Bassett Announces First Quarter 2007 Results.BASSETT, Va. -- Bassett Furniture Bassett Furniture is a furniture manufacturer located in Virginia, USA. Bassett Furniture is one of the oldest furniture manufacturers in Virginia and has been producing hand crafted furniture for over 100 years. Industries Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :BSET BSET Bachelor of Science in Engineering Technology BSET Building Systems Engineering Technology BSET Berhampur School of Engineering and Technology ) announced today its results of operations for its fiscal quarter ended February 24, 2007. Sales for the first quarter of 2007 were $73.4 million down 15% from the $86.5 million reported in the first quarter of 2006. As previously announced, this shortfall is primarily due to continued soft furniture retail conditions which have impacted both retail sales and wholesale shipments. This decrease was also partially due to the sale of the Company's Weiman operation at the end of April 2006. The Company reported a net loss of $(4.2) million or $(0.35) per share as compared to net income of $2.2 million or $0.18 per share in the first quarter of 2006. Also as previously announced, the net loss for the first quarter of 2007 included a $3.6 million non-cash pre-tax or $0.19 per share after-tax charge related to closing a wood manufacturing plant in Bassett, Va. Excluding the effects of the non-cash asset impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charge, the Company's net loss would have been $(2.0) million. A reconciliation of net income and earnings per share calculations has been set forth below. As noted above, the Company announced on March 5, 2007 plans to cease operations at its wood manufacturing facility in Bassett. The closure of the 323,000 square foot facility is planned to be completed during the third quarter of 2007 and will affect approximately 280 employees or 15 percent of the Company's workforce. During the last few years, like most of the U.S. furniture industry, Bassett has experienced a shift in demand from domestically produced to imported wood furniture. With the current business levels, it was no longer feasible to continue to operate the large manufacturing facility even with the efficiency improvements and investments made over the last two years. The Company plans to source the majority of the products currently produced at this facility from overseas suppliers, to continue to produce certain custom bedroom products domestically and to discontinue dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: production of slower selling items. The Company also expects to record a charge of approximately $1.0 million in the second quarter of 2007 for severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when benefits associated with the plant closure. The Bassett Furniture retail store program had 133 stores (106 licensed and 27 Company-owned) in operation at the end of the first quarter. No stores were opened during the quarter with one licensee licensee n. a person given a license by government or under private agreement. (See: license, licensor) LICENSEE. One to whom a license has been given. 1 M. Q. & S. 699 n. store being closed. The Company expects that four or five new stores will be opened over the remainder of the year. "This was an extremely difficult quarter for the Company both in terms of our business levels and the announcement made earlier this month related to the closing of our facility in Bassett," said Robert H. Spilman Jr., president and chief executive officer. "While we are reducing our cost structure to reflect the pace of incoming orders, the Company continues to pursue mid and long-term growth initiatives on a number of fronts. The reception of our dealers to new sharper value products at the High Point Market last week was very positive. Components of our store presentation improvement program were on display and favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. embraced by our licensees. The debut of our new store prototype this fall and new embellishments to our consumer catalog catalog, descriptive list, on cards or in a book, of the contents of a library. Assurbanipal's library at Nineveh was cataloged on shelves of slate. The first known subject catalog was compiled by Callimachus at the Alexandrian Library in the 3d cent. B.C. highlight continued efforts to strengthen store performance." Wholesale Segment Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight for our wholesale segment were $62.3 million for the first quarter of 2007, 18% below the $76.3 million sales level attained in the first quarter of 2006. For the first quarter of 2007, approximately 74% of wholesale shipments were to Bassett stores compared to 70% in the first quarter of 2006. Additionally, approximately 47% of wholesale shipments in the quarter were imported products as compared to 44% in 2006. The wholesale segment generated an operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of $(1.2) million in the first quarter of 2007 as compared to $3.7 million of operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. in 2006. The $4.9 million decrease in operating income was primarily attributable to the reduction in sales volume. The Company also incurred increased selling, general and administrative expenses associated with the development and distribution of the spring catalog, the development of the new store prototype concept, additional television advertising and the addition of new retail management personnel. With the continued difficult furniture retail environment resulting in the significant drop in the wholesale volume, the Company will continue to assess and adjust its wholesale cost structure to match the associated demand. The Company expects that the closure of the Bassett plant will result in annual improvements beginning in 2008 to operating income of $3.0 to $4.0 million per year after factoring in expected sales reductions. Retail Segment Bassett's 27 corporate stores continued to experience relatively soft conditions at retail with sales of $21.2 million in the first quarter of 2007 as compared to $21.9 million in 2006. The retail segment incurred an operating loss of $(2.4) million for the quarter compared to an operating loss of $(2.2) million in 2006. The Company is beginning to see improvement from stabilizing stabilizing, v to hold a limb motionless in order to ground its energy; a standard isometric resistance technique, it releases tension and lengthens muscle fibers. the operations at these stores and has seen moderately positive trends in sales and margins during February and March of 2007 as compared to 2006. Balance Sheet and Cash Flow Inventories decreased $3.8 million due to lower business levels and improved inventory management. Accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying increased $4.3 million during the first quarter of 2007, due to the timing of shipments late in the quarter coupled with the slower pace of collections from certain store licensees related in part to the overall retail environment. The Company believes it has adequate reserves for bad debts as it continues to aggressively work with its dealers to help ensure their long-term profitability and, in turn, improved cash collections for the Company. The Company used $3.8 million of cash in operations for the first quarter of 2007 and paid $2.4 million in regular quarterly dividends. These cash uses were primarily funded through sales of investments approximating $4.0 million, $2.8 million of dividends received from an affiliate and a $1.0 million increase in the revolving credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. facility. With $5.0 million outstanding, the $40 million revolving credit facility matures November 30, 2007 and is presented as a current liability in the consolidated balance sheet consolidated balance sheet A balance sheet in which assets and liabilities of a parent company and its controlled subsidiaries are combined, thereby presenting balance sheet items for the parent and its subsidiaries as if they were a single firm. . The Company expects to renew the facility or have another facility in place prior to the maturity date. Board and annual meetings formerly held at the end of February will be held on April 19, 2007. About Bassett Furniture Industries, Inc. Bassett Furniture Industries, Inc. (NASDAQ:BSET), is a leading manufacturer and marketer of high quality, mid-priced home furnishings furnishings the extra type or quantity of hair on the head, tail, ears or legs, specified for a particular breed. For example, the feathers in setters, the beard in Bearded collies, the eyebrows in Schnauzers. . With more than 130 Bassett Furniture stores, Bassett has leveraged its strong brand name in furniture into a growing network of corporate and licensed stores that focus on providing consumers with a friendly environment for buying furniture and accessories. The most significant growth vehicle for Bassett continues to be the Company's dedicated retail store program. Bassett's retail strategy encompasses affordable custom-built furniture that is ready for delivery in the home within 30 days. The stores also feature the latest on-trend furniture styles, more than 1,000 upholstery upholstery, general term for household fittings, hangings, curtains, cushions, and covers. It refers to stuffed, padded, and spring-cushioned furniture, such as chairs and sofas, or to the usually decorative materials and fabrics that cover them. fabrics, free in-home design visits, and coordinated decorating accessories. For more information, visit the Company's website at bassettfurniture.com. (BSET-E) Certain of the statements in this release, particularly those preceded by, followed by or including the words "believes," "expects," "anticipates," "intends," "should," "estimates," or similar expressions, or those relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc or anticipating financial results for periods beyond the end of the first quarter of fiscal 2007, 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 Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. for forward looking statements contained in the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and 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 forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. 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: economic, competitive, governmental and other factors identified in Bassett's filings with the Securities and Exchange Commission, and the effects of national and global economic or other conditions and future events on the retail demand for home furnishings. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] The Company has included the "as adjusted" information because it uses, and believes that others may use, such information in comparing the Company's operating results from period to period. However, the items excluded in determining the "as adjusted" information are significant components in understanding and assessing the Company's overall financial performance for the periods covered. Restatement Restatement A revision in a company's earlier financial statements. Notes: The need for restating financial figures can result from fraud, misrepresentation, or a simple clerical error. of Financial Statements As more fully discussed in the Company's 2006 Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. , fiscal 2006 quarterly financial information was restated based on the Company's review of the accounting treatment associated with its acquisition of three retail licensee operations in fiscal 2005 and the classification of certain notes receivable activity in the statement of cash flows. The effects of those restatements on the financial statements for the quarter ended February 25, 2006 included herein are summarized below:
> Incr-
> (Dec-
Gross profit > $
(337)
Operating income > (217)
Net income >
(130)
>
Cash flow from operations > $ 1,029
Cash flow from investing activities > (1,029)
|
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion