Bassett Announces Second Quarter 2004 Earnings.BASSETT Bassett is a surname, and may refer to:
BSET Building Systems Engineering Technology BSET Berhampur School of Engineering and Technology ) announced today its earnings for its second fiscal quarter ended May 29, 2004. Sales for the second quarter of 2004 were $80.4 million, up 4.5% from second quarter 2003 levels. The growth in the Company's ongoing distribution channels, fueled by increased shipments to Bassett Furniture Direct stores (BFDs) and greater demand for juvenile juvenile /ju·ve·nile/ (ju´vin-il) 1. pertaining to youth or childhood. 2. a youth or child; a young animal. 3. a cell or organism intermediate between immature and mature forms. products, accounted for the sales increase. Year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. shipments into the BFD BFD Big Freakin' Deal (polite form) BFD Bidirectional Forwarding Detection (IP networking) BFD Binary File Descriptor (computer programming) channel were up 11% over 2003. The Bassett Furniture Direct retail store program continues to grow with 104 stores currently in operation. The Company expects licensees to open six stores in the third quarter and eight in the fourth quarter ending fiscal year 2004 with 118 stores. Sales to BFD stores were 57% of total wholesale shipments in the first half of 2004 compared to 52% in the first half of 2003. The Company reported net income for the quarter of $1.9 million or $.16 per share as compared to $1.2 million or $.10 per share for the second quarter of 2003. On a year-to-date basis, the Company recorded net income of $4.2 million or $.36 per share, after both realizing a $3.9 million gain on the sale of its former California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). 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. facility and recognizing a $2.8 million restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). and impaired asset Impaired Asset An asset with a market value that is worth less than its book value. Notes: If the sum of all estimated future cash flows is less than the carrying value of the asset, then the asset would be considered impaired and would have to be written down to its fair charge in the first quarter of 2004, compared to a $5.2 million net loss in the first half of 2003. Excluding the gain and charge, net income for the first six months was $3.4 million or $.30 per share compared to $1.9 million or $.17 per share in the first six months of 2003 (excluding restructuring and impaired asset charges and cumulative effect of accounting change).* A reconciliation to the net income and earnings per share has been set forth below. The 2004 earnings improvement resulted from a combination of sales growth and a reduction in selling, general, and administrative expenses. The approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. one and a half percentage point reduction in selling, general and administrative expenses for both the quarter and six month results as compared to 2003 was primarily due to actions taken in 2003 which lowered the expense structure of the Company-owned retail stores. The Company generated $1.9 million of operating cash flows Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. during the first half of 2004 primarily through operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before . This cash flow along with the proceeds from the sale of the former California facility (received in the first quarter) and a dividend from an affiliate Affiliate Relationship between two companies when one company owns substantial interest, but less than a majority of the voting stock of another company, or when two companies are both subsidiaries of a third company. See: Subsidiaries, parent company. were used to fund capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. , pay dividends, and purchase $6.5 million of net investments. Real estate purchases in the quarter included assuming $7.2 million of real estate debt on two BFD store properties. "We are pleased with our year-over-year sales growth and improved operating earnings," said Robert Robert, Henry Martyn 1837-1923. American army engineer and parliamentary authority. He designed the defenses for Washington, D.C., during the Civil War and later wrote Robert's Rules of Order (1876). Noun 1. H. Spilman Jr., president and chief executive officer. "However, we continue efforts to improve operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: with a primary focus on the profitability of our Wood Division. Our Upholstery and Import Divisions both experienced encouraging results for the quarter. Additionally, our Company-owned retail stores in Texas (LRG LRG Large LRG Liquefied Refinery Gases LRG Local and Regional Governments LRG Long Range Aircraft LRG Looking Real Good LRG Location Reference Group LRG Local Reference Group LRG Library Resource Guide (Information Today, Inc) ) continued their positive results from the first quarter to the second quarter." The recent U.S. Department of Commerce preliminary ruling imposing anti-dumping duties on imports of Chinese Chinese, subfamily of the Sino-Tibetan family of languages (see Sino-Tibetan languages), which is also sometimes grouped with the Tai, or Thai, languages in a Sinitic subfamily of the Sino-Tibetan language stock. wood bedroom furniture would result in an assessment of duties in the range of 8 to 11% on product sourced by the Company from Chinese vendors. Mr. Spilman said, "We were fairly satisfied with the preliminary ruling by the Department of Commerce and do not believe this ruling will have a significant impact on our overall results. We do hope the ruling will help deter further price deflation deflation: see inflation. deflation Contraction in the volume of available money or credit that results in a general decline in prices. A less extreme condition is known as disinflation. in our industry." Bassett also announced that its Board of Directors has declared de·clare v. de·clared, de·clar·ing, de·clares v.tr. 1. To make known formally or officially. See Synonyms at announce. 2. To state emphatically or authoritatively; affirm. 3. a regular quarterly dividend of $.20 per share payable on September September: see month. 1, 2004, to shareholders of record on August 17, 2004. Bassett Furniture Industries, Inc. 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 over 100 Bassett Furniture Direct stores, Bassett has leveraged its strong brand name in furniture into a growing network of licensed stores that focus on providing consumers with a friendly environment for buying furniture and accessories. While the Company continues to sell its products to other retailers, 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 cus·tom-built adj. Built according to the specifications of the buyer. custom-built or -made Adjective made according to the specifications of an individual customer Noun 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 fabrics, free in-home in-home adj. Operating in or provided at the home of the customer or patient: in-home shopping; an in-home nursing program. design visits, and coordinated decorating accessories. For more information, visit the Company's website at www.bassettfurniture.com. *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. Certain of the statements in the immediately preceding paragraphs, 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 first quarter of fiscal year 2004, constitute "forward looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. . 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 those results to differ materially from those expressed 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.
BASSETT FURNITURE INDUSTRIES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Income - Unaudited
(In thousands, except for per share data)
13 Weeks Ended 13 Weeks Ended
May 29, 2004 May 31, 2003
----------------------------------------
Amount Percent Amount Percent
Of Net Of Net
Sales Sales
----------------------------------------
Net sales $80,355 100.0% $76,866 100.0%
Cost of sales 59,936 74.6% 57,318 74.6%
---------------------- ---------------
Gross profit 20,419 25.4% 19,548 25.4%
---------------------- ---------------
Selling, general and
administrative 19,783 24.6% 19,990 26.0%
---------------------- ---------------
Income (loss) from operations 636 0.8% (442) -0.6%
Other income, net 1,901 2.3% 1,821 2.4%
---------------------- ---------------
Income before income taxes 2,537 3.1% 1,379 1.8%
Income tax provision (652) -0.8% (186) -0.2%
---------------------- ---------------
Net income $1,885 2.3% $1,193 1.6%
====================== ===============
Basic earnings per share: $0.16 $0.10
============= ========
Diluted earnings per share: $0.16 $0.10
============= ========
Note - As reflected and explained in the Company's 2003 Annual
Report, 2003 second quarter amounts were adjusted to reflect the
adoption of FIN 46R for LRG which required consolidation of LRG as of
the beginning of 2003.
BASSETT FURNITURE INDUSTRIES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Income - Unaudited
(In thousands, except for per share data)
26 Weeks 26 Weeks
Ended Ended
May 29, May 31,
2004 2003
---------------------------------------
Amount Percent Amount Percent
of Net of Net
Sales Sales
---------------------------------------
Net sales $156,923 100.0% $154,480 100.0%
Cost of sales 116,837 74.5% 114,728 74.3%
-------------------- -----------------
Gross profit 40,086 25.5% 39,752 25.7%
-------------------- -----------------
Selling, general and
administrative 38,280 24.4% 40,288 26.1%
Gain on sale of property (3,890) -2.5% - 0.0%
Restructuring and impaired
asset charges 2,840 1.8% 3,200 2.1%
-------------------- -----------------
37,230 23.7% 43,488 28.2%
-------------------- -----------------
Income (loss) from operations 2,856 1.8% (3,736) -2.4%
Other income, net 2,914 1.9% 2,963 1.9%
-------------------- -----------------
Income (loss) before income
taxes and cumulative effect of
accounting change 5,770 3.7% (773) -0.5%
Income tax (provision) benefit (1,557) -1.0% 416 0.3%
-------------------- -----------------
Income (loss) before cumulative
effect of accounting change 4,213 2.7% (357) -0.2%
-------------------- -----------------
Cumulative effect of accounting
change, net of income tax
of $3,200 - 0.0% (4,875) -3.2%
-------------------- -----------------
Net income (loss) $4,213 2.7% $(5,232) -3.4%
==================== =================
Basic earnings (loss) per
share: $0.36 $(0.45)
============== =========
Diluted earnings (loss) per
share: $0.36 $(0.45)
============== =========
Note - As reflected and explained in the Company's 2003 Annual
Report, 2003 amounts were adjusted to reflect the adoption of FIN 46R
for LRG which required consolidation of LRG as of the beginning of
2003.
BASSETT FURNITURE INDUSTRIES, INC. AND SUBSIDIARIES
Reconciliation of Net Income (Loss) as Reported
to Net Income as Adjusted (Unaudited)
(In thousands, except for per share data)
26 Weeks 26 Weeks
Ended Ended
May 29, 2004 May 31, 2003
------------- -------------
Net income (loss) as reported $4,213 $(5,232)
Gain on sale of property, net of income
taxes (2,840) -
Restructuring and impaired asset charge,
net of income taxes 2,073 2,304
Cumulative effect of accounting change,
net of income taxes - 4,875
-------------- -------------
Net income as adjusted $3,446 $1,947
============== =============
Reconciliation of Earnings (Loss) Per Share as Reported
to Earnings Per Share as Adjusted (Unaudited)
26 Weeks 26 Weeks
Ended Ended
May 29, 2004 May 31, 2003
-------------- ------------
Diluted earnings (loss) per share $0.36 $(0.45)
Gain on sale of property, net of income
taxes (0.24) -
Restructuring and impaired asset charge,
net of income taxes 0.18 0.20
Cumulative effect of accounting change,
net of income taxes - 0.42
-------------- -------------
Diluted earnings per share as adjusted $0.30 $0.17
============== =============
BASSETT FURNITURE INDUSTRIES, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands, except share and per share data)
(Unaudited)
Assets May 29, Nov. 29,
2004 2003
----------- ---------
Current assets
Cash and cash equivalents $12,982 $15,181
Accounts receivable, net 40,184 39,230
Inventories 35,634 36,454
Deferred income taxes 4,600 5,307
Assets held for sale 831 1,881
Other current assets 2,438 4,525
----------- ---------
Total current assets 96,669 102,578
----------- ---------
Property and equipment, net 44,406 48,800
----------- ---------
Investments 74,699 65,151
Retail real estate, net 41,758 32,930
Notes receivable, net 14,886 15,399
Other, net 14,286 15,522
----------- ---------
145,629 129,002
----------- ---------
Total assets $286,704 $280,380
=========== =========
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable $13,625 $15,127
Accrued liabilities 23,024 22,341
----------- ---------
Total current liabilities 36,649 37,468
----------- ---------
Long-term liabilities
Employee benefits 9,598 9,824
Real estate notes payable 7,219 -
Distributions in excess of affiliate earnings 12,565 13,070
----------- ---------
29,382 22,894
----------- ---------
Commitments and Contingencies
Stockholders' equity
Common stock, par value $5 a share, 50,000,000
shares authorized, issued and outstanding -
11,681,792 in 2004 and 11,599,936 in 2003 58,409 58,000
Retained earnings 159,610 159,487
Accumulated other comprehensive income -
unrealized holding gains, net of income tax 2,654 2,531
----------- ---------
Total stockholders' equity 220,673 220,018
----------- ---------
Total liabilities and stockholders' equity $286,704 $280,380
=========== =========
BASSETT FURNITURE INDUSTRIES, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows - Unaudited
(In thousands)
26 Weeks Ended
May 29, May 31,
2004 2003
-----------------------
Operating Activities
Net income (loss) $4,213 $(5,232)
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 4,959 5,441
Equity in undistributed income of
investments (5,061) (4,237)
Provision for write-down of property
and equipment 2,103 1,530
Cumulative effect of accounting change,
net - 4,875
Provision for losses on trade accounts receivable 550 256
Net gain from sales of investments - (14)
Net gain from sales of property and equipment (3,890) -
Deferred income taxes 707 (416)
Changes in employee benefit liabilities (226) (113)
Changes in operating assets and
liabilities, exclusive of assets
and liabilities acquired in a
business combination:
Trade accounts receivable (1,504) (723)
Inventories 820 (2,221)
Refundable income taxes - 3,511
Other current assets 60 156
Accounts payable and accrued
liabilities (819) (1,962)
-------------- --------
Net cash provided by operating
activities 1,912 851
-------------- --------
Investing Activities
Purchases of property and equipment (5,356) (3,326)
Proceeds from sales of property and
equipment 8,081 372
Proceeds from sales of investments 10,482 17,000
Purchases of investments (16,982) (12,000)
Dividends from an affiliate 2,343 1,874
Other, net 1,002 362
-------------- --------
Net cash (used in) provided by
investing activities (430) 4,282
-------------- --------
Financing Activities
Borrowings under revolving credit arrangement - 4,000
Issuance of common stock, net 1,761 110
Repurchases of common stock (772) (924)
Cash dividends (4,670) (4,634)
-------------- --------
Net cash used in financing
activities (3,681) (1,448)
-------------- --------
Net change in cash and cash equivalents (2,199) 3,685
-------------- --------
Cash and cash equivalents, beginning of period 15,181 2,892
-------------- --------
Cash and cash equivalents, end of period $12,982 $6,577
============== ========
Note - As reflected and explained in the Company's 2003 Annual
Report, 2003 amounts were adjusted to reflect the adoption of FIN 46R
for LRG which required consolidation of LRG as of the beginning of
2003.
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