Bassett cuts net loss in 4Q
By Jay McIntosh -- Furniture Today, January 20, 2002
BASSETT, Va. — Bassett Furniture ended its fiscal year with a big improvement in operating earnings, although restructuring and other charges resulted in a net loss for the fourth quarter ended Nov. 24.
Fourth-quarter sales of $78.1 million were down 12.2% from the comparable period a year ago. For the full year, sales of $305.7 million were down 16.8%.
"In many ways we are happy to have 2001 behind us," said Rob Spilman Jr., president and chief executive officer. "It was a difficult year for us due to the overall economy and the decisions we made to close four of our facilities. We do believe we are now better positioned for improved profitability."
He said the new fiscal year started on an encouraging note with "very good" sales at licensed Bassett Furniture Direct retailers in December and January.
"We continue to focus on improving our retail programs, making it easier for our customers to do business with us, and delivering a better return for our shareholders," said Spilman.
Bassett reported a net loss of $1.5 million in the fourth quarter and $2.6 million for the year. That compares with a $3.1 million loss in the fiscal 2000 fourth quarter and earnings of $10 million for the year.
Excluding restructuring and related charges, the company said it had operating earnings of $2.5 million in the fourth quarter, compared with an $800,000 loss a year earlier. The improvement stemmed mainly from better earnings in the upholstery division, inventory-related cost reductions, and higher sales from five new Bassett Furniture Direct stores.
Aside from operations, the company had investment-related losses of $3.4 million in the fourth quarter, including a one-time charge of $1.4 million to recapitalize LRG Furniture. LRG is the Texas-based BFD licensee of which Bassett is part owner.
For fiscal 2002, Bassett expects its "other income" to be in a more normal range of $1.8 million to $2.2 million per quarter. Earnings per share for the current year are projected at $1 to $1.20.
Sales in the first quarter are expected to be in the $76 million to $80 million range, with total sales in 2002 about even with fiscal 2001. The company expects the portion of its sales through licensed BFD stores to grow from 36% in 2001 to about 45% this year. There are 71 BFD stores now, and another 15 are expected to be added this year.
| Bassett Furniture Inds. | |||
|---|---|---|---|
| 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 11/24 | 2001 | 2000 | Change |
| Sales | $78,068,000 | $88,902,000 | (12.2%) |
| Operating income | 662,000 | (4,556,000) | — |
| Net income | (a)(1,522,000) | (b)(3,131,000) | — |
| Earnings per share | (0.13) | (0.27) | — |
| Year ended 11/24 | 2001 | 2000 | Change |
| Sales | $305,676,000 | $367,444,000 | (16.8%) |
| Operating income | (3,257,000) | 3,484,000 | — |
| Net income | (a)(2,642,000) | (b)10,032,000 | — |
| Earnings per share | (0.23) | 0.85 | — |
| (a) Includes pretax gains on the sale of property and equipment of $1.3 million in the 2001 quarter and $5.3 million in the 2001 year, pretax restructuring and impaired asset charges of $313,000 in the 2001 quarter and $7 million in the 2001 year, and income tax benefits of $295,000 in the 2001 quarter and $1 million in the 2001 year. (b) Includes pretax restructuring and impaired asset charges of $6.7 million in both the 2000 quarter and year. The 2000 quarter also includes a $1.6 million income tax benefit, and the 2000 year includes a $364,000 extraordinary charge, the cumulative effect of an accounting change. | |||
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