~~On April 7, 2015~~In May 2014, the Financial Accounting Standards Board (the “FASB”) issued ~~Accounting Standards Update No. 2015-03,~~ASU 2014-09,~~Simplifying~~Revenue from Contracts with Customers. This ASU provides a framework for revenue recognition that replaces most existing GAAP revenue recognition guidance when it becomes effective. We have an option to use either a retrospective approach or a cumulative effect adjustment approach to implement the ~~Presentation of Debt Issuance Costs.~~guidance. The new standard is effective for us on July 1, 2018, with early adoption permitted. We are currently conducting a comprehensive review of our revenue streams and contracts as they relate to this guidance to identify potential differences that would result from applying the new requirements. While we are still assessing the overall impact this guidance will ~~classify debt issuance~~have on our consolidated financial statements and financial statement disclosures, based on the work performed to date, we do not believe that the adoption will have a material impact on our consolidated financial statements.

In July 2015, the FASB issued ASU 2015-11,“Inventory (Topic 330): Simplifying the Measurement of Inventory,” which states that inventory should be measured at the lower of cost and net realizable value. Net realizable value is defined as estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The new guidance is effective for the Company on July 1, 2017. The new guidance should be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. We plan on adopting effective July 1, 2017.We do not believe that the adoption will have a ~~deduction from debt liability.~~material impact on our consolidated financial statements.

In November 2015, the FASB issued ASU 2015-17,Balance Sheet Classification of Deferred Taxes, which requires the Company to present all deferred tax assets and liabilities as noncurrent. This pronouncement is effective for the Company on July 1, 2017, and early adoption is permitted. We plan on adopting effective July 1, 2017. At June 30, ~~2015~~2017 and ~~2014,~~2016 we had net current deferred tax assets of $3.9 million and $3.2 million respectively which would have been classified as noncurrent under the new standard.

In February 2016, the FASB issued ASU 2016-02,Leases, which is intended to improve financial reporting about leasing transactions. The ASU will require lessees that lease assets with lease terms of more than twelve months to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. Lessors will remain largely unchanged from current GAAP. In addition, the ASU will require disclosures to help investors and other financial statement users better understand the amount, timing and uncertainty of cash flows arising from leases. This pronouncement is effective for the Company ~~had $1.3 million~~on July 1, 2019, and ~~$0.3 million respectively in unamortized debt issuance costs, classified as other assets~~early adoption is permitted. The Company is currently evaluating the impact on our consolidated ~~balance sheet~~financial statements. We plan on adopting effective July 1, 2019.

In March 2016, the FASB issued ASU 2016-09,Improvements to Employee Share-Based Payment Accounting, which amends ASC Topic 718, Stock Compensation. The objective of this amendment is part of the FASB’s Simplification Initiative as it applies to several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. This pronouncement is effective for the Company on July 1, 2017, and allows for prospective, retrospective or modified retrospective adoption, depending on the area covered in the update, with early adoption permitted. We plan on adopting effective July 1, 2017. For the fiscal years ended June 30, 2017 and 2016, the Company recorded a credit to additional paid in capital of $0.1 million and $1.0 million respectively, that under the new standard would have been recognized in income. Excess tax benefits were not material in either fiscal years 2017, 2016 or 2015.

In November 2016, the FASB issued ASU 2016-18,Statement of Cash Flows (Topic 230): Restricted Cash. It is intended to reduce diversity in the presentation of restricted cash and restricted cash equivalents in the statement. The statement requires that restricted cash and restricted cash equivalents be ~~classified~~included as components of total cash and cash equivalents as presented on the statement of cash flows. The Company currently does not include restricted cash as a ~~deduction from debt. There will be no effect~~component of cash and equivalents as presented on the ~~consolidated statements~~statement of ~~comprehensive income upon adoption of the ASU.~~cash flows. The ~~ASU~~new guidance is effective for the Company ~~beginning in~~on July ~~2015 and will be applied retrospectively.~~1, 2018, with early adoption permitted. The Company is currently evaluating the impact on our consolidated financial statements. We plan on adopting effective July 1, 2018.

We are exposed to market risks relating to fluctuations in interest rates and foreign currency exchange rates.

Interest rate risk exists primarily through our borrowing activities. We utilize United States dollar denominated borrowings to fund substantially all our working capital and investment needs. Short-term debt, if required, is used to meet working capital requirements and long-term debt is generally used to finance long-term investments. There is inherent rollover risk for borrowings as they mature and are renewed at current market rates. The extent of this risk is not quantifiable or predictable because of the variability of future interest rates and our future financing requirements.

For floating-rate obligations, interest rate changes do not affect the fair value of the underlying financial instrument but would impact future earnings and cash flows, assuming other factors are held constant. Conversely, for fixed-rate obligations, interest rate changes affect the fair value of the underlying financial instrument but would not impact earnings or cash flows. At June 30, ~~2015,~~2017, we had ~~$72.7~~$13.8 million inof floating-rate debt obligations ~~outstanding. As~~outstanding under our Facility. We currently do not engage in any interest rate hedging activity and we have no intention of doing so in the foreseeable future. Based on the average interest rate of the loans under the Facility during the quarter ended June 30, 2017, and to the extent that ~~same date,~~borrowings were outstanding, a 10% change in the interest rate would not have a material effect on our ~~fixed-rate debt obligations consist~~consolidated results of ~~$1.6 million of capital leases.~~operations and financial condition.

Foreign currency exchange risk is primarily limited to our operation of ~~six~~ Ethan Allen operated retail design centers located in Canada, one distribution center in Belgium, and our plants in Mexico and Honduras, as substantially all purchases of imported parts and finished goods are denominated in United States dollars. As such, gains or losses resulting from market changes in the value of foreign currencies have not had, nor are they expected to have, a material effect on our consolidated results of operations. A decrease in the value of foreign currencies (in particular Asian) relative to the United States dollar may affect the profitability of our vendors but as we employ a balanced sourcing strategy, we believe any impact would be moderate relative to peers in the industry.

Our Consolidated Financial Statements and Supplementary Data are listed in Item 15 of this Annual Report.

We have audited the accompanying consolidated balance sheets of Ethan Allen Interiors Inc.and subsidiaries (the Company) as of June 30, ~~2015~~2017 and ~~2014,~~2016, and the related consolidated statements of comprehensive income, shareholders’ equity, and cash flows for each of the years in the three-year period ended June 30, ~~2015.~~2017. We also have audited the Company’s internal control over financial reporting as of June 30, ~~2015,~~2017, based on criteria established inInternal Control – Integrated Framework ~~(1992)~~(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on these consolidated financial statements and an opinion on the Company’s internal control over financial reporting based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Ethan Allen Interiors Inc. and subsidiaries as of June 30, ~~2015~~2017 and ~~2014,~~2016, and the results of ~~its~~their operations and ~~its~~their cash flows for each of the years in the three-year period ended June 30, ~~2015,~~2017, in conformity with U.S. generally accepted accounting principles. Also in our opinion, ~~Ethan Allen Interiors Inc. and subsidiaries~~the Company maintained, in all material respects, effective internal control over financial reporting as of June 30, ~~2015,~~2017, based on criteria established inInternal Control – Integrated Framework ~~(1992)~~(2013) issued by ~~the Committee of Sponsoring Organizations of the Treadway Commission (COSO)~~.COSO.

(1)Summary of Significant Accounting Policies

Basis of Presentation

The following is a summary of significant accounting policies of Ethan Allen Interiors Inc., and its wholly-owned subsidiaries (collectively "We," "Us," "Our," "Ethan Allen" or the "Company"). All significant intercompany accounts and transactions have been eliminated in the consolidated financial statements. Our consolidated financial statements also include the accounts of an entity in which we are a majority shareholder with the power to direct the activites that most significantly impact the entity’s performance. Noncontrolling interest amounts in the entity are immaterial and included in the Consolidated Statement of Comprehensive Income within interest and other income, net.

Nature of Operations

We are a leading manufacturer and retailer of quality home furnishings and accents, offering complimentary interior design service to our clients and sell a full range of furniture products and decorative accents. We sell our products through one of the country’s largest home furnishing retail networks ~~with~~and at June 30, 2017 there were a total of ~~299 retail~~303 design centers in our retail network, of which ~~144~~148 are Company operated and 155 are independently operated. Nearly all of our Company operated retail design centers are located in the United States, with the remaining Company operated design centers located in ~~Canada and Belgium.~~Canada. The majority of the independently operated design centers are in Asia, with the remaining independently operated design centers located throughout the United States, ~~Canada,~~ the Middle East and Europe. We ~~have eight~~own and operate nine manufacturing facilities including six manufacturing plants and one ~~of which includes a separate~~ sawmill ~~operation, located throughout~~in the United States and one manufacturing plant in Mexico and one in ~~each of Mexico and~~ Honduras.

Use of Estimates

We prepare our consolidated financial statements in conformity with accounting principles generally accepted in the United States, which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Because of the inherent uncertainty involved in making those estimates, actual results could differ from those estimates. Areas in which significant estimates have been made include, but are not limited to, revenue recognition, the allowance for doubtful accounts receivable, inventory obsolescence, tax valuation allowances, useful lives and impairment analyses for property, plant and equipment and definite lived intangible assets, goodwill and indefinite lived intangible asset impairment analyses, the evaluation of uncertain tax positions and the fair value of assets acquired and liabilities assumed in business combinations.

Reclassifications

Certain reclassifications have been made to prior years’ financial statements ~~in order~~ to conform to the current year’s presentation. These changes were made for disclosure purposes only and did not have any impact on previously reported results.

Cash Equivalents

Cash and short-term, highly liquid investments with original maturities of three months or less are considered cash and cash equivalents. We invest excess cash in money market accounts, short-term commercial paper, and U.S. Treasury Bills.

~~ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES~~

Inventories

Inventories are stated at the lower of cost (first-in, first-out) or market. Cost is determined based solely on those charges incurred in the acquisition and production of the related inventory (i.e. material, labor and manufacturing overhead costs).

~~Marketable Securities~~

The Company’s investments are classified at the time of purchase as either available-for-sale or held-to-maturity, and reassessed as of each balance sheet date. Our marketable securities consist of available-for-sale securities, and are marked-to-market based on prices provided by our investment advisors, with unrealized gains and temporary unrealized losses reported as a component of other comprehensive income net of tax, until realized. When realized, the Company recognizes gains and losses on the sales of the securities on a specific identification method and includes the realized gains or losses in other income, net, in the consolidated statements of operations. The Company includes interest, dividends, and amortization of premium or discount on securities classified as available-for-sale in other income, net in the consolidated statements of operations. We also evaluate our available-for-sale securities to determine whether a decline in fair value of a security below the amortized cost basis is other than temporary. Should the decline be considered other than temporary, we write down the cost of the security and include the loss in earnings. In making this determination we consider such factors as the reason for and significance of the decline, current economic conditions, the length of time for which there has been an unrealized loss, the time to maturity, and other relevant information. Available-for-sale securities are classified as either short-term or long-term based on management’s intention of when to sell the securities.

Property, Plant and Equipment

Property, plant and equipment are stated at cost, net of accumulated depreciation and amortization. Depreciation of plant and equipment is provided over the estimated useful lives of the respective assets on a straight-line basis. Estimated useful lives of the respective assets typically range from twenty to forty years for buildings and improvements and from three to twenty years for machinery and equipment. Leasehold improvements are amortized based on the underlying lease term, or the asset’s estimated useful life, whichever is shorter.

ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES

Operating Leases

We record expense for operating leases by recognizing the minimum lease payments on a straight-line basis, beginning on the date that the lessee takes possession or control of the property. ~~A number of~~Several our operating lease agreements contain provisions for tenant improvement allowances, rent holidays, rent concessions, and/or rent escalations.

Incentive payments received from landlords are recorded as deferred lease incentives and are amortized over the underlying lease term on a straight-line basis as a reduction of rent expense. When the terms of an operating lease provide for periods of free rent, rent concessions, and/or rent escalations, we establish a deferred rent liability for the difference between the scheduled rent payment and the straight-line rent expense recognized. This deferred rent liability is also amortized over the underlying lease term on a straight-line basis as a reduction of rent expense.

Retail Design Center Acquisitions

We account for the acquisition of retail design centers and related assets with the purchase method. Accounting for these transactions as purchase business combinations requires the allocation of purchase price paid to the assets acquired and liabilities assumed based on their fair values as of the date of the acquisition. The amount paid in excess of the fair value of net assets acquired is accounted for as goodwill.

~~ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES~~

Goodwill and Other Intangible Assets

Our intangible assets are comprised primarily of goodwill, which represents the excess of cost over the fair value of net assets acquired, and trademarks. We determined these assets have indefinite useful lives, and are therefore not amortized.

Impairment of Long-Lived Assets and Goodwill

Goodwill and other indefinite-lived intangible assets are evaluated for impairment on an annual basis during the fourth quarter of each fiscal year, and between annual tests whenever events or circumstances indicate that the carrying value of the goodwill or other intangible asset may exceed its fair value. When testing goodwill for impairment, we may assess qualitative factors for some or all of our reporting units to determine whether it is more likely than not (that is, a likelihood of more than 50 percent) that the fair value of a reporting unit is less than its carrying amount, including goodwill. Alternatively, we may bypass this qualitative assessment for some or all of our reporting units and determine whether the carrying value exceeds the fair value using a quantitative assessment, as described below.

The recoverability of long-lived assets ~~are~~is evaluated for impairment ~~by determining~~whenever events or changes in circumstances indicate that we may not be able to recover the carrying amount of an asset or asset group. Our assessment of recoverability determines whether the carrying value will be recovered through the expected undiscounted future cash flows resulting from the use of the asset. In the event the sum of the expected undiscounted future cash flows is less than the carrying value of the asset, an impairment loss equal to the excess of the asset’s carrying value over its fair value is recorded. The long-term nature of these assets requires the estimation of cash inflows and outflows several years into the future and only takes into consideration technological advances known at the time of the impairment test.

To evaluate goodwill using a quantitative assessment, the Company determines the current fair value of the reporting units using a combination of “Market” and “Income” approaches. In the Market approach, the “Guideline Company” method is used, which focuses on comparing the Company’s risk profile and growth prospects to reasonably similar publicly traded companies. Key assumptions used for the Guideline Company method are total invested capital (“TIC”) multiples for revenues and operating cash flows, as well as consideration of control premiums. The TIC multiples are determined based on public furniture companies within our peer group, and if appropriate, recent comparable transactions are considered. Control premiums are determined using recent comparable transactions in the open market. Under the Income approach, a discounted cash flow method is used, which includes a terminal value, and is based on external analyst financial projection estimates, as well as internal financial projection estimates prepared by management. The long-term terminal growth rate assumptions reflect our current long-term view of the market in which we compete. Discount rates use the weighted average cost of capital for companies within our peer group, adjusted for specific company risk premium factors.

The fair value of our trade name, which is the Company’s only indefinite-lived intangible asset other than goodwill, is valued using the relief-from-royalty method. Significant factors used in trade name valuation are rates for royalties, future growth, and a discount factor. Royalty rates are determined using an average of recent comparable values. Future growth rates are based on the Company’s perception of the long-term values in the market in which we compete, and the discount rate is determined using the weighted average cost of capital for companies within our peer group, adjusted for specific company risk premium factors.

ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES

Financial Instruments

Because of their short-term nature, the carrying value of our cash and cash equivalents, receivables and payables, short-term debt and customer deposit liabilities approximates fair value. Substantially all of our long-term debt at both June 30, ~~2015~~2017 and 2016 consists of our term loan and revolving credit ~~facility, and at June 30, 2014 substantially all of our long-term debt consisted of our Senior Notes, the~~facility. The estimated fair value ~~of which~~ is ~~$77.6 million at June 30, 2015 and $133.3 million at June 30, 2014, as compared~~equal to athe carrying value on those ~~dates of $77.6 million and $129.3 million, respectively.~~dates.

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance must be established for deferred tax assets when it is more likely than not that the assets will not be realized.

We recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. Most of the unrecognized tax benefits, if recognized, would be recorded as a benefit to income tax expense.

The liability associated with an unrecognized tax benefit is classified as a long-term liability except for the amount for which a cash payment is expected to be made or tax positions settled within one year. We recognize interest and penalties related to income tax matters as a component of income tax expense.

Revenue Recognition

Revenue is recognized when all of the following have occurred: persuasive evidence of a sales arrangement exists (e.g. a wholesale purchase order or retail sales invoice); the sales arrangement specifies a fixed or determinable sales price; title and risk of ownership has passed to the customer; no specific performance obligations remain; product is shipped or services are provided to the customer; collectability is reasonably assured. As such, revenue recognition generally occurs upon the shipment of goods to independent retailers or, in the case of Ethan Allen operated retail design centers, upon delivery to the customer. If shipping is billed to customers, this is included in revenue. Recorded sales provide for estimated returns and allowances. We permit our customers to return defective products and incorrect shipments, and terms we offer are standard for the industry.

Shipping and Handling Costs

Our practice has been to sell our products at the same delivered cost to all retailers nationwide, regardless of shipping point. Costs incurred by the Company to deliver finished goods are expensed and recorded in selling, general and administrative expenses. Shipping and handling costs amounted to $71.3 million in fiscal year 2017, $71.7 million for fiscal 2016 and $67.3 million in fiscal ~~year 2015, $67.1 million for fiscal 2014 and $62.3 million in fiscal 2013.~~

~~ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES~~2015.

Advertising Costs

Advertising costs are expensed when first aired or distributed. Our total advertising costs were ~~$30.2~~$39.7 million in fiscal year ~~2015, $29.5~~2017, $34.1 million in fiscal year ~~2014~~2016 and ~~$29.8~~$31.8 million in fiscal year ~~2013.~~2015. These amounts include advertising media expenses, outside and inside agency expenses, certain website related fees and photo and video ~~production net of proceeds received by us under our agreement with~~production. Fiscal 2016 and 2015 amounts include reclassifications to conform to the ~~third-party financial institution responsible for administering our consumer finance programs.~~current year presentation. Prepaid advertising costs at June 30, ~~2015~~2017 totaled ~~$1.8~~$1.5 million compared to ~~$0.6~~$2.0 million at June 30, ~~2014.~~2016.

Earnings Per Share

We compute basic earnings per share by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated similarly, except that the weighted average outstanding shares are adjusted to include the effects of converting all potentially dilutive share-based awards issued under our employee stock plans (see Notes 9 and 10). Certain unvested share-based payment awards are participating securities because they contain rights to receive non-forfeitable dividends (if paid). The earnings available to participating securities under the two-class method of computing earnings per share is insignificant.

ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES

Share-Based Compensation

We estimate, as of the date of grant, the fair value of stock options awarded using the Black-Scholes option pricing model. Use of a valuation model requires management to make certain assumptions with respect to selected model inputs, including anticipated changes in the underlying stock price (i.e. expected volatility) and option exercise activity (i.e. expected life). Expected volatility is based on the historical volatility of our stock and other contributing factors. The expected life of options granted, which represents the period of time that the options are expected to be outstanding, is based, primarily, on historical data. We estimate, as of the date of grant, the fair value of restricted stock units awarded using a discounted cash flow model which requires management to make certain assumptions with respect to model inputs including anticipated future dividends not paid during the restriction period, and a discount for lack of marketability for a one-year holding period after vesting.

Share-based compensation expense is included in the Consolidated Statements of Operations within selling, general and administrative expenses. Tax benefits associated with our share-based compensation arrangements are included in the Consolidated Statements of Operations within income tax expense.

All shares of our common stock received in connection with the exercise of share-based awards have been recorded as treasury stock and result in a reduction in shareholders’ equity.

Foreign Currency Translation

The functional currency of each Company operated foreign location is the respective local currency. Assets and liabilities are translated into United States dollars using the current period-end exchange rate and income and expense amounts are translated using the average exchange rate for the period in which the transaction occurred. Resulting translation adjustments are reported as a component of accumulated other comprehensive income within shareholders’ equity.

~~Recent~~Recently Adopted Accounting Pronouncements

~~On April 7, 2015~~There were no accounting pronouncements adopted in the ~~Financial Accounting Standards Board issued Accounting Standards Update No. 2015-03,~~~~Simplifying the Presentation of Debt Issuance Costs.~~~~The new standard will classify debt issuance costs as a deduction from debt liability. At~~fiscal years ended June 30, ~~of 2015 and 2014, the Company~~2017 or 2016 that had ~~$1.3 million and $0.3 million respectively in unamortized debt issuance costs, classified as other assets~~a material effect on our consolidated ~~balance sheet which, under the new standard, would be classified as a deduction from debt. There will be no effect on the consolidated~~financial statements ~~of comprehensive income upon adoption of the ASU. The ASU is effective for the Company beginning in July 2015 and will be applied retrospectively.~~or financial statement disclosures.

(6)Borrowings~~Borrowings~~

Total debt obligations at June 30 consist of the following (in thousands):

2015

2014

5.375% Senior Notes due 2015
$ - $ 129,255
Term loan
35,000 -
Revolver
40,000 -
Capital leases and other
2,568 1,657
Total debt
77,568 130,912
Less curent maturities
3,341 501
Total long-term debt
$ 74,227 $ 130,411

	June 30,			June 30,
	2017			2016

Revolving Credit Facility due 10/21/2019	$	-		$	25,000
Term Loan due 10/21/2019		13,833			16,167
Capital leases		1,085			1,560
Total debt obligations		14,918			42,727
Unamortized debt issuance costs		(579	)		(889	)
Total debt		14,339			41,838
Less current maturities		2,731			3,001
Total long-term	$	11,608		$	38,837

In September 2005, we issued $200.0 million in ten-year senior unsecured notes due October 1, 2015 (the "Senior Notes"). The Senior Notes were issued by Global, bearing an annual coupon rate of 5.375% with interest payable semi-annually in arrears on April 1 and October 1. We used the net proceeds of $198.4 million to improve our retail network, invest in our manufacturing and logistics operations, and for other general corporate purposes. In fiscal years 2011 through 2013, the Company repurchased an aggregate $70.6 million of the Senior Notes in several unsolicited transactions. On March 18, 2015, we repaid the remaining balance of $129.4 million, accrued interest of $3.2 million, and a “make whole” payment of $3.5 million, funded with $61.1 million from the Company’s existing cash balances, and $75 million from our senior secured revolving credit and term loan facility. In connection with this early redemption, the Company incurred a $3.7 million pre-tax charge, consisting of the “make whole” payment along with unamortized balances of bond discount and other costs. This charge is classified within the Consolidated Statements of Comprehensive Income under Interest and Other Income (Expense).

The Company entered into a five year, $150 million senior secured revolving credit and term loan facility on October 21, 2014, as amended ~~January 28, 2015~~ (the “Facility”). ~~The Facility amended and restated the previous five year, $50 million secured revolving credit facility in its entirety.~~ The Facility, which expires on October 21, 2019, provides a term loan of up to $35 million and a revolving credit line of up to $115 million, subject to borrowing base availability. ~~During March 2015, we utilized $35 million of the term loan and $40 million of the revolving credit line, along with available cash to fully redeem our Senior Notes.~~ We incurred financing costs of $1.5 million under the Facility, which are being amortized by the ~~straight-line method, which approximates the~~ interest method, over the remaining life of the Facility.

At the Company’s option, revolving loans under the Facility bear interest, based on the average availability, at an annual rate of either (a) the London Interbank Offered rate (“LIBOR”) plus 1.5% to 1.75%, or (b) the higher of (i) the prime rate, (ii) the federal funds effective rate plus 0.50%, or (iii) LIBOR plus 1.0% plus in each case 0.5% to 0.75%. At June 30, ~~2015~~2017 the annual interest rate in effect on the revolving loan was ~~1.6875%~~2.5625%.

At the Company’s option, term loans under the Facility bear interest, based on the Company’s rent adjusted leverage ratio, at an annual rate of either (a) ~~the London Interbank Offered rate (“LIBOR”)~~LIBOR plus 1.75% to 2.25%, or (b) the higher of (i) the prime rate, (ii) the federal funds effective rate plus 0.50%, or (iii) LIBOR plus 1.0% plus in each case 0.75% to 1.25%. At June 30, ~~2015~~2017 the annual interest rate in effect on the term loan was ~~1.9375%~~3.0%.

The Company pays a commitment fee of 0.15% to 0.25% per annum on the unused portion of the Facility, and fees on issued letters of credit at an annual rate of 1.5% to 1.75% based on the average availability. Certain payments are restricted if the availability under the revolving credit line falls below 20% of the total revolving credit line, and the Company is subject to pro forma compliance with the fixed charge coverage ratio if applicable.

~~ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES~~

Quarterly installments of principal on the term loan are payable based on a straight line ~~15 year~~15-year amortization period, with the balance due at maturity. In fiscal 2017 we repaid $25.0 million of the revolving credit facility with excess operating cash. The Company does not expect to repay ~~the revolving credit~~in advance any additional portion of the Facility within the next year.

The Facility is secured by all property owned, leased or operated by the Company in the United States and includes certain real property owned by the Company and contains customary covenants which may limit the Company’s ability to incur debt; engage in mergers and consolidations; make restricted payments (including ~~dividends)~~dividends and share repurchases); sell certain assets; and make investments.

ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES

The Facility includes a covenant that requires the Company ~~must~~to maintain ~~at all times~~ a minimum fixed charge coverage ratio of ~~1.0 to 1.0 for the first year and~~ 1.1 to 1.0 at all times ~~thereafter. If~~unless the outstanding term loans are less than $17.5 million and the fixed charge coverage ratio equals or exceeds 1.25 to 1.0, in which case the fixed charge coverage ratio ceases to apply and thereafter ~~shall~~is only be triggered if average monthly availability is less than 15% of the amount of the revolving credit line. ~~Our applicable~~The Company has met the exemption conditions and is currently exempt from the fixed charge coverage ratio ~~was 1.4 to 1.0 at June 30, 2015.~~covenant.

The Company intends to use the Facility for working capital and general corporate purposes, ~~in addition to the refinancing of our Senior Notes which occurred in March 2015.~~including dividend payments and share repurchases. At June 30, ~~2015,~~2017 and June 30, 2016, there was $0.1 million and $0.2 million respectively, of standby letters of credit outstanding under the ~~Facility and total~~Facility. Total availability under the Facility ~~of $74.8 million.~~

~~The Facility replaced a $50 million senior secured, asset-based revolving credit facility (the “Prior Facility”) which~~ was in effect on June 30, 2014, and which would have expired March 25, 2016, or June 26, 2015 if the Senior Notes had not been refinanced prior to that date. At June 30, 2014, there was $0.6 million of standby letters of credit outstanding under the Prior Facility. The Prior Facility was secured by all property owned, leased or operated by the Company in the United States excluding any real property owned by the Company and contained customary covenants limiting the Company’s ability to incur debt, engage in mergers and consolidations, make restricted payments (including dividends), sell certain assets, and make investments. Remaining availability under the Prior Facility totaled $49.4$114.9 million at June 30, ~~2014~~2017 and ~~as a result, covenants and other restricted payment limitations did not apply.~~$89.8 million at June 30, 2016.

At both June 30, ~~2015~~2017 and June 30, ~~2014,~~2016, we were in compliance with all covenants of under the ~~Senior Notes and the credit facilities.~~facility.

~~For fiscal years ended June 30, 2015, 2014 and 2013, the~~The weighted-average interest ~~rates~~rate applicable under our outstanding debt obligations for each ~~year was approximately 4.8%, 5.5% and 5.5% respectively.~~ of the last three fiscal years were as follows:

	Fiscal Year Ended June 30,
	2017			2016			2015
Weighted-average interest rate		2.4	%		2.0	%		4.8	%

Aggregate scheduled maturities of our debt obligations for each of the five fiscal years subsequent to June 30, ~~2015,~~2017, and thereafter are as follows (in thousands):

Fiscal Year Ended June 30
2016	$	3,341
2017		3,304
2018		2,815		2,999
2019		2,396		2,518
2020		65,712		9,294
Subsequent to 2020		-
2021				66
2022				41
Subsequent to 2022				-
Total scheduled debt payments	$	77,568	$	14,918

Total rent expense for each of the past three fiscal years ended June 30 was as follows (in thousands):

~~As of June 30, 2015 and 2014, deferred~~Deferred rent credits ~~totaling $12.4 million and $12.5 million, respectively,~~ and deferred lease incentives ~~totaling $3.8 million and $3.1 million, respectively,~~ are reflected in the Consolidated Balance ~~Sheets. These amounts~~Sheets and are amortized over the respective underlying lease terms on a straight-line basis as a reduction of rent expense. The amounts for the past two fiscal years are as follows:

For the fiscal years presented above, we funded our purchases of treasury stock with existing cash on hand and cash generated through current period operations. All of our common stock repurchases are recorded as treasury stock and result in a reduction of shareholders’ equity.

At June 30, 2015, we had 1,382,400 shares of common stock available for future issuance pursuant to the 1992 Stock Option Plan (the “Plan”). The maximum number of shares of common stock reserved for issuance under the Plan is 6,487,867 shares. Following is a description of grants made under the Plan.

~~The Plan provides for the grant of non-compensatory stock options to eligible employees and non-employee directors. Stock options~~Options granted under the Plan are non-qualified under Section 422 of the Internal Revenue code and allow for the purchase of shares of our common stock. The Plan also provides for the issuance of stock appreciation rights ("SARs") on issued options, however, no SARs have been issued as of June 30, 2015. The awarding of such options is determined by the Compensation Committee of the Board of Directors after consideration of recommendations proposed by the Chief Executive Officer. Option awards are generally granted with an exercise price equal to the market price of our common stock at the date of grant, vest ratably over a specified service period, and have a contractual term of 10 years. In fiscal 2015 the service period was 5 years for awards to employees ~~(as further described below), and 3 years for awards to independent directors.~~

~~Effective October~~beginning January 1, 2011, the Company and M. Farooq Kathwari, our President and Chief Executive Officer, entered into a new employment agreement (the "Agreement"). Pursuant to the terms of the Agreement, Mr. Kathwari was awarded on October 1, 2011, options to purchase 300,000 shares of our common stock at an exercise price of $13.61 which vest ratably over a 5-year period on each June 30, unless earlier vested, in certain circumstances, in accordance with the terms of the Agreement. During fiscal 2015 the Company granted to certain executives of the Company other than Mr. Kathwari, options to purchase an aggregate of 195,000 shares of our common stock, which2014 vest provided certain performance and service conditions are met (“Performance Options”). The performance conditions allow the potential vesting in three equal tranches, provided attainment of a minimum annual 5% growth in operating income (as defined in the agreement) for each of the ensuing three fiscal years. If the minimum annual growth is not achieved in any fiscal year, that tranche is forfeited, except that if a cumulative compound growth rate of 5% is achieved at the end of the three fiscal years, performance conditions for all three tranches will have been met. Service conditions require an additional period after performance conditions are met. Consequently, assuming both performance and service conditions are met, shares become exercisable between 3 and 5 years from grant date. At June 30, ~~2015, 43,667~~2017, 196,000 Performance Options achieved the performance conditions, and consequently will vest ratably in three equal tranches on the grant date anniversary in years three, four and five provided service conditions are also met. The ~~Company considers the~~ remaining ~~282,333~~130,000 Performance Options ~~to be probable of achieving~~did not achieve the respective performance conditions so ~~they are being amortized~~the amortization to ~~expense over their respective service periods.~~date was reversed at June 30 2017, and the options will be cancelled during fiscal 2018. The Performance Options are reflected in the options tables presented below. All options were issued at the closing stock price on each grant date, and have a contractual term of 10 years. A summary of stock option activity occurring during the fiscal year ended June 30, ~~2015~~2017 is presented ~~below:~~below.

The weighted average grant-date fair value of options granted during fiscal 2017, 2016 and 2015 ~~2014,~~was $8.30, $11.53 and ~~2013 was~~ $11.30 ~~$11.42 and $9.96~~ respectively. The total intrinsic value of options exercised during 2017, 2016 and 2015 ~~2014 and 2013~~ was ~~$4.5~~$0.8 million, ~~$0.2~~$0.3 million, and ~~$0.8~~$4.5 million, respectively. As of June 30, ~~2015,~~2017, there was ~~$3.1~~$0.7 million of total unrecognized compensation cost related to nonvested options granted under the Plan. That cost is expected to be recognized over a weighted average period of ~~3.0~~1.8 years. A summary of the nonvested shares as of June 30, ~~2015~~2017 and changes during the year then ended is presented ~~below:~~

On July 26, 2011, as a result of the Company’s performance, the Compensation Committee of the Company’s board of directors awarded Mr. Kathwari 30,000 service-based restricted shares, which vest in three equal annual installments on the grant date anniversary. Effective October 1, 2011, pursuant to the terms of the Agreement, Mr. Kathwari was awarded 105,000 shares of restricted stock, which vest ratably over a 5-year period on each June 30, unless earlier vested, in certain circumstances, in accordance with the terms of the Agreement.

~~A summary of nonvested restricted share activity occurring during the fiscal year ended June 30, 2015 is presented~~ below.

We account for stock unit awards as equity-based awards because upon vesting, they will be settled in common shares. These awards, which contain time and other vesting conditions, may also contain performance conditions providing recipients a contingent right to receive shares of the Company's common stock ("Performance Units"), conditioned upon the Company's achievement of certain performance targets and goals, and subject to the terms of the agreements. For Performance Units, we expense as compensation cost the fair value of the shares as of the grant date, and amortize expense ratably over the total performance and time vest period, taking into account the probability that we will satisfy the performance goals. We estimate, as of the date of grant, the fair value of Performance Units with a discounted cash flow model, using as model inputs the risk-free rate of return as the discount rate, dividend yield for dividends not paid during the restriction period, and a discount for lack of marketability for a one-year post-vest holding period. The lack of marketability discount used is the present value of a future put option using Monte-Carlo and Black-Scholes pricing models. The weighted average assumptions used for the fiscal years ended June 30 are noted in the table following. No Performance based restricted stock unit awards were granted under the Plan prior to December 1, 2015.

For each grant of Performance Units, the amount of the grant that will be earned and paid will be determined by reference to the achievement of certain performance goals for each of two initial fiscal years (on a cumulative basis) and the three fiscal years (on a cumulative basis) applicable to such grant.Equity-based compensation expenses related to performance-based shares recognized in our consolidated statements of comprehensive income are presented in the following table for the fiscal years ended June 30 (in thousands).

A summary of stock unit activity occurring during the fiscal year ended June 30, 2017 is presented below.

As of June 30, ~~2015,~~2017, there was $0.3 million of total unrecognized compensation cost related to ~~restricted shares~~nonvested units granted under the ~~Plan.~~Plan based on our probability estimates. That cost is expected to be recognized over a weighted average period of ~~1.0~~2.3 years. ~~The total fair value of restricted shares vested during the fiscal years ending June 30, 2015 and 2014 was $0.8 million and $0.9 million respectively.~~

No restricted stock awards were granted or vested during fiscal 2017 and there was ~~deemed~~no unrecognized compensation cost related to ~~have earned 126,000 stock units. In~~restricted shares granted under the ~~event of the termination of his employment, regardless of the reason for termination, Mr. Kathwari will receive shares of common stock equal to the number of stock units earned.~~

The following is a reconciliation of expected income tax expense (benefit) (computed by applying the federal statutory income tax rate to income before taxes) to actual income tax expense (benefit) (in thousands):

The deferred income tax asset and liability balances at June 30 (in thousands) include:

The deferred tax balances are classified in the Consolidated Balance Sheets as follows at June 30 (in thousands):

~~Note:~~ Current deferred tax assets and liabilities and non-current deferred tax assets and liabilities have been presented net in the Consolidated Balance Sheets.

We evaluate our deferred taxes to determine if the “more likely than not” standard of evidence has not been met thereby supporting the need for a valuation allowance. A valuation allowance must be established for deferred tax assets when it is less than 50% likely that assets will be realized. At June 30 of ~~2015, 2014~~2017 and ~~2013,~~2016, such an allowance was in place against the Belgian foreign tax assets, ~~in our retail segment,~~ and at June 30, ~~2015~~2017 this valuation allowance was approximately ~~$1.8~~$2.5 million. At June 30, 2013, a valuation allowance was also in place against certain U.S. retail segment assets. During fiscal 2014, we determined these assets would likely be realized due to a return to profitability that remains through fiscal 2015. Accordingly, during fiscal 2014, we released all of the U.S. retail segment valuation allowance remaining against deferred tax assets, recording a tax benefit of $2 million at that time.

The Company’s deferred income tax assets at June 30, ~~2015~~2017 with respect to the net operating losses expire as follows (in thousands):

Deferred U.S. federal income taxes are not provided for unremitted foreign earnings of our foreign subsidiaries because we expect those earnings will be permanently reinvested.

We recognize interest and penalties related to income tax matters as a component of income tax expense. If the ~~$3.1~~$2.1 million of unrecognized tax benefits and related interest and penalties as of June 30, ~~2015~~2017 were recognized, approximately ~~$2.0~~$1.4 million would be recorded as a benefit to income tax expense. A reconciliation of the beginning and ending amount of unrecognized tax benefits including related interest and penalties as of June 30, ~~2015~~2017 and ~~2014~~2016 is as follows (in thousands):

It is reasonably possible that various issues relating to approximately ~~$1.2~~$0.2 million of the total gross unrecognized tax benefits as of June 30, ~~2015~~2017 will be resolved within the next twelve months as exams are completed or statutes expire. If recognized, approximately ~~$0.8~~$0.1 million of unrecognized tax benefits would reduce our tax expense in the period realized. However, actual results could differ from those currently anticipated.

The Company conducts business globally and, as a result, the Company or one or more of its subsidiaries files income tax returns in the U.S., various state, and foreign jurisdictions. In the normal course of business, the Company is subject to examination by the taxing authorities in such major jurisdictions as the U.S. Canada, Mexico, Belgium and Honduras. As of June 30, ~~2015,~~2017, the Company and certain subsidiaries are currently under audit from ~~2007~~2014 through ~~2013~~2016 in the U.S. While the amount of uncertain tax benefits with respect to the entities and years under audit may change within the next twelve months, it is not anticipated that any of the changes will be significant.

On a quarterly basis, we review our litigation activities and determine if an unfavorable outcome to us is considered “remote”, “reasonably possible” or “probable” as defined by U.S. GAAP. Where we determine an unfavorable outcome is probable and is reasonably estimable, we accrue for potential litigation losses. The liability we may ultimately incur with respect to such litigation matters, in the event of a negative outcome, may be in excess of amounts currently accrued, if any; however, we do not expect that the reasonably possible outcome of these litigation matters would, individually or in the aggregate, have a material adverse effect on our financial condition, results of operations or cash flows. Where we determine an unfavorable outcome is not probable or reasonably estimable, we do not accrue for any potential litigation loss.

Although the outcome of the various claims and proceedings against us cannot be predicted with certainty, management believes that the likelihood is remote that any existing claims or proceedings, individually or in the aggregate, will have a material adverse effect on our financial position, results of operations or cash flows.

Foreign currency translation adjustments are the result of changes in foreign currency exchange rates related to our operations in Canada, Belgium, Honduras and Mexico, and exclude income taxes given that the earnings of non-U.S. subsidiaries are deemed to be reinvested for an indefinite ~~period of time. The derivative instruments were reclassified to interest expense in our consolidated statements of operations.~~

(15)Segment Information

Our ~~operations are classified into two operating segments:~~ wholesale and ~~retail. These~~retail operating segments represent strategic business areas ~~which, although they~~of our vertically integrated enterprise that operate separately and provide their own distinctive ~~services, enable~~services. This vertical structure enables us to ~~more effectively~~ offer our complete line of home furnishings and ~~accents.~~

~~The wholesale segment is principally involved in the development~~accents more effectively while controlling quality and cost. We evaluate performance of the ~~Ethan Allen brand, which encompasses the design, manufacture, domestic~~respective segments based upon revenues and offshore sourcing, sale and distribution of a full range of home furnishings and accents to a network of independently operated and Ethan Allen operated 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 operated 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 accents to consumers through a network of Company operated 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.

income. Inter-segment ~~eliminations~~transactions result, primarily, from the wholesale sale of inventory to the retail segment, including the related profit margin.

ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES

~~We evaluate performance~~As of June 30, 2017, the ~~respective segments based upon revenues~~Company operated 148 design centers (our retail segment) and ~~operating income. While the manner in which~~ our home furnishings and accents 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 theindependent retailers operated 155 design centers. Our wholesale segment ~~we maintain revenue information according~~net sales include sales to ~~each respective product line (i.e. case goods, upholstery, or home accents~~our retail segment, which are eliminated in consolidation, and ~~other). The allocation~~sales to our independent retailers. Our retail segment net sales accounted for 79% of ~~retail~~our consolidated net sales ~~by product line generally follows that of the~~in fiscal 2017. Our wholesale segment ~~(see~~net sales to independent retailers accounted for 21%, including approximately 11.9% of our consolidated net sales in fiscal 2017 to the ~~product line table below). A breakdown of wholesale sales by product line for each of the last three fiscal years ended June 30 is provided below:~~

Fiscal Year Ended June 30,

2015

2014

2013

Case Goods
34 % 36 % 37 %
Upholstered Products
48 % 48 % 48 %
Home Accessories and Other
18 % 16 % 15 %
100 % 100 % 100 %

ten largest independent retailers, who operate 101 design centers. Information for each of the last three fiscal years ended June 30 is provided below (in thousands):

	2015			2014			2013			2017			2016			2015
Net sales:
Wholesale segment	$	469,384		$	453,607		$	434,439		$	453,326		$	491,467		$	469,384
Retail segment		579,713			580,739			578,284			603,677			626,511			579,713
Elimination of inter-company sales		(294,497	)		(287,687	)		(283,640	)		(293,618	)		(323,776	)		(294,497	)
Consolidated Total	$	754,600		$	746,659		$	729,083		$	763,385		$	794,202		$	754,600

Operating income (loss):
Wholesale segment	$	66,988		$	57,816		$	50,843		$	53,505		$	74,412		$	66,988
Retail segment		1,726			10,515			8,016			1,198			16,450			1,726
Adjustment of inter-company profit (1)		(2,780	)		1,305			1,578			3,247			(1,683	)		(2,780	)
Consolidated Total	$	65,934		$	69,636		$	60,437		$	57,950		$	89,179		$	65,934

Depreciation & Amortization:
Wholesale segment	$	8,044		$	7,887		$	8,166		$	7,550		$	7,587		$	8,044
Retail segment		11,098			10,043			9,842			12,565			11,766			11,098
Consolidated Total	$	19,142		$	17,930		$	18,008		$	20,115		$	19,353		$	19,142

Capital expenditures:
Wholesale segment	$	9,427		$	11,013		$	7,024		$	8,589		$	12,446		$	9,427
Retail segment		10,360			8,292			11,981			9,056			10,521			10,360
Acquisitions		1,991			-			770			676			165			1,991
Consolidated Total	$	21,778		$	19,305		$	19,775		$	18,321		$	23,132		$	21,778

~~(1) Represents the change in wholesale profit contained in Ethan Allen design center inventory at the end of the period.~~

~~(2) The wholesale profit contained in the retail segment inventory that has not yet been realized. These profits are realized when the related inventory is sold.~~

Our international net sales are comprised of our wholesale segment sales to independent retailers and our retail segment sales to consumers through the Company operated design centers. The number of international design centers, and the related net sales as a percent of our consolidated net sales is shown in the following table.

Cash equivalents consist of money market accounts, and mutual funds in U.S. government and agency fixed income securities. We use quoted prices in active markets for identical assets or liabilities to determine fair value. There were no transfers between level 1 and level 2 during fiscal years ~~2015~~2017 or ~~2014.~~2016. At June 30, ~~2015~~2017 and ~~2014, $8.0~~2016, $7.3 million and ~~$8.5~~$7.8 million, respectively, of cash equivalents were restricted and classified as a long-term asset.

~~At June 30, 2015~~We did not hold any available-for-sale securities ~~consist of $2.2 million of U.S. municipal bonds, and~~ at June 30, ~~2014, available for sale securities consisted of $18.2 million in U.S.~~2017 or 2016 as all municipal ~~bonds. All securities in both years have maturities of less than two years,~~bonds matured and ~~are rated A/A2 or better by S&P/Moody’s respectively.~~the proceeds were transferred to our operating cash accounts. There were no material gross unrealized gains or losses on available-for-sale securities at June 30, ~~2015~~2017 or June 30, ~~2014.~~

~~Additional information on available-for-sale securities balances at June 30 are provided in the following table (in thousands).~~

~~The contractual maturities of our available-for-sale investments as of June 30, 2015 and 2013 were as follows (in thousands):~~

Proceeds from sales of investments available for sale were $15.4 million in fiscal 2015 and $14.9 million during fiscal 2014, resulting in no material gain or loss in either period. There were no investments that have been in a continuous loss position for more than one year, and there have been no other-than-temporary impairments recognized.2016.

We measure certain assets, including our cost and equity method investments, at fair value on a nonrecurring basis. These assets are recognized at fair value when they are deemed to be other-than-temporarily impaired. During the year ended June 30, 2015, we determined that certain long-lived assets of our retail design centers in Belgium were impaired, and an impairment charge of $0.8 million was ~~recorded. The Company’s decision during the third quarter of fiscal 2015 to exit the lease in Brussels led to our re-evaluation of the future cash flows of~~recorded at that ~~asset group over a shorter useful life than previously expected.~~

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

~~Our~~We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including ~~the~~our Chairman of the Board and Chief Executive ~~Officer ("~~Officer("CEO")and Executive Vice President Administration and Chief Financial Officer("CFO"), as appropriate, to allow timely decisions regarding required financial disclosure.

We carried out an evaluation, under the supervision and with the participation of our management, including the CEO and the ~~Chief Financial Officer ("CFO"), conducted an evaluation~~CFO, of the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of the end of the period covered by this report. Based on such evaluation, the CEO and CFO have concluded that, as of June 30, ~~2015,~~2017, our disclosure controls and procedures were effective in ensuring that material information relating to us (including our consolidated subsidiaries), which is required to be disclosed by us in our periodic reports filed or submitted ~~under~~to the ~~Exchange Act~~SEC is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and (ii) accumulated and communicated to management, including the CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as(as such term is defined in Exchange Act Rule 13a-15(f) and 15d-15(f)). ~~Under~~Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the ~~supervision~~reliability of financial reporting and the preparation of financial statements for external purposes in accordance with ~~the participation~~U.S. GAAP.

Our internal control over financial reporting includes those policies and procedures that:

Management has assessed the effectiveness of our internal control over financial reporting based on the framework inInternal Control - Integrated Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission ~~(1992~~(2013 framework). Based on that evaluation, management concluded that our internal control over financial reporting was effective as of June 30, ~~2015.~~2017 to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external reporting purposes in accordance with U.S. GAAP.

KPMG LLP, the independent registered public accounting firm that audited the consolidated financial statements included in this Annual Report on Form 10-K, has also audited the effectiveness of our internal control over financial reporting as of June 30, ~~2015,~~2017, as stated in their report included under Item 8 of this Annual Report.

There have been no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the ~~fourth~~ fiscal quarter ended June 30, ~~2015~~2017 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Except as set forth below, the information required by Items 10, 11, 12, 13 and 14 ~~will appear in the~~is incorporated by reference to Ethan Allen Interiors Inc. proxy statement for the Annual Meeting of Shareholders scheduled to be held on ~~October~~November 15, ~~2015~~2017 (the "Proxy Statement")~~. The Proxy Statement, which will~~ to be filed with the SEC pursuant to Regulation 14A ~~under~~within 120 days after the ~~Securities Exchange Act~~end of 1934, is incorporated by reference in this Annual Report pursuant to General Instruction G(3) of Form 10-K (other than the portions thereof not deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934). In addition, the information set forth below is provided as required by Item 10 and the listing standards of the New York Stock Exchange ("NYSE").our 2017 fiscal year.

We have adopted a code of ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. Our code of ethics can be accessed via our website at www.ethanallen.com/governance.

We intend to disclose any amendment of our Code of Ethics, or any waiver of any provision thereof, applicable to our principal executive officer and/or principal financial officer, or persons performing similar functions, directors and other executive officers on our website within 4 days of the date of such amendment or waiver. In the case of a waiver, the nature of the waiver, the name of the person to whom the waiver was granted, and the date of the waiver will also be disclosed.

Information contained on, or connected to, our website is not incorporated by reference into this Form 10-K and should not be considered part of this or any other report that we file with, or furnish to, the SEC.

The information set forth under the heading “Executive Officers of the Registrant” in Part I, Item 1 of this form 10-K is also incorporated by reference in this section.

Our Board of Directors has determined that we have ~~four~~three "audit committee financial experts", as defined under Item 407(d)(5)(ii) of Regulation S-K of the Securities Exchange Act of 1934, currently serving on our Audit Committee. Those members of our Audit Committee who are deemed to be audit committee financial experts are as follows:

All persons identified as audit committee financial experts are independent from management as defined by the applicable listing standards of the New York Stock Exchange.

The remaining information required by this Item will be included in and is incorporated herein by reference from our 2017 Proxy Statement.

The information required by this Item will be included in and is incorporated herein by reference from our 2017 Proxy Statement.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters

The information required by this Item is incorporated by reference to the sections entitled ["Equity Compensation Plan Information"] and ["Security Ownership of Common Stock of Certain Owners and Management"] in the 2017 Proxy Statement.

Item 13. Certain Relationships and Related Transactions, and Director Independence

The information required by this Item is incorporated by reference to the section entitled ["Certain Relationships and Related Party Transactions"] and ["Corporate Governance —Director Independence "] in the 2017 Proxy Statement.

The information required by this item is incorporated by reference to the sections entitled ["Audit Fees"]and ["Audit and Non-Audit Engagement Pre-Approval Policy "] in the 2017 Proxy Statement.

† Management contract or ~~a part of a registration statement~~compensatory plan, contract or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.arrangement.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature appears below hereby constitutes and appoints M. Farooq Kathwari and Corey Whitely, and each of them individually, his or her true and lawful agent, proxy and attorney-in-fact, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to (i) act on, sign and file with the Securities and Exchange Commission any and all amendments to this Report together with all schedules and exhibits thereto, (ii) act on, sign and file with the Securities and Exchange Commission any and all exhibits to this Report and any and all exhibits and schedules thereto, (iii) act on, sign and file any and all such certificates, notices, communications, reports, instruments, agreements and other documents as may be necessary or appropriate in connection therewith and (iv) take any and all such actions which may be necessary or appropriate in connection therewith, granting unto such agents, proxies and attorneys-in-fact, and each of them individually, full power and authority to do and perform each and every act and thing necessary or appropriate to be done, as fully for all intents and purposes as he or she might or could do in person, and hereby approving, ratifying and confirming all that such agents, proxies and attorneys-in-fact, any of them or any of his, her or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the date indicated.

Delaware		06-1275288
~~(State~~(State or other jurisdiction of incorporation or organization)	~~(I.R.S.~~	(I.R.S. Employer Identification No.)

~~Ethan Allen Drive, Danbury, CT~~	~~06811~~
~~(Address of principal executive offices)~~	~~(Zip Code)~~

~~Registrant's telephone number, including area code (203) 743-8000~~
Ethan Allen Drive, Danbury, CT		06811
(Address of principal executive offices)		(Zip Code)

Title of Each Class				Name of Each Exchange On Which Registered
Common Stock, $.01 par value				New York Stock Exchange, Inc.

Large accelerated filer ~~[X]~~	[X]	Accelerated filer [ ]
Non-accelerated filer	[ ] Do not check if smaller reporting company)	Smaller reporting company [ ]
Emerging growth company	[ ]

Item		Page
	PART I

Item 1.	Business	3

Item 1A.	Risk Factors	9

Item 1B.	Unresolved Staff Comments	13

Item 2.	Properties	13

Item 3.	Legal Proceedings	14

Item 4.	Mine Safety Disclosures	15

	PART II

Item 5.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	15

Item 6.	Selected Financial Data	17

Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operation	18

Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	28

Item 8.	Financial Statements and Supplementary Data	28

Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	50

Item 9A.	Controls and Procedures	51

Item 9B.	Other Information	51

	PART III

Item 10.	Directors, Executive Officers and Corporate Governance	52

Item 11.	Executive Compensation	52

Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters	52

Item 13.	Certain Relationships and Related Transactions, and Director Independence	52

Item 14.	Principal Accounting Fees and Services	52

	PART IV

Item 15.	Exhibits and Financial Statement Schedules	52

Item 16.	Form 10-K Summary	56

SIGNATURES		57

M. Farooq Kathwari, age 72
	●	Chairman of the Board, President and Chief Executive Officer since 1988

Daniel M. Grow, age 71
	●	Senior Vice President, Business Development since February 2015
	●	Vice-President, Business Development from 2009 to 2015

Eric D. Koster, age 70
	●	Vice-President, General Counsel and Secretary since April 2013
	●	Private practice prior to joining the Company in April 2013

Tracy Paccione, age 51
	●	Vice-President, Merchandising since June 2009

Clifford Thorn, age 65
	●	Vice-President, Upholstery Manufacturing since May 2001

Corey Whitely, age 57
	●	Executive Vice-President, Administration, Chief Financial Officer and Treasurer since July 2014
	●	Executive Vice-President, Operations from October 2007 through July 2014

Item	Page

PART I

1.	Business	3

1A.	Risk Factors	11

1B.	Unresolved Staff Comments	16

2.	Properties	17

3.	Legal Proceedings	18

4.	Mine Safety Disclosures	18

PART II

5.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	18

6.	Selected Financial Data	21

7.	Management's Discussion and Analysis of Financial Condition and Results of Operation	22

7A.	Quantitative and Qualitative Disclosures About Market Risk	34

8.	Financial Statements and Supplementary Data	35

9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	61

9A.	Controls and Procedures	61

9B.	Other Information	62

PART III

10.	Directors, Executive Officers and Corporate Governance	62

11.	Executive Compensation	62

12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	62

13.	Certain Relationships and Related Transactions, and Director Independence	62

14.	Principal Accountant Fees and Services	62

PART IV

15.	Exhibits and Financial Statement Schedules	63

	Signatures	68

																			Fiscal 2017									Fiscal 2016
	Year-to-date Fiscal 2015									Year-to-date Fiscal 2014									Independent			Company-						Independent			Company-
	Independent retailers			Company-operated			Total			Independent retailers			Company-operated			Total			retailers			operated			Total			retailers			operated			Total
Retail Design Center location activity:
Balance at beginning of period		152			143			295			148			147			295			153			143			296			155			144			299
New locations		22			4			26			10			9			19			8			6			14			15			10			25
Closures		(17	)		(5	)		(22	)		(6	)		(13	)		(19	)		(5	)		(2	)		(7	)		(16	)		(12	)		(28	)
Transfers		(2	)		2			-			-			-			-			(1	)		1			-			(1	)		1			-
Balance at end of period		155			144			299			152			143			295			155			148			303			153			143			296
Relocations (in new and closures)		7			2			9			-			6			6			1			2			3			2			6			8

Retail Design Center geographic locations:
United States		58			137			195			61			135			196			48			142			190			50			137			187
Canada		2			6			8			4			6			10			-			6			6			-			6			6
Asia		87			-			87			81			-			81
China																				82			-			82			83			-			83
Other Asia																				12			-			12			11			-			11
Europe		1			1			2			1			2			3			6			-			6			2			-			2
Middle East		7			-			7			5			-			5			7			-			7			7			-			7
Total		155			144			299			152			143			295			155			148			303			153			143			296

	Market Price				Dividends
	High		Low		Per Share
Fiscal 2015
First Quarter	$	26.84	$	22.06	$	0.12
Second Quarter		31.24		22.58		0.12
Third Quarter		32.63		25.31		0.12
Fourth Quarter		28.25		23.33		0.14

Fiscal 2014
First Quarter	$	31.25	$	25.30	$	0.10
Second Quarter		31.09		23.88		0.10
Third Quarter		31.52		24.03		0.10
Fourth Quarter		27.63		22.83		0.10

					Total Number of		Maximum Number of
					Shares Purchased		Shares that May Yet
	Number of		Average		as Part of Publicly		Be Purchased
	Shares		Price Paid		Announced		Under the
	Purchased		Per Share		Plans or Programs		Plans or Programs
Period
April 2015		100,000	$	24.88		100,000		2,897,724
May 2015		416,329	$	25.34		416,329		2,481,395
June 2015		25,736	$	24.89		25,736		2,455,659
Total		542,065	$	25.23		542,065

	Fiscal years ended June 30,
	2017		%			2016		%			2015		%
Net sales	$	763.4		100.0	%	$	794.2		100.0	%	$	754.6		100.0	%
Gross profit	$	419.7		55.0	%	$	442.2		55.7	%	$	411.2		54.5	%
SG&A	$	361.8		47.4	%	$	353.1		44.5	%	$	345.2		45.7	%
Operating income		58.0		7.6	%		89.2		11.2	%		65.9		8.7	%
Net income		36.2		4.7	%		56.6		7.1	%		37.1		4.9	%
Earnings per diluted share	$	1.29				$	2.00				$	1.27
Net cash provided by operating activities	$	78.6				$	58.4				$	55.1

			Less						More				Less						More
			than 1			1-3		4-5	than 5				than 1			1-3		4-5	than 5
		Total	Year			Years		Years	Years		Total		Year		Years		Years		Years
Long-term debt obligations:
Debt maturities	$	77,568	$	3,341	$	6,119	$	68,108	$	-	$	14.9	$	3.0	$	11.8	$	0.1	$	-
Contractual interest		5,640		1,256		2,620		1,764		-		0.8		0.4		0.4		-		-
Operating lease obligations		209,250		31,255		54,343		42,745		80,907		197.1		34.9		57.8		44.6		59.8
Letters of credit		204		204		-		-		-		0.1		0.1		-		-		-
Purchase obligations (1)		-		-		-		-		-		-		-		-		-		-
Other long-term liabilities		226		3		45		45		133		0.2		-		-		0.0		0.2
Total contractual obligations	$	292,888	$	36,059	$	63,127	$	112,662	$	81,040	$	213.2	$	38.4	$	70.0	$	44.8	$	60.0

									Accumulated																				Accumulated
			Additional						Other						Non-								Additional						Other						Non-
	Common		Paid-in			Treasury			Comprehensive			Retained			Controlling						Common		Paid-in			Treasury			Comprehensive			Retained			Controlling
	Stock		Capital			Stock			Income			Earnings			Interests			Total			Stock		Capital			Stock			Income			Earnings			Interests			Total
Balance at June 30, 2012	$	485	$	361,165		$	(584,041	)	$	1,141		$	542,918		$	200		$	321,868
Stock issued on share-based awards		1		1,398			-			-			-			-			1,399
Compensation expense associated with share-based awards		-		1,401			-			-			-			-			1,401
Tax benefit associated with exercise of share based awards		-		(26	)		-			-			-			-			(26	)
Dividends declared on common stock		-		-			-			-			(22,313	)		-			(22,313	)
Increase from business combination																-			-
Comprehensive income (loss)		-		-			-			(457	)		32,478			7			32,028
Balance at June 30, 2013		486		363,938			(584,041	)		684			553,083			207			334,357

Stock issued on share-based awards		-		357			-			-			-			-			357
Compensation expense associated with share-based awards		-		1,325			-			-			-			-			1,325
Tax benefit associated with exercise of share based awards		-		113			-			-			-			-			113
Dividends declared on common stock		-		-			-			-			(11,619	)		-			(11,619	)
Capital distribution		-		-			-			-			-			(25	)		(25	)
Comprehensive income (loss)		-		-			-			(42	)		42,931			70			42,959
Balance at June 30, 2014		486		365,733			(584,041	)		642			584,395			252			367,467			486		365,733			(584,041	)		642			584,395			252			367,467

Stock issued on share-based awards		3		4,117			-			-			-			-			4,120			3		4,117			-			-			-			-			4,120
Compensation expense associated with share-based awards		-		1,236			-			-			-			-			1,236			-		1,236			-			-			-			-			1,236
Tax benefit associated with exercise of share based awards		-		(172	)		-			-			-			-			(172	)		-		(172	)		-			-			-			-			(172	)
Purchase/retirement of company stock		-		-			(21,545	)		-			-			-			(21,545	)		-		-			(21,545	)		-			-			-			(21,545	)
Dividends declared on common stock		-		-			-			-			(14,458	)		-			(14,458	)		-		-			-			-			(14,458	)		-			(14,458	)
Capital distribution		-		-			-			-			-			(25	)		(25	)		-		-			-			-			-			(25	)		(25	)
Comprehensive income (loss)		-		-			-			(3,280	)		37,142			50			33,912			-		-			-			(3,280	)		37,142			50			33,912
Balance at June 30, 2015	$	489	$	370,914		$	(605,586	)	$	(2,638	)	$	607,079		$	277		$	370,535			489		370,914			(605,586	)		(2,638	)		607,079			277			370,535

Stock issued on share-based awards																						-		734			-			-			-			-			734
Compensation expense associated with share-based awards																						-		2,356			-			-			-			-			2,356
Tax benefit associated with exercise of share based awards																						-		968			-			-			-			-			968
Purchase/retirement of company stock																						-		-			(19,346	)		-			-			-			(19,346	)
Dividends declared on common stock																						-		-			-			-			(17,401	)		-			(17,401	)
Capital distribution																						-		-			-			-			-			(100	)		(100	)
Comprehensive income (loss)																						-		-			-			(2,208	)		56,637			27			54,456
Balance at June 30, 2016																						489		374,972			(624,932	)		(4,846	)		646,315			204			392,202

Stock issued on share-based awards																						1		1,199			-			-			-			-			1,200
Compensation expense associated with share-based awards																						-		1,259			-			-			-			-			1,259
Tax benefit associated with exercise of share based awards																						-		120			-			-			-			-			120
Purchase/retirement of company stock																						-		-			(10,247	)		-			-			-			(10,247	)
Dividends declared on common stock																						-		-			-			-			(20,533	)		-			(20,533	)
Capital distribution																						-		-			-			-			-			-			-
Comprehensive income (loss)																						-		-			-			715			36,194			(14	)		36,895
Balance at June 30, 2017																					$	490	$	377,550		$	(635,179	)	$	(4,131	)	$	661,976		$	190		$	400,896

	2015		2014

5.375% Senior Notes due 2015	$	-	$	129,255
Term loan		35,000		-
Revolver		40,000		-
Capital leases and other		2,568		1,657
Total debt		77,568		130,912
Less curent maturities		3,341		501
Total long-term debt	$	74,227	$	130,411

Fiscal Year Ended June 30
	Minimum		Minimum		Minimum		Minimum
	Future		Future		Future		Future
	Lease		Sublease		Lease		Sublease
	Payments		Rentals
2016	$	31,255	$	1,688
2017		28,090		1,563
Fiscal Year Ended June 30,					Payments		Rentals
2018		26,253		1,462	$	34,901	$	2,012
2019		22,724		912		31,157	$	1,469
2020		20,021		709		26,610		965
Subsequent to 2020		80,907		1,215
2021						24,118		776
2022						20,526		657
Subsequent to 2022						59,804		152
Total	$	209,250	$	7,549	$	197,116	$	6,031

	2017		2016
Deferred rent credits	$	13,876	$	13,003
Deferred lease incentives	$	5,238	$	4,538

	Fiscal Year Ended June 30,															Fiscal Year Ended June 30,
	2015			2014			2013			2012			2011			2017			2016			2015			2014			2013
Consolidated Operations Data
Net Sales	$	754,600		$	746,659		$	729,083		$	729,373		$	678,960		$	763,385		$	794,202		$	754,600		$	746,659		$	729,083
Cost of Sales		343,437			340,163			330,734			339,085			329,500			343,662			351,966			343,437			340,163			330,734
Selling, general andadministrative expenses		345,229			336,860			337,912			340,591			317,527			361,773			353,057			345,229			336,860			337,912
Operating income (loss)		65,934			69,636			60,437			49,697			31,933
Operating income																	57,950			89,179			65,934			69,636			60,437
Interest and other expense, net		9,251			7,234			10,263			8,458			5,562			955			1,223			9,251			7,234			10,263
Income (loss) before incometax expense		56,683			62,402			50,174			41,239			26,371
Income before incometax expense																	56,995			87,956			56,683			62,402			50,174
Income tax expense (benefit)		19,541			19,471			17,696			(8,455	)		(2,879	)		20,801			31,319			19,541			19,471			17,696
Net income (loss)	$	37,142		$	42,931		$	32,478		$	49,694		$	29,250

Net income																$	36,194		$	56,637		$	37,142		$	42,931		$	32,478

Per Share Data
Net income (loss) per basicshare	$	1.29		$	1.48		$	1.13		$	1.72		$	1.02
Net income per basicshare																$	1.31		$	2.02		$	1.29		$	1.48		$	1.13
Basic weighted average sharesoutstanding		28,874			28,918			28,864			28,824			28,758			27,679			28,072			28,874			28,918			28,864
Net income (loss) per dilutedshare	$	1.27		$	1.47		$	1.11		$	1.71		$	1.01
Net income per dilutedshare																$	1.29		$	2.00		$	1.27		$	1.47		$	1.11
Diluted weighted averageshares outstanding		29,182			29,276			29,239			29,109			28,966			27,958			28,324			29,182			29,276			29,239
Cash dividends per share	$	0.50		$	0.40		$	0.77		$	0.30		$	0.22		$	0.74		$	0.62		$	0.50		$	0.40		$	0.77

Other Information
Depreciation and amortization	$	19,142		$	17,930		$	18,008		$	18,581		$	20,816		$	20,115		$	19,353		$	19,142		$	17,930		$	18,008
Capital expenditures andacquisitions	$	21,778		$	19,305		$	19,775		$	23,404		$	12,051		$	18,321		$	23,132		$	21,778		$	19,305		$	19,775
Working capital	$	129,705		$	169,582		$	127,631		$	131,715		$	113,912		$	116,653		$	124,857		$	130,012		$	169,582		$	127,631
Current ratio		1.92 to 1			2.25 to 1			1.96 to 1			1.87 to 1			1.74 to 1			1.92 to 1			2.01 to 1			1.92 to 1			2.25 to 1			1.96 to 1
Effective tax rate		34.5	%		31.2	%		35.3	%		-20.5	%		-10.9	%		36.5	%		35.6	%		34.5	%		31.2	%		35.3	%

Balance Sheet Data (at end of period)
Total assets	$	607,308		$	654,434		$	617,285		$	644,788		$	628,325		$	568,222		$	577,409		$	605,977		$	654,434		$	617,285
Total debt, including capitallease obligations		77,568			130,912			131,289			154,500			165,032			14,339			41,838			76,237			130,912			131,289
Shareholders' equity	$	370,535		$	367,467		$	334,357		$	321,868		$	281,687		$	400,896		$	392,202		$	370,535		$	367,467		$	334,357
Debt as a percentage of equity		20.9	%		35.6	%		39.3	%		48.0	%		58.6	%		3.6	%		10.7	%		20.6	%		35.6	%		39.3	%
Debt as a percentage of capital		17.3	%		26.3	%		28.2	%		32.4	%		36.9	%		3.5	%		9.6	%		17.1	%		26.3	%		28.2	%

	Fiscal Year Ended June 30,
	2017		2016		2015
Retail segment
Revenue	-3.6	%	8.1	%	-0.2	%
Comparable design center revenue	-4.6	%	8.3	%	0.0	%
Total written orders	-0.6	%	1.7	%	3.9	%
Comparable design center written orders	-2.5	%	1.8	%	4.0	%
Operating Income	-92.7	%	853.1	%	-83.6	%

	Fiscal Year Ended June 30,									Fiscal Years Ended June 30,
	2015			2014			2013			2017			2016			2015
Operating Activities
Cash provided by (used in) operating activities
Net income plus depreciation and amortization	$	56.3		$	60.9		$	50.5		$	56.3		$	76.0		$	56.3
Working capital items		(15.2	)		(2.1	)		2.4			14.5			(19.3	)		(15.2	)
Other operating activities		14.0			1.1			8.4			7.8			1.7			14.0
Total provided by operating activities	$	55.1		$	59.9		$	61.3		$	78.6		$	58.4		$	55.1

Investing Activities
Cash provided by (used in) investing activities
Capital expenditures & acquisitions	$	(21.8	)	$	(19.3	)	$	(19.8	)	$	(18.3	)	$	(23.1	)	$	(21.8	)
Net sales (purchases) of marketable securities		15.4			(3.4	)		(7.1	)
Net sales of marketable securities											-			2.2			15.4
Other investing activities		9.8			10.6			5.3			1.9			8.4			9.8
Total provided (used) in investing activities	$	3.4		$	(12.1	)	$	(21.6	)	$	(16.4	)	$	(12.5	)	$	3.4

Financing Activities
Cash provided by (used in) financing activities
Payments of long-term debt and capital lease obligations	$	(133.7	)	$	(0.5	)	$	(26.1	)	$	(28.4	)	$	(34.8	)	$	(133.7	)
Borrowings from revolving credit and term loan facilities	$	75.0		$	-		$	-		$	-		$	-		$	75.0
Purchases and retirements of company stock		(17.6	)		-			-			(10.2	)		(19.3	)		(17.6	)
Payment of cash dividends		(13.3	)		(11.3	)		(22.2	)		(20.0	)		(16.6	)		(13.3	)
Other financing activities		(1.4	)		0.5			1.7			1.3			1.6			(1.4	)
Total used in financing activities	$	(91.0	)	$	(11.3	)	$	(46.6	)	$	(57.3	)	$	(69.1	)	$	(91.0	)

	2015			2014			2013			2017			2016			2015
Operating activities:
Net income	$	37,142		$	42,931		$	32,478		$	36,194		$	56,637		$	37,142
Adjustments to reconcile net income to netcash provided by operating activities:
Depreciation and amortization		19,142			17,930			18,008			20,115			19,353			19,142
Compensation expense related to share-based payment awards		1,236			1,325			1,401			1,259			2,356			1,236
Provision (benefit) for deferred income taxes		3,923			(3,032	)		2,767
Provision for deferred income taxes											3,507			671			3,923
Restructuring and impairment charge		784			-			-			-			-			784
Loss on disposal of property, plant and equipment		4,180			2,093			3,717
Loss (gain) on disposal of property, plant and equipment											1,033			(2,267	)		4,180
Other		3,606			415			1,824			(6	)		(1,295	)		3,606

Change in operating assets and liabilities, net ofeffects of acquired businesses:
Accounts receivable		(559	)		(149	)		1,922			(2,826	)		2,926			(559	)
Inventories		(5,036	)		(9,019	)		18,569			13,507			(9,982	)		(5,036	)
Prepaid and other current assets		(9,628	)		4,269			1,070			1,010			5,113			(9,628	)
Customer deposits		7,517			586			(6,951	)		1,883			(7,275	)		7,517
Accounts payable		(5,349	)		1,300			(4,320	)		1,524			(3,509	)		(5,349	)
Accrued expenses and other current liabilities		(2,113	)		969			(7,839	)		(547	)		(6,550	)		(2,113	)
Other assets and liabilities		261			271			(1,345	)		1,980			2,191			261
Net cash provided by operating activities		55,106			59,889			61,301			78,633			58,369			55,106

Investing activities:
Proceeds from the disposal of property, plant & equipment		9,103			3,381			3,283			1,273			8,073			9,103
Change in restricted cash and investments		497			6,926			(17	)		490			190			497
Capital expenditures		(19,787	)		(19,305	)		(19,005	)		(17,645	)		(22,967	)		(19,787	)
Acquisitions		(1,991	)		-			(770	)		(676	)		(165	)		(1,991	)
Purchases of marketable securities		-			(18,268	)		(18,247	)
Sales of marketable securities		15,430			14,883			11,165			-			2,150			15,430
Other investing activities		176			325			1,990			175			193			176
Net cash provided by (used in) investing activities		3,428			(12,058	)		(21,601	)		(16,383	)		(12,526	)		3,428

Financing activities:
Borrowings from revolving credit and term loan facilities		75,000			-			-			-			-			75,000
Payments on long-term debt and capital lease obligations		(133,710	)		(480	)		(26,104	)		(28,401	)		(34,840	)		(133,710	)
Purchases and retirements of company stock		(17,552	)		-			-			(10,246	)		(19,346	)		(17,552	)
Payment of cash dividends		(13,348	)		(11,297	)		(22,220	)		(20,031	)		(16,646	)		(13,348	)
Other financing activities		(1,353	)		525			1,758			1,335			1,718			(1,353	)
Net cash used in financing activities		(90,963	)		(11,252	)		(46,566	)		(57,343	)		(69,114	)		(90,963	)

						Weighted
				Weighted		Average
				Average		Remaining
				Exercise		Contractual		Aggregate
Options	Shares			Price		Term (yrs)		Intrinsic Value
Outstanding - June 30, 2016		907,073		$	24.08
Granted		20,153			34.73
Exercised		(58,450	)		20.51
Canceled (forfeited/expired)		(32,756	)		28.77
Outstanding - June 30, 2017		836,020			24.41		4.2	$	6,900,417
Exercisable - June 30, 2017		550,736		$	23.33		2.4	$	5,201,916

				Weighted Average
				Grant Date
Options	Shares			Fair Value
Nonvested June 30, 2014		330,677		$	9.10
Granted		221,316			11.30
Vested		(87,419	)		7.31
Canceled (forfeited/expired)		(10,000	)		10.25
Nonvested at June 30, 2015		454,574		$	10.49

	2017			2016
Volatility		30.8	%		33.3	%
Risk-free rate of return		0.92	%		0.77	%
Dividend yield		1.97	%		1.99	%
Expected average life (years)		2.04			1.75

Granted within fiscal years ending June 30,	2017		2016
2016	$	794	$	733
2017		12		-
Total expense	$	806	$	733

					2017			2016
Deferred tax liabilities:
Inventories		149		-
Property, plant and equipment		1,358		622		5,360			654
Intangible assets other than goodwill		14,261		14,306		14,166			14,260
Commissions		3,999		3,274		3,420			3,478
Other, net		-		-		-			-
Total deferred tax liability		19,767		18,202		22,946			18,392
Total net deferred tax asset	$	1,602	$	5,533
Total net deferred tax asset (liability)					$	(2,578	)	$	929

	Deferred		Net Operating
	Income		Loss
	Tax Assets		Carryforwards
United States (State), expiring between 2016 and 2032	$	1,641	$	35,761
Foreign, Expiring between 2029 and 2033		2,419		7,579

	Foreign						Unrealized						Years ended June 30,
	currency						gains and						2017			2016
	translation			Derivative			losses on
	adjustments			instruments			investments			Total
Balance June 30, 2014	$	670		$	(39	)	$	11		$	642
Beginning balance													$	(4,846	)	$	(2,638	)
Changes before reclassifications	$	(3,308	)	$	-		$	(11	)	$	(3,319	)		715			(2,208	)
Amounts reclassified from accumulatedother comprehensive income	$	-		$	39		$	-		$	39			-			-
Current period other comprehensive income	$	(3,308	)	$	39		$	(11	)	$	(3,280	)		715			(2,208	)
Balance June 30, 2015	$	(2,638	)	$	-		$	-		$	(2,638	)
Ending balance													$	(4,131	)	$	(4,846	)

	June 30			June 30			June 30
	2015			2014			2013
Total Assets:
Wholesale segment	$	297,280		$	339,271		$	291,942
Retail segment		341,886			344,025			355,233
Inventory profit elimination (2)		(31,858	)		(28,862	)		(29,890	)
Consolidated Total	$	607,308		$	654,434		$	617,285

	Quarter Ended								Quarter Ended
									September 30		December 31		March 31		June 30
Fiscal 2017:
Net Sales									$	193,287	$	194,672	$	180,501	$	194,925
Gross profit										108,467		108,124		94,735		108,397
Net income										11,529		10,700		2,282		11,683
Earnings per basic share										0.42		0.39		0.08		0.42
Earnings per diluted share										0.41		0.38		0.08		0.42
Dividends declared per common share										0.17		0.19		0.19		0.19

Fiscal 2016:
Net Sales									$	190,391	$	207,535	$	190,583	$	205,693
Gross profit										104,673		116,058		105,717		115,788
Net income										13,147		16,534		10,178		16,778
Earnings per basic share										0.46		0.58		0.37		0.60
Earnings per diluted share										0.46		0.58		0.36		0.60
Dividends declared per common share										0.14		0.14		0.17		0.17
	September 30		December 31		March 31		June 30
Fiscal 2015:
Net Sales	$	190,706	$	197,067	$	173,259	$	193,568	$	190,706	$	197,067	$	173,259	$	193,568
Gross profit		104,803		106,074		94,110		106,176		104,803		106,074		94,110		106,176
Net income		11,879		10,038		2,536		12,689		11,879		10,038		2,536		12,689
Earnings per basic share		0.41		0.35		0.09		0.44		0.41		0.35		0.09		0.44
Earnings per diluted share		0.41		0.34		0.09		0.44		0.41		0.34		0.09		0.44
Dividends declared per common share		0.12		0.12		0.12		0.14		0.12		0.12		0.12		0.14

Fiscal 2014:
Net Sales	$	181,659	$	193,104	$	173,061	$	198,835
Gross profit		98,743		105,999		93,130		108,624
Net income		9,034		11,555		5,258		17,084
Earnings per basic share		0.31		0.40		0.18		0.59
Earnings per diluted share		0.31		0.39		0.18		0.58
Dividends declared per common share		0.10		0.10		0.10		0.10

Fiscal 2013:
Net Sales	$	187,437	$	191,251	$	168,144	$	182,251
Gross profit		104,253		103,967		91,785		98,344
Net income		10,064		9,846		4,374		8,194
Earnings per basic share		0.35		0.34		0.15		0.28
Earnings per diluted share		0.35		0.34		0.15		0.28
Dividends declared per common share		0.09		0.50		0.09		0.09

June 30, 2015
									June 30, 2017						June 30, 2016
	Level 1		Level 2		Level 3		Balance		Level 1		Level 2		Balance		Level 1		Level 2		Balance
Cash equivalents	$	84,192	$	-	$	-	$	84,192	$	65,031	$	-	$	65,031	$	60,479	$	-	$	60,479
Available-for-sale securities		-		2,198		-		2,198		-		-		-		-		-		-
Total	$	84,192	$	2,198	$	-	$	86,390	$	65,031	$	-	$	65,031	$	60,479	$	-	$	60,479

June 30, 2014
	Level 1		Level 2		Level 3		Balance
Cash equivalents	$	117,683	$	-	$	-	$	117,683
Available-for-sale securities		-		18,153		-		18,153
Total	$	117,683	$	18,153	$	-	$	135,836

	Amortized		Fair
	Cost Basis		Value
2015	$	2,155	$	2,198
2014	$	17,909	$	18,153

June 30, 2015
			Estimated
	Cost		Fair Value
Due in one year or less	$	2,296	$	2,198
Due after one year through five years	$	-	$	-

			Additions									Additions
	Balance at		(Reductions)			Adjustments		Balance at		Balance at		(Reductions)			Adjustments		Balance at
	Beginning		Charged to			and/or		End of		Beginning		Charged to			and/or		End of
	of Period		Income			Deductions		Period		of Period		Income			Deductions		Period
Accounts Receivable:
Sales discounts, sales returns andallowance for doubtful accounts:
June 30, 2017										$	1,639	$	28		$	-	$	1,667
June 30, 2016											1,386		253			-		1,639
June 30, 2015	$	1,442	$	(56	)	$	-	$	1,386	$	1,442	$	(56	)	$	-	$	1,386
June 30, 2014	$	1,230	$	212		$	-	$	1,442
June 30, 2013	$	1,250	$	(20	)	$	-	$	1,230

	•	pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;

	•	provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and

	(a)(1)	Financial Statements. Our Consolidated Financial Statements, included under Item 8 hereof, as required at June 30, ~~2015~~2017 and ~~2014,~~2016, and for the years ended June 30, ~~2015, 2014~~2017, 2016 and ~~2013~~2015 consist of the following:

		~~Consolidated Balance Sheets~~

		~~Consolidated Statements of Operations~~

		~~Consolidated Statements of Cash Flows~~

		~~Consolidated Statements of Shareholders' Equity~~

		~~Notes to Consolidated Financial Statements~~

	Exhibit Number	Exhibit

	3 (a)	Amended and Restated Certificate of Incorporation of the Company dated as of November 16, 2016 (incorporated by reference to Exhibit 3.(A) to the Current Report on Form 8-K of the Company filed with the SEC on November 16, 2016)

	3 (b)	Certificate of Designations relating to the New Convertible Preferred Stock dated as of March 23, 1993 (incorporated by reference to Exhibit 3(b) to the Annual Report on Form 10-K of the Company filed with the SEC on August 8, 2012)
*
	3 (c)	Certificate of ~~Designation relating to the~~Designations of Series C Junior Participating Preferred Stock dated as of July 3, 1996, and Certificate of Amendment of Certificate of Designations of Series C Junior Participating Preferred Stock dated as of December 27, 2004 (incorporated by reference to Exhibit 3(c) to the Annual Report on Form 10-K of the Company filed with the SEC on August 8, 2012)

	3 (d)	Amended and Restated By-laws of the Company (incorporated by reference to Exhibit ~~3(d)~~3.(D) to the ~~Registration Statement~~Current Report on Form ~~S-1~~8-K of the Company filed with the SEC on ~~March~~November 16, ~~1993)~~2016)

	3 (e)	Certificate of Incorporation of Ethan Allen Global, Inc. (incorporated by reference to Exhibit 3(e) to the Registration Statement on Form S-4 of Ethan Allen Global, Inc. filed with the SEC on February 3, 2006)

	3 (f)	By-laws of Ethan Allen Global, Inc. (incorporated by reference to Exhibit 3(f) to the Registration Statement on Form S-4 of Ethan Allen Global, Inc. filed with the SEC on February 3, 2006)

	3 (g)	Restated Certificate of Incorporation of Ethan Allen Inc. (now known as, Ethan Allen Retail, Inc.) (incorporated by reference to Exhibit 3(g) to the Registration Statement on Form S-4 of Ethan Allen Global, Inc. filed with the SEC on February 3, 2006)

	3 (g)-1	Certificate of Amendment of Restated Certificate of Incorporation of Ethan Allen Inc. (now known as Ethan Allen Retail, Inc.) as of June 29, 2005 (incorporated by reference to Exhibit 3(g)-1 to the Registration Statement on Form S-4 of Ethan Allen Global, Inc. filed with the SEC on February 3, 2006)

	3 (h)	Amended and Restated By-laws of Ethan Allen Inc. (now known as Ethan Allen Retail, Inc.) (incorporated by reference to Exhibit 3(h) to the Registration Statement on Form S-4 of Ethan Allen Global, Inc. filed with the SEC on February 3, 2006)

	3 (i)	Certificate of Incorporation of Ethan Allen Manufacturing Corporation (now known as Ethan Allen Operations, Inc.) (incorporated by reference to Exhibit 3(i) to the Registration Statement on Form S-4 of Ethan Allen Global, Inc. filed with the SEC on February 3, 2006)

	3 (i)-1	Certificate of Amendment of Certificate of Incorporation of Ethan Allen Manufacturing Corporation (now known as, Ethan Allen Operations, Inc.) as of June 29, 2005 (incorporated by reference to Exhibit 3(i)-1 to the Registration Statement on Form S-4 of Ethan Allen Global, Inc. filed with the SEC on February 3, 2006)

	3 (j)	By-laws of Ethan Allen Manufacturing Corporation (now known as, Ethan Allen Operations, Inc.) (incorporated by reference to Exhibit 3(j) to the Registration Statement on Form S-4 of Ethan Allen Global, Inc. filed with the SEC on February 3, 2006)

	3 (k)	Certificate of Formation of Ethan Allen Realty, LLC (incorporated by reference to Exhibit 3(k) to the Registration Statement on Form S-4 of Ethan Allen Global, Inc. filed with the SEC on February 3, 2006)

	3 (l)	Limited Liability Company Operating Agreement of Ethan Allen Realty, LLC (incorporated by reference to Exhibit 3(l) to the Registration Statement on Form S-4 of Ethan Allen Global, Inc. filed with the SEC on February 3, 2006)

	3 (l)-1	Amendment No. 1 to Operating Agreement of Ethan Allen Realty, LLC as of June 30, 2005 (incorporated by reference to Exhibit 3(l)-1 to the Registration Statement on Form S-4 of Ethan Allen Global, Inc. filed with the SEC on February 3, 2006)

	3 (m)	Certificate of Incorporation of Lake Avenue Associates, Inc. (incorporated by reference to Exhibit 3(m) to the Registration Statement on Form S-4 of Ethan Allen Global, Inc. filed with the SEC on February 3, 2006)

	3 (n)	By-laws of Lake Avenue Associates, Inc. (incorporated by reference to Exhibit 3(n) to the Registration Statement on Form S-4 of Ethan Allen Global, Inc. filed with the SEC on February 3, 2006)

	3 (o)	Certificate of Incorporation of Manor House, Inc. (incorporated by reference to Exhibit 3(o) to the Registration Statement on Form S-4 of Ethan Allen Global, Inc. filed with the SEC on February 3, 2006)


	3 (p)	Restated By-laws of Manor House, Inc. (incorporated by reference to Exhibit 3(p) to the Registration Statement on Form S-4 of Ethan Allen Global, Inc. filed with the SEC on February 3, 2006)
	~~4 (a)~~	Form of outstanding 5.375% Senior Note due 2015 pursuant to Rule 144A of the Securities Act (incorporated by reference to Exhibit A to Exhibit 10.2 to the Current Report on Form 8-K of the Company filed with the SEC on September 30, 2005)
	~~4 (b)~~	Indenture dated September 27, 2005, by and among Ethan Allen Global, Inc., the Guarantors named therein, and the Initial Purchaser named therein, relating to the Notes (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K of the Company filed with the SEC on September 30, 2005)
	~~4 (c)~~	~~Form of Exchange Note (incorporated by reference to Exhibit 4(d) to the Registration Statement on Form S-4 of Ethan Allen Global, Inc. filed with the SEC on February 3, 2006)~~
	10 (a)	Restated Directors Indemnification Agreement dated March 1993, among the Company and Ethan Allen and their Directors (incorporated by reference to Exhibit 10(c) to the Registration Statement on Form S-1 of the Company filed with the SEC on March 16, 1993)

	10 (b)	The Ethan Allen Retirement Savings Plan as Amended and Restated, effective January 1, 2006 (incorporated by reference to Exhibit 10(b)-7 to the Quarterly Report on Form 10-Q of the Company filed with the SEC on November 5, 2007 †

	10 (c)	Sales Finance Agreement, dated June 25, 1999, between the Company and MBNA America Bank, N.A. (incorporated by reference to Exhibit 10(j) to the Annual Report on Form 10-K of the Company filed with the SEC on September 13, 2000)

	10 (d)	Second Amended and Restated Private Label Consumer Credit Card Program Agreement, dated as of July 23, 2007, by and between Ethan Allen Global, Inc., Ethan Allen Retail, Inc. and GE Money Bank (incorporated by reference to Exhibit 10(e)-3 to the Quarterly Report on Form 10-Q of the Company filed with the SEC on November 5, 2007)(confidential treatment granted under Rule 24b-2 as to certain portions which are omitted and filed separately with the SEC)

	10 (d)-1	First Amendment to Second Amended and Restated Private Label Consumer Credit Card Program Agreement, dated as of July 25, 2008, by and between Ethan Allen Global, Inc., Ethan Allen Retail, Inc. and GE Money Bank (incorporated by reference as Exhibit 10(e)-1 to the Quarterly Report on Form 10-Q of the Company filed with the SEC on May 10, 2010)

	10 (d)-2	Second Amendment to Second Amended and Restated Private Label Consumer Credit Card Program Agreement, dated as of February 16, 2010, by and between Ethan Allen Global, Inc., Ethan Allen Retail, Inc. and GE Money Bank (incorporated by reference as Exhibit 10(e)-2 to the Quarterly Report on Form 10-Q of the Company filed with the SEC on May 10, 2010) (confidential treatment granted under Rule 24b-2 as to certain portions which are omitted and filed separately with the SEC)

	10 (d)-3	Third Amendment to Second Amended and Restated Private Label Consumer Credit Card Program Agreement, dated as of June 30, 2011, by and between Ethan Allen Global, Inc., Ethan Allen Retail, Inc. and GE Money Bank (incorporated by reference to Exhibit 10(e)-3 to the Quarterly Report on Form 10-Q of the Company filed with the SEC on November 3, 2010) (confidential treatment under Rule 24b-2 requested as to certain portions which are omitted and filed separately with the SEC)