Good day, ladies and gentlemen, and welcome to the Ethan Allen Second Quarter Earnings Release Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session with instructions following at that time. (Operator Instructions) Now I will turn the conference over to your host, David Callen, Vice President of Finance and Treasurer. Please begin.

Thank you, Tyrone and thank you for joining the call. Today is Ethan Allen’s conference call for our second fiscal quarter ended December 31, 2013. I am David Callen, the Company’s Vice President of Finance and Treasurer. This call is being webcast live on ethanallen.com, where you will also find our press release which contains supporting details, including reconciliations of non-GAAP information referred to in the release and on this call. Our comments today will include forward-looking statements that are subject to risks, which may cause the actual results to be materially different than expected when making those statements. Please refer to our filings with the SEC for a complete review of those risks. The Company assumes no obligation to update or revise any forward-looking matters discussed during this call. After our Chairman and CEO, Farooq Kathwari, provides his opening remarks, I will follow with details on the financial results. Farooq will then provide more details about our ongoing business initiatives before opening up the telephone lines for questions. With that, here is Farooq Kathwari.

Yes, thank you, Dave, and thank you for participating in this call. I apologize for the change in timing due to my having to attend a funeral of a close family friend. A brief overview of our second quarter results are: sales of $193.1 million increased 1% from prior year; adjusted earnings per share was $0.41, up 5% from the previous year; gross margin of 54.9%, improved 50 basis points over prior year; our comparable retail division retail sales were lower by 1.8%, while for the six months increased by 6.6%. As we mentioned in our press release, sales are impacted by external internal factors including the government shutdown, challenging weather, delay in receipts of our offshore products. Another factor which I will address in greater detail in my later comments was that the fact that our marketing programs had less urgency due to the predictability of our own promotional offerings. We will discuss steps that we have taken in becoming more aggressive and we see the positive impact of this already in traffic in January so far. Our adjusted operating margin was a healthy 10.7% compared to a 10.5%. The wholesale operating margin was 12.7% compared to 9.9%. Our adjusted retail division operating margin was 3.3% compared to 4.6% in the previous year. The shift of advertising from national television to direct mail had impacted the improvement of margins at the wholesale level, while it had more of a negative impact because most of the increase in advertising was done at the retail level. We have rejected to increase advertising as we had mentioned last time about 10%. For lot of reasons, we decided not to go through with that and increase it by 2.3%. And as I mentioned, the bulk of advertising was direct mail. It did impact our operating margins of the retail division on the comparable [basis] [ph] by 0.7%. So therefore on a comparable basis, our retail margins would have been 4% compared to 4.6%. We also ended with a stronger backlog in the retail division that increased by 14%. We continue to strengthen our balance sheet, our cash and securities increased by 24% to $113 million as of December 31, 2013. I will again as I said give you an overview of some of our marketing objectives and most of them is really to see how the opportunity we have to increase sales because with the vertically integrated structure, which is operating very well as you can already see, increase in sales has a very positive impact to the bottom line. With that, Dave will give a brief financial overview.

Thank you, Farooq. Consolidated net sales during our second quarter were $193.1 million, up 1% from net sales of $191.3 million in the prior year quarter. Our wholesale division net sales grew 4.6% to $113.1 million. The growth in wholesale was driven by higher shipments to our independent retailers. Our retail division net sales of $151.5 million as compared to $151.8 million in prior year. Comparable delivered net sales for our retail division grew 3.4% over the second quarter last year. Our retail division's written orders in the second quarter were 4% lower than last year including comparable design center written orders which were 1.8% below the prior year. Our retail backlog at December 31, 2013 is 14% higher than a year ago. We operated 147 design centers during the second quarter, which is two fewer than we operated a year ago. Our global retail network included 295 design centers at December 31, 2013 compared with 305 locations at the end of last year. Independent retailers operate 148 of these including 68 in China, this compares with 156 independently operated last year including 74 in China. Our consolidated gross margin of 54.9% in our second quarter improved 50 basis points over the 54.4% gross margin in last year’s second quarter. The leverage on our wholesale operations with a higher sales and favorable mix of [actions in excess] [ph] and upholstery products were the key drivers of this improvement. These favorable factors were partially offset by lower proportion of retail net sales to our consolidated net sales and a $1.2 million lower benefit in consolidation than in the prior year from sale through of retail inventory. Our operating costs were well controlled during the quarter. Our adjusted results in the current quarter exclude $754,000 of international startup losses and the prior…

Yes, thanks Dave. As I mentioned our focus remains to increase our sales. While our recent sales increased 6% for the six months ended December 31, we are taking several important initiatives which include stronger marketing program to create urgency in traffic. From late November 2013 we started taking predictability out from our sales offerings by creating a number of promotions which are resulting as I said earlier in higher traffic in January. We plan to continue these initiatives as we move forward. Out in February, we are introducing a major initiative which for us is a paradigm shift. Historically, our focus has been on providing custom made products. Last year, we made the initial effort to introduce the in-stock program under the Express program. From February, that’s next month, we will on a gradual basis, convert many of our products that we show in our design centers to in-stock programs. The marketing umbrella under our eclecticism umbrella will promote both custom and in-stock. In this age of instant gratification, having a large product offering under On Demand will make us approachable and achievable to more clients. Our in-stock products will continue to be offered in custom, which is a competitive advantage for us. We will continue to accelerate our advertising programs with special emphasis to enlarge our digital presence. From our website enhancements with advertising in digital mediums, we already started a stronger digital advertising program in January and which will continue as we move forward. We continue to introduce technology on all areas of our business. We are currently shipping the Ethan Allen tablets to over 1,200 interior design consultants for the retail division and also additionally through our independent retail associates. We are seeing the benefits of more efficiency in design centers and in-house visits. We expect…

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Yes, hi, Brad, good morning. Bradley B. Thomas – KeyBanc Capital Markets, Inc.: Hi, Farooq, good morning to you, good morning David. I wanted to just ask about trends in the quarter and then the new marketing plans. It was obviously an unusual and difficult holiday season for a lot of retailers, difficult weather, could you maybe speak a little bit more to what the trends were in the quarter and maybe what the written comps look like in December in some of the markets like California and Florida that weren’t affected by difficult weather?

Yes, good question. We had sunshine in sunshine states. We had good businesses in California, Florida and in fact what happened was that October as I had mentioned also in the last previous call, again this government shutdown did have a major impact on us. We were down 10.5% in October, November was somewhat better, we are up 3.6% and then the bad weather affected us in December and we are down 2.6%. And again however, due to the fact that our first quarter as you know, sales were high, we did end up the year with a very strong backlog at the retail division 14% and now good news is that most of that product is hitting now and we are going to shift to our clients who are looking forward to this product being received because of the delays. So I think the other thing that you mentioned here is, our best market really, the biggest growth we’ve had has been in Florida and the West Coast. Bradley B. Thomas – KeyBanc Capital Markets, Inc.: Great and then to that point on the backlog, how quickly will you be able to improve some of the issues on the imported product? Will we start to see that in the coming quarter or could that take a few quarters to work through?

No, coming quarter, by actually most of it in January and rest of it in February and March. Bradley B. Thomas – KeyBanc Capital Markets, Inc.: Okay, great. And then just lastly with respect to the marketing, were there some changes in your December quarter that you think maybe hurt you because you weren’t pushing urgency as much as you had been in the past and how much of a benefit you think you might see from some of the changes that you are putting into place now?

Actually we were very strong. We started this in the late November. You might recall we started a program of saying that Black Friday Goes Red and that worked for us and for the first time, we saw - very proactive and it did make an impact. We continued in December, but the bad weather really was bad and that affected us, but we were very strong marketing programs. Now we know we are continuing that within January. As I mentioned, that old saying in my office is if you keep on doing the same thing over and over again, you are not going to get different results. Our predictability of our offerings was and has been a factor and we have changed it and we got to change it and we’ve changed in a major way. Yet on the other hand, we got to protect our margin. So while we are protecting our margins, we are creating more urgency in our offerings, we are using a lot more digital advertising as I mentioned and we are also looking like everybody else, what mediums are going to work as we move forward and whether it’s television, we are of course very, very strong in direct mail. Our email [blast] [ph] that we are sending out to our own clients and we are now even buying prospect lists, so we have a fairly strong program Brad to continue but as you know my focus is not just one quarter, we want to build this business over a longer bit of time. We are positioned well because our regional network is good. We do need to get more traffic into our design centers, that’s why this next initiative of On Demand and Custom and if you haven’t received it, I am sure Dave is going to all send you our newest direct mail hitting the first week in February to our clients and we are starting it with obviously a limited number of products. But by the time we are done in six months period, almost everything that we are showing is almost will be available in-stock and all those products are also available in custom. Now On Demand and Custom I believe will create a competitive advantage for us. Bradley B. Thomas – KeyBanc Capital Markets, Inc.: Great. I did get the January mailing and it does look very good. Well, thank you so much Farooq and good luck.

All right, thanks Brad.

Our next question is from Budd Bugatch of Raymond James. Your line is open.

Hi, good morning. Budd Bugatch – Raymond James & Associates, Inc.: Good morning Farooq, good morning David. I am interested in the issue on advertising, I do agree that I’d love to see more traffic in the stores and I think that’s a great initiative and I hope that you continue on that, but you said, I think you said that you had planned to increase advertising 10%, but to only increased it 2.3% is, did I hear that correctly and can you talk about what you look like in the future now?

Yes. Budd we did increase by 2.3% and I felt the conditions, environment was not conducive to spending a lot of money last quarter, but we pulled back some things and I think it was a wise decision, because we spent a lot of money in September of last year, we spent a lot of money in October and then we were impacted by all this government shutdown. Of course it helped us build our brand, build the story of our eclecticism, but I think that it was a wise decision for us not to spend that money. As you all know you never know which 50% of this advertising works and especially you Budd, being in retail. Now going forward, we will continue to expand. We will have more advertising, but we are also taking a looking at how do we maximize the efficiency of advertising. We used to spend and we’ve stopped it for the time being a lot of money on national television. Now we have started a fairly major program on digital advertising, we have done some shelter magazine advertising. The mediums are changing, so the objective really is not necessarily only increasing dollar amounts subject to as you know is, we are seeing how we become more efficient and in fact spending less is better as long as we are efficient. So we are going to spend some more money, but really I am not going to spend money just for the sake of spending it. We are working very hard to make our advertising more efficient in an environment where everybody is sort of as you know looking to see what is - what advertising is going to work in this new world. Budd Bugatch – Raymond James & Associates, Inc.: Okay. And I think you also said that January was up, I couldn't remember whether it was traffic or business or both. Did I hear that correctly?

The traffic was up. Now January also as you know some parts of the country like, Winston, the whole of the Midwest was almost - we stopped doing business in many of the markets in the Midwest, also in the northeast. Our stores in some cases were closed, but it was not just a question of closing the stores. The real issue was that people, our designers couldn’t come. While we did open the designers or skeleton staff, some few places we had to completely close them, but in most places, we like to keep them open, but as the designers don’t make it, hard to do business. But our traffic was up, and as you know the next six, seven or eight days are very important for us. What we have also done in January, which I am sure you’ve noticed that instead of having one sale ending the end of the month, which meant all our business would go way to the end of the month, we have created a number of events during the month; one of them just ended at the Martin Luther Day this last Monday, it was good. We’ve got traffic, we’ve got some business but is positive, but of course we’ve got to wait till the end of the month to see the overall results. Budd Bugatch – Raymond James & Associates, Inc.: I understand but it begins with traffic, so that’s a good sign.

Yes. Budd Bugatch – Raymond James & Associates, Inc.: And I also like the idea of varying the promotions and not being predictable. So I think that's a good situation too. So you talked also about the On Demand, how much inventory is that going to impact? What's the increase on that look like?

Yes, as you know our inventory is about $140 million is on a lower side and again part of it was reflected of the fact that a fair amount of product from offshore didn’t get delayed is coming in this quarter, but we have said that we would increase it after $10 million as we move forward, so keep that as perspective in mind in the next few quarters. Budd Bugatch – Raymond James & Associates, Inc.: And what caused the offshore delays? Is there something specific or systemic with its cause there?

There were a number of reasons. Our business has now become back to normal in China, and so that’s good news, but that there were some increases there and other one was the fact that some categories that we buy from overseas like especially our more of our high-end traditional we had higher sales. Our projection was somewhat lower and they were also delayed over there in manufacturing, all those factors combined rated a higher backlog. Budd Bugatch – Raymond James & Associates, Inc.: Primarily high-end wood furniture coming from China in that region?

Yes, right in Philippines, Indonesia as you know there are lot challenges there now. Budd Bugatch – Raymond James & Associates, Inc.: Yes, in the Philippines for sure in subwoofer.

Its Philippines, Indonesia and China, yes. Budd Bugatch – Raymond James & Associates, Inc.: Okay. And lastly for me, the retail margin, on very flat sales, you had 130 basis points lower margin. I think you said some of that was because of the advertising shift. Can you quantify that, David, for us and maybe walk us through what caused that margin differential?

Go ahead David.

Yes, but as Farooq mentioned, we’ve had higher advertising charges in the retail division, it was offset…

Budd, did you say gross margin or operating margin? Budd Bugatch – Raymond James & Associates, Inc.: Op margin. Farooq, it was 130 days as points I think 3.3% this year and 4.6% last.

That’s right, go ahead Dave.

Right. So as Farooq mentioned that advertising has accounted for about 70 basis points of the change, which would brought it to about 4% operating margin versus the 4.6% operating margin last year. Of course about 2% decline had some of impact we had some merchandizing charges in the quarter as well and supported the new rollout during the quarter starting build or so, that about covers. Budd Bugatch – Raymond James & Associates, Inc.: Yes, I mean the gross profit, as I recall you entered the quarter with some, still some highly discounted floor samples in the backlog that I think you said would take the first couple of weeks and I suspect that had a depressing effect on the gross margin, but then I thought with the higher accessories you would've had a lift in gross margin. So how did that wash out?

Let me address that. Yes, we have continued to sell-off products in this quarter and as we move forward, as I mentioned we are going to be introducing new products, so the next year is going to be pretty aggressive on that front. So we will have some impacts on gross margins, so I think that 0.5% difference that’s what we are talking about between just advertising reflected mostly effect at the gross margin level of products that we installed from our floor samples and as we move forward, some of that would continue, but the gross margin level that we are operating at is more or less stay at that level as long as our sales remain at that level. If they increase, we have an opportunity for increasing gross margin and operating margin. Budd Bugatch – Raymond James & Associates, Inc.: Okay. So just a last thing on that, operating expense levels, there is not a big mixed shift that we and company-owned stores or anything like that that cause the retail situation and it’s a 4% operating margin or kind of a reasonable boggy [ph] going forward for retail or what’s your kind of goal or margin target in retail?

Our goal is to do it even better than that. At 4%, we are still operating at levels of sales that I think we had a much greater opportunity of increasing sales, that’s when I said, our focus is to leverage what we have, increase the productivity of our design status and that has a tremendous leverage both at retail and at wholesale. So 4% is a reasonable number, but as we move forward and increase the sales, we have an opportunity of increasing.

Just one comment I would add, Budd is that this is a seasonally lower quarter in terms of breaking some of our cost on its side, so keep that in mind if you are projecting for Q3 that that’s typically a lower margin quarter. Budd Bugatch – Raymond James & Associates, Inc.: Got you, okay, thank you David, thank you Farooq, good luck on the quarter and good luck on the year.

Thanks Budd. All right, Tyrone?

Thank you. Our next question is from Matthew Fassler of Goldman Sachs. Your line is open.

Yes, hi, good morning. Halley M. Goodman – Goldman Sachs & Co.: Hi this is Halley Goodman on behalf of Matt Fassler. We are wondering just how customers are responding to the new furnishings and furniture in stores that are part of the New Eclecticism?

Yes, as you know the main objective of The New Eclecticism was really adding color is basically, practically all of it is existing product. The objective was to add color, mixing of the products, it is creating an interest and I think that what it is doing is that it is taking us which our objective is which I have stated previously that really we have been considered a leader in furniture, but as we move forward, we have to be a leader in fashion. So this eclecticism really, objective of the eclecticism is to project in a fashionable way. People are responding well, also understanding it better and as we move forward, we will continue to project it in a very fashionable way whether it is On Demand or whether it’s custom. Halley M. Goodman – Goldman Sachs & Co.: Thank you. And one follow-up; what is the current mix of accents and accessories and how should we expect this trend over the next year?

Yes, that’s very good, because we did spend a fair amount of money in the last quarter in predicting our accents, it did go up, 15% to 17% and opportunity really is to continue that growth, because our business model provides a bit closer 2000 interior designer and still no different than many people whose still accents from this store shelves, people come in, buy then take it away or of course very strong e-commerce business. Our business so far to a great degree is focused on the fact that the customers come in, they worked at our designers and our accents are used as part of their decorating projects. So now our objective is to of course, keep on increasing that plus also letting people know that we have these accents available either in our design centers or on our website, so you’re going to continue to see improvement. We did see an improvement of 15% to 17% last quarter. Halley M. Goodman – Goldman Sachs & Co.: Thank you.

Thank you. The next question is from Todd Schwartzman of Sidoti. Your line is open.

Hi, good morning Todd. Todd A. Schwartzman – Sidoti & Co. LLC: Hi good morning Farooq, good morning David. On the close out, the clearance inventory, is that going to impact Q4 gross margin as well as current quarter?

Well, this is always the continuous process start. It’s going to have some impact, but I don’t think that it is anything extraordinary. So we always have, we are making changes, we are not going to introduce too many new products in the next quarter or so. Products on the stock being introduced in our fourth quarter and then the first quarter of next year, those somewhat to less activity, but a normal activity of floor samples and returns and all that kind of product that we sell. Todd A. Schwartzman – Sidoti & Co. LLC: I appreciate there is a lot of moving parts, but from where you sit right now is it Q2 of next year, when that impact becomes more or less inconsequential?

No. As I said, our objective is that while we have got great products, Todd but we are reevaluating all our products, to see how do we even make them stronger. So we have a great team of designers, internal, external. So we are going to start from first quarter of next year start seeing some major, I will say major changes to our product offerings, which will take us a few quarters, so which means we will be selling some products off. So we will let you know as we move forward, but overall it also depends on our overall sales growth, because sales growth takes care of a lot of these problems or issues somewhat of a lower margin on floor sample products that are sold. Todd A. Schwartzman – Sidoti & Co. LLC: ?:

No, Todd, as you know it’s hard to quantify I mean if we look – I will say that it is most probably close to in the – between 4% and 6% range. Todd A. Schwartzman – Sidoti & Co. LLC: Okay, that’s helpful. Thanks Farooq. What gives you the confidence that the recent change in your marketing is responsible for that 4% to 6% pick up and not the government shutdown or maybe some other external factors?

I think it is the combination of them, certainly the fact that on one hand there was no government shutdown this quarter, on the other hand we still had a pretty bad weather in many parts of the country. In fact today as you know the Northeast is freezing. Todd A. Schwartzman – Sidoti & Co. LLC: Yes.

But I think it’s the combination of both. It’s a combination of – slightly better environment than we ever had in the last quarter and our marketing efforts, promotional activities are stronger too. I think it’s – I don’t know 60-40, 70-30 I think maybe 60-40 or 70-30 is our own activities and the rest is environment which is better. Todd A. Schwartzman – Sidoti & Co. LLC: Got it. And lastly share buybacks looks like you are not active at all in the quarter when do you – what would it take to you to get more aggressive there?

Well, there is always opportunity as you know that in the last – 15 years we purchased $600 million of our stock but we’ll watch it carefully, we see when its makes sense and we do have as you know our total debt is now between our cash and debt is maybe either or not $10 million or $12 million and maybe we are relatively low in debt, so we will watch it carefully and we look at that opportunity also. Todd A. Schwartzman – Sidoti & Co. LLC: Great thanks.

Thanks Todd.

Thank you. Our next person is from John Baugh of Stifel. Your line is open.

Yes, good morning. John A. Baugh – Stifel, Nicolaus & Co., Inc.: Good morning Farooq and good morning David. I wanted to ask in that business in our March quarter question as much it is a calendar 2014 and/or 2015 or beyond question, and that is with the change as you’re contemplating in the marketing, you’ve referenced some inner month promotions, whatever it is you’re thinking about needing that you to drive traffic, does it alter in any way the contribution margin you’ve last guided us to. As you’d think about the business model or just shifting advertising you say from TV to digital and no change?

So John I don’t think all of these things are going to change in any material way the projections that we did because in north there is a possibility that on one hand it is and I think you’re referring to the fact that more proportional activity could have an impacts on our gross margin. Yes that is a possibility, we are also – on the other hand, our sales have even a more of a positive impact so that’s where the issue is, for us to give all these extra promotions or not increased sales, that is going to impact our gross margin, so we have to increase sales. John A. Baugh – Stifel, Nicolaus & Co., Inc.: And then, you’ve mentioned a paradigm shift, move into in-stock where did you sit now as a percentage of products that’s of your revenue that is equivalent stock in and what’s the goal, how big a shift here we talking about and then what timeframe in my mind $10 million if it’s a material change, isn’t a big enough increase in inventory but I love your color on that?

I think that at this stage, starting in February about less than 10% of our product is next on our floors is On Demand meaning in-stock. We progressively increased it, but that 10% you will notice in our February magazine is predominantly are shown, so that people know that all those – then those are great products. These are some of our best selling products where we are starting it with, we are a year from now almost all a very substantial part of our case good that’d be still on our floors are going to be On Demand. Most of our accents are going to be in demand and maybe 30% to 40% of upholstery will be a demand and keeping in mind all those products or most of those products are also available in different options and finishes certainly in upholstery, we’ve got lot of, lot of options, so we’ll maintain both in-stock and demand it’s going to take us about a year to get there. John A. Baugh – Stifel, Nicolaus & Co., Inc.: And that would take the numbers I mean, if you less than 10% a day, and virtually all of the accessories and maybe that’s not much of a change from where you are today, but all the case goods that you at least display then all the accessories, I mean where does that consolidated in-stock number do you think go and what would be inventory level would be to support that?

It also will depend how much of that, I mean talking of furniture as you have rightly said many of the accents reduce stock, although lot of the accents are also custom like our soft good products, whether it’s draperies, bedspreads and all of that are custom, it will continue to be. This is an interesting as we go forward we will see how much of our case goods is going to be produced domestically are in North America and how much is going to be produced offshore, almost all our upholstery is made in our own plants, we have a much better control in terms of the inventory management of that, when you have offshore the lead times increase it is much more unpredictable it’s not under our control which means we have to make greater projections on inventory. So we will see John we had already low in our inventory to some degree, so to spend million dollars that I am talking of initially in the next few quarters is the next few quarters after that we’ll see how much more investment we have to make and that investment will also reflect the business we are doing. John A. Baugh – Stifel, Nicolaus & Co., Inc.: Do you plan Farooq on the case goods in terms of what you display in the stores to skew that even more heavily than currently to domestic to avoid the inventory lead times from offshore?

Well as you know at this stage our domestic margins are much lower than offshore. We have better control, overseas margins are much, much better, we don’t have much control, so we are going to – but on the other hand as we increase as I said in my comments as we increase our domestic volumes they do improve our margins. So it’s sort of a re-level balance. There are some products that we will have – that has to be made overseas at this stage because of their complexity and a very, very high labor content. So we are looking to make progress on United States plans. We have little more flexibility in Honduras. In the U.S. plants our products are designed, are going to be made which are more compatible for U.S. manufacturing, meaning less labor, but great quality, great lumber, great wood. I’m talking of wood products now and that’s how we are designing them. John A. Baugh – Stifel, Nicolaus & Co., Inc.: Okay. Thanks. And my last question on the Chinese business, the stores there. You mentioned the store numbers there. Could you just kind of walk us through, I know there were some open inventory positions there that you worked through this past calendar year. Can you give us a flavor for the flow of China in calendar 2014 versus calendar 2013?

Well, first of all the stores closing – really the ones that have closed are relatively very, very small, 3,000 square feet to 5,000 square feet. Most of our business is done in their largest stores, which are all operating. That’s where we get most of our business, but the numbers are – but behind the numbers it has those – if they had closed a lot of their larger stores that will be an issue. In the last six months or so inventory positions that they had they are back to normal. So they’re starting to get normalized business. The business of Ethan Allen has been up and we are looking forward to a good business in calendar 2014 versus calendar 2013. John A. Baugh – Stifel, Nicolaus & Co., Inc.: So you describe that business as having a positive sales and earnings trajectory to your raw business?

Yes, absolutely. John A. Baugh – Stifel, Nicolaus & Co., Inc.: Great. Thank you. Good luck.

Thanks, John.

Thank you. Our next question is from Cristina Fernández of Telsey Group. Your line is open.

Yes, hi. Good morning, Cristina. Cristina Fernández – Telsey Advisory Group LLC: Hi. Good morning. I wanted to see if you have a sense of the increasing traffic that you’re seeing in January as well as those regions where you are performing better like – in California. Is that improvement coming from your core Baby Boomers and more fluent customer or is that activation on customer you are trying to reach is also coming to the stores?

Yes, good question. At this stage most of our business is still being done by our core customers, which you might call Baby Boomers. Today of course age is not a factor in design. People today of all ages are buying all kinds of different specs [ph], but, yes most of our business is still – this increase is Baby Boomers. The good news also is we are starting to make an inroad into younger people and that’s one of the reasons this On Demand is very important because the younger people don’t want to wait and this will make it possible for them to get in, in less than two weeks while the custom product is they generally have to wait for many weeks. By the time it gets into their home from six to eight weeks. And I think that time factor is an important factor in reaching the Gen X that you referred to. Cristina Fernández – Telsey Advisory Group LLC: And then, just touching back on the On Demand program and how that’s different from the Ethan Allen Express program from a year, two years ago. I mean it seems like if I get it correctly, just now you have more inventory and the lead times maybe a little bit shorter. So instead of two, three weeks it’s two weeks, and then it starts marketing how is that going to be different?

Yes, marketing is what’s different. In the Express program when we launched it, we launched it somewhat as a separate program from our main programs. The On Demand is an integral part of our total merchandising and if you will look at it on February offering when we’re introducing it you will see that On Demand and custom are both integrated to be able to show everything we do. Express was somewhat on the sidelines and also we saw some of the products that we took over there were, as you mentioned, more for the Baby Boomers. In the On Demand, the programs we are putting in are going across the board that it would be all customers whether they are Baby Boomers or their Gen X are going to be benefiting from this. So you are going to see lot of the products that we’ll be showing on the floor, as I said earlier, are going to be available in stock as we move forward and we have started this in February. I think we are going to see how well it does, how do we modify, gauge it, improve it as we move forward, but it’s critical that today one has to have both On Demand and custom. And as you know, a lot of people when they come in and they do have an option a lot of times they do end up by buying custom, but they need to have the option that they can get it On Demand if they want to. Cristina Fernández – Telsey Advisory Group LLC: And then just lastly, on the promotional, I guess hidden to what your plans are, I mean, I got the sense that your plan is just to do more shorter promotions, but more of those instead of the month-end sales and probably still be at that 10%, 15% off that you’ve been offering in the last few months?

That’s right. I think you are absolutely right. However, we – influences in January, as you know, we had three different offerings. One we called umbrella offering, which in January this month we are going in. It offers about a 10% saving across the board. Then from the bringing of the month to the end of this Columbus Day we offered a special program on upholstery, which offered maybe up to 15%. Then we also offered, as you might have seen, a special offer of $750 savings if they buy $3,500 and above. That is ending this coming Sunday. And then we have other offerings till end of the month. So what we are learning is, which we knew all along, is that our customers need a little bit more time than the typical retail that you give them two days and they come and buy. We need to give them at least from one week to two weeks for them to work with our designers and make the decision. So that’s why most of our promotion is one week, two weeks and then an umbrella program for the month. Cristina Fernández – Telsey Advisory Group LLC: Thank you.

All right.

Next question is from Jeremy Hamblin of Dougherty & Company. Your line is open.

Yeah. Hi, Jeff. How are you? Jeremy Hamblin – Dougherty & Co. LLC: Good morning. How are you? So I wanted to just talk in kind of a broader brush strokes about marketing and kind of your spend going forward. Not just in the near-term quarters, and thinking about how you are going to use your marketing dollars and you are shifting a little bit more towards digital. Do you think over time that the spend is likely to stay level or increase a little bit or is that really just a function of your increase as you see better results on the sales front?

The whole advertising world is in a flux. I wish we were as predictable as we used to do business 10 years back, but that’s not the case. Today lots of changes are taking place. The digital medium is coming in. Our email blasts are making an impact. Less and less people are reading newspapers. We have direct mail. We are also looking at the impact of direct mails, whether should it be 30 pages or 60 pages or 700 pages as some folks have done. All of those things are being – one has to look into. Bottom line at this stage unless I see, if we see there’s an opportunity that our advertising is going to make a difference, we will put more money into that. In the 1991, 1992 period you were not there. We repositioned internally. We have lots of debt. We changed 40% of our product line and I borrowed $30 million, $40 million on advertising. We are not spending that money right now. So if we have to we are going to spend lot more money. We have the resources to do it, but I want to make sure it brings results, but definitely we’re going to watch it very carefully, lot of moving parts. But at this stage the minimum we are going to spend is what we have been spending with slight increases for the next few quarters. Jeremy Hamblin – Dougherty & Co. LLC: Okay. And then just a follow-up to that, really with the new eclecticism and the marketing changes in general, it seems like you’re looking to broaden the demographic and the appeal of the Ethan Allen brand and you’re seeing kind of your sales flatten out here. I’m wondering how do you look at it in terms of how long it will take to educate a new demographic about what Ethan Allen stands for and to bring them into be a customer of the company’s goods? :

It’s going to be, I guess, an ongoing event for us. We have a brand that, that is very, very well recognized. Working out with main customers is folks that you might refer to as Baby Boomers. However, with the changes that we’re making with this eclecticism, which is a style, fashion because eclecticism really is projecting fashion and color. That will continue to do whatever name we use for it that will continue. The On Demand is going to be very important for these new demographics, and as I mentioned earlier we are also going to make major adjustments for our product lines, which is going to also be good for the Baby Boomers and also for the Gen X as we move forward. And I would think to answer your question I think we’re going to start seeing impact of this in the next 12 months to 24 months, I am taking of major impact. Jeremy Hamblin – Dougherty & Company: And then just one last follow-up, we didn’t talk at all about Platinum Awards program, and I think as I’ve talked to some stores, in Denison stores I think it seems like the program, hasn’t really taken hold either with your customers or the design associates. Are there any plans to make adjustments to that program which at this point is really just kind of a discounting program? Is there any longer-term plans to make adjustments to potentially have more loyalty to the program?

Yes, I mean that’s a good question. We did introduce it, but we have somewhat captured a little bit, very low key in the last couple of months. The reason is that we have introduced a lot of new initiatives is that where I talked about going from the predictability to the unpredictability of the various offers, we felt that those are at this stage more important than continuing to offer under the Platinum umbrella. And Jeremy I am sorry I didn’t use the right name. But what you’re going to see is that, we will get it back in and offer it as one of the options at offerings, as you move forward. In other words, giving those members who are already Platinum give them an opportunity of having a special offering like we’re doing the two or three times a month. Second thing is that, we are determining whether we should make it into a point program, that’s what all as you know the rewards are. We didn’t make it into a point program for a number of reasons. One of them is that once you start doing it, it’s something you got to continue to do with it, these are the fair liability, because once it out you got to than create a financial liability with all the moving parts, we decided for the timing to hold it and in the next couple of months, we’ll go back to see how better we use it, there is a point system, we have got to get back into the bridal registry, where this is all very important part of it. So for the next couple of months then we sort of low key, then we will start utilizing it. Jeremy Hamblin – Dougherty & Company: Thanks so much.

Thanks, thanks Jeremy.

Thank you again. (Operator Instruction) Next question is from Kristine Koerber of DISCERN Securities. Your line is open.

Yes, hi good morning. Kristine Koerber – DISCERN Securities, Inc.: Hi, good morning. A couple of questions and a follow up to other callers questions, first it sound like you have lot of flexibility with regards to advertising, can you just give us a little more color on kind of the lead times, you needed for advertising I mean how quickly can you react change in advertising, is it days or weeks?

The good news is that, we run our own in-house advertising group, both from the creative side, the photo studio side, the video side, we create our own television commercials, now where the lead time is greater is on these direct mail magazines, but even that we’ve cut down to now for instance our March magazine, is just been finalized now which is in a record time, previously we would taking three months, four months before, it would have been done this coming March. So we’ve reduced that time period, where we have gained the greater flexibility is in the new mediums, like for instance the digital mediums. Our e-mail does, those, we have the flexibility of putting in programs, on a two day notice. Previously just couldn’t do it, so lot of flexibility in the digital world where there is somewhat less flexibility, on this direct mail, but even that we have cut it down by more than 50% or more than, more time in terms of being flexible. So we will continue to ask to remain very flexible and determine where as we need to spend the money we will. Kristine Koerber – DISCERN Securities, Inc.: Okay, that’s helpful. And then can you clarify you talk about faster delivery, for the On Demand initiative, are we going to see more products delivered within two weeks, but what is the faster delivery I mean how much faster are we talking?

Yes, at this stage most of it will be delivered within two weeks and we are going to – and then we will take a look at it, whether it makes sense for us to keep some of it, On Demand program for instance more closer to the West Coast or in the West Coast. Right now it is going to be a shift from our distribution centers in which EMEA than it goes to our service centers at retail, now it will also depends for instance, our service centers, our major service centers, whether it’s in the Washington, Greater Washington, Philadelphia New York they receive 4 to 5 containers a day. So install from Virginia where we have our major distribution center, but they can receive the product the next day, but then they have to reschedule it. So within two weeks is the time we are giving to most of the countries. Kristine Koerber – DISCERN Securities, Inc.: Okay, as far as the accent and decor product that’s still within 48 hours is correct?

Yes, if it is shared by UPS, we are shipping it all within the next day. Kristine Koerber – DISCERN Securities, Inc.: Okay and are you still targeting the decor product to be about 35% in the next over the long-term?

Over the long-term with 17% and that is opportunity that we have so we got to take it up and every 2%, 3% makes a big difference. Kristine Koerber – DISCERN Securities, Inc.: Okay, thank you.

All right, thanks very much. All right, Tyrone I think I’ll have to be leaving. I’ve got to go to Brooklyn. We got to see what the traffic is here up in Brooklyn. And if any questions, please give a call to David Callen and thank you for all participating and just again I apologize for change of the time, but good to have the opportunity of talking to everybody.

Ladies and gentlemen, thank you for your participation in today’s conference. This concludes the program. You may now disconnect. Have a wonderful day.