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Bassett's sales decline 4.1% in 4Q but rise 7.6% for year

Larry Thomas -- Furniture Today, January 30, 2012

BASSETT, Va. - Bassett Furniture Inds. said sales fell 4.1% in the fiscal fourth quarter ended Nov. 26, but the case goods and upholstery major posted a profit of $633,000.
     The company said the sales decline was due largely to having fewer licensee-operated Bassett Home Furnishings stores. Sales to company-owned stores and independent furniture retailers - other than Bassett stores - increased 9%.
     "In order to reduce accounts receivable exposure from underperforming retail licensees, the company ultimately ended 2011 with 15 fewer licensed stores than at year end 2010," said Rob Spilman, president and CEO. "This reduction in store count was responsible for 97% of the quarter's decline in wholesale sales."
     Delivered sales at company-owned stores rose 13%, with a 4.9% comparable-store increase, he said.
     The company ended its fiscal year on Nov. 26 with 49 company-owned stores and 39 licensee-owned stores. It has since opened one company-owned store.
     Total sales for the most recent quarter were $63.3 million. That was down from $66 million in the same quarter a year earlier.
     The quarter's net income, which equals 6 cents per share, was below income of $1.94 million, or 17 cents per share, in last year's fourth fiscal quarter.
     Much of the decline was due to an income tax expense of $776,000. In the comparable 2010 quarter, Bassett recorded an income tax benefit of $94,000.
     For the fiscal year, sales were $253.2 million, up 7.6% from $235.3 million the previous year.
     Net income for the year, which included an $85.5 million gain on the sale of its stake in the International Home Furnishings Center, was $55.3 million or $4.79 per share. That compares with a net loss of $2 million or 17 cents per share the previous year.
     "The emphasis has now squarely shifted to fine tuning the company's operating performance," Spilman said. "We made progress this quarter by improving corporate retail results, increasing wholesale margins and reducing bad debt charges."
     He said the company has now had five consecutive years of improved results in its retail division.
     "Once again, there was tremendous activity in our corporate retail division in 2011 as we acquired nine licensee stores and closed seven of our own. Against that backdrop, the 39% improvement in year over year operating results was impressive. Our team continues to streamline costs, upgrade the caliber of our design staff, and offer a high level of service to our consumers," said Spilman.

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 11/26	2011	2010	Change
Sales	$63,266,000	$65,991,000	(4.1%)
Operating income	1,900,000	2,234,000	(15.0%)
Net income (a) (b)	633,000	1,941,000	(67.4%)
Earnings per share	0.06	0.17	(64.7%)
Year ended 11/26	2011	2010	Change
Sales	$253,208,000	$235,254,000	7.6%
Operating income	5,543,000	1,880,000	194.8%
Net income (c)	55,342,000	(2,002,000)	-
Earnings per share	4.79	(0.17)	-
(a) Includes income from Continued Dumping & Subsidy Offset Act of $765,000 in 2011 and $488,000 in 2010. (b) Includes income tax expense of $776,000 in 2011 and income tax benefit of $94,000 in 2010. (c) Includes bad debt and notes receivable charges of $13.5 million; licensee debt cancellation charges of $6.45 million; restructuring and asset impairment charges of $2.5 million; lease exit costs of $3.73 million; and gain on sale of affiliate of $85.5 million in 2011.

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Bassett Furniture posts profit despite 4.2% sales decline in 4Q

Jan 24, 2012

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