Ethan Allen(US:ETD)2021-01-28 23:50Financial Data and Key Metrics Changes - Consolidated net sales for the quarter were $178.8 million, a 2.4% increase compared to the prior year quarter [8] - Adjusted earnings per share (EPS) increased 155.6% to $0.69 from $0.27 in the prior year quarter [12] - Adjusted operating margin increased to 13.1% compared to 5.4% a year ago, primarily due to a 3.9% increase in gross profit and an 11.4% reduction in adjusted operating expenses [11] - Cash on hand was $80 million, with inventory at $126.7 million and no outstanding borrowings [13] Business Line Data and Key Metrics Changes - Retail segment written orders grew 44.9% compared to the prior year [7] - E-commerce orders reflected a significant growth of 194% for the quarter [7] - Wholesale net sales increased by 10.5% as production levels improved, matching pre-COVID-19 levels [8] - Retail net sales increased by 4.1% for the quarter [10] Market Data and Key Metrics Changes - Retail sales as a percentage of total consolidated sales were 81% compared to 79.7% a year ago, positively impacting consolidated gross margin [11] - Backlog for the retail division increased by 146% [7] Company Strategy and Development Direction - The company focuses on five key areas: talent development, marketing, service, technology, and social responsibility [15][19] - Investment in digital marketing has increased reach while reducing costs [16] - The company plans to double production in some wood products in North America and has already invested to double capacities in upholstery manufacturing [36] Management Comments on Operating Environment and Future Outlook - Management noted that the last 12 months have been challenging yet rewarding, with significant changes strengthening the enterprise [6] - The company expects to see increases in delivered sales in the upcoming quarters, estimating growth between 10% to 20% [24] - Management acknowledged challenges related to transportation and raw materials but emphasized the advantage of having 75% of products made in North America [23][27] Other Important Information - The company paid regular dividends of $5.3 million during the quarter, with a 19% increase in the regular dividend announced in November [14] - The company generated $65.9 million in cash from operating activities, a 181.8% increase from the prior year period [13] Q&A Session Summary Question: What is the reasonable revenue growth rate given the strong backlog? - Management indicated that they expect delivered sales to increase between 10% to 20% in the upcoming quarter due to a 146% increase in retail backlog [24] Question: How is the company managing inflation and rising costs? - Management noted that while raw material prices and transportation costs are increasing, their exposure to external sourcing is less than 25%, which mitigates some impact [27] Question: What is driving the increase in backlog? - Management attributed the increase to strong demand for home products, effective marketing, and discounts offered to attract new customers [30] Question: How are promotions being managed given high demand? - Management stated that they have provided more discounts than usual to attract new customers while maintaining margins [31] Question: What is the current timeframe for product delivery? - Management reported that the delivery timeframe has improved to approximately 8-9 weeks, with a quick ship option available in less than 6 weeks [33]