Exhibit 99.1
| Ethan Allen Interiors Inc. |
|
| Investor/ Media Contact: | Peg Lupton |
| (203) 743-8234 | |
ETHAN ALLEN REPORTS RESULTS FOR QUARTER
AND FISCAL YEAR ENDED JUNE 30, 2008
DANBURY, CT., July 23, 2008 – Ethan Allen Interiors Inc. (“Ethan Allen” or the “Company”) (NYSE:ETH) today reported operating results for the three and twelve months ended June 30, 2008.
Three Months Ended June 30, 2008
Net delivered sales for the quarter ended June 30, 2008 amounted to $235.9 million as compared to $258.5 million in the prior year quarter. Net delivered sales for the Company’s Retail division were $176.5 million, down 5.9% from the prior year quarter. Wholesale sales were $147.7 million, down 9.3% from the prior year quarter. Comparable Ethan Allen design center delivered sales were down 11.1% as compared to the prior year quarter.
For the quarter ended June 30, 2008, diluted earnings per share amounted to $0.39 on net income of $11.1 million, which includes a $2.8 million Retail division restructuring charge relating to the plan announced on January 10, 2008. Excluding the restructuring charge, diluted earnings per share amounted to $0.45. This compares to diluted earnings per share and net income of $0.65 and $20.5 million, respectively, in the prior year comparable period.
Year Ended June 30, 2008
For the twelve months ended June 30, 2008, net delivered sales totaled $980 million as compared to $1.0 billion in the prior year comparable period. Net delivered sales for the Company’s Retail division were $724.6 million, up 3.7% from the prior year. Wholesale sales were $616.2 million, down 6.1% from the prior year. Comparable Ethan Allen design center delivered sales were down 3.2% as compared to the prior year comparable period.
For the twelve months ended June 30, 2008, which includes a $6.8 million restructuring and impairment charge, diluted earnings per share amounted to $1.97 on net income of $58.1 million. This compares to diluted earnings per share and net income of $2.15 and $69.2 million respectively, for the prior year, which included a $13.4 million restructuring and impairment charge. Excluding the impact of the impairment and restructuring charges in both periods, diluted
earnings per share amounted to $2.12 in the current year period as compared to $2.41 in the prior year comparable period.
Farooq Kathwari, Chairman and CEO, commented, “We are pleased with the progress we have made during the fiscal year. We are gratified with our superior financial performance in a very challenging economic environment. More importantly, we have undertaken numerous initiatives to position us for growth as an interior design based enterprise. In our Retail Division, initiatives include the implementation of the design team concept, the conversion of twelve design centers to design studios, the restructuring of the retail design service center network, closing of twelve Retail Division design centers in underperforming markets, and opening of a record number of eighteen new design centers, including relocations. In other areas of our vertically integrated structure, we have improved our product offerings; launched a major national and regional advertising campaign relating to our interior design services; made major improvements to our information systems including development of a new website, and strengthened our manufacturing and logistics base.”
Commenting on the outlook for fiscal 2009, Mr. Kathwari stated, “In these challenging times it makes sense to be prepared for further softening of the economy and also be ready for the next upturn. The initiatives we have taken position us well. As far as our financial performance is concerned, we expect to continue to do relatively well.”
Ethan Allen Interiors Inc. (NYSE: ETH) is an interior design business providing complimentary design service and one-stop shopping convenience through a dedicated international network of 295 retail locations, which are referred to as design centers and design studios. Ethan Allen owns nine manufacturing facilities, including two saw mills, in the United States and one in Mexico.
The Company will conduct a Conference Call at 11:00 AM (Eastern) on Wednesday, July 23rd. The live webcast and replay are accessible via the Company’s website at http://ethanallen.com/investors.
The webcast and transcript of the July 9, 2008 Investor Conference presentation is also available at http://ethanallen.com/investors.
This press release should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended June 30, 2007 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.
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Ethan Allen Interiors Inc.
Selected Financial Information
Unaudited
(In millions)
Selected Consolidated Financial Data:
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| Three Months Ended |
| Twelve Months Ended |
| ||||||||
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| 6/30/08 |
| 6/30/07 |
| 6/30/08 |
| 6/30/07 |
| ||||
Net Sales |
| $ | 235.9 |
| $ | 258.5 |
| $ | 980.0 |
| $ | 1,005.3 |
|
Gross Margin |
| 54.2 | % | 53.4 | % | 53.7 | % | 52.4 | % | ||||
Operating Margin |
| 8.1 | % | 12.5 | % | 9.8 | % | 11.1 | % | ||||
Operating Margin (ex restructuring & impairment charge) |
| 9.3 | % | 12.5 | % | 10.5 | % | 12.4 | % | ||||
Net Income |
| $ | 11.1 |
| $ | 20.5 |
| $ | 58.1 |
| $ | 69.2 |
|
Net Income (ex restructuring & impairment charge) |
| $ | 12.9 |
| $ | 20.5 |
| $ | 62.4 |
| $ | 77.7 |
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Operating Cash Flow |
| $ | 18.9 |
| $ | 49.3 |
| $ | 86.1 |
| $ | 119.2 |
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Capital Expenditures |
| $ | 13.7 |
| $ | 11.6 |
| $ | 60.0 |
| $ | 59.1 |
|
Acquisitions |
| $ | 1.0 |
| $ | 3.9 |
| $ | 7.8 |
| $ | 15.3 |
|
Treasury Stock Repurchases (settlement date basis) |
| $ | — |
| $ | 17.0 |
| $ | 73.2 |
| $ | 51.6 |
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EBITDA |
| $ | 26.6 |
| $ | 39.5 |
| $ | 124.5 |
| $ | 136.9 |
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EBITDA as % of Net Sales |
| 11.3 | % | 15.3 | % | 12.7 | % | 13.6 | % | ||||
EBITDA (ex restructuring & impairment charge) |
| $ | 29.4 |
| $ | 39.5 |
| $ | 131.3 |
| $ | 150.3 |
|
EBITDA as % of Net Sales (ex restructuring & impairment charge) |
| 12.5 | % | 15.3 | % | 13.4 | % | 15.0 | % | ||||
Selected Financial Data by Business Segment:
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| Three Months Ended |
| Twelve Months Ended |
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| 6/30/08 |
| 6/30/07 |
| 6/30/08 |
| 6/30/07 |
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Retail |
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Net Sales |
| $ | 176.5 |
| $ | 187.5 |
| $ | 724.6 |
| $ | 698.6 |
|
Operating Margin |
| (0.9 | )% | 3.5 | % | (0.4 | )% | 2.2 | % | ||||
Operating Margin (ex restructuring & impairment charge) |
| 0.8 | % | 3.5 | % | 0.6 | % | 2.2 | % | ||||
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| Three Months Ended |
| Twelve Months Ended |
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| 6/30/08 |
| 6/30/07 |
| 6/30/08 |
| 6/30/07 |
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Wholesale |
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Net Sales |
| $ | 147.7 |
| $ | 162.8 |
| $ | 616.2 |
| $ | 656.0 |
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Operating Margin |
| 13.9 | % | 15.8 | % | 16.3 | % | 15.1 | % | ||||
Operating Margin (ex restructuring & impairment charge) |
| 13.9 | % | 15.8 | % | 16.3 | % | 17.2 | % | ||||
Ethan Allen Interiors Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
|
| Three Months |
| Twelve Months |
| ||||||||
|
| Ended June 30, |
| Ended June 30, |
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|
| 2008 |
| 2007 |
| 2008 |
| 2007 |
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| (unaudited) |
| (unaudited) |
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Net sales |
| $ | 235,907 |
| $ | 258,531 |
| $ | 980,045 |
| $ | 1,005,312 |
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Cost of sales |
| 107,939 |
| 120,543 |
| 453,980 |
| 478,729 |
| ||||
Gross profit |
| 127,968 |
| 137,988 |
| 526,065 |
| 526,583 |
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Operating expenses: |
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Selling |
| 58,300 |
| 59,053 |
| 229,590 |
| 223,146 |
| ||||
General & administrative |
| 47,699 |
| 46,662 |
| 193,639 |
| 178,876 |
| ||||
Restructuring & impairment charges |
| 2,843 |
| — |
| 6,836 |
| 13,442 |
| ||||
Total operating expenses |
| 108,842 |
| 105,715 |
| 430,065 |
| 415,464 |
| ||||
Operating income |
| 19,126 |
| 32,273 |
| 96,000 |
| 111,119 |
| ||||
Interest & other miscellaneous income |
| 1,413 |
| 3,223 |
| 7,891 |
| 10,369 |
| ||||
Interest & other related financing costs |
| 2,920 |
| 2,982 |
| 11,713 |
| 11,762 |
| ||||
Income before income tax expense |
| 17,619 |
| 32,514 |
| 92,178 |
| 109,726 |
| ||||
Income tax expense |
| 6,519 |
| 12,030 |
| 34,106 |
| 40,499 |
| ||||
Net income |
| $ | 11,100 |
| $ | 20,484 |
| $ | 58,072 |
| $ | 69,227 |
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Basic earnings per share: |
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Net income per share |
| $ | 0.39 |
| $ | 0.66 |
| $ | 1.98 |
| $ | 2.19 |
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Basic weighted average shares outstanding |
| 28,686 |
| 31,056 |
| 29,267 |
| 31,566 |
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Diluted earnings per share: |
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Net income per share |
| $ | 0.39 |
| $ | 0.65 |
| $ | 1.97 |
| $ | 2.15 |
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Diluted weighted average shares outstanding |
| 28,826 |
| 31,556 |
| 29,470 |
| 32,261 |
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Ethan Allen Interiors Inc.
Condensed Consolidated Balance Sheets
Unaudited
(In thousands)
|
| June 30, |
| June 30, |
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| 2008 |
| 2007 |
| ||
Assets |
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Current Assets: |
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Cash and cash equivalents |
| $ | 74,376 |
| $ | 147,879 |
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Accounts receivable, net |
| 12,672 |
| 14,602 |
| ||
Inventories |
| 186,265 |
| 181,884 |
| ||
Prepaid expenses and other current assets |
| 32,860 |
| 33,104 |
| ||
Deferred income taxes |
| 4,005 |
| 4,960 |
| ||
Total current assets |
| 310,178 |
| 382,429 |
| ||
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Property, plant, and equipment, net |
| 350,432 |
| 322,185 |
| ||
Intangible assets, net |
| 96,823 |
| 92,500 |
| ||
Other assets |
| 4,540 |
| 5,484 |
| ||
Total Assets |
| 761,973 |
| 802,598 |
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Liabilities and Shareholders’ Equity |
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Current Liabilities: |
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Current maturities of long-term debt |
| $ | 41 |
| $ | 40 |
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Customer deposits |
| 47,297 |
| 52,072 |
| ||
Accounts payable |
| 26,444 |
| 26,650 |
| ||
Accrued expenses and other current liabilities |
| 61,720 |
| 68,677 |
| ||
Total current liabilities |
| 135,502 |
| 147,439 |
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Long-term debt |
| 202,988 |
| 202,868 |
| ||
Other long-term liabilities |
| 20,383 |
| 12,003 |
| ||
Deferred income taxes |
| 27,327 |
| 30,646 |
| ||
Total liabilities |
| 386,200 |
| 392,956 |
| ||
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Shareholders’ equity |
| 375,773 |
| 409,642 |
| ||
Total Liabilities and Shareholders’ Equity |
| $ | 761,973 |
| $ | 802,598 |
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