Quarterly report pursuant to Section 13 or 15(d)

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

v2.4.0.6
Note 15 - Financial Information About the Parent, the Issuer and the Guarantors
6 Months Ended
Dec. 31, 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 December 31, 2012 and June 30, 2012, the condensed consolidating statements of operations for the three and six months ended December 31, 2012 and 2011, and the condensed consolidating statements of cash flows for the six months ended December 31, 2012 and 2011 of the Parent, the Issuer, the Guarantors and the Non-Guarantors.

CONDENSED CONSOLIDATING BALANCE SHEET
(In thousands)

December 31, 2012

   
Parent
   
Issuer
   
Guarantors
   
Non-Guarantors
   
Eliminations
   
Consolidated
 
Assets
                                   
Current assets:
                                   
Cash and cash equivalents
  $ -     $ 49,220     $ 5,316     $ 2,731     $ -     $ 57,267  
Marketable securities
    -       17,869       -       -       -       17,869  
Accounts receivable, net
    -       10,861       276       -       -       11,137  
Inventories
    -       -       165,051       5,006       (27,672 )     142,385  
Prepaid expenses and other current assets
    -       7,355       10,801       2,102       -       20,258  
Intercompany receivables
    -       852,131       284,679       (8,892 )     (1,127,918 )     -  
Total current assets
    -       937,436       466,123       947       (1,155,590 )     248,916  
Property, plant and equipment, net
    -       9,750       273,562       15,841       -       299,153  
Goodwill and other intangible assets
    -       37,905       7,223       -       -       45,128  
Restricted cash and investments
    -       15,427       -       -       -       15,427  
Other assets
    -       5,148       1,604       -       -       6,752  
Investment in affiliated companies
    673,506       (109,636 )     -       -       (563,870 )     -  
Total assets
  $ 673,506     $ 896,030     $ 748,512     $ 16,788     $ (1,719,460 )   $ 615,376  
Liabilities and Shareholders’ Equity
                                               
Current liabilities:
                                               
Current maturities of long-term debt
  $ -     $ -     $ 466     $ -     $ -     $ 466  
Customer deposits
    -       -       44,192       2,484       -       46,676  
Accounts payable
    -       3,943       11,908       483       -       16,334  
Accrued expenses and other current liabilities
    126       35,887       15,661       1,208       -       52,882  
Intercompany payables
    347,719       (720 )     768,708       12,211       (1,127,918 )     -  
Total current liabilities
    347,845       39,110       840,935       16,386       (1,127,918 )     116,358  
Long-term debt
    -       153,047       1,824       -       -       154,871  
Other long-term liabilities
    -       3,650       14,725       111       -       18,486  
Total liabilities
    347,845       195,807       857,484       16,497       (1,127,918 )     289,715  
Shareholders’ equity
    325,661       700,223       (108,972 )     291       (591,542 )     325,661  
Total liabilities and shareholders’ equity
  $ 673,506     $ 896,030     $ 748,512     $ 16,788     $ (1,719,460 )   $ 615,376  

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 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  
Total operating 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 miscellaneous income, net
    9,891       83       31       (34 )     (9,843 )     128  
Interest and other related financing costs
    -       2,183       15       -       -       2,198  
Income before income tax expense
    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  

Three months ended December 31, 2011

   
Parent
   
Issuer
   
Guarantors
   
Non-Guarantors
   
Eliminations
   
Consolidated
 
Net sales
  $ -     $ 106,087     $ 196,556     $ 8,533     $ (127,901 )   $ 183,275  
Cost of sales
    -       78,863       130,514       4,503       (128,824 )     85,056  
Gross profit
    -       27,224       66,042       4,030       923       98,219  
Selling, general and administrative expenses
    45       10,699       70,146       3,391       -       84,281  
Total operating expenses
    45       10,699       70,146       3,391       -       84,281  
Operating income (loss)
    (45 )     16,525       (4,104 )     639       923       13,938  
Interest and other miscellaneous income, net
    8,122       (3,451 )     89       6       (4,621 )     145  
Interest and other related financing costs
    -       2,274       -       -       -       2,274  
Income before income tax expense
    8,077       10,800       (4,015 )     645       (3,698 )     11,809  
Income tax expense
    -       3,601       124       7       -       3,732  
Net income/(loss)
  $ 8,077     $ 7,199     $ (4,139 )   $ 638     $ (3,698 )   $ 8,077  

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

(In thousands)
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  
Total operating 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 miscellaneous income, net
    20,000       (519 )     25       (75 )     (19,229 )     202  
Interest and other related financing costs
    -       4,366       31       -       -       4,397  
Income before income tax expense
    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  

Six months ended December 31, 2011

   
Parent
   
Issuer
   
Guarantors
   
Non-Guarantors
   
Eliminations
   
Consolidated
 
Net sales
  $ -     $ 222,563     $ 391,376     $ 17,428     $ (263,171 )   $ 368,196  
Cost of sales
    -       166,387       259,697       9,636       (263,628 )     172,092  
Gross profit
    -       56,176       131,679       7,792       457       196,104  
Selling, general and administrative expenses
    90       22,458       139,144       6,836       -       168,528  
Total operating expenses
    90       22,458       139,144       6,836       -       168,528  
Operating income (loss)
    (90 )     33,718       (7,465 )     956       457       27,576  
Interest and other miscellaneous income, net
    14,937       (6,510 )     145       6       (8,373 )     205  
Interest and other related financing costs
    -       4,625       -       -       -       4,625  
Income before income tax expense
    14,847       22,583       (7,320 )     962       (7,916 )     23,156  
Income tax expense
    -       8,103       170       36       -       8,309  
Net income/(loss)
  $ 14,847     $ 14,480     $ (7,490 )   $ 926     $ (7,916 )   $ 14,847  

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 )
Purchase of marketable securities
    -       (13,816 )     -       -       -       (13,816 )
Proceeds from the sale of marketable securities
    -       4,740       -       -       -       4,740  
Other
    -       101       550       -       -       651  
Net cash provided by (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 provided by (used in) financing activities
    (19,284 )     -       (124 )     -       -       (19,408 )
Effect of exchange rate changes on cash
    -       -       -       107       -       107  
Net 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  

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

(In thousands)

Six months ended December 31, 2011

   
Parent
   
Issuer
   
Guarantors
   
Non-Guarantors
   
Eliminations
   
Consolidated
 
Net cash provided by operating activities
  $ 4,856     $ (1,586 )   $ 4,833     $ 2,862     $ -     $ 10,965  
Cash flows from investing activities:
                                               
Capital expenditures
    -       (1,036 )     (9,224 )     (1,132 )     -       (11,392 )
Proceeds from the disposal of property, plant and equipment
    -       68       1,724       -       -       1,792  
Change in restricted cash and investments
    -       989       -       -       -       989  
Purchase of marketable securities
    -       (2,108 )     -       -       -       (2,108 )
Proceeds from the sale of marketable securities
    -       3,825       -       -       -       3,825  
Other
    -       258       511       -       -       769  
Net cash used in investing activities
    -       1,996       (6,989 )     (1,132 )     -       (6,125 )
Cash flows from financing activities:
                                               
Payments on long-term debt
    -       (11,918 )     (210 )     -       -       (12,128 )
Dividends paid
    (4,031 )     -       -       -       -       (4,031 )
Purchases and other retirements of company stock
    (847 )     -       -       -       -       (847 )
Other
    22       -       275       -       -       297  
Net cash used in financing activities
    (4,856 )     (11,918 )     65       -       -       (16,709 )
Effect of exchange rate changes on cash
    -       -       -       (298 )     -       (298 )
Net increase (decrease) in cash and cash equivalents
    -       (11,508 )     (2,091 )     1,432       -       (12,167 )
Cash and cash equivalents – beginning of period
    -       69,763       7,716       1,040       -       78,519  
Cash and cash equivalents – end of period
  $ -     $ 58,255     $ 5,625     $ 2,472     $ -     $ 66,352