Ethan Allen Announces Plan to Convert Existing Manufacturing Facility into Regional Distribution Center
September 07 2005 - 2:44PM
Business Wire
Ethan Allen Interiors Inc. (NYSE:ETH) ("Ethan Allen" or the
"Company") today announced a plan to convert one of its existing
manufacturing facilities into a large, regional distribution
center. The plant, which is currently involved in the production of
wood case goods furniture, is located in Dublin, Virginia. In
connection with this initiative, the Company will permanently cease
production at the Dublin location and consolidate the distribution
operations of its existing Old Fort, North Carolina location into
the new, larger facility. The decision impacts approximately 325
employees, of which the Company expects approximately 75 to remain
employed by Ethan Allen in new positions. The Dublin facility,
which totals approximately 570,000 square feet, was purchased by
the Company in October 2000. Since that time, approximately 450,000
square feet of the facility's available space has been used for
manufacturing activities. Most of the production from the plant
will be absorbed by Ethan Allen's remaining manufacturing
facilities. Farooq Kathwari, Chairman and CEO, commented, "We
sincerely regret the impact that this decision will have on many of
our employees. We believe, however, that this action will
strengthen our logistical capabilities and improve the Company's
remaining U.S. manufacturing operations." Ethan Allen has 11
remaining plant locations, including 5 wood case goods plants, 5
upholstery plants, and 1 accessory assembling plant. These
facilities total nearly 3.5 million square feet and employ
approximately 3,700 people. The Company will record a pre-tax
restructuring and impairment charge of approximately $4.0 to $5.0
million ($2.5 to $3.1 million, after-tax), or $0.07 to $0.09 per
share, the majority of which will be non-cash in nature. Most of
the earnings impact is expected to occur in the Company's first
fiscal quarter ended September 30, 2005. Ethan Allen Interiors
Inc., a leading manufacturer and retailer of quality home
furnishings, sells a full range of products through an exclusive
network of more than 300 stores located in the United States,
Canada, Mexico, and overseas. The Company is vertically integrated
with manufacturing facilities and sawmills located throughout the
United States. The discussions set forth in this press release
should be read in conjunction with the Company's Quarterly Report
on Form 10-Q for the quarter ended March 31, 2005. Management's
discussion in this release contains forward-looking statements
relating to future results of the Company. These forward-looking
statements are subject to various assumptions, risk and
uncertainties, and accordingly, actual results could differ
materially from those contemplated by the forward-looking
statements. This news release does not constitute an offer to sell
or a solicitation of an offer to buy any securities.
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