Ethan Allen Interiors Inc. (“Ethan Allen” or the “Company”) (NYSE:
ETD) today issued the following statement regarding an update on
the flooding that has recently impacted its Orleans, Vermont,
manufacturing facility:
In July 2023, Ethan Allen’s wood furniture
manufacturing operations located in Orleans, Vermont,
sustained damage from heavy flooding of the nearby Barton
River. In addition to losses related to wood
furniture inventory parts and state-of-the-art
manufacturing equipment, the flooding also resulted in a temporary
work stoppage for many Vermont associates and
a disruption and delay of shipments for
approximately seven weeks.
Ethan Allen has deep roots in Vermont, first
established in 1936 when the Company’s founders purchased a sawmill
in Beecher Falls. The Orleans workshop employs approximately
250 dedicated local associates and serves as an important
economic engine, not only in the Orleans and Barton areas, but
also for businesses and workers throughout the Northeast Kingdom.
Ethan Allen’s sawmill and wood machining operation, located about
an hour away in Beecher Falls, provides wood parts to Orleans.
“We are proud of our roots in the Northeast
Kingdom,” said Ethan Allen’s Chairman, President and CEO, Farooq
Kathwari. “We are fortunate to have maintained our manufacturing
facilities in North America, which enables us to be in a better
position to serve our clients. I recently had the opportunity to
visit both Orleans and Beecher Falls and meet with our dedicated
associates. While the July flooding has caused substantial damage
to our Vermont wood furniture manufacturing plant, we are
pleased to see our business resume operations and actively work
down existing backlog.”
Ethan Allen is currently working through
insurance to recover a portion of incurred losses, which will be
included in the Company’s fiscal 2024 first quarter financial
results. Losses incurred from the disposal of damaged inventory,
inoperable machinery equipment from water damage, facility cleanup,
and restoration, are currently estimated to be approximately $2.5
million, net of insurance recoveries and grant proceeds. In
addition, the flooding has resulted in a delay in the production of
custom orders, which is expected to reduce the Company’s
consolidated net sales by approximately $15 million during the
first quarter of fiscal 2024.
Thanks to the hard work of Ethan Allen’s
associates as well as external specialized teams, the Company is
making good progress towards equipment repair and cleanup of
the plant. Mr. Kathwari credits Governor Phil Scott, members of the
Vermont state legislature, and the state’s Department of
Economic Development, which awarded Ethan Allen
a $500,000 grant through its Business Emergency Gap
Assistance Program. These funds will be used toward
cleanup and restoration efforts as well as for local
capital projects to further enhance the Orleans workshop. “We
appreciate the State of Vermont’s ongoing partnership and its
commitment to our business
and to our local associates,” Mr. Kathwari
stated.
“Our wood furniture manufacturing in
Orleans resumed limited operations during August 2023, and at this
time, approximately 75% of our associates are back to work. We
have set aside significant capital to enhance and improve our
production workflows as we move forward. Although we continue to
assess the costs of cleanup and repair, as our work is ongoing, we
are pleased to say that we remain open for business in Vermont,”
Mr. Kathwari concluded.
ABOUT ETHAN ALLEN
Ethan Allen Interiors Inc. (NYSE: ETD) is a
leading interior design company, manufacturer and retailer in the
home furnishings marketplace. The Company is a global luxury home
fashion brand that is vertically integrated from product design
through home delivery, which offers its customers stylish product
offerings, artisanal quality, and personalized service. The Company
provides complimentary interior design service to its clients and
sells a full range of home furnishings through a retail network of
design centers located throughout the United States and abroad as
well as online at ethanallen.com. Ethan Allen owns and operates ten
manufacturing facilities located in the United States, Mexico and
Honduras, including one sawmill, one rough mill and a lumberyard.
Approximately 75% of its products are manufactured or assembled in
these North American facilities.
For more information on Ethan Allen's products
and services, visit www.ethanallen.com.
Investor / Media Contact: Matt McNulty Senior Vice
President, Chief Financial Officer and Treasurer
IR@ethanallen.com
FORWARD-LOOKING STATEMENTS
This press release contains “forward-looking
statements” within the meaning of the Private Securities Litigation
Reform Act of 1995, Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”). Generally, forward-looking statements represent
management’s beliefs and assumptions concerning current
expectations, projections or trends relating to results of
operations, financial results, financial condition, strategic
objectives and plans, expenses, dividends, share repurchases,
liquidity, use of cash and cash requirements and investments. Such
forward-looking statements can be identified by the fact that they
do not relate strictly to historical or current facts. These
forward-looking statements may include words such as “anticipate,”
“estimate,” “expect,” “project,” “plan,” “intend,” “believe,”
“continue,” “may,” “will,” “short-term,” “target,” “outlook,”
“forecast,” “future,” “strategy,” “opportunity,” “would,”
“guidance,” “non-recurring,” “one-time,” “unusual,” “should,”
“likely,” and other words and terms of similar meaning in
connection with any discussion of the timing or nature of future
operating or financial performance or other events. The Company
derives many of its forward-looking statements from operating
budgets and forecasts, which are based upon many detailed
assumptions. While the Company believes that its assumptions are
reasonable, it cautions that it is very difficult to predict the
impact of known factors and it is impossible for the Company to
anticipate all factors that could affect actual results and matters
that are identified as “short term,” “non-recurring,” “unusual,”
“one-time,” or other words and terms of similar meaning may in fact
recur in one or more future financial reporting periods.
Forward-looking statements are subject to risks
and uncertainties that may cause actual results to differ
materially from those that are expected. Actual results could
differ materially from those anticipated in the forward-looking
statements due to a number of risks and uncertainties including,
but not limited to, the risks and uncertainties disclosed in Part
I, Item 1A. Risk Factors, in the Company’s 2023 Annual Report
on Form 10-K and other factors identified in its reports filed with
the Securities and Exchange Commission (the “SEC”), available on
the SEC's website at www.sec.gov.
All forward-looking statements attributable to
the Company, or persons acting on its behalf, are expressly
qualified in their entirety by these cautionary statements, as well
as other cautionary statements. A reader should evaluate all
forward-looking statements made in this press release in the
context of these risks and uncertainties. Given the risks and
uncertainties surrounding forward-looking statements, you should
not place undue reliance on these statements. Many of these factors
are beyond the Company’s ability to control or predict. The Company
is including this cautionary note to make applicable and take
advantage of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995 for forward-looking statements. The
forward-looking statements included in this press release are made
only as of the date hereof. The Company undertakes no obligation to
publicly update or revise any forward-looking statement, whether as
a result of new information, future events or otherwise, except as
otherwise required by law.
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