<PAGE>
<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
-----------------------------------------------
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from____________________ to _______________________
Commission File Number: 1-11806
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Ethan Allen Interiors Inc.; Ethan Allen Inc.; Ethan Allen Finance Corporation;
Ethan Allen Manufacturing Corporation; Andover Woods Products Inc.
- - -----------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 06-1275288
- - -----------------------------------------------------------------------------
(State or other jurisdiction of incorporation (I.R.S.Employer ID No.)
or organization)
Ethan Allen Drive, Danbury, Connecticut 06811
- - -----------------------------------------------------------------------------
(Address of principal executive offices)
(203) 743-8000
- - -----------------------------------------------------------------------------
(Registrant's telephone number, including area code)
N/A
- - -----------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since
last report)
<PAGE>
<PAGE>
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. [X] Yes [ ] No
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a
plan confirmed by a court. [ ] Yes [ ] No
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
14,376,205 at September 30, 1996
<PAGE>
<PAGE>
ETHAN ALLEN INTERIORS INC.
AND SUBSIDIARIES
INDEX
PAGE
----
Part I. Financial Information:
Item 1. Consolidated Financial Statements as of
September 30 and June 30, 1996 and for
the three months ended September 30, 1996
and 1995 (unaudited):
Consolidated Balance Sheets 4
Consolidated Statements of Operations 6
Consolidated Statements of Cash Flows 7
Consolidated Statement of Shareholders'
Equity 9
Notes to Consolidated Financial
Statements 10
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations 14
Part II. Other Information: 18
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 6. Exhibits and reports on Form 8-K
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
ETHAN ALLEN INTERIORS INC. AND SUBSIDIARY
Consolidated Balance Sheets
(Dollars in thousands)
September 30,
ASSETS 1996 June 30,
------ (unaudited) 1996
------------- --------
<S> <C> <C>
Current assets:
Cash $ 11,565 $ 9,078
Accounts receivable, less allowances of
$2,510 and $2,564 at September 30 and
June 30, 1996, respectively 35,949 33,984
Notes receivable, current portion, less
allowances of $328 and $314 at September 30
and June 30, 1996, respectively 1,253 1,314
Inventories (note 3) 102,024 107,224
Prepaid expenses and other current assets 8,516 7,377
Deferred income taxes 8,325 9,305
------- -------
Total current assets 167,632 168,282
------- -------
Property, plant and equipment, net 161,727 159,634
Property, plant and equipment held for sale (note 4) 1,095 4,233
Notes receivable, net of current portion, less
allowance of $178 and $97 at September 30
and June 30, 1996, respectively 2,452 2,561
Intangibles, net of amortization of $12,181 and
$11,768 at September 30 and June 30, 1996,
respectively 53,652 54,065
Deferred financing costs, net of amortization of
$1,597 and $1,426 at September 30 and June 30,
1996, respectively 1,710 1,877
Other assets 4,905 5,329
------ -------
Total assets $393,173 $395,981
======= =======
<PAGE>
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Current liabilities:
Current maturities of long-term debt and
capital lease obligations $ 2,091 $ 2,498
Accounts payable 42,945 36,742
Accrued expenses 4,933 6,956
Accrued compensation and benefits 12,813 12,939
-------- --------
Total current liabilities 62,782 59,135
-------- --------
Long-term debt, less current maturities 65,350 79,929
Obligations under capital leases, less current
maturities 2,849 2,752
Other long-term liabilities, principally long-term
compensation, environmental and legal reserves 922 1,036
Deferred income taxes 32,316 32,836
------- -------
Total liabilities 164,219 175,688
------- -------
Commitments and contingencies (note 5) - -
Shareholders' equity:
Class A common stock, par value $.01, 35,000,000
shares authorized, 14,632,722 and 14,568,731
shares issued at September 30 and June 30,
1996, respectively 146 146
Preferred stock, par value $.01, 1,055,000 shares
authorized, no shares issued and outstanding at
September 30 and June 30, 1996, respectively - -
Additional paid-in capital 254,960 254,971
------- -------
255,106 255,117
Less: Notes receivable from officer and employees (33) (51)
Treasury stock (at cost) 261,138 and 256,480
shares at September 30 and June 30, 1996,
respectively (5,496) (5,371)
------- -------
249,577 249,695
Accumulated deficit (20,623) (29,402)
------- -------
Total shareholders' equity 228,954 220,293
------- -------
Total liabilities and shareholders' equity $393,173 $395,981
======= =======
See accompanying notes to consolidated financial statements.
<PAGE>
<PAGE>
<CAPTION>
ETHAN ALLEN INTERIORS INC. AND SUBSIDIARY
Consolidated Statements of Operations
(Unaudited)
(Dollars in thousands, except per share data)
Three Months
Ended September 30,
1996 1995
--------- ---------
<S> <C> <C>
Net sales $132,355 $116,941
Cost of sales 77,777 71,470
------- -------
Gross profit 54,578 45,471
Operating expenses:
Selling 19,160 17,769
General and administrative 19,016 17,816
------ ------
Operating income 16,402 9,886
------ ------
Interest and other miscellaneous
income, net 49 303
Interest expense 1,591 2,553
Amortization of deferred
financing costs 221 109
----- -----
1,812 2,662
----- -----
Income before income taxes 14,639 7,527
Income tax expense 5,856 3,027
------ -----
Net income $ 8,783 $ 4,500
======= =======
Per share data:
Net income per common share $ 0.60 $ 0.31
======= =======
Dividends declared $ 0.04 $ -
======= =======
Weighted average common shares
outstanding (in thousands) 14,639 14,599
See accompanying notes to consolidated financial statements.
<PAGE>
<PAGE>
<CAPTION>
ETHAN ALLEN INTERIORS INC. AND SUBSIDIARY
Consolidated Statements of Cash Flows
(Unaudited)
(Dollars in thousands)
Three Months
Ended September 30,
1996 1995
--------- ----------
<S> <C> <C>
Operating activities:
Net income $ 8,783 $ 4,500
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 4,570 4,396
Provision for deferred income taxes 752 116
Other non-cash charges 360 (73)
Change in:
Accounts receivable (1,871) (4,896)
Inventories 5,200 5,989
Prepaid and other current assets (1,139) (2,335)
Other assets 153 48
Accounts payable 6,203 6,369
Accrued expenses (2,012) (2,415)
Other long-term liabilities (114) (16)
------ ------
Net cash provided by operating activities 20,885 11,683
------ ------
Investing activities:
Proceeds from the disposal of property,
plant and equipment 331 96
Proceeds from the disposal of property,
plant and equipment held for sale 1,724 -
Capital expenditures (5,055) (3,130)
Payments received on long-term notes receivable 371 395
Disbursements made for long-term notes receivable (277) (400)
------ ------
Net cash used by investing activities (2,906) (3,039)
------- -------
<PAGE>
Financing activities:
Payments on revolving credit facility (21,000) (23,500)
Borrowings on revolving credit facility 14,500 15,500
Other long-term borrowings 440 -
Redemption of Senior Notes (8,425) -
Payments on long-term debt, including
current maturities (36) (19)
Issuance of common stock 226 105
Payments under capital leases (493) (457)
Increase in deferred financing costs (4) (88)
Payments to acquire treasury stock (125) -
Payments of dividends (575) -
Net cash used by financing activities (15,492) (8,459)
Net increase in cash 2,487 185
Cash at beginning of period 9,078 7,546
-------- --------
Cash at end of period $ 11,565 $ 7,731
======= =======
See accompanying notes to consolidated financial statements.
<PAGE>
<PAGE>
<CAPTION>
ETHAN ALLEN INTERIORS INC. AND SUBSIDIARY
Consolidated Statements of Shareholders' Equity
Three Months Ended September 30, 1996
(Unaudited)
(Dollars in thousands)
Additional
Common Paid-in Notes Treasury Accumulated
Stock Capital Receivable Stock Deficit Total
------- ---------- ---------- -------- ----------- --------
<S> <C> <C> <C> <C> <C> <C>
Balance at June 30, 1996 $ 146 $254,971 $ (51) $(5,371) $ (29,402) $220,293
Issuance of common stock - 226 - - - 226
Payments received on notes
receivable - - 18 - - 18
Increase in management
warrants - 47 - - - 47
Purchase of 4,658 shares
of treasury stock - - - (125) - (125)
Tax benefit associated with
the exercise of employee
options and warrants - 292 - - - 292
Dividends declared - (576) - - - (576)
Foreign currency adjustment - - - - (4) (4)
Net income - - - - 8,783 8,783
Balance at September 30, 1996 $ 146 $254,960 $ (33) $(5,496) $(20,623) $228,954
======== ======== ======= ======= ======== =======
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<PAGE>
ETHAN ALLEN INTERIORS INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Unaudited)
(1) Basis of Presentation
Ethan Allen Interiors Inc. (the "Company") is a Delaware corporation
incorporated on May 25, 1989. The consolidated financial statements
include the accounts of the Company and its wholly-owned subsidiary
Ethan Allen Inc. ("Ethan Allen") and Ethan Allen's subsidiaries. All
intercompany accounts and transactions have been eliminated in the
consolidated financial statements. All of Ethan Allen's capital
stock is owned by the Company. The Company has no other assets or
operating results other than those associated with its investment in
Ethan Allen.
(2) Interim Financial Presentation
All significant intercompany accounts and transactions have been
eliminated in the consolidated financial statements.
In the opinion of the Company, all adjustments, consisting only of
normal recurring accruals necessary for fair presentation, have been
included in the financial statements. The results of operations for
the three months ended September 30, 1996, are not necessarily
indicative of results for the fiscal year.
(3) Inventories
Inventories at September 30 and June 30, 1996 are summarized as
follows (dollars in thousands):
September 30, June 30,
1996 1996
----------- ---------
Retail merchandise $ 28,240 $ 28,695
Finished products 33,646 39,146
Work in process 12,656 12,803
Raw materials 27,482 26,580
-------- --------
$102,024 $107,224
======== =======
(4) Plant, Property and Equipment Held for Sale
Property and plants held for resale are recorded at lower of cost or
net realizable values. As of July 1, 1996, the Company adopted FAS
121, "Accounting for the Impairment of Long-Lived Assets and
Long-Lived Assets To Be Disposed Of." The adoption of this standard
did not have a material impact on the Company's financial position or
its results of operations.
<PAGE>
<PAGE>
ETHAN ALLEN INTERIORS INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Unaudited)
(5) Contingencies
The Company has been named as a potentially responsible party ("PRP")
for the cleanup of four sites currently listed or proposed for
inclusion on the National Priorities List ("NPL") under the
Comprehensive Environmental Response, Compensation and Liability Act
of 1980 ("CERCLA"). Numerous other parties have been identified as
PRP at these sites. The Company believes its share of waste
contributed to these sites is small in relation to the total;
however, liability under "CERCLA" may be joint and several. The
Company has total reserves of $500,000 applicable to these sites.
With respect to all of these sites, the Company believes that it is
not a major contributor based on the very small volume of waste
generated by the Company in relation to the total volume at the site.
For three of the sites, the site assessment is at a very early stage
and there has been no allocation of responsibility among the parties.
Environmental assessment activity with respect to these sites is
expected to continue over the next few years. With respect to the
fourth site, final allocation is in the process of being negotiated.
(6) Wholly-Owned Subsidiary
The Company owns all of the outstanding stock of Ethan Allen, has no
material assets other than its ownership of Ethan Allen stock, and
conducts all significant operating transactions through Ethan Allen.
The Company has guaranteed Ethan Allen's obligation under the Credit
Agreement and the Senior Notes and has pledged all the outstanding
capital stock of Ethan Allen to secure its guarantee under its Credit
Agreement.
The condensed balance sheets of Ethan Allen as of September 30 and
June 30, 1996 are as follows (dollars in thousands):
September 30, June 30,
1996 1996
------------- -----------
Assets
------
Current assets $167,591 $168,261
Non-current assets 229,637 231,163
-------- --------
Total assets $397,228 $399,424
======= =======
Liabilities
-----------
Current liabilities $ 62,160 $ 58,517
Non-current liabilities 101,437 116,553
------- -------
Total liabilities $163,597 $175,070
======= =======
<PAGE>
<PAGE>
ETHAN ALLEN INTERIORS INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Unaudited)
A summary of Ethan Allen's operating activity for the three months
ended September 30, 1996 and 1995 is as follows (dollars in
thousands):
Three Months
Ended September 30,
1996 1995
-------- --------
Net sales $132,355 $116,941
Gross profit 54,578 45,471
Operating income 16,420 9,915
Interest expense 1,591 2,553
Amortization of deferred
financing costs 221 109
Income before income
tax expense 14,656 7,554
Net income 8,800 4,527
(7) Business Reorganization
The Company implemented a business reorganization ("Reorganization")
effective July 1, 1995, which permitted a separation of manufacturing
operations from distribution and store operations. This has given
the Company additional flexibility to permit it to reduce its
aggregate state corporate income tax liability by allocating income
to the operations responsible for generating such income thereby
reducing the Company's effective tax rate. The Company believes that
the separation of manufacturing operations from distribution and
store operations will also provide for improved measures of
performance, including profitability of operations and return on
assets, by allowing the Company to more easily allocate income,
expenses and assets to the separate operations of the Company's
business. The Reorganization consists principally of the following
elements: (i) the contribution of Ethan Allen's manufacturing
equipment to Ethan Allen Manufacturing Corporation ("EAMC"), which is
a wholly-owned subsidiary of the Company (ii) the execution of
operating lease arrangements between EAMC and Ethan Allen for real
property used in manufacturing operations (iii) the contribution by
Ethan Allen of certain of Ethan Allen's trademarks and service marks,
design patents and related assets to Ethan Allen Finance Corporation
("EAFC") which is a wholly-owned subsidiary of Ethan Allen, (iv) the
full and unconditional guarantee on a senior unsecured basis of Ethan
Allen's obligations under Ethan Allen's Credit Agreement and 8-3/4%
Senior Notes due 2001 by each of EAMC and EAFC and Andover Woods
Products Inc. ("Andover", an existing wholly-owned subsidiary of the
Company) (collectively,"Guarantor Subsidiaries"), (v) the amendment
of the Company's existing guarantee of Ethan Allen's obligations
under the Senior Notes and the Indenture to include a guarantee of
each Guarantor Subsidiary's obligations under its subsidiary
<PAGE>
<PAGE>
ETHAN ALLEN INTERIORS INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Unaudited)
guarantee, (vi) the execution of a management agreement and a service
mark licensing agreement and a trademark licensing agreement between
EAMC and EAFC, (vii) the execution of a management agreement between
Ethan Allen and EAFC and (viii) the execution of a manufacturing
agreement between Ethan Allen and EAMC. Ethan Allen continues to own
its headquarters building in Danbury, Connecticut, the real property
associated with EAMC's manufacturing operations and the assets and
liabilities associated with the Ethan Allen-owned retail operations
and Ethan Allen's distribution, service and home delivery operations.
The summarized historical combined balance sheet information for the
Guarantor Subsidiaries at September 30, 1996 and at June 30, 1996 is
as follows (dollars in thousands):
September 30, June 30,
Assets 1996 1996
------ -------------- ---------
Current assets $ 54,953 $ 46,394
Non-current assets 165,443 164,602
------- -------
Total assets $220,396 $210,996
======= =======
Liabilities
Current liabilities $ 23,252 $ 21,346
Non-current liabilities 17,939 17,939
------- -------
Total liabilities $ 41,191 $ 39,285
======= =======
Summarized historical combined operating activity for the three
months ended September 30, 1996 and 1995 is as follows (dollars in
thousands):
Three Months
Ended
September 30,
1996 1995
--------- ---------
Net sales $ 77,413 $ 67,965
Gross profit 15,680 10,756
Operating income 11,289 6,863
Income before interest
expense and income taxes 12,407 7,951
Income before income taxes 12,387 7,883
Net income 7,494 4,769
<PAGE>
<PAGE>
ETHAN ALLEN INTERIORS INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Unaudited)
The summarized historical financial information for the Guarantor
Subsidiaries above, has been derived from the financial statements of
the Company.
<PAGE>
<PAGE>
MANAGEMENT DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Ethan Allen's revenues are comprised of wholesale sales to
dealer-owned stores and retail sales of Ethan Allen-owned stores as follows
(dollars in millions):
Three Months
Ended
September 30,
1996 1995
--------- ----------
Revenues:
Net wholesale sales to dealer-
owned stores $ 86.1 $ 77.8
Net retail sales of Ethan Allen-
owned stores 40.2 34.8
Other revenues 6.0 4.3
----- -----
Total $132.3 $116.9
===== =====
Three Months Ended September 30, 1996 Compared to Three Months Ended
September 30, 1995
Sales for the three months ended September 30, 1996 increased by
$15.4 million, or 13.2%, over the corresponding period in the prior year
to $132.3 million. Net sales to dealer-owned stores increased by $8.3
million, or 10.7% to $86.1 million, and net retail sales by Ethan
Allen-owned stores increased by $5.4 million, or 15.5% to $40.2 million.
Sales growth has resulted from newer product offerings, a coordinated
advertising program, 95% brand awareness, and growth in international
sales. In addition, sales growth can be attributed to the strengthening of
the Company's existing retail base through relocations and store
renovations. At September 30, 1996, there were 288 total stores, of which
231 were dealer-owned, as compared to 296 total stores, of which 236 were
dealer-owned at September 30, 1995. The net decrease in the number of
stores is primarily due to the closing of 14 smaller, under-performing
stores in Japan, which were replaced by 3 larger, high-volume stores in
fiscal 1996.
The increase in retail sales by Ethan Allen-owned stores is
attributable to a 12.5%, or $4.1 million, increase in comparable store
sales, and an increase in sales generated by newly opened or acquired
stores of $2.0 million, partially offset by closed stores, which generated
$.7 million less in sales in the three months ended September 30, 1996, as
compared to the three months ended September 30, 1995.
<PAGE>
<PAGE>
Comparable stores are stores that, if newly opened, have been open
for at least 15 months. Ethan Allen's retail business is principally
special order and minimal net sales are generated during the first three
months of operations of newly opened stores. Stores acquired from dealers
by Ethan Allen are included in comparable store sales in their thirteenth
full month of Ethan Allen-owned operations.
Gross profit for the three months ended September 30, 1996 increased
by $9.1 million from the three months ended September 30, 1995 to $54.6
million. This increase is attributable to higher sales volumes, combined
with an increase in gross margin to 41.2% in the three months ended
September 30, 1996 from 38.9% in the three months ended September 30, 1995.
Gross margins have been favorably impacted by greater manufacturing
efficiencies, the full benefit of recent price increases and a higher
proportionate percentage of retail sales to total sales, partially offset
by an increase in lumber and other raw material costs and higher employee
benefit costs.
Selling, general and administrative expenses increased $2.6 million
from $35.6 million, or 30.4% of net sales, in the three months ended
September 30, 1995 to $38.2 million, or 28.8% of net sales, in the three
months ended September 30, 1996. This increase is attributable principally
to an increase in operating expenses of the Company's retail division of
$1.3 million due to higher sales volumes. Wholesale operating expenses
also increased due to higher sales volumes and increased employee benefit
costs.
Operating income for the three months ended September 30, 1996 was
$16.4 million, an increase of $6.5 million as compared to the three months
ended September 30, 1995. Wholesale operating income was $15.3 million for
the three months ended September 30, 1996, reflecting an increase of $5.7
million as compared to the prior year quarter. This increase is
attributable to higher sales volumes and increased gross margins. Retail
operating income was $1.3 million in the three months ended September 30,
1996, as compared to break-even in the corresponding period in the prior
year. The higher retail sales volumes and improved gross margin were
partially offset by higher operating expenses primarily due to the higher
sales volumes.
<PAGE>
<PAGE>
Interest expense, including amortization of deferred financing costs,
for the three months ended September 30, 1996 decreased by $.9 million to
$1.8 million from $2.7 million in the three months ended September 30,
1995, due to lower debt balances outstanding.
Income tax expense of $5.9 million, or an effective tax rate of
40.0%, was recorded for the three months ended September 30, 1996, as
compared to $3.0 million, or an effective tax rate of 40.2%, in the prior
year quarter.
For the three months ended September 30, 1996, the Company recorded
net income of $8.8 million compared to net income for the three months
ended September 30, 1995 of $4.5 million.
Financial Condition and Liquidity
Principal sources of liquidity are cash flow from operations and
additional borrowing capacity under the revolving credit facility. Net
cash provided by operating activities totaled $20.9 million this quarter as
compared to $11.7 million in the three months ended September 30, 1995. The
increase is principally due to a $4.3 million increase in net income, a
$1.9 million increase in accounts receivable in the three months ended
September 30, 1996, as compared to a $4.9 million increase in the three
months ended September 30, 1995, and a $1.1 million increase in prepaid and
other current assets in the three months ended September 30, 1996, as
compared to a $2.3 million increase in the prior year quarter. At
September 30, 1996, the Company had working capital of $104.8 million and a
current ratio of 2.67 to 1.
During the three months ended September 30, 1996, capital spending
totaled $5.1 million as compared to $3.1 million in the three months ended
September 30, 1995. Capital expenditures in fiscal 1996 are anticipated to
be approximately $18.0 million. The Company anticipates that cash from
operations will be sufficient to fund this level of capital expenditures.
The increased level of anticipated capital spending, which is attributable
primarily to manufacturing efficiency improvements and scheduled new store
openings, is expected to continue for the foreseeable future.
Total debt outstanding at September 30, 1995 is $70.3 million. The
Company's balance under its revolving credit facility at September 30, 1996
was $.5 million. Trade and standby letters of credit of $13.3 million were
also outstanding as of September 30, 1996. Other debt includes $53.6
million of outstanding Senior Notes which have a final maturity in 2001,
with no scheduled amortization prior to final maturity. The Senior Notes
may not be redeemed at the option of the Company until March 15, 1998.
Therefore, the Company does not anticipate that any Senior Notes will be
repaid for at least two years; however, the Company may from time to time,
either directly or through agents, repurchase its Senior Notes in the open
market, through negotiated purchases or otherwise, at prices and on terms
satisfactory to the Company. During the quarter ended September 30, 1996,
$8.4 million principal amount was repurchased. <PAGE>
<PAGE>
During the fiscal year ended June 30, 1996, the Company closed on
loan commitments in the aggregate amount of approximately $1.4 million
related to the modernization of its Beecher Falls manufacturing facility.
Loans made pursuant to these commitments will bear interest at rates of 3
to 8% and will have maturities of 7 to 30 years. The loans will have a
first and second lien in respect of equipment financed by such loans and a
first and second mortgage interest in respect of a building, the
construction of which was financed by such loans. Interest and principal
on such loans will be paid monthly, commencing July 26, 1996, and October
15, 1996. As of June 30, 1996, the Company received $500,000 of loan
proceeds which was included in long term debt at year end. During the
quarter ended September 30, 1996, loan proceeds in the amount of $440,000
were received and are included in long term debt at September 30, 1996.
As of September 30, 1995, aggregate scheduled maturities of long-term
debt for each of the next five fiscal years are $.1 million, $.4 million,
$7.1 million, $62.2 million and $.2 million, respectively. Management
believes that its cash flow from operations, together with its other
available sources of liquidity, will be adequate to make all required
payments of principal and interest on its debt, to permit anticipated
capital expenditures and to fund working capital and other cash
requirements.
The Company may also, from time to time, either directly or through
agents, repurchase its common stock in the open market through negotiated
purchases or otherwise, at prices and on terms satisfactory to the Company.
During the quarter ended September 30, 1996, 4,658 shares were purchased at
an average price of $26.76 per share. Depending on market prices and other
conditions relevant to the Company, such purchases may be discontinued at
any time.
<PAGE>
<PAGE>
PART II. OTHER INFORMATION
Item 1. - Legal Proceedings
There has been no change to matters discussed in Business-Legal Proceedings
in Company's Form 10-K as filed with the Securities and Exchange Commission
on September 27, 1996.
Item 2. - Changes in Securities
There has been no change to matters discussed in Description and Ownership
of Capital Stock in the Company's Form 10-K as filed with the Securities
and Exchange Commission on September 27, 1996.
Item 6. - Exhibits and Reports on Form 8-K
(a) 11. - Statement re Computation of Per Share Earnings
(b) 27. - Financial Data Schedule
<PAGE>
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ETHAN ALLEN INTERIORS INC.
--------------------------
(Registrant)
DATE: 11/14/96 BY: /s/ M. Farooq Kathwari
-------- M. Farooq Kathwari
Chairman of the Board
President and Chief
Executive Officer
(Principal Executive Officer)
DATE: 11/14/96 BY: /s/ Edward P. Schade
-------- Edward P. Schade
Vice President &
Treasurer
(Principal Financial Officer)
DATE: 11/14/96 BY: /s/ Gerardo Burdo
-------- Gerardo Burdo
Corporate Controller
(Principal Accounting Officer)
<PAGE>
<PAGE>
INDEX TO EXHIBITS
11. Computation of Per Share Earnings Page 21
27. Financial Data Schedule Page 22
<PAGE>
ETHAN ALLEN INTERIORS INC.
Computation of Per Share Earnings
Three Months Ended
September 30,
1996 1995
-------- --------
Primary Earnings Per Share:
- - ---------------------------
Average number of
shares outstanding 14,344,000 14,434,000
Shares repurchased under
treasury method (522,000) (579,000)
Net effect of common
stock equivalents 817,000 744,000
---------- ----------
Average number of
shares - primary 14,639,000 14,599,000
Net income $ 8,783,000 $ 4,500,000
========= ==========
Per Share Data
--------------
Net income per common share $ 0.60 $ 0.31
===== =====
Earnings Per Common Share:
- - --------------------------
Earnings per common share are computed by dividing net earnings by
the weighted average number of shares of common stock and common stock
equivalents outstanding during each period. The Company has issued stock
options and warrants which are the Company's only common stock equivalents.
Fully Diluted Earnings Per Share:
- - ---------------------------------
Fully diluted earnings per share is within 3% of primary earnings per
share for all periods presented.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
consolidated financial statements of Ethan Allen Interiors, Inc. for
the quarter ended September 30, 1996 and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-10-1996
<PERIOD-END> SEP-30-1996
<CASH> 11,565
<SECURITIES> 0
<RECEIVABLES> 35,949<F4>
<ALLOWANCES> 0
<INVENTORY> 102,024
<CURRENT-ASSETS> 167,632<F5>
<PP&E> 244,684
<DEPRECIATION> 82,957
<TOTAL-ASSETS> 393,173<F6>
<CURRENT-LIABILITIES> 62,782<F7>
<BONDS> 68,199<F8>
0
0<F9>
<COMMON> 146<F10>
<OTHER-SE> 228,808<F11>
<TOTAL-LIABILITY-AND-EQUITY> 228,954
<SALES> 132,355
<TOTAL-REVENUES> 132,355<F12>
<CGS> 77,777
<TOTAL-COSTS> 77,777
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,812<F13>
<INCOME-PRETAX> 14,639
<INCOME-TAX> 5,856
<INCOME-CONTINUING> 8,783
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,783
<EPS-PRIMARY> .60<F14>
<EPS-DILUTED> .60<F15>
<PAGE>
<FN>
<F4> Figure for receivables is net of allowances for doubtful accounts
of $2,510.
<F5> Includes prepaid expenses of $8,516.
<F6> Includes goodwill of $9,278 (net of amortization).
<F7> Includes current portion of long-term debt of $2,091 as of
September 30, 1996.
<F8> Includes long-term debt of $65,350 (net of the current portion of
long-term debt) and capitalized leases of $2,849 (net of the current
portion of capitalized leases). As of September 30, 1996 outstanding
long-term debt of Ethan Allen on a consolidated basis consisted of (i)
revolving credit facility of $500, (ii) 8.75% senior notes of $53,575,
(iii) 9.75% mortgage note of $1,580 (net of current portion), (iv)
industrial revenue bonds of $8,455, and (v) other of $1,240 (net of current
portion). For a description of the terms of Ethan Allen's long-term debt,
see Footnote 8 to Ethan Allen's fiscal 1996 Consolidated Financial
Statements.
<F9> As of September 30, 1996, Ethan Allen had no shares of preferred
stock outstanding.
<F10> As of September 30, 1996, Ethan Allen had 14,632,722 shares of common
stock, $.01 par value per share, issued. For a description of Ethan
Allen's common stock as of June 30, 1996, see Ethan Allen's fiscal 1996
Consolidated Statement of Stockholders' Equity and Footnote 10 of Ethan
Allen's fiscal 1996 Consolidated Financial Statements.
<F11> Consists of $254,960 of additional paid in capital, $(20,623) of
retained earnings, ($33) of notes receivable from officers and employees
and ($5,496) of treasury stock.
<F12> In the quarter ended September 30, 1996, Ethan Allen's revenues were
derived from sales generated by its wholesale and retail operations.
<F13> Consists of $1,591 of interest expense and $221 of amortization of
deferred costs during fiscal 1996.
<F14> Earnings per share for the quarter ended September 30, 1996, were
$0.60. For information on Ethan Allen's earnings per share, see Ethan
Allen's Consolidated Financial Statements for the quarter ended September
30, 1996.
<F15> Earnings per share on a fully diluted basis for the quarter ended
September 30, 1996, were $0.60.
</FN>
</TABLE>
