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Bassett Announces Fiscal Fourth Quarter Results

Bassett Announces Fiscal Fourth Quarter Results

BASSETT, Va., Jan. 10, 2013 (GLOBE NEWSWIRE) -- Bassett Furniture Industries,
Inc. (Nasdaq:BSET) announced today its results of operations for its fiscal
quarter ended November 24, 2012.

Fiscal 2012 Fourth Quarter Highlights

  *Consolidated sales for the fourth quarter 2012 increased 21% as compared
    to the fourth quarter 2011
  *Operating profit for the fourth quarter was $2.5 million versus $1.1
    million for the fourth quarter last year
  *Wholesale sales increased 18% compared to the fourth quarter 2011
  *Company-owned store delivered sales increased 24% overall compared to the
    fourth quarter 2011 which included a 15% increase from the 48 comparable
    stores
  *Repurchased 128,000 shares using $1.4 million of cash
  *Declared a regular quarterly dividend totaling $0.6 million or $0.05 per
    share
  *Paid a special dividend of $13.7 million or $1.25 per share

On a consolidated basis, the Company reported net sales for the fourth quarter
of 2012 of $76.8 million, an increase of $13.5 million, or 21%, from sales
levels attained in the fourth quarter of 2011. Operating income increased to
$2.5 million from $1.1 million driven primarily by higher sales in both the
wholesale and retail segments. This was offset by higher selling, general and
administrative expenses due primarily to the increased number of Company-owned
stores, higher marketing and advertising costs associated with the
introduction of the new HGTV Design Studios at the retail stores, and
increased health care costs due to higher than normal claim activity. Included
in the Company's net income is a net tax benefit of $14.2 million which was
primarily due to a $16.0 million reduction of certain valuation reserves
against the Company's deferred tax assets. As a result, the Company recorded
net income of $16.9 million or $1.55 per diluted share for the fourth quarter
of 2012 compared to $0.6 million or $0.06 per diluted share in the fourth
quarter of 2011.

"We were pleased to post a 21% increase in consolidated revenue for the fourth
quarter of 2012," said Robert H. Spilman, Jr., President and Chief Executive
Officer. "A very strong showing by our corporate retail unit coupled with
significant gains in our open market sales efforts drove the top line
improvement.And, despite incurring a large unfavorable employee health
insurance adjustment, quarterly operating income increased 127% to $2.5
million."

"As 2012 unfolded, our revenue improved, ultimately ending with a 6.5% sales
gain for the year," continued Spilman."Several factors behind this trend
continue to provide momentum as we head into 2013.First, we are operating a
much healthier retail network that is no longer plagued by the store closings
of the past few years.Second, recent Bassett product line introductions have
been very successful at retail.Third, our effort to grow our business outside
of the store footprint continues to take hold as sales grew 38% in this
channel in the quarter.Finally, we are encouraged by the initial sales
results of the HGTV Design Studio at Bassett products in our Bassett Home
Furnishings (BHF) store network.This assortment of custom upholstery was a
major driver behind our 15% fourth quarter comparable store increase.Both the
HGTV Design Studio at Bassett and the HGTV Home open market product lines will
be aggressively promoted in 2013 and we look forward to fully realizing the
sales that the investment in this partnership will generate."

Wholesale
Segment

Net sales for the wholesale segment were $51.8 million for the fourth quarter
of 2012 as compared to $43.7 million for the fourth quarter of 2011, an
increase of 18%.Wholesale shipments increased due to a 38% increase in
wholesale sales outside the BHF store network and an 11% increase in shipments
to the BHF store network.Gross margins for the wholesale segment were 32.7%
for the fourth quarter of 2012 as compared to 33.7% for the fourth quarter of
2011.This decrease was due primarily to greater discounts on certain
discontinued products and increased health care costs due to higher than
normal claim activity, partially offset by improvements from greater leverage
of fixed costs.Wholesale SG&A increased $2.5 million to $15.1 million for the
fourth quarter of 2012 as compared to $12.6 million for the fourth quarter of
2011.SG&A costs as a percentage of sales were flat at 29% for the fourth
quarter of 2012 as compared to the fourth quarter of 2011 as the profit
improvement from leveraging fixed SG&A costs was offset by increased marketing
and advertising costs associated with the rollout of the HGTV product lines.

"Overall wholesale sales increased 18% to $51.8 million, with upholstery sales
growing by 19% for the quarter while our wood division posted a 16% gain,"
added Spilman. "The increase in volume and resulting efficiencies enabled both
our upholstery and wood operations to post improved levels of profitability at
the divisional level in spite of the aforementioned health care
charges.However, increases in SG&A spending from increased promotional
allowances and new HGTV national advertising expense resulted in a 9% decline
in wholesale operating income to $1.9 million.We plan to better leverage
these marketing costs in 2013 with growth generated from five to seven new
Bassett stores, continued gains in open market sales, and increased revenues
from the full rollout of the HGTV partnership."

Retail Segment

Company-owned stores had sales of $48.8 million for the fourth quarter of 2012
as compared to $39.4 million for the fourth quarter of 2011, an increase of
24%.The increase was comprised of a $5.9 million or 15% increase in
comparable store sales along with a $3.5 million increase in non-comparable
store sales. While the Company does not recognize sales until goods are
delivered to the customer, management tracks written sales (the dollar value
of sales orders taken, rather than delivered) as a key store performance
indicator. Written sales for comparable stores increased by 14% for the fourth
quarter of 2012 as compared to the fourth quarter of 2011.

Operating income for the Company-owned stores improved to $0.4 million in the
fourth quarter of 2012 as compared to a loss of $0.6 million for the fourth
quarter of 2011. This improvement was primarily driven by the sales increases
noted above. Gross margins were essentially flat at 48.0% for the fourth
quarter of 2012 as compared to 47.9% for the fourth quarter of 2011. SG&A
expense increased $3.6 million, primarily due to increased store count. As a
percentage of sales, SG&A decreased to 47% for the fourth quarter of 2012
compared to 49% for the same quarter last year, primarily due to greater
leverage of fixed costs from higher sales.Refer to the accompanying schedule
of Supplemental Retail Information for results of operations for the Company's
retail segment by comparable and all other stores.

The following table summarizes the changes in store count during the year
ended November 24, 2012:

                     November 26, New    Stores   Stores November 24,
                      2011         Stores Acquired Closed 2012
                                                     
Licensee-owned stores 39          --   (3)     (3)   33
Company-owned stores  49          3     3       (2)   53
                                                     
Total                 88          3     --     (5)   86

"The fourth quarter was the best ever in our corporate retail division as we
generated sales of $48.8 million, an overall increase of 24%," said
Spilman."The strong gain in comparable store sales helped produce a retail
operating profit of $0.4 million, a $1.0 million improvement from last
year.2012 marked another year of solid improvement for our corporate retail
division as witnessed by our year-over-year 9% comparable store sales increase
and the 54% decrease in corporate store losses.The combination of a strong
product assortment, good looking stores, highly trained designers, effective
marketing programs, and superior levels of customer service has matured our
proposition into a unique experience in our industry that is resonating with
consumers.In 2013, we look forward to opening five to seven new stores and
repositioning two others into better retail locations.Finally, we will test a
new small store concept designed to better highlight our industry leading
custom upholstery capabilities."

Balance Sheet and Cash Flow

The Company generated $1.0 million in cash from operating activities for the
three months ended November 24, 2012 as compared with cash generated in
operations of $6.9 million for the three months ended November 26, 2011. This
decrease was primarily due to increases in accounts receivable and inventory
as a result of increased volume and operating activity in the fourth quarter
of 2012.Capital expenditures for the fourth quarter of 2012 were $2.1 million
primarily related to the expansion and remodeling in the Company-owned store
network.The Company also repurchased 128,000 shares of common stock using
$1.4 million in cash and paid $0.6 million in regular dividends and $13.7
million in special dividends during the quarter.

About Bassett Furniture Industries, Inc.

Bassett Furniture Industries, Inc. (Nasdaq:BSET), is a leading manufacturer
and marketer of high quality, mid-priced home furnishings. With 86 company-
and licensee-owned stores, Bassett has leveraged its strong brand name in
furniture into a network of corporate and licensed stores that focus on
providing consumers with a friendly environment for buying furniture and
accessories. The most significant growth opportunity for Bassett continues to
be the Company's dedicated retail store program. Bassett's retail strategy
includes 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 750 upholstery fabrics, free in-home design visits, and
coordinated decorating accessories. Bassett is also growing its traditional
wholesale business with more than 500 accounts on the open market, across the
United States and internationally.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
or anticipating financial results for periods beyond the end of the fourth
fiscal quarter of 2012, 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 actual results to differ materially from those
indicated in the forward looking statements:the effects of national and
global economic or other conditions and future events on the retail demand for
home furnishings and the ability of Bassett's customers and consumers to
obtain credit; and the economic, competitive, governmental and other factors
identified in Bassett's filings with the Securities and Exchange
Commission.Any forward-looking statement that Bassett makes speaks only as of
the date of such statement, and Bassett undertakes no obligation to update any
forward-looking statements, whether as a result of new information, future
events or otherwise.Comparisons of results for current and any prior periods
are not intended to express any future trends or indication of future
performance, unless expressed as such, and should only be viewed as historical
data.

BASSETT FURNITURE INDUSTRIES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Income - unaudited
(In thousands, except for per share data)

               Quarter Ended     Quarter Ended     YearEnded         Year Ended
              November 24,      November 26,      November 24,       November 26,          
               2012              2011              2012               2011
                         Percent           Percent            Percent            Percent
              Amount    of      Amount    of      Amount     of      Amount     of
                         Net               Net                Net                Net
                         Sales             Sales              Sales              Sales
                                                                         
Net sales      $76,812 100.0%  $63,266 100.0%  $269,672 100.0%  $253,208 100.0%
                                                                         
Cost of sales  36,640   47.7%   29,996   47.4%   128,350   47.6%   125,642   49.6%
                                                                         
Gross profit   40,172   52.3%   33,270   52.6%   141,322   52.4%   127,566   50.4%
                                                                         
Selling,
general and
administrative
expense
excluding bad  37,697   49.1%   31,370   49.6%   134,796   50.0%   122,023   48.2%
debt and notes
receivable
valuation
charges
Bad debt and
notes
receivable     (40)     -0.1%   374      0.6%    376       0.1%    13,490    5.3%
valuation
charges
(recoveries)
Licensee debt
cancellation   --       0.0%    --       0.0%    --        0.0%    6,447     2.5%
charges
Restructuring
and asset      --       0.0%    418      0.7%    711       0.3%    2,500     1.0%
impairment
charges
Lease exit     --       0.0%    --       0.0%    359       0.1%    3,728     1.5%
costs
Operating      2,515    3.3%    1,108    1.8%    5,080     1.9%    (20,622)  -8.1%
income (loss)
                                                                         
Gain on sale   --       0.0%    --       0.0%    --        0.0%    85,542    33.8%
of affiliate
Income from
Continued
Dumping &      --       0.0%    765      1.2%    9,010     3.3%    765       0.3%
Subsidy Offset
Act
Other income   163      0.2%    (464)    -0.7%   (2,076)   -0.8%   (5,934)   -2.3%
(loss), net
Income before  2,678    3.5%    1,409    2.2%    12,014    4.5%    59,751    23.6%
income taxes
                                                                         
Income tax
benefit        14,218   18.5%   (776)    -1.2%   14,699    5.5%    (4,409)   -1.7%
(expense)
Net income     $16,896 22.0%   $633    1.0%    $26,713  9.9%    $55,342  21.9%
                                                                         
Basic earnings $1.57          $0.06          $2.43           $4.84    
per share
                                                                         
Diluted
earnings per   $1.55          $0.06          $2.41           $4.79    
share

                                                           
BASSETT FURNITURE INDUSTRIES, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets -Unaudited
(In thousands)
                                                           
Assets                                     November24, 2012 November 26, 2011
Current assets                                              
Cash and cash equivalents                 $45,566         $69,601
Accounts receivable, net                   15,755           14,756
Inventories                                57,916           45,129
Deferred income taxes, net                 6,832            393
Other current assets                      6,439            10,324
Total current assets                       132,508          140,203
                                                           
Property and equipment                                      
Cost                                       148,157          143,824
Less accumulated depreciation              91,533           93,878
Property and equipment, net                56,624           49,946
                                                           
Long-term assets                                            
Retail real estate                         12,736           16,257
Deferred income taxes, net                 10,484           767
Other                                      14,828           16,001
Total long-term assets                     38,048           33,025
Total assets                               $227,180        $223,174
                                                           
Liabilities and Stockholders' Equity                        
Current liabilities                                         
Accounts payable                           $22,405         $18,821
Accrued compensation and benefits          6,926            7,201
Customer deposits                          12,253           9,238
Dividends payable                          542              6,063
Other accrued liabilities                  10,213           10,302
Current portion of real estate notes       241              202
payable
Total current liabilities                  52,580           51,827
                                                           
Long-term liabilities                                       
Post employment benefit obligations        11,577           11,226
Real estate notes payable                  3,053            3,662
Other long-term liabilities                2,690            4,024
Total long-term liabilities                17,320           18,912
                                                           
Stockholders' equity                                        
Common stock                               54,184           56,712
Retained earnings                          104,319          96,331
Accumulated other comprehensive loss       (1,223)          (608)
Total stockholders' equity                 157,280          152,435
Total liabilities and stockholders' equity $227,180        $223,174

                                                           
BASSETT FURNITURE INDUSTRIES, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows - unaudited
(In thousands)

                                          Year Ended        Year Ended
                                           November 24, 2012 November 26, 2011
Operating activities:                                       
Net income                                 $26,713         $55,342
Adjustments to reconcile net income to net
cash provided by (used in) operating                        
activities:
Depreciation and amortization              5,473            5,514
Equity in undistributed income of
investments and unconsolidated affiliated  (347)            (1,840)
companies
Provision for restructuring and asset      711              2,500
impairment charges
Non-cash portion of lease exit costs       359              2,228
Licensee debt cancellation charges         --               6,447
Provision for lease and loan guarantees    (41)             1,283
Bad debt and notes receivable valuation    376              13,490
charges
Gain on mortgage settlement                --               (1,305)
Gain on sale of affiliate                  --               (85,542)
Other than temporary impairment of         806              --
investments
Impairment and lease exit charges on       --               4,790
retail real estate
Deferred income taxes                      (15,822)         236
Other, net                                 642              214
Changes in operating assets and                             
liabilities
Accounts receivable                        (2,967)          1,034
Inventories                                (11,307)         299
Other current assets                      (276)            2,300
Accounts payable and accrued liabilities   3,636            (12,421)
Net cash provided by (used in) operating   7,956            (5,431)
activities
                                                           
Investing activities:                                       
Purchases of property and equipment        (9,000)          (4,168)
Proceeds from sale of property and         19               211
equipment
Proceeds from sale of interest in          1,410            69,152
affiliate
Release of collateral restrictions on cash --               11,240
equivalents
Proceeds from sales of investments         4,854            3,297
Purchases of investments                   (1,781)          (3,132)
Dividend from affiliate                    --               3,756
Equity contribution to affiliate           --               (980)
Acquisitions of retail licensee stores     (549)            --
Note receivable payments                   1,240            127
Net cash provided by (used in) investing   (3,807)          79,503
activities
                                                           
Financing activities:                                      
Repayments of real estate notes payable    (570)            (8,647)
Issuance of common stock                   842              170
Repurchases of common stock                (7,015)          (2,964)
Cash dividends                            (21,441)         (695)
Payments on other notes                    --               (3,406)
Net cash used in financing activities      (28,184)         (15,542)
Change in cash and cash equivalents        (24,035)         58,530
Cash and cash equivalents - beginning of   69,601           11,071
period
Cash and cash equivalents - end of period  $45,566         $69,601

                                                                   
BASSETT FURNITURE INDUSTRIES, INC. AND SUBSIDIARIES
Segment Information - unaudited
(In thousands)

              Quarter         Quarter         Year Ended       Year Ended
             ended          ended          November        November    
              November        November        24, 2012         26, 2011
              24, 2012        26, 2011
Net Sales                                                           
Wholesale     $51,831 (a) $43,746 (a) $185,187 (a) $177,372  (a)
Retail        48,833        39,363        171,633        147,961    
Inter-company (23,852)      (19,843)      (87,148)       (72,125)   
elimination
Consolidated  $76,812      $63,266      $269,672      $253,208  
                                                                   
Operating                                                           
Income (Loss)
Wholesale     $1,925  (b) $2,110  (b) $7,500   (b) $(4,394)  (b)
Retail        369           (584)         (2,067)        (4,495)    
Inter-company 221           --            717            942        
elimination
Licensee debt
cancellation  --            --            --             (6,447)    
charge
Restructuring
and asset     --            (418)         (711)          (2,500)    
impairment
charges
Lease exit    --            --            (359)          (3,728)    
costs
Consolidated  $2,515       $1,108       $5,080        $(20,622) 
                                                                   
                                                                   
(a) Excludes wholesale shipments for dealers where collectibility is not
reasonably assured at time of shipment as follows:
             November       November                                 
              24, 2012        26, 2011
Quarter      $--          $--                                    
ended
Year ended   --           1,678                                   
(b) Includes bad debt and notes receivable valuation charges (recoveries) as
follows:
             November       November                                 
              24, 2012        26, 2011
Quarter      $(40)        $374                                   
ended
Year ended   376           13,490                                  


BASSETT FURNITURE INDUSTRIES, INC. AND SUBSIDIARIES
Supplemental Retail Information--unaudited
(In thousands)

              48 Comparable Stores               40 Comparable Stores
              Quarter Ended     Quarter Ended     Year Ended         Year Ended
               November 24, 2012 November 26, 2011 November 24, 2012  November 26, 2011
                         Percent           Percent            Percent            Percent
              Amount    of      Amount    of      Amount     of      Amount     of
                         Net               Net                Net                Net
                         Sales             Sales              Sales              Sales
                                                                         
Net sales      $45,020 100.0%  $39,080 100.0%  $140,345 100.0%  $128,580 100.0%
                                                                         
Cost of sales  23,411   52.0%   20,205   51.7%   72,470    51.6%   66,400    51.6%
                                                                         
Gross profit   21,609   48.0%   18,875   48.3%   67,875    48.4%   62,180    48.4%
                                                                         
Selling,
general and    21,055   46.8%   19,082   48.8%   67,835    48.3%   64,191    49.9%
administrative
expense*
                                                                         
Income (loss)
from           $554    1.2%    $(207)  -0.5%   $40      0.1%    $(2,011) -1.5%
operations
                                                                         
                                                                         
              All Other Stores                    All Other Stores
              Quarter Ended     Quarter Ended     Year Ended         Year Ended
               November 24, 2012 November 26, 2011 November 24, 2012  November 26, 2011
                         Percent           Percent            Percent            Percent
              Amount    of      Amount    of      Amount     of      Amount     of
                         Net               Net                Net                Net
                         Sales             Sales              Sales              Sales
                                                                         
Net sales      $3,813  100.0%  $283    100.0%  $31,288  100.0%  $19,381  100.0%
                                                                         
Cost of sales  1,983    52.0%   312      110.2%  16,802    53.7%   11,699    60.4%
                                                                         
Gross profit   1,830    48.0%   (29)     -10.2%  14,486    46.3%   7,682     39.6%
                                                                         
Selling,
general and    2,015    52.8%   348      123.0%  16,594    53.0%   10,166    52.5%
administrative
expense
                                                                         
Loss from      $(185)  -4.8%   $(377)  -133.2% $(2,108) -6.7%   $(2,484) -12.9%
operations
                                                                         
*Comparable store SG&A includes retail corporate overhead and administrative costs.

CONTACT: J. Michael Daniel, Vice-President
         and Chief Accounting Officer
         (276) 629-6614 - Investors
        
         Jay S. Moore, Director of
         Communications
         (276) 629-6450 - Media
 
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