Ethan Allen Interiors Inc (ETH) has reported 35.28 percent plunge in profit for the quarter ended Dec. 31, 2016. The company has earned $10.70 million, or $0.38 a share in the quarter, compared with $16.53 million, or $0.58 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $10.76 million, or $0.39 a share compared with $15.83 million or $0.55 a share, a year ago. Revenue during the quarter dropped 6.20 percent to $194.67 million from $207.54 million in the previous year period. Gross margin for the quarter contracted 38 basis points over the previous year period to 55.54 percent. Total expenses were 91.22 percent of quarterly revenues, up from 87.23 percent for the same period last year. That has resulted in a contraction of 399 basis points in operating margin to 8.78 percent.
Operating income for the quarter was $17.09 million, compared with $26.51 million in the previous year period.
However, the adjusted operating income for the quarter stood at $17.09 million compared to $25.31 million in the prior year period. At the same time, adjusted operating margin contracted 341 basis points in the quarter to 8.78 percent from 12.19 percent in the last year period.
Farooq Kathwari, Chairman and Chief executive officer officer, stated, “As we mentioned earlier this month and stated again in the summary highlights today, despite very tough previous-year comparisons and a challenging retail environment, we had decent results.” Mr. Kathwari further stated, “We strongly believe that our excellence in customer experience is the most important differentiating factor. We are now ready to invest in expanding our marketing, effective the third quarter, as many of our initiatives are in place. These include a major refresh of our product offerings; expansion of our manufacturing capacities; relocation and renovation of our Design Centers; and adding technology at all levels of our enterprise to improve the customer experience. We remain cautiously optimistic, especially in view of the challenging comparison to last year’s third quarter when our adjusted diluted earnings per share increased 89%.”
Working capital increases
Ethan Allen Interiors Inc has recorded an increase in the working capital over the last year. It stood at $136.61 million as at Dec. 31, 2016, up 6.69 percent or $8.57 million from $128.04 million on Dec. 31, 2015. Current ratio was at 2.22 as on Dec. 31, 2016, up from 2.06 on Dec. 31, 2015. Cash conversion cycle (CCC) has decreased to 73 days for the quarter from 144 days for the last year period. Days sales outstanding were almost stable at 5 days for the quarter, when compared with the last year period.
Days inventory outstanding has decreased to 85 days for the quarter compared with 158 days for the previous year period. At the same time, days payable outstanding went down to 18 days for the quarter from 19 for the same period last year.
Debt comes down significantly
Ethan Allen Interiors Inc has recorded a decline in total debt over the last one year. It stood at $40.34 million as on Dec. 31, 2016, down 49.93 percent or $40.23 million from $80.57 million on Dec. 31, 2015. Total debt was 7.02 percent of total assets as on Dec. 31, 2016, compared with 13.92 percent on Dec. 31, 2015. Debt to equity ratio was at 0.10 as on Dec. 31, 2016, down from 0.21 as on Dec. 31, 2015. Interest coverage ratio deteriorated to 52.76 for the quarter from 61.50 for the same period last year. Disclaimer: Please note that this is an auto-generated article. IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website. For queries contact: editor@irisindia.net
