Earnings Call Excerpt
Ethan Allen Interiors Inc. (ETH)
F2Q09 Earnings Call
January 29, 2009 11:00 am ET
Executives
M. Farooq Kathwari – Chairman, Chief Executive Officer, President, Chief Operating Officer
David R. Cullen – Vice President of Finance and Treasurer
Peg Lupton – Director of Investor Relations
Analysts
Robert Higginbotham – Goldman Sachs
Todd Schwartzman – Sidoti & Company
Budd Bugatch – Raymond James
[Rishi Sadarangani]
Anthony Chukumba – FTN Midwest Securities Corp.
[Maggie Gillman].
Joel Havard – Hilliard Lyons
Presentation
Operator
Welcome to the second quarter earning release call. (Operator Instructions) I would now like to introduce your host for today Chairman, President and CEO, Mr. Farooq Kathwari. Sir, you may begin.
M Farooq Kathwari
With me today are Dave Cullen, the Vice President of Finance and Treasurer, and Peg Lupton, Director of Investor Relations. I am going to provide you with very brief opening comments followed by Dave Cullen giving details about our financial results. I will then discuss in greater detail our business initiatives and open for questions and plan to end by about 11:45 am.
Despite a very difficult period, we saw our sales decline by 27%. We were able to generate a 5.3% operating income. We were able to maintain our consolidated growth margins at 53.7%, the same level as last year despite lower sales. Our inventories remain stable and operating expenses during the quarter were reduced by $14 million.
Our board also decided to continue our cash dividend, although at a reduced rate of $0.10 per share. And we have also reached an agreement to amend our bank facility providing us $100 million unsecured revolver. Our objection continues to be to manage our cash so that we do not draw on the revolver.
I will discuss in greater detail our business strategy, which focuses on two elements. First, positioning Ethan Allen as a provider of interior design services with stylish, good quality and value offerings. And second, continuing our process of reinvention by improving and simplifying our structure, adding technology to our personal services and continuing to reduce operating costs to counter the expectations of lower sales volume for the foreseeable future.
With that, Dave?
David R. Cullen
Please note that in the earnings release issued this morning and in the course of our prepared remarks, reference has been made to certain non-GAAP information, which excludes the effects of restructuring, impairment and related charges recorded during the quarter and year-to-date ended December 31, 2008 and December 31, 2007. A reconciliation of this non-GAAP information to the most directly comparable GAAP measure is available on our website.
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