Bassett(BSET) - 2024 Q4 - Annual Report

Financial Performance - Net sales revenue for the year ended November 30, 2024, decreased by $60,213, or approximately 15% from the prior year, primarily due to decreases in wholesale shipments and retail delivered sales [114]. - Gross profit for fiscal 2024 was $179,415, representing a gross margin of 54.4%, which increased by 150 basis points from 2023 [115]. - SG&A expenses for fiscal 2024 were $187,527, accounting for 56.8% of sales, an increase of 420 basis points from the previous year due to lower sales volumes [116]. - The net sales of furniture and accessories for the year ended November 30, 2024, were $329,923, with a gross profit of $179,415 [125]. - The wholesale segment generated net sales of $207,462, while the retail segment (Company-owned stores) reported net sales of $204,563 for the year ended November 30, 2024 [125]. - Net sales for fiscal 2024 decreased by $41,449 million or 17% compared to fiscal 2023, primarily due to a 19% decrease in shipments to the open market [129]. - Operating income for fiscal 2024 was $25,357 million, a decrease of $5,342 million or 17.4% from fiscal 2023 [127]. - Net sales for the retail segment decreased by $31,377 million or 13.3% in fiscal 2024 compared to fiscal 2023, with total net sales of $204,563 million [131]. - Corporate and other segment net sales declined by $3,885 million or 44.1% to $4,919 million in fiscal 2024 [136]. - The logistical services segment reported zero revenue in fiscal 2024, a decrease of $16,776 million or 100% from fiscal 2023 [138]. E-commerce and Customer Engagement - E-commerce sales increased by over 20% in the latter half of the fiscal year, although they remain small compared to in-store sales [101]. - The new web platform launched in late 2023 has led to increased customer engagement, with more page views and time spent on the site [101]. Asset Impairment and Restructuring - The company recognized non-cash charges totaling $2,401 related to the impairment of Noa Home's assets and a charge of $962 associated with cumulative translation losses [102]. - In fiscal 2024, the company recognized asset impairment charges totaling $5,515, a contract abandonment charge of $1,240, cumulative translation losses of $962, and a restructuring charge of $440, which is expected to yield annual savings of approximately $2,500 starting in 2025 [117]. - The company recorded asset impairment charges totaling $2,887 million in the retail segment and $727 million in the wholesale segment [128]. - The company recognized a charge of $1,827 to fully impair the Noa Home trade name intangible asset during fiscal 2024 [168]. - Noa Home, acquired on September 2, 2022, was determined not likely to achieve profitability and ceased operations as of November 30, 2024, with sales primarily generated outside the United States [121]. Cash Flow and Capital Expenditures - Cash provided by operations decreased by $14,674 million to $4,050 million in fiscal 2024, primarily due to changes in working capital [146]. - The overall cash position declined by $12,993 million during fiscal 2024, with cash and cash equivalents totaling $59,911 million as of November 30, 2024 [147]. - The company spent $5,211 million on property and equipment, including new store openings and remodels during fiscal 2024 [147]. - Total capital expenditures for fiscal 2025 are anticipated to be between $8 million and $12 million, focusing on store remodeling and IT investments [152]. Debt and Credit Facilities - The company entered into a Credit Facility with a line of credit of up to $25,000, with $6,013 outstanding under standby letters of credit as of November 30, 2024 [148]. - The company must maintain a Consolidated Minimum Tangible Net Worth of at least $120,000 under the terms of the Credit Facility [148]. Inventory and Reserves - The allowance for credit losses was $1,097 as of November 30, 2024, representing 7.7% of gross accounts receivable [162]. - Reserves for excess and obsolete inventory were $5,395 as of November 30, 2024, representing 8.9% of inventories on a LIFO basis [163]. Market Risks - The company is exposed to market risk from changes in the cost of raw materials, particularly wood, woven fabric, and foam products [174]. - The company manages exposure to diesel fuel price risk through the application of fuel surcharges to customers [175]. - The company is not significantly exposed to foreign currency market risk for purchases outside North America, as most are denominated in U.S. dollars [173].