BSET Bassett Furniture Industries Inc

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Virginia	000-00209	54-0135270
(State or other jurisdiction of incorporation or organization)	(Commission File No.)	(I.R.S. Employer Identification No.)

3525 Fairystone Park Highway Bassett, Virginia	24055
(Address of principal executive offices)	(Zip Code)

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

	Title of each class		Trading Symbol		Name of exchange on which registered
	Common Stock ($5.00 par value)		BSET		NASDAQ

Item 8.01

Other Events

Item 9.01.

Financial Statements and Exhibits.

99	News release issued by Bassett Furniture Industries, Inc. on July 10, 2024.

104	Cover Page Interactive Data File (embedded within the inline XBRL document)

July 10, 2024	By:	/s/ J. Michael Daniel
		J. Michael Daniel
		Title:  Senior Vice President – Chief Financial & Administrative Officer

Exhibit 99

 

 

Bassett Furniture Industries, Inc. P.O. Box 626  Bassett, VA 24055

Contacts: J. Michael Daniel Senior Vice President and Chief Financial Officer (276) 629-6614 – Investors mdaniel@bassettfurniture.com   Peter D. Morrison Vice President of Communications (276) 629-6450 – Media

 

 

For immediate release                           

 

Bassett Reports Fiscal Second Quarter Results and Launches Restructuring Plan

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(Bassett, Va.) – July 10, 2024 – Bassett Furniture Industries, Inc. (Nasdaq: BSET) reported today its results of operations for its second quarter ended June 1, 2024. The Company also announced a restructuring plan designed to improve long-term operational and financial performance.

 

Q2 Consolidated Business Highlights: [FY 24 vs. FY 23, unless otherwise specified]

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Revenues decreased 17%.

●

When comparing to the first quarter of 2024, revenues increased 3.8%, normalizing the first quarter for the extra week due to our fiscal calendar.

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Operating loss of $8.5 million which included asset impairment charges of $5.5 million and additional inventory valuation charges of $2.7 million.

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Gross margin of 52.5%, which included the increased inventory valuation charges noted above. Excluding the inventory valuation charges, gross profit margin would have been 55.7% (see Table 5).

●

Loss per share of $0.82 vs. diluted earnings per share $0.24.

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Generated $5.8 million of operating cash flow for the quarter.

 

 

Fiscal 2024 Second Quarter Overview

(Dollars in millions)

 

		Sales																Operating Income (Loss)
		2nd Qtr								Dollar				%				2nd Qtr				% of				2nd Qtr				% of
		2024				2023				Change				Change				2024				Sales				2023				Sales
Consolidated (1)		$	83.4			$	100.5			$	(17.1	)			-17.0	%		$	(8.5	)			-10.2	%		$	2.5				2.5	%
Wholesale		$	52.6			$	61.8			$	(9.2	)			-14.9	%		$	5.7				10.8	%		$	7.0				11.3	%
Retail		$	50.5			$	60.8			$	(10.3	)			-16.9	%		$	(2.2	)			-4.4	%		$	0.8				1.3	%
Corporate & Other (2)		$	1.1			$	2.3			$	(1.2	)			-52.2	%		$	(6.9	)			N/A			$	(6.9	)			N/A

 

(1)

Our consolidated results include certain intercompany eliminations as well as asset impairment charges of $5.5 million which are not  allocated to our segment operating results. See Table 4, “Segment Information” below for an illustration of the effects of these items   on our consolidated sales and operating income.

 

(2)	Corporate and Other includes the operations of Noa Home Inc. along with the shared Corporate costs that are benefiting both  the Wholesale and Retail segments.

 

“Excluding the additional inventory valuation charges that we recorded, we were pleased with another quarter of strong gross margins, despite lower sales.” said Robert H. Spilman, Jr., Bassett Chairman and Chief Executive Officer. “The environment for housing remains challenging and consumers are choosing to invest in experiences over their homes, a change from the Covid period. We continue to be disciplined on expenses to improve operating efficiency.”

 

Restructuring Plan

The Company also announced a restructuring plan to more right-size its cost structure and to prepare it for topline growth. The comprehensive strategy builds on the strength of Bassett’s brand quality, design expertise and service, and focuses on driving revenue growth and profitability long-term. The five-point plan includes:

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Drive organic growth through Bassett-branded retail locations, omni-channel capabilities, and enhanced customization positioning to expand dedicated distribution footprint.

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Rationalize US wood manufacturing from two locations into one primary location, supported by a small satellite operation.

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Optimize inventory and drop unproductive lines.

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Improve overall cost structure and invest capital in refurbishment of current retail locations.

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Close the Noa Home e-commerce business.

 

“Bassett Furniture has a long history of weathering economic cycles, such as the inflationary environment and slow housing market we’re experiencing in 2024 – factors that led to soft demand in our second quarter,” explained Spilman. “The business climate has remained difficult through the first six months of this year and may not improve in the near future. Accordingly, we are committed to returning to profitability by running a leaner operation, with priority focus on both our inventory position and the overall cost structure. We believe that our restructuring plan, expected to improve our bottom line between $5.5 million and $6.5 million on an annual basis, coupled with our solid balance sheet, puts us in a position to be a considerably stronger company when customer demand inevitably improves. I’m particularly pleased that our Board believes in our ability to improve operations and continue our strong cash generation by increasing our quarterly dividend by 11%.”

 

 

Conference Call and Webcast

The Company will hold a conference call to discuss its quarterly results on July 11, 2024, at 9:00 am ET. The public is invited to listen to the conference call by webcast, accessible through the Company’s investor relations website, https://investors.bassettfurniture.com/. Participants can also listen to the conference call via https://edge.media-server.com/mmc/p/332ii2e5. A replay and transcript of the conference call will be available on demand on the investor relations site.

 

About Bassett Furniture Industries, Inc.

Bassett Furniture Industries, Inc. (NASDAQ: BSET) is a leading manufacturer and marketer of high-quality home furnishings. With 88 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. Bassett’s retail strategy includes stylish, custom-built furniture that features 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. For more information, visit the Company’s website at bassettfurniture.com. (BSET-E)

 

Forward-Looking Statements

 

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 2024, 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.

 

 

Table 1

BASSETT FURNITURE INDUSTRIES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations - unaudited

(In thousands, except for per share data)

 

		Quarter Ended																Six Months
		June 1, 2024								May 27, 2023								June 1, 2024								May 27, 2023
						Percent of								Percent of								Percent of								Percent of
		Amount				Net Sales				Amount				Net Sales				Amount				Net Sales				Amount				Net Sales
Net sales of furniture and accessories		$	83,410				100.0	%		$	100,519				100.0	%		$	169,964				100.0	%		$	208,217				100.0	%
Cost of furniture and accessories sold			39,650				47.5	%			47,686				47.4	%			78,337				46.1	%			98,187				47.2	%
Gross profit			43,760				52.5	%			52,833				52.6	%			91,627				53.9	%			110,030				52.8	%
Selling, general and administrative expenses			46,707				56.0	%			51,366				51.1	%			96,931				57.0	%			105,861				50.8	%
Asset impairment charges			5,515				6.6	%			-				0.0	%			5,515				3.2	%			-				0.0	%
Gain on revaluation of contingent consideration			-				0.0	%			1,013				1.0	%			-				0.0	%			1,013				0.5	%
Income (loss) from operations			(8,462	)			-10.1	%			2,480				2.5	%			(10,819	)			-6.4	%			5,182				2.5	%
Interest income			627				0.8	%			569				0.6	%			1,383				0.8	%			721				0.3	%
Other loss, net			(276	)			-0.3	%			(505	)			-0.5	%			(380	)			-0.2	%			(1,072	)			-0.5	%
Income (loss) before income taxes			(8,111	)			-9.7	%			2,544				2.5	%			(9,816	)			-5.8	%			4,831				2.3	%
Income tax expense (benefit)			(910	)			-1.1	%			468				0.5	%			(1,422	)			-0.8	%			1,310				0.6	%
Net income (loss)			(7,201	)			-8.6	%			2,076				2.1	%			(8,394	)			-4.9	%			3,521				1.7	%
Basic and diluted earnings (loss) per share		$	(0.82	)						$	0.24							$	(0.96	)						$	0.40

 

 

Table 2

BASSETT FURNITURE INDUSTRIES, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(In thousands)

 

		(Unaudited)
Assets		June 1, 2024				November 25, 2023
Current assets
Cash and cash equivalents		$	42,646			$	52,407
Short-term investments			17,814				17,775
Accounts receivable, net			13,495				13,736
Inventories, net			56,875				62,982
Recoverable income taxes			2,896				2,574
Other current assets			9,377				8,480
Total current assets			143,103				157,954
Property and equipment, net			79,802				83,981
Other long-term assets
Deferred income taxes, net			6,085				4,645
Goodwill and other intangible assets			14,213				16,067
Right of use assets under operating leases			94,748				100,888
Other			7,313				6,889
Total long-term assets			122,359				128,489
Total assets		$	345,264			$	370,424
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable		$	12,188			$	16,338
Accrued compensation and benefits			8,424				8,934
Customer deposits			23,021				22,788
Current portion of operating lease obligations			18,293				18,827
Other accrued expenses			9,056				11,003
Total current liabilities			70,982				77,890
Long-term liabilities
Post employment benefit obligations			10,758				10,207
Long-term portion of operating lease obligations			90,646				97,357
Other long-term liabilities			1,218				1,529
Total long-term liabilities			102,622				109,093
Stockholders’ equity
Common stock			43,808				43,842
Retained earnings			127,807				139,354
Additional paid-in-capital			52				93
Accumulated other comprehensive income (loss)			(7	)			152
Total stockholders' equity			171,660				183,441
Total liabilities and stockholders’ equity		$	345,264			$	370,424

 

 

Table 3

BASSETT FURNITURE INDUSTRIES, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows - unaudited

(In thousands)

 

		Six Months
		June 1, 2024				May 27, 2023
Operating activities:
Net income (loss)		$	(8,394	)		$	3,521
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization			5,291				4,909
Non-cash asset impairment charges			5,515				-
Gain on revaluation of contingent consideration			-				(1,013	)
Inventory valuation charges			3,879				2,475
Deferred income taxes			(1,440	)			392
Other, net			689				1,388
Changes in operating assets and liabilities:
Accounts receivable			241				3,005
Inventories			2,228				15,145
Other current and long-term assets			(1,217	)			953
Right of use assets under operating leases			8,707				9,105
Customer deposits			233				(12,022	)
Accounts payable and other liabilities			(6,930	)			(8,715	)
Obligations under operating leases			(10,721	)			(10,255	)
Net cash provided by (used in) operating activities			(1,919	)			8,888
Investing activities:
Purchases of property and equipment			(3,683	)			(7,405	)
Proceeds from disposal of discontinued operations, net			-				1,000
Other			(383	)			(637	)
Net cash used in investing activities			(4,066	)			(7,042	)
Financing activities:
Cash dividends			(3,153	)			(2,832	)
Other issuance of common stock			179				177
Repurchases of common stock			(489	)			(3,450	)
Taxes paid related to net share settlement of equity awards			(161	)			(109	)
Repayments of finance lease obligations			(153	)			(137	)
Net cash used in financing activities			(3,777	)			(6,351	)
Effect of exchange rate changes on cash and cash equivalents			1				(42	)
Change in cash and cash equivalents			(9,761	)			(4,547	)
Cash and cash equivalents - beginning of period			52,407				61,625
Cash and cash equivalents - end of period		$	42,646			$	57,078

 

 

Table 4

BASSETT FURNITURE INDUSTRIES, INC. AND SUBSIDIARIES

Segment Information - unaudited

(In thousands)

 

		Quarter Ended								Six Months
		June 1, 2024				May 27, 2023				June 1, 2024				May 27, 2023
Sales Revenue
Wholesale sales of furniture and accessories		$	52,609			$	61,774			$	107,310			$	131,658
Less: Sales to retail segment			(20,751	)			(24,330	)			(44,514	)			(54,429	)
Wholesale sales to external customers			31,858				37,444				62,796				77,229
Retail sales of furniture and accessories			50,468				60,778				104,222				125,740
Corporate & Other - Noa Home (1)			1,084				2,297				2,946				5,248
Consolidated net sales of furniture and accessories		$	83,410			$	100,519			$	169,964			$	208,217
Income (Loss) before Income Taxes
Income (Loss) from Operations
Wholesale		$	5,687			$	7,005			$	12,446			$	15,999
Retail			(2,222	)			755				(3,834	)			2,285
Net expenses - Corporate and other (1)			(6,942	)			(6,949	)			(14,537	)			(14,720	)
Inter-company elimination			530				656				621				605
Asset impairment charges			(5,515	)			-				(5,515	)
Gain on revaluation of contingent consideration			-				1,013				-				1,013
Consolidated income (loss) from operations			(8,462	)			2,480				(10,819	)			5,182
Interest income			627				569				1,383				721
Other loss, net			(276	)			(505	)			(380	)			(1,072	)
Consolidated income (loss) before income taxes		$	(8,111	)		$	2,544			$	(9,816	)		$	4,831

 

(1) Corporate and Other includes the operations of Noa Home Inc. along with the shared  Corporate costs that are benefiting both the Wholesale and Retail segments.

 

 

Table 5

BASSETT FURNITURE INDUSTRIES, INC. AND SUBSIDIARIES

Adjusted Gross Profit

(In thousands)

 

		Quarter Ended																Six Months Ended
		June 1, 2024								May 27, 2023								June 1, 2024								May 27, 2023
						Percent of								Percent of								Percent of								Percent of
		Amount				Net Sales				Amount				Net Sales				Amount				Net Sales				Amount				Net Sales
Gross profit as reported		$	43,760				52.5	%		$	52,833				52.6	%		$	91,627				52.5	%		$	110,030				52.8	%
Additional inventory valuation charges			2,701				3.2	%			1,003				1.0	%			2,701				1.6	%			1,003				0.5	%
Gross profit as adjusted		$	46,461				55.7	%		$	53,836				53.6	%		$	94,328				55.5	%		$	111,033				53.3	%

 

v3.24.2

Document And Entity Information	Jul. 10, 2024
Document Information [Line Items]
Entity, Registrant Name	BASSETT FURNITURE INDUSTRIES, INCORPORATED
Document, Type	8-K
Document, Period End Date	Jul. 10, 2024
Entity, Incorporation, State or Country Code	VA
Entity, File Number	000-00209
Entity, Tax Identification Number	54-0135270
Entity, Address, Address Line One	3525 Fairystone Park Highway
Entity, Address, City or Town	Bassett
Entity, Address, State or Province	VA
Entity, Address, Postal Zip Code	24055
City Area Code	276
Local Phone Number	629-6000
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock
Trading Symbol	BSET
Security Exchange Name	NASDAQ
Entity, Emerging Growth Company	false
Amendment Flag	false
Entity, Central Index Key	0000010329

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