1. Ethan Allen
Jon Dickey
April 28, 2005

2. History Founded in 1932 by Theodore Baumritter and Nathan Ancell
Sold under the Allen name for the first time in 1937
Incorporated in 1989 to sell furniture through the countries largest network of home furnishing retail stores

3. Industry Furniture Industry Competitors Furniture International (FBN)
La-Z-Boy (LZB)

4. Corporate Information
Operate in two segments
Retail
46% of revenue
Wholesale
54% of revenue
6,600 employees
More than 300 stores based mostly in the U.S

5. Our Position Acquired on 10/22/1999 Our Position Paid $33.00/share
700 shares
Cost basis of $23,100
Our Position
Currently trading at $30.60 a share
Worth $21,400
A loss of $1,680

6. Key Statistics ETH Industry Avg Market Cap: 1.08 B P/E (ttm): 14.19
EPS (ttm): 2.14
Revenue: M
Revenue Growth: 5.3%
ROE: 17.42%
Profit Margin (ttm): 8.4%
Stock Price: $30.60
Industry Avg
Market Cap: M
P/E (ttm): 20.52
EPS (ttm): .69
Revenue: M
Revenue Growth: 5.7%

7. Recent ETH Developments
Ethan Allen has missed earnings and posted lower profits in each of the past two quarters
During that time, ETH stock has fallen by almost 25%
Since last earnings call, increased share repurchase capabilities to 2 million shares

8. Recent Industry Developments
Furniture Brands also posted poor earnings in their most recent quarter
Domestic Furniture sales are down as a whole
The industry appears to be struggling due to a drop in the housing market
A very cyclical industry

9. ETH last 5 years

10. ETH vs. The Market

11. ETH vs. LZB

12. ETH vs. FBN

13. Future Projections
DCF- Stock Price of $21.57
View Excel

14. Options
Buy More
Just a few months ago, the stock was very profitable
Stock repurchase plan could be a signal that the company is actually undervalued
Hold
Assuming that ETH will rebound from this downward cycle and the industry will regain profitability

15. Options
Sell
ETH has shown very little profitability during its time in the portfolio and has underachieved greatly in recent months

16. Recommendation Sell all 700 shares of ETH at the market
Poor Earnings- the company is not making money right now
DCF shows little future growth

17. Questions?