Bassett Announces Realignment to Improve Future Profitability.

Business Editors

BASSETT, Va.--(BUSINESS WIRE)--Nov. 27, 2000

Bassett Furniture Industries, Inc., a leading manufacturer and marketer of branded home furnishings, announced today further consolidation of its domestic wood manufacturing operations resulting in the eventual elimination of up to 280 jobs.

Most of these positions are centered in the company's J.D. Bassett facility, which will cease assembly and finishing operations at the end of January. The rough-end fabricating, glue operation and powerhouse at the J.D. Bassett facility will remain open and service other production needs. Products currently manufactured at J.D. Bassett will be transferred to Bassett Superior Lines in Bassett and to the company's facility in Mt. Airy, N.C. As a result, approximately 40 positions will be added in Mt. Airy. Every effort will be made to absorb labor into other plants as openings become available and production requirements dictate.

Total costs associated with the restructuring are expected to be approximately $10 million to $12 million. These costs will be incurred during the fourth quarter of fiscal 2000 and fiscal year 2001. The Company will record restructuring charges in the fourth quarter of fiscal 2000 of $7 million to $8 million and also expects to incur an additional $1.5 to $2.0 million in other non-recurring costs for a total estimated after-tax impact on fourth quarter earnings of $0.50 to $0.60 per share. The remaining $1.5 million to $2.0 million of period costs will be incurred in fiscal year 2001 and, when netted against expected savings for the period, are expected to result in a positive estimated after-tax impact on EPS of $0.12 to $0.16 for fiscal year 2001. The Company expects the net savings and, therefore, positive impact on EPS to be greater in future periods.

Soft business continues, due in part to sluggish housing starts, high oil prices and high interest rates. These conditions have resulted in reduced manufacturing schedules, which will significantly impact operating earnings in the fourth quarter. Excluding the restructuring and additional non-recurring charges, earnings per share are expected to be $.32 to $.36 for the fourth quarter of 2000 and $1.46 to $1.50 for the full year on slightly lower than expected sales, with lower operating earnings offset in part by improved other income.

Commenting on these actions, Robert H. Spilman Jr., president and chief executive officer stated, "This was a difficult but necessary decision. Foremost, we must improve the operating performance of the company. This will allow us to produce the same amount of domestic volume with a lower cost level. Consequently, we will be able to operate our remaining facilities with a much higher degree of capacity utilization. Finally, this will give us increased flexibility as we deal with the rising tide of Asian imports."

"By virtue of our brand and dedicated Bassett Furniture Direct (BFD) and At Home with Bassett store network, we believe the Company will be uniquely positioned to cope with this shifting tide. Although the transition to dedicated retail has been difficult, we are more confident than ever that this is the right strategy for Bassett's long term success. We expect to continue to open 12 to 15 BFD stores and 40 to 50 At Home with Bassett stores per year," Spilman added.

Bassett will pay its regular quarterly dividend of $0.20 per share on December 1, 2000, marking thirty-one consecutive quarters at this level.

Bassett Furniture Industries, Inc., based in Bassett, Va., is one of the world's largest manufacturers and marketers of home furnishings. The products, designed to provide quality, style and value, are sold through Bassett Furniture Direct(TM) stores, At Home with Bassett(R), and other furniture and department stores. The company's common stock is traded on the NASDAQ market under the symbol BSET. More information about Bassett is available on the company's Internet site at http://www.bassettfurniture.com .

Certain of the statements in the immediately preceding paragraphs, particularly those preceded by, followed by or including the words "believes," "expects," "anticipates," "intends," "estimates," or similar expressions, or those relating to BFD store openings or anticipating financial results for periods beyond the third quarter of fiscal year 2000, 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 those results to differ materially from those expressed in the forward-looking statements: Economic, competitive, governmental, technological, raw material issues and other factors identified in Bassett's filings with the Securities and Exchange Commission.