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, 2011
DANBURY, CT., August 3, 2011 – 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, 2011.
Mr. Farooq Kathwari, Chairman, President and CEO commenting on the results stated, “We are pleased at the growth in sales and net income during the fourth quarter and fiscal year ended June 30, 2011. Our fourth quarter net sales increased 9.0% and net income, excluding special items, increased 32.7%. During the same period our written (booked) orders for the retail division increased by 14.6%. We ended the year with $107.8 million of cash and securities after reducing our debt during the 2011 fiscal year by $38.2 million.”
Mr. Kathwari continued, “We had strong results for our fiscal year ending June 30, 2011. Net sales increased by 15.1% and our net income, excluding special items improved to $16.9 million compared to a loss of $4.2 million in fiscal 2010. Our improving trends in written business, especially in the second half of our fiscal year, resulted in stronger retail and wholesale backlogs than this time last year. We also made major progress in improving our vertically integrated enterprise during fiscal 2011.”
Three Months Ended June 30, 2011
Net sales for the quarter ended June 30, 2011 were $178.0 million, an increase of 9.0% compared with the prior year quarter. The Company’s Retail division net sales were $136.8 million, an increase of 13.0% from the prior year quarter. Written orders booked during the quarter by the Retail division were 14.6% greater than the prior year quarter including comparable design center orders which grew 12.9%.
Net income for the quarter ended June 30, 2011 was $7.2 million or $0.25 earnings per diluted share compared with a net loss the prior year of $26.5 million or $0.91 per diluted share. Excluding special items in both periods, net income for the quarter ended June 30, 2011 was $6.1 million or $0.21 per diluted share compared with $4.6 million or $0.16 per diluted share in the prior year period.
Twelve Months Ended June 30, 2011
For the twelve months ended June 30, 2011, net sales were $679.0 million, up 15.1% from the prior year comparable period. Net income year to date was $29.3 million or $1.01 per diluted share compared with a year to date net loss of $44.3 million or $1.53 loss per diluted share the prior year. Excluding special items, earnings were $0.58 per diluted share for fiscal year 2011 compared with a net loss per diluted share of $0.15 for fiscal year 2010.
Mr. Kathwari concluded, “Our focus on our Five Priorities: projecting a relevant message, accelerating the development of stylish and attainable products, strengthening our retail network, investing in technology, and developing relevant sourcing and logistics, continues to position us well. We are pleased that our written business in July continued to be ahead of the previous year. While we are operating in an uncertain economic environment, we remain cautiously optimistic of the opportunity to continue our progress and increase both sales and profitability.”
Analyst Conference Call
The Company will conduct a conference call at 11:00 AM (Eastern) on Thursday, August 4th 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 a manufacturer and retailer of quality home furnishings. Ethan Allen offers free interior design service to its clients and sells a full range of furniture products and decorative accessories through ethanallen.com and through a network of approximately 300 Design Centers in the United States and abroad. Ethan Allen owns and operates seven manufacturing facilities in North America, including five manufacturing plants and one sawmill in the United States and one manufacturing plant in Mexico. Over seventy percent of its products are made in our 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 for the year ended June 30, 2010 (the “2010 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 2010 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
| Selected Consolidated Financial Data: | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | Three Months Ended | | | Twelve Months Ended | |
| | | 06/30/11 | | | 06/30/10 | | | 06/30/11 | | | 06/30/10 | |
| | | | | | | | | | | | | |
| Net sales | | $ | 178.0 | | | $ | 163.3 | | | $ | 679.0 | | | $ | 590.1 | |
| Gross margin | | | 52.9 | % | | | 49.5 | % | | | 51.5 | % | | | 47.5 | % |
| Operating margin | | | 6.4 | % | | | 7.6 | % | | | 4.7 | % | | | -2.0 | % |
| Operating margin (excluding special items*) | | | 6.8 | % | | | 5.6 | % | | | 5.0 | % | | | 0.2 | % |
| Net income (loss) | | $ | 7.2 | | | $ | (26.5 | ) | | $ | 29.3 | | | $ | (44.3 | ) |
Net income (loss) (excluding special items* and unusual income tax effects) | | $ | 6.1 | | | $ | 4.6 | | | $ | 16.9 | | | $ | (4.2 | ) |
| Operating cash flow | | $ | 22.6 | | | $ | 17.7 | | | $ | 63.2 | | | $ | 51.3 | |
| Capital expenditures | | $ | 3.4 | | | $ | 2.3 | | | $ | 9.1 | | | $ | 9.9 | |
| Acquisitions | | $ | 2.3 | | | $ | 0.1 | | | $ | 3.0 | | | $ | 0.1 | |
Treasury stock repurchases (settlement date basis) | | $ | 0.0 | | | $ | 0.0 | | | $ | 5.4 | | | $ | 0.0 | |
| | | | | | | | | | | | | | | | | |
| EBITDA | | $ | 15.9 | | | $ | 19.8 | | | $ | 57.3 | | | $ | 21.5 | |
| EBITDA as % of net sales | | | 8.9 | % | | | 12.2 | % | | | 8.4 | % | | | 3.6 | % |
| | | | | | | | | | | | | | | | | |
| EBITDA (excluding special items*) | | $ | 16.6 | | | $ | 15.5 | | | $ | 57.6 | | | $ | 27.0 | |
| EBITDA as % of net sales (excluding special items*) | | | 9.4 | % | | | 9.5 | % | | | 8.5 | % | | | 4.6 | % |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Selected Financial Data by Business Segment: | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Twelve Months Ended | |
| | | 06/30/11 | | | 06/30/10 | | | 06/30/11 | | | 06/30/10 | |
| Retail | | | | | | | | | | | | | | | | |
| Net sales | | $ | 136.8 | | | $ | 121.2 | | | $ | 505.9 | | | $ | 438.5 | |
| Operating margin | | | -1.4 | % | | | 2.3 | % | | | -2.9 | % | | | -6.6 | % |
| Operating margin (excluding special items*) | | | -0.9 | % | | | -1.6 | % | | | -2.7 | % | | | -7.1 | % |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Wholesale | | | | | | | | | | | | | | | | |
| Net sales | | $ | 110.5 | | | $ | 100.1 | | | $ | 422.9 | | | $ | 362.5 | |
| Operating margin | | | 12.8 | % | | | 11.1 | % | | | 11.6 | % | | | 3.9 | % |
| Operating margin (excluding special items*) | | | 12.8 | % | | | 12.5 | % | | | 11.8 | % | | | 8.2 | % |
| * 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.
Condensed Consolidated Income Statements
| | | Three Months Ended | | | Twelve Months Ended | |
| | | 06/30/11 | | | 06/30/10 | | | 06/30/11 | | | 06/30/10 | |
| | | | | | | | | | | | | |
| Net sales | | $ | 177,952 | | | $ | 163,304 | | | $ | 678,960 | | | $ | 590,054 | |
| Cost of sales | | | 83,803 | | | | 82,387 | | | | 329,500 | | | | 309,777 | |
| Gross profit | | | 94,149 | | | | 80,917 | | | | 349,460 | | | | 280,277 | |
| Operating expenses: | | | | | | | | | | | | | | | | |
| Selling | | | 43,067 | | | | 33,021 | | | | 161,609 | | | | 142,562 | |
| General and administrative | | | 39,034 | | | | 34,989 | | | | 154,792 | | | | 147,013 | |
| Restructuring and impairment charge | | | 733 | | | | 448 | | | | 1,126 | | | | 2,437 | |
| Total operating expenses | | | 82,834 | | | | 68,458 | | | | 317,527 | | | | 292,012 | |
| Operating income (loss) | | | 11,315 | | | | 12,459 | | | | 31,933 | | | | (11,735 | ) |
| Interest and other income | | | 111 | | | | 2,161 | | | | 5,564 | | | | 4,872 | |
| Interest expense | | | 2,477 | | | | 2,986 | | | | 11,126 | | | | 11,924 | |
| Income (loss) before income taxes | | | 8,949 | | | | 11,634 | | | | 26,371 | | | | (18,787 | ) |
| Income tax expense (benefit) | | | 1,774 | | | | 38,178 | | | | (2,879 | ) | | | 25,529 | |
| Net income (loss) | | $ | 7,175 | | | $ | (26,544 | ) | | $ | 29,250 | | | $ | (44,316 | ) |
| | | | | | | | | | | | | | | | | |
| Basic earnings per common share: | | | | | | | | | | | | | | | | |
| Net income (loss) per basic share | | $ | 0.25 | | | $ | (0.91 | ) | | $ | 1.02 | | | $ | (1.53 | ) |
| Basic weighted average shares outstanding | | | 28,772 | | | | 29,069 | | | | 28,758 | | | | 28,982 | |
| | | | | | | | | | | | | | | | | |
| Diluted earnings per common share: | | | | | | | | | | | | | | | | |
| Net income (loss) per diluted share | | $ | 0.25 | | | $ | (0.91 | ) | | $ | 1.01 | | | $ | (1.53 | ) |
| Diluted weighted average shares outstanding | | | 29,007 | | | | 29,069 | | | | 28,966 | | | | 28,982 | |
Ethan Allen Interiors Inc.
Condensed Consolidated Balance Sheets
| | | | | | | |
| | | | | | | |
| Assets | | | | | | |
| Current assets: | | | | | | |
| Cash and cash equivalents | | $ | 78,519 | | | $ | 73,852 | |
| Marketable securities | | | 12,909 | | | | 11,075 | |
| Accounts receivable, net | | | 15,036 | | | | 17,105 | |
| Inventories | | | 141,692 | | | | 134,040 | |
| Prepaid expenses & other current assets | | | 20,372 | | | | 23,620 | |
| Total current assets | | | 268,528 | | | | 259,692 | |
| | | | | | | | | |
| Property, plant and equipment, net | | | 294,853 | | | | 305,747 | |
| Intangible assets, net | | | 45,128 | | | | 45,128 | |
| Restricted cash and investments | | | 16,391 | | | | 17,318 | |
| Other assets | | | 3,425 | | | | 3,892 | |
| | | | | | | | | |
| Total Assets | | $ | 628,325 | | | $ | 631,777 | |
| | | | | | | | | |
| | | | | | | | | |
| Liabilities and Shareholders' Equity | | | | | | | | |
| Current liabilities: | | | | | | | | |
| Current maturities of long-term debt | | | 19 | | | | 3,898 | |
| Customer deposits | | | 62,649 | | | | 52,605 | |
| Accounts payable | | | 26,958 | | | | 23,952 | |
| Accrued expenses & other current liabilities | | | 64,990 | | | | 65,287 | |
| Total current liabilities | | | 154,616 | | | | 145,742 | |
| | | | | | | | | |
| Long-term debt | | | 165,013 | | | | 199,369 | |
| Other long-term liabilities | | | 18,975 | | | | 19,123 | |
| Deferred income taxes | | | 8,034 | | | | 9,084 | |
| Total liabilities | | | 346,638 | | | | 373,318 | |
| | | | | | | | | |
| Shareholders' equity | | | 281,687 | | | | 258,459 | |
| | | | | | | | | |
| Total Liabilities and Shareholders' Equity | | $ | 628,325 | | | $ | 631,777 | |
Ethan Allen Interiors Inc.
Three and Twelve Months Ended June 30, 2011 and 2010
(in thousands, except per share amounts)
| | | Three Months EndedJune 30, | | | Twelve Months EndedJune 30, | |
| | | 2011 | | | 2010 | | | 2011 | | | 2010 | |
| Net Income / Earnings Per Share | | | | | | | | | | | | |
| Net income (loss) | | $ | 7,175 | | | $ | (26,544 | ) | | $ | 29,250 | | | $ | (44,316 | ) |
| Special items net of related tax effects * | | | 465 | | | | (2,756 | ) | | | 194 | | | | 7,722 | |
| Unusual income tax effects | | | (1,492 | ) | | | 33,932 | | | | (12,505 | ) | | | 32,386 | |
Net income (loss) (excluding special items* and unusual income tax effects) | | $ | 6,148 | | | $ | 4,632 | | | $ | 16,939 | | | $ | (4,208 | ) |
| Basic weighted average shares outstanding | | | 28,772 | | | | 29,069 | | | | 28,758 | | | | 28,982 | |
| Earnings (loss) per basic share | | $ | 0.25 | | | $ | (0.91 | ) | | $ | 1.02 | | | $ | (1.53 | ) |
Earnings (loss) per basic share (excluding special items* and unusual income tax effects) | | $ | 0.21 | | | $ | 0.16 | | | $ | 0.59 | | | $ | (0.15 | ) |
| | | | | | | | | | | | | | | | | |
| Diluted weighted average shares outstanding | | | 29,007 | | | | 29,069 | | | | 28,966 | | | | 28,982 | |
| Earnings (loss) per diluted share | | $ | 0.25 | | | $ | (0.91 | ) | | $ | 1.01 | | | $ | (1.53 | ) |
Earnings (loss) per diluted share (excluding special items* and unusual income tax effects) | | $ | 0.21 | | | $ | 0.16 | | | $ | 0.58 | | | $ | (0.15 | ) |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Consolidated Operating Income / Operating Margin | | | | | | | | | | | | | | | | |
| Operating income (loss) | | $ | 11,315 | | | $ | 12,459 | | | $ | 31,933 | | | $ | (11,735 | ) |
| Add: special items * | | | 733 | | | | (3,340 | ) | | | 1,805 | | | | 13,161 | |
| Operating income (loss) (excluding special items*) | | $ | 12,048 | | | $ | 9,119 | | | $ | 33,738 | | | $ | 1,426 | |
| Net sales | | $ | 177,952 | | | $ | 163,304 | | | $ | 678,960 | | | $ | 590,054 | |
| Operating margin | | | 6.4 | % | | | 7.6 | % | | | 4.7 | % | | | -2.0 | % |
| Operating margin (excluding special items*) | | | 6.8 | % | | | 5.6 | % | | | 5.0 | % | | | 0.2 | % |
| | | | | | | | | | | | | | | | | |
| Wholesale Operating Income / Operating Margin | | | | | | | | | | | | | | | | |
| Wholesale operating income (loss) | | $ | 14,147 | | | $ | 11,102 | | | $ | 49,223 | | | $ | 14,201 | |
| Add: special items | | | - | | | | 1,374 | | | | 679 | | | | 15,661 | |
| Wholesale operating income (excluding special items*) | | $ | 14,147 | | | $ | 12,476 | | | $ | 49,902 | | | $ | 29,862 | |
| Wholesale net sales | | $ | 110,479 | | | $ | 100,094 | | | $ | 422,946 | | | $ | 362,468 | |
| Wholesale operating margin | | | 12.8 | % | | | 11.1 | % | | | 11.6 | % | | | 3.9 | % |
| Wholesale operating margin (excluding special items*) | | | 12.8 | % | | | 12.5 | % | | | 11.8 | % | | | 8.2 | % |
| | | | | | | | | | | | | | | | | |
| Retail Operating Income / Operating Margin | | | | | | | | | | | | | | | | |
| Retail operating income (loss) | | $ | (1,902 | ) | | $ | 2,743 | | | $ | (14,669 | ) | | $ | (28,764 | ) |
| Add: special items | | | 733 | | | | (4,714 | ) | | | 1,126 | | | | (2,500 | ) |
| Retail operating income (loss) (excluding special items*) | | $ | (1,169 | ) | | $ | (1,971 | ) | | $ | (13,543 | ) | | $ | (31,264 | ) |
| Retail net sales | | $ | 136,844 | | | $ | 121,153 | | | $ | 505,910 | | | $ | 438,539 | |
| Retail operating margin | | | -1.4 | % | | | 2.3 | % | | | -2.9 | % | | | -6.6 | % |
| Retail operating margin (excluding special items*) | | | -0.9 | % | | | -1.6 | % | | | -2.7 | % | | | -7.1 | % |
| * 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.
Three and Twelve Months Ended June 30, 2011 and 2010
(in thousands, except per share amounts)
| | | Three Months EndedJune 30, | | | Twelve Months EndedJune 30, | |
| | | 2011 | | | 2010 | | | 2011 | | | 2010 | |
| | | | | | | | | | | | | |
| EBITDA | | | | | | | | | | | | |
| Net income (loss) | | $ | 7,175 | | | $ | (26,544 | ) | | $ | 29,250 | | | $ | (44,316 | ) |
| Add: interest expense (income), net | | | 2,269 | | | | 2,665 | | | | 10,076 | | | | 10,907 | |
| Less: income tax expense (benefit) | | | 1,774 | | | | 38,178 | | | | (2,879 | ) | | | 25,529 | |
Add: depreciation and amortization (including accelerated depreciation) | | | 4,696 | | | | 5,549 | | | | 20,816 | | | | 29,398 | |
| EBITDA | | $ | 15,914 | | | $ | 19,848 | | | $ | 57,263 | | | $ | 21,518 | |
| Net sales | | $ | 177,952 | | | $ | 163,304 | | | $ | 678,960 | | | $ | 590,054 | |
| EBITDA as % of net sales | | | 8.9 | % | | | 12.2 | % | | | 8.4 | % | | | 3.6 | % |
| EBITDA | | $ | 15,914 | | | $ | 19,848 | | | $ | 57,263 | | | $ | 21,518 | |
| Add: special items* | | | 733 | | | | (4,340 | ) | | | 305 | | | | 5,531 | |
| Adjusted EBITDA | | $ | 16,647 | | | $ | 15,508 | | | $ | 57,568 | | | $ | 27,049 | |
| Net sales | | $ | 177,952 | | | $ | 163,304 | | | $ | 678,960 | | | $ | 590,054 | |
| Adjusted EBITDA as % of net sales | | | 9.4 | % | | | 9.5 | % | | | 8.5 | % | | | 4.6 | % |
| * Special items consist of restructuring, impairment, transition charges and certain other items. | |
| Related tax effects are calculated using a normalized income tax rate. | | | | | | | | | |
