Bassett posts loss; sales slip 13.6%
By Furniture Today Staff -- Furniture Today, April 1, 2003
Bassett, Va. — Full-line manufacturer, importer and retail franchiser Bassett Furniture Inds. said first-quarter sales of $73.3 million were down 13.6% from the same period last year.
The company attributed the sales decrease to soft conditions in the industry and previously disclosed sales decreases to a major customer, JCPenney. Fiscal 2002's first quarter also included an additional week of shipments.
Bassett lost $1.3 million in the first quarter, compared to net income of $2.9 million in fiscal 2002's first three months. Gross margins improved due to the inclusion of corporate store gross profit, cost reductions initiated earlier this year and improved margins in the upholstery and import divisions. But a previously announced $3.2 million charge related to the closing of Bassett's Dublin, Ga., case goods plant resulted in an overall loss for the period.
"Business conditions continue to be challenging," said Robert Spilman Jr., president and chief executive officer. "The cost-reduction actions we have taken have helped to offset lower sales levels and will position us for greater profitability in the future.
"We continue to be focused on our stores — both adding stores and improving our overall program. I am particularly excited about the new product introductions for the coming months, especially American Hewn," which is debuting at this week's market.
The Bassett Furniture Direct store program continued to grow, with 88 stores currently in operation. Licensees opened four stores in the first quarter, and the company expects licensees to open six stores in the second quarter, with a total of 20 new stores planned for fiscal 2003. Sales to BFD stores represented 45% of total Bassett sales in 2002 and are planned to be approximately 55% of the company's sales in 2003. Sales to BFD stores were 50% of sales for the first quarter of 2003.
Bassett borrowed $4 million during the first quarter to support increased inventory levels needed by the company's growing import division, in addition to funding an increase in accounts receivable. The increase in accounts receivable is reflective of the general economic downturn, the company said.
Bassett also used $5 million of investment proceeds to fund capital spending, BFD growth and as working capital.
| Bassett Furniture Inds. | |||
|---|---|---|---|
| Owns Bassett Glass, Bassett Motion, Bassett Supply and Weiman | |||
| Earnings per share are fully diluted, and all figures in parentheses are loses or declines. | |||
| Quarter ended 3/1(a) | 2003 | 2002 | Change |
| (a) The 2003 quarter is 13 weeks; the 2002 quarter is 14 weeks. (b) Includes a $3.2 million pretax restructuring and impaired fixed asset charge and a $517,000 income tax benefit. | |||
| Sales | $73,282,000 | $84,788,000 | (13.6%) |
| Operating income | 527,000 | 3,000,000 | (82.4%) |
| Net income | (b)(1,330,000) | 2,912,000 | — |
| Earnings per share | (0.11) | 0.25 | — |
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