Bassett Furniture Industries, Inc. (Nasdaq: BSET) announced today
its results of operations for its fiscal quarter ended August 25,
2018.
Fiscal 2018 Third Quarter Highlights(Dollars in
millions)
|
Sales |
|
Operating Income |
|
3rd Qtr |
|
Dollar |
% |
|
3rd Qtr |
% of |
|
3rd Qtr |
% of |
|
2018 |
2017 |
|
Change |
Change |
|
2018 |
Sales |
|
2017 |
Sales |
Consolidated * |
$ |
113.0 |
$ |
114.3 |
|
$ |
(1.3 |
) |
-1.1 |
% |
|
$ |
4.3 |
3.8 |
% |
|
$ |
7.3 |
6.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Wholesale |
$ |
63.8 |
$ |
61.8 |
|
$ |
2.1 |
|
3.4 |
% |
|
$ |
3.3 |
5.2 |
% |
|
$ |
4.5 |
7.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Total Retail |
$ |
65.4 |
$ |
67.4 |
|
$ |
(2.0 |
) |
-2.9 |
% |
|
$ |
0.9 |
1.3 |
% |
|
$ |
1.4 |
2.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
55 Comparable
Stores |
$ |
59.4 |
$ |
60.4 |
|
$ |
(1.0 |
) |
-1.7 |
% |
|
$ |
2.2 |
3.6 |
% |
|
$ |
1.2 |
2.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Logistical
Services |
$ |
23.5 |
$ |
24.9 |
|
$ |
(1.4 |
) |
-5.6 |
% |
|
$ |
0.1 |
0.6 |
% |
|
$ |
1.2 |
4.7 |
% |
|
* 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. |
|
|
Net income for the quarter was $2.9 million or $0.28 per diluted
share as compared to net income of $4.6 million or $0.43 per
diluted share for the prior year quarter. Included in the
consolidated operating and net income for the prior year quarter
was a $1.2 million gain on the sale of the Las Vegas store
building. Excluding the effects of this gain, operating
income would have been $6.1 million or 5.3% of sales and net income
would have been $3.9 million or $0.36 per diluted share for the
prior year quarter, respectively.
“We forged ahead in the third quarter with the
many growth and business enhancement initiatives that we have
described in recent communications,” commented Rob Spilman,
Chairman and CEO. “While we seek to improve upon the 1.1%
revenue decline and resulting drop in operating income that were
posted in the period, we are focused on the advancement of our
strategy as we seek to build on the success of the past several
years. The executional elements of our improvement strategy -
our customer service model, product line extension, digital
marketing, logistics, and store network expansion - are being
driven in concert with the ultimate goal of attracting and
retaining more Bassett customers through our vertically integrated
model as time goes on. Backed by our highly recognized brand,
solid balance sheet, and industry leading speed-to-market
capabilities, our blueprint for the future will benefit not only
our store network but also the furniture retail channels that we
serve in the open market. During the quarter, we generated
over $11 million of cash flow from operations while purchasing
approximately $2 million of our common stock. Finally, in
support of these efforts, our Board of Directors increased our
quarterly dividend by 13.6% in July.”
Wholesale
Segment
Net sales for the wholesale segment were $63.8
million for the third quarter of 2018 as compared to $61.8 million
for the third quarter of 2017, an increase of $2.1 million or
3.4%. This increase was driven by $3.2 million in sales from
Lane Venture, acquired during the first quarter of 2018, partially
offset by a 2.7% decrease in furniture shipments to the Bassett
Home Furnishings network and a 0.2% decrease in furniture shipments
to the open market (outside the Bassett Home Furnishings network),
as compared to the prior year period. Gross margins for the
wholesale segment were 33.3% for the third quarter of 2018 as
compared to 33.6% for the prior year quarter. This decrease
was primarily driven by the addition of comparatively lower margins
in the Lane Venture operation as both Upholstery and Wood margins
were slightly higher year over year. Wholesale SG&A for
the third quarter of 2018 was $18.0 million as compared to $16.3
million for the prior year period. SG&A as a percentage of
sales increased to 28.2% as compared to 26.4% for the third quarter
of 2017. This increase in SG&A as a percentage of sales
was primarily driven by planned higher digital marketing and other
brand development costs. Operating income was $3.3 million or
5.2% of sales as compared to $4.5 million or 7.2% of sales in the
prior year.
“Wholesale shipments of Bassett branded products
declined by 2% in the quarter,” continued Spilman. “There are
several interesting subplots that make up the story of the
wholesale quarter. Bassett Casegoods shipments continue to
rebound as recent introductions resonate with retail
customers. Sales of these imported wood products grew by 4.7%
in the period. Bassett Custom Wood declined modestly compared
to last year’s 23% growth rate of these domestically produced
products. On the upholstery front, shipments of domestically
made Bassett Custom Upholstery declined by 1.7% versus the record
third quarter of 2017. Nevertheless, we are very encouraged
by dealer reaction to the revamp of our signature Bassett Custom
Upholstery program and look forward to introducing this product to
our stores and independent customers later this fall.
Representing some 25% of total domestic upholstery shipments, this
introduction has been a major product development undertaking. We
continue to invest and experiment with various elements of our
website and mobile digital marketing tactics. Some of this
work is foundational data collection that will provide us with the
tracking metrics that will form the cornerstone of our ability to
digitally track the consumer’s journey through the Bassett
experience. Once again, we will invest in these capabilities
until they have been fully developed over the next few
quarters. With the addition of the Lane Venture volume,
overall wholesale shipments grew by 3.4%. Encouragingly, our
wholesale backlog (excluding Lane Venture) at quarter’s end was 16%
greater than last year.”
“September 24, 2018 marked the first day of the
new 10% tariff on goods imported from China with the threat of them
increasing to 25% on January 1, 2019,” added Spilman.
“Included in the over 5,700 items specified by the Trump
Administration is all furniture and furniture components
manufactured in China. We strongly oppose the concept of
these tariffs and have worked closely with our representation in
Washington lobbying against it. Fortunately, over 70% of what
we sell is manufactured here in the United States with components
that primarily are either made domestically or sourced from
countries not subject to the new tariffs, with certain fabrics and
leathers being an exception. In addition, we have transformed
much of our supply chain for internationally-sourced finished goods
over the last few years so that most of those goods will not be
subject to the new tariffs. We have developed a plan to
mitigate the cost increases, which includes instituting what we
hope will be a temporary price increase on certain products.”
Retail Segment
Net sales for the 64 Company-owned Bassett Home
Furnishings stores were $65.4 million for the third quarter of 2018
as compared to $67.4 million for the third quarter of 2017, a
decrease of $2.0 million or 2.9%. The overall decrease was due to a
1.7% decrease in comparable store sales along with a $1.0 million
decrease 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 increased by 0.2% for the third quarter
of 2018 as compared to the third quarter of 2017.
The consolidated retail operating income for the
third quarter of 2018 was $0.9 million as compared to $1.4 million
for the third quarter of 2017, a decrease of $0.5 million.
The 55 comparable stores generated operating income of $2.2 million
for the quarter, or 3.6% of sales, as compared to $1.2 million, or
2.0% of sales, for the prior year quarter. Gross margins for
comparable stores were 52.2% for the third quarter of 2018 as
compared to 51.9% for the third quarter of 2017. This
increase was primarily due to improved pricing strategies and
product mix. SG&A expenses for comparable stores
decreased $1.3 million to $28.8 million or 48.5% of sales as
compared to $30.2 million or 49.9% of sales for the third quarter
of 2017 primarily due to lower advertising and employee benefit
costs, and $0.5 million in prior year expenses associated with
settling employment claims.
Non-comparable stores generated sales of $6.0
million with an operating loss of $1.3 million as compared to sales
of $7.0 million and operating income of $0.1 million in the prior
year quarter. As part of the $1.3 million loss for the third
quarter of 2018, the Company incurred $0.5 million in new store
pre-opening costs, an increase of $0.2 million over the prior
year. In addition, the Company incurred $0.1 million of post
opening startup losses compared to $0.1 million in the third
quarter of 2017. Also, the prior year period included a $1.2
million gain on the sale of the Las Vegas store building. 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.
“Written business in our corporate stores
improved as the quarter progressed,” said Spilman. “Written
comparable store sales improved by a modest 0.2% but delivered
comparable sales declined by 1.7%. No new corporate stores
were opened in the period although we did debut a new licensed
location in Daly City, California, our fifth store in the San
Francisco Bay area. We are about to embark upon a robust new
store opening timeline in which we will open six new stores and
relocate two others over the next three quarters. Three of
the new stores will be in Florida as we enter the Miami, Naples/Ft.
Myers, and Sarasota markets. We have three existing stores in
Florida and we plan to fill in the state over the next few
years. Our footprint from Atlanta to New York performs
exceptionally well and we hope to bolt on 10-12 additional
(including the aforementioned three) locations to the south to
complement our strength on the eastern seaboard. We are also
excited about the prospects for our first Generation 3 store which
opened in Frisco, Texas on September 12th. Although only open
for a short time, we are particularly encouraged with the level of
customer traffic and the pace of written sales. With an
expanded design center, a new fixturing package and our newest
technology, we seek to offer our consumers a tactile experience
that builds on their initial interface with the Bassett brand on
our website. As time goes on, we plan to incorporate the
fundamentals of the new prototype across a large portion of the
existing network.”
Logistical Services Segment
Revenue for Zenith was $23.5 million for the
third quarter of 2018 as compared to $24.9 million for 2017, a
decrease of $1.4 million or 5.6%. This decrease was primarily
due to decreased revenues in both the middle and final mile
operations. The middle mile decrease was due to freight
reductions from one significant customer. Final mile revenues began
to decline during the quarter as Zenith began the process of
discontinuing the final mile service in preparation for
transitioning the assets and many of the employees used in that
service to the Bassett corporate retail operation, where they will
be used solely for the delivery of goods to Bassett retail
customers. This will result in reducing total revenue for the
Logistical Services segment by approximately 20% when the
transition is complete. As the majority of those revenues
have been from Bassett corporate retail stores and have
historically been eliminated in Bassett’s consolidated income
statement, the ultimate effect is expected to be a reduction of
consolidated revenues by less than 1%. Zenith’s operating
expenses were $23.4 million or 99.4% of sales as compared to $23.8
million or 95.3% 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.
“The labor shortage in the over-the-road
transportation business, the loss of volume from a major customer,
and the decision to transfer the home delivery services into the
Bassett corporate retail division’s hands made for a tough quarter
at Zenith,” commented Spilman. “Despite the results, Zenith
remains a fundamental piece of our model and we believe that the
current challenges can be overcome. At its core, Zenith’s
ability to efficiently move furniture over the road remains best of
class and in high demand. The loss of volume from one
customer was responsible for 176% of Zenith’s revenue decline in
the period. The freight line remains profitable despite
higher fuel costs. This part of the business is being
constrained by a lack of drivers in the marketplace but we are
having some early success in using our regional warehouse assets to
do more short hauls to customers in zones that will allow those
drivers to spend the night at home. Our warehousing business
is also profitable and in demand as we grew revenue by 4.7% this
quarter. Our decision to cede the home delivery business to
Bassett retail was based on the 80% of total home delivery revenue
that Bassett represented and the incompatibility of the white glove
service demanded by Bassett consumers and the separate demands of
the pure play e-commerce customers that we were servicing. In
essence, for the most part, Zenith home delivery personnel will
become employees of Bassett retail and continue to do what they
have been doing. This will allow Zenith to focus on their
core competencies with a reduced overhead burden. In the end,
the long haul freight excellence of Zenith coupled with its
regional warehousing platform makes the business essential to
Bassett’s service proposition and attractive to our other
customers, especially in the unprecedented tight labor market in
which we operate today.”
About Bassett Furniture Industries, Inc.Bassett
Furniture Industries, Inc. (NASDAQ:BSET), is a leading manufacturer
and marketer of high quality home furnishings. With 97 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 third 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 |
|
Nine Months Ended |
|
August 25, 2018 |
|
August 26, 2017 |
|
August 25, 2018 |
|
August 26, 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 |
$ |
99,807 |
|
|
|
$ |
100,152 |
|
|
|
$ |
298,605 |
|
|
|
$ |
294,144 |
|
|
Logistics |
|
13,149 |
|
|
|
|
14,109 |
|
|
|
|
41,603 |
|
|
|
|
40,134 |
|
|
Total
sales revenue |
|
112,956 |
|
100.0 |
% |
|
|
114,261 |
|
100.0 |
% |
|
|
340,208 |
|
100.0 |
% |
|
|
334,278 |
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of furniture and
accessories sold |
|
44,821 |
|
39.7 |
% |
|
|
45,320 |
|
39.7 |
% |
|
|
133,750 |
|
39.3 |
% |
|
|
132,199 |
|
39.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses excluding |
|
|
|
|
|
|
|
|
|
|
|
new store
pre-opening costs |
|
63,279 |
|
56.0 |
% |
|
|
61,373 |
|
53.7 |
% |
|
|
192,986 |
|
56.7 |
% |
|
|
180,972 |
|
54.1 |
% |
New store pre-opening
costs |
|
532 |
|
0.5 |
% |
|
|
308 |
|
0.3 |
% |
|
|
1,435 |
|
0.4 |
% |
|
|
1,583 |
|
0.5 |
% |
Income
from operations |
|
4,324 |
|
3.8 |
% |
|
|
7,260 |
|
6.4 |
% |
|
|
12,037 |
|
3.5 |
% |
|
|
19,524 |
|
5.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Gain on sale of
investments |
|
- |
|
0.0 |
% |
|
|
- |
|
0.0 |
% |
|
|
- |
|
0.0 |
% |
|
|
3,267 |
|
1.0 |
% |
Impairment of
investment real estate |
|
- |
|
0.0 |
% |
|
|
- |
|
0.0 |
% |
|
|
- |
|
0.0 |
% |
|
|
(1,084 |
) |
-0.3 |
% |
Other loss, net |
|
(492 |
) |
-0.4 |
% |
|
|
(583 |
) |
-0.5 |
% |
|
|
(1,352 |
) |
-0.4 |
% |
|
|
(1,944 |
) |
-0.6 |
% |
Income before income
taxes |
|
3,832 |
|
3.4 |
% |
|
|
6,677 |
|
5.8 |
% |
|
|
10,685 |
|
3.1 |
% |
|
|
19,763 |
|
5.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
provision |
|
887 |
|
0.8 |
% |
|
|
2,098 |
|
1.8 |
% |
|
|
4,364 |
|
1.3 |
% |
|
|
6,431 |
|
1.9 |
% |
Net income |
$ |
2,945 |
|
2.6 |
% |
|
$ |
4,579 |
|
4.0 |
% |
|
$ |
6,321 |
|
1.9 |
% |
|
$ |
13,332 |
|
4.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share |
$ |
0.28 |
|
|
|
$ |
0.43 |
|
|
|
$ |
0.59 |
|
|
|
$ |
1.25 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share |
$ |
0.28 |
|
|
|
$ |
0.43 |
|
|
|
$ |
0.59 |
|
|
|
$ |
1.24 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BASSETT FURNITURE INDUSTRIES, INC. AND
SUBSIDIARIES |
Condensed Consolidated Balance Sheets |
(In thousands) |
|
|
(Unaudited) |
|
|
Assets |
|
August 25, 2018 |
|
November 25, 2017 |
Current
assets |
|
|
|
|
Cash and
cash equivalents |
|
$ |
25,763 |
|
|
$ |
53,949 |
|
Short-term investments |
|
|
22,643 |
|
|
|
23,125 |
|
Accounts
receivable, net |
|
|
19,485 |
|
|
|
19,640 |
|
Inventories, net |
|
|
63,726 |
|
|
|
54,476 |
|
Other
current assets |
|
|
8,724 |
|
|
|
8,192 |
|
Total current
assets |
|
|
140,341 |
|
|
|
159,382 |
|
|
|
|
|
|
Property and equipment,
net |
|
|
103,205 |
|
|
|
103,244 |
|
|
|
|
|
|
Other long-term
assets |
|
|
|
|
Deferred
income taxes, net |
|
|
5,773 |
|
|
|
8,393 |
|
Goodwill
and other intangible assets |
|
|
28,541 |
|
|
|
17,351 |
|
Other |
|
|
6,624 |
|
|
|
5,378 |
|
Total long-term
assets |
|
|
40,938 |
|
|
|
31,122 |
|
Total
assets |
|
$ |
284,484 |
|
|
$ |
293,748 |
|
|
|
|
|
|
Liabilities and
Stockholders’ Equity |
|
|
|
|
Current
liabilities |
|
|
|
|
Accounts
payable |
|
$ |
24,219 |
|
|
$ |
21,760 |
|
Accrued
compensation and benefits |
|
|
13,434 |
|
|
|
14,670 |
|
Customer
deposits |
|
|
21,168 |
|
|
|
27,107 |
|
Dividends
payable |
|
|
- |
|
|
|
3,759 |
|
Current
portion of long-term debt |
|
|
436 |
|
|
|
3,405 |
|
Other
accrued liabilities |
|
|
13,031 |
|
|
|
12,655 |
|
Total current
liabilities |
|
|
72,288 |
|
|
|
83,356 |
|
|
|
|
|
|
Long-term
liabilities |
|
|
|
|
Post
employment benefit obligations |
|
|
13,677 |
|
|
|
13,326 |
|
Long-term
debt |
|
|
- |
|
|
|
329 |
|
Other
long-term liabilities |
|
|
6,564 |
|
|
|
5,277 |
|
Total long-term
liabilities |
|
|
20,241 |
|
|
|
18,932 |
|
|
|
|
|
|
|
|
|
|
|
Stockholders’
equity |
|
|
|
|
Common
stock |
|
|
53,326 |
|
|
|
53,690 |
|
Retained
earnings |
|
|
141,505 |
|
|
|
139,378 |
|
Additional paid-in-capital |
|
|
- |
|
|
|
962 |
|
Accumulated other comprehensive loss |
|
|
(2,876 |
) |
|
|
(2,570 |
) |
Total stockholders'
equity |
|
|
191,955 |
|
|
|
191,460 |
|
Total
liabilities and stockholders’ equity |
|
$ |
284,484 |
|
|
$ |
293,748 |
|
|
|
|
|
|
BASSETT FURNITURE INDUSTRIES, INC. AND
SUBSIDIARIES |
Consolidated Statements of Cash Flows - unaudited |
(In thousands) |
|
|
|
|
|
|
|
Nine Months Ended |
|
|
August 25, 2018 |
|
August 26, 2017 |
Operating
activities: |
|
|
|
|
Net income |
|
$ |
6,321 |
|
|
$ |
13,282 |
|
Adjustments to
reconcile net income to net cash provided by |
|
|
|
|
(used in) operating
activities: |
|
|
|
|
Depreciation and amortization |
|
|
9,920 |
|
|
|
10,060 |
|
Provision
for asset impairment charge |
|
|
- |
|
|
|
1,084 |
|
Gain on
sale of property and equipment |
|
|
(130 |
) |
|
|
(1,278 |
) |
Gain on
sale of investments |
|
|
- |
|
|
|
(3,267 |
) |
Tenant
improvement allowances received from lessors |
|
|
2,220 |
|
|
|
1,165 |
|
Deferred
income taxes |
|
|
2,620 |
|
|
|
195 |
|
Other,
net |
|
|
490 |
|
|
|
516 |
|
Changes
in operating assets and liabilities |
|
|
|
|
Accounts
receivable |
|
|
1,183 |
|
|
|
(1,018 |
) |
Inventories |
|
|
(5,349 |
) |
|
|
(4,190 |
) |
Other
current and long-term assets |
|
|
(496 |
) |
|
|
1,919 |
|
Customer
deposits |
|
|
(5,939 |
) |
|
|
(4,424 |
) |
Accounts
payable and accrued liabilities |
|
|
196 |
|
|
|
654 |
|
Net cash provided by operating activities |
|
|
11,036 |
|
|
|
14,698 |
|
|
|
|
|
|
Investing
activities: |
|
|
|
|
Purchases of property
and equipment |
|
|
(12,632 |
) |
|
|
(10,817 |
) |
Proceeds from sale of
retail real estate and property and equipment |
|
|
2,488 |
|
|
|
4,474 |
|
Cash paid for business
acquisition |
|
|
(15,556 |
) |
|
|
- |
|
Proceeds from
maturities and sales of investments |
|
|
482 |
|
|
|
3,592 |
|
Acquisition of retail
licensee store |
|
|
- |
|
|
|
(655 |
) |
Other |
|
|
- |
|
|
|
223 |
|
Net cash used in investing activities |
|
|
(25,218 |
) |
|
|
(3,183 |
) |
|
|
|
|
|
Financing
activities: |
|
|
|
|
Cash dividends |
|
|
(7,462 |
) |
|
|
(6,544 |
) |
Proceeds from the
exercise of stock options |
|
|
27 |
|
|
|
310 |
|
Other issuance of
common stock |
|
|
264 |
|
|
|
83 |
|
Repurchases of common
stock |
|
|
(2,848 |
) |
|
|
(83 |
) |
Taxes paid related to
net share settlement of equity awards |
|
|
(674 |
) |
|
|
(641 |
) |
Repayments of notes
payable |
|
|
(3,311 |
) |
|
|
(3,287 |
) |
Net cash used in financing activities |
|
|
(14,004 |
) |
|
|
(10,162 |
) |
Change in cash
and cash equivalents |
|
|
(28,186 |
) |
|
|
1,353 |
|
Cash and cash
equivalents - beginning of period |
|
|
53,949 |
|
|
|
35,144 |
|
|
|
|
|
|
Cash and cash
equivalents - end of period |
|
$ |
25,763 |
|
|
$ |
36,497 |
|
|
|
|
|
|
BASSETT FURNITURE INDUSTRIES, INC. AND
SUBSIDIARIES |
|
Segment Information - unaudited |
|
(In thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended |
|
Nine Months Ended |
|
|
|
August 25, 2018 |
|
August 26, 2017 |
|
August 25, 2018 |
|
August 26, 2017 |
|
Net Sales |
|
|
|
|
|
|
|
|
|
Wholesale |
|
$ |
63,847 |
|
|
$ |
61,757 |
|
|
$ |
190,735 |
|
|
$ |
186,025 |
|
|
Retail -
Company-owned stores |
|
|
65,430 |
|
|
|
67,402 |
|
|
|
198,773 |
|
|
|
196,139 |
|
|
Logistical services |
|
|
23,536 |
|
|
|
24,925 |
|
|
|
73,714 |
|
|
|
71,885 |
|
|
Inter-company eliminations: |
|
|
|
|
|
|
|
|
|
Furniture
and accessories |
|
|
(29,470 |
) |
|
|
(29,007 |
) |
|
|
(90,903 |
) |
|
|
(88,020 |
) |
|
Logistical services |
|
|
(10,387 |
) |
|
|
(10,816 |
) |
|
|
(32,111 |
) |
|
|
(31,751 |
) |
|
Consolidated |
|
$ |
112,956 |
|
|
$ |
114,261 |
|
|
$ |
340,208 |
|
|
$ |
334,278 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income |
|
|
|
|
|
|
|
|
|
Wholesale |
|
$ |
3,298 |
|
|
$ |
4,466 |
|
|
$ |
9,401 |
|
|
$ |
15,142 |
|
|
Retail |
|
|
858 |
|
|
|
1,353 |
|
|
|
971 |
|
|
|
1,377 |
|
|
Logistical services |
|
|
139 |
|
|
|
1,164 |
|
|
|
758 |
|
|
|
1,736 |
|
|
Inter-company elimination |
|
|
29 |
|
|
|
277 |
|
|
|
907 |
|
|
|
1,269 |
|
|
Consolidated |
|
$ |
4,324 |
|
|
$ |
7,260 |
|
|
$ |
12,037 |
|
|
$ |
19,524 |
|
|
|
|
|
|
|
|
|
|
|
|
BASSETT FURNITURE INDUSTRIES, INC. AND
SUBSIDIARIES |
|
Rollforward of BHF Store Count |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
November 25, |
|
|
|
August
25, |
|
|
2017 |
Opened* |
Closed* |
Transfers |
2018 |
|
|
|
|
|
|
|
Company-owned stores |
|
60 |
4 |
- |
- |
64 |
Licensee-owned stores |
|
30 |
2 |
- |
- |
32 |
|
|
|
|
|
|
|
Total |
|
90 |
6 |
- |
- |
96 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* 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) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
55 Comparable Stores |
|
53 Comparable Stores |
|
|
Quarter Ended |
|
Quarter Ended |
|
Nine Months Ended |
|
Nine Months Ended |
|
|
August 25, 2018 |
|
August 26, 2017 |
|
August 25, 2018 |
|
August 26, 2017 |
|
|
|
Percent of |
|
|
Percent of |
|
|
Percent of |
|
|
Percent of |
|
|
Amount |
Net Sales |
|
Amount |
Net Sales |
|
Amount |
Net Sales |
|
Amount |
Net Sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
$ |
59,435 |
|
100.0 |
% |
|
$ |
60,446 |
100.0 |
% |
|
$ |
175,730 |
|
100.0 |
% |
|
$ |
176,236 |
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales |
|
28,424 |
|
47.8 |
% |
|
|
29,073 |
48.1 |
% |
|
|
85,104 |
|
48.4 |
% |
|
|
86,834 |
|
49.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit |
|
31,011 |
|
52.2 |
% |
|
|
31,373 |
51.9 |
% |
|
|
90,626 |
|
51.6 |
% |
|
|
89,402 |
|
50.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expense* |
|
28,848 |
|
48.5 |
% |
|
|
30,166 |
49.9 |
% |
|
|
85,030 |
|
48.4 |
% |
|
|
85,438 |
|
48.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
from operations |
$ |
2,163 |
|
3.6 |
% |
|
$ |
1,207 |
2.0 |
% |
|
$ |
5,596 |
|
3.2 |
% |
|
$ |
3,964 |
|
2.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other Stores |
|
All Other Stores |
|
|
Quarter Ended |
|
Quarter Ended |
|
Nine Months Ended |
|
Nine Months Ended |
|
|
August 25, 2018 |
|
August 26, 2017 |
|
August 25, 2018 |
|
August 26, 2017 |
|
|
|
Percent of |
|
|
Percent of |
|
|
Percent of |
|
|
Percent of |
|
|
Amount |
Net Sales |
|
Amount |
Net Sales |
|
Amount |
Net Sales |
|
Amount |
Net Sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
$ |
5,995 |
|
100.0 |
% |
|
$ |
6,956 |
100.0 |
% |
|
$ |
23,043 |
|
100.0 |
% |
|
$ |
19,903 |
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales |
|
2,926 |
|
48.8 |
% |
|
|
4,024 |
57.8 |
% |
|
|
11,169 |
|
48.5 |
% |
|
|
10,794 |
|
54.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit |
|
3,069 |
|
51.2 |
% |
|
|
2,932 |
42.2 |
% |
|
|
11,874 |
|
51.5 |
% |
|
|
9,109 |
|
45.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expense |
|
3,842 |
|
64.1 |
% |
|
|
2,478 |
35.6 |
% |
|
|
15,064 |
|
65.4 |
% |
|
|
10,113 |
|
50.8 |
% |
|
Pre-opening store
costs** |
|
532 |
|
8.9 |
% |
|
|
308 |
4.4 |
% |
|
|
1,435 |
|
6.2 |
% |
|
|
1,583 |
|
8.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
(loss) from operations |
$ |
(1,305 |
) |
-21.8 |
% |
|
$ |
146 |
2.1 |
% |
|
$ |
(4,625 |
) |
-20.1 |
% |
|
$ |
(2,587 |
) |
-13.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*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 possession and store opening date, employee
payroll and training costs prior to store opening |
|
|
|
|
|
|
|
and other various expenses incurred prior to store
opening. |
|
|
|
|
|
|
|
|
|
|
|
J. Michael DanielSenior Vice President
and Chief Financial Officer(276)
629-6614 – Investors
Peter D. MorrisonVice President of
Communications(276) 629-6450 – Media
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