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Jay McIntosh

Store profits lift Bassett 2Q

Bassett, Va. - Bassett Furniture said its sales rose 1.8% to $67.5 million in it second quarter, ended May 26, and the company posted a $1.6 million operating profit versus an operating loss a year ago.
     A small part of the profit - about $100,000 - came from the 50 company-owned Bassett Home Furnishings stores, the first time the retail operation has ended a quarter in the black.
     "Our corporate retail group produced a milestone achievement this quarter by producing their first ever quarterly operating profit," said Rob Spilman, Bassett's president and CEO. "This marks the fifth consecutive quarter of year over year improvement for the segment."
     Bassett's net income for the quarter was $8 million or 71 cents per share, thanks to a $9 million distribution from the U.S. government of antidumping duties paid by importers of Chinese bedroom furniture. In the comparable quarter last year, net income was $62.6 million or $5.39 per share, due mainly to an $85.5 million gain on the sale of the company's interest in High Point's International Home Furnishings Center.
     The company said the operating profit, a turnaround from a $14.3 million operating loss a year earlier (after debt writeoffs and other costs), was attributable to increased gross margins and reduced bad debt, restructuring and other expenses.
     Wholesale segment sales of $45.9 million were just barely ahead of the $45.8 million posted a year earlier, the company said.
     Company-owned store sales came to $42.6 million, up 12.6% from $38 million a year earlier, with same-store sales rising 7.9%.
     "We were pleased to achieve sales growth in our wholesale segment despite operating fewer stores than we did in the same period of fiscal 2011, primarily due to increased market share with independent furniture stores," said Spilman. "In addition, the debut of the HGTV Furniture Collection in our new HGTV showroom at the April High Point Market was very encouraging as we placed the assortment with several major new customers. These products will begin to ship in September of this year and will continue to be phased in to our dealers through the first quarter of 2013."
     He added that the company opened a new store in Paramus, N.J., in late May and plans a new store in Dallas this year.
     "Meanwhile, we will focus on the conversion of our in-store design centers to HGTV Design Studios at Bassett that will be rolled out later this summer and featured nationally on the HGTV network beginning Labor Day weekend," Spilman said.

Bassett Furniture Inds.

Owns Bassett Glass, Bassett Motion and Bassett Supply

Earnings per share are fully diluted, and all figures in parentheses are losses or declines.

Quarter ended 5/26

2012

2011

Change

Sales

$67,454,000

$66,261,000

1.8%

Operating income

2,448,000

2,318,000

5.6%

Net income (a)

8,042,000

62,546,000

(87.1%)

Earnings per share

0.71

5.39

(86.8%)

6 months ended 5/26

2012

2011

Change

Sales

$128,422,000

$130,525,000

(1.6%)

Operating income

3,123,000

3,658,000

(14.6%)

Net income (a)

7,446,000

54,292,000

(86.3%)

Earnings per share

0.67

4.69

(85.7%)

(a) Includes gain of $9 million from Continued Dumping & Subsidy Act in 2012 quarter and six months, and gain of $85.5 million on the sale of an affiliate in the 2011 quarter and six months.

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