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Ethan Allen Reports Results for the Quarter and Fiscal Year Ended June 30, 2005

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Ethan Allen Interiors Inc. reported sales and earnings for the three and twelve months ended June 30, 2005. Three Months Ended June 30, 2005 Net delivered sales for the quarter ended June 30, 2005 amounted to $242.3 million as compared to $246.6 million in the prior year quarter. Net delivered sales for the Company's Retail division increased 1.1% to $151.4 million, while Wholesale sales decreased 0.3% to $171.8 million during that same period. Comparable Ethan Allen store delivered sales decreased 1.3% as compared to the prior year quarter. Earnings per share amounted to $0.56 for the current quarter on net income of $19.5 million. This compares to earnings per share and net income of $0.35 and $13.5 million, respectively, in the prior year comparable period, which included pre-tax restructuring and impairment charges of $12.8 million. Excluding the impact of the restructuring and impairment charges, earnings per share for the prior year quarter amounted to $0.56 on net income of $21.3 million. Current quarter operating income amounted to $32.1 million, or 13.3% of net sales. This compares to operating income of $21.9 million, or 8.9% of net sales, in the prior year comparable quarter which included the aforementioned restructuring and impairment charges. Excluding the impact of the restructuring and impairment charges, operating income for the prior year period amounted to $34.7 million, or 14.1% of net sales. Total written orders increased 5.4% as compared to the prior year quarter. At the Wholesale level, net orders booked increased 4.1%, while at the Retail level, written sales increased 8.6% and comparable store written sales increased 5.8%. During the current quarter, the Company utilized $22.6 million of available cash from operations to repurchase 716,900 million shares of its common stock in the open market. As of June 30, 2005, the Company has a remaining authorization to repurchase an additional 2.0 million shares. Year Ended June 30, 2005 For the fiscal year ended June 30, 2005, net sales amounted to $949.0 million as compared to $955.1 million in the prior year. Net delivered sales for the Company's Retail division increased 1.7% to $586.2 million, while Wholesale sales decreased 1.6% to $663.2 million. Full year comparable Ethan Allen store delivered sales decreased 0.2% as compared to the prior year. Fiscal year earnings per share totaled $2.19 on net income of $79.3 million. This compares to earnings per share and net income of $2.08 and $79.5 million, respectively, for the prior year, which included pre-tax restructuring and impairment charges of $12.5 million. Excluding the impact of the restructuring and impairment charges, prior year earnings per share amounted to $2.28 on net income of $87.2 million. Total year operating income amounted to $128.9 million, or 13.6% of net sales, as compared to operating income of $126.4 million, or 13.2% of net sales, in the prior year, which included the aforementioned restructuring and impairment charges. Excluding the impact of the restructuring and impairment charges, operating income for the prior year amounted to $138.9 million, or 14.5% of net sales. On a full-year basis, total written orders decreased 1.4% as compared to the prior year. Within that same period, Wholesale net orders booked decreased 3.0%, while Retail written sales increased 2.9% and comparable store written sales increased 1.0%. For the fiscal year ended June 30, 2005 the Company utilized $81.4 million of available cash from operations to repurchase 2.4 million shares of its common stock in the open market. Farooq Kathwari, Chairman and CEO, commented: "The business initiatives undertaken during the past three years have allowed us to remain well-positioned in this period of economic and industry uncertainty. In that time, we have changed 70% of our product line to offer greater style and value, and continued to make improvements with respect to the sourcing of our products, both domestically and abroad. During that same time, we have strengthened our retail network through the opening of more than 45 new stores in prime locations. Our efforts have also included significant investments in our people, increasing and improving the level of professionalism in our retail store personnel. Lastly, we have adhered to a balanced and focused marketing campaign which has included increased distribution of our direct mail magazine and, when appropriate, increased investment in national television advertising." Mr. Kathwari continued: "These initiatives were made possible as a result of our decision last year to eliminate promotional sale periods and, instead, make our best possible prices available to consumers every day of the year. The introduction of everyday pricing has not only allowed us to establish greater credibility with consumers, it has also provided us the opportunity to critically examine all facets of our business, making substantive changes where necessary, in order to more effectively carry out our solutions-based approach to home decorating. In this time of commoditization, we believe that differentiating ourselves in this manner, with a strong focus on service, is critical." "Despite the challenging environment and these changes we have implemented within our business, we have been able to maintain strong margins and continually enhance shareholder value through the ongoing repurchase of our stock and payment of quarterly cash dividends. Our balance sheet remains strong and we generated more than $100.0 million in operating cash flow for the year." Commenting on business trends Mr. Kathwari stated: "We have continued to see positive trends in written business during the month of July and, as such, believe that the analysts' current range of estimates for the fiscal first quarter ended September 30, 2005 and the fiscal year ended June 30, 2006 are reasonable and achievable." 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 an exclusive network of 313 retail stores in the United States and abroad, of which 126 are Company-owned. Ethan Allen has 12 manufacturing facilities, which include 2 sawmills, located throughout the United States.

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