Ethan Allen (ETH) Prelim. Q3 EPS Misses Views

Ethan Allen (NYSE: ETH) announced that it will release its third quarter 2015 results on Monday, April 27, 2015 after the market close.

The company's Chairman, President and CEO Farooq Kathwari stated, “During the third quarter we began phase two of our new product launch as planned and continued implementing many initiatives. We are freshening up our design centers and adding to our professional staff of retail management and over 1,500 interior designers in North America. Technology is being added at all levels with a major emphasis on our website. We are very focused on increasing our manufacturing in the United States and North America. Importantly, we are strengthening our merchandising programs with changing since last fall to this fall about 70% of our offerings.

As we have discussed, these initiatives are very important for the long-term, but there will be some disruption in the short-term due to continued sell off of floor samples, implementing new product through our manufacturing and increasing our operating expenses. We expect written and delivered sales for the quarter to be flat to last year and adjusted EPS in the range of $0.18.”

*** The Street sees EPS of $0.22.

Mr. Kathwari continued, “We are also pleased our balance sheet remains healthy and that we have continued to strengthen our financial structure during the quarter, now with 40% less debt than a year ago due to the early extinguishment of our senior notes. We also plan to continue to enhance shareholder return by repurchase of our stock and payment of cash dividends.

During the quarter we resumed our stock repurchase program by utilizing $2.8 million to purchase 103,766 shares. The Board of Directors has authorized an increase to the stock repurchase authorization of two million shares taking the total open repurchase authorization to 2,997,724 shares. Additionally, the Board of Directors has declared a regular quarterly cash dividend of $0.14 per share, an increase of 16.7%, which will be payable to shareholders of record as of July 9, 2015 and will be paid on July 24, 2015. Since going public, the company has invested in capital expenditures of $737.9 million including investments in retail and manufacturing properties and acquisitions, repurchased 18.3 million shares for $535.5 million, paid cash dividends of $345 million and repaid $315.8 million of debt.

Mr. Kathwari concluded, "As discussed previously, we expect another six months of some disruption as we continue to strengthen our teams and invest in our marketing and manufacturing. Our focus is to position us to grow our sales, both in our design centers and by ecommerce."

The conference call to discuss the company's business and financial highlights is scheduled for the same afternoon as the earnings release, Monday, April 27, 2015 at 5:00 PM ET. You will be able to access a live webcast from the "Events & Presentations" page at http://ethanallen.com/investors.

To access the conference call, dial 866-814-1919 (or 703-639-1363 for international callers), and provide conference ID 1653926. For those unable to listen to the live broadcast, a webcast replay will be archived on the company’s website for at least 60 days.

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