# ETHAN ALLEN INTERIORS INC (ETD) Informational only - not investment advice. CIK: 0000896156 SIC: 2511 Wood Household Furniture, (No Upholstered) SIC breadcrumb: [Manufacturing](/division/D/) > [SIC Major Group 25](/major-group/25/) > [SIC 2511 Wood Household Furniture, (No Upholstered)](/industry/2511/) Latest 10-K filed: 2025-08-22 SEC page: https://www.sec.gov/edgar/browse/?CIK=896156 Filing source: https://www.sec.gov/Archives/edgar/data/896156/000143774925027594/eth20250630_10k.htm ## Selected Fundamentals | Metric | Value | Unit | FY | Filed | | --- | ---: | --- | ---: | --- | | Revenue | 614649000 | USD | 2025 | 2025-08-22 | | Net income | 51596000 | USD | 2025 | 2025-08-22 | | Assets | 737099000 | USD | 2025 | 2025-08-22 | ## Financials Annual standardized facts from SEC companyfacts as of latest extracted filing date 2025-08-22. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000896156.json. Derived margins are computed from the extracted annual SEC facts. | Metric | 2010 | 2011 | 2012 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | | Revenue | | | | | 763,385,000 | 766,784,000 | 746,684,000 | 589,837,000 | 685,169,000 | 817,762,000 | 791,382,000 | 646,221,000 | 614,649,000 | | Net income | -44,316,000 | 29,250,000 | 49,619,000 | | | | | | | | 105,807,000 | 63,816,000 | 51,596,000 | | Operating income | | | | 89,179,000 | 57,950,000 | 48,867,000 | 33,947,000 | 14,644,000 | 77,285,000 | 138,250,000 | 137,196,000 | 77,991,000 | 61,988,000 | | Gross profit | | | | 442,236,000 | 419,723,000 | 415,964,000 | 409,491,000 | 323,132,000 | 393,107,000 | 484,706,000 | 480,370,000 | 393,062,000 | 372,121,000 | | Diluted EPS | | | | 2.00 | 1.29 | 1.32 | 0.96 | 0.34 | 2.37 | 4.05 | 4.13 | 2.49 | 2.01 | | Assets | | | | 577,409,000 | 568,222,000 | 530,433,000 | 510,351,000 | 622,789,000 | 683,245,000 | 719,895,000 | 745,453,000 | 744,917,000 | 737,099,000 | | Liabilities | | | | 185,207,000 | 167,326,000 | 146,563,000 | 146,422,000 | 294,725,000 | 331,827,000 | 312,572,000 | 274,447,000 | 262,001,000 | 254,830,000 | | Stockholders' equity | | | | 391,998,000 | 400,706,000 | 383,731,000 | 363,866,000 | 328,065,000 | 351,443,000 | 407,349,000 | 471,028,000 | 482,980,000 | 482,355,000 | | Cash and cash equivalents | | | | 52,659,000 | 57,701,000 | 22,363,000 | 20,824,000 | 72,276,000 | 104,596,000 | 109,919,000 | 62,130,000 | 69,710,000 | 76,178,000 | | Net margin | | | | | | | | | | | 13.37% | 9.88% | 8.39% | | Operating margin | | | | | 7.59% | 6.37% | 4.55% | 2.48% | 11.28% | 16.91% | 17.34% | 12.07% | 10.09% | ## Quarterly Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-04-29. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000896156.json. Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived. | Quarter | End date | Revenue | Net income | Diluted EPS | Method | | --- | --- | ---: | ---: | ---: | --- | | 2012-Q4 | 2012-06-30 | | 7,293,000 | | derived Q4 = FY annual - nine-month YTD | | 2022-Q3 | 2022-03-31 | | | 0.97 | reported discrete quarter | | 2023-Q1 | 2022-09-30 | | | 1.17 | reported discrete quarter | | 2023-Q2 | 2022-12-31 | | | 1.10 | reported discrete quarter | | 2023-Q3 | 2023-03-31 | 186,316,000 | | 0.87 | reported discrete quarter | | 2023-Q4 | 2023-06-30 | 187,375,000 | | | derived Q4 = FY annual - nine-month YTD | | 2024-Q1 | 2023-09-30 | 163,892,000 | | 0.58 | reported discrete quarter | | 2024-Q3 | 2024-03-31 | 146,421,000 | | 0.50 | reported discrete quarter | | 2024-Q4 | 2024-06-30 | 168,632,000 | | | derived Q4 = FY annual - nine-month YTD | | 2025-Q1 | 2024-09-30 | 154,337,000 | | 0.57 | reported discrete quarter | | 2024-Q2 | 2024-12-31 | 157,260,000 | | 0.59 | reported discrete quarter | | 2025-Q3 | 2025-03-31 | 142,695,000 | | 0.37 | reported discrete quarter | | 2025-Q4 | 2025-06-30 | 160,357,000 | | | derived Q4 = FY annual - nine-month YTD | | 2026-Q2 | 2025-09-30 | | 10,451,000 | | reported discrete quarter | | 2026-Q1 | 2025-09-30 | 146,984,000 | 10,451,000 | 0.41 | reported discrete quarter | | 2026-Q2 | 2025-12-31 | 149,916,000 | | 0.46 | reported discrete quarter | | 2026-Q3 | 2025-12-31 | | 11,744,000 | | reported discrete quarter | | 2026-Q3 | 2026-03-31 | 135,835,000 | | 0.23 | reported discrete quarter | ## Macro Cross-References - [CPIAUCSL](/indicator/CPIAUCSL/): Consumer Price Index for All Urban Consumers: All Items in U.S. City Average - [UNRATE](/indicator/UNRATE/): Unemployment Rate - [FEDFUNDS](/indicator/FEDFUNDS/): Federal Funds Effective Rate - [CES0500000003](/indicator/CES0500000003/): Average Hourly Earnings of All Employees, Total Private - [DFEDTARU](/indicator/DFEDTARU/): Federal Funds Target Range - Upper Limit - [DFEDTARL](/indicator/DFEDTARL/): Federal Funds Target Range - Lower Limit - [DGS3MO](/indicator/DGS3MO/): Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity - [DGS2](/indicator/DGS2/): Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity - [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity - [DGS30](/indicator/DGS30/): Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity - [T10Y2Y](/indicator/T10Y2Y/): 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity - [CPILFESL](/indicator/CPILFESL/): Consumer Price Index for All Urban Consumers: All Items Less Food and Energy - [CPIUFDSL](/indicator/CPIUFDSL/): Consumer Price Index for All Urban Consumers: Food - [CPIENGSL](/indicator/CPIENGSL/): Consumer Price Index for All Urban Consumers: Energy - [CUSR0000SAH1](/indicator/CUSR0000SAH1/): Consumer Price Index for All Urban Consumers: Shelter - [PCEPI](/indicator/PCEPI/): Personal Consumption Expenditures: Chain-type Price Index - [PCEPILFE](/indicator/PCEPILFE/): Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index - [PPIACO](/indicator/PPIACO/): Producer Price Index by Commodity: All Commodities - [T10YIE](/indicator/T10YIE/): 10-Year Breakeven Inflation Rate - [U6RATE](/indicator/U6RATE/): Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons - [PAYEMS](/indicator/PAYEMS/): All Employees, Total Nonfarm - [CIVPART](/indicator/CIVPART/): Labor Force Participation Rate - [EMRATIO](/indicator/EMRATIO/): Employment-Population Ratio - [UNEMPLOY](/indicator/UNEMPLOY/): Unemployed - [CE16OV](/indicator/CE16OV/): Employment Level - [ICSA](/indicator/ICSA/): Initial Claims - [JTSJOL](/indicator/JTSJOL/): Job Openings: Total Nonfarm - [JTSQUR](/indicator/JTSQUR/): Quits: Total Nonfarm - [GDPC1](/indicator/GDPC1/): Real Gross Domestic Product - [A191RL1Q225SBEA](/indicator/A191RL1Q225SBEA/): Real Gross Domestic Product: Percent Change from Preceding Period - [INDPRO](/indicator/INDPRO/): Industrial Production: Total Index - [TCU](/indicator/TCU/): Capacity Utilization: Total Index - [HOUST](/indicator/HOUST/): New Privately-Owned Housing Units Started: Total Units - [PERMIT](/indicator/PERMIT/): New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units - [RSAFS](/indicator/RSAFS/): Advance Retail Sales: Retail Trade - [PCE](/indicator/PCE/): Personal Consumption Expenditures - [DSPIC96](/indicator/DSPIC96/): Real Disposable Personal Income - [PSAVERT](/indicator/PSAVERT/): Personal Saving Rate - [M2SL](/indicator/M2SL/): M2 - [BOPGSTB](/indicator/BOPGSTB/): U.S. International Trade in Goods and Services: Balance - [MSPUS](/indicator/MSPUS/): Median Sales Price of Houses Sold for the United States - [HSN1F](/indicator/HSN1F/): New One Family Houses Sold: United States - [RHORUSQ156N](/indicator/RHORUSQ156N/): Homeownership Rate in the United States - [TTLCONS](/indicator/TTLCONS/): Total Construction Spending: Total Construction in the United States - [RRVRUSQ156N](/indicator/RRVRUSQ156N/): Rental Vacancy Rate in the United States - [TOTALSL](/indicator/TOTALSL/): Total Consumer Credit Owned and Securitized - [REVOLSL](/indicator/REVOLSL/): Revolving Consumer Credit Owned and Securitized - [DRCCLACBS](/indicator/DRCCLACBS/): Delinquency Rate on Credit Card Loans, All Commercial Banks - [GDP](/indicator/GDP/): Gross Domestic Product - [GPDI](/indicator/GPDI/): Gross Private Domestic Investment - [GCE](/indicator/GCE/): Government Consumption Expenditures and Gross Investment - [PCEC](/indicator/PCEC/): Personal Consumption Expenditures - [NETEXP](/indicator/NETEXP/): Net Exports of Goods and Services - [GFDEBTN](/indicator/GFDEBTN/): Federal Debt: Total Public Debt - [GFDEGDQ188S](/indicator/GFDEGDQ188S/): Federal Debt: Total Public Debt as Percent of Gross Domestic Product - [FYFSD](/indicator/FYFSD/): Federal Surplus or Deficit - [FGRECPT](/indicator/FGRECPT/): Federal Government Current Receipts - [FGEXPND](/indicator/FGEXPND/): Federal Government: Current Expenditures - [MANEMP](/indicator/MANEMP/): All Employees, Manufacturing - [USCONS](/indicator/USCONS/): All Employees, Construction - [USTRADE](/indicator/USTRADE/): All Employees, Retail Trade - [USFIRE](/indicator/USFIRE/): All Employees, Financial Activities - [USGOVT](/indicator/USGOVT/): All Employees, Government - [AWHAETP](/indicator/AWHAETP/): Average Weekly Hours of All Employees, Total Private - [DGORDER](/indicator/DGORDER/): Manufacturers' New Orders: Durable Goods - [NEWORDER](/indicator/NEWORDER/): Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft - [BUSINV](/indicator/BUSINV/): Total Business Inventories - [EXPGS](/indicator/EXPGS/): Exports of Goods and Services - [IMPGS](/indicator/IMPGS/): Imports of Goods and Services - [IR](/indicator/IR/): Import Price Index (End Use): All Commodities - [PPIFIS](/indicator/PPIFIS/): Producer Price Index by Commodity: Final Demand ## Latest quarter (10-Q) Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/896156/000143774926013892/eth20260331_10q.htm Extracted between Part I Item 2 and the next Item 3/4 or Part II heading after HTML sanitization. Confidence: high Filing date: 2026-04-29 Report date: 2026-03-31 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations This Management’s Discussion and Analysis of Financial Condition and Results of Operations (the “MD&A”) is designed to provide a reader of our consolidated financial statements with a narrative from the perspective of our management on our financial condition, results of operations, liquidity and certain other factors that may affect our future results. The MD&A is based upon, and should be read in conjunction with, our 2025 Annual Report on Form 10-K, Current Reports on Form 8-K and other filings with the Securities and Exchange Commission (“SEC”), and the consolidated financial statements and related notes included in this Quarterly Report on Form 10-Q. The MD&A is presented in the following sections: - Cautionary Note Regarding Forward-Looking Statements - Executive Overview - Key Operating Metrics - Results of Operations - Regulation G Reconciliations of Non-GAAP Financial Measures - Liquidity - Capital Resources, including Material Cash Requirements - Off-Balance Sheet and Other Arrangements - Significant Accounting Policies - Critical Accounting Estimates - Recent Accounting Pronouncements Cautionary Note Regarding Forward-Looking Statements This Quarterly Report on Form 10-Q, including the MD&A, contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Generally, forward-looking statements represent management’s beliefs and assumptions concerning current expectations, projections or trends relating to results of operations, financial results, financial condition, strategic objectives and plans, expenses, dividends, share repurchases, liquidity, use of cash and cash requirements, borrowing capacity, investments, future economic performance, and our business and industry. Such forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. These forward-looking statements may include words such as “anticipate,” “estimate,” “expect,” “project,” “plan,” “intend,” “believe,” “continue,” “may,” “will,” “short-term,” “target,” “outlook,” “forecast,” “future,” “strategy,” “opportunity,” “would,” “guidance,” “non-recurring,” “one-time,” “unusual,” “should,” “likely,” and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events. We derive many of our forward-looking statements from operating budgets and forecasts, which are based upon many detailed assumptions. While the Company believes that its assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors and it is impossible for the Company to anticipate all factors that could affect actual results and matters that are identified as “short term,” “non-recurring,” “unusual,” “one-time,” or other words and terms of similar meaning may in fact recur in one or more future financial reporting periods.  Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those that are expected. Actual results could differ materially from those anticipated in the forward-looking statements due to a number of risks and uncertainties including, but not limited to the risks and uncertainties disclosed in Part I, Item 1A, Risk Factors, in our 2025 Annual Report on Form 10-K, and elsewhere here in this Quarterly Report on Form 10-Q. All forward-looking statements attributable to the Company, or persons acting on its behalf, are expressly qualified in their entirety by these cautionary statements, as well as other cautionary statements. A reader should evaluate all forward-looking statements made in this Quarterly Report on Form 10-Q in the context of these risks and uncertainties. Given the risks and uncertainties surrounding forward-looking statements, you should not place undue reliance on these statements. Many of these factors are beyond our ability to control or predict. The forward-looking statements included in this Quarterly Report on Form 10-Q are made only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as otherwise required by law. 20 ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES Executive Overview Who We Are. Founded in 1932, Ethan Allen is a leading interior design company, manufacturer and retailer in the home furnishings marketplace. We are a global luxury home fashion brand that is vertically integrated from product design through home delivery, which offers clients stylish product offerings, artisanal quality and personalized service. We are known for the quality and craftsmanship of our products as well as for the exceptional personal service from design to delivery. Our strong network of entrepreneurial leaders and interior designers provide complimentary interior design service to our clients and sell a full range of home furnishing products through a retail network of design centers located throughout the U.S. and internationally, as well as online at ethanallen.com. Ethan Allen design centers represent a mix of locations operated by independent licensees and Company-operated locations. At March 31, 2026, the Company operates 142 retail design centers, 137 located in the U.S. and 5 in Canada. We also have 44 independently owned and operated Ethan Allen design centers located in the U.S., Asia, the Middle East and Europe. We manufacture approximately 75% of our furniture in our North American manufacturing plants and have been recognized for product quality and craftsmanship since 1932. At March 31, 2026, we own and operate 11 manufacturing facilities, including four manufacturing plants, one sawmill, one rough mill and a kiln dry lumberyard in the U.S., three manufacturing plants in Mexico and one manufacturing plant in Honduras. We also partner with suppliers located in Europe, Asia, and other countries to produce and import various products that support the business. Business Model. Our vertical integration is a competitive advantage for us. Our North American manufacturing and logistics operations are an integral part of an overall strategy to maximize production efficiencies and maintain this competitive advantage. Our business model is to maintain continued focus on: (i) providing relevant product offerings, (ii) capitalizing on the professional and personal service offered to our customers by our interior design professionals, (iii) leveraging the benefits of our vertical integration including a manufacturing presence in North America, (iv) investing in new technologies across key aspects of our vertically integrated business, (v) maintaining a strong logistics network, (vi) communicating our messages with strong marketing campaigns, and (vii) utilizing our website, ethanallen.com, as a key marketing tool to drive traffic to our retail design centers. We aim to position Ethan Allen as a premier interior design destination and a preferred brand offering products of superior style, quality, and value to customers with a comprehensive, one-stop shopping solution for their home furnishing and interior design needs. We seek to constantly reinvent our projection and product offerings through a broad selection of products, designed to complement one another, reflecting current fashion trends in home furnishing. Talent. At March 31, 2026, our employee count totaled 3,105, with 2,158 within our wholesale segment and 947 in our retail segment. Our headcount is down 5.7% compared with a year ago and 39.4% less than at March 31, 2019. Fiscal 2026 Third Quarter in Review (1). Our fiscal 2026 third quarter results were impacted by a reduction in business with the U.S. State Department, lower international sales and sluggish demand from a challenging environment for home furnishings, which included weather disruptions and macroeconomic uncertainty. Consolidated net sales were $135.8 million, a 4.8% decrease from the prior year quarter primarily due to fewer contract sales, lower delivered unit volume, reduced available backlog and inclement weather partially offset by higher average ticket price, incremental designer floor sample sales and fewer sales returns. Retail segment written orders were flat to last year while our wholesale segment written orders declined 7.6% primarily due to macroeconomic challenges, reduced government activity and a slowdown in our international business. We maintained a strong consolidated gross margin of 59.4% due to a change in sales mix, selective price increases and lower headcount partially offset by incremental tariffs, delivering written orders that had higher promotional discounts and increased designer floor sample sales. Our operating margin was 4.8% compared to 7.7% a year ago while diluted EPS was $0.23 compared with $0.37 a year ago. Adjusted operating margin in the current year third quarter was 5.0% while adjusted diluted EPS was $0.24. Lower operating margin was driven by fewer contract sales, lower unit volumes, increased tariffs, elevated designer floor sample sales and increased occupancy costs partially offset by change in sales mix, reduced freight, lower headcount, disciplined spending and a higher retail average ticket price. We also continued our history of paying dividends to shareholders by paying a regular quarterly cash dividend of $10.0 million. Cash, cash equivalents and investments totaled $180.9 million at March 31, 2026 and we had no outstanding debt. We ended the quarter with 142 Company-operated and 44 independently owned and operated locations with new design centers to be opened in vibrant markets such as Rancho Cucamonga, California and Aventura, Florida later this year. (1) Refer to the Regulation G Reconciliations of Non-GAAP Financial Measures section within the MD&A for the reconciliation of GAAP to adjusted key financial metrics. 21 ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES Key Operating Metrics A summary of our key operating metrics is presented in the following table (in millions, except per share data): Three months ended March 31, Nine months ended March 31, 2026 % of Sales 2025 % of Sales % Chg 2026 % of Sales 2025 % of Sales % Chg Net sales $ 135.8 $ 142.7 (4.8% ) $ 432.7 $ 454.3 (4.7% ) Gross profit $ 80.7 59.4 % $ 87.4 61.2 % (7.6% ) $ 262.2 60.6 % $ 276.1 60.8 % (5.0% ) Operating income $ 6.5 4.8 % $ 11.0 7.7 % (41.1% ) $ 30.7 7.1 % $ 46.7 10.3 % (34.4% ) Adjusted operating income(1) $ 6.8 5.0 % $ 11.3 8.0 % (39.8% ) $ 30.9 7.1 % $ 47.3 10.4 % (34.7% ) Net income $ 5.9 4.4 % $ 9.6 6.7 % (38.2% ) $ 28.1 6.5 % $ 39.3 8.7 % (28.5% ) Adjusted net income(1) $ 6.2 4.6 % $ 9.9 6.9 % (37.1% ) $ 28.3 6.5 % $ 39.8 8.8 % (28.9% ) Diluted EPS $ 0.23 $ 0.37 (37.8% ) $ 1.10 $ 1.53 (28.1% ) Adjusted diluted EPS(1) $ 0.24 $ 0.38 (36.8% ) $ 1.10 $ 1.55 (29.0% ) Cash flow from operating activities $ 15.1 $ 10.2 47.9 % $ 30.1 $ 36.9 (18.5% ) Wholesale written orders (7.6% ) (11.0% ) Retail written orders (0.2% ) (4.5% ) (1) Refer to the Regulation G Reconciliations of Non-GAAP Financial Measures section within the MD&A for the reconciliation of GAAP to adjusted key financial metrics. Design center activity and geographic distribution of our retail network are as follows: Fiscal 2026 Fiscal 2025 Independent Company- Independent Company- retailers operated Total retailers operated Total Retail Design Center activity: Balance at July 1 45 142 187 45 142 187 [Excerpt truncated for page length; source filing is linked above.] ## Latest 10-K MD&A Extracted between Item 7 and the next Item 7A/8 heading after HTML sanitization. Confidence: high ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is designed to provide a reader of our financial statements with a narrative from the perspective of our management on our financial condition, results of operations, liquidity and certain other factors that may affect our future results.  The MD&A is based upon, and should be read in conjunction with Item 7A. Quantitative and Qualitative Disclosures About Market Risks and our Consolidated Financial Statements and related Notes included under Item 8 of this Annual Report on Form 10-K. Executive Overview Who We Are. Founded in 1932, Ethan Allen is a leading interior design company, manufacturer and retailer in the home furnishings marketplace. We are a global luxury home fashion brand that is vertically integrated from product design through home delivery, which offers clients stylish product offerings, artisanal quality and personalized service. We are known for the quality and craftsmanship of our products as well as for the exceptional personal service from design to delivery. We provide complimentary interior design service to our clients and sell a full range of home furnishings through a retail network of design centers located throughout the U.S. and internationally as well as online at ethanallen.com. Ethan Allen design centers represent a mix of locations operated by independent licensees and Company-operated locations. At June 30, 2025, the Company operates 142 retail design centers, 137 located in the U.S. and five in Canada. Our independently operated design centers are located in the U.S., Asia, the Middle East and Europe. During fiscal 2025, we opened four new design centers in Middleton, WI, Toronto, Canada, Peoria, AZ and Watchung, NJ that showcase our unique vision of American style while combining complimentary interior design services with technology. We also own and operate eleven manufacturing facilities, including four manufacturing plants, one sawmill, one rough mill and a kiln dry lumberyard in the U.S., three upholstery manufacturing plants in Mexico and one case goods manufacturing plant in Honduras. Approximately 75% of our furniture is manufactured in our North American plants. In addition, we contract with various suppliers located in Europe, Asia and other various countries to import products that support our business. We executed well throughout the fiscal year as the Company remained focused on five key areas: talent, service, marketing, technology and social responsibility. These areas of focus along with our interior design professionals combining personal service with technology contributed to Ethan Allen recently being named America’s #1 Premium Retailer by Newsweek, for the third year in a row. Our strategic initiatives to further strengthen our talent, introduce new products, run strong marketing campaigns, invest in our North American manufacturing, and maintain our logistics network throughout North America has positioned us well.  Business Model. Our vertical integration is a competitive advantage for us. Our North American manufacturing and logistics operations are an integral part of an overall strategy to maximize production efficiencies and maintain this competitive advantage. Our business model is to maintain continued focus on (i) providing relevant product offerings, (ii) capitalizing on the professional and personal service offered to our customers by our interior design professionals, (iii) leveraging the benefits of our vertical integration including a manufacturing presence in North America, (iv) investing in new technologies across key aspects of our vertically integrated business, (v) maintaining a strong logistics network, (vi) communicating our messages with strong marketing campaigns, and (vii) utilizing our website, ethanallen.com, as a key marketing tool to drive traffic to our retail design centers. We aim to position Ethan Allen as a premier interior design destination and a preferred brand offering products of superior style, quality, and value to customers with a comprehensive, one-stop shopping solution for their home furnishing and interior design needs. We seek to constantly reinvent our projection and product offerings through a broad selection of products, designed to complement one another, reflecting current fashion trends in home furnishing. Talent. At June 30, 2025, our employee count totaled 3,211, with 2,239 employees in our wholesale segment and 972 in our retail segment. Our employee count decreased 5.7% or 193 associates during fiscal 2025, with 56 fewer employees in retail and 137 fewer employees in wholesale. We were pleased to strengthen our teams during fiscal 2025 while at the same time reducing headcount through operational efficiencies. 21 ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES Fiscal 2025 Financial Year in Review (1). Our financial performance during fiscal 2025 was highlighted by strong margins, positive operating cash flow and a robust balance sheet despite operating in a challenging environment. We generated strong operating cash flow of $61.7 million, which helped us grow our cash, cash equivalents and investments total to $196.2 million at June 30, 2025. We continued our history of returning capital to shareholders by paying four regular cash dividends of $0.39 and declared a special cash dividend of $0.40 per share, bringing the total amount of dividends paid to $50.1 million during fiscal 2025. Consolidated net sales of $614.6 million were down 4.9% compared to the prior year due to lower delivered unit volume, reduced available backlog, less design center traffic and fewer contract sales partially offset by higher average ticket prices. We ended the fiscal year with wholesale backlog of $48.9 million, down 8.7% from a year ago due to lower contract volume and improved customer lead times. Our consolidated gross margin of 60.5% was comparable to 60.8% in the prior year as benefits from a change in sales mix, lower input costs, reduced headcount, fewer designer floor sample sales and selective price increases were offset by lower unit volume sales, increased promotional activity and higher financing costs. Our adjusted operating margin was 10.2% compared to 12.1% in the prior year primarily due to deleveraging from lower unit sales partially offset by disciplined cost management and gross margin preservation. Adjusted diluted earnings per share of $2.04 was down from $2.49 in the prior year. The home furnishings industry has been challenged by lower consumer confidence, a weak housing market and uncertainty surrounding global trade policies including tariffs. Despite these challenges, our robust balance sheet and financial stability provide a solid foundation. We are confident in the strength of our vertically integrated business model as we have successfully navigated challenging times over the course of Ethan Allen’s 93-year history and we will continue to serve our clients and deliver value to our shareholders. Refer to the Regulation G Reconciliation of Non-GAAP Financial Measures section within this MD&A for the reconciliation of U.S. generally accepted accounting principles (“GAAP”) to adjusted key financial metrics. Key Operating Metrics A summary of our key operating metrics is presented in the following table (in millions, except per share data). Fiscal Year Ended June 30, 2025 % of Sales % Chg 2024 % of Sales % Chg 2023 % of Sales % Chg Net sales $ 614.6 100.0 % (4.9% ) $ 646.2 100.0 % (18.3% ) $ 791.4 100.0 % (3.2% ) Gross profit $ 372.1 60.5 % (5.3% ) $ 393.1 60.8 % (18.2% ) $ 480.4 60.7 % (0.9% ) Operating income $ 62.0 10.1 % (20.5% ) $ 78.0 12.1 % (43.2% ) $ 137.2 17.3 % (0.8% ) Adjusted operating income(1) $ 62.9 10.2 % (19.3% ) $ 77.9 12.1 % (41.6% ) $ 133.5 16.9 % (0.5% ) Net income $ 51.6 8.4 % (19.1% ) $ 63.8 9.9 % (39.7% ) $ 105.8 13.4 % 2.4 % Adjusted net income(1) $ 52.3 8.5 % (18.0% ) $ 63.8 9.9 % (38.1% ) $ 103.1 13.0 % 2.8 % Diluted EPS $ 2.01 (19.3% ) $ 2.49 (39.7% ) $ 4.13 2.0 % Adjusted diluted EPS(1) $ 2.04 (18.1% ) $ 2.49 (38.2% ) $ 4.03 2.5 % Cash flow from operating activities $ 61.7 (23.1% ) $ 80.2 (20.3% ) $ 100.7 45.1 % Return on equity 10.8 % 13.4 % 23.5 % Wholesale written orders (3.2% ) (10.9% ) (9.0% ) Retail written orders (1.5% ) (8.4% ) (12.3% ) (1) Refer to the Regulation G Reconciliation of Non-GAAP Financial Measures section within this MD&A for the reconciliation of GAAP to adjusted key financial metrics. Results of Operations For an understanding of the significant factors that influenced our financial performance in fiscal 2025 compared with fiscal 2024, the following discussion should be read in conjunction with the consolidated financial statements and related notes presented under Item 8 in this Annual Report on Form 10-K. Refer to Results of Operations under Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, contained in Part II of our Annual Report on Form 10-K for the fiscal year ended June 30, 2024, filed with the SEC on August 23, 2024, for an analysis of the fiscal 2024 results as compared to fiscal 2023. (in thousands) Fiscal Year Ended June 30, 2025 2024 % Change Consolidated net sales $ 614,649 $ 646,221 (4.9% ) Wholesale net sales $ 359,057 $ 371,087 (3.2% ) Retail net sales $ 523,142 $ 540,550 (3.2% ) Consolidated gross profit $ 372,121 $ 393,062 (5.3% ) Consolidated gross margin 60.5 % 60.8 % 22 ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES Net Sales Consolidated net sales in fiscal 2025 decreased $31.6 million or 4.9% compared to the prior year due to lower delivered unit volume, reduced available backlog, less design center traffic and fewer contract sales partially offset by higher average ticket prices. A stagnant housing market, inflationary pressure and cautious consumer spending due to economic uncertainty contributed to lower demand levels and related sales. A higher average ticket price was driven by fewer designer floor sample sales and selective price increases.  Wholesale net sales in fiscal 2025 decreased 3.2% compared to the prior year primarily due to a decline in contract sales partially offset by an increase in intersegment sales to our Company-operated design centers. Excluding intersegment sales to our retail segment, wholesale net sales decreased $14.2 million or 13.4% compared to the prior year period. Our contract sales, including shipments to the GSA, decreased 23.7% due to less incoming orders as a result of the slowdown in government spending, which led to lower available backlog. Our international sales, which represented 1.4% of total wholesale net sales in fiscal 2025, decreased 27.6% from lower net sales to China. Wholesale written orders, which represent orders booked through all of our channels, were down 3.2% in fiscal 2025 compared to the prior year driven primarily from the decline in our contract business. Contract orders were down 25.4% while our international retailers decreased 17.9%. However, orders from intersegment Company-operated design centers and our independent U.S. retail network were relatively flat compared to prior year as demand patterns began to show signs of improvement during the just completed fourth quarter. Wholesale backlog was $48.9 million at June 30, 2025, down 8.7% from a year ago due to lower contract volume and improved customer lead times. The number of weeks of wholesale backlog at June 30, 2025 was 7.0 weeks, down from 7.3 weeks a year ago. Retail net sales from Company-operated design centers decreased 3.2% during fiscal 2025 compared to the prior year primarily from reduced delivered unit volumes, lower written orders, less available backlog, lower designer floor sample sales and decreased premier home delivery revenue partially offset by an increase in average ticket price. Sales in the U.S. were down 2.7% while sales from our Canadian design centers decreased 20.8%. Retail written orders declined 1.5% year over year due to lower consumer confidence, a weak housing market and uncertainty about trade tariffs. However, during the just completed fourth quarter, Retail written orders rose by 1.6%, driven by the strength of new product introductions, increased promotional activity, elevated clearance and improved consumer sentiment from the pause of additional tariffs. At June 30, 2025, there were 142 Company-operated design centers with new design centers in Middleton, WI, Toronto, Canada, Watchung, NJ and Peoria, AZ.  Gross Profit and Margin Consolidated gross profit in fiscal 2025 decreased $20.9 million or 5.3% compared with the prior year due primarily from the 4.9% decline in consolidated net sales, increased promotional levels and higher financing costs from increased usage of our Ethan Allen private label platinum card. These declines were partially offset by lower input costs, including raw material and freight, an increase in average ticket price, lower designer floor sample sales and reduced headcount which helped keep our consolidated gross margin comparable with last year. Wholesale gross profit decreased 1.2% due to the 3.2% decline in sales partially offset by a 70-basis point gross margin improvement. Retail gross profit decreased 3.8% due to the 3.2% decrease in net shipments combined with a 30-basis point reduction in gross margin. Consolidated gross margin was 60.5%, a 30-basis point decline over the prior year due to lower unit volume sales and higher financing costs partially offset by a change in sales mix, lower raw material and freight input costs, reduced headcount, fewer designer floor sample sales and selective price increases which contributed to a higher average ticket price. Retail sales, when expressed as a percentage of total consolidated net sales, were 85.1% in fiscal 2025, up from 83.6% in the prior year period, which had a positive impact on our consolidated gross margin. Wholesale gross margin was up 70 basis points over the prior year due to lower raw material and fuel input costs, reduced headcount and investments in technology, which helped streamline production workflows. These benefits were partially offset by reduced production volumes from lower incoming written orders, which led to increased plant inefficiencies and higher manufacturing variances. Our retail gross margin decreased 30 basis points compared to the prior year due to higher financing costs and increased promotional levels partially offset by higher average ticket price and a decline in sales of designer floor samples. 23 ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES Selling, General & Administrative (“SG&A”) Expenses (in thousands) Fiscal Year Ended June 30, 2025 2024 % Change SG&A expenses $ 309,790 $ 315,148 (1.7% ) Restructuring and other impairment charges, net of gains $ 343 $ (77 ) (545.5% ) Consolidated operating income $ 61,988 $ 77,991 (20.5% ) Consolidated operating margin 10.1 % 12.1 % Consolidated adjusted operating income $ 62,895 $ 77,914 (19.3% ) Consolidated adjusted operating margin 10.2 % 12.1 % Wholesale operating income $ 46,989 $ 48,707 (3.5% ) Retail operating income $ 19,781 $ 24,704 (19.9% ) SG&A expenses for fiscal 2025 decreased $5.4 million or 1.7% compared to the prior year. When expressed as a percentage of sales, SG&A expenses were 50.4%, an increase from 48.8% in the prior year primarily due to fixed cost deleveraging from lower delivered sales. SG&A expenses were down 1.7% while consolidated sales decreased 4.9%, which led to a decrease in operating leverage.  Consolidated selling expenses were down 3.6% during fiscal 2025. Wholesale selling expenses, which include our logistics operation, decreased 0.1% from a 9.8% decline in wholesale units shipped, lower freight costs including fuel, and less outgoing distribution costs combined with reduced headcount partially offset by an increase in advertising expenses and digital and web-technology spend. Retail selling expenses were down 4.8% due to reduced delivery costs from lower delivered revenue, less headcount and lower designer variable compensation from lower retail sales. Consolidated advertising expenses were equal to 2.9% of net sales, up from 2.5% in the prior year due to increased digital media spend, including paid social campaigns and a higher volume of digital magazine mailings. Consolidated general and administrative (“G&A”) expenses increased 1.0% during fiscal 2025. Wholesale G&A rose 7.1% due to higher employee benefit costs, incremental incentive compensation and additional investments in corporate technology. Retail G&A expenses were down 0.9% due to reduced headcount and elevated prior year design center refresh costs. Restructuring and Other Charges, Net of Gains Restructuring and other charges, net of gains for fiscal 2025 was a charge of $0.3 million and related primarily to severance and other charges. Included within other charges was $0.1 million from a recent fire within our Vermont sawmill. The temporary disruption caused by the June 2025 fire did not have a material impact on our operations as the facility resumed operations by early July. Losses incurred were from the disposal of damaged inventory, inoperable equipment from fire damage, facility cleanup and restoration and we are working through insurance to recover a portion of our losses incurred. The prior year gain of $0.1 million related to a $2.6 million gain related to the amortization of the deferred liability generated from the sale-leaseback transaction completed on August 1, 2022 partially offset by $2.2 million in net losses from the July 2023 Vermont flood and $0.4 million in severance and other charges. Consolidated Operating Income Consolidated operating income for fiscal 2025 decreased $16.0 million or 20.5%. Adjusted operating income was $62.9 million, or 10.2% of net sales compared with $77.9 million, or 12.1% of net sales in the prior year. The primary driver of reduced operating income was lower consolidated net sales partially offset by lower SG&A expenses. We remain focused on a disciplined approach to cost savings and expense control in a challenging environment, which helped mitigate the impact of reduced consolidated net sales. Wholesale operating income for fiscal 2025 was $47.0 million or 13.1% of net sales, compared to $48.7 million or 13.1% in the prior year. The decrease in wholesale operating income was driven by the $12.0 million decline in wholesale net sales partially offset by a 70-basis point increase in gross margin combined with higher restructuring charges in the prior year related to the Vermont flood. Retail operating income for fiscal 2025 was $19.8 million or 3.8% of retail net sales, compared to $24.7 million or 4.6% in the prior year. The decrease in operating income was driven primarily by the $17.4 million reduction in retail net sales combined with a 30-basis point drop in gross margin partially offset by a decline in SG&A expenses. 24 ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES Other Income (Expense) (in thousands) Fiscal Year Ended June 30, 2025 2024 % Change Interest and other income, net $ 7,275 $ 7,700 (5.5% ) Interest and other financing costs $ 243 $ 245 (0.8% ) Interest and other income, net includes interest income on investments, foreign currency gains or losses and other income (expense) incurred outside our normal course of business. Interest and other income, net decreased 5.5% to $7.3 million during fiscal 2025 due to foreign currency losses reflecting greater volatility in exchange rates, including a weaker U.S. dollar partially offset by an additional $0.1 million in interest income on our investments. Income Taxes, Net Income and Diluted Earnings per Share (“EPS”) (in thousands) Fiscal Year Ended June 30, 2025 2024 % Change Income tax expense $ 17,424 $ 21,630 (19.4% ) Effective tax rate 25.2 % 25.3 % Net income $ 51,596 $ 63,816 (19.1% ) Adjusted net income $ 52,271 $ 63,758 (18.0% ) Diluted EPS $ 2.01 $ 2.49 (19.3% ) Adjusted diluted EPS $ 2.04 $ 2.49 (18.1% ) Income Tax Expense Income tax expense for fiscal 2025 decreased $4.2 million or 19.4% compared with the prior year due to the $16.4 million decrease in income before income taxes. Our effective tax rate was 25.2% compared with 25.3% in the prior year. Our effective tax rate of 25.2% varies from the 21% federal statutory rate primarily due to state taxes. Net Income and Diluted EPS Net income for fiscal 2025 was $51.6 million compared with $63.8 million in the prior year period. Adjusted net income was $52.3 million, a decrease of 18.0% compared with $63.8 million in the prior year period. The decrease in net income was driven by the $31.6 million reduction in consolidated net sales partially offset by lower SG&A expenses.    Diluted EPS for fiscal 2025 was $2.01 compared to $2.49 per diluted share in the prior year period. Adjusted diluted EPS was $2.04, down 18.1% compared with the prior year period. The decrease in diluted EPS was primarily due to lower consolidated net sales partially offset by lower SG&A expenses. Regulation G Reconciliations of Non-GAAP Financial Measures To supplement the financial measures prepared in accordance with GAAP, we use non-GAAP financial measures, including adjusted operating income and margin, adjusted net income and adjusted diluted EPS. The reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP are shown in the tables below. These non-GAAP measures are derived from the consolidated financial statements but are not presented in accordance with GAAP. We believe these non-GAAP measures provide a meaningful comparison of our results to others in our industry and our prior year results. Investors should consider these non-GAAP financial measures in addition to, and not as a substitute for, our financial performance measures prepared in accordance with GAAP. Moreover, these non-GAAP financial measures have limitations in that they do not reflect all the items associated with the operations of the business as determined in accordance with GAAP. Other companies may calculate similarly titled non-GAAP financial measures differently than we do, limiting the usefulness of those measures for comparative purposes. Despite the limitations of these non-GAAP financial measures, we believe these adjusted financial measures and the information they provide are useful in viewing our performance using the same tools that management uses to assess progress in achieving our goals. Adjusted measures may also facilitate comparisons to our historical performance. 25 ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES The following tables below show a reconciliation of non-GAAP financial measures used in this filing to the most directly comparable GAAP financial measures. (in thousands, except per share amounts) Fiscal Year Ended June 30, 2025 2024 % Change Consolidated Adjusted Operating Income / Operating Margin GAAP Operating income $ 61,988 $ 77,991 (20.5% ) Adjustments (pre-tax) * 907 (77 ) Adjusted operating income * $ 62,895 $ 77,914 (19.3% ) Consolidated Net sales $ 614,649 $ 646,221 (4.9% ) GAAP Operating margin 10.1 % 12.1 % Adjusted operating margin * 10.2 % 12.1 % Consolidated Adjusted Net Income / Adjusted Diluted EPS GAAP Net income $ 51,596 $ 63,816 (19.1% ) Adjustments, net of tax * 675 (58 ) Adjusted net income $ 52,271 $ 63,758 (18.0% ) Diluted weighted average common shares 25,634 25,644 GAAP Diluted EPS $ 2.01 $ 2.49 (19.3% ) Adjusted diluted EPS * $ 2.04 $ 2.49 (18.1% ) * Adjustments to reported GAAP financial measures including operating income and margin, net income, and diluted EPS have been adjusted by the following: (in thousands) Fiscal Year Ended June 30, 2025 2024 Gain on sale-leaseback transaction(1) $ (218 ) $ (2,620 ) Orleans, Vermont flood(1) 92 2,243 Severance and other charges(1) 469 300 Other non-restructuring charges 564 - Adjustments to operating income 907 (77 ) Related income tax effects on non-recurring items(2) (232 ) 19 Adjustments to net income $ 675 $ (58 ) (1) Refer to Note 11, Restructuring and Other Charges, Net of Gains, of the notes to our consolidated financial statements included under Item 8 of this Annual Report on Form 10-K for additional information regarding these adjustments. (2) Calculated using the marginal tax rate for each period presented. Liquidity Our sources of liquidity include cash and cash equivalents, short-term and long-term investments, cash generated from operations and amounts available under our credit facility. We believe these sources remain adequate to meet our short-term requirements and contractual obligations and fulfill other cash requirements for day-to-day operations for at least the next twelve months, as well as to meet long-term liquidity requirements and contractual obligations, finance our long-term growth plans and invest in capital expenditures for the foreseeable future. We are committed to maintaining a strong balance sheet and monitoring our liquidity closely.   The following table illustrates the main components of our available liquidity (in thousands). June 30, 2025 2024 Cash and cash equivalents $ 76,178 $ 69,710 Investments, short-term 59,955 91,319 Investments, long-term (1) 60,030 34,772 Availability under existing credit facility 120,952 120,952 Total available liquidity $ 317,115 $ 316,753 (1) Our long-term investments in U.S. Treasury notes are classified as non-current as they have stated maturities greater than one year. 26 ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES At June 30, 2025, we had working capital of $157.1 million compared with $179.0 million at June 30, 2024 and a current ratio of 2.03 at June 30, 2025, comparable to 2.16 a year ago. Our non-U.S. subsidiaries held $3.6 million in cash and cash equivalents at June 30, 2025, which we have determined to be permanently reinvested. Summary of Cash Flows At June 30, 2025, we held cash and cash equivalents of $76.2 million compared with $69.7 million at June 30, 2024. Cash and cash equivalents aggregated to 10.3% of our total assets at June 30, 2025, compared with 9.4% a year ago. In addition to cash and cash equivalents of $76.2 million, we had aggregated investments of $120.0 million at June 30, 2025 compared with $126.1 million at June 30, 2024. Our investments at June 30, 2025 are within U.S. Treasury bills and notes, which we expect will further enhance our returns on excess cash. Our U.S. Treasury bills with maturities of less than one year totaled $60.0 million while our U.S. Treasury notes with maturities ranging between one and two years totaled $60.0 million. We believe our cash, cash equivalents and investments are available to meet short-term liquidity needs. The following table illustrates the main components of our cash flows during each of the last three fiscal years. (in millions) Fiscal Year Ended June 30, 2025 2024 2023 Operating activities Net income $ 51.6 $ 63.8 $ 105.8 Non-cash operating lease cost 32.7 32.0 30.2 Restructuring and other charges, net of gains 0.3 (0.1 ) (3.7 ) Payments on restructuring and other charges, net of proceeds (0.6 ) (1.0 ) (1.0 ) Depreciation and amortization 15.5 16.0 15.6 Deferred income taxes and other non-cash items 1.6 1.2 0.6 Changes in operating assets and liabilities (39.4 ) (31.7 ) (46.8 ) Total provided by operating activities $ 61.7 $ 80.2 $ 100.7 Investing activities Capital expenditures $ (11.3 ) $ (9.6 ) $ (13.9 ) Proceeds from sales of property, plant and equipment - - 9.9 Proceeds from sales of investments, net of purchases 8.9 (10.4 ) (97.5 ) Total used in investing activities $ (2.4 ) $ (20.0 ) $ (101.5 ) Financing activities Taxes paid related to net share settlement of equity awards $ (2.2 ) $ (2.1 ) $ (0.8 ) Dividend payments (50.1 ) (50.3 ) (46.4 ) Proceeds from employee stock plans - 0.5 0.1 Payments on financing leases and other (0.3 ) (0.4 ) (0.5 ) Total used in financing activities $ (52.6 ) $ (52.3 ) $ (47.6 ) Our cash, cash equivalents and restricted cash increased $6.7 million or 9.6% during fiscal 2025 due to $61.7 million in net cash provided by operating activities and $8.9 million of proceeds from sales of investments, net of purchases, partially offset by $50.1 million in cash dividends paid, capital expenditures of $11.3 million and $2.2 million in taxes paid related to net share settlement of vested equity awards. Cash Provided by Operating Activities Cash provided by operating activities in fiscal 2025 was primarily attributable to net income, adjusted for non-cash items, partially offset by changes in working capital. We generated $61.7 million in cash from operating activities during fiscal 2025 compared with $80.2 million in the prior year. This decrease was due to lower net income and changes in working capital. Changes in working capital reflect an increase in prepaid expenses and a decline in accounts payable, primarily due to timing of payments. Restructuring payments made during fiscal 2025 of $0.6 million related primarily to severance while payments of $1.0 million in the prior year included $0.6 million related to the Vermont flood restoration efforts. Cash Used in Investing Activities Cash used in investing activities was $2.4 million during fiscal 2025, compared with $20.0 million in the prior year. During fiscal 2025, we had $8.9 million of proceeds from sales of investments, net of purchases, which represented $94.1 million of U.S. Treasuries that matured during the fiscal year of which $85.2 million was reinvested. The prior year included an outgoing $10.4 million of net purchases of investments, which related to $124.5 million of U.S. treasuries that matured during the year and were subsequently reinvested at a higher amount of $134.9 million. Capital expenditures during fiscal 2025 were $11.3 million compared with $9.6 million in the prior year as we further expanded our manufacturing facilities in Mexico, remodeled our hotel, built-out new retail design centers and continued to invest in new manufacturing equipment and technology. 27 ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES Cash Used in Financing Activities Cash used in financing activities was $52.6 million during fiscal 2025 compared with $52.3 million in the prior year. Total dividends paid were $50.1 million, a decrease of 0.4% from a year ago due to a reduction in the special cash dividend paid, which went from $0.50 per share last year to $0.40 in the current year. The decrease in our special cash dividend was offset by an 8.3% increase in our regular quarterly dividend, which rose from $0.36 to $0.39 per share, effective May 2024. In addition, during fiscal 2025, a total of 70,495 shares valued at $2.2 million were repurchased from employees to satisfy their withholding tax obligations upon vesting of equity awards. This compared to $2.1 million repurchased for similar withholding tax obligations in the prior year period. Restricted Cash We present restricted cash as a component of total cash and cash equivalents on our consolidated statements of cash flows and within Other assets on our consolidated balance sheets. At June 30, 2025 we held $0.8 million of restricted cash related to the Ethan Allen insurance captive compared to $0.5 million in the prior year. Exchange Rate Changes Due to changes in exchange rates, our cash and cash equivalents were impacted by less than $0.1 million during fiscal 2025 compared with $0.3 million in the prior year period. These changes had an immaterial impact on our cash balances held in Canada, Mexico and Honduras. Capital Resources, including Material Cash Requirements Sources of Liquidity Capital Needs. On January 26, 2022, we entered into a Third Amended and Restated Credit Agreement (the “Credit Agreement”) with JPMorgan Chase Bank, N.A. as administrative agent and syndication agent and Capital One, National Association, as documentation agent. The Credit Agreement amended and restated the Second Amended and Restated Credit Agreement, dated as of December 21, 2018, as amended. The Credit Agreement provides for a $125 million revolving credit facility (the “Facility”), subject to borrowing base availability, with a maturity date of January 26, 2027. The Credit Agreement also provides us with an option to increase the size of the Facility up to an additional amount of $60 million. Availability under the Facility fluctuates according to a borrowing base calculated on eligible accounts receivable and inventory, net of customer deposits and reserves. The Facility includes covenants that apply under certain circumstances, including a fixed-charge coverage ratio requirement that applies when excess availability under the credit line is less than certain thresholds. As of June 30, 2025, we were not subject to the fixed-charge coverage ratio requirement, had no borrowings outstanding under the Facility, were in compliance with all other covenants, and had borrowing availability of $121.0 million of the $125.0 million credit commitment. See Note 12, Credit Agreement, to the consolidated financial statements included under Item 8 of this Annual Report on Form 10-K, for a further description of the Credit Agreement. Letters of Credit. At both June 30, 2025 and 2024 there were $4.0 million of standby letters of credit outstanding under the Facility. Uses of Liquidity Capital Expenditures. Capital expenditures during fiscal 2025 totaled $11.3 million compared with $9.6 million in the prior year. Current year capital expenditures related primarily to the further expansion of our manufacturing facilities in Mexico, new retail design centers, investments in technology, and remodeling costs associated with our hotel. During fiscal 2025, we further strengthened our vertically integrated enterprise through the purchase of property, plant and equipment for $1.6 million, which increased our manufacturing operations in Silao, Mexico. New design centers in Middleton, WI, Toronto, Canada, Watchung, NJ, and Peoria, AZ were opened during fiscal 2025 that showcase our unique style while combining complimentary interior design services with technology. We have no material contractual commitments outstanding for future capital expenditures and anticipate that cash from operations will be sufficient to fund future capital expenditures at least for the next twelve months and foreseeable future.  28 ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES Dividends. Our Board has the sole authority to determine if and when we will declare future dividends and on what terms. We have a strong history of returning capital to shareholders and continued this practice during fiscal 2025 as the following actions were taken pertaining to dividends. ● On July 30, 2024, our Board declared a $0.40 per share special cash dividend in addition to our regular quarterly cash dividend of $0.39 per share, both paid on August 29, 2024 ● On October 29, 2024, our Board declared a regular quarterly cash dividend of $0.39 per share, which was paid on November 27, 2024 ● On January 28, 2025, our Board declared a regular quarterly cash dividend of $0.39 per share, which was paid on February 26, 2025 ● On May 5, 2025, our Board declared a regular quarterly cash dividend of $0.39 per share, which was paid on May 29, 2025 During fiscal 2025 we paid a total of $1.96 per share in cash dividends for an aggregate total of $50.1 million. This included the special dividend paid on August 29, 2024 totaling $10.2 million. In the prior year period, total dividends paid were $50.3 million. With our dividends, we have returned $721.3 million to shareholders since our initial public offering in 1993. We have paid a special cash dividend each of the past five years and paid an annual cash dividend every year since 1996. Although we expect to continue to declare and pay quarterly cash dividends for the foreseeable future, the payment of future cash dividends is within the discretion of our Board and will depend on our earnings, operations, financial condition, capital requirements and general business outlook, among other factors. Our credit agreement also includes covenants with certain limitations on our ability to pay dividends. Share Repurchase Program. There were no share repurchases under our existing multi-year share repurchase program during fiscal 2025 or 2024. At June 30, 2025, we had a remaining Board authorization to repurchase 2,007,364 shares of our common stock pursuant to our share repurchase program. The timing and amount of any future share repurchases in the open market and through privately negotiated transactions will be determined by the Company’s officers at their discretion and based on a number of factors, including an evaluation of market and economic conditions while also maintaining financial flexibility. Material Cash Requirements from Contractual Obligations Fluctuations in our operating results, levels of inventory on hand, operating lease commitments, the degree of success of our accounts receivable collection efforts, the timing of tax and other material payments, the rate of written orders and net sales, levels of customer deposits on hand, as well as capital expenditures will impact our liquidity and cash flows in future periods. The effect of our contractual obligations on our liquidity and capital resources in future periods should be considered in conjunction with the factors mentioned here. At June 30, 2025, we had total contractual obligations of $182.8 million, down from $197.9 million a year ago primarily due to lower retail design center lease obligations and timing of purchase orders for the procurement of finished goods and raw materials. 29 ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES Our material cash requirements for our contractual obligations at June 30, 2025 were as follows: ● Lease Obligations. We lease real estate for both retail design centers and home delivery centers and also have equipment leases for certain equipment. At June 30, 2025, we had operating and finance lease obligations of $146.3 million and $0.7 million, respectively, with $33.9 million and $0.4 million payable within the next 12 months, respectively. For more information, see Note 6, Leases, in the notes to consolidated financial statements included under Item 8 of this Annual Report on Form 10-K. ● Open Purchase Orders. We had purchase obligations, defined as agreements that are enforceable and legally binding that specify all significant terms, including fixed or minimum quantities to be purchased, of $21.0 million at June 30, 2025, comparable to $30.7 million in the prior year period. Our purchase obligations at June 30, 2025, all payable within 12 months, related to purchase orders for the procurement of selected finished goods sourced from third-party suppliers, lumber, fabric, leather and other raw materials used in our manufacturing. The decline in open purchase orders during fiscal 2025 was driven by timing of purchase requisitions, payments and a reduction in available backlog. ● Long-term Debt. We had no outstanding borrowings under our revolving credit facility at June 30, 2025 and 2024, respectively. For more information, see Note 12, Credit Agreement, in the notes to the consolidated financial statements included under Item 8 of this Annual Report on Form 10-K. ● Other Purchase Obligations. Other purchase commitments for services such as telecommunication, software, web development, financial and accounting services, insurance and other maintenance contracts was $14.8 million at June 30, 2025 compared with $14.9 million in the prior year period. For a discussion of our liquidity and capital resources and our cash flow activities for the fiscal year ended June 30, 2024, see Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of our Annual Report on Form 10-K for the fiscal year ended June 30, 2024, filed with the SEC on August 23, 2024. Other Arrangements We do not utilize or employ any other arrangements in operating our business. As such, we do not maintain any retained or contingent interests, derivative instruments or variable interests which could serve as a source of potential risk to our future liquidity, capital resources and results of operations. Product Warranties. At both June 30, 2025 and 2024, our product warranty liability totaled $1.0 million. Our products, including case goods, upholstery and home accents, generally carry explicit product warranties and are provided based on terms that are generally accepted in the industry. All our domestic independent retailers are required to enter into and perform in accordance with the terms and conditions of a warranty service agreement. We record provisions for estimated warranty and other related costs at time of sale based on historical warranty loss experience and make periodic adjustments to those provisions to reflect actual experience. Contingencies We are involved in various claims and litigation as well as environmental matters, which arise in the normal course of business. Although the final outcome of these legal and environmental matters cannot be determined, based on the facts presently known, it is our opinion that the final resolution of these matters will not have a material adverse effect on our financial position or future results of operations. Critical Accounting Estimates We prepare our consolidated financial statements in conformity with GAAP. In some cases, these principles require management to make difficult and subjective judgments regarding uncertainties and, as a result, such estimates and assumptions may significantly impact our financial results and disclosures. We consider an accounting estimate to be critical if: (i) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (ii) changes in the estimate that are reasonably likely to occur from period to period, or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations. We base our estimates on currently known facts and circumstances, prior experience and other assumptions we believe to be reasonable. We use our best judgment in valuing these estimates and may, as warranted, use external advice. Actual results could differ from these estimates, assumptions, and judgments and these differences could be significant. We make frequent comparisons throughout the year of actual experience to our assumptions to reduce the likelihood of significant adjustments and will record adjustments when differences are known. 30 ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES The following critical accounting estimates affect our consolidated financial statements. Impairment of Long-Lived Assets The recoverability of long-lived assets, including those held by our retail design centers, is evaluated for impairment whenever events or changes in circumstances indicate that we may not be able to recover the carrying amount of an asset or asset group. Conditions that may indicate impairment include, but are not limited to, a significant adverse change in customer demand or business climate that could affect the value of an asset, change in the intended use of an asset, a product recall or an adverse action or assessment by a regulator. If the sum of the estimated undiscounted future cash flows over the remaining life of the primary asset is less than the carrying value, we recognize a loss equal to the difference between the carrying value and the fair value, usually determined by the estimated discounted cash flow analysis or independent third-party appraisal of the asset or asset group. While determining fair value requires a variety of input assumptions and judgment, we believe our estimates of fair value are reasonable. The asset group is defined as the lowest level for which identifiable cash flows are available and largely independent of the cash flows of other groups of assets, which for our retail segment is the individual design center. For retail design center long-lived assets, expected cash flows are determined based on our estimate of future net sales, margin rates and expenses over the remaining expected terms of the leases. Goodwill and Indefinite-Lived Intangible Assets We review the carrying value of our goodwill and intangible assets with indefinite lives at least annually, during the fourth quarter, or more frequently if an event occurs or circumstances change, for possible impairment. Both goodwill and indefinite-lived intangible assets are assigned to our wholesale reporting unit which is principally involved in the development of the Ethan Allen brand and encompasses all aspects of design, manufacturing, sourcing, marketing, sale and distribution of our home furnishings and accents. Goodwill. We may elect to evaluate qualitative factors to determine if it is more likely than not that the fair value of a reporting unit or fair value of indefinite lived intangible assets is less than its carrying value. If the qualitative evaluation indicates that it is more likely than not that the fair value of a reporting unit or indefinite lived intangible asset is less than its carrying amount, a quantitative impairment test is required. Alternatively, we may bypass the qualitative assessment for a reporting unit or indefinite lived intangible asset and directly perform a quantitative assessment. A quantitative impairment test involves estimating the fair value of each reporting unit and indefinite lived intangible asset and comparing these estimated fair values with the respective reporting unit or indefinite lived intangible asset carrying value. If the carrying value of a reporting unit exceeds its fair value, an impairment loss will be recognized in an amount equal to such excess, limited to the total amount of goodwill allocated to the reporting unit. If the carrying value of an individual indefinite lived intangible asset exceeds its fair value, such individual indefinite lived intangible asset is written down by an amount equal to such excess. Estimating the fair value of reporting units and indefinite lived intangible assets involves the use of significant assumptions, estimates and judgments with respect to a number of factors, including sales, gross margin, general and administrative expenses, capital expenditures, operating income and cash flows, the selection of an appropriate discount rate, as well as market values and multiples of earnings and revenue of comparable public companies. To evaluate goodwill in a quantitative impairment test, the fair value of the reporting units is estimated using a combination of Market and Income approaches. The Market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities (including a business). In the Market approach, the method focuses on comparing the Company’s risk profile and growth prospects to reasonably similar publicly traded companies. Key assumptions used include multiples for revenues, operating income and operating cash flows, as well as consideration of control premiums. The selected multiples are determined based on public companies within our peer group, and if appropriate, recent comparable transactions are also 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 management’s forecasts and budgets. 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 Company performed its annual goodwill impairment test during the fourth quarter of fiscal 2025 utilizing a qualitative analysis and concluded it was more likely than not the fair value of our wholesale reporting unit was greater than its respective carrying value and no impairment charge was required. In performing the qualitative assessment, we considered such factors as macroeconomic conditions, industry and market conditions in which we operate, including the competitive environment and any significant changes in demand. We also considered our stock price both in absolute terms and in relation to peer companies. 31 ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES Indefinite-Lived Intangible Assets. We also annually evaluate whether our trade name continues to have an indefinite life. Our trade name is reviewed for impairment annually in the fourth quarter and may be reviewed more frequently if indicators of impairment are present. Conditions that may indicate impairment include, but are not limited to, a significant adverse change in customer demand or business climate that could affect the value of an asset, a product recall or an adverse action or assessment by a regulator. Factors used in the valuation of intangible assets with indefinite lives include, but are not limited to, management’s plans for future operations, recent results of operations and projected future cash flows. Similar to goodwill, we may elect to perform a qualitative assessment. If the qualitative evaluation indicates that it is more likely than not that the fair value of our trade name was less than its carrying value, a quantitative impairment test is required. Alternatively, we may bypass the qualitative assessment for our indefinite lived intangible asset and directly perform a quantitative assessment. To evaluate our trade name using a quantitative analysis, its fair value is calculated using the relief-from-royalty method. Significant factors used in the trade name valuation are rates for royalties, future revenue growth and a discount factor. Royalty rates are determined using an average of recent comparable values, review of the operating margins and consideration of the specific characteristics of the trade name. 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. We performed our annual indefinite-lived intangible asset impairment test during the fourth quarter of fiscal 2025 utilizing a qualitative analysis and concluded it was more likely than not the fair value of our trade name was greater than its carrying value and no impairment charge was required. Qualitative factors reviewed included a review for significant adverse changes in client demand or business climate that could affect the value of the asset, a product recall or an adverse action or assessment by a regulator. Inventories Inventories (finished goods, work in process and raw materials) are stated at the lower of cost, determined on a first-in, first-out basis, and net realizable value. 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). At June 30, 2025 our inventory reserves totaled $1.5 million, which we estimate for excess quantities and obsolete items based on specific identification and historical write-downs, taking into account future demand and market conditions. Our inventory reserves contain uncertainties that require management to make assumptions and to apply judgment regarding a number of factors, including market conditions, the selling environment, historical results and current inventory trends. We adjust our inventory reserves for net realizable value and obsolescence based on trends, aging reports, specific identification and estimates of future retail sales prices. If actual demand or market conditions change from our prior estimates, we adjust our inventory reserves accordingly throughout the period. We have not made any material changes to our assumptions included in the calculations of the lower of cost or net realizable value reserves during the periods presented. Our inventory reserves of $1.5 million at June 30, 2025 were down from $1.8 million a year ago primarily due to a decline in our inventory carrying levels combined with fewer returns and obsolete items. Income Taxes We are subject to income taxes in the U.S. and other foreign jurisdictions. Our effective tax rate for fiscal 2025 was 25.2% compared with 25.3% in the prior year. Our tax provision is an estimate based on our understanding of laws in Federal, state and foreign tax jurisdictions. These laws can be complicated and are difficult to apply to any business, including ours. The tax laws also require us to allocate our taxable income to many jurisdictions based on subjective allocation methodologies and information collection processes. Our effective tax rate varies from the 21% federal statutory rate primarily due to state taxes. We use the asset and liability method to account for income taxes. We recognize deferred tax assets and liabilities based on the estimated 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. We measure deferred tax assets and liabilities using enacted tax rates in effect for the year in which we expect to recover or settle those temporary differences. When we record deferred tax assets, we are required to estimate, based on forecasts of taxable earnings in the relevant tax jurisdiction, whether we are more likely than not to recover them. In making judgments about realizing the value of our deferred tax assets, we consider historic and projected future operating results, the eligible carry-forward period, tax law changes and other relevant considerations. The Company evaluates, on a quarterly basis, uncertain tax positions taken or expected to be taken on tax returns for recognition, measurement, presentation, and disclosure in its financial statements. If an income tax position exceeds a 50% probability of success upon tax audit, based solely on the technical merits of the position, the Company recognizes an income tax benefit in its financial statements. The tax benefits recognized are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. 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. As of June 30, 2025, we had gross unrecognized tax benefits totaling $3.9 million, consistent with the year ago period. 32 ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES Business Insurance Reserves We have insurance programs in place for workers’ compensation and healthcare under certain employee benefit plans provided by the Company. The programs, which are funded through self-insured retention, are subject to stop-loss limitations. We accrue estimated losses using actuarial models and assumptions based on historical loss experience. At June 30, 2025, we recorded a liability of $1.5 million for incurred but not reported healthcare claims and $4.5 million related to workers’ compensation claims. These business insurance reserves are recorded within Accrued compensation and benefits on our consolidated balance sheets. Although we believe that the reserves are adequate, the estimates are based on historical experience, which may not be indicative of current and future losses. In addition, the actuarial calculations used to estimate reserves are based on numerous assumptions, some of which are subjective. We adjust insurance reserves, as needed, in the event that future loss experience differs from historical loss patterns. Significant Accounting Policies See Note 3, Summary of Significant Accounting Policies, in the notes to our consolidated financial statements included under Part II, Item 8, for a full description of our significant accounting policies. Recent Accounting Pronouncements See Note 3, Summary of Significant Accounting Policies, in the notes to our consolidated financial statements included under Part II, Item 8, for a full description of recent accounting pronouncements, including the expected dates of adoption.