ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
Proceeds received in connection with the issuance of the Senior Notes,
net of a related discount of $1.6 million, totaled $198.4 million. We intend to use the
net proceeds from the offering to expand our retail network, invest in our
manufacturing and logistics operations, and for other general corporate purposes. As of
December 31, 2007, outstanding borrowings related to this transaction have been
included in the Consolidated Balance Sheets within long-term debt. The discount on the
Senior Notes is being amortized to interest expense over the life of the related
debt.
In connection with the offering, debt issuance costs totaling $2.0
million were incurred related, primarily, to banking, legal, accounting, rating agency,
and printing services. As of December 31, 2007, these costs have been included in the
Consolidated Balance Sheets as deferred financing costs within other assets and are
being amortized to interest expense over the life of the Senior Notes.
Also in connection with the issuance of the Senior Notes, Global, in
July and August 2005, entered into 6 separate forward contracts to hedge the risk-free
interest rate associated with $108.0 million of the related debt in order to minimize
the negative impact of interest rate fluctuations on earnings, cash flows and equity.
The forward contracts were entered into with a major banking institution thereby
mitigating the risk of credit loss.
Upon issuance of the Senior Notes and settlement of the related forward
contracts, losses totaling $0.9 million were incurred representing the change in the
fair value of the forward contracts since their respective trade dates. In accordance
with SFAS No. 133, as amended, it was determined that a portion of the related losses
was the result of hedge ineffectiveness and, as such, $0.1 million of the losses was
included, within interest and other related financing costs, in the Consolidated
Statement of Operations for the fiscal year ended June 30, 2006. The balance of the
losses has been included (on a net-of-tax basis) in the Consolidated Balance Sheets
within accumulated other comprehensive income and is being amortized to interest
expense over the life of the Senior Notes. The remaining unamortized balance of these
forward contract losses totaled $0.6 million ($0.4 million, net-of-tax) at both
December 31, 2007 and June 30, 2007.
Environmental Matters
We and our subsidiaries are subject to various environmental laws and
regulations. Under these laws, we and/or our subsidiaries are, or may be, required to
remove or mitigate the effects on the environment of the disposal or release of certain
hazardous materials.
As of December 31, 2007, we and/or our subsidiaries have been named as a
potentially responsible party ("PRP") with respect to the remediation of three active
sites currently listed, or proposed for inclusion, on the National Priorities List
("NPL") under the Comprehensive Environmental Response, Compensation and Liability Act
of 1980, as amended ("CERCLA"). The sites are located in Southington, Connecticut; High
Point, North Carolina; and Atlanta, Georgia.
In addition, during the fiscal year ended June 30, 2007, our liability
with respect to a fourth site located in Lyndonville, Vermont was resolved. We had
previously received a certificate of construction completion for this location, subject
to certain limited conditions which were the obligation of another PRP. In July 2007,
we obtained the final certificate of construction completion advising us that all
conditions had been met.
We do not anticipate incurring significant costs with respect to the
Southington, Connecticut, High Point, North Carolina, or Atlanta, Georgia sites as we
believe that we are not a major contributor based on the very small volume of waste
generated by us in relation to total volume at those sites. Specifically, with respect
to the Southington site, our volumetric share is less than 1% of over 51 million
gallons disposed of at the site and there
ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
are more than 1,000 PRPs. With respect to the High Point site, our
volumetric share is less than 1% of over 18 million gallons disposed of at the site and
there are more than 2,000 PRPs, including more than 1,000 "de-minimis" parties (of
which we are one). With respect to the Atlanta site, a former solvent
recycling/reclamation facility, our volumetric share is less than 1% of over 20 million
gallons disposed of at the site by more than 1,700 PRPs. In all three cases, the other
PRPs consist of local, regional, national and multi-national companies.
Liability under CERCLA may be joint and several. As such, to the extent
certain named PRPs are unable, or unwilling, to accept responsibility and pay their
apportioned costs, we could be required to pay in excess of our pro rata share of
incurred remediation costs. Our understanding of the financial strength of other PRPs
has been considered, where appropriate, in the determination of our estimated
liability.
In addition, in July 2000, we were notified by the State of New York
(the "State") that we may be named a PRP in a separate, unrelated matter with respect
to a site located in Carroll, New York. To date, no further notice has been received
from the State and the State has not yet conducted an initial environmental study at
this site.
As of December 31, 2007, we believe that established reserves related to
these environmental contingencies are adequate to cover probable and reasonably
estimable costs associated with the remediation and restoration of these
sites.
We are subject to other federal, state and local environmental
protection laws and regulations and are involved, from time to time, in investigations
and proceedings regarding environmental matters. Such investigations and proceedings
typically concern air emissions, water discharges, and/or management of solid and
hazardous wastes. We believe that our facilities are in material compliance with all
such applicable laws and regulations.
Regulations issued under the Clean Air Act Amendments of 1990 required
the industry to reformulate certain furniture finishes or institute process changes to
reduce emissions of volatile organic compounds. Compliance with many of these
requirements has been facilitated through the introduction of high solids coating
technology and alternative formulations. In addition, we have instituted a variety of
technical and procedural controls, including reformulation of finishing materials to
reduce toxicity, implementation of high velocity low pressure spray systems,
development of storm water protection plans and controls, and further development of
related inspection/audit teams, all of which have served to reduce emissions per unit
of production. We remain committed to implementing new waste minimization programs
and/or enhancing existing programs with the objective of (i) reducing the total volume
of waste, (ii) limiting the liability associated with waste disposal, and (iii)
continuously improving environmental and job safety programs on the factory floor which
serve to minimize emissions and safety risks for employees. We will continue to
evaluate the most appropriate, cost effective control technologies for finishing
operations and design production methods to reduce the use of hazardous materials in
the manufacturing process.
(10)
|
Share-Based Compensation
|
On October 10, 2007, the Company’s Board of Directors and M.
Farooq Kathwari, our President and Chief Executive Officer, agreed to the terms of a
new employment agreement expiring on June 30, 2012 (the "Agreement"). Pursuant to the
terms of the Agreement, Mr. Kathwari was awarded, on October 10, 2007, options to
purchase 150,000 shares of our common stock. These options were issued at an exercise
price of $34.03 (the closing price of a share of our common stock on the New York Stock
Exchange as of such date), and vest ratably over a 3-year period. The Agreement
provides for additional grants of 90,000 and 60,000 shares on July 1, 2008 and July 1,
2009, respectively, with exercise prices equal to the closing price of a share of our
common stock on the New York Stock Exchange as of such dates. The 2008 grant will vest
ratably over a 2-year period and the 2009 grant will vest ratably over a 1-year period.
All options awarded under the Agreement have a contractual term of 10 years.
ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
In connection with the Agreement, Mr. Kathwari received an award of
20,000 restricted shares with vesting based on continuing service and the performance
of the Company’s stock price during the 32 month period subsequent to the award
date as compared to the Standard and Poor’s 500 index. Mr. Kathwari will also
receive, as per the Agreement, additional restricted share grants of 20,000 shares on
each of July 1, 2008 and July 1, 2009. Each of these awards will also vest based on
continuing service and the Company’s stock performance as compared to the
Standard and Poor’s 500 index for the 3-year period subsequent to the relevant
award dates.
Also in connection with the Agreement, Mr. Kathwari received an award of
15,000 restricted shares. These shares are service-based with 3,000 shares vesting on
June 30 for each of the years 2008 through 2012.
Basic and diluted earnings per share are calculated using the following
weighted average share data (in thousands):
|
Three Months Ended
December 31,
|
Six Months Ended
December 31,
|
|
2007
|
2006
|
2007
|
2006
|
Weighted
average common shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
outstanding for basic
calculation
|
|
|
|
29,391
|
|
|
31,737
|
|
|
29,738
|
|
|
31,776
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of dilutive stock
options and
other share-based awards
|
|
|
|
151
|
|
|
766
|
|
|
265
|
|
|
791
|
|
|
|
|
|
|
|
|
|
|
Weighted average common
shares
outstanding, adjusted for diluted
calculation
|
|
|
|
29,542
|
|
|
32,503
|
|
|
30,003
|
|
|
32,567
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2007 and 2006, stock options to purchase 1,638,060
and 345,256 common shares, respectively, had exercise prices which exceeded the average
market price of our common stock for the corresponding periods. These options have been
excluded from the respective diluted earnings per share calculation as their impact is
anti-dilutive.
(12)
|
Comprehensive Income
|
Total comprehensive income represents the sum of net income and items of
"other comprehensive income or loss" that are reported directly in equity. Such items,
which are generally presented on a net-of-tax basis, may include foreign currency
translation adjustments, prior service costs and actuarial gains and losses, fair value
adjustments (i.e. gains and losses) on certain derivative instruments, and unrealized
gains and losses on certain investments in debt and equity securities. We have reported
our total comprehensive income in the Consolidated Statements of Shareholders’
Equity.
Our accumulated other comprehensive income, which is comprised of losses
on certain derivative instruments and accumulated foreign currency translation
adjustments, totaled $2.0 million at December 31, 2007 and $1.4 million at June 30,
2007. Losses on derivative instruments are the result of cash-flow hedging contracts
entered into in connection with the issuance of the Senior Notes (see Note 8). Foreign
currency translation adjustments are the result of changes in foreign currency exchange
rates related to our operation of five Ethan Allen-owned retail design centers located
in Canada and our cut and sew plant located in Mexico. Foreign currency
translation
ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
adjustments exclude income tax expense (benefit) given that the earnings
of non-U.S. subsidiaries are deemed to be reinvested for an indefinite period of
time.
Our operations are classified into two operating segments: wholesale and
retail. These operating segments represent strategic business areas which, although
they operate separately and provide their own distinctive services, enable us to more
effectively offer our complete line of home furnishings and accessories.
The wholesale segment is principally involved in the development of the
Ethan Allen brand, which encompasses the design, manufacture, domestic and off-shore
sourcing, sale and distribution of a full range of home furnishings and accessories to
a network of independently-owned and Ethan Allen-owned design centers as well as
related marketing and brand awareness efforts. Wholesale revenue is generated upon the
wholesale sale and shipment of our product to all retail design centers, including
those owned by Ethan Allen. Wholesale profitability includes (i) the wholesale gross
margin, which represents the difference between the wholesale sales price and the cost
associated with manufacturing and/or sourcing the related product, and (ii) other
operating costs associated with wholesale segment activities.
The retail segment sells home furnishings and accessories to consumers
through a network of Company-owned design centers. Retail revenue is generated upon the
retail sale and delivery of our product to our customers. Retail profitability includes
(i) the retail gross margin, which represents the difference between the retail sales
price and the cost of goods purchased from the wholesale segment, and (ii) other
operating costs associated with retail segment activities.
Inter-segment eliminations result, primarily, from the wholesale sale of
inventory to the retail segment, including the related profit margin.
We evaluate performance of the respective segments based upon revenues
and operating income. While the manner in which our home furnishings and accessories
are marketed and sold is consistent, the nature of the underlying recorded sales (i.e.
wholesale versus retail) and the specific services that each operating segment provides
(i.e. wholesale manufacturing, sourcing, and distribution versus retail selling) are
different. Within the wholesale segment, we maintain revenue information according to
each respective product line (i.e. case goods, upholstery, or home accessories and
other).
A breakdown of wholesale sales by these product lines for the three and
six months ended December 31, 2007 and 2006 is provided below:
|
Three Months Ended
December 31,
|
Six Months Ended
December 31,
|
|
2007
|
2006
|
2007
|
2006
|
Case
Goods
|
|
|
|
43
|
%
|
|
45
|
%
|
|
45
|
%
|
|
45
|
%
|
Upholstered
Products
|
|
|
|
40
|
|
|
39
|
|
|
39
|
|
|
39
|
|
Home Accessories and
Other
|
|
|
|
17
|
|
|
16
|
|
|
16
|
|
|
16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
Revenue information by product line is not as easily determined within
the retail segment. However, because wholesale production and sales are matched, for
the most part, to incoming orders, we believe that the allocation of retail sales by
product line would be similar to that of the wholesale segment.
ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
Segment information for the three months ended December 31, 2007 and
2006 is set forth below (in thousands):
|
Three Months Ended
December 31,
|
Six Months Ended
December 31,
|
|
2007
|
2006
|
2007
|
2006
|
Net
Sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wholesale
segment
|
|
|
$
|
155,930
|
|
$
|
165,661
|
|
$
|
312,253
|
|
$
|
321,302
|
|
Retail
segment
|
|
|
|
192,579
|
|
|
177,410
|
|
|
375,333
|
|
|
343,380
|
|
Elimination of
inter-company sales
|
|
|
|
(88,999
|
)
|
|
(85,652
|
)
|
|
(179,349
|
)
|
|
(164,440
|
)
|
|
|
|
|
|
|
|
|
|
Consolidated
Total
|
|
|
$
|
259,510
|
|
$
|
257,419
|
|
$
|
508,237
|
|
$
|
500,242
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
Six Months Ended
December 31,
|
|
2007
|
2006
|
2007
|
2006
|
Operating
Income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wholesale segment
(1)
|
|
|
$
|
26,376
|
|
$
|
30,137
|
|
$
|
53,156
|
|
$
|
41,561
|
|
Retail
segment
|
|
|
|
6,351
|
|
|
5,791
|
|
|
7,250
|
|
|
8,634
|
|
Elimination of
inter-company profit (2)
|
|
|
|
770
|
|
|
601
|
|
|
888
|
|
|
564
|
|
|
|
|
|
|
|
|
|
|
Consolidated
Total
|
|
|
$
|
33,497
|
|
$
|
36,529
|
|
$
|
61,294
|
|
$
|
50,759
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
Expenditures:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wholesale
segment
|
|
|
$
|
2,316
|
|
$
|
2,165
|
|
$
|
4,360
|
|
$
|
4,923
|
|
Retail
segment
|
|
|
|
15,452
|
|
|
17,130
|
|
|
25,953
|
|
|
30,024
|
|
Acquisitions (3)
(4)
|
|
|
|
6,042
|
|
|
3,360
|
|
|
6,138
|
|
|
9,569
|
|
|
|
|
|
|
|
|
|
|
Consolidated
Total
|
|
|
$
|
23,810
|
|
$
|
22,655
|
|
$
|
36,451
|
|
$
|
44,516
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
2007
|
June 30,
2007
|
|
Total
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wholesale
segment
|
|
|
|
|
|
$
|
366,015
|
|
$
|
416,237
|
|
|
|
|
Retail
segment
|
|
|
|
|
|
|
430,129
|
|
|
425,382
|
|
|
|
|
Inventory profit
elimination (5)
|
|
|
|
|
|
|
(38,050
|
)
|
|
(39,021
|
)
|
|
|
|
|
|
|
|
|
|
|
Consolidated
Total
|
|
|
|
|
|
$
|
758,094
|
|
$
|
802,598
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Operating income for the wholesale segment for the six
months ended December 31, 2006 includes a pre-tax restructuring and
impairment charge, net of $13.6 million.
|
|
(2)
|
Represents the change in the inventory profit
elimination entry necessary to adjust for the embedded wholesale profit
contained in Ethan Allen-owned design center inventory existing at the
end of the period. See note 5 below.
|
|
(3)
|
Amount reflected as acquisitions for 2007 excludes the
purchase (for consideration totaling $0.6 million) of a retail design
center with an effective (closing) date of June 30, 2007 and for which
funding did not occur until July 2, 2007.
|
|
(4)
|
Amount reflected as acquisitions for the three and six
months ended December 31, 2007 includes the purchase of 2 retail design
centers and the purchase of a cut and sew plant in Mexico. The amount
reflected as acquisitions for the three months ended December 31, 2006
includes the purchase of 5 retail design centers. The amount reflected
as acquisitions for the six months ended December 31, 2006 includes the
purchase of 7 retail design centers.
|
|
(5)
|
Represents the embedded wholesale profit contained in
Ethan Allen-owned design center inventory that has not yet been
realized. These profits are realized when the related inventory is
sold.
|
There are 40 independent retail design centers located outside the
United States. Approximately 2% of our net sales are derived from sales to these retail
design centers.
ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
Restructuring, impairment and other related charges
On January 10, 2008, we announced a plan to consolidate the operations
of certain retail design centers and service centers. For the most part, business
currently serviced by these locations will be transferred to other locations serving
the same general market areas. All customer orders will continue to be serviced in the
ordinary course of business. About half of the full and part-time positions affected by
this decision are expected to transfer into nearby operations.
Stock Repurchases and Remaining Authorization
Subsequent to December 31, 2007 and through the date of this filing we
repurchased, in five separate open market transactions, an additional 0.2 million
shares of our common stock at a total cost of $5.3 million, representing an average
price per share of $24.10. As of the date of this filing, we had a remaining Board
authorization to repurchase 1.7 million shares.
(15)
|
Recent Accounting Pronouncements
|
In December 2007, the FASB issued SFAS No. 141 (revised 2007),
Business Combinations
(SFAS No. 141(R)),
which replaces SFAS No. 141. SFAS No. 141(R) establishes principles and requirements
for how an acquirer in a business combination recognizes and measures in its financial
statements the identifiable assets acquired, the liabilities assumed, and any
controlling interest; recognizes and measures the goodwill acquired in the business
combination or a gain from a bargain purchase; and determines what information to
disclose to enable users of the financial statements to evaluate the nature and
financial effects of the business combination. SFAS No. 141(R) is to be applied
prospectively to business combinations for which the acquisition date is on or after an
entity's fiscal year that begins after December 15, 2008 (July 1, 2009 for the
Company). As such, we are currently in the process of evaluating the impact of this
authoritative guidance on our consolidated financial statements.
In February 2007, the FASB issued SFAS No.
159,
The Fair Value Option for Financial Assets and Financial
Liabilities
, which allows the Company to choose to measure
selected financial assets and financial liabilities at fair value. Unrealized gains and
losses on items for which the fair value option has been elected are reported in
earnings. SFAS No. 159 is effective for fiscal years beginning after November 15,
2007 (July 1, 2008 for the Company). As such, we are currently in the process of
evaluating the impact of this authoritative guidance on our consolidated financial
statements.
In September 2006, the FASB issued SFAS No. 157,
Fair Value Measurements
, which provides a
single definition of fair value, and requires additional disclosure about the use of
fair value to measure assets and liabilities. SFAS No. 157 emphasizes that fair value
is a market-based measurement defined as the price that would be received to sell an
asset or liability in an orderly transaction between market participants at the
measurement date. Thus, SFAS No. 157 adheres to a definition of fair value based upon
exit-price as opposed to entry-price (i.e. the price paid to acquire an asset or
liability). This authoritative guidance is effective for fiscal years beginning after
November 15, 2007 (July 1, 2008 for the Company). As such, we are currently in the
process of evaluating the impact of this authoritative guidance on our consolidated
financial statements.
(16)
|
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 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
ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
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. Ethan Allen (UK)
Ltd., KEA International Inc. (which was legally dissolved in January 2007), Northeast
Consolidated, Inc. (which was legally dissolved in June 2007), Riverside Water Works,
Inc. (which was legally dissolved in June 2007), and 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, 2007 and June 30, 2007, the condensed consolidating
statements of operations for the three and six months ended December 31, 2007 and 2006,
and the condensed consolidating statements of cash flows for the six months ended
December 31, 2007 and 2006 of the Parent, the Issuer, the Guarantors and the
Non-Guarantors.
ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
Condensed Consolidating Balance Sheet
(in
thousands)
December 31, 2007
|
Parent
|
Issuer
|
Guarantors
|
Non-Guarantors
|
Eliminations
|
Consolidated
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
$
|
-
|
|
$
|
83,251
|
|
$
|
3,017
|
|
$
|
-
|
|
$
|
-
|
|
$
|
86,268
|
|
Accounts
receivable, net
|
|
|
|
-
|
|
|
11,306
|
|
|
1,024
|
|
|
-
|
|
|
-
|
|
|
12,330
|
|
Inventories
|
|
|
|
-
|
|
|
-
|
|
|
222,403
|
|
|
-
|
|
|
(38,050
|
)
|
|
184,353
|
|
Prepaid
expenses and other current assets
|
|
|
|
-
|
|
|
18,045
|
|
|
16,848
|
|
|
-
|
|
|
-
|
|
|
34,893
|
|
Intercompany
|
|
|
|
-
|
|
|
697,193
|
|
|
196,275
|
|
|
-
|
|
|
(893,468
|
)
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
current assets
|
|
|
|
-
|
|
|
809,795
|
|
|
439,567
|
|
|
-
|
|
|
(931,518
|
)
|
|
317,844
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property,
plant and equipment, net
|
|
|
|
-
|
|
|
12,526
|
|
|
328,493
|
|
|
-
|
|
|
-
|
|
|
341,019
|
|
Goodwill
and other intangible assets
|
|
|
|
-
|
|
|
37,905
|
|
|
56,292
|
|
|
-
|
|
|
-
|
|
|
94,197
|
|
Other
assets
|
|
|
|
-
|
|
|
3,885
|
|
|
1,149
|
|
|
-
|
|
|
-
|
|
|
5,034
|
|
Investment
in affiliated companies
|
|
|
|
641,934
|
|
|
140,228
|
|
|
-
|
|
|
-
|
|
|
(782,162
|
)
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
|
$
|
641,934
|
|
$
|
1,004,339
|
|
$
|
825,501
|
|
$
|
-
|
|
$
|
(1,713,680
|
)
|
$
|
758,094
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Shareholders’ Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
maturities of long-term debt
|
|
|
$
|
-
|
|
$
|
-
|
|
$
|
40
|
|
$
|
-
|
|
$
|
-
|
|
$
|
40
|
|
Customer
deposits
|
|
|
|
-
|
|
|
-
|
|
|
44,881
|
|
|
-
|
|
|
-
|
|
|
44,881
|
|
Accounts
payable
|
|
|
|
-
|
|
|
3,453
|
|
|
20,433
|
|
|
-
|
|
|
-
|
|
|
23,886
|
|
Accrued
expenses and other current liabilities
|
|
|
|
6,527
|
|
|
42,253
|
|
|
12,745
|
|
|
-
|
|
|
-
|
|
|
61,525
|
|
Intercompany
|
|
|
|
262,040
|
|
|
43,443
|
|
|
587,933
|
|
|
52
|
|
|
(893,468
|
)
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
current liabilities
|
|
|
|
268,567
|
|
|
89,149
|
|
|
666,032
|
|
|
52
|
|
|
(893,468
|
)
|
|
130,332
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term
debt
|
|
|
|
-
|
|
|
198,757
|
|
|
4,171
|
|
|
-
|
|
|
-
|
|
|
202,928
|
|
Other
long-term liabilities
|
|
|
|
-
|
|
|
7,862
|
|
|
12,680
|
|
|
-
|
|
|
-
|
|
|
20,542
|
|
Deferred
income taxes
|
|
|
|
-
|
|
|
28,960
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
28,960
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities
|
|
|
|
268,567
|
|
|
324,728
|
|
|
682,883
|
|
|
52
|
|
|
(893,468
|
)
|
|
382,762
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders’
equity
|
|
|
|
373,367
|
|
|
679,611
|
|
|
142,618
|
|
|
(52
|
)
|
|
(820,212
|
)
|
|
375,332
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities and shareholders’ equity
|
|
|
$
|
641,934
|
|
$
|
1,004,339
|
|
$
|
825,501
|
|
$
|
-
|
|
$
|
(1,713,680
|
)
|
$
|
758,094
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17
ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
CONDENSED CONSOLIDATING BALANCE SHEET
(in thousands)
June 30, 2007
|
Parent
|
Issuer
|
Guarantors
|
Non-Guarantors
|
Eliminations
|
Consolidated
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
$
|
-
|
|
$
|
142,253
|
|
$
|
5,626
|
|
$
|
-
|
|
$
|
-
|
|
$
|
147,879
|
|
Accounts
receivable, net
|
|
|
|
-
|
|
|
14,118
|
|
|
471
|
|
|
13
|
|
|
-
|
|
|
14,602
|
|
Inventories
|
|
|
|
-
|
|
|
-
|
|
|
210,146
|
|
|
10,759
|
|
|
(39,021
|
)
|
|
181,884
|
|
Prepaid
expenses and other current assets
|
|
|
|
-
|
|
|
15,743
|
|
|
21,969
|
|
|
352
|
|
|
-
|
|
|
38,064
|
|
Intercompany
|
|
|
|
-
|
|
|
591,102
|
|
|
195,444
|
|
|
-
|
|
|
(786,546
|
)
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
current assets
|
|
|
|
-
|
|
|
763,216
|
|
|
433,656
|
|
|
11,124
|
|
|
(825,567
|
)
|
|
382,429
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property,
plant and equipment, net
|
|
|
|
-
|
|
|
11,104
|
|
|
311,081
|
|
|
-
|
|
|
-
|
|
|
322,185
|
|
Goodwill
and other intangible assets
|
|
|
|
-
|
|
|
37,905
|
|
|
54,595
|
|
|
-
|
|
|
-
|
|
|
92,500
|
|
Other
assets
|
|
|
|
-
|
|
|
4,299
|
|
|
1,185
|
|
|
-
|
|
|
-
|
|
|
5,484
|
|
Investment
in affiliated companies
|
|
|
|
600,453
|
|
|
149,524
|
|
|
-
|
|
|
-
|
|
|
(749,977
|
)
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
|
$
|
600,453
|
|
$
|
966,048
|
|
$
|
800,517
|
|
$
|
11,124
|
|
$
|
(1,575,544
|
)
|
$
|
802,598
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Shareholders’ Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
maturities of long-term debt
|
|
|
$
|
-
|
|
$
|
-
|
|
$
|
40
|
|
$
|
-
|
|
$
|
-
|
|
$
|
40
|
|
Customer
deposits
|
|
|
|
-
|
|
|
-
|
|
|
52,072
|
|
|
-
|
|
|
-
|
|
|
52,072
|
|
Accounts
payable
|
|
|
|
3,436
|
|
|
6,509
|
|
|
12,732
|
|
|
3,973
|
|
|
-
|
|
|
26,650
|
|
Accrued
expenses and other current liabilities
|
|
|
|
6,286
|
|
|
47,471
|
|
|
14,920
|
|
|
-
|
|
|
-
|
|
|
68,677
|
|
Intercompany
|
|
|
|
182,458
|
|
|
43,443
|
|
|
553,479
|
|
|
7,166
|
|
|
(786,546
|
)
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
current liabilities
|
|
|
|
192,180
|
|
|
97,423
|
|
|
633,243
|
|
|
11,139
|
|
|
(786,546
|
)
|
|
147,439
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term
debt
|
|
|
|
-
|
|
|
198,676
|
|
|
4,192
|
|
|
-
|
|
|
-
|
|
|
202,868
|
|
Other
long-term liabilities
|
|
|
|
-
|
|
|
227
|
|
|
11,776
|
|
|
-
|
|
|
-
|
|
|
12,003
|
|
Deferred
income taxes
|
|
|
|
-
|
|
|
30,646
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
30,646
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities
|
|
|
|
192,180
|
|
|
326,972
|
|
|
649,211
|
|
|
11,139
|
|
|
(786,546
|
)
|
|
392,956
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders’
equity
|
|
|
|
408,273
|
|
|
639,076
|
|
|
151,306
|
|
|
(15
|
)
|
|
(788,998
|
)
|
|
409,642
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities and shareholders’ equity
|
|
|
$
|
600,453
|
|
$
|
966,048
|
|
$
|
800,517
|
|
$
|
11,124
|
|
$
|
(1,575,544
|
)
|
$
|
802,598
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
(in thousands)
Three Months Ended December 31, 2007
|
Parent
|
Issuer
|
Guarantors
|
Non-Guarantors
|
Eliminations
|
Consolidated
|
Net sales
|
|
|
$
|
-
|
|
$
|
156,233
|
|
$
|
265,672
|
|
$
|
-
|
|
$
|
(162,395
|
)
|
$
|
259,510
|
|
Cost of
sales
|
|
|
|
-
|
|
|
109,789
|
|
|
173,560
|
|
|
-
|
|
|
(163,292
|
)
|
|
120,057
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
|
-
|
|
|
46,444
|
|
|
92,112
|
|
|
-
|
|
|
897
|
|
|
139,453
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling,
general and administrative expenses
|
|
|
|
42
|
|
|
12,261
|
|
|
93,640
|
|
|
13
|
|
|
-
|
|
|
105,956
|
|
Restructuring and
impairment charge, net
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
operating expenses
|
|
|
|
42
|
|
|
12,261
|
|
|
93,640
|
|
|
13
|
|
|
-
|
|
|
105,956
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income (loss)
|
|
|
|
(42
|
)
|
|
34,183
|
|
|
(1,528
|
)
|
|
(13
|
)
|
|
897
|
|
|
33,497
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
and other miscellaneous income, net
|
|
|
|
20,664
|
|
|
(306
|
)
|
|
201
|
|
|
-
|
|
|
(18,378
|
)
|
|
2,181
|
|
Interest
and other related financing costs
|
|
|
|
-
|
|
|
2,867
|
|
|
77
|
|
|
-
|
|
|
-
|
|
|
2,944
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
before income tax expense
|
|
|
|
20,622
|
|
|
31,010
|
|
|
(1,404
|
)
|
|
(13
|
)
|
|
(17,481
|
)
|
|
32,734
|
|
Income tax
expense
|
|
|
|
-
|
|
|
11,223
|
|
|
889
|
|
|
-
|
|
|
-
|
|
|
12,112
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income (loss)
|
|
|
$
|
20,622
|
|
$
|
19,787
|
|
$
|
(2,293
|
)
|
$
|
(13
|
)
|
$
|
(17,481
|
)
|
$
|
20,622
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, 2006
|
Parent
|
Issuer
|
Guarantors
|
Non-Guarantors
|
Eliminations
|
Consolidated
|
Net sales
|
|
|
$
|
-
|
|
$
|
165,635
|
|
$
|
251,626
|
|
$
|
-
|
|
$
|
(159,842
|
)
|
$
|
257,419
|
|
Cost of
sales
|
|
|
|
-
|
|
|
116,988
|
|
|
167,411
|
|
|
9
|
|
|
(160,739
|
)
|
|
123,669
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
|
-
|
|
|
48,647
|
|
|
84,215
|
|
|
(9
|
)
|
|
897
|
|
|
133,750
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling,
general and administrative expenses
|
|
|
|
42
|
|
|
9,478
|
|
|
88,008
|
|
|
7
|
|
|
-
|
|
|
97,535
|
|
Restructuring and
impairment credit
|
|
|
|
-
|
|
|
-
|
|
|
(314
|
)
|
|
-
|
|
|
-
|
|
|
(314
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
operating expenses
|
|
|
|
42
|
|
|
9,478
|
|
|
87,694
|
|
|
7
|
|
|
-
|
|
|
97,221
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income (loss)
|
|
|
|
(42
|
)
|
|
39,169
|
|
|
(3,479
|
)
|
|
(16
|
)
|
|
897
|
|
|
36,529
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
and other miscellaneous income, net
|
|
|
|
22,834
|
|
|
(2,233
|
)
|
|
32
|
|
|
11
|
|
|
(18,069
|
)
|
|
2,575
|
|
Interest
and other related financing costs
|
|
|
|
-
|
|
|
2,838
|
|
|
77
|
|
|
-
|
|
|
-
|
|
|
2,915
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
before income tax expense
|
|
|
|
22,792
|
|
|
34,098
|
|
|
(3,524
|
)
|
|
(5
|
)
|
|
(17,172
|
)
|
|
36,189
|
|
Income tax
expense
|
|
|
|
-
|
|
|
12,129
|
|
|
1,268
|
|
|
-
|
|
|
-
|
|
|
13,397
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income (loss)
|
|
|
$
|
22,792
|
|
$
|
21,969
|
|
$
|
(4,792
|
)
|
$
|
(5
|
)
|
$
|
(17,172
|
)
|
$
|
22,792
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
(in thousands)
Six Months Ended December 31, 2007
|
Parent
|
Issuer
|
Guarantors
|
Non-Guarantors
|
Eliminations
|
Consolidated
|
Net sales
|
|
|
$
|
-
|
|
$
|
312,780
|
|
$
|
516,636
|
|
$
|
-
|
|
$
|
(321,179
|
)
|
$
|
508,237
|
|
Cost of
sales
|
|
|
|
-
|
|
|
220,322
|
|
|
337,201
|
|
|
-
|
|
|
(322,196
|
)
|
|
235,327
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
|
-
|
|
|
92,458
|
|
|
179,435
|
|
|
-
|
|
|
1,017
|
|
|
272,910
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling,
general and administrative expenses
|
|
|
|
83
|
|
|
23,265
|
|
|
188,255
|
|
|
13
|
|
|
-
|
|
|
211,616
|
|
Restructuring and
impairment charge, net
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
operating expenses
|
|
|
|
83
|
|
|
23,265
|
|
|
188,255
|
|
|
13
|
|
|
-
|
|
|
211,616
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income (loss)
|
|
|
|
(83
|
)
|
|
69,193
|
|
|
(8,820
|
)
|
|
(13
|
)
|
|
1,017
|
|
|
61,294
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
and other miscellaneous income, net
|
|
|
|
38,209
|
|
|
(4,762
|
)
|
|
615
|
|
|
-
|
|
|
(28,959
|
)
|
|
5,103
|
|
Interest
and other related financing costs
|
|
|
|
-
|
|
|
5,726
|
|
|
153
|
|
|
-
|
|
|
-
|
|
|
5,879
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
before income tax expense
|
|
|
|
38,126
|
|
|
58,705
|
|
|
(8,358
|
)
|
|
(13
|
)
|
|
(27,942
|
)
|
|
60,518
|
|
Income tax
expense
|
|
|
|
-
|
|
|
21,467
|
|
|
925
|
|
|
-
|
|
|
-
|
|
|
22,392
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income (loss)
|
|
|
$
|
38,126
|
|
$
|
37,238
|
|
$
|
(9,283
|
)
|
$
|
(13
|
)
|
$
|
(27,942
|
)
|
$
|
38,126
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended December 31,
2006
|
Parent
|
Issuer
|
Guarantors
|
Non-Guarantors
|
Eliminations
|
Consolidated
|
Net sales
|
|
|
$
|
-
|
|
$
|
320,562
|
|
$
|
490,790
|
|
$
|
-
|
|
$
|
(311,110
|
)
|
$
|
500,242
|
|
Cost of
sales
|
|
|
|
-
|
|
|
225,876
|
|
|
326,209
|
|
|
14
|
|
|
(311,936
|
)
|
|
240,163
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
|
-
|
|
|
94,686
|
|
|
164,581
|
|
|
(14
|
)
|
|
826
|
|
|
260,079
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling,
general and administrative expenses
|
|
|
|
83
|
|
|
20,946
|
|
|
174,659
|
|
|
10
|
|
|
-
|
|
|
195,698
|
|
Restructuring and
impairment charge, net
|
|
|
|
-
|
|
|
-
|
|
|
13,622
|
|
|
-
|
|
|
-
|
|
|
13,622
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
operating expenses
|
|
|
|
83
|
|
|
20,946
|
|
|
188,281
|
|
|
10
|
|
|
-
|
|
|
209,320
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income (loss)
|
|
|
|
(83
|
)
|
|
73,740
|
|
|
(23,700
|
)
|
|
(24
|
)
|
|
826
|
|
|
50,759
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
and other miscellaneous income, net
|
|
|
|
31,327
|
|
|
(20,555
|
)
|
|
(140
|
)
|
|
23
|
|
|
(5,848
|
)
|
|
4,807
|
|
Interest
and other related financing costs
|
|
|
|
-
|
|
|
5,700
|
|
|
153
|
|
|
-
|
|
|
-
|
|
|
5,853
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
before income tax expense
|
|
|
|
31,244
|
|
|
47,485
|
|
|
(23,993
|
)
|
|
(1
|
)
|
|
(5,022
|
)
|
|
49,713
|
|
Income tax
expense
|
|
|
|
-
|
|
|
16,914
|
|
|
1,555
|
|
|
-
|
|
|
-
|
|
|
18,469
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income (loss)
|
|
|
$
|
31,244
|
|
$
|
30,571
|
|
$
|
(25,548
|
)
|
$
|
(1
|
)
|
$
|
(5,022
|
)
|
$
|
31,244
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
(in thousands)
Six Months Ended December 31, 2007
|
Parent
|
Issuer
|
Guarantors
|
Non-Guarantors
|
Eliminations
|
Consolidated
|
Net cash provided by (used
in) operating activities
|
|
|
$
|
79,536
|
|
$
|
(57,995
|
)
|
$
|
25,869
|
|
$
|
-
|
|
$
|
-
|
|
$
|
47,410
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows
from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
|
|
-
|
|
|
(3,104
|
)
|
|
(27,209
|
)
|
|
-
|
|
|
-
|
|
|
(30,313
|
)
|
Acquisitions
|
|
|
|
-
|
|
|
-
|
|
|
(6,747
|
)
|
|
-
|
|
|
-
|
|
|
(6,747
|
)
|
Proceeds
from the disposal of property, plant
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and
equipment
|
|
|
|
-
|
|
|
-
|
|
|
5,198
|
|
|
-
|
|
|
-
|
|
|
5,198
|
|
Other
|
|
|
|
-
|
|
|
12
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
cash used in investing activities
|
|
|
|
-
|
|
|
(3,092
|
)
|
|
(28,758
|
)
|
|
-
|
|
|
-
|
|
|
(31,850
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows
from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments
on long-term debt
|
|
|
|
-
|
|
|
-
|
|
|
(20
|
)
|
|
-
|
|
|
-
|
|
|
(20
|
)
|
Purchases
and other retirements of
company stock
|
|
|
|
(67,191
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(67,191
|
)
|
Proceeds
from issuance of common stock
|
|
|
|
414
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
414
|
|
Excess
tax benefits from share-based payment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
arrangements
|
|
|
|
-
|
|
|
2,085
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
2,085
|
|
Dividends
paid
|
|
|
|
(12,759
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(12,759
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
cash provided by (used in) financing
activities
|
|
|
|
(79,536
|
)
|
|
2,085
|
|
|
(20
|
)
|
|
-
|
|
|
-
|
|
|
(77,471
|
)
|
Effect of
exchange rate changes on cash
|
|
|
|
-
|
|
|
-
|
|
|
300
|
|
|
-
|
|
|
-
|
|
|
300
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
decrease in cash and cash equivalents
|
|
|
|
-
|
|
|
(59,002
|
)
|
|
(2,609
|
)
|
|
-
|
|
|
-
|
|
|
(61,611
|
)
|
Cash and
cash equivalents - beginning of period
|
|
|
|
-
|
|
|
142,253
|
|
|
5,626
|
|
|
-
|
|
|
-
|
|
|
147,879
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and
cash equivalents - end of period
|
|
|
$
|
-
|
|
$
|
83,251
|
|
$
|
3,017
|
|
$
|
-
|
|
$
|
-
|
|
$
|
86,268
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
(in thousands)
Six Months Ended December 31, 2006
|
Parent
|
Issuer
|
Guarantors
|
Non-Guarantors
|
Eliminations
|
Consolidated
|
Net cash provided by (used
in) operating activities
|
|
|
$
|
31,569
|
|
$
|
(22,336
|
)
|
$
|
47,016
|
|
$
|
-
|
|
$
|
-
|
|
$
|
56,249
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows
from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
|
|
-
|
|
|
(1,139
|
)
|
|
(33,808
|
)
|
|
-
|
|
|
-
|
|
|
(34,947
|
)
|
Acquisitions
|
|
|
|
-
|
|
|
-
|
|
|
(9,569
|
)
|
|
-
|
|
|
-
|
|
|
(9,569
|
)
|
Proceeds
from the disposal of property, plant
and equipment
|
|
|
|
-
|
|
|
-
|
|
|
61
|
|
|
-
|
|
|
-
|
|
|
61
|
|
Other
|
|
|
|
-
|
|
|
78
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
78
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
cash used in investing activities
|
|
|
|
-
|
|
|
(1,061
|
)
|
|
(43,316
|
)
|
|
-
|
|
|
-
|
|
|
(44,377
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows
from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments
on long-term debt
|
|
|
|
-
|
|
|
-
|
|
|
(19
|
)
|
|
-
|
|
|
-
|
|
|
(19
|
)
|
Payment
of deferred financing costs
|
|
|
|
-
|
|
|
(107
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(107
|
)
|
Purchases
and other retirements of
company stock
|
|
|
|
(19,536
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(19,536
|
)
|
Proceeds
from issuance of common stock
|
|
|
|
126
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
126
|
|
Excess
tax benefits from share-based payment
arrangements
|
|
|
|
-
|
|
|
1,661
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
1,661
|
|
Dividends
paid
|
|
|
|
(12,159
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(12,159
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
cash provided by (used in) financing
activities
|
|
|
|
(31,569
|
)
|
|
1,554
|
|
|
(19
|
)
|
|
-
|
|
|
-
|
|
|
(30,034
|
)
|
Effect of
exchange rate changes on cash
|
|
|
|
-
|
|
|
-
|
|
|
(75
|
)
|
|
-
|
|
|
-
|
|
|
(75
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
increase (decrease) in cash and cash equivalents
|
|
|
|
-
|
|
|
(21,843
|
)
|
|
3,606
|
|
|
-
|
|
|
-
|
|
|
(18,237
|
)
|
Cash and
cash equivalents - beginning of period
|
|
|
|
-
|
|
|
172,246
|
|
|
1,555
|
|
|
-
|
|
|
-
|
|
|
173,801
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and
cash equivalents - end of period
|
|
|
$
|
-
|
|
$
|
150,403
|
|
$
|
5,161
|
|
$
|
-
|
|
$
|
-
|
|
$
|
155,564
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES