Ethan Allen Interiors Inc. ("Ethan Allen" or the "Company")
(NYSE:ETH) today reported sales and earnings for the three and nine
months ended March 31, 2006. Three and Nine Month Results Net
delivered sales for the quarter ended March 31, 2006 increased
15.5% to $267.1 million from $231.2 million in the prior year
quarter. Net delivered sales for the Company's Retail division
increased 22.6% to $168.2 million, while Wholesale sales increased
13.9% to $192.2 million during that same period. Comparable Ethan
Allen store delivered sales increased 15.2% over the prior year
quarter. During that same period, Retail division written sales
increased 19.5% while comparable store written sales increased
12.3%. For the nine months ended March 31, 2006, net delivered
sales increased 12.4% to $794.4 million from $706.8 million in the
prior year comparable period. Net delivered sales for the Company's
Retail division increased 16.5% to $506.6 million, while Wholesale
sales increased 13.6% to $558.2 million during that same period.
Comparable Ethan Allen store delivered sales increased 12.2% over
the prior year comparable period. During that same period, Retail
division written sales increased 16.1% while comparable store
written sales increased 11.4%. For the quarter ended March 31,
2006, earnings per share increased 18.0% to $0.59 on net income of
$20.0 million. This compares to earnings per share and net income
of $0.50 and $17.9 million, respectively, in the prior year
comparable period. For the nine months ended March 31, 2006,
earnings per share, which includes a pre-tax restructuring and
impairment charge of $4.2 million related to the Company's planned
conversion of one of its existing manufacturing facilities into a
regional distribution center, amounted to $1.85 on net income of
$63.3 million. This compares to earnings per share and net income
of $1.63 and $59.8 million, respectively, in the prior year
comparable period. Excluding the impact of the restructuring and
impairment charge, earnings per share for the current nine-month
period amounted to $1.93 on net income of $65.9 million. Farooq
Kathwari, Chairman and CEO, commented: "We are pleased with the
continued progress at Ethan Allen and believe that our results
reflect the positive effects of initiatives undertaken in recent
years, including: the relocation of our stores to larger and more
prominent locations; major investments at retail to increase the
professionalism of our management team; the impact of new product
introductions - over 80% of our product offerings are new within
the last three years; enhanced advertising and marketing programs;
and faster delivery of our products to our customers." Mr. Kathwari
continued: "All of these initiatives, particularly the development
of a more professional Company-operated retail division, have
entailed major investment and cost. Still, despite these
expenditures and additional cost increases associated with selected
raw materials, fuel, utilities, and health insurance, we have been
able to report significant improvements in both profitability and
operating cash flow." Commenting on the outlook for the remainder
of the fiscal year, Mr. Kathwari stated: "So far this fiscal year
we have experienced considerable increases in both sales and
earnings and, at this stage, we believe that the analyst estimates
for the fourth quarter ended June 30, 2006 are within reach." Ethan
Allen Interiors Inc. is a leading manufacturer and retailer of
quality home furnishings. The Company sells a full range of
furniture products and decorative accessories through an exclusive
network of 311 retail stores in the United States and abroad, of
which 134 are Company-owned. Ethan Allen has 10 manufacturing
facilities, which include 2 sawmills, located throughout the United
States. The Company will conduct a Conference Call at 11:00 AM
(Eastern) on Monday, April 24th. The live webcast and replay are
accessible via the Company's website at
www.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, 2005 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. -0- *T Ethan Allen Interiors Inc. Selected Financial
Information Unaudited (In millions) Selected Consolidated Financial
Data: ------------------------------------- Three Months Ended Nine
Months Ended ------------------ ------------------ 3/31/06 3/31/05
3/31/06 3/31/05 -------- -------- -------- -------- Net Sales $
267.1 $ 231.2 $ 794.4 $ 706.8 Gross Margin 50.5% 47.8% 50.5% 48.1%
Operating Margin 12.5% 12.7% 13.3% 13.7% Operating Margin (ex
restructuring & impairment charge) 12.5% 12.7% 13.9% 13.7% Net
Income $ 20.0 $ 17.9 $ 63.3 $ 59.8 Net Income (ex restructuring
& impairment charge) $ 20.0 $ 17.9 $ 65.9 $ 59.8 Operating Cash
Flow $ 26.3 $ 12.4 $ 92.5 $ 79.2 Capital Expenditures $ 7.1 $ 8.8 $
28.3 $ 24.2 Treasury Stock Repurchases (settlement date basis) $ -
$ 20.5 $ 51.1 $ 59.6 EBITDA $ 40.3 $ 34.8 $ 124.6 $ 114.1 EBITDA as
% of Net Sales 15.1% 15.0% 15.7% 16.1% EBITDA (ex restructuring
& impairment charge) $ 40.3 $ 34.8 $ 128.8 $ 114.1 EBITDA as %
of Net Sales (ex restructuring & impairment charge) 15.1% 15.0%
16.2% 16.1% Selected Financial Data by Business Segment:
-------------------------------------------- Three Months Ended
Nine Months Ended ------------------ ------------------ Retail
3/31/06 3/31/05 3/31/06 3/31/05 --------- -------- --------
-------- -------- Net Sales $ 168.2 $ 137.3 $ 506.6 $ 434.8
Operating Margin 0.1% -0.7% 2.2% 1.8% Three Months Ended Nine
Months Ended ------------------ ------------------ Wholesale
3/31/06 3/31/05 3/31/06 3/31/05 --------- -------- --------
-------- -------- Net Sales $ 192.2 $ 168.8 $ 558.2 $ 491.4
Operating Margin 17.7% 18.7% 17.4% 17.6% Operating Margin (ex
restructuring & impairment charge) 17.7% 18.7% 18.2% 17.6%
Ethan Allen Interiors Inc. Condensed Consolidated Statements of
Operations (In thousands, except per share amounts) Three Months
Nine Months Ended March 31, Ended March 31, 2006 2005 2006 2005
(unaudited) (unaudited) Net sales $ 267,071 $ 231,154 $ 794,388 $
706,752 Cost of sales 132,325 120,704 393,248 366,476 --------
-------- -------- ---------- Gross profit 134,746 110,450 401,140
340,276 Operating expenses: Selling 58,340 45,506 166,291 137,347
General and administrative 43,067 35,646 124,787 106,319
Restructuring and impairment charges - - 4,241 (219) --------
-------- -------- ---------- Total operating expenses 101,407
81,152 295,319 243,447 Operating income 33,339 29,298 105,821
96,829 Interest and other miscellaneous income 1,747 160 2,950
1,406 Interest and other related financing costs 3,095 201 6,497
488 -------- -------- -------- ---------- Income before income tax
expense 31,991 29,257 102,274 97,747 Income tax expense 11,997
11,322 38,986 37,920 -------- -------- -------- ---------- Net
income $ 19,994 $ 17,935 $ 63,288 $ 59,827 ========= =========
======== ========= Basic earnings per share: Net income per share $
0.61 $ 0.51 $ 1.90 $ 1.68 ========= ========= ======== =========
Basic weighted average shares outstanding 33,021 35,257 33,340
35,690 Diluted earnings per share: Net income per share $ 0.59 $
0.50 $ 1.85 $ 1.63 ========= ========= ======== ========= Diluted
weighted average shares outstanding 34,046 36,148 34,173 36,603
Ethan Allen Interiors Inc. Condensed Consolidated Balance Sheets
(In thousands)
----------------------------------------------------------------------
March 31, June 30, 2006 2005 (unaudited)
----------------------------------------------------------------------
Assets Current Assets: Cash and cash equivalents $ 185,754 $ 3,448
Accounts receivable, net 26,724 28,019 Inventories 191,573 186,479
Prepaid expenses and other current assets 48,089 46,443 --------
--------- Total current assets 452,140 264,389 Property, plant, and
equipment, net 286,797 275,211 Intangible assets, net 86,032 82,897
Other assets 5,645 5,889 -------- --------- Total Assets $ 830,614
$ 628,386 ======== ========= Liabilities and Shareholders' Equity
Current Liabilities: Current maturities of long-term debt and
capital lease obligations $ 212 $ 240 Customer deposits 58,220
53,654 Accounts payable 28,193 19,352 Accrued expenses and other
current liabilities 59,063 60,720 -------- --------- Total current
liabilities 145,688 133,966 Long-term debt 202,717 12,270 Other
long-term liabilities 12,075 12,445 Deferred income taxes 36,261
35,637 -------- --------- Total liabilities 396,741 194,318
Shareholders' equity 433,873 434,068 -------- --------- Total
Liabilities and Shareholders' Equity $ 830,614 $ 628,386 ========
========= *T
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