ETHAN ALLEN INTERIORS INC. Item 2.02 Results of Operations and Financial Condition
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Exhibit 99.1 to this report contains non-GAAP gross profit and margin, non-GAAP operating income and margin, non-GAAP net income, and non-GAAP diluted earnings per share for the periods presented. These non-GAAP measures are not in accordance with, or an alternative for, measures prepared in accordance with generally accepted accounting principles, and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. Ethan Allen believes that non-GAAP measures have limitations in that they do not reflect all of the amounts associated with the Company's results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate Ethan Allen's results of operations in conjunction with the corresponding GAAP measures.
Ethan Allen believes that the presentation of non-GAAP measures when shown in conjunction with the corresponding GAAP measures, provides useful information to investors and management regarding financial and business trends relating to its financial condition and its historical and projected results of operations. For its internal budgeting process, Ethan Allen's management uses financial statements that do not include, when applicable, significant asset impairments and restructurings, retail acquisition costs, significant litigation settlements and other contingencies, and the income tax effects of the foregoing. The Company's management also uses the foregoing non-GAAP measures, in addition to the corresponding GAAP measures, in reviewing the financial results of Ethan Allen. From time to time in the future, there may be other items that Ethan Allen may exclude for purposes of its internal budgeting process and in reviewing its financial results.
As described above, Ethan Allen excludes the following items from one or more of its non-GAAP measures when applicable:
? Significant asset impairments and restructurings. Ethan Allen from time to
time incurs significant asset impairments and restructuring charges, including
employee serverance, inventory write-downs and other exit costs. The Company
excludes these items because it does not believe they are reflective of
ongoing business and operating results.
? Retail acquisition costs. The Company excludes such expenses related to retail
acquisitions and purchases of retail assets that have no direct correlation to
the operation of Ethan Allen's business.
? Significant litigation settlements and other contingencies. Ethan Allen from
time to time may incur charges or benefits related to significant litigation
settlements and other contingencies. The Company excludes these charges or
benefits, when significant, because it does not believe they are reflective of
ongoing business and operating results.
? Income tax effects of the foregoing. This amount is used to present each of
the amounts described above on an after-tax basis consistent with the
presentation of non-GAAP net income.
From time to time in the future, there may be other items that Ethan Allen may exclude if it believes that doing so is consistent with the goal of providing useful information to investors and management.
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Item 9.01 Financial Statements and Exhibits (d) Exhibits Exhibit No. Description 99.1 Press release datedFebruary 4, 2020 , furnished herewith
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