Bassett turns profit for year
By Furniture Today Staff -- Furniture Today, January 13, 2003
Bassett, Va. — Full-line manufacturer and retailer Bassett Furniture Inds. said sales in its fourth quarter rose 1.7% to $79.4 million as sales for the year ended Nov. 30 climbed 5.8% to $325.5 million.
Net income was $1.7 million in the fourth quarter versus a loss of $1.5 million in the prior year's period. Net income for fiscal 2002 was $6.7 million compared to a loss of $2.6 million in fiscal 2001.
Bassett attributed the sales increases to growth in the Bassett Furniture Direct store program and the inclusion of corporate store sales in net sales during the last nine months. Also, the 53-week fiscal 2002 included an additional week of shipments compared to fiscal 2001.
Lower buying levels at JCPenney, a major customer, significantly affected earnings, especially in the fourth quarter, Bassett said.
Bassett Furniture Direct continues to grow, with 85 BFD stores currently open. Licensees opened 21 stores in 2002 and Bassett expects to open 20 more franchised units in fiscal 2003, spread evenly over the year. Sales to BFD stores were 45% of total sales in 2002 and are set to approach 55% in 2003.
Gross profit improvements for the quarter and year were driven by the inclusion of corporate store gross profit, cost reductions initiated in 2001, and better performance in both the Upholstery and Import Divisions, Bassett said.
The Wood Division's performance improved over 2001 for the year but was down for the quarter and below expectations, due mainly to the JCPenney account and higher-than-expected labor and materials costs, the company said.
Bassett's balance sheet remains very strong, with a debt to capital ratio of only 1.3% at year's end and a significant investment portfolio. Debt was reduced by $4.5 million in fiscal 2002. Inventories increased during both the quarter and year, primarily to support growth in the Import Division.
Robert H. Spilman Jr., president and chief executive officer, said Bassett made significant progress on its move toward dedicated distribution.
"Virtually every facet of the BFD program is improving — same-store sales, training, advertising, site selection, licensee due diligence, store operations and merchandising all made great strides in 2002," he said.
In operations, Spilman said the nearly completed conversion of the Upholstery Division to fully integrated cellular manufacturing, upgraded products and custom options, and strong service boosted that division's sales 15% in 2002.
Bassett said current business conditions are relatively soft. December 2002 orders and shipments were below prior-year levels.
| Bassett Furniture Inds. | |||
|---|---|---|---|
| Owns Bassett Glass, Bassett Motion, Bassett Supply and Weiman | |||
| Earnings per share are fully diluted and all figures in parentheses are losses or declines. | |||
| Quarter ended 11/30 | 2002 | 2001 | Change |
| (a) Includes pretax gains on the sale of property and equipment of $1.3 million in the 2001 quarter and $5.3 million in the 2001 year, pretax charges for restructuring and asset impairment of $313,000 in the 2001 quarter and $7 million in the 2001 year and income tax benefits of $295,000 in the 2001 quarter and $1 million in the 2001 year. (b) 2002 is 53 weeks; 2001 is 52 weeks. (c) Includes a $1.3 million pretax restructuring and asset impairment charge. | |||
| Sales | $79,428,000 | $78,068,000 | 1.7% |
| Operating income | 766,000 | 662,000 | 15.7% |
| Net income | 1,667,000 | (a)(1,522,000) | — |
| Earnings per share | 0.14 | (0.13) | — |
| Year ended 11/30(b) | 2002 | 2001 | Change |
| Sales | $323,487,000 | $305,676,000 | 5.8% |
| Operating income | 7,507,000 | (3,257,000) | — |
| Net income | (c)6,741,000 | (a)(2,642,000) | — |
| Earnings per share | 0.57 | (0.23) | — |
