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

3 Months Ended

Sep. 30, 2012

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 September 30, 2012 and June 30, 2012, the condensed consolidating statements of operations for the three months ended September 30, 2012 and 2011, and the condensed consolidating statements of cash flows for the three months ended September 30, 2012 and 2011 of the Parent, the Issuer, the Guarantors and the Non-Guarantors.

CONDENSED CONSOLIDATING BALANCE SHEET

(In thousands)

September 30, 2012

	Parent		Issuer			Guarantors			Non-Guarantors			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	-	$	57,379		$	13,497		$	3,037		$	-		$	73,913
Marketable securities		-		10,670			-			-			-			10,670
Accounts receivable, net		-		14,470			174			-			-			14,644
Inventories		-		-			183,695			4,995			(30,739	)		157,951
Prepaid expenses and other current assets		-		6,961			14,723			2,107			-			23,791
Intercompany receivables		-		849,792			280,215			(8,600	)		(1,121,407	)		-
Total current assets		-		939,272			492,304			1,539			(1,152,146	)		280,969
Property, plant and equipment, net		-		9,415			273,009			14,898			-			297,322
Goodwill and other intangible assets		-		37,905			7,223			-			-			45,128
Restricted cash and investments		-		15,422			-			-			-			15,422
Other assets		-		5,071			802			-			-			5,873
Investment in affiliated companies		663,269		(109,588	)		-			-			(553,681	)		-
Total assets	$	663,269	$	897,497		$	773,338		$	16,437		$	(1,705,827	)	$	644,714
Liabilities and Shareholders’ Equity
Current liabilities:
Current maturities of long-term debt	$	-	$	-		$	253		$	-		$	-		$	253
Customer deposits		-		-			57,909			3,015			-			60,924
Accounts payable		-		6,334			14,189			308			-			20,831
Accrued expenses and other current liabilities		2,722		41,259			16,221			1,126			-			61,328
Intercompany payables		330,881		327			779,301			10,898			(1,121,407	)		-
Total current liabilities		333,603		47,920			867,873			15,347			(1,121,407	)		143,336
Long-term debt		-		153,016			1,200			-			-			154,216
Other long-term liabilities		-		3,621			13,800			75			-			17,496
Total liabilities		333,603		204,557			882,873			15,422			(1,121,407	)		315,048
Shareholders’ equity		329,666		692,940			(109,535	)		1,015			(584,420	)		329,666
Total liabilities and shareholders’ equity	$	663,269	$	897,497		$	773,338		$	16,437		$	(1,705,827	)	$	644,714

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
Deferred income taxes		-		-			-			-			-			-
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)

Three months ended September 30, 2012

	Parent			Issuer			Guarantors			Non-Guarantors			Eliminations			Consolidated
Net sales	$	-		$	111,624		$	203,950		$	9,580		$	(137,717	)	$	187,437
Cost of sales		-			83,805			131,929			5,807			(138,357	)		83,184
Gross profit		-			27,819			72,021			3,773			640			104,253
Selling, general and administrative expenses		45			10,242			71,906			4,090			-			86,283
Restructuring and impairment charge, (credit) net		-			-			16			-			-			16
Total operating expenses		45			10,242			71,922			4,090			-			86,299
Operating income (loss)		(45	)		17,577			99			(317	)		640			17,954
Interest and other miscellaneous income, net		10,109			(602	)		(6	)		(41	)		(9,386	)		74
Interest and other related financing costs		-			2,183			16			-			-			2,199
Income before income tax expense		10,064			14,792			77			(358	)		(8,746	)		15,829
Income tax expense		-			5,323			419			23			-			5,765
Net income/(loss)	$	10,064		$	9,469		$	(342	)	$	(381	)	$	(8,746	)	$	10,064

Three months ended September 30, 2011

	Parent			Issuer			Guarantors			Non-Guarantors		Eliminations			Consolidated
Net sales	$	-		$	116,476		$	194,820		$	8,895	$	(135,270	)	$	184,921
Cost of sales		-			87,524			129,183			5,133		(134,804	)		87,036
Gross profit		-			28,952			65,637			3,762		(466	)		97,885
Selling, general and administrative expenses		45			11,759			69,038			3,445		-			84,287
Restructuring and impairment charge, (credit) net		-			-			(40	)		-		-			(40	)
Total operating expenses		45			11,759			68,998			3,445		-			84,247
Operating income (loss)		(45	)		17,193			(3,361	)		317		(466	)		13,638
Interest and other miscellaneous income, net		6,815			(3,059	)		56			-		(3,752	)		60
Interest and other related financing costs		-			2,351			-			-		-			2,351
Income before income tax expense		6,770			11,783			(3,305	)		317		(4,218	)		11,347
Income tax expense		-			4,502			46			29		-			4,577
Net income/(loss)	$	6,770		$	7,281		$	(3,351	)	$	288	$	(4,218	)	$	6,770

CONDENSED CONSOLIDATING BALANCE SHEET

(In thousands)

	Parent			Issuer			Guarantors			Non-Guarantors			Eliminations		Consolidated
Net cash provided by (used in) operating activities	$	2,547		$	(5,061	)	$	8,333		$	870		$	-	$	6,689
Cash flows from investing activities:
Capital expenditures		-			(768	)		(7,163	)		(387	)		-		(8,318	)
Acquisitions		-			-			(598	)		-			-		(598	)
Proceeds from the disposal of property, plant and equipment		-			-			711			-			-		711
Change in restricted cash and investments		-			(6	)		-			-			-		(6	)
Purchase of marketable securities		-			(4,677	)		-			-			-		(4,677	)
Proceeds from the sale of marketable securities		-			2,885			-			-			-		2,885
Other		-			60			-			-			-		60
Net cash provided by (used in) investing activities		-			(2,506	)		(7,050	)		(387	)		-		(9,943	)
Cash flows from financing activities:
Payments on long-term debt		-			-			(62	)		-			-		(62	)
Proceeds from issuance of common stock		47			-			-			-			-		47
Dividends paid		(2,594	)		-			-			-			-		(2,594	)
Net cash provided by (used in) financing activities		(2,547	)		-			(62	)		-			-		(2,609	)
Effect of exchange rate changes on cash		-			-			-			55			-		55
Net decrease in cash and cash equivalents		-			(7,567	)		1,221			538			-		(5,808	)
Cash and cash equivalents – beginning of period		-			64,946			12,276			2,499			-		79,721
Cash and cash equivalents – end of period	$	-		$	57,379		$	13,497		$	3,037		$	-	$	73,913

CONDENSED CONSOLIDATING BALANCE SHEET

(In thousands)

Three months ended September 30, 2011

	Parent			Issuer			Guarantors			Non-Guarantors			Eliminations		Consolidated
Net cash provided by operating activities	$	2,864		$	2,304		$	(546	)	$	1,630		$	-	$	6,252
Cash flows from investing activities:
Capital expenditures		-			(240	)		(2,328	)		(807	)		-		(3,375	)
Proceeds from the disposal of property, plant and equipment		-			-			70			-			-		70
Change in restricted cash and investments		-			996			-			-			-		996
Purchase of marketable securities		-			(261	)		-			-			-		(261	)
Proceeds from the sale of marketable securities		-			1,965			-			-			-		1,965
Other		-			252			-			-			-		252
Net cash used in investing activities		-			2,712			(2,258	)		(807	)		-		(353	)
Cash flows from financing activities:
Payments on long-term debt		-			(1,980	)		(210	)		-			-		(2,190	)
Purchases and other retirements of company stock		(847	)		-			-			-			-		(847	)
Dividends paid		(2,017	)		-			-			-			-		(2,017	)
Net cash used in financing activities		(2,864	)		(1,980	)		(210	)		-			-		(5,054	)
Effect of exchange rate changes on cash		-			-			-			12			-		12
Net increase (decrease) in cash and cash equivalents		-			3,036			(3,014	)		835			-		857
Cash and cash equivalents – beginning of period		-			69,763			7,716			1,040			-		78,519
Cash and cash equivalents – end of period	$	-		$	72,799		$	4,702		$	1,875		$	-	$	79,376