ETH Ethan Allen Interiors Inc

Ethan Allen Interiors Inc. (�Ethan Allen� or the �Company�) (NYSE:ETH) today reported operating results for the three and twelve months ended June 30, 2007. Three Months Ended June 30, 2007 Net delivered sales for the quarter ended June 30, 2007 amounted to $258.5 million as compared to $272.0 million in the prior year quarter. Net delivered sales for the Company�s Retail division increased 1.7% to $187.5 million. Wholesale sales decreased 8.5% to $162.8 million during that same period. Comparable Ethan Allen design center delivered sales decreased 5.9% as compared to the prior year quarter. For the quarter ended June 30, 2007, earnings per share amounted to $0.65 on net income of $20.5 million. This compares to earnings per share and net income of $0.66 and $22.4 million, respectively, in the prior year comparable period. Year Ended June 30, 2007 For the twelve months ended June 30, 2007, net delivered sales totaled $1.005 billion as compared to $1.066 billion in the prior year comparable period. Net delivered sales for the Company�s Retail division increased 1.1% to $698.6 million. Wholesale sales decreased 10.9% to $656.0 million during that same period. Comparable Ethan Allen design center delivered sales decreased 6.3% as compared to the prior year comparable period. For the twelve months ended June 30, 2007, earnings per share, which includes a previously announced September 2006 restructuring and impairment charge, amounted to $2.15 on net income of $69.2 million. This compares to earnings per share and net income of $2.51 and $85.7 million, respectively, in the prior year comparable period which included a September 2005 restructuring and impairment charge. Excluding the impact of these charges in both periods, earnings per share amounted to $2.41 on net income of $77.7 million in the current year period as compared to earnings per share and net income of $2.59 and $88.3 million, respectively, in the prior year comparable period. Farooq Kathwari, Chairman and CEO, commented: "We are pleased with our results for the fourth quarter and fiscal year ended June 30, 2007. Despite a challenging economic environment and tough period-over-period comparisons as a result of a 12% increase in sales in both the prior year quarter and year, our sales held up and gross margins improved. Our quarterly earnings per share of $0.65 compares to $0.66 a year ago and reflects our continued cost control efforts, an increased gross margin, and the benefit of share repurchases. For the year ended June 30, 2007, capital expenditures and acquisitions totaled $59.1 million and $15.3 million, respectively, with the majority of our capital expenditures relating to the opening of new design centers. In addition, we utilized $51.6 million of available cash to repurchase 1.5 million shares of our common stock in the open market. As of June 30, 2007, the Company had remaining authorization available to repurchase an additional 1.4 million shares.� Mr. Kathwari continued: �We believe the sustained operating performance of the Company during this difficult time in our industry is a direct result of several initiatives undertaken in recent years, including: the continued repositioning of our retail network; investments in recruiting and training efforts to increase the professionalism of our retail management team; the development of stylish, high-quality products at good value; improved advertising and marketing programs; and faster delivery of our products to our customers. All of these initiatives have a common objective � a renewed focus on providing solutions and service. As a result, we believe that such efforts provide us a distinct competitive advantage and an opportunity to grow our business.� Commenting on the Company�s outlook for the fiscal year ended June 30, 2008, Mr. Kathwari stated: "While we have seen some positive trends in recent weeks, we remain cautiously aware of the fact that consumer confidence is impacted by several factors that are beyond our control. At the present time, we believe that we have the opportunity to realize earnings per share within the current range of analyst estimates for the fiscal year ended June 30, 2008.� 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 a network of 313 design centers in the United States and abroad, of which 158 are Company-owned. Ethan Allen has 9 manufacturing facilities, which include 2 sawmills, located throughout the United States. The Company will conduct a Conference Call at 11:00 AM (Eastern) on Wednesday, July 25th. 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, 2006 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. �Ethan Allen Interiors Inc. Selected Financial Information Unaudited (In millions) � Selected Consolidated Financial Data: � Three Months Ended Twelve Months Ended 6/30/07 6/30/06 6/30/07 6/30/06 Net Sales $ 258.5 $ 272.0 $ 1,005.3 $ 1,066.4 Gross Margin 53.4% 51.4% 52.4% 50.7% Operating Margin 12.5% 13.5% 11.1% 13.4% Operating Margin (ex restructuring & impairment charge) 12.5% 13.5% 12.4% 13.8% Net Income $ 20.5 $ 22.4 $ 69.2 $ 85.7 Net Income (ex restructuring & impairment charge) $ 20.5 $ 22.4 $ 77.7 $ 88.3 � Operating Cash Flow $ 49.3 $ 39.5 $ 119.2 $ 131.6 Capital Expenditures $ 11.6 $ 13.2 $ 59.1 $ 41.5 Acquisitions $ 3.9 $ 1.5 $ 15.3 $ 7.8 Treasury Stock Repurchases (settlement date basis) $ 17.0 $ 33.0 $ 51.6 $ 84.1 � EBITDA $ 39.5 $ 42.0 $ 136.9 $ 163.3 EBITDA as % of Net Sales 15.3% 15.5% 13.6% 15.3% EBITDA (ex restructuring & impairment charge) $ 39.5 $ 42.0 $ 150.3 $ 167.5 EBITDA as % of Net Sales (ex restructuring & impairment charge) 15.3% 15.5% 15.0% 15.7% Selected Financial Data by Business Segment: � Three Months Ended Twelve Months Ended Retail 6/30/07 6/30/06 6/30/07 6/30/06 Net Sales $ 187.5 $ 184.4 $ 698.6 $ 691.0 Operating Margin 3.5% 4.6% 2.2% 2.9% Selected Financial Data by Business Segment: � Three Months Ended Twelve Months Ended Wholesale 6/30/07 6/30/06 6/30/07 6/30/06 Net Sales $ 162.8 $ 178.0 $ 656.0 $ 736.1 Operating Margin 15.8% 15.7% 15.1% 17.0% Operating Margin (ex restructuring & impairment charge) 15.8% 15.7% 17.2% 17.6% Ethan Allen Interiors Inc. Condensed Consolidated Statements of Operations Unaudited (In thousands, except per share amounts) � � Three Months Twelve Months Ended June 30, Ended June 30, � � 2007 � � 2006 � � 2007 � � 2006 � Net sales $ 258,531 $ 272,002 $ 1,005,312 $ 1,066,390 Cost of sales 120,543 132,160 478,729 525,408 Gross profit 137,988 139,842 526,583 540,982 Operating expenses: Selling 59,053 58,113 223,146 224,404 General & administrative 46,662 44,878 178,876 169,665 Restructuring & impairment charge - - 13,442 4,241 Total operating expenses 105,715 102,991 415,464 398,310 Operating income 32,273 36,851 111,119 142,672 Interest & other miscellaneous income 3,223 1,976 10,369 4,926 Interest & other related financing costs 2,982 2,996 11,762 9,493 Income before income tax expense 32,514 35,831 109,726 138,105 Income tax expense 12,030 13,437 40,499 52,423 Net income $ 20,484 $ 22,394 $ 69,227 $ 85,682 � Basic earnings per share: Net income per share $ 0.66 $ 0.68 $ 2.19 $ 2.58 Basic weighted average shares outstanding 31,056 32,819 31,566 33,210 � Diluted earnings per share: Net income per share $ 0.65 $ 0.66 $ 2.15 $ 2.51 Diluted weighted average shares outstanding 31,556 33,824 32,261 34,086 Ethan Allen Interiors Inc. Condensed Consolidated Balance Sheets Unaudited (In thousands) � � June 30, � June 30, � � 2007 � � 2006 � Assets Current Assets: Cash and cash equivalents $ 147,879 $ 173,801 Accounts receivable, net 14,602 22,179 Inventories 181,884 189,650 Prepaid expenses and other current assets 33,104 31,289 Deferred income taxes 4,960 8,696 Total current assets 382,429 425,615 � Property, plant, and equipment, net 322,185 294,170 Intangible assets, net 92,500 87,899 Other assets 5,484 6,416 Total Assets $ 802,598 $ 814,100 � Liabilities and Shareholders' Equity Current Liabilities: Current maturities of long-term debt $ 40 $ 39 Customer deposits 52,072 53,203 Accounts payable 26,650 28,549 Accrued expenses and other current liabilities 68,677 65,786 Total current liabilities 147,439 147,577 � Long-term debt 202,868 202,748 Other long-term liabilities 12,003 12,151 Deferred income taxes 30,646 34,182 Total liabilities 392,956 396,658 � Shareholders' equity 409,642 417,442 Total Liabilities and Shareholders' Equity $ 802,598 $ 814,100