Ethan Allen says VT flooding to reduce Q1 revenue by approximately $15M

Ethan Allen Interiors issued the following statement regarding an update on the flooding that has recently impacted its Orleans, Vermont, manufacturing facility: In July 2023, Ethan Allen’s wood furniture manufacturing operations located in Orleans, Vermont, sustained damage from heavy flooding of the nearby Barton River. In addition to losses related to wood furniture inventory parts and state-of-the-art manufacturing equipment, the flooding also resulted in a temporary work stoppage for many Vermont associates and a disruption and delay of shipments for approximately seven weeks…. While the July flooding has caused substantial damage to our Vermont wood furniture manufacturing plant, we are pleased to see our business resume operations and actively work down existing backlog.” Ethan Allen is currently working through insurance to recover a portion of incurred losses, which will be included in the Company’s fiscal 2024 first quarter financial results. Losses incurred from the disposal of damaged inventory, inoperable machinery equipment from water damage, facility cleanup, and restoration, are currently estimated to be approximately $2.5M, net of insurance recoveries and grant proceeds. In addition, the flooding has resulted in a delay in the production of custom orders, which is expected to reduce the Company’s consolidated net sales by approximately $15M during the first quarter of fiscal 2024. “Our wood furniture manufacturing in Orleans resumed limited operations during August 2023, and at this time, approximately 75% of our associates are back to work. We have set aside significant capital to enhance and improve our production workflows as we move forward. Although we continue to assess the costs of cleanup and repair, as our work is ongoing, we are pleased to say that we remain open for business in Vermont,” Mr. Kathwari concluded. Q1 revenue consensus estimate is currently184.95M