Bassett(US:BSET)2021-09-29 16:00Financial Performance - Consolidated net sales of furniture and accessories for the nine months ended August 28, 2021, totaled $316,522 million, compared to $232,283 million for the same period in 2020, representing an increase of 36.3%[84]. - Consolidated total sales revenue for the nine months ended August 28, 2021, was $356,638, an increase from $267,480 for the same period in 2020, representing a growth of approximately 33.2%[132]. - Income from operations for the nine months ended August 28, 2021, was $18,890, compared to a loss of $11,067 for the same period in 2020, indicating a significant turnaround[126]. - For the quarter ended August 28, 2021, total sales revenue was $104,870, compared to $80,341 for the quarter ended August 29, 2020, marking a year-over-year increase of 30.5%[135]. - Net sales for the three months ended August 28, 2021, increased by $17,630, and for the nine months, they increased by $65,783 compared to the prior year periods[140]. Inventory and Assets - For the three and nine months ended August 28, 2021, total inventories amounted to $73,827, an increase from $54,886 as of November 28, 2020, reflecting a growth of approximately 34.4%[42]. - The balance of reserves for excess quantities and obsolete inventory was $4,444 as of August 28, 2021, down from $4,522 as of November 28, 2020, reflecting a decrease of 1.7%[43]. - The balance of prepaid commissions included in other current assets was $6,073 million as of August 28, 2021, up from $4,279 million as of November 28, 2020, indicating a 42% increase[81]. - The company holds a substantial investment in retail real estate with a net book value of $17,071 million as of August 28, 2021[161]. Liabilities and Debt - The company’s total liabilities related to the unfunded Supplemental Retirement Income Plan were $8,444 as of August 28, 2021, slightly down from $8,565 as of November 28, 2020[49]. - The total liability for all deferred compensation arrangements was $3,372 million as of August 28, 2021, compared to $2,927 million as of November 28, 2020, reflecting an increase of 15.2%[56]. - The company has guaranteed lease obligations of licensee operators amounting to $1,959 million as of August 28, 2021, compared to $1,811 million as of November 28, 2020, indicating a rise of 8.2%[69]. Taxation - The effective tax rates for the three and nine months ended August 28, 2021, were 27.2% and 27.3%, respectively, differing from the federal statutory rate of 21% primarily due to state income taxes and tax deficiencies of $117[30]. - The effective tax rates for the three and nine months ended August 28, 2021, were 27.2% and 27.3%, respectively, differing from the federal statutory rate of 21% due to state income taxes and stock-based compensation[154]. Operational Costs - Cost of furniture and accessories sold as a percentage of total revenue increased due to rising raw material and freight costs, despite improved leverage on fixed costs[112]. - SG&A expenses as a percentage of sales decreased significantly due to higher sales volume and maintained expense reductions from fiscal 2020[112]. - SG&A expenses for the nine months ended August 28, 2021, totaled $145,474, compared to $130,225 for the same period in 2020, representing an increase of 11.7%[132]. Logistical Services - The company’s revenues from logistical services are generated by its wholly-owned subsidiary, Zenith Freight Lines, LLC, although specific revenue figures were not disclosed[21]. - Zenith Freight Lines, LLC, which provides logistical services, generates approximately 65% of its revenue from non-Bassett customers[99]. - Logistical services revenue for the three months ended August 28, 2021, increased by $3,352 million, representing a significant recovery from the prior year due to the impact of the COVID-19 pandemic[149]. Shareholder Activities - The company has $19,348 million remaining authorized under its existing share repurchase plan as of August 28, 2021[157]. - During the nine months ended August 28, 2021, 7,105 restricted shares with an aggregate fair value of $175 million were granted to non-employee directors under the 2021 Stock Incentive Plan[60]. Manufacturing and Production - The company opened an additional 123,000 square foot upholstery manufacturing facility in Newton, NC, to address growing backlogs and expand its product offerings[107]. - Approximately 75% of the products sold are manufactured in the United States, with additional sourcing from Vietnam, Thailand, and China[96]. - The company plans to emphasize its "Made in America" story and utilize locally sourced materials, rebranding its Custom Upholstery line under the Bench Made program[103]. Impairment Charges - The company incurred $1,070 million of non-cash impairment charges in its wholesale segment during the nine months ended August 29, 2020, primarily due to the closure of a manufacturing facility[65]. - The company recorded $11,114 in non-cash asset impairment charges during the nine months ended August 29, 2020, primarily related to underperforming retail stores[127]. - The company recognized a non-cash goodwill impairment charge of $1,971 during the nine months ended August 29, 2020, due to the impact of the COVID-19 pandemic[128].