Ethan Allen Interiors Inc. (ETH) has reported a 51.77 percent plunge in profit for the quarter ended Mar. 31, 2015. The company has earned $2.54 million, or $0.09 a share in the quarter, compared with $5.26 million, or $0.18 a share for the same period last year. Revenue during the quarter went up marginally by 0.11 percent to $173.26 million from $173.06 million in the previous year period. Gross margin for the quarter expanded 50 basis points over the previous year period to 54.32 percent. Total expenses were 94.68 percent of quarterly revenues, up from 94.48 percent for the same period last year. That has resulted in a contraction of 19 basis points in operating margin to 5.32 percent.
Operating income for the quarter was $9.23 million, compared with $9.55 million in the previous year period.
Farooq Kathwari, chairman and chief executive officer commented, "During the third quarter we began phase two of our new product launch as planned and continued implementing many initiatives. We are freshening up our design centers and adding to our professional staff of retail management and over 1,500 interior designers in North America. Technology is being added at all levels with a major emphasis on our website. Our focus is to position us to grow our sales, both in our design centers and by ecommerce."
Working capital declines
Ethan Allen Interiors Inc. has witnessed a decline in the working capital over the last year. It stood at $128.79 million as at Mar. 31, 2015, down 18 percent or $28.27 million from $157.06 million on Mar. 31, 2014. Current ratio was at 1.94 as on Mar. 31, 2015, down from 2.12 on Mar. 31, 2014. Cash conversion cycle (CCC) has increased to 160 days for the quarter from 142 days for the last year period. Days sales outstanding were almost stable at 7 days for the quarter, when compared with the last year period.
Days inventory outstanding has increased to 174 days for the quarter compared with 160 days for the previous year period. At the same time, days payable outstanding went down to 22 days for the quarter from 26 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 $77.82 million as on Mar. 31, 2015, down 40.60 percent or $53.19 million from $131.01 million on Mar. 31, 2014. Total debt was 12.78 percent of total assets as on Mar. 31, 2015, compared with 20.31 percent on Mar. 31, 2014. Debt to equity ratio was at 0.21 as on Mar. 31, 2015, down from 0.37 as on Mar. 31, 2014. Interest coverage ratio improved to 5.43 for the quarter from 5.11 for the same period last year.
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