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Ethan Allen posts double-digit rise in 4Q income, yearly income drops

DANBURY, Conn — Ethan Allen posted a 12.3% gain in net income its fiscal fourth quarter and a 1.7% decrease in net sales despite a bump in its retail division business.

Net income for the quarter ended June 30 increased to $8.2 million, or 28 cents per share, compared to $ 7.3 million or 25 cents per share for the same period a year ago. Adjusted earnings grew 26% to $9.9 million or 34 cents per share from $7.8 million or 27 cents per share, the company said

Net sales decreased to $182.3 million from $185.3 million, while the company's retail division net sales increased 1.1% to $145.3 million, and comparable design center net sales increased 2.5%. Written orders for the division were off 1.9%.

For the year, net income dropped 34.6% to $32.5 million, or $1.11 per share from $49.7 million or $1.71 per share the previous year, but the company noted the earlier year's results included $23.9 million in non-cash tax benefits.

Adjusted net income for the year grew 39% to $38.4 million or $1.31 per share from $27.5 million, or 94 cents per share.

Net sales for the year were essentially flat at $729.1 million, down slightly from $729.4 million, while Ethan Allen's retail division sales increased 3.4% to $578.3 million and design center same-store sales increased 3.3%.

"We are gratified with our strong performance in earnings due to major improvements in all areas but especially in the operation of the retail division," Farooq Kathwari, chairman and CEO of the vertically integrated company, said in a release.

He noted that the large jump in adjusted earnings came despite flat sales.

"Written and delivered sales were impacted by several factors including significant reduction in clearance events, lower international shipments and timing of events," he said.

Kathwari said the company is "cautiously optimistic regarding our growth opportunities in fiscal 2014," and that its initiatives this past year have positioned it for sales growth opportunities and continued profitability improvements.

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