BASSETT, Va., Oct. 09, 2024 (GLOBE NEWSWIRE) -- Bassett Furniture Industries, Inc. (NASDAQ:BSET) reported today its results of operations for its third quarter ended August 31, 2024. In addition, the Company's Board of Directors declared a regular quarterly dividend of $0.20 per share of common stock, payable on Nov. 29, 2024, to shareholders of record at the close of business on Nov. 15, 2024. This dividend represents an 11% increase over the prior year's quarterly dividend.
Q3 Consolidated Business Highlights: [FY 24 vs. FY 23, unless otherwise specified]
Revenues decreased 13%, impacted by a cyber incident that suspended all financial systems and manufacturing for 7 days.
Operating loss of $6.4 million, which included a $1.2 million loss on a logistical services contract the Company abandoned and various costs associated with the cyber incident.
Gross margin of 53.0%, which included $0.6 million of manufacturing wages paid during the cyber shutdown. Excluding the wage charge, gross profit margin would have been 53.8% as compared to adjusted gross margin of 52.7% in 2023 (see Table 5).
Diluted loss per share of $0.52 vs. a loss of $0.30 in 2023.
Limited cash flow deficit for the quarter to $0.4 million despite challenging results and cyber disruption related costs.
Fiscal 2024 Third Quarter Overview (Dollars in millions)
Sales
Operating Income (Loss)
3rd Qtr
Dollar
%
3rd Qtr
% of
3rd Qtr
% of
2024
2023
Change
Change
2024
Sales
2023
Sales
Consolidated (1)
$
75.6
$
87.2
$
(11.6
)
-13.3
%
$
(6.4
)
-8.5%
$
(3.8
)
-4.4%
Wholesale
$
47.8
$
56.7
$
(8.9
)
-15.7
%
$
4.4
9.2%
$
6.3
11.1%
Retail
$
47.3
$
52.3
$
(5.0
)
-9.6
%
$
(2.8
)
-5.9%
$
(3.0
)
-5.7%
Corporate & Other (2)
$
1.0
$
1.8
$
(0.8
)
-44.4
%
$
(7.0
)
N/A
$
(7.4
)
N/A
(1) Our consolidated results for the quarter include certain intercompany eliminations as well as a $1.2 million contract abandonment charge which are not allocated to our segment operating results. See Table 4, "Segment Information" below for an illustration of the effects of these items on our consolidated sales and operating income.
(2) Corporate and Other includes the operations of Noa Home Inc. along with the shared Corporate costs that are benefiting both the Wholesale and Retail segments.
"The third quarter is historically our slowest as we customarily shut down manufacturing for the week of July 4th," said Robert H. Spilman, Jr., Bassett Chairman and Chief Executive Officer. "Although we had additional challenges this year, we delivered strong gross margins. In mid-July, we reported that we detected unauthorized activities in our IT systems, which resulted in us shutting down our IT systems and ceasing manufacturing for 7 days. The industry remained challenged by economic factors in the quarter, including a slow housing market that is forecasted to improve heading into 2025. With our strong balance sheet and our focus on right-sizing our expense structure, our goal is to drive better profitability."
Update on Restructuring Plan The Company made progress on the restructuring plan announced in July to lower its cost structure and to strengthen operations for topline growth. The comprehensive strategy builds on the strength of Bassett's brand quality, design expertise and service, and focuses on driving revenue growth and profitability long-term. The five-point plan will be completed by the end of the fourth quarter. "We are running a leaner operation, reducing expenses and investing in new products and services," Spilman added. "Through our restructuring plan, we are on target to improve our bottom-line between $5.5 million and $6.5 million on an annual basis. We are committed to returning to profitability."
Conference Call and Webcast The Company will hold a conference call to discuss its quarterly results on October 10, 2024, at 9:00 am ET. The public is invited to listen to the conference call by webcast, accessible through the Company's investor relations website, https://investors.bassettfurniture.com/. Participants can also listen to the conference call via https://edge.media-server.com/mmc/p/4t38wrd6. A replay and transcript of the conference call will be available on demand on the investor relations site.
About Bassett Furniture Industries, Inc. Bassett Furniture Industries, Inc. (NASDAQ:BSET) is a leading manufacturer and marketer of high-quality home furnishings. With 87 company- and licensee-owned stores at the time of this release, Bassett has leveraged its strong brand name in furniture into a network of corporate and licensed stores that focus on providing consumers with a friendly environment for buying furniture and accessories. Bassett's retail strategy includes stylish, custom-built furniture that features the latest on-trend furniture styles, free in-home design visits, and coordinated decorating accessories. Bassett also has a traditional wholesale business with more than 700 accounts on the open market, across the United States and internationally. For more information, visit the Company's website at bassettfurniture.com.
Forward-Looking Statements
Certain of the statements in this release, particularly those preceded by, followed by or including the words "believes," "plans," "expects," "anticipates," "intends," "should," "estimates," or similar expressions, or those relating to or anticipating financial results or changes in operations for periods beyond the end of the third fiscal quarter of 2024, constitute "forward looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended. For those statements, Bassett claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. In many cases, Bassett cannot predict what factors would cause actual results to differ materially from those indicated in the forward-looking statements. Expectations included in the forward-looking statements are based on preliminary information, as well as certain assumptions which management believes to be reasonable at this time. The following important factors affect Bassett and could cause actual results to differ materially from those indicated in the forward looking statements: the effects of national and global economic or other conditions and future events on the retail demand for home furnishings and the ability of Bassett's customers and consumers to obtain credit; the success of marketing, logistics, retail and other initiatives; and the economic, competitive, governmental and other factors identified in Bassett's filings with the Securities and Exchange Commission. Any forward-looking statement that Bassett makes speaks only as of the date of such statement, and Bassett undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. Comparisons of results for current and any prior periods are not intended to express any future trends or indication of future performance, unless expressed as such, and should only be viewed as historical data.
Contacts: J. Michael Daniel Senior Vice President and Chief Financial Officer (276) 629-6614 – Investors
Peter D. Morrison Vice President of Communications (276) 629-6450 – Media
Table 1
BASSETT FURNITURE INDUSTRIES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations - unaudited
(In thousands, except for per share data)
Quarter Ended
Nine Months
August 31, 2024
August 26, 2023
August 31, 2024
August 26, 2023
Percent of
Percent of
Percent of
Percent of
Amount
Net Sales
Amount
Net Sales
Amount
Net Sales
Amount
Net Sales
Net sales of furniture and accessories
$
75,619
100.0
%
$
87,217
100.0
%
$
245,583
100.0
%
$
295,434
100.0
%
Cost of furniture and accessories sold
35,526
47.0
%
42,173
48.4
%
113,863
46.4
%
140,360
47.5
%
Gross profit
40,093
53.0
%
45,044
51.6
%
131,720
53.6
%
155,074
52.5
%
Selling, general and administrative expenses
45,210
59.8
%
48,848
56.0
%
142,141
57.9
%
154,709
52.4
%
Loss on contract abandonment
1,240
1.6
%
-
0.0
%
1,240
0.5
%
-
0.0
%
Asset impairment charges
-
0.0
%
-
0.0
%
5,515
2.2
%
-
0.0
%
Gain on revaluation of contingent consideration
-
0.0
%
-
0.0
%
-
0.0
%
1,013
0.3
%
Income (loss) from operations
(6,357
)
-8.4
%
(3,804
)
-4.4
%
(17,176
)
-7.0
%
1,378
0.5
%
Interest income
692
0.9
%
923
1.1
%
2,075
0.8
%
