10q10k10q10k.net

What changed in BASSETT FURNITURE INDUSTRIES INC's 10-K — 2022 vs 2023

vs

Paragraph-level year-over-year comparison of BASSETT FURNITURE INDUSTRIES INC's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+370 added−424 removedSource: 10-K (2024-01-25) vs 10-K (2023-01-24)

Top changes in BASSETT FURNITURE INDUSTRIES INC's 2023 10-K

370 paragraphs added · 424 removed · 285 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

36 edited+13 added−32 removed10 unchanged
Biggest changeNet sales for our Company-owned retail stores by major product category for the last three fiscal years are summarized below: 2022 (2) 2021 2020 Bassett Custom Upholstery $ 163,755 57.1 % $ 139,527 56.3 % $ 112,888 53.3 % Bassett Leather 1,707 0.6 % 226 0.1 % 2,326 1.1 % Bassett Custom Wood 43,208 15.1 % 30,931 12.5 % 28,942 13.7 % Bassett Casegoods 40,146 14.0 % 42,658 17.2 % 35,728 16.9 % Accessories, mattresses & other (1) 38,105 13.3 % 34,485 13.9 % 32,060 15.1 % Total $ 286,921 100.0 % $ 247,827 100.0 % $ 211,944 100.0 % (1) Includes sales of goods other than Bassett-branded products, such as accessories and bedding, and also includes the sale of furniture protection plans.
Biggest changeThe following table shows the number of Company-owned stores by state at November 25, 2023: Number of Number of State Stores State Stores Arizona 3 Nevada 1 Arkansas 1 New Jersey 2 California 2 New York 4 Connecticut 3 North Carolina 5 Delaware 1 Ohio 2 Florida 4 Oklahoma 1 Georgia 3 Pennsylvania 2 Kentucky 1 South Carolina 1 Maryland 3 Tennessee 1 Massachusetts 1 Texas 10 Missouri 1 Virginia 4 Total 56 Net sales for our Company-owned retail stores by major product category for the last three fiscal years are summarized below: 2023 2022 2021 Bassett Custom Upholstery $ 134,000 56.8 % $ 163,755 57.4 % $ 139,527 56.3 % Bassett Leather 1,951 0.8 % 1,707 0.6 % 226 0.1 % Bassett Custom Wood 36,732 15.6 % 43,208 15.2 % 30,931 12.5 % Bassett Casegoods 32,252 13.7 % 40,146 14.1 % 42,658 17.2 % Accessories, mattresses & other (1) 31,005 13.1 % 36,303 12.7 % 34,485 13.9 % Total $ 235,940 100.0 % $ 285,119 100.0 % $ 247,827 100.0 % (1) Includes sales of goods other than Bassett-branded products, such as accessories and bedding, and also includes the sale of furniture protection plans.
Discrimination and Harassment Policy We continue to maintain and enforce our policy prohibiting discrimination and harassment in our workplace. Our managers are trained in how to prevent, recognize and respond to possible inappropriate behavior. Associates have several available avenues for reporting concerns, including a confidential hotline. We promptly and carefully investigate each complaint of harassment or discrimination.
We continue to maintain and enforce our policy prohibiting discrimination and harassment in our workplace. Our managers are trained in how to prevent, recognize and respond to possible inappropriate behavior. Associates have several available avenues for reporting concerns, including a confidential hotline. We promptly and carefully investigate each complaint of harassment or discrimination.
These sales representatives are compensated based on a standard commission rate. We believe this blended strategy provides us the greatest ability to effectively distribute our products throughout the United States and ultimately gain market share. The BHF stores feature custom order furniture, free in-home and virtual design visits (“home makeovers”) and coordinated decorating accessories.
These sales representatives are compensated based on a standard commission rate. We believe this blended strategy provides us the greatest ability to effectively distribute our products throughout the United States and ultimately gain market share. The BHF stores feature custom order furniture, free in-home or virtual design visits (“home makeovers”) and coordinated decorating accessories.
We consider our website to be the front door to our brand experience where customers can research our furniture and accessory offerings and subsequently buy online or engage with an in-store design consultant. Customer acquisition resulting from our digital outreach strategies has significantly increased our traffic to the website and our online orders.
We consider our website to be the front door to our brand experience where customers can research our furniture and accessory offerings and subsequently buy online or engage with an in-store design consultant. Customer acquisition resulting from our digital outreach strategies has increased our traffic to the website and our online orders.
Through our website, www.bassettfurniture.com, we make available free of charge as soon as reasonably practicable after electronically filing or furnishing with the SEC, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments thereto. 7
Through our website, www.bassettfurniture.com, we make available free of charge as soon as reasonably practicable after electronically filing or furnishing with the SEC, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments thereto.
Our products are sold primarily through a network of Company-owned and licensee-owned branded stores under the Bassett Home Furnishings (“BHF”) name, with additional distribution through other wholesale channels including multi-line furniture stores, many of which feature Bassett galleries or design centers. We also sell our products through our website at www.bassettfurniture.com .
Our products are sold primarily through a network of Company-owned and licensee-owned branded stores under the Bassett Home Furnishings (“BHF”) name, with additional distribution through other wholesale channels including multi-line furniture stores, many of which feature Bassett galleries or design centers. We also sell our products through our newly redesigned website at www.bassettfurniture.com .
We were founded in 1902 and incorporated under the laws of Virginia in 1930. Our rich 120-year history has instilled the principles of quality, value, and integrity in everything we do, while simultaneously providing us with the expertise to respond to ever-changing consumer tastes and meet the demands of a global economy.
We were founded in 1902 and incorporated under the laws of Virginia in 1930. Our rich 121-year history has instilled the principles of quality, value, and integrity in everything we do, while simultaneously providing us with the expertise to respond to ever-changing consumer tastes and meet the demands of a global economy.
Wholesale Segment Overview The wholesale furniture industry is very competitive and there are a large number of manufacturers both within and outside the United States who compete in the market on the basis of product quality, price, style, delivery and service. Additionally, many retailers source imported product directly, thus bypassing domestic furniture manufacturers and wholesale importers.
The wholesale furniture industry is very competitive and there are a large number of manufacturers both within and outside the United States who compete in the market on the basis of product quality, price, style, delivery and service. Additionally, many retailers source imported product directly, thus bypassing domestic furniture manufacturers and wholesale importers.
Our philosophy is based on building strong long-term relationships with each customer. Sales people are referred to as “Design Consultants” and are trained to evaluate customer needs and provide comprehensive solutions for their home decor. Until a rigorous training and design certification program is completed, Design Consultants are not authorized to perform in-home or virtual design services for our customers.
Our philosophy is based on building strong long-term relationships with each customer. Salespeople are referred to as “Design Consultants” and are trained to evaluate customer needs and provide comprehensive solutions for their home decor. Until a rigorous training and design certification program is completed, Design Consultants are not authorized to perform in-home or virtual design services for our customers.
In order to reach markets that cannot be effectively served by our retail store network, we also distribute our products, including the Lane Venture outdoor furniture products, through other wholesale channels including multi-line furniture stores, many of which feature Bassett galleries or design centers. We use a network of over 30 independent sales representatives who have stated geographical territories.
In order for the Bassett brand to reach markets that cannot be effectively served by our retail store network, we also distribute our products through other wholesale channels including multi-line furniture stores, many of which feature Bassett galleries or design centers. We use a network of over 30 independent sales representatives who have stated geographical territories.
We also have factories in Martinsville and Bassett, Virginia that assemble and finish our custom bedroom and dining offerings. Late in the third quarter of fiscal 2022, we purchased a facility which we had formerly leased in Haleyville, Alabama where we manufacture aluminum frames for our outdoor furniture.
We also have factories in Martinsville and Bassett, Virginia that assemble and finish our custom bedroom and dining offerings. In 2022, we purchased a facility which we had formerly leased in Haleyville, Alabama where we manufacture aluminum frames for our outdoor furniture.
With 91 BHF stores at November 26, 2022, we have leveraged our strong brand name in furniture into a network of Company-owned and licensed stores that focus on providing consumers with a friendly environment for buying furniture and accessories.
With 87 BHF stores at November 25, 2023, we have leveraged our strong brand name in furniture into a network of Company-owned and licensed stores that focus on providing consumers with a friendly and casual environment for buying furniture and accessories.
Major Customers Our risk exposure related to our customers, consisting primarily of trade accounts receivable along with certain guarantees, net of recognized reserves, totaled approximately $19,709 and $22,447 at November 26, 2022 and November 27, 2021, respectively.
Major Customers Our risk exposure related to our customers, consisting primarily of trade accounts receivable along with certain guarantees, net of recognized reserves, totaled approximately $15,636 and $19,709 at November 25, 2023 and November 22, 2022, respectively.
In addition to the furniture that we manufacture domestically, we source most of our formal bedroom and dining room furniture (casegoods) and certain leather upholstery offerings from several foreign plants, primarily in Vietnam, Thailand and China. Over 75% of the products we currently sell are manufactured in the United States.
In addition to the furniture that we manufacture domestically, we source most of our formal bedroom and dining room furniture (casegoods) and certain leather upholstery offerings from several foreign plants, primarily in Vietnam and China.
We consider our website to be the front door to our brand experience where customers can research our furniture and accessory offerings and subsequently buy online or engage with an in-store design consultant. Customer acquisition resulting from our digital outreach strategies has significantly increased our traffic to the website since 2019.
We consider our website to be the front door to our brand experience where customers can research our furniture and accessory offerings and subsequently buy online or engage with an in-store design consultant. Digital outreach strategies have become the primary vehicle for brand advertising and customer acquisition.
Personal & Financial Wellbeing ● We offer a free online mental and behavioral health resource to all our associates, their spouses and adolescent children, with unlimited access to board-certified psychiatrists and licensed therapists. ● Our wellness programs, including onsite health clinics, personalized health coaching, mental health counseling, and incentivized healthy lifestyle choices, are designed to improve associate health and reduce healthcare costs for both the associate and the Company. ● We provide opportunities for our associates to meet with a certified financial planner for personalized retirement planning and budget counseling. ● We offer comprehensive benefit plans including Company subsidized health insurance, 401(k) Plan with Company matching contributions, and paid time off.
More details about our commitment to preventing discrimination and harassment in our workplaces are available on our website. 5 Quality of Life We continue to invest in the physical and mental well-being of our associates, their spouses and their children. ● We offer several free online mental and behavioral health resources, with unlimited access to board-certified psychiatrists and licensed therapists. ● Our wellness programs, including onsite health clinics, personalized health coaching, mental health counseling, and incentivized healthy lifestyle choices, are designed to improve associate health and reduce healthcare costs for both the associate and the Company. ● We provide opportunities for our associates to meet with a certified financial planner for personalized retirement planning and budget counseling. ● We offer comprehensive benefit plans including Company subsidized health insurance, 401(k) Plan with Company matching contributions, and paid time off.
As a result of the sale, the operations of our former logistical services segment, which consisted entirely of the operations of Zenith, are presented in this Annual Report on Form 10-K as discontinued operations.
Hunt Transport Services, Inc. (“J.B. Hunt”), and the transaction was completed on February 28, 2022. As a result of the sale, the operations of our former logistical services segment, which consisted entirely of the operations of Zenith, are presented in this Annual Report on Form 10-K as discontinued operations.
In 2018, we added outdoor furniture to our offerings with the acquisition of the Lane Venture brand. Our strategy is to distribute these products outside of our BHF store network through a network of over 10 independent sales representatives. Using Lane Venture as a platform, we developed the Bassett Outdoor brand that is only marketed through the BHF store network.
Our strategy is to distribute these products outside of our BHF store network through independent sales representatives each of which have a stated geographic territory. Using Lane Venture as a platform, we developed the Bassett Outdoor brand that is only marketed through the BHF store network.
Wholesale shipments by category for the last three fiscal years, excluding intercompany sales to our retail segment, are summarized below: 2022 2021 2020 External Intercompany Total External Intercompany Total External Intercompany Total Bassett Custom Upholstery $ 124,565 $ 82,437 $ 207,002 63.8 % $ 105,445 $ 69,533 $ 174,978 59.2 % $ 71,840 $ 56,360 $ 128,200 58.0 % Bassett Leather 35,953 76 36,029 11.1 % 36,157 61 36,218 12.3 % 20,487 949 21,436 9.7 % Bassett Custom Wood 22,534 24,764 47,298 14.6 % 24,079 24,066 48,145 16.3 % 19,682 19,629 39,311 17.8 % Bassett Casegoods 15,628 18,612 34,240 10.5 % 17,378 18,610 35,988 12.2 % 13,719 18,409 32,128 14.5 % Total $ 198,680 $ 125,889 $ 324,569 100.0 % $ 183,059 $ 112,270 $ 295,329 100.0 % $ 125,728 $ 95,347 $ 221,075 100.0 % Approximately 22% of our 2022 wholesale sales were of imported product compared to 24% in both 2021 and 2020.
Wholesale shipments by category for the last three fiscal years, excluding intercompany sales to our retail segment, are summarized below: 2023 2022 2021 External Intercompany Total External Intercompany Total External Intercompany Total Bassett Custom Upholstery $ 89,005 $ 66,363 $ 155,368 62.4 % $ 124,565 $ 82,437 $ 207,002 63.8 % $ 105,445 $ 69,533 $ 174,978 59.2 % Bassett Leather 26,701 1,171 27,872 11.2 % 35,953 76 36,029 11.1 % 36,157 61 36,218 12.3 % Bassett Custom Wood 17,357 20,070 37,427 15.0 % 22,534 24,764 47,298 14.6 % 24,079 24,066 48,145 16.3 % Bassett Casegoods 12,329 15,915 28,244 11.3 % 15,628 18,612 34,240 10.5 % 17,378 18,610 35,988 12.2 % Total $ 145,392 $ 103,519 $ 248,911 100.0 % $ 198,680 $ 125,889 $ 324,569 100.0 % $ 183,059 $ 112,270 $ 295,329 100.0 % Approximately 22% of our 2023 and 2022 wholesale sales were of imported product compared to 24% in 2020.
Available Information We file our annual, quarterly and current reports, proxy statements and other information with the SEC. Our SEC filings are available to the public at the SEC’s website at www.sec.gov.
In fiscal 2023, 2022 and 2021, no customer accounted for more than 10% of total consolidated net sales. 6 Available Information We file our annual, quarterly and current reports, proxy statements and other information with the SEC. Our SEC filings are available to the public at the SEC’s website at www.sec.gov.
The dollar value of our wholesale backlog, representing orders received but not yet shipped to the BHF store network or independent dealers, was $35,336 at November 26, 2022 and $90,057 at November 27, 2021.
The dollar value of our wholesale backlog, representing orders received but not yet shipped to the BHF store network or independent dealers, was $18,478 at November 25, 2023 and $35,336 at November 26, 2022. 3 We use lumber, fabric, leather, foam and other materials in the production of wood and upholstered furniture.
Digital advertising continued to dominate our marketing expenditures in 2022 as compared to traditional television and direct mail advertising. We plan to continue with increased levels of spending on digital advertising and outreach during 2023. The migration to digital brand research has caused us to comprehensively evaluate all of our American made custom products.
Digital advertising continued to dominate our marketing expenditures in 2023 as compared to traditional television and direct mail advertising. We plan to continue with increased levels of spending on digital advertising and outreach during 2024. We also continue to re-examine the performance of every one of our stores.
Based on this feedback, we instituted a mentorship program to assist with new associate orientation at our Martinsville facility and started weekly department manager-led meetings with production personnel. 6 Professional Development We offer opportunities to our associates for educational and skill development, including: ● Leadership, communication and diversity/inclusion training for identified high potential associates. ● Tuition reimbursement for associates who desire to further their education. ● Online training for managers, with classes completed monthly. ● Training for customer-facing associates designed to enhance the in-store and follow up experiences for our customers.
Professional Development We offer opportunities to our associates for educational and skill development, including: ● Tuition reimbursement for associates who desire to further their education. ● Online training for managers, with classes completed monthly. ● Training for customer-facing associates designed to enhance the in-store and follow up experiences for our customers.
During the fourth quarter of fiscal 2022 we acquired Noa Home Inc. (“Noa Home”), a mid-priced e-commerce furniture retailer headquartered in Montreal, Canada. Noa Home has operations in Canada, Australia, Singapore and the United Kingdom. With a lean staffing model, the Noa Home team has built an operational blueprint that has the potential for significant growth.
During the fourth quarter of fiscal 2022 we acquired Noa Home (see Note 3 to the Consolidated Financial Statements for additional information regarding the acquisition). A mid-priced e-commerce furniture retailer headquartered in Montreal, Canada, Noa Home has operations in Canada, Australia, Singapore and the United Kingdom.
At November 26, 2022 and November 27, 2021, approximately 31% and 24%, respectively, of the aggregate risk exposure, net of reserves, was attributable to five customers. In fiscal 2022, 2021 and 2020, no customer accounted for more than 10% of total consolidated net sales.
At November 25, 2023 and November 26, 2022, approximately 35% and 31%, respectively, of the aggregate risk exposure, net of reserves, was attributable to five customers.
Human Capital We employed 1,561 people as of November 26, 2022. Our associate count represents a decrease of 658 from a year ago, 644 due to the sale of Zenith with the remaining 14 primarily attributable to the reduction in the number of Company-owned retail stores.
Human Capital We employed 1,389 people as of November 25, 2023. Our associate count represents a decrease of 172 from a year ago, 135 due to headcount reductions in our manufacturing facilities in response to business conditions, 22 primarily attributable to the reduction in the number of Company-owned retail stores and 15 related to the corporate overhead function.
Retail Segment Overview – Company-Owned Retail Stores The retail furniture industry remains very competitive and includes local furniture stores, regional furniture retailers, national department and chain stores, single-vendor branded retailers and on-line retailers. As a whole, our store network with 58 Company-owned stores and 33 licensee-owned stores, ranks in the top 30 in retail furniture sales in the United States.
Retail Segment Overview – Company-Owned Retail Stores The retail—Company-owned stores segment consists of 56 BHF stores that provide consumers with a friendly and casual environment for buying furniture and accessories. The retail furniture industry remains very competitive and includes local furniture stores, regional furniture retailers, national department and chain stores, single-vendor branded retailers and on-line retailers.
This allows Bassett branded product to move from inside the home to outside the home to capitalize on the growing trend of outdoor living. We have factories in Newton, North Carolina that manufacture both stationary and motion upholstered furniture for inside the home along with our outdoor furniture offerings.
In the second quarter of 2023, we debuted the Bassett Outdoor contract line at the HD Expo Show in Las Vegas targeting the hospitality segment. 2 We have factories in Newton, North Carolina that manufacture both stationary and motion upholstered furniture for inside the home along with our outdoor furniture offerings.
We believe the acquisition will provide Bassett with a greater online presence and will allow us to attract more digitally native consumers. While still in the planning phase, we expect to introduce the Noa Home brand in the United States during 2023.
With a lean staffing model, the Noa Home team has built an operational blueprint that has the potential for significant growth. We believe the acquisition will provide Bassett with a greater online presence and will allow us to attract more digitally native consumers.
During the first quarter of 2022, we entered into a definitive agreement to sell substantially all of the assets of our wholly-owned subsidiary, Zenith Freight Lines, LLC (“Zenith”) to J.B. Hunt Transport Services, Inc. (“J.B. Hunt”), and the transaction was completed on February 28, 2022.
Over 75% of our wholesale revenues are derived from products that are manufactured in the United States using a mix of domestic and globally sourced components and raw materials. During the first quarter of 2022, we entered into a definitive agreement to sell substantially all of the assets of our wholly-owned subsidiary, Zenith Freight Lines, LLC (“Zenith”) to J.B.
The wholesale home furnishings segment is involved principally in the design, manufacture, sourcing, sale and distribution of furniture products to a network of BHF stores (Company-owned retail stores and licensee-owned stores) and independent furniture retailers. Our retail segment consists of 58 Company-owned and operated BHF stores.
Operating Segments We have strategically aligned our business into three reportable segments: ● Wholesale ● Retail—Company-owned stores ● Corporate and other Wholesale Segment Overview The wholesale segment is involved principally in the design, manufacturing and sourcing of furniture products that are distributed through our BHF store network (both Company-owned and licensee-owned stores) and various independent retailers.
During the second quarter of 2022, we implemented a comprehensive Product Information Management system which will allow us to enhance and standardize our product development and data management and governance processes. This will result in more consistent data that our merchandizing and sales teams can use in analyzing various product and sales trends in order to make better informed decisions.
This results in more consistent data that our merchandizing and sales teams can use in analyzing various product and sales trends in order to make better informed decisions. We also introduced a new web platform in August of 2023 that leverages world class features including enhanced customer research capabilities and streamlined navigation.
While we work to make it easier to purchase either in store or on-line, we will not compromise our in-store experience or the quality of our in-home makeover capabilities. 2 We are engaged in a multi-year cross-functional digital transformation initiative with the first phase consisting of the examination and improvement of our underlying data management processes.
As a result, we have been engaged in a multi-year cross-functional digital transformation initiative with the first phase consisting of the examination and improvement of our underlying data management processes. During fiscal 2022, we implemented a comprehensive Product Information Management system which allows us to enhance and standardize our product development and data management and governance processes.
These include: ● Updated break area, restrooms, lighting and parking at our Haleyville, Alabama manufacturing facility ● Improved lighting and flooring, and reconfigured layouts to facilitate more efficient and roomier work areas in our Newton, NC upholstery facilities. ● Invested in material handling solutions at our Bassett, VA plant, reducing the need for associates to physically move materials through the production process. ● Continued renovations at our corporate headquarters.
These include: ● Completed renovations to the break area and restrooms at our Haleyville, Alabama manufacturing facility. ● Updated air-handling systems at our Newton, North Carolina upholstery facilities, which improved air circulation and quality. ● Renovated the break area at our Martinsville, Virginia plant. ● Continued with lighting improvements at our Bassett, Virginia facility.
We believe that on a market-by-market basis, there will be fewer stores in the future. We will continue to evaluate store-by-store performance as we seek the optimal store count in the markets in which we compete at retail. We also plan to heavily emphasize our “Made in America” story and utilize locally harvested and organic materials when possible.
Store traffic has been declining and the effect on our retail model has become increasingly challenging. We believe that on a market-by-market basis, there will be fewer stores in the future.
In addition, we expanded our Bench Made solid wood dining offerings to provide a sleeker more contemporary styled product to complement our initial Bench Made dining offerings. 5 Trademarks Our trademarks, including “Bassett” and the names of some of our marketing divisions, products and collections, are significant to the conduct of our business.
We consider our corporate functions to be other business activities and have aggregated them with our other insignificant operating segment, Noa Home, acquired in late 2022. Trademarks Our trademarks, including “Bassett” and the names of some of our marketing divisions, products and collections, are significant to the conduct of our business.
Removed
During the second quarter of fiscal 2022, we opened our first regional fulfillment center (“RFC”) in Orlando, Florida where we are stocking our best sellers for much quicker delivery. This adds an element of immediacy to our proven platform of made to order custom furniture that has driven our strategy for the past two decades.
Added
Since the debut of the new site, we have seen increased engagement with the brand through a greater number of page views per customer along with more time spent on the site. We have also seen an increase in average order value that has resulted in increased e-commerce revenue.
Removed
During the fourth quarter of 2022, we opened our second RFC near Baltimore, Maryland. In December of 2022, we opened three more RFCs in Conover, North Carolina, Grand Prairie, Texas and Riverside, California. We plan to evaluate the performance of these five RFCs before considering any additional locations.
Added
We plan to implement several enhancements to the site in 2024 that will improve the overall customer experience and brand presentation. While we have made it easier to purchase on-line, we will not compromise our in-store experience or the quality of our in-home makeover capabilities. We spent over $4 million on developing and implementing the new website in 2023.
Removed
With the purchase, we also obtained two additional buildings which will allow us to expand our footprint at that facility. Our manufacturing team takes great pride in the breadth of its options, the precision of its craftsmanship, and the speed of its manufacturing process.
Added
We are currently in the process of expanding Noa Home’s product assortment and categories offered on the Canadian website. In August of 2023, we introduced the Noa Home brand in the United States. In 2018, we added outdoor furniture to our offerings with the acquisition of the Lane Venture brand.
Removed
The migration to digital brand research has caused us to comprehensively evaluate all of our American made custom products.
Added
This allows Bassett branded products to move from inside the home to outside the home to capitalize on the growing trend of outdoor living.
Removed
While our Bench Made line of custom upholstery and custom bedroom and dining products continue to be our most successful offerings, most of these items must be purchased in a store as they are not conducive to web transactions due to the number of options available.
Added
As a whole, our store network which includes 31 licensee-owned stores, ranks in the top 30 in retail furniture sales in the United States.
Removed
Consequently, we will continue to methodically re-design each one of these important lines to best serve our customers online, in the store or wherever our customer might be.
Added
We will continue to evaluate store-by-store performance as we seek the optimal store count in the markets in which we compete at retail. 4 Corporate and Other Corporate and other includes the shared costs of corporate functions such as treasury and finance, information technology, accounting, human resources, legal and others, including certain product development and marketing functions benefitting both wholesale and retail operations.
Removed
Our intent is to continue to offer the consumer custom options that will help them personalize their home but to do so in an edited fashion that will provide a better web experience in the research phase and will also allow the final purchase to be made either on the web or in the store.
Added
Headcount by segment is as follows: ● 705 in the wholesale segment ● 496 in the retail segment ● 188 in the corporate and other segment We approach our workplace culture by being Invested … In Each Other , the tenets of which include fostering a workplace that promotes respect for each other, investing in our associates’ well-being, providing safe and comfortable work environments, offering opportunities to develop personally and professionally, being good stewards of the environment, and giving back to the communities in which we work and live.
Removed
We are also in the process of implementing a new eCommerce platform that we plan to introduce in the second quarter of 2023. The new web platform will leverage world class features including enhanced customer research capabilities and streamlined navigation that we believe will result in increased web traffic and sales.
Added
We believe that these investments are crucial to the success of our associates and our Company. Workplace Respect We value the diversity of our associates as an essential component in the way we do business.
Removed
Impact of the COVID-19 Pandemic and Related Supply Chain and Labor Issues Upon Our Business On March 11, 2020, the World Health Organization declared the coronavirus (“COVID-19”) outbreak to be a global pandemic.
Added
It continues to be Bassett’s policy to be equitable and impartial in our relations with our associates and to base all employment-related decisions upon valid, job-related factors, without regard to race, color, religion, national origin, age, sex, physical or mental disability, genetic information, veteran or other protected status. “Sex” includes gender identity and gender expression, transgender status, and pregnancy.
Removed
In response to this declaration and the rapid spread of COVID-19 within the United States, federal, state and local governments throughout the country imposed varying degrees of restrictions on social and commercial activity to promote social distancing in an effort to slow the spread of the illness.
Added
We completed associate focus group meetings at our manufacturing locations, which solicited input for improving our facilities and work-life balance.
Removed
These measures had a significant adverse impact upon many sectors of the economy, including non-essential retail commerce, beginning in our second fiscal quarter of 2020.
Added
Environmental and Civic Responsibility Representing our commitment to sustainably sourced hardwoods, each Arbor Day since 2021, over 30 of our associates travel to central Ohio to take part in the planting of Appalachian hardwood seedlings. This event is hosted by our BenchMade supply partners, and over 170,000 trees have been planted to date – and counting.
Removed
In response to the restrictive measures imposed by governmental authorities and for the protection of our employees and customers, we temporarily closed our dedicated stores, our manufacturing locations and many of our warehouses for much of the second fiscal quarter of 2020.
Added
Additionally, we remain committed to our recycling efforts. Materials recycled in 2023 include: Tons Tons Wood dust 1,770 Fabric scraps 184 Paper/cardboard 129 Metal/electronics 97 Wood pallets 85 Finishing materials 50 Our partnership with the Stephen Siller Tunnels2Towers Foundation, which began in 2019, continued last year as we furnished five smart homes built for wounded veterans and first responders.
Removed
This extended period of suspended operations had a material adverse impact upon our results of operations during the second fiscal quarter of 2020 and resulted in a significant net loss for 2020.
Added
Additionally, our associates and Bassett have a long history of supporting the United Way both financially and by volunteering with United Way supported agencies.
Removed
In addition to operating losses resulting from severely reduced sales volumes, we also recorded charges for goodwill impairment as well as for the impairment of certain other long-lived assets.
Removed
However, since restarting our manufacturing operations and reopening stores, we have seen a significant improvement in business conditions which allowed us to return to overall profitability for the third and fourth fiscal quarters of 2020 continuing through fiscal 2022.
Removed
However, continuing logistical challenges faced by the entire home furnishings industry resulting from COVID-related labor shortages and supply chain disruptions created significant delays in order fulfillment and increasing backlogs as we were not able to produce and ship at the incoming rate of wholesale and retail orders.
Removed
Gradual decreases in wholesale and retail backlogs over the course of 2022 were driven by a lower rate of incoming orders coupled with gradual easing of supply chain constraints. By the end of fiscal 2022, these issues have been substantially resolved.
Removed
However, we cannot anticipate the impact of any future resurgence of COVID-19 upon our business, which could include, among other things, reductions in customer traffic to our retail stores, increased labor shortages and renewed supply chain disruptions.
Removed
Should these conditions resume, this may have a material adverse impact on our ultimate financial condition and liquidity. 3 Operating Segments We have strategically aligned our business into two reportable segments: Wholesale and Retail – Company-owned stores.
Removed
The following table shows the number of Company-owned stores by state as of November 26, 2022: Number of Number of State Stores State Stores Alabama 1 Nevada 1 Arizona 3 New Jersey 2 Arkansas 1 New York 5 California 2 North Carolina 5 Connecticut 3 Ohio 2 Delaware 1 Oklahoma 1 Florida 4 Pennsylvania 2 Georgia 3 South Carolina 1 Kentucky 1 Tennessee 1 Maryland 3 Texas 10 Massachusetts 1 Virginia 4 Missouri 1 Total 58 Our five locations in the state of New York include a 16,000 square foot clearance center in Middletown, New York.
Removed
Unlike our other 57 BHF locations, the clearance center offers only clearance merchandise at reduced price points and without design consulting services.
Removed
The significant reduction in backlog is due to a 15% decrease in incoming orders for 2022 coupled with the easing of COVID-related labor shortages and supply chain disruptions. 4 We use lumber, fabric, leather, foam and other materials in the production of wood and upholstered furniture.
Removed
Our Company-owned store network peaked at 70 stores in fiscal 2019. Since that time, we have closed ten underperforming locations along with two others that are in the process of relocation within their markets.
Removed
(2) Beginning with the fourth quarter of fiscal 2022, our retail segment includes the sales of Noa Home, which was acquired on September 2, 2022. The COVID crisis in 2020 gave us the opportunity to look inward and to make structural improvements to our business model.
Removed
We instituted a “virtual appointment” program for our stores in late March of 2020, whereby consumers digitally engage with our designers and transact without physically visiting a store. Adding this new form of engagement is one of the many lasting changes that have come out of the pandemic.
Removed
While our Bench Made line of custom upholstery and custom bedroom and dining products continue to be our most successful offerings, most of these items must be purchased in a store as they are not conducive to web transactions due to the number of options available. Consequently, we will continue to methodically re-design each one of these important lines.
Removed
Our intent is to continue to offer the consumer custom options that will help them personalize their home but to do so in an edited fashion that will provide a better web experience in the research phase and will also allow the final purchase to be made either on the web or in the store.
Removed
While we work to make it easier to purchase either in store or on-line, we will not compromise on our in-store experience or the quality of our in-home makeover capabilities. We also continue to re-examine the performance of every one of our stores. Store traffic has been declining and the effect on our retail model has become increasingly challenging.
Removed
As part of this, we recently rebranded our premier Custom Upholstery line to be part of the Bench Made program emphasizing that those products are artisan crafted with exceptional domestic materials and are made to order.
Removed
Headcount by segment is as follows: ● 1,037 in the wholesale segment ● 524 in the retail segment Invested … In Each Other is more than a catchphrase at Bassett – it’s how we approach our relationships with our associates.
Removed
When we invest in our team members’ personal wellbeing, work environment and professional development, we promote a work culture that fosters mutual respect, increased productivity, and best-in-class customer service.

… 1 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

20 edited+4 added−12 removed12 unchanged
Biggest changeIf these efforts are unsuccessful or we incur substantial costs in connection with these efforts, our business, operating results and financial condition could be adversely affected. Risks Related to Material Sourcing and Supply Our use of foreign sources of production for a portion of our products exposes us to certain additional risks associated with international operations.
Biggest changeWe cannot provide assurance that our marketing, advertising and other efforts to promote and maintain awareness of our brand will not require us to incur substantial costs. If these efforts are unsuccessful or we incur substantial costs in connection with these efforts, our business, operating results and financial condition could be adversely affected.
Competition from any of these sources could cause us to lose market share, revenues and customers, increase expenditures or reduce prices, any of which could have a material adverse effect on our results of operations. 8 Our licensee-owned stores may not be able to meet their obligations to us.
Competition from any of these sources could cause us to lose market share, revenues and customers, increase expenditures or reduce prices, any of which could have a material adverse effect on our results of operations. Our licensee-owned stores may not be able to meet their obligations to us.
Any such proceedings could distract our management from running our business and cause us to incur significant unplanned losses and expenses. Consumer perception of our brand could also be negatively affected by these events, which could further adversely affect our results and prospects. 10
Any such proceedings could distract our management from running our business and cause us to incur significant unplanned losses and expenses. Consumer perception of our brand could also be negatively affected by these events, which could further adversely affect our results and prospects.
Maintaining and enhancing our brand is critical to our ability to expand our base of customers and drive increased traffic at both Company-owned and licensee-owned stores and to our website. Digital advertising and outreach continue to dominate our marketing expenditures. We are also investing heavily in our website and e-commerce.
Maintaining and enhancing our brand is critical to our ability to expand our base of customers and drive increased traffic at both Company-owned and licensee-owned stores and to our website. Digital advertising and outreach continue to dominate our marketing expenditures. We also invested heavily in our website and e-commerce.
As with all retailers, our business is susceptible to changes in consumer tastes and trends. We attempt to monitor changes in consumer tastes and home design trends through attendance at international industry events and fashion shows, internal marketing research, and communication with our retailers and design consultants who provide valuable input on consumer tendencies.
We attempt to monitor changes in consumer tastes and home design trends through attendance at international industry events and fashion shows, internal marketing research, and communication with our retailers and design consultants who provide valuable input on consumer tendencies.
We have a significant amount of accounts receivable attributable to our network of licensee-owned stores. We also guarantee a limited number of leases of some of our licensees.
We have a significant amount of accounts receivable attributable to our network of licensee-owned stores. We also guarantee two leases of one of our licensees.
Our primary and back-up computer systems are subject to damage or interruption from power outages, computer and telecommunications failures, computer viruses, security breaches, natural disasters and errors by employees.
Disruptions in both our primary and back-up systems could adversely affect our business and operating results. Our primary and back-up computer systems are subject to damage or interruption from power outages, computer and telecommunications failures, computer viruses, security breaches, natural disasters and errors by employees.
Our use of foreign sources for the supply of certain of our products exposes us to risks associated with overseas sourcing.
Risks Related to Material Sourcing and Supply Our use of foreign sources of production for a portion of our products exposes us to certain additional risks associated with international operations. Our use of foreign sources for the supply of certain of our products exposes us to risks associated with overseas sourcing.
Governments in the foreign countries where we source our products may change their laws, regulations and policies, including those related to tariffs and trade barriers, investments, taxation and exchange controls which could make it more difficult to service our customers resulting in an adverse effect on our earnings. 9 Fluctuations in the price, availability and quality of raw materials could result in increased costs or cause production delays which might result in a decline in sales, either of which could adversely impact our earnings.
Governments in the foreign countries where we source our products may change their laws, regulations and policies, including those related to tariffs and trade barriers, investments, taxation and exchange controls which could make it more difficult to service our customers resulting in an adverse effect on our earnings.
We may in the future become subject to claims for purportedly fraudulent transactions arising out of the actual or alleged theft of credit or debit card information.
We also store and process confidential information pertaining to our employees and other third parties on our networks. We have and may in the future become subject to claims for purportedly fraudulent transactions arising out of the actual or alleged theft of credit or debit card information.
We may incur significant future losses due to our recent acquisition of Noa Home If expected growth trends in Noa Home’s revenue fail to materialize, we may be unable to recover our investment in Noa Home, including any additional financial support we may find necessary to provide.
If these stores do not generate the necessary level of sales and profits, the licensees may not be able to fulfill their obligations to us resulting in additional bad debt expenses and real estate related losses. 7 We may incur significant future losses due to our recent acquisition of Noa Home If expected growth trends in Noa Home’s revenue fail to materialize, we may be unable to recover our investment in Noa Home, including any additional financial support we may find necessary to provide.
There is no guarantee that we will be able to successfully pass along additional cost increases as they arise and rising inflation could have an adverse impact upon consumer demand for discretionary items such as home furnishings. Production delays or upward trends in raw material prices could result in lower sales or margins, thereby adversely impacting our earnings.
For example, lumber prices fluctuate over time based on factors such as weather and demand, which in turn impact availability. There is no guarantee that we will be able to successfully pass along additional cost increases as they arise and rising inflation could have an adverse impact upon consumer demand for discretionary items such as home furnishings.
If our critical business computer systems or back-up systems are damaged or cease to function properly, we may have to make a significant investment to repair or replace them. We may incur costs and reputational harm resulting from security risks we face in connection with our electronic processing, storage and transmission of confidential information.
If our critical business computer systems or back-up systems are damaged or cease to function properly, we may have to make a significant investment to repair or replace them.
Risks Related to Our Brand and Product Offerings Failure to successfully anticipate or respond to changes in consumer tastes and trends in a timely manner could adversely impact our business, operating results and financial condition. Sales of our furniture are dependent upon consumer acceptance of our designs, styles, quality and price.
This may result in significant operating losses from Noa Home which could have an adverse impact on our future cash flows and results of operations. Risks Related to Our Brand and Product Offerings Failure to successfully anticipate or respond to changes in consumer tastes and trends in a timely manner could adversely impact our business, operating results and financial condition.
Fluctuations in the price, availability and quality of raw materials could result in increased costs or a delay in manufacturing our products, which in turn could result in a delay in delivering products to our customers. For example, lumber prices fluctuate over time based on factors such as weather and demand, which in turn impact availability.
Certain of our raw materials, including fabrics, are purchased both abroad and domestically. Fluctuations in the price, availability and quality of raw materials could result in increased costs or a delay in manufacturing our products, which in turn could result in a delay in delivering products to our customers.
Risks Related to Electronic Data Processing and Digital Information We rely extensively on computer systems to process transactions, summarize results and manage our business. Disruptions in both our primary and back-up systems could adversely affect our business and operating results.
Production delays or upward trends in raw material prices could result in lower sales or margins, thereby adversely impacting our earnings. 8 Risks Related to Electronic Data Processing and Digital Information We rely extensively on computer systems to process transactions, summarize results and manage our business.
Risks Related to Our Retail Operations We face a volatile retail environment and changing economic conditions that may further adversely affect consumer demand and spending. Historically, the home furnishings industry has been subject to cyclical variations in the general economy and to uncertainty regarding future economic prospects.
Any of the following risks could materially adversely affect our business, operations, industry, financial position or future financial results. Risks Related to Our Retail Operations We face a volatile retail environment and changing economic conditions that may further adversely affect consumer demand and spending.
We accept electronic payment cards in our stores and also gather certain personal identifiable information in the processing of our retail sales transactions. We also store and process confidential information pertaining to our employees and other third parties on our networks.
We may also incur reputational harm resulting from these security risks. We accept electronic payment cards in our stores and also gather certain personal identifiable information in the processing of our retail sales transactions.
These risks are related to government regulation, volatile ocean freight costs, delays in shipments, extended lead time in ordering and, more recently, disruptions in supply due to plant shut-downs and shipping delays resulting from surges in COVID infections in other parts of the world.
These risks are related to government regulation, volatile ocean freight costs, delays in shipments, extended lead time in ordering.
We use various types of wood, foam, fibers, fabrics, leathers, and other raw materials in manufacturing our furniture. Certain of our raw materials, including fabrics, are purchased both abroad and domestically.
Fluctuations in the price, availability and quality of raw materials could result in increased costs or cause production delays which might result in a decline in sales, either of which could adversely impact our earnings. We use various types of wood, foam, fibers, fabrics, leathers, and other raw materials in manufacturing our furniture.
Removed
Any of the following risks could materially adversely affect our business, operations, industry, financial position or future financial results. Risks Related to the Coronavirus Pandemic The coronavirus global pandemic which caused a significant disruption in non-essential retail commerce may continue to have a material adverse impact upon our financial condition and results of operations.
Added
Historically, the home furnishings industry has been subject to cyclical variations in the general economy and to uncertainty regarding future economic prospects.
Removed
On March 11, 2020, the World Health Organization declared the current coronavirus (“COVID-19”) outbreak to be a global pandemic.
Added
Sales of our furniture are dependent upon consumer acceptance of our designs, styles, quality and price. As with all retailers, our business is susceptible to changes in consumer tastes and trends.
Removed
In response to this declaration and the rapid spread of COVID-19 within the United States, federal, state and local governments throughout the country imposed varying degrees of restriction on social and commercial activity to promote social distancing in an effort to slow the spread of the illness.
Added
We have previously and may continue in the future to incur costs resulting from security risks we face in connection with our electronic processing, storage and transmission of confidential information whether on computer systems maintained on our internal network or by third parties that may host certain of our systems.
Removed
These measures had a significant adverse impact upon many sectors of the economy, including non-essential retail commerce. As a result of these circumstances, we temporarily closed our dedicated stores, our manufacturing locations and many of our warehouses. In addition, many of our office personnel were working remotely.
Added
Certain of these transactions were processed through our e-commerce site that was hosted and maintained by a third party that was subject to at least one data breach. We have subsequently moved our e-commerce site to another provider that we believe provides greater overall security.
Removed
By the end of June 2020, we had reopened all of our retail stores that had been temporarily closed.
Removed
However, continuing logistical challenges faced by the entire home furnishings industry resulting from COVID-related labor shortages and supply chain disruptions created significant delays in order fulfillment and increasing backlogs as we were not able to produce and ship at the incoming rate of wholesale and retail orders.
Removed
Gradual decreases in wholesale and retail backlogs over the course of 2022 were driven by a lower rate of incoming orders coupled with gradual easing of supply chain constraints. By the end of fiscal 2022, these issues have been substantially resolved.
Removed
However, we cannot anticipate the impact of any future resurgence of COVID-19 upon our business, which could include, among other things, reductions in customer traffic to our retail stores, increased labor shortages and renewed supply chain disruptions. Should these conditions resume, this may have a material adverse impact on our ultimate financial condition and liquidity.
Removed
If these stores do not generate the necessary level of sales and profits, the licensees may not be able to fulfill their obligations to us resulting in additional bad debt expenses and real estate related losses.
Removed
This may result in significant operating losses from Noa Home which could have an adverse impact on our future cash flows and results of operations, including significant charges for the impairment of certain acquired assets including goodwill.
Removed
We plan to debut a new website in the second quarter of 2023 which will include improved navigation and on-line order capabilities designed to drive additional on-line sales. We cannot provide assurance that our marketing, advertising and other efforts to promote and maintain awareness of our brand will not require us to incur substantial costs.
Removed
More recently, general price inflation brought on by labor and supply shortages have forced us to implement several general price increases in 2022 and 2021.

Item 2. Properties

Properties — owned and leased real estate

5 edited+1 added−1 removed0 unchanged
Biggest changeITEM 2. PROPERTIES General We own our corporate office building, which includes an annex, located in Bassett, Va. We own the following facilities, by segment: Wholesale Segment: Facility Location Bassett Wood Division Martinsville, Va. Bassett Wood Division Bassett, Va. Bassett Upholstery Division Newton, N.C. Bassett Upholstery Division Haleyville, Alabama 3 Warehouses Bassett, Va.
Biggest changeITEM 2. PROPERTIES We own the following facilities, by segment: Wholesale Segment: Facility Location Bassett Wood Division Martinsville, Va. Bassett Wood Division Bassett, Va. Bassett Upholstery Division Newton, N.C. Bassett Upholstery Division Haleyville, Alabama 3 Warehouses Bassett, Va. 9 In general, these facilities are suitable and are considered to be adequate for the continuing operations involved.
Retail Segment: Real estate associated with our retail segment consists of eight owned locations with an aggregate square footage of 203,465 and a net book value of $21,164.
Retail Segment: Real estate associated with our retail segment consists of eight owned locations with an aggregate square footage of 203,465 and a net book value of $24,279.
These stores are located as follows: Concord, North Carolina Greensboro, North Carolina Greenville, South Carolina Fredericksburg, Virginia Houston, Texas Louisville, Kentucky Knoxville, Tennessee Tampa, Florida (to be opened in 2023) Of these locations, two are subject to land leases. Our remaining 51 store locations are leased from third parties.
These stores are located as follows: Concord, North Carolina Greensboro, North Carolina Greenville, South Carolina Fredericksburg, Virginia Houston, Texas Louisville, Kentucky Knoxville, Tennessee Tampa, Florida (opened in the first quarter of fiscal 2024) Of these locations, two are subject to land leases. Our remaining 49 store locations are leased from third parties.
In addition to the owned properties shown above, we lease facilities in Newton, North Carolina for the manufacturing of upholstered furniture and the manufacturing and warehousing operations of Lane Venture and Bassett Outdoor.
All facilities are in regular use and provide adequate capacity for our manufacturing and warehousing needs. In addition to the owned properties shown above, we lease facilities in Newton, North Carolina for the manufacturing of upholstered furniture and the manufacturing and warehousing operations of Lane Venture and Bassett Outdoor.
In addition to retail stores, we also lease thirteen locations for use as regional warehouses and home delivery distribution centers. See Note 15 to the Consolidated Financial Statements included under Item 8 of this Annual Report for more information with respect to our operating lease obligations.
See Note 15 to the Consolidated Financial Statements included under Item 8 of this Annual Report for more information with respect to our operating lease obligations.
Removed
In general, these facilities are suitable and are considered to be adequate for the continuing operations involved. All facilities are in regular use and provide adequate capacity for our manufacturing and warehousing needs.
Added
In addition to retail stores, we also lease thirteen locations for use as regional warehouses and home delivery distribution centers. Corporate and Other Segment : We own our corporate office building, which includes an annex, located in Bassett, Va. Noa Home does not own any property or buildings and is not party to any real estate leases.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

7 edited+0 added−4 removed2 unchanged
Biggest changeThe following table summarizes the stock repurchase activity for the three months ended November 26, 2022, and the approximate dollar value of shares that may yet be repurchased pursuant to our stock repurchase program: Issuer Purchases of Equity Securities (dollar amounts in thousands, except share and per share data) Total Shares Purchased Average Price Paid Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs August 28 - October 1, 2022 76,000 $ 17.82 76,000 $ 29,503 October 2 - October 29, 2022 124,678 $ 16.99 123,453 $ 27,404 October 30 - November 26, 2022 74,703 $ 18.80 74,703 $ 25,999
Biggest changeThe following table summarizes the stock repurchase activity for the three months ended November 25, 2023, and the approximate dollar value of shares that may yet be repurchased pursuant to our stock repurchase program: Total Shares Purchased Average Price Paid Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs August 27 - September 30, 2023 8,559 $ 14.02 8,559 $ 21,823 October 1 - October 28, 2023 - $ - - $ 21,823 October 29 - November 25, 2023 - $ - - $ 21,823
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information: Bassett’s common stock trades on the NASDAQ global select market system under the symbol “BSET.” We had approximately 6,600 beneficial stockholders at January 13, 2023.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information: Bassett’s common stock trades on the NASDAQ global select market system under the symbol “BSET.” We had approximately 6,600 beneficial stockholders at January 22, 2024.
In 2019, he was also promoted to the position of Senior Vice President, Chief Operations Officer. Bruce R. Cohenour, 64, has been with the Company since 2011, starting as Senior Vice President of Upholstery Merchandising. In 2013, he was promoted to Senior Vice President of Sales and Merchandising. In 2019, he was appointed Senior Vice President, Chief Sales Officer.
He was appointed Senior Vice President, Wood in 2009. In 2019, he was also promoted to the position of Senior Vice President, Chief Operations Officer. Bruce R. Cohenour, 65, has been with the Company since 2011, starting as Senior Vice President of Upholstery Merchandising. In 2013, he was promoted to Senior Vice President of Sales and Merchandising.
Prior to joining Bassett, Mr. Cohenour was with Hooker Furniture Corp. from 2007 through 2010, last serving as President of the Case Goods Division. J. Michael Daniel, 61, joined the Company in 2007 as Corporate Controller. From April 2009 through December 2009, he served as Corporate Controller and Interim Chief Financial Officer.
In 2019, he was appointed Senior Vice President, Chief Sales Officer. Prior to joining Bassett, Mr. Cohenour was with Hooker Furniture Corp. from 2007 through 2010, last serving as President of the Case Goods Division. J. Michael Daniel, 62, joined the Company in 2007 as Corporate Controller.
In January 2010, he was appointed Vice President and Chief Accounting Officer. In January 2013, he was promoted to Senior Vice President and Chief Financial Officer. In 2019, he was also promoted to the position of Senior Vice President, Chief Financial and Administrative Officer. Jay R.
From April 2009 through December 2009, he served as Corporate Controller and Interim Chief Financial Officer. In January 2010, he was appointed Vice President and Chief Accounting Officer. In January 2013, he was promoted to Senior Vice President and Chief Financial Officer. In 2019, he was also promoted to the position of Senior Vice President, Chief Financial and Administrative Officer.
Bassett III, 64, has been with the Company since 1981 and served in various wood manufacturing and product sourcing capacities, including Vice President, Wood Manufacturing; Vice-President, Global Sourcing from 2001 to 2007 and Vice President, Wood in 2008. He was appointed Senior Vice President, Wood in 2009.
ITEM 4. MINE SAFETY DISCLOSURES Not applicable. INFORMATION ABOUT OUR EXECUTIVE OFFICERS John E. Bassett III, 65, has been with the Company since 1981 and served in various wood manufacturing and product sourcing capacities, including Vice President, Wood Manufacturing; Vice-President, Global Sourcing from 2001 to 2007 and Vice President, Wood in 2008.
Since 2000, he has served as Chief Executive Officer and President, and in 2016 also became the Chairman of the Board of Directors. 12 PART II ITEM 5.
Jay R. Hervey, Esq., 64, has served as the General Counsel, Vice President and Secretary for the Company since 1997. Robert H. Spilman, Jr., 67, has been with the Company since 1984. Since 2000, he has served as Chief Executive Officer and President, and in 2016 also became the Chairman of the Board of Directors. 10 PART II ITEM 5.
Removed
ITEM 4. MINE SAFETY DISCLOSURES Not applicable. INFORMATION ABOUT OUR EXECUTIVE OFFICERS David C. Baker, 62, joined the Company in 2005 as Director, Store Operations. From 2006 to 2015 he served as Vice President – Corporate Retail, and in 2015 was appointed to Senior Vice President, Corporate Retail. In 2019, he was appointed Senior Vice President, Chief Retail Officer.
Removed
Prior to joining Bassett, Mr. Baker managed Bassett stores for licensees from 1999 to 2005 after having previously managed stores for other furniture retail chains including Haverty’s and Rhodes Furniture. 11 John E.
Removed
Hervey, Esq., 63, has served as the General Counsel, Vice President and Secretary for the Company since 1997. Kara Kelchner-Strong, 48, joined the Company in 2007 as Director, Retail Communications. In 2015, she was promoted to Vice President, Strategy and Planning.
Removed
In 2018, she was appointed Vice President, Strategic Transformation Officer and in 2019, she was promoted to Senior Vice President, Customer Experience Officer. Prior to joining Bassett, she held several positions with Restoration Hardware. Robert H. Spilman, Jr., 66, has been with the Company since 1984.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

217 edited+67 added−90 removed163 unchanged
Biggest changeRichmond, Virginia January 24, 2023 28 Consolidated Balance Sheets Bassett Furniture Industries, Incorporated and Subsidiaries November 26, 2022 and November 27, 2021 (In thousands, except share and per share data) 2022 2021 Assets Current assets Cash and cash equivalents $ 61,625 $ 34,374 Short-term investments 17,715 17,715 Accounts receivable, net of allowance for credit losses of $1,261 and $567 as of November 26, 2022 and November 27, 2021, respectively 17,838 20,567 Inventories 85,477 78,004 Recoverable income taxes 2,353 8,379 Current assets of discontinued operations held for sale - 11,064 Other current assets 11,487 10,181 Total current assets 196,495 180,284 Property and equipment, net 77,001 69,168 Other long-term assets Deferred income taxes, net 5,528 3,189 Goodwill and other intangible assets 21,727 14,354 Right of use assets under operating leases 99,472 95,955 Long-term assets of discontinued operations held for sale - 52,757 Other 6,050 5,953 Total other long-term assets 132,777 172,208 Total assets $ 406,273 $ 421,660 Liabilities and Stockholders ’ Equity Current liabilities Accounts payable $ 20,359 $ 23,988 Accrued compensation and benefits 12,921 12,639 Customer deposits 35,963 51,492 Current portion of operating lease obligations 18,819 20,235 Current liabilites of discontinued operations held for sale - 16,095 Other accrued liabilities 12,765 9,770 Total current liabilities 100,827 134,219 Long-term liabilities Post employment benefit obligations 9,954 12,968 Long-term portion of operating lease obligations 97,477 94,845 Long-term liabilities of discontinued operations held for sale - 16,210 Other long-term liabilities 2,406 686 Total long-term liabilities 109,837 124,709 Commitments and Contingencies Stockholders equity Common stock, $5 par value; 50,000,000 shares authorized; issued and outstanding 8,951,839 at November 26, 2022 and 9,762,125 at November 27, 2021 44,759 48,811 Retained earnings 150,800 115,631 Additional paid-in-capital - 113 Accumulated other comprehensive income (loss) 50 (1,823 ) Total stockholders' equity 195,609 162,732 Total liabilities and stockholders ’ equity $ 406,273 $ 421,660 The accompanying notes to consolidated financial statements are an integral part of these statements. 29 Consolidated Statements of Operations Bassett Furniture Industries, Incorporated and Subsidiaries For the years ended November 26, 2022, November 27, 2021, and November 28, 2020 (In thousands, except per share data) 2022 2021 2020 Net sales of furniture and accessories $ 485,601 $ 430,886 $ 337,672 Cost of furniture and accessories sold 237,262 209,799 163,567 Gross profit 248,339 221,087 174,105 Selling, general and administrative expenses 218,069 196,830 176,405 Gain on sale of real estate 4,595 - - Asset impairment charges - - 12,184 Goodwill impairment charge - - 1,971 Litigation expense - - 1,050 \\ Income (loss) from continuing operations 34,865 24,257 (17,505 ) Interest income 302 48 232 Interest expense (38 ) (33 ) - Other loss, net (1,067 ) (1,515 ) (740 ) Income (loss) from continuing operations before income taxes 34,062 22,757 (18,013 ) Income tax expense (benefit) 8,702 5,836 (6,536 ) Income (loss) from continuing operations 25,360 16,921 (11,477 ) Discontinued operations: Income from operations of logistical services 1,712 1,483 1,227 Gain on disposal 52,534 - - Income tax expense 14,261 362 171 Income from discontinued operations 39,985 1,121 1,056 Net income $ 65,345 $ 18,042 $ (10,421 ) Basic earnings (loss) per share: Income (loss) from continuing operations $ 2.70 $ 1.72 $ (1.15 ) Income from discontinued operations 4.26 0.11 0.11 Basic earnings (loss) per share $ 6.96 $ 1.83 $ (1.04 ) Diluted earnings (loss) per share: Income (loss) from continuing operations $ 2.70 $ 1.72 $ (1.15 ) Income from discontinued operations 4.26 0.11 0.11 Diluted earnings (loss) per share $ 6.96 $ 1.83 $ (1.04 ) Dividends per share Regular dividends $ 0.60 $ 0.53 $ 0.46 Special dividend $ 1.50 $ 0.25 $ - The accompanying notes to consolidated financial statements are an integral part of these statements. 30 Consolidated Statements of Comprehensive Income (Loss) Bassett Furniture Industries, Incorporated and Subsidiaries For the years ended November 26, 2022, November 27, 2021, and November 28, 2020 (In thousands) 2022 2021 2020 Net income (loss) $ 65,345 $ 18,042 $ (10,421 ) Other comprehensive income (loss): Foreign currency translation adjustments (274 ) - - Income taxes related to foreign currency translation adjustments 70 - - Actuarial adjustment to Long Term Cash Awards (LTCA) 303 26 (86 ) Amortization associated with LTCA 132 144 125 Income taxes related to LTCA (107 ) (44 ) (10 ) Actuarial adjustment to supplemental executive retirement defined benefit plan (SERP) 2,200 (788 ) (259 ) Amortization associated with SERP 124 44 8 Income taxes related to SERP (575 ) 190 64 Other comprehensive income (loss), net of tax 1,873 (428 ) (158 ) Total comprehensive income (loss) $ 67,218 $ 17,614 $ (10,579 ) The accompanying notes to consolidated financial statements are an integral part of these statements. 31 Consolidated Statements of Cash Flows Bassett Furniture Industries, Incorporated and Subsidiaries For the years ended November 26, 2022, November 27, 2021, and November 28, 2020 (In thousands) 2022 2021 2020 Operating activities: Net income (loss) $ 65,345 $ 18,042 $ (10,421 ) Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization 11,309 14,597 13,480 Gain on disposal of discontinued operations (52,534 ) - - Non-cash goodwill impairment charge - - 1,971 Non-cash asset impairment charges - - 12,184 Net gain on disposals of property and equipment (4,595 ) (367 ) (81 ) Gains on lease modifications - (37 ) (1,313 ) Inventory valuation charges 3,648 2,969 4,922 Deferred income taxes (2,339 ) 1,545 2,513 Other, net (302 ) 765 (51 ) Changes in operating assets and liabilities Accounts receivable 3,169 (5,828 ) (962 ) Inventories (9,536 ) (26,087 ) 6,494 Other current and long-term assets 5,944 (2,241 ) (9,325 ) Right of use assets under operating leases 20,531 26,243 32,107 Customer deposits (16,588 ) 11,730 14,421 Accounts payable and accrued liabilities (4,073 ) 2,153 5,965 Obligations under operating leases (22,949 ) (28,921 ) (35,229 ) Net cash provided by (used in) operating activities (2,970 ) 14,563 36,675 Investing activities: Purchases of property and equipment (21,296 ) (10,750 ) (6,029 ) Proceeds from sales of property and equipment 8,226 382 2,345 Cash paid for business acquisitions, net of cash acquired (5,582 ) - - Proceeds from the disposition of discontinued operations 84,534 - - Purchases of investments - - (295 ) Proceeds from maturities of investments - - 16 Other (40 ) (1,203 ) 216 Net cash provided by (used in) investing activities 65,842 (11,571 ) (3,747 ) Financing activities: Cash dividends (20,162 ) (7,689 ) (4,544 ) Proceeds from exercise of stock options - 42 - Issuance of common stock 424 363 285 Repurchases of common stock (15,122 ) (5,566 ) (2,208 ) Taxes paid related to net share settlement of equity awards (19 ) (219 ) (228 ) Repayment of finance lease obligations (684 ) (1,348 ) (121 ) Net cash used in financing activities (35,563 ) (14,417 ) (6,816 ) Effect of exchenge rate changes on cash and cash equivalents (58 ) - - Change in cash and cash equivalents 27,251 (11,425 ) 26,112 Cash and cash equivalents - beginning of year 34,374 45,799 19,687 Cash and cash equivalents - end of year $ 61,625 $ 34,374 $ 45,799 The accompanying notes to consolidated financial statements are an integral part of these statements. 32 Consolidated Statements of Stockholders ’ Equity Bassett Furniture Industries, Incorporated and Subsidiaries For the years ended November 26, 2022, November 27, 2021, and November 28, 2020 (In thousands, except share and per share data) Accumulated Additional other Common Stock paid-in Retained comprehensive Shares Amount capital earnings income (loss) Total Balance, November 30, 2019 10,116,290 $ 50,581 $ 195 $ 129,130 $ (1,236 ) $ 178,670 Comprehensive income (loss) Net loss - - - (10,421 ) - (10,421 ) Amortization of defined benefit plan costs, net of tax - - - - 98 98 Actuarial adjustments to defined benefit plans, net of tax - - - - (256 ) (256 ) Cumulative effect of a change in accounting principle - - - (3,785 ) - (3,785 ) Regular dividends ($0.455 per share) - - - (4,545 ) - (4,545 ) Issuance of common stock 43,218 216 69 - - 285 Purchase and retirement of common stock (216,721 ) (1,083 ) (684 ) (669 ) - (2,436 ) Stock-based compensation - - 420 - - 420 Balance, November 28, 2020 9,942,787 49,714 - 109,710 (1,394 ) 158,030 Comprehensive income (loss) Net income - - - 18,042 - 18,042 Amortization of defined benefit plan costs, net of tax - - - - 138 138 Actuarial adjustments to defined benefit plans, net of tax - - - - (567 ) (567 ) Regular dividends ($0.53 per share) - - - (5,210 ) - (5,210 ) Special dividend ($0.25 per share) - - - (2,479 ) - (2,479 ) Issuance of common stock 34,902 175 230 - - 405 Purchase and retirement of common stock (215,564 ) (1,078 ) (275 ) (4,432 ) - (5,785 ) Stock-based compensation - - 158 - - 158 Balance, November 27, 2021 9,762,125 48,811 113 115,631 (1,823 ) 162,732 Comprehensive income (loss) Net income - - - 65,345 - 65,345 Foreign currency translation adjustments, net of tax - - - - (204 ) (204 ) Amortization of defined benefit plan costs, net of tax - - - - 192 192 Actuarial adjustments to defined benefit plans, net of tax - - - - 1,885 1,885 Regular dividends ($0.60 per share) - - - (5,668 ) - (5,668 ) Special dividend ($1.50 per share) - - - (14,494 ) - (14,494 ) Issuance of common stock 59,024 295 129 - - 424 Purchase and retirement of common stock (869,310 ) (4,347 ) (780 ) (10,014 ) - (15,141 ) Stock-based compensation - - 538 - - 538 Balance, November 26, 2022 8,951,839 $ 44,759 $ - $ 150,800 $ 50 $ 195,609 The accompanying notes to consolidated financial statements are an integral part of these statements. 33 1.
Biggest changeRichmond, Virginia January 25, 2024 27 Consolidated Balance Sheets Bassett Furniture Industries, Incorporated and Subsidiaries November 25, 2023 and November 26, 2022 (In thousands, except share and per share data) 2023 2022 Assets Current assets Cash and cash equivalents $ 52,407 $ 61,625 Short-term investments 17,775 17,715 Accounts receivable, net of allowance for credit losses of $535 and $1,261 as of November 25, 2023 and November 26, 2022, respectively 13,736 17,838 Inventories 62,982 85,477 Recoverable income taxes 2,574 2,353 Other current assets 8,480 11,487 Total current assets 157,954 196,495 Property and equipment, net 83,981 77,001 Other long-term assets Deferred income taxes, net 4,645 5,528 Goodwill and other intangible assets 16,067 21,727 Right of use assets under operating leases 100,888 99,472 Other 6,889 6,050 Total other long-term assets 128,489 132,777 Total assets $ 370,424 $ 406,273 Liabilities and Stockholders ’ Equity Current liabilities Accounts payable $ 16,338 $ 20,359 Accrued compensation and benefits 8,934 12,921 Customer deposits 22,788 35,963 Current portion of operating lease obligations 18,827 18,819 Other accrued liabilities 11,003 12,765 Total current liabilities 77,890 100,827 Long-term liabilities Post employment benefit obligations 10,207 9,954 Long-term portion of operating lease obligations 97,357 97,477 Other long-term liabilities 1,529 2,406 Total long-term liabilities 109,093 109,837 Commitments and Contingencies Stockholders ’ equity Common stock, $5 par value; 50,000,000 shares authorized; issued and outstanding 8,768,221 at November 25, 2023 and 8,951,839 at November 26, 2022 43,842 44,759 Retained earnings 139,354 150,800 Additional paid-in-capital 93 - Accumulated other comprehensive income (loss) 152 50 Total stockholders' equity 183,441 195,609 Total liabilities and stockholders ’ equity $ 370,424 $ 406,273 The accompanying notes to consolidated financial statements are an integral part of these statements. 28 Consolidated Statements of Operations Bassett Furniture Industries, Incorporated and Subsidiaries For the years ended November 25, 2023, November 26, 2022, and November 27, 2021 (In thousands, except per share data) 2023 2022 2021 Net sales of furniture and accessories $ 390,136 $ 485,601 $ 430,886 Cost of furniture and accessories sold 183,648 237,262 209,799 Gross profit 206,488 248,339 221,087 Selling, general and administrative expenses 205,227 218,069 196,830 Goodwill impairment charge 5,409 - - Gain on revaluation of contingent consideration 1,013 - - Gain on sale of real estate - 4,595 - Income (loss) from continuing operations (3,135 ) 34,865 24,257 Interest income 2,528 302 48 Interest expense (22 ) (38 ) (33 ) Other loss, net (1,859 ) (1,067 ) (1,515 ) Income (loss) from continuing operations before income taxes (2,488 ) 34,062 22,757 Income tax expense 683 8,702 5,836 Income (loss) from continuing operations (3,171 ) 25,360 16,921 Discontinued operations: Income from operations of logistical services - 1,712 1,483 Gain on disposal - 52,534 - Income tax expense - 14,261 362 Income from discontinued operations - 39,985 1,121 Net income (loss) $ (3,171 ) $ 65,345 $ 18,042 Basic earnings (loss) per share: Income (loss) from continuing operations $ (0.36 ) $ 2.70 $ 1.72 Income from discontinued operations - 4.26 0.11 Basic earnings (loss) per share $ (0.36 ) $ 6.96 $ 1.83 Diluted earnings (loss) per share: Income (loss) from continuing operations $ (0.36 ) $ 2.70 $ 1.72 Income from discontinued operations - 4.26 0.11 Diluted earnings (loss) per share $ (0.36 ) $ 6.96 $ 1.83 Dividends per share Regular dividends $ 0.68 $ 0.60 $ 0.53 Special dividend $ - $ 1.50 $ 0.25 The accompanying notes to consolidated financial statements are an integral part of these statements. 29 Consolidated Statements of Comprehensive Income (Loss) Bassett Furniture Industries, Incorporated and Subsidiaries For the years ended November 25, 2023, November 26, 2022, and November 27, 2021 (In thousands) 2023 2022 2021 Net income (loss) $ (3,171 ) $ 65,345 $ 18,042 Other comprehensive income (loss): Foreign currency translation adjustments (378 ) (274 ) - Income taxes related to foreign currency translation adjustments 96 70 - Actuarial adjustment to Long Term Cash Awards (LTCA) 100 303 26 Amortization associated with LTCA 119 132 144 Income taxes related to LTCA (59 ) (107 ) (44 ) Actuarial adjustment to supplemental executive retirement defined benefit plan (SERP) 324 2,200 (788 ) Amortization associated with SERP - 124 44 Income taxes related to SERP (100 ) (575 ) 190 Other comprehensive income (loss), net of tax 102 1,873 (428 ) Total comprehensive income (loss) $ (3,069 ) $ 67,218 $ 17,614 The accompanying notes to consolidated financial statements are an integral part of these statements. 30 Consolidated Statements of Cash Flows Bassett Furniture Industries, Incorporated and Subsidiaries For the years ended November 25, 2023, November 26, 2022, and November 27, 2021 (In thousands) 2023 2022 2021 Operating activities: Net income (loss) $ (3,171 ) $ 65,345 $ 18,042 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization 10,141 11,309 14,597 Gain on disposal of discontinued operations - (52,534 ) - Non-cash goodwill impairment charge 5,409 - - Gain on revaluation of contingent consideration (1,013 ) - - Net loss (gain) on disposals of property and equipment 5 (4,595 ) (367 ) Inventory valuation charges 4,626 3,648 2,969 Deferred income taxes 831 (2,339 ) 1,545 Other, net 2,031 (302 ) 728 Changes in operating assets and liabilities Accounts receivable 4,102 3,169 (5,828 ) Inventories 17,869 (9,536 ) (26,087 ) Other current and long-term assets 1,773 5,944 (2,241 ) Right of use assets under operating leases 18,680 20,531 26,243 Customer deposits (13,175 ) (16,588 ) 11,730 Accounts payable and accrued liabilities (9,188 ) (4,073 ) 2,153 Obligations under operating leases (20,196 ) (22,949 ) (28,921 ) Net cash provided by (used in) operating activities 18,724 (2,970 ) 14,563 Investing activities: Purchases of property and equipment (17,489 ) (21,296 ) (10,750 ) Proceeds from sales of property and equipment 500 8,226 382 Cash paid for business acquisitions, net of cash acquired - (5,582 ) - Proceeds from the disposition of discontinued operations 1,000 84,534 - Other (1,774 ) (40 ) (1,203 ) Net cash provided by (used in) investing activities (17,763 ) 65,842 (11,571 ) Financing activities: Cash dividends (5,982 ) (20,162 ) (7,689 ) Proceeds from exercise of stock options - - 42 Issuance of common stock 318 424 363 Repurchases of common stock (4,176 ) (15,122 ) (5,566 ) Taxes paid related to net share settlement of equity awards (109 ) (19 ) (219 ) Repayment of finance lease obligations (278 ) (684 ) (1,348 ) Net cash used in financing activities (10,227 ) (35,563 ) (14,417 ) Effect of exchenge rate changes on cash and cash equivalents 48 (58 ) - Change in cash and cash equivalents (9,218 ) 27,251 (11,425 ) Cash and cash equivalents - beginning of year 61,625 34,374 45,799 . . .
Sale of the Assets of Zenith Freight Lines, LLC During the first quarter of 2022, we entered into a definitive agreement to sell substantially all of the assets of our wholly-owned subsidiary, Zenith, to J,J.B. Hunt for $86,939 in cash.
Sale of the Assets of Zenith Freight Lines, LLC During the first quarter of 2022, we entered into a definitive agreement to sell substantially all of the assets of our wholly-owned subsidiary, Zenith, to J.B. Hunt for $86,939 in cash.
Refer to the reconciliation of segment results to consolidated results of operations presented above.
Refer to the reconciliation of segment results to consolidated results of operations presented above.
Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits.
The more likely than not threshold is defined as having a likelihood of more than 50 percent.
The more likely than not threshold is defined as having a likelihood of more than 50 percent.
If, after assessing the totality of events or circumstances, we determine that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the quantitative impairment test is unnecessary and our goodwill is considered to be unimpaired.
If, after assessing the totality of events or circumstances, we determine that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the quantitative impairment test is unnecessary and our goodwill is considered to be unimpaired.
However, if based on our qualitative assessment we conclude that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, we will proceed with performing the quantitative evaluation process.
However, if based on our qualitative assessment we conclude that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, we will proceed with performing the quantitative evaluation process.
The quantitative evaluation compares the carrying value of each reporting unit that has goodwill with the estimated fair value of the respective reporting unit.
The quantitative evaluation compares the carrying value of each reporting unit that has goodwill with the estimated fair value of the respective reporting unit.
Should the carrying value of a reporting unit be in excess of the estimated fair value of that reporting unit, a goodwill impairment charge will be recognized in the amount by which the reporting unit’s carrying amount exceeds its fair value, but not to exceed the total goodwill assigned to the reporting unit.
Should the carrying value of a reporting unit be in excess of the estimated fair value of that reporting unit, a goodwill impairment charge will be recognized in the amount by which the reporting unit’s carrying amount exceeds its fair value, but not to exceed the total goodwill assigned to the reporting unit.
The cash flows used to determine fair value are dependent on a number of significant management assumptions such as our expectations of future performance and the expected future economic environment, which are partly based upon our historical experience. Our estimates are subject to change given the inherent uncertainty in predicting future results.
The cash flows used to determine fair value are dependent on a number of significant management assumptions such as our expectations of future performance and the expected future economic environment, which are partly based upon our historical experience. Our estimates are subject to change given the inherent uncertainty in predicting future results.
Additionally, the discount rate and the terminal growth rate are based on our judgment of the rates that would be utilized by a hypothetical market participant. As part of the goodwill impairment testing, we also consider our market capitalization in assessing the reasonableness of the combined fair values estimated for our reporting units.
Additionally, the discount rate and the terminal growth rate are based on our judgment of the rates that would be utilized by a hypothetical market participant. As part of the goodwill impairment testing, we also consider our market capitalization in assessing the reasonableness of the combined fair values estimated for our reporting units.
We lease land and buildings that are used in the operation of our Company-owned retail stores as well as in the operation of certain of our licensee-owned stores, and we lease land and buildings at various locations throughout the continental United States for warehouse space used in our retail segment.
We lease land and buildings that are used in the operation of our Company-owned retail stores as well as in the operation of certain of our licensee-owned stores, and we lease land and buildings at various locations throughout the continental United States for warehouse space used in our retail segment.
If the estimates of the useful lives should change, we will amortize the remaining book value over the remaining useful lives or, if an asset is deemed to be impaired, a write-down of the value of the asset may be required at such time.
If the estimates of the useful lives should change, we will amortize the remaining book value over the remaining useful lives or, if an asset is deemed to be impaired, a write-down of the value of the asset may be required at such time.
The cash flows used to determine fair value are dependent on a number of significant management assumptions such as our expectations of future performance and the expected future economic environment, which are partly based upon our historical experience. Our estimates are subject to change given the inherent uncertainty in predicting future results.
The cash flows used to determine fair value are dependent on a number of significant management assumptions such as our expectations of future performance and the expected future economic environment, which are partly based upon our historical experience. Our estimates are subject to change given the inherent uncertainty in predicting future results.
Under the terms of the facility, we must maintain the following financial covenants, measured quarterly on a rolling twelve-month basis: ● Consolidated fixed charge coverage ratio of not less than 1.4 times, ● Consolidated lease-adjusted leverage ratio not to exceed 3.0 times, and ● Minimum tangible net worth of $140,000.
Under the terms of the facility, we must maintain the following financial covenants, measured quarterly on a rolling twelve-month basis: ● Consolidated fixed charge coverage ratio of not less than 1.4 times, ● Consolidated lease-adjusted leverage ratio not to exceed 3.0 times, and ● Minimum tangible net worth of $140,000.
While we believe such assumptions and estimates are reasonable, the actual results may differ materially from the projected amounts. Other Intangible Assets – Intangible assets acquired in a business combination and determined to have an indefinite useful life are not amortized but are tested for impairment annually or between annual tests when an impairment indicator exists.
While we believe such assumptions and estimates are reasonable, the actual results may differ materially from the projected amounts. 23 Other Intangible Assets – Intangible assets acquired in a business combination and determined to have an indefinite useful life are not amortized but are tested for impairment annually or between annual tests when an impairment indicator exists.
If actual demand or market conditions in the future are less favorable than those estimated, additional inventory write-downs may be required. 36 Property and Equipment Property and equipment is comprised of all land, buildings and leasehold improvements and machinery and equipment used in the manufacturing and warehousing of furniture, our Company-owned retail operations, our logistical services operations, and corporate administration.
If actual demand or market conditions in the future are less favorable than those estimated, additional inventory write-downs may be required. Property and Equipment Property and equipment is comprised of all land, buildings and leasehold improvements and machinery and equipment used in the manufacturing and warehousing of furniture, our Company-owned retail operations, our logistical services operations, and corporate administration.
Our former logistical services segment which represented the operations of Zenith is now presented as a discontinued operation. 17 Reconciliation of Segment Results to Consolidated Results of Operations To supplement the financial measures prepared in accordance with GAAP, we present gross profit by segment inclusive of the effects of intercompany sales by our wholesale segment to our retail segment.
Our former logistical services segment which represented the operations of Zenith is now presented as a discontinued operation. Reconciliation of Segment Results to Consolidated Results of Operations To supplement the financial measures prepared in accordance with GAAP, we present gross profit by segment inclusive of the effects of intercompany sales by our wholesale segment to our retail segment.
We believe that our existing cash, together with cash from operations, will be sufficient to meet our capital expenditure and working capital requirements for the foreseeable future. Fair Value Measurements We account for items measured at fair value in accordance with ASC Topic 820, Fair Value Measurements and Disclosures .
We believe that our existing cash, together with cash from operations, will be sufficient to meet our capital expenditure and working capital requirements for the foreseeable future. 21 Fair Value Measurements We account for items measured at fair value in accordance with ASC Topic 820, Fair Value Measurements and Disclosures .
We are also exposed to foreign currency market risk through our investment in Noa Home. Our investment in Noa Home is subject to changes in the value of the Canadian dollar versus the U.S. dollar. Additionally, Noa Home is exposed to other local currency fluctuation risk through its operations in Australia, Singapore and the United Kingdom.
We are also exposed to foreign currency market risk through our investment in Noa Home. Our investment in Noa Home is subject to changes in the value of the Canadian dollar versus the U.S. dollar. Additionally, Noa Home is exposed to other local currency fluctuation risk through its operations in Australia, Singapore, the United States and the United Kingdom.
Although the final outcome of these matters cannot be determined, based on the facts presently known, it is our opinion that the final resolution of these matters will not have a material adverse effect on our financial position or future results of operations. 17.
Although the final outcome of these matters cannot be determined, based on the facts presently known, it is our opinion that the final resolution of these matters will not have a material adverse effect on our financial position or future results of operations. 55 17.
The inputs into these fair value estimates reflect our market assumptions and are not observable. Consequently, the inputs are considered to be Level 3 as specified in the fair value hierarchy in ASC Topic 820, Fair Value Measurements and Disclosures . See Note 4. 6.
The inputs into these fair value estimates reflect our market assumptions and are not observable. Consequently, the inputs are considered to be Level 3 as specified in the fair value hierarchy in ASC Topic 820, Fair Value Measurements and Disclosures . See Note 4. 41 6.
For the annual tests of goodwill performed as of the beginning of the fourth fiscal quarters of 2022 and 2021, we performed the qualitative assessment as described above and concluded that there was no additional impairment of our goodwill as of November 26, 2022 or November 27, 2021.
For the annual tests of goodwill performed as of the beginning of the fourth fiscal quarters of 2022 and 2021, we performed the qualitative assessment as described above and concluded that there was no impairment of our goodwill as of November 26, 2022 or November 27, 2021.
In addition to the furniture that we manufacture domestically, we source most of our formal bedroom and dining room furniture (casegoods) and certain leather upholstery offerings from several foreign plants, primarily in Vietnam, Thailand and China.
In addition to the furniture that we manufacture domestically, we source most of our formal bedroom and dining room furniture (casegoods) and certain leather upholstery offerings from several foreign plants, primarily in Vietnam and China.
The preliminary allocation of the purchase price (translated into U.S. dollars as of the acquisition date) is as follows: Fair value of consideration transferred in exchange for 100% of Noa Home: Cash $ 5,878 Fair value of contingent consideration payable 1,375 Total fair value of consideration paid or payable $ 7,253 Allocation of the fair value of consideration transferred: Identifiable assets acquired: Cash $ 296 Inventory 1,585 Other current assets 317 Property & equipment 155 Intangible asset - trade name 1,929 Total identifiable assets acquired 4,282 Liabilities assumed: Accounts payable (1,227 ) Customer deposits (1,059 ) Other current liabilities and accrued expenses (458 ) Total liabilities assumed (2,744 ) Net identifiable assets acquired 1,538 Goodwill 5,715 Total net assets acquired $ 7,253 Goodwill was determined based on the residual difference between the fair value of the consideration transferred and the value assigned to the tangible and intangible assets and liabilities recognized in connection with the acquisition and is deductible for tax purposes.
The allocation of the purchase price (translated into U.S. dollars as of the acquisition date) is as follows: Fair value of consideration transferred in exchange for 100% of Noa Home: Cash $ 5,878 Fair value of contingent consideration payable 1,375 Total fair value of consideration paid or payable $ 7,253 Allocation of the fair value of consideration transferred: Identifiable assets acquired: Cash $ 296 Inventory 1,585 Other current assets 317 Property & equipment 155 Intangible asset - trade name 1,929 Total identifiable assets acquired 4,282 Liabilities assumed: Accounts payable (1,227 ) Customer deposits (1,059 ) Other current liabilities and accrued expenses (458 ) Total liabilities assumed (2,744 ) Net identifiable assets acquired 1,538 Goodwill 5,715 Total net assets acquired $ 7,253 39 Goodwill was determined based on the residual difference between the fair value of the consideration transferred and the value assigned to the tangible and intangible assets and liabilities recognized in connection with the acquisition and is deductible for US tax purposes.
Zenith also charged Bassett $9,121 for logistical services provided to our wholesale segment during the year ended November 26, 2022, and $31,329 and $26,967 for fiscal 2021 and 2020, respectively. These shipping and handling costs are included in selling, general and administrative expenses in the accompanying condensed consolidated statements of income. We have entered into a service agreement with J.B.
Zenith charged Bassett $9,121 for logistical services provided to our wholesale segment during the year ended November 26, 2022, and $31,329 and $26,967 for fiscal 2021 and 2020, respectively. These shipping and handling costs are included in selling, general and administrative expenses in the accompanying condensed consolidated statements of income. We entered into a service agreement with J.B.
It will require approximately $22,000 of future taxable income to utilize our net deferred tax assets. Liquidity and Capital Resources We are committed to maintaining a strong balance sheet in order to weather difficult industry conditions, to allow us to take advantage of opportunities as market conditions improve, and to execute our long-term retail strategies.
It will require approximately $18,000 of future taxable income to utilize our net deferred tax assets. Liquidity and Capital Resources We are committed to maintaining a strong balance sheet in order to weather difficult industry conditions, to allow us to take advantage of opportunities as market conditions improve, and to execute our long-term retail strategies.
We adjust insurance reserves, as needed, in the event that future loss experience differs from historical loss patterns. Supplemental Cash Flow Information Refer to the supplemental lease disclosures in Note 15 for cash flow impacts of leasing transactions during fiscal 2022, 2021 and 2020. Otherwise, there were no material non-cash investing or financing activities during fiscal 2022, 2021 or 2020.
We adjust insurance reserves, as needed, in the event that future loss experience differs from historical loss patterns. Supplemental Cash Flow Information Refer to the supplemental lease disclosures in Note 15 for cash flow impacts of leasing transactions during fiscal 2023, 2022 and 2021. Otherwise, there were no material non-cash investing or financing activities during fiscal 2023, 2022 or 2021.
Because it is our intention to maintain and grow those brands, they are considered to be indefinite-lived intangible assets. The amortization expense associated with finite-lived intangible assets during fiscal 2022, 2021 and 2020 was $57 each year and is included in selling, general and administrative expense in our consolidated statement of operations.
Because it is our intention to maintain and grow those brands, they are considered to be indefinite-lived intangible assets. The amortization expense associated with finite-lived intangible assets during fiscal 2023, 2022 and 2021 was $57 each year and is included in selling, general and administrative expense in our consolidated statement of operations.
Gross margins for the year ended November 26, 2022 declined 110 basis points compared to the prior year period as we experienced significant increases in material and other production costs. In addition, we experienced reduced margins in our Bassett Leather product line due to price discounting during the last half of the year.
Gross margins for the year ended November 26, 2022 declined 90 basis points compared to the prior year period as we experienced significant increases in material and other production costs. In addition, we experienced reduced margins in our Bassett Leather product line due to price discounting during the last half of the year.
In fiscal 2022, 2021 and 2020, no customer accounted for more than 10% of total consolidated net sales. We have no foreign manufacturing operations. We define export sales from our wholesale segment as sales to any country or territory other than the United States or its territories or possessions.
In fiscal 2023, 2022 and 2021, no customer accounted for more than 10% of total consolidated net sales. We have no foreign manufacturing operations. We define export sales from our wholesale segment as sales to any country or territory other than the United States or its territories or possessions.
(2) The interest expense in fiscal 2022 and 2021 is attributable to finance leases for computer and office equipment. See Note 15 to the Consolidated Financial Statements for additional information regarding our leases. (3) Represents the portion of net periodic pension costs not included in income from operations.
(2) The interest expense in fiscal 2023 and 2022 is attributable to finance leases for computer and office equipment. See Note 15 to the Consolidated Financial Statements for additional information regarding our leases. (3) Represents the portion of net periodic pension costs not included in income from operations.
Recent Accounting Pronouncements See Note 2 to our Consolidated Financial Statements regarding the impact or potential impact of recent accounting pronouncements upon our financial position and results of operations. 25 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We are exposed to market risk from changes in the value of foreign currencies.
Recent Accounting Pronouncements See Note 2 to our Consolidated Financial Statements regarding the impact or potential impact of recent accounting pronouncements upon our financial position and results of operations. 24 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We are exposed to market risk from changes in the value of foreign currencies.
Should we have to close or otherwise abandon one of these leased locations, we could incur additional impairment charges if rental market conditions do not support a fair value for the right of use asset in excess of its carrying value. 26 ITEM 8.
Should we have to close or otherwise abandon one of these leased locations, we could incur additional impairment charges if rental market conditions do not support a fair value for the right of use asset in excess of its carrying value. 25 ITEM 8.
Substantially all of our purchases outside of North America are denominated in U.S. dollars. Therefore, we believe that gains or losses resulting from changes in the value of foreign currencies relating to foreign purchases not denominated in U.S. dollars would not be material to our results from operations in fiscal 2022.
Substantially all of our purchases outside of North America are denominated in U.S. dollars. Therefore, we believe that gains or losses resulting from changes in the value of foreign currencies relating to foreign purchases not denominated in U.S. dollars would not be material to our results from operations in fiscal 2023.
Among the factors that contributed to a purchase price resulting in the recognition of goodwill are the expected synergies arising from combining the Company’s manufacturing and distribution capabilities with Noa Home’s position in the international e-commerce market for home furnishings and accessories.
Among the factors that contributed to a purchase price resulting in the recognition of goodwill were the expected synergies arising from combining the Company’s manufacturing and distribution capabilities with Noa Home’s position in the international e-commerce market for home furnishings and accessories.
We recognize compensation cost for awards with service only conditions with a graded vesting schedule on a straight-line basis over the longest vesting period. Stock Options There were no new grants of options made in 2022, 2021 or 2020.
We recognize compensation cost for awards with service only conditions with a graded vesting schedule on a straight-line basis over the longest vesting period. Stock Options There were no new grants of options made in 2023, 2022 or 2021.
The increase in interest income for fiscal 2022 as compared with fiscal 2021 was due primarily to higher interest rates paid on certificates of deposit. See Note 4 to the Consolidated Financial Statements for additional information regarding our investments in certificates of deposit.
The increase in interest income for fiscal 2023 as compared with fiscal 2022 was due primarily to higher interest rates paid on certificates of deposit. See Note 4 to the Consolidated Financial Statements for additional information regarding our investments in certificates of deposit.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors of Bassett Furniture Industries, Incorporated and Subsidiaries Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Bassett Furniture Industries, Incorporated and Subsidiaries (the Company) as of November 26, 2022 and November 27, 2021, and the related consolidated statements of operations, comprehensive income (loss), stockholders' equity and cash flows for each of the three years in the period ended November 26, 2022, and the related notes and financial statement schedule listed in the Index at Item 15(a)(2) (collectively referred to as the “consolidated financial statements”).
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors of Bassett Furniture Industries, Incorporated and Subsidiaries Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Bassett Furniture Industries, Incorporated and Subsidiaries (the Company) as of November 25, 2023 and November 26, 2022, the related consolidated statements of operations, comprehensive income (loss), stockholders' equity and cash flows for each of the three years in the period ended November 25, 2023, and the related notes and financial statement schedule listed in the Index at Item 15(a)(2) (collectively referred to as the “consolidated financial statements”).
Our philosophy is based on building strong long-term relationships with each customer. Sales people are referred to as “Design Consultants” and are trained to evaluate customer needs and provide comprehensive solutions for their home decor. Until a rigorous training and design certification program is completed, Design Consultants are not authorized to perform in-home or virtual design services for our customers.
Our philosophy is based on building strong long-term relationships with each customer. Salespeople are referred to as “Design Consultants” and are trained to evaluate customer needs and provide comprehensive solutions for their home decor. Until a rigorous training and design certification program is completed, Design Consultants are not authorized to perform in-home or virtual design services for our customers.
This assessment considers, among other matters, the nature, frequency and severity of recent losses, forecasts of future profitability, the duration of statutory carryforward or carryback periods, our experience with tax attributes expiring unused and tax planning alternatives. In making such judgments, significant weight is given to evidence that can be objectively verified. See Note 13.
This assessment considers, among other matters, the nature, frequency and severity of recent losses, forecasts of future profitability, the duration of statutory carryforward or carryback periods, our experience with tax attributes expiring unused and tax planning alternatives. In making such judgments, significant weight is given to evidence that can be objectively verified.
We also distribute our products through other multi-line furniture stores, many of which feature Bassett galleries or design centers. Products can also be purchased by the end consumer directly from our website. We sourced approximately 22% of our wholesale products from various foreign countries, with the remaining volume produced at our five domestic manufacturing facilities.
We also distribute our products through other multi-line furniture stores, many of which feature Bassett galleries or design centers. Products can also be purchased by the end consumer directly from our website. We sourced approximately 23% of our wholesale products from various foreign countries, with the remaining volume produced at our five domestic manufacturing facilities. 2.
Deferred Compensation Plan We have an unfunded Deferred Compensation Plan that covers one current and certain former executives and provides for voluntary deferral of compensation. This plan has been frozen with no additional participants or benefits permitted. We recognized expense of $154, $204, and $176 in fiscal 2022, 2021, and 2020, respectively, associated with the plan.
Deferred Compensation Plan We have an unfunded Deferred Compensation Plan that covers one current and certain former executives and provides for voluntary deferral of compensation. This plan has been frozen with no additional participants or benefits permitted. We recognized expense of $204, $154, and $204 in fiscal 2023, 2022, and 2021, respectively, associated with the plan.
Other Gains and Losses Gains on Dispositions of Retail Store Locations During the third quarter of fiscal 2022, we sold one of our Company-owned store locations in Houston, Texas for $8,217 net of closing costs, resulting in a gain of $4,595 during the year ended November 26, 2022.
Gains on Dispositions of Retail Store Locations During the third quarter of fiscal 2022, we sold one of our Company-owned store locations in Houston, Texas for $8,217 net of closing costs, resulting in a gain of $4,595 during the year ended November 26, 2022.
Zenith also charged Bassett for logistical services provided to our wholesale segment in the amount of $9,121 during 2022 prior to disposal, and $31,329 and $26,967, for all of 2021 and 2020, respectively. We have entered into a service agreement with J.B. Hunt for the continuation of these services for a period of seven years following the sale of Zenith.
Zenith also charged Bassett for logistical services provided to our wholesale segment in the amount of $9,121 during 2022 prior to disposal, and $31,329 for all of 2021. We have entered into a service agreement with J.B. Hunt for the continuation of these services for a period of seven years following the sale of Zenith.
Additionally, if we are required to assume responsibility for payment under the lease obligations of $1,880 and $1,845 which we have guaranteed on behalf of licensees as of November 26, 2022 and November 27, 2021, respectively, we may not be able to secure sufficient sub-lease income in the current market to offset the payments required under the guarantees.
Additionally, if we are required to assume responsibility for payment under the lease obligations of $1,845 and $1,880 which we have guaranteed on behalf of licensees as of November 25, 2023 and November 26, 2022, respectively, we may not be able to secure sufficient sub-lease income in the current market to offset the payments required under the guarantees.
Compensation expense related to restricted stock and stock options included in selling, general and administrative expenses in our consolidated statements of operations for fiscal 2022, 2021 and 2020 was as follows: 2022 2021 2020 Stock based compensation expense $ 538 $ 158 $ 420 Incentive Stock Compensation Plans 2021 Plan On March 10, 2021, our shareholders approved the Bassett Furniture Industries, Incorporated 2021 Stock Incentive Plan (the “2021 Plan”).
Compensation expense related to restricted stock and stock options included in selling, general and administrative expenses in our consolidated statements of operations for fiscal 2023, 2022 and 2021 was as follows: 2023 2022 2021 Stock based compensation expense $ 849 $ 538 $ 158 Incentive Stock Compensation Plans 2021 Plan On March 10, 2021, our shareholders approved the Bassett Furniture Industries, Incorporated 2021 Stock Incentive Plan (the “2021 Plan”).
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of November 26, 2022 and November 27, 2021, and the related consolidated statements of operations, comprehensive income (loss), stockholders' equity, and cash flows for each of the three years in the period ended November 26, 2022, and the related notes and schedule and our report dated January 24, 2023 expressed an unqualified opinion thereon.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of November 25, 2023 and November 26, 2022, the related consolidated statements of operations, comprehensive income (loss), stockholders' equity, and cash flows for each of the three years in the period ended November 25, 2023, and the related notes and schedule and our report dated January 25, 2024 expressed an unqualified opinion thereon.
There have been no changes in our internal controls over financial reporting during our fourth fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 64 Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors of Bassett Furniture Industries, Incorporated and Subsidiaries Opinion on Internal Control over Financial Reporting We have audited Bassett Furniture Industries, Incorporated and Subsidiaries’ internal control over financial reporting as of November 26, 2022, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), (the COSO criteria).
There have been no changes in our internal controls over financial reporting during our fourth fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 61 Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors of Bassett Furniture Industries, Incorporated and Subsidiaries Opinion on Internal Control over Financial Reporting We have audited Bassett Furniture Industries, Incorporated and Subsidiaries’ internal control over financial reporting as of November 25, 2023, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).
Substantially all of the customer deposits held at November 27, 2021 related to performance obligations were satisfied during fiscal 2022 and have therefore been recognized in revenue for the year ended November 26, 2022. Estimates for returns and allowances have been recorded as a reduction of revenue based on our historical return patterns.
Substantially all of the customer deposits held at November 26, 2022 related to performance obligations were satisfied during fiscal 2023 and have therefore been recognized in revenue for the year ended November 25, 2023. Estimates for returns and allowances have been recorded as a reduction of revenue based on our historical return patterns.
Substantially all of the customer deposits held at November 27, 2021 related to performance obligations satisfied during fiscal 2022 and have therefore been recognized in revenue for the year ended November 26, 2022. Estimates for returns and allowances have been recorded as a reduction of revenue based on our historical return patterns.
Substantially all of the customer deposits held at November 26, 2022 related to performance obligations satisfied during fiscal 2023 and have therefore been recognized in revenue for the year ended November 25, 2023. Estimates for returns and allowances have been recorded as a reduction of revenue based on our historical return patterns.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of November 26, 2022, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated January 24, 2023 expressed an unqualified opinion thereon.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of November 25, 2023, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated January 25, 2024 expressed an unqualified opinion thereon.
See Note 13. We recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position.
We recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position.
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at November 26, 2022 and November 27, 2021, and the results of its operations and its cash flows for each of the three years in the period ended November 26, 2022, in conformity with U.S. generally accepted accounting principles.
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at November 25, 2023 and November 26, 2022, and the results of its operations and its cash flows for each of the three years in the period ended November 25, 2023, in conformity with U.S. generally accepted accounting principles.
Company contributions are subject to the same rules described above regarding the crediting of gains or losses from deemed investments and the timing of distributions. Expense (credits) associated with deferred compensation under the Plan was $ (16) , $338 and $264 for fiscal 2022, 2021 and 2020, respectively.
Company contributions are subject to the same rules described above regarding the crediting of gains or losses from deemed investments and the timing of distributions. Expense (credits) associated with deferred compensation under the Plan was $46, $ (16) and $338 for fiscal 2023, 2022 and 2021, respectively.
The weighted average useful lives of our finite-lived intangible assets and remaining amortization periods as of November 26, 2022 are as follows: Useful Life in Years Remaining Amortization Period in Years Customer relationships 9 4 Our trade name intangible assets are associated with Noa Home and Lane Venture.
The weighted average useful lives of our finite-lived intangible assets and remaining amortization periods as of November 25, 2023 are as follows: Useful Life in Years Remaining Amortization Period in Years Customer relationships 9 4 Our trade name intangible assets are associated with Noa Home and Lane Venture.
The financial statements have been prepared in accordance with generally accepted accounting principles in the United States ("GAAP"). Unless otherwise indicated, references in the Consolidated Financial Statements to fiscal 2022, 2021 and 2020 are to Bassett's fiscal year ended November 26, 2022, November 27, 2021 and November 28, 2020, respectively.
The financial statements have been prepared in accordance with generally accepted accounting principles in the United States ("GAAP"). Unless otherwise indicated, references in the Consolidated Financial Statements to fiscal 2023, 2022 and 2021 are to Bassett's fiscal year ended November 25, 2023, November 26, 2022 and November 27, 2021, respectively.
As the CDs mature, we expect to reinvest them in CDs of similar maturities of up to one year. Due to the nature of these investments and their relatively short maturities, the carrying amount of the short-term investments at November 26, 2022 and November 27, 2021 approximates their fair value.
As the CDs mature, we expect to reinvest them in CDs of similar maturities of up to one year. Due to the nature of these investments and their relatively short maturities, the carrying amount of the short-term investments at November 25, 2023 and November 26, 2022 approximates their fair value.
With the participation of our CEO and CFO, our management conducted an evaluation of the effectiveness of our internal control over financial reporting as of November 26, 2022 based on the criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.
With the participation of our CEO and CFO, our management conducted an evaluation of the effectiveness of our internal control over financial reporting as of November 25, 2023 based on the criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.
The proceeds of the above options are estimated to cover the maximum amount of our future payments under the guarantee obligations, net of reserves. The fair value of lease guarantees (an estimate of the cost to the Company to perform on these guarantees) at November 26, 2022 and November 27, 2021, were not material. 56 16.
The proceeds of the above options are estimated to cover the maximum amount of our future payments under the guarantee obligations, net of reserves. The fair value of lease guarantees (an estimate of the cost to the Company to perform on these guarantees) at November 25, 2023 and November 26, 2022, were not material. 16.
Sales commissions at retail are accrued at the time a sale is written (i.e. – when the customer’s order is placed) and are carried as prepaid commissions in other current assets until the goods are delivered and revenue is recognized.
Sales commissions at wholesale are accrued upon the shipment of goods. Sales commissions at retail are accrued at the time a sale is written (i.e. – when the customer’s order is placed) and are carried as prepaid commissions in other current assets until the goods are delivered and revenue is recognized.
We were contingently liable under licensee lease obligation guarantees in the amount of $1,880 at November 26, 2022. The remaining terms under these lease guarantees range from approximately one to five years. See Note 15 to our consolidated financial statements for a schedule of future cash payments on our lease obligations and additional details regarding our leases and lease guarantees.
We were contingently liable under licensee lease obligation guarantees in the amount of $1,845 at November 25, 2023. The remaining terms under these lease guarantees range from approximately one to five years. See Note 15 to our consolidated financial statements for a schedule of future cash payments on our lease obligations and additional details regarding our leases and lease guarantees.
Bassett’s full range of furniture products and accessories, designed to provide quality, style and value, are sold through an exclusive nation-wide network of 91 retail stores known as Bassett Home Furnishings (referred to as “BHF”). Of the 91 stores, the Company owns and operates 58 stores (“Company-owned retail stores”) with the other 33 being independently owned (“licensee operated”).
Bassett’s full range of furniture products and accessories, designed to provide quality, style and value, are sold through an exclusive nation-wide network of 87 retail stores known as Bassett Home Furnishings (referred to as “BHF”). Of the 87 stores, the Company owns and operates 56 stores (“Company-owned retail stores”) with the other 31 being independently owned (“licensee operated”).
At November 26, 2022 our definite-lived intangible assets consist of customer relationships acquired in the acquisition of Lane Venture with a carrying value of $232. Impairment of Long-Lived Assets - We periodically evaluate whether events or circumstances have occurred that indicate long-lived assets may not be recoverable or that the remaining useful life may warrant revision.
At November 25, 2023 our definite-lived intangible assets consist of customer relationships acquired in the acquisition of Lane Venture with a carrying value of $175. Impairment of Long-Lived Assets - We periodically evaluate whether events or circumstances have occurred that indicate long-lived assets may not be recoverable or that the remaining useful life may warrant revision.
Our liability for Company contributions and participant deferrals at November 26, 2022 and November 27, 2021 was $2,070 and $1,789, respectively, and is included in post-employment benefit obligations in our consolidated balance sheets. On May 2, 2017, we made Long Term Cash Awards (“LTC Awards”) totaling $2,000 under the Plan to certain management employees in the amount of $400 each.
Our liability for Company contributions and participant deferrals at November 25, 2023 and November 26, 2022 was $2,661 and $2,070, respectively, and is included in post-employment benefit obligations in our consolidated balance sheets. On May 2, 2017, we made Long Term Cash Awards (“LTC Awards”) totaling $2,000 under the Plan to certain management employees in the amount of $400 each.
Lease guarantees range from one to five years. We were contingently liable under licensee lease obligation guarantees in the amount of $1,880 and $1,845 at November 26, 2022 and November 27, 2021, respectively.
Lease guarantees range from one to five years. We were contingently liable under licensee lease obligation guarantees in the amount of $1,845 and $1,880 at November 25, 2023 and November 26, 2022, respectively.
(2) Beginning with the fourth quarter of fiscal 2022, our retail segment includes the sales of Noa Home, which was acquired on September 2, 2022 (see Note 3). 63 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. ITEM 9A.
(2) Beginning with the fourth quarter of fiscal 2022, our Corporate and other segment includes the sales of Noa Home, which was acquired on September 2, 2022 (see Note 3). 60 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. ITEM 9A.
In our opinion, Bassett Furniture Industries, Incorporated and Subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of November 26, 2022, based on the COSO criteria.
In our opinion, Bassett Furniture Industries, Incorporated and Subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of November 25, 2023, based on the COSO criteria.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Ernst & Young LLP Richmond, Virginia January 24, 2023 65 ITEM 9B . OTHER INFORMATION None.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Ernst & Young LLP Richmond, Virginia January 25, 2024 62 ITEM 9B . OTHER INFORMATION None .
Costs incurred to deliver retail merchandise to customers, including the cost of operating regional distribution warehouses, are also recorded in selling, general and administrative expense and totaled $23,812, $22,494, and $19,024 for fiscal 2022, 2021 and 2020, respectively.
Costs incurred to deliver retail merchandise to customers, including the cost of operating regional distribution warehouses, are also recorded in selling, general and administrative expense and totaled $23,399, $23,812, and $22,494 for fiscal 2023, 2022 and 2021, respectively.
Inventories accounted for under the LIFO method represented 46% and 53% of total inventory before reserves at November 26, 2022 and November 27, 2021, respectively. We estimate inventory reserves for excess quantities and obsolete items based on specific identification and historical write-offs, taking into account future demand and market conditions.
Inventories accounted for under the LIFO method represented 51% and 46% of total inventory before reserves at November 25, 2023 and November 26, 2022, respectively. We estimate inventory reserves for excess quantities and obsolete items based on specific identification and historical write-offs, taking into account future demand and market conditions.
We own life insurance policies on these executives with a current net death benefit of $1,587 at November 26, 2022 and we expect to substantially fund this death benefit through the proceeds received upon the death of the executive. Funding for the remaining cash flows is expected to be provided through operations.
We own life insurance policies on these executives with a current net death benefit of $1,504 at November 25, 2023 and we expect to substantially fund this death benefit through the proceeds received upon the death of the executive. Funding for the remaining cash flows is expected to be provided through operations.
Our retail real estate holdings of $21,164 and $16,971 at November 26, 2022 and November 27, 2021, respectively, for Company-owned stores, consisting of eight locations with a total of 203,465 square feet of space, could suffer significant impairment in value if we are forced to close additional stores and sell or lease the related properties during periods of weakness in certain markets.
Our retail real estate holdings of $24,279 and $21,164 at November 25, 2023 and November 26, 2022, respectively, for Company-owned stores, consisting of eight locations with a total of 203,465 square feet of space, could suffer significant impairment in value if we are forced to close additional stores and sell or lease the related properties during periods of weakness in certain markets.
The determination of the fair value of our reporting units is based on a combination of a market approach, that considers benchmark company market multiples, and an income approach, that utilizes discounted cash flows for each reporting unit and other Level 3 inputs as specified in the fair value hierarchy in ASC Topic 820, Fair Value Measurements and Disclosure (see Note 4).
The determination of the fair value of our reporting units is based on a combination of a market approach, that considers benchmark company market multiples and comparable transactions occurring within the last two years, and an income approach, that utilizes discounted cash flows for each reporting unit and other Level 3 inputs as specified in the fair value hierarchy in ASC Topic 820, Fair Value Measurements and Disclosure (see Note 4).
Advertising Costs incurred for producing and distributing advertising and advertising materials are expensed when incurred and are included in selling, general and administrative expenses. Advertising costs totaled $16,698, $15,228, and $12,619 in fiscal 2022, 2021, and 2020, respectively. Insurance Reserves We have self-funded insurance programs in place to cover workers’ compensation and health insurance.
Advertising Costs incurred for producing and distributing advertising and advertising materials are expensed when incurred and are included in selling, general and administrative expenses. Advertising costs totaled $19,106, $16,698, and $15,228 in fiscal 2023, 2022, and 2021, respectively. Insurance Reserves We have self-funded insurance programs in place to cover workers’ compensation and health insurance.
The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. 27 Measurement of Reserves for Excess and Obsolete Inventories Measurement of Reserves for Excess and Obsolete Inventories Description of the Matter At November 26, 2022, the Company’s inventories were $85.5 million.
The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. 26 Measurement of Reserves for Excess and Obsolete Inventories Measurement of Reserves for Excess and Obsolete Inventories Description of the Matter At November 25, 2023, the Company’s inventories were $63.0 million.
For an analysis of the fiscal year 2021 results as compared to fiscal year 2020, see “Analysis of Operations” in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Company’s 2021 Annual Report on Form 10-K, filed with the SEC on January 31, 2022.
For additional analysis of the fiscal year 2022 results as compared to fiscal year 2021, see “Analysis of Operations” in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Company’s 2022 Annual Report on Form 10-K, filed with the SEC on January 24, 2023.
During 2022, 2021 and 2020, purchases from our two largest vendors located in Vietnam and China were $33,253, $34,658 and $15,378 respectively. We estimate an inventory reserve for excess quantities and obsolete items based on specific identification and historical write-offs, taking into account future demand, market conditions and the respective valuations at LIFO.
During 2023, 2022 and 2021, purchases from our three largest vendors located in Vietnam and China were $13,498, $33,253 and $34,658 respectively. We estimate an inventory reserve for excess quantities and obsolete items based on specific identification and historical write-offs, taking into account future demand, market conditions and the respective valuations at LIFO.
Other Items Affecting Net Income (Loss) Other items affecting net income (loss) for fiscal 2022 and 2021 are as follows: 2022 2021 Interest income (1) $ 302 $ 48 Interest expense (2) (38 ) (33 ) Net periodic pension costs (3) (489 ) (422 ) Net gains (cost) of company-owned life insurance (4) 161 (364 ) Other (739 ) (729 ) Total other loss, net $ (803 ) $ (1,500 ) (1) Consists of interest income arising from our short-term investments and interest-bearing cash equivalents.
Hunt. 19 Other Items Affecting Net Income (Loss) Other items affecting net income (loss) for fiscal 2023 and 2022 are as follows: 2023 2022 2021 Interest income (1) $ 2,528 $ 302 $ 48 Interest expense (2) (22 ) (38 ) (33 ) Net periodic pension costs (3) (496 ) (489 ) (422 ) Net gains (cost) of company-owned life insurance (4) (572 ) 161 (364 ) Other (791 ) (739 ) (729 ) Total other loss, net $ 647 $ (803 ) $ (1,500 ) (1) Consists of interest income arising from our short-term investments and interest-bearing cash equivalents.
We also have factories in Martinsville and Bassett, Virginia that assemble and finish our custom bedroom and dining offerings. Late in the third quarter of fiscal 2022, we purchased a facility which we had formerly leased in Haleyville, Alabama where we manufacture aluminum frames for our outdoor furniture.
We also have factories in Martinsville and Bassett, Virginia that assemble and finish our custom bedroom and dining offerings. In 2022, we purchased a facility which we had formerly leased in Haleyville, Alabama where we manufacture aluminum frames for our outdoor furniture.

… 294 more changes not shown on this page.

Other BSET 10-K year-over-year comparisons