ETHAN ALLEN REPORTS FOURTH QUARTER AND FISCAL YEAR ENDED JUNE 30, 2016 RESULTS: FY16 NET REVENUES INCREASE 5.2% WITH DILUTED EPS OF $2.00
(Thomson Reuters ONE) -
FOURTH QUARTER NET REVENUES INCREASE 6.3% WITH DILUTED EPS OF $0.60
DANBURY, CT - July 26, 2016 - Ethan Allen Interiors Inc. ("Ethan Allen" or the
"Company") (NYSE: ETH) today reported operating results for the fiscal 2016
fourth quarter and full fiscal year periods ended June 30, 2016. Please refer to
the accompanying financial statements and reconciliation to non-GAAP measures
discussed below.
Fiscal 2016 Fourth Quarter Highlights compared to Fiscal 2015 fourth quarter:
* Consolidated net sales of $205.7 million increased 6.3%
* Gross margin of 56.3% up from 54.9%
* GAAP operating margin of 12.5%, compared to 9.6%; adjusted operating margin
of 12.3%, compared to 10.3%(See Exhibit 1 for a reconciliation of GAAP to
non-GAAP operating margin)
* GAAP operating income of $25.8 million, increased 38.7%; adjusted operating
income of $25.2 million increased 27.0%(See Exhibit 1 for a reconciliation
of GAAP to non-GAAP operating income)
* GAAP diluted earnings per share ("EPS") of $0.60 improved 36.4% over
previous year GAAP EPS of $0.44; adjusted EPS of $0.57 improved 32.6% over
prior year adjusted EPS of $0.43(See Exhibit 1 for a reconciliation of GAAP
to non-GAAP EPS)
* Retail net sales increased 7.6% to $163.6 million; comparable store net
sales increased 9.4%
* Retail total written orders decreased 1.2% and comparable written orders
decreased 0.6%
* Wholesale net sales increased 9.6% to $127.4 million
* EBITDA of $30.6 million, or 14.9% of sales, compared to $23.4 million, or
12.1% of sales; adjusted EBITDA of $30.1 million, or 14.6% of sales compared
to $24.7 million, or 12.8% of sales
* Paid dividends of $4.7 million, an increase of 35.9%
Fiscal 2016 Highlights compared to Fiscal 2015:
* Consolidated net sales of $794.2 million increased 5.2%
* Gross margin of 55.7% up from 54.5%
* GAAP operating margin of 11.2%, compared to 8.7%; adjusted operating margin
of 10.9%, compared to 9.3%(See Exhibit 1 for a reconciliation of GAAP to
non-GAAP operating margin)
* GAAP operating income of $89.2 million, increased 35.3%; adjusted operating
income of $87.0 million increased 23.4%(See Exhibit 1 for a reconciliation
of GAAP to non-GAAP operating income)
* GAAP diluted earnings per share ("EPS") of $2.00 improved 57.5% over
previous year GAAP EPS of $1.27; adjusted EPS of $1.92 improved 36.2% over
prior year adjusted EPS of $1.41(See Exhibit 1 for a reconciliation of GAAP
to non-GAAP EPS)
* Retail net sales increased 8.1% to $626.5 million; comparable store net
sales increased 8.5%
* Retail total written orders increased 1.7% and comparable written orders
increased 1.8%
* Wholesale net sales increased 4.7% to $491.5 million
* EBITDA of $108.5 million, 13.7% of sales, compared to $81.3 million, 10.8%
of sales; adjusted EBITDA of $106.3 million, 13.4% of sales compared to
$89.5 million, 11.9% of sales
* Paid dividends of $16.6 million, an increase of 24.7%
* Repurchased 0.7 million shares for $19.3 million
* Reduced debt $34.4 million
"We are pleased with our results for the fourth quarter and the fiscal year
ended June 30th. Our many initiatives in the last few years in repositioning our
product offerings, strengthening our interior design network, creating desire
and action through our various marketing initiatives, benefiting from our
technology enhancements and improvements to our manufacturing, logistics and
sourcing has resulted in our strong performance," said Farooq Kathwari,
Chairman, President and CEO of Ethan Allen.
"We remain cautiously optimistic due to the launch of many marketing initiatives
including the launch of the Ethan Allen | Disney program in the latter part of
our second quarter," Mr. Kathwari further stated.
FISCAL 2016 FOURTH QUARTER FINANCIAL RESULTS:
Consolidated
Net sales for the quarter ended June 30, 2016 increased 6.3% over the prior year
to $205.7 million, with increases in both our retail and wholesale segments.
Gross profit was $115.8 million for the quarter ended June 30, 2016, an increase
of $9.6 million, or 9.1% over the prior year quarter, and gross margin was
56.3% compared to 54.9% in the prior year quarter. Increased wholesale sales of
9.6% improved our manufacturing efficiency, and retail sales as a percent of
total consolidated sales increased to 79.5% from 78.5%, further increasing our
consolidated gross margin due to mix.
Operating expenses were $90.0 million in the quarter ended June 30, 2016, or
43.8% of sales compared to $87.6 million, or 45.3% of sales in the prior year
quarter.
GAAP operating income increased 38.7% to $25.8 million, or 12.5% of sales in the
quarter ended June 30, 2016, compared to the prior year quarter GAAP operating
income of $18.6 million, or 9.6% of sales. The increase was mostly due to
increased sales, primarily in our retail segment where sales increased 7.6%.
Adjusted operating income increased 27.0% to $25.2 million, or 12.3% of sales in
the quarter ended June 30, 2016, compared to adjusted operating income of $19.8
million, or 10.3% of sales in the same period of the prior year. (See Exhibit 1
for a reconciliation of GAAP to non-GAAP presentation)
Net income for the quarter ended June 30, 2016 was $16.8 million or $0.60 per
diluted share compared to $12.7 million or $0.44 per diluted share in the prior
year fourth quarter. Adjusted net income was $16.0 million or $0.57 per diluted
share in the quarter ended June 30, 2016, and $12.3 million or $0.43 per diluted
share in the same period of the prior year. (See Exhibit 1 for a reconciliation
of GAAP to non-GAAP presentation)
Retail Segment
Net sales increased 7.6% to $163.6 million in the quarter ended June 30, 2016,
including a comparable design center net sales increase of 9.4%.
Comparable written orders for the Retail Division decreased 0.6% for the fourth
quarter of fiscal 2016 compared to the prior year fourth quarter and total
written orders for the Retail Division decreased 1.2% over the same prior year
period. The Company's comparative written orders for the prior year fourth
quarter had increased 10.4%. Last year, the price increase effective in July
accelerated some ordering activity into fourth quarter 2015. This year a price
increase is effective in early August.
Retail operating income of $7.5 million in the quarter ended June 30, 2016
improved over the same period of the prior year of $2.1 million, an increase of
$5.4 million, of which $1.9 million was due to the adjustments referred to in
exhibit 1. The balance is largely due to the 7.6% sales increase.
Wholesale Segment
Net sales of $127.4 million increased 9.6%, with increased sales to our retail
and domestic independent dealers, partially offset by decreases in international
sales.
Wholesale operating income of $18.4 million increased 3.0% largely due to
increased sales, a benefit of our vertical integration.
Balance Sheet and Cash Flow
Total debt of $41.8 million decreased $34.4 million from June 30, 2015 due to
both scheduled repayments as well as additional payments of $31.5 million, and
working capital decreased $5.2 million, or 4.0% from June 30, 2015.
Total cash and securities, including restricted cash, of $60.5 million decreased
$25.9 million from June 30, 2015 due to additional debt payments, share
repurchases and increased dividends.
Inventories of $162.3 million increased as planned by $10.4 million from June
30, 2015.
Capital expenditures were $23.0 million fiscal year to date at June 30, 2016
compared to $19.8 million for the same prior year period.
Dividends and share repurchases; During the quarter ended June 30, 2016, we paid
$4.7 million of dividends, a 35.9% increase over the same prior year quarter.
FISCAL 2016 YEAR-TO-DATE FINANCIAL RESULTS:
Consolidated net sales were $794.2 million, up 5.2% from $754.6 million during
the same period in the prior year. Gross margin, operating profit margin and
adjusted operating profit margin were 55.7%, 11.2% and 10.9% respectively in
fiscal 2016 and 54.5%, 8.7% and 9.3% during the same period in fiscal 2015. Net
income for the twelve months ended June 30, 2016 was $56.6 million or $2.00 per
diluted share compared to $37.1 million or $1.27 per diluted share in the prior
year comparable period. Adjusted net income of $54.4 million for the twelve
months ended June 30, 2016, increased 32.1% compared with $41.2 million for the
same period in the prior year and our adjusted earnings per diluted share
increased 36.2% for the twelve months to date at $1.92 compared with $1.41 for
the same period in the prior year.
Analyst Conference Call
Ethan Allen will conduct a conference call at 5:00 PM (Eastern) on Tuesday, July
26 to discuss its financial results and business initiatives. The live webcast
is accessible via the Company's website at http://ethanallen.com/investors. To
participate in the call, dial 866-219-5894 (or 703-639-1125 for international
callers) and provide conference ID# 1673971. 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 U.S. 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 Twelve Months
Ended Ended
06/30/16 06/30/15 06/30/16 06/30/15
Net sales $205.7 $193.6 $794.2 $754.6
Gross margin 56.3% 54.9% 55.7% 54.5%
Operating margin 12.5% 9.6% 11.2% 8.7%
Adjusted operating margin * 12.3% 10.3% 10.9% 9.3%
Net income $16.8 $12.7 $56.6 $37.1
Adjusted net income * $16.0 $12.3 $54.4 $41.2
Operating cash flow $19.8 $32.7 $58.4 $55.1
Capital expenditures $9.1 $2.3 $23.0 $19.8
Acquisitions $0.2 $0.0 $0.2 $2.0
Company stock repurchases (trade date) $0.0 $13.7 $19.3 $16.5
EBITDA $30.6 $23.4 $108.5 $81.3
EBITDA as % of net sales 14.9% 12.1% 13.7% 10.8%
Adjusted EBITDA* $30.1 $24.7 $106.3 $89.5
Adjusted EBITDA as % of net sales * 14.6% 12.8% 13.4% 11.9%
Selected Financial Data by Business
Segment:
Three Months Twelve Months
Ended Ended
06/30/16 06/30/15 06/30/16 06/30/15
Retail
Net sales $163.6 $152.0 $626.5 $579.7
Operating margin 4.6% 1.4% 2.6% 0.3%
Adjusted operating margin * 4.2% 2.2% 2.3% 0.8%
Wholesale
Net sales $127.4 $116.3 $491.5 $469.4
Operating margin 14.4% 15.3% 15.1% 14.3%
Adjusted operating margin * 14.4% 15.3% 15.1% 14.6%
Ethan Allen Interiors Inc.
Condensed Consolidated Statements of Comprehensive Income
Unaudited
(in thousands)
Three Months Twelve Months
Ended Ended
06/30/16 06/30/15 06/30/16 06/30/15
Net sales $205,693 $193,568 $794,202 $754,600
Cost of sales 89,905 87,392 351,966 343,437
Gross profit 115,788 106,176 442,236 411,163
Selling, general and administrative 90,025 87,598 353,057 345,229
expenses
Operating income 25,763 18,578 89,179 65,934
Interest and other income (expense) 71 29 395 (3,333)
Interest expense 151 448 1,618 5,918
Income before income taxes 25,683 18,159 87,956 56,683
Income tax expense 8,905 5,470 31,319 19,541
Net income $16,778 $12,689 $56,637 $37,142
Basic earnings per common share:
Net income per basic share $0.60 $0.44 $2.02 $1.29
Basic weighted average shares 27,745 28,712 28,072 28,874
outstanding
Diluted earnings per common share:
Net income per diluted share $0.60 $0.44 $2.00 $1.27
Diluted weighted average shares 28,023 28,942 28,324 29,182
outstanding
Comprehensive income:
Net income $16,778 $12,689 $56,637 $37,142
Other comprehensive income
Currency translation adjustment (979) (250) (2,208) (3,308)
Other 7 11 27 78
Other comprehensive income (loss) net (972) (239) (2,181) (3,230)
of tax
Comprehensive income $15,806 $12,450 $54,456 $33,912
Ethan Allen Interiors Inc.
Condensed Consolidated Balance Sheets
Unaudited
(in thousands)
June 30, June 30,
2016 2015
Assets
Current assets:
Cash and cash equivalents $52,659 $76,182
Marketable securities - 2,198
Accounts receivable, net 9,467 12,547
Inventories 162,323 151,916
Prepaid expenses & other current assets 23,755 27,831
Total current assets 248,204 270,674
Property, plant and equipment, net 273,615 277,035
Intangible assets, net 45,128 45,128
Restricted cash and investments 7,820 8,010
Other assets 2,642 5,130
Total Assets $577,409 $605,977
Liabilities and Shareholders' Equity
Current liabilities:
Current maturities of long-term debt 3,001 3,034
Customer deposits 60,958 67,970
Accounts payable 15,437 18,946
Accrued expenses & other current liabilities 43,951 50,712
Total current liabilities 123,347 140,662
Long-term debt 38,837 73,203
Other long-term liabilities 23,023 21,577
Total liabilities 185,207 235,442
Shareholders' equity:
Common stock 489 489
Additional paid-in-capital 374,972 370,914
Less: Treasury stock (624,932) (605,586)
Retained earnings 646,315 607,079
Accumulated other comprehensive income (4,846) (2,638)
Total Ethan Allen Interiors Inc. shareholders' equity 391,998 370,258
Noncontrolling interests 204 277
Total shareholders' equity 392,202 370,535
Total Liabilities and Shareholders' Equity $577,409 $605,977
Ethan Allen Interiors Inc.
GAAP Reconciliation
Three and Twelve Months Ended June 30, 2016 and 2015
Unaudited
(in thousands, except per share amounts)
Three Months Twelve Months
Ended Ended
June 30, June 30,
2016 2015 2016 2015
Net Income / Earnings Per Share
Net income $16,778 $12,689 $56,637 $37,142
Adjustments net of related tax effects (351) 806 (1,407) 5,233
*
Normalized income tax effects* (469) (1,158) (785) (1,148)
Adjusted net income $15,958 $12,337 $54,445 $41,227
Diluted weighted average shares 28,023 28,942 28,324 29,182
outstanding
Earnings per diluted share $0.60 $0.44 $2.00 $1.27
Adjusted earnings per diluted share $0.57 $0.43 $1.92 $1.41
Consolidated Operating Income /
Operating Margin
Operating income $25,763 $18,578 $89,179 $65,934
Add: adjustments * (552) 1,269 (2,216) 4,551
Adjusted operating income* $25,211 $19,847 $86,963 $70,485
Net sales $205,693 $193,568 $794,202 $754,600
Operating margin 12.5% 9.6% 11.2% 8.7%
Adjusted operating margin* 12.3% 10.3% 10.9% 9.3%
Wholesale Operating Income / Operating
Margin
Wholesale operating income $18,371 $17,841 $74,412 $66,988
Add: adjustments* - - - 1,419
Adjusted wholesale operating income * $18,371 $17,841 $74,412 $68,407
Wholesale net sales $127,435 $116,309 $491,467 $469,384
Wholesale operating margin 14.4% 15.3% 15.1% 14.3%
Adjusted wholesale operating margin * 14.4% 15.3% 15.1% 14.6%
Retail Operating Income / Operating
Margin
Retail operating income $7,492 $2,137 $16,450 $1,726
Add: adjustments (552) 1,269 (2,216) 3,132
Adjusted retail operating income * $6,940 $3,406 $14,234 $4,858
Retail net sales $163,594 $152,003 $626,511 $579,713
Retail operating margin 4.6% 1.4% 2.6% 0.3%
Adjusted retail operating margin * 4.2% 2.2% 2.3% 0.8%
Ethan Allen Interiors Inc.
GAAP Reconciliation
Three and Twelve Months Ended June 30, 2016 and 2015
Unaudited
(in thousands, except per share amounts)
Three Months Twelve Months
Ended Ended
June 30, June 30,
2016 2015 2016 2015
EBITDA
Net income $16,778 $12,689 $56,637 $37,142
Add: interest expense, net 219 354 1,168 5,455
income tax expense 8,905 5,470 31,319 19,541
depreciation and amortization 4,722 4,928 19,353 19,142
EBITDA $30,624 $23,441 $108,477 $81,280
Net sales $205,693 $193,568 $794,202 $754,600
EBITDA as % of net sales 14.9% 12.1% 13.7% 10.8%
EBITDA $30,624 $23,441 $108,477 $81,280
Add: adjustments* (552) 1,269 (2,216) 8,241
Adjusted EBITDA $30,072 $24,710 $106,261 $89,521
Net sales $205,693 $193,568 $794,202 $754,600
Adjusted EBITDA as % of net sales 14.6% 12.8% 13.4% 11.9%
Design Center Activity Fourth Quarter Fiscal 2016 Company
Independent Owned Total
Balance at beginning of period 161 141 302
Additions (includes Relocations)((1)) 1 5 6
Closings (includes Relocations)((1)) (8) (4) (12)
Transfers (1) 1 0
Balance at end of period 153 143 296
United States 50 137 187
International 103 6 109
((1) )Relocations in additions & closing 0 3 3
* Adjustments consist of the following:
Three months Twelve months
ended ended
June 30, June 30,
2016 2015 2016 2015
Adjustments net of related income tax
effects:
Real estate losses (gains) (595) 1,269 (2,419) 3,607
Loss on early extinguishment of Senior - - - 3,690
Notes
Restructuring charges 43 - 203 160
Asset impairment - - - 784
(552) 1,269 (2,216) 8,241
Related tax effects 201 (463) 809 (3,008)
Adjustments net of related income tax (351) 806 (1,407) 5,233
effects
Related tax effects are calculated using a normalized income tax rate of 36.5%.
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#2030888]
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Datum: 26.07.2016 - 22:03 Uhr
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