Bassett(BSET) - 2019 Q4 - Annual Report

Financial Performance - Net sales for fiscal 2019 were $452,087 thousand, a slight decrease of 1.7% compared to $456,855 thousand in fiscal 2018[99]. - Operating income for fiscal 2019 was $(595) thousand, a significant decline from $14,084 thousand in fiscal 2018, impacted by asset impairment charges and litigation costs totaling $8,041 thousand[99]. - Net income for fiscal 2019 was $(1,928) thousand, compared to a net income of $8,218 thousand in fiscal 2018, resulting in diluted earnings per share of $(0.19) versus $0.77[99]. - Total sales revenue for 2019 was $452,087, a decrease of 1.7% from $456,855 in 2018[224]. - Net income for 2019 was a loss of $1,928, compared to a profit of $8,218 in 2018, representing a significant decline[228]. - The company incurred asset impairment charges of $4,431 in 2019, compared to $469 in 2018[228]. - Basic loss per share for 2019 was $(0.19), down from earnings of $0.77 per share in 2018[224]. - The company reported a net loss of $1,928,000, resulting in a basic and diluted loss per share of $0.19[382]. Assets and Liabilities - Total assets decreased to $275,766 thousand in fiscal 2019 from $291,641 thousand in fiscal 2018, reflecting a decline in cash and cash equivalents[219]. - Long-term liabilities increased to $24,825 thousand in fiscal 2019 from $19,513 thousand in fiscal 2018, primarily due to post-employment benefit obligations[219]. - The company reported a current ratio of 1.89 to 1 in fiscal 2019, an improvement from 1.82 to 1 in fiscal 2018, indicating better short-term financial health[99]. - Cash and cash equivalents at the end of 2019 were $19,687, down from $33,468 at the end of 2018[229]. - The company has guaranteed lease obligations for licensee operators amounting to $1,776,000 as of November 30, 2019[377]. Cash Flow and Dividends - Cash dividends declared in fiscal 2019 were $5,133 thousand, slightly up from $5,041 thousand in fiscal 2018, with cash dividends per share increasing to $0.50 from $0.47[99]. - Cash dividends paid in 2019 totaled $5,133, a decrease from $8,800 in 2018[229]. - Net cash provided by operating activities decreased to $9,809 in 2019, down from $29,907 in 2018[228]. - The company reported a net cash used in investing activities of $(11,173) in 2019, compared to $(31,973) in 2018[229]. Inventory and Receivables - The company’s accounts receivable increased to $21,378 thousand in fiscal 2019 from $19,055 thousand in fiscal 2018, indicating improved sales collection[219]. - The company’s inventories rose to $66,302 thousand in fiscal 2019, up from $64,192 thousand in fiscal 2018, reflecting inventory management strategies[219]. - Total inventories as of November 30, 2019, were $66,302, up from $64,192 as of November 24, 2018[312]. Operational Insights - Selling, general and administrative expenses increased to $264,280 in 2019, up from $260,339 in 2018[224]. - The company plans to continue focusing on cost management and operational efficiency to improve future performance[226]. - The company operates 103 retail stores, of which 70 are company-owned and 33 are independently operated[233]. Acquisitions and Investments - Bassett acquired Lane Venture on December 21, 2017, integrating its operations into the wholesale segment since the acquisition date[235]. - The company acquired Lane Venture for $15,556 in cash, which included identifiable assets valued at $12,622 and liabilities assumed of $1,209, resulting in goodwill of $4,143[291]. - The company expects synergies from the acquisition of Lane Venture to enhance its manufacturing and distribution capabilities in the outdoor furnishings market[294]. Taxation and Compliance - The total income tax provision for fiscal 2019 was $188, a significant decrease from $3,988 in fiscal 2018, primarily due to a federal tax rate reduction from 35% to 21%[359]. - The effective income tax rate for fiscal 2019 was (10.8)%, compared to 32.7% in fiscal 2018, influenced by the impairment of non-deductible goodwill[360]. - The company has state net operating loss carryforwards of $4,095 available to offset future taxable state income, expiring between 2021 and 2027[362]. Employee Compensation and Benefits - The total intrinsic value of options exercised in 2019 was $34,000, compared to $75,000 in 2018, a decrease of about 54.7%[353]. - Non-vested restricted shares outstanding increased from 81,036 shares at the end of 2018 to 90,153 shares at the end of 2019, an increase of approximately 11.2%[354]. - The company expects to fund the remaining cash flows for the Supplemental Retirement Income Plan through operations[338]. Market Risks - The company has potential exposure to market risk related to commercial real estate, with retail real estate holdings valued at $17,845 thousand as of November 30, 2019[211]. - Approximately 28% of the aggregate credit risk exposure, net of reserves, was attributable to five customers as of November 30, 2019, compared to 33% in the previous year[253]. - Total credit risk exposure related to customers was $23,297,000 as of November 30, 2019, compared to $21,050,000 in 2018[257].