This is a partial transcript from Your World with Neil Cavuto, August 7, 2002, that was edited for clarity. Click here for complete access to all of Neil Cavuto's CEO interviews.
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NEIL CAVUTO, HOST: From modern movies to modern home furnishings. Ethan Allen Interiors announced fiscal fourth-quarter earnings today. Net income rose 54 cents a share from 39 a year earlier.
Here with the details is Farooq Kathwari, the chairman and CEO of Ethan Allen Interiors. Farooq, good to see you.
FAROOQ KATHWARI, CHAIRMAN & CEO, ETHAN ALLEN INTERIORS (ETH): Good to see you, Neil.
CAVUTO: So, people are decorating like crazy?
KATHWARI: They are because we have talked for the last few years, the interest of the consumer in their homes. I think that interest in the last year or two has even increased. People are spending time in their homes, and the issue really is that you need to be in the right place at the right time. Now, we have spent the last 10 years repositioning Ethan Allen. Today, we have from contemporary to casual to...
CAVUTO: See, that's my thing. I think you are all over the map now. I mean, you used to be in the high-brow end. I mean, how do those high- brow folks go?
KATHWARI: I tell you this, and you are a customer, and I am pretty sure that your home, you have rooms where you have our casual furniture and you have rooms where you have our classic furniture. I am sure your wife is good at decorating.
CAVUTO: Thank you.
KATHWARI: No, but you are a customer.
CAVUTO: But that is my point though. I mean, do a lot of your regular customers who look at you, all right, I get this stuff here. Is sort of like the questions I ask of Mercedes and BMW when they branch out across, you know, other ends of the spectrum, does it hurt you?
KATHWARI: No, it doesn't as long as you maintain quality.
CAVUTO: Yes.
KATHWARI: See, what we have done is we have maintained the level of quality, whether it is contemporary or whether it's classics. Then on top of it, our design consultants are a key to our business because today, not only do you need to have great products, you need to have good service. And 3,000 design consultants making house calls, making decorating easy and fun, that is really what we do.
CAVUTO: You stand by your numbers too. You did not have to, but you went ahead and signed off on your financial statement, right? Why did you do that?
KATHWARI: You know, Neil, I did because I thought it was the right thing to do. But I am a little angry that we have to do this kind of a thing because this is something normal. We should not have to sign. This is our job. Our job is to project credibility, to have the right kind of numbers and I think the fact that we are now by law required to do these kinds of things is not a good sign because I believe that we should have the credibility, we should have the honesty to do these kind of things. I mean, that is what we are paid for.
I did it because I feel great about our numbers. You know, the last three or four years, I have been watching this whole phenomenon of the pressures being put on CEOs by the media, by the financial analysts, by all these consultants coming to you and saying we are going to give you all kinds of advice. And I was even called being conservative, you know. And they said, why do you have cash? Why don't you have any debt? You know, we last year generated $135 million of cash from operating cash flow. We spent money, we bought about $30 million of our stocks...
CAVUTO: So, you stand by what you are doing and saying?
KATHWARI: Of course.
CAVUTO: And you signed on the dotted line to prove it.
KATHWARI: I did it this morning.
CAVUTO: All right. Farooq Kathwari, good seeing you again.
KATHWARI: Good to be here.
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