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Ethan Allen Interiors Inc. (“Ethan Allen” or the “Company”) (NYSE:ETH) announced today that its Board of Directors has declared a regular quarterly cash dividend of $0.07 per share, a 40% increase, which will be payable to shareholders of record as of July 11, 2011 and will be paid on July 25, 2011. The Company also reported operating results for the three and nine months ended March 31, 2011.

Mr. Farooq Kathwari, Chairman, President and CEO commenting on the results stated, “We are pleased with our progress which has given us the opportunity to increase the dividend to our shareholders. Our delivered sales increased in the quarter 10.6%, and excluding special items, we had net income per share of $0.07 compared to a loss of $0.05 in the previous year quarter. We have continued to invest in marketing and in adding qualified associates, particularly in our Retail operations. During the quarter, we increased our advertising by 31% and for nine months by 26% compared to the previous year periods. During the quarter, written business in the Company’s Retail Division increased 11.4% and comparable written increased 13.4%. The Retail Division wrote $148 million and delivered $117 million, resulting in written orders exceeding deliveries by more than $30 million during the quarter. Our liquidity continues to improve. As of March 31st, we had cash and securities of $100.2 million. We have also continued to repurchase our 5.375% bonds. During the quarter we purchased $19.8 million and for nine months $26.6 million.”

Three Months Ended March 31, 2011

Net sales for the quarter ended March 31, 2011 were $162.8 million, an increase of 10.6% compared with the prior year quarter. The Company’s Retail division net sales were $117.0 million, an increase of 9.3% from the prior year quarter. Written orders booked during the quarter by the Retail division were 11.4% greater than the prior year quarter including comparable design center orders which grew 13.4%. As a result of the growth of our independent retailer in China, and at their request, a separate section of an existing Ethan Allen warehouse was established by us to hold sold product on their behalf. At the end of the quarter ending March 31, $5.2 million of sold product was held in the warehouse and is part of our net sales.

Net income for the quarter ended March 31, 2011 was $3.5 million or $0.12 earnings per diluted share compared with a net loss the prior year of $0.9 million or a $0.03 loss per diluted share. Excluding special items in both periods, net income for the quarter ended March 31, 2011 was $2.0 million or $0.07 per diluted share compared with a net loss the prior year quarter of $1.5 million or $0.05 loss per diluted share.

Nine Months Ended March 31, 2011

For the nine months ended March 31, 2011, net sales were $501.0 million, up 17.4% from the prior year comparable period. Net income year to date was $22.1 million or $0.76 per diluted share compared with a year to date net loss of $17.8 million or $0.61 loss per diluted share the prior year. Excluding special items in both periods for the nine months, current year earnings were $0.37 per diluted share compared with a net loss per diluted share of $0.31 the prior year.

Commenting on business outlook, Mr. Kathwari stated: “The economy is healing, and due to the many initiatives we have undertaken in the last three years, we remain cautiously optimistic. Our plans are for continued investments in advertising and also adding qualified professionals in the Retail division."

Analyst Conference Call

The Company will conduct a conference call at 11:00 AM (Eastern) on Thursday, April 28th to discuss the financial results and our business initiatives. The live webcast and replay are accessible via the Company’s website at http://ethanallen.com/investors .

About Ethan Allen

Ethan Allen Interiors Inc. 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 280 Design Centers in the United States and abroad. Ethan Allen owns and operates seven manufacturing facilities in North America, including five manufacturing plants and one sawmill in the United States and one manufacturing plant in Mexico. Over seventy percent of its products are made 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, 2010 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 thousands)    

Selected Consolidated Financial Data:

  Three Months Ended Nine Months Ended 03/31/11 03/31/10 03/31/11 03/31/10   Net sales $162.8 $147.3 $501.0 $426.8 Gross margin 51.0% 48.9% 51.0% 46.7% Operating margin 2.9% -1.9% 4.1% -5.7% Operating margin (excluding special items*) 3.0% -0.2% 4.3% -1.8% Net income (loss) $3.5 ($0.9) $22.1 ($17.8) Net income (loss) (excluding special items* and unusual income tax effects) $2.0 ($1.5) $10.8 ($8.8) Operating cash flow $37.8 $12.8 $40.6 $33.6 Capital expenditures $1.8 $2.3 $5.7 $7.6 Acquisitions $0.4 $0.0 $0.6 $0.0 Treasury stock repurchases (settlement date basis) $0.0 $0.0 $5.4 $0.0   EBITDA $10.8 $3.4 $41.3 $1.7 EBITDA as % of net sales 6.7% 2.3% 8.3% 0.4%   EBITDA (excluding special items*) $10.9 $5.9 $40.9 $11.5 EBITDA as % of net sales (excluding special items*) 6.7% 4.0% 8.2% 2.7%      

Selected Financial Data by Business Segment:

Three Months Ended Nine Months Ended 03/31/11 03/31/10 03/31/11 03/31/10

Retail

Net sales $117.0 $107.1 $369.1 $317.4 Operating margin -6.2% -9.7% -3.5% -9.9% Operating margin (excluding special items*) -6.1% -9.3% -3.4% -9.2%    

Wholesale

Net sales $104.1 $96.6 $312.5 $262.4 Operating margin 12.7% 7.0% 11.2% 1.2% Operating margin (excluding special items*) 12.7% 9.2% 11.4% 6.6%   * Special items consist of restructuring, impairment, transition charges and other certain items. Related tax effects are calculated using a normalized income tax rate.                 Ethan Allen Interiors Inc. Condensed Consolidated Income Statements Unaudited (in thousands)       Three Months Ended Nine Months Ended

03/31/11

03/31/10

03/31/11

03/31/10

  Net sales $ 162,822 $ 147,258 $ 501,008 $ 426,750 Cost of sales   79,753     75,231     245,697     227,390   Gross profit 83,069 72,027 255,311 199,360 Operating expenses: Selling 39,147 37,321 118,542 109,541 General and administrative 39,056 37,129 115,758 112,024 Restructuring and impairment charge   109     400     393     1,989   Total operating expenses   78,312     74,850     234,693     223,554   Operating income (loss) 4,757 (2,823 ) 20,618 (24,194 ) Interest and other income 1,128 894 5,453 2,711 Interest expense   2,773     2,979     8,649     8,938   Income (loss) before income taxes 3,112 (4,908 ) 17,422 (30,421 ) Income tax expense (benefit)   (406 )   (4,053 )   (4,653 )   (12,649 ) Net income (loss) $ 3,518   $ (855 ) $ 22,075   $ (17,772 )   Basic earnings per common share: Net income (loss) per basic share $ 0.12 $ (0.03 ) $ 0.77 $ (0.61 ) Basic weighted average shares outstanding 28,751 29,016 28,753 28,953   Diluted earnings per common share: Net income (loss) per diluted share $ 0.12 $ (0.03 ) $ 0.76 $ (0.61 ) Diluted weighted average shares outstanding 28,987 29,016 28,953 28,953         Ethan Allen Interiors Inc. Condensed Consolidated Balance Sheets Unaudited (in thousands)         March 31, June 30,

2011

2010

  Assets Current assets: Cash and cash equivalents $ 70,812 $ 73,852 Marketable securities 12,990 11,075 Accounts receivable, net 20,174 17,105 Inventories 131,499 134,040 Prepaid expenses & other current assets   20,532   23,620 Total current assets 256,007 259,692   Property, plant and equipment, net 295,433 305,747 Intangible assets, net 45,128 45,128 Restricted cash and investments 16,377 17,318 Other assets   4,162   3,892   Total Assets $ 617,107 $ 631,777       Liabilities and Shareholders' Equity Current liabilities: Current maturities of long-term debt 3,882 3,898 Customer deposits 53,540 52,605 Accounts payable 22,781 23,952 Accrued expenses & other current liabilities   56,974   65,287 Total current liabilities 137,177 145,742   Long-term debt 172,953 199,369 Other long-term liabilities 19,834 19,123 Deferred income taxes   11,157   9,084 Total liabilities 341,121 373,318   Shareholders' equity   275,986   258,459   Total Liabilities and Shareholders' Equity $ 617,107 $ 631,777                 Ethan Allen Interiors Inc. GAAP Reconciliation Three and Nine Months Ended March 31, 2011 and 2010 Unaudited (in thousands, except per share amounts)   Three Months Ended Nine Months Ended March 31, March 31, 2011     2010 2011     2010

Net Income / Earnings Per Share

Net income (loss) $ 3,518 $ (855 ) $ 22,075 $ (17,772 ) Special items net of related tax effects * 69 1,591 (272 ) 10,478 Unusual income tax effects   (1,542 )       (2,261 )   (11,012 )       (1,545 ) Net income (loss) (excluding special items* and unusual income tax effects) $ 2,045       $ (1,525 )     $ 10,791       $ (8,839 ) Basic weighted average shares outstanding 28,751 29,016 28,753 28,953 Earnings (loss) per basic share $ 0.12   $ (0.03 ) $ 0.77   $ (0.61 ) Earnings (loss) per basic share (excluding special items* and unusual income tax effects) $ 0.07       $ (0.05 ) $ 0.38       $ (0.31 )   Diluted weighted average shares outstanding 28,987 29,016 28,953 28,953 Earnings (loss) per diluted share $ 0.12       $ (0.03 ) $ 0.76       $ (0.61 ) Earnings (loss) per diluted share (excluding special items* and unusual income tax effects) $ 0.07       $ (0.05 ) $ 0.37       $ (0.31 )    

Consolidated Operating Income / Operating Margin

Operating income (loss) $ 4,757 $ (2,823 ) $ 20,618 $ (24,194 ) Add: special items *   109         2,506     1,072         16,501   Operating income (loss) (excluding special items*) $ 4,866       $ (317 ) $ 21,690       $ (7,693 )   Net sales $ 162,822       $ 147,258   $ 501,008       $ 426,750   Operating margin   2.9 %       -1.9 %   4.1 %       -5.7 % Operating margin (excluding special items*)   3.0 %       -0.2 %   4.3 %       -1.8 %  

Wholesale Operating Income / Operating Margin

Wholesale operating income (loss) $ 13,253 $ 6,737 $ 35,076 $ 3,099 Add: special items   -         2,108     679         14,287   Wholesale operating income (excluding special items*) $ 13,253       $ 8,845   $ 35,755       $ 17,386   Wholesale net sales $ 104,119       $ 96,594   $ 312,467       $ 262,374   Wholesale operating margin   12.7 %       7.0 %   11.2 %       1.2 % Wholesale operating margin (excluding special items*)   12.7 %       9.2 %   11.4 %       6.6 %  

Retail Operating Income / Operating Margin

Retail operating income (loss) $ (7,271 ) $ (10,366 ) $ (12,767 ) $ (31,507 ) Add: special items   109         398     393         2,214   Retail operating income (loss) (excluding special items*) $ (7,162 )     $ (9,968 ) $ (12,374 )     $ (29,293 ) Retail net sales $ 117,029       $ 107,113   $ 369,066       $ 317,386   Retail operating margin   -6.2 %       -9.7 %   -3.5 %       -9.9 % Retail operating margin (excluding special items*)   -6.1 %       -9.3 %   -3.4 %       -9.2 %   * Special items consist of restructuring, impairment, transition charges and certain other items. Related tax effects are calculated using a normalized income tax rate.                 Ethan Allen Interiors Inc. GAAP Reconciliation Three and Nine Months Ended March 31, 2011 and 2010 Unaudited (in thousands, except per share amounts) Three Months Ended Nine Months Ended March 31, March 31, 2011     2010 2011     2010      

EBITDA

Net income (loss) $ 3,518 $ (855 ) $ 22,075 $ (17,772 ) Add: interest expense (income), net 2,527 2,745 7,807 8,242 Less: income tax expense (benefit) (406 ) (4,053 ) (4,653 ) (12,649 ) Add: depreciation and amortization (including accelerated depreciation)   5,191         5,519     16,120         23,849   EBITDA $ 10,830       $ 3,356   $ 41,349       $ 1,670   Net sales $ 162,822       $ 147,258   $ 501,008       $ 426,750   EBITDA as % of net sales   6.7 %       2.3 %   8.3 %       0.4 %   EBITDA $ 10,830 $ 3,356 $ 41,349 $ 1,670 Add: special items*   109         2,506     (428 )       9,871   Adjusted EBITDA $ 10,939       $ 5,862   $ 40,921       $ 11,541   Net sales $ 162,822       $ 147,258   $ 501,008       $ 426,750   Adjusted EBITDA as % of net sales   6.7 %       4.0 %   8.2 %       2.7 %   * Special items consist of restructuring, impairment, transition charges and certain other items. Related tax effects are calculated using a normalized income tax rate.