Ethan Allen Interiors Inc. (�Ethan Allen� or the �Company�)
(NYSE:ETH) today reported operating results for the three and six
months ended December 31, 2007. Three Month Results Net delivered
sales for the quarter ended December 31, 2007 increased 0.8% to
$259.5 million as compared to $257.4 million in the prior year
quarter. Net delivered sales for the Company�s Retail division
increased 8.6% to $192.6 million. Wholesale sales decreased 5.9% to
$155.9 million during that same period. Comparable Ethan Allen
design center delivered sales decreased 0.6% as compared to the
prior year quarter. For the quarter ended December 31, 2007,
earnings per diluted share amounted to $0.70 on net income of $20.6
million. This compares to earnings per diluted share and net income
of $0.70 and $22.8 million, respectively, in the prior year
comparable period. Six Month Results For the six months ended
December 31, 2007, net delivered sales increased 1.6% to $508.2
million as compared to $500.2 million in the prior year comparable
period. Net delivered sales for the Company�s Retail division
increased 9.3% to $375.3 million, while Wholesale sales decreased
2.8% to $312.3 million during that same period. Comparable Ethan
Allen design center delivered sales were basically even with the
prior year comparable period. For the six months ended December 31,
2007, earnings per diluted share amounted to $1.27 on net income of
$38.1 million. This compares to earnings per diluted share and net
income of $0.96 and $31.2 million, respectively, in the prior year
comparable period which included a September 2006 restructuring and
impairment charge. Excluding the impact of this charge in the prior
year period, earnings per diluted share amounted to $1.22 on net
income of $39.8 million, respectively. Farooq Kathwari, Chairman
and CEO, commented, �We continue to show positive sales results
both for the quarter and for the six months ended December 31,
2007. For the quarter ended December 31, 2007 our gross margin
increased to 53.7% from 52%, our operating earnings remained very
strong at 12.9%, and our earnings per share were $0.70, the same as
in the prior year, and for the six months our earnings per share
were $1.27 compared to $1.22 before restructure charges in the
prior year. So far this fiscal year we have generated $47.4 million
in operating cash, and utilized $30.3 million to fund capital
expenditures oriented primarily toward opening new design centers
and $64.8M million to repurchase shares of our common stock. In
January, 2008 we spent an additional $5.3 million to repurchase
shares of our common stock, and as of January 23, 2008 we have
remaining authorization to repurchase 1.7 million shares. � Mr.
Kathwari further stated, �Our positive results reflect the ongoing
re-positioning of our Company to provide interior design solutions.
This has involved numerous initiatives including strengthening our
retail network by relocating design centers to stronger retail
locations with ten new design centers opened during the last six
months, the implementation of the project management program and
intensive training programs, remerchandising about 80% of our
product line to implement the new lifestyle projections, a strong
regional and national advertising program, and investments in our
manufacturing and logistics network.� Commenting on the near term
future outlook Mr. Kathwari said, "While we are operating in a
difficult economic environment, especially for the home and home
furnishing categories, we remain cautiously optimistic that we have
the opportunity to continue to do well due to the above mentioned
initiatives that positions Ethan Allen as a provider of style,
quality, value and solutions." 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 305 design centers in the United
States and abroad, of which 160 are Company-owned. Ethan Allen has
nine manufacturing facilities, which include two sawmills, located
throughout the United States and one facility located in Mexico.
The Company will conduct a Conference Call at 11:00 AM (Eastern) on
Wednesday, January 23rd. 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, 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. Ethan Allen Interiors Inc. Selected Financial Information
Unaudited (In millions) � � Selected Consolidated Financial Data: �
� Three Months Ended Six Months Ended 12/31/07 12/31/06 12/31/07
12/31/06 Net Sales $ 259.5 $ 257.4 $ 508.2 $ 500.2 Gross Margin
53.7% 52.0% 53.7% 52.0% Operating Margin 12.9% 14.2% 12.1% 10.1%
Operating Margin (ex restructuring & impairment charge
(credit)) 12.9% 14.1% 12.1% 12.9% Net Income $ 20.6 $ 22.8 $ 38.1 $
31.2 Net Income (ex restructuring & impairment charge (credit))
$ 20.6 $ 22.6 $ 38.1 $ 39.8 � Operating Cash Flow $ 6.0 $ 20.9 $
47.4 $ 56.2 Capital Expenditures $ 17.8 $ 19.3 $ 30.3 $ 34.9
Treasury Stock Repurchases (settlement date basis) $ 23.1 $ - $
64.8 $ 17.7 � EBITDA $ 40.6 $ 42.9 $ 75.7 $ 62.9 EBITDA as % of Net
Sales 15.6% 16.7% 14.9% 12.6% EBITDA (ex restructuring &
impairment charge (credit)) $ 40.6 $ 42.6 $ 75.7 $ 76.5 EBITDA as %
of Net Sales (ex restructuring & impairment charge (credit))
15.6% 16.5% 14.9% 15.3% Selected Financial Data by Business
Segment: � Three Months Ended Six Months Ended Retail 12/31/07
12/31/06 12/31/07 12/31/06 Net Sales $ 192.6 $ 177.4 $ 375.3 $
343.4 Operating Margin 3.3% 3.3% 1.9% 2.5% � Three Months Ended Six
Months Ended Wholesale 12/31/07 12/31/06 12/31/07 12/31/06 Net
Sales $ 155.9 $ 165.7 $ 312.3 $ 321.3 Operating Margin 16.9% 18.2%
17.0% 12.9% Operating Margin (ex restructuring & impairment
charge (credit)) � 16.9% 18.0% 17.0% 17.2% Ethan Allen Interiors
Inc. Condensed Consolidated Statements of Operations (In thousands,
except per share amounts) � � � Three Months Six Months Ended
December 31, Ended December 31, 2007 � 2006 2007 � 2006 � � �
(unaudited) � � (unaudited) � Net sales $ 259,510 $ 257,419 $
508,237 $ 500,242 Cost of sales 120,057 123,669 235,327 240,163
����Gross profit 139,453 133,750 272,910 260,079 Operating
expenses: ��Selling 57,600 54,175 115,178 109,213 ��General &
administrative 48,356 43,360 96,438 86,485 ��Restructuring &
impairment charge (credit) - (314) - 13,622 ���Total operating
expenses 105,956 97,221 211,616 209,320 ����Operating income 33,497
36,529 61,294 50,759 Interest & other miscellaneous income
2,181 2,575 5,103 4,807 Interest & other related financing
costs 2,944 2,915 5,879 5,853 ��Income before income tax expense
32,734 36,189 60,518 49,713 Income tax expense 12,112 13,397 22,392
18,469 ����Net income $ 20,622 $ 22,792 $ 38,126 $ 31,244 � Basic
earnings per share: Net income per share $ 0.70 $ 0.72 $ 1.28 $
0.98 Basic weighted average shares outstanding 29,391 31,737 29,738
31,776 � Diluted earnings per share: Net income per share $ 0.70 $
0.70 $ 1.27 $ 0.96 Diluted weighted average shares outstanding
29,542 32,503 30,003 32,567 Ethan Allen Interiors Inc. Condensed
Consolidated Balance Sheets Unaudited (In thousands) � � December
31, � June 30, � � � 2007 � � ���2007��� � Assets Current Assets:
���Cash and cash equivalents $ 86,268 $ 147,879 ���Accounts
receivable, net 12,330 14,602 ���Inventories 184,353 181,884
���Prepaid expenses and other current assets 30,464 33,104
���Deferred income taxes 4,429 4,960 �����Total current assets
317,844 382,429 � Property, plant, and equipment, net 341,019
322,185 Intangible assets, net 94,197 92,500 Other assets 5,034
5,484 �����Total Assets $ 758,094 $ 802,598 � Liabilities and
Shareholders' Equity Current Liabilities: ���Current maturities of
long-term debt $ 40 $ 40 ���Customer deposits 44,881 52,072
���Accounts payable 23,886 26,650 ���Accrued expenses and other
current liabilities 61,525 68,677 �����Total current liabilities
130,332 147,439 � Long-term debt 202,928 202,868 Other long-term
liabilities 20,542 12,003 Deferred income taxes 28,960 30,646
�����Total liabilities 382,762 392,956 � Shareholders' equity
375,332 409,642 �����Total Liabilities and Shareholders' Equity $
758,094 $ 802,598
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