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Ethan Allen profits decline 73%

Sales fall 27% in quarter ended Dec. 31

Larry Thomas -- Furniture Today, January 29, 2009

DANBURY, Conn. — Manufacturer and retailer Ethan Allen said profits tumbled more than 73% in the quarter ended Dec. 31 as the company continued to face weak consumer demand.

Sales for the three-month period, the second quarter of Ethan Allen's fiscal year, were 27% below the same period in 2007.

"Despite major economic challenges resulting in a decline in sales, we maintained profitability," said Farooq Kathwari, chairman and CEO. "We are pleased that during this turbulent period we have also maintained a strong marketing program while reducing operating costs."

Net sales for the most recent quarter totaled $189.6 million, compared with $259.5 million for the quarter ended Dec. 31, 2007.

Net income was $5.5 million or 19 cents per share, compared with $20.6 million or 70 cents per share in the same quarter in 2007.

Kathwari said the company will concentrate on conserving cash, and noted that its revolving credit agreement was recently amended to give Ethan Allen even greater flexibility in the months ahead.

The board of directors also voted to reduce the quarterly cash dividend from 25 cents per share to 10 cents per share.

"We will continue to focus on creatively and proactively managing our enterprise, and at the same time conserving cash and making those investments that will position us to be ready when growth returns," Kathwari said.

For the six months ended Dec. 31, sales fell 22.2% to $395.4 million.

Six-month net income was $12.9 million or 45 cents per share. That's down 66.1% from $38.1 million or $1.28 per share in the six months ended Dec. 31, 2007.

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