ETHAN ALLEN REPORTS RESULTS FOR THIRD QUARTER ENDED MARCH 31, 2016
(Thomson Reuters ONE) -
ETHAN ALLEN REPORTS RESULTS FOR THIRD QUARTER ENDED MARCH 31, 2016
DANBURY, CT - April 25, 2016 - Ethan Allen Interiors Inc. ("Ethan Allen" or the
"Company") (NYSE: ETH) today reported operating results for the fiscal 2016
third quarter ended March 31, 2016. Please refer to the accompanying financial
statements and reconciliation to non-GAAP measures discussed below.
Fiscal 2016 Third Quarter Highlights compared to fiscal 2015 third quarter:
* Consolidated net sales of $190.6 million increased 10.0%
* Gross margin of 55.5% up from 54.3%
* GAAP operating margin 8.4%, compared to 5.3%; Adjusted operating margin
8.2%, compared to 5.8%. (See Exhibit 1 for a reconciliation of GAAP to non-
GAAP operating margin)
* GAAP diluted earnings per share ("EPS") of $0.36 improved 300.0% over
previous year GAAP EPS of $0.09; Adjusted EPS of $0.34 improved 88.9% over
prior year adjusted EPS of $0.18; (See Exhibit 1 for a reconciliation of
GAAP to non-GAAP EPS)
* Retail net sales increased 17.5% to $152.2 million; comparable store net
sales increased 18.6%
* Retail total written orders increased by 4.3% and comparable written orders
increased by 5.5%
* Wholesale net sales increased 4.4% to $117.2 million
* EBITDA of $20.9 million, 11.0% of sales, compared to $10.3 million, 6.0% of
sales; adjusted EBITDA of $20.4 million, 10.7% of sales compared to $14.8
million, 8.6% of sales.
* Paid dividends of $3.9 million, an increase of 12.7%; fiscal year to date
paid dividends of $11.9 million, an increase of 20.7%.
* Repurchased 0.3 million shares for $7.1 million; fiscal year to date
repurchased 0.7 million shares for $19.3 million.
Chairman and CEO, Farooq Kathwari commented "The operating leverage of our
vertically integrated structure resulted in our adjusted operating earnings
increasing 55.0%. Adjusted earnings per share increased by 88.9%, which was also
benefited by lower interest expense." Mr. Kathwari continued, "We are making
very good progress with repositioning our product offerings, our interior design
network, making technology enhancements and improvements in our manufacturing,
sourcing and logistics. We remain cautiously optimistic."
FISCAL 2016 THIRD QUARTER FINANCIAL RESULTS:
Consolidated
Net sales for the quarter ended March 31, 2016 increased 10.0% over the prior
year to $190.6 million, with increases in both our retail and wholesale
segments.
Gross profit was $105.7 million for the quarter ended March 31, 2016, an
increase of $11.6 million, or 12.3% over the prior year quarter, and gross
margin was 55.5% compared to 54.3% in the prior year quarter. Increased
wholesale sales of 4.4% improved our manufacturing efficiency, and retail sales
as a percent of total consolidated sales increased to 79.8% from 74.7%, further
increasing our consolidated gross margin due to mix.
Operating expenses were $89.7 million in the quarter ended March 31, 2016, or
47.1% of sales compared to $84.9 million, or 49.0% of sales in the prior year
quarter. Expenses increased in proportion to sales growth, mainly in our retail
segment, exclusive of special items discussed below.
GAAP operating income increased 73.5% to $16.0 million, or 8.4% of sales in the
quarter ended March 31, 2016, compared to the prior year quarter GAAP operating
income of $9.2 million, or 5.3% of sales. The increase was mostly due to
increased sales, primarily in our retail segment where sales increased 17.5%.
Adjusted operating income increased 55.0% to $15.5 million, or 8.2% of sales in
the quarter ended March 31, 2016, compared to adjusted operating income of $10.0
million, or 5.8% of sales in the same period of the prior year. Adjusted amounts
exclude special items consisting of a $0.5 million gain on disposition of real
estate in the quarter ended March 31, 2016, compared to a $0.8 million
impairment on assets in the third fiscal quarter of last year. See Exhibit 1 for
a reconciliation of GAAP to non-GAAP presentation.
Net income for the quarter ended March 31, 2016 was $10.2 million or $0.36 per
diluted share compared to $2.5 million or $0.09 per diluted share in the prior
year third quarter. Excluding special items, adjusted net income was $9.6
million or $0.34 per diluted share in the quarter ended March 31, 2016, and $5.3
million or $0.18 per diluted share in the same period of the prior year.
Adjusted amounts exclude the special items noted above, a prior year loss on
early extinguishment of our Senior Notes included in non-operating expense, and
the effect of a normalized income tax rate of 36.5%. See Exhibit 1 for a
reconciliation of GAAP to non-GAAP presentation.
Retail Segment
Net sales increased 17.5% to $152.2 million in the quarter ended March
31, 2016, including a comparable design center net sales increase of 18.6%. Our
new products are being well received and our marketing initiatives continue to
generate consumer interest.
Comparable written orders for the Retail Division increased 5.5% for the third
quarter of fiscal 2016 compared to the prior year third quarter and total
written orders for the Retail Division increased 4.3% over the same prior year
period.
Retail operating income of $0.6 million in the quarter ended March 31, 2016
improved over the loss in the same period of the prior year of $5.1 million, an
increase of $5.1 million, of which $1.3 million was due to the special items
noted above. The balance is largely due to the 17.5% sales increase.
Wholesale Segment
Net sales of $117.2 million increased 4.4%, with increased sales to our retail
and domestic independent dealers, partially offset by decreases in international
sales.
Wholesale operating income of $15.8 million increased 9.1% largely due to the
increased sales, a benefit of our vertical integration.
Balance Sheet and Cash Flow
Total debt of $47.6 million decreased $28.7 million from June 30, 2015 due to
both scheduled repayments as well as additional payments of $26.5 million, and
working capital decreased $11.2 million, or 8.6% from June 30, 2015.
Total cash and securities, including restricted cash, of $56.6 million decreased
$29.8 million from June 30, 2015 due to additional debt payments, share
repurchases and increased dividends.
Inventories of $163.7 million increased as planned $11.8 million from June
30, 2015.
Capital expenditures were $13.8 million fiscal year to date at March 31, 2016
compared to $17.5 million for the same prior year period.
Dividends and share repurchases; During the quarter ended March 31, 2016, we
paid $3.9 million of dividends, a 12.7% increase over the same prior year
quarter, and repurchased 0.3 million shares of our common stock for $7.1
million.
FISCAL 2016 YEAR-TO-DATE FINANCIAL RESULTS:
Consolidated net sales were $588.5 million, up 4.9% from $561.0 million during
the same period in the prior year. Gross margin, operating profit margin and
adjusted operating profit margin were 55.5%, 10.8% and 10.5% respectively in
fiscal 2016 and 54.4%, 8.4% and 9.0% during the same period in fiscal 2015. Net
income for the nine months ended March 31, 2016 was $39.9 million or $1.40 per
diluted share compared to $24.5 million or $0.84 per diluted share in the prior
year comparable period. Adjusted net income of $38.5 million for the nine months
ended March 31, 2016, increased 33.2% compared with $28.9 million for the same
period in the prior year and our adjusted earnings per diluted share increased
36.4% for the nine months to date at $1.35 compared with $0.99 for the same
period in the prior year.
Analyst Conference Call
Ethan Allen will conduct a conference call at 5:00 PM (Eastern) on Monday, April
25th to discuss the financial results and its business initiatives. The live
webcast is accessible via the Company's website at
http://ethanallen.com/investors. To participate on the call, dial 866-219-5894
(or 703-639-1125 for international callers) and provide conference ID# 1670807.
An archived recording of the call will be made available for a limited time on
the Company's website.
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 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, which are prepared and
presented in accordance with Generally Accepted Accounting Principles ("GAAP").
In this press release we have included financial measures that are not prepared
in accordance with GAAP. The Company uses the following non-GAAP financial
measures: "adjusted operating expenses", "adjusted operating income", "adjusted
operating margin", "adjusted net income", "adjusted earnings per share", and
earnings before interest, taxes, depreciation and amortization ("EBITDA"),
(collectively "non-GAAP financial measures"). We compute these non-GAAP
financial measures by adjusting the GAAP measures to remove the impact of
certain recurring and non-recurring charges and gains and the tax effect of
these adjustments. The presentation of this financial information is not
intended to be considered in isolation or as a substitute for, or superior to,
the financial information prepared and presented in accordance with GAAP. The
Company uses these non-GAAP financial measures for financial and operational
decision making and as a means to evaluate period-to-period comparisons. The
Company believes that they provide useful information about operating results,
enhance the overall understanding of past financial performance and future
prospects, and allow for greater transparency with respect to key metrics used
by management in its financial and operational decision making. The non-GAAP
financial measures used by the Company in this press release may be different
from the non-GAAP financial measures, including similarly titled measures, used
by other companies. A reconciliation of these financial measures to the most
directly comparable financial measure reported in accordance with GAAP is also
provided at the end of this press release.
Forward-Looking Information
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 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 our management's beliefs and assumptions concerning future events
based on information currently available to us relating to our 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,
but not limited to: changes in global or regional political or economic
conditions, including changes in governmental and central bank policies; our
ability to secure debt or other forms of financing; the effect of operating
losses on our ability to pay cash dividends; changes in business conditions in
the furniture industry, including changes in consumer spending patterns, tastes
and demand for home furnishings; competition from overseas manufacturers and
domestic retailers and competitive factors such as changes in products or
marketing efforts of others; effects of our brand awareness and marketing
programs, including changes in demand for our existing and new products; our
ability to locate new design center sites and/or negotiate favorable lease terms
for additional design centers or for the expansion of existing design centers;
fluctuations in interest rates and the cost, availability and quality of raw
materials; pricing pressures; the effects of labor strikes; weather conditions
that may affect sales; volatility in fuel, utility, transportation and security
costs; the potential effects of natural disasters affecting our suppliers or
trading partners; the effects of terrorist attacks or conflicts or wars
involving the United States or its allies or trading partners; and those matters
discussed in "Item 1A - Risk Factors" of our Annual Report on Form 10-K for the
year ended June 30, 2015, and elsewhere in this press release and our 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 our ability to control or predict. Our forward-looking statements speak
only as of the date of this press release. Other than as required by law, we
undertake no obligation to update or revise forward-looking statements, whether
as a result of new information, future events, or otherwise.
#######
Ethan Allen Interiors Inc.
Selected Financial Information
Unaudited
(in millions)
Selected Consolidated Financial
Data:
Three Months
Ended Nine Months Ended
03/31/16 03/31/15 03/31/16 03/31/15
Net sales $190.6 $173.3 $588.5 $561.0
Gross margin 55.5% 54.3% 55.5% 54.4%
Operating margin 8.4% 5.3% 10.8% 8.4%
Operating margin (excluding
special items*) 8.2% 5.8% 10.5% 9.0%
Net income $10.2 $2.5 $39.9 $24.5
Net income (excluding special
items* and
unusual income tax effects) $9.6 $5.3 $38.5 $28.9
Operating cash flow $17.6 $12.0 $38.6 $22.5
Capital expenditures $6.5 $4.4 $13.8 $17.5
Acquisitions $0.0 $0.0 $0.0 $2.0
Company stock repurchases
(trade date) $7.1 $2.8 $19.3 $2.8
EBITDA $20.9 $10.3 $77.9 $57.8
EBITDA as % of net sales 11.0% 6.0% 13.2% 10.3%
EBITDA (excluding special
items*) $20.4 $14.8 $76.2 $64.8
EBITDA as % of net sales
(excluding special items*) 10.7% 8.6% 12.9% 11.6%
Selected Financial Data by
Business Segment:
Three Months
Ended Nine Months Ended
03/31/16 03/31/15 03/31/16 03/31/15
Retail
Net sales $152.2 $129.5 $462.9 $427.7
Operating margin 0.4% -4.0% 1.9% -0.1%
Operating margin (excluding
special items*) 0.1% -3.3% 1.6% 0.3%
Wholesale
Net sales $117.2 $112.3 $364.0 $353.1
Operating margin 13.5% 12.9% 15.4% 13.9%
Operating margin (excluding
special items*) 13.5% 12.9% 15.4% 14.3%
* 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 Nine Months Ended
03/31/16 03/31/15 03/31/16 03/31/15
Net sales $190,583 $173,259 $588,509 $561,032
Cost of sales 84,866 79,149 262,061 256,045
Gross profit 105,717 94,110 326,448 304,987
Selling, general and administrative
expenses 89,708 84,884 263,032 257,631
Operating income 16,009 9,226 63,416 47,356
Interest and other income (expense) 149 (3,594) 324 (3,362)
Interest expense 580 1,699 1,467 5,470
Income before income taxes 15,578 3,933 62,273 38,524
Income tax expense 5,400 1,397 22,414 14,071
Net income $10,178 $2,536 $39,859 $24,453
Basic earnings per common share:
Net income per basic share $0.37 $0.09 $1.41 $0.85
Basic weighted average shares
outstanding 27,827 28,925 28,181 28,927
Diluted earnings per common share:
Net income per diluted share $0.36 $0.09 $1.40 $0.84
Diluted weighted average shares
outstanding 28,061 29,242 28,424 29,262
Comprehensive income:
Net income $10,178 $2,536 $39,859 $24,453
Other comprehensive income
Currency translation adjustment 166 (972) (1,229) (3,058)
Other 6 29 20 67
Other comprehensive income (loss) net
of tax 172 (943) (1,209) (2,991)
Comprehensive income $10,350 $1,593 $38,650 $21,462
Ethan Allen Interiors Inc.
Condensed Consolidated Balance Sheets
Unaudited
(in thousands)
March 31, June 30,
2016 2015
Assets
Current assets:
Cash and cash equivalents $ 48,815 $ 76,182
Marketable securities - 2,198
Accounts receivable, net 10,787 12,547
Inventories 163,743 151,916
Prepaid expenses & other current assets 26,337 27,831
Total current assets 249,682 270,674
Property, plant and equipment, net 273,403 277,035
Intangible assets, net 45,128 45,128
Restricted cash and investments 7,813 8,010
Other assets 3,043 5,130
Total Assets $ 579,069 $ 605,977
Liabilities and Shareholders' Equity
Current liabilities:
Current maturities of long-term debt 3,057 3,034
Customer deposits 66,241 67,970
Accounts payable 17,065 18,946
Accrued expenses & other current liabilities 44,524 50,712
Total current liabilities 130,887 140,662
Long-term debt 44,503 73,203
Other long-term liabilities 23,502 21,577
Total liabilities 198,892 235,442
Shareholders' equity:
Common stock 489 489
Additional paid-in-capital 374,013 370,914
Less: Treasury stock (624,932) (605,586)
Retained earnings 634,277 607,079
Accumulated other comprehensive income (3,867) (2,638)
Total Ethan Allen Interiors Inc. shareholders'
equity 379,980 370,258
Noncontrolling interests 197 277
Total shareholders' equity 380,177 370,535
Total Liabilities and Shareholders' Equity $ 579,069 $ 605,977
Design Center Activity
Third Quarter - Fiscal 2016
--------------------------------------
Independent Company Owned Total
Balance at beginning of period 160 142 302
Additions (includes Relocations)((1)) 4 2 6
Closings (includes Relocations)((1)) (3) (3) (6)
Balance at end of period 161 141 302
United States 54 136 190
International 107 5 112
161 141 302
((1)) Relocations 1 2 3
Ethan Allen Interiors Inc.
GAAP Reconciliation
Three and Nine Months Ended March 31, 2016 and 2015
Unaudited
(in thousands, except per share amounts)
Three Months Ended Nine Months Ended
March 31, March 31,
2016 2015 2016 2015
------------------------------ --------------------
Net Income / Earnings Per
Share
Net income $10,178 $ 2,536 $39,859 $24,453
Special items net of
related tax effects * (302) 2,849 (1,057) 4,427
Unusual income tax
effects (286) (38) (315) 10
------------------------------ --------------------
Net income (excluding
special items* and
unusual income tax
effects) $ 9,590 $ 5,347 $38,487 $28,890
------------------------------ --------------------
Diluted weighted average
shares outstanding 28,061 29,242 28,424 29,262
Earnings per diluted share $ 0.36 $ 0.09 $1.40 $0.84
------------------------------ --------------------
Earnings per diluted share
(excluding special
items* and unusual income
tax effects) $ 0.34 $ 0.18 $1.35 $0.99
------------------------------ --------------------
Consolidated Operating
Income / Operating Margin
Operating income $16,009 $ 9,226 $63,416 $47,356
Add: special items * (476) 797 (1,664) 3,282
------------------------------ --------------------
Operating income (excluding
special items*) $15,533 $10,023 $61,752 $50,638
------------------------------ --------------------
Net sales $190,583 $173,259 $588,509 $561,032
------------------------------ --------------------
Operating margin 8.4% 5.3% 10.8% 8.4%
------------------------------ --------------------
Operating margin (excluding
special items*) 8.2% 5.8% 10.5% 9.0%
------------------------------ --------------------
Wholesale Operating Income
/ Operating Margin
Wholesale operating income $15,764 $14,450 $56,041 $49,147
Add: special items - - - 1,419
------------------------------ --------------------
Wholesale operating income
(excluding special items*) $15,764 $14,450 $56,041 $50,566
------------------------------ --------------------
Wholesale net sales $117,164 $112,265 $364,032 $353,075
------------------------------ --------------------
Wholesale operating margin 13.5% 12.9% 15.4% 13.9%
------------------------------ --------------------
Wholesale operating margin
(excluding special items*) 13.5% 12.9% 15.4% 14.3%
------------------------------ --------------------
Retail Operating Income /
Operating Margin
Retail operating income $629 $(5,126) $8,958 $ (411)
Add: special items (476) 797 (1,664) 1,863
------------------------------ --------------------
Retail operating income
(excluding special items*) $153 $(4,329) $7,294 $1,452
------------------------------ --------------------
Retail net sales $152,174 $129,460 $462,917 $427,710
------------------------------ --------------------
Retail operating margin 0.4% -4.0% 1.9% -0.1%
------------------------------ --------------------
Retail operating margin
(excluding special items*) 0.1% -3.3% 1.6% 0.3%
------------------------------ --------------------
* 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 and Nine Months Ended March 31, 2016 and 2015
Unaudited
(in thousands, except per share amounts)
Three Months Ended Nine Months Ended
March 31, March 31,
2016 2015 2016 2015
--------------------------------- --------------------
EBITDA
Net income $10,178 $ 2,536 $39,859 $24,453
Add: interest expense,
net 273 1,582 949 5,101
income tax expense 5,400 1,397 22,414 14,071
depreciation and
amortization 5,042 4,820 14,631 14,214
--------------------------------- --------------------
EBITDA $20,893 $10,335 $77,853 $57,839
--------------------------------- --------------------
Net sales $190,583 $173,259 $588,509 $561,032
--------------------------------- --------------------
EBITDA as % of net sales 11.0% 6.0% 13.2% 10.3%
--------------------------------- --------------------
EBITDA $20,893 $10,335 $77,853 $57,839
Add: special items* (476) 4,487 (1,664) 6,972
--------------------------------- --------------------
EBITDA (excluding
special items) $20,417 $14,822 $76,189 $64,811
--------------------------------- --------------------
Net sales $190,583 $173,259 $588,509 $561,032
--------------------------------- --------------------
EBITDA as % of net sales
(excluding special
items) 10.7% 8.6% 12.9% 11.6%
--------------------------------- --------------------
* 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#2006142]
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Datum: 25.04.2016 - 22:03 Uhr
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