administrative expenses

     82,799       86,299  

Operating income

     15,944       17,954  

Interest and other income

     82       74  

Interest expense

     1,873       2,199  

Income before income taxes

     14,153       15,829  

Income tax expense

     5,119       5,765  

Net income

   $ 9,034     $ 10,064  
                 

Basic earnings per common share:

                

Net income per basic share

   $ 0.31     $ 0.35  

Basic weighted average shares outstanding

     28,911       28,836  
                 

Diluted earnings per common share:

                

Net income per diluted share

   $ 0.31     $ 0.35  

Diluted weighted average shares outstanding

     29,288       29,141  
                 

Comprehensive income:

                

Net income

   $ 9,034     $ 10,064  

Other comprehensive income

                

Currency translation adjustment

     55       160  

Other

     18       25  

Other comprehensive income (loss) net of tax

     73       185  

Comprehensive income

   $ 9,107     $ 10,249  

 

 
 
 

 

Ethan Allen Interiors Inc.

Condensed Consolidated Balance Sheets

Unaudited

(in thousands)

 

 

   

September 30,

2013

    

June 30,

2013

  

Assets

                

Current assets:

                

Cash and cash equivalents

   $ 91,224     $ 72,601  

Marketable securities

     13,431       15,529  

Accounts receivable, net

     12,549       12,277  

Inventories

     141,664       137,256  

Prepaid expenses & other current assets

     22,515       22,907  

Total current assets

     281,383       260,570  
                 

Property, plant and equipment, net

     289,542       291,672  

Intangible assets, net

     45,128       45,128  

Restricted cash and investments

     14,934       15,433  

Other assets

     4,585       4,482  
                 

Total Assets

   $ 635,572     $ 617,285  
                 
                 
                 

Liabilities and Shareholders' Equity

                

Current liabilities:

                

Current maturities of long-term debt

     485       480  

Customer deposits

     67,401       59,098  

Accounts payable

     25,783       22,995  

Accrued expenses & other current liabilities

     51,214       50,366  

Total current liabilities

     144,883       132,939  
                 

Long-term debt

     130,712       130,809  

Other long-term liabilities

     19,036       19,180  

Total liabilities

     294,631       282,928  
                 

Shareholders' equity

     340,941       334,357  
                 

Total Liabilities and Shareholders' Equity

   $ 635,572     $ 617,285  

 

 
 
 

 

Ethan Allen Interiors Inc.

GAAP Reconciliation

Three Months Ended September 30, 2013 and 2012

Unaudited

(in thousands, except per share amounts)

 

 

   

Three Months Ended

September 30,

  
   

2013

    

2012

  

Net Income / Earnings Per Share

                

Net income

   $ 9,034     $ 10,064  

Special items net of related tax effects *

     533       1,022  

Unusual income tax effects

    (46 )     (12 )

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

   $ 9,521     $ 11,074  

Basic weighted average shares outstanding

     28,911       28,836  

Earnings per basic share

   $ 0.31     $ 0.35  

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

   $ 0.33     $ 0.38  
                 

Diluted weighted average shares outstanding

     29,288       29,141  

Earnings per diluted share

   $ 0.31     $ 0.35  

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

   $ 0.33     $ 0.38  
                 
                 

Consolidated Operating Income / Operating Margin

                

Operating income

   $ 15,944     $ 17,954  

Add: special items *

     840       1,610  

Operating income (excluding special items*)

   $ 16,784     $ 19,564  

Net sales

   $ 181,659     $ 187,437  

Operating margin

     8.8 %     9.6 %

Operating margin (excluding special items*)

     9.2 %     10.4 %
                 
                 

Retail Operating Income / Operating Margin

                

Retail operating income (loss)

   $ (204 )   $ 1,048  

Add: special items

     840       1,610  

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

   $ 636     $ 2,658  

Retail net sales

   $ 141,827     $ 149,079  

Retail operating margin

     -0.1 %     0.7 %

Retail operating margin (excluding special items*)

     0.4 %     1.8 %

 

* 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 Months Ended September 30, 2013 and 2012

Unaudited

(in thousands, except per share amounts)

 

 

   

Three Months Ended

September 30,

  
   

2013

    

2012

  
                 

EBITDA

                

Net income

   $ 9,034     $ 10,064  

Add:   interest expense, net

     1,750       2,055  

income tax expense

     5,119       5,765  

depreciation and amortization

     4,289       4,606  

EBITDA

   $ 20,192     $ 22,490  

Net sales

   $ 181,659     $ 187,437  

EBITDA as % of net sales

     11.1 %     12.0 %

EBITDA

   $ 20,192     $ 22,490  

Add: special items*

     840       1,610  

EBITDA (excluding special items)

   $ 21,032     $ 24,100  

Net sales

   $ 181,659     $ 187,437  

EBITDA as % of net sales (excluding special items)

     11.6 %     12.9 %

 

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

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