Ethan Allen Reports Higher Third Quarter Results

Furniture World Magazine

Ethan Allen Interiors Inc. reported sales and earnings for the three and nine months ended March 31, 2006. Net delivered sales for the quarter ended March 31, 2006 increased 15.5% to $267.1 million from $231.2 million in the prior year quarter. Net delivered sales for the Company's Retail division increased 22.6% to $168.2 million, while Wholesale sales increased 13.9% to $192.2 million during that same period. Comparable Ethan Allen store delivered sales increased 15.2% over the prior year quarter. During that same period, Retail division written sales increased 19.5% while comparable store written sales increased 12.3%. For the nine months ended March 31, 2006, net delivered sales increased 12.4% to $794.4 million from $706.8 million in the prior year comparable period. Net delivered sales for the Company's Retail division increased 16.5% to $506.6 million, while Wholesale sales increased 13.6% to $558.2 million during that same period. Comparable Ethan Allen store delivered sales increased 12.2% over the prior year comparable period. During that same period, Retail division written sales increased 16.1% while comparable store written sales increased 11.4%. For the quarter ended March 31, 2006, earnings per share increased 18.0% to $0.59 on net income of $20.0 million. This compares to earnings per share and net income of $0.50 and $17.9 million, respectively, in the prior year comparable period. For the nine months ended March 31, 2006, earnings per share, which includes a pre-tax restructuring and impairment charge of $4.2 million related to the Company's planned conversion of one of its existing manufacturing facilities into a regional distribution center, amounted to $1.85 on net income of $63.3 million. This compares to earnings per share and net income of $1.63 and $59.8 million, respectively, in the prior year comparable period. Excluding the impact of the restructuring and impairment charge, earnings per share for the current nine-month period amounted to $1.93 on net income of $65.9 million. Farooq Kathwari, Chairman and CEO, commented: "We are pleased with the continued progress at Ethan Allen and believe that our results reflect the positive effects of initiatives undertaken in recent years, including: the relocation of our stores to larger and more prominent locations; major investments at retail to increase the professionalism of our management team; the impact of new product introductions - over 80% of our product offerings are new within the last three years; enhanced advertising and marketing programs; and faster delivery of our products to our customers." Mr. Kathwari continued: "All of these initiatives, particularly the development of a more professional Company-operated retail division, have entailed major investment and cost. Still, despite these expenditures and additional cost increases associated with selected raw materials, fuel, utilities, and health insurance, we have been able to report significant improvements in both profitability and operating cash flow." Commenting on the outlook for the remainder of the fiscal year, Mr. Kathwari stated: "So far this fiscal year we have experienced considerable increases in both sales and earnings and, at this stage, we believe that the analyst estimates for the fourth quarter ended June 30, 2006 are within reach." Ethan Allen Interiors Inc. is a leading manufacturer and retailer of quality home furnishings. The Company sells a full range of furniture products and decorative accessories through an exclusive network of 311 retail stores in the United States and abroad, of which 134 are Company-owned. Ethan Allen has 10 manufacturing facilities, which include 2 sawmills, located throughout the United States.