UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20599
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) June 25, 2003
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BASSETT FURNITURE INDUSTRIES, INCORPORATED
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(Exact name of registrant as specified in its charter)
VIRGINIA 0-209 54-0135270
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(State or other jurisdiction of (Comission File No.) (I.R.S. Employer
incorporation or organization) Identification No.)
3525 FAIRYSTONE PARK HIGHWAY
BASSETT, VIRGINIA 24055
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 276/629-6000
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Item 5. Other Events
On June 25, 2003, Bassett Furniture Industries issued the news release attached
hereto as Exhibit (99) to this report (the "News Release") relating to, among
other things, the financial results for the second quarter of fiscal year 2003.
A copy of the press release announcing this information is attached to this
report as Exhibit 99 and is incorporated herein by reference.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
(99) News release issued by Bassett Furniture Industries on June
25, 2003.
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: June 25, 2002 By: /s/ Barry C. Safrit
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Barry C. Safrit
Title: Vice President, Chief Financial
Officer
EXHIBIT INDEX
Description
Exhibit No. 99 News release issued by Bassett Furniture Industries on
June 25, 2003.
Exhibit 99
Bassett Logo
Bassett Furniture Industries, Inc. Barry C. Safrit, V.P., CFO
P.O. Box 626 (276) 629-6757 - Investors
Bassett, VA 24055 (276) 629-6332 - Fax
Jay S. Moore, Dir. of
Communications
For Immediate Release (276) 629-6450 - Media
(276) 629-6418 - Fax
Bassett Furniture News Release
Bassett Announces Second Quarter 2003 Earnings
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(Bassett, Va.) - June 25, 2003 - Bassett Furniture Industries Inc.
announced today the financial results for its second fiscal quarter ended May
31, 2003.
Sales for the second quarter of 2003 were $71.5 million, down 11.6% from
second quarter 2002 levels. The decrease was due to industry-wide soft retail
conditions as well as the previously disclosed significant sales decrease with
JCPenney.
Sales for the first half of the year were $144.8 million compared to
$165.7 million for the first half of 2002. Nearly half of the $20.8 million
decline was the sales decrease with JCPenney. The remaining decline was
indicative of economic conditions as well as an extra week included in the first
half of fiscal 2002 (27 weeks vs. 26 weeks).
The Bassett Furniture Direct (BFD) retail store program continues to grow
with 93 stores currently in operation. Licensees opened five additional stores
in the second quarter making a total of nine stores opened in the first half of
fiscal 2003. The Company expects licensees to open eleven stores in the second
half for a total of 20 new stores in fiscal 2003. Sales to BFD stores were 45%
of total Company sales in 2002 and are planned to be approximately 55% of total
Bassett sales in 2003.
The Company reported a modest operating loss for the quarter which was
reflective of the sales environment and costs associated with consolidating its
Dublin, Ga., wood manufacturing facility into its Bassett, Va., facility as
previously announced. Management believes that the Company's wood division will
be better positioned to produce higher operating earnings in domestic wood in
subsequent quarters based on the restructuring efforts completed during the
second quarter. Upholstery division gross margin for the quarter improved by 1.8
points over the gross margin from the previous year quarter, despite lower sales
volume. Import division sales increased slightly with continued solid profit
margins in this segment.
The Company reported net income for the quarter of $1.2 million or $.10
per diluted share compared to net income of $2.9 million or $.24 per diluted
share for the second quarter of 2002. Earnings from investments were better than
expected and better than in the second quarter of 2002.
Net loss on a year to date basis was $(.1) million or $(.01) per share
including a previously announced $3.2 million charge related to closing its
Dublin facility in the first quarter.
"Earnings continue to be a challenge in this tough economic and industry
environment," said Robert H. Spilman Jr., president and chief executive officer.
"We are pleased with the operating cash flow we generated during the quarter and
our investment results. Additionally, we made progress in positioning our
overall cost structure. We continue to be encouraged by the new stores we are
opening, and the number of prospects we have who want to own and operate Bassett
stores in the future. We remain committed to our goal of 150 BFDs by the end of
our fiscal 2005."
The Company borrowed $4 million during the first half of 2003 to support
increased inventory levels of the Company's growing Import Division in addition
to funding capital spending. During the second quarter the Company generated
positive operating cash flow as inventory and receivable levels decreased by
$2.5 million and $1.3 million respectively and the Company received an income
tax refund. Bassett repurchased 69,278 of its shares at a cost of $.9 million
during the first half of 2003 and has $10.3 million remaining on its share
repurchase program. The Company's debt to capital ratio was 3.1% at May 31,
2003.
Bassett Furniture's Board of Directors yesterday declared a regular
quarterly dividend of $.20 per share payable on September 2, 2003, to
shareholders of record on August 15, 2003.
Bassett Furniture Industries Inc., based in Bassett, Va., is one of the world's
leading manufacturers and marketers of branded home furnishings. Bassett's
products, designed to provide quality, style and value, are sold through Bassett
Furniture Direct(TM) stores, At Home with Bassett(R), and other furniture and
department stores. The Company's common stock is traded on the NASDAQ market
under the symbol BSET. More information about Bassett is available on the
Company's Internet site at www.bassettfurniture.com.
Certain of the statements in the immediately preceding paragraphs, 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
second quarter of fiscal year 2003, 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 those results to differ materially from those expressed in the
forward looking statements: the effects of recent events and the effects of
future governmental and military responses to such events on demand for
furniture at the retail level, and the economic, competitive, governmental,
technological and other factors identified in Bassett's filings with the
Securities and Exchange Commission.
###
BASSETT FURNITURE INDUSTRIES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Income - Unaudited (Stated in thousands of
dollars except for per share data)
13 Weeks Ended 13 Weeks Ended
May 31, 2003 June 1, 2002
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Percent of Percent of
Amount Net Sales Amount Net Sales
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Net sales $71,529 100.0% $ 80,904 100.0%
Cost of sales 56,398 78.8% 62,455 77.2%
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Gross profit 15,131 21.2% 18,449 22.8%
Selling, general and administrative 15,409 21.5% 15,820 19.6%
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Income (loss) from operations (278) -0.4% 2,629 3.2%
Other income , net 1,657 2.3% 1,544 1.9%
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Income before income taxes 1,379 1.9% 4,173 5.2%
Income tax provision (186) -0.3% (1,293) -1.6%
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Net income $ 1,193 1.7% $ 2,880 3.6%
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Basic earnings per share: $ 0.10 $ 0.25
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Diluted earnings per share: $ 0.10 $ 0.24
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BASSETT FURNITURE INDUSTRIES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Income (Loss) - Unaudited
(Stated in thousands of dollars except for per share data)
26 Weeks Ended 27 Weeks Ended
May 31, 2003 June 1, 2002
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Percent of Percent of
Amount Net Sales Amount Net Sales
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Net sales $ 144,811 100.0% $165,692 100.0%
Cost of sales 113,842 78.6% 130,515 78.8%
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Gross profit 30,969 21.4% 35,177 21.2%
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Selling, general and administrative 30,720 21.2% 29,548 17.8%
Restructuring and impaired fixed asset charges 3,200 2.2% - 0.0%
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33,920 23.4% 29,548 17.8%
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Income (loss) from operations (2,951) -2.0% 5,629 3.4%
Other income , net 2,483 1.7% 2,765 1.7%
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Income (loss) before income taxes (468) -0.3% 8,394 5.1%
Income tax (provision) benefit 331 0.2% (2,602) -1.6%
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Net income (loss) $ (137) -0.1% $ 5,792 3.5%
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Basic earnings (loss) per share: $ (0.01) $ 0.50
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Diluted earnings (loss) per share: $ (0.01) $ 0.49
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BASSETT FURNITURE INDUSTRIES, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(Stated in thousands of dollars except for per share data)
(Unaudited)
May 31, 2003 November 30, 2002
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ASSETS
Current assets
Cash and cash equivalents $ 4,989 $ 1,371
Accounts receivable,net 45,037 44,806
Inventories 45,166 43,449
Refundable income taxes 767 2,924
Deferred income taxes 3,600 3,600
Other current assets 6,797 6,816
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106,356 102,966
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Property and equipment, net 86,714 90,542
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Other assets
Investments 60,881 63,248
Investment in unconsolidated affiliated companies 4,200 4,383
Deferred income taxes 2,244 3,454
Notes receivable, net 17,992 18,761
Other, net 7,048 7,526
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92,365 97,372
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Total assets $ 285,435 $ 290,880
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 11,981 $ 17,738
Accrued liabilities 18,881 16,406
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Total current liabilities 30,862 34,144
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Long-term liabilities
Employee benefits 10,039 10,152
Long-term debt 7,000 3,000
Deferred revenue from unconsolidated affiliate 13,142 13,941
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30,181 27,093
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Stockholders' equity
Common stock, par value $5 a share, 50,000,000
shares authorized, issued and outstanding -
11,602,141 in 2003 and 11,660,587 in 2002 58,011 58,303
Retained earnings 164,496 169,789
Accumulated other comprehensive income -
unrealized holding gains, net of tax 1,885 1,551
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Total stockholders' equity 224,392 229,643
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Total liabilities and stockholders' equity $ 285,435 $ 290,880
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BASSETT FURNITURE INDUSTRIES, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows - Unaudited
(Stated in thousands of dollars)
26 Weeks Ended 27 Weeks Ended
May 31, 2003 June 1, 2002
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Operating Activities
Net income (loss) $ (137) $ 5,792
Adjustments to reconcile net income (loss) to net cash provided
by operating activities:
Depreciation and amortization 5,301 5,085
Equity in undistributed income of investments (3,723) (4,096)
Provision for write-down of property and equipment 1,530 -
Provision for losses on trade accounts receivable 256 -
Net gain from sales of investment securities (14) (302)
Net gain from sales of property and equipment (106) -
Compensation earned under restricted stock and stock option plans - 90
Deferred income taxes (331) 2,602
Changes in employee benefit liabilities (113) (115)
Changes in operating assets and liabilities, exclusive of assets
and liabilities acquired in a business combination:
Trade accounts receivable (487) 6,305
Inventories (1,697) (2,382)
Refundable income taxes 3,511 -
Other current assets 19 6,550
Accounts payable and accrued liabilities (3,282) (5,308)
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Net cash provided by operating activities 727 14,221
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Investing Activities
Purchases of property and equipment (3,269) (4,346)
Proceeds from sales of property and equipment 372 -
Proceeds from sales of investment securities 17,000 654
Dividends from investments 1,875 5,343
Purchase of investment securities (12,000) -
Investments in unconsolidated affiliated companies - (2,118)
Other, net 361 (665)
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Net cash provided by (used in) investing activities 4,339 (1,132)
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Financing Activities
Borrowings (repayments) under revolving credit arrangement, net 4,000 (8,671)
Issuance of common stock, net 110 249
Repurchases of common stock (924) -
Cash dividends (4,634) (4,689)
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Net cash used in financing activities (1,448) (13,111)
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Net change in cash and cash equivalents 3,618 (22)
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Cash and cash equivalents, beginning of period 1,371 5,347
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Cash and cash equivalents, end of period $ 4,989 $ 5,325
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