ETHAN ALLEN REPORTS RESULTS FOR FIRST QUARTER ENDED SEPTEMBER 30, 2015
(Thomson Reuters ONE) -
DANBURY, CT - October 27, 2015 - Ethan Allen Interiors Inc. ("Ethan Allen" or
the "Company") (NYSE: ETH) today reported operating results for the fiscal 2016
first quarter ended September 30, 2015. Please refer to the accompanying
financial statements and reconciliation to non-GAAP measures discussed below.
First Quarter Highlights
* Sales of $190.4 million. Previous year $190.7 million.
* Total cash and securities of $94.8 million compared to $86.4 million at
prior fiscal year end.
* Paid dividends of $4.0 million, an increase of 38% over the prior year
quarter.
* Gross margin of 55.0% in both current and prior year periods.
* GAAP & Adjusted Operating Income of $20.9 million, 11.0% of sales. Previous
year GAAP operating income $20.5 million, 10.7% of sales, adjusted operating
income $21.9 million, 11.5% of sales.
* GAAP & Adjusted Earnings per diluted share (EPS) of $0.46; Previous year
GAAP EPS of $0.41, adjusted EPS $0.44.
* Retail Comparable Written Orders decrease by 9.8% and Total Written Orders
decrease by 9.3%.
* EBITDA $25.7 million 13.5% of sales. Previous year EBITDA $25.2 million
13.2% of sales, adjusted EBITDA $26.6 million 14.0% of sales.
"Our strong operational performance during the quarter reflects the strength of
our vertically integrated structure" said Farooq Kathwari, Chairman and CEO. "As
we previously announced, the timing of our marketing initiatives had a negative
impact on our written orders during the quarter. However, we expect stronger
written orders in the second quarter and moving forward as indicated by
increased levels in October 2015."
He further stated, "Importantly, our balance sheet remains healthy and we are
operating from a position of financial strength. We are well positioned to
execute our initiative to raise up to $250 million in the debt markets as
previously announced, and believe our planned strategy to raise capital is in
the best interests of the Company and its shareholders as we continue to enhance
shareholder returns."
Mr. Kathwari concluded, "We are in the midst of a substantial transformation
that is leveraging our unique, vertically integrated structure, while
repositioning Ethan Allen's offerings, interior design network, our technology
base, manufacturing and logistics. As we have previously stated, we believe
that, beginning in fiscal 2017, we will be well positioned to begin an
accelerated growth phase, towards sales of $1 billion at which level we expect
to increase our operating margin from our industry leading 11% to about 15% of
sales."
Fiscal 2016 First Quarter Financial Results:
Consolidated net sales for the quarter ended September 30, 2015 decreased 0.2%
over the prior year to $190.4 million. The Company's retail segment net sales
increased 0.7% to $146.0 million including a comparable design center net sales
increase of 0.2%. The Company's wholesale segment net sales decreased 3.3%.
Comparable written orders for the Retail Division decreased 9.8% for the first
quarter of fiscal 2015 compared to the prior year first quarter and total
written orders for the Retail Division decreased 9.3% over the same prior year
period. These declines were primarily the result of the timing of the Company's
marketing strategy. The timing of the annual price increase resulted in shifting
some written orders into the quarter ending June 30, 2015. In addition, as part
of the initiative to make major new product introductions more effective, both
at the retail and at the manufacturing levels, a storewide introductory sale
event began September 1, 2015 and will conclude on December 31, 2015, as
compared against monthly end-of-sale promotions in the prior year period,
affecting the month of September.
Gross margin for the both the quarter ended September 30, 2015 as well as prior
year quarter was 55.0%. Operating expenses of $83.8 million compared to $84.3 in
the prior year quarter. Decreased operating expenses were in part due to the
sale of real estate in the prior year that did not recur in the current period.
Net income for the quarter ended September 30, 2015 was $13.1 million or $0.46
per diluted share compared with $11.9 million or $0.41 per diluted share in the
prior year quarter. Excluding special items in the prior year quarter, adjusted
net income was $12.8 million or $0.44 per diluted share.
Total debt of $75.5 million decreased $0.7 million due to scheduled repayments,
and working capital increased $11.4 million, or 8.8% from June 30, 2015. Capital
expenditures were $3.1 million year to date at September 30, 2015 compared to
$5.4 million prior year and inventories of $156.6 million increased $4.7 million
from June 30, 2015 in support of our new product launch and marketing
initiatives.
Analyst Conference Call
Ethan Allen will conduct a conference call at 5:00 PM (Eastern) on Tuesday,
October 27th to discuss the financial results and its business initiatives. The
live webcast and replay are accessible via the Company's website at
http://ethanallen.com/investors. To participate on the call, dial 866-818-1223
(or 703-639-1376 for international callers) and provide conference ID# 1664086.
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 eight manufacturing facilities including five
manufacturing plants and one sawmill in the United States plus one plant each in
Mexico and Honduras. Approximately seventy percent of its products are made in
its North American plants. For more information on Ethan Allen's products and
services, visit ethanallen.com.
Non-GAAP Financial Information
This press release is intended to supplement, rather than to supersede, the
Company's condensed consolidated financial statements. It contains references to
the Company's (i) consolidated operating income/operating margin, (ii) wholesale
operating income/operating margin, (iii) retail operating income/operating
margin, (iv) net income, (v) earnings per share, and (vi) earnings before
interest, taxes, depreciation and amortization ("EBITDA"), all excluding the
effects of restructuring charges as a result of the Company's previous decision
to consolidate facilities, and also excluding certain transition costs and non-
operating income adjustments in both fiscal 2016 and fiscal 2015. A
reconciliation of these financial measures to the most directly comparable
financial measure reported in accordance with generally accepted accounting
principles ("GAAP") is also provided at the end of this press release.
Management believes that excluding items which are deemed to be non-recurring in
nature from financial measures such as operating income, operating margin, net
income, and earnings per share, allows investors to more easily compare and
evaluate the Company's financial performance relative to prior periods and
industry comparables. These adjusted measures also aid investors in
understanding the operating results of the Company absent such non-recurring or
unusual events. Management considers EBITDA an important indicator of the
operational strength and performance of its business, including the ability of
the Company to pay interest, service debt and fund capital expenditures. Given
the nature of the Company's operations, including the tangible assets necessary
to carry out its production and distribution activities, depreciation and
amortization represent Ethan Allen's largest non-cash charges. As these non-cash
charges do not affect the Company's ability to service debt or make capital
expenditures, it is important to consider EBITDA in addition to, but not as a
substitute for, operating income, net income and other measures of financial
performance reported in accordance with GAAP, including cash flow measures such
as operating cash flow.
This press release and any related webcasts, conference calls and other related
discussions should also be read in conjunction with the Company's Annual Report
on Form 10-K for the year ended June 30, 2015 (the "2015 Form 10-K") 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 include statements about such matters as: our
capital structure; future or targeted operational and financial performance;
liquidity, capital and debt levels; strategic plans; the pending proxy contest,
the impacts thereof and other possible changes in the composition of the
Company's board of directors; stock repurchase and dividend plans; our inability
to secure debt or other forms of financing; demand for our products; our
position in markets we serve; regional and global economic and industry market
conditions and changes therein. 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
including specifically, and without limitation, those set forth in Part I, Item
1A "Risk Factors" of the 2015 Form 10-K. 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 millions)
Selected Consolidated Financial
Data:
Three Months Ended
09/30/15 09/30/14
Net sales $190.4 $190.7
Gross margin 55.0% 55.0%
Operating margin 11.0% 10.7%
Operating margin (excluding special
items*) 11.0% 11.5%
Net income $13.1 $11.9
Net income (excluding special items*
and
unusual income tax effects) $13.1 $12.8
Operating cash flow $16.1 $6.8
Capital expenditures $3.1 $5.4
Acquisitions $0.0 $2.0
Company stock repurchases $0.0 $0.0
EBITDA $25.7 $25.2
EBITDA as % of net sales 13.5% 13.2%
EBITDA (excluding special items*) $25.7 $26.6
EBITDA as % of net sales (excluding
special items*) 13.5% 14.0%
Selected Financial Data by Business
Segment:
Three Months Ended
09/30/15 09/30/14
Retail
Net sales $146.0 $145.0
Operating margin 1.1% 1.2%
Operating margin (excluding special
items*) 1.1% 1.8%
Wholesale
Net sales $120.5 $124.6
Operating margin 17.1% 17.3%
Operating margin (excluding special
items*) 17.1% 17.7%
* 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 Statements of Comprehensive Income
Unaudited
(in thousands)
Three Months Ended
09/30/15 09/30/14
Net sales $190,391 $190,706
Cost of sales 85,718 85,903
Gross profit 104,673 104,803
Selling, general and
administrative expenses 83,773 84,333
Operating income 20,900 20,470
Interest and other income 126 143
Interest expense 456 1,889
Income before income taxes 20,570 18,724
Income tax expense 7,423 6,845
Net income $ 13,147 $ 11,879
Basic earnings per common
share:
Net income per basic share $ 0.46 $ 0.41
Basic weighted average shares
outstanding 28,410 28,927
Diluted earnings per common
share:
Net income per diluted share $ 0.46 $ 0.41
Diluted weighted average shares
outstanding 28,673 29,248
Comprehensive income:
Net income $ 13,147 $ 11,879
Other comprehensive income
Currency translation adjustment (984) (855)
Other 6 16
Other comprehensive income
(loss) net of tax (978) (839)
Comprehensive income $ 12,169 $ 11,040
Ethan Allen Interiors Inc.
Condensed Consolidated Balance Sheets
Unaudited
(in thousands)
September 30, June 30,
2015 2015
Assets
Current assets:
Cash and cash equivalents $ 87,008 $ 76,182
Marketable securities - 2,198
Accounts receivable, net 12,705 12,547
Inventories 156,567 151,916
Prepaid expenses & other current assets 26,591 27,831
Total current assets 282,871 270,674
Property, plant and equipment, net 274,745 277,035
Intangible assets, net 45,128 45,128
Restricted cash and investments 7,803 8,010
Other assets 4,545 5,130
Total Assets $ 615,092 $ 605,977
Liabilities and Shareholders' Equity
Current liabilities:
Current maturities of long-term debt 3,041 3,034
Customer deposits 66,577 67,970
Accounts payable 20,148 18,946
Accrued expenses & other current liabilities 51,705 50,712
Total current liabilities 141,471 140,662
Long-term debt 72,464 73,203
Other long-term liabilities 21,606 21,577
Total liabilities 235,541 235,442
Shareholders' equity:
Common stock 489 489
Additional paid-in-capital 371,757 370,914
Less: Treasury stock (605,586) (605,586)
Retained earnings 616,230 607,079
Accumulated other comprehensive income (3,622) (2,638)
Total Ethan Allen Interiors Inc. shareholders'
equity 379,268 370,258
Noncontrolling interests 283 277
Total shareholders' equity 379,551 370,535
Total Liabilities and Shareholders' Equity $ 615,092 $ 605,977
Ethan Allen Interiors Inc.
GAAP Reconciliation
Three Months Ended September 30, 2015 and 2014
Unaudited
(in thousands, except per share amounts)
Three Months Ended
September 30,
2015 2014
-----------------------
Net Income / Earnings Per Share
Net income $ 13,147 $ 11,879
Special items net of related tax effects * 8 897
Unusual income tax effects (85) 11
-----------------------
Net income (excluding special items* and
unusual income tax effects) $ 13,070 $ 12,787
-----------------------
Diluted weighted average shares outstanding 28,673 29,248
Earnings per diluted share $ 0.46 $ 0.41
-----------------------
Earnings per diluted share (excluding special
items* and unusual income tax effects) $ 0.46 $ 0.44
-----------------------
Consolidated Operating Income / Operating Margin
Operating income $ 20,900 $ 20,470
Add: special items * 13 1,413
-----------------------
Operating income (excluding special items*) $ 20,913 $ 21,883
-----------------------
Net sales $190,391 $190,706
-----------------------
Operating margin 11.0% 10.7%
-----------------------
Operating margin (excluding special items*) 11.0% 11.5%
-----------------------
Wholesale Operating Income / Operating Margin
Wholesale operating income $ 20,587 $ 21,542
Add: special items - 494
-----------------------
Wholesale operating income (excluding special
items*) $ 20,587 $ 22,036
-----------------------
Wholesale net sales $120,455 $124,600
-----------------------
Wholesale operating margin 17.1% 17.3%
-----------------------
Wholesale operating margin (excluding special
items*) 17.1% 17.7%
-----------------------
Retail Operating Income / Operating Margin
Retail operating income $ 1,640 $ 1,762
Add: special items 13 919
-----------------------
Retail operating income (excluding special items*) $ 1,653 $ 2,681
-----------------------
Retail net sales $146,040 $145,043
-----------------------
Retail operating margin 1.1% 1.2%
-----------------------
Retail operating margin (excluding special items*) 1.1% 1.8%
-----------------------
* Special items consist of restructuring, transition charges and certain
other items.
Related tax effects are calculated using a normalized income tax rate.
Ethan Allen Interiors Inc.
GAAP Reconciliation
Three Months Ended September 30, 2015 and 2014
Unaudited
(in thousands, except per share amounts)
Three Months Ended
September 30,
2015 2014
-------------------------------
EBITDA
Net income $ 13,147 $ 11,879
Add: interest expense, net 354 1,758
income tax expense 7,423 6,845
depreciation and amortization 4,783 4,719
-------------------------------
EBITDA $ 25,707 $ 25,201
-------------------------------
Net sales $ 190,391 $ 190,706
-------------------------------
EBITDA as % of net sales 13.5% 13.2%
-------------------------------
EBITDA $ 25,707 $ 25,201
Add: special items* 13 1,413
-------------------------------
EBITDA (excluding special items) $ 25,720 $ 26,614
-------------------------------
Net sales $ 190,391 $ 190,706
-------------------------------
EBITDA as % of net sales (excluding special
items) 13.5% 14.0%
-------------------------------
* Special items consist of restructuring, transition charges and certain other
items.
Related tax effects are calculated using a normalized income tax
rate.
This announcement is distributed by GlobeNewswire on behalf of
GlobeNewswire clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Ethan Allen Interiors Inc. via GlobeNewswire
[HUG#1961903]
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Datum: 27.10.2015 - 21:09 Uhr
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News-ID 429906
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