Bassett Announces Fiscal First Quarter Results
BASSETT, Va., April 03, 2024 (GLOBE NEWSWIRE) -- Bassett Furniture Industries, Inc. (Nasdaq: BSET) announced today its results of operations for its first quarter ended March 2, 2024.
Fiscal 2024 First Quarter Highlights
(Dollars in millions)
Sales | Operating Income (Loss) | ||||||||||||||||||||||||
1st Qtr | Dollar | % | 1st Qtr | % of | 1st Qtr | % of | |||||||||||||||||||
2024 | 2023 | Change | Change | 2024 | Sales | 2023 | Sales | ||||||||||||||||||
Consolidated (1) | $ | 86.6 | $ | 107.7 | $ | (21.1 | ) | -19.6 | % | $ | (2.4 | ) | -2.8 | % | $ | 2.7 | 2.5 | % | |||||||
Wholesale | $ | 54.7 | $ | 69.9 | $ | (15.2 | ) | -21.7 | % | $ | 6.8 | 12.4 | % | $ | 9.0 | 12.9 | % | ||||||||
Retail | $ | 53.8 | $ | 65.0 | $ | (11.2 | ) | -17.2 | % | $ | (1.6 | ) | -3.0 | % | $ | 1.5 | 2.3 | % | |||||||
Corporate & Other (2) | $ | 1.9 | $ | 3.0 | $ | (1.1 | ) | -36.7 | % | $ | (7.6 | ) | N/A | $ | (7.8 | ) | N/A | ||||||||
(1) Our consolidated results include certain intercompany eliminations. 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. | |||||||||||||||||||||||||
As we once again compared to the inflated sales of the pandemic period, our consolidated sales dropped by
We produced an operating loss of
Despite producing a record retail gross margin for the quarter, corporate retail posted a
There are currently no new corporately owned stores planned for 2024, although we are performing due diligence in several markets. Our attention is now focused on a refurbishment program for the existing fleet, which will begin in earnest this summer. Coming out of the pandemic, corporate retail posted 14 consecutive quarters of profitability; several quarters were at record levels, albeit admittedly fueled by an unsustainable tailwind of written business. The pendulum of consumer preferences has since swung dramatically away from purchases surrounding the home, not to mention several quarters of a weak housing market. While our gross margin was at record levels, we were not able to generate enough sales to overcome the burden of our fixed costs to post a profit for the quarter. With our lean organization, we are committed to returning to a consistently profitable corporate retail network, no matter what the economy throws at us.
Total wholesale revenue declined by
Approximately
In short, the Design Studio is a smaller version of the BDC built almost entirely around the display of our Premier Custom Upholstery program. For a comparatively modest financial commitment, the dealer enjoys a product that is well proven at retail and a program that includes several of the store elements found in the BDC program complete with a compelling in-store technology package. We are confident that the return on investment for the retailer will be quite strong as our Premier Custom Upholstery display model has been successfully executed in the field for many years. Thus far, we have brought 17 Bassett Design Studio accounts into the fold. Our initial target is 100 accounts and we will make presentations on the Studio concept by featuring the 1,000 square foot footprint in our showroom at the Spring Furniture Market next week in High Point, North Carolina.
We used
Robert H. Spilman, Jr., Chairman and CEO
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)
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 first 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.
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
Table 1 | ||||||||||||
BASSETT FURNITURE INDUSTRIES, INC. AND SUBSIDIARIES | ||||||||||||
Condensed Consolidated Statements of Operations – unaudited | ||||||||||||
(In thousands, except for per share data) | ||||||||||||
Quarter Ended | ||||||||||||
March 2, 2024 | February 25, 2023 | |||||||||||
Percent of | Percent of | |||||||||||
Amount | Net Sales | Amount | Net Sales | |||||||||
Net sales of furniture and accessories | $ | 86,554 | 100.0 | % | $ | 107,698 | 100.0 | % | ||||
Cost of furniture and accessories sold | 38,687 | 44.7 | % | 50,501 | 46.9 | % | ||||||
Gross profit | 47,867 | 55.3 | % | 57,197 | 53.1 | % | ||||||
Selling, general and administrative expenses | 50,224 | 58.0 | % | 54,495 | 50.6 | % | ||||||
Income (loss) from operations | (2,357 | ) | -2.7 | % | 2,702 | 2.5 | % | |||||
Interest income | 756 | 1.6 | % | 152 | 0.3 | % | ||||||
Other loss, net | (104 | ) | -0.1 | % | (567 | ) | -0.5 | % | ||||
Income (loss) before income taxes | (1,705 | ) | -2.0 | % | 2,287 | 2.1 | % | |||||
Income tax expense (benefit) | (512 | ) | -0.6 | % | 842 | 0.8 | % | |||||
Net income (loss) | (1,193 | ) | -1.4 | % | 1,445 | 1.3 | % | |||||
Basic and diluted earnings (loss) per share | $ | (0.14 | ) | $ | 0.16 |
Table 2 | ||||||||
BASSETT FURNITURE INDUSTRIES, INC. AND SUBSIDIARIES | ||||||||
Condensed Consolidated Balance Sheets | ||||||||
(In thousands) | ||||||||
(Unaudited) | ||||||||
Assets | March 2, 2024 | November 25, 2023 | ||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 40,609 | $ | 52,407 | ||||
Short-term investments | 17,775 | 17,775 | ||||||
Accounts receivable, net | 13,942 | 13,736 | ||||||
Inventories, net | 62,957 | 62,982 | ||||||
Recoverable income taxes | 2,206 | 2,574 | ||||||
Other current assets | 12,016 | 8,480 | ||||||
Total current assets | 149,505 | 157,954 | ||||||
Property and equipment, net | 83,590 | 83,981 | ||||||
Other long-term assets | ||||||||
Deferred income taxes, net | 5,567 | 4,645 | ||||||
Goodwill and other intangible assets | 16,069 | 16,067 | ||||||
Right of use assets under operating leases | 99,390 | 100,888 | ||||||
Other | 7,324 | 6,889 | ||||||
Total long-term assets | 128,350 | 128,489 | ||||||
Total assets | $ | 361,445 | $ | 370,424 | ||||
Liabilities and Stockholders’ Equity | ||||||||
Current liabilities | ||||||||
Accounts payable | $ | 14,635 | $ | 16,338 | ||||
Accrued compensation and benefits | 7,679 | 8,934 | ||||||
Customer deposits | 22,763 | 22,788 | ||||||
Current portion of operating lease obligations | 17,530 | 18,827 | ||||||
Other accrued expenses | 10,678 | 11,003 | ||||||
Total current liabilities | 73,285 | 77,890 | ||||||
Long-term liabilities | ||||||||
Post employment benefit obligations | 10,678 | 10,207 | ||||||
Long-term portion of operating lease obligations | 95,312 | 97,357 | ||||||
Other long-term liabilities | 1,532 | 1,529 | ||||||
Total long-term liabilities | 107,522 | 109,093 | ||||||
Stockholders’ equity | ||||||||
Common stock | 43,883 | 43,842 | ||||||
Retained earnings | 136,588 | 139,354 | ||||||
Additional paid-in-capital | 175 | 93 | ||||||
Accumulated other comprehensive income (loss) | (8 | ) | 152 | |||||
Total stockholders' equity | 180,638 | 183,441 | ||||||
Total liabilities and stockholders’ equity | $ | 361,445 | $ | 370,424 |
Table 3 | ||||||||
BASSETT FURNITURE INDUSTRIES, INC. AND SUBSIDIARIES | ||||||||
Consolidated Statements of Cash Flows – unaudited | ||||||||
(In thousands) | ||||||||
Three Months | ||||||||
March 2, 2024 | February 25, 2023 | |||||||
Operating activities: | ||||||||
Net income (loss) | $ | (1,193 | ) | $ | 1,445 | |||
Adjustments to reconcile net income (loss) to net cash provided by (used in) | ||||||||
operating activities: | ||||||||
Depreciation and amortization | 2,664 | 2,340 | ||||||
Deferred income taxes | (922 | ) | 132 | |||||
Other, net | 302 | 852 | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (206 | ) | (470 | ) | ||||
Inventories | 25 | 6,466 | ||||||
Other current and long-term assets | (3,167 | ) | 30 | |||||
Right of use assets under operating leases | 4,375 | 4,587 | ||||||
Customer deposits | (24 | ) | (4,923 | ) | ||||
Accounts payable and other liabilities | (3,374 | ) | (4,596 | ) | ||||
Obligations under operating leases | (6,219 | ) | (5,300 | ) | ||||
Net cash provided by (used in) operating activities | (7,739 | ) | 563 | |||||
Investing activities: | ||||||||
Purchases of property and equipment | (2,076 | ) | (3,341 | ) | ||||
Other | (270 | ) | (563 | ) | ||||
Net cash used in investing activities | (2,346 | ) | (3,904 | ) | ||||
Financing activities: | ||||||||
Cash dividends | (1,573 | ) | (1,421 | ) | ||||
Other issuance of common stock | 86 | 80 | ||||||
Repurchases of common stock | – | (1,844 | ) | |||||
Taxes paid related to net share settlement of equity awards | (161 | ) | (109 | ) | ||||
Repayments of finance lease obligations | (74 | ) | (69 | ) | ||||
Net cash used in financing activities | (1,722 | ) | (3,363 | ) | ||||
Effect of exchange rate changes on cash and cash equivalents | 9 | (29 | ) | |||||
Change in cash and cash equivalents | (11,798 | ) | (6,733 | ) | ||||
Cash and cash equivalents – beginning of period | 52,407 | 61,625 | ||||||
Cash and cash equivalents – end of period | $ | 40,609 | $ | 54,892 |
Table 4 | ||||||||
BASSETT FURNITURE INDUSTRIES, INC. AND SUBSIDIARIES | ||||||||
Segment Information – unaudited | ||||||||
(In thousands) | ||||||||
Quarter Ended | ||||||||
March 2, 2024 | February 25, 2023 | |||||||
Sales Revenue | ||||||||
Wholesale sales of furniture and accessories | $ | 54,700 | $ | 69,884 | ||||
Less: Sales to retail segment | (23,762 | ) | (30,099 | ) | ||||
Wholesale sales to external customers | 30,938 | 39,785 | ||||||
Retail sales of furniture and accessories | 53,754 | 64,962 | ||||||
Corporate & Other (1) | 1,862 | 2,951 | ||||||
Consolidated net sales of furniture and accessories | $ | 86,554 | $ | 107,698 | ||||
Income (Loss) from Operations | ||||||||
Wholesale | $ | 6,760 | $ | 8,994 | ||||
Retail | (1,612 | ) | 1,530 | |||||
Net expenses – Corporate and other (1) | (7,595 | ) | (7,771 | ) | ||||
Inter-company elimination | 90 | (51 | ) | |||||
Consolidated | $ | (2,357 | ) | $ | 2,702 | |||
(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. |
