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

CONDENSED CONSOLIDATING BALANCE SHEET

(In thousands)

September 30, 2013

	Parent		Issuer			Guarantors			Non-Guarantors			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	-	$	74,888		$	12,810		$	3,526		$	-		$	91,224
Marketable securities		-		13,431			-			-			-			13,431
Accounts receivable, net		-		12,306			242			1			-			12,549
Inventories		-		-			165,829			5,827			(29,992	)		141,664
Prepaid expenses and other current assets		-		7,015			13,431			2,069			-			22,515
Intercompany receivables		-		831,631			304,803			(3,654	)		(1,132,780	)		-
Total current assets		-		939,271			497,115			7,769			(1,162,772	)		281,383
Property, plant and equipment, net		-		9,256			263,836			16,450			-			289,542
Goodwill and other intangible assets		-		37,905			7,223			-			-			45,128
Restricted cash and investments		-		14,934			-			-			-			14,934
Other assets		-		2,262			1,509			814			-			4,585
Investment in affiliated companies		695,856		(113,612	)		-			-			(582,244	)		-
Total assets	$	695,856	$	890,016		$	769,683		$	25,033		$	(1,745,016	)	$	635,572
Liabilities and Shareholders’ Equity
Current liabilities:
Current maturities of long-term debt	$	-	$	-		$	485		$	-		$	-		$	485
Customer deposits		-		-			63,752			3,649			-			67,401
Accounts payable		-		6,516			18,564			703			-			25,783
Accrued expenses and other current liabilities		3,021		32,213			14,406			1,574			-			51,214
Intercompany payables		351,894		(7,854	)		765,023			23,717			(1,132,780	)		-
Total current liabilities		354,915		30,875			862,230			29,643			(1,132,780	)		144,883
Long-term debt		-		129,178			1,534			-			-			130,712
Other long-term liabilities		-		4,473			14,185			378			-			19,036
Total liabilities		354,915		164,526			877,949			30,021			(1,132,780	)		294,631
Shareholders’ equity		340,941		725,490			(108,266	)		(4,988	)		(612,236	)		340,941
Total liabilities and shareholders’ equity	$	695,856	$	890,016		$	769,683		$	25,033		$	(1,745,016	)	$	635,572

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

	Parent			Issuer			Guarantors			Non-Guarantors			Eliminations			Consolidated
Net sales	$	-		$	111,523		$	194,828		$	10,439		$	(135,131	)	$	181,659
Cost of sales		-			83,933			127,155			6,857			(135,029	)		82,916
Gross profit		-			27,590			67,673			3,582			(102	)		98,743
Selling, general and administrative expenses		45			9,632			68,165			4,957			-			82,799
Operating income (loss)		(45	)		17,958			(492	)		(1,375	)		(102	)		15,944
Interest and other income (expense)		9,079			(1,868	)		-			(16	)		(7,113	)		82
Interest and other related financing costs		-			1,851			22			-			-			1,873
Income (loss) before income taxes		9,034			14,239			(514	)		(1,391	)		(7,215	)		14,153
Income tax expense (benefit)		-			5,058			38			23			-			5,119
Net income/(loss)	$	9,034		$	9,181		$	(552	)	$	(1,414	)	$	(7,215	)	$	9,034

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			71,922			4,090			-			86,299
Operating income (loss)		(45	)		17,577			99			(317	)		640			17,954
Interest and other income (expense)		10,109			(602	)		(6	)		(41	)		(9,386	)		74
Interest and other related financing costs		-			2,183			16			-			-			2,199
Income (loss) before income taxes		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

CONDENSED CONSOLIDATING STATEMENT OF CASH FL (In thousands) Three months ended September 30, 2013
	Parent			Issuer			Guarantors			Non-Guarantors			Eliminations		Consolidated
Net cash provided by (used in) operating activities	$	2,477		$	15,198		$	2,707		$	763		$	-	$	21,145
Cash flows from investing activities:
Capital expenditures		-			(159	)		(2,994	)		(152	)		-		(3,305	)
Proceeds from the disposal of property, plant and equipment		-			18			752			-			-		770
Change in restricted cash and investments		-			499			-			-			-		499
Purchases of marketable securities		-			(3,990	)		-			-			-		(3,990	)
Sales of marketable securities		-			5,920			-			-			-		5,920
Other		-			83			-			-			-		83
Net cash provided by (used in) investing activities		-			2,371			(2,242	)		(152	)		-		(23	)
Cash flows from financing activities:
Payments on long-term debt		-			-			(118	)		-			-		(118	)
Dividends paid		(2,605	)		-			-			-			-		(2,605	)
Other		128			12			-			-			-		140
Net cash provided by (used in) financing activities		(2,477	)		12			(118	)		-			-		(2,583	)
Effect of exchange rate changes on cash		-			-			-			84			-		84
Net increase (decrease) in cash and cash equivalents		-			17,581			347			695			-		18,623

Cash and cash equivalents – beginning of period		-			57,307			12,463			2,831			-		72,601
Cash and cash equivalents – end of period	$	-		$	74,888		$	12,810		$	3,526		$	-	$	91,224

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS (In thousands) Three months ended September 30, 2012
	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	)
Purchases of marketable securities		-			(4,677	)		-			-			-		(4,677	)
Sales of marketable securities		-			2,885			-			-			-		2,885
Other		-			60			-			-			-		60
Net cash used in investing activities		-			(2,506	)		(7,050	)		(387	)		-		(9,943	)
Cash flows from financing activities:
Payments on long-term debt		-			-			(62	)		-			-		(62	)
Dividends paid		(2,594	)		-			-			-			-		(2,594	)
Other		47			-			-			-			-		47
Net cash used in financing activities		(2,547	)		-			(62	)		-			-		(2,609	)
Effect of exchange rate changes on cash		-			-			-			55			-		55
Net increase (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