“We are taking many steps to manage this crisis with compassion and collaboration. An important aspect is to have cash to continue to exist. Fortunately, we have been prudent and so far, have been debt free. However, we have now taken on debt to ensure we have cash availability to survive this crisis. We have to make tough decisions to conserve cash. We are taking many measures including reduced compensation of our management associates. I have personally decided to take zero salary to
“We are taking a major workforce reduction through temporary layoffs,” said
The Company’s action plans are outlined below into three key categories: Operations, Human Capital, and Cash & Expense Management; and are based on its continued assessment of the COVID-19 health crisis and to ensure the well-being of its employees and their families, its customers and the communities where it operates.
Operations
Ethan Allen has taken the following operational actions:
- The Company’s design centers, which were originally planned to be closed from
March 19th through March 27th , will remain closed as multiple counties and states have imposed shelter in place, or stay at home orders extending through mid to late April. - The Company, which has been paying its associates since the
March 19, 2020 closures will continue to pay its affected associates throughApril 2, 2020 . - Temporary closure of most of its manufacturing facilities, effective immediately.
- The Company will continue to serve its customers. Customers can schedule in-person appointments with the Company’s design consultants and interact virtually with them through Live Chat online at www.ethanallen.com. Design consultants will work remotely utilizing technology, including the Ethan Allen inHome augmented reality app, the 3-D room planning tool,
Skype and FaceTime.
Human Capital
Ethan Allen has taken the following actions with its workforce:
- The furlough of approximately 70% of its global workforce. The recently signed Coronavirus Aid, Relief and Economic Security (CARES) Act provides larger unemployment benefits than at any other time in
U.S. history. Farooq Kathwari , Ethan Allen’s Chairman, President and CEO will forego his salary throughJune 30, 2020 .- A salary reduction of up to 40% for all senior management and up to 20% for other salaried employees through
June 30, 2020 . - The Company’s Board of Directors will reduce their cash compensation by 50% through
June 30, 2020 . - As noted earlier, the Company will pay its affected associates through
April 2, 2020 . In addition, impacted employees will continue to receive enrolled benefits for up to 2 months.
Cash & Expense Management
In light of these temporary closures and workforce reductions, Ethan Allen is taking the following actions to manage cash flow, control expenses and facilitate a strong return to business once it resumes operations:
- Elimination of all non-essential operating expenses so that operations are maintained at minimum levels.
- The delay of capital expenditures.
- Temporary halt of the share repurchase program.
- The Company’s regular quarterly cash dividend is currently being evaluated.
As previously announced on
Ethan Allen plans to report its fiscal 2020 third quarter results in early May and will update the investment community with more details on its various initiatives at that time. Until that time, the Company undertakes no obligation to update the investment community.
ABOUT ETHAN ALLEN
Investor / Media Contact:
Vice President, Finance
IR@ethanallen.com
FORWARD-LOOKING STATEMENTS
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which represent management's beliefs and assumptions concerning future events based on information currently available to the Company relating to its future results. Such forward-looking statements are identified in this press release and the related webcasts, conference calls and other related discussions or documents incorporated herein by reference by use of forward-looking words such as “anticipate,” “believe,” “plan,” “estimate,” “expect,” “intend,” “will,” “may,” “continue,” “project,” “target,” “outlook," "forecast," “guidance," and similar expressions and the negatives of such forward-looking words. These forward-looking statements are subject to management decisions and various assumptions about future events and are not guarantees of future performance. Actual results could differ materially from those anticipated in the forward-looking statements due to a number of risks and uncertainties including, but not limited to the following: a volatile retail environment and changing economic conditions may further adversely affect consumer demand and spending; global and local economic uncertainty may materially adversely affect manufacturing operations or sources of merchandise and international operations; disruptions of supply chain; changes in
Given the risks and uncertainties surrounding forward-looking statements, you should not place undue reliance on these statements. Many of these factors are beyond the Company’s ability to control or predict. These forward-looking statements speak only as of the date of this news release. Other than as required by law, the Company undertakes no obligation to update or revise its forward-looking statements, whether because of new information, future events, or otherwise. Accordingly, actual circumstances and results could differ materially from those contemplated by the forward-looking statements.
Source:
2020 GlobeNewswire, Inc., source