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

6 Months Ended

Dec. 31, 2013

Disclosure Text Block Supplement [Abstract]

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 December 31, 2013 and June 30, 2013, the condensed consolidating statements of operations for the three and six months ended December 31, 2013 and 2012, and the condensed consolidating statements of cash flows for the six months ended December 31, 2013 and 2012 of the Parent, the Issuer, the Guarantors and the Non-Guarantors.

CONDENSED CONSOLIDATING BALANCE SHEET

(In thousands)

December 31, 2013

	Parent		Issuer			Guarantors			Non-Guarantors			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	-	$	68,896		$	5,639		$	3,068		$	-		$	77,603
Marketable securities		-		20,157			-			-			-			20,157
Accounts receivable, net		-		10,493			261			-			-			10,754
Inventories		-		-			162,888			5,609			(28,533	)		139,964
Prepaid expenses and other current assets		-		8,747			10,941			1,786			-			21,474
Intercompany receivables		-		836,612			309,181			(3,728	)		(1,142,065	)		-
Total current assets		-		944,905			488,910			6,735			(1,170,597	)		269,952
Property, plant and equipment, net		-		9,173			264,796			16,419			-			290,388
Goodwill and other intangible assets		-		37,905			7,223			-			-			45,128
Restricted cash and investments		-		14,935			-			-			-			14,935
Other assets		-		2,554			1,520			804			-			4,878
Investment in affiliated companies		707,766		(111,222	)		-			-			(596,544	)		-
Total assets	$	707,766	$	898,250		$	762,449		$	23,958		$	(1,767,142	)	$	625,281
Liabilities and Shareholders’ Equity
Current liabilities:
Current maturities of long-term debt	$	-	$	-		$	490		$	-		$	-		$	490
Customer deposits		-		-			48,764			3,414			-			52,178
Accounts payable		-		5,796			15,820			295			-			21,911
Accrued expenses and other current liabilities		3,030		31,330			13,869			1,283			-			49,512
Intercompany payables		354,776		(8,126	)		770,388			25,027			(1,142,065	)		-
Total current liabilities		357,806		29,000			849,331			30,019			(1,142,065	)		124,091
Long-term debt		-		129,204			1,409			-			-			130,613
Other long-term liabilities		-		4,072			16,136			409			-			20,617
Total liabilities		357,806		162,276			866,876			30,428			(1,142,065	)		275,321
Shareholders’ equity		349,960		735,974			(104,427	)		(6,470	)		(625,077	)		349,960
Total liabilities and shareholders’ equity	$	707,766	$	898,250		$	762,449		$	23,958		$	(1,767,142	)	$	625,281

CONDENSED CONSOLIDATING BALANCE SHEET

(In thousands)

June 30, 2013

	Parent		Issuer			Guarantors			Non-Guarantors			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	-	$	57,307		$	12,463		$	2,831		$	-		$	72,601
Marketable securities		-		15,529			-			-			-			15,529
Accounts receivable, net		-		12,061			212			4			-			12,277
Inventories		-		-			161,683			5,463			(29,890	)		137,256
Prepaid expenses and other current assets		-		9,882			11,275			1,750			-			22,907
Intercompany receivables		-		831,238			302,577			(3,726	)		(1,130,089	)		-
Total current assets		-		926,017			488,210			6,322			(1,159,979	)		260,570
Property, plant and equipment, net		-		9,432			265,698			16,542			-			291,672
Goodwill and other intangible assets		-		37,905			7,223			-			-			45,128
Restricted cash and investments		-		15,433			-			-			-			15,433
Other assets		-		2,188			1,488			806			-			4,482
Investment in affiliated companies		686,451		(111,647	)		-			-			(574,804	)		-
Total assets	$	686,451	$	879,328		$	762,619		$	23,670		$	(1,734,783	)	$	617,285
Liabilities and Shareholders’ Equity
Current liabilities:
Current maturities of long-term debt	$	-	$	-		$	480		$	-		$	-		$	480
Customer deposits		-		-			56,030			3,068			-			59,098
Accounts payable		-		7,390			15,097			508			-			22,995
Accrued expenses and other current liabilities		2,720		29,710			16,683			1,253			-			50,366
Intercompany payables		349,374		(7,460	)		766,039			22,136			(1,130,089	)		-
Total current liabilities		352,094		29,640			854,329			26,965			(1,130,089	)		132,939
Long-term debt		-		129,152			1,657			-			-			130,809
Other long-term liabilities		-		4,492			14,355			333			-			19,180
Total liabilities		352,094		163,284			870,341			27,298			(1,130,089	)		282,928
Shareholders’ equity		334,357		716,044			(107,722	)		(3,628	)		(604,694	)		334,357
Total liabilities and shareholders’ equity	$	686,451	$	879,328		$	762,619		$	23,670		$	(1,734,783	)	$	617,285

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

(In thousands)

Three months ended December 31, 2013

	Parent			Issuer		Guarantors			Non-Guarantors			Eliminations			Consolidated
Net sales	$	-		$	111,305	$	207,100		$	10,502		$	(135,803	)	$	193,104
Cost of sales		-			85,483		132,002			6,882			(137,262	)		87,105
Gross profit		-			25,822		75,098			3,620			1,459			105,999
Selling, general and administrative expenses		45			11,910		69,174			5,020			-			86,149
Operating income (loss)		(45	)		13,912		5,924			(1,400	)		1,459			19,850
Interest and other income (expense)		11,600			2,498		(43	)		(22	)		(13,990	)		43
Interest and other related financing costs		-			1,850		21			-			-			1,871
Income (loss) before income taxes		11,555			14,560		5,860			(1,422	)		(12,531	)		18,022
Income tax expense		-			4,419		2,059			(11	)		-			6,467
Net income/(loss)	$	11,555		$	10,141	$	3,801		$	(1,411	)	$	(12,531	)	$	11,555

Three months ended December 31, 2012

	Parent			Issuer		Guarantors		Non-Guarantors			Eliminations			Consolidated
Net sales	$	-		$	107,768	$	201,661	$	10,149		$	(128,327	)	$	191,251
Cost of sales		-			81,997		130,553		6,128			(131,394	)		87,284
Gross profit		-			25,771		71,108		4,021			3,067			103,967
Selling, general and administrative expenses		45			12,112		69,884		4,569			-			86,610
Operating income (loss)		(45	)		13,659		1,224		(548	)		3,067			17,357
Interest and other income (expense)		9,891			83		31		(34	)		(9,843	)		128
Interest and other related financing costs		-			2,183		15		-			-			2,198
Income (loss) before income taxes		9,846			11,559		1,240		(582	)		(6,776	)		15,287
Income tax expense		-			4,735		683		23			-			5,441
Net income/(loss)	$	9,846		$	6,824	$	557	$	(605	)	$	(6,776	)	$	9,846

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

(In thousands)

Six months ended December 31, 2013

	Parent			Issuer		Guarantors			Non-Guarantors			Eliminations			Consolidated
Net sales	$	-		$	222,828	$	401,928		$	20,941		$	(270,934	)	$	374,763
Cost of sales		-			169,416		259,157			13,739			(272,291	)		170,021
Gross profit		-			53,412		142,771			7,202			1,357			204,742
Selling, general and administrative expenses		90			21,542		137,339			9,977			-			168,948
Operating income (loss)		(90	)		31,870		5,432			(2,775	)		1,357			35,794
Interest and other income (expense)		20,679			630		(43	)		(38	)		(21,103	)		125
Interest and other related financing costs		-			3,701		43			-			-			3,744
Income (loss) before income taxes		20,589			28,799		5,346			(2,813	)		(19,746	)		32,175
Income tax expense		-			9,477		2,097			12			-			11,586
Net income/(loss)	$	20,589		$	19,322	$	3,249		$	(2,825	)	$	(19,746	)	$	20,589

Six months ended December 31, 2012

	Parent			Issuer			Guarantors		Non-Guarantors			Eliminations			Consolidated
Net sales	$	-		$	219,392		$	405,611	$	19,729		$	(266,044	)	$	378,688
Cost of sales		-			165,802			262,482		11,935			(269,751	)		170,468
Gross profit		-			53,590			143,129		7,794			3,707			208,220
Selling, general and administrative expenses		90			22,354			141,806		8,659			-			172,909
Operating income (loss)		(90	)		31,236			1,323		(865	)		3,707			35,311
Interest and other income (expense)		20,000			(519	)		25		(75	)		(19,229	)		202
Interest and other related financing costs		-			4,366			31		-			-			4,397
Income (loss) before income taxes		19,910			26,351			1,317		(940	)		(15,522	)		31,116
Income tax expense		-			10,058			1,102		46			-			11,206
Net income/(loss)	$	19,910		$	16,293		$	215	$	(986	)	$	(15,522	)	$	19,910

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

(In thousands)

Six months ended December 31, 2013

	Parent			Issuer			Guarantors			Non-Guarantors			Eliminations		Consolidated
Net cash provided by (used in) operating activities	$	5,316		$	16,056		$	608		$	626		$	-	$	22,606
Cash flows from investing activities:
Capital expenditures		-			(201	)		(7,946	)		(411	)		-		(8,558	)
Proceeds from the disposal of property, plant and equipment		-			19			752			-			-		771
Change in restricted cash and investments		-			498			-			-			-		498
Purchases of marketable securities		-			(15,716	)		-			-			-		(15,716	)
Sales of marketable securities		-			10,723						-			-		10,723
Other		-			175			-			-			-		175
Net cash provided by (used in) investing activities		-			(4,502	)		(7,194	)		(411	)		-		(12,107	)
Cash flows from financing activities:
Payments on long-term debt		-			-			(238	)		-			-		(238	)
Dividends paid		(5,502	)		-			-			-			-		(5,502	)
Other		186			35			-			-			-		221
Net cash provided by (used in) financing activities		(5,316	)		35			(238	)		-			-		(5,519	)
Effect of exchange rate changes on cash		-			-			-			22			-		22
Net increase (decrease) in cash and cash equivalents		-			11,589			(6,824	)		237			-		5,002

Cash and cash equivalents – beginning of period		-			57,307			12,463			2,831			-		72,601
Cash and cash equivalents – end of period	$	-		$	68,896		$	5,639		$	3,068		$	-	$	77,603

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

(In thousands)

Six months ended December 31, 2012

	Parent			Issuer			Guarantors			Non-Guarantors			Eliminations		Consolidated
Net cash provided by (used in) operating activities	$	19,284		$	(5,033	)	$	2,258		$	1,671		$	-	$	18,180
Cash flows from investing activities:
Capital expenditures		-			(1,758	)		(10,261	)		(1,546	)		-		(13,565	)
Acquisitions		-			-			(598	)		-			-		(598	)
Proceeds from the disposal of property, plant and equipment		-			51			1,215			-			-		1,266
Change in restricted cash and investments		-			(11	)		-			-			-		(11	)
Purchases of marketable securities		-			(13,816	)		-			-			-		(13,816	)
Sales of marketable securities		-			4,740			-			-			-		4,740
Other		-			101			550			-			-		651
Net cash used in investing activities		-			(10,693	)		(9,094	)		(1,546	)		-		(21,333	)
Cash flows from financing activities:
Payments on long-term debt		-			-			(124	)		-			-		(124	)
Dividends paid		(19,617	)		-			-			-			-		(19,617	)
Other		333			-			-			-			-		333
Net cash used in financing activities		(19,284	)		-			(124	)		-			-		(19,408	)
Effect of exchange rate changes on cash		-			-			-			107			-		107
Net increase (decrease) in cash and cash equivalents		-			(15,726	)		(6,960	)		232			-		(22,454	)
Cash and cash equivalents – beginning of period		-			64,946			12,276			2,499			-		79,721
Cash and cash equivalents – end of period	$	-		$	49,220		$	5,316		$	2,731		$	-	$	57,267