Earnings Call Excerpt
Ethan Allen Interiors Inc. (ETH)
F1Q09 Earnings Call
October 23, 2008 11:00 am ET
Executives
M. Farooq Kathwari – Chairman, Chief Executive Officer, President, Chief Operating Officer
David R. Cullen – Principal Financial Officer
Analysts
Budd Bugatch – Raymond James
Robert Higginbotham – Goldman Sachs
Todd Schwartzman – Sidoti & Company
John Baugh – Stifel Nicolaus & Company, Inc.
Rob Furlong – Garp Research & Securities
Joel Havard – Hilliard Lyons
Rishi Sadarangani – Alliance Bernstein
Presentation
Operator
Good day ladies and gentleman and welcome to the Ethan Allen Earnings Release. (Operator Instructions). At this time I would like to introduce your host, Mr. Farooq Kathwari.
M. Farooq Kathwari
Good morning I am Farooq Kathwari the Chairman and CEO of Ethan Allen and also joining me today is Dave Cullen our Vice President of Finance.
These extraordinary times have challenged us to remain extremely proactive in managing our costs on one hand and also maintaining the moral and forward momentum for our enterprise. While our sales declined 17% we maintained higher gross margins, reduced our expenses and most importantly focused on maintaining strong liquidity positions.
We also continue to strengthen many aspects of our enterprise, which positions us very well for growth in sales and profitability. I will discuss in greater detail after David Cullen gives an overview of our financial results.
David R. Cullen
Please note that in the earnings release issued earlier today and in the course of our prepared remarks, reference has been made to certain non-GAAP information which exclusively affects of restructuring and impairment charges recorded during the quarter ended September 30, 2008. Our reconciliation of this non-GAAP information to the most directly comparable GAAP measure is available on our website.
Net sales for the quarter were $205.8 million compared to $248.7 million in the first quarter last year. The retail division's net sales were $155.9 million versus $182.8 million last year. With comparable design center delivered sales 19% lower than in the prior year quarter. Written sales in retail decreased 24.3% and comparable written sales decreased 27.7% versus the prior year quarter.
Wholesale net delivered sales were $121.3 million in the quarter compared to $156.3 million last year in the first quarter. Consolidated gross margins for the quarter continue to improve to 54.4% as compared to 53.7% in the prior year period reflecting improved margin in our retail segments and an increase in the proportion of retail sales for our total sales.
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