UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended May 29, 2004
OR
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File No. 0-209
BASSETT FURNITURE INDUSTRIES, INCORPORATED
(Exact name of Registrant as specified in its charter)
| Virginia | 54-0135270 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
3525 Fairystone Park Highway
Bassett, Virginia 24055
(Address of principal executive offices)
(Zip Code)
(276) 629-6000
(Registrant’s telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes x No ¨
At May 29, 2004, 11,681,792 shares of common stock of the Registrant were outstanding.
BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES
TABLE OF CONTENTS
2 of 26
PART I – FINANCIAL INFORMATION
BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
FOR THE PERIODS ENDED MAY 29, 2004 AND MAY 31, 2003 – UNAUDITED
(In thousands except per share data)
| Six Months Ended |
Quarter Ended |
|||||||||||||||
| 26 Weeks |
26 Weeks |
13 Weeks |
13 Weeks |
|||||||||||||
| May 29, 2004 |
May 31, 2003 |
May 29, 2004 |
May 31, 2003 |
|||||||||||||
| Net sales |
$ | 156,923 | $ | 154,480 | $ | 80,355 | $ | 76,866 | ||||||||
| Cost of sales |
116,837 | 114,728 | 59,936 | 57,318 | ||||||||||||
| Gross profit |
40,086 | 39,752 | 20,419 | 19,548 | ||||||||||||
| Selling, general and administrative |
38,280 | 40,288 | 19,783 | 19,990 | ||||||||||||
| Gain on sale of property, net |
(3,890 | ) | — | — | — | |||||||||||
| Restructuring and impaired asset charges |
2,840 | 3,200 | — | — | ||||||||||||
| Operating income (loss) |
2,856 | (3,736 | ) | 636 | (442 | ) | ||||||||||
| Other income, net |
2,914 | 2,963 | 1,901 | 1,821 | ||||||||||||
| Income (loss) before income tax (provision) benefit and cumulative effect of accounting change |
5,770 | (773 | ) | 2,537 | 1,379 | |||||||||||
| Income tax (provision) benefit |
(1,557 | ) | 416 | (652 | ) | (186 | ) | |||||||||
| Income (loss) before cumulative effect of accounting change |
4,213 | (357 | ) | 1,885 | 1,193 | |||||||||||
| Cumulative effect of accounting change, net of income tax benefit of $3,200 |
— | (4,875 | ) | — | — | |||||||||||
| Net income (loss) |
$ | 4,213 | $ | (5,232 | ) | $ | 1,885 | $ | 1,193 | |||||||
| Retained earnings-beginning of period |
159,487 | 169,789 | 160,352 | 160,495 | ||||||||||||
| Cash dividends |
(4,670 | ) | (4,634 | ) | (2,339 | ) | (2,316 | ) | ||||||||
| Issuance of common stock |
1,128 | 56 | 260 | 34 | ||||||||||||
| Share repurchases |
(548 | ) | (578 | ) | (548 | ) | (5 | ) | ||||||||
| Retained earnings-end of period |
$ | 159,610 | $ | 159,401 | $ | 159,610 | $ | 159,401 | ||||||||
| Basic earnings (loss) per share |
$ | 0.36 | $ | (0.45 | ) | $ | 0.16 | $ | 0.10 | |||||||
| Diluted earnings (loss) per share |
$ | 0.36 | $ | (0.45 | ) | $ | 0.16 | $ | 0.10 | |||||||
| Dividends per share |
$ | 0.40 | $ | 0.40 | $ | 0.20 | $ | 0.20 | ||||||||
The accompanying notes to condensed consolidated financial statements are an integral part of the condensed consolidated financial statements.
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PART I – FINANCIAL INFORMATION – CONTINUED
BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
MAY 29, 2004 AND NOVEMBER 29, 2003
(In thousands)
| (Unaudited) May 29, 2004 |
November 29, 2003 | |||||
| Assets |
||||||
| Current assets |
||||||
| Cash and cash equivalents |
$ | 12,982 | $ | 15,181 | ||
| Accounts receivable, net |
40,184 | 39,230 | ||||
| Inventories |
35,634 | 36,454 | ||||
| Assets held for sale, net |
831 | 1,881 | ||||
| Deferred income taxes |
4,600 | 5,307 | ||||
| Other current assets |
2,438 | 4,525 | ||||
| Total current assets |
96,669 | 102,578 | ||||
| Property and equipment |
||||||
| Cost |
166,130 | 167,702 | ||||
| Less accumulated depreciation |
121,724 | 118,902 | ||||
| Total property and equipment |
44,406 | 48,800 | ||||
| Investments |
74,699 | 65,151 | ||||
| Retail real estate, net |
41,758 | 32,930 | ||||
| Notes receivable, net |
14,886 | 15,399 | ||||
| Other, net |
14,286 | 15,522 | ||||
| Total other assets |
145,629 | 129,002 | ||||
| Total assets |
$ | 286,704 | $ | 280,380 | ||
| Liabilities and Stockholders’ Equity |
||||||
| Current liabilities |
||||||
| Accounts payable |
$ | 13,625 | $ | 15,127 | ||
| Accrued liabilities |
23,024 | 22,341 | ||||
| Total current liabilities |
36,649 | 37,468 | ||||
| Long-term liabilities |
||||||
| Employee benefits |
9,598 | 9,824 | ||||
| Real estate notes payable |
7,219 | — | ||||
| Distributions in excess of affiliate earnings |
12,565 | 13,070 | ||||
| Total long-term liabilities |
29,382 | 22,894 | ||||
| Stockholders’ Equity |
||||||
| Common stock |
58,409 | 58,000 | ||||
| Retained earnings |
159,610 | 159,487 | ||||
| Accumulated other comprehensive income - unrealized holding gains, net of income tax effect |
2,654 | 2,531 | ||||
| Total stockholders’ equity |
220,673 | 220,018 | ||||
| Total liabilities and stockholders’ equity |
$ | 286,704 | $ | 280,380 | ||
The accompanying notes to condensed consolidated financial statements are an integral part of the condensed consolidated financial statements.
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PART I – FINANCIAL INFORMATION – CONTINUED
BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE PERIODS ENDED MAY 29, 2004 AND MAY 31, 2003 - UNAUDITED
(In thousands)
| Twenty-Six Weeks Ended |
||||||||
| May 29, 2004 |
May 31, 2003 |
|||||||
| Net income (loss) |
$ | 4,213 | $ | (5,232 | ) | |||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
||||||||
| Depreciation and amortization |
4,959 | 5,441 | ||||||
| Equity in undistributed income of investments |
(5,061 | ) | (4,237 | ) | ||||
| Provision for writedown of property and equipment |
2,103 | 1,530 | ||||||
| Cumulative effect of accounting change, net |
— | 4,875 | ||||||
| Net gain from sale of property and equipment |
(3,890 | ) | — | |||||
| Net gain from sales of investments |
— | (14 | ) | |||||
| Provision for losses on trade accounts receivable |
550 | 256 | ||||||
| Deferred income taxes |
707 | (416 | ) | |||||
| Changes in employee benefit liabilities |
(226 | ) | (113 | ) | ||||
| Changes in operating assets and liabilities, exclusive of assets and liabilities acquired in a business combination: |
||||||||
| Trade accounts receivable |
(1,504 | ) | (723 | ) | ||||
| Inventories |
820 | (2,221 | ) | |||||
| Refundable income taxes |
— | 3,511 | ||||||
| Other current assets |
60 | 156 | ||||||
| Accounts payable and accrued liabilities |
(819 | ) | (1,962 | ) | ||||
| Net cash provided by operating activities |
1,912 | 851 | ||||||
| Investing activities: |
||||||||
| Purchases of property and equipment |
(5,356 | ) | (3,326 | ) | ||||
| Proceeds from sales of property and equipment |
8,081 | 372 | ||||||
| Proceeds from sales of investments |
10,482 | 17,000 | ||||||
| Purchases of investments |
(16,982 | ) | (12,000 | ) | ||||
| Dividends from an affiliate |
2,343 | 1,874 | ||||||
| Other, net |
1,002 | 362 | ||||||
| Net cash (used in) provided by investing activities |
(430 | ) | 4,282 | |||||
| Financing activities: |
||||||||
| Borrowings under revolving credit arrangement |
— | 4,000 | ||||||
| Issuance of common stock |
1,761 | 110 | ||||||
| Repurchases of common stock |
(772 | ) | (924 | ) | ||||
| Cash dividends |
(4,670 | ) | (4,634 | ) | ||||
| Net cash used in financing activities |
(3,681 | ) | (1,448 | ) | ||||
| Net change in cash and cash equivalents |
(2,199 | ) | 3,685 | |||||
| Cash and cash equivalents, beginning of period |
15,181 | 2,892 | ||||||
| Cash and cash equivalents, end of period |
$ | 12,982 | $ | 6,577 | ||||