Bassett 2Q sales down 14%
By Heath E. Combs -- Furniture Today, July 9, 2007
Bassett, Va. — Bassett Furniture Inds. said last week it lost $2.4 million in its fiscal second quarter, ended May 26, as sales declined 14% to $75.4 million because of soft retail conditions.
In the same quarter last year, the company had a profit of $2.8 million.
Excluding restructuring, lease exit and other one-time charges, results would have been about break-even, the company said, which would represent a $2 million improvement over the results for the first quarter of 2007.
One of the one-time charges was a $1 million item for the cost of downsizing its High Point showroom. The company will reduce its space in the International Home Furnishings Center by about half, leaving it with about 35,000 square feet of space, said Barry Safrit, chief financial officer.
One reason Bassett will need less space is that it will show new product at a dealer conference for Bassett Furniture Direct store operators, Safrit said. Last year, the company reported that 72% of its wholesale shipments went to BFD stores.
"These are truly difficult times for our industry and our results for the second quarter reflect that," said Rob Spilman Jr., Bassett president and CEO.
"We continue to believe the initiatives we have in place to improve our store program, combined with actions we have and are taking to reduce our cost structure, will make us a better company and coupled with a better overall retail environment should lead to improved operating results. An additional challenge will be repositioning our upholstery fabric line in light of the recent financial difficulties of two of our key suppliers," Spilman said.
Net sales for Bassett's wholesale segment were $63.4 million, 16% below the $75.4 million in sales for second quarter 2006.
About 46% of wholesale shipments in the first half were imported products compared with 44% in the first half of 2006.
Sales from company-owned stores were up about 5% to $21.9 million. The stores incurred an operating loss of $2.7 million, compared with a $2.6 million loss in second quarter 2006.
The loss included about $400,000 from two Boston area stores acquired at the beginning of the quarter.
So far this year, Bassett has reduced inventories by $6.2 million because of slower sales and improved inventory management, the company 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. | |||
| 13 weeks ended 5/26 | 2007 | 2006 | Change |
| (a) Includes restructuring and asset impairment charges of $1.9 million in the 2007 quarter and $5.5 million in the 2007 half, and lease exit costs of $1.9 million in the 2007 quarter and half. | |||
| Sales | $75,432,000 | $87,663,000 | (14.0%) |
| Operating income | (2,112,000) | 1,070,000 | — |
| Net income (a) | (2,420,000) | 2,833,000 | — |
| Earnings per share | (0.20) | 0.24 | — |
| 26 weeks ended 5/26 | 2007 | 2006 | Change |
| Sales | $148,852,000 | $174,152,000 | (14.5%) |
| Operating income | (5,625,000) | 2,268,000 | — |
| Net income (a) | (6,607,000) | 5,013,000 | — |
| Earnings per share | (0.56) | 0.42 | — |
