Ethan Allen Interiors Inc. (“Ethan Allen” or the “Company”)
(NYSE:ETH) today reported operating results for the three and
twelve months ended June 30, 2009.
Three Months Ended June 30, 2009
Net delivered sales for the quarter ended June 30, 2009 amounted
to $138.7 million as compared to $235.9 million in the prior year
quarter. Net delivered sales for the Company’s Retail division were
$102.3 million compared with $176.5 million the prior year quarter.
Wholesale sales were $85.2 million versus $147.7 million the prior
year quarter. Comparable Ethan Allen design center delivered sales
were down 43.5% as compared to the prior year quarter.
For the quarter ended June 30, 2009, diluted loss per share
amounted to $0.58 on a loss of $16.9 million, which includes a
$12.9 million restructuring and impairment charge for previously
announced actions. Also included in the current quarter results was
$1.5 million ($0.05 per diluted share) of tax expense for the
recording of reserves on certain deferred tax assets. This compares
to diluted earnings per share and net income of $0.39 and $11.1
million, respectively, for the prior year, which included a
restructuring and impairment charge of $2.8 million. Excluding the
impact of the restructuring and impairment charges in both periods
and the tax entries in the current quarter, diluted loss per share
amounted to $0.23 in the current period compared to diluted
earnings per share of $0.45 in the prior year comparable
period.
Year Ended June 30, 2009
For the twelve months ended June 30, 2009, net delivered sales
totaled $674.3 million as compared to $980.0 million in the prior
year comparable period. Net delivered sales for the Company’s
Retail division were $508.6 million compared with $724.6 million
the prior year. Wholesale sales were $403.4 million versus $616.2
million the prior year. Comparable Ethan Allen design center
delivered sales were down 32.5% as compared to the prior year
comparable period.
For the twelve months ended June 30, 2009, which includes a
$48.4 million goodwill impairment charge and $18.6 million of
restructuring and impairment costs, diluted loss per share amounted
to $1.83 on a net loss of $52.7 million. As noted above, the
results for the fiscal year include $1.5 million tax expense booked
in the fourth quarter ($0.05 per diluted share). This compares to
diluted earnings per share and net income of $1.97 and $58.1
million respectively, for the prior year, which included a $6.8
million restructuring and impairment charge. Excluding the impact
of the goodwill impairment and the tax expense noted above from the
current year and the restructuring and impairment charges in both
fiscal years, diluted loss per share amounted to $0.31 on a net
loss of $8.9 million in the current year period as compared to
diluted earnings per share of $2.12 on net income of $62.4 million
in the prior year comparable period.
Farooq Kathwari, Chairman and CEO, commented, “Fiscal 2009,
while extremely challenging, provided us the opportunity to
accelerate our process of reinvention. We focused on two major
initiatives. First: to bring our expense and cost structure down.
On an annualized basis we reduced about $120 million in operating
expenses and about $30 million in manufacturing costs. We will see
most of the reductions benefiting our fiscal 2010. Second: to
implement many initiatives that will create a strong competitive
difference and help grow our sales and profitability. Our move
toward custom production in our case goods manufacturing and the
launch of the new Interior Design Affiliate program are just the
latest examples of these initiatives.”
Mr. Kathwari further stated, “Our focus was also to maintain a
strong cash position. As of June 30, 2009 we had $53 million in
cash which has grown to $63 million. While business conditions
remain very difficult, the rates of decline that we experienced in
the last six months were substantially reduced in July.”
Analyst Conference Call
The Company will conduct a Conference Call at 11:00 AM (Eastern)
on Wednesday, August 12th. The live webcast and replay are
accessible via the Company’s website at
http://ethanallen.com/investors.
About Ethan Allen
Ethan Allen Interiors Inc. ("Ethan Allen" or the "Company";
NYSE:ETH) is a leading interior design company and manufacturer and
retailer of quality home furnishings. The Company offers free
interior design service to its clients and sells a full range of
furniture products and decorative accessories through
ethanallen.com and a network of approximately 300 Design Centers in
the United States and abroad. Ethan Allen owns and operates six
manufacturing facilities in the United States, which includes one
sawmill, and one manufacturing facility in Mexico, and manufactures
approximately sixty-five percent of its products in its United
States plants. For more information on Ethan Allen’s products and
services, visit ethanallen.com.
This press release should be read in conjunction with the
Company’s Annual Report on Form 10-K for the year ended June 30,
2008 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 06/30/09
06/30/08 06/30/09
06/30/08 Net sales $ 138.7 $
235.9 $ 674.3 $ 980.0 Gross margin 48.7 % 54.2 % 51.5 % 53.7 %
Operating margin -14.7 % 8.1 % -10.8 % 9.8 % Operating margin (ex
restructuring & impairment charges ) -5.4 % 9.3 % -0.9 % 10.5 %
Net income (loss) ($16.9 ) $ 11.1 ($52.7 ) $ 58.1 Net income (loss)
(ex restructuring & impairment charges) ($6.8 ) $ 12.9 ($8.9 )
$ 62.4 Operating cash flow $ 8.1 $ 18.9 $ 21.9 $ 86.1
Capital expenditures $ 2.1 $ 13.7 $ 22.5 $ 60.0 Acquisitions $ 0.6
$ 1.0 $ 1.4 $ 7.8 Treasury stock repurchases (settlement date
basis) $ 0.0 $ 0.0 $ 0.0 $ 73.2 EBITDA ($13.9 ) $ 26.6
($45.1 ) $ 124.5 EBITDA as % of net sales -10.0 % 11.3 % -6.7 %
12.7 % EBITDA (ex restructuring & impairment charges ) ($1.0 )
$ 29.4 $ 21.9 $ 131.3 EBITDA as % of net sales (ex restructuring
& impairment charges ) -0.7 % 12.5 % 3.3 % 13.4 %
Selected Financial Data by Business
Segment:
Three Months Ended Twelve Months Ended
06/30/09 06/30/08
06/30/09
06/30/08
Retail
Net sales $ 102.3 $ 176.5 $ 508.6 $ 724.6 Operating margin -13.6 %
-0.9 % -18.1 % -0.4 % Operating margin (ex restructuring &
impairment charges ) -12.3 % 0.8 % -8.4 % 0.6 %
Wholesale
Net sales $ 85.2 $ 147.7 $ 403.4 $ 616.2 Operating margin -9.1 %
13.9 % 1.7 % 16.3 % Operating margin (ex restructuring &
impairment charges ) 4.5 % 13.9 % 6.0 % 16.3 %
Ethan Allen Interiors Inc. Selected Financial
Information Unaudited (in thousands, except per share
amounts)
Three Months Ended
Twelve Months Ended 06/30/09
06/30/08 06/30/09
06/30/08 Net sales $ 138,657 $ 235,907 $
674,277 $ 980,045 Cost of sales
71,107
107,939 326,935
453,980 Gross profit 67,550 127,968
347,342 526,065 Operating expenses: Selling 36,526 58,300
182,800 229,590 General and administrative 38,506 47,699 170,312
193,639 Goodwill impairment - - 48,400 - Restructuring and
impairment charge
12,880
2,843 18,601
6,836 Total operating expenses
87,912 108,842
420,113 430,065
Operating income (loss) (20,362 ) 19,126 (72,771 ) 96,000 Interest
and other miscellaneous income 336 1,413 3,355 7,891 Interest
expense and other related financing costs
2,946
2,920 11,764
11,713 Income (loss) before income taxes
(22,972 ) 17,619 (81,180 ) 92,178 Income tax expense (benefit)
(6,049 ) 6,519
(28,493 )
34,106 Net income (loss)
$
(16,923 ) $
11,100 $ (52,687
) $ 58,072 Basic
earnings per common share: Net income (loss) per basic share $
(0.58 ) $ 0.39 $ (1.83 ) $ 1.98 Basic weighted average shares
outstanding 28,954 28,686 28,814 29,267 Diluted earnings per
common share: Net income (loss) per diluted share $ (0.58 ) $ 0.39
$ (1.83 ) $ 1.97 Diluted weighted average shares outstanding 28,954
28,826 28,814 29,470
Ethan Allen Interiors Inc.
Condensed Consolidated Balance Sheets Unaudited (in
thousands) June 30, June 30, 2009 2008
Assets Current assets: Cash and cash equivalents $ 52,960 $
74,376 Accounts receivable, net 13,086 12,672 Inventories 156,519
186,265 Prepaid expenses & other current assets 21,060 32,860
Deferred income taxes
5,873
4,005 Total current assets 249,498 310,178
Property, plant and equipment, net 333,599 350,432 Intangible
assets, net 45,128 96,823 Other assets
13,003
7,080 Total Assets
$
641,228 $ 764,513
Liabilities and Shareholders' Equity Current
liabilities: Current maturities of long-term debt $ 42 $ 41
Customer deposits 31,691 47,297 Accounts payable 22,199 26,444
Accrued expenses & other current liabilities
54,829 61,720 Total current
liabilities 108,761 135,502 Long-term debt 203,106 202,988
Other long-term liabilities 23,438 22,923 Deferred income taxes
- 27,327 Total liabilities
335,305 388,740 Shareholders' equity
305,923 375,773 Total
Liabilities and Shareholders' Equity
$
641,228 $ 764,513
Ethan Allen Interiors Inc. GAAP Reconciliation
Three and Twelve Months Ended June 30, 2009 and 2008
Unaudited (in thousands, except per share amounts)
Three Months Ended Twelve Months Ended
June 30, June 30, 2009
2008 2009 2008
Net Income / Earnings Per
Share
Net income (loss) $ (16,923 ) $ 11,100 $ (52,687 ) $ 58,072 Add:
restructuring and impairment charge, net of related tax effect
10,150 1,791 43,748
4,307 Net income (loss) (excluding restructuring and
impairment charge) $ (6,773 ) $ 12,891 $ (8,939 ) $ 62,379
Earnings (loss) per basic share $ (0.58 ) $ 0.39
$ (1.83 ) $ 1.98 Earnings (loss) per basic share
(excluding restructuring and impairment charge) $ (0.23 ) $ 0.45
$ (0.31 ) $ 2.13 Basic weighted average shares
outstanding 28,954 28,686 28,814 29,267 Earnings (loss) per
diluted share $ (0.58 ) $ 0.39 $ (1.83 ) $ 1.97
Earnings (loss) per diluted share (excluding restructuring and
impairment charge) $ (0.23 ) $ 0.45 $ (0.31 ) $ 2.12
Diluted weighted average shares outstanding 28,954 28,826 28,814
29,470
Consolidated Operating Income / Operating
Margin
Operating income (loss) $ (20,362 ) $ 19,126 $ (72,771 ) $ 96,000
Add: restructuring and impairment charge 12,880
2,843 67,001 6,836
Operating income (loss) (excluding restructuring and impairment
charge) $ (7,482 ) $ 21,969 $ (5,770 ) $ 102,836
Net sales $ 138,657 $ 235,907 $ 674,277
$ 980,045 Operating margin -14.7 % 8.1 %
-10.8 % 9.8 % Operating margin (excluding
restructuring and impairment charge) -5.4 % 9.3 %
-0.9 % 10.5 %
Wholesale Operating Income / Operating
Margin
Wholesale operating income (loss) $ (7,726 ) $ 20,492 $ 6,670 $
100,324 Add: restructuring and impairment charge 11,539
- 17,420 -
Wholesale operating income (excluding restructuring and impairment
charge) $ 3,813 $ 20,492 $ 24,090 $ 100,324
Wholesale net sales $ 85,163 $ 147,708 $
403,378 $ 616,230 Wholesale operating margin
-9.1 % 13.9 % 1.7 % 16.3 % Wholesale operating
margin (excluding restructuring and impairment charge) 4.5 %
13.9 % 6.0 % 16.3 %
Retail Operating Income / Operating
Margin
Retail operating income (loss) $ (13,944 ) $ (1,506 ) $ (92,100 ) $
(2,800 ) Add: restructuring and impairment charge 1,341
2,843 49,581 6,836
Retail operating income (loss) (excluding restructuring and
impairment charge) $ (12,603 ) $ 1,337 $ (42,519 ) $ 4,036
Retail net sales $ 102,263 $ 176,474 $ 508,621
$ 724,586 Retail operating margin -13.6 %
-0.9 % -18.1 % -0.4 % Retail operating margin
(excluding restructuring and impairment charge) -12.3 %
0.8 % -8.4 % 0.6 %
EBITDA
Net income (loss) $ (16,923 ) $ 11,100 $ (52,687 ) $ 58,072 Add:
interest expense (income), net 2,703 2,357 10,480 7,613 Add: income
tax expense (benefit) (6,049 ) 6,519 (28,493 ) 34,106 Add:
depreciation and amortization 6,350 6,593
25,635 24,670 EBITDA $ (13,919 )
$ 26,569 $ (45,065 ) $ 124,461 Net sales $ 138,657
$ 235,907 $ 674,277 $ 980,045 EBITDA as
% of net sales -10.0 % 11.3 % -6.7 %
12.7 % EBITDA $ (13,919 ) $ 26,569 $ (45,065 ) $ 124,461
Add: restructuring and impairment charge 12,880
2,843 67,001 6,836 EBITDA
(excluding restructuring and impairment charge) $ (1,039 ) $ 29,412
$ 21,936 $ 131,297 Net sales $ 138,657
$ 235,907 $ 674,277 $ 980,045 EBITDA as % of
net sales excluding restructuring and
impairment charge) -0.7 % 12.5 % 3.3 %
13.4 %
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