9-6-06 - The city of Atoka's largest employer is shutting down. The Ethan Allen furniture plant in Atoka employs 250 people, but production of upholstery at the plant will cease.
The furniture maker is converting the plant into a regional distribution center. Of the 250 employees, only 40 will be retained.
Ethan Allen is shutting down another plant in Spruce Pine, North Carolina.
The following is a news release from Ethan Allen:
DANBURY, Conn.--(BUSINESS WIRE)--Sept. 6, 2006--Ethan Allen Interiors Inc. (NYSE:ETH) ("Ethan Allen" or the "Company") today announced a plan to close its Spruce Pine, North Carolina case goods manufacturing facility and convert its Atoka, Oklahoma upholstery manufacturing facility into a regional distribution center. In connection with this initiative, the Company will permanently cease production at both locations, allocating production among its remaining domestic manufacturing locations and selected offshore vendors. The decision impacts approximately 465 employees.
The Spruce Pine facility, which totals approximately 280,000 square feet, was built by the Company in 1989. The Atoka facility, which totals approximately 256,000 square feet, was built by the Company in 1973 and currently utilizes approximately 159,000 square feet in the production of upholstery manufacturing with the remaining 97,000 square feet utilized as part of the Company's existing distribution operations. Ethan Allen has 9 remaining plant locations, including 4 case goods plants, 4 upholstery plants, and 1 accessory plant. These facilities total nearly 3.0 million square feet and employ approximately 2,300 people.
Farooq Kathwari, Chairman and CEO, commented, "We sincerely regret the impact that this decision will have on many of our employees. We believe, however, that this action will strengthen our logistical capabilities and improve the Company's remaining U.S. manufacturing operations."
The Company will record a pre-tax restructuring and impairment charge of approximately $13.5 to $14.5 million ($8.4 to $9.1 million, after-tax), or $0.26 to $0.28 per share, the majority of which will be non-cash in nature. Most of the earnings impact is expected to occur in the Company's first fiscal quarter ended September 30, 2006.
Mr. Kathwari, will be making a presentation at the Goldman Sachs Global Retail Conference on September 7, 2006. The presentation, which will include a question and answer session, is scheduled to begin at 11:55 am Eastern time. The audio portion of this presentation will be webcast and can be accessed at http://www.ethanallen.com/investors.
Ethan Allen Interiors Inc. is a leading manufacturer and retailer of quality home furnishings, selling a full range of products through an exclusive network of more than 300 stores located in the United States, Canada, and overseas. The Company is vertically integrated with manufacturing facilities and sawmills located throughout the United States.