10-Q 1 bset20220827_10q.htm FORM 10-Q bset20220827_10q.htm
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended August 27, 2022

 

OR

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from _____________________________ to _______________________

 

Commission File No. 000-00209

 

BASSETT FURNITURE INDUSTRIES, INCORPORATED

(Exact name of Registrant as specified in its charter)

 

Virginia 54-0135270

(State or other jurisdiction

of incorporation or organization)

(I.R.S. Employer

Identification No.)

                                   

3525 Fairystone Park Highway

Bassett, Virginia 24055

(Address of principal executive offices)

(Zip Code)

 

(276) 629-6000

(Registrant's telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading Symbol

 

Name of exchange on which registered

Common Stock ($5.00 par value)

 

BSET

 

NASDAQ

 

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes ☒  No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

 

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large Accelerated Filer Accelerated Filer
Non-accelerated Filer Smaller Reporting Company
    Emerging Growth Company

    

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No ☒

 

At September 23, 2022, 9,155,740 shares of common stock of the Registrant were outstanding.

 

Page 1 of 36

 

 

BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES

 

TABLE OF CONTENTS

 

ITEM   PAGE
     
PART I - FINANCIAL INFORMATION
     
1. Condensed Consolidated Financial Statements as of August 27, 2022 (unaudited) and November 27, 2021 and for the three and nine months ended August 27, 2022 (unaudited) and August 28, 2021 (unaudited)  
     
  Condensed Consolidated Statements of Income  3
     
  Condensed Consolidated Statements of Comprehensive Income 4
     
  Condensed Consolidated Balance Sheets 5
     
  Condensed Consolidated Statements of Cash Flows 6
     
  Notes to Condensed Consolidated Financial Statements 7
     
2. Management's Discussion and Analysis of Financial Condition and Results of Operations  23
     
3. Quantitative and Qualitative Disclosures About Market Risk  34
     
4. Controls and Procedures 34
     
PART II - OTHER INFORMATION
     
1. Legal Proceedings 35
     
2. Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities 35
     
3. Defaults Upon Senior Securities  35
     
6. Exhibits  35

           

Page 2 of 36

 

 

 

PART I - FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS

BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

FOR THE PERIODS ENDED AUGUST 27, 2022 AND AUGUST 28, 2021 UNAUDITED

(In thousands except per share data)

 

   

Quarter Ended

   

Nine Months Ended

 
                                 
   

August 27, 2022

   

August 28, 2021

   

August 27, 2022

   

August 28, 2021

 
                                 

Net sales of furniture and accessories

  $ 118,012     $ 104,870     $ 364,582     $ 316,522  

Cost of furniture and accessories sold

    57,240       52,263       180,479       153,426  

Gross profit

    60,772       52,607       184,103       163,096  
                                 

Selling, general and administrative expenses

    54,695       47,631       160,536       145,473  

Gain on sale of real estate

    4,595       -       4,595       -  

Income from operations

    10,672       4,976       28,162       17,623  
                                 

Other loss, net

    (594 )     (268 )     (1,850 )     (828 )

Income from continuing operations before income taxes

    10,078       4,708       26,312       16,795  
                                 

Income tax expense

    2,305       1,267       6,505       4,579  
                                 

Income from continuing operations

    7,773       3,441       19,807       12,216  
                                 

Discontinued operations:

                               

Income (loss) from operations of logistical services

    -       (565 )     1,712       1,079  

Gain on disposal (less adjustments)

    (193 )     -       53,061       -  

Income tax expense (benefit)

    (48 )     (140 )     14,261       294  
                                 

Income (loss) from discontinued operations

    (145 )     (425 )     40,512       785  
                                 

Net income

  $ 7,628     $ 3,016     $ 60,319     $ 13,001  
                                 

Basic earnings per share:

                               

Income from continuing operations

  $ 0.84     $ 0.35     $ 2.08     $ 1.24  

Income (loss) from discontinued operations

    (0.02 )     (0.04 )     4.26       0.08  

Basic and diluted earnings per share

  $ 0.82     $ 0.31     $ 6.34     $ 1.32  
                                 

Diluted earnings per share:

                               

Income from continuing operations

  $ 0.84     $ 0.35     $ 2.08     $ 1.24  

Income (loss) from discontinued operations

    (0.02 )     (0.04 )     4.26       0.08  

Diluted earnings per share

  $ 0.82     $ 0.31     $ 6.34     $ 1.32  
                                 

Regular dividends per share

  $ 0.16     $ 0.14     $ 0.44     $ 0.39  
                                 

Special dividend per share

  $ -     $ -     $ 1.50     $ 0.25  

 

The accompanying notes to condensed consolidated financial statements are an integral part of the condensed consolidated financial statements.

 

Page 3 of 36

 

 

 

PART I FINANCIAL INFORMATION CONTINUED

ITEM 1. FINANCIAL STATEMENTS

BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE PERIODS ENDED AUGUST 27, 2022 AND AUGUST 28, 2021 UNAUDITED

(In thousands)

 

   

Quarter Ended

   

Nine Months Ended

 
   

August 27, 2022

   

August 28, 2021

   

August 27, 2022

   

August 28, 2021

 
                                 

Net income

  $ 7,628     $ 3,016     $ 60,319     $ 13,001  
Other comprehensive income:                                

Amortization associated with Long Term Cash Awards (LTCA)

    33       36       99       108  

Income taxes related to LTCA

    (8 )     (9 )     (24 )     (28 )

Amortization associated with supplemental executive retirement defined benefit plan (SERP)

    31       11       93       33  

Income taxes related to SERP

    (8 )     (3 )     (24 )     (9 )
                                 

Other comprehensive income, net of tax

    48       35       144       104  
                                 

Total comprehensive income

  $ 7,676     $ 3,051     $ 60,463     $ 13,105  

 

The accompanying notes to condensed consolidated financial statements are an integral part of the condensed consolidated financial statements.

 

Page 4 of 36

 

 

PART I FINANCIAL INFORMATION CONTINUED

ITEM 1. FINANCIAL STATEMENTS

BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

AUGUST 27, 2022 AND NOVEMBER 27, 2021

(In thousands)

 

   

(Unaudited)

         

 

 

August 27, 2022

   

November 27, 2021

 
Assets                
Current assets                

Cash and cash equivalents

  $ 66,870     $ 34,374  

Short-term investments

    17,715       17,715  

Accounts receivable, net

    20,950       20,567  

Inventories

    91,681       78,004  

Recoverable income taxes

    5,427       8,379  

Current assets of discontinued operations held for sale

    -       11,064  

Other current assets

    11,104       10,181  

Total current assets

    213,747       180,284  
                 

Property and equipment, net

    75,513       69,168  
                 

Deferred income taxes

    6,045       3,189  

Goodwill and other intangible assets

    14,313       14,354  

Right of use assets under operating leases

    86,809       95,955  

Long-term assets of discontinued operations held for sale

    -       52,757  

Other

    6,260       5,953  

Total long-term assets

    113,427       172,208  

Total assets

  $ 402,687     $ 421,660  
                 

Liabilities and Stockholders Equity

               
Current liabilities                

Accounts payable

  $ 24,189     $ 23,988  

Accrued compensation and benefits

    12,809       12,639  

Customer deposits

    40,311       51,492  

Current portion operating lease obligations

    19,969       20,235  

Current liabilities of discontinued operations held for sale

    -       16,095  

Other current liabilites and accrued expenses

    12,746       9,770  

Total current liabilities

    110,024       134,219  
                 
Long-term liabilities                

Post employment benefit obligations

    13,016       12,968  

Long-term portion of operating lease obligations

    84,102       94,845  

Long-term liabilities of discontinued operations held for sale

    -       16,210  

Other long-term liabilities

    606       686  

Total long-term liabilities

    97,724       124,709  
                 
                 

Stockholders equity

               

Common stock

    46,064       48,811  

Retained earnings

    150,553       115,631  

Additional paid-in capital

    -       113  

Accumulated other comprehensive loss

    (1,678 )     (1,823 )

Total stockholders' equity

    194,939       162,732  

Total liabilities and stockholders equity

  $ 402,687     $ 421,660  

 

The accompanying notes to condensed consolidated financial statements are an integral part of the condensed consolidated financial statements.

 

Page 5 of 36

 

 

 

PART I FINANCIAL INFORMATION CONTINUED

ITEM 1. FINANCIAL STATEMENTS

BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE PERIODS ENDED AUGUST 27, 2022 AND AUGUST 28, 2021 UNAUDITED

(In thousands)

 

   

Nine Months Ended

 
   

August 27, 2022

   

August 28, 2021

 
Operating activities:                

Net income

  $ 60,319     $ 13,001  

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

               

Depreciation and amortization

    8,732       10,458  

Gain on disposal of discontinued operations

    (53,061 )     -  

Gain on sale of property and equipment

    (4,603 )     (68 )

Deferred income taxes

    (2,856 )     1,053  

Other, net

    1,425       478  

Changes in operating assets and liabilities:

               

Accounts receivable

    57       (4,329 )

Inventories

    (13,677 )     (18,941 )

Other current assets

    2,961       (100 )

Right of use assets under operating leases

    15,881       18,857  

Customer deposits

    (11,181 )     11,341  

Accounts payable and other liabilities

    1,227       2,750  

Obligations under operating leases

    (17,519 )     (20,823 )

Net cash provided by (used in) operating activities

    (12,295 )     13,677  
                 
Investing activities:                

Purchases of property and equipment

    (17,266 )     (7,141 )

Proceeds from sales of property and equipment

    8,226       101  

Proceeds from the disposal of discontinued operations, net

    84,534       -  

Other

    (1,428 )     (1,173 )

Net cash provided by (used in) investing activities

    74,066       (8,213 )
                 
Financing activities:                

Cash dividends

    (18,734 )     (6,321 )

Proceeds from the exercise of stock options

    -       42  

Other issuance of common stock

    340       266  

Repurchases of common stock

    (10,263 )     (5,566 )

Taxes paid related to net share settlement of equity awards

    -       (219 )

Repayments of finance lease obligations

    (618 )     (854 )

Net cash used in financing activities

    (29,275 )     (12,652 )

Change in cash and cash equivalents

    32,496       (7,188 )

Cash and cash equivalents - beginning of period

    34,374       45,799  
              .  

Cash and cash equivalents - end of period

  $ 66,870     $ 38,611  

 

The accompanying notes to condensed consolidated financial statements are an integral part of the condensed consolidated financial statements.

 

Page 6 of 36

 

PART I-FINANCIAL INFORMATION-CONTINUED

BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-UNAUDITED

AUGUST 27, 2022

(Dollars in thousands except share and per share data)

 

 

1. Basis of Presentation

 

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and footnotes required by accounting principles generally accepted in the United States (“GAAP”) for complete financial statements. In our opinion, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included.

 

References to “ASC” included hereinafter refer to the Accounting Standards Codification established by the Financial Accounting Standards Board (“FASB”) as the source of authoritative GAAP.

 

The condensed consolidated financial statements include the accounts of Bassett Furniture Industries, Incorporated (“Bassett”, “we”, “our”, or the “Company”) and our wholly-owned subsidiaries of which we have a controlling interest. In accordance with ASC Topic 810, we have evaluated our licensees and certain other entities to determine whether they are variable interest entities (“VIEs”) of which we are the primary beneficiary and thus would require consolidation in our financial statements. To date we have concluded that none of our licensees represent VIEs. We were the primary beneficiary of one VIE by virtue of our control over the activities that most significantly impact the entity’s economic performance. This VIE was created to effect a Section 1031 like-kind exchange involving the purchase of real property in the state of Florida and the sale of real property in the state of Texas (see Note 13, Retail Real Estate Transactions). Subsequent to the completion of the exchange transactions during the third quarter of fiscal 2022, the sole equity interest in the VIE was transferred to Bassett and the entity is now consolidated as a wholly owned subsidiary.

 

Revenue from the sale of furniture and accessories is reported in the accompanying condensed consolidated statements of income net of estimates for returns and allowances.

 

On January 31, 2022, we entered into a definitive agreement to sell substantially all of the assets of our wholly-owned subsidiary, Zenith Freight Lines, LLC (“Zenith”) to J.B. Hunt Transport Services, Inc. (“J.B. Hunt”). The sale was completed on February 28, 2022. Accordingly, the operations of our logistical services segment as well as the gain realized upon disposal are presented in the accompanying condensed consolidated statements of income as discontinued operations, and the assets sold to and liabilities assumed by J.B. Hunt are presented in the accompanying condensed consolidated balance sheet as of November 27, 2021 as assets and liabilities of discontinued operations held for sale. See Note 12, Discontinued Operations, for additional information. Costs incurred by Bassett for logistical services performed for Bassett by Zenith are included in selling, general and administrative expenses.

 

Recently Adopted Accounting Pronouncements

 

Effective as of the beginning of fiscal 2022, we have adopted Accounting Standards Update No. 2019-12 – Income Taxes (Topic 740) Simplifying the Accounting for Income Taxes. The amendments in ASU 2019-12 eliminate certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. ASU 2019-12 also clarifies and simplifies other aspects of the accounting for income taxes. The amendments in ASU 2019-12 became effective for us as of the beginning of our 2022 fiscal year. We adopted ASU 2019-12 on a prospective basis and the adoption did not have a material impact upon our financial condition or results of operations.

 

Certain prior year amounts have been reclassified to conform with the current year presentation.

 

 

2. Interim Financial Presentation

 

All intercompany accounts and transactions have been eliminated in the condensed consolidated financial statements. The results of operations for the three and nine months ended August 27, 2022 are not necessarily indicative of results for the full fiscal year. These interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended November 27, 2021.

 

Page 7 of 36

 

PART I-FINANCIAL INFORMATION-CONTINUED

BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-UNAUDITED

AUGUST 27, 2022

(Dollars in thousands except share and per share data)

 

Income Taxes

 

We calculate an anticipated effective tax rate for the year based on our annual estimates of pretax income and use that effective tax rate to record our year-to-date income tax provision.  Any change in annual projections of pretax income could have a significant impact on our effective tax rate for the respective quarter.

 

Our effective tax rate was 22.8% and 25.6% for the three and nine months ended August 27, 2022, respectively, and 27.2% and 27.3% for the three and nine months ended August 28, 2021, respectively. These effective rates differ from the federal statutory rate of 21% primarily due to the effects of state income taxes and various permanent differences, including those associated with Company-owned life insurance, and tax of $552 for the nine months ended August 27, 2022 associated with non-deductible goodwill written off in connection with our sale of Zenith and included in income tax on discontinued operations, and tax deficiencies of $117 during the nine months ended August 28, 2021 arising from stock-based compensation.

 

Cash paid for income taxes, net of refunds, during the nine months ended August 27, 2022 was $20,722, including the estimated tax payable on the taxable gain realized on our sale of Zenith. Cash paid for income taxes, net of refunds, during the nine months ended August 28, 2021 was $624. These cash payments for income taxes are included in cash flows from operating activities in the accompanying condensed consolidated statement of cash flows.

 

 

3. Financial Instruments and Investments

 

Financial Instruments

 

Our financial instruments include cash and cash equivalents, short-term investments in certificates of deposit (CDs), accounts receivable, and accounts payable. Because of their short maturities, the carrying amounts of cash and cash equivalents, short-term investments in CDs, accounts receivable, and accounts payable approximate fair value.

 

Investments

 

Our short-term investments of $17,715 at August 27, 2022 and November 27, 2021 consisted of CDs. At August 27, 2022, the CDs had original terms averaging eight months, bearing interest at rates ranging from 0.25% to 3.00%. At August 27, 2022, the weighted average remaining time to maturity of the CDs was approximately six months and the weighted average yield of the CDs was approximately 2.17%. Each CD is placed with a federally insured financial institution and all deposits are within federal deposit insurance limits. Due to the nature of these investments and their relatively short maturities, the carrying amount of the short-term investments at August 27, 2022 and November 27, 2021 approximates their fair value.

 

 

4. Accounts Receivable

 

Accounts receivable consists of the following:

 

   

August 27, 2022

   

November 27, 2021

 

Gross accounts receivable

  $ 21,902     $ 21,134  

Allowance for doubtful accounts

    (952 )     (567 )

Accounts receivable, net

  $ 20,950     $ 20,567  

 

We maintain an allowance for credit losses for estimated losses resulting from the inability of our customers to make required payments. The allowance for credit losses is based on a review of specifically identified accounts in addition to an overall aging analysis which is applied to accounts pooled on the basis of similar risk characteristics. Judgments are made with respect to the collectibility of accounts receivable within each pool based on historical experience, current payment practices and current economic trends based on our expectations over the expected life of the receivables, which is generally ninety days or less. Actual credit losses could differ from those estimates.

 

Page 8 of 36

 

PART I-FINANCIAL INFORMATION-CONTINUED

BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-UNAUDITED

AUGUST 27, 2022

(Dollars in thousands except share and per share data)

 

Activity in the allowance for credit losses for the nine months ended August 27, 2022 was as follows:

 

   

2022

 
         

Balance at November 27, 2021

  $ 567  

Additions charged to expense

    439  

Write-offs against allowance

    (54 )

Balance at August 27, 2022

  $ 952  

 

We believe that the carrying value of our net accounts receivable approximates fair value. The inputs into these fair value estimates reflect our market assumptions and are not observable. Consequently, the inputs are considered to be Level 3 as specified in the fair value hierarchy in ASC Topic 820, Fair Value Measurements and Disclosures. See Note 3.

 

 

5. Inventories

 

Domestic furniture inventories are valued at the lower of cost, which is determined using the last-in, first-out (LIFO) method, or market. Imported inventories and those applicable to our Lane Venture and Bassett Outdoor lines are valued at the lower of cost, which is determined using the first-in, first-out (FIFO) method, or net realizable value.

 

Inventories were comprised of the following:

 

   

August 27, 2022

   

November 27, 2021

 

Wholesale finished goods

  $ 50,617     $ 40,254  

Work in process

    695       482  

Raw materials and supplies

    23,527       21,653  

Retail merchandise

    35,169       30,914  

Total inventories on first-in, first-out method

    110,008       93,303  

LIFO adjustment

    (12,407 )     (10,483 )

Reserve for excess and obsolete inventory

    (5,920 )     (4,816 )
    $ 91,681     $ 78,004  

 

We estimate an inventory reserve for excess quantities and obsolete items based on specific identification and historical write-offs, taking into account future demand, market conditions and the respective valuations at LIFO. The need for these reserves is primarily driven by the normal product life cycle. As products mature and sales volumes decline, we rationalize our product offerings to respond to consumer tastes and keep our product lines fresh. If actual demand or market conditions in the future are less favorable than those estimated, additional inventory write-downs may be required. In determining reserves, we calculate separate reserves on our wholesale and retail inventories. Our wholesale inventories tend to carry the majority of the reserves for excess quantities and obsolete inventory due to the nature of our distribution model. These wholesale reserves primarily represent design and/or style obsolescence. Typically, product is not shipped to our retail warehouses until a consumer has ordered and paid a deposit for the product. We do not typically hold retail inventory for stock purposes. Consequently, floor sample inventory and inventory for delivery to customers account for the majority of our inventory at retail. Retail reserves are based on accessory and clearance floor sample inventory in our stores and any inventory that is not associated with a specific customer order in our retail warehouses.

 

Page 9 of 36

 

PART I-FINANCIAL INFORMATION-CONTINUED

BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-UNAUDITED

AUGUST 27, 2022

(Dollars in thousands except share and per share data)

 

Activity in the reserves for excess quantities and obsolete inventory by segment are as follows:

 

   

Wholesale
Segment

   

Retail Segment

   

Total

 
                         

Balance at November 27, 2021

  $ 3,683     $ 1,133     $ 4,816  

Additions charged to expense

    1,941       862       2,803  

Write-offs

    (982 )     (717 )     (1,699 )

Balance at August 27, 2022

  $ 4,642     $ 1,278     $ 5,920  

 

Our estimates and assumptions have been reasonably accurate in the past. We have not made any significant changes to our methodology for determining inventory reserves in 2022 and do not anticipate that our methodology is likely to change in the future.

 

 

6. Goodwill and Other Intangible Assets

 

Goodwill and other intangible assets consisted of the following:

 

   

August 27, 2022

 
   

Gross Carrying
Amount

   

Accumulated
Amortization

   

Intangible
Assets, Net

 
Intangibles subject to amortization                        

Customer relationships

  $ 512     $ (264 )   $ 248  
                         
Intangibles not subject to amortization:                        

Trade names

                    6,848  

Goodwill

                    7,217  
                         

Total goodwill and other intangible assets

                  $ 14,313  

 

   

November 27, 2021

 
   

Gross Carrying Amount

   

Accumulated Amortization

   

Intangible Assets, Net

 

Intangibles subject to amortization

                       

Customer relationships

  $ 512     $ (223 )   $ 289  
                         

Intangibles not subject to amortization:

                       

Trade names

                    6,848  

Goodwill

                    7,217  
                         

Total goodwill and other intangible assets

                  $ 14,354  

 

Page 10 of 36

 

PART I-FINANCIAL INFORMATION-CONTINUED

BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-UNAUDITED

AUGUST 27, 2022

(Dollars in thousands except share and per share data)

 

The carrying amounts of goodwill by reportable segment at both August 27, 2022 and November 27, 2021 are as follows:

 

   

Original

   

Accumulated

         
   

Recorded

   

Impairment

   

Carrying

 
   

Value

   

Losses

   

Amount

 
                         

Wholesale

  $ 9,188     $ (1,971 )   $ 7,217  

Retail

    1,926       (1,926 )     -  
                         

Total goodwill

  $ 11,114     $ (3,897 )   $ 7,217  

 

Goodwill and other intangible assets associated with our logistical services segment totaling $9,094 at November 27, 2021 are included in assets of discontinued operations held for sale in the accompanying balance sheet (see Note 12).

 

Amortization expense associated with intangible assets during the three and nine months ended August 27, 2022 and August 28, 2021 was as follows:

 

   

Quarter Ended

   

Nine Months Ended

 
                         
   

August 27, 2022

   

August 28, 2021

   

August 27, 2022

   

August 28, 2021

 
                                 

Intangible asset amortization expense

  $ 14     $ 14     $ 42     $ 42  

 

Estimated future amortization expense for intangible assets that exist at August 27, 2022 is as follows:

 

Remainder of fiscal 2022

  $ 15  

Fiscal 2023

    57  

Fiscal 2024

    57  

Fiscal 2025

    57  

Fiscal 2026

    57  

Fiscal 2027

    5  
         

Total

  $ 248  

 

 

7. Bank Credit Facility

 

Our bank credit facility provides for a line of credit of up to $25,000. At August 27, 2022, we had $3,931 outstanding under standby letters of credit against our line, leaving availability under our credit line of $21,069. In addition, we had outstanding standby letters of credit with another bank totaling $325 at August 27, 2022. The line bears interest at the One-Month Term Secured Overnight Financing Rate (“One-Month Term SOFR”) plus 1.5% and is unsecured. Our bank charges a fee of 0.25% on the daily unused balance of the line, payable quarterly. Under the terms of the facility, we must maintain the following financial covenants, measured quarterly on a rolling twelve-month basis:

 

 

Consolidated fixed charge coverage ratio of not less than 1.4 times,

 

 

Consolidated lease-adjusted leverage ratio not to exceed 3.0 times, and

 

 

Minimum tangible net worth of $140,000.

 

We were in compliance with these covenants at August 27, 2022 and expect to remain in compliance for the foreseeable future. The credit facility will mature on January 27, 2025, at which time any amounts outstanding under the facility will be due.

 

Page 11 of 36

 

PART I-FINANCIAL INFORMATION-CONTINUED

BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-UNAUDITED

AUGUST 27, 2022

(Dollars in thousands except share and per share data)

 

 

8. Post Employment Benefit Obligations

 

Defined Benefit Plans

 

We have an unfunded Supplemental Retirement Income Plan (the “Supplemental Plan”) that covers one current and certain former executives. The liability for the Supplemental Plan was $9,062 and $9,192 as of August 27, 2022 and November 27, 2021, respectively.

 

We also have the Bassett Furniture Industries, Incorporated Management Savings Plan (the “Management Savings Plan”) which was established in the second quarter of fiscal 2017. The Management Savings Plan is an unfunded, nonqualified deferred compensation plan maintained for the benefit of certain highly compensated or management level employees. As part of the Management Savings Plan, we have made Long Term Cash Awards (“LTC Awards”) totaling $2,000 to certain management employees in the amount of $400 each. The liability for the LTC Awards was $1,560 and $1,548 as of August 27, 2022 and November 27, 2021, respectively.

 

The combined pension liability for the Supplemental Plan and LTC Awards is recorded as follows in the condensed consolidated balance sheets:

 

   

August 27, 2022

   

November 27, 2021

 

Accrued compensation and benefits

  $ 913     $ 913  

Post employment benefit obligations

    9,709       9,827  
                 

Total pension liability

  $ 10,622     $ 10,740  

 

Components of net periodic pension costs for our defined benefit plans for the three and nine months ended August 27, 2022 and August 28, 2021 are as follows:

 

   

Quarter Ended

   

Nine Months Ended

 
   

August 27, 2022

   

August 28, 2021

   

August 27, 2022

   

August 28, 2021

 

Service cost

  $ 9     $ 31     $ 27     $ 91  

Interest cost

    58       48       173       146  

Amortization of prior service costs

    31       31       94       94  

Amortization of loss

    33       15       100       45  
                                 

Net periodic pension cost

  $ 131     $ 125     $ 394     $ 376  

 

The components of net periodic pension cost other than the service cost component, which is included in selling, general and administrative expenses, are included in other loss, net in our condensed consolidated statements of operations.

 

Deferred Compensation Plans

 

We have an unfunded deferred compensation plan that covers one current executive and certain former executives and provides for voluntary deferral of compensation. This plan has been frozen with no additional participants or deferrals permitted. Our liability under this plan was $1,657 and $1,648 as of August 27, 2022 and November 27, 2021, respectively.

 

We also have an unfunded, nonqualified deferred compensation plan maintained for the benefit of certain highly compensated or management level employees which was established under the Management Savings Plan. Our liability under this plan, including both accrued Company contributions and participant salary deferrals, was $1,946 and $1,789 as of August 27, 2022 and November 27, 2021, respectively.

 

Page 12 of 36

 

PART I-FINANCIAL INFORMATION-CONTINUED

BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-UNAUDITED

AUGUST 27, 2022

(Dollars in thousands except share and per share data)

 

Our combined liability for all deferred compensation arrangements, including Company contributions and participant deferrals under the Management Savings Plan, is recorded as follows in the condensed consolidated balance sheets:

 

   

August 27, 2022

   

November 27, 2021

 

Accrued compensation and benefits

  $ 296     $ 296  

Post employment benefit obligations

    3,307       3,142  
                 

Total deferred compensation liability

  $ 3,603     $ 3,438  

 

We recognized expense under our deferred compensation arrangements during the three and nine months ended August 27, 2022 and August 28, 2021 as follows:

 

   

Quarter Ended

   

Nine Months Ended

 
   

August 27, 2022

   

August 28, 2021

   

August 27, 2022

   

August 28, 2021

 

Deferred compensation expense (benefit)

  $ (7 )   $ 96     $ 54     $ 451  

 

 

9. Commitments and Contingencies

 

We are involved in various legal and environmental matters which arise in the normal course of business. Although the final outcome of these matters cannot be determined, based on the facts presently known, we believe that the final resolution of these matters will not have a material adverse effect on our financial position or future results of operations.

 

 

10. Lease Guarantees

 

We have guaranteed certain lease obligations of licensee operators. Lease guarantees range from one to three years. We were contingently liable under licensee lease obligation guarantees in the amounts of $1,871 and $1,845 at August 27, 2022 and November 27, 2021, respectively.

 

In the event of default by an independent dealer under the guaranteed lease, we believe that the risk of loss is mitigated through a combination of options that include, but are not limited to, arranging for a replacement dealer or liquidating the collateral (primarily inventory). The proceeds of the above options are expected to cover the estimated amount of our future payments under the guarantee obligations, net of recorded reserves. The fair value of lease guarantees (an estimate of the cost to the Company to perform on these guarantees) at August 27, 2022 and November 27, 2021 was not material.

 

Page 13 of 36

 

PART I-FINANCIAL INFORMATION-CONTINUED

BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-UNAUDITED

AUGUST 27, 2022

(Dollars in thousands except share and per share data)

 

 

11. Earnings Per Share

 

The following reconciles basic and diluted earnings per share:

 

   

Net Income

   

Weighted Average
Shares

   

Net Income
Per Share

 

For the quarter ended August 27, 2022:

                       
                         

Basic earnings per share - continuing operations

  $ 7,773       9,238,185     $ 0.84  
Add effect of dilutive securities:                        

Restricted shares

    -       28,927       -  

Diluted earnings per share - continuing operations

  $ 7,773       9,267,112     $ 0.84  
                         

Basic loss per share - discontinued operations

  $ (145 )     9,238,185     $ (0.02 )

Add effect of dilutive securities:

                       

Restricted shares

    -       28,927       -  

Diluted loss per share - discontinued operations

  $ (145 )     9,267,112     $ (0.02 )
                         

For the quarter ended August 28, 2021:

                       
                         

Basic earnings per share - continuing operations

  $ 3,441       9,779,928     $ 0.35  

Add effect of dilutive securities:

                       

Options and restricted shares

    -       5,415       -  

Diluted earnings per share - continuing operations

  $ 3,441       9,785,343     $ 0.35  
                         

Basic loss per share - discontinued operations

  $ (425 )     9,779,928     $ (0.04 )

Add effect of dilutive securities:

                       

Options and restricted shares

    -       5,415       -  

Diluted loss per share - discontinued operations

  $ (425 )     9,785,343     $ (0.04 )
                         
                         

For the nine months ended August 27, 2022:

                       
                         

Basic earnings per share - continuing operations

  $ 19,807       9,503,937     $ 2.08  

Add effect of dilutive securities:

                       

Restricted shares

    -       5,688       -  

Diluted earnings per share - continuing operations

  $ 19,807       9,509,625     $ 2.08  
                         

Basic earnings per share - discontinued operations

  $ 40,512       9,503,937     $ 4.26  

Add effect of dilutive securities:

                       

Restricted shares

    -       5,688       -  

Diluted earnings per share - discontinued operations

  $ 40,512       9,509,625     $ 4.26  
                         

For the nine months ended August 28, 2021:

                       
                         

Basic earnings per share - continuing operations

  $ 12,216       9,864,691     $ 1.24  

Add effect of dilutive securities:

                       

Options and restricted shares

    -       9,329       -  

Diluted earnings per share - continuing operations

  $ 12,216       9,874,020     $ 1.24  
                         

Basic earnings per share - discontinued operations

  $ 785       9,864,691     $ 0.08  

Add effect of dilutive securities:

                       

Options and restricted shares

    -       9,329       -  

Diluted earnings per share - discontinued operations

  $ 785       9,874,020     $ 0.08  

 

Page 14 of 36

 

PART I-FINANCIAL INFORMATION-CONTINUED

BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-UNAUDITED

AUGUST 27, 2022

(Dollars in thousands except share and per share data)

 

 

For the three and nine months ended August 27, 2022 and August 28, 2021, the following potentially dilutive shares were excluded from the computations as their effect was anti-dilutive:

 

   

Quarter Ended

   

Nine Months Ended

 
   

August 27, 2022

   

August 28, 2021

   

August 27, 2022

   

August 28, 2021

 
                                 

Unvested shares

    15,799       -       67,099       7,105  

 

 

12. Discontinued Operations

 

On January 31, 2022, we entered into a definitive agreement to sell substantially all of the assets of Zenith to J.B. Hunt. The sale was completed on February 28, 2022, at which time we received the following net proceeds:

 

Sales price prior to post-closing working capital adjustment

  $ 86,939  
Less:        

Amount held in escrow for contingencies related to representations and warranties (1)

    1,000  

Seller expenses paid at closing

    418  

Working capital adjustment paid to buyer

    987  
         

Net proceeds from the sale (2)

  $ 84,534  

 

 

(1)

To be held in escrow until the first anniversary of the sale, at which time any amount not distributed or reserved for specified claims will be released to the Company. This amount is included in other current assets in the accompanying condensed consolidated balance sheet at August 27, 2022.

 

 

(2)

Included in cash flows from investing activities in the accompanying condensed consolidated statement of cash flows for the nine months ended August 27, 2022.

 

The sales price was subject to a customary post-closing working capital adjustment which was paid during the third quarter of fiscal 2022. Including the effect of the working capital adjustment, we recognized a pre-tax gain from the sale of Zenith of $53,061.

 

The operations of our logistical services segment, which consisted entirely of the operations of Zenith, are presented in the accompanying condensed consolidated statements of income as discontinued operations, and the assets sold to and liabilities assumed by J.B. Hunt are presented in the accompanying condensed consolidated balance sheet as assets and liabilities of discontinued operations held for sale as of November 27, 2021.

 

Page 15 of 36

 

PART I-FINANCIAL INFORMATION-CONTINUED

BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-UNAUDITED

AUGUST 27, 2022

(Dollars in thousands except share and per share data)

 

The following table summarizes the major classes of assets and liabilities of the discontinued operations held for sale as reported in the condensed consolidated balance sheet as of November 27, 2021:

 

   

November 27, 2021

 
Carrying amounts of major classes of assets included as part of discontinued operations:        

Accounts receivable, net

  $ 7,601  

Other current assets

    3,463  

Property and equipment, net

    24,898  

Goodwill and other intangible assets

    9,094  

Right of use assets under operating leases

    18,193  

Other

    572  
         
    $ 63,821  
         
Balance sheet classification:        

Current assets of discontinued operations held for sale

  $ 11,064  

Long-term assets of discontinued operations held for sale

    52,757  
         

Total assets of discontinued operations held for sale

  $ 63,821  
         
Carrying amounts of major classes of liabilities included as part of discontinued operations:        

Accounts payable

  $ 4,336  

Accrued compensation and benefits

    3,295  

Current portion operating lease obligations

    7,458  

Other current liabilites and accrued expenses

    1,006  

Long-term portion of operating lease obligations

    10,996  

Other long-term liabilities

    5,214  
         
    $ 32,305  
         
Balance sheet classification:        

Current liabilities of discontinued operations held for sale

  $ 16,095  

Long-term liabilities of discontinued operations held for sale

    16,210  
         

Total liabilities of discontinued operations held for sale

  $ 32,305  

 

Following the sale of Zenith, certain of Zenith’s liabilities primarily representing reserves and accrued liabilities for pre-disposal workers’ compensation, health insurance and auto liability claims were retained by Bassett. The remaining balance of these reserves and accruals total $537 at August 27, 2022 and are included in other current liabilities and accrued expenses in the accompanying condensed consolidated balance sheet.

 

Page 16 of 36

 

PART I-FINANCIAL INFORMATION-CONTINUED

BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-UNAUDITED

AUGUST 27, 2022

(Dollars in thousands except share and per share data)

 

The following table summarizes the major classes of line items constituting income of the discontinued operations, as reported in the condensed consolidated statements of income for the three and nine months ended August 27, 2022 and August 28, 2021:

 

   

Quarter Ended

   

Nine Months Ended

 
   

August 27, 2022

   

August 28, 2021

   

August 27, 2022

   

August 28, 2021

 
Major line items constituting pretax income of discontinued operations:                                

Logistical services revenue

  $ -     $ 14,036     $ 16,776     $ 40,116  

Cost of logistical services

    -       14,522       15,001       38,849  

Other loss, net

    -       (79 )     (63 )     (188 )
                                 

Income (loss) from operations of logistical services

    -       (565 )     1,712       1,079  

Gain on disposal (less adjustments)

    (193 )     -       53,061       -  

Pretax income of discontinued operations

    (193 )     (565 )     54,773       1,079  

Income tax expense (benefit)

    (48 )     (140 )     14,261       294  
                                 

Income (loss) from discontinued operations, net of tax

  $ (145 )   $ (425 )   $ 40,512     $ 785  

 

The amounts for revenue and costs of logistical services shown above represent the results of Zenith’s business transactions with third parties. Zenith also charged Bassett for logistical services provided to our wholesale segment in the amount of $9,121 during the nine months ended August 27, 2022, and $7,164 and $23,409, respectively, for the three and nine months ended August 28, 2021. We have entered into a service agreement with J.B. Hunt for the continuation of these services for a period of seven years following the sale of Zenith. Subsequent to the sale, we incurred $10,307 and $19,852 of expense during the three and nine months ended August 27, 2022, respectively, for the performance of logistical services, of which $17,818 had been paid in cash as of August 27, 2022.

 

Included in other loss, net, is interest arising from finance leases assumed by J.B. Hunt as part of the transaction. Such interest amounted to $78 for the nine months ended August 27, 2022, and $86 and $207, respectively, for the three and nine months ended August 28, 2021.

 

The following table summarizes the cash flows generated by discontinued operations during the nine months ended August 27, 2022 and August 28, 2021:

 

   

Nine Months Ended

 
   

August 27, 2022

   

August 28, 2021

 

Cash provided by operating activities

  $ 1,681     $ 3,231  

Cash used in investing activities

    (81 )     (2,706 )

Cash used in financing activities

    (371 )     (834 )
                 

Net cash provided by (used in) discontinued operations

  $ 1,229     $ (309 )

 

 

13. Retail Real Estate Transactions

 

During the third quarter of fiscal 2022, we sold one of our Company-owned store locations in Houston, Texas for $8,217 net of closing costs, resulting in a gain of $4,595 during the three and nine months ended August 27, 2022. The sale closed on June 24, 2022, and we expect to vacate the premises during the fourth quarter of fiscal 2022. This store will be relocated to a new leased store in the Houston market that we expect to open during the second quarter of fiscal 2023.

 

This sale, together with our recent purchase of real property in Tampa, Florida for $7,668 in cash during the second quarter of fiscal 2022 will be treated as an exchange of like-kind property under Section 1031 of the Internal Revenue Code of 1986, as amended, for the purpose of deferring approximately $4,300 of the taxable gain arising from the sale of the Houston property. A VIE was established during the second quarter of fiscal 2022 for purposes of acquiring the Tampa, Florida property, of which the Company was the primary beneficiary by virtue of our control over the activities that most significantly impact the entity's economic performance. Subsequent to the completion of the exchange transactions during the third quarter of fiscal 2022, the sole equity interest in the VIE was transferred to Bassett and the entity is now consolidated as a wholly owned subsidiary We plan to remodel the Tampa property and open as a Company-owned store in the second quarter of fiscal 2023.

 

Page 17 of 36

 

PART I-FINANCIAL INFORMATION-CONTINUED

BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-UNAUDITED

AUGUST 27, 2022

(Dollars in thousands except share and per share data)

 

 

14. Segment Information

 

We have strategically aligned our business into two reportable segments as defined in ASC 280, Segment Reporting, and as described below:

 

 

Wholesale. The wholesale home furnishings segment is involved principally in the design, manufacture, sourcing, sale and distribution of furniture products to a network of Bassett stores (Company-owned and licensee-owned retail stores) and independent furniture retailers. Our wholesale segment includes our wood and upholstery operations, which include Lane Venture, as well as all corporate selling, general and administrative expenses, including those corporate expenses related to both Company- and licensee-owned stores. Our wholesale segment also includes our holdings of short-term investments and retail real estate previously leased as licensee stores. The earnings and costs associated with these assets are included in other loss, net, in our condensed consolidated statements of operations.

 

 

Retail  Company-owned stores. Our retail segment consists of Company-owned stores and includes the revenues, expenses, assets and liabilities and capital expenditures directly related to these stores and the Company-owned distribution network utilized to deliver products to our retail customers.

 

Inter-company net sales elimination represents the elimination of wholesale sales to our Company-owned stores. Inter-company income elimination includes the embedded wholesale profit in the Company-owned store inventory that has not been realized. These profits will be recorded when merchandise is delivered to the retail consumer. The inter-company income elimination also includes rent paid by our retail stores occupying Company-owned real estate.

 

Our former logistical services segment which represented the operations of Zenith is now presented as a discontinued operation in the accompanying condensed consolidated balances sheets and statements of income (see Note 12).

 

Page 18 of 36

 

PART I-FINANCIAL INFORMATION-CONTINUED

BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-UNAUDITED

AUGUST 27, 2022

(Dollars in thousands except share and per share data)

 

The following table presents our segment information:

 

 

   

Quarter Ended

   

Nine Months Ended

 
   

August 27, 2022

   

August 28, 2021

   

August 27, 2022

   

August 28, 2021

 

Sales Revenue

                               

Wholesale sales of furniture and accessories

  $ 78,959     $ 73,073     $ 249,945     $ 219,371  

Less: Sales to retail segment

    (31,833 )     (26,779 )     (95,976 )     (84,303 )

Wholesale sales to external customers

    47,126       46,294       153,969       135,068  

Retail sales of furniture and accessories

    70,886       58,576       210,613       181,454  

Consolidated net sales of furniture and accessories

  $ 118,012     $ 104,870     $ 364,582     $ 316,522  
                                 

Income from Operations

                               

Wholesale

  $ 1,611     $ 4,466     $ 8,430     $ 14,622  

Retail - Company-owned stores

    4,529       917       15,754       3,663  

Inter-company elimination

    (63 )     (407 )     (617 )     (662 )

Gain on sale of real estate

    4,595       -       4,595       -  

Consolidated

  $ 10,672     $ 4,976     $ 28,162     $ 17,623  
                                 

Depreciation and Amortization

                               

Wholesale

  $ 1,213     $ 835     $ 3,038     $ 2,456  

Retail - Company-owned stores

    1,455       1,528       4,429       4,625  

Consolidated

  $ 2,668     $ 2,363     $ 7,467     $ 7,081  
                                 

Capital Expenditures

                               

Wholesale

  $ 3,160     $ 2,078     $ 15,065     $ 4,244  

Retail - Company-owned stores

    1,468       54       2,201       191  

Consolidated

  $ 4,628     $ 2,132     $ 17,266     $ 4,435  

 

   

As of

   

As of

 

 

 

August 27, 2022

   

November 27, 2021

 
Identifiable Assets                

Wholesale

  $ 243,046     $ 196,853  

Retail - Company-owned stores

    159,641       160,986  

Discontinued Operations

    -       63,821  

Consolidated

  $ 402,687     $ 421,660  

 

See Note 15, Revenue Recognition, for disaggregated revenue information regarding sales of furniture and accessories by product type for the wholesale and retail segments.

 

 

15. Revenue Recognition

 

We recognize revenue when we transfer promised goods or services to our customers in an amount that reflects the consideration we expect to receive in exchange for those goods or services. For our wholesale and retail segments, revenue is recognized when the risks and rewards of ownership and title to the product have transferred to the buyer. At wholesale, transfer occurs and revenue is recognized upon the shipment of goods to independent dealers and licensee-owned BHF stores. At retail, transfer occurs and revenue is recognized upon delivery of goods to the customer. All wholesale and retail revenues are recorded net of estimated returns and allowances based on historical patterns. We typically collect a significant portion of the purchase price from our retail customers as a deposit upon order, with the balance typically collected upon delivery. These customer deposits are carried on our balance sheet as a current liability until delivery is fulfilled and amounted to $40,311 and $51,492 as of August 27, 2022 and November 27, 2021, respectively. Substantially all of the customer deposits held at November 27, 2021 related to performance obligations that were satisfied during the current year-to-date period and have therefore been recognized in revenue for the three and nine months ended August 27, 2022.

 

Sales commissions are expensed as part of selling, general and administrative expenses at the time revenue is recognized because the amortization period would have been one year or less. Sales commissions at wholesale are accrued upon the shipment of goods. Sales commissions at retail are accrued at the time a sale is written (i.e. – when the customer’s order is placed) and are carried as prepaid commissions in other current assets until the goods are delivered and revenue is recognized. At August 27, 2022 and November 27, 2021, our balance of prepaid commissions included in other current assets was $4,357 and $6,221, respectively.

 

Page 19 of 36

 

PART I-FINANCIAL INFORMATION-CONTINUED

BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-UNAUDITED

AUGUST 27, 2022

(Dollars in thousands except share and per share data)

 

We exclude from revenue all amounts collected from customers for sales tax. We do not disclose amounts allocated to remaining unsatisfied performance obligations as they are expected to be satisfied within one year or less.

 

Disaggregated revenue information for sales of furniture and accessories by product category for the three and nine months ended August 27, 2022 and August 28, 2021, excluding intercompany transactions between our segments, is a follows:

 

   

Quarter Ended

 
   

August 27, 2022

   

August 28, 2021

 
   

Wholesale

   

Retail

   

Total

   

Wholesale

   

Retail

   

Total

 

Bassett Custom Upholstery

  $ 30,885     $ 39,054     $ 69,939     $ 26,276     $ 32,362     $ 58,638  

Bassett Leather

    6,290       867       7,157       9,142       302       9,444  

Bassett Custom Wood

    5,564       11,357       16,921       5,745       7,674       13,419  

Bassett Casegoods

    4,387       10,404       14,791       5,131       10,394       15,525  

Accessories, mattresses and other (1)

    -       9,204       9,204       -       7,844       7,844  

Consolidated net sales of furniture and accessories

  $ 47,126     $ 70,886     $ 118,012     $ 46,294     $ 58,576     $ 104,870  

 

   

Nine Months Ended

 
   

August 27, 2022

   

August 28, 2021

 
   

Wholesale

   

Retail

   

Total

   

Wholesale

   

Retail

   

Total

 

Bassett Custom Upholstery

  $ 96,636     $ 122,248     $ 218,884     $ 77,134     $ 102,201     $ 179,335  

Bassett Leather

    29,111       1,399       30,510       26,898       782       27,680  

Bassett Custom Wood

    17,207       32,001       49,208       17,921       20,756       38,677  

Bassett Casegoods

    11,015       27,884       38,899       13,115       32,175       45,290  

Accessories, mattresses and other (1)

    -       27,081       27,081       -       25,540       25,540  

Consolidated net sales of furniture and accessories

  $ 153,969     $ 210,613     $ 364,582     $ 135,068     $ 181,454     $ 316,522  

 

(1) 

Includes the sale of goods other than Bassett-branded products, such as accessories and bedding, and also includes the  sale of furniture protection plans.

 

Page 20 of 36

 

PART I-FINANCIAL INFORMATION-CONTINUED

BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-UNAUDITED

AUGUST 27, 2022

(Dollars in thousands except share and per share data)

 

 

16. Changes to Stockholders Equity

 

The following changes in our stockholders’ equity occurred during the three and nine months ended August 27, 2022 and August 28, 2021:

 

   

Quarter Ended

   

Nine Months Ended

 
                                 
   

August 27, 2022

   

August 28, 2021

   

August 27, 2022

   

August 28, 2021

 

Common Stock: