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 March 31, 2016

 

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: 1-11692

 

Ethan Allen Interiors Inc

(Exact name of registrant as specified in its charter)

 

Delaware		06-1275288
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

 

 

Ethan Allen Drive, Danbury, Connecticut		06811
(Address of principal executive offices)		(Zip Code)

 

(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)

 

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

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or such shorter period that the registrant was required to submit and post such files).  [X] Yes    [ ] No

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act

 

Large accelerated filer [X]	Accelerated filer                    [ ]
Non-accelerated filer     [ ]	Smaller reporting company[ ]

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     [ ] Yes     [X] No

 

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

At April 21, 2016, there were 27,743,478 shares of Class A Common Stock, par value $.01, outstanding.

 

  

Table of Contents

 

PART I ‐ FINANCIAL INFORMATION
Item 1.	Financial Statements
Consolidated Balance Sheets		1
Consolidated Statements of Comprehensive Income		2
Consolidated Statements of Cash Flows		3
Consolidated Statements of Shareholders’ Equity		4
Notes to Consolidated Financial Statements		5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	26
Item 4.	Controls and Procedures	26
PART II ‐ OTHER INFORMATION
Item 1.	Legal Proceedings	27
Item 1A.	Risk Factors	27
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	27
Item 3.	Defaults Upon Senior Securities	27
Item 4.	Mine Safety Disclosures	27
Item 5.	Other Information	27
Item 6.	Exhibits	28
SIGNATURES		29

 

 

   

PART I - FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES

 

Consolidated Balance Sheets 

(In thousands)

 

 

See accompanying notes to consolidated financial statements.

 

 

 

ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES

 

Consolidated Statements of Comprehensive Income (Unaudited)

 

(In thousands, except per share data)

 

 

See accompanying notes to consolidated financial statements.

 

 

  

ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES

 

Consolidated Statements of Cash Flows (Unaudited) 

(In thousands)

 

 

See accompanying notes to consolidated financial statements.

 

 

    

ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES

 

Consolidated Statements of Shareholders’ Equity

 

Nine Months Ended March 31, 2016

(Unaudited)

(In thousands)

 

 

See accompanying notes to consolidated financial statements.

 

 

 

ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

 

 

 

ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

 

 

 

ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

 

 

 

ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

 

 

 

ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

The following discussion of financial condition and results of operations should be read in conjunction with (i) our Consolidated Financial Statements, and notes thereto, included in Item 1 of Part I of this Quarterly Report on Form 10-Q and (ii) our Annual Report on Form 10-K for the year ended June 30, 2015.

 

Forward-Looking Statements

 

Management's discussion and analysis of financial condition and results of operations and other sections of this Quarterly Report on Form 10-Q contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which represent our management’s beliefs and assumptions concerning future events based on information currently available to us relating to our future results. Such forward-looking statements are identified in this Quarterly Report on Form 10-Q and in documents incorporated herein by reference by use of forward-looking words such as "anticipate", "believe", "plan", "estimate", "expect", "intend", “will”, “may”, “continue”, “project”, ”target”, “outlook”, “forecast”, “guidance”, and similar expressions and the negatives of such forward-looking words. These forward-looking statements are subject to management decisions and various assumptions about future events, and are not guarantees of future performance. A number of risks and uncertainties could cause actual results to differ materially from those anticipated in the forward-looking statements, including, but not limited to: changes in global or regional political or economic conditions, including changes in governmental and central bank policies; our ability to secure debt or other forms of financing; the effect of operating losses on our ability to pay cash dividends; changes in business conditions in the furniture industry, including changes in consumer spending patterns, tastes and demand for home furnishings; competition from overseas manufacturers and domestic retailers and competitive factors such as changes in products or marketing efforts of others; effects of our brand awareness and marketing programs, including changes in demand for our existing and new products; our ability to locate new design center sites and/or negotiate favorable lease terms for additional design centers or for the expansion of existing design centers; fluctuations in interest rates and the cost, availability and quality of raw materials; pricing pressures; the effects of labor strikes; weather conditions that may affect sales; volatility in fuel, utility, transportation and security costs; the potential effects of natural disasters affecting our suppliers or trading partners; the effects of terrorist attacks or conflicts or wars involving the United States or its allies or trading partners; and those matters discussed in “Item 1A – Risk Factors” of our Annual Report on Form 10-K for the year ended June 30, 2015, and elsewhere in this Quarterly Report on Form 10-Q and our SEC filings. Accordingly, actual circumstances and results could differ materially from those contemplated by the forward-looking statements.

 

Given the risks and uncertainties surrounding forward-looking statements, you should not place undue reliance on these statements. Many of these factors are beyond our ability to control or predict. Our forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q. Other than as required by law, we undertake no obligation to update or revise forward-looking statements, whether as a result of new information, future events, or otherwise.

 

Critical Accounting Policies

 

The Company’s consolidated financial statements are based on the accounting policies used. Certain accounting polices require that estimates and assumptions be made by management for use in the preparation of the financial statements. Critical accounting policies are those that are central to the presentation of the Company’s financial condition and results and that require subjective or complex estimates by management. There have been no material changes with respect to the Company’s critical accounting policies from those disclosed in its 2015 Annual Report on Form 10-K filed with the SEC on August 12, 2015.

 

On April 7, 2015 the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs. The new standard classifies debt issuance costs as a deduction from the debt liability, consistent with debt discounts. Prior to the issuance of ASU 2015-03, these costs were classified as assets. We adopted the provisions of ASU 2015-03 beginning in July 2015 and prior period amounts have been reclassified to conform to the current period presentation. As of June 30, 2015, $0.3 million of debt issuance costs were reclassified in the consolidated balance sheet from other noncurrent assets to current portion of long-term debt and $1.0 million was reclassified from other noncurrent assets to long-term debt, less current portion. The adoption of ASU 2015-03 did not impact our consolidated statements of comprehensive income, or our consolidated statements of cash flows.

 

Overview

 

We are a leading interior design company and manufacturer and retailer of quality home furnishings. Founded over 80 years ago, today we are a leading international home fashion brand doing business in North America, Europe, Asia and the Middle East. We are vertically integrated from design through delivery, affording our clientele a value equation of style, quality and price. We offer complementary interior design service to our clients and sell a full range of furniture products and decorative accents through ethanallen.com and a network of 300 design centers in the United States and abroad. The design centers represent a mix of independent licensees and our own Company operated retail segment. We own and operate nine manufacturing plants including six manufacturing plants and one sawmill in the United States and a manufacturing plant each in Mexico and Honduras.

 

 

 

ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES 

 

Our business model is to maintain continued focus on (i) communicating our messages with strong advertising and marketing campaigns, (ii) capitalizing on the strength of our interior design professionals and management in our retail design centers, (iii) utilizing ethanallen.com as a key marketing tool to drive traffic to a network of 200 North American design centers located near our demographic base, (iii) investing in new technologies across key aspects of our vertically integrated business, and (iv) leveraging the benefits of our vertical integration by maintaining our manufacturing capacity in North America where we manufacture approximately 70% of our products.

 

Our competitive advantages arise from:

 

●

providing fashionable high quality products of the finest craftsmanship;

 

●

offering complimentary design service through an estimated 2,000 motivated interior design professionals network-wide, which we believe makes us the world’s leading interior design network;

 

●

our wide array of custom product offerings across our upholstery, case goods, and accent product categories;

 

●

enhancing our technology in all aspects of the business; and

 

●

leveraging our vertically integrated structure.

 

We continue to make considerable investments to strengthen the level of service, professionalism, and interior design competence, as well as to improve the efficiency of our retail operations. We believe that over time, we will continue to benefit from (i) continuous repositioning of our retail network, (ii) frequent new product introductions, (iii) new and innovative marketing promotions and effective use of targeted advertising media, and (iv) continued use of the latest technology coupled with personal service from our interior design professionals. We believe our network of professionally trained interior design professionals differentiates us significantly from others in our industry.

 

Results of Operations

 

In the third quarter of fiscal 2016, consolidated net sales of $190.6 million increased 10.0% compared to the third quarter of fiscal 2015. During the same period, consolidated operating margin increased to 8.4% from 5.3%, and net income increased to $0.36 from $0.09 per diluted share. Beginning in the fall of 2014, we began a major transformation of our product offerings with several phases. We introduced Casual Classics during the first phase in the fall of 2014, focusing on relaxed finishes and comfort. In the spring and summer of 2015, we launched the second phase, Romantic Classics, with unique, stand-alone timeless pieces with new finishes and forms, designed specifically for manufacturing primarily at our North American workshops to obtain maximum benefit from our vertical integration. We launched the third phase in the fall of 2015, during which we further developed Romantic Classics, inspired by European designs, taking inspiration from the classics and modernizing them for today’s living, with continued focus on North American manufacturing. In our current phase, we continue to differentiate our brand, we are further developing our Casual Classics, with three new product lines expected to be introduced in stages through the summer of 2016, followed by the introduction of our Ethan Allen | Disney home line in the fall of 2016. While we implement major product introductions, such as the anticipated introductions described above, our wholesale segment experiences some disruptions in manufacturing as we change tooling and methods, build prototypes and then ramp up production. In our retail segment, some disruption also occurs in our design centers as we update floor displays, and sell the remainder of our older products on clearance to make space for the new product. Our continuous product transformation in measured steps helps us minimize these disruptions and preserve our reputation for offering high-quality and fashionable products.

 

During the third quarter of fiscal 2016, we continued our transition to growth, with a year-over-year quarterly 10.0% increase in consolidated net sales, following a 5.3% increase in our second quarter of fiscal 2016. Third quarter sales increased in both our wholesale and retail segments. The Canadian dollar regained some strength versus the U.S. dollar during the March 2016 quarter, though it is still weaker than it was one year ago, and so continues to have a negative impact on sales in our retail segment when compared to the prior year quarter.

 

 

 

ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES 

 

During the third quarter of fiscal 2016, our retail segment had slightly lower gross margins due to sales promotions, product mix, clearance sales and currency fluctuation in our international operations. We anticipate continuing sales promotions and during the remainder of 2016 we anticipate continuing clearance sales as we make room for the planned new product introductions. The gross margin and gross profit of our wholesale segment improved over the third quarter of fiscal 2015 due to higher sales and maintaining our current level of efficiency in manufacturing the newly designed products in our North American workshops.

 

Comparing the third quarters of fiscal 2016 and fiscal 2015, net sales increased by 17.5% in our retail segment and by 4.4% in our wholesale segment. The ratio of retail segment net sales to consolidated net sales for the third quarter was 79.8% compared to 74.7%. The consolidated gross margin was 55.5% for the third quarter of fiscal 2016 and 54.3% for the third quarter of fiscal 2015, and operating expenses as a percentage of total net sales were 47.1% in the third quarter of fiscal 2016 compared to 49.0%.

 

Written orders booked by the retail segment in the third quarter of fiscal 2016 increased by 4.3% as compared to the same quarter of fiscal 2015, and comparable written orders increased by 5.5% in the same period. As we transition the major new product introductions, both at retail and at the manufacturing level, we are varying the timing and duration of our sale events this fiscal year, as compared to monthly promotions in the prior fiscal year. We believe that our varied promotions and the new product programs are having a positive impact on written orders. We operate five design centers in Canada, and the strengthening of the U.S. dollar to the Canadian dollar and euro resulted in an average decrease on a constant currency basis for the retail segment of 0.5% in net sales, written and comparable orders during the quarter ending March 31, 2016.

 

We measure the performance of our retail design centers based on net sales and written orders booked on a comparable period to period basis. Comparable design centers are those which have been operating for at least 15 months. Minimal net sales derived from the delivery of customer ordered product are generated during the first three months of operations of newly opened (including relocated) design centers. Design centers acquired by us from independent retailers are included in comparable design center sales in their 13th full month of Ethan Allen-owned operations. The frequency of our promotional events as well as the timing of the end of those events can impact the orders booked during a given quarter. Our international net sales are comprised of our wholesale segment sales to independent retailers and our retail segment sales to consumers through the Company operated international Design Centers. International net sales as a percent of our consolidated net sales were 8.1% for the third quarter of fiscal 2016 and 13.6% for the comparable prior year period. The following tables show selected Design Center location information.

 

 

 

ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES 

 

		Nine Months Ended March 31, 2016												Nine Months Ended March 31, 2015
		Independent retailers				Company-operated				Total				Independent retailers				Company-operated				Total
Retail Design Center location activity:
Balance at beginning of period			155				144				299				152				143				295
New locations			14				5				19				17				3				20
Closures			(8	)			(8	)			(16	)			(12	)			(4	)			(16	)
Transfers			-				-				-				(2	)			2				-
Balance at end of period			161				141				302				155				144				299
Relocations (in new and closures)			2				3				5				6				2				8
Retail Design Center geographic locations:
United States			54				136				190				58				136				194
International			107				5				112				97				8				105
Total			161				141				302				155				144				299

  

Third Quarter Ended March 31, 2016 Compared to Third Quarter Ended March 31, 2015

 

Consolidated net sales for the third quarter of fiscal 2016 increased $17.3 million, or 10.0% to $190.6 million from $173.3 million in the third quarter of fiscal 2015. Net sales increased in both our retail and wholesale segments.

 

Wholesale net sales for the third quarter of fiscal 2016 increased $4.9 million, or 4.4% to $117.2 million from $112.3 million in the third quarter of fiscal 2015. Sales increased to both our retail segment and domestic independent dealers. This was partially offset by a reduction in international sales, primarily to our independent dealer in China, where economic growth continues, but at a slower rate than in the past, which has been widely reported. Since June 30, 2015 there have been six net additional independent retailer Design Centers.

 

Retail net sales for the third quarter of fiscal 2016 increased $22.7 million, or 17.5% to $152.2 million from $129.5 million for the third quarter of fiscal 2015. As we continue the next phase of our new product introductions, our new products are being well received and our marketing initiatives continue to generate consumer interest. Net sales during the third quarter of fiscal 2016 also benefitted from a higher backlog than during the same quarter of 2015, a milder winter this year than that of 2015, and one extra day in February 2016 due to the leap year, partially offset by the fact that Easter was in the third quarter of fiscal 2016 compared to the fourth quarter of fiscal 2015. Our retail segment currently operates three fewer Design Centers than in the third quarter of fiscal 2015. We continue to be impacted by sales discounts, as well as the effect of exchange rates on our Canadian design centers. Our written business (new orders booked) in the third quarter of fiscal 2016 increased 4.3% from the third quarter of fiscal 2015 while comparable design center written business increased 5.5% from the third quarter of fiscal 2015. At March 31, 2016, the retail undelivered backlog was 3.4% lower than that at March 31, 2015.

 

Gross profit was $105.7 million for the third quarter of fiscal 2016, an increase of $11.6 million, or 12.3%, from $94.1 million in the third quarter of fiscal 2015 with increases in both our retail and wholesale segments. Consolidated gross margin for the third quarter of fiscal 2016 was 55.5% compared to 54.3% in third quarter of fiscal 2015. Increased wholesale sales of 4.4% increased our manufacturing efficiency, increasing gross profit and gross margins. Retail sales as a percent of total sales increased to 79.8% from 74.7%, further increasing our consolidated gross margin due to mix, and the retail sales increase of 17.5% increasing consolidated gross profit.

 

 

 

ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES 

 

Operating expenses for the third quarter of fiscal 2016 increased $4.8 million, or 5.7%, to $89.7 million from $84.9 million for the third quarter of fiscal 2015. In the third quarter of fiscal 2016, variable costs increased due to increased sales for the retail segment. Operating expenses in the third quarter of fiscal 2016 were partially offset by gains on real estate dispositions as compared to a loss recognized in the prior year period from an asset impairment.

 

Operating income and profit margin was $16.0 million, or 8.4% of net sales for the third quarter of fiscal 2016, an increase of $6.8 million, or 73.5%, from $9.2 million, or 5.3% of net sales for the third quarter of fiscal 2015.

 

Wholesale operating income for the third quarter of fiscal 2016 increased $1.3 million, or 9.1% to $15.8 million, or 13.5% of sales, from $14.5 million, or 12.9% of sales, for the third quarter of fiscal 2015, largely due to higher volume of sales.

 

Retail operating income for the third quarter of fiscal 2016 increased $5.8 million to $0.6 million, or 0.4% of sales, for the third quarter of fiscal 2016 compared to a loss of $5.2 million, or (4.0)% of sales for the third quarter of fiscal 2015. The higher operating margin in the third quarter of fiscal 2016 was driven primarily by higher sales, as well as the positive impact of gains on real estate dispositions as compared to the prior year asset impairment.

 

Interest and other income (expense) in the third quarter of fiscal 2015 included a loss on the early extinguishment of our Senior Notes in March 2015 of $3.7 million, which consisted of a $3.5 million “make whole” payment, and the write-off of unamortized fees for the balance.

 

Interest and other related financing costs in the third quarter of fiscal 2016 were $0.6 million, or approximately $1.1 million lower than in the third quarter of fiscal 2015. The early extinguishment of our $200 million Senior Notes due October 1, 2015 reduced the amount of interest beginning March 18, 2015. Interest expense on the Senior Notes had been $1.8 million per quarter, or 5.7% annually on the face value of the Senior Notes. Future interest expense will vary depending on variable interest rates and amounts borrowed under our five-year, $150 million senior secured revolving credit and term loan facility.

 

Income tax expense for the third quarter of fiscal 2016 totaled $5.4 million compared to $1.4 million for the third quarter of fiscal 2015. Our effective tax rate was 34.7% in the third quarter of fiscal 2016 and 35.5% in the third quarter of fiscal 2015. The effective tax rate for both the third quarter of fiscal 2016 and 2015 primarily includes tax expense on that quarter’s net income, and tax and interest expense on uncertain tax positions, partially offset by the reversal and recognition of some uncertain tax positions.

 

Net income for the third quarter of fiscal 2016, was $10.2 million compared to $2.5 million for the third quarter of fiscal 2015. This resulted in net income per diluted share of $0.36 for the third quarter of fiscal 2016 compared to $0.09 per diluted share for the third quarter of fiscal 2015.

 

Nine Months Ended March 31, 2016 Compared to Nine Months Ended March 31, 2015

 

Consolidated net sales for the nine months ended March 31, 2016 increased $27.5 million, or 4.9% to $588.5 million from $561.0 million for the nine months ended March 31, 2015. Net sales increased in both our retail and wholesale segments.

 

Wholesale net sales for the nine months ended March 31, 2016 increased $11.0 million, or 3.1% to $364.0 million from $353.1 million in the prior year comparable period. Improvements in efficiency during the second and third fiscal quarters more than offset first fiscal quarter disruptions caused by the first runs of new products. Six new independent retailer Design Centers were added during the nine months ended March 31, 2016.

 

Retail net sales from the Company’s retail segment for the nine months ended March 31, 2016 increased $35.2 million, or 8.2% to $462.9 million from $427.7 million for the prior year comparable period. Increased sales are due in part to our marketing campaigns and new product introductions. Also favorably impacting sales was a milder winter this year and one extra day in February 2016 due to the leap year. This was partially offset by Easter falling into the third quarter of fiscal 2016 compared to the fourth quarter of fiscal 2015, and a net decrease of three Design Centers from March 31, 2015. We were also negatively impacted by sales discounts, and to a lesser extent the effect of exchange rates on our Canadian design centers. Our written business (new orders booked) in the first nine months of fiscal 2016 increased 2.7% while comparable design center written business also increased 2.7% compared to the comparable period of fiscal 2015. The timing of our annual price increase resulted in shifting some written sales into the quarter ending June 30, 2015.

 

 

 

ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES 

 

Gross profit was $326.4 million for the nine months ended March 31, 2016, an increase of $21.5 million, or 7.0%, from $305.0 million in the prior year comparable period with increases in both our retail and wholesale segments. Consolidated gross margin for the first nine months of fiscal 2016 was 55.5% compared to 54.4% in the first nine months of fiscal 2015. Sales growth for both wholesale and retail segments was the primary reason for the increase, along with an increase in retail sales as a percent of total sales to 78.7% from 76.2%.

 

Operating expenses for the first nine months of fiscal 2016 increased $5.4 million, or 2.1%, to $263.0 million from $257.6 million in the prior year comparable period, and were 44.7% of sales in the current fiscal year and 45.9% in the prior fiscal year. Expenses increased in absolute dollars due primarily to variable costs that increased due to increased sales, primarily for the retail segment. Operating expenses were partially offset by gains on real estate dispositions in the current year compared to real estate disposition losses and an asset impairment in the prior year.

 

Operating income and profit margin for the first nine months of fiscal 2016 was $63.4 million, or 10.8% of net sales, an increase of $16.1 million, or 33.9%, from $47.4 million, or 8.4% of net sales for the first nine months of fiscal 2015.

 

Wholesale operating income increased $6.9 million, or 14.0% to $56.0 million, or 15.4% of sales for the first nine months of fiscal 2016, from $49.1 million, or 13.9% of sales for the first nine months of fiscal 2015, largely due to higher volume of sales.

 

Retail operating income for the nine months ended March 31, 2016 was $9.0 million, or 1.9% of sales, compared to a loss of $0.4 million, or (0.1)% of sales in the prior year comparable period, representing an increase of $9.4 million, with a higher operating margin driven primarily by increased sales, along with a positive impact from the gains on real estate dispositions in the current year compared to real estate disposition losses and an asset impairment in the prior year.

 

Interest and other income (expense) for the first nine months of fiscal 2015 included a loss on the early extinguishment of our Senior Notes in the quarter ended March 2015 of $3.7 million, which consisted of a $3.5 million “make whole” payment, and the write-off of unamortized fees.

 

Interest and other related financing costs were approximately $4.0 million, or 73.2% lower in the first nine months of fiscal 2016 than in the first nine months of fiscal 2015. The early extinguishment of our Senior Notes reduced the amount of interest beginning March 18, 2015. Interest expense on the Senior Notes had been $1.8 million per quarter, or 5.7% annually on the face value of the Senior Notes. Future interest expense will vary depending on variable interest rates and amounts borrowed under the Facility.

 

Income tax expense for the nine months ended March 31, 2016 totaled $22.4 million, an increase of $8.3 million or 59.3% compared to $14.1 million for the nine months ended March 31, 2015. Our effective tax rate for the first nine months of fiscal 2016 was 36.0% compared to 36.5% for the first nine months of fiscal 2015. The effective tax rate for both the current and prior fiscal year primarily include tax expense on that fiscal year’s net income, and tax and interest expense on uncertain tax positions, partially offset by the reversal and recognition of some uncertain tax positions.

 

Net income for the nine months ended March 31, 2016, was $39.9 million, an increase of $15.4 million, or 63.0% from $24.5 million for the nine months ended March 31, 2015. This resulted in net income per diluted share of $1.40 for nine months ended March 31, 2016 compared to $0.84 per diluted share for the nine months ended March 31, 2015.

 

 

 

ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES 

  

Liquidity and Capital Resources

 

At March 31, 2016, we held unrestricted cash and equivalents of $48.8 million and restricted cash and investments of $7.8 million. At June 30, 2015, we held unrestricted cash and cash equivalents of $76.2 million, marketable securities of $2.2 million, and restricted cash and investments of $8.0 million. Our principal sources of liquidity include cash and cash equivalents, cash flow from operations, amounts available under the Facility, and other borrowings.

 

In September 2005, we issued $200 million in ten-year senior unsecured notes due October 1, 2015. On October 21, 2014, the Company entered into a five year, $150 million senior secured revolving credit and term loan facility, as amended. The Facility, which expires on October 21, 2019, provides a term loan of up to $35 million and a revolving credit line of up to $115 million, subject to borrowing base availability. During March 2015, we utilized $35 million of the term loan and $40 million of the revolving credit line, along with our available cash to fully redeem our Senior Notes. We incurred financing costs of $1.5 million under the Facility, which are being amortized by the interest method, over the remaining life of the Facility.

 

At the Company’s option, loans under the Facility’s revolving credit line bear interest, based on the average availability, at an annual rate of either (a) LIBOR plus 1.5% to 1.75%, or (b) the higher of (i) the prime rate, (ii) the federal funds effective rate plus 0.50%, or (iii) LIBOR plus 1.0% plus in each case 0.5% to 0.75%. At March 31, 2016, the annual interest rate in effect on the revolving loan was 1.9375%.

 

At the Company’s option, term loans under the Facility bear interest, based on the Company’s rent adjusted leverage ratio, at an annual rate of either (a) LIBOR plus 1.75% to 2.25%, or (b) the higher of (i) the prime rate, (ii) the federal funds effective rate plus 0.50%, or (iii) LIBOR plus 1.0% plus in each case 0.75% to 1.25%. At March 31, 2016, the annual interest rate in effect on the term loan was 2.1875%.

 

The Company pays a commitment fee of 0.15% to 0.25% per annum on the unused portion of the Facility, and fees on issued letters of credit at an annual rate of 1.5% to 1.75% based on the average availability. Certain payments are restricted if the availability under the revolving credit line falls below 20% of the total revolving credit line, and the Company is subject to pro forma compliance with the fixed charge coverage ratio if applicable.

 

Quarterly installments of principal on the term loan are payable based on a straight line 15-year amortization period, with the balance due at maturity. The Company does not expect to repay the revolving credit line portion of the Facility within the next year.

 

The Facility is secured by all property owned, leased or operated by the Company in the United States and includes certain real property owned by the Company and contains customary covenants which may limit the Company’s ability to incur debt; engage in mergers and consolidations; make restricted payments (including dividends and share repurchases); sell certain assets; and make investments.

 

The Company must maintain a minimum fixed charge coverage ratio of 1.1 to 1.0 at all times. If the outstanding term loans are less than $17.5 million and the fixed charge coverage ratio equals or exceeds 1.25 to 1.0, the fixed charge coverage ratio ceases to apply and thereafter shall only be triggered if average monthly availability is less than 15% of the amount of the revolving credit line. During November 2015, we made a $16.5 million prepayment on the term loan, bringing the outstanding term loan to $17.3 million, and the fixed charge coverage ratio ceased to apply. During the quarter ended March 31, 2016, our average availability was 65.0%, such that the fixed charge coverage ratio did not apply.

 

The Company intends to use the Facility for working capital and general corporate purposes, including dividend payments and share repurchases, in addition to the refinancing of our Senior Notes which occurred in March 2015. At both March 31, 2016 and June 30, 2015, there was $0.2 million of standby letters of credit outstanding under the Facility. Total availability under the Facility was $84.8 million at March 31, 2016 and $74.8 million at June 30, 2015. The increase was due to a $10.0 million payment we made on the revolving loan during March 2016.

 

At both March 31, 2016 and June 30, 2015, we were in compliance with all of the covenants under the Facility.

 

 

 

ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES 

 

We remain in discussions with our bankers on enhancing our capital structure and alternatives to raise up to $250 million in long-term debt financing. The funds would be utilized for our general corporate needs and to further increase shareholder returns. However, there can be no assurances that the financing will be completed, as it is subject to market and other customary conditions.

 

A summary of net cash provided by (used in) operating, investing, and financing activities for the nine months ended March 31, 2016 and 2015 is provided below (in millions):

 

		Nine months ended
		March 31,
		2016				2015
Cash provided by (used in) operating activities
Net income plus depreciation and amortization		$	54.5			$	38.7
Working capital items			(18.7	)			(25.5	)
Other operating activities			2.8				9.3
Total provided by operating activities		$	38.6			$	22.5
Cash provided by (used in) investing activities
Capital expenditures and acquisitions		$	(13.8	)		$	(19.5	)
Net sales of marketable securities			2.2				11.3
Other investing activities			4.5				7.5
Total provided by investing activities		$	(7.1	)		$	(0.7	)
Cash provided by (used in) financing activities
Borrowings from revolving credit and term loan facilities			-				75.0
Payments on long-term debt and capital lease obligations		$	(29.0	)		$	(133.5	)
Payment of cash dividends			(11.9	)			(9.8	)
Purchase/retirement of company stock			(19.0	)			(2.8	)
Other financing activities			1.3				(0.8	)
Total used in financing activities		$	(58.6	)		$	(71.9	)

 

Cash Provided by (Used in) Operating Activities

 

In the first nine months of fiscal 2016, cash of $38.6 million was provided by operating activities, an increase of $16.1 million from $22.5 million in the prior year comparable period. This was largely due to an increase in net income as well as less cash used in fiscal year 2016 for working capital in the ordinary course of business (primarily prepaid and other current assets and timing of payments on trade payables offset by accrued expenses), as well as changes to other working capital items (defined below). Net income plus depreciation and amortization in the prior fiscal year includes a $3.7 million expense for the early redemption of our Senior Notes. Of this amount, $3.5 million is offset as a positive in other operating activities, as this is considered a financing activity and not an operating activity. Other operating activities changed primarily due to net gains on the sale of real estate in the current year compared to net losses in the prior year. These are deducted from net income to arrive at cash from operating activities. Working capital items consist of current assets (accounts receivable, inventories, prepaid and other current assets) less current liabilities (customer deposits, payables, and accrued expenses and other current liabilities).

 

Cash Provided by (Used in) Investing Activities

 

In the first nine months of fiscal 2016, $7.1 million of cash was used in investing activities, whereas $0.7 million was used in the first nine months of fiscal 2015, which is $6.4 million less cash used in the prior year comparable period. Less cash was provided in the first nine months of fiscal 2016 primarily due to decreases in net sales of marketable securities in the current fiscal year. There were less proceeds from the sale of real estate in the current fiscal year than in the prior fiscal year, although the gains on sale were greater in the current fiscal year than in the prior fiscal year. These were partially offset by decreased current fiscal year capital expenditures. We anticipate that cash from operations will be sufficient to fund future capital expenditures.

 

 

 

ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES 

 

Cash Provided by (Used in) Financing Activities

 

In the first nine months of fiscal 2016, $58.6 million was used in financing activities, which is $13.3 million less cash used than $71.9 million of cash used during the first nine months of fiscal 2015. During the current fiscal year we made a $16.5 million prepayment on the term loan, a $10.0 million payment on our revolver, $2.5 in scheduled payments on debt and capital leases, repurchased $19.0 million of our common stock and paid an increase of $2.1 million in our dividend payments. During the prior fiscal year we redeemed our Senior Notes by paying $54.4 million with available cash, and $75 million through the use of the Facility. We also paid a $3.5 million prepayment premium to bondholders as stipulated in the original bond indenture. There were three quarterly dividend payments in the first nine months of fiscal 2016 that due to increased dividends paid per share, compared to the prior year, resulted in an increase of 23.5% in dividends paid compared to the dividends paid for the first nine months of the prior fiscal year. The Company has continuously paid dividends for every quarter since 1996 and we expect to continue to do so as economic conditions and liquidity permit.

 

Our total debt obligations at March 31, 2016 consist of the following (in millions):

 

Revolving Credit Facility due 10/21/2019		$	30.0
Term Loan due 10/21/2019		$	16.8
Capital leases		$	1.8
Unamortized debt issuance costs		$	(1.0	)
Total debt		$	47.6
Less current maturities		$	3.1
Total long-term		$	44.5

 

The following table summarizes, as of March 31, 2016, the timing of cash payments related to our outstanding long-term debt obligations for the remaining three months of fiscal 2016, and each of the five fiscal years subsequent to June 30, 2016, and thereafter (in millions).

 

Periods ending June 30,
2016		$	0.8
2017		$	3.3
2018		$	2.8
2019		$	2.4
2020		$	39.2
2021 and thereafter		$	-
Total scheduled debt payments		$	48.5

 

We believe that our cash flow from operations, together with our other available sources of liquidity including the Facility and refinancing alternatives, will be adequate to make all required payments of principal and interest on our debt, to permit anticipated capital expenditures, and to fund working capital and other cash requirements. As of March 31, 2016, we had working capital of $118.8 million compared to $130.0 million at June 30, 2015, a decrease of $11.2 million, or 8.6%. The Company had a current ratio of 1.91 to 1 at March 31, 2016 and 1.92 to 1 at June 30, 2015.

 

 

 

ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES 

 

In addition to using available cash to fund changes in working capital, capital expenditures, acquisition activity, the repayment of debt, the payment of dividends, and debt repurchases, we have been authorized by our board of directors to repurchase shares of our common stock from time to time, either directly or through agents, in the open market at prices and on terms satisfactory to us. All of our common stock repurchases and retirements are recorded as treasury stock and result in a reduction of shareholders’ equity. During the nine months ending March 31, 2016 we repurchased the following shares of our common stock on a trade date basis:

 

		Nine months ended
		March 31,
		2016				2015
Shares of common stock repurchased			697,799				103,766
Cost to repurchase common stock		$	19,346,104			$	2,791,439
Average price per share		$	27.72			$	26.90

 

At March 31, 2016, we had a remaining Board authorization to repurchase 1,757,860 shares of our common stock.

 

Contractual Obligations

 

There has been no material change to the amount or timing of cash payments related to our outstanding contractual obligations as set forth in Part II, Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the year ended June 30, 2015 as filed with the SEC on August 12, 2015.

 

Off-Balance Sheet Arrangements and Other Commitments, Contingencies and Contractual Obligations

 

We do not utilize or employ any off-balance sheet arrangements, including special-purpose entities, in operating our business. As such, we do not maintain any (i) retained or contingent interests, (ii) derivative instruments (other than as specified below), or (iii) variable interests which could serve as a source of potential risk to our future liquidity, capital resources and results of operations.

 

We may, from time to time in the ordinary course of business, provide guarantees on behalf of selected affiliated entities or become contractually obligated to perform in accordance with the terms and conditions of certain business agreements. The nature and extent of these guarantees and obligations may vary based on our underlying relationship with the benefiting party and the business purpose for which the guarantee or obligation is being provided. The only such material program was for our consumer credit program described below, which was in place both at March 31, 2016 and June 30, 2015.

 

Ethan Allen Consumer Credit Program

 

The terms and conditions of our consumer credit program, which is financed and administered by a third-party financial institution on a non-recourse basis to Ethan Allen, are set forth in an agreement between the Company and that financial service provider (the “Program Agreement”) which was last amended effective January 2014. Any independent retailer choosing to participate in the consumer credit program is required to enter into a separate agreement with that same third-party financial institution which sets forth the terms and conditions under which the retailer is to perform in connection with its offering of consumer credit to its customers (the “Retailer Agreement”). We have obligated ourselves on behalf of any independent retailer choosing to participate in our consumer credit program by agreeing, in the event of default, breach, or failure of the independent retailer to perform under such Retailer Agreement, to take on certain responsibilities of the independent retailer, including, but not limited to, delivery of goods and reimbursement of customer deposits. Customer receivables originated by independent retailers remain non-recourse to Ethan Allen. The Program Agreement will terminate on July 31, 2019, but includes a provision for automatic one-year renewals unless either party gives notice of termination. While the maximum potential amount of future payments (undiscounted) that we could be required to make under this obligation is indeterminable, recourse provisions exist that would enable us to recover, from the independent retailer, any amount paid or incurred by us related to our performance. Based on the underlying creditworthiness of our independent retailers, including their historical ability to satisfactorily perform in connection with the terms of our consumer credit program, we believe this obligation will expire without requiring funding by us. To ensure funding for delivery of products sold, the terms of the Program Agreement also contain a right for the financial services provider to demand from the Company collateral at a variable rate based on the volume of program sales if the Company does not meet certain covenants. At March 31, 2016 and June 30, 2015, no collateral was required under the Program Agreement.

 

 

 

ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES 

 

Product Warranties

 

Our products, including our case goods, upholstery and home accents, generally carry explicit product warranties that extend from one to ten years and are provided based on terms that are generally accepted in the industry. All of our domestic independent retailers are required to enter into and perform in accordance with the terms and conditions of a warranty service agreement. We record provisions for estimated warranty and other related costs at time of sale based on historical warranty loss experience and make periodic adjustments to those provisions to reflect actual experience. On rare occasions, certain warranty and other related claims involve matters of dispute that ultimately are resolved by negotiation, arbitration or litigation. In certain cases, a material warranty issue may arise which is beyond the scope of our historical experience. We provide for such warranty issues as they become known and are deemed both probable and estimable. It is reasonably possible that, from time to time, additional warranty and other related claims could arise from disputes or other matters beyond the scope of our historical experience. As of March 31, 2016 and June 30, 2015, our product warranty liability totaled $1.1 million and $1.0 million, respectively.

 

Business Outlook

 

We continue to strengthen our vertically integrated structure from concept of idea, to engineering, to manufacturing, to retail and logistics. On the manufacturing side, our objective is to maintain strong manufacturing capabilities in North America, which we believe is a long-term competitive advantage that will allow us to advance our objectives of maintaining short order times, exceptional quality and improving capacity to ship custom made to order items more quickly, which in turn will allow us to grow our business. In September 2015, the Company announced the planned doubling of its upholstery manufacturing facility in Mexico. The expansion has begun and is expected to be completed within the next two years.

 

Beginning in fiscal 2014, we have been undergoing a major transformation of our product offerings, which is intended to refresh over 70% of our products with the completion of the most current phase during the summer through fall of 2016. We are anticipating that by fiscal 2017 we will be well positioned to leverage all the actions we have taken.

 

We expect the home furnishings industry to remain extremely competitive with respect to both the sourcing of products and the wholesale and retail sale of those products for the foreseeable future. Domestic manufacturers continue to face pricing pressures because of the lower manufacturing costs in some other countries, particularly within Asia. While we also utilize overseas sourcing for approximately one third of our products, we choose to differentiate ourselves by maintaining a substantial North American manufacturing base, where we can leverage our vertically integrated structure to our advantage. We continue to believe that a balanced approach to product sourcing, which includes our own North American manufacturing of about 70% of our product offerings coupled with the import of other selected products, provides the greatest degree of flexibility and is the most effective approach to ensuring that acceptable levels of quality, service and value are attained.

 

We therefore remain cautiously optimistic about our performance due to the many strong programs already in place and others we currently plan to introduce in the coming months. Our retail strategy involves (i) a continued focus on providing new product introductions, a wide array of product solutions, and superior interior design solutions through our large staff of interior design professionals, (ii) continuing strong advertising and marketing campaigns to get our message across and to continue broadening our customer base, (iii) the opening of new or relocated design centers in more prominent locations, and encouraging independent retailers to do the same, (iv) leveraging the use of technology and personal service within our retail network and online through www.ethanallen.com, and (v) further expansion internationally. We believe this strategy provides an opportunity to grow our business.

 

 

 

ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES 

 

Where You Can Find Other Information

 

Our website is www.ethanallen.com. Information contained on our website is not part of this Quarterly Report on Form 10-Q. Information that we furnish or file with the SEC, including our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any amendments to, or exhibits included in, these reports are available for download, free of charge, on our website soon after such reports are filed with or furnished to the SEC. Our SEC filings, including exhibits filed therewith, are also available on the SEC’s website at www.sec.gov. You may obtain and copy any document we furnish or file with the SEC at the SEC’s public reference room at 100 F Street, NE, Room 1580, Washington, D.C. 20549. You may obtain information on the operation of the SEC’s public reference facilities by calling the SEC at 1-800-SEC-0330. You may request copies of these documents, upon payment of a duplicating fee, by writing to the SEC at its principal office at 100 F Street, NE, Room 1580, Washington, D.C. 20549.

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

We are exposed to market risks relating to fluctuations in interest rates.

 

Interest rate risk exists primarily through our borrowing activities. We utilize United States dollar denominated borrowings to fund substantially all our working capital and investment needs. Short-term debt, if required, is used to meet working capital requirements and long-term debt is generally used to finance long-term investments. There is inherent rollover risk for borrowings as they mature and are renewed at current market rates. The extent of this risk is not quantifiable or predictable because of the variability of future interest rates and our future financing requirements.

 

For floating-rate obligations, interest rate changes do not affect the fair value of the underlying financial instrument but would impact future earnings and cash flows, assuming other factors are held constant. Conversely, for fixed-rate obligations, interest rate changes affect the fair value of the underlying financial instrument but would not impact earnings or cash flows. At March 31, 2016, we had $46.8 million of floating-rate debt obligations outstanding under our Facility. We currently do not engage in any interest rate hedging activity and we have no intention of doing so in the foreseeable future. Based on the average interest rate of the loans under the Facility during the quarter ended March 31, 2016, and to the extent that borrowings were outstanding, a 10% change in the interest rate would not have a material effect on our consolidated results of operations and financial condition. For information regarding the Company’s other risk factors, see Item 7A – Quantitative and Qualitative Disclosures About Market Risk in our Annual Report on Form 10-K for the year ended June 30, 2015 as filed with the SEC on August 12, 2015.

 

Item 4. Controls and Procedures

 

Management’s Report on Disclosure Controls and Procedures

 

We carried out an evaluation, under the supervision and with the participation of our management, including the Chairman of the Board and Chief Executive Officer ("CEO") and the Executive Vice President Administration and Chief Financial Officer ("CFO"), of the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of the end of the period covered by this report. Based on such evaluation, the CEO and CFO have concluded that, as of March 31, 2016, our disclosure controls and procedures were effective in ensuring that material information relating to us (including our consolidated subsidiaries), which is required to be disclosed by us in our periodic reports filed or submitted to the SEC is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and (ii) accumulated and communicated to management, including the CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

 

 

 

ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES 

 

Changes in Internal Control over Financial Reporting 

 

There have been no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter ended March 31, 2016 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

PART II - OTHER INFORMATION

 

Item 1. Legal Proceedings

 

There have been no material changes to the matters discussed in Part I, Item 3 - Legal Proceedings in our Annual Report on Form 10-K for the year ended June 30, 2015 as filed with the SEC on August 12, 2015. See Note 8 of the Notes to Consolidated Financial Statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q for a description of our legal proceedings.

 

Item 1A. Risk Factors

 

There have been no material changes to the matters discussed in “Item IA – Risk Factors” in our Annual Report on Form 10-K for the year ended June 30, 2015 as filed with the SEC on August 12, 2015.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

Issuer Purchases of Equity Securities

 

Certain information regarding purchases made by or on behalf of us or any affiliated purchaser (as defined in Rule 10b-18(a)(3) under the Exchange Act) of our common stock during the three months ended March 31, 2016 on a trade date basis is provided below:

  

Period							(a) Total Number of Shares Purchased				(b) Average Price Paid per Share				(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)				(d) Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (1)
January 1, 2016			-		January 31, 2016			164,513			$	26.24				164,513				1,849,817
February 1, 2016			-		February 29, 2016			-				-				-				1,849,817
March 1, 2016			-		March 31, 2016			91,957			$	30.73				91,957				1,757,860
Total / Average								256,470			$	27.85				256,470

 

(1) On November 21, 2002, our Board of Directors approved a share repurchase program authorizing us to repurchase up to 2,000,000 shares of our common stock, from time to time, either directly or through agents, in the open market at prices and on terms satisfactory to us. Subsequent to that date, the Board of Directors increased the aggregate authorization under the repurchase program on several separate occasions, the last of which was on April 13, 2015 when the Board of Directors increased the aggregate authorization to approximately 3,000,000 shares. There is no expiration date on the repurchase authorization and the amount and timing of future share repurchases, if any, will be determined as market and business conditions warrant.]

 

Item 3. Defaults Upon Senior Securities

 

Not applicable.

 

Item 4. Mine Safety Disclosures

 

Not applicable.

 

Item 5. Other Information

 

Not applicable.

 

 

 

ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES 

   

Item 6. Exhibits 

   

Exhibit Number	Description
31.1	Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
32.2	Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema
101.CAL	XBRL Taxonomy Extension Calculation Linkbase
101.DEF	XBRL Taxonomy Extension Definition Linkbase
101.LAB	XBRL Taxonomy Extension Label Linkbase
101.PRE	XBRL Taxonomy Extension Presentation Linkbase

 

*

- Furnished herewith.

 

 

 

 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: April 26, 2016	BY: /s/ M. Farooq Kathwari
	M. Farooq Kathwari
	Chairman, President and Chief Executive Officer
	(Principal Executive Officer)

   

 

DATE: April 26, 2016	BY: /s/ Corey Whitely
	Corey Whitely
	Executive Vice President Administration
	Chief Financial Officer and Treasurer
	(Principal Financial Officer)

 

29