Bassett 4Q sales down 3.4%
Powell Slaughter -- Furniture Today, January 31, 2005
Bassett, Va. — Bassett Furniture Inds. reported fourth-quarter sales of $80.1 million, down 3.4% from the prior year's quarter. In its 2004 year, which ended Nov. 27, sales for the full-line manufacturer and importer were essentially flat at $315.7 million.
Net income in the fourth quarter dropped 10.5% to $2.9 million. For the year, Bassett recorded net income of $8.2 million, compared to a $470,000 net loss in 2003.
Figures for fiscal 2004 include a $3.9 million gain on the sale of Bassett's former California upholstery facility, and recognition of $4.1 million in restructuring and impaired asset charges.
The company said it continues a transition from traditional channels of distribution to its Bassett Furniture Direct store network, which represented 60% of total wholesale shipments in 2004 compared to 53% in 2003.
Fourth-quarter shipments to BFD stores were up $20.3 million, or 13%, over 2003, offsetting attrition in other channels, including a $10.6 million decrease with JCPenney and a $9.7 million decline in sales to smaller independent furniture stores.
The BFD network continues to grow, with 116 stores in operation at the end of 2004. The company expects licensees to open 20 to 25 BFD stores in fiscal 2005, spread fairly evenly throughout the year. Bassett expects sales growth from these stores will outpace attrition in other channels.
"Overall retail conditions were fairly spotty throughout most of our fourth quarter, and, as a result we did not achieve our targeted sales or operating earnings for the quarter," said Robert H. Spilman Jr., president and CEO. "For the year, we were pleased with the improvement in our retail results, the growth of our import division, and the growth of our BFD store program."
Spilman said new bedroom, dining, juvenile and leather produce was instrumental in 2004's earnings improvement.
"We expect to see continued earnings improvement in 2005 through a combination of ... new BFD stores, initiatives in place to improve our domestic wood business, and the continued growth of our import division," he said. "Additionally, we believe our manufacturing capacity is now aligned with our BFD business and with current demand. Our primary focus in 2005 will be continuing to improve ... our BFD store program."
Bassett increased inventories $10.8 million during the year to support the introduction of collections and provide better service on key imported items. The 2004 increase follows an $11 million decrease in inventories in 2003.
For the year, the company utilized over $11 million in cash, reflecting in part the increased inventories and ongoing support of dividends. Proceeds from the sale of former manufacturing properties were reinvested in the business, primarily in retail real estate. The company also increased its investment portfolio.
| 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. | |||
| 13 weeks ended 11/27 | 2004 | 2003 | Change |
| (a) Includes pretax non-operating income of $2.6 million in the 2004 13 weeks and $1.4 million in the 2003 13 weeks. (b) Includes pretax non-operating income of $7.1 million in the 2004 52 weeks and $6.1 million in the 2003 52 weeks and pretax restructuring and impaired asset charges of $4.1 million in the 2004 52 weeks and $3.2 million in the 2003 52 weeks. The 2004 52 weeks also includes a $3.9 million pretax gain on the sale of property and the 2003 52 weeks also includes a $4.9 million extraordinary charge, the cumulative effect of an accounting change. | |||
| Sales | $80,146,000 | $82,944,000 | (3.4%) |
| Operating income | 1,009,000 | 2,384,000 | (57.7%) |
| Net income (a) | 2,868,000 | 3,205,000 | (10.5%) |
| Earnings per share | 0.24 | 0.28 | (14.3%) |
| 52 weeks ended 11/27 | 2004 | 2003 | Change |
| Sales | $315,654,000 | $316,857,000 | (0.4%) |
| Operating income | 3,897,000 | 1,970,000 | 97.8% |
| Net income (b) | 8,209,000 | (470,000) | — |
| Earnings per share | 0.69 | (0.04) | — |
