Bassett in black as sales rise 9.7%
By Furniture Today Staff -- Furniture Today, June 30, 2002
BASSETT, Va. — Strong performance in Bassett Furniture Direct stores and in the Five Star quick-ship program boosted second-quarter sales at Bassett Furniture Inds. to $80.9 million, up 9.7% from the same period last year.
The company earned $2.9 million in the quarter ended June 1, compared to a loss of $538,000 in second-quarter 2001.
The full-line manufacturer's revenues included $2.7 million in net retail sales from six BFD stores in North Carolina and Virginia, acquired March 1 from Texas-based franchisee LRG Furniture. Bassett previously held a partial interest in the stores.
LRG still has a Bassett Furniture Direct store in Austin, Texas, three in Houston, one in San Antonio and two in Las Vegas.
For the six months, Bassett posted sales of $165.7 million and net income of $5.8 million, increases of 6% and 237.9%, respectively, over the first six months of fiscal 2001.
The upholstery and import divisions continued to improve earnings in the quarter, the company said, and the wood division posted increased earnings despite slightly lower sales. Gross margin improved over last year's quarter due to cost reductions associated with the restructuring of manufacturing completed last year and, to a lesser degree, inclusion of retail sales in 2002.
Cash flow for the first six months was on plan, enabling Bassett to repay $8.7 million of debt. Cash generated from operations was more than $14 million for the latest six months, due in part to the continued reduction in trade account receivables and other short-term receivables.
Bassett ended the second quarter with 73 BFD stores — including the six company-owned units — and plans to add eight stores in the third quarter and four in the fourth for a total of 85 stores at year's end. None of the stores slated to open in the second half will be company-owned. Bassett intends to open 15 to 20 BFD stores each year.
"Our operating earnings are headed in the right direction, but we still have a long way to go," said Rob Spilman, president and chief executive officer. "We are now focusing Bassett Furniture Direct expansion in major metropolitan areas such as New York, Chicago, Los Angeles, Washington, D.C., and Connecticut. Sales growth in these markets will be largely incremental as the company currently has only a small presence in these areas."
| • Bassett Furniture Inds.(a) | |||
|---|---|---|---|
| Owns Bassett Glass, Bassett Motion, Bassett Supply and Weiman | |||
| Earnings per share are fully diluted, and all figures in parentheses are losses or declines. | |||
| Quarter ended 6/1 | 2002 | 2001 | Change |
| Sales | $80,904,000 | $73,765,000 | 9.7% |
| Operating income | 2,629,000 | (2,629,000) | — |
| Net income | (b)2,880,000 | (c)(538,000) | — |
| Earnings per share | 0.25 | (0.05) | — |
| 6 months ended 6/1 | 2002 | 2001 | Change |
| Sales | $165,692,000 | $156,318,000 | 6.0% |
| Operating income | 5,629,000 | (1,271,000) | — |
| Net income | (b)5,792,000 | (c)1,714,000 | 237.9% |
| Earnings per share | 0.50 | 0.15 | 233.3% |
| (a) Includes the results of six Bassett Furniture Direct stores from their March 1, 2002 acquisition. (b) Includes non-operating income of $1.5 million in the 2002 quarter and $2.8 million in the 2002 six months. (c) Includes pretax restructuring charges of $819,000 in the 2001 quarter and $2.7 million in the 2001 six months. The 2001 quarter also includes a $233,000 income tax benefit and the 2001 six months also includes a $3 million pretax gain on the sale of property and equipment. | |||
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