Ethan Allen Initiates Optimization of Manufacturing and Logistics
April 17 2019 - 12:16PM
DANBURY, CT -
April 17, 2019 - Ethan Allen Interiors Inc. ("Ethan Allen" or
the "Company") (NYSE: ETH) today announced plans to further improve
its vertical integration operations with the following
initiatives.
-
The 550,000 sq. ft. Old Fort, NC plant, while
maintaining a lumber processing facility, will be converted into a
state-of-the-art distribution center to support the Company's
national distribution structure and growing U.S. government GSA
contract business.
-
Consolidating U.S. case goods manufacturing to
Vermont. This involves consolidating approximately half of the case
goods manufacturing at the Old Fort, NC plant into the Company's
case goods plants in Orleans and Beecher Falls, Vermont, which
together have approximately 1.0 million sq. ft. of manufacturing
space, with the balance of the Old Fort manufacturing to be
consolidated into the Company's other case goods manufacturing
facilities.
-
The Company's U.S. upholstery manufacturing has
previously been consolidated to our Maiden, NC campus where we have
three plants totaling 714,000 sq. ft. We are in the process of
expanding the campus with the addition of 80,000 sq. ft. at an
investment of approximately $5.0 million.
-
The distribution operations at the Company's
250,000 sq. ft. Passaic, NJ facility will be moved to our
operations in North Carolina and the art framing operations will be
outsourced.
"These decisions are not easy,
especially as they affect approximately 325 of our associates in
Old Fort, NC and 55 associates in Passaic, NJ. I have had a
personal close association with many of these associates for about
forty years. They leave a legacy of fine artisanry, safety, and
manufacturing leadership," said Farooq Kathwari, Ethan Allen's
Chairman, President, and CEO.
As a result of these initiatives,
the Company expects to incur restructuring and other consolidation
costs of approximately $7 million to $8 million, of which
approximately 40% is expected to be non-cash asset impairment
charges, primarily during the fourth quarter. In addition, the
Company will also make related capital investments of approximately
$8 million, which includes the expansion in Maiden, NC, over the
next twelve months. The Company expects these changes will provide
an opportunity to benefit gross profit by $5 million to $6 million
during fiscal 2020 and beginning in fiscal 2021, after the
completion of these initiatives, provide the opportunity for a 100
to 200 bps improvement to gross margin.
About Ethan Allen
Ethan Allen Interiors Inc. (NYSE: ETH) is a leading interior design
company and manufacturer and retailer of quality home furnishings.
The company offers complimentary 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 nine manufacturing facilities including six
manufacturing plants and one sawmill in the United States plus one
plant each in Mexico and Honduras. Approximately seventy-five
percent of its products are made in its North American plants. For
more information on Ethan Allen's products and services, visit
www.ethanallen.com.
Media Contact:
Geri Moran
Director, Marketing and Public Relations
geri.moran@ethanallen.com
203.743.8374
Investor Relations Contact:
Corey Whitely
Executive Vice President, Administration
Chief Financial Officer and Treasurer
ir@ethanallen.com
Forward-Looking
Information
This press release contains forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), which represent
management's beliefs and assumptions concerning future events based
on information currently available to the Company relating to
future results. Such forward-looking statements are identified in
this press release and in documents incorporated herein by
reference by use of forward-looking words such as "anticipate",
"believe", "plan", "estimate", "expect", "intend", "will", "may",
"continue", "project", "target", "outlook", "forecast", "guidance",
and similar expressions and the negatives of such forward-looking
words. These forward-looking statements are subject to management
decisions and various assumptions about future events and are not
guarantees of future performance. A number of risks and
uncertainties could cause actual results to differ materially from
those anticipated in the forward-looking statements, including,
those matters discussed in "Item 1A - Risk Factors" of the
Company's fiscal 2018 Form 10-K and elsewhere in this press release
and its SEC filings. Accordingly, actual circumstances and results
could differ materially from those contemplated by the
forward-looking statements.
Given the risks and uncertainties surrounding
forward-looking statements, you should not place undue reliance on
these statements. Many of these factors are beyond the Company's
ability to control or predict. These forward-looking statements
speak only as of the date of this press release. Other than as
required by law, the Company undertakes no obligation to update or
revise forward-looking statements, whether as a result of new
information, future events, or otherwise.
This
announcement is distributed by West Corporation on behalf of West
Corporation clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Ethan Allen Interiors Inc. via Globenewswire
Ethan Allen Interiors (NYSE:ETH)
Historical Stock Chart
From Apr 2024 to May 2024
Ethan Allen Interiors (NYSE:ETH)
Historical Stock Chart
From May 2023 to May 2024