Bassett(US:BSET)2020-10-01 14:16Financial Performance - Total sales revenue for the quarter ended August 29, 2020, was $91,559,000, a decrease of 16.3% compared to $109,419,000 for the same quarter in 2019[10]. - Net income for the quarter was $2,178,000, slightly up from $2,157,000 in the previous year, despite a net loss of $16,964,000 for the nine months ended August 29, 2020[11]. - Basic earnings per share for the quarter was $0.22, compared to $0.21 for the same quarter last year[11]. - Income from operations for the nine months ended August 29, 2020, was a loss of $11,067 million, compared to a profit of $5,885 million for the same period in 2019[133]. - The company experienced a 21% decrease in revenues and a net operating loss of $16,964 for the nine months ended August 29, 2020, due to COVID-19 disruptions[104]. Assets and Liabilities - Total current assets increased to $145,918,000 as of August 29, 2020, from $136,786,000 as of November 30, 2019[14]. - Total liabilities increased to $240,852,000 as of August 29, 2020, compared to $97,096,000 as of November 30, 2019[14]. - Cash and cash equivalents increased to $31,029,000 as of August 29, 2020, from $19,687,000 as of November 30, 2019[14]. - The total pension liability, including the Supplemental Plan and LTC Awards, was $10,099 million as of August 29, 2020, slightly up from $10,090 million as of November 30, 2019[55]. - Deferred compensation liability increased from $2,661 million as of November 30, 2019, to $2,844 million as of August 29, 2020, marking a growth of 6.9%[59]. Inventory and Impairment - The company reported a decrease in inventory to $58,601,000 from $66,302,000 year-over-year[14]. - The company incurred asset impairment charges of $12,184,000 in the nine months ended August 31, 2019[11]. - The company reported a goodwill impairment charge of $1,971 million and asset impairment charges totaling $12,184 million[16]. - Inventory valuation charges amounted to $3,814 million, reflecting an increase from $1,753 million in the prior period[16]. - The balance for reserves for excess quantities and obsolete inventory increased from $2,362 million as of November 30, 2019, to $4,556 million as of August 29, 2020, reflecting a rise of 93.6%[43]. Cash Flow and Operating Activities - Net cash provided by operating activities was $17,483 million, a significant increase compared to a net cash used of $2,059 million in the previous period[16]. - Cash dividends paid were $3,306 million, down from $3,867 million in the previous period[16]. - The company reported a net cash used in investing activities of $1,201 million, a decrease from $6,038 million in the prior period[16]. - The overall cash position improved by $11,342 during the first nine months of fiscal 2020, compared to a decrease of $18,830 in the prior year[155]. Operational Adjustments and COVID-19 Impact - The company implemented a 21% permanent workforce reduction and temporary salary reductions to maintain liquidity during the pandemic[104]. - The company negotiated rent abatements and deferrals with landlords as part of its response to the financial impact of COVID-19[72]. - The company temporarily closed stores and manufacturing locations due to COVID-19, impacting order fulfillment and creating significant backlogs[170]. - Logistical challenges from COVID-related labor shortages and supply chain disruptions have created delays in order fulfillment[170]. - The company faced significant disruptions in non-essential retail commerce due to the COVID-19 pandemic, which may adversely affect financial condition[169]. Sales and Revenue Trends - Wholesale orders for Q3 2020 increased by 26% compared to 2019, indicating strong demand post-reopening[105]. - Logistics revenue for Q3 2020 was $11,218, reflecting a 1.5% increase from $11,050 in Q3 2019[121]. - The retail segment reported net sales decreased by $18,395 or 27.6% for the quarter ended August 29, 2020, and by $51,575 or 26.0% for the nine months ended August 29, 2020[145]. - The company expects manufacturing and shipping pace to increase and backlogs to decrease by the end of Q4 2020[106]. - Digital outreach strategies led to a 63% increase in website traffic and a 118% increase in web orders for Q3 2020 compared to 2019[116]. Tax and Compliance - The company’s effective tax rates for the three and nine months ended August 29, 2020 were 36.8% and (36.5%), respectively[31]. - The effective tax rates for the three and nine months ended August 29, 2020 were 36.8% and (36.5%), respectively, influenced by the carryback of net operating losses[153]. Future Outlook and Strategic Initiatives - The company plans to emphasize its "Made in America" story and utilize locally harvested materials in new product offerings[120]. - The company is evaluating its inventory assortment to simplify product offerings and align with its omnichannel marketing strategy[142]. - The company has $9,097,000 remaining for stock repurchases under its plan, which was originally announced in 1998 and increased in 2018[172].