Bassett(US:BSET)2021-03-31 16:00Revenue and Sales Performance - Revenue from furniture and accessories for the three months ended February 27, 2021, was $25,914 million, an increase from $23,551 million for the same period in 2020, representing an increase of 10.0%[18] - Total wholesale shipments amounted to $70,264 million for the quarter ended February 27, 2021, a 8.6% increase from $65,017 million for the same period in 2020[67] - Net sales for the wholesale segment for the three months ended February 27, 2021 increased by $5,247 or 8.1% over the prior year period[108] - Retail net sales for the three months ended February 27, 2021 declined by $5,451 or 8.3% from the prior year period, despite a 4.1% increase in written sales[112] - Wholesale orders for Q1 2021 increased by 44% compared to pre-pandemic levels in Q1 2020, resulting in a wholesale backlog of $67,469[95] - The wholesale segment accounted for 61.7% of total shipments, with Bassett Custom Upholstery leading at $43,348[67] Inventory and Accounts Receivable - Total inventories as of February 27, 2021, amounted to $62,936 million, compared to $54,886 million as of November 28, 2020, reflecting an increase of 14.6%[39] - The company reported a total of $76,498 million in inventories on a first-in, first-out method as of February 27, 2021, compared to $68,299 million as of November 28, 2020, an increase of 12.3%[39] - Net accounts receivable as of February 27, 2021, was $24,720 million, up from $22,340 million as of November 28, 2020, indicating an increase of 10.6%[35] - The company’s gross accounts receivable increased to $25,914 million as of February 27, 2021, from $23,551 million as of November 28, 2020, representing an increase of 10.0%[35] - The allowance for doubtful accounts decreased to $1,194 million as of February 27, 2021, from $1,211 million as of November 28, 2020, showing a reduction of 1.4%[36] Financial Position and Cash Flow - The company had cash and cash equivalents totaling $62,748 as of February 27, 2021, indicating sufficient liquidity for operations[120] - Operating cash flow for Q1 2021 was $4,984, an increase of $10,277 compared to Q1 2020, primarily due to higher operating income and increased customer deposits[119] - Overall cash position decreased by $766 in Q1 2021, an improvement of $6,732 compared to a decrease of $7,498 in Q1 2020[120] - Net cash used in investing activities increased by $1,112 to $1,189 in Q1 2021, compared to a net use of $77 in the prior year[120] - Net cash used in financing activities increased by $2,383 to $4,561 in Q1 2021, primarily due to a special dividend of $2,479 declared and paid[120] Operating Expenses and Profitability - SG&A expenses as a percentage of sales for the wholesale segment decreased by 240 basis points due to higher sales volume and expense reductions[108] - Gross margins for the first quarter of 2021 increased by 150 basis points driven by lower promotional activity and improved clearance margins[112] - Income from operations for Q1 2021 was $459 million, a decline of $376 million or 45.0% from $835 million in Q1 2020[113][114] - Net periodic pension cost decreased to $125 million for the three months ended February 27, 2021, compared to $142 million for the same period in 2020, representing a reduction of about 12%[49] Tax and Liabilities - The effective tax rate for the quarter ended February 27, 2021, was 29.4%, down from 34.5% for the quarter ended February 29, 2020[28] - The total deferred compensation liability increased to $3,197 million as of February 27, 2021, up from $2,927 million on November 28, 2020, reflecting a growth of approximately 9.2%[52] - The liability for the Supplemental Retirement Income Plan was $8,525 as of February 27, 2021, down from $8,565[45] Store Operations and Market Strategy - The retail segment consists of 97 Bassett Home Furnishings stores as of February 27, 2021, focusing on providing a high level of customer service and stylish furniture[82] - The company plans to continue evaluating store performance due to declining store traffic over the past three years, suggesting potential future reductions in store count[90] - The company emphasizes its "Made in America" story and has rebranded its premier Custom Upholstery line to highlight artisan craftsmanship and domestic materials[92] - The company has expanded its Bench Made solid wood dining offerings to include more contemporary styles, enhancing its product range[92] Logistics and Supply Chain - The logistics segment's total operating costs were $19,621 million for the three months ended February 27, 2021, down from $20,480 million for the same period in 2020, reflecting a decrease of about 4.2%[62] - Logistical services revenue for Q1 2021 declined by $1,234 or 5.8% from the prior year period, with operating income decreasing by 45%[113] - The company has faced logistical challenges due to COVID-related labor shortages and supply chain disruptions, impacting order fulfillment and increasing backlogs[96][112] - Zenith Freight Lines, LLC generated approximately 60% of its revenue from services provided to non-Bassett customers, indicating a diversified revenue stream[87]