Bassett Furniture Industries Inc. (BSET, Financial) filed Quarterly Report for the period ended 2009-05-30.
Bassett Furniture Industries Inc. is a leading manufacturer and marketer of high quality mid-priced home furnishings. With over one hundred and thirty Bassett Furniture Direct stores Bassett has leveraged its brand name in furniture with a network of licensed and Company-owned stores that focus on providing consumers with a friendly and professional environment for buying furniture and accessories. The Company continues to sell its products to other retailers in addition to the Company's dedicated retail store program. Bassett's retail strategy promotes affordable custom-built furniture that is ready for delivery in the home within thirty days. The stores also feature the latest on-trend furniture styles more than one thousand upholstery fabrics free in-home design visits and coordinated decorating accessories. Bassett Furniture Industries Inc. has a market cap of $50.4 million; its shares were traded at around $4.4 with and P/S ratio of 0.2.
On a consolidated basis, we reported net sales for the second quarter of 2009 of $57,718, a decrease of $17,144, or 23%, from sales levels attained in the second quarter of 2008. Sales for the six months ended May 30, 2009 were $115,529, a decrease of $40,931 or 26.2%. Due to our fiscal calendar, the six months ended May 30, 2009 included 26 weeks compared to 27 weeks for the six months ended May 31, 2008.
The results for the quarter and six months ended May 30, 2009 included several restructuring and other non-cash items including asset impairment charges of $376 to write-off the remaining leasehold improvements for our Arlington, Texas and Alpharetta, Georgia stores. We concluded that these stores, along with the Lewisville, Texas store, would run inventory liquidation sales and close during the third quarter of 2009. There were no unamortized leasehold improvements recorded for our Lewisville, Texas store. We expect to record additional lease exit charges of $1,500 to $2,500 in the third quarter. We also recorded a non-cash asset impairment charge of $258 to write-off the remaining leasehold improvements and a $285 lease exit charge associated with the closure of our retail office in Greensboro, North Carolina. In addition, we recorded a $434 non-cash impairment charge in accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, to write-down the carrying value of our long-lived assets associated with a nonperforming retail location. Lastly, we recorded $320 in severance charges associated with the downsizing announced in March of 2009.
The results for the quarter and six months ended May 31, 2008 included three unusual pretax items consisting of $1,418 of legal and other expenses for the proxy contest with Costa Brava Partnership III L.P., a $1,342 gain associated with the sale of our airplane and a $384 impairment charge associated with the writeoff of leasehold improvements for a closed store.
Wholesale SG&A, excluding bad debt and notes receivable valuation charges, decreased $4,177 during the second quarter of 2009 as compared to 2008 due primarily to lower spending due to lower sales and continued cost cutting measures. We recorded $5,849 of bad debt and notes receivable valuation charges for the second quarter of 2009 as compared to $1,266 for the second quarter of 2008, as our licensees continued to struggle to pay for the furniture shipped to them in a prolonged and severe recessionary environment.
Net sales for the wholesale segment were $92,960 for the six months ended May 30, 2009 as compared to $131,299 for the six months ended May 31, 2008, a decrease of 29%. Due to our fiscal calendar, the six months ended May 30, 2009 included 26 weeks compared to 27 weeks for the six months ended May 31, 2008. Gross margins for the wholesale segment were 28.0% for the six months ended May 30, 2009 as compared to 29.8% for the six months ended May 31, 2008. This decrease is primarily due to lower realized margins on our wood furniture and certain discount programs designed to sell more furniture, partially offset by increased margins on our upholstered furniture due to its custom nature. Wholesale SG&A, excluding bad debt and notes receivable valuation charges, decreased $8,504 during the 26 weeks of 2009 as compared to the 27 weeks of 2008 due primarily to decreased wholesale spending due to lower sales and continued cost cutting measures. The Company recorded $11,741 of bad debt and notes receivable valuation charges for the first half of fiscal 2009 as compared to $2,036 during the first half of fiscal 2008.
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Bassett Furniture Industries Inc. is a leading manufacturer and marketer of high quality mid-priced home furnishings. With over one hundred and thirty Bassett Furniture Direct stores Bassett has leveraged its brand name in furniture with a network of licensed and Company-owned stores that focus on providing consumers with a friendly and professional environment for buying furniture and accessories. The Company continues to sell its products to other retailers in addition to the Company's dedicated retail store program. Bassett's retail strategy promotes affordable custom-built furniture that is ready for delivery in the home within thirty days. The stores also feature the latest on-trend furniture styles more than one thousand upholstery fabrics free in-home design visits and coordinated decorating accessories. Bassett Furniture Industries Inc. has a market cap of $50.4 million; its shares were traded at around $4.4 with and P/S ratio of 0.2.
Highlight of Business Operations:
On March 19, 2009, we announced actions to reduce our overall cost structure that will result in lower expenditures for payroll, employee benefits, warehousing and distribution, marketing, and other miscellaneous items. Approximately 50 positions in departments throughout the Company were affected including corporate retail, administration, customer service, manufacturing, and marketing resulting in an approximate 6% reduction in payroll. Accordingly, we recorded severance charges of $320 during the quarter ended May 30, 2009. Additionally, our Mt. Airy, N.C., distribution facility closed on March 1, 2009 and has been listed for sale. Its inventory was consolidated to other warehouses in the U.S. and Asia, which we believe will reduce our overall distribution costs by 7%. Marketing expenditures have been trimmed primarily through reduced television production costs and upcoming changes to our consumer catalog format. As a result of these actions, we expect to realize annualized savings of $7,000 to $8,000. We have, however, continued to invest in our website. A new site debuted in May and featured enhanced aesthetics, easier navigation for individual items and collections, and improved E-commerce capabilities.On a consolidated basis, we reported net sales for the second quarter of 2009 of $57,718, a decrease of $17,144, or 23%, from sales levels attained in the second quarter of 2008. Sales for the six months ended May 30, 2009 were $115,529, a decrease of $40,931 or 26.2%. Due to our fiscal calendar, the six months ended May 30, 2009 included 26 weeks compared to 27 weeks for the six months ended May 31, 2008.
The results for the quarter and six months ended May 30, 2009 included several restructuring and other non-cash items including asset impairment charges of $376 to write-off the remaining leasehold improvements for our Arlington, Texas and Alpharetta, Georgia stores. We concluded that these stores, along with the Lewisville, Texas store, would run inventory liquidation sales and close during the third quarter of 2009. There were no unamortized leasehold improvements recorded for our Lewisville, Texas store. We expect to record additional lease exit charges of $1,500 to $2,500 in the third quarter. We also recorded a non-cash asset impairment charge of $258 to write-off the remaining leasehold improvements and a $285 lease exit charge associated with the closure of our retail office in Greensboro, North Carolina. In addition, we recorded a $434 non-cash impairment charge in accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, to write-down the carrying value of our long-lived assets associated with a nonperforming retail location. Lastly, we recorded $320 in severance charges associated with the downsizing announced in March of 2009.
The results for the quarter and six months ended May 31, 2008 included three unusual pretax items consisting of $1,418 of legal and other expenses for the proxy contest with Costa Brava Partnership III L.P., a $1,342 gain associated with the sale of our airplane and a $384 impairment charge associated with the writeoff of leasehold improvements for a closed store.
Wholesale SG&A, excluding bad debt and notes receivable valuation charges, decreased $4,177 during the second quarter of 2009 as compared to 2008 due primarily to lower spending due to lower sales and continued cost cutting measures. We recorded $5,849 of bad debt and notes receivable valuation charges for the second quarter of 2009 as compared to $1,266 for the second quarter of 2008, as our licensees continued to struggle to pay for the furniture shipped to them in a prolonged and severe recessionary environment.
Net sales for the wholesale segment were $92,960 for the six months ended May 30, 2009 as compared to $131,299 for the six months ended May 31, 2008, a decrease of 29%. Due to our fiscal calendar, the six months ended May 30, 2009 included 26 weeks compared to 27 weeks for the six months ended May 31, 2008. Gross margins for the wholesale segment were 28.0% for the six months ended May 30, 2009 as compared to 29.8% for the six months ended May 31, 2008. This decrease is primarily due to lower realized margins on our wood furniture and certain discount programs designed to sell more furniture, partially offset by increased margins on our upholstered furniture due to its custom nature. Wholesale SG&A, excluding bad debt and notes receivable valuation charges, decreased $8,504 during the 26 weeks of 2009 as compared to the 27 weeks of 2008 due primarily to decreased wholesale spending due to lower sales and continued cost cutting measures. The Company recorded $11,741 of bad debt and notes receivable valuation charges for the first half of fiscal 2009 as compared to $2,036 during the first half of fiscal 2008.
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