ETHAN ALLEN REPORTS RESULTS FOR QUARTER AND NINE MONTHS ENDED MARCH 31, 2015

DANBURY, CT - April 23, 2015 - Ethan Allen Interiors Inc. ("Ethan Allen" or the "Company") (NYSE: ETH) today reported operating results for the fiscal 2015 third quarter and nine month year to date periods ended March 31, 2015. Please refer to the accompanying financial statements and reconciliation to non-GAAP measures discussed below.

Third Quarter and Year-to-Date Highlights:

• Quarterly Sales of $173.3 million Increase by 0.1%; Year to Date Sales of $561.0 million Increase by 2.4%.
   
• Quarterly Gross Margin of 54.3%; Year to Date Gross Margin of 54.4%
   
• Quarterly Adjusted Operating Income of $10.0 million or 5.8% of Sales; Year to Date Adjusted Operating Income of $50.6 million or 9.0% of Sales.
   
• Quarterly Adjusted Earnings per Diluted Share (EPS) of $0.18; Year to Date Adjusted EPS of $0.99; GAAP Quarterly EPS of $0.09; GAAP Year to Date EPS of $0.84.
   
• Retail Quarterly Comparable Written Sales Decrease by 0.4% (increase by 0.3% on a constant currency basis) and Total Written Sales Decrease by 0.7% (no decrease on a constant currency basis);
   
• Retail Year to Date Comparable Written Sales Increase by 2.5%. Year to Date Total Written Sales Increase by 1.6%. 
   
• During the Quarter the Company Retired All Outstanding 5.375% Senior Notes; Repurchased $2.8 million of our Stock.

Highlights on Marketing and Operations:

• Product Offerings: During the third quarter we began the second phase of our new product rollout strategy following the second quarter phase one launch of over 600 new product offerings.
   
• Design Centers: The Design Center renovations are continuing, reflecting a fashionable and relaxed attitude. During the third quarter between the Company and our independent retailers we opened five new design centers and closed three.
   
• Manufacturing and Logistics: Continuing focus on managing the transition to the new product offerings. Continued to invest in technology in our manufacturing operations.
   
• Dividends:  Paid dividends during the quarter of $3.5 million, 20% increase to prior year. Announced 16.7% further increase to the dividend on April 14, 2015.
   
• Balance Sheet:  During the quarter we replaced $129.4 million in 5 3/8% fixed rate debt with $75 million in variable rate debt tied to LIBOR and currently less than 2.0%.

Farooq Kathwari, Chairman and CEO commented, "During the third quarter we began phase two of our new product launch as planned and continued implementing many initiatives. We are freshening up our design centers and adding to our professional staff of retail management and over 1,500 interior designers in North America. Technology is being added at all levels with a major emphasis on our website.  We are very focused on increasing our manufacturing in the United States and North America. Importantly, we are strengthening our merchandising programs with changing since last fall to this fall about 70% of our offerings." Mr. Kathwari concluded, "As we have discussed, these initiatives are very important for the long-term, but there will be some disruption in the short-term due to continued sell off of floor samples, implementing new product through our manufacturing and increasing our operating expenses. We expect another six months of some disruption as we continue to strengthen our teams and invest in our marketing and manufacturing. Our focus is to position us to grow our sales, both in our design centers and by ecommerce."

Fiscal 2015 Third Quarter Financial Results:

Consolidated net sales for the quarter ended March 31, 2015 increased 0.1% over the prior year to $173.3 million. The Company's wholesale segment net sales increased 1.0%. The Company's retail segment net sales decreased 1.8% to $129.5 million including a comparable design center net sales decrease of 0.4%.

Comparable written sales for the Retail Division decreased 0.4% for the third quarter of fiscal 2015 compared to the prior year third quarter (increased 0.3% on a constant currency basis), and total written sales for the Retail Division decreased 0.7% (no decrease on a constant currency basis) over the same prior year period. Constant currency basis reflects the unfavorable impact of the change in Canadian dollar and euro exchange rates. We operate eight design centers in Canada and Europe, and the strengthening of the U.S. dollar to the Canadian dollar and euro resulted in an average decrease for the retail segment of 0.7% in both net sales and written sales, and a 0.6% decrease in comparable written sales during the quarter.

Gross Margin for the quarter ended March 31, 2015 was 54.3% compared to 53.8% in the prior year quarter. Adjusted operating expenses of $84.1 million compared to $81.2 in the prior year quarter. Increased operating expenses were in part due to continued sell off of floor samples, implementing new product through our manufacturing and adding to our professional staff of retail management and interior designers.  

Net income for the quarter ended March 31, 2015 was $2.5 million or $0.09 per diluted share compared with $5.3 million or $0.18 per diluted share in the prior year quarter. Excluding special items in both periods, adjusted earnings for the quarter were $0.18 per diluted share or $5.3 million compared to $0.22 per diluted share or $6.5 million in the prior year quarter.

Total debt of $77.8 million decreased $53.1 million, and working capital decreased $40.8 million from June 30, 2014 due to the early extinguishment of our 5 3/8% Senior Notes. We funded the extinguishment using $75.0 million of our senior secured revolving credit and term loan facility and $61 million from existing cash balances. Capital Expenditures were $17.5 million year to date at March 31, 2015 compared to $12.6 million prior year and inventories of $154.9 million increased $9.9 million as planned from March 31, 2014 in support of our new product launch and marketing initiatives.

Fiscal 2015 Year-to-Date Financial Results:

Year to date net sales were $561.0 million, up 2.4% from $547.8 million the prior year. Gross margin and adjusted operating profit margin were 54.4% and 9.0% respectively in both years. Net income for the nine months ended March 31, 2015 was $24.5 million or $0.84 per diluted share compared with $25.8 million or $0.88 per diluted share in the prior year comparable period. Adjusted net income year to date of $28.9 million increased 3.4% compared with $27.9 million the prior year period and our adjusted earnings per diluted share increased 4.2% for the nine months to date at $0.99 compared with $0.95 the prior year to date period.

Analyst Conference Call

Ethan Allen will conduct a conference call at 5:00 PM (Eastern) on Thursday, April 23rd to discuss the financial results and its business initiatives. The live webcast and replay are accessible via the Company's website at http://ethanallen.com/investors. To participate on the call, dial 866-818-1223 (or 703-639-1376 for international callers) and provide conference ID# 1653926.

About Ethan Allen

Ethan Allen Interiors Inc. (NYSE: ETH) is a leading interior design company and manufacturer and retailer of quality home furnishings. The company offers complimentary interior design service to its clients and sells a full range of furniture products and decorative accessories through ethanallen.com and a network of approximately 300 Design Centers in the United States and abroad. Ethan Allen owns and operates eight manufacturing facilities including five manufacturing plants and one sawmill in the United States plus one plant in each of Mexico and Honduras. Approximately seventy percent of its products are made in its North American plants. For more information on Ethan Allen's products and services, visit ethanallen.com.

Non-GAAP Financial Information

This press release is intended to supplement, rather than to supersede, the Company's condensed consolidated financial statements. It contains references to the Company's (i) consolidated operating income/operating margin, (ii) wholesale operating income/operating margin, (iii) retail operating income/operating margin, (iv) net income, (v) earnings per share, and (vi) earnings before interest, taxes, depreciation and amortization ("EBITDA"), all excluding the effects of restructuring charges as a result of the Company's previous decision to consolidate facilities, and also excluding certain transition costs and non-operating income adjustments in both fiscal 2015 and fiscal 2014. A reconciliation of these financial measures to the most directly comparable financial measure reported in accordance with generally accepted accounting principles ("GAAP") is also provided at the end of this press release.

Management believes that excluding items which are deemed to be non-recurring in nature from financial measures such as operating income, operating margin, net income, and earnings per share, allows investors to more easily compare and evaluate the Company's financial performance relative to prior periods and industry comparables.  These adjusted measures also aid investors in understanding the operating results of the Company absent such non-recurring or unusual events.

Management considers EBITDA an important indicator of the operational strength and performance of its business, including the ability of the Company to pay interest, service debt and fund capital expenditures. Given the nature of the Company's operations, including the tangible assets necessary to carry out its production and distribution activities, depreciation and amortization represent Ethan Allen's largest non-cash charges. As these non-cash charges do not affect the Company's ability to service debt or make capital expenditures, it is important to consider EBITDA in addition to, but not as a substitute for, operating income, net income and other measures of financial performance reported in accordance with GAAP, including cash flow measures such as operating cash flow. 

This press release should also be read in conjunction with the Company's Annual Report on Form 10-K for the year ended June 30, 2014 (the "2014 Form 10-K") and other reports filed with the Securities and Exchange Commission. This press release and related discussions contain forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements reflect management's current expectations concerning future events and results of the Company, and are subject to various assumptions, risks and uncertainties including specifically, and without limitation, those set forth in Part I, Item 1A "Risk Factors" of the 2014 Form 10-K. Accordingly, actual future events or results could differ materially from those contemplated by the forward-looking statements. The Company assumes no obligation to update or provide revision to any forward-looking statement at any time for any reason.

#######