Ethan Allen Remains Profitable Despite Second Quarter Sales Decline

Furniture World Magazine

Ethan Allen Interiors Inc. reported operating results for the three and six months ended December 31, 2008. Three Months Ended December 31, 2008 Net delivered sales for the quarter ended December 31, 2008 amounted to $189.6 million as compared to $259.5 million in the prior year quarter. Net delivered sales for the Company's Retail division were $147.2 million as compared to $192.6 million in the prior year quarter. Retail division comparable delivered sales were down 26.9% as compared to the prior year quarter. Wholesale sales were $108.8 million, as compared to $ 155.9 million in the prior year quarter. For the quarter ended December 31, 2008, diluted earnings per share amounted to $0.19 on net income of $5.5 million. This compares to diluted earnings per share and net income of $0.70 and $20.6 million, respectively, in the prior year comparable period. Six Months Ended December 31, 2008 For the six months ended December 31, 2008, net delivered sales totaled $395.4 million as compared to $508.2 million in the prior year comparable period. Net delivered sales for the Company's Retail division were $303.1 million as compared to $375.3 million in the prior year. Retail division comparable delivered sales were down 23.0% as compared to the prior year comparable period. Wholesale sales were $230.1 million as compared to $312.3 in the prior year. For the six months ended December 31, 2008, diluted earnings per share amounted to $0.45 on net income of $12.9 million, including a restructuring benefit of $1.1 million net of tax. Excluding this net restructuring benefit, diluted earnings per share was $0.41 on $11.8 million in net income. This compares to diluted earnings per share and net income of $1.27 and $38.1 million, respectively, in the prior year comparable period. Ethan Allen Amends Bank Credit Facility Ethan Allen has reached an agreement with its lending group to amend its existing un-drawn revolving credit agreement to provide additional covenant flexibility and reduce the total line to $100 million. Ethan Allen Declares Quarterly Cash Dividend Ethan Allen's Board of Directors has declared a regular quarterly cash dividend of $0.10 per share, which will be payable to shareholders of record as of April 14, 2009 and paid on April 28, 2009. Farooq Kathwari, Chairman and CEO, commented, "Despite major economic challenges resulting in a decline in sales, we maintained profitability. We are pleased that during this turbulent period we have also maintained a strong marketing program while reducing operating costs. This would not have been possible without the continuous process of reinvention that has been undertaken by us during the last several years." Mr. Kathwari continued, "Having already made the substantial investments to reposition our retail network and launch our new website, our need for capital expenditures is substantially reduced, and we are focused on conserving cash in a prudent and conservative manner. We are very pleased to be able to continue to pay a quarterly cash dividend to our shareholders out of current cash flow. Although we have not drawn on the line of credit and only used our existing credit facility to support Letters of Credit, the new covenants provide greater flexibility going forward. We are pleased to have the continued support of our lending group and are happy to have this additional source of liquidity." Commenting on the outlook for fiscal 2009, Mr. Kathwari stated, "We will continue to focus on creatively and proactively managing our enterprise, and at the same time conserving cash and making those investments that will position us to be ready when growth returns." 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 293 design centers in the United States and abroad, of which 162 are Company owned. Ethan Allen owns eight manufacturing facilities in the United States, which include 2 sawmills, and one cut and sew factory in Mexico.