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Bassett Announces Net Income for the Fiscal Fourth Quarter and Increased Dividend
Fiscal 2011 Fourth Quarter
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Consolidated sales for the fourth quarter decreased 4.1% to
$63.3 million as compared to the fourth quarter of 2010. -
Company-owned store delivered sales increased 13% to
$39.4 million with a 4.9% comparable store increase (locations that have been open and operated for all of each comparable reporting period). -
Wholesale sales declined 11% to
$43.7 million . - Gross margins increased to 52.6% of sales for Q4 2011 from 48.3% for Q4 2010.
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Operating profit increased by
$0.6 million to 3% of sales. -
Pretax income decreased by
$0.4 million as Q4 2010 included$1.4 million of income from our previous investment in the International Home Furnishings Center. -
Net income declined to
$0.6 million from$1.9 million partly attributable to a$0.9 million increase in income tax expense. -
Generated
$6.9 million of cash from operations during the quarter. -
Repurchased 112,500 shares using
$0.9 million and paid$0.4 million in dividends during the 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
Wholesale Segment
Fiscal 2011 Fourth Quarter
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Wholesale shipments declined 11% to
$43.7 million as compared to the fourth quarter of 2010 due primarily to fewer stores in the dedicated retail network in 2011 and shipping in the fourth quarter of 2010 of a backlog built in the second and third quarters of 2010. This decline was partially offset by increased shipments in the traditional and export channels in 2011. - Wholesale operating margins increased to 4.8% from 3.2% primarily from improved wood margins and lower bad debt charges, partially offset by higher SG&A expenditures, primarily in preparation for the launch of the new HGTV Home Division.
- Both wood and upholstery sales down 12% for the quarter; both essentially flat for the year.
- Traditional and export sales channels increased 8.4% for the quarter, resulting from increased market share.
"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
Retail Segment
Fiscal 2011 Fourth Quarter
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Company-owned store delivered sales increased 13% to
$39.4 million with a 4.9% comparable store sales increase. - Written sales for comparable stores increased 7.2% compared to Q4 2010.
- Operating margins improved from a 2.5% loss in Q4 2010 to a 1.5% loss in Q4 2011 due to increasing leverage of fixed costs from higher comparable store sales and greater operating efficiencies.
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Comparable stores generated
$0.1 million operating profit. -
Opened a new store in
Torrance, California onDecember 26, 2011 .
The following table summarizes the changes in store count during the year ended
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New | Stores | Stores |
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| 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,"
Increased Dividend
The Company also announced today that its Board of Directors has declared a regular quarterly dividend of
About
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,
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| Condensed Consolidated Statements of Operations - unaudited | ||||||||
| (In thousands, except for per share data) | ||||||||
| Quarter Ended | Quarter Ended | Year Ended | Year Ended | |||||
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| 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) | ||||
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| Condensed Consolidated Balance Sheets - unaudited | ||
| (In thousands) | ||
| Assets |
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| 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 |
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| Consolidated Statements of Cash Flows - unaudited | ||
| (In thousands) | ||
| Year Ended | Year Ended | |
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| 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 |
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| Segment Information - unaudited | ||||||||
| (In thousands) | ||||||||
| Quarter ended | Quarter ended | Year Ended | Year Ended | |||||
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November 26, 2011 |
November 27, 2010 |
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| 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: | ||||||||
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| Quarter ended | $ -- | $ 85 | ||||||
| Year ended | 1,678 | 947 | ||||||
| (b) Includes bad debt and notes receivable valuation charges as follows: | ||||||||
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| Quarter ended | $ 374 | $ 1,431 | ||||||
| Year ended | $ 13,490 | $ 6,567 | ||||||
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| Supplemental Retail Information-unaudited | ||||||||
| (In thousands) | ||||||||
| 40 Comparable Stores | 32 Comparable Stores | |||||||
| Quarter Ended | Quarter Ended | Year Ended | Year Ended | |||||
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| 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 | |||||
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| 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:Source:J. Michael Daniel , Vice-President and Chief Accounting Officer (276) 629-6614 - InvestorsJay S. Moore , Director of Communications (276) 629-6450 - Media
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