A N N U A L R E P O R T 2 0 2 2
CELEBRATING
90 YEARS
OF INNOVATION
financial highlights
a
t
a
d
Net sales
2022
2021
2020
$817,762
$685,169
$589,837
t
n
e
m
e
t
a
t
s
e
m
o
c
n
i
Adjusted gross margin (a)
Adjusted operating income (a)
Adjusted net income (a)
Adjusted diluted EPS (a)
Cash and cash equivalents
Total assets
Long-term debt
Total liabilities
Shareholders’ equity
Working capital
Adjusted return on equity (a)
Current ratio
Long-term debt to equity
Common shares outstanding
a
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h
s
e
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n
a
a
b
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s
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r
t
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m
y
e
k
59.3%
$134,240
$100,277
$3.93
$109,919
$719,895
–
$312,572
$407,323
$131,106
26.4%
1.61
0.0%
57.5%
$80,335
$60,059
$2.37
$104,596
$683,245
–
$331,827
$351,418
$71,377
17.7%
1.32
0.0%
55.7%
$17,072
$13,512
$0.52
$72,276
$622,789
$50,000
$294,724
$328,064
$90,974
3.9%
1.65
15.2%
25,322,792
25,237,415
25,053,082
y
t
i
i
d
u
q
i
l
Cash flows from operating activities
Capital expenditures and acquisitions
Cash dividends paid
Dividend yield
$69,356
$13,387
$48,257
6.3%
$129,912
$12,029
$43,290
3.6%
$52,696
$17,059
$21,469
7.1%
Amounts in thousands, except share and per share data
(a) See reconciliation of U.S. GAAP to adjusted key financial measures in this annual report
Dear Fellow Shareholders
As we celebrate 90 years of innovation, we are
pleased to report strong financial results for
the fiscal year ended June 30, 2022, including
net sales of $817.8 million, adjusted operating
income of $134.2 million, and adjusted diluted
EPS of $3.93, an increase of 65.8%. We also
generated $69.4 million of cash from operating
activities, ended the year with no debt, and
increased our regular quarterly cash dividend
by 28% while paying a special cash dividend of
$0.75 per share.
We remain focused and well positioned,
capitalizing on our brand differentiators while
implementing strategic initiatives with an eye
toward the future. Despite unprecedented
supply chain challenges and economic
uncertainties, we have continued to strengthen
our vertically integrated enterprise; reinvent
existing product collections while expanding
our portfolio of offerings for the whole home;
strategically relocate existing Design Centers
and open new ones; invest in technology;
and offer the complimentary design service
of our interior design professionals combined
with technology.
We have expanded the reach of our brand
and recently launched a new digital magazine
program that has helped our prospect outreach
and conversion. We also remain committed to
our environmental, health and safety, and social
responsibility initiatives.
Vertical integration:
the key to our success
One of our greatest competitive advantages,
our unique vertically integrated enterprise
has enabled us to deliver exceptional service
even as we faced raw material shortages and
logistical challenges, including elevated shipping
container costs. We manage the Ethan Allen
experience from product concept to delivery,
making approximately 75% of our products
within our own North American manufacturing
workshops. Through our Premier In-Home
Delivery service, we further enhance the value
of the Ethan Allen experience, ensuring the
highest level of personal service.
Combining technology
with personal service
We offer complimentary design service
through our world-class interior designers
as part of every Ethan Allen experience. Our
investments in 3D technology and augmented
reality, including our 3D Room Planner and
our EA inHome® app, have given our designers
additional opportunities to connect with their
clients in the Design Center, at home, or via
virtual appointment. In fiscal 2022, we launched
the state-of-the-art immersive 3D Ethan Allen
Virtual Design Center, which showcases the
timeless aesthetic of our vast product portfolio.
Breadth of styles &
customization options
Another advantage of vertical integration is
our ability to customize most of our upholstery
and case goods, and to curate accents from
the world’s finest artisans. All of our products
are Ethan Allen branded. This year, to further
strengthen our position as a whole-home
interior design solution, we introduced several
new products in upholstery; in case goods,
including home office; in outdoor living; and
in accents, including lighting, decorative
accents, and a new flooring program. Our
craftspeople focus on the details—many items
are handcrafted one at a time—enabling clients
to customize our products with the help of our
interior design professionals.
Social responsibility
Across our enterprise, we maintain a
steadfast commitment to good corporate
governance, environmental stewardship,
and social responsibility. Our primary focus
remains operating in a safe manner for our
associates and clients. Throughout our history,
philanthropy has been a core value to us. We
strive to develop exceptional programs based
on partnerships where employees feel a sense
of connection to and pride in their communities,
and our mission is to enhance the quality of life
in the communities in which we work and live.
Talent
Our associates possess an entrepreneurial
spirit, a passion for style, a drive for excellence,
and outstanding communication skills,
supporting a culture that embraces creativity,
integrity, diversity, innovation, and inclusion
of people from all backgrounds. Since our
founding, we have aimed to build a collaborative
culture that emphasizes treating people with
dignity and respect while offering employees
a variety of opportunities and experiences.
I would like to thank each associate, as well
as our Board of Directors, our clients, and all
shareholders, for their continued support as
we look forward to a successful fiscal 2023
and turn our eyes toward the next 90 years—
we’re just getting started.
Farooq Kathwari
Chairman, President and CEO
Ethan Allen Interiors Inc.
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OU R VER TI CALLY I NTEG R ATED ENTER PR I S E
MAN U FAC TU R I N G & DI STR I B UTI O N
WHERE INTERIOR DESIGN & TECHNOLOGY CONVERGE
AMERICAN ST YLE , MADE TO ORDER
SOCIAL R E S PO N S I B I LIT Y & SUSTAINAB I LIT Y
E THAN ALLEN BY TH E N U M B ER S
A unique vision of American style.
A steadfast reputation for quality.
A robust network of more than
1,000 interior designers, and 75% of products
made in our North American plants.
We are Ethan Allen. This is our story.
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our vertically integrated
enterprise
174
Design Centers in
North America
KE Y
Manufacturing Plants
Distribution Centers
Home Delivery Centers
Design Centers
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NEW OR RELOCATED
DESIGN CENTERS:
13% in the past five years
48% in the past ten years
Ethan Allen Design Centers are typically located in
busy retail settings as freestanding destinations
or as part of town centers, lifestyle centers, and
suburban shopping malls.
Ethan Allen operates ten manufacturing facilities
located in the United States, Mexico, and Honduras.
These facilities are owned by the Company and
include five case goods plants and five upholstery
plants. Approximately 75% of our products
are manufactured or assembled in these North
American facilities. The Company also owns
and operates three national distribution centers,
which are located in North Carolina and Virginia.
Westport, CT
Walnut Creek, CA
Hartsdale, NY
manufacturing
& distribution
At Ethan Allen, we design our own upholstery
and premium freight rates, we’ve maintained
and case goods products, manufacturing
industry competitive lead times.
about 75% in our North American workshops.
Our logistics network is integrated from
manufacturing to the client’s home, utilizing air
freight, ocean vessels, trucks,
and trains for safe, on-time delivery.
In addition to emphasizing safety throughout
our manufacturing and logistics network, we
continue to manage specific processes that
reinforce our value proposition for quality.
We mill much of our own wood, inspect any
Since we purchased our Beecher Falls
lumber that we purchase, and kiln-dry all wood
workshop in 1936, our vertically integrated
to ensure correct moisture content, so that
structure has been both a strategic and a
furniture doesn’t split or crack. We also tailor
branding advantage. Despite supply chain
all upholstery by hand, using fabrics that meet
challenges, including shortages of drivers,
or exceed industry standards and leathers that
trailers, containers, and ocean vessel capacity,
we cut and color-blend in our workshops.
as well as port closures, port congestion,
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Our workshops
Case Goods
Beecher Falls, VT: Sawmill & Machining
• 336,000 sq. ft. of manufacturing capacity
• Sawmill, kiln drying, wood panel processing, machining, and some assembly operations
Beecher Falls, VT
Orleans, VT: Machining, Veneering & Finishing
• 666,000 sq. ft. of manufacturing capacity
• Rough mill, machining and sanding, cabinet, finishing, and rub and pack operations
Pine Valley, NC: Lumber Processing Center
• 63,000 sq. ft.
• Procures regionally sourced lumber from local sawmills
• Grading, stacking, and kiln-drying
Choloma, Cortes, Honduras: Machining through Finishing
• 241,000 sq. ft. of manufacturing capacity
• Processing and machining of rough lumber, sanding, carving, assembly,
and finishing through shipping
Orleans, VT
Upholstery
Maiden/Claremont, NC: Fabric Upholstery
• 736,000 sq. ft. of manufacturing capacity
• Recently added cutting-edge exposed wood frame manufacturing technology
Silao, Guanajuato, Mexico: Fabric & Leather Upholstery
• 572,000 sq. ft. of manufacturing capacity
• Utilizes state-of-the-art fabric and leather cutting machines, plus C&C routers
that cut engineered wood frames
Our distribution centers
Our wholesale distribution centers ship to approximately 51 retail service centers
as well as to all international retailers.
Dublin, VA
• 631,000 sq. ft. of warehouse and parts fulfillment capacity
• Ethan Allen’s primary furniture and accents distribution facility; receives
more than 600,000 pieces of furniture and accessories every year
Pine Valley, NC
• 490,000 sq. ft. of warehouse capacity
• Domestic distribution, plus all exports for U.S. State Department program
• Hard accents, soft goods, area rugs, outdoor furniture, and accents
Maiden, NC
• 54,000 sq. ft. of warehouse capacity
• Hard accents UPS direct-to-consumer shipping; hanging fabric samples
and swatch fulfillment
Maiden, NC
Silao, Mexico
Choloma, Honduras
where interior design
& technology converge
From choosing the perfect fabric to designing
The professionalism of our entrepreneurial
our clients’ homes, our interior designers
interior design team ensures that the quality
combine personal service with digital design
of our interior design service is a significant
technology. Utilizing 3D room planning and AR
competitive advantage. Through a business
tools, our team of interior designers serve our
model that encourages entrepreneurship
clients in Design Centers, at their homes, and
and a sense of ownership, we attract and
via virtual appointment.
retain top interior designers who build
long-term client relationships.
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THE FUTURE OF HOME
Many complimentary
interior design service
sessions begin online,
an evolution made possible
by our 3D Room Planner.
Designers create custom
room layouts with furniture,
accents, and even flooring and
window treatments, starting
a collaborative process that
continues online, in clients’
homes, or in the Design Center.
Clients can preview furniture in
their current spaces, at size and
scale, with the EA inHome® app.
Through the photorealism
of our 3D renderings,
designers can provide
a preview of projects
before clients place
their orders.
Our 3D room planner
offers both overhead
and in-room perspectives
on designed rooms.
Our Virtual Design Center showcases
Ethan Allen’s vast product portfolio
while fostering collaboration
between designers and clients.
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American style, made to order
Our unique vision of American style brings
of upholstery and case goods selections in
together the best designs from all over the
fiscal 2022. Inspired by various design genres,
world and reimagines them from a distinctly
formal in presentation yet transitional in form,
American point of view.
each new piece highlights our commitment
Centering our business around a made-
to-order model enables us to maintain
an extensive catalog of products and
to classic handcraftsmanship through veneer
work, hand-applied metallic finishes, and collar
and ferrule elements.
customizations that can be created on
To further cement our status as a whole-home
demand. Through customization, we project
interior design solution, we also expanded
ourselves as an aspirational, luxury brand,
our accents selection by launching new
offering truly handcrafted furnishings that
lighting collections that included coordinating
can be personalized with the help of an
chandeliers, lamps, and sconces. We also
interior designer.
premiered a curated, high-quality selection
Continuing our focus on classic design with
a modern perspective, we debuted a series
of Luxury Vinyl Flooring.
ENDLESS CUSTOMIZATIONS
An immense selection of
frames, fabrics, leathers,
finishes, and accents provides
a bottomless toolkit with which
designers can showcase our
design philosophy—“classic
design, modern perspective”—
in ways that are personalized
to every client.
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expanding our reach
Our creative messaging is relevant, aspirational, and conveyed
through a variety of channels. Recognizing that our clients
increasingly spend time in digital spaces, we have transitioned
to a digital-first marketing strategy.
DIGITAL MAGAZINES
DIRECT MAIL
Published and distributed via email
twice a month to national and
dedicated prospects, our digital
magazines enable us to broaden
our reach and enhance desirability
and visibility while expressing our
dynamic brand story.
Print media, including direct mail magazines that we deploy
approximately once per quarter, and broadcast media
also continue to play key roles in our fresh, ever-evolving
creative marketing approach and strategy.
OUR TIMELESS TRADITION forEXCEPTIONAL CRAFTSMANSHIPclassic DESIGN through today’s eyesintroducing NEW designs for spring social responsibility
& sustainability
We aim to build a collaborative culture that
we follow federal Equal Opportunity
that enable associates to feel both a sense of
emphasizes dignity and respect for all of our
Employment standards, ensuring freedom
connection to and pride in their communities.
associates while offering equal opportunity
from discrimination on the basis of
across our global organization. Our Silao
protected classes.
Our work to cut our carbon footprint,
greenhouse emissions, electrical and water
workshops have earned Great Place to Work®
Mexico certification for three consecutive
years. The annual health fair that we provide
for our associates in Honduras has been named
Best Health Fair for multiple years by the
Medical Enterprise System of the Honduras
Institute of Social Security.
We continue to develop impactful practices
usage, and landfill waste continues, as does
to make our company more diverse and
our commitment to prioritizing responsible
inclusive by supporting diversity awareness,
forestry and materials that are not harmful
maintaining an inclusive environment free from
to the environment.
discrimination of any kind, including sexual or
other discriminatory harassment and offering
multiple avenues, including a confidential
Our case goods and upholstery finishes, many
of which are water based, are low in volatile
organic compounds (VOC) and in hazardous air
pollutants (HAP), and the flexible polyurethane
foams used in our upholstery are certified
through the CertiPUR-US® program.
We work every day to capitalize on the talents
whistleblower hotline, through which to report
of our diverse workforce through recognition
inappropriate behavior. We also work to
and promotion to leadership positions.
enhance quality of life in the communities in
Furthermore, as a U.S. government contractor,
which we work and live, developing partnerships
PRESERVING OUR RESOURCES
Most of the wood we source for
domestic production comes
from responsibly managed
Appalachian forests, and we
have been Verified Sustainable
and Legal by the Appalachian
Hardwood Manufacturers, Inc.
In our Vermont workshops,
we use recycled biomass—
chips and sawdust leftover
from making furniture—to
cogenerate electricity for
our wood-drying kilns.
by the numbers
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13
consolidated sales & operating margin
Consolidated Net Sales
Adjusted Operating Margin (a)
Millions
$575
$600
$625
$650
$675
$700
$725
$750
$775
$800
$825
2022
2021
2020
$589.8
2.9%
$817.8
16.4%
$685.2
11.7%
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10% 11% 12% 13% 14% 15% 16% 17%
(a) See reconciliation of U.S. GAAP to adjusted key financial measures in the back of this annual report.
total special & regular dividends paid
Cash Dividends Paid—Total
Dividend Yield
Millions
$0
$5
$10
$15
$20
$25
$30
$35
$40
$45
$50
6.3%
$48.3
3.6%
$43.3
$21.5
7.1%
0%
1%
2%
3%
4%
5%
6%
7%
8%
2022
2021
2020
100
DIRECTORS
EXECUTIVE OFFICERS
Farooq Kathwari
Chairman of the Board, President
and Chief Executive Officer
Farooq Kathwari
Chairman of the Board, President
and Chief Executive Officer
María Eugenia Casar
Former Under-Secretary-General,
United Nations
Amy Franks
Executive Vice President,
Retail Network & Business Development
Dr. John Clark
Special Advisor, Connecticut
State Colleges and Universities
Matt McNulty
Senior Vice President,
Chief Financial Officer & Treasurer
John J. Dooner Jr.
Chairman, The Dooner Group
Ashley Fothergill
Senior Vice President, Merchandising
Eric Koster
Vice President,
General Counsel & Secretary
David M. Sable
Co-Founder and Partner,
DoAble, LLC
Tara I. Stacom
Executive Vice Chairman,
Cushman & Wakefield
Cynthia Ekberg Tsai
Chief Executive Officer,
Tana Systems
Corporate Headquarters
Ethan Allen Interiors Inc.
25 Lake Avenue Ext.
Danbury, CT 06811
203.743.8000
ethanallen.com
Independent Registered
Public Accounting Firm
CohnReznick LLP
1301 6th Avenue
New York, NY 10019
212.297.0400
Investor Relations
Matt McNulty
Senior Vice President, Chief
Financial Officer & Treasurer
IR@ethanallen.com
Stock Exchange Listing
New York Stock Exchange
Ethan Allen Interiors Inc.
Trading Symbol: ETD
Transfer Agent
Computershare Investor
Services, LLC
211 Quality Circle, Suite 210
College Station, TX 77845
computershare.com
corporate data .
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