ETHAN ALLEN REPORTS FISCAL 2018 FIRST QUARTER RESULTS
(Thomson Reuters ONE) -
ETHAN ALLEN REPORTS FISCAL 2018 FIRST QUARTER RESULTS
DANBURY, CT - October 25, 2017 - Ethan Allen Interiors Inc. ("Ethan Allen" or
the "Company") (NYSE: ETH) today reported operating results for the fiscal 2018
first quarter ended September 30, 2017. Please refer to the accompanying
financial statements and reconciliation to non-GAAP measures discussed below.
Farooq Kathwari, Chairman and CEO, commented, "As stated in our press release of
October 12, 2017, that despite the challenges of the hurricanes during the
quarter and first-run production of new products, our total written orders in
our Company-operated retail division increased 1.7%, which followed an 8.1%
increase in the prior year first quarter. Our balance sheet continues to
strengthen and we distributed $5.2 million in dividends during the quarter, an
increase of 10.6% compared to the prior year quarter. Our total order backlogs
increased 61.6% at wholesale and increased 11.6% for the retail division
compared to June 30, 2017. The wholesale backlog increase also reflects $12.4
million of orders we have received from the US Department of State, including
$10.4 million during our fiscal 2018 first quarter." Mr. Kathwari continued,
"Last week we celebrated our 85(th) anniversary with 550 of our team members
attending our conference. We discussed our many initiatives to strengthen our
talent, offerings, marketing, combining technology with personal service and our
vertical integration, which includes manufacturing about 75% of our products in
our North American workshops."
Two major hurricanes, Harvey and Irma, disrupted several key markets in which
the Company operates: 15 Design Centers in Florida, including 11 company-
operated locations, plus five company-operated Design Centers in the coastal
Carolinas were affected by Hurricane Irma; and 11 Design Centers in Texas, with
five independently operated locations in the Houston market, were impacted by
Hurricane Harvey. Design Centers and delivery centers were closed anywhere from
a couple of days to more than a week, with an effect on both written orders and
net delivered sales. Hurricane Harvey also disrupted the Company's wholesale
logistics, as the temporary shutdown of railway shipping through Houston
impacted shipments from the Company's upholstery plant in Mexico, and ocean
freight arrivals were delayed into the Port of Houston. First production runs of
floor samples for our Passport collection, which is launching in November and
strong orders and first run production of products for the Department of State
Worldwide Residential Furniture Program during the quarter also resulted in
production and shipping delays.
FISCAL 2018 FIRST QUARTER FINANCIAL RESULTS:
Consolidated
Net sales for the three months ended September 30, 2017 were $181.3 million
which decreased 6.2% compared to $193.3 million in the comparable prior year
period.
Gross profit was $100.3 million for the three months ended September 30, 2017
compared to $108.5 million and gross margin was 55.3% compared to 56.1% in the
comparable prior year period. The reduction in gross profit was primarily due to
the hurricanes and disruptions in the manufacturing operations by first
production runs. Retail sales as a percent of total consolidated sales decreased
to 78.1% from 78.8% decreasing our consolidated gross margin due to mix.
Operating expenses for the three months ended September 30, 2017 were $88.8
million or 49.0% of sales compared to $90.1 million or 46.6% of sales in the
comparable prior year period. This was primarily due to decreased costs in the
current year for marketing, and a loss on the sale of real estate in our retail
segment in the prior year.
Operating income for the three months ended September 30, 2017 was $11.5 million
or 6.4% of sales compared to $18.3 million or 9.5% of sales in the comparable
prior year period. Adjusted operating income for the three months ended
September 30, 2017 was $12.4 million or 6.8% of sales compared to $19.0 million
or 9.8% of sales in the comparable prior year period. The primary causes for the
decrease in operating income were the negative effects of the hurricanes and
first production runs, which resulted in lower sales in the current year
quarter. (See Exhibit 1 for a reconciliation of GAAP to non-GAAP presentation).
Net income was $7.4 million or $0.27 per diluted share for the three months
ended September 30, 2017 and $11.5 million or $0.41 per diluted share in the
prior year comparable period. Adjusted net income was $7.8 million or $0.28 per
diluted share for the three months ended September 30, 2017 and $11.9 million or
$0.43 per diluted share in the prior year comparable period. (See Exhibit 1 for
a reconciliation of GAAP to non-GAAP presentation)
Retail Segment
Net sales for the three months ended September 30, 2017 were $141.6 million
compared to $152.3 million in the prior year comparable period, a decrease of
7.0% compared to the prior year. Comparative net sales were $138.1 million
compared to $151.4 million in the prior year period. Comparable design centers
are those which have been operating for at least 15 months, including relocated
design centers provided the original and relocated design center location had
been operating for at least 15 months on a combined basis.
Total written orders for the retail division for the first quarter of fiscal
2018 were up 1.7% compared to the same prior year period, and comparable Design
Center written orders were up 0.5% over the same period.
Operating income was a loss of $2.8 million for the three months ended September
30, 2017, a decrease of $3.8 million from $1.0 million over the same prior year
period. The lower operating income in the current quarter was driven primarily
by the decrease in sales, partly offset by reduced operating expenses.
Wholesale Segment
Net sales of $111.6 million compared to $114.6 million in the prior year
quarter, a decrease of 2.6%. The reduction in sales is primarily a reflection of
the production and logistics disruptions caused by hurricanes and first
production runs.
Operating income of $13.5 million compared to $16.5 million in the prior year
quarter. The current year decrease was largely due to the lower current period
sales.
Balance Sheet and Cash Flow
Total debt of $0.6 million decreased $13.7 million from June 30, 2017 primarily
due to a $13.3 million early payoff of our term loan, reducing borrowings under
our credit facility to zero.
Total cash and securities, including restricted cash, of $59.8 million decreased
$5.2 million from June 30, 2017, despite paying down $13.3 million on debt and
$5.2 million in dividends. Our cash provided by operating activities for the
September 2017 quarter was $17.6 million from $27.5 million for the prior year
September quarter. Working capital decreased $10.3 million from June 30, 2017,
primarily due to the $13.3 million paydown of debt.
Inventories of $157.5 million decreased by $1.8 million from September 30, 2016.
Capital expenditures were $2.7 million fiscal year to date at September
30, 2017 compared to $7.4 million for the same prior year period. Expenditures
were primarily at retail design centers.
Dividends and share repurchases; During the year to date period ended September
30, 2017, we paid $5.2 million of dividends, a 10.6% increase over the prior
fiscal year.
Analyst Conference Call
Ethan Allen will conduct an analyst conference call at 5:00 PM (Eastern) on
Wednesday, October 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#
50728592. 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 75% of its products are made in its North
American plants. For more information on Ethan Allen's products and services,
visit ethanallen.com.
Investor Relations Contact
Corey Whitely
Executive Vice President, Administration
Chief Financial Officer and Treasurer
IR(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, 2017 and other reports filed with the
Securities and Exchange Commission.
This press release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995, 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 any related webcasts, conference calls
and other related discussions or 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. Actual results could differ materially from
those anticipated in the forward-looking statements due to a number of risks and
uncertainties including, but not limited to: competition from overseas
manufacturers and domestic retailers; our anticipating or responding to changes
in consumer tastes and trends in a timely manner; our ability to maintain and
enhance our brand, marketing and advertising efforts and pricing strategies;
changes in global and local economic conditions that may adversely affect
consumer demand and spending, our manufacturing operations or sources of
merchandise and international operations; changes in U.S. policy related to
imported merchandise; an economic downturn; our limited number of manufacturing
and logistics sites; fluctuations in the price, availability and quality of raw
materials; environmental, health and safety requirements; product safety
concerns; disruption to our technology infrastructure (including cyber-attacks);
increasing labor costs, competitive labor markets and our continued ability to
retain high-quality personnel and risks of work stoppages; loss of key
personnel; our ability to obtain sufficient external funding to finance our
operations and growth; access to consumer credit; the effect of operating losses
on our ability to pay cash dividends; 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; 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, 2017, 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
09/30/17 09/30/16
Net sales $181.3 $193.3
Gross margin 55.3% 56.1%
Operating margin 6.4% 9.5%
Adjusted operating margin * 6.8% 9.8%
Net income $7.4 $11.5
Adjusted net income * $7.8 $11.9
Operating cash flow $17.6 $27.5
Capital expenditures $2.7 $7.4
Acquisitions $0.0 $0.0
Company stock repurchases (trade date) $0.0 $3.4
EBITDA $16.5 $23.4
EBITDA as % of net sales 9.1% 12.1%
Adjusted EBITDA * $17.4 $24.0
Adjusted EBITDA as % of net sales * 9.6% 12.4%
Selected Financial Data by Business Segment:
Three Months Ended
Retail 09/30/17 09/30/16
Net sales $141.6 $152.3
Operating margin -2.0% 0.7%
Adjusted operating margin * -2.0% 1.1%
Wholesale
Net sales $111.6 $114.6
Operating margin 12.1% 14.4%
Adjusted operating margin * 12.8% 14.4%
Ethan Allen Interiors Inc.
Condensed Consolidated Statements of Comprehensive Income
Unaudited
(in thousands)
Three Months Ended
09/30/17 09/30/16
Net sales $181,302 $193,287
Cost of sales 80,979 84,820
Gross profit 100,323 108,467
Selling, general and administrative expenses 88,774 90,130
Operating income 11,549 18,337
Interest and other income 56 143
Interest expense 185 323
Income before income taxes 11,420 18,157
Income tax expense 4,005 6,628
Net income $7,415 $11,529
Basic earnings per common share:
Net income per basic share $0.27 $0.42
Basic weighted average shares outstanding 27,459 27,725
Diluted earnings per common share:
Net income per diluted share $0.27 $0.41
Diluted weighted average shares outstanding 27,756 28,012
Comprehensive income:
Net income $7,415 $11,529
Other comprehensive income
Currency translation adjustment (130) (930)
Other (14) (12)
Other comprehensive income (loss) net of tax (144) (942)
Comprehensive income $7,271 $10,587
Ethan Allen Interiors Inc.
Condensed Consolidated Balance Sheets
Unaudited
(in thousands)
September 30, June 30,
Assets 2017 2017
Current assets:
Cash and cash equivalents $52,728 $57,701
Accounts receivable, net 10,088 12,293
Inventories 157,505 149,483
Prepaid expenses & other current assets 21,787 23,621
Total current assets 242,108 243,098
Property, plant and equipment, net 267,257 270,198
Intangible assets, net 45,128 45,128
Restricted cash and investments 7,046 7,330
Other assets 2,887 2,468
Total Assets $564,426 $568,222
Liabilities and Shareholders' Equity
Current liabilities:
Current maturities of long-term debt 372 2,731
Customer deposits 69,165 62,960
Accounts payable 17,231 16,961
Accrued expenses & other current liabilities 48,979 43,793
Total current liabilities 135,747 126,445
Long-term debt 263 11,608
Other long-term liabilities 26,144 29,273
Total liabilities 162,154 167,326
Shareholders' equity:
Common stock 490 490
Additional paid-in-capital 376,251 377,550
Less: Treasury stock -634,532 -635,179
Retained earnings 664,148 661,976
Accumulated other comprehensive income -4,261 -4,131
Total Ethan Allen Interiors Inc. shareholders' equity 402,096 400,706
Noncontrolling interests 176 190
Total shareholders' equity 402,272 400,896
Total Liabilities and Shareholders' Equity $564,426 $568,222
Ethan Allen Interiors Inc.
Design Center Activity
First Quarter Fiscal 2018
Unaudited
Company
Independent Owned Total
Balance at beginning of period 155 148 303
Additions (includes Relocations) ((1)) 3 2 5
Closings (includes Relocations) ((1)) (2) 0 (2)
Transfers 0 0 0
Balance at end of period 156 150 306
United States 48 144 192
International 108 6 114
((1) ) Relocations in additions & closing 0 0 0
Ethan Allen Interiors Inc.
GAAP Reconciliation
Three Months Ended September 30, 2017 and 2016
Unaudited
(in thousands, except per share amounts)
Three Months Ended
September 30,
2017 2016
Net Income / Earnings Per Share
Net income $7,415 $11,529
Adjustments net of related tax effects * 580 391
Normalized income tax effects * -163 1
Adjusted net income $7,832 $11,921
Diluted weighted average shares outstanding 27,756 28,012
Earnings per diluted share $0.27 $0.41
Adjusted earnings per diluted share $0.28 $0.43
Consolidated Operating Income / Operating Margin
Operating income $11,549 $18,337
Add: adjustments * 847 616
Adjusted operating income * $12,396 $18,953
Net sales $181,302 $193,287
Operating margin 6.4% 9.5%
Adjusted operating margin * 6.8% 9.8%
Wholesale Operating Income / Operating Margin
Wholesale operating income $13,462 $16,491
Add: adjustments * 847 0
Adjusted wholesale operating income * $14,309 $16,491
Wholesale net sales $111,587 $114,564
Wholesale operating margin 12.1% 14.4%
Adjusted wholesale operating margin * 12.8% 14.4%
Retail Operating Income / Operating Margin
Retail operating income -$2,773 $1,023
Add: adjustments * 0 616
Adjusted retail operating income * -$2,773 $1,639
Retail net sales $141,575 $152,255
Retail operating margin -2.0% 0.7%
Adjusted retail operating margin * -2.0% 1.1%
Ethan Allen Interiors Inc.
GAAP Reconciliation
Three Months Ended September 30, 2017 and 2016
Unaudited
(in thousands, except per share amounts)
Three Months Ended
September 30,
2017 2016
EBITDA
Net income $7,415 $11,529
Add: interest expense, net 26 201
income tax expense 4,005 6,628
depreciation and amortization 5,086 4,999
EBITDA $16,532 $23,357
Net sales $181,302 $193,287
EBITDA as % of net sales 9.1% 12.1%
EBITDA $16,532 $23,357
Add: adjustments * 914 616
Adjusted EBITDA $17,446 $23,973
Net sales $181,302 $193,287
Adjusted EBITDA as % of net sales 9.6% 12.4%
* Adjustments consist of the following:
Three Months Ended
September 30,
2017 2016
Adjustments net of related income tax effects:
Real estate losses $0 $616
Organizational changes and other exit costs 847 0
Adjustments to operating income 847 616
Early debt extinguishment 67 0
Adjustments to EBITDA 914 616
Related tax effects -334 -225
Adjustments net of related income tax effects $580 $391
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: 25.10.2017 - 22:03 Uhr
Sprache: Deutsch
News-ID 565310
Anzahl Zeichen: 31192
contact information:
Town:
DANBURY
Kategorie:
Business News
Diese Pressemitteilung wurde bisher 265 mal aufgerufen.
Die Pressemitteilung mit dem Titel:
"ETHAN ALLEN REPORTS FISCAL 2018 FIRST QUARTER RESULTS"
steht unter der journalistisch-redaktionellen Verantwortung von
Ethan Allen Interiors Inc. (Nachricht senden)
Beachten Sie bitte die weiteren Informationen zum Haftungsauschluß (gemäß TMG - TeleMedianGesetz) und dem Datenschutz (gemäß der DSGVO).
