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Ethan Allen Reports Results For Fiscal Year And Quarter Ended June 30, 2013

This press release should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended June 30, 2012 (the “2012 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 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 2012 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

Twelve Months Ended

06/30/13

06/30/12

06/30/13

06/30/12
 
Net sales $ 182.3 $ 185.3 $ 729.1 $ 729.4
Gross margin 54.0 % 53.9 % 54.6 % 53.5 %
Operating margin 9.0 % 7.7 % 8.3 % 6.8 %
Operating margin (excluding special items*) 9.6 % 7.7 % 9.4 % 7.1 %
Net income $ 8.2 $ 7.3 $ 32.5 $ 49.7
Net income (excluding special items* and
unusual income tax effects) $ 9.9 $ 7.8 $ 38.4 $ 27.5
Operating cash flow $ 16.9 $ 9.9 $ 61.3 $ 37.7
Capital expenditures $ 2.5 $ 3.0 $ 19.0 $ 22.9
Acquisitions $ 0.2 $ 0.0 $ 0.8 $ 0.5
Treasury stock repurchases $ 0.0 $ 0.5 $ 0.0 $ 1.4
 
EBITDA $ 19.2 $ 18.9 $ 76.4 $ 68.3
EBITDA as % of net sales 10.5 % 10.2 % 10.5 % 9.4 %
 
EBITDA (excluding special items*) $ 22.1 $ 18.8 $ 86.7 $ 70.4
EBITDA as % of net sales (excluding special items*) 12.1 % 10.1 % 11.9 % 9.6 %
 
 
 
 

Selected Financial Data by Business Segment:

Three Months Ended

Twelve Months Ended

06/30/13

06/30/12

06/30/13

06/30/12

Retail
Net sales $ 145.3 $ 143.7 $ 578.3 $ 559.4
Operating margin 2.2 % -0.7 % 1.4 % -2.1 %
Operating margin (excluding special items*) 2.9 % -0.7 % 2.5 % -1.7 %
 
 

Wholesale
Net sales $ 106.7 $ 112.8 $ 434.4 $ 456.9
Operating margin 12.4 % 13.2 % 11.7 % 14.1 %
Operating margin (excluding special items*) 12.4 % 13.2 % 12.1 % 14.1 %
 
* 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

Twelve Months Ended

06/30/13

06/30/12

06/30/13

06/30/12
 
Net sales $ 182,251 $ 185,316 $ 729,083 $ 729,373
Cost of sales   83,907     85,407     330,734     339,085  
Gross profit 98,344 99,909 398,349 390,288
Selling, general and administrative expenses   81,878     85,575     337,912     340,591  
Operating income 16,466 14,334 60,437 49,697
Interest and other income (1,677 ) 200 (1,485 ) 562
Interest expense   2,186     2,206     8,778     9,020  
Income before income taxes 12,603 12,328 50,174 41,239
Income tax expense (benefit)   4,409     5,029     17,696     (8,455 )
Net income $ 8,194   $ 7,299   $ 32,478   $ 49,694  
 
Basic earnings per common share:
Net income per basic share $ 0.28 $ 0.25 $ 1.13 $ 1.72
Basic weighted average shares outstanding 28,905 28,856 28,864 28,824
 
Diluted earnings per common share:
Net income per diluted share $ 0.28 $ 0.25 $ 1.11 $ 1.71
Diluted weighted average shares outstanding 29,319 29,179 29,239 29,109
 
Comprehensive income:
Net income $ 8,194 $ 7,299 $ 32,478 $ 49,694
Other comprehensive income
Currency translation adjustment (946 ) (687 ) (506 ) (1,154 )
Other   9     (3 )   56     (38 )
Other comprehensive income (loss) net of tax   (937 )   (690 )   (450 )   (1,192 )
Comprehensive income $ 7,257   $ 6,609   $ 32,028   $ 48,502  
 
       
Ethan Allen Interiors Inc.
Condensed Consolidated Balance Sheets
Unaudited
(in thousands)
 
 
 
 
June 30, June 30,

2013

2012
 
Assets
Current assets:
Cash and cash equivalents

$  
72,601

$  
79,721
Marketable securities 15,529 9,005
Accounts receivable, net 12,277 14,919
Inventories 137,256 155,739
Prepaid expenses & other current assets   22,907   23,408
Total current assets 260,570 282,792
 
Property, plant and equipment, net 291,672 295,695
Intangible assets, net 45,128 45,128
Restricted cash and investments 15,433 15,416
Other assets   4,482   5,757
 
Total Assets $ 617,285 $ 644,788
 
 
 
Liabilities and Shareholders' Equity
Current liabilities:
Current maturities of long-term debt 480 250
Customer deposits 59,098 65,465
Accounts payable 22,995 27,315
Accrued expenses & other current liabilities   50,366   58,047
Total current liabilities 132,939 151,077
 
Long-term debt 130,809 154,250
Other long-term liabilities   19,180   17,593
Total liabilities 282,928 322,920
 
Shareholders' equity   334,357   321,868
 
Total Liabilities and Shareholders' Equity $ 617,285 $ 644,788
 
       
Ethan Allen Interiors Inc.
GAAP Reconciliation
Three and Twelve Months Ended June 30, 2013 and 2012
Unaudited
(in thousands, except per share amounts)
 
Three Months Ended Twelve Months Ended
June 30, June 30,
  2013     2012     2013     2012  

Net Income / Earnings Per Share
Net income $ 8,194

$
7,299 $ 32,478 $ 49,694
Special items net of related tax effects * 1,861 (57 ) 6,544 1,318
Unusual income tax effects   (191 )   529     (617 )   (23,508 )
Net income (excluding special items* and
unusual income tax effects) $ 9,864   $ 7,771   $ 38,405   $ 27,504  
Basic weighted average shares outstanding 28,905 28,856 28,864 28,824
Earnings per basic share $ 0.28   $ 0.25   $ 1.13   $ 1.72  
Earnings per basic share (excluding special items*
and unusual income tax effects) $ 0.34   $ 0.27   $ 1.33   $ 0.95  
 
Diluted weighted average shares outstanding 29,319 29,179 29,239 29,109
Earnings per diluted share $ 0.28   $ 0.25   $ 1.11   $ 1.71  
Earnings per diluted share (excluding special
items* and unusual income tax effects) $ 0.34   $ 0.27   $ 1.31   $ 0.94  
 
 

Consolidated Operating Income / Operating Margin
Operating income $ 16,466 $ 14,334 $ 60,437 $ 49,697
Add: special items *   1,007     (90 )   8,382     2,075  
Operating income (excluding special items*) $ 17,473   $ 14,244   $ 68,819   $ 51,772  
 
Net sales $ 182,251   $ 185,316   $ 729,083   $ 729,373  
Operating margin   9.0 %   7.7 %   8.3 %   6.8 %
Operating margin (excluding special items*)   9.6 %   7.7 %   9.4 %   7.1 %
 

Wholesale Operating Income / Operating Margin
Wholesale operating income $ 13,192 $ 14,852 $ 50,843 $ 64,436
Add: special items   43     -     1,886     131  
Wholesale operating income (excluding special items*) $ 13,235   $ 14,852   $ 52,729   $ 64,567  
Wholesale net sales $ 106,749   $ 112,846   $ 434,439   $ 456,915  
Wholesale operating margin   12.4 %   13.2 %   11.7 %   14.1 %
Wholesale operating margin (excluding special items*)   12.4 %   13.2 %   12.1 %   14.1 %
 

Retail Operating Income / Operating Margin
Retail operating income (loss) $ 3,234 $ (944 ) $ 8,016 $ (11,522 )
Add: special items   964     (90 )   6,496     1,944  
Retail operating income (loss) (excluding special items*) $ 4,198   $ (1,034 ) $ 14,512   $ (9,578 )
Retail net sales $ 145,322   $ 143,730   $ 578,284   $ 559,417  
Retail operating margin   2.2 %   -0.7 %   1.4 %   -2.1 %
Retail operating margin (excluding special items*)   2.9 %   -0.7 %   2.5 %   -1.7 %
 
* Special items consist of restructuring, impairment, 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 Twelve Months Ended June 30, 2013 and 2012
Unaudited
(in thousands, except per share amounts)
 
Three Months Ended Twelve Months Ended
June 30, June 30,
  2013     2012     2013     2012  
 

EBITDA
Net income $ 8,194 $ 7,299 $ 32,478 $ 49,694
Add: interest expense, net 2,054 2,059 8,219 8,478
income tax expense 4,409 5,029 17,696 (8,455 )
depreciation and amortization   4,494     4,489     18,008     18,581  
EBITDA $ 19,151   $ 18,876   $ 76,401   $ 68,298  
Net sales $ 182,251   $ 185,316   $ 729,083   $ 729,373  
EBITDA as % of net sales   10.5 %   10.2 %   10.5 %   9.4 %
 
EBITDA $ 19,151 $ 18,876 $ 76,401 $ 68,298
Add: special items*   2,931     (90 )   10,306     2,075  
EBITDA (excluding special items) $ 22,082   $ 18,786   $ 86,707   $ 70,373  
Net sales $ 182,251   $ 185,316   $ 729,083   $ 729,373  
EBITDA as % of net sales (excluding special items)   12.1 %   10.1 %   11.9 %   9.6 %
 
* Special items consist of restructuring, impairment, transition charges and certain other items.
Related tax effects are calculated using a normalized income tax rate.

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