ETHAN ALLEN REPORTS FISCAL 2017 SECOND QUARTER RESULTS
(Thomson Reuters ONE) -
ETHAN ALLEN REPORTS FISCAL 2017 SECOND QUARTER RESULTS
DANBURY, CT - January 25, 2017 - Ethan Allen Interiors Inc. ("Ethan Allen" or
the "Company") (NYSE: ETH) today reported operating results for the fiscal 2017
second quarter ended December 31, 2016. Please refer to the accompanying
financial statements and reconciliation to non-GAAP measures discussed below.
Summary Financial Information for Second Fiscal Quarter Ended December 31, 2016:
* Written orders for Retail lower by 3.6% from a strong increase of 15.3% in
the previous year period
* Consolidated net sales of $194.7 million, lower by 6.2% from previous year
when consolidated net sales increased by 5.3%
* Gross margin of 55.5% compared to 55.9%
* Operating income of $17.1 million, compared to $26.5 million; adjusted
operating income of $17.1 million compared to $25.3 million in previous year
when adjusted operating income increased 35.1% (See Exhibit 1 for a
reconciliation of GAAP to non-GAAP operating income)
* Operating margin of 8.8%, compared to previous year of 12.8%; adjusted
operating margin of 8.8%, compared to previous year of 12.2% (See Exhibit 1
for a reconciliation of GAAP to non-GAAP operating margin)
* Diluted earnings per share ("EPS") of $0.38 compared to previous year of
$0.58; adjusted EPS of $0.39 compared to previous year adjusted EPS of $0.55
when adjusted EPS increased 48.6% (See Exhibit 1 for a reconciliation of
GAAP to non-GAAP EPS)
* Paid dividends of $4.7 million, an increase of 18.3%
Farooq Kathwari, Chairman and CEO, stated, "As we mentioned earlier this month
and stated again in the summary highlights today, despite very tough previous-
year comparisons and a challenging retail environment, we had decent results."
Mr. Kathwari further stated, "We strongly believe that our excellence in
customer experience is the most important differentiating factor. We are now
ready to invest in expanding our marketing, effective the third quarter, as many
of our initiatives are in place. These include a major refresh of our product
offerings; expansion of our manufacturing capacities; relocation and renovation
of our Design Centers; and adding technology at all levels of our enterprise to
improve the customer experience. We remain cautiously optimistic, especially in
view of the challenging comparison to last year's third quarter when our
adjusted diluted earnings per share increased 89%."
FISCAL 2017 SECOND QUARTER FINANCIAL RESULTS:
Consolidated
Net sales for the quarter ended December 31, 2016 were $194.7 million compared
to $207.5 million in the prior year quarter.
Gross profit was $108.1 million for the quarter ended December 31, 2016 compared
to $116.1 million and gross margin was 55.5% compared to 55.9% in the prior year
quarter. Retail sales as a percent of total consolidated sales increased to
80.3% from 79.4%, increasing our consolidated gross margin due to mix, while
lower wholesale production reduced our gross margin in total.
Operating expenses were $91.0 million in the quarter ended December 31, 2016, or
46.8% of sales compared to $89.6 million, or 43.1% of sales in the prior year
quarter. This was primarily due to the prior year quarter $1.3 million gain on
the sale of real estate in our retail segment. Compared to the prior year
quarter, the current year second quarter incurred pre-launch costs associated
with the Ethan Allen | Disney launch and incremental costs from operating more
new design centers in the current quarter.
Operating income was $17.1 million, or 8.8% of sales in the quarter ended
December 31, 2016, compared to the prior year quarter operating income of $26.5
million, or 12.8% of sales. Adjusted operating income was $17.1 million, or
8.8% of sales in the quarter ended December 31, 2016, compared to $25.3 million,
or 12.2% 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 December 31, 2016 was $10.7 million or $0.38
per diluted share compared to $16.5 million or $0.58 per diluted share in the
prior year second quarter. Adjusted net income was $10.8 million or $0.39 per
diluted share in the quarter ended December 31, 2016, and $15.8 million or $0.55
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 of $156.3 million in the quarter ended December 31, 2016 compared to
$164.7 million in the prior year quarter. Comparable design center net sales
declined 5.4%.
Total written orders for the Retail Division declined 3.6% for the second
quarter of fiscal 2017 compared to the prior year second quarter and comparable
written orders for the Retail Division declined 4.5% over the same prior year
period.
Retail operating income of $2.1 million in the quarter ended December 31, 2016
declined over the same period of the prior year of $6.7 million, a decrease of
$4.5 million. The lower operating margin in the current quarter was driven
primarily by the prior year income on the sale of real estate, reduced operating
profits from more new stores operating less than 15 months in the current versus
the prior year, more discounts and promotions in the current quarter, and
expenses associated with the Ethan Allen | Disney new product launch. This was
partly offset by an increase in average sale price, and a reduction in clearance
sales in the current quarter.
Wholesale Segment
Net sales of $113.7 million decreased 10.1%, with decreased sales to our retail
and independent dealers.
Wholesale operating income of $14.2 million compared to $19.7 million in the
prior year quarter. The current year was impacted by lower sales by retail and
higher promotional discounts..
FISCAL 2017 YEAR-TO-DATE FINANCIAL RESULTS:
Consolidated net sales were $388.0 million compared to $397.9 million during the
same period in the prior year. Gross margin, operating profit margin and
adjusted operating profit margin were 55.8%, 9.1% and 9.3% respectively in
fiscal 2017 and 55.5%, 11.9% and 11.6% during the same period in fiscal 2016.
Net income for the six months ended December 31, 2016 was $22.2 million or $0.79
per diluted share compared to $29.7 million or $1.04 per diluted share in the
prior year comparable period. Adjusted net income of $22.7 million for the six
months ended December 31, 2016, compared with $28.9 million for the same period
in the prior year and our adjusted earnings per diluted share for the six months
to date at $0.81 compared with $1.01 for the same period in the prior year.
Balance Sheet and Cash Flow
Total debt of $40.3 million decreased $1.5 million from June 30, 2016 due to
scheduled repayments.
Total cash and securities, including restricted cash, of $64.5 million increased
$4.0 million from June 30, 2016, and working capital increased $11.8 million
during the same period.
Inventories of $160.4 million decreased by $1.9 million from June 30, 2016,
primarily from our retail service centers.
Capital expenditures were $11.3 million fiscal year to date at December
31, 2016 compared to $7.4 million for the same prior year period.
Dividends and share repurchases; During the quarter ended December 31, 2016, we
paid $4.7 million of dividends, an 18.3% increase over the same prior year
quarter. We repurchased 107,700 shares for $3.4 million in the first quarter
which settled in the second quarter.
Analyst Conference Call
Ethan Allen will conduct an analyst conference call at 5:00 PM (Eastern) on
Wednesday, January 25 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 844-822-0103
(or 614-999-9166 for international callers) and provide conference ID#
41001866. An archived recording of the call will be made available for at least
60-days 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 five percent of its products are made
in its North American plants. For more information on Ethan Allen's products and
services, visit ethanallen.com.
Investor / Media Contact
Corey Whitely
Executive Vice President, Administration
Chief Financial Officer and Treasurer
corey.whitely(at)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, 2016 (the "2016 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, 2016, 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 Six Months Ended
Ended
12/31/16 12/31/15 12/31/16 12/31/15
Net sales $194.7 $207.5 $388.0 $397.9
Gross margin 55.5% 55.9% 55.8% 55.5%
Operating margin 8.8% 12.8% 9.1% 11.9%
Adjusted operating margin * 8.8% 12.2% 9.3% 11.6%
Net income $10.7 $16.5 $22.2 $29.7
Adjusted net income * $10.8 $15.8 $22.7 $28.9
Operating cash flow ($0.0) $5.0 $27.5 $21.0
Capital expenditures $3.8 $4.2 $11.3 $7.4
Company stock repurchases (trade date) $0.0 $12.2 $3.4 $12.2
EBITDA $22.2 $31.3 $45.5 $57.0
EBITDA as % of net sales 11.4% 15.1% 11.7% 14.3%
Adjusted EBITDA * $22.2 $30.1 $46.1 $55.8
Adjusted EBITDA as % of net sales * 11.4% 14.5% 11.9% 14.0%
Selected Financial Data by Business
Segment:
Three Months Six Months Ended
Ended
12/31/16 12/31/15 12/31/16 12/31/15
Retail
Net sales $156.3 $164.7 $308.5 $310.7
Operating margin 1.4% 4.1% 1.0% 2.7%
Adjusted operating margin * 1.4% 3.3% 1.2% 2.3%
Wholesale
Net sales $113.7 $126.4 $228.3 $246.9
Operating margin 12.5% 15.6% 13.4% 16.3%
Adjusted operating margin * 12.5% 15.6% 13.4% 16.3%
Ethan Allen Interiors Inc.
Condensed Consolidated Statements of Comprehensive Income
Unaudited
(in thousands)
Three Months Six Months Ended
Ended
12/31/16 12/31/15 12/31/16 12/31/15
Net sales $194,672 $207,535 $387,959 $397,926
Cost of sales 86,548 91,477 171,368 177,195
Gross profit 108,124 116,058 216,591 220,731
Selling, general and administrative 91,030 89,551 181,160 173,324
expenses
Operating income 17,094 26,507 35,431 47,407
Interest and other income 182 49 325 175
Interest expense 324 431 647 887
Income before income taxes 16,952 26,125 35,109 46,695
Income tax expense 6,252 9,591 12,880 17,014
Net income $10,700 $16,534 $22,229 $29,681
Basic earnings per common share:
Net income per basic share $0.39 $0.58 $0.80 $1.05
Basic weighted average shares 27,666 28,304 27,696 28,357
outstanding
Diluted earnings per common share:
Net income per diluted share $0.38 $0.58 $0.79 $1.04
Diluted weighted average shares 27,945 28,537 27,979 28,605
outstanding
Comprehensive income:
Net income $10,700 $16,534 $22,229 $29,681
Other comprehensive income
Currency translation adjustment (1,281) (411) (2,211) (1,395)
Other (11) 8 (23) 14
Other comprehensive income (loss) net of (1,292) (403) (2,234) (1,381)
tax
Comprehensive income $9,408 $16,131 $19,995 $28,300
Ethan Allen Interiors Inc.
Condensed Consolidated Balance Sheets
Unaudited
(in thousands)
December 31, June 30,
2016 2016
Assets
Current assets:
Cash and cash equivalents $ 57,149 $ 52,659
Marketable securities - -
Accounts receivable, net 8,773 9,467
Inventories 160,384 162,323
Prepaid expenses & other current assets 22,110 23,755
Total current assets 248,416 248,204
Property, plant and equipment, net 271,147 273,615
Intangible assets, net 45,128 45,128
Restricted cash and investments 7,308 7,820
Other assets 2,506 2,642
Total Assets $ 574,505 $ 577,409
Liabilities and Shareholders' Equity
Current liabilities:
Current maturities of long-term debt 2,810 3,001
Customer deposits 55,297 60,958
Accounts payable 12,969 15,437
Accrued expenses & other current liabilities 40,732 43,951
Total current liabilities 111,808 123,347
Long-term debt 37,533 38,837
Other long-term liabilities 23,680 23,023
Total liabilities 173,021 185,207
Shareholders' equity:
Common stock 490 489
Additional paid-in-capital 377,634 374,972
Less: Treasury stock (628,300) (624,932)
Retained earnings 658,536 646,315
Accumulated other comprehensive income (7,057) (4,846)
Total Ethan Allen Interiors Inc. shareholders' 401,303 391,998
equity
Noncontrolling interests 181 204
Total shareholders' equity 401,484 392,202
Total Liabilities and Shareholders' Equity $ 574,505 $ 577,409
Ethan Allen Interiors Inc.
Design Center Activity
Second Quarter Fiscal 2017
Unaudited
Company
Independent Owned Total
Balance at beginning of period 151 145 296
Additions (includes Relocations) ((1)) 5 1 6
Closings (includes Relocations) ((1)) (1) - (1)
Transfers - - -
Balance at end of period 155 146 301
United States 49 140 189
International 106 6 112
((1) ) Relocations in additions & closing - - -
Ethan Allen Interiors Inc.
GAAP Reconciliation
Three and Six Months Ended December 31, 2016 and 2015
Unaudited
(in thousands, except per share amounts)
Three Months Six Months Ended
Ended
December 31, December 31,
2016 2015 2016 2015
Net Income / Earnings Per Share
Net income $10,700 $16,534 $22,229 $29,681
Adjustments net of related tax effects * - (763) 391 (754)
Normalized income tax effects * 65 56 65 (30)
Adjusted net income $10,765 $15,827 $22,685 $28,897
Diluted weighted average shares 27,945 28,537 27,979 28,605
outstanding
Earnings per diluted share $0.38 $0.58 $0.79 $1.04
Adjusted earnings per diluted share $0.39 $0.55 $0.81 $1.01
Consolidated Operating Income /
Operating Margin
Operating income $17,094 $26,507 $35,431 $47,407
Add: adjustments * - (1,201) 616 (1,188)
Adjusted operating income * $17,094 $25,306 $36,047 $46,219
Net sales $194,672 $207,535 $387,959 $397,926
Operating margin 8.8% 12.8% 9.1% 11.9%
Adjusted operating margin * 8.8% 12.2% 9.3% 11.6%
Wholesale Operating Income / Operating
Margin
Wholesale operating income $14,179 $19,690 $30,670 $40,277
Add: adjustments * - - - -
Adjusted wholesale operating income * $14,179 $19,690 $30,670 $40,277
Wholesale net sales $113,693 $126,413 $228,257 $246,868
Wholesale operating margin 12.5% 15.6% 13.4% 16.3%
Adjusted wholesale operating margin * 12.5% 15.6% 13.4% 16.3%
Retail Operating Income / Operating
Margin
Retail operating income $2,147 $6,689 $3,170 $8,329
Add: adjustments * - (1,201) 616 (1,188)
Adjusted retail operating income * $2,147 $5,488 $3,786 $7,141
Retail net sales $156,292 $164,703 $308,547 $310,743
Retail operating margin 1.4% 4.1% 1.0% 2.7%
Adjusted retail operating margin * 1.4% 3.3% 1.2% 2.3%
Ethan Allen Interiors Inc.
GAAP Reconciliation
Three and Six Months Ended December 31, 2016 and 2015
Unaudited
(in thousands, except per share amounts)
Three Months Ended Six Months Ended
December 31, December 31,
2016 2015 2016 2015
EBITDA
Net income $10,700 $16,534 $22,229 $29,681
Add: interest expense, net 208 322 409 676
income tax expense 6,252 9,591 12,880 17,014
depreciation and amortization 5,000 4,806 9,999 9,589
EBITDA $22,160 $31,253 $45,517 $56,960
Net sales $194,672 $207,535 $387,959 $397,926
EBITDA as % of net sales 11.4% 15.1% 11.7% 14.3%
EBITDA $22,160 $31,253 $45,517 $56,960
Add: adjustments * - (1,201) 616 (1,188)
Adjusted EBITDA $22,160 $30,052 $46,133 $55,772
Net sales $194,672 $207,535 $387,959 $397,926
Adjusted EBITDA as % of net sales 11.4% 14.5% 11.9% 14.0%
* Adjustments consist of the
following:
Three Months Ended Six Months Ended
December31, December31,
2016 2015 2016 2015
Adjustments net of related income tax
effects:
Real estate losses (gains) $- $(1,334) $616 $(1,334)
Restructuring charges - 133 - 146
- (1,201) 616 (1,188)
Related tax effects - 438 (225) 434
Adjustments net of related income tax $- $(763) $391 $(754)
effects
Related tax effects are calculated using a normalized tax
rate of 36.5%
This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Ethan Allen Interiors Inc. via GlobeNewswire
Unternehmensinformation / Kurzprofil:
Datum: 25.01.2017 - 22:03 Uhr
Sprache: Deutsch
News-ID 520015
Anzahl Zeichen: 32251
contact information:
Town:
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Kategorie:
Business News
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