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Ethan Allen Reports Fiscal Year 2020 and Fourth Quarter Results
DANBURY, CT – August 4, 2020 – Ethan Allen Interiors Inc. (“Ethan Allen” or the “Company”) (NYSE: ETH) provided several updates on its business and reported financial results for its fiscal year and fourth quarter ended June 30, 2020.
The Company’s fourth quarter of fiscal 2020 saw unprecedented disruption around the world as a result of the rapid spread of COVID-19.
Farooq Kathwari, Ethan Allen’s Chairman, President and CEO commented, “We are very gratified with the work and focus of our teams during this unprecedented crisis due to COVID-19. The foremost focus has been operating safely for our associates and clients. We have had to make many hard decisions including the furlough of approximately 70% of our global workforce. Fortunately, we have been able to bring many associates back with 56% of them having already returned to work.”
Mr. Kathwari continued, “Our action plan and the key steps taken helped us end with a strong cash position, which included generating $14 million in cash from operating activities over the last three months. For precautionary purposes, we drew $100 million from our credit facility in March 2020 and by June 30, 2020 had repaid $50 million, maintaining total cash of $72.3 million at June 30, 2020.”
“We are pleased with our written orders during the period considering almost all our design centers closed in mid-March and remained closed for the majority of the fourth quarter. Our advantage of combining the skilled personal service of our interior design associates with technology resulted in total wholesale orders, as a percentage of the previous year orders, as follows: April 35%, May 70% and June 117%. For the full quarter ending June 30, 2020, wholesale orders were 70% of the prior year. We are pleased that in July we continued with strong orders, reaching 103% of the strong prior year July. This was accomplished despite resurging challenges of COVID-19 in many parts of the country. As we move forward, we will continue to focus on our advantages, including a strong retail network, our vertical structure whereby 75% of products are made in our North American workshops and increasing the use of technology in all aspects of our enterprise, while also maintaining our focus on strong governance and social responsibility,” Mr. Kathwari further stated.
“We are also very pleased that our Board of Directors reinstated the regular quarterly cash dividend and declared a regular quarterly cash dividend of $0.21 per share, which will be payable to shareholders of record as of Thursday, October 8, 2020, and paid on Thursday, October 22, 2020. We are cautiously optimistic to grow our sales and profits,” Mr. Kathwari concluded.
The Company previously announced its COVID-19 action plan on April 1, 2020, which included, among other things, the temporary closure of design centers and manufacturing facilities, the furlough of 70% of its global workforce, the decision by the Company’s CEO to temporarily forego his salary through June 30, 2020, a temporary reduction in salaries of up to 40% for all senior management and up to 20% for other salaried employees through June 30, 2020, a temporary reduction of 50% in the cash compensation of the Company’s directors through June 30, 2020, the elimination of all non-essential operating expenses, a delay of capital expenditures and the temporary suspension of the regular quarterly dividend and share repurchase program.
The Company gradually began reopening its design centers beginning in May and as of June 30, 2020, has reopened all of its Company-operated retail design centers, including 14% open by appointment only. The Company resumed production in its North American manufacturing plants during the second half of the quarter, some in a limited capacity, and expects to work through existing order backlog and ramp up to full production by the end of August. The Company’s distribution centers are fully open and making home deliveries. The Company restored the temporary salary reductions on June 30, 2020 as planned and has reinstated the regular quarterly dividend.
The following information was filed by Ethan Allen Interiors Inc (ETH) on Tuesday, August 4, 2020 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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