ex_133030.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) January 17, 2019

 


 

BASSETT FURNITURE INDUSTRIES, INCORPORATED

(Exact name of registrant as specified in its charter)

 


 

VIRGINIA

 

000-00209

 

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))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.

 

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 



 

 

 

 

Item 2.02.

Results of Operations and Financial Condition.

 

On January 17, 2019 Bassett Furniture Industries issued a news release relating to, among other things, the fourth quarter financial results for the fiscal year ended November 24, 2018. 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 January 17, 2019.

 

 

 

 

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: January 17, 2019 By: /s/ J. Michael Daniel  
    J. Michael Daniel  
    Title:     Senior Vice President – Chief Financial Officer  

 

ex_133030.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
   
  Peter D. Morrison
  Vice President of Communications
For Immediate Release (276) 629-6450 – Media

 

 

 

Bassett Furniture News Release

Bassett Announces Fiscal Fourth Quarter Results

 

(Bassett, Va.) – January 17, 2019 – Bassett Furniture Industries, Inc. (Nasdaq: BSET) announced today its results of operations for its fiscal quarter ended November 24, 2018.

 

Fiscal 2018 Fourth Quarter Highlights

(Dollars in millions)

 

   

Sales

   

Operating Income

 
   

4th Qtr

   

Dollar

   

%

   

4th Qtr

   

% of

   

4th Qtr

   

% of

 
   

2018

   

2017

   

Change

   

Change

   

2018

   

Sales

   

2017

   

Sales

 

Consolidated (1)

  $ 116.6     $ 118.2     $ (1.6 )     -1.3 %   $ 2.0       1.8 %   $ 7.5       6.3 %
                                                                 

Wholesale

  $ 65.2     $ 63.2     $ 2.0       3.3 %   $ 2.9       4.4 %   $ 4.0       6.3 %
                                                                 

Total Retail

  $ 70.1     $ 72.1     $ (2.0 )     -2.8 %   $ (1.3 )     -1.8 %   $ 2.1       2.9 %
                                                                 

57 Comparable Stores

  $ 64.7     $ 68.4     $ (3.7 )     -5.3 %   $ 0.4       0.6 %   $ 3.5       5.2 %
                                                                 

Logistical Services (2)

  $ 20.1     $ 21.6     $ (1.5 )     -6.7 %   $ 0.6       3.2 %   $ 1.2       5.7 %

 

(1) Our consolidated results include certain intercompany eliminations. See the “Segment Information” table below for an illustration of the effects of these intercompany eliminations on our consolidated sales and operating income.

    

(2) Current and prior period sales have been retrospectively restated to reflect the transfer of intercompany home delivery services from logistical services to retail. The effect of the transfer on operating income was not material.

 

 

Net income for the quarter was $1.9 million or $0.18 per diluted share as compared to net income of $5.0 million or $0.46 per diluted share for the prior year quarter. Included in the consolidated operating income for the quarter ended November 24, 2018 is an impairment charge of $0.5 million associated with the writeoff of fixed assets for an underperforming retail store location in Torrance, CA and a lease exit charge for $0.3 million associated with the closure of an underperforming store in San Antonio, TX. In addition, the Company recorded a $0.7 million tax benefit arising from the final adjustment to our interim estimates of the impact of reduced federal income tax rates on the valuation of our deferred tax assets. Excluding these items, consolidated operating income for the quarter would have been $2.8 million or 2.5% of sales and net income would have been $1.8 million or $0.17 per diluted share.

 

 

 

 

“As we have discussed throughout 2019, in recognition of the rapidly changing environment surrounding our sector and retail in general, we began 18 months ago to study and implement a number of measures to transform our business and to ensure a solid future for our 116 year old company,” commented Rob Spilman, Chairman and CEO. “We are currently in the midst of the executional phase of several of these initiatives. The expense involved with building for the future coupled with less than expected sales in our corporate stores adversely affected our financial results in 2018; particularly in the 4th quarter. Our task at hand is to bring several of these projects to fruition while returning our existing stores to organic growth. We plan to accomplish this objective through more robust digital engagement with our consumers, higher levels of interactive customer service, and an expanded product assortment designed to work together to increase our brand’s reach and capabilities. And, while we invest in the future, we remain mindful of the present as we returned $14.7 million of the $28.7 million of operating cash flow that we generated in fiscal 2018 to shareholders in the form of dividends and share buybacks.”

 

“For the quarter, consolidated revenue declined by 1.3% to $116.6 million, thus ending a tumultuous year for Bassett,” continued Spilman. “Raw material price increases, new tariffs on imported goods, new store startup expenses, investments in digital marketing, and higher health care costs were some of the challenges that characterized the year. In all, eight new Bassett Home Furnishings stores opened in 2018 including six corporate stores and two licensed locations. In addition, our first clearance center was opened and three stores were closed. In December, the first month of fiscal 2019, three additional corporate stores came on and a new licensee store in Boise, Idaho opened. Looking ahead, there will be four additional corporate stores to open in 2019. After that, there are very few additional stores being considered for the near term as we plan to focus on existing store productivity and digital outreach to the consumer. We are also exploring prudent means to reduce our cost structure in certain areas as we tailor our organization and our business model to the requirements of the future.”

 

Wholesale Segment

 

Net sales for the wholesale segment were $65.2 million for the fourth quarter of 2018 as compared to $63.2 million for the fourth quarter of 2017, an increase of $2.0 million or 3.3%. This increase was driven by $2.4 million in sales from Lane Venture, acquired during the first quarter of 2018, and a 1.3% increase in furniture shipments to the open market (outside the Bassett Home Furnishings network), partially offset by a 0.7% decrease in shipments to the Bassett Home Furnishings network, as compared to the prior year period. Gross margins for the wholesale segment were 33.8% for the fourth quarter of 2018 as compared to 34.1% for the prior year quarter. This decrease was primarily driven by the lower margins in the domestic upholstery operations due to higher labor costs from unfavorable health care experience and unfavorable fixed cost absorption due to lower sales volumes. This decrease was partially offset by higher margins in the domestic wood operations due to greater absorption of fixed costs from higher sales volumes and improved overall operating efficiencies. Wholesale SG&A for the fourth quarter of 2018 was $19.1 million as compared to $17.6 million for the prior year period. SG&A as a percentage of sales increased to 29.4% as compared to 27.8% for the fourth quarter of 2017. This increase in SG&A as a percentage of sales was primarily driven by higher digital marketing and other brand development costs and higher employee health care expenses from unfavorable claim experience, partially offset by lower incentive compensation. Operating income was $2.9 million or 4.4% of sales as compared to $4.0 million or 6.3% of sales in the prior year.

 

 

 

 

“Wholesale sales grew by 3.3% for the quarter and 2.7% for the year,” said Spilman. “Leading the way was our wood operation as both our domestically made Bassett Custom Wood and imported Bassett Casegoods posted sales increases for the quarter. In fact, for the year, sales and profitability at our two Virginia based wood manufacturing facilities hit all-time highs. Sales of U. S. made Bassett Custom Upholstery were off slightly for the quarter, although we have high hopes for the newly launched HGTV Design Studio by Bassett product. This product has been our theme song for many years of positive growth but began to markedly decline in the back half of 2018. We are very pleased with the first few weeks of sales of the new product that we have seen in the stores since Christmas. Finally, we look forward to the new year with the startup of the Lane Venture acquisition behind us. We have two new wholesale showrooms, a stronger sales force, an improved product line, a new manufacturing platform, and a new warehouse to underscore our commitment to the Lane Venture brand and the outdoor furniture category to show for our efforts in 2018.”

 

Retail Segment

 

Net sales for the 65 Company-owned Bassett Home Furnishings stores were $70.1 million for the fourth quarter of 2018 as compared to $72.1 million for the fourth quarter of 2017, a decrease of $2.0 million or 2.8%. The overall decrease was due to a 5.3% decrease in comparable store sales partially offset by a $1.6 million increase in non-comparable store sales.

 

While the Company does not recognize sales until goods are delivered to the consumer, management tracks written sales (the retail dollar value of sales orders taken, rather than delivered) as a key store performance indicator. Written sales for comparable stores decreased by 7.5% for the fourth quarter of 2018 as compared to the fourth quarter of 2017.

 

The consolidated retail operating loss for the fourth quarter of 2018 was $1.3 million as compared to operating income of $2.1 million for the fourth quarter of 2017, a decrease of $3.4 million. The 57 comparable stores generated operating income of $0.4 million for the quarter, or 0.6% of sales, as compared to $3.5 million, or 5.2% of sales, for the prior year quarter. Gross margins for comparable stores were 51.3% for the fourth quarter of 2018 as compared to 52.6% for the fourth quarter of 2017.  This decrease was primarily due to the selloff of existing floor samples and other clearance product as a result of the repositioning of two stores in the Houston market. SG&A expenses for comparable stores increased $0.3 million to $32.8 million or 50.6% of sales as compared to $32.4 million or 47.4% of sales for the fourth quarter of 2017 primarily due to higher advertising costs and employee health care expenses from unfavorable claim experience, partially offset by lower warehouse and delivery expenses from the previously announced transition of the Bassett final mile service from Zenith to the Corporate retail operation.

 

Non-comparable stores generated sales of $5.4 million with an operating loss of $1.7 million as compared to sales of $3.7 million and an operating loss of $1.4 million in the prior year quarter. As part of the $1.7 million loss for the fourth quarter of 2018, the Company incurred $0.6 million in new store pre-opening costs, a decrease of $0.2 million from the prior year. In addition, the Company incurred $0.4 million of post opening startup losses compared to $0.1 million in the fourth quarter of 2017. As previously stated, the Company’s retail expansion is initially costly. However, the Company believes that site selection and new store presentation will generally result in locations that operate at or above a break-even level within a reasonable period of time following store opening.

 

 

 

 

“Corporate retail turned in a disappointing performance for the quarter,” continued Spilman. “The 5.3% decline in comparable delivered sales prevented us from continuing our seven consecutive year record of increasing comparable store sales as we fell 1.6% for the entire year. It is interesting to note that 70% of our yearly decline stemmed from declining sales from our legacy HGTV Design Studio at Bassett upholstery product which we have totally redesigned and replaced with new product that hit the floors in December. Once again, we are pleased with the initial sell-through of the newly introduced program. All in all, it was a difficult and busy quarter as we opened two stores, closed two, and were in the midst of floor sets for the three new stores that opened in December. Also, we assumed the operation and the personnel of 10 Zenith home delivery centers in the period, which will allow us to focus on the personalized delivery service that the Bassett customer expects. Another point of interest is the change in mix of our advertising dollars for the quarter. We began preparation this summer for the addition of a larger share of digital advertising spending for the September – November period. Although we cut back on some television and direct mail, we ultimately overspent our normally disciplined advertising allocation significantly in the quarter. Since that time, we have returned to normalized levels of spending. Results for the new strategy have been mixed but are improving. Web traffic and engagement have spiked markedly since we moved into 2019. The change in advertising mix is being monitored weekly on a market by market level and we are committed to a more robust digital marketing program for the future.”

 

“We opened our new Frisco, Texas Generation 3 prototype store mid-September and the first three months of performance have been strong,” added Spilman. “Our custom furniture and in-home design capabilities are showcased through a much larger design center, an expanded display of accessories, and a new fixture package. Consumers are gravitating to the interactive wall-mounted screens to visualize the many options in our customizable furniture. We have been investing for over a year to digitize every SKU in our assortment to bring each item and the accompanying options to life on the web and in the store. The Generation 3 store is the natural extension of our web experience, whether mobile or desktop, which we will further integrate with the in store experience as we move ahead. And, as we slow the pace of our new store rollout in the near term, we plan to begin to migrate the most compelling elements of the Generation 3 stores to the existing store network this year.”

 

Logistical Services Segment

 

Revenues for Zenith were $20.1 million for the fourth quarter of 2018 as compared to $21.6 million for 2017, a decrease of $1.4 million or 6.7%.  This decrease was primarily due to freight reductions from one significant external customer. Zenith’s operating expenses were $19.5 million or 96.8% of sales as compared to $20.3 million or 94.3% of sales for the prior year period.  This increase in expenses as a percent of sales was primarily due to increases in fuel costs coupled with reduced leverage of fixed costs partially offset by lower incentive compensation.

 

“Zenith also faced a number of challenges that required operational adjustments during 2018,” observed Spilman. “The well-chronicled labor shortage that confronts the U. S. Trucking industry intensified its effect on Zenith. As mentioned, the decision was made to exit the home delivery business, driven largely by the desire to focus on the legacy 3PL and middle mile segments for which Zenith is favorably regarded in the furniture industry. Demand for its services in these areas remains high and the renewed focus on these core competencies should allow more time to be spent on driver recruitment and refinement of the operating model. Profitability should also improve as the competing priorities and scheduling demands of the e-commerce community did not mesh well with the white glove requirements of delivering high quality furniture to the home. We enter 2019 contemplating a renewed emphasis on our ‘30 days in the home’ commitment for custom furniture – and we mean real custom furniture, not just another color of fabric on a standard frame. For those simpler transactions that others masquerade as ‘custom’ furniture, we are exploring a much faster delivery promise.”

 

 

 

About Bassett Furniture Industries, Inc.

Bassett Furniture Industries, Inc. (NASDAQ:BSET), is a leading manufacturer and marketer of high quality home furnishings. With 100 company- and licensee-owned stores at the time of this release, 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 stylish, custom-built furniture that is ready for delivery in the home within 30 days. The stores also feature the latest on-trend furniture styles, free in-home design visits, and coordinated decorating accessories. Bassett also has a traditional wholesale business with more than 700 accounts on the open market, across the United States and internationally and a logistics business specializing in home furnishings. 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,” “plans,” “expects,” “anticipates,” “intends,” “should,” “estimates,” or similar expressions, or those relating to or anticipating financial results or changes in operations for periods beyond the end of the fourth fiscal quarter of 2018, 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; the success of marketing, logistics, retail and other initiatives; 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)

 

   

Quarter Ended

   

Year Ended

 
   

November 24, 2018

   

November 25, 2017

   

November 24, 2018

   

November 25, 2017

 
           

Percent of

           

Percent of

           

Percent of

           

Percent of

 
   

Amount

   

Net Sales

   

Amount

   

Net Sales

   

Amount

   

Net Sales

   

Amount

   

Net Sales

 
                                                                 

Sales revenue:

                                                               

Furniture and accessories

  $ 103,864             $ 103,953             $ 402,469             $ 398,097          

Logistics

    12,783               14,272               54,386               54,406          

Total sales revenue

    116,647       100.0 %     118,225       100.0 %     456,855       100.0 %     452,503       100.0 %
                                                                 

Cost of furniture and accessories sold

    45,831       39.3 %     45,380       38.4 %     179,581       39.3 %     177,579       39.2 %
                                                                 

Selling, general and administrative expenses excluding new store pre-opening costs

    67,353       57.7 %     64,521       54.6 %     260,339       57.0 %     245,493       54.3 %

New store pre-opening costs

    646       0.6 %     830       0.7 %     2,081       0.5 %     2,413       0.5 %

Lease exit costs

    301       0.3 %     -       0.0 %     301       0.1 %     -       0.0 %

Asset impairment charges

    469       0.4 %     -       0.0 %     469       0.1 %     -       0.0 %

Income from operations

    2,047       1.8 %     7,494       6.3 %     14,084       3.1 %     27,018       6.0 %
                                                                 

Gain on sale of investments

    -       0.0 %     954       0.8 %     -       0.0 %     4,221       0.9 %

Impairment of investment real estate

    -       0.0 %     -       0.0 %     -       0.0 %     (1,084 )     -0.2 %

Other loss, net

    (526 )     -0.5 %     (285 )     -0.2 %     (1,878 )     -0.4 %     (2,279 )     -0.5 %

Income before income taxes

    1,521       1.3 %     8,163       6.9 %     12,206       2.7 %     27,876       6.2 %
                                                                 

Income tax provision (benefit)

    (376 )     -0.3 %     3,189       2.7 %     3,988       0.9 %     9,620       2.1 %

Net income

  $ 1,897       1.6 %   $ 4,974       4.2 %   $ 8,218       1.8 %   $ 18,256       4.0 %
                                                                 

Basic earnings per share

  $ 0.18             $ 0.46             $ 0.77             $ 1.71          
                                                                 

Diluted earnings per share

  $ 0.18             $ 0.46             $ 0.77             $ 1.70          

 

 

 

 

BASSETT FURNITURE INDUSTRIES, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(In thousands)

 

   

(Unaudited)

         

Assets

 

November 24, 2018

   

November 25, 2017

 

Current assets

               

Cash and cash equivalents

  $ 33,468     $ 53,949  

Short-term investments

    22,643       23,125  

Accounts receivable, net

    19,055       19,640  

Inventories, net

    64,192       54,476  

Other current assets

    9,189       8,192  

Total current assets

    148,547       159,382  
                 

Property and equipment, net

    104,863       103,244  
                 

Other long-term assets

               

Deferred income taxes, net

    3,266       8,393  

Goodwill and other intangible assets

    28,480       17,351  

Other

    6,485       5,378  

Total long-term assets

    38,231       31,122  

Total assets

  $ 291,641     $ 293,748  
                 

Liabilities and Stockholders’ Equity

               

Current liabilities

               

Accounts payable

  $ 27,407     $ 21,760  

Accrued compensation and benefits

    12,994       14,670  

Customer deposits

    27,157       27,107  

Dividends payable

    -       3,759  

Current portion of long-term debt

    292       3,405  

Other accrued liabilities

    13,969       12,655  

Total current liabilities

    81,819       83,356  
                 

Long-term liabilities

               

Post employment benefit obligations

    13,173       13,326  

Long-term debt

    -       329  

Other long-term liabilities

    6,340       5,277  

Total long-term liabilities

    19,513       18,932  
                 
                 

Stockholders’ equity

               

Common stock

    52,638       53,690  

Retained earnings

    140,009       139,378  

Additional paid-in-capital

    -       962  

Accumulated other comprehensive loss

    (2,338 )     (2,570 )

Total stockholders' equity

    190,309       191,460  

Total liabilities and stockholders’ equity

  $ 291,641     $ 293,748  

 

 

 

 

BASSETT FURNITURE INDUSTRIES, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows - unaudited

(In thousands)

 

   

Year Ended

 
   

November 24, 2018

   

November 25, 2017

 

Operating activities:

               

Net income

  $ 8,218     $ 18,256  

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

               

Depreciation and amortization

    13,203       13,312  

Non-cash asset impairment charge

    469       -  

Non-cash portion of lease exit costs

    301       -  

Gain on sale of property and equipment

    (234 )     (1,190 )

Gain on sale of investments

    -       (4,221 )

Impairment charges on retail real estate

            1,084  

Tenant improvement allowances received from lessors

    2,462       1,643  

Deferred income taxes

    4,663       (302 )

Other, net

    1,398       1,345  

Changes in operating assets and liabilities

               

Accounts receivable

    1,732       (1,225 )

Inventories

    (5,998 )     (918 )

Other current and long-term assets

    (961 )     2,477  

Customer deposits

    50       1,926  

Accounts payable and accrued liabilities

    3,395       4,197  

Net cash provided by operating activities

    28,698       36,384  
                 

Investing activities:

               

Purchases of property and equipment

    (18,301 )     (15,500 )

Proceeds from sale of retail real estate and property and equipment

    2,689       4,474  

Cash paid for business acquisition

    (15,556 )     -  

Proceeds from maturities and sales of investments

    482       5,546  

Acquisition of retail licensee store

    -       (655 )

Net cash used in investing activities

    (30,686 )     (6,135 )
                 

Financing activities:

               

Cash dividends

    (8,800 )     (7,725 )

Proceeds from the exercise of stock options

    27       310  

Other issuance of common stock

    355       168  

Repurchases of common stock

    (5,946 )     (83 )

Taxes paid related to net share settlement of equity awards

    (674 )     (641 )

Repayments of notes payable

    (3,455 )     (3,473 )

Net cash used in financing activities

    (18,493 )     (11,444 )

Change in cash and cash equivalents

    (20,481 )     18,805  

Cash and cash equivalents - beginning of period

    53,949       35,144  

Cash and cash equivalents - end of period

  $ 33,468     $ 53,949  

 

 

 

 

BASSETT FURNITURE INDUSTRIES, INC. AND SUBSIDIARIES

Segment Information - unaudited

(In thousands)

 

   

Quarter Ended

   

Year Ended

 
   

November 24, 2018

   

November 25, 2017

   

November 24, 2018

   

November 25, 2017

 

Net Sales

                               

Wholesale

  $ 65,222     $ 63,168     $ 255,958     $ 249,193  

Retail - Company-owned stores

    70,110       72,125       268,883       268,264  

Logistical services (1)

    20,100       21,554       82,866       83,030  

Inter-company eliminations:

                               

Furniture and accessories

    (31,468 )     (31,340 )     (122,372 )     (119,360 )

Logistical services (1)

    (7,317 )     (7,282 )     (28,480 )     (28,624 )

Consolidated

  $ 116,647     $ 118,225     $ 456,855     $ 452,503  
                                 

Operating Income

                               

Wholesale

  $ 2,873     $ 3,979     $ 12,274     $ 19,121  

Retail

    (1,283 )     2,113       (312 )     3,490  

Logistical services

    640       1,226       1,398       2,962  

Inter-company elimination

    587       176       1,494       1,445  

Lease exit costs

    (301 )     -       (301 )     -  

Asset impairment charges

    (469 )     -       (469 )     -  

Consolidated

  $ 2,047     $ 7,494     $ 14,084     $ 27,018  

 

(1)

Current and prior period sales have been retrospectively restated to reflect the transfer of intercompany home delivery services from logistical services to retail. The effect of the transfer on operating income was not material.

 

 

 

 

BASSETT FURNITURE INDUSTRIES, INC. AND SUBSIDIARIES

Rollforward of BHF Store Count

 

   

November 25,

                           

November 24,

 
   

2017

   

Opened*

   

Closed*

   

Transfers

   

2018

 
                                         

Company-owned stores

    60       6       (1 )     -       65  

Licensee-owned stores

    30       2       -       -       32  
                                         

Total

    90       8       (1 )     -       97  

 

* Does not include openings and closures due to relocation of existing stores within a market.

 

 

 

 

BASSETT FURNITURE INDUSTRIES, INC. AND SUBSIDIARIES

Supplemental Retail Information--unaudited

(In thousands)

 

   

57 Comparable Stores

   

53 Comparable Stores

 
   

Quarter Ended

   

Quarter Ended

   

Year Ended

   

Year Ended

 
   

November 24, 2018

   

November 25, 2017

   

November 24, 2018

   

November 25, 2017

 
           

Percent of

           

Percent of

           

Percent of

           

Percent of

 
   

Amount

   

Net Sales

   

Amount

   

Net Sales

   

Amount

   

Net Sales

   

Amount

   

Net Sales

 
                                                                 

Net sales

  $ 64,744       100.0 %   $ 68,394       100.0 %   $ 235,868       100.0 %   $ 239,633       100.0 %
                                                                 

Cost of sales

    31,560       48.7 %     32,412       47.4 %     114,469       48.5 %     116,923       48.8 %
                                                                 

Gross profit

    33,184       51.3 %     35,982       52.6 %     121,399       51.5 %     122,710       51.2 %
                                                                 

Selling, general and administrative expense*

    32,771       50.6 %     32,435       47.4 %     115,094       48.8 %     115,161       48.1 %
                                                                 

Income from operations

  $ 413       0.6 %   $ 3,547       5.2 %   $ 6,305       2.7 %   $ 7,549       3.2 %

 

 

   

All Other Stores

   

All Other Stores

 
   

Quarter Ended

   

Quarter Ended

   

Year Ended

   

Year Ended

 
   

November 24, 2018

   

November 25, 2017

   

November 24, 2018

   

November 25, 2017

 
           

Percent of

           

Percent of

           

Percent of

           

Percent of

 
   

Amount

   

Net Sales

   

Amount

   

Net Sales

   

Amount

   

Net Sales

   

Amount

   

Net Sales

 
                                                                 

Net sales

  $ 5,366       100.0 %   $ 3,731       100.0 %   $ 33,015       100.0 %   $ 28,631       100.0 %
                                                                 

Cost of sales

    2,758       51.4 %     2,423       64.9 %     16,122       48.8 %     15,540       54.3 %
                                                                 

Gross profit

    2,608       48.6 %     1,308       35.1 %     16,893       51.2 %     13,091       45.7 %
                                                                 

Selling, general and administrative expense

    3,658       68.2 %     1,912       51.2 %     21,429       64.9 %     14,737       51.5 %

Pre-opening store costs**

    646       12.0 %     830       22.2 %     2,081       6.3 %     2,413       8.4 %
                                                                 

Income (loss) from operations

  $ (1,696 )     -31.6 %   $ (1,434 )     -38.4 %   $ (6,617 )     -20.0 %   $ (4,059 )     -14.2 %

 

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

**Pre-opening store costs include the accrual for straight-line rent recorded during the period between date of possesion and store opening date, employee payroll and training costs prior to store opening and other various expenses incurred prior to store opening.