Ethan Allen Interiors Inc. (ETD) 2011年年度報告「NYSE」.pdf

《Ethan Allen Interiors Inc. (ETD) 2011年年度報告「NYSE」.pdf》由會員分享，可在線閱讀，更多相關《Ethan Allen Interiors Inc. (ETD) 2011年年度報告「NYSE」.pdf（82頁珍藏版）》請在三個皮匠報告上搜索。

1、A N N U A LR E P O R T2 0 1 1During the last fiscal year,we have contin-ued to make progress in repositioningEthan Allen to meet the challenges of the“Great Recession.”We have strengthenedeach of the five priorities that have beenour focus,resulting in major improvementsin our financial position.OPE

2、RATIONS:We made major strides in improving ourfive areas of focus during fiscal 2011:Projecting a relevant message:We focusedon getting an aspirational and attainablemessage across.We increased our advertis-ing spending by 26%during the fiscal year,aggressively utilizing direct mail,national tel-evi

3、sion and digital advertising.Managementin advertising was also strengthened duringthe year.These investments in advertisingand management provide us an opportunityto continue to develop our brand in a differ-entiated manner.Accelerating the development of stylishand attainable products:During the ye

4、arwe accelerated the development of our prod-uct programs.We focused our offers in theprojections of our 5 Signature Lifestyles:Elegance,Vintage,Romance,Explorer,andModern.Products were developed for bothour domestic and offshore manufacturing.We are planning to launch a major productprogram introdu

5、ced to our retail networkearlier this year.Consumers will see the firstphase in September 2011,with other majornew products to be introduced to consumersfrom January to June of 2012.We are in astrong position to continue to project relevantofferings to our clients.Strengthening our retail network:We

6、 tooksteps this year to add more than 225 qualifiedand entrepreneurial interior design associatesto our network.We continue to relocate ourdesign centers to more advantageous sitesand to close and consolidate poorlyperforming locations.At the end of June2011,we have 287 design centers in ourretail n

7、etwork,53 of which are in China.Alsoduring the year,we made major investmentsin the Retail Division.This included addingmanagement and qualified interior designassociates.We believe this incremental invest-ment of$6 million will provide an opportunityto grow our business.Moreover,we aregratified tha

8、t our independent licensees havealso done relatively well,despite operatingin one of the most challenging economicenvironments.Investment in relevant technology:Wecontinued our investments in technologyboth at the wholesale and the retail level.At the wholesale level,we completed theupgrade of our i

9、nformation systems in uphol-stery manufacturing and started the processfor our case goods manufacturing.On themarketing side,we continued to upgrade ourvibrant website and also add other digitalmedia to our messaging arsenal such asour Facebook page.On the retail side,weupgraded our point of sale an

10、d client man-agement information systems,introducedtouch-screen technology,and we have begunto develop touchpad technology for ourretail associates.Developing relevant sourcing and logistics:We continued the process of repositioningour manufacturing,sourcing,and logistics.Our upholstery manufacturin

11、g made impor-tant strides in establishing a strong base bothin Maiden,North Carolina and Silao,Mexico.The Mexican operation continues to grow.With the completion of the latest additionscheduled for October of this year,it is amodern 240,000 square foot manufacturingfacility,enabling us to continue t

12、o grow ourupholstery program.The U.S.case goodsmanufacturing plants are operating moreefficiently.The conversion to custom manu-facturing upon receipt of customer ordershas been challenging,but it is beginning topay dividends through improved plant oper-ating margins and efficiencies throughoutour l

13、ogistics operations.We are also workingclosely with our offshore partners on someof the great new products hitting our designcenter floors in fiscal 2012.FINANCIALS:These operational actions continue tostrengthen our financial position*:Revenues&backlogs:For fiscal year endedJune 30,2011,net sales w

14、ere$679 million,up 15.1%from the previous year.Our writtenorders were strong;especially in the secondhalf of our fiscal year with our Retail Divisionorders increasing 13%over the prior year inboth comparable locations and for the totaldivision.This led to stronger backlogs in bothour Retail and Whol

15、esale divisions at the endof fiscal 2011.Margins&operating leverage:Our grossmargin excluding transition charges improvedto 51.6%from 50.1%.Our operating incomeexcluding special items was$33.7 million or5.0%of net sales compared to$1.4 millionor 0.2%of net sales the prior year.Demon-strating the ope

16、rating leverage of our verti-cally integrated enterprise,the$89 millionin incremental net sales drove$32.3 million inadditional operating income,for a 36.3%in-cremental impact.Our net income excludingspecial items for the year was$16.9 million($0.58 per diluted share)compared to a lossof$4.2 million

17、($0.15 per diluted share)in theprevious year.Liquidity:We strengthened our liquidity.We ended the fiscal year with cash and secu-rities of$107.8 million.We repaid$38 millionof debt during the year,thereby reducingour annualized interest expense by over$2 million.We also strengthened our revolv-ing c

18、redit facility by extending its life byapproximately four years,reducing its costs,and adding flexibility of expansion potentialfrom its current$50 million undrawn line upto$100 million for future business opportuni-ties.Moreover,we increased our dividendon an annual basis by 40%,from$0.20 to$0.28 p

19、er share.We are pleased to have made such excellentprogress this fiscal yeardue in large partto the commitment and passion of our asso-ciates throughout the business.Every oneof them has had a hand in improving ourposition each day.This effort has preparedus for growth.We appreciate your continuedco

20、nfidence and support.Sincerely,FAROOQ KATHWARIChairman of the Board,President and CEOEthan Allen Interiors Inc.DearSHAREHOLDER*See GAAP ReconciliationStatement of Operations Data201120102009Net sales$678,960$590,054$674,277Gross profit$349,460$280,277$347,342Operating income(loss)(a)$31,933$(11,735)

21、$(72,771)Net income(loss)(b)$29,250$(44,316)$(52,687)Per Share DataNet income(loss)per diluted share(b)$1.01$(1.53)$(1.83)Diluted weighted average common shares outstanding28,96628,98228,814Balance Sheet DataCash and Securities(c)$107,819$102,245$52,960Working capital$113,912$113,950$139,239Current

22、ratio1.74 to 11.78 to 12.24 to 1Total assets$628,325$631,777$646,485Total debt,including capital lease obligations$165,032$203,267$203,148Shareholders equity$281,687$258,459$305,923Debt as%of equity58.6%78.6%66.4%Debt as%of capital36.9%44.0%39.9%Cash Returned to ShareholdersDividends paid$5,754$5,80

23、1$23,617Cost of shares repurchased$2,787$2,589-Number of shares repurchased0.2 million0.2 million-FinancialHIGHLIGHTSAmounts in thousands,except per share data.Fiscal years ended June 30.(a)Includes the effects of pre-tax restructuring and impairment charges totaling$1.1 million,$2.4 million,and$67.

24、0 million in fiscal years 2011,2010,and 2009 respectively.(b)Includes the effects of pre-tax restructuring and impairment charges in note(a)and impacts from changes to tax asset valuation allowances of($12.7)million,34.1 million,and$2.1 million in fiscal years 2011,2010,and 2009 respectively.(c)Incl

25、udes cash and cash equivalents,marketable securities,and restricted cash and investments.UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington,D.C.20549 FORM 10-K (Mark One)X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended June 30,2

26、011 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 1-11692 Ethan Allen Interiors Inc.(Exact name of registrant as specified in its charter)Delaware 06-1275288 (State or other jurisdiction of incorpor

27、ation or organization)(I.R.S.Employer Identification No.)Ethan Allen Drive,Danbury,CT 06811 (Address of principal executive offices)(Zip Code)Registrants telephone number,including area code (203)743-8000 Securities registered pursuant to Section 12(b)of the Act:Title of Each Class Name of Each Exch

28、ange On Which Registered Common Stock,$.01 par value New York Stock Exchange,Inc.Securities registered pursuant to Section 12(g)of the Act:None(Title of Class)Indicate by check mark if the Registrant is a well-known seasoned issuer,as defined in Rule 405 of the Securities Act.Yes X No Indicate by ch

29、eck mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d)of the Act.Yes X No Indicate by check mark whether the Registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934 during the preceding 12 months

30、(or for such shorter period that the Registrant was required to file such reports),and(2)has been subject to such filing requirements for the past 90 days.X Yes No Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site,if any,every Interactive

31、 Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T(232.405 of this chapter)during the preceding 12 months(or such shorter period that the registrant was required to submit and post such files).Yes No Indicate by check mark if disclosure of delinquent filers pursuan

32、t to Item 405 of Regulation S-K is not contained herein,and will not be contained,to the best of Registrants knowledge,in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.X Indicate by check mark whether the registr

33、ant is a large accelerated filer,an accelerated filer,a non-accelerated filer,or a smaller reporting company.See the definitions of“large accelerated filer,”“accelerated filer”and“smaller reporting company”in Rule 12b-2 of the Exchange Act(check one):Indicate by check mark whether the Registrant is

34、a shell company(as defined in Rule 12b-2 of the Act).Yes X No The aggregate market value of the Registrants common stock,par value$.01 per share,held by non-affiliates(based upon the closing sale price on the New York Stock Exchange)on December 31,2010,(the last day of the Registrants most recently

35、completed second fiscal quarter)was approximately$574,818,766.As of July 31,2011,there were 28,792,973 shares of the Registrants common stock,par value$.01 per share,outstanding.DOCUMENTS INCORPORATED BY REFERENCE:Certain information contained in the Registrants definitive Proxy Statement for the 20

36、11 Annual Meeting of stockholders,which will be filed with the Securities and Exchange Commission pursuant to Regulation 14A of the Securities Exchange Act of 1934,is incorporated by reference into Part III hereof.Large accelerated filer Accelerated filer X Non-accelerated filer Smaller reporting co

37、mpany 2 TABLE OF CONTENTS Item Page PART I 1.Business 3 1A.Risk Factors 11 1B.Unresolved Staff Comments 15 2.Properties 15 3.Legal Proceedings 16 4.Reserved 17 PART II 5.Market for Registrants Common Equity,Related Stockholder Matters and Issuer Purchases of Equity Securities 17 6.Selected Financial

38、 Data 18 7.Managements Discussion and Analysis of Financial Condition and Results of Operations 19 7A.Quantitative and Qualitative Disclosures About Market Risk 33 8.Financial Statements and Supplementary Data 33 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

39、69 9A.Controls and Procedures 69 9B.Other Information 70 PART III 10.Directors,Executive Officers and Corporate Governance 70 11.Executive Compensation 70 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 70 13.Certain Relationships and Related Transac

40、tions,and Director Independence 70 14.Principal Accountant Fees and Services 70 PART IV 15.Exhibits and Financial Statement Schedules 71 Signatures 76 3 PART I Item 1.Business Background Incorporated in Delaware in 1989,Ethan Allen Interiors Inc.,through its wholly-owned subsidiary,Ethan Allen Globa

41、l,Inc.,and Ethan Allen Global,Inc.s subsidiaries(collectively,We,Us,Our,Ethan Allen or the Company),is a leading manufacturer and retailer of quality home furnishings and accessories,offering a full complement of home decorating and design solutions through one of the countrys largest home furnishin

42、g retail networks.We refer to our Ethan Allen retail outlets as design centers instead of stores to better reflect these expanded capabilities.We have made,and continue to make,considerable investment in our business in order to expand and improve our interior design capabilities and to leverage our

43、 domestic manufacturing and logistics operations.The Company was founded in 1932 and has sold products under the Ethan Allen brand name since 1937.Mission Statement Our primary business objective is to provide our customers with a convenient,full-service,one-stop shopping solution for their home dec

44、orating needs by offering stylish,high-quality products at good value.In order to meet our stated objective,we have developed and adhere to a focused and comprehensive business strategy.The elements of this strategy,each of which is integral to our solutions-based philosophy,include(i)our vertically

45、 integrated operating structure,(ii)our stylish products and related marketing initiatives,(iii)our retail design center network,(iv)our people,and(v)our focus on providing design solutions.Operating Segments Our products are sold through a dedicated global network of 287 retail design centers.As of

46、 June 30,2011,the Company operated 147 design centers(our retail segment)and our independent retailers operated 140 design centers(as compared to 145 and 136,respectively,at the end of the prior fiscal year).Our wholesale segment net sales include sales to our retail segment and sales to our indepen

47、dent retailers.Our retail segment net sales accounted for 75%of our consolidated net sales in fiscal 2011 while wholesale segment net sales to independent retailers accounted for 25%.Our net sales to the ten largest independent retailers,who operate 77 design centers,accounted for approximately 13%o

48、f our consolidated net sales in fiscal 2011.Our wholesale and retail operating segments represent strategic business areas of our vertically integrated business that operate separately and provide their own distinctive services(further outlined below).This enables us to more effectively offer our co

49、mplete line of home furnishings and accessories and more efficiently control quality and cost.For certain financial information regarding our operating segments,see Note 16 to the Consolidated Financial Statements included under Item 8 of this Annual Report and incorporated herein by reference.While

50、 the manner in which our home furnishings and accessories are marketed and sold is consistent between our wholesale and retail segments,the nature of the underlying recorded sales(i.e.wholesale versus retail)and the specific services that each operating segment provides(i.e.wholesale manufacturing,s

51、ourcing,and distribution versus retail selling)are different.Within the wholesale segment,we maintain revenue information according to each respective product line(i.e.case goods,upholstery,or home accessories and other).Sales of case good items include,but are not limited to,beds,dressers,armoires,

52、tables,chairs,buffets,entertainment units,home office furniture,and wooden accents.Sales of upholstery home furnishing items include sleepers,recliners,chairs,sofas,loveseats,cut fabrics and leather.Skilled craftsmen cut,sew and upholster custom-designed upholstery items which are available in a var

53、iety of frame and fabric options.Home accessory and other items include window treatments,wall decor,lighting,clocks,bedding and bedspreads,decorative accessories,area rugs,and home and garden furnishings.4 Revenue information by product line is not as easily determined within the retail segment.How

54、ever,because wholesale sales are matched,for the most part,to incoming orders,we believe that the allocation of retail sales by product line would be similar to that of the wholesale segment.We evaluate performance of the respective segments based upon revenues and operating income.Inter-segment eli

55、minations result,primarily,from the wholesale sale of inventory to the retail segment,including the related profit margin.Wholesale Segment Overview:Wholesale net sales for each of the last three fiscal years are summarized below(in millions):Fiscal Year Ended June 30,2011 2010 2009 Wholesale net sa

56、les$422.9$362.5$403.4 Wholesale net sales for each of the last three fiscal years,allocated by product line,were as follows:Fiscal Year Ended June 30,2011 2010 2009 Case Goods 39%40%41%Upholstered Products 46 46 41 Home Accessories and Other 15 14 18 100%100%100%The wholesale segment,principally inv

57、olved in the development of the Ethan Allen brand,encompasses all aspects of design,manufacture,sourcing,sale,and distribution of our broad range of home furnishings and accessories.Wholesale revenue is generated upon the wholesale sale and shipment of our products to our network of independently op

58、erated design centers and Company-operated design centers(see Company operated retail comments below)through its national distribution center and one other smaller fulfillment center.During the past year,independent retailers opened 15 new design centers,closed five,and six design centers were acqui

59、red from independent retailers by the Company.We continue to promote the growth and expansion of our independent retailers through ongoing support in the areas of market analysis,site selection,and business development.As in the past,our independent retailers are required to enter into license agree

60、ments with us,which(i)authorize the use of certain Ethan Allen trademarks and(ii)require adherence to certain standards of operation,including a requirement to fulfill related warranty service agreements.We are not subject to any territorial or exclusive retailer agreements in North America.The whol

61、esale segment also develops and implements related marketing and brand awareness programs.Wholesale profitability includes(i)the wholesale gross margin,which represents the difference between the wholesale net sales price and the cost associated with manufacturing and/or sourcing the related product

62、,and(ii)other operating costs associated with wholesale segment activities.The Companys domestic manufacturing is included in the results of the wholesale segment.During fiscal 2011,the Companys domestic manufacturing footprint remained stable and we focused on achieving operational efficiencies.We

63、doubled the size of our Mexico plant to 130,000 square feet in fiscal 2011.We operate three case good plants(including one sawmill),three upholstery plants(two upholstery plants on our Maiden,North Carolina campus and one cut and sew plant in Mexico)and one home accessory plant.We also source select

64、ed case goods,upholstery,and home accessory items from third-party suppliers located both domestically and outside the United States.5 As of June 30,2011,we maintained a wholesale backlog of$62.8 million(as compared to$57.0 million as of June 30,2010)which is anticipated to be serviced in the first

65、quarter of fiscal 2012.Backlog at a point in time is a result,primarily,of net orders booked in prior periods,manufacturing schedules,timing associated with the receipt of sourced product,and the timing and volume of wholesale shipments.Because orders may be rescheduled and/or canceled,the measure o

66、f backlog at a point in time may not necessarily be indicative of future sales performance.For the twelve months ended June 30,2011,net orders booked at the wholesale level,which includes orders generated by independently operated and Company operated design centers,totaled$427.9 million as compared

67、 to$403.7 million for the twelve months ended June 30,2010.In any given period,net orders booked may be impacted by the timing of floor sample orders received in connection with new product introductions.New product offerings may be made available to the retail network at any time during the year,in

68、cluding in connection with our periodic retailer conferences.Retail Segment Overview:Retail net sales for each of the last three fiscal years are summarized below(in millions):Fiscal Year Ended June 30,2011 2010 2009 Retail net sales$505.9$438.5$508.6 The retail segment sells home furnishings and ac

69、cessories to consumers through a network of Company-operated design centers.During fiscal 2011,we acquired six design centers from independent retailers,relocated one,and closed four design centers.The number of independent interior designers affiliated with the Company has grown to over 2,300 inter

70、ior designers.The interior design affiliate program,initiated in fiscal 2010,provides the opportunity for Ethan Allen designers to work with independent interior design affiliates that apply and meet Ethan Allen standards.This program allows the Company to reach additional clients serving both Compa

71、ny operated and independent retail operations not otherwise affiliated with Ethan Allen and compensates them for the incremental business.Retail revenue is generated upon the retail sale and delivery of our products to our retail customers through its network of service centers.Retail profitability

72、includes(i)the retail gross margin,which represents the difference between the retail net sales price and the cost of goods purchased from the wholesale segment,and(ii)other operating costs associated with retail segment activities.We pursue further expansion of the Company-operated retail business

73、by opening new design centers,relocating existing design centers and,when appropriate,acquiring design centers from independent retailers.The geographic distribution of retail design center locations is included under Item 2 of Part I of this Annual Report.Products Our strategy has been to position

74、Ethan Allen as a preferred brand with superior style,quality and value while,at the same time,providing consumers with a comprehensive,one-stop shopping solution for their home furnishing and design needs.In carrying out our strategy,we continue to expand our reach to a broader consumer base through

75、 a diverse selection of attractively priced products,designed to complement one another,reflecting the popular trend toward eclectic home decorating.Regular product introductions,a broad range of styles and selections within our custom upholstery and case good lines,new finishes for,and redesigns of

76、,previous product introductions,and expanded product offerings to accommodate todays home decorating trends,continue to redefine Ethan Allen,positioning us as a leader in style.In an effort to more effectively position ourselves as a provider of interior design solutions,we offer a merchandising str

77、ategy which involves the grouping of our product offerings into five distinct product“lifestyles”,each reflecting the diversity and eclecticism that we believe represents the best in American design.In accordance with this merchandising strategy,new products are designed and developed to reflect uni

78、que elements applicable to one or more of the following lifestyles:Elegance;Modern;Romance;Explorer;and Vintage.6 All of our case goods,upholstered products,and home accessories are styled with distinct design characteristics.Home accessories play an important role in our marketing strategy as they

79、enable us to offer the consumer the convenience of one-stop shopping by creating a comprehensive home furnishing solution.The interior of our design centers is organized to facilitate display of our product offerings,both in room settings that project the category lifestyle and by product grouping t

80、o facilitate comparisons of the styles and tastes of our clients.To further enhance the experience,technology is used to expand the range of products viewed by including content from our award-winning website and advanced large touch-screen flat panel displays.We continuously monitor changes in home

81、 design trends through attendance at international industry events and fashion shows,internal market research,and regular communication with our retailers and design center design consultants who provide valuable input on consumer tendencies.We believe that the observations and input gathered enable

82、 us to incorporate appropriate style details into our products to react quickly to changing consumer tastes.Product Sourcing Activities We are one of the largest manufacturers of home furnishings in the United States,manufacturing and/or assembling approximately 70%of our products in our six domesti

83、c manufacturing facilities.Our facilities are located in the Northeast and Southeast regions of the United States where they are close to sources of raw materials and skilled craftsmen.Our domestic upholstery manufacturing is supported by our high quality upholstery cut and sew plant in Mexico.The b

84、alance of our production is outsourced according to our own internally developed design specifications,through third-party suppliers,most of which are located outside the United States.These suppliers,primarily in Asia,have been carefully selected and generally have supplied us for many years.We bel

85、ieve that strategic investment in our manufacturing facilities,combined with an appropriate level of outsourcing through both foreign and domestic suppliers,will accommodate future sales growth and allow us to maintain an appropriate degree of control over cost,quality and service to our customers.W

86、e also take pride in our“green”initiatives that include,in select product offerings,the use of responsibly harvested Appalachian woods,water based finishes,organic cotton textiles and recycled materials.Raw Materials and Other Suppliers The most important raw materials we use in furniture manufactur

87、ing are lumber,veneers,plywood,hardware,glue,finishing materials,glass,mirrored glass,laminates,fabrics,foam,and filling material.The various types of wood used in our products include cherry,ash,oak,maple,prima vera,mahogany,birch and pine;substantially all of which are purchased domestically.Fabri

88、cs and other raw materials are purchased both domestically and outside the United States.We have no significant long-term supply contracts,and have sufficient alternate sources of supply to prevent disruption in supplying our operations.We maintain a number of sources for our raw materials,which we

89、believe contribute to our ability to obtain competitive pricing.Lumber prices fluctuate over time based on factors such as weather and demand,which,in turn,impact availability.Higher material prices could have an adverse effect on margins.Appropriate amounts of lumber and fabric inventory are typica

90、lly stocked to maintain adequate production levels.We believe that our sources of supply for these materials are sufficient and that we are not dependent on any one supplier.We enter into standard purchase agreements with certain foreign and domestic suppliers to source selected case goods,upholster

91、y,and home accessory items.The terms of these arrangements are customary for the industry and do not contain any long-term contractual obligations on our behalf.We believe we maintain good relationships with our suppliers.7 Distribution and Logistics We distribute our products through one primary di

92、stribution center,owned by the Company,strategically located in the Southeast United States.This national distribution center is supported by a smaller Company-owned order fulfillment center located in the South Central United States.Our primary distribution center provides efficient cross-dock oper

93、ations to receive and ship product from our manufacturing facilities and third-party suppliers to our network of retail design centers and retail service centers.While we manufacture to custom order the majority of our products,we also stock selected case goods,upholstery and accessories to provide

94、for quick delivery of in-stock items and to allow for more efficient production runs.Within our existing manufacturing sites,we have two large“supermarkets of parts”for the components used in our custom case goods manufacturing.Wholesale shipments utilize our own fleet of trucks and trailers or are

95、subcontracted with independent carriers.Approximately 88%of our fleet(trucks and trailers)is leased under operating lease agreements with remaining terms ranging from one to 15 months.Our policy is to sell our products at the same delivered cost to all Company-operated and independently operated des

96、ign centers nationwide,regardless of their shipping point.The adoption of this policy has created pricing credibility with our wholesale customers and provided our retail network the opportunity to achieve more consistent margins as fluctuations attributable to the cost of shipping have been elimina

97、ted.Further,this policy has eliminated the need for our independent retailers to carry significant amounts of inventory in their own warehouses.As a result,we obtain more accurate consumer product demand information.Retail service centers are operated by the Company,independent retailers,and subcont

98、ractors to prepare products for delivery into clients homes.There were 16 Company-operated service centers at the end of fiscal 2011,down from 18 one year earlier.Marketing Programs Our marketing and advertising strategies are developed to drive traffic into our network of design centers and to .We

99、believe these strategies give Ethan Allen a strong competitive advantage in the home furnishings industry.We create and coordinate print,digital and television campaigns nationally,as well as assist in local marketing and promotional efforts.The Companys network of approximately 290 retail design ce

100、nters and more than 2,300 independent members of the Interior Design Affiliate program benefit from these marketing efforts,and we believe these efforts position us to consistently fulfill our brand promise.Our in-house team of advertising specialists send consistent,clear messages that Ethan Allen

101、is a leader in style and service,with everything for the well-designed home.We use several forms of media to accomplish this,including television(national and local),direct mail,newspapers,regional shelter magazines,social media,email,online sponsorships and ads as well as at .A strong national emai

102、l marketing campaign delivers emails and design and product brochures to a growing database of clients.Our national television and print advertising campaigns are designed to leverage our strong brand equity,finding creative and compelling ways to remind consumers of our tremendous range of products

103、,services,special programs,and custom options.We believe that we consistently deliver the most cohesive national advertising campaign in the home furnishings industry.Coordinated local television,print and online ads serve to support our national programs.The Ethan Allen direct mail magazine,which b

104、rands our new five Signature Lifestyles and communicates the breadth of our products and services,is one of our most important marketing tools.We publish these magazines and sell them to Company and independently operated design centers who use demographic information collected through independent m

105、arket research to target potential clients.Given the importance of this advertising medium,direct mail marketing lists are continually refined to target those consumers who are most likely to 8 purchase,and improve the return on direct mail expenditures.Approximately 18 million copies of our direct

106、mail magazine were distributed to consumers during fiscal 2011.Our television advertising and direct mail efforts are supported by strong print campaigns.We also update our Style Book approximately every six months.In addition to its use as a catalog of our case goods and upholstery products,the Sty

107、le Book is full of quality,design,and service stories,and looks and ideas to spark inspiration.This publication is a comprehensive and effective resource for clients.The Companys award winning website,provides our customers and design associates a great way to shop and design.The website features a

108、series of helpful tabs with videos,feature stories,design and style solutions,and fresh,new looks.For example,the sites myprojects tool lets visitors create idea boards and room plans.If they like,a design professional from their local Ethan Allen design center can give them feedback.Visitors will f

109、ind all our latest news and promotional information here too.Nearly all of Ethan Allens products are available for purchase online.We also have a robust and informative extranet available to our retailers and design professionals.It is the primary source of communication in and among members of our

110、retail network.It provides information about every aspect of the business of Ethan Allen at retail,including advertising materials,prototype floor plan displays,and extensive product details.Retail Design Center Network Ethan Allen design centers are typically located in busy urban settings as frees

111、tanding destinations or as part of suburban strip malls,depending upon the real estate opportunities in a particular market.Our design centers average approximately 16,000 square feet in size but range from approximately 3,000 square feet to 35,000 square feet.We maximize uniformity of presentation

112、throughout the retail design center network through a comprehensive set of standards and display planning assistance.These standard interior design formats assist each design center in presenting a high quality image by using focused lifestyle settings and select product category groupings to displa

113、y our products and information to facilitate design solutions and to educate consumers.We also create a uniform design center image with consistent exterior facades in addition to the interior layouts.The adherence to all of these standards have helped position Ethan Allen as a leader in home furnis

114、hings retailing.We have strengthened the retail network with many initiatives,including the opening of new and relocated design centers in desirable locations,introduction of Lifestyle presentations and floor plans,strengthening of the professionalism of our designers through training and certificat

115、ion,and the consolidation of certain design centers and service centers.This continuous improvement resulted in fiscal 2011 with one new Company-operated design center and 15 new independently operated design centers during the year including relocations.Four Company-operated and five independently

116、operated design centers in underperforming markets were closed or consolidated into existing design centers.People At June 30,2011,the Company had approximately 4,700 employees(“associates”),less than one percent of whom are represented by unions whose collective bargaining agreements expire within

117、the next three years.We expect no significant changes in our relations with the unions and believe we maintain good relationships with our employees.The retail network,which includes both Company-operated and independently operated design centers,is staffed with a sales force of design consultants a

118、nd service professionals who provide customers with effective home decorating solutions at no additional charge.Our interior design associates receive specialty training with respect to the distinctive design and quality features inherent in each of our products and programs.This enables them to 9 m

119、ore effectively communicate the elements of style and value that serve to differentiate us from our competition.As such,we believe our design consultants,and the complimentary service they provide,create a distinct competitive advantage over other home furnishing retailers.We continue to strengthen

120、the level of service,professionalism,interior design competence,efficiency,and effectiveness of retail design center associates.The Companys interior design affiliate program,launched in fiscal 2010,resulted in the registration with the Company of more than 2,300 qualified professional interior desi

121、gners who add strength and breadth to our interior design reach.We believe that this program augments the Company and independent retailer design staffs to reach more clients and improve market penetration.This structure,along with the emphasis in our messaging to clients that“we can help as little

122、or as much as you like”R,continues to improve the customer service experience.We recognize the importance of our retail design center network to our long-term success.Accordingly,we believe we(i)have established a strong management team within Company-operated design centers and(ii)continue to work

123、closely with our independent retailers in order to assist them.With this in mind,we make our services available to every design center,whether independently operated or Company-operated,in support of their marketing efforts,including coordinated advertising,merchandising and display programs,and ext

124、ensive training seminars and educational materials.We believe that the development of design consultants,service and delivery personnel,and retailers is important for the growth of our business.As a result,we have committed to make available comprehensive retail training programs intended to increas

125、e the customer service capabilities of each individual.Customer Service Offerings We offer numerous customer service programs,each of which has been developed and introduced to consumers in an effort to make their shopping experience easier and more enjoyable.Gift Card This program allows customers

126、to purchase gift cards through our website or at any participating retail design center,which can be redeemed for any of our products or services.On-Line Room Planning We offer,via our website,an interactive on-line room planning resource which serves to further assist consumers with their home deco

127、rating needs.Through the use of this web-based tool,customers can determine which of our product offerings best fit their particular needs based on their own individual home floor plan.Ethan Allen Consumer Credit Programs The Ethan Allen Finance Plus program offers consumers(clients)a menu of custom

128、 financing options through the use of just one account.Clients can choose between(i)“Fixed Payment”which offers fixed monthly payments the customer chooses(12,24,or 36 months)at an interest rate of 9.99%per annum,and(ii)Deferred Interest which offers clients a way to borrow interest free for six mon

129、ths with small minimum monthly payments.If the purchase is not paid by the due date,interest is charged from the date of purchase at a fixed interest rate of 29.99%per annum.All plans provide credit lines from$1,000 to$20,000,or greater,if the customer qualifies.Financing offered is administered by

130、a third-party financial institution and is granted to our customers on a non-recourse basis to the Company.Clients may apply for an Ethan Allen Finance Plus card at any participating design center or on-line at .Competition The domestic and global home furnishings industry faces numerous challenges,

131、not the least of which is an influx of low-priced products from overseas.As a result,we believe a trend toward product commoditization has developed.The economic recession resulted in many small and medium sized furniture retailers going out of business,and other well-established competitors resorti

132、ng to heavy discounts to attract customers.We differentiate ourselves as a preferred brand by adhering to a business strategy focused on providing(i)high-quality,well designed and often custom handmade products at good value,(ii)a comprehensive complement of 10 home furnishing design solutions,inclu

133、ding our complimentary design service,and(iii)excellence in customer service.We consider our vertical integration a significant competitive advantage in the current environment as it allows us to design,manufacture and source,distribute,market,and sell our products through one of the industrys large

134、st single-source retail networks.The internet also provides a highly competitive medium for the sale of a significant amount of home furnishings each year.Much of that product is sold through commodity oriented,low priced and low service retailers.At Ethan Allen the ultimate goal of our internet str

135、ategy is to drive traffic into our network of design centers by coupling technology with excellent personal service.At EthanA,customers have the opportunity to buy our products online but we take the process further.With so much of our product offering being custom,we encourage our website customers

136、 to get online help from our network of interior design professionals.This complimentary interior design support creates a competitive advantage through our excellent personal service.This enhances the experience and regularly leads to internet customers becoming clients of our network of interior d

137、esign centers.Industry globalization has provided us an opportunity to adhere to a blended sourcing strategy,establishing relationships with certain manufacturers,both domestically and outside the United States,to source selected case goods,upholstery,and home accessory items.We intend to continue t

138、o balance our domestic production with opportunities to source from foreign and domestic manufacturers,as appropriate,in order to maintain our competitive advantage.We believe the home furnishings industry competes primarily on the basis of product styling and quality,personal service,prompt deliver

139、y,product availability and price.We further believe that we effectively compete on the basis of each of these factors and that,more specifically,our retail format,our award winning website,and complimentary design service create a distinct competitive advantage,further supporting our mission of prov

140、iding consumers with a complete home decorating and design solution.We also believe that we differentiate ourselves further with the quality of our design service through our internal training and certification programs along with our interior design affiliate program.Our objective is to continue to

141、 develop and strengthen our retail network by(i)expanding the Company-operated retail business through the relocation of existing design centers,opening of new design centers,and,when appropriate,acquiring design centers from,or selling design centers to,independent retailers,and(ii)obtaining and re

142、taining independent retailers,encouraging such retailers to expand their business through the opening or relocation of new design centers with the objective of increasing the volume of their sales and(iii)further expanding our sales network through our interior designer affiliate program.Trademarks

143、We currently hold,or have registration applications pending for,numerous trademarks,service marks and design patents for the Ethan Allen name,logos and designs in a broad range of classes for both products and services in the United States and in many foreign countries.In addition,we have registered

144、,or have applications pending for certain of our slogans utilized in connection with promoting brand awareness,retail sales and other services and certain collection names.We view such trademarks and service marks as valuable assets and have an ongoing program to diligently monitor and defend,throug

145、h appropriate action,against their unauthorized use.Available Information We make available,free of charge via our website,all Annual Reports on Form 10-K,Quarterly Reports on Form 10-Q,Current Reports on Form 8-K and other information filed with,or furnished to,the Securities and Exchange Commissio

146、n(the SEC or the Commission),including amendments to such reports.This information is available at as soon as reasonably practicable after it is electronically filed with,or furnished to,the SEC.In addition,the SEC maintains a website that contains reports,proxy and information statements,and other

147、information regarding companies that file electronically with the Commission.This information is available at www.sec.gov.11 In addition,charters of all committees of our Board of Directors,as well as our Corporate Governance guidelines,are available on our website at or,upon written request,in prin

148、ted hardcopy form.Written requests should be sent to Office of the Secretary,Ethan Allen Interiors Inc.,Ethan Allen Drive,Danbury,Connecticut 06811.Item 1A.Risk Factors The following information describes certain significant risks and uncertainties inherent in our business that should be carefully c

149、onsidered,along with other information contained elsewhere in this report and in other filings,when making an investment decision with respect to us.If one or more of these risks actually occurs,the impact on our business,including our financial condition,results of operations,and cash flows could b

150、e adverse.A prolonged economic downturn may materially adversely affect our business.Our business and results of operations are affected by international,national and regional economic conditions.The United States and many other international economies experienced a major recession,with continuing e

151、ffects for our industry.Our primary customer base,direct or indirect,is composed of individual consumers.A hesitant recovery in the U.S.economy,continuing high unemployment,volatile capital markets,depressed housing prices and tight consumer lending practices have resulted in considerable negative p

152、ressure on consumer spending.We believe these events have impacted consumers in our markets in ways that have negatively affected our business.In the event the current economic conditions worsen,our current and potential customers may be inclined to further delay their purchases.In addition,further

153、tightening of credit markets may restrict our customers ability and willingness to make purchases.Access to consumer credit could be interrupted and reduce sales and profitability.Our ability to continue to access consumer credit for our clients could be negatively affected by conditions outside our

154、 control.Given the difficult capital markets,there is a risk that,though we have agreements that do not expire until July 2014,our business partner which issues our private label credit card program,may not be able to fulfill its obligations under that agreement.We may be unable to obtain sufficient

155、 external funding to finance our operations and growth.Historically,we have relied upon our cash from operations to fund our operations and growth.As we operate and expand our business,we may rely on external funding sources,including the proceeds from the issuance of debt or the$50 million revolvin

156、g bank line of credit under our existing credit facility.Any unexpected reduction in cash flow from operations could increase our external funding requirements to levels above those currently available.The credit rating agencies Moodys Corporation and Standard and Poors most recent rating of our cor

157、porate and senior unsecured credit is Ba2 and B+respectively.If our credit ratings were lowered further,the Companys access to debt could be negatively impacted.There can be no assurance that we will not experience unexpected cash flow shortfalls in the future or that any increase in external fundin

158、g required by such shortfalls will be available.Operating losses could reduce our liquidity and impact our dividend policy.Historically,we have relied on our cash from operations to fund our operations and the payment of cash dividends.If the Companys financial performance were to deteriorate result

159、ing in financial losses we may not be able to fund a shortfall from operations and would require external funding.Some financing instruments used by the Company historically may not be available to the Company in the future.We cannot assure that additional sources of financing would be available to

160、the Company on commercially favorable terms should the Companys capital requirements exceed cash available from operations and existing cash and cash equivalents.In such circumstances,the Company may reduce its quarterly dividends.12 Additional impairment charges could reduce our profitability.We ha

161、ve significant long-lived tangible and intangible assets recorded on our balance sheets.If our operating results decline,we may incur impairment charges in the future,which could have a material impact on our financial results.We evaluate the recoverability of the carrying amount of our long-lived t

162、angible and intangible assets on an ongoing basis.There can be no assurance that the outcome of such future reviews will not result in substantial impairment charges.Impairment assessment inherently involves judgments as to assumptions about expected future cash flows and the impact of market condit

163、ions on those assumptions.Future events and changing market conditions may impact our assumptions as to prices,costs or other factors that may result in changes in our estimates of future cash flows.Although we believe the assumptions we use in testing for impairment are reasonable,significant chang

164、es in any of our assumptions could produce a significantly different result.We face changes in global and local economic conditions that may adversely affect consumer demand and spending,our manufacturing operations or sources of merchandise.Historically,the home furnishings industry has been subjec

165、t to cyclical variations in the general economy and to uncertainty regarding future economic prospects.Such uncertainty,as well as other variations in global economic conditions such as rising fuel costs and increasing interest rates,may continue to cause inconsistent and unpredictable consumer spen

166、ding habits,while increasing our own fuel,utility,transportation or security costs.These risks,as well as industrial accidents or work stoppages,could also severely disrupt our manufacturing operations,which could have a material adverse effect on our financial performance.We import a portion of our

167、 merchandise from foreign countries.As a result,our ability to obtain adequate supplies or our costs may be adversely affected by events affecting international commerce and businesses located outside the United States,including natural disasters,changes in international trade,central bank actions,c

168、hanges in the relationship of the U.S.dollar versus other currencies,and other governmental policies of the U.S.and the countries from which we import a portion of our merchandise.The inability to import products from certain foreign countries or the imposition of significant tariffs could have a ma

169、terial adverse effect on our results of operations.Competition from overseas manufacturers and domestic retailers may adversely affect our business,operating results or financial condition.Our wholesale business segment is involved in the development of our brand,which encompasses the design,manufac

170、ture,sourcing,sales and distribution of our home furnishings products,and competes with other U.S.and foreign manufacturers.Our retail business segment sells home furnishings to consumers through a network of Company-operated design centers,and competes against a diverse group of retailers ranging f

171、rom specialty stores to traditional furniture and department stores,any of which may operate locally,regionally and nationally,as well as over the internet.We also compete with these and other retailers for appropriate retail locations as well as for qualified design consultants and management perso

172、nnel.Such competition could adversely affect our future financial performance.Industry globalization has led to increased competitive pressures brought about by the increasing volume of imported finished goods and components,particularly for case good products,and the development of manufacturing ca

173、pabilities in other countries,specifically within Asia.The increase in overseas production capacity has created over-capacity for many U.S.manufacturers,including us,which has led to industry-wide plant consolidation.In addition,because many foreign manufacturers are able to maintain substantially l

174、ower production costs,including the cost of labor and overhead,imported product may be capable of being sold at a lower price to consumers,which,in turn,could lead to some measure of further industry-wide price deflation.We cannot provide assurance that we will be able to establish or maintain relat

175、ionships with sufficient or appropriate manufacturers,whether foreign or domestic,to supply us with selected case goods,upholstery and 13 home accessory items to enable us to maintain our competitive advantage.In addition,the emergence of foreign manufacturers has served to broaden the competitive l

176、andscape.Some of these competitors produce furniture types not manufactured by us and may have greater financial resources available to them or lower costs of operating.This competition could adversely affect our future financial performance.Failure to successfully anticipate or respond to changes i

177、n consumer tastes and trends in a timely manner could adversely impact our business,operating results and financial condition.Sales of our products are dependent upon consumer acceptance of our product designs,styles,quality and price.We continuously monitor changes in home design trends through att

178、endance at international industry events and fashion shows,internal marketing research,and regular communication with our retailers and design consultants who provide valuable input on consumer tendencies.However,as with all retailers,our business is susceptible to changes in consumer tastes and tre

179、nds.Such tastes and trends can change rapidly and any delay or failure to anticipate or respond to changing consumer tastes and trends in a timely manner could adversely impact our business,operating results and financial condition.Our reduced number of manufacturing and logistics sites may increase

180、 our exposure to business disruptions and could result in higher transportation costs.We have reduced the number of manufacturing sites in our case good and upholstery operations,consolidated our distribution network into fewer centers for both wholesale and retail segments,and operate a single acce

181、ssories plant.Our upholstery operations consist of two upholstery plants on our Maiden,North Carolina campus supported by one cut and sew plant in Mexico.The Company operates one sawmill in support of our case goods operations.Our plants require various raw materials and commodities such as logs and

182、 lumber for our case good plants and foam,springs and engineered hardwood board for our upholstery plants.If any of our manufacturing or logistics sites experience significant business interruption,our ability to manufacture products or deliver timely would likely be impacted.While we have long-stan

183、ding relationships with multiple outside suppliers of our raw materials and commodities,there can be no assurance of their ability to fulfill our supply needs on a timely basis.The consolidation to fewer locations has resulted in longer distances for delivery and could result in higher costs to tran

184、sport products if fuel costs increase significantly.Our current and former manufacturing and retail operations and products are subject to increasingly stringent environmental,health and safety requirements.We use and generate hazardous substances in our manufacturing and retail operations.In additi

185、on,both the manufacturing properties on which we currently operate and those on which we have ceased operations are and have been used for industrial purposes.Our manufacturing operations and,to a lesser extent,our retail operations involve risk of personal injury or death.We are subject to increasi

186、ngly stringent environmental,health and safety laws and regulations relating to our products,current and former properties and our current operations.These laws and regulations provide for substantial fines and criminal sanctions for violations and sometimes require product recalls and/or redesign,t

187、he installation of costly pollution control or safety equipment,or costly changes in operations to limit pollution or decrease the likelihood of injuries.In addition,we may become subject to potentially material liabilities for the investigation and cleanup of contaminated properties and to claims a

188、lleging personal injury or property damage resulting from exposure to or releases of hazardous substances or personal injury because of an unsafe workplace.We have been identified as a potentially responsible party in connection with one site that is currently listed,or proposed for inclusion,on the

189、 National Priorities List under the Comprehensive Environmental Response,Compensation and Liability Act of 1980,as amended,or its state counterpart.In addition,noncompliance with,or stricter enforcement of,existing laws and regulations,adoption of more stringent new laws and regulations,discovery of

190、 previously unknown contamination or imposition of new or increased requirements could require us to incur costs or become the basis of new or increased liabilities that could be material.14 Fluctuations in the price,availability and quality of raw materials could result in increased costs or cause

191、production delays which might result in a decline in sales,either of which could adversely impact our earnings.We use various types of wood,foam,fibers,fabrics,leathers,and other raw materials in manufacturing our furniture.Certain of our raw materials,including fabrics,are purchased domestically an

192、d outside the United States.Fluctuations in the price,availability and quality of raw materials could result in increased costs or a delay in manufacturing our products,which in turn could result in a delay in delivering products to our customers.For example,lumber prices fluctuate over time based o

193、n factors such as weather and demand,which in turn,impact availability.Production delays or upward trends in raw material prices could result in lower sales or margins,thereby adversely impacting our earnings.In addition,certain suppliers may require extensive advance notice of our requirements in o

194、rder to produce products in the quantities we desire.This long lead time may require us to place orders far in advance of the time when certain products will be offered for sale,thereby exposing us to risks relating to shifts in consumer demand and trends,and any further downturn in the U.S.economy.

195、We depend on key personnel and could be affected by the loss of their services.The success of our business depends upon the services of certain senior executives,and in particular,the services of M.Farooq Kathwari,Chairman of the Board,President and Chief Executive Officer,who is the only one of our

196、 senior executives who operates under a written employment agreement.The loss of any such person or other key personnel could have a material adverse effect on our business and results of operations.Our business is sensitive to increasing labor costs,competitive labor markets,our continued ability t

197、o retain high-quality personnel and risks of work stoppages.The market for qualified employees and personnel in the retail and manufacturing industries is highly competitive.Our success depends upon our ability to attract,retain and motivate qualified craftsmen,professional and clerical associates a

198、nd upon the continued contributions of these individuals.We cannot provide assurance that we will be successful in attracting and retaining qualified personnel.A shortage of qualified personnel may require us to enhance our wage and benefits package in order to compete effectively in the hiring and

199、retention of qualified employees.Our labor costs may continue to increase and such increases may not be recovered.In addition,some of our employees are covered by collective bargaining agreements with local labor unions.Although we do not anticipate any difficulty renegotiating these contracts as th

200、ey expire,a labor-related stoppage by these unionized employees could adversely affect our business and results of operations.The loss of the services of such personnel or our failure to attract additional qualified personnel could have a material adverse effect on our business,operating results and

201、 financial condition.Our success depends upon our brand,marketing and advertising efforts and pricing strategies.If we are not able to maintain and enhance our brand,or if we are not successful in these other efforts,our business and operating results could be adversely affected.Maintaining and enha

202、ncing our brand is critical to our ability to expand our base of customers and may require us to make substantial investments.Our advertising campaign utilizes television,direct mail,newspapers,magazines and radio to maintain and enhance our existing brand equity.We cannot provide assurance that our

203、 marketing,advertising and other efforts to promote and maintain awareness of our brand will not require us to incur substantial costs.If these efforts are unsuccessful or we incur substantial costs in connection with these efforts,our business,operating results and financial condition could be adve

204、rsely affected.We may not be able to maintain our current design center locations at current costs.We may also fail to successfully select and secure design center locations.15 Our design centers are typically located in busy urban settings as freestanding destinations or as part of suburban strip m

205、alls,depending upon the real estate opportunities in a particular market.Our business competes with other retailers and as a result,our success may be affected by our ability to renew current design center leases and to select and secure appropriate retail locations for existing and future design ce

206、nters.Our results of operations for any quarter are not necessarily indicative of our results of operations for a full year.Sales of furniture and other home furnishing products fluctuate from quarter to quarter due to such factors as changes in global and regional economic conditions,changes in com

207、petitive conditions,changes in production schedules in response to seasonal changes in energy costs and weather conditions,and changes in consumer order patterns.From time to time,we have experienced,and may continue to experience,volatility with respect to demand for our home furnishing products.Ac

208、cordingly,results of operations for any quarter are not necessarily indicative of the results of operations for a full year.Failure to protect our intellectual property could adversely affect us.We believe that our patents,trademarks,service marks,trade secrets,copyrights and all of our other intell

209、ectual property are important to our success.We rely on patent,trademark,copyright and trade secret laws,and confidentiality and restricted use agreements,to protect our intellectual property and may seek licenses to intellectual property of others.Some of our intellectual property is not covered by

210、 any patent,trademark,or copyright or any applications for the same.We cannot provide assurance that agreements designed to protect our intellectual property will not be breached,that we will have adequate remedies for any such breach,or that the efforts we take to protect our proprietary rights wil

211、l be sufficient or effective.Any significant impairment of our intellectual property rights or failure to obtain licenses of intellectual property from third parties could harm our business or our ability to compete.Moreover,we cannot provide assurance that the use of our technology or proprietary k

212、now-how or information does not infringe the intellectual property rights of others.If we have to litigate to protect or defend any of our rights,such litigation could result in significant expense.Item 1B.Unresolved Staff Comments None.Item 2.Properties Our corporate headquarters,located in Danbury

213、,Connecticut,consists of one building containing 144,000 square feet,situated on approximately 18.0 acres of land,all of which is owned by us.Located adjacent to the corporate headquarters,and situated on approximately 5.4 acres,is the Ethan Allen Hotel and Conference Center,containing 193 guestroom

214、s.This hotel,owned by a wholly-owned subsidiary of Ethan Allen,is used in connection with Ethan Allen functions and training programs,as well as for functions and accommodations for the general public.We operate seven manufacturing facilities located in three states and Mexico.All of these facilitie

215、s are owned by the Company and include three case good plants(including one sawmill)totaling 1,548,845 square feet,three upholstery furniture plants(consisting of two upholstery plants on our Maiden,North Carolina campus and one cut and sew plant in Mexico)totaling 710,539 square feet,and one home a

216、ccessory plant of 295,000 square feet.In our wholesale division,we own and operate one national distribution center supported by one owned small parcel and fulfillment center which are a combined 823,414 square feet.Our U.S.manufacturing and distribution facilities are located in North Carolina,Verm

217、ont,Virginia,Oklahoma,and New Jersey,and our Mexico plant is located in Guanajuato.We own five and lease 11 retail service centers,totaling 1,072,471 square feet.Our retail service centers are located throughout the United States and Canada and serve to support our various retail sales districts.16

218、The geographic distribution of our retail design center network as of June 30,2011 is as follows:Retail Design Center Category Company Operated Independently Operated United States 142 70 Canada 5 3 Asia -63 Middle East -4 Total 147 140 Of the 147 Company-operated retail design centers,68 of the pro

219、perties are owned and 79 of the properties are leased from independent third parties.Of the 68 owned design centers,18 are subject to land leases.We own ten additional retail properties,one of which is leased to an independent Ethan Allen retailer,and two of which are leased to unaffiliated third pa

220、rties.See Note 8 to the Consolidated Financial Statements included under Item 8 of this Annual Report for more information with respect to our operating lease obligations.The Beecher Falls,Vermont manufacturing facility was financed,in part,by the Town of Canaan,Vermont.The associated remaining debt

221、 bears interest at a fixed rate of 3.00%and a balance at June 30,2011 of$0.2 million,with maturities of one to 16 years.We believe that all of our properties are well maintained and in good condition.We estimate that our manufacturing plants are currently operating at approximately 80%of capacity.We

222、 believe we have additional capacity at selected facilities,which we could utilize with minimal additional capital expenditures.Item 3.Legal Proceedings We are a party to various legal actions with customers,employees and others arising in the normal course of our business.We maintain liability insu

223、rance,which is deemed to be adequate for our needs and commensurate with other companies in the home furnishings industry.We believe that the final resolution of pending actions(including any potential liability not fully covered by insurance)will not have a material adverse effect on our financial

224、condition,results of operations,or cash flows.Environmental Matters We and our subsidiaries are subject to various environmental laws and regulations.Under these laws,we and/or our subsidiaries are,or may be,required to remove or mitigate the effects on the environment of the disposal or release of

225、certain hazardous materials.During fiscal 2009,three locations where we and/or our subsidiaries had been named as a Potentially Responsible Party(“PRP”)were resolved.In each case,we were not a major contributor based on the very small volume of waste generated by us in relation to total volume at th

226、ose sites and were able to take part in de minimis settlement arrangements.In August 2010,the Company resolved the remaining environmental case in Carroll,New York in which it had been named as a PRP.As of June 30,2011,we believe that the company is adequately reserved.We believe our currently antic

227、ipated capital expenditures for environmental control facility matters are not material.We are subject to other federal,state and local environmental protection laws and regulations and are involved,from time to time,in investigations and proceedings regarding environmental matters.Such investigatio

228、ns and proceedings typically concern air emissions,water discharges,and/or management of solid and hazardous wastes.We believe that our facilities are in material compliance with all such applicable laws and regulations.Regulations issued under the Clean Air Act Amendments of 1990 required the indus

229、try to reformulate certain furniture finishes or institute process changes to reduce emissions of volatile organic compounds.Compliance 17 with many of these requirements has been facilitated through the introduction of high solids coating technology and alternative formulations.In addition,we have

230、instituted a variety of technical and procedural controls,including reformulation of finishing materials to reduce toxicity,implementation of high velocity low pressure spray systems,development of storm water protection plans and controls,and further development of related inspection/audit teams,al

231、l of which have served to reduce emissions per unit of production.We remain committed to implementing new waste minimization programs and/or enhancing existing programs with the objective of(i)reducing the total volume of waste,(ii)limiting the liability associated with waste disposal,and(iii)contin

232、uously improving environmental and job safety programs on the factory floor which serve to minimize emissions and safety risks for employees.We will continue to evaluate the most appropriate,cost effective,control technologies for finishing operations and design production methods to reduce the use

233、of hazardous materials in the manufacturing process.Item 4.Reserved PART II Item 5.Market for Registrants Common Equity,Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock is traded on the New York Stock Exchange under ticker symbol ETH.The following table sets for

234、th,for each quarterly period during the past two fiscal years,(i)the intraday high and low and stock prices as reported on the New York Stock Exchange and(ii)the dividend per share paid by us:Market Price Dividend High Low Per Share Fiscal 2011 First Quarter$17.77$12.35$0.05 Second Quarter 21.42 14.

235、56 0.05 Third Quarter 25.05 19.01 0.05 Fourth Quarter 25.37 18.50 0.07 Fiscal 2010 First Quarter$17.62$9.97$0.05 Second Quarter 16.96 11.00 0.05 Third Quarter 22.00 13.00 0.05 Fourth Quarter 25.40 13.82 0.05 As of August 10,2011,there were 322 shareholders of record of our common stock.Management es

236、timates there are approximately 11,000 beneficial shareholders of the Companys common stock.On July 26,2011,we declared a dividend of$0.07 per common share,payable on October 25,2011 to shareholders of record as of October 10,2011.We expect to continue to declare quarterly dividends for the foreseea

237、ble future,business conditions permitting.Equity Compensation Plan Information The information required by this Item 5 with respect to Equity Compensation Plan Information is set forth in Item 12 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters,contained

238、 in this Annual Report and incorporated herein by reference.Issuer Purchases of Equity Securities On November 21,2002,our Board of Directors approved a share repurchase program authorizing us to repurchase up to 2,000,000 shares of our common stock,from time to time,either directly or through agents

239、,in the open market at prices and on terms satisfactory to us.Subsequent to that date,the Board of Directors increased the remaining authorization on seven separate occasions,the last of which was on November 13,2007.18 There were no share repurchases during the quarter ended June 30,2011.As of June

240、 30,2011,we had a remaining Board authorization to repurchase 1,180,783 shares.Stockholder Rights Plan We have a Stockholder Rights Plan,a description of which is set forth in Note 9 to the Consolidated Financial Statements included under Item 8 of this Annual Report and incorporated herein by refer

241、ence.Such description contains all of the required information with respect thereto.Comparative Company Performance The following line graph compares cumulative total stockholder return for the Company with a performance indicator of the overall stock market,the Standard&Poors 500 Index,and an indus

242、try index,the Peer Issuer Group Index,assuming$100 was invested on June 30,2006.The peer group includes Bassett Furniture Industries,Inc.,Chromcraft Revington,Inc.,Flexsteel Industries,Inc.,Furniture Brands International,Inc.,Haverty Furniture Companies,Inc.,La-Z-boy Inc.,Leggett&Platt,Inc.,and Pier

243、 1 Imports Inc.The returns of each company have been weighted according to each companys market capitalization.$0$20$40$60$80$100$120$1406/066/076/086/096/106/11COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*Among Ethan Allen Interiors Inc.,the S&P 500 Indexand a Peer GroupEthan Allen Interiors Inc.S&

244、P 500Peer Group*$100 invested on 6/30/06 in stock or index,including reinvestment of dividends.Fiscal year ending June 30.Copyright 2011 S&P,a division of The McGraw-Hill Companies Inc.All rights reserved.Item 6.Selected Financial Data The following table presents selected financial data for the fis

245、cal years ended June 30,2011,2010,2009,2008 and 2007 which has been derived from our consolidated financial statements(dollar amounts in thousands except per share data).The information set forth below should be read in conjunction with Managements Discussion and Analysis of Financial Condition and

246、Results of Operations included under Item 7 of this Annual Report and our Consolidated Financial Statements(including the notes thereto)included under Item 8 of this Annual Report.19 Fiscal Year Ended June 30,2011 2010 2009 2008 2007 Statement of Operations Data:Net sales$678,960$590,054$674,277$980

247、,045$1,005,312 Cost of sales 329,500 309,777 326,935 453,980 478,729 Selling,general and administrative expenses 316,401 289,575 353,112 423,229 402,022 Restructuring and impairment charges,net 1,126 2,437 67,001 6,836 13,442 Operating income(loss)31,933 (11,735)(72,771)96,000 111,119 Interest and o

248、ther expense,net 5,562 7,052 8,409 3,822 1,393 Income(loss)before income tax expense 26,371 (18,787)(81,180)92,178 109,726 Income tax expense(benefit)(2,879)25,529 (28,493)34,106 40,499 Net income(loss)$29,250$(44,316)$(52,687)$58,072$69,227 Per Share Data:Net income(loss)per basic share$1.02$(1.53)

249、$(1.83)$1.98$2.19 Basic weighted average shares outstanding 28,758 28,982 28,814 29,267 31,566 Net income(loss)per diluted share$1.01$(1.53)$(1.83)$1.97$2.15 Diluted weighted average shares outstanding 28,966 28,982 28,814 29,470 32,261 Cash dividends per share$0.22$0.20$0.65$0.88$0.80 Other Informa

250、tion:Depreciation and amortization$20,816$29,398$25,635$24,670$23,013 Capital expenditures and acquisitions$12,051$9,972$23,903$67,815$74,370 Working capital$113,912$113,950$139,239$176,796$234,990 Current ratio 1.74 to 1 1.78 to 1 2.24 to 1 2.30 to 1 2.59 to 1 Effective tax rate -10.9%-135.9%35.1%3

251、7.0%36.9%Balance Sheet Data(at end of period):Total assets$628,325$631,777$646,485$764,093$802,598 Total debt,including capital lease obligations 165,032 203,267 203,148 203,029 202,908 Shareholders equity$281,687$258,459$305,923$375,773$409,642 Debt as a percentage of equity 58.6%78.6%66.4%54.0%49.

252、5%Debt as a percentage of capital 36.9%44.0%39.9%35.1%33.1%Item 7.Managements Discussion and Analysis of Financial Condition and Results of Operation The following discussion of financial condition and results of operations is based upon,and should be read in conjunction with,our Consolidated Financ

253、ial Statements(including the notes thereto)included under Item 8 of this Annual Report.20 Forward-Looking Statements Managements discussion and analysis of financial condition and results of operations and other sections of this Annual Report contain forward-looking statements relating to our future

254、 results.Such forward-looking statements are identified by use of forward-looking words such as anticipates,believes,plans,estimates,expects,and intends or words or phrases of similar expression.These forward-looking statements are subject to management decisions and various assumptions,risks and un

255、certainties,including,but not limited to:the effects of terrorist attacks or conflicts or wars involving the United States or its allies or trading partners;the potential effects of natural disasters affecting our suppliers or trading partners;the effects of labor strikes;weather conditions that may

256、 affect sales;volatility in fuel,utility,transportation and security costs;changes in global or regional political or economic conditions,including changes in governmental and central bank policies;changes in business conditions in the furniture industry,including changes in consumer spending patter

257、ns and demand for home furnishings;effects of our brand awareness and marketing programs,including changes in demand for our existing and new products;our ability to locate new design center sites and/or negotiate favorable lease terms for additional design centers or for the expansion of existing d

258、esign centers;competitive factors,including changes in products or marketing efforts of others;pricing pressures;fluctuations in interest rates and the cost,availability and quality of raw materials;those matters discussed in Items 1A and 7A of this Annual Report and in our SEC filings;and our futur

259、e decisions.Accordingly,actual circumstances and results could differ materially from those contemplated by the forward-looking statements.Critical Accounting Policies Our consolidated financial statements have been prepared in conformity with U.S.generally accepted accounting principles that requir

260、e,in some cases,that certain estimates and assumptions be made that affect the amounts and disclosures reported in those financial statements and the related accompanying notes.Estimates are based on currently known facts and circumstances,prior experience and other assumptions believed to be reason

261、able.We use our best judgment in valuing these estimates and may,as warranted,solicit external advice.Actual results could differ from these estimates,assumptions and judgments,and these differences could be material.The following critical accounting policies,some of which are impacted significantly

262、 by estimates,assumptions and judgments,affect our consolidated financial statements.Inventories Inventories(finished goods,work in process and raw materials)are stated at the lower of cost,determined on a first-in,first-out basis,or market.Cost is determined based solely on those charges incurred i

263、n the acquisition and production of the related inventory(i.e.material,labor and manufacturing overhead costs).We estimate an inventory reserve for excess quantities and obsolete items based on specific identification and historical write-downs,taking into account future demand and market conditions

264、.If actual demand or market conditions in the future are less favorable than those estimated,additional inventory write-downs may be required.Revenue Recognition Revenue is recognized when all of the following have occurred:persuasive evidence of a sales arrangement exists(e.g.a wholesale purchase o

265、rder or retail sales invoice);the sales arrangement specifies a fixed or determinable sales price;product is shipped or services are provided to the customer;and collectability is reasonably assured.As such,revenue recognition occurs upon the shipment of goods to independent retailers or,in the case

266、 of Ethan Allen-operated retail design centers,upon delivery to the customer.Recorded sales provide for estimated returns and allowances.We permit our customers to return defective products and incorrect shipments,and terms we offer are standard for the industry.During the third quarter of fiscal 20

267、11,as a result of the growth of our independent retailer in China,and at their request,a separate section of an existing Ethan Allen warehouse was established by us to hold sold product on their behalf.At March 31,2011,$5.2 million of sold product was held in this warehouse,and recorded as revenue d

268、uring that third quarter.We delivered that product during the fourth quarter.At June 30,2011,$0.7 million of sold product was held in the warehouse,and is part of our net sales for the fourth quarter of fiscal 2011.Under this 21 arrangement,after a fixed commitment by the customer is made,the Compan

269、y recognizes revenue when the sales price is fixed,collectability is reasonably assured,title and risk of ownership has passed to the customer,no specific performance obligations remain,and a fixed schedule of delivery is agreed upon and in place.The substantial business purpose for the customer req

270、uest was to provide additional warehouse space to support their business expansion plans and to reduce delivery lead times.Allowance for Doubtful Accounts We maintain an allowance for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments.The a

271、llowance for doubtful accounts is based on a review of specifically identified accounts in addition to an overall aging analysis.Judgments are made with respect to the collectability of accounts receivable based on historical experience and current economic trends.Actual losses could differ from tho

272、se estimates.Retail Design Center Acquisitions-We account for the acquisition of retail design centers and related assets with the purchase method.Accounting for these transactions as purchase business combinations requires the allocation of purchase price paid to the assets acquired and liabilities

273、 assumed based on their fair values as of the date of the acquisition.The amount paid in excess of the fair value of net assets acquired is accounted for as goodwill.Impairment of Long-Lived Assets and Goodwill We periodically evaluate whether events or circumstances have occurred that indicate that

274、 long-lived and indefinite-lived assets may not be recoverable or that the remaining useful life may warrant revision.When such events or circumstances are present,the Company determines whether the carrying value exceeds the fair value as described below.The recoverability of long-lived assets are

275、evaluated for impairment by determining whether the carrying value will be recovered through the expected undiscounted future cash flows resulting from the use of the asset.In the event the sum of the expected undiscounted future cash flows is less than the carrying value of the asset,an impairment

276、loss equal to the excess of the assets carrying value over its fair value is recorded.The long-term nature of these assets requires the estimation of cash inflows and outflows several years into the future and only takes into consideration technological advances known at the time of the impairment t

277、est.Goodwill and other indefinite-lived intangible assets are evaluated for impairment on an annual basis and between annual tests whenever events or circumstances indicate that the carrying value of the goodwill or other intangible asset may exceed its fair value.We conduct our required annual impa

278、irment test of goodwill and other intangible assets during the fourth quarter of each fiscal year.To evaluate goodwill,the Company determines the current fair value of the Reporting Units using a combination of“Market”and“Income”approaches.In the Market approach,the“Guideline Company”method is used,

279、which focuses on comparing the Companys risk profile and growth prospects to reasonably similar publicly traded companies.Key assumptions used for the Guideline Company method are total invested capital(“TIC”)multiples for revenues and operating cash flows,as well as consideration of control premium

280、s.The TIC multiples are determined based on public furniture companies within our peer group,and if appropriate,recent comparable transactions are considered.Control premiums are determined using recent comparable transactions in the open market.Under the Income approach,a discounted cash flow metho

281、d is used,which includes a terminal value,and is based on external analyst financial projection estimates,as well as internal financial projection estimates prepared by management.The long-term terminal growth rate assumptions reflect our current long-term view of the market in which we compete.Disc

282、ount rates use the weighted average cost of capital for companies within our peer group,adjusted for specific company risk premium factors.The fair value of our trade name,which is the Companys only indefinite-lived intangible asset other than goodwill,is valued using the relief-from-royalty method.

283、Significant factors used in trade name valuation are rates for royalties,future growth,and a discount factor.Royalty rates are determined using an average of recent comparable values.Future growth rates are based on the Companys perception of the long-term values in the 22 market in which we compete

284、,and the discount rate is determined using the weighted average cost of capital for companies within our peer group,adjusted for specific company risk premium factors.The Company performs its annual impairment test in the fourth quarter of each fiscal year.In fiscal 2009,the Company recorded an impa

285、irment charge for$48.4 million for the retail segment.There was no impairment in either 2011 or 2010.The fair values of the wholesale reporting unit and trade name exceeded their carrying value by a substantial margin.To calculate fair value of these assets,management relies on estimates and assumpt

286、ions which by their nature have varying degrees of uncertainty.Wherever possible,management therefore looks for third party transactions as described above to provide the best possible support for the assumptions incorporated.Management considers several factors to be significant when estimating fai

287、r value including expected financial outlook of the business,changes in the Companys stock price,the impact of changing market conditions on financial performance and expected future cash flows,and other factors.Deterioration in any of these factors may result in a lower fair value assessment,which

288、could lead to impairment of the long-lived assets and goodwill of the Company.Income Taxes Income taxes are accounted for under the asset and liability method.Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statemen

289、t carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards.Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expe

290、cted to be recovered or settled.The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.Additional factors that we consider when making judgments about the deferred tax valuation include tax law changes,a recen

291、t history of cumulative losses,and variances in future projected profitability.The Company evaluates quarterly uncertain tax positions taken or expected to be taken on tax returns for recognition,measurement,presentation,and disclosure in its financial statements.If an income tax position exceeds a

292、50%probability of success upon tax audit,based solely on the technical merits of the position,the Company recognizes an income tax benefit in its financial statements.The tax benefits recognized are measured based on the largest benefit that has a greater than 50%likelihood of being realized upon ul

293、timate settlement.The liability associated with an unrecognized tax benefit is classified as a long-term liability except for the amount for which a cash payment is expected to be made or tax positions settled within one year.We recognize interest and penalties related to income tax matters as a com

294、ponent of income tax expense.Business Insurance Reserves We have insurance programs in place to cover workers compensation and property/casualty claims.The insurance programs,which are funded through self-insured retention,are subject to various stop-loss limitations.We accrue estimated losses using

295、 actuarial models and assumptions based on historical loss experience.Although we believe that the insurance reserves are adequate,the reserve estimates are based on historical experience,which may not be indicative of current and future losses.In addition,the actuarial calculations used to estimate

296、 insurance reserves are based on numerous assumptions,some of which are subjective.We adjust insurance reserves,as needed,in the event that future loss experience differs from historical loss patterns.Other Loss Reserves We have a number of other potential loss exposures incurred in the ordinary cou

297、rse of business such as environmental claims,product liability,litigation,tax liabilities,restructuring charges,and the recoverability of deferred income tax benefits.Establishing loss reserves for these matters requires the use of estimates and judgment with regard to maximum risk exposure and ulti

298、mate liability or realization.As a result,these estimates are often developed with our counsel,or other appropriate advisors,and are based on our current understanding of the underlying facts and circumstances.Because of uncertainties related to the ultimate outcome of these issues or the possibilit

299、ies of changes in the underlying facts and circumstances,additional charges related to these issues could be required in the future.23 Basis of Presentation As of June 30,2011,Ethan Allen Interiors Inc.has no material assets other than its ownership of the capital stock of Ethan Allen Global,Inc.and

300、 conducts all significant transactions through Ethan Allen Global,Inc.;therefore,substantially all of the financial information presented herein is that of Ethan Allen Global,Inc.Results of Operations Our Company and the furniture industry are slowly recovering from the Great Recession in the United

301、 States and abroad.Unemployment remains high,capital markets volatile,and housing metrics including credit availability remain well below pre-Great Recession levels.Despite this,we have seen consumer spending slowly improving,beginning in fiscal 2010.The many actions we have taken to significantly r

302、educe costs have allowed us to return to profitability,by changing many aspects of our business.We consolidated our manufacturing footprint to seven facilities in North America where more than 70%of our products are made.We also converted our remaining case good plants from forecasted demand based m

303、anufacturing to manufacture after a custom order is received.This provides a significant differentiating factor in the market,and results in efficiencies in our manufacturing and logistics operations.We believe we have retained sufficient scalable capacity domestically and abroad to meet higher volu

304、mes of demand.We consolidated our logistics for both our wholesale and retail divisions resulting in one major wholesale distribution center and 16 retail service centers operated by the Company.We have also changed our retail footprint.We consolidated multiple design centers serving the same market

305、 into one,prominently located design center and closed underperforming locations.At June 30,2011,the Company operated 147 design centers compared with 159 at June 30,2009.Independent retailers operated 140 design centers at June 30,2011 compared with 134 at June 30,2009,with 24 more international de

306、sign centers than at June 30,2009.The increase in international design centers increased our international net sales to 6.3%of our consolidated net sales for the year ended June 30,2011,with most of the growth coming from China.We continue to see improvement in consumer spending.For both our wholesa

307、le and retail business segments,we have now had six consecutive quarters of year over year sales growth.We have had our first four consecutive quarterly profits since December 2008.We have been hiring associates to support the ramping up of production in our manufacturing,adding highly skilled inter

308、ior designers in our retail division,and continuing to increase our spending in marketing and advertising to drive consumer traffic.In taking these actions to grow the business,we remain cautious but optimistic.Income Tax Valuation Allowance:As a result of losses we sustained for fiscal 2010 and 200

309、9,which were brought on by the severe economic factors discussed earlier,we assessed the likelihood that we would be able to realize the benefits of our deferred tax assets.As a result,a full valuation allowance was established as of June 30,2010.On that date the Company had a three year cumulative

310、loss.As of June 30,2011,the Company remains in a three year cumulative loss and the full valuation allowance remains in place,though at a reduced level after recording the impact of the changes in tax accounting methods made in the quarter ended December 31,2010.The valuation allowance at June 30,20

311、11 was$23.5 million vs.$36.2 million at June 30,2010.Of the total decrease,$10.2 million is related to tax accounting method changes reported in our tax returns for the fiscal year ended June 30,2010.Restructuring Activities:During fiscal 2009 and 2008,we announced and executed plans to consolidate

312、our operations as part of an overall strategy to maximize production efficiencies and maintain our competitive advantage.These restructuring activities are now complete.There is a remaining liability at June 30,2011 of$2.5 million for non-cancellable lease obligations with expirations ranging from l

313、ess than one to 22 years.Changes in the estimated future costs of these obligations are included as restructuring and impairment charges in the Statement of Operations,and the 24 Companys restructuring reserve is classified with accrued expenses and other current liabilities in the Consolidated Bala

314、nce Sheets.Business Results:Our revenues are comprised of(i)wholesale sales to independently operated and Company-operated retail design centers and(ii)retail sales of Company-operated design centers.See Note 16 to our Consolidated Financial Statements for the year ended June 30,2011 included under

315、Item 8 of this Annual Report.The components of consolidated revenues and operating income(loss)are as follows(in millions):Fiscal Year Ended June 30,2011 2010 2009 Revenue:Wholesale segment$422.9$362.5$403.4 Retail segment 505.9 438.5 508.6 Elimination of inter-segment sales (249.8)(210.9)(237.7)Con

316、solidated revenue$679.0$590.1$674.3 Operating Income(loss):Wholesale segment(1)$49.2$14.2$6.7 Retail segment(2)(14.7)(28.7)(92.1)Adjustment for inter-company profit(3)(2.6)2.8 12.6 Consolidated operating income$31.9$(11.7)$(72.8)(1)Operating income for the wholesale segment for the twelve months end

317、ed June 2010 and 2009 includes pre-tax restructuring and impairment charges(credit)of($0.2)million and$17.4 million,respectively.(2)Operating income for the retail segment for the twelve months ended June 2011,2010 and 2009 includes pre-tax restructuring and impairment charges of$1.1 million,$2.7 mi

318、llion and$49.6 million,respectively.(3)Represents the change in wholesale profit contained in Ethan Allen-operated design center inventory existing at the end of the period.Fiscal 2011 Compared to Fiscal 2010 Consolidated revenue for the fiscal year ended June 30,2011 increased by$88.9 million,or 15

319、.1%,to$679.0 million,from$590.1 million in fiscal 2010.There was year-over-year growth in both the wholesale and retail segments,for net sales,written orders,and backlogs.We believe this growth is due to(i)continued new and innovative marketing initiatives including promotional pricing and our inter

320、active web site ,(ii)a significant increase in advertising,where we continue to invest in national television and direct mail media,emphasizing to our target audience our interior design services and the full line of our quality product offerings,(iii)increased use of digital communications includin

321、g periodic distribution of e-magazines to increase client exposures and drive traffic to our website and design centers,(iv)an increase in the number of our highly skilled interior designers and other retail associates,and(v)our continued repositioning of the retail network.Wholesale revenue for fis

322、cal 2011 increased by$60.5 million,or 16.7%,to$422.9 million from$362.5 million in the prior year.The year-over-year increase was primarily attributable to an increase in the incoming order rate as we began to see a gradual though inconsistent improvement in consumer spending.We believe this improve

323、ment is due to our promotional activities,our ability to increase production through operating efficiencies,staffing increases,and to a lesser extent,an increase in the number of total design centers globally to 287 from 281 at June 30,2010.The independently operated retail network grew by four net

324、design centers to 140 at June 30,2011 and 25 there were two net additional Ethan Allen-operated design centers.Wholesale orders increased 6.0%in fiscal 2011 compared to fiscal 2010.Retail revenue from Ethan Allen-operated design centers for the twelve months ended June 30,2011 increased by$67.4 mill

325、ion,or 15.4%,to$505.9 million from$438.5 million for the twelve months ended June 30,2011.We believe the increase in retail sales by Ethan Allen-operated design centers is due to our promotional marketing campaigns and the design solutions approach of our interior design professionals,increases in a

326、dvertising,where we continue to invest in national television and direct mail media,our digital communications to prospective clients,the positive effects of repositioning the retail network,and an increase in the number of highly skilled interior designers,retail management,and other retail associa

327、tes,and by a net increase of two Ethan Allen-operated design centers between June 30,2011 and June 30,2010.We ended the current year with 147 Ethan Allen-operated design centers;including six acquired from independent dealers since June 30,2010.Comparable design centers are those which have been ope

328、rating for at least 15 months.Minimal net sales,derived from the delivery of customer ordered product,are generated during the first three months of operations of newly opened(including relocated)design centers.Design centers acquired by us from independent retailers are included in comparable desig

329、n center sales in their 13th full month of Ethan Allen-owned operations.Year-over-year,written business of Ethan Allen-operated design centers increased 7.7%and comparable design centers written business increased 10.3%.The frequency of our promotional events as well as the timing of the end of thos

330、e events can impact the orders booked during a given period.We have made considerable investment within the retail network to strengthen the level of service,professionalism,interior design competence,efficiency,and effectiveness of the retail design center personnel.We believe that over time,we wil

331、l continue to benefit from(i)our repositioning of the retail network,(ii)new product introductions,(iii)new marketing promotions,and our interior design affiliate(IDA)program,(iv)continued use of technology including our state-of-the-art website coupled with personal service from our design professi

332、onals and our touch screen displays,and(v)ongoing use of targeted advertising media.Gross profit for fiscal 2011 increased to$349.5 million from$280.3 million in fiscal 2010.The$69.2 million increase in gross profit was primarily attributable to(i)a combined increase in both wholesale and retail sal

333、es of 15.1%,(ii)the benefit in fiscal 2011 of a full year of streamlined and more efficient manufacturing processes which were in progress during the prior fiscal year,and(iii)to a lesser extent some net pricing benefit and higher average merchandise sales per invoice.With the improvements in orders,we operated our plants at approximately 80%of capacity during fiscal 2011,up from 60%in fiscal 201