Ethan Allen Interiors Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Note 21 - Financial Information About the Parent, the Issuer and the Guarantors

Note 21 - Financial Information About the Parent, the Issuer and the Guarantors

12 Months Ended

Jun. 30, 2012

Condensed Financial Statements [Text Block]

(21) 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 June 30, 2012 and June 30, 2011, the condensed consolidating statements of operations for the twelve months ended June 30, 2012, 2011 and 2010, and the condensed consolidating statements of cash flows for the twelve months ended June 30, 2012, 2011 and 2010 of the Parent, the Issuer, the Guarantors and the Non-Guarantors.

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 BALANCE SHEET
(In thousands)

June 30, 2011

	Parent		Issuer			Guarantors			Non-Guarantors			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	-	$	69,763		$	7,716		$	1,040		$	-		$	78,519
Marketable securities		-		12,909			-			-			-			12,909
Accounts receivable, net		-		13,609			174			1,253			-			15,036
Inventories		-		-			164,938			4,554			(27,800	)		141,692
Prepaid expenses and other current assets		-		4,598			14,866			908			-			20,372
Intercompany receivables		-		784,285			249,461			(8,423	)		(1,025,323	)		-
Total current assets		-		885,164			437,155			(668	)		(1,053,123	)		268,528
Property, plant and equipment, net		-		8,023			276,057			10,773			-			294,853
Goodwill and other intangible assets		-		37,905			7,223			-			-			45,128
Restricted cash and investments		-		16,391			-			-			-			16,391
Other assets		-		2,700			725			-			-			3,425
Investment in affiliated companies		602,699		(93,132	)		-			-			(509,567	)		-
Total assets	$	602,699	$	857,051		$	721,160		$	10,105		$	(1,562,690	)	$	628,325
Liabilities and Shareholders’ Equity
Current liabilities:
Current maturities of long-term debt	$	-	$	-		$	19		$	-		$	-		$	19
Customer deposits		-		-			59,633			3,016			-			62,649
Accounts payable		-		7,333			19,233			392			-			26,958
Accrued expenses and other current liabilities		2,130		43,212			18,746			902			-			64,990
Intercompany payables		318,882		597			702,748			3,096			(1,025,323	)		-
Total current liabilities		321,012		51,142			800,379			7,406			(1,025,323	)		154,616
Long-term debt		-		164,832			181			-			-			165,013
Other long-term liabilities		-		4,392			14,474			109			-			18,975
Deferred income taxes		-		8,034			-			-			-			8,034
Total liabilities		321,012		228,400			815,034			7,515			(1,025,323	)		346,638
Shareholders’ equity		281,687		628,651			(93,874	)		2,590			(537,367	)		281,687
Total liabilities and shareholders’ equity	$	602,699	$	857,051		$	721,160		$	10,105		$	(1,562,690	)	$	628,325

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
(In thousands)

Year Ended June 30, 2012

	Parent			Issuer			Guarantors			Non-Guarantors			Eliminations			Consolidated
Net sales	$	-		$	456,895		$	787,295		$	33,417		$	(548,234	)	$	729,373
Cost of sales		-			341,365			523,064			19,311			(544,655	)		339,085
Gross profit		-			115,530			264,231			14,106			(3,579	)		390,288
Selling, general and administrative expenses		180			45,690			280,565			14,241			-			340,676
Restructuring and impairment charge, (credit) net		-			-			(85	)		-			-			(85	)
Total operating expenses		180			45,690			280,480			14,241			-			340,591
Operating income (loss)		(180	)		69,840			(16,249	)		(135	)		(3,579	)		49,697
Interest and other miscellaneous income, net		49,874			(15,403	)		216			17			(34,142	)		562
Interest and other related financing costs		-			8,997			23			-			-			9,020
Income before income tax expense		49,694			45,440			(16,056	)		(118	)		(37,721	)		41,239
Income tax expense (benefit)		-			(8,013	)		(523	)		81			-			(8,455	)
Net income/(loss)	$	49,694		$	53,453		$	(15,533	)	$	(199	)	$	(37,721	)	$	49,694

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

(In thousands)

Year Ended June 30, 2011

	Parent			Issuer			Guarantors			Non-Guarantors		Eliminations			Consolidated
Net sales	$	-		$	423,458		$	718,660		$	29,861	$	(493,019	)	$	678,960
Cost of sales		-			321,706			481,814			16,198		(490,218	)		329,500
Gross profit		-			101,752			236,846			13,663		(2,801	)		349,460
Selling, general and administrative expenses		180			43,791			259,539			12,891		-			316,401
Restructuring and impairment charge, (credit) net		-			-			1,126			-		-			1,126
Total operating expenses		180			43,791			260,665			12,891		-			317,527
Operating income (loss)		(180	)		57,961			(23,819	)		772		(2,801	)		31,933
Interest and other miscellaneous income, net		29,430			(17,842	)		232			5		(6,261	)		5,564
Interest and other related financing costs		-			10,847			279			-		-			11,126
Income before income tax expense		29,250			29,272			(23,866	)		777		(9,062	)		26,371
Income tax expense (benefit)		-			(2,959	)		-			80		-			(2,879	)
Net income/(loss)	$	29,250		$	32,231		$	(23,866	)	$	697	$	(9,062	)	$	29,250

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
(In thousands)

Year Ended June 30, 2010

	Parent			Issuer			Guarantors			Non-Guarantors			Eliminations			Consolidated
Net sales	$	-		$	363,038		$	603,191		$	22,463		$	(398,638	)	$	590,054
Cost of sales		-			286,185			412,992			11,939			(401,339	)		309,777
Gross profit		-			76,853			190,199			10,524			2,701			280,277
Selling, general and administrative expenses		195			41,930			236,791			10,659			-			289,575
Restructuring and impairment charge, net		-			-			2,437			-			-			2,437
Total operating expenses		195			41,930			239,228			10,659			-			292,012
Operating income (loss)		(195	)		34,923			(49,029	)		(135	)		2,701			(11,735	)
Interest and other miscellaneous income, net		(44,121	)		(44,539	)		106			16			93,410			4,872
Interest and other related financing costs		-			11,619			305			-			-			11,924
Income before income tax expense		(44,316	)		(21,235	)		(49,228	)		(119	)		96,111			(18,787	)
Income tax expense		-			25,529			-			-			-			25,529
Net income/(loss)	$	(44,316	)	$	(46,764	)	$	(49,228	)	$	(119	)	$	96,111		$	(44,316	)

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

(In thousands)

Year Ended June 30, 2012

	Parent			Issuer			Guarantors			Non-Guarantors			Eliminations		Consolidated
Net cash provided by (used in) operating activities	$	9,187		$	3,939		$	18,441		$	6,134		$	-	$	37,701
Cash flows from investing activities:
Capital expenditures		-			(1,952	)		(15,721	)		(5,211	)		-		(22,884	)
Acquisitions		-			-			(520	)		-			-		(520	)
Proceeds from the disposal of property, plant and equipment		-			12			1,861			-			-		1,873
Change in restricted cash and investments		-			975			-			-			-		975
Purchase of marketable securities		-			(3,647	)		-			-			-		(3,647	)
Proceeds from the sale of marketable securities		-			7,230			-			-			-		7,230
Other		-			305			511			-			-		816
Net cash provided by (used in) investing activities		-			2,923			(13,869	)		(5,211	)		-		(16,157	)
Cash flows from financing activities:
Payments on long-term debt		-			(11,917	)		(287	)		-			-		(12,204	)
Purchases and other retirements of company stock		(1,350	)		-			-			-			-		(1,350	)
Proceeds from issuance of common stock		225			-			-			-			-		225
Excess tax benefits from share-based payment arrangements		-			238			-			-			-		238
Proceeds from noncontrolling interest		-			-			275			-			-		275
Dividends paid		(8,062	)		-			-			-			-		(8,062	)
Net cash provided by (used in) financing activities		(9,187	)		(11,679	)		(12	)		-			-		(20,878	)
Effect of exchange rate changes on cash		-			-			-			536			-		536
Net decrease in cash and cash equivalents		-			(4,817	)		4,560			1,459			-		1,202
Cash and cash equivalents – beginning of period		-			69,763			7,716			1,040			-		78,519
Cash and cash equivalents – end of period	$	-		$	64,946		$	12,276		$	2,499		$	-	$	79,721

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
(In thousands)

Year Ended June 30, 2011

	Parent			Issuer			Guarantors			Non-Guarantors			Eliminations		Consolidated
Net cash provided by operating activities	$	11,055		$	38,590		$	10,672		$	2,845		$	-	$	63,162
Cash flows from investing activities:
Capital expenditures		-			(1,182	)		(5,017	)		(2,895	)		-		(9,094	)
Acquisitions		-			-			(2,957	)		-			-		(2,957	)
Proceeds from the disposal of property, plant and equipment		-			-			3,196			-			-		3,196
Change in restricted cash and investments		-			927			-			-			-		927
Purchase of marketable securities		-			(9,466	)		-			-			-		(9,466	)
Proceeds from the sale of marketable securities		-			7,319			-			-			-		7,319
Other		-			432			-			-			-		432
Net cash used in investing activities		-			(1,970	)		(4,778	)		(2,895	)		-		(9,643	)
Cash flows from financing activities:
Payments on long-term debt		-			(33,989	)		(3,898	)		-			-		(37,887	)
Purchases and other retirements of company stock		(5,377	)		-			-			-			-		(5,377	)
Proceeds from issuance of common stock		76			-			-			-			-		76
Increase in deferred financing costs		-			(137	)		-			-			-		(137	)
Dividends paid		(5,754	)		-			-			-			-		(5,754	)
Net cash used in financing actvities		(11,055	)		(34,126	)		(3,898	)		-			-		(49,079	)
Effect of exchange rate changes on cash		-			-			-			227			-		227
Net increase in cash and cash equivalents		-			2,494			1,996			177			-		4,667
Cash and cash equivalents – beginning of period		-			67,269			5,720			863			-		73,852
Cash and cash equivalents – end of period	$	-		$	69,763		$	7,716		$	1,040		$	-	$	78,519

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
(In thousands)

Year Ended June 30, 2010

	Parent			Issuer			Guarantors			Non-Guarantors			Eliminations		Consolidated
Net cash provided by (used in) operating activities	$	5,800		$	48,466		$	(4,272	)	$	1,337		$	-	$	51,331
Cash flows from investing activities:
Capital expenditures		-			(393	)		(6,706	)		(2,823	)		-		(9,922	)
Acquisitions		-			-			(50	)		-			-		(50	)
Proceeds from the disposal of property, plant and equipment		-			-			13,198			-			-		13,198
Change in restricted cash and investments		-			(17,318	)		-			-			-		(17,318	)
Purchase of marketable securities		-			(11,364	)		-			-			-		(11,364	)
Proceeds from the sale of marketable securities		-			200			-			-			-		200
Other		-			165			-			-			-		165
Net cash used in investing activities		-			(28,710	)		6,442			(2,823	)		-		(25,091	)
Cash flows from financing activities:
Payments on long-term debt		-			-			(42	)		-			-		(42	)
Proceeds from issuance of common stock		1			-			-			-			-		1
Increase in deferred financing costs		-			(199	)		-			-			-		(199	)
Dividends paid		(5,801	)		-			-			-			-		(5,801	)
Net cash used in financing actvities		(5,800	)		(199	)		(42	)		-			-		(6,041	)
Effect of exchange rate changes on cash		-			-			-			693			-		693
Net increase (decrease) in cash and cash equivalents		-			19,557			2,128			(793	)		-		20,892
Cash and cash equivalents – beginning of period		-			47,712			3,592			1,656			-		52,960
Cash and cash equivalents – end of period	$	-		$	67,269		$	5,720		$	863		$	-	$	73,852