Ethan Allen Interiors Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Note 15 - Financial Information About the Parent, the Issuer and the Guarantors

Note 15 - Financial Information About the Parent, the Issuer and the Guarantors

9 Months Ended

Mar. 31, 2013

Condensed Financial Statements [Text Block]

(15) Financial Information About the Parent, the Issuer and the Guarantors

On September 27, 2005, Global (the "Issuer") issued $200 million aggregate principal amount of Senior Notes which have been guaranteed on a senior basis by Interiors (the "Parent"), and other wholly owned domestic subsidiaries of the Issuer and the Parent, including Ethan Allen Retail, Inc., Ethan Allen Operations, Inc., Ethan Allen Realty, LLC, Lake Avenue Associates, Inc. and Manor House, Inc. The subsidiary guarantors (other than the Parent) are collectively called the "Guarantors". The guarantees of the Guarantors are unsecured. All of the guarantees are full, unconditional and joint and several and the Issuer and each of the Guarantors are 100% owned by the Parent. Our other subsidiaries which are not guarantors are called the "Non-Guarantors".

The following tables set forth the condensed consolidating balance sheets as of March 31, 2013 and June 30, 2012, the condensed consolidating statements of operations for the three and nine months ended March 31, 2013 and 2012, and the condensed consolidating statements of cash flows for the nine months ended March 31, 2013 and 2012 of the Parent, the Issuer, the Guarantors and the Non-Guarantors.

CONDENSED CONSOLIDATING BALANCE SHEET

(In thousands)

March 31, 2013

	Parent		Issuer			Guarantors			Non-Guarantors			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	-	$	67,474		$	13,001		$	3,170		$	-		$	83,645
Marketable securities		-		18,176			-			-			-			18,176
Accounts receivable, net		-		11,112			231			1			-			11,344
Inventories		-		-			166,520			5,336			(29,815	)		142,041
Prepaid expenses and other current assets		-		8,062			12,744			1,774			-			22,580
Intercompany receivables		-		844,039			295,163			(8,372	)		(1,130,830	)		-
Total current assets		-		948,863			487,659			1,909			(1,160,645	)		277,786
Property, plant and equipment, net		-		9,656			267,586			16,838			-			294,080
Goodwill and other intangible assets		-		37,905			7,223			-			-			45,128
Restricted cash and investments		-		15,430			-			-			-			15,430
Other assets		-		3,507			1,558			817			-			5,882
Investment in affiliated companies		678,728		(112,156	)		-			-			(566,572	)		-
Total assets	$	678,728	$	903,205		$	764,026		$	19,564		$	(1,727,217	)	$	638,306
Liabilities and Shareholders’ Equity
Current liabilities:
Current maturities of long-term debt	$	-	$	-		$	469		$	-		$	-		$	469
Customer deposits		-		-			56,957			2,575			-			59,532
Accounts payable		-		9,879			15,012			525			-			25,416
Accrued expenses and other current liabilities		2,747		31,751			14,471			1,270			-			50,239
Intercompany payables		346,831		(2,723	)		770,576			16,146			(1,130,830	)		-
Total current liabilities		349,578		38,907			857,485			20,516			(1,130,830	)		135,656
Long-term debt		-		153,078			1,758			-			-			154,836
Other long-term liabilities		-		3,926			14,524			214			-			18,664
Total liabilities		349,578		195,911			873,767			20,730			(1,130,830	)		309,156
Shareholders’ equity		329,150		707,294			(109,741	)		(1,166	)		(596,387	)		329,150
Total liabilities and shareholders’ equity	$	678,728	$	903,205		$	764,026		$	19,564		$	(1,727,217	)	$	638,306

CONDENSED CONSOLIDATING BALANCE SHEET

(In thousands)

June 30, 2012

	Parent		Issuer			Guarantors			Non-Guarantors			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	-	$	64,946		$	12,276		$	2,499		$	-			79,721
Marketable securities		-		9,005			-			-			-			9,005
Accounts receivable, net		-		14,648			263			8			-			14,919
Inventories		-		-			182,382			4,736			(31,379	)		155,739
Prepaid expenses and other current assets		-		6,191			14,689			2,528			-			23,408
Intercompany receivables		-		829,913			273,536			(8,515	)		(1,094,934	)		-
Total current assets		-		924,703			483,146			1,256			(1,126,313	)		282,792
Property, plant and equipment, net		-		9,078			272,228			14,389			-			295,695
Goodwill and other intangible assets		-		37,905			7,223			-			-			45,128
Restricted cash and investments		-		15,416			-			-			-			15,416
Other assets		-		4,948			809			-			-			5,757
Investment in affiliated companies		652,868		(108,864	)		-			-			(544,004	)		-
Total assets	$	652,868	$	883,186		$	763,406		$	15,645		$	(1,670,317	)	$	644,788
Liabilities and Shareholders’ Equity
Current liabilities:
Current maturities of long-term debt	$	-	$	-		$	250		$	-		$	-		$	250
Customer deposits		-		-			62,479			2,986			-			65,465
Accounts payable		-		7,126			19,695			494			-			27,315
Accrued expenses and other current liabilities		2,713		35,752			18,537			1,045			-			58,047
Intercompany payables		328,287		327			756,513			9,807			(1,094,934	)		-
Total current liabilities		331,000		43,205			857,474			14,332			(1,094,934	)		151,077
Long-term debt		-		152,986			1,264			-			-			154,250
Other long-term liabilities		-		3,641			13,874			78			-			17,593
Total liabilities		331,000		199,832			872,612			14,410			(1,094,934	)		322,920
Shareholders’ equity		321,868		683,354			(109,206	)		1,235			(575,383	)		321,868
Total liabilities and shareholders’ equity	$	652,868	$	883,186		$	763,406		$	15,645		$	(1,670,317	)	$	644,788

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

(In thousands)

Three months ended March 31, 2013

	Parent			Issuer			Guarantors			Non-Guarantors			Eliminations			Consolidated
Net sales	$	-		$	108,595		$	188,589		$	9,311		$	(138,351	)	$	168,144
Cost of sales		-			81,631			124,977			5,959			(136,208	)		76,359
Gross profit		-			26,964			63,612			3,352			(2,143	)		91,785
Total operating expenses		45			12,817			65,310			4,953			-			83,125
Operating income (loss)		(45	)		14,147			(1,698	)		(1,601	)		(2,143	)		8,660
Interest and other miscellaneous income, net		4,419			(2,404	)		5			(131	)		(1,899	)		(10	)
Interest and other related financing costs		-			2,180			15			-			-			2,195
Income (loss) before income taxes		4,374			9,563			(1,708	)		(1,732	)		(4,042	)		6,455
Income tax expense (benefit)		-			3,001			(943	)		23			-			2,081
Net income/(loss)	$	4,374		$	6,562		$	(765	)	$	(1,755	)	$	(4,042	)	$	4,374

Three months ended March 31, 2012

	Parent			Issuer			Guarantors			Non-Guarantors			Eliminations			Consolidated
Net sales	$	-		$	121,425		$	191,275		$	7,971		$	(144,810	)	$	175,861
Cost of sales		-			89,850			127,738			4,704			(140,706	)		81,586
Gross profit		-			31,575			63,537			3,267			(4,104	)		94,275
Total operating expenses		45			11,969			70,764			3,710			-			86,488
Operating income (loss)		(45	)		19,606			(7,227	)		(443	)		(4,104	)		7,787
Interest and other miscellaneous income, net		27,593			(6,598	)		66			(36	)		(20,868	)		157
Interest and other related financing costs		-			2,180			9			-			-			2,189
Income (loss) before income taxes		27,548			10,828			(7,170	)		(479	)		(24,972	)		5,755
Income tax expense (benefit)		-			(20,869	)		(947	)		23			-			(21,793	)
Net income/(loss)	$	27,548		$	31,697		$	(6,223	)	$	(502	)	$	(24,972	)	$	27,548

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

(In thousands)

Nine months ended March 31, 2013

	Parent			Issuer			Guarantors			Non-Guarantors			Eliminations			Consolidated
Net sales	$	-		$	327,987		$	594,200		$	29,040		$	(404,395	)	$	546,832
Cost of sales		-			247,433			387,459			17,894			(405,959	)		246,827
Gross profit		-			80,554			206,741			11,146			1,564			300,005
Total operating expenses		135			35,171			207,116			13,612			-			256,034
Operating income (loss)		(135	)		45,383			(375	)		(2,466	)		1,564			43,971
Interest and other miscellaneous income, net		24,419			(2,923	)		30			(206	)		(21,128	)		192
Interest and other related financing costs		-			6,546			46			-			-			6,592
Income (loss) before income taxes		24,284			35,914			(391	)		(2,672	)		(19,564	)		37,571
Income tax expense		-			13,059			159			69			-			13,287
Net income/(loss)	$	24,284		$	22,855		$	(550	)	$	(2,741	)	$	(19,564	)	$	24,284

Nine months ended March 31, 2012

	Parent			Issuer			Guarantors			Non-Guarantors			Eliminations			Consolidated
Net sales	$	-		$	343,988		$	582,651		$	25,399		$	(407,981	)	$	544,057
Cost of sales		-			256,237			387,435			14,340			(404,334	)		253,678
Gross profit		-			87,751			195,216			11,059			(3,647	)		290,379
Total operating expenses		135			34,427			209,908			10,546			-			255,016
Operating income (loss)		(135	)		53,324			(14,692	)		513			(3,647	)		35,363
Interest and other miscellaneous income, net		42,530			(13,108	)		211			(30	)		(29,241	)		362
Interest and other related financing costs		-			6,805			9			-			-			6,814
Income (loss) before income taxes		42,395			33,411			(14,490	)		483			(32,888	)		28,911
Income tax expense (benefit)		-			(12,766	)		(777	)		59			-			(13,484	)
Net income/(loss)	$	42,395		$	46,177		$	(13,713	)	$	424		$	(32,888	)	$	42,395

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

(In thousands)

Nine months ended March 31, 2013

	Parent			Issuer			Guarantors			Non-Guarantors			Eliminations		Consolidated
Net cash provided by (used in) operating activities	$	18,360		$	12,214		$	10,950		$	2,921		$	-	$	44,445
Cash flows from investing activities:
Capital expenditures		-			(1,115	)		(13,165	)		(2,265	)		-		(16,545	)
Acquisitions		-			-			(598	)		-			-		(598	)
Proceeds from the disposal of property, plant and equipment		-			51			3,175			-			-		3,226
Change in restricted cash and investments		-			(14	)		-			-			-		(14	)
Purchases of marketable securities		-			(17,547	)		-			-			-		(17,547	)
Sales of marketable securities		-			7,990			-			-			-		7,990
Other		-			783			550			-			-		1,333
Net cash provided by (used in) investing activities		-			(9,852	)		(10,038	)		(2,265	)		-		(22,155	)
Cash flows from financing activities:
Payments on long-term debt		-			-			(187	)		-			-		(187	)
Dividends paid		(19,617	)		-			-			-			-		(19,617	)
Other		1,257			166			-			-			-		1,423
Net cash provided by (used in) financing activities		(18,360	)		166			(187	)		-			-		(18,381	)
Effect of exchange rate changes on cash		-			-			-			15			-		15
Net increase (decrease) in cash and cash equivalents		-			2,528			725			671			-		3,924
Cash and cash equivalents – beginning of period		-			64,946			12,276			2,499			-		79,721
Cash and cash equivalents – end of period	$	-		$	67,474		$	13,001		$	3,170		$	-	$	83,645

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

(In thousands)

Nine months ended March 31, 2012

	Parent			Issuer			Guarantors			Non-Guarantors			Eliminations		Consolidated
Net cash provided by (used in) operating activities	$	6,668		$	2,161		$	16,667		$	2,337		$	-	$	27,833
Cash flows from investing activities:
Capital expenditures		-			(1,592	)		(16,833	)		(1,411	)		-		(19,836	)
Acquisitions		-			-			(520	)		-			-		(520	)
Proceeds from the disposal of property, plant and equipment		-			-			1,792			-			-		1,792
Change in restricted cash and investments		-			981			-			-			-		981
Purchases of marketable securities		-			(3,290	)		-			-			-		(3,290	)
Sales of marketable securities		-			4,675			-			-			-		4,675
Other		-			262			511			-			-		773
Net cash provided by (used in) investing activities		-			1,036			(15,050	)		(1,411	)		-		(15,425	)
Cash flows from financing activities:
Payments on long-term debt		-			(11,918	)		(227	)		-			-		(12,145	)
Dividends paid		(6,046	)		-			-			-			-		(6,046	)
Purchases and other retirements of company stock		(847	)		-			-			-			-		(847	)
Other		225			-			275			-			-		500
Net cash provided by (used in) financing activities		(6,668	)		(11,918	)		48			-			-		(18,538	)
Effect of exchange rate changes on cash		-			-			-			741			-		741
Net increase (decrease) in cash and cash equivalents		-			(8,721	)		1,665			1,667			-		(5,389	)
Cash and cash equivalents – beginning of period		-			69,763			7,716			1,040			-		78,519
Cash and cash equivalents – end of period	$	-		$	61,042		$	9,381		$	2,707		$	-	$	73,130