<< Back
Bassett Announces Fiscal Fourth Quarter Results
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
“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
“For the quarter, consolidated revenue declined by 1.3% to
Wholesale Segment
Net sales for the wholesale segment were
“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
Retail Segment
Net sales for the 65 Company-owned Bassett Home Furnishings stores were
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
Non-comparable stores generated sales of
“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
“We opened our new
Logistical Services Segment
Revenues for Zenith were
“Zenith also faced a number of challenges that required operational adjustments during 2018,” observed Spilman. “The well-chronicled labor shortage that confronts the
About
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 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 | |||||
(276) 629-6450 – Media |
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. |
Source: Bassett Furniture Industries, Incorporated