Bassett Furniture Industries, Inc. (Nasdaq: BSET) announced today
its results of operations for its fiscal quarter ended June 1,
2019.
Fiscal 2019 Second Quarter Highlights(Dollars in
millions)
|
Sales |
|
Operating Income (Loss) |
|
2nd Qtr |
|
Dollar |
% |
|
2nd Qtr |
% of |
|
2nd Qtr |
% of |
|
|
2019 |
|
2018 |
|
Change |
Change |
|
|
2019 |
|
Sales |
|
|
2018 |
Sales |
Consolidated (1) |
$ |
108.2 |
$ |
117.0 |
|
$ |
(8.8 |
) |
-7.5 |
% |
|
$ |
0.7 |
|
0.6 |
% |
|
$ |
5.7 |
4.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Wholesale |
$ |
63.1 |
$ |
63.8 |
|
$ |
(0.8 |
) |
-1.0 |
% |
|
$ |
3.2 |
|
5.0 |
% |
|
$ |
3.0 |
4.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Total Retail |
$ |
62.6 |
$ |
68.7 |
|
$ |
(6.1 |
) |
-8.9 |
% |
|
$ |
(3.0 |
) |
-4.7 |
% |
|
$ |
1.6 |
2.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
59 Comparable Stores |
$ |
56.3 |
$ |
66.1 |
|
$ |
(9.8 |
) |
-14.8 |
% |
|
$ |
(1.7 |
) |
-3.0 |
% |
|
$ |
2.4 |
3.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Logistical Services (2) |
$ |
20.1 |
$ |
21.2 |
|
$ |
(1.1 |
) |
-5.4 |
% |
|
$ |
0.3 |
|
1.3 |
% |
|
$ |
0.3 |
1.4 |
% |
|
(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 $0.4 million or
$0.04 per diluted share as compared to $4.3 million or $0.40 per
diluted share for the prior year quarter.
“The second quarter of fiscal 2019 was tough,”
commented Rob Spilman, Chairman and CEO. “The overall retail
home furnishings sector was sluggish and sales in our corporate
store network were down sharply on both a written and delivered
sales basis. The significant declines in our written sales
around President’s Day and the month of April resulted in the
reported delivered comparable sales shortfall for the
quarter. These trends coupled with store startup losses in
new stores opened less than a year and a markedly negative
comparison to the hurricane fueled sales and profits generated in
Houston in 2018 were significantly detrimental to our bottom
line. Relatively strong sales around our quarter ending
Memorial Day Sale provided a much-needed boost to our order
backlogs as we entered the third quarter. In addition, sales
trends for the June promotions were slightly better than last
year. Positively, we generated $6.8 million of operating cash
flow for the period, keeping our balance sheet in a solid position
with $34.2 million of cash and short-term investments, over $22
million available on our credit facility, and no long-term
debt.”
“In reaction to the challenging big ticket
retail environment, we are mobilized on multiple fronts,” continued
Spilman. “There is no doubt that more aggressive use of
discounts and credit promotions increasingly characterize today’s
furniture retail space. We successfully employed our
variation of these tactics over the three week Memorial Day
promotion. Going forward, we will use a mix of newly crafted
promotional messages and consumer financing designed to more
overtly emphasize the value of our products. In concert, we
have strengthened our long standing ‘30 Days in the Home’ on custom
furniture with the addition of a ‘14 Days in the Home’ message on a
series of wood and upholstery items. Furthermore, as we
mentioned after the first quarter, we are expanding our opening
price point merchandise assortment to expand our reach with value
conscious consumers. Coupled with our digital engagement strategy,
we are encouraged by the page views that the new value oriented
merchandise has generated. Again, although we remain
committed to our design makeover and custom furniture strategy, we
have concluded that a layer of opening price point merchandise with
a compelling delivery promise will bring a new customer to
Bassett. We believe that our manufacturing efficiencies and
our supply chain will allow us to pursue these tactics without
sacrificing our wholesale and retail gross margins. Over 75%
of Bassett branded products shipped from an American factory in the
quarter and we will leverage our ability to manufacture and deliver
our products with heightened speed and value.”
Wholesale Segment
Net sales for the wholesale segment were $63.1
million for the second quarter of 2019 as compared to $63.8 million
for the second quarter of 2018, a decrease of $0.7 million or
1.0%. This decrease was primarily driven by a 7% decrease in
furniture shipments to the open market (outside the Bassett Home
Furnishings network), partially offset by a $0.3 million increase
in Lane Venture shipments. Shipments to the Bassett Home
Furnishings network were essentially flat as compared to the prior
year quarter. Gross margin for the wholesale segment was
34.3% for the second quarter of 2019 as compared to 32.9% for the
prior year quarter. This increase was primarily driven by
higher margins in the domestic custom upholstery operations as
price increases implemented during the third quarter of 2018 offset
the increased raw material costs experienced late in 2017 and early
2018. Wholesale SG&A for the second quarter of 2019 was
$18.5 million as compared to $17.9 million for the prior year
period. SG&A as a percentage of sales increased to 29.3% as
compared to 28.1% for the second quarter of 2018. This
increase in SG&A as a percentage of sales was primarily driven
by higher over-the-road freight costs along with higher marketing
and other brand development costs, partially offset by lower
incentive compensation costs. Operating income was $3.2
million or 5.0% of sales for the second quarter of 2019 as compared
to $3.0 million or 4.8% of sales in the prior year.
“Consolidated wholesale sales declined by 1.0%
for the period,” added Spilman. “Without the ongoing wind
down of our juvenile division, wholesale sales were actually
flat. Bolstered by a 5% increase in our revamped HGTV Home
Design Studio by Bassett line, sales of our domestically produced
Bassett Custom Upholstery segment grew slightly while profitability
grew by 7%. Our imported Bassett Leather motion and
stationary product sales declined by 12% as complications from the
Chinese tariff situation hampered customers that directly import
containers of these products. Working closely with our
longtime Asian partner, we have moved the majority of these goods
out of China to be able to source the same product at pre-tariff
pricing. A highlight of the quarter was our Lane Venture
division. Sales grew by double digits and profits tripled as
our high level of service has begun to resonate with our dealer
base through repeat orders. On the wood products side, our
imported Bassett Casegoods volume grew slightly while our domestic
Bassett Custom Wood product sales declined from last year’s record
pace. We moved our imported wood products to Vietnam over 10
years ago and are consequently buffered from the turmoil
surrounding the large amounts of wood products that are still
imported from China. We continue with the exit process from
the juvenile furniture business and we were able to move about 40%
of the remaining inventory during the period. All in all, our
wholesale operations ran well during the period and were able to
increase profits despite reduced factory work schedules brought on
by the tepid retail environment.”
Retail Segment
Net sales for the 70 Company-owned Bassett Home
Furnishings stores were $62.6 million for the second quarter of
2019 as compared to $68.7 million for the second quarter of 2018, a
decrease of $6.1 million or 8.9%. This decrease was due to a $9.8
million or 14.8% decrease in sales for the 59 comparable stores,
partially offset by an increase of $3.7 million in non-comparable
store sales as the Company has opened 10 stores over the last 18
months.
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 7.4% for the second
quarter of 2019 as compared to the second quarter of
2018.
The consolidated retail operating loss for the
second quarter of 2019 was $3.0 million as compared to operating
income of $1.6 million for the second quarter of 2018, a decrease
of $4.6 million. The 59 comparable stores generated an
operating loss of $1.7 million for the quarter, or 3.0% of sales,
as compared to operating income of $2.4 million, or 3.7% of sales,
for the prior year quarter. Gross margins for comparable stores
were 50.8% for the second quarter of 2019 as compared to 52.1% for
the second quarter of 2018. This decrease was primarily due
to increased wholesale costs as a result of tariffs on Chinese
products instituted in late 2018 along with higher costs of
freight, both of which were passed on in a wholesale price increase
in January 2019. Although most of the Company’s goods are
domestically made, and most of its other goods are imported from
countries outside of China, the most significant impact from the
tariffs has been in the cost of the fabric that the Company uses in
its upholstered furniture manufactured in the United States.
The Company implemented a retail price increase late in the second
quarter to mitigate these cost increases.
SG&A expenses for comparable stores
decreased $1.7 million to $30.3 million or 53.8% of sales as
compared to $32.0 million or 48.4% of sales for the second quarter
of 2018. The increase as a percentage of sales was primarily
due to a de-leveraging of fixed costs from lower sales volumes,
inefficiencies in the warehouse and home delivery operation and
higher financing costs as more of the Company’s retail customers
chose to finance their purchases through the Company’s third-party
credit provider. These increases were partially offset by
various fixed cost decreases that resulted from changes in the
Company’s cost structure.
Non-comparable stores generated sales of $6.2
million with an operating loss of $1.3 million as compared to sales
of $2.5 million and an operating loss of $0.8 million in the prior
year quarter. As part of the $1.3 million loss for the second
quarter of 2019, the Company incurred $0.4 million in new store
pre-opening costs, an increase of $0.2 million from the prior
year. In addition, the Company incurred $0.3 million of post
opening startup losses compared to $0.4 million in the second
quarter of 2018.
“Of course, the big story of the quarter and the
year to date is the loss generated by our corporate retail
segment,” said Spilman. “The swing from retail profitability
to a loss is being addressed, not only by the new promotional and
merchandising strategies, but also by thoroughly examining our cost
structure. Our bottom line will also improve through a reduction of
store startup expenses resulting from the lack of new store
openings that are currently in the pipeline. Specifically,
our Princeton, NJ location opening in the 4th quarter is the only
remaining new store this year. Our Sarasota, Florida store
opened in April; the only new store in the period following the
four new corporate stores and the one repositioned location that
debuted in the first quarter. Pre- and post-opening store
expenses to date total $2.0 million this year. We anticipate
that the forthcoming rate of this expense will dramatically decline
in the next few quarters. Also noteworthy is our methodical
pursuit of the formula to digitally engage consumers and drive them
to our website and our stores. We are encouraged by recent
upticks in web traffic and in the number of first-time users that
are engaging with our brand. The cost of our digital strategy
is being weighed against our television and direct mail
expenditures, both of which have declined as a result of increased
digital investment. Third-party consumer finance costs have
increased as periodic credit promotions have been effective in
closing larger ticket sales and are believed to be a mechanism that
we should employ more frequently in the future.”
Logistical Services Segment
Revenues for Zenith were $20.1 million for the
second quarter of 2019 as compared to $21.2 million for 2018, a
decrease of $1.1 million or 5.4%. This decrease was primarily
due to the previously announced discontinuation of home delivery
services to third-party customers. Zenith’s operating
expenses were $19.8 million or 98.7% of sales as compared to $20.9
million or 98.6% of sales for the prior year period.
“Absent the retail home delivery business that
Zenith exited late last year, overall revenue was flat for the
division in the quarter,” continued Spilman. “The Zenith team
continues to perfect their new distribution model that entails
transporting large loads to population centers that are
subsequently broken down and delivered to retailers on smaller,
more nimble 26 foot trucks. Given their experience to date of
better speed to market and improved driver recruitment
capabilities, they are optimistic that the new template has
addressed the constraints that have faced them over the past few
years in a very tight labor environment.”
About Bassett Furniture Industries, Inc.Bassett
Furniture Industries, Inc. (NASDAQ:BSET), is a leading manufacturer
and marketer of high quality home furnishings. With 103 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 second fiscal quarter of 2019,
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 |
|
Six Months Ended |
|
June 1, 2019 |
|
May 26, 2018 |
|
June 1, 2019 |
|
May 26, 2018 |
|
|
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 |
$ |
95,824 |
|
|
|
$ |
102,675 |
|
|
|
$ |
203,181 |
|
|
|
$ |
198,798 |
|
|
Logistics |
|
12,366 |
|
|
|
|
14,305 |
|
|
|
|
25,850 |
|
|
|
|
28,454 |
|
|
Total sales revenue |
|
108,190 |
|
100.0 |
% |
|
|
116,980 |
|
100.0 |
% |
|
|
229,031 |
|
100.0 |
% |
|
|
227,252 |
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of furniture and
accessories sold |
|
42,530 |
|
39.3 |
% |
|
|
45,660 |
|
39.0 |
% |
|
|
91,707 |
|
40.0 |
% |
|
|
88,929 |
|
39.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses excluding |
|
|
|
|
|
|
|
|
|
|
|
new store pre-opening
costs |
|
64,590 |
|
59.7 |
% |
|
|
65,456 |
|
56.0 |
% |
|
|
133,976 |
|
58.5 |
% |
|
|
129,707 |
|
57.1 |
% |
New store pre-opening
costs |
|
369 |
|
0.3 |
% |
|
|
201 |
|
0.2 |
% |
|
|
863 |
|
0.4 |
% |
|
|
903 |
|
0.4 |
% |
Early retirement program |
|
- |
|
0.0 |
% |
|
|
- |
|
0.0 |
% |
|
|
835 |
|
0.4 |
% |
|
|
- |
|
0.0 |
% |
Income from
operations |
|
701 |
|
0.6 |
% |
|
|
5,663 |
|
4.8 |
% |
|
|
1,650 |
|
0.7 |
% |
|
|
7,713 |
|
3.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Other loss, net |
|
(145 |
) |
-0.1 |
% |
|
|
(233 |
) |
-0.2 |
% |
|
|
(268 |
) |
-0.1 |
% |
|
|
(860 |
) |
-0.4 |
% |
Income before income
taxes |
|
556 |
|
0.5 |
% |
|
|
5,430 |
|
4.6 |
% |
|
|
1,382 |
|
0.6 |
% |
|
|
6,853 |
|
3.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Income tax provision |
|
111 |
|
0.1 |
% |
|
|
1,141 |
|
1.0 |
% |
|
|
329 |
|
0.1 |
% |
|
|
3,477 |
|
1.5 |
% |
Net income |
$ |
445 |
|
0.4 |
% |
|
$ |
4,289 |
|
3.7 |
% |
|
$ |
1,053 |
|
0.5 |
% |
|
$ |
3,376 |
|
1.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share |
$ |
0.04 |
|
|
|
$ |
0.40 |
|
|
|
$ |
0.10 |
|
|
|
$ |
0.32 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share |
$ |
0.04 |
|
|
|
$ |
0.40 |
|
|
|
$ |
0.10 |
|
|
|
$ |
0.31 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BASSETT FURNITURE INDUSTRIES, INC. AND SUBSIDIARIES |
Condensed Consolidated Balance Sheets |
(In thousands) |
|
|
(Unaudited) |
|
|
Assets |
|
June 1, 2019 |
|
November 24, 2018 |
Current
assets |
|
|
|
|
Cash and cash equivalents |
|
$ |
11,581 |
|
|
$ |
33,468 |
|
Short-term
investments |
|
|
22,643 |
|
|
|
22,643 |
|
Accounts receivable,
net |
|
|
20,906 |
|
|
|
19,055 |
|
Inventories, net |
|
|
66,715 |
|
|
|
64,192 |
|
Other current
assets |
|
|
14,652 |
|
|
|
9,189 |
|
Total current assets |
|
|
136,497 |
|
|
|
148,547 |
|
|
|
|
|
|
Property and equipment,
net |
|
|
106,089 |
|
|
|
104,863 |
|
|
|
|
|
|
Other long-term
assets |
|
|
|
|
Deferred income taxes,
net |
|
|
3,250 |
|
|
|
3,266 |
|
Goodwill and other
intangible assets |
|
|
28,291 |
|
|
|
28,480 |
|
Other |
|
|
6,374 |
|
|
|
6,485 |
|
Total long-term assets |
|
|
37,915 |
|
|
|
38,231 |
|
Total
assets |
|
$ |
280,501 |
|
|
$ |
291,641 |
|
|
|
|
|
|
Liabilities and
Stockholders’ Equity |
|
|
|
|
Current
liabilities |
|
|
|
|
Accounts payable |
|
$ |
19,587 |
|
|
$ |
27,407 |
|
Accrued compensation
and benefits |
|
|
11,299 |
|
|
|
12,994 |
|
Customer deposits |
|
|
24,910 |
|
|
|
27,157 |
|
Other accrued liabilities |
|
|
11,667 |
|
|
|
14,261 |
|
Total current liabilities |
|
|
67,463 |
|
|
|
81,819 |
|
|
|
|
|
|
Long-term
liabilities |
|
|
|
|
Post employment benefit
obligations |
|
|
12,623 |
|
|
|
13,173 |
|
Other long-term
liabilities |
|
|
13,249 |
|
|
|
6,340 |
|
Total long-term
liabilities |
|
|
25,872 |
|
|
|
19,513 |
|
|
|
|
|
|
|
|
|
|
|
Stockholders’
equity |
|
|
|
|
Common stock |
|
|
52,262 |
|
|
|
52,638 |
|
Retained earnings |
|
|
137,127 |
|
|
|
140,009 |
|
Accumulated other
comprehensive loss |
|
|
(2,223 |
) |
|
|
(2,338 |
) |
Total stockholders'
equity |
|
|
187,166 |
|
|
|
190,309 |
|
Total liabilities and
stockholders’ equity |
|
$ |
280,501 |
|
|
$ |
291,641 |
|
|
|
|
|
|
BASSETT FURNITURE INDUSTRIES, INC. AND SUBSIDIARIES |
Consolidated Statements of Cash Flows - unaudited |
(In thousands) |
|
|
|
|
|
|
|
Six Months Ended |
|
|
June 1, 2019 |
|
May 26, 2018 |
Operating
activities: |
|
|
|
|
Net income |
|
$ |
1,053 |
|
|
$ |
3,376 |
|
Adjustments to reconcile net
income to net cash provided by (used in) |
|
|
|
|
operating
activities: |
|
|
|
|
Depreciation and amortization |
|
|
6,735 |
|
|
|
6,688 |
|
Gain on sale of property and equipment |
|
|
(3 |
) |
|
|
(136 |
) |
Deferred income taxes |
|
|
23 |
|
|
|
2,183 |
|
Other, net |
|
|
(276 |
) |
|
|
1,243 |
|
Changes in operating assets and liabilities |
|
|
|
|
Accounts receivable |
|
|
(1,824 |
) |
|
|
124 |
|
Inventories |
|
|
(3,355 |
) |
|
|
(3,689 |
) |
Other current and long-term assets |
|
|
(3,274 |
) |
|
|
(2,311 |
) |
Customer deposits |
|
|
(2,247 |
) |
|
|
(5,014 |
) |
Accounts payable and other liabilities |
|
|
(5,774 |
) |
|
|
(2,185 |
) |
Net cash provided by (used in) operating
activities |
|
|
(8,942 |
) |
|
|
279 |
|
|
|
|
|
|
Investing
activities: |
|
|
|
|
Purchases of property and
equipment |
|
|
(8,313 |
) |
|
|
(7,662 |
) |
Proceeds from sale of property
and equipment |
|
|
11 |
|
|
|
2,463 |
|
Cash paid for business
acquisition |
|
|
- |
|
|
|
(15,556 |
) |
Other |
|
|
343 |
|
|
|
(527 |
) |
Net cash used in investing activities |
|
|
(7,959 |
) |
|
|
(21,282 |
) |
|
|
|
|
|
Financing
activities: |
|
|
|
|
Cash dividends |
|
|
(2,603 |
) |
|
|
(6,124 |
) |
Proceeds from the exercise of
stock options |
|
|
25 |
|
|
|
27 |
|
Other issuance of common
stock |
|
|
159 |
|
|
|
173 |
|
Repurchases of common
stock |
|
|
(2,347 |
) |
|
|
(823 |
) |
Taxes paid related to net
share settlement of equity awards |
|
|
- |
|
|
|
(522 |
) |
Repayments of notes
payable |
|
|
(220 |
) |
|
|
(3,128 |
) |
Net cash used in financing activities |
|
|
(4,986 |
) |
|
|
(10,397 |
) |
Change in cash and
cash equivalents |
|
|
(21,887 |
) |
|
|
(31,400 |
) |
Cash and cash
equivalents - beginning of period |
|
|
33,468 |
|
|
|
53,949 |
|
Cash and cash
equivalents - end of period |
|
$ |
11,581 |
|
|
$ |
22,549 |
|
|
|
|
|
|
BASSETT FURNITURE INDUSTRIES, INC. AND SUBSIDIARIES |
|
Segment Information - unaudited |
|
(In thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended |
|
Six Months Ended |
|
|
|
June 1, 2019 |
|
May 26, 2018 |
|
June 1, 2019 |
|
May 26, 2018 |
|
Net Sales |
|
|
|
|
|
|
|
|
|
Wholesale |
|
$ |
63,131 |
|
|
$ |
63,788 |
|
|
$ |
135,912 |
|
|
$ |
126,888 |
|
|
Retail - Company-owned stores |
|
|
62,568 |
|
|
|
68,682 |
|
|
|
132,197 |
|
|
|
133,343 |
|
|
Logistical services (1) |
|
|
20,093 |
|
|
|
21,229 |
|
|
|
41,844 |
|
|
|
42,651 |
|
|
Inter-company eliminations: |
|
|
|
|
|
|
|
|
|
Furniture and accessories |
|
|
(29,875 |
) |
|
|
(29,795 |
) |
|
|
(64,929 |
) |
|
|
(61,433 |
) |
|
Logistical services (1) |
|
|
(7,727 |
) |
|
|
(6,924 |
) |
|
|
(15,993 |
) |
|
|
(14,197 |
) |
|
Consolidated |
|
$ |
108,190 |
|
|
$ |
116,980 |
|
|
$ |
229,031 |
|
|
$ |
227,252 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income |
|
|
|
|
|
|
|
|
|
Wholesale |
|
$ |
3,173 |
|
|
$ |
3,039 |
|
|
$ |
7,355 |
|
|
$ |
6,103 |
|
|
Retail |
|
|
(2,953 |
) |
|
|
1,626 |
|
|
|
(5,999 |
) |
|
|
113 |
|
|
Logistical services |
|
|
252 |
|
|
|
289 |
|
|
|
964 |
|
|
|
619 |
|
|
Inter-company elimination |
|
|
229 |
|
|
|
709 |
|
|
|
165 |
|
|
|
878 |
|
|
Early retirement program |
|
|
- |
|
|
|
- |
|
|
|
(835 |
) |
|
|
- |
|
|
Consolidated |
|
$ |
701 |
|
|
$ |
5,663 |
|
|
$ |
1,650 |
|
|
$ |
7,713 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) 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 24, |
|
|
|
June 1, |
|
|
2018 |
Opened* |
Closed* |
Transfers |
2019 |
|
|
|
|
|
|
|
Company-owned stores |
|
65 |
5 |
- |
- |
70 |
Licensee-owned stores |
|
32 |
1 |
- |
- |
33 |
|
|
|
|
|
|
|
Total |
|
97 |
6 |
- |
- |
103 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* 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) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
59 Comparable Stores |
|
57 Comparable Stores |
|
|
Quarter Ended |
|
Quarter Ended |
|
Six Months Ended |
|
Six Months Ended |
|
|
June 1, 2019 |
|
May 26, 2018 |
|
June 1, 2019 |
|
May 26, 2018 |
|
|
|
Percent of |
|
|
Percent of |
|
|
Percent of |
|
|
Percent of |
|
|
Amount |
Net Sales |
|
Amount |
Net Sales |
|
Amount |
Net Sales |
|
Amount |
Net Sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
$ |
56,325 |
|
100.0 |
% |
|
$ |
66,136 |
|
100.0 |
% |
|
$ |
118,279 |
|
100.0 |
% |
|
$ |
127,884 |
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales |
|
27,715 |
|
49.2 |
% |
|
|
31,687 |
|
47.9 |
% |
|
|
58,748 |
|
49.7 |
% |
|
|
62,177 |
|
48.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
28,610 |
|
50.8 |
% |
|
|
34,449 |
|
52.1 |
% |
|
|
59,531 |
|
50.3 |
% |
|
|
65,707 |
|
51.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expense* |
|
30,285 |
|
53.8 |
% |
|
|
32,030 |
|
48.4 |
% |
|
|
62,128 |
|
52.5 |
% |
|
|
62,822 |
|
49.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
operations |
$ |
(1,675 |
) |
-3.0 |
% |
|
$ |
2,419 |
|
3.7 |
% |
|
$ |
(2,597 |
) |
-2.2 |
% |
|
$ |
2,885 |
|
2.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other Stores |
|
All Other Stores |
|
|
Quarter Ended |
|
Quarter Ended |
|
Six Months Ended |
|
Six Months Ended |
|
|
June 1, 2019 |
|
May 26, 2018 |
|
June 1, 2019 |
|
May 26, 2018 |
|
|
|
Percent of |
|
|
Percent of |
|
|
Percent of |
|
|
Percent of |
|
|
Amount |
Net Sales |
|
Amount |
Net Sales |
|
Amount |
Net Sales |
|
Amount |
Net Sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
$ |
6,243 |
|
100.0 |
% |
|
$ |
2,546 |
|
100.0 |
% |
|
$ |
13,918 |
|
100.0 |
% |
|
$ |
5,459 |
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales |
|
3,063 |
|
49.1 |
% |
|
|
1,242 |
|
48.8 |
% |
|
|
6,981 |
|
50.2 |
% |
|
|
2,746 |
|
50.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
3,180 |
|
50.9 |
% |
|
|
1,304 |
|
51.2 |
% |
|
|
6,937 |
|
49.8 |
% |
|
|
2,713 |
|
49.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expense |
|
4,089 |
|
65.5 |
% |
|
|
1,896 |
|
74.5 |
% |
|
|
9,476 |
|
68.1 |
% |
|
|
4,582 |
|
83.9 |
% |
|
Pre-opening store costs** |
|
369 |
|
5.9 |
% |
|
|
201 |
|
7.9 |
% |
|
|
863 |
|
6.2 |
% |
|
|
903 |
|
16.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
operations |
$ |
(1,278 |
) |
-20.5 |
% |
|
$ |
(793 |
) |
-31.1 |
% |
|
$ |
(3,402 |
) |
-24.4 |
% |
|
$ |
(2,772 |
) |
-50.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*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
andChief Financial Officer(276) 629-6614
– Investors
Peter D. MorrisonVice President of
Communications(276) 629-6450 – Media
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