bset20130403_8k.htm

 



 UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 


 

FORM 8-K

 


 CURRENT REPORT

 

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported) April 4, 2013

 


 BASSETT FURNITURE INDUSTRIES, INCORPORATED

(Exact name of registrant as specified in its charter)

 


 

         

VIRGINIA

 

0-209

 

54-0135270

(State or other jurisdiction of

incorporation or organization)

 

(Commission File No.)

 

(I.R.S. Employer

Identification No.)

 

     

3525 FAIRYSTONE PARK HIGHWAY

BASSETT, VIRGINIA

 

24055

(Address of principal executive offices)

 

(Zip Code)

 

Registrant’s telephone number, including area code 276/629-6000

  

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 



 

 

 

 
 

 

 

Item 2.02.   Results of Operations and Financial Condition.


On April 4, 2013 Bassett Furniture Industries issued a news release relating to, among other things, the first quarter financial results for the fiscal year ending November 30, 2013. A copy of the news release announcing this information is attached to this report as Exhibit 99.

  

Item 9.01.   Financial Statements and Exhibits.

  

Exhibit 99   News release issued by Bassett Furniture Industries, Inc. on April 4, 2013.

 

 
 

 

 

 

Signatures

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

BASSETT FURNITURE INDUSTRIES, INCORPORATED

 

 

 

 

 

Date: April 4, 2013

By:

/s/ J. Michael Daniel

 

 

J. Michael Daniel

 

 

Title:

Senior Vice President – Chief Financial Officer

 

 

  

 
 

 

 

EXHIBIT INDEX

 

 

 

 

Description

 

Exhibit No. 99  

News release issued by Bassett Furniture Industries on April 4, 2013.

 

 

bset20130403_8kex99-1.htm

Exhibit 99

 

 

Bassett Furniture Industries, Inc.

J. Michael Daniel

P.O. Box 626

Senior Vice President and

Bassett, VA 24055

Chief Financial Officer

(276) 629-6614 – Investors

Jay S. Moore

Director of Communications

For Immediate Release

(276) 629-6450 – Media

 

 

Bassett Furniture News Release

Bassett Announces Fiscal First Quarter Results



(Bassett, Va.) – April 4, 2013– Bassett Furniture Industries, Inc. (Nasdaq: BSET) announced today its results of operations for its fiscal quarter ended March 2, 2013.


Fiscal 2013 First Quarter Highlights


 

Consolidated sales for the first quarter of 2013 increased 31% as compared to the first quarter of 2012

Operating profit for the quarter was $2.4 million versus $0.2 million for the prior year quarter

Wholesale sales increased 27% compared to the prior year quarter

Company-owned store delivered sales increased 29% compared to the prior year quarter which included a 16% increase from the 48 comparable stores

Due to the Company’s fiscal calendar, the first quarter of 2013 consisted of 14 weeks while the first quarter of 2012 consisted of 13 weeks

 

On a consolidated basis, the Company reported net sales for the first quarter of 2013 of $79.8 million, an increase of $18.9 million, or 31%, over the first quarter of 2012. As noted above, the first quarter of 2013 consisted of 14 weeks while the first quarter of 2012 consisted of 13 weeks. On an average weekly basis, consolidated net sales increased 22%. Operating income increased to $2.4 million from $0.2 million driven primarily by higher sales in both the wholesale and retail segments. This was partially offset by higher selling, general and administrative expenses due primarily to the increased number of Company-owned stores, planned higher marketing and advertising costs to drive continued sales growth, and increased health care costs due to higher claim experience. The Company recorded net income of $1.0 million or $0.09 per diluted share for the first quarter of 2013 compared to a net loss of $(0.6) million or $(0.05) per diluted share in the first quarter of 2012.


“The sales momentum that we enjoyed at the end of 2012 continued during the first quarter of 2013 as we posted an exciting 31% increase in consolidated revenue,” commented Robert H. Spilman, Jr., President and Chief Executive Officer. “Allowing for the extra week in this year’s fiscal calendar, the Company grew revenue by 22% on a normalized basis. The same factors that propelled our business during the second half of last year drove this quarter’s increase – improving sales in our Bassett Home Furnishings stores and market share gains with independent retailers. Operating profit continued to improve as both our wholesale and retail segments posted markedly better results than a year ago. These positive trends combined with our financial strength make us well positioned to continue to grow our top line and further enhance operating performance in the future.”

 

 

 
 

 

 

Wholesale Segment


Net sales for the wholesale segment were $54.0 million for the first quarter of 2013 as compared to $42.6 million for the first quarter of 2012, an increase of $11.4 million or 27%. On an average weekly basis (normalizing for the extra week in the first quarter of 2013), wholesale net sales increased 18%. Wholesale shipments increased due to a 47% increase in wholesale sales outside the BHF store network and a 17% increase in shipments to the BHF store network. Gross margins for the wholesale segment were 33.4% for the first quarter of 2013 as compared to 31.8% for the first quarter of 2012. This increase was primarily due to higher margins in the upholstery operations as increased sales volumes provided greater leverage of fixed costs, partially offset by increased health care costs due to higher claim experience. Wholesale SG&A increased $3.3 million to $15.0 million for the first quarter of 2013 as compared to $11.7 million for the first quarter of 2012. SG&A costs as a percentage of sales increased to 27.8% as compared to 27.5% for the first quarter of 2012. Profit improvement from leveraging fixed SG&A costs through higher sales volumes was offset by planned increased marketing and advertising costs to drive continued sales growth.


“Both our upholstery and wood operations grew nicely in the quarter as a number of our recent product introductions are selling well at retail,” added Spilman. “To drive volume and increase consumer awareness, we spent more heavily on sales promotions and on national advertising in association with our partnership with the HGTV television network. We believe that these investments in marketing are bearing fruit in the form of increasing market share. On a normalized basis, our upholstery and wood operations grew at the rate of 18% and 14% respectively in the quarter. As a result, wholesale operating income was 64% greater than the same period a year ago. Continued growth in our domestic custom assortment as well as our offshore cut and sew program were the major contributors to our gains in upholstery. And despite the industry wide challenges that the casegoods segment has experienced in recent years, we were gratified to see our new wood product introductions drive a double digit sales increase for the second consecutive quarter.”


Retail Segment


Net sales for Company-owned stores were $50.0 million for the first quarter of 2013 as compared to $38.8 million for the first quarter of 2012, an increase of $11.2 million or 29%. The increase was comprised of a $6.1 million or 16% increase in comparable store sales along with a $5.1 million increase in non-comparable store sales. On an average weekly basis (normalizing for the extra week in the first quarter of 2013), comparable store sales increased 7.6%.


While the Company does not recognize sales until goods are delivered to the customer, management tracks written sales (the dollar value of sales orders taken, rather than delivered) as a key store performance indicator. Written sales for comparable stores increased by 20% for the first quarter of 2013 as compared to the first quarter of 2012. On an average weekly basis, written sales for comparable stores increased by 12%.

 

 

 
 

 

 

Operating results for the Company-owned stores improved from a loss of $1.0 million in the first quarter of 2012 to a loss of $0.6 million in the first quarter of 2013. This improvement was primarily driven by the increased sales noted above. Gross margins were slightly lower at 47.8% for the quarter as compared to 48.1% for the prior year quarter. SG&A expense increased $4.8 million, primarily due to increased store count and higher sales volumes. As a percentage of sales, SG&A decreased to 48.9% for the quarter as compared to 50.7% for the same quarter last year, primarily due to greater leverage of fixed costs from higher sales. This improvement was partially offset by increased health care costs due to higher claim experience and incremental management and overhead costs as the Company-owned network continues to grow. Refer to the accompanying schedule of Supplemental Retail Information for results of operations for the Company’s retail segment by comparable and all other stores.


The following table summarizes the changes in store count during the first quarter of 2013:

 

 

November 24,

New

Stores

Stores

March 2,

 

2012

Stores

Acquired

Closed

2013

                                         

Company-owned stores

    53     1     -     -     54

Licensee-owned stores

    33     1     -     (1 )     33
                                         

Total

    86     2     -     (1 )     87

“The progress that our corporate retail group has exhibited over the past several reporting periods continued during the first quarter as our operating loss was reduced by 43%,” continued Spilman. “The conversion of our in store design centers to the HGTV Design Studio at Bassett played a large part in our 7.6% same store sales increase, which comes on top of a 9.1% same store sales increase last year. Consumers are responding to our HGTV marketing campaign and are buying more with each transaction, signifying growth in our in home “makeover” capability, a key point of differentiation for Bassett stores. The quarter ended with the opening of a new store in a fashionable home furnishings shopping district in Dallas. The second quarter will see a repositioned Hartford, CT location come on line as well as the opening of a new small store in Raleigh, NC. We are also at the front end of the relocation process of several of our first generation stores. We look forward to moving these stores to locations that are more suitable to the Bassett of 2013. We believe that our new generation stores in better situated real estate will garner improved financial performance in these individual locations.”

 

 

About Bassett Furniture Industries, Inc.

Bassett Furniture Industries, Inc. (NASDAQ:BSET), is a leading manufacturer and marketer of high quality, mid-priced home furnishings. With 87 company- and licensee-owned stores, Bassett has leveraged its strong brand name in furniture into a network of corporate and licensed stores that focus on providing consumers with a friendly environment for buying furniture and accessories. The most significant growth opportunity for Bassett continues to be the Company’s dedicated retail store program. Bassett’s retail strategy includes affordable custom-built furniture that is ready for delivery in the home within 30 days. The stores also feature the latest on-trend furniture styles, more than 1,000 upholstery fabrics, free in-home design visits, and coordinated decorating accessories. Bassett is also growing its traditional wholesale business with more than 500 accounts on the open market, across the United States and internationally. For more information, visit the Company’s website at bassettfurniture.com. (BSET-E)

 

 

 
 

 

 


 

Certain of the statements in this release, particularly those preceded by, followed by or including the words “believes,” “expects,” “anticipates,” “intends,” “should,” “estimates,” or similar expressions, or those relating to or anticipating financial results for periods beyond the end of the first fiscal quarter of 2013, constitute “forward looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended. For those statements, Bassett claims the protection of the safe harbor for forward looking statements contained in the Private Securities Litigation Reform Act of 1995. In many cases, Bassett cannot predict what factors would cause actual results to differ materially from those indicated in the forward looking statements. Expectations included in the forward-looking statements are based on preliminary information as well as certain assumptions which management believes to be reasonable at this time. The following important factors affect Bassett and could cause actual results to differ materially from those indicated in the forward looking statements: the effects of national and global economic or other conditions and future events on the retail demand for home furnishings and the ability of Bassett’s customers and consumers to obtain credit; and the economic, competitive, governmental and other factors identified in Bassett’s filings with the Securities and Exchange Commission. Any forward-looking statement that Bassett makes speaks only as of the date of such statement, and Bassett undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. Comparisons of results for current and any prior periods are not intended to express any future trends or indication of future performance, unless expressed as such, and should only be viewed as historical data.


###

 

 

 
 

 

 

BASSETT FURNITURE INDUSTRIES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Income - unaudited

(In thousands, except for per share data)

 


 

14 Weeks Ended

March 2, 2013

13 Weeks Ended

February 25, 2012

 

Amount

Percent of

Net Sales

Amount

Percent of

Net Sales

                                 

Net sales

  $ 79,849     100.0 %   $ 60,968     100.0 %
                                 

Cost of sales

    38,489     48.2 %     29,297     48.1 %
                                 

Gross profit

    41,360     51.8 %     31,671     51.9 %
                                 

Selling, general and administrative expense

    38,996     48.8 %     31,028     50.9 %

Restructuring and asset impairment charges

    -     0.0 %     236     0.4 %

Lease exit costs

    -     0.0 %     228     0.4 %
                                 

Operating income

    2,364     3.0 %     179     0.3 %
                                 

Other loss, net

    668     0.8 %     1,247     2.0 %

Income (loss) before income taxes

    1,696     2.1 %     (1,068 )     -1.8 %
                                 

Income tax expense (benefit)

    716     0.9 %     (472 )     -0.8 %

Net income (loss)

  $ 980     1.2 %   $ (596 )     -1.0 %
                                 

Basic earnings (loss) per share

  $ 0.09           $ (0.05 )        
                                 

Diluted earnings (loss) per share

  $ 0.09           $ (0.05 )        

 

 

 

 
 

 

 

BASSETT FURNITURE INDUSTRIES, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets -Unaudited

(In thousands)


Assets

March 2, 2013

November 24, 2012

Current assets

               

Cash and cash equivalents

  $ 47,159   $ 45,566

Accounts receivable, net

    14,838     15,755

Inventories

    57,807     57,916

Deferred income taxes, net

    6,952     6,832

Other current assets

    5,251     6,439

Total current assets

    132,007     132,508
                 

Property and equipment, net

    56,738     56,624
                 

Other long-term assets

               

Retail real estate

    12,610     12,736

Deferred income taxes, net

    10,280     10,485

Other

    15,352     14,827

Total long-term assets

    38,242     38,048

Total assets

  $ 226,987   $ 227,180
                 

Liabilities and Stockholders’ Equity

               

Current liabilities

               

Accounts payable

  $ 18,427   $ 22,405

Accrued compensation and benefits

    6,742     6,926

Customer deposits

    15,955     12,253

Dividends payable

    -     542

Other accrued liabilities

    11,107     10,454

Total current liabilities

    52,231     52,580
                 

Long-term liabilities

               

Post employment benefit obligations

    11,501     11,577

Real estate notes payable

    2,991     3,053

Other long-term liabilities

    2,291     2,690

Total long-term liabilities

    16,783     17,320
                 
                 

Stockholders’ equity

               

Common stock

    54,236     54,184

Retained earnings

    104,757     104,319

Additional paid-in-capital

    184     -

Accumulated other comprehensive loss

    (1,204 )     (1,223 )

Total stockholders' equity

    157,973     157,280

Total liabilities and stockholders’ equity

  $ 226,987   $ 227,180

 

 

 
 

 

 

 BASSETT FURNITURE INDUSTRIES, INC. AND SUBSIDIARIES

 Consolidated Statements of Cash Flows - unaudited

 (In thousands)


 

14 Weeks Ended

13 Weeks Ended

 

March 2, 2013

February 25, 2012

Operating activities:

               

Net income (loss)

  $ 980   $ (596 )

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

               

Depreciation and amortization

    1,434     1,316

Equity in undistributed income of investments and unconsolidated affiliated companies

    (114 )     (16 )

Provision for restructuring and asset impairment charges

    -     236

Non-cash portion of lease exit costs

    -     228

Other than temporary impairment of investments

    -     806

Deferred income taxes

    171     20

Other, net

    (102 )     (341 )

Changes in operating assets and liabilities

               

Accounts receivable

    860     894

Inventories

    109     (930 )

Other current assets

    (1,120 )     (439 )

Accounts payable and accrued liabilities

    (250 )     (2,472 )

Net cash provided by (used in) operating activities

    1,968     (1,294 )
                 

Investing activities:

               

Purchases of property and equipment

    (2,621 )     (1,918 )

Proceeds from sale of property and equipment

    955     5

Proceeds from sale of interest in affiliate

    2,348     1,410

Proceeds from sales of investments

    -     398

Purchases of investments

    -     (396 )

Other

    2     2

Net cash provided by (used in) investing activities

    684     (499 )
                 

Financing activities:

               

Repayments of real estate notes payable

    (59 )     (49 )

Issuance of common stock

    320     39

Repurchases of common stock

    (236 )     (646 )

Cash dividends

    (1,084 )     (6,063 )

Net cash used in financing activities

    (1,059 )     (6,719 )

Change in cash and cash equivalents

    1,593     (8,512 )

Cash and cash equivalents - beginning of period

    45,566     69,601

Cash and cash equivalents - end of period

  $ 47,159   $ 61,089

 

 

 

 
 

 

 

BASSETT FURNITURE INDUSTRIES, INC. AND SUBSIDIARIES

Segment Information - unaudited

(In thousands)

 


 

14 Weeks Ended

13 Weeks Ended

 

March 2, 2013

February 25, 2012

Net Sales

               

Wholesale

  $ 53,960   $ 42,611

Retail

    49,957     38,816

Inter-company elimination

    (24,068 )     (20,459 )

Consolidated

  $ 79,849   $ 60,968
                 

Operating Income (Loss)

               

Wholesale

  $ 3,001   $ 1,831

Retail

    (571 )     (999 )

Inter-company elimination

    (66 )     (189 )

Restructuring and asset impairment charges

    -     (236 )

Lease exit costs

    -     (228 )

Consolidated

  $ 2,364   $ 179

 

 

 

 
 

 

 

BASSETT FURNITURE INDUSTRIES, INC. AND SUBSIDIARIES

Supplemental Retail Information--unaudited

(In thousands)


 

48 Comparable Stores

 

14 Weeks Ended

March 2, 2013

13 Weeks Ended

February 25, 2012

 

Amount

Percent of

Net Sales

Amount

Percent of

Net Sales

                                 

Net sales

  $ 44,353     100.0 %   $ 38,270     100.0 %
                                 

Cost of sales

    23,146     52.2 %     19,846     51.9 %
                                 

Gross profit

    21,207     47.8 %     18,424     48.1 %
                                 

Selling, general and administrative expense*

    21,315     48.1 %     19,083     49.9 %
                                 

Income (loss) from operations

  $ (108 )     -0.3 %   $ (659 )     -1.8 %

 


 

All Other Stores

 

14 Weeks Ended

March 2, 2013

13 Weeks Ended

February 25, 2012

 

Amount

Percent of

Net Sales

Amount

Percent of

Net Sales

                                 

Net sales

  $ 5,604     100.0 %   $ 546     100.0 %
                                 

Cost of sales

    2,937     52.4 %     301     55.1 %
                                 

Gross profit

    2,667     47.6 %     245     44.9 %
                                 

Selling, general and administrative expense

    3,130     55.9 %     585     107.1 %
                                 

Loss from operations

  $ (463 )     -8.3 %   $ (340 )     -62.2 %

 

*Comparable store SG&A includes retail corporate overhead and administrative costs.