Bassett Furniture Industries
Jan 24, 2012
PDF

Bassett Announces Net Income for the Fiscal Fourth Quarter and Increased Dividend

BASSETT, Va., Jan. 24, 2012 (GLOBE NEWSWIRE) -- Bassett Furniture Industries, Inc. (Nasdaq:BSET) announced today its results of operations for its fiscal quarter ended November 26, 2011.

Fiscal 2011 Fourth Quarter

"As the Company grappled with the negative effects of the housing related downturn over the past several years, management's focus has been largely concentrated on stabilizing the health of its store network and on limiting balance sheet exposure," said Robert H. Spilman Jr., President and Chief Executive Officer. "The emphasis has now squarely shifted to fine tuning the Company's operating performance. We made progress this quarter by improving corporate retail results, increasing wholesale margins, and reducing bad debt charges. The improvement in operating results was tempered by increased SG&A spending primarily related to next fall's launch of the new HGTV Home Division and restructuring charges related to closed plant demolition and store closure and relocation costs."

Wholesale Segment                                                                         

Fiscal 2011 Fourth Quarter

"In order to reduce accounts receivable exposure from underperforming retail licensees, the Company ultimately ended 2011 with 15 fewer licensed stores than at year end 2010," commented Mr. Spilman. "This reduction in store count was responsible for 97% of the quarter's decline in wholesale sales. Conversely, the wholesale volume derived from corporate retail stores and from independent retail furniture store sales grew by 9%. Despite the reduced volume, wholesale operating margins increased by 50% in 2011. For several years we have been dealing with the business challenges presented by the deteriorating health of our weaker licensed store operations. We made the decision to aggressively deal with most of the remaining delinquent licensee exposure in 2011, primarily through closures or takeovers. Although we definitely believe that this was the right decision for the Company, we are now dealing with the decline in wholesale sales that is a by-product of this process. Nevertheless, we were pleased that we were able to post improved wholesale margins for the quarter. We are focused on increasing our wholesale market share through our remaining store operations and with independent furniture retailers in both the Bassett and soon to be introduced HGTV Home Furniture Collection product assortments."

Retail Segment

Fiscal 2011 Fourth Quarter

The following table summarizes the changes in store count during the year ended November 26, 2011:

  November 27, New Stores Stores November 26,
  2010 Stores Acquired Closed 2011
           
Company-owned stores  47  --  9  (7)  49
Licensee-owned stores  54  --  (9)  (6)  39
           
Total  101  --  --  (13)  88

"The year over year improvement in operating performance accomplished by the Company's retail division continued in 2011, marking the fifth consecutive year of improved results," Mr. Spilman continued.  "Once again, there was tremendous activity in our corporate retail division in 2011 as we acquired nine licensee stores and closed seven of our own. Against that backdrop, the 39% improvement in year over year operating results was impressive. Our team continues to streamline costs, upgrade the caliber of our design staff, and offer a high level of service to our consumers. We are excited about our new Torrance, California location and look forward to opening a repositioned store in Richmond, Virginia in February."

Increased Dividend

The Company also announced today that its Board of Directors has declared a regular quarterly dividend of $0.05 per share on outstanding common stock payable on March 1, 2012, to shareholders of record at the close of business February 15, 2012.  This represents an increase of $0.015 over the regular dividend paid on December 1, 2011.

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 89 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 750 upholstery fabrics, free in-home design visits, and coordinated decorating accessories. 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 fourth fiscal quarter of 2011, 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 Operations - unaudited
(In thousands, except for per share data)
           
  Quarter Ended Quarter Ended Year Ended Year Ended
  November 26, 2011 November 27, 2010 November 26, 2011 November 27, 2010
    Percent of   Percent of   Percent of   Percent of
  Amount Net Sales Amount Net Sales Amount Net Sales Amount Net Sales
                 
Net sales  $ 63,266 100.0%  $ 65,991 100.0%  $ 253,208 100.0%  $ 235,254 100.0%
                 
Cost of sales  29,996 47.4%  34,097 51.7%  125,642 49.6%  122,566 52.1%
                 
 Gross profit  33,270 52.6%  31,894 48.3%  127,566 50.4%  112,688 47.9%
                 
Selling, general and administrative expense                
excluding bad debt and notes receivable valuation charges  31,370 49.6%  29,660 44.9%  122,023 48.2%  110,808 47.1%
Bad debt and notes receivable                
valuation charges  374 0.6%  1,431 2.2%  13,490 5.3%  6,567 2.8%
Licensee debt cancellation charges  -- 0.0%  -- 0.0%  6,447 2.5%  -- 0.0%
Income from Continued Dumping & Subsidy Offset Act  (765) -1.2%  (488) -0.7%  (765) -0.3%  (488) -0.2%
Restructuring and asset impairment charges  418 0.7%  -- 0.0%  2,500 1.0%  -- 0.0%
Lease exit costs  -- 0.0%  -- 0.0%  3,728 1.5%  -- 0.0%
                 
 Operating income (loss)  1,873 3.0%  1,291 2.0%  (19,857) -7.8%  (4,199) -1.8%
                 
Gain on sale of affiliate  -- 0.0%  -- 0.0%  85,542 33.8%  -- 0.0%
Other income (loss), net  (464) -0.7%  556 0.8%  (5,934) -2.3%  1,991 0.8%
                 
Income (loss) before income taxes  1,409 2.2%  1,847 2.8%  59,751 23.6%  (2,208) -0.9%
                 
Income tax (expense) benefit  (776) -1.2%  94 0.1%  (4,409) -1.7%  206 0.1%
Net income (loss)  $ 633 1.0%  $ 1,941 2.9%  $ 55,342 21.9%  $ (2,002) -0.9%
                 
Basic income (loss) per share  $ 0.06    $ 0.17    $ 4.84    $ (0.17)  
                 
Diluted income (loss) per share  $ 0.06    $ 0.17    $ 4.79    $ (0.17)  
 
BASSETT FURNITURE INDUSTRIES, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets - unaudited
(In thousands)
     
Assets November 26, 2011 November 27, 2010
Current assets    
 Cash and cash equivalents   $ 69,601  $ 11,071
 Accounts receivable, net  14,756  31,621
 Marketable securities  2,939  --
 Inventories  45,129  41,810
 Other current assets   7,778  6,969
Total current assets  140,203  91,471
     
Property and equipment    
 Cost  143,824  142,362
 Less accumulated depreciation  93,878  96,112
Property and equipment, net  49,946  46,250
     
Investments   806  15,111
Retail real estate  16,257  27,513
Notes receivable, net  1,802  7,508
Other  14,160  9,464
Total long-term assets  33,025  59,596
Total assets  $ 223,174  $ 197,317
     
Liabilities and Stockholders' Equity    
Current liabilities    
Accounts payable  $ 18,821  $ 24,893
Accrued compensation and benefits  7,201  6,652
Customer deposits  9,238  9,171
Dividends payable  6,063  --
Other accrued liabilities  10,302  11,594
Current portion of real estate notes payable  202  9,521
Total current liabilities  51,827  61,831
     
Long-term liabilities    
Post employment benefit obligations  11,226  11,004
Real estate notes payable  3,662  4,295
Distributions in excess of affiliate earnings  --  7,356
Other long-term liabilities  4,024  6,526
Total long-term liabilities  18,912  29,181
     
Commitments and Contingencies    
     
Stockholders' equity    
Common stock  56,712  57,795
Retained earnings  96,331  48,459
Additional paid-in-capital  --  478
Accumulated other comprehensive loss  (608)  (427)
Total stockholders' equity  152,435  106,305
Total liabilities and stockholders' equity  $ 223,174  $ 197,317
 
BASSETT FURNITURE INDUSTRIES, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows - unaudited
(In thousands)
     
  Year Ended Year Ended
  November 26, 2011 November 27, 2010
Operating activities:    
Net income (loss)  $ 55,342  $ (2,002)
Adjustments to reconcile net income (loss) to net cash     
 provided by (used in) operating activities:    
Depreciation and amortization  5,514  5,966
Equity in undistributed income of investments and unconsolidated    
affiliated companies  (1,840)  (4,737)
Provision for restructuring and asset impairment charges  2,500  --
Licensee debt cancellation charges  6,447  --
Lease exit costs  2,228  --
Provision for lease and loan guarantees  1,283  1,407
Provision for losses on accounts and notes receivable  13,490  6,567
Gain on mortgage settlement  (1,305)  --
Gain on sale of affiliate  (85,542)  --
Gain on sale of equity securities  --  (2,024)
Impairment and lease exit charges on retail real estate  4,790  --
Other, net  450  256
Changes in operating assets and liabilities     
 Accounts receivable  1,034  (4,467)
 Inventories  299  (5,443)
 Other current assets   2,300  5,262
 Accounts payable and accrued liabilities  (12,421)  7,003
 Net cash provided by (used in) operating activities  (5,431)  7,788
     
Investing activities:    
Purchases of property and equipment  (4,168)  (2,013)
Proceeds from sales of property and equipment  211  4,247
Acquisition of retail licensee stores, net of cash acquired  --  (378)
Proceeds from sale of affiliate  69,152  --
Release of collateral restrictions on cash equivalents  11,240  --
Proceeds from sales of investments  3,297  9,101
Purchases of investments  (3,132)  (8,851)
Dividends from affiliates  3,756  937
Equity contribution to affiliate  (980)  --
Net cash received on licensee notes  127  494
 Net cash provided by investing activities  79,503  3,537
     
Financing activities:     
Net repayments under revolving credit facility  --  (15,000)
Repayments of real estate notes payable  (8,647)  (7,530)
Issuance of common stock  170  142
Repurchases of common stock  (2,964)  --
Cash dividends   (695)  --
Payments on other notes  (3,406)  (1,087)
 Net cash used in financing activities  (15,542)  (23,475)
Change in cash and cash equivalents  58,530  (12,150)
Cash and cash equivalents - beginning of period  11,071  23,221
  . .
Cash and cash equivalents - end of period  $ 69,601  $ 11,071
 
BASSETT FURNITURE INDUSTRIES, INC. AND SUBSIDIARIES 
Segment Information - unaudited
(In thousands)
                 
  Quarter ended   Quarter ended   Year Ended   Year Ended  
  November 26,
2011
  November 27,
2010
  November 26, 2011   November 27, 2010  
Net Sales                
Wholesale  $ 43,746 (a)   $ 49,322 (a)   $ 177,372 (a)   $ 176,255 (a)
Retail  39,363    34,842    147,961    122,241  
Inter-company elimination  (19,843)    (18,173)    (72,125)    (63,242)  
Consolidated  $ 63,266    $ 65,991    $ 253,208    $ 235,254  
                 
Operating Income (Loss)                
Wholesale  $ 2,111 (b)   $ 1,561 (b)   $ (4,392) (b)   $ 2,431 (b)
Retail  (584)    (863)    (4,495)    (7,387)  
Inter-company elimination  (1)    105    940    269  
Licensee debt cancellation charge  --    --    (6,447)    --  
Income from CDSOA  765    488    765    488  
Restructuring and asset impairment charges  (418)    --    (2,500)    --  
Lease exit costs      --    (3,728)    --  
Consolidated  $ 1,873    $ 1,291    $ (19,857)    $ (4,199)  
                 
(a) Excludes wholesale shipments for dealers where collectibility is not reasonably assured at time of shipment as follows:      
  November 26, 2011   November 27, 2010          
Quarter ended  $ --    $ 85          
Year ended  1,678    947          
                 
(b) Includes bad debt and notes receivable valuation charges as follows:          
  November 26, 2011   November 27, 2010          
Quarter ended  $ 374    $ 1,431          
Year ended $ 13,490    $ 6,567          
 
BASSETT FURNITURE INDUSTRIES, INC. AND SUBSIDIARIES
Supplemental Retail Information-unaudited
(In thousands)
                 
   40 Comparable Stores  32 Comparable Stores
  Quarter Ended Quarter Ended Year Ended Year Ended
  November 26, 2011 November 27, 2010 November 26, 2011 November 27, 2010
    Percent of   Percent of   Percent of   Percent of
  Amount Net Sales Amount Net Sales Amount Net Sales Amount Net Sales
                 
Net sales  $ 32,797 100.0%  $ 31,277 100.0%  $ 99,924 100.0%  $ 95,342 100.0%
                 
Cost of sales  16,981 51.8%  16,030 51.3%  51,558 51.6%  48,775 51.2%
                 
 Gross profit  15,816 48.2%  15,247 48.7%  48,366 48.4%  46,567 48.8%
                 
Selling, general and administrative expense*  15,670 47.8%  15,530 49.7%  50,429 50.5%  49,993 52.3%
                 
 Loss from operations  $ 146 0.4%  $ (283) -0.9%  $ (2,063) -2.1%  $ (3,426) -3.6%
                 
  All Other Stores All Other Stores
  Quarter Ended Quarter Ended Year Ended Year Ended
  November 26, 2011 November 27, 2010 November 26, 2011 November 27, 2010
    Percent of   Percent of   Percent of   Percent of
  Amount Net Sales Amount Net Sales Amount Net Sales Amount Net Sales
                 
Net sales  $ 6,566 100.0%  $ 3,565 100.0%  $ 48,037 100.0%  $ 26,899 100.0%
                 
Cost of sales  3,536 53.9%  2,070 58.1%  26,541 55.3%  14,838 55.2%
                 
Gross profit  3,030 46.1%  1,495 41.9%  21,496 44.7%  12,061 44.8%
                 
Selling, general and administrative expense  3,760 57.4%  2,075 58.2%  23,928 49.7%  16,022 59.6%
                 
Loss from operations  $ (730) -11.1%  $ (580) -16.3%  $ (2,432) -5.1%  $ (3,961) -14.7%
                 
*Comparable store SG&A includes retail corporate overhead and administrative costs.
CONTACT: J. Michael Daniel, Vice-President and

         Chief Accounting Officer

         (276) 629-6614 - Investors



         Jay S. Moore, Director of Communications

         (276) 629-6450 - Media
Source: Bassett Furniture Industries, Inc.

News Provided by Acquire Media