Company Quick10K Filing
Bassett Furniture
Closing Price ($) Shares Out (MM) Market Cap ($MM)
$0.00 10 $149
10-K 2020-01-23 Annual: 2019-11-30
10-Q 2019-10-03 Quarter: 2019-08-31
10-Q 2019-07-02 Quarter: 2019-06-01
10-Q 2019-04-04 Quarter: 2019-03-02
10-K 2019-01-17 Annual: 2018-11-24
10-Q 2018-09-27 Quarter: 2018-08-25
10-Q 2018-06-28 Quarter: 2018-05-26
10-Q 2018-03-28 Quarter: 2018-02-24
10-K 2018-01-18 Annual: 2017-11-25
10-Q 2017-09-28 Quarter: 2017-08-26
10-Q 2017-06-29 Quarter: 2017-05-27
10-Q 2017-03-30 Quarter: 2017-02-25
10-K 2017-01-19 Annual: 2016-11-26
10-Q 2016-09-29 Quarter: 2016-08-27
10-Q 2016-06-30 Quarter: 2016-05-28
10-Q 2016-03-31 Quarter: 2016-02-27
10-K 2016-01-21 Annual: 2015-11-28
10-Q 2015-10-01 Quarter: 2015-08-29
10-Q 2015-07-01 Quarter: 2015-05-30
10-Q 2015-04-09 Quarter: 2015-02-28
10-K 2015-01-22 Annual: 2014-11-29
10-Q 2014-10-02 Quarter: 2014-08-30
10-Q 2014-07-02 Quarter: 2014-05-31
10-Q 2014-04-03 Quarter: 2014-03-01
10-K 2014-01-23 Annual: 2013-11-30
10-Q 2013-10-03 Quarter: 2013-08-31
10-Q 2013-07-09 Quarter: 2013-06-01
10-Q 2013-04-04 Quarter: 2013-03-02
10-K 2013-02-04 Annual: 2012-11-24
10-Q 2012-10-04 Quarter: 2012-08-25
10-Q 2012-07-05 Quarter: 2012-05-26
10-Q 2012-04-05 Quarter: 2012-02-25
10-K 2012-02-03 Annual: 2011-11-26
10-Q 2011-10-06 Quarter: 2011-08-27
10-Q 2011-07-07 Quarter: 2011-05-28
10-Q 2011-04-12 Quarter: 2011-02-26
10-K 2011-02-03 Annual: 2010-11-27
10-Q 2010-10-07 Quarter: 2010-08-28
10-Q 2010-07-08 Quarter: 2010-05-29
10-Q 2010-04-08 Quarter: 2010-02-27
10-K 2010-02-12 Annual: 2009-11-28
8-K 2020-01-23 Earnings, Exhibits
8-K 2020-01-16 Other Events, Exhibits
8-K 2020-01-15 Amend Bylaw, Exhibits
8-K 2019-10-10 Other Events, Exhibits
8-K 2019-10-03 Earnings, Exhibits
8-K 2019-09-04 Officers
8-K 2019-07-18 Other Events, Exhibits
8-K 2019-07-02 Earnings, Exhibits
8-K 2019-04-04 Earnings, Exhibits
8-K 2019-03-07 Other Events, Exhibits
8-K 2019-03-06 Shareholder Vote
8-K 2019-01-17 Earnings, Exhibits
8-K 2019-01-17 Earnings, Exhibits
8-K 2019-01-16 Amend Bylaw, Exhibits
8-K 2018-10-04 Other Events, Exhibits
8-K 2018-09-27 Earnings, Exhibits
8-K 2018-07-12 Other Events, Exhibits
8-K 2018-06-28 Earnings, Exhibits
8-K 2018-03-28 Earnings, Exhibits
8-K 2018-03-08 Other Events, Exhibits
8-K 2018-03-07 Shareholder Vote
8-K 2018-03-07 Amend Bylaw, Exhibits
8-K 2018-03-07 Officers, Exhibits
8-K 2018-01-18 Earnings, Exhibits
8-K 2018-01-11 Other Events, Exhibits
BSET 2019-11-30
Part I
Item 1. Business
Item 1A. Risk Factors
Item 1B. Unresolved Staff Comments
Item 2. Properties 
Item 3. Legal Proceedings 
Item 4. Mine Safety Disclosures 
Part II
Item 6. Selected Financial Data
Item 7. Management’S Discussion and Analysis of Financial Condition and Results of Operations
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Item 8. Financial Statements and Supplementary Data
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Item 9A. Controls and Procedures
Item 9B. Other Information
Part III
Item 10. Directors and Executive Officers of The Registrant
Item 11. Executive Compensation
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Item 13. Certain Relationships and Related Transactions
Item 14. Principal Accounting Fees and Services
Part IV
Item 15. Exhibits, Financial Statement Schedules
Item 16. Form 10-K Summary
EX-4.C ex_169936.htm
EX-21 ex_169887.htm
EX-23.A ex_169888.htm
EX-31.A ex_169889.htm
EX-31.B ex_169890.htm
EX-32.A ex_169893.htm
EX-32.B ex_169892.htm

Bassett Furniture Earnings 2019-11-30

BSET 10K Annual Report

Balance SheetIncome StatementCash Flow

Comparables ($MM TTM)
Ticker M Cap Assets Liab Rev G Profit Net Inc EBITDA EV G Margin EV/EBITDA ROA
HOFT 248 401 133 660 134 30 47 267 20% 5.6 8%
HBB 240 306 247 732 181 5 20 239 25% 12.2 2%
TTS 201 417 279 349 245 3 39 259 70% 6.6 1%
BSET 149 281 93 459 276 6 20 137 60% 6.9 2%
FLXS 134 254 49 444 70 -33 -31 112 16% -3.6 -13%
PRPL 59 100 103 336 132 -3 4 72 39% 17.9 -3%
NVFY 22 81 6 57 10 2 2 18 17% 9.1 3%
DXYN 10 264 214 389 83 -25 -5 131 21% -24.5 -9%
ARCI 7 33 15 33 9 -6 -2 6 26% -2.8 -18%
PIR 3 1,239 1,230 1,495 410 -252 -248 220 27% -0.9 -20%

bset20191130_10k.htm
0000010329 BASSETT FURNITURE INDUSTRIES INC false --11-30 FY 2019 0 0 2 2 52 0 1,287 857 78 184 0 5 0 0 2 2016 2017 2018 2019 1 1 5 2 7 1 3 In 2018 we adopted ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Comprehensive Income. ASU 2018-02 addressed the impact of the remeasurement of deferred taxes on items in accumulated other comprehensive income due to the reduction in federal statutory rates arising from the Tax Cuts and Jobs Act of December 2017 by allowing the transfer of certain tax effects carried over from prior years to retained earnings as of the beginning of fiscal 2018. Net loss includes a $2,157 charge to income tax expense arising from the remeasurement of our deferred tax assets due to the reduction in the Federal statutory income tax rate included in the Tax Cuts and Jobs Act (see Note 14). Beginning with the third quarter of fiscal 2019, our wholesale segment no longer purchases accessory items for resale to our retail segment or to third party customers such as licensees or independent furniture retailers. Our retail segment and third party customers now source their accessory items directly from the accessory vendors. Represents reserves of acquired business at date of acquisition. Income from operations includes a gain of $165 from the sale of our Spring, Texas retail store (see Note 15). Net income includes a benefit of $155 in income tax expense arising from additional adjustments to the remeasurement of our deferred tax assets resulting from the Act (see Note 14). Income from operations includes a $469 asset impairment charge related to our Torrance, California retail store and a $301 charge for lease exit costs related to the closing of a store in San Antonio, Texas (see Note 15). Net income includes a $704 tax benefit arising from the final adjustment to our interim estimates of the impact of reduced federal income tax rates on the valuation of our deferred tax assets (see Note 14). Income from operations includes a charge of $835 charge arising from certain eligible employees’ acceptance of voluntary early retirement package (see Note 15). Deductions are for the purpose for which the reserve was created. Loss from operations includes a charge for the impairment of goodwill of $1,926 (see Note 8) and charges of $4,431, $700 and $149 for impairment of long-lived assets, litigation costs and lease termination costs, respectively (see Note 15). 815 754 5 5 50,000,000 50,000,000 10,116,290 10,527,636 10,116,290 10,527,636 0.42 0.35 0.47 0.50 00000103292018-11-252019-11-30 xbrli:shares 00000103292020-01-18 00000103292019-06-01 thunderdome:item iso4217:USD 00000103292019-11-30 00000103292018-11-24 0000010329bset:FurnitureAndAccessoriesMember2018-11-252019-11-30 0000010329bset:FurnitureAndAccessoriesMember2017-11-262018-11-24 0000010329bset:FurnitureAndAccessoriesMember2016-11-272017-11-25 0000010329bset:LogisticalServicesMember2018-11-252019-11-30 0000010329bset:LogisticalServicesMember2017-11-262018-11-24 0000010329bset:LogisticalServicesMember2016-11-272017-11-25 00000103292017-11-262018-11-24 00000103292016-11-272017-11-25 iso4217:USDxbrli:shares 0000010329us-gaap:PensionPlansDefinedBenefitMember2018-11-252019-11-30 0000010329us-gaap:PensionPlansDefinedBenefitMember2017-11-262018-11-24 0000010329us-gaap:PensionPlansDefinedBenefitMember2016-11-272017-11-25 0000010329us-gaap:SupplementalEmployeeRetirementPlanDefinedBenefitMember2018-11-252019-11-30 0000010329us-gaap:SupplementalEmployeeRetirementPlanDefinedBenefitMember2017-11-262018-11-24 0000010329us-gaap:SupplementalEmployeeRetirementPlanDefinedBenefitMember2016-11-272017-11-25 00000103292017-11-25 00000103292016-11-26 0000010329us-gaap:CommonStockMember2016-11-26 0000010329us-gaap:AdditionalPaidInCapitalMember2016-11-26 0000010329us-gaap:RetainedEarningsMember2016-11-26 0000010329us-gaap:AccumulatedOtherComprehensiveIncomeMember2016-11-26 0000010329us-gaap:CommonStockMember2016-11-272017-11-25 0000010329us-gaap:AdditionalPaidInCapitalMember2016-11-272017-11-25 0000010329us-gaap:RetainedEarningsMember2016-11-272017-11-25 0000010329us-gaap:AccumulatedOtherComprehensiveIncomeMember2016-11-272017-11-25 0000010329us-gaap:SupplementalEmployeeRetirementPlanDefinedBenefitMemberus-gaap:CommonStockMember2016-11-272017-11-25 0000010329us-gaap:SupplementalEmployeeRetirementPlanDefinedBenefitMemberus-gaap:AdditionalPaidInCapitalMember2016-11-272017-11-25 0000010329us-gaap:SupplementalEmployeeRetirementPlanDefinedBenefitMemberus-gaap:RetainedEarningsMember2016-11-272017-11-25 0000010329us-gaap:SupplementalEmployeeRetirementPlanDefinedBenefitMemberus-gaap:AccumulatedOtherComprehensiveIncomeMember2016-11-272017-11-25 0000010329us-gaap:CommonStockMember2017-11-25 0000010329us-gaap:AdditionalPaidInCapitalMember2017-11-25 0000010329us-gaap:RetainedEarningsMember2017-11-25 0000010329us-gaap:AccumulatedOtherComprehensiveIncomeMember2017-11-25 0000010329us-gaap:CommonStockMember2017-11-262018-11-24 0000010329us-gaap:AdditionalPaidInCapitalMember2017-11-262018-11-24 0000010329us-gaap:RetainedEarningsMember2017-11-262018-11-24 0000010329us-gaap:AccumulatedOtherComprehensiveIncomeMember2017-11-262018-11-24 0000010329us-gaap:SupplementalEmployeeRetirementPlanDefinedBenefitMemberus-gaap:CommonStockMember2017-11-262018-11-24 0000010329us-gaap:SupplementalEmployeeRetirementPlanDefinedBenefitMemberus-gaap:AdditionalPaidInCapitalMember2017-11-262018-11-24 0000010329us-gaap:SupplementalEmployeeRetirementPlanDefinedBenefitMemberus-gaap:RetainedEarningsMember2017-11-262018-11-24 0000010329us-gaap:SupplementalEmployeeRetirementPlanDefinedBenefitMemberus-gaap:AccumulatedOtherComprehensiveIncomeMember2017-11-262018-11-24 0000010329us-gaap:CommonStockMember2018-11-24 0000010329us-gaap:AdditionalPaidInCapitalMember2018-11-24 0000010329us-gaap:RetainedEarningsMember2018-11-24 0000010329us-gaap:AccumulatedOtherComprehensiveIncomeMember2018-11-24 0000010329us-gaap:CommonStockMember2018-11-252019-11-30 0000010329us-gaap:AdditionalPaidInCapitalMember2018-11-252019-11-30 0000010329us-gaap:RetainedEarningsMember2018-11-252019-11-30 0000010329us-gaap:AccumulatedOtherComprehensiveIncomeMember2018-11-252019-11-30 0000010329us-gaap:PensionPlansDefinedBenefitMemberus-gaap:CommonStockMember2018-11-252019-11-30 0000010329us-gaap:PensionPlansDefinedBenefitMemberus-gaap:AdditionalPaidInCapitalMember2018-11-252019-11-30 0000010329us-gaap:PensionPlansDefinedBenefitMemberus-gaap:RetainedEarningsMember2018-11-252019-11-30 0000010329us-gaap:PensionPlansDefinedBenefitMemberus-gaap:AccumulatedOtherComprehensiveIncomeMember2018-11-252019-11-30 0000010329us-gaap:SupplementalEmployeeRetirementPlanDefinedBenefitMemberus-gaap:CommonStockMember2018-11-252019-11-30 0000010329us-gaap:SupplementalEmployeeRetirementPlanDefinedBenefitMemberus-gaap:AdditionalPaidInCapitalMember2018-11-252019-11-30 0000010329us-gaap:SupplementalEmployeeRetirementPlanDefinedBenefitMemberus-gaap:RetainedEarningsMember2018-11-252019-11-30 0000010329us-gaap:SupplementalEmployeeRetirementPlanDefinedBenefitMemberus-gaap:AccumulatedOtherComprehensiveIncomeMember2018-11-252019-11-30 0000010329us-gaap:CommonStockMember2019-11-30 0000010329us-gaap:AdditionalPaidInCapitalMember2019-11-30 0000010329us-gaap:RetainedEarningsMember2019-11-30 0000010329us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-11-30 xbrli:pure 0000010329bset:CompanyownedRetailStoresMember2019-11-30 0000010329bset:LicenseeOperatedRetailStoresMember2019-11-30 utr:D 0000010329srt:MinimumMember2018-11-252019-11-30 0000010329srt:MaximumMember2018-11-252019-11-30 00000103292018-11-25 0000010329bset:LogisticalServicesMember2018-11-252019-11-30 0000010329us-gaap:OtherCurrentAssetsMemberbset:SalesCommissionsMember2019-11-30 0000010329us-gaap:OtherCurrentAssetsMemberbset:SalesCommissionsMember2018-11-24 0000010329us-gaap:SalesRevenueNetMemberus-gaap:CustomerConcentrationRiskMember2018-11-252019-11-30 0000010329us-gaap:SalesRevenueNetMemberus-gaap:CustomerConcentrationRiskMember2017-11-262018-11-24 0000010329us-gaap:SalesRevenueNetMemberus-gaap:CustomerConcentrationRiskMember2016-11-272017-11-25 0000010329us-gaap:SalesRevenueNetMemberus-gaap:CustomerConcentrationRiskMemberbset:LogisticalServicesMember2018-11-252019-11-30 0000010329us-gaap:SalesRevenueNetMemberus-gaap:CustomerConcentrationRiskMemberbset:LogisticalServicesMember2017-11-262018-11-24 0000010329us-gaap:SalesRevenueNetMemberus-gaap:CustomerConcentrationRiskMemberbset:LogisticalServicesMember2016-11-272017-11-25 0000010329us-gaap:NonUsMember2018-11-252019-11-30 0000010329us-gaap:NonUsMember2017-11-262018-11-24 0000010329us-gaap:NonUsMember2016-11-272017-11-25 utr:Y 0000010329us-gaap:BuildingAndBuildingImprovementsMembersrt:MinimumMember2017-11-262018-11-24 0000010329us-gaap:BuildingAndBuildingImprovementsMembersrt:MaximumMember2017-11-262018-11-24 0000010329us-gaap:MachineryAndEquipmentMembersrt:MinimumMember2017-11-262018-11-24 0000010329us-gaap:MachineryAndEquipmentMembersrt:MaximumMember2017-11-262018-11-24 0000010329us-gaap:OtherNoncurrentAssetsMember2018-11-24 0000010329bset:RetailRealEstateMember2018-11-252019-11-30 0000010329bset:OtherLossNetMemberbset:RetailRealEstateMember2018-11-252019-11-30 0000010329bset:RetailRealEstateMember2017-11-262018-11-24 0000010329bset:RetailRealEstateMember2016-11-272017-11-25 0000010329bset:DeliverWholesaleMerchandiseToCustomersMember2019-11-30 0000010329bset:DeliverWholesaleMerchandiseToCustomersMember2018-11-24 0000010329bset:DeliverWholesaleMerchandiseToCustomersMember2017-11-25 0000010329bset:DeliverRetailMerchandiseToCustomersMember2019-11-30 0000010329bset:DeliverRetailMerchandiseToCustomersMember2018-11-24 0000010329bset:DeliverRetailMerchandiseToCustomersMember2017-11-25 00000103292019-09-012019-11-30 0000010329bset:ReclassificationOfInvestmentsInCompanyOwnedLifeInsuranceDueToASU201615Member2017-11-262018-11-24 0000010329bset:ReclassificationOfInvestmentsInCompanyOwnedLifeInsuranceDueToASU201615Member2016-11-272017-11-25 0000010329bset:ReclassificationRepresentingPortionOfDebtPaymentAttributableToDiscountAccretionDueToASU201615Member2017-11-262018-11-24 0000010329bset:ReclassificationRepresentingPortionOfDebtPaymentAttributableToDiscountAccretionDueToASU201615Member2016-11-272017-11-25 0000010329bset:AcquisitionOfLaneVentureMember2017-12-212017-12-21 0000010329bset:AcquisitionOfLaneVentureMember2017-11-262018-11-24 0000010329bset:AcquisitionOfLaneVentureMember2017-12-21 0000010329bset:AcquisitionOfLaneVentureMemberus-gaap:TradeNamesMember2017-12-21 0000010329bset:AcquisitionOfLaneVentureMemberus-gaap:CustomerRelationshipsMember2017-12-212017-12-21 0000010329bset:AcquisitionOfLaneVentureMemberus-gaap:CustomerRelationshipsMember2017-12-21 0000010329bset:BassettHomeFurnishingsColumbusOhioMember2016-11-272017-02-25 0000010329bset:BassettHomeFurnishingsColumbusOhioMember2017-02-25 0000010329us-gaap:CertificatesOfDepositMember2019-11-30 0000010329us-gaap:CertificatesOfDepositMember2018-11-24 0000010329srt:WeightedAverageMember2018-11-252019-11-30 00000103292018-12-31 00000103292017-12-31 00000103292019-01-012019-12-31 00000103292018-01-012018-12-31 00000103292019-12-31 0000010329us-gaap:OperatingSegmentsMemberbset:WholesaleSegmentMember2017-11-25 0000010329us-gaap:OperatingSegmentsMemberbset:RetailSegmentMember2017-11-25 0000010329us-gaap:OperatingSegmentsMemberbset:WholesaleSegmentMember2017-11-262018-11-24 0000010329us-gaap:OperatingSegmentsMemberbset:RetailSegmentMember2017-11-262018-11-24 0000010329us-gaap:OperatingSegmentsMemberbset:WholesaleSegmentMember2018-11-24 0000010329us-gaap:OperatingSegmentsMemberbset:RetailSegmentMember2018-11-24 0000010329us-gaap:OperatingSegmentsMemberbset:WholesaleSegmentMember2018-11-252019-11-30 0000010329us-gaap:OperatingSegmentsMemberbset:RetailSegmentMember2018-11-252019-11-30 0000010329us-gaap:OperatingSegmentsMemberbset:WholesaleSegmentMember2019-11-30 0000010329us-gaap:OperatingSegmentsMemberbset:RetailSegmentMember2019-11-30 0000010329bset:WholesaleSegmentMemberbset:JuvenileFurnitureLineOfBusinessMember2018-11-252019-11-30 0000010329bset:WholesaleSegmentMember2019-11-30 0000010329bset:WholesaleSegmentMember2018-11-24 0000010329bset:RetailSegmentMember2019-11-30 0000010329bset:RetailSegmentMember2018-11-24 0000010329bset:LogisticalServicesMember2019-11-30 0000010329bset:LogisticalServicesMember2018-11-24 0000010329us-gaap:OtherCurrentAssetsMember2019-11-30 0000010329us-gaap:SubsequentEventMember2019-12-012020-01-23 0000010329us-gaap:CostOfSalesMember2018-11-252019-11-30 0000010329us-gaap:CostOfSalesMember2017-11-262018-11-24 0000010329us-gaap:CostOfSalesMember2016-11-272017-11-25 0000010329us-gaap:SellingGeneralAndAdministrativeExpensesMemberbset:WholesaleSegmentMember2018-11-252019-11-30 0000010329us-gaap:SellingGeneralAndAdministrativeExpensesMemberbset:WholesaleSegmentMember2017-11-262018-11-24 0000010329us-gaap:SellingGeneralAndAdministrativeExpensesMemberbset:WholesaleSegmentMember2016-11-272017-11-25 0000010329us-gaap:SellingGeneralAndAdministrativeExpensesMemberbset:RetailSegmentMember2018-11-252019-11-30 0000010329us-gaap:SellingGeneralAndAdministrativeExpensesMemberbset:RetailSegmentMember2017-11-262018-11-24 0000010329us-gaap:SellingGeneralAndAdministrativeExpensesMemberbset:RetailSegmentMember2016-11-272017-11-25 0000010329us-gaap:SellingGeneralAndAdministrativeExpensesMemberbset:LogisticalServicesMember2018-11-252019-11-30 0000010329us-gaap:SellingGeneralAndAdministrativeExpensesMemberbset:LogisticalServicesMember2017-11-262018-11-24 0000010329us-gaap:SellingGeneralAndAdministrativeExpensesMemberbset:LogisticalServicesMember2016-11-272017-11-25 0000010329us-gaap:SellingGeneralAndAdministrativeExpensesMember2018-11-252019-11-30 0000010329us-gaap:SellingGeneralAndAdministrativeExpensesMember2017-11-262018-11-24 0000010329us-gaap:SellingGeneralAndAdministrativeExpensesMember2016-11-272017-11-25 0000010329us-gaap:CustomerRelationshipsMember2019-11-30 0000010329us-gaap:TechnologyBasedIntangibleAssetsMember2019-11-30 0000010329us-gaap:CustomerRelationshipsMember2018-11-24 0000010329us-gaap:TechnologyBasedIntangibleAssetsMember2018-11-24 00000103292019-09-01 0000010329bset:WholesaleSegmentMember2017-11-25 0000010329bset:RetailSegmentMember2017-11-25 0000010329bset:LogisticalServicesMember2017-11-25 0000010329bset:WholesaleSegmentMember2017-11-262018-11-24 0000010329bset:RetailSegmentMember2017-11-262018-11-24 0000010329bset:LogisticalServicesMember2017-11-262018-11-24 0000010329bset:WholesaleSegmentMember2018-11-252019-11-30 0000010329bset:RetailSegmentMember2018-11-252019-11-30 0000010329us-gaap:CustomerRelationshipsMember2018-11-252019-11-30 0000010329us-gaap:TechnologyBasedIntangibleAssetsMember2018-11-252019-11-30 00000103292019-08-31 0000010329bset:InternationalMarketCentersLPMember2011-05-02 0000010329bset:InternationalMarketCentersLPMember2016-11-272017-11-25 0000010329bset:MinorityInterestInPrivatelyHeldStartUpProviderOfPropertyAndCasualtyInsuranceMember2016-11-26 0000010329bset:MinorityInterestInPrivatelyHeldStartUpProviderOfPropertyAndCasualtyInsuranceMember2016-11-272017-11-25 0000010329bset:RealEstateNotesPayableOperatedInRetailSegmentMember2018-11-24 0000010329bset:BankOneMember2019-11-30 0000010329bset:BankTwoMember2019-11-30 0000010329us-gaap:SupplementalEmployeeRetirementPlanDefinedBenefitMember2017-05-012017-05-01 0000010329bset:NoncurrentPortionOfPostEmploymentBenefitsLiabilityMemberus-gaap:SupplementalEmployeeRetirementPlanDefinedBenefitMember2019-11-30 0000010329bset:NoncurrentPortionOfPostEmploymentBenefitsLiabilityMemberus-gaap:SupplementalEmployeeRetirementPlanDefinedBenefitMember2018-11-24 0000010329bset:ManagementSavingsPlanMember2017-05-022017-05-02 0000010329bset:ManagementSavingsPlanMember2017-05-02 0000010329bset:ManagementSavingsPlanMember2018-11-252019-11-30 0000010329bset:ManagementSavingsPlanMember2017-11-262018-11-24 0000010329bset:ManagementSavingsPlanMember2016-11-272017-11-25 0000010329bset:ManagementSavingsPlanMember2019-11-30 utr:M 0000010329us-gaap:SupplementalEmployeeRetirementPlanDefinedBenefitMember2019-11-30 0000010329bset:UnfundedDeferredCompensationPlanMember2018-11-252019-11-30 0000010329bset:UnfundedDeferredCompensationPlanMember2017-11-262018-11-24 0000010329bset:UnfundedDeferredCompensationPlanMember2016-11-272017-11-25 0000010329bset:UnfundedDeferredCompensationPlanMember2019-11-30 0000010329bset:UnfundedDeferredCompensationPlanMember2018-11-24 0000010329us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2017-11-25 0000010329bset:ASU201802Memberus-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2017-11-262018-11-24 0000010329us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetUnamortizedGainLossMember2017-11-262018-11-24 0000010329us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2017-11-262018-11-24 0000010329us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2018-11-24 0000010329us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2018-11-252019-11-30 0000010329us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2019-11-30 0000010329bset:The2010PlanMember2019-11-30 00000103292018-11-30 00000103292018-11-302018-11-30 0000010329us-gaap:EmployeeStockOptionMember2018-11-252019-11-30 0000010329us-gaap:EmployeeStockOptionMember2017-11-262018-11-24 0000010329us-gaap:EmployeeStockOptionMember2016-11-272017-11-25 0000010329us-gaap:RestrictedStockMember2018-11-24 0000010329us-gaap:RestrictedStockMember2018-11-252019-11-30 0000010329us-gaap:RestrictedStockMember2019-11-30 0000010329us-gaap:RestrictedStockMemberbset:NonemployeeDirectorsMember2019-03-062019-03-06 0000010329us-gaap:RestrictedStockMemberbset:EmployeesMember2019-07-232019-07-23 0000010329us-gaap:RestrictedStockMemberbset:EmployeesMember2019-10-092019-10-09 0000010329us-gaap:RestrictedStockMemberbset:NonemployeeDirectorsMember2018-11-252019-11-30 0000010329us-gaap:RestrictedStockMemberbset:EmployeesMember2017-11-262018-11-24 0000010329us-gaap:RestrictedStockMemberbset:EmployeesMember2016-11-272017-11-25 0000010329us-gaap:RestrictedStockMember2017-11-262018-11-24 0000010329us-gaap:RestrictedStockMember2016-11-272017-11-25 0000010329bset:January102017Memberus-gaap:RestrictedStockMember2019-11-30 0000010329bset:January102017Memberus-gaap:RestrictedStockMember2018-11-252019-11-30 0000010329bset:January112018Memberus-gaap:RestrictedStockMember2019-11-30 0000010329bset:January112018Memberus-gaap:RestrictedStockMember2018-11-252019-11-30 0000010329bset:March82017Memberus-gaap:RestrictedStockMember2019-11-30 0000010329bset:March82017Memberus-gaap:RestrictedStockMember2018-11-252019-11-30 0000010329bset:July232019Memberus-gaap:RestrictedStockMember2019-11-30 0000010329bset:July232019Memberus-gaap:RestrictedStockMember2018-11-252019-11-30 0000010329bset:October92019Memberus-gaap:RestrictedStockMember2019-11-30 0000010329bset:October92019Memberus-gaap:RestrictedStockMember2018-11-252019-11-30 0000010329bset:EmployeeStockPurchasePlanMember2017-03-012017-03-01 0000010329bset:EmployeeStockPurchasePlanMember2019-11-30 0000010329us-gaap:StateAndLocalJurisdictionMember2019-11-30 0000010329us-gaap:StateAndLocalJurisdictionMemberus-gaap:EarliestTaxYearMember2018-11-252019-11-30 0000010329us-gaap:StateAndLocalJurisdictionMemberus-gaap:LatestTaxYearMember2018-11-252019-11-30 0000010329bset:LandAndBuildingOccupiedBySpringTexasRetailStoreMember2017-11-262018-11-24 0000010329us-gaap:SellingGeneralAndAdministrativeExpensesMemberbset:FormerRetailStoreLasVegasNevadaMember2016-11-272017-11-25 0000010329bset:FormerRetailStoreLasVegasNevadaMember2016-11-272017-11-25 0000010329us-gaap:OtherCurrentLiabilitiesMember2019-11-30 0000010329us-gaap:LeaseholdImprovementsMember2018-11-252019-11-30 0000010329us-gaap:LeaseholdImprovementsMember2017-11-262018-11-24 0000010329us-gaap:LeaseholdImprovementsMember2016-11-272017-11-25 0000010329bset:RetailStoresMembersrt:MinimumMember2018-11-252019-11-30 0000010329bset:RetailStoresMembersrt:MaximumMember2018-11-252019-11-30 0000010329bset:TransportationEquipmentLeasesMembersrt:MinimumMember2018-11-252019-11-30 0000010329bset:TransportationEquipmentLeasesMembersrt:MaximumMember2018-11-252019-11-30 0000010329bset:RetailStoresMember2019-11-30 0000010329bset:DistributionCentersMember2019-11-30 0000010329bset:TransportationEquipmentLeasesMember2019-11-30 0000010329bset:AllOtherLeasePaymentMember2019-11-30 0000010329bset:LeaseObligationsOfLicenseeOperatorsMember2019-11-30 0000010329bset:LeaseObligationsOfLicenseeOperatorsMember2018-11-24 0000010329us-gaap:RestrictedStockMember2018-11-252019-11-30 0000010329us-gaap:RestrictedStockMember2017-11-262018-11-24 0000010329us-gaap:RestrictedStockMember2016-11-272017-11-25 0000010329us-gaap:EmployeeStockOptionMember2018-11-252019-11-30 0000010329us-gaap:EmployeeStockOptionMember2017-11-262018-11-24 0000010329us-gaap:EmployeeStockOptionMember2016-11-272017-11-25 0000010329bset:ZenithFreightLinesMember2018-11-252019-11-30 0000010329bset:ZenithFreightLinesMember2017-11-262018-11-24 0000010329bset:ZenithFreightLinesMember2016-11-272017-11-25 0000010329us-gaap:OperatingSegmentsMemberbset:WholesaleSegmentMember2016-11-272017-11-25 0000010329us-gaap:OperatingSegmentsMemberbset:RetailSegmentMember2016-11-272017-11-25 0000010329us-gaap:OperatingSegmentsMemberbset:LogisticalServicesMember2018-11-252019-11-30 0000010329us-gaap:OperatingSegmentsMemberbset:LogisticalServicesMember2017-11-262018-11-24 0000010329us-gaap:OperatingSegmentsMemberbset:LogisticalServicesMember2016-11-272017-11-25 0000010329us-gaap:IntersegmentEliminationMemberbset:FurnitureAndAccessoriesMember2018-11-252019-11-30 0000010329us-gaap:IntersegmentEliminationMemberbset:FurnitureAndAccessoriesMember2017-11-262018-11-24 0000010329us-gaap:IntersegmentEliminationMemberbset:FurnitureAndAccessoriesMember2016-11-272017-11-25 0000010329us-gaap:IntersegmentEliminationMemberbset:LogisticalServicesMember2018-11-252019-11-30 0000010329us-gaap:IntersegmentEliminationMemberbset:LogisticalServicesMember2017-11-262018-11-24 0000010329us-gaap:IntersegmentEliminationMemberbset:LogisticalServicesMember2016-11-272017-11-25 0000010329us-gaap:OperatingSegmentsMemberbset:CompanyownedRetailStoresMember2018-11-252019-11-30 0000010329us-gaap:OperatingSegmentsMemberbset:CompanyownedRetailStoresMember2017-11-262018-11-24 0000010329us-gaap:OperatingSegmentsMemberbset:CompanyownedRetailStoresMember2016-11-272017-11-25 0000010329us-gaap:IntersegmentEliminationMember2018-11-252019-11-30 0000010329us-gaap:IntersegmentEliminationMember2017-11-262018-11-24 0000010329us-gaap:IntersegmentEliminationMember2016-11-272017-11-25 0000010329us-gaap:OperatingSegmentsMemberbset:CompanyownedRetailStoresMember2019-11-30 0000010329us-gaap:OperatingSegmentsMemberbset:CompanyownedRetailStoresMember2018-11-24 0000010329us-gaap:OperatingSegmentsMemberbset:CompanyownedRetailStoresMember2017-11-25 0000010329us-gaap:OperatingSegmentsMemberbset:LogisticalServicesMember2019-11-30 0000010329us-gaap:OperatingSegmentsMemberbset:LogisticalServicesMember2018-11-24 0000010329us-gaap:OperatingSegmentsMemberbset:LogisticalServicesMember2017-11-25 0000010329bset:UpholsteryMemberbset:WholesaleSegmentMember2018-11-252019-11-30 0000010329bset:UpholsteryMemberbset:WholesaleSegmentMember2017-11-262018-11-24 0000010329bset:UpholsteryMemberbset:WholesaleSegmentMember2016-11-272017-11-25 0000010329bset:BassettLeatherMemberbset:WholesaleSegmentMember2018-11-252019-11-30 0000010329bset:BassettLeatherMemberbset:WholesaleSegmentMember2017-11-262018-11-24 0000010329bset:BassettLeatherMemberbset:WholesaleSegmentMember2016-11-272017-11-25 0000010329bset:BassettCustomWoodMemberbset:WholesaleSegmentMember2018-11-252019-11-30 0000010329bset:BassettCustomWoodMemberbset:WholesaleSegmentMember2017-11-262018-11-24 0000010329bset:BassettCustomWoodMemberbset:WholesaleSegmentMember2016-11-272017-11-25 0000010329bset:BassettCasegoodsMemberbset:WholesaleSegmentMember2018-11-252019-11-30 0000010329bset:BassettCasegoodsMemberbset:WholesaleSegmentMember2017-11-262018-11-24 0000010329bset:BassettCasegoodsMemberbset:WholesaleSegmentMember2016-11-272017-11-25 0000010329bset:AccessoriesMemberbset:WholesaleSegmentMember2018-11-252019-11-30 0000010329bset:AccessoriesMemberbset:WholesaleSegmentMember2017-11-262018-11-24 0000010329bset:AccessoriesMemberbset:WholesaleSegmentMember2016-11-272017-11-25 0000010329bset:WholesaleSegmentMember2016-11-272017-11-25 0000010329bset:FurnitureAndAccessoriesMember2018-11-252019-03-02 0000010329bset:FurnitureAndAccessoriesMember2019-03-032019-06-01 0000010329bset:FurnitureAndAccessoriesMember2019-06-022019-08-31 0000010329bset:FurnitureAndAccessoriesMember2019-09-012019-11-30 0000010329bset:LogisticalServicesMember2018-11-252019-03-02 0000010329bset:LogisticalServicesMember2019-03-032019-06-01 0000010329bset:LogisticalServicesMember2019-06-022019-08-31 0000010329bset:LogisticalServicesMember2019-09-012019-11-30 00000103292018-11-252019-03-02 00000103292019-03-032019-06-01 00000103292019-06-022019-08-31 0000010329bset:FurnitureAndAccessoriesMember2017-11-262018-02-24 0000010329bset:FurnitureAndAccessoriesMember2018-02-252018-05-26 0000010329bset:FurnitureAndAccessoriesMember2018-05-272018-08-25 0000010329bset:FurnitureAndAccessoriesMember2018-08-262018-11-24 0000010329bset:LogisticalServicesMember2017-11-262018-02-24 0000010329bset:LogisticalServicesMember2018-02-252018-05-26 0000010329bset:LogisticalServicesMember2018-05-272018-08-25 0000010329bset:LogisticalServicesMember2018-08-262018-11-24 00000103292017-11-262018-02-24 00000103292018-02-252018-05-26 00000103292018-05-272018-08-25 00000103292018-08-262018-11-24 00000103292018-11-252019-02-23 0000010329us-gaap:LeaseholdImprovementsMember2019-08-252019-11-30 00000103292019-08-252019-11-30 0000010329bset:LandAndBuildingOccupiedBySpringTexasRetailStoreMember2018-02-252018-05-26 0000010329us-gaap:LeaseholdImprovementsMember2018-08-262018-11-24 0000010329us-gaap:AllowanceForCreditLossMember2016-11-26 0000010329us-gaap:AllowanceForCreditLossMember2016-11-272017-11-25 0000010329us-gaap:AllowanceForCreditLossMember2017-11-25 0000010329us-gaap:AllowanceForNotesReceivableMember2016-11-26 0000010329us-gaap:AllowanceForNotesReceivableMember2016-11-272017-11-25 0000010329us-gaap:AllowanceForNotesReceivableMember2017-11-25 0000010329us-gaap:AllowanceForCreditLossMember2017-11-262018-11-24 0000010329us-gaap:AllowanceForCreditLossMember2018-11-24 0000010329us-gaap:AllowanceForNotesReceivableMember2017-11-262018-11-24 0000010329us-gaap:AllowanceForNotesReceivableMember2018-11-24 0000010329us-gaap:AllowanceForCreditLossMember2018-11-252019-11-30 0000010329us-gaap:AllowanceForCreditLossMember2019-11-30 0000010329us-gaap:AllowanceForNotesReceivableMember2018-11-252019-11-30 0000010329us-gaap:AllowanceForNotesReceivableMember2019-11-30
 

 


UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C., 20549

 

FORM 10-K

 

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the fiscal year ended November 30, 2019

 

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)

 

Registrant’s telephone number, including area code 276/629-6000

 

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

 

Title of each class:

 

Trading Symbol

 

Name of each exchange on which registered

Common Stock ($5.00 par value)

 

BSET

 

NASDAQ

 

Securities registered pursuant to Section 12(g) of the Act:      None

 

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act         ☐  Yes    ☒  No

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ☐  Yes    ☒  No

 

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 at least 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 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 12-b2 of the Exchange Act).      Yes    ☒  No

 

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant as of June 1, 2019 was $162,765,082.

 

The number of shares of the Registrant’s common stock outstanding on January 18, 2020 was 10,116,625.

 

 

 

 

DOCUMENTS INCORPORATED BY REFERENCE

 

Portions of the Bassett Furniture Industries, Incorporated definitive Proxy Statement for its 2019 Annual Meeting of Stockholders to be held March 11, 2020, to be filed with the Securities and Exchange Commission pursuant to Regulation 14A under the Securities Exchange Act of 1934 (the “Proxy Statement”) are incorporated by reference into Part III of this Form 10-K.

 

 

 

 

 

TABLE OF CONTENTS

 

FORWARD-LOOKING STATEMENTS

1

     

PART I

Item 1.

Business 

2

Item 1A.

Risk Factors 

7

Item 1B.

Unresolved Staff Comments 

9

Item 2.

Properties

9

Item 3.

Legal Proceedings 

10

Item 4.

Mine Safety Disclosures

10

 

Information about our Executive Officers

10

     

PART II

Item 5.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 

11

Item 6.

Selected Financial Data 

12

Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

13

Item 7A.

Quantitative and Qualitative Disclosures about Market Risk 

29

Item 8.

Financial Statements and Supplementary Data 

30

Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 

64

Item 9A.

Controls and Procedures 

64

Item 9B.

Other Information 

66

     

PART III

Item 10.

Directors, Executive Officers and Corporate Governance 

66

Item 11.

Executive Compensation 

66

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 

66

Item 13.

Certain Relationships and Related Transactions, and Director Independence 

66

Item 14.

Principal Accountant Fees and Services 

66

     

PART IV

Item 15.

Exhibits

67

Item 16. 

Form 10-K Summary

68

     

SIGNATURES

69

 

 

 

 

As used herein, unless the context otherwise requires, “Bassett,” the “Company,” “we,” “us” and “our” refer to Bassett Furniture Industries, Incorporated and its subsidiaries. References to 2019, 2018, 2017, 2016 and 2015 mean the fiscal years ended November 30, 2019, November 24, 2018, November 25, 2017, November 26, 2016 and November 28, 2015. Please note that fiscal 2019 contained 53 weeks.

 

 

 

 

Safe-harbor, forward-looking statements

 

This discussion contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations and business of Bassett Furniture Industries, Incorporated and subsidiaries. Such forward-looking statements are identified by use of forward-looking words such as “anticipates”, “believes”, “plans”, “estimates”, “expects”, “aimed” and “intends” or words or phrases of similar expression. These forward-looking statements involve certain risks and uncertainties. No assurance can be given that any such matters will be realized. Important factors, which should be read in conjunction with Item 1A “Risk Factors”, that could cause actual results to differ materially from those contemplated by such forward-looking statements include:

 

 

competitive conditions in the home furnishings industry

     
 

general economic conditions, including the strength of the housing market in the United States

     
 

overall retail traffic levels in stores and on the web and consumer demand for home furnishings

     
 

ability of our customers and consumers to obtain credit

     
 

Bassett store openings and store closings and the profitability of the stores (independent licensees and Company-owned retail stores)

     
 

ability to implement our retail strategies, including our initiatives to expand and improve our digital marketing capabilities, and realize the benefits from such strategies as they are implemented

     
 

fluctuations in the cost and availability of raw materials, fuel, labor and sourced products, including those which may result from the imposition of new or increased duties, tariffs, retaliatory tariffs and trade limitations with respect to foreign-sourced products

     
 

results of marketing and advertising campaigns

     
 

effectiveness and security of our information technology systems

     
 

future tax legislation, or regulatory or judicial positions

     
 

ability to efficiently manage the import supply chain to minimize business interruption

     
 

concentration of domestic manufacturing, particularly of upholstery products, and the resulting exposure to business interruption from accidents, weather and other events and circumstances beyond our control

     
 

general risks associated with providing freight transportation and other logistical services by our wholly-owned subsidiary Zenith Freight Lines, LLC

 

1

 

 

PART I

 

 

ITEM 1.

BUSINESS

 

(dollar amounts in thousands except per share data)

 

General

 

Bassett is a leading retailer, manufacturer and marketer of branded home furnishings. Our products are sold primarily through a network of Company-owned and licensee-owned branded stores under the Bassett Home Furnishings (“BHF”) name, with additional distribution through other wholesale channels including multi-line furniture stores, many of which feature Bassett galleries or design centers. We were founded in 1902 and incorporated under the laws of Virginia in 1930. Our rich 117-year history has instilled the principles of quality, value, and integrity in everything we do, while simultaneously providing us with the expertise to respond to ever-changing consumer tastes and meet the demands of a global economy.

 

With 103 BHF stores at November 30, 2019, we have leveraged our strong brand name in furniture into a network of Company-owned and licensed stores that focus on providing consumers with a friendly environment for buying furniture and accessories.  Our store program is designed to provide a single source home furnishings retail store that provides a unique combination of stylish, quality furniture and accessories with a high level of customer service.  In order to reach markets that cannot be effectively served by our retail store network, we also distribute our products through other wholesale channels including multi-line furniture stores, many of which feature Bassett galleries or design centers. We use a network of over 30 independent sales representatives who have stated geographical territories. These sales representatives are compensated based on a standard commission rate. We believe this blended strategy provides us the greatest ability to effectively distribute our products throughout the United States and ultimately gain market share.  

 

The BHF stores feature custom order furniture, free in-home design visits (“home makeovers”), and coordinated decorating accessories.  Our philosophy is based on building strong long-term relationships with each customer.  Sales people are referred to as “Design Consultants” and are trained to evaluate customer needs and provide comprehensive solutions for their home decor.  Until a rigorous training and design certification program is completed, Design Consultants are not authorized to perform in-home design services for our customers.

 

We have factories in Newton, North Carolina and Grand Prairie, Texas that manufacture custom upholstered furniture, a factory in Martinsville, Virginia that primarily assembles and finishes our custom casual dining offerings and a factory in Bassett, Virginia that assembles and finishes our “Bench Made” line of custom, solid hardwood furniture. Our manufacturing team takes great pride in the breadth of its options, the precision of its craftsmanship, and the speed of its process, with custom pieces often manufactured within two weeks of taking the order in our stores. Our logistics team then promptly ships the product to one of our home delivery hubs or to a location specified by our licensees.  In addition to the furniture that we manufacture domestically, we source most of our formal bedroom and dining room furniture (casegoods) and certain leather upholstery offerings from several foreign plants, primarily in Vietnam, Thailand and China. Over 75% of the products we currently sell are manufactured in the United States.

 

We also own Zenith Freight Lines, LLC (“Zenith”) which provides logistical services to Bassett along with other furniture manufacturers and retailers. Zenith delivers best-of-class shipping and logistical support services that are uniquely tailored to the needs of Bassett and the furniture industry. Approximately 60% of Zenith’s revenue is generated from services provided to non-Bassett customers.

 

On December 21, 2017, we purchased certain assets and assumed certain liabilities of Lane Venture from Heritage Home Group, LLC for $15,556 in cash. Lane Venture is a manufacturer and distributor of premium outdoor furniture and is now being operated as a component of our wholesale segment. This acquisition marked our entry into the market for outdoor furniture and we believe that Lane Venture has provided a foundation for us to become a significant participant in this category. Our strategy is to distribute this brand outside of our BHF store network only. See Note 3 to our consolidated financial statements for additional details regarding this acquisition.

 

With the knowledge we have gained through operating Lane Venture, we have developed a new separate brand that will only be marketed through the BHF store network. This will allow Bassett branded product to move from inside the home to outside the home to capitalize the growing trend of outdoor living. Bassett Outdoor is currently marketed in a limited number of stores with a broader distribution planned late in the first quarter of 2020.

 

2

 

 

Operating Segments

 

We have strategically aligned our business into three reportable segments: Wholesale, Retail – Company-owned stores, and Logistical Services.

 

The wholesale home furnishings segment is involved principally in the design, manufacture, sourcing, sale and distribution of furniture products to a network of BHF stores (Company-owned retail stores and licensee-owned stores) and independent furniture retailers. Our retail segment consists of 70 Company-owned and operated BHF stores. The following table shows the number of Company-owned stores by state as of November 30, 2019:

 

   

Number of

     

Number of

 

State

 

Stores

 

State

 

Stores

 

Alabama

  1  

Missouri

  1  

Arizona

  3  

Nevada

  1  

Arkansas

  1  

New Jersey

  2  

California

  5  

New York

  6  

Connecticut

  3  

North Carolina

  5  

Delaware

  1  

Ohio

  2  

Florida

  6  

Oklahoma

  1  

Georgia

  3  

Pennsylvania

  2  

Kansas

  1  

South Carolina

  1  

Kentucky

  1  

Tennessee

  1  

Maryland

  3  

Texas

  12  

Massachusetts

  3  

Virginia

  5  
       

Total

  70  

 

Our six locations in the state of New York include a 16,000 square foot clearance center in Middletown, New York. Unlike our other 69 BHF locations, the clearance center offers only clearance merchandise at reduced price points and without design consulting services.

 

 

Wholesale Segment Overview

 

The wholesale furniture industry is very competitive and there are a large number of manufacturers both within and outside the United States who compete in the market on the basis of product quality, price, style, delivery and service. Additionally, many retailers source imported product directly, thus bypassing domestic furniture manufacturers and wholesale importers. We believe that we can be successful in the current competitive environment because our products represent excellent value combining attractive prices, quality and styling, prompt delivery, and superior service.

 

Wholesale shipments by category for the last three fiscal years are summarized below:

 

   

2019

   

2018

   

2017

 
                                                 

Bassett Custom Upholstery

  $ 152,415       58.4 %   $ 141,321       55.2 %   $ 136,366       54.7 %

Bassett Leather

    19,220       7.4 %     21,589       8.4 %     22,528       9.0 %

Bassett Custom Wood

    46,082       17.6 %     46,074       18.0 %     43,793       17.6 %

Bassett Casegoods

    40,920       15.7 %     42,875       16.8 %     42,874       17.2 %

Accessories (1)

    2,468       0.9 %     4,099       1.6 %     3,632       1.5 %

Total

  $ 261,105       100.0 %   $ 255,958       100.0 %   $ 249,193       100.0 %

 

  (1) Beginning with the third quarter of fiscal 2019, our wholesale segment no longer purchases accessory items for resale to our retail segment or to third party customers such as licensees or independent furniture retailers. Our retail segment and third party customers now source their accessory items directly from the accessory vendors.

 

Approximately 23% of our 2019 wholesale sales were of imported product compared to 27% in both 2018 and 2017. We define imported product as fully finished product that is sourced. Our domestic product includes certain products that contain components which were also sourced. We continue to believe that a blended strategy including domestically produced products primarily of a custom-order nature combined with sourcing of major collections provides the best value and quality of products to our customers. The decline in imported goods share of our wholesale sales over the last three years has been driven primarily by increasing sales of our domestic custom wood and upholstery product offerings.

 

3

 

 

The dollar value of our wholesale backlog, representing orders received but not yet shipped to the BHF store network or independent dealers, was $19,952 at November 30, 2019 and $25,810 at November 24, 2018. We expect that the November 30, 2019 backlog will be filled within fiscal 2020, with the majority of the backlog being filled during the first quarter.

 

We use lumber, fabric, leather, foam and other materials in the production of wood and upholstered furniture. These components are purchased from a variety of domestic and international suppliers and are widely available. The price and availability of foam, which is highly dependent on the cost of oil and available capacity of oil refineries, can be subject to significant volatility from time to time. We currently assemble and finish these components in our four plants in the United States.

 

Other Investments and Real Estate

 

Our balance sheet at November 30, 2019 and November 24, 2018 included short-term investments in certificates of deposit and certain retail real estate related to former licensee-owned stores. The impact upon earnings arising from these assets is included in other loss, net, in our consolidated statements of operations. Our investment balances at each of the last three fiscal year-ends are as follows:

 

   

November 30,

   

November 24,

   

November 25,

 
   

2019

   

2018

   

2017

 
                         

Investments in certificates of deposit

  $ 17,436     $ 22,643     $ 23,125  

Certain retail real estate

    -       1,655       2,969  

 

Our short-term investments at November 30, 2019 consist of certificates of deposit (“CDs”) with original terms generally ranging from six to twelve months, bearing interest at rates ranging from 0.85% to 2.55% with a weighted average yield of approximately 2.09%. At November 30, 2019, the weighted average remaining time to maturity of the CDs was approximately three months. Each CD is placed with a federally insured financial institution and all deposits are within Federal deposit insurance limits.

 

Prior to November 30, 2019 we held investments in retail store properties that we had previously leased to licensees. In November of 2019 we sold one such property, which had a carrying value of $1,655 at November 24, 2018, to the lessee for net proceeds of $1,475. At November 30, 2019, our only remaining investment real estate consisted of a building subject to a ground lease expiring in 2020. During fiscal 2017, we fully impaired the carrying value of the building. See Item 2, Properties, for additional information about our retail real estate holdings.

 

 

Retail Segment Overview – Company-Owned Retail Stores

 

The retail furniture industry remains very competitive and includes local furniture stores, regional furniture retailers, national department and chain stores and single-vendor branded retailers. As a whole, our store network with 70 Company-owned stores and 33 licensee-owned stores, ranks in the top 30 in retail furniture sales in the United States. As of November 30, 2019, we have completed a three-year store expansion program and have no further openings planned at this time. We will continue to assess the economic and competitive environment in various markets and may consider future expansion should attractive opportunities arise.

 

Net sales for our Company-owned retail stores for the last three fiscal years are summarized below:

 

   

2019

   

2018

   

2017

 
                         

Net sales

  $ 268,693     $ 268,883     $ 268,264  

 

Maintaining and enhancing our brand is critical to our ability to expand our base of customers and drive increased traffic at both Company-owned and licensee-owned stores and to our website. We believe that most of our customers research our brand and furniture offerings on our website prior to visiting a store. Our advertising and marketing campaign utilizes local and national television, direct mail, catalogs, newspapers, magazines, radio, internet and social and other digital media in an effort to maintain and enhance our existing brand equity.

 

Our stores incorporate a stylish, residential feel while highlighting our unmatched custom manufacturing capabilities in upholstered furniture and casual and formal dining. 

 

4

 

 

Logistical Services Segment Overview

 

Zenith is a specialized supply chain solutions provider, offering the home furnishings industry the benefit of an asset-based network to move product with greater efficiency, enhanced speed to market, less damage and a single source of shipment visibility. We provide fully integrated solutions with the highest commitment to customer care and service as we seek to go beyond our customers’ transactional expectations to create collaborative partnerships that provide a single source network to:

 

 

Better manage inventory across multiple locations and provide total audit-ready accountability

 

Reduce line haul and delivery costs

 

Ensure availability of high-volume items in stores

 

Integrate the omnichannel nature of today’s retail supply chain

 

Management and predictability of the total landed cost of goods

 

Our customer solutions are provided through the following services:

 

 

Network line haul freight (middle mile)

 

Warehousing, distribution and inventory management

 

At November 30, 2019, our shipping and delivery fleet consisted of the following:

 

   

Owned

   

Leased

   

Total

 

Tractors

    139       121       260  

Trailers

    239       271       510  

Local delivery trucks

    18       4       22  

 

We own a central warehousing and national distribution hub located in Conover, North Carolina, and we lease eleven facilities in ten states across the continental United States from which we operate regional freight terminals and provide warehouse and distribution services.

 

Trademarks

 

Our trademarks, including “Bassett” and the names of some of our marketing divisions, products and collections, are significant to the conduct of our business. This is important due to consumer recognition of the names and identification with our broad range of products. Certain of our trademarks are licensed to independent retailers for use in full store and store gallery presentations of our products. We also own copyrights that are important in the conduct of our business.

 

Government Regulations

 

We believe that we have materially complied with all federal, state and local standards regarding safety, health and pollution and environmental controls.

 

Our logistical services segment is also subject to regulation by several federal governmental agencies, including the Department of Transportation (“DOT”). Specifically the Federal Motor Carrier Safety Administration and the Surface Transportation Board, which are agencies within the DOT. We are also subject to rules and regulations of various state agencies. These regulatory authorities have broad powers, generally governing matters such as authority to engage in motor carrier operations, motor carrier registration, driver hours of service, safety and fitness of transportation equipment and drivers and other matters.

 

We may also be affected by laws and regulations of countries from which we source goods. Labor, environmental and other laws and regulations change over time, especially in the developing countries from which we source. Changes in these areas of regulation could negatively impact the cost and availability of sourced goods. The timing and extent to which these regulations could have an adverse effect on our financial position or results of operations is difficult to predict. In addition, the imposition of new or increased duties, tariffs, retaliatory tariffs and trade limitations with respect to foreign-sourced products could negatively impact the cost of such goods. Based on the present facts, we do not believe that they will have a material adverse effect on our financial position or future results of operations.

 

People

 

We employed 2,555 people as of November 30, 2019, of which 887 were employed in our retail segment, 1,050 were employed in our wholesale segment and 618 were employed in our logistical services segment, which also utilized another 24 temporary workers provided through staffing agencies. None of our employees are subject to collective bargaining arrangements and we have not experienced any recent work stoppages. We consider our relationship with our employees to be good.

 

5

 

 

Major Customers

 

Our risk exposure related to our customers, consisting primarily of trade accounts receivable along with certain guarantees, net of recognized reserves, totaled approximately $23,129 and $21,050 at November 30, 2019 and November 24, 2018, respectively. At November 30, 2019 and November 24, 2018, approximately 28% and 33%, respectively, of the aggregate risk exposure, net of reserves, was attributable to five customers. In fiscal 2019, 2018 and 2017, no customer accounted for more than 10% of total consolidated net sales. However, two customers accounted for approximately 44%, 40% and 47% of our consolidated revenue from logistical services during 2019, 2018 and 2017, respectively.

 

Available Information

 

We file our annual, quarterly and current reports, proxy statements and other information with the SEC. Our SEC filings are available to the public at the SEC’s website at www.sec.gov.

 

Through our website, www.bassettfurniture.com, we make available free of charge as soon as reasonably practicable after electronically filing or furnishing with the SEC, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments thereto.

 

6

 

 

ITEM 1A.

RISK FACTORS

 

The following risk factors should be read carefully in connection with evaluating our business and the forward-looking information contained in this Annual Report on Form 10-K. The risk factors below represent what we believe are the known material risk factors with respect to us and our business. Any of the following risks could materially adversely affect our business, operations, industry, financial position or future financial results.

 

We face a volatile retail environment and changing economic conditions that may further adversely affect consumer demand and spending.

 

Historically, the home furnishings industry has been subject to cyclical variations in the general economy and to uncertainty regarding future economic prospects. Should the current economic recovery falter or the current recovery in housing starts stall, consumer confidence and demand for home furnishings could deteriorate which could adversely affect our business through its impact on the performance of our Company-owned stores, as well as our licensees and the ability of a number of them to meet their obligations to us.

 

Our retail stores face significant competition from national, regional and local retailers of home furnishings, including increasing on-line competition via the internet.

 

The retail market for home furnishings is highly fragmented and intensely competitive. We currently compete against a diverse group of retailers, including national department stores, regional or independent specialty stores, and dedicated franchises of furniture manufacturers. National mass merchants such as Costco also have limited product offerings. We also compete with retailers that market products through store catalogs and the internet. In addition, there are few barriers to entry into our current and contemplated markets, and new competitors may enter our current or future markets at any time. We have also seen increasing competition from retailers offering consumers the ability to purchase home furnishings via the internet for home delivery, and this trend is expected to continue. Our existing competitors or new entrants into our industry may use a number of different strategies to compete against us, including aggressive advertising, pricing and marketing, extension of credit to customers on terms more favorable than we offer, and expansion into markets where we currently operate.

 

Competition from any of these sources could cause us to lose market share, revenues and customers, increase expenditures or reduce prices, any of which could have a material adverse effect on our results of operations.

 

Our licensee-owned stores may not be able to meet their obligations to us.

 

We have a significant amount of accounts receivable attributable to our network of licensee-owned stores. We also guarantee some of the leases of some of our licensees. If these stores do not generate the necessary level of sales and profits, the licensees may not be able to fulfill their obligations to us resulting in additional bad debt expenses and real estate related losses.

 

Failure to successfully anticipate or respond to changes in consumer tastes and trends in a timely manner could adversely impact our business, operating results and financial condition.

 

Sales of our furniture are dependent upon consumer acceptance of our designs, styles, quality and price. As with all retailers, our business is susceptible to changes in consumer tastes and trends. We attempt to monitor changes in consumer tastes and home design trends through attendance at international industry events and fashion shows, internal marketing research, and communication with our retailers and design consultants who provide valuable input on consumer tendencies. However, such tastes and trends can change rapidly and any delay or failure to anticipate or respond to changing consumer tastes and trends in a timely manner could adversely impact our business, operating results and financial condition.

 

In addition, certain suppliers may require extensive advance notice of our requirements in order to produce products in the quantities we desire. This long lead time may require us to place orders far in advance of the time when certain products will be offered for sale, thereby exposing us to risks relating to shifts in consumer demand and trends, and any downturn in the U.S. economy.

 

7

 

 

Our success depends upon our brand, marketing and advertising efforts and pricing strategies, and if we are not able to maintain and enhance our brand, or if we are not successful in these efforts and strategies, our business and operating results could be adversely affected. 

 

Maintaining and enhancing our brand is critical to our ability to expand our base of customers and drive increased traffic at both Company-owned and licensee-owned stores and to our website. Our advertising and marketing campaign utilizes television, direct mail, catalogs, newspapers, magazines, radio, the internet and social and other digital media in an effort to maintain and enhance our existing brand equity. We cannot provide assurance that our marketing, advertising and other efforts to promote and maintain awareness of our brand will not require us to incur substantial costs. If these efforts are unsuccessful or we incur substantial costs in connection with these efforts, our business, operating results and financial condition could be adversely affected.

 

Our use of foreign sources of production for a portion of our products exposes us to certain additional risks associated with international operations.

 

Our use of foreign sources for the supply of certain of our products exposes us to risks associated with overseas sourcing.  These risks are related to government regulation, volatile ocean freight costs, delays in shipments, and extended lead time in ordering. Governments in the foreign countries where we source our products may change their laws, regulations and policies, including those related to tariffs and trade barriers, investments, taxation and exchange controls which could make it more difficult to service our customers resulting in an adverse effect on our earnings. We could also experience increases in the cost of ocean freight shipping which could have an adverse effect on our earnings. Shipping delays and extended order lead times may adversely affect our ability to respond to sudden changes in demand, resulting in the purchase of excess inventory in the face of declining demand, or lost sales due to insufficient inventory in the face of increasing demand, either of which would also have an adverse effect on our earnings or liquidity.

 

Fluctuations in the price, availability and quality of raw materials could result in increased costs or cause production delays which might result in a decline in sales, either of which could adversely impact our earnings. 

 

We use various types of wood, foam, fibers, fabrics, leathers, and other raw materials in manufacturing our furniture. Certain of our raw materials, including fabrics, are purchased both abroad and domestically. Fluctuations in the price, availability and quality of raw materials could result in increased costs or a delay in manufacturing our products, which in turn could result in a delay in delivering products to our customers. For example, lumber prices fluctuate over time based on factors such as weather and demand, which in turn impact availability. Production delays or upward trends in raw material prices could result in lower sales or margins, thereby adversely impacting our earnings.

 

We rely extensively on computer systems to process transactions, summarize results and manage our business.  Disruptions in both our primary and back-up systems could adversely affect our business and operating results.

 

Our primary and back-up computer systems are subject to damage or interruption from power outages, computer and telecommunications failures, computer viruses, security breaches, natural disasters and errors by employees.  Though losses arising from some of these issues would be covered by insurance, interruptions of our critical business computer systems or failure of our back-up systems could reduce our sales or result in longer production times.  If our critical business computer systems or back-up systems are damaged or cease to function properly, we may have to make a significant investment to repair or replace them.

 

We may incur costs and reputational harm resulting from security risks we face in connection with our electronic processing, storage and transmission of confidential information.

 

We accept electronic payment cards in our stores and also gather certain personal identifiable information in the processing of our retail sales transactions. We also store and process confidential information pertaining to our employees and other third parties on our networks. We may in the future become subject to claims for purportedly fraudulent transactions arising out of the actual or alleged theft of credit or debit card information. In addition, if there were a disclosure of confidential information provided by, or concerning, our employees, customers or other third parties, including through inadvertent disclosure, unapproved dissemination, or unauthorized access, our reputation could be harmed and we could be subject to civil or criminal liability and regulatory actions. Proceedings related to theft of credit or debit card information may be brought by payment card providers, banks and credit unions that issue cards, cardholders (either individually or as part of a class action lawsuit) and federal and state regulators. Any such proceedings could distract our management from running our business and cause us to incur significant unplanned losses and expenses. Consumer perception of our brand could also be negatively affected by these events, which could further adversely affect our results and prospects.

 

8

 

 

We may suffer adverse impacts from additional risks associated with the operations of Zenith, a freight transportation and logistics business.

 

Zenith exposes us to certain risks common to that business, including, but not limited to: difficulties attracting and retaining qualified drivers which could result in increases in driver compensation and could adversely affect our profitability and our ability to maintain or grow our fleet; adverse impacts from unfavorable fluctuations in the availability and price of diesel fuel; increased costs of compliance with, or liability for violation of, existing or future regulations in the highly regulated freight transportation industry; adverse impacts upon Zenith’s results of operations which may result from seasonal factors and harsh weather conditions; and the increased liability inherent with the operation of heavy over-the-road vehicles.

 

ITEM 1B.

UNRESOLVED STAFF COMMENTS

 

None. 

 

ITEM 2.

PROPERTIES 

 

General

 

We own our corporate office building, which includes an annex, located in Bassett, Va.

 

We own the following facilities, by segment:

 

Wholesale Segment:

 

Facility

Location

 

 

Bassett Wood Division

Martinsville, Va.

Bassett Wood Division

Bassett, Va.

Bassett Upholstery Division

Newton, N.C.

3 Warehouses

Bassett, Va.

 

In general, these facilities are suitable and are considered to be adequate for the continuing operations involved. All facilities are in regular use and provide adequate capacity for our manufacturing and warehousing needs. In addition to the owned properties shown above, we have an upholstery division manufacturing facility which occupies part of a regional distribution center in Grand Prairie, Texas that is leased by our logistical services segment, and we lease property in Newton, North Carolina for the manufacturing and warehousing operations of Lane Venture and Bassett Outdoor. We also lease a facility in Haleyville, Alabama which houses a production line for aluminum outdoor furniture.

 

Retail Segment:

 

Real estate associated with our retail segment consists of eight owned locations with an aggregate square footage of 201,096 and a net book value of $17,845. These stores are located as follows:

 

Concord, North Carolina Greensboro, North Carolina
Greenville, South Carolina Fredericksburg, Virginia
Houston, Texas (2 locations) Louisville, Kentucky
Knoxville, Tennessee  

 

Of these locations, two are subject to land leases. A ninth location in Gulfport, Mississippi was closed during the fourth fiscal quarter of 2019 and was under contract for sale as of November 30, 2019 with the sale ultimately closing in December 2019. Our remaining 63 store locations are leased from third-parties. In addition to retail stores, we also lease fifteen locations for use as regional warehouses and home delivery distribution centers.

 

9

 

 

Logistical Services Segment:

 

Owned real estate associated with our logistical services segment is located in Conover, North Carolina and includes the following facilities:

 

 

Facility

 

Square Footage

 

Distribution center and corporate office

    242,000  

2 Maintenance facilities

    15,142  

2 Transit warehouses

    86,135  

 

 

In addition to the owned facilities listed above, we also lease warehouse space in eleven locations across the United States with an aggregate square footage of 942,876.

 

Other Real Estate Owned:

 

We hold one retail store property that we previously leased to a licensee. The property, with a square footage of 24,675, is subject to a ground lease which expires in the first quarter of fiscal 2020. The carrying value of this property was fully impaired in fiscal 2017.

 

See Note 16 to the Consolidated Financial Statements included under Item 8 of this Annual Report for more information with respect to our operating lease obligations.

 

ITEM 3.

LEGAL PROCEEDINGS 

 

None.  

 

 

ITEM 4.

MINE SAFETY DISCLOSURES 

 

Not applicable.  

 

INFORMATION ABOUT OUR EXECUTIVE OFFICERS 

 

David C. Baker, 59, joined the Company in 2005 as Director, Store Operations. From 2006 to 2015 he served as Vice President – Corporate Retail, and in 2015 was appointed to Senior Vice President, Corporate Retail. In 2019, he was appointed Senior Vice President, Chief Retail Officer. Prior to joining Bassett, Mr. Baker managed Bassett stores for licensees from 1999 to 2005 after having previously managed stores for other furniture retail chains including Haverty’s and Rhodes Furniture.

 

John E. Bassett III, 61, has been with the Company since 1981 and served in various wood manufacturing and product sourcing capacities, including Vice President, Wood Manufacturing; Vice-President, Global Sourcing from 2001 to 2007 and Vice President, Wood in 2008. He was appointed Senior Vice President, Wood in 2009. In 2019, he was also promoted to the position of Senior Vice President, Chief Operations Officer.

 

Bruce R. Cohenour, 61, has been with the Company since 2011, starting as Senior Vice President of Upholstery Merchandising. In 2013, he was promoted to Senior Vice President of Sales and Merchandising. In 2019, he was appointed Senior Vice President, Chief Sales Officer. Prior to joining Bassett, Mr. Cohenour was with Hooker Furniture Corp. from 2007 through 2010, last serving as President of the Case Goods Division.

 

J. Michael Daniel, 58, joined the Company in 2007 as Corporate Controller. From April 2009 through December 2009, he served as Corporate Controller and Interim Chief Financial Officer. In January 2010, he was appointed Vice President and Chief Accounting Officer. In January 2013, he was promoted to Senior Vice President and Chief Financial Officer. In 2019, he was also promoted to the position of Senior Vice President, Chief Financial and Administrative Officer.

 

Jack L. Hawn, 66, has been with the Company since 2015 as Senior Vice President, Bassett and President, Zenith. His company, Zenith Transportation, Inc., was majority owner of Zenith (Zenith Freight Lines, LLC) from 1999 until its interest in Zenith was acquired by the Company in 2015. He has served as President of Zenith since its formation in 1999.

 

Jay R. Hervey, Esq., 60, has served as the General Counsel, Vice President and Secretary for the Company since 1997.

 

Kara Kelchner-Strong, 45, joined the Company in 2007 as Director, Retail Communications. In 2015, she was promoted to Vice President, Strategy and Planning. In 2018, she was appointed Vice President, Strategic Transformation Officer and in 2019, she was promoted to Senior Vice President, Customer Experience Officer. Prior to joining Bassett, she held several positions with Restoration Hardware.

 

Stefanie J. Lucas, 56, joined the Company in 2019 as Senior Vice President, Chief Merchandising Officer. Prior to joining Bassett, she was the Chief Executive Officer of Boston Interiors, a top 100 home furnishings retailer.

 

Robert H. Spilman, Jr., 63, has been with the Company since 1984. Since 2000, he has served as Chief Executive Officer and President, and in 2016 also became the Chairman of the Board of Directors.

 

10

 

 

PART II

 

ITEM 5.

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

 

Market Information:

 

Bassett’s common stock trades on the NASDAQ global select market system under the symbol “BSET.” We had approximately 3,700 beneficial stockholders at January 17, 2020.

 

Issuer Purchases of Equity Securities: 

 

We are authorized to repurchase Company stock under a plan which was originally announced in 1998. On October 3, 2018, the Board of Directors increased the remaining limit of the repurchase plan to $20 million. The repurchase program does not include a specific time table or price targets and may be suspended or terminated at any time. Shares may be purchased through open market or privately negotiated transactions at the discretion of management based on its evaluation of prevailing market conditions and other factors. The following table summarizes the stock repurchase activity for the three months ended November 30, 2019 and the approximate dollar value of shares that may yet be purchased pursuant to our stock repurchase program:

 

Issuer Purchases of Equity Securities

(dollar amounts in thousands, except share and per share data)

 

   

Total

Shares

Purchased

   

Average

Price Paid

 

Total Number of Shares

Purchased as Part of

Publicly Announced Plans

or Programs

 

Approximate Dollar Value

of Shares that May Yet Be

Purchased Under the Plans

or Programs

                                           

September 1 - October 5, 2019

    5,500     $ 12.58         5,500           $ 11,069    

October 6 -November 2, 2019

    8,410     $ 14.49         8,410           $ 10,948    

November 3 - November 30, 2019

    19,864     $ 15.52         19,864           $ 10,639    

 

11

 

 

ITEM 6.

SELECTED FINANCIAL DATA

 

The selected financial data set forth below for the fiscal years indicated were derived from our audited consolidated financial statements. The information should be read in conjunction with our consolidated financial statements (including the notes thereto) and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” appearing elsewhere in, or incorporated by reference into, this report.

 

(In thousands)

 

2019

     

2018

     

2017

     

2016

     

2015

   
                                                   
                                                   

Net sales

  $ 452,087  

(1)

  $ 456,855  

(1)

  $ 452,503  

(1)

  $ 432,038  

(1)

  $ 430,927  

(1)

Operating income

  $ (595 )

(2)

  $ 14,084  

(2)

  $ 27,018  

(2)

  $ 28,193  

(2)

  $ 25,989  

(2)

Other income (loss), net

  $ (1,145 )     $ (1,878 )     $ 858  

(3)

  $ (2,416 )     $ 5,879  

(4)

Income before income taxes

  $ (1,740 )     $ 12,206       $ 27,876       $ 25,777       $ 31,868    

Income tax expense

  $ 188       $ 3,988  

(5)

  $ 9,620       $ 9,948       $ 11,435    

Net income

  $ (1,928 )     $ 8,218       $ 18,256       $ 15,829       $ 20,433    

Diluted earnings per share

  $ (0.19 )     $ 0.77       $ 1.70       $ 1.46       $ 1.88    

Cash dividends declared

  $ 5,133       $ 5,041       $ 8,266       $ 7,345       $ 5,868    

Cash dividends per share

  $ 0.50       $ 0.47       $ 0.77       $ 0.68       $ 0.54    

Total assets

  $ 275,766       $ 291,641       $ 293,748       $ 278,267       $ 282,543    

Long-term debt

  $ -       $ -       $ 329       $ 3,821       $ 8,500    

Current ratio

    1.89 to 1         1.82 to 1         1.91 to 1         1.83 to 1         1.84 to 1    

Book value per share

  $ 17.66       $ 18.08       $ 17.83       $ 16.85       $ 16.25    

 

 

 

(1)

Fiscal 2019, 2018, 2017, 2016 and 2015 included logistical services revenue from Zenith in the amount of $48,222, $54,386, $54,406, $54,842 and $43,522, respectively, since the acquisition of Zenith on February 2, 2015.

 

(2)

Fiscal 2019 operating income includes asset impairment charges, a goodwill impairment charge, litigation costs, early retirement program charges and lease exit costs totaling $8,041. Fiscal 2018 operating income includes restructuring and asset impairment charges and lease exit costs totaling $770. Fiscal 2017 operating income includes a gain of $1,220 resulting from the sale of our retail store in Las Vegas, Nevada. Fiscal 2016 operating income includes the benefit of a $1,428 award received from the settlement of class action litigation. Fiscal 2015 included restructuring and asset impairment charges and lease exit costs totaling $974. See Note 15 to the Consolidated Financial Statements for additional information related to each of these items.

 

(3)

Fiscal 2017 includes $4,221 of gains resulting from the sale of investments (see Note 9 to the Consolidated Financial Statements), and an impairment charge of $1,084 retail real estate held for investment (see Note 2 to the Consolidated Financial Statements).

 

(4)

Fiscal 2015 includes a remeasurement gain of $7,212 arising from our acquisition of Zenith and $240 of income received from the Continued Dumping and Subsidy Offset Act (“CDSOA”).

 

(5)

Fiscal 2018 income tax expense includes a charge of $1,331 resulting from the remeasurement of our deferred tax assets following the reduction of federal income tax rates with the enactment of the Tax Cuts and Jobs Act (see Note 14 to the Consolidated Financial Statements).

 

12

 

 

ITEM 7.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(Amounts in thousands except share and per share data)

 

Our fiscal year, which ends on the last Saturday of November, periodically results in a 53-week year instead of the normal 52 weeks.  The current fiscal year ending November 30, 2019 is a 53-week year, with the additional week being included in our first fiscal quarter.  Accordingly, the information presented below includes 53 weeks of operations for the year ended November 30, 2019 as compared to 52 weeks included in the years ended November 24, 2018 and November 25, 2017.

 

Overview

 

Bassett is a leading retailer, manufacturer and marketer of branded home furnishings. Our products are sold primarily through a network of Company-owned and licensee-owned branded stores under the Bassett Home Furnishings (“BHF”) name, with additional distribution through other wholesale channels including multi-line furniture stores. We were founded in 1902 and incorporated under the laws of Virginia in 1930. Our rich 117-year history has instilled the principles of quality, value, and integrity in everything we do, while simultaneously providing us with the expertise to respond to ever-changing consumer tastes and meet the demands of a global economy.

 

With 103 BHF stores at November 30, 2019, we have leveraged our strong brand name in furniture into a network of Company-owned and licensed stores that focus on providing consumers with a friendly environment for buying furniture and accessories.  Our store program is designed to provide a single source home furnishings retail store that provides a unique combination of stylish, quality furniture and accessories with a high level of customer service.  In order to reach markets that cannot be effectively served by our retail store network, we also distribute our products through other wholesale channels including multi-line furniture stores, many of which feature Bassett galleries or design centers. We use a network of over 30 independent sales representatives who have stated geographical territories. These sales representatives are compensated based on a standard commission rate. We believe this blended strategy provides us the greatest ability to effectively distribute our products throughout the United States and ultimately gain market share.  

 

The BHF stores feature custom order furniture, free in-home design visits (“home makeovers”) and coordinated decorating accessories.  Our philosophy is based on building strong long-term relationships with each customer.  Sales people are referred to as “Design Consultants” and are trained to evaluate customer needs and provide comprehensive solutions for their home decor.  Until a rigorous training and design certification program is completed, Design Consultants are not authorized to perform in-home design services for our customers.

 

We have factories in Newton, North Carolina and Grand Prairie, Texas that manufacture custom upholstered furniture, a factory in Martinsville, Virginia that primarily assembles and finishes our custom casual dining offerings and a factory in Bassett, Virginia that assembles and finishes our “Bench Made” line of custom, solid hardwood furniture. In late 2019, we also began operating a facility in Haleyville, Alabama that will provide Bassett with the capability to manufacture custom aluminum outdoor furniture primarily under the Lane Venture brand. Our manufacturing team takes great pride in the breadth of its options, the precision of its craftsmanship, and the speed of its process, with custom pieces often manufactured within two weeks of taking the order in our stores. Our logistics team then promptly ships the product to one of our home delivery hubs or to a location specified by our licensees.  In addition to the furniture that we manufacture domestically, we source most of our formal bedroom and dining room furniture (casegoods) and certain leather upholstery offerings from several foreign plants, primarily in Vietnam, Thailand and China. Over 75% of the products we currently sell are manufactured in the United States.

 

We also own Zenith Freight Lines, LLC (“Zenith”) which provides logistical services to Bassett along with other furniture manufacturers and retailers. Zenith delivers best-of-class shipping and logistical support services that are uniquely tailored to the needs of Bassett and the furniture industry. Approximately 60% of Zenith’s revenue is generated from services provided to non-Bassett customers.

 

On December 21, 2017, we purchased certain assets and assumed certain liabilities of Lane Venture from Heritage Home Group, LLC for $15,556 in cash. Lane Venture is a manufacturer and distributor of premium outdoor furniture and is now being operated as a component of our wholesale segment. This acquisition marked our entry into the market for outdoor furniture and we believe that Lane Venture has provided a foundation for us to become a significant participant in this category. Our strategy is to distribute this brand outside of our BHF store network only. See Note 3 to our consolidated financial statements for additional details regarding this acquisition.

 

With the knowledge we have gained through operating Lane Venture, we have developed a new separate brand that will only be marketed through the BHF store network. This will allow Bassett branded product to move from inside the home to outside the home to capitalize the growing trend of outdoor living. Bassett Outdoor is currently marketed in a limited number of stores with a broader distribution planned late in the first quarter of 2020.

 

At November 30, 2019, our BHF store network included 70 Company-owned stores and 33 licensee-owned stores. During fiscal 2019, we opened new stores in Coral Gables, Florida, Columbus, Ohio, Tucson, Arizona, Estero, Florida, Sarasota, Florida and Princeton, New Jersey. During fiscal 2019 we closed one underperforming store in Gulfport, Mississippi and repositioned our store in Friendswood, Texas and another store in Palm Beach, Florida. In addition, a new licensee store was opened in Boise, Idaho. A new 23,000 square foot licensee store was opened in December of 2019 in Thornton, Colorado.

 

13

 

 

We have completed a three-year store expansion program that has seen us grow to more than 100 stores throughout the country. We currently have no Company-owned or licensee-owned store openings planned. Our strategy is to assess the current fleet of stores and improve the overall operations and profitability of the Corporate Retail segment. We will continue to assess the economic and competitive environment in various markets and may consider future expansion should attractive opportunities arise.

 

As with any retail operation, prior to opening a new store we incur such expenses as rent, training costs and other payroll related costs. These costs generally range between $200 to $400 per store depending on the overall rent costs for the location and the period between the time when we take physical possession of the store space and the time of the store opening. Generally, rent payments during a buildout period between delivery of possession and opening of a new store are deferred and therefore straight-line rent expense recognized during that time does not require cash. Inherent in our retail business model, we also incur losses in the two to three months of operation following a new store opening. Like other furniture retailers, we do not recognize a sale until the furniture is delivered to our customer. Because our retail business model does not involve maintaining a stock of retail inventory that would result in quick delivery and because of the custom nature of many of our furniture offerings, delivery to our customers usually occurs about 30 days after an order is placed. We generally require a deposit at the time of order and collect the remaining balance when the furniture is delivered, at which time the sale is recognized. Coupled with the previously discussed store pre-opening costs, total start-up losses can range from $400 to $600 per store.

 

Today’s customers expect their digital experiences and communications to be personalized, highly-relevant and catered to match their specific needs and preferences. We have established a centralized customer care center that is using customer relationship management (CRM) software to track each customer’s path from initial engagement through point of sale and ultimately to their post-delivery experience. We will continue to invest in our digital effort to improve our customers’ journey from the time they begin on our website to the final step of delivering the goods to their homes. We view the combination of website traffic and store traffic in a holistic fashion where our customer generally experiences our brand on our website before visiting a store. While store traffic has been decreasing over the last few years, traffic to our website increased this year with web visits up 15% for the year ended November 30, 2019 as compared to the prior year period. We plan to invest more in new digital outreach strategies on a store market by market basis to drive more traffic to the website.

 

Our pure e-commerce sales (ordering directly from the website) have historically been immaterial. We plan to invest in our website in 2020 to improve the navigation and the ordering capabilities to increase web sales. Much of our current product offerings highlight the breadth and depth of our custom furniture capabilities which are difficult to show and sell online. We plan to expand our merchandising strategies to include more product that can be more easily purchased online with or without a store visit. While we work to increase web sales, we will not compromise on our in-store experience or the quality of our in-home makeover capabilities.

 

14

 

 

Analysis of Operations

 

Net sales revenue, cost of furniture and accessories sold, selling, general and administrative (“SG&A”) expense, new store pre-opening costs, other charges, and income from operations were as follows for the years ended November 30, 2019, November 24, 2018 and November 25, 2017:

 

                                                   

Change from Prior Year

 
                                                   

2019 vs 2018

   

2018 vs 2017

 
   

2019*

   

2018

   

2017

   

Dollars

   

Percent

   

Dollars

   

Percent

 

Sales Revenue:

                                                                               

Furniture and accessories

  $ 403,865       89.3 %   $ 402,469       88.1 %   $ 398,097       88.0 %   $ 1,396       0.3 %   $ 4,372       1.1 %

Logistics

    48,222       10.7 %     54,386       11.9 %     54,406       12.0 %     (6,164 )     -11.3 %     (20 )     0.0 %

Total net sales revenue

    452,087       100.0 %     456,855       100.0 %     452,503       100.0 %     (4,768 )     -1.0 %     4,352       1.0 %
                                                                                 

Cost of furniture and accessories sold

    179,244       39.6 %     179,581       39.3 %     177,579       39.2 %     (337 )     -0.2 %     2,002       1.1 %

SG&A

    264,280       58.5 %     260,339       57.0 %     245,493       54.3 %     3,941       1.5 %     14,846       6.0 %

New store pre-opening costs

    1,117       0.2 %     2,081       0.5 %     2,413       0.6 %     (964 )     -46.3 %     (332 )     -13.8 %

Other charges

    8,041       1.8 %     770       0.2 %     -       0.0 %     7,271       994.3 %     770        NM  
                                                                                 

Income (loss) from operations

  $ (595 )     -0.1 %   $ 14,084       3.1 %   $ 27,018       6.0 %   $ (14,679 )     -104.2 %   $ (12,934 )     -47.9 %

 

*53 weeks for fiscal 2019 as compared with 52 weeks for fiscal 2018 and 2017.

 

 

Our consolidated net sales by segment were as follows:

 

                            Change from Prior Year  
                           

2019 vs 2018

   

2018 vs 2017

 
   

2019

   

2018

   

2017

   

Dollars

   

Percent

   

Dollars

   

Percent

 

Net Sales

                                                       

Wholesale

  $ 261,105     $ 255,958     $ 249,193     $ 5,147       2.0 %   $ 6,765       2.7 %

Retail

    268,693       268,883       268,264       (190 )     -0.1 %     619       0.2 %

Logistical services

    80,074       82,866       83,030       (2,792 )     -3.4 %     (164 )     -0.2 %

Inter-company eliminations:

                                                       

Furniture and accessories

    (125,933 )     (122,372 )     (119,360 )     (3,561 )     2.9 %     (3,012 )     2.5 %

Logistical services

    (31,852 )     (28,480 )     (28,624 )     (3,372 )     11.8 %     144       -0.5 %

Consolidated

  $ 452,087     $ 456,855     $ 452,503     $ (4,768 )     -1.0 %   $ 4,352       1.0 %

 

Refer to the segment information which follows for a discussion of the significant factors and trends affecting our results of operations for fiscal 2019 and 2018 as compared with the prior year periods.

 

Certain other items affecting comparability between periods are discussed below in “Other Items Affecting Net Income”.

 

15

 

 

Segment Information

 

We have strategically aligned our business into three reportable segments 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 (licensee-owned stores and Company-owned stores) and independent furniture retailers. Our wholesale segment includes our wood and upholstery operations as well as all corporate selling, general and administrative expenses, including those corporate expenses related to both Company- and licensee-owned stores. We eliminate the sales between our wholesale and retail segments as well as the imbedded profit in the retail inventory for the consolidated presentation in our financial statements. 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 consolidated statements of operations.

 

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

 

Logistical services. With our acquisition of Zenith on February 2, 2015, we created the logistical services operating segment which reflects the operations of Zenith. In addition to providing shipping and warehousing services for the Company, the revenue from which is eliminated upon consolidation, Zenith also provides similar services to other customers, primarily in the furniture industry. Revenue from the performance of these services to other customers is included in logistics revenue in our consolidated statement of operations. Zenith’s operating costs are included in selling, general and administrative expenses.

 

During the fourth quarter of fiscal 2018, we substantially completed transferring operational control of home delivery services for BHF stores from Zenith to our retail segment, including the transfer of the assets and many of the employees used in providing that service. Accordingly, the revenues for the logistical services segment for all periods presented have been restated to no longer include the intercompany revenues and related costs for those services. Concurrently with the transfer of home delivery operations to retail, Zenith also ceased providing such services to third party customers. Revenues from Zenith’s home delivery services formerly provided to third party customers and the associated costs thereof continue to be reported in the logistical services segment. The impact upon segment operating income (loss) from the restatement was not material. Zenith continues to provide other intercompany shipping and warehousing services to Bassett which are eliminated in consolidation.

 

16

 

 

The following tables illustrate the effects of various intercompany eliminations on income (loss) from operations in the consolidation of our segment results:

 

   

Year Ended November 30, 2019

 
   

Wholesale

   

Retail

   

Logistics

   

Eliminations

     

Consolidated

 

Sales revenue:

                                         

Furniture & accessories

  $ 261,105     $ 268,693     $ -     $ (125,933 )

(1)

  $ 403,865  

Logistics

    -       -       80,074       (31,852 )

(2)

    48,222  

Total sales revenue

    261,105       268,693       80,074       (157,785 )       452,087  

Cost of furniture and accessories sold

    173,350       131,528       -       (125,634 )

(3)

    179,244  

SG&A expense

    76,299       143,057       78,219       (33,295 )

(4)

    264,280  

New store pre-opening costs

    -       1,117       -       -         1,117  

Income (loss) from operations (5)

  $ 11,456     $ (7,009 )   $ 1,855     $ 1,144       $ 7,446  

 

   

Year Ended November 24, 2018

 
   

Wholesale

   

Retail

   

Logistics

   

Eliminations

     

Consolidated

 

Sales revenue:

                                         

Furniture & accessories

  $ 255,958     $ 268,883     $ -     $ (122,372 )

(1)

  $ 402,469  

Logistics

    -       -       82,866       (28,480 )

(2)

    54,386  

Total sales revenue

    255,958       268,883       82,866       (150,852 )       456,855  

Cost of furniture and accessories sold

    171,272       130,591       -       (122,282 )

(3)

    179,581  

SG&A expense

    72,412       136,523       81,468       (30,064 )

(4)

    260,339  

New store pre-opening costs

    -       2,081       -       -         2,081  

Income (loss) from operations (5)

  $ 12,274     $ (312 )   $ 1,398     $ 1,494       $ 14,854  

 

   

Year Ended November 25, 2017

 
   

Wholesale

   

Retail

   

Logistics

   

Eliminations

     

Consolidated

 

Sales revenue:

                                         

Furniture & accessories

  $ 249,193     $ 268,264     $ -     $ (119,360 )

(1)

  $ 398,097  

Logistics

    -       -       83,030       (28,624 )

(2)

    54,406  

Total sales revenue

    249,193       268,264       83,030       (147,984 )       452,503  

Cost of furniture and accessories sold

    164,028       132,463       -       (118,912 )

(3)

    177,579  

SG&A expense

    66,044       129,898       80,068       (30,517 )

(4)

    245,493  

New store pre-opening costs

    -       2,413       -       -         2,413  

Income from operations

  $ 19,121     $ 3,490     $ 2,962     $ 1,445       $ 27,018  

 

(1) 

Represents the elimination of sales from our wholesale segment to our Company-owned BHF stores.

(2) 

Represents the elimination of logistical services billed to our wholesale segment.

(3) 

Represents the elimination of purchases by our Company-owned BHF stores from our wholesale segment, as well as the change for the period in the elimination of intercompany profit in ending retail inventory.

(4) 

Represents the elimination of rent paid by our retail stores occupying Company-owned real estate and logistical services expense incurred from Zenith by our wholesale segment.

 

 

 

 

   

Year Ended

 
   

November 30,

   

November 24,

   

November 25,

 
   

2019

   

2018

   

2017

 
                         

Intercompany logistical services

  $ (31,852 )   $ (28,480 )   $ (28,624 )

Intercompany rents

    (1,443 )     (1,584 )     (1,893 )

Total SG&A expense elimination

  $ (33,295 )   $ (30,064 )   $ (30,517 )

 

(5)

Excludes the effects of goodwill and asset impairment charges, cost of early retirement program, litigation costs and lease exit costs which are not allocated to our segments.

 

17

 

 

The following table reconciles income from operations as shown above for our consolidated segment results with income (loss) from operations as reported in accordance with GAAP:

 

   

2019

   

2018

   

2017

 
                         

Consolidated segment income from operations excluding special charges

  $ 7,446     $ 14,854     $ 27,018  

Less:

                       

Asset impairment charges

    4,431       469       -  

Goodwill impairment charge

    1,926       -       -  

Early retirement program

    835       -       -  

Litigation expense

    700       -       -  

Lease exit costs

    149       301       -  
                         

Income (loss) from operations as reported

  $ (595 )   $ 14,084     $ 27,018  

 

Asset Impairment Charges

 

During fiscal 2019 the loss from operations included $4,431 of non-cash impairment charges recognized on the assets of six underperforming retail stores.

 

During fiscal 2018 income from operations included $469 of non-cash asset impairment charges recognized on the assets of one underperforming retail store.

 

With regard to these seven locations, we are evaluating their ongoing viability which may result in the decision to close certain of these stores in the future.

 

Goodwill Impairment Charge

 

During fiscal 2019 our annual evaluation of the carrying value of our recorded goodwill resulted in the recognition of a $1,926 non-cash charge for the impairment of goodwill associated with our retail reporting unit (see Note 8 to our Consolidated Financial Statements).

 

Early Retirement Program

 

During the first quarter of fiscal 2019, we offered a voluntary early retirement package to certain eligible employees of the Company. Twenty-three employees accepted the offer, which expired on February 28, 2019. These employees are to receive pay equal to one-half their current salary plus benefits over a period of one year from the final day of each individual’s active employment. Accordingly, we recognized a charge of $835 during the year ended November 30, 2019.

 

Litigation Expense 

 

During fiscal 2019 we accrued $700 for the estimated costs to resolve certain wage and hour violation claims that have been asserted against the Company. While the ultimate cost of resolving these claims may be substantially higher, the amount accrued represents our estimate of the most likely outcome of a mediated settlement.

 

Lease Exit Costs

 

During fiscal 2019 we recognized a $149 charge for lease exit costs incurred in connection with the repositioning of a Company-owned retail store in Palm Beach, Florida to a new location within the same market.

 

During fiscal 2018 we recognized a $301 charge for lease exit costs incurred in connection with the closing of a Company-owned retail store location in San Antonio, Texas.

 

18

 

 

Wholesale Segment

 

Net sales, gross profit, SG&A expense and operating income for our Wholesale Segment were as follows for the years ended November 30, 2019, November 24, 2018 and November 25, 2017:

 

                                                   

Change from Prior Year

 
                                                   

2019 vs 2018

   

2018 vs 2017

 
   

2019*

   

2018

   

2017

   

Dollars

   

Percent

   

Dollars

   

Percent

 
                                                                                 

Net sales

  $ 261,105       100.0 %   $ 255,958       100.0 %   $ 249,193       100.0 %   $ 5,147       2.0 %   $ 6,765       2.7 %

Gross profit

    87,755       33.6 %     84,686       33.1 %     85,165       34.2 %     3,069       3.6 %     (479 )     -0.6 %

SG&A

    76,299       29.2 %     72,412       28.3 %     66,044       26.5 %     3,887       5.4 %     6,368       9.6 %

Income from operations

  $ 11,456       4.4 %   $ 12,274       4.8 %   $ 19,121       7.7 %   $ (818 )     -6.7 %   $ (6,847 )     -35.8 %

 

 

Wholesale shipments by category for the last three fiscal years are summarized below:

 

                                                   

Change from Prior Year

 
                                                   

2019 vs 2018

   

2018 vs 2017

 
   

2019*

   

2018

   

2017

   

Dollars

   

Percent

   

Dollars

   

Percent

 
                                                                                 

Bassett Custom Upholstery

  $ 152,415       58.4 %   $ 141,321       55.2 %   $ 136,366       54.7 %   $ 11,094       7.9 %   $ 4,955       3.6 %

Bassett Leather

    19,220       7.4 %     21,589       8.4 %     22,528       9.0 %     (2,369 )     -11.0 %     (939 )     -4.2 %

Bassett Custom Wood

    46,082       17.6 %     46,074       18.0 %     43,793       17.6 %     8       0.0 %     2,281       5.2 %

Bassett Casegoods

    40,920       15.7 %     42,875       16.8 %     42,874       17.2 %     (1,955 )     -4.6 %     1       0.0 %

Accessories

    2,468       0.9 %     4,099       1.6 %     3,632       1.5 %     (1,631 )     -39.8 %     467       12.9 %

Total

  $ 261,105       100.0 %   $ 255,958       100.0 %   $ 249,193       100.0 %   $ 5,147       2.0 %   $ 6,765       2.7 %

 

*53 weeks for fiscal 2019 as compared with 52 weeks for fiscal 2018 and 2017.

 

 

Fiscal 2019 as Compared to Fiscal 2018

 

On an average weekly basis (normalizing for 53 weeks compared to 52 weeks), net sales for 2019 were essentially flat at $256,178. A $3,206 increase in outdoor furniture shipments was primarily offset by a $2,707 decrease in juvenile furniture shipments as we exited this furniture line during 2019. In addition, the wholesale segment ceased selling accessories to the BHF network beginning at the start of the third quarter of 2019. Both the corporate- and licensee-owned stores now purchase accessories directly from third-party accessory providers. This resulted in a $1,678 decrease in the sale of accessories. Gross margin for the wholesale segment was 33.6% for fiscal 2019 as compared to 33.1% for the prior year. This increase was primarily driven by higher margins in domestic custom upholstery operations as price increases implemented during the third quarter of 2018 offset the increased raw material costs experienced late in 2017 and early 2018. Margins in the imported wood operations increased due to lower realized container freight costs and improved margins on the sales of discontinued product, partially offset by the $390 inventory valuation charge associated with our exit from the juvenile line of business. The increase in SG&A as a percentage of sales was primarily driven by higher marketing and other brand development costs and increased over-the-road freight and warehousing costs.   

 

Fiscal 2018 as Compared to Fiscal 2017

 

The increase in net sales was driven by the addition of $9,546 of revenue for Lane Venture, acquired during the first quarter of 2018, along with a 1.8% increase in furniture shipments to the open market (outside the BHF network and excluding shipments from Lane Venture), partially offset by a 2.8% decrease in furniture shipments to the BHF network as compared to the prior year period. A much smaller component of our wholesale revenues, shipments of wholesale accessories, increased 12.9% over the prior year period. Gross margins for the wholesale segment were 33.1% for fiscal 2018 compared to 34.2% for the prior year. This decrease was primarily driven by lower margins in the Bassett Custom Upholstery operations, excluding Lane Venture, due to higher materials costs coupled with lower absorption of fixed costs due to lower volumes. In June 2018, we implemented targeted price increases to our Custom Upholstery line to mitigate the effects of the cost increases and began seeing the benefit on margins in July 2018. Wholesale SG&A increased as a percentage of sales over the prior year period primarily driven by planned higher digital marketing and other brand development costs, partially offset by decreased incentive compensation. In addition, we incurred $256 of one-time acquisition costs along with other startup costs associated with the Lane Venture operation.

 

19

 

 

Wholesale Backlog

 

The dollar value of our wholesale backlog, representing orders received but not yet delivered to dealers and Company stores as of November 30, 2019, November 24, 2018, and November 25, 2017 was as follows:

 

   

2019

   

2018

   

2017

 
                         

Year end wholesale backlog

  $ 19,953     $ 25,810     $ 22,239  

 

Retail Segment – Company Owned Stores

 

Net sales, gross profit, SG&A expense, new store pre-opening costs and operating income for our Retail Segment were as follows for the years ended November 30, 2019, November 24, 2018 and November 25, 2017:

 

                                                                   

Change from Prior Year

 
   

2019 vs 2018

   

2018 vs 2017

   

2019 vs 2018

   

2018 vs 2017

 
   

2019*

   

2018

   

2018

   

2017

   

Dollars

   

Percent

   

Dollars

   

Percent

 
                                                                                                 

Net sales

  $ 268,693       100.0 %   $ 268,883       100.0 %   $ 268,883       100.0 %   $ 268,264       100.0 %   $ (190 )     -0.1 %   $ 619       0.2 %

Gross profit

    137,165       51.0 %     138,292       51.4 %     138,292       51.4 %     135,801       50.6 %     (1,127 )     -0.8 %     2,491       1.8 %

SG&A expense

    143,057       53.2 %     136,523       50.8 %     136,523       50.8 %     129,898       48.4 %     6,534       4.8 %     6,625       5.1 %

New store pre-opening costs

    1,117       0.4 %     2,081       0.8 %     2,081       0.8 %     2,413       0.9 %     (964 )     -46.3 %     (332 )     -13.8 %

Income (loss) from operations

  $ (7,009 )     -2.6 %   $ (312 )     -0.1 %   $ (312 )     -0.1 %   $ 3,490       1.3 %   $ (6,697 )     2146.5 %   $ (3,802 )     -108.9 %

 

 

The following tables present operating results on a comparable store basis for each comparative set of periods. Table A compares the results of the 56 stores that were open and operating for all of 2019 and 2018. Table B compares the results of the 53 stores that were open and operating for all of 2018 and 2017.

 

Comparable Store Results:

 

                                                                   

Change from Prior Year

 
   

Table A: 2019 vs 2018 (56 Stores)

   

Table B: 2018 vs 2017 (53 Stores)

   

2019 vs 2018

   

2018 vs 2017

 
   

2019*

   

2018

   

2018

   

2017

   

Dollars

   

Percent

   

Dollars

   

Percent

 
                                                                                                 

Net sales

  $ 234,401       100.0 %   $ 252,353       100.0 %   $ 235,868       100.0 %   $ 239,633       100.0 %   $ (17,952 )     -7.1 %   $ (3,765 )     -1.6 %

Gross profit

    119,786       51.1 %     130,102       51.6 %     121,399       51.5 %     122,710       51.2 %     (10,316 )     -7.9 %     (1,311 )     -1.1 %

SG&A expense

    120,755       51.5 %     124,396       49.3 %     115,094       48.8 %     115,161       48.1 %     (3,641 )     -2.9 %     (67 )     -0.1 %

Income (loss) from operations

  $ (969 )     -0.4 %   $ 5,706       2.3 %   $ 6,305       2.7 %   $ 7,549       3.2 %   $ (6,675 )     -117.0 %   $ (1,244 )     -16.5 %

 

The following tables present operating results for all other stores which were not comparable year-over-year. Each table includes the results of stores that either opened or closed at some point during the 24 months of each comparative set of periods.

 

All Other (Non-Comparable) Store Results:

 

                                                                   

Change from Prior Year

 
   

2019 vs 2018 All Other Stores

   

2018 vs 2017 All Other Stores

   

2019 vs 2018

   

2018 vs 2017