Ethan Allen Reports Results for Quarter And Fiscal Year

Furniture World Magazine

Ethan Allen Interiors Inc. reported operating results for the three and twelve months ended June 30, 2007. Three Months Ended June 30, 2007 Net delivered sales for the quarter ended June 30, 2007 amounted to $258.5 million as compared to $272.0 million in the prior year quarter. Net delivered sales for the Company’s Retail division increased 1.7% to $187.5 million. Wholesale sales decreased 8.5% to $162.8 million during that same period. Comparable Ethan Allen design center delivered sales decreased 5.9% as compared to the prior year quarter. For the quarter ended June 30, 2007, earnings per share amounted to $0.65 on net income of $20.5 million. This compares to earnings per share and net income of $0.66 and $22.4 million, respectively, in the prior year comparable period. Year Ended June 30, 2007 For the twelve months ended June 30, 2007, net delivered sales totaled $1.005 billion as compared to $1.066 billion in the prior year comparable period. Net delivered sales for the Company’s Retail division increased 1.1% to $698.6 million. Wholesale sales decreased 10.9% to $656.0 million during that same period. Comparable Ethan Allen design center delivered sales decreased 6.3% as compared to the prior year comparable period. For the twelve months ended June 30, 2007, earnings per share, which includes a previously announced September 2006 restructuring and impairment charge, amounted to $2.15 on net income of $69.2 million. This compares to earnings per share and net income of $2.51 and $85.7 million, respectively, in the prior year comparable period which included a September 2005 restructuring and impairment charge. Excluding the impact of these charges in both periods, earnings per share amounted to $2.41 on net income of $77.7 million in the current year period as compared to earnings per share and net income of $2.59 and $88.3 million, respectively, in the prior year comparable period. Farooq Kathwari, Chairman and CEO, commented: "We are pleased with our results for the fourth quarter and fiscal year ended June 30, 2007. Despite a challenging economic environment and tough period-over-period comparisons as a result of a 12% increase in sales in both the prior year quarter and year, our sales held up and gross margins improved. Our quarterly earnings per share of $0.65 compares to $0.66 a year ago and reflects our continued cost control efforts, an increased gross margin, and the benefit of share repurchases. For the year ended June 30, 2007, capital expenditures and acquisitions totaled $59.1 million and $15.3 million, respectively, with the majority of our capital expenditures relating to the opening of new design centers. In addition, we utilized $51.6 million of available cash to repurchase 1.5 million shares of our common stock in the open market. As of June 30, 2007, the Company had remaining authorization available to repurchase an additional 1.4 million shares.” Mr. Kathwari continued: “We believe the sustained operating performance of the Company during this difficult time in our industry is a direct result of several initiatives undertaken in recent years, including: the continued repositioning of our retail network; investments in recruiting and training efforts to increase the professionalism of our retail management team; the development of stylish, high-quality products at good value; improved advertising and marketing programs; and faster delivery of our products to our customers. All of these initiatives have a common objective – a renewed focus on providing solutions and service. As a result, we believe that such efforts provide us a distinct competitive advantage and an opportunity to grow our business.” Commenting on the Company’s outlook for the fiscal year ended June 30, 2008, Mr. Kathwari stated: "While we have seen some positive trends in recent weeks, we remain cautiously aware of the fact that consumer confidence is impacted by several factors that are beyond our control. At the present time, we believe that we have the opportunity to realize earnings per share within the current range of analyst estimates for the fiscal year ended June 30, 2008.” 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 a network of 313 design centers in the United States and abroad, of which 158 are Company-owned. Ethan Allen has 9 manufacturing facilities, which include 2 sawmills, located throughout the United States.