Bassett posts loss; sales drop 21.8%
By Furniture Today Staff -- Furniture Today, October 7, 2001
Bassett, Va. — Full-line manufacturer/importer Bassett Furniture Inds. lost $2.8 million on sales of $71.3 million in its third quarter ended Aug. 25. Sales were down 21.8% from last year's third quarter, when Bassett netted $4.3 million.
Year-to-date sales fell 18.3% to $227.6 million, and the loss was $1.1 million. In fiscal 2000, the company netted $13.2 million on sales of $278.5 million during the first nine months.
In the third quarter, $4.4 million of pretax restructuring and non-recurring charges affected the bottom line. Bassett anticipates it will incur $500,000 in similar charges during the fourth quarter.
Year-to-date restructuring charges total $6.6 million, stemming from the closing of three domestic wood plants, including fixed asset write-downs and severance costs for terminated employees. Bassett expects to save about $10 million a year through the closings.
Third-quarter results were in line with expectations, said Rob Spilman, president and chief executive officer.
"We are pleased with the progress we have made on reducing inventory and accounts receivable levels," he said. "We expect that soft business conditions in the industry will continue to impact operating results for the remainder of 2001."
Spilman said long-term prospects remain sound despite the Sept. 11 terrorist attacks. Beyond cutting interest rates, the Federal Reserve has supplied record amounts of money to the banking system to cushion the impact and stabilize the economy, he said.
Capital management remains a focus at Bassett, which so far this year has reduced inventories and receivables by $27 million, trimming $8 million from inventories in the third quarter alone. As a result, the company has cut debt from $45 million on Nov. 25, 2000, to $13 million at the end of the latest quarter.
Bassett will continue to focus distribution on Bassett Furniture Direct stores, galleries, and its Five Star partnerships with independent dealers. The company now has 63 BFD stores, and plans to open seven more by year's end.
| 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 8/25 | 2001 | 2000 | Change | |
| (a) Includes pretax gains on the sale of property and equipment of $985,000 in the 2001 quarter and $4 million in the 2001 nine months, pretax restructuring charges of $4 million in the 2001 quarter and $6.6 million in the 2001 nine months, and income tax benefits of $1.5 million in the 2001 quarter and $747,000 in the 2001 nine months. (b) Includes a $364,000 extraordinary loss, the cumulative effect of an accounting change. | ||||
| Sales | $71,290,000 | $91,155,000 | (21.8%) | |
| Operating income | (2,648,000) | 2,262,000 | — | |
| Net income | (a)(2,834,000) | 4,305,000 | — | |
| Earnings per share | (0.24) | 0.37 | — | |
| 9 months ended 8/25 | 2001 | 2000 | Change | |
| Sales | $227,608,000 | $278,542,000 | (18.3%) | |
| Operating income | (3,919,000) | 8,040,000 | — | |
| Net income | (a)(1,120,000) | (b)13,174,000 | — | |
| Earnings per share | (0.10) | 1.11 | — | |
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