Bassett post $2.7M loss in 3Q; sales dip just 1%
By Larry Thomas -- Furniture Today, October 19, 2008
BASSETT, Va. — Bassett Furniture Inds. said its sales declined less than 1% in its third fiscal quarter, but the company recorded a net loss of $2.7 million due largely to an increase in its bad debt reserve.
The company said retail business condition weakened noticeably during the final weeks of the quarter, which ended Aug. 30.
Sales for the quarter totaled $70.2 million, compared with $70.5 million in the comparable quarter in 2007.
The most recent quarter's loss, which equals 23 cents per share, compares with net income of $676,000 or 6 cents per share in last year's third fiscal quarter.
During the most recent quarter, the company said it increased its bad debt reserve by $3.2 million due to the “impact that the prolonged weak retail environment is having on certain of the company's dealers.”
“Despite our overall disappointing results, we believe that progress was made in key areas of our operations,” said Rob Spilman, president and CEO. “We continue to show improved gross margins in both the wholesale and retail divisions, and our new product introductions have been well received.”
At the end of the quarter, 120 Bassett Furniture Direct stores were in operation, including 29 company-owned locations. Three stores were opened during the quarter but 10 were closed, and the company said three to five additional stores probably will close before the end of the year.
For the nine months ended Aug. 30, sales rose 3.3% to $226.6 million. The company recorded a net loss of $2.5 million or 22 cents per share, compared with a loss of $5.9 million or 50 cents per share in the comparable period in 2007.
| 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. | |||
| (a) Includes net restructuring and asset impairment charges and unusual gains of a negative $240,000 in the 2008 13 weeks, a positive $718,000 in the 2008 40 weeks, and a negative $5.5 million in the 2007 39 weeks. Also includes proxy defense costs of $1.4 million in the 2008 40 weeks, and lease exit costs of $640,000 in the 2008 13 weeks and 40 weeks, and $1.9 million in the 2007 39 weeks. (b) Year to date is 40 weeks in 2008 and 39 weeks in 2007. |
|||
| 13 weeks ended 8/30 | 2008 | 2007 | Change |
| Sales | $70,159,000 | $70,497,000 | (0.5%) |
| Operating income | (223,000) | (1,453,000) | — |
| Net income (a) | (2,652,000) | 676,000 | — |
| Earnings per share | (0.23) | 0.06 | — |
| 40 weeks ended 8/30 (b) | 2008 | 2007 | Change |
| Sales | $226,620,000 | $219,349,000 | 3.3% |
| Operating income | 7,353,000 | (7,078,000) | — |
| Net income (a) | (2,528,000) | (5,931,000) | — |
| Earnings per share | (0.22) | (0.50) | — |
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