Ethan Allen Updates Progress and Comments on Business
April 10 2008 - 8:30AM
Business Wire
Ethan Allen Interiors Inc. (NYSE: ETH) updates progress on the plan
to consolidate the operations of about twelve of its company owned
retail Design Centers and two Retail Service Centers during the
March and June quarters which was announced on January 10, 2008,
and comments on business for the quarter ended March 31, 2008.
During the quarter ended March 31, 2008, four Design Centers were
converted to smaller size Design Studios better suited to the
smaller markets they serve. In addition, seven Design Centers and
two retail Service Centers were closed and, for the most part, were
consolidated into other existing operations resulting in a total
pretax restructuring charge of about $4.0 million or $2.5 million
after tax and $0.09 per diluted share. Regarding the business
update for the quarter ended March 31, 2008, Mr. Kathwari, Chairman
and CEO, commented, �We saw the impact of the weak economy on our
sales during the March quarter. Our sales of $235.9 million were
4.3% lower than the previous year quarter and earnings per diluted
share is expected to be $0.29 to $0.30 including restructuring
charges and $0.38 to $0.39 excluding them.� Mr. Kathwari further
commented, �As indicated in our January conference call, we have
taken aggressive steps to convert and consolidate certain existing
Design Centers as mentioned above. We have also relocated several
existing Design Centers to prominent locations and have
substantially completed the installation of the branded Lifestyle
presentations in nearly all of the 153 Company operated Design
Centers. During the quarter ended March 31, 2008, we opened four
new Design Centers, all relocations. We expect to open an
additional six or seven in our fourth quarter which will bring the
total of new Design Centers opened during the fiscal year to about
twenty, which is the largest number of new Design Centers opened in
any recent year. All these initiatives have added costs to this
fiscal year, especially in the third quarter ended March 31, 2008.�
Mr. Kathwari further stated, �We expect that the added costs of all
the above initiatives, which have impacted both gross margins and
operating expenses, will be substantially reduced in our next
fiscal year. In addition, starting from our next fiscal year we
expect to have a substantial reduction in our capital expenditures
related to the opening of new Design Centers. We will discuss this
in greater detail in our upcoming conference call on April 22nd at
8:30 a.m. During the quarter that will end June 30, 2008, we expect
to consolidate the two remaining Design Centers located in New York
City with the opening of the new flagship Design Center in
Manhattan located at 3rd Avenue and 60th Street. The company
expects to take a $3 to $4 million pretax restructuring charge, or
$1.9 to $2.5 million after tax, during the fourth quarter. The
overall restructuring charges in the third and fourth fiscal
quarters are anticipated to have a diluted earnings per share
impact of about $0.15 to $0.17 which is less than the previous
estimate of $0.20 to $0.22 per diluted share.� 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 291 design
centers in the United States and abroad, of which 153 are
Company-owned. Ethan Allen has nine manufacturing facilities, which
include two sawmills, located throughout the United States and one
manufacturing facility in Mexico. The Company will release earnings
for the third quarter after the market closes on April 21st and
will conduct a Conference Call at 8:30 a.m. (Eastern) on Tuesday,
April 22nd. The live webcast and replay will be 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.
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