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

Quarterly report pursuant to Section 13 or 15(d)

Note 18 - Financial Information About the Parent, the Issuer and the Guarantors

Note 18 - Financial Information About the Parent, the Issuer and the Guarantors

3 Months Ended

Sep. 30, 2011

Condensed Financial Information of Parent Company Only Disclosure [Text Block]

(18) 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, 2011 and June 30, 2011, the condensed consolidating statements of operations for the three months ended September 30, 2011 and 2010, and the condensed consolidating statements of cash flows for the three months ended September 30, 2011 and 2010 of the Parent, the Issuer, the Guarantors and the Non-Guarantors.

CONDENSED CONSOLIDATING BALANCE SHEET

(In thousands)

September 30, 2011

	Parent		Issuer			Guarantors			Non-Guarantors			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	-	$	72,799		$	4,702		$	1,875					$	79,376
Marketable securities		-		11,107			-			-			-			11,107
Accounts receivable, net		-		14,443			194			6			-			14,643
Inventories		-		-			164,959			4,357			(28,266	)		141,050
Prepaid expenses and other current assets		-		4,972			13,837			2,446			-			21,255
Intercompany receivables		-		798,788			253,747			(9,030	)		(1,043,505	)		-
Total current assets		-		902,109			437,439			(346	)		(1,071,771	)		267,431
Property, plant and equipment, net		-		8,099			273,737			9,699			-			291,535
Goodwill and other intangible assets		-		37,905			7,223			-			-			45,128
Restricted cash and investments		-		15,395			-			-			-			15,395
Other assets		-		2,479			764			-			-			3,243
Investment in affiliated companies		608,077		(96,195	)		-			-			(511,882	)		-
Total assets	$	608,077	$	869,792		$	719,163		$	9,353		$	(1,583,653	)	$	622,732
Liabilities and Shareholders’ Equity
Current liabilities:
Customer deposits	$	-	$	-		$	55,056		$	2,686		$	-		$	57,742
Accounts payable		-		7,640			15,051			370			-			23,061
Accrued expenses and other current liabilities		2,136		50,479			15,032			791			-			68,438
Intercompany payables		321,785		597			716,892			4,231			(1,043,505	)		-
Total current liabilities		323,921		58,716			802,031			8,078			(1,043,505	)		149,241
Long-term debt		-		162,861			-			-			-			162,861
Other long-term liabilities		-		4,089			14,356			97			-			18,542
Deferred income taxes		-		7,932			-			-			-			7,932
Total liabilities		323,921		233,598			816,387			8,175			(1,043,505	)		338,576
Shareholders’ equity		284,156		636,194			(97,224	)		1,178			(540,148	)		284,156
Total liabilities and shareholders’ equity	$	608,077	$	869,792		$	719,163		$	9,353		$	(1,583,653	)	$	622,732

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)

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

Three months ended September 30, 2010

	Parent			Issuer			Guarantors			Non-Guarantors		Eliminations			Consolidated
Net sales	$	-		$	107,518		$	174,970		$	6,913	$	(124,560	)	$	164,841
Cost of sales		-			82,434			118,562			3,639		(122,175	)		82,460
Gross profit		-			25,084			56,408			3,274		(2,385	)		82,381

Selling, general and administrative expenses		45			10,262			63,521			2,942		-			76,770
Restructuring and impairment charge, (credit) net		-			-			225			-		-			225
Total operating expenses		45			10,262			63,746			2,942		-			76,995
Operating income (loss)		(45	)		14,822			(7,338	)		332		(2,385	)		5,386

Interest and other miscellaneous income, net		3,858			(3,925	)		(13	)		5		3,232			3,157
Interest and other related financing costs		-			2,898			76			-		-			2,974
Income before income tax expense		3,813			7,999			(7,427	)		337		847			5,569
Income tax expense		-			1,756			-			-		-			1,756

Net income/(loss)	$	3,813		$	6,243		$	(7,427	)	$	337	$	847		$	3,813

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
(In thousands)

Three months ended September 30, 2011

	Parent			Issuer			Guarantors			Non-Guarantors			Eliminations		Consolidated
Net cash provided by (used in) 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 provided by (used in) financing activities		(2,864	)		(1,980	)		(210	)		-			-		(5,054	)

Effect of exchange rate changes on cash		-			-			-			12			-		12

Net 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

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

(In thousands)

Three months ended September 30, 2010

	Parent			Issuer			Guarantors			Non-Guarantors			Eliminations		Consolidated
Net cash provided by (used in) operating activities	$	6,815		$	(5,951	)	$	(1,888	)	$	143		$	-	$	(881	)

Cash flows from investing activities:
Capital expenditures		-			(332	)		(772	)		(400	)		-		(1,504	)
Proceeds from the disposal of property, plant and equipment		-			-			57			-			-		57
Change in restricted cash and investments		-			989			-			-			-		989
Purchase of marketable securities		-			(613	)		-			-			-		(613	)
Other		-			18			-			-			-		18
Net cash used in investing activities		-			62			(715	)		(400	)		-		(1,053	)

Cash flows from financing activities:
Payments on long-term debt		-			(2,285	)		(11	)		-			-		(2,296	)
Purchases and other retirements of company stock		(5,377	)		-			-			-			-		(5,377	)
Dividends paid		(1,438	)		-			-			-			-		(1,438	)

Net cash provided by (used in) financing activities		(6,815	)		(2,285	)		(11	)		-			-		(9,111	)

Effect of exchange rate changes on cash		-			-			-			(79	)		-		(79	)

Net decrease in cash and cash equivalents		-			(8,174	)		(2,614	)		(336	)		-		(11,124	)

Cash and cash equivalents – beginning of period		-			67,269			5,720			863			-		73,852

Cash and cash equivalents – end of period	$	-		$	59,095		$	3,106		$	527		$	-	$	62,728

- Definition

The entire disclosure for condensed financial information, including the financial position, cash flows, and the results of operations of the registrant (parent company) as of the same dates or for the same periods for which audited consolidated financial statements are being presented. Alternatively, the details of this disclosure can be reported by the specific parent company taxonomy elements, indicating the appropriate date and period contexts in an instance document.

+ References + Details