2 unchanged sentences
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
−Removed: FOR THE PERIODS ENDED AUGUST 26, 2023 AND AUGUST 27, 2022 –
+Added: FOR THE PERIODS ENDED MARCH 2, 2024 AND FEBRUARY 25, 2023 – UNAUDITED
(In thousands)
−Removed: Nine Months Ended
−Removed: August 26, 2023
−Removed: August 27, 2022
+Added: Three Months Ended
+Added: March 2, 2024
+Added: February 25, 2023
Operating activities:
−Removed: Adjustments to reconcile net income to net cash provided by (used in) operating activities:
+Added: Net income (loss)
+Added: Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization
−Removed: Gain on disposal of discontinued operations
−Removed: Gain on sale of property and equipment
−Removed: Gain on revaluation of contingent consideration
Deferred income taxes
9 unchanged sentences
Purchases of property and equipment
−Removed: Proceeds from sales of property and equipment
−Removed: Proceeds from the disposal of discontinued operations, net
−Removed: Net cash provided by (used in) investing activities
+Added: Net cash used in investing activities
Financing activities:
13 unchanged sentences
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-UNAUDITED
−Removed: AUGUST 26, 2023
+Added: MARCH 2, 2024
(Dollars in thousands except share and per share data)
Basis of Presentation
−Removed: The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and footnotes required by accounting principles generally accepted in the United States (“GAAP”) for complete financial statements.
+Added: The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and footnotes required by accounting principles generally accepted in the United States (“GAAP”) for complete financial statements.
In our opinion, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included.
−Removed: References to “ASC”
−Removed: included hereinafter refer to the Accounting Standards Codification established by the Financial Accounting Standards Board (“FASB”) as the source of authoritative GAAP.
−Removed: The condensed consolidated financial statements include the accounts of Bassett Furniture Industries, Incorporated (“Bassett”, “we”, “our”, or the “Company”) and our wholly-owned subsidiaries of which we have a controlling interest.
−Removed: In accordance with ASC Topic 810, we have evaluated our licensees and certain other entities to determine whether they are variable interest entities (“VIEs”) of which we are the primary beneficiary and thus would require consolidation in our financial statements.
+Added: References to “ASC” included hereinafter refer to the Accounting Standards Codification established by the Financial Accounting Standards Board (“FASB”) as the source of authoritative GAAP.
+Added: The condensed consolidated financial statements include the accounts of Bassett Furniture Industries, Incorporated (“Bassett”, “we”, “our”, or the “Company”) and our wholly-owned subsidiaries of which we have a controlling interest.
+Added: In accordance with ASC Topic 810, we have evaluated our licensees and certain other entities to determine whether they are variable interest entities (“VIEs”) of which we are the primary beneficiary and thus would require consolidation in our financial statements.
To date we have concluded that none of our licensees represent VIEs.
−Removed: During the second and third fiscal quarters of 2022, we were the primary beneficiary of one VIE by virtue of our control over the activities that most significantly impact the entity’s economic performance.
−Removed: This VIE was created to effect a Section 1031 like-kind exchange involving the purchase of real property in Tampa, Florida, for $ 7,668 during the second quarter of 2022 and the sale of real property in Houston, Texas for $ 8,217 during the third quarter of 2022 for the purpose of deferring approximately $ 4,300 of the taxable gain resulting from the sale of the Houston property.
−Removed: Subsequent to the completion of the exchange transactions during the third quarter of fiscal 2022, the sole equity interest in the VIE was transferred to Bassett and the entity is now consolidated as a wholly owned subsidiary.
Revenue from the sale of furniture and accessories is reported in the accompanying condensed consolidated statements of operations net of estimates for returns and allowances.
−Removed: On January 31, 2022, we entered into a definitive agreement to sell substantially all of the assets of our wholly-owned subsidiary, Zenith Freight Lines, LLC (“Zenith”) to J.B.
−Removed: Hunt Transport Services, Inc.
−Removed: (“J.B.
−Removed: Hunt”).
−Removed: The sale was completed on February 28, 2022.
−Removed: Accordingly, the operations of our logistical services segment for the three and nine months ended August 27, 2022 are presented in the accompanying condensed consolidated statements of operations as discontinued operations.
−Removed: See Note 12, Discontinued Operations, for additional information.
−Removed: Costs incurred by Bassett for logistical services performed for Bassett by Zenith were included in selling, general and administrative expenses for the nine months ended August 27, 2022.
−Removed: On September 2, 2022, we acquired 100 % of the capital stock of Noa Home Inc.
−Removed: (“Noa Home”), a mid-priced e-commerce furniture retailer headquartered in Montreal, Canada.
−Removed: Noa Home has operations in Canada, Australia, Singapore and the United Kingdom.
−Removed: Since acquisition, Noa Home has been consolidated as a wholly-owned subsidiary.
−Removed: See Note 3 for additional information.
−Removed: Certain prior year amounts have been reclassified to conform to the current year presentation (see Note 13, Segments).
+Added: Our fiscal year, which ends on the last Saturday of November, periodically results in a 53-week year instead of the normal 52 weeks.
+Added: The current fiscal year ending November 30, 2024 is a 53-week year, with the additional week being included in our first fiscal quarter.
+Added: Accordingly, the information presented below includes 14 weeks of operations for the quarter ended March 2, 2024 as compared with 13 weeks included in the quarter ended February 25, 2023.
Interim Financial Presentation and Other Information
All intercompany accounts and transactions have been eliminated in the condensed consolidated financial statements.
−Removed: The results of operations for the three and nine months ended August 26, 2023 are not necessarily indicative of results for the full fiscal year.
+Added: The results of operations for the three months ended March 2, 2024 are not necessarily indicative of results for the full fiscal year.
These interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended November 25, 2023.
1 unchanged sentence
Any change in annual projections of pretax income could have a significant impact on our effective tax rate for the respective quarter.
−Removed: PART I-FINANCIAL INFORMATION-CONTINUED
−Removed: BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES
−Removed: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-UNAUDITED
−Removed: AUGUST 26, 2023
−Removed: (Dollars in thousands except share and per share data)
−Removed: Our effective tax rate was 18.8 % and 43.3 % for the three and nine months ended August 26, 2023, respectively, and 22.8 % and 25.6 % for the three and nine months ended August 27, 2022, respectively.
−Removed: The effective rate for the three months ended August 26, 2023 differs from the federal statutory rate of 21 % primarily due the effect of a change in our estimate of annual pretax income on our anticipated effective rate for the full year, offset by increases in the valuation allowance placed on deferred tax assets associated with Noa Home and the effects of state income taxes and various permanent differences.
−Removed: For the nine months ended August 26, 2023, the effective rate differs from the federal statutory rate primarily due to the non-taxable gain on revaluation of contingent consideration associated with the acquisition of Noa Home (see Note 3), offset by increases in the valuation allowance placed on deferred tax assets associated with Noa Home and the effects of state income taxes and various permanent differences.
−Removed: For the three and nine months ended August 27, 2022, the effective rates differ from the federal statutory rate of 21 % primarily due to the effects of state income taxes and various permanent differences, including those associated with Company-owned life insurance, and a tax of $ 522 for the nine months ended August 27, 2022 associated with the non-deductible goodwill written off in connection with the sale of Zenith and included in income tax on discontinued operations.
+Added: Our effective tax rate was 30.0 % and 36.8 % for the three months ended March 2, 2024 and February 25, 2023, respectively.
+Added: The effective rates for the three months ended March 2, 2024 and February 25, 2023 differ from the federal statutory rate of 21 % primarily due to increases in the valuation allowance placed on deferred tax assets associated with Noa Home Inc.
+Added: (“Noa Home”), the effects of state income taxes and various permanent differences.
Non-cash Investing and Financing Activity
−Removed: During the nine months ended August 26, 2023 and August 27, 2022, $ 6,026 and $ 6,957 , respectively, of lease right-of-use assets were added through the recognition of the corresponding lease obligations.
−Removed: Business Combinations
−Removed: On September 2, 2022, we acquired 100 % of the capital stock of Noa Home, a mid-priced e-commerce furniture retailer headquartered in Montreal, Canada.
−Removed: Noa Home has operations in Canada, Australia, Singapore and the United Kingdom.
−Removed: The initial purchase price (denominated in Canadian dollars) of approximately C$ 7,700 included cash payments of C$ 2,000 paid to the co-founders of Noa Home and approximately C$ 5,700 for the repayment of existing debt owed by Noa Home.
−Removed: Per the terms of the agreement at the acquisition date, the Noa Home co-founders also had the opportunity to receive additional cash payments totaling approximately C$ 1,330 per year for the three fiscal years following the year of acquisition based on established increases in net revenues and achieving certain internal EBITDA goals.
−Removed: Under the acquisition method of accounting, the fair value of the consideration transferred was allocated to the tangible and intangible assets acquired and the liabilities assumed based on their estimated fair values as of the acquisition date with the remaining unallocated amount recorded as goodwill.
−Removed: PART I-FINANCIAL INFORMATION-CONTINUED
−Removed: BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES
−Removed: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-UNAUDITED
−Removed: AUGUST 26, 2023
−Removed: (Dollars in thousands except share and per share data)
−Removed: The allocation of the fair value of the acquired business has been based on a preliminary valuation.
−Removed: Our estimates and assumptions are subject to change as we obtain additional information for our estimates during the measurement period (up to one year from the acquisition date).
−Removed: The primary areas of the preliminary allocation of the fair value of consideration transferred that are not yet finalized relate to the fair values of certain tangible and intangible assets acquired and the residual goodwill.
−Removed: As of August 26, 2023, there have been no changes to the preliminary allocation of the purchase price (translated into U.S.
−Removed: dollars as of the acquisition date) which is as follows:
−Removed: Fair value of consideration given in exchange for 100% of Noa Home:
−Removed: Fair value of contingent consideration as of acquisition date
−Removed: Total fair value of consideration given
−Removed: Allocation of the fair value of consideration transferred:
−Removed: Identifiable assets acquired:
−Removed: Other current assets
−Removed: Property & equipment
−Removed: Intangible asset - trade name
−Removed: Total identifiable assets acquired
−Removed: Liabilities assumed:
−Removed: Accounts payable
−Removed: Customer deposits
−Removed: Other current liabilities and accrued expenses
−Removed: Total liabilities assumed
−Removed: Net identifiable assets acquired
−Removed: Total net assets acquired
−Removed: Goodwill was determined based on the residual difference between the fair value of the consideration transferred and the value assigned to the tangible and intangible assets and liabilities recognized in connection with the acquisition and is deductible for tax purposes.
−Removed: Among the factors that contributed to a purchase price resulting in the recognition of goodwill are the expected synergies arising from combining the Company’s manufacturing and distribution capabilities with Noa Home’s position in the international e-commerce market for home furnishings and accessories.
−Removed: A portion of the fair value of the consideration transferred in the amount of $ 1,929 has been assigned to the identifiable intangible asset associated with the Noa Home trade name.
−Removed: This intangible asset is considered to have an indefinite life.
−Removed: The indefinite-lived intangible asset and goodwill are not amortized but will be tested for impairment annually or between annual tests if an indicator of impairment exists and the Company determines it is more likely than not that the fair value of the goodwill is below its book value.
−Removed: The fair values of consideration transferred and net assets acquired were determined using a combination of Level 2 and Level 3 inputs as specified in the fair value hierarchy in ASC 820, Fair Value Measurements and Disclosures .
−Removed: Subsequent to the acquisition date, the parties concluded that the targets originally set forth by which the Noa Home co-founders were to earn the contingent consideration would likely not be met within the initially anticipated time frame.
−Removed: Therefore, we have agreed to replace the contingent consideration with two fixed payments of C$ 200 each, the first of which was paid in June of 2023 with the second to be paid in December of 2024.
−Removed: As a result of the write-down of the contingent consideration payable that was recognized at the acquisition date, we recorded a gain of $ 1,013 for the nine months ended August 26, 2023.
−Removed: The revenues and results of operations of Noa Home for the three and nine months ended August 26, 2023 were not material.
−Removed: The pro forma impact of the acquisition has not been presented because it was not material to our consolidated results of operations for the three and nine months ended August 27, 2022.
+Added: During the three months ended March 2, 2024 and February 25, 2023, $ 3,044 and $ 3,406 , respectively, of lease right-of-use assets were added through the recognition of the corresponding lease obligations.
PART I-FINANCIAL INFORMATION-CONTINUED
1 unchanged sentence
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-UNAUDITED
−Removed: AUGUST 26, 2023
+Added: MARCH 2, 2024
(Dollars in thousands except share and per share data)
3 unchanged sentences
Because of their short maturities, the carrying amounts of cash and cash equivalents, short-term investments in CDs, accounts receivable, and accounts payable approximate fair value.
−Removed: Our short-term investments of $ 17,743 and $ 17,715 at August 26, 2023 and November 26, 2022 consisted of CDs.
−Removed: At August 26, 2023, the CDs had original terms averaging seven months, bearing interest at rates ranging from 0.7 % to 5.45 %.
−Removed: At August 26, 2023, the weighted average remaining time to maturity of the CDs was approximately six months and the weighted average yield of the CDs was approximately 5.09 %.
+Added: Our short-term investments of $ 17,775 at both March 2, 2024 and November 25, 2023 consisted of CDs.
+Added: At March 2, 2024, the CDs had original terms averaging seven months, bearing interest at rates ranging from 0.7 % to 5.45 % and the weighted average remaining time to maturity was approximately five months and the weighted average yield of the CDs was approximately 5.04 %.
Each CD is placed with a federally insured financial institution and all deposits are within federal deposit insurance limits.
−Removed: Due to the nature of these investments and their relatively short maturities, the carrying amount of the short-term investments at August 26, 2023 and November 26, 2022 approximates their fair value.
+Added: Due to the nature of these investments and their relatively short maturities, the carrying amount of the short-term investments at March 2, 2024 and November 25, 2023 approximates their fair value.
Accounts Receivable
Accounts receivable consists of the following:
−Removed: August 26, 2023
+Added: March 2, 2024
November 25, 2023
6 unchanged sentences
Actual credit losses could differ from those estimates.
−Removed: Activity in the allowance for credit losses for the nine months ended August 26, 2023 was as follows:
+Added: Activity in the allowance for credit losses for the three months ended March 2, 2024 was as follows:
Balance at November 25, 2023
1 unchanged sentence
Write-offs against allowance
−Removed: Balance at August 26, 2023
+Added: Balance at March 2, 2024
We believe that the carrying value of our net accounts receivable approximates fair value.
4 unchanged sentences
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-UNAUDITED
−Removed: AUGUST 26, 2023
+Added: MARCH 2, 2024
(Dollars in thousands except share and per share data)
2 unchanged sentences
Inventories were comprised of the following:
−Removed: August 26, 2023
+Added: March 2, 2024
November 25, 2023
21 unchanged sentences
Additions charged to expense
−Removed: Balance at August 26, 2023
+Added: Balance at March 2, 2024
Our estimates and assumptions have been reasonably accurate in the past.
3 unchanged sentences
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-UNAUDITED
−Removed: AUGUST 26, 2023
+Added: MARCH 2, 2024
(Dollars in thousands except share and per share data)
1 unchanged sentence
Goodwill and other intangible assets consisted of the following:
−Removed: August 26, 2023
+Added: March 2, 2024
Gross Carrying
−Removed: Accumulated Amortization
Intangibles subject to amortization
4 unchanged sentences
Gross Carrying
−Removed: Accumulated Amortization
Intangibles subject to amortization
2 unchanged sentences
Total goodwill and other intangible assets
−Removed: Changes in the carrying amounts of goodwill by reportable segment were as follows:
−Removed: Corporate & Other
−Removed: Balance as of November 26, 2022
−Removed: Foreign currency translation adjustments
−Removed: Balance as of August 26, 2023
−Removed: Accumulated impairment losses at both August 26, 2023 and November 26, 2022 were $ 3,897 .
−Removed: Due to the decline in the share price of our common stock through the end of the third quarter of 2023, we performed a qualitative analysis of our goodwill as of August 26, 2023 and concluded that it was not more likely than not that the carrying value of our reporting units with goodwill exceeded their fair values.
+Added: There were no changes in the carrying amounts of goodwill during the three months ended March 2, 2024.
+Added: The carrying amounts of goodwill by reportable segment, including accumulated impairment losses, at both March 2, 2024 and November 25, 2023 were as follows:
+Added: Corporate and other
+Added: Total goodwill
PART I-FINANCIAL INFORMATION-CONTINUED
1 unchanged sentence
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-UNAUDITED
−Removed: AUGUST 26, 2023
+Added: MARCH 2, 2024
(Dollars in thousands except share and per share data)
−Removed: Amortization expense associated with intangible assets during the three and nine months ended August 26, 2023 and August 27, 2022 was as follows:
+Added: Amortization expense associated with intangible assets during the three months ended March 2, 2024 and February 25, 2023 was as follows:
Quarter Ended
−Removed: Nine Months Ended
−Removed: August 26, 2023
−Removed: August 27, 2022
−Removed: August 26, 2023
−Removed: August 27, 2022
+Added: March 2, 2024
+Added: February 25, 2023
Intangible asset amortization expense
−Removed: Estimated future amortization expense for intangible assets that exist at August 26, 2023 is as follows:
+Added: Estimated future amortization expense for intangible assets that exist at March 2, 2024 is as follows:
Remainder of fiscal 2024
1 unchanged sentence
Our bank credit facility provides for a line of credit of up to $ 25,000 .
−Removed: At August 26, 2023, we had $ 3,731 outstanding under standby letters of credit against our line, leaving availability under our credit line of $ 21,269 .
−Removed: The line bears interest at the One-Month Term Secured Overnight Financing Rate (“One-Month Term SOFR”) plus 1.5 % and is unsecured.
+Added: At March 2, 2024, we had $ 3,731 outstanding under standby letters of credit against our line, leaving availability under our credit line of $ 21,269 .
+Added: The line bears interest at the One-Month Term Secured Overnight Financing Rate (“One-Month Term SOFR”) plus 1.5 % and is unsecured.
Our bank charges a fee of 0.25 % on the daily unused balance of the line, payable quarterly.
−Removed: Under the terms of the bank credit facility, we must maintain the following financial covenants, measured quarterly on a rolling twelve-month basis:
+Added: Under the terms of the facility, we must maintain the following financial covenants, measured quarterly on a rolling twelve-month basis:
Consolidated fixed charge coverage ratio of not less than 1.4 times,
1 unchanged sentence
Minimum tangible net worth of $ 140,000 .
−Removed: We were in compliance with these covenants at August 26, 2023.
−Removed: The credit facility will mature on January 27, 2025, at which time any amounts outstanding under the facility will be due.
+Added: Due to our results of operations in 2023, we were not in compliance with certain of these covenants at the end of our 2023 fiscal year.
+Added: Consequently, our bank agreed to reduce the consolidated fixed charge coverage ratio to 1.0 times and increase the consolidated lease-adjusted leverage ratio to 3.75 times, as defined, for the year ended November 25, 2023 and the quarter ended March 2, 2024.
+Added: We were in compliance with the amended covenants at November 25, 2023 and at March 2, 2024.
+Added: The respective ratios will revert back to the previous values for the quarter ending June 1, 2024.
+Added: We are in negotiations with our bank and plan to have an amended, restated or new agreement with a similar line of credit in place by the end of the second quarter of 2024.
Post Employment Benefit Obligations
Defined Benefit Plans
−Removed: We have an unfunded Supplemental Retirement Income Plan (the “Supplemental Plan”) that covers one current and certain former executives.
−Removed: The liability for the Supplemental Plan was $ 6,049 and $ 5,987 as of August 26, 2023 and November 26, 2022, respectively.
−Removed: We also have the Bassett Furniture Industries, Incorporated Management Savings Plan (the “Management Savings Plan”) which was established in the second quarter of fiscal 2017.
−Removed: The Management Savings Plan is an unfunded, nonqualified deferred compensation plan maintained for the benefit of certain highly compensated or management level employees.
−Removed: As part of the Management Savings Plan, we have made Long Term Cash Awards (“LTC Awards”) totaling $ 2,000 to certain management employees in the amount of $ 400 each.
−Removed: The liability for the LTC Awards was $ 1,350 and $ 1,275 as of August 26, 2023 and November 26, 2022, respectively.
+Added: We have an unfunded Supplemental Retirement Income Plan (the “Supplemental Plan”) that covers one current and certain former executives.
+Added: The liability for the Supplemental Plan was $ 5,784 and $ 5,778 as of March 2, 2024 and November 25, 2023, respectively.
PART I-FINANCIAL INFORMATION-CONTINUED
1 unchanged sentence
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-UNAUDITED
−Removed: AUGUST 26, 2023
+Added: MARCH 2, 2024
(Dollars in thousands except share and per share data)
+Added: We also have the Bassett Furniture Industries, Incorporated Management Savings Plan (the “Management Savings Plan”) which was established in the second quarter of fiscal 2017.
+Added: The Management Savings Plan is an unfunded, nonqualified deferred compensation plan maintained for the benefit of certain highly compensated or management level employees.
+Added: As part of the Management Savings Plan, we have made Long Term Cash Awards (“LTC Awards”) totaling $ 2,000 to five management employees in the amount of $ 400 each.
+Added: Currently, two of those employees have retired and are receiving benefits.
+Added: The liability for the LTC Awards was $ 1,257 and $ 1,234 as of March 2, 2024 and November 25, 2023, respectively.
The combined pension liability for the Supplemental Plan and LTC Awards is recorded as follows in the condensed consolidated balance sheets:
−Removed: August 26, 2023
+Added: March 2, 2024
November 25, 2023
2 unchanged sentences
Total pension liability
−Removed: Components of net periodic pension costs for our defined benefit plans for the three and nine months ended August 26, 2023 and August 27, 2022 are as follows:
+Added: Components of net periodic pension costs for our defined benefit plans for the three months ended March 2, 2024 and November 25, 2023 are as follows:
Quarter Ended
−Removed: Nine Months Ended
−Removed: August 26, 2023
−Removed: August 27, 2022
−Removed: August 26, 2023
−Removed: August 27, 2022
+Added: March 2, 2024
+Added: February 25, 2023
Interest cost
6 unchanged sentences
This plan has been frozen with no additional participants or deferrals permitted.
−Removed: Our liability under this plan was $ 1,645 and $ 1,616 as of August 26, 2023 and November 26, 2022, respectively.
+Added: Our liability under this plan was $ 1,642 and $ 1,655 as of March 2, 2024 and November 25, 2023, respectively.
We also have an unfunded, nonqualified deferred compensation plan maintained for the benefit of certain highly compensated or management level employees which was established under the Management Savings Plan.
−Removed: Our liability under this plan, including both accrued Company contributions and participant salary deferrals, was $ 2,618 and $ 2,070 as of August 26, 2023 and November 26, 2022, respectively.
+Added: Our liability under this plan, including both accrued Company contributions and participant salary deferrals, was $ 3,117 and $ 2661 as of March 2, 2024 and November 25, 2023, respectively.
Our combined liability for all deferred compensation arrangements, including Company contributions and participant deferrals under the Management Savings Plan, is recorded as follows in the condensed consolidated balance sheets:
−Removed: August 26, 2023
+Added: March 2, 2024
November 25, 2023
5 unchanged sentences
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-UNAUDITED
−Removed: AUGUST 26, 2023
+Added: MARCH 2, 2024
(Dollars in thousands except share and per share data)
−Removed: We recognized expense under our deferred compensation arrangements during the three and nine months ended August 26, 2023 and August 27, 2022 as follows:
+Added: We recognized expense under our deferred compensation arrangements during the three months ended March 2, 2024 and February 25, 2023 as follows:
Quarter Ended
−Removed: Nine Months Ended
−Removed: August 26, 2023
−Removed: August 27, 2022
−Removed: August 26, 2023
−Removed: August 27, 2022
+Added: March 2, 2024
+Added: February 25, 2023
Deferred compensation expense (benefit)
3 unchanged sentences
Lease Guarantees
−Removed: We were contingently liable under a licensee lease obligation guarantee in the amounts of $ 1,906 and $ 1,880 at August 26, 2023 and November 26, 2022, respectively.
−Removed: The remaining term under this lease guarantee extends for five years.
−Removed: In the event of default by an independent dealer under the guaranteed lease, we believe that the risk of loss is mitigated through a combination of options that include, but are not limited to, arranging for a replacement dealer or liquidating the collateral (primarily inventory).
+Added: We were contingently liable under a licensee lease obligation guarantee in the amounts of $ 1,750 and $ 1,845 at March 2, 2024 and November 25, 2023, respectively.
+Added: The remaining term under this lease guarantee extends for four and a half years.
+Added: In the event of default by the licensee, we believe that the risk of loss is mitigated through a combination of options that include, but are not limited to, arranging for a replacement licensee or liquidating the collateral (primarily inventory).
The proceeds of the above options are expected to cover the estimated amount of our future payments under the guarantee obligation, net of recorded reserves.
−Removed: The fair value of this lease guarantee (an estimate of the cost to the Company to perform on the guarantee) at August 26, 2023 and November 26, 2022 was not material.
−Removed: PART I-FINANCIAL INFORMATION-CONTINUED
−Removed: BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES
−Removed: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-UNAUDITED
−Removed: AUGUST 26, 2023
−Removed: (Dollars in thousands except share and per share data)
+Added: The fair value of this lease guarantee (an estimate of the cost to the Company to perform on the guarantee) at March 2, 2024 and November 25, 2023 was not material.
Earnings (Loss) Per Share
1 unchanged sentence
Weighted Average
−Removed: For the quarter ended August 26, 2023:
−Removed: Basic loss per share - continuing operations
+Added: For the quarter ended March 2, 2024:
+Added: Basic loss per share
Add effect of dilutive securities:
1 unchanged sentence
Diluted loss per share - continuing operations
−Removed: For the quarter ended August 27, 2022:
−Removed: Basic earnings per share - continuing operations
−Removed: Add effect of dilutive securities:
−Removed: Options and restricted shares
−Removed: Diluted earnings per share - continuing operations
−Removed: Basic loss per share - discontinued operations
−Removed: Add effect of dilutive securities:
−Removed: Options and restricted shares*
−Removed: Diluted loss per share - discontinued operations
−Removed: For the nine months ended August 26, 2023:
−Removed: Basic earnings per share - continuing operations
−Removed: Add effect of dilutive securities:
−Removed: Restricted shares
−Removed: Diluted earnings per share - continuing operations
−Removed: For the nine months ended August 27, 2022:
−Removed: Basic earnings per share - continuing operations
−Removed: Add effect of dilutive securities:
−Removed: Options and restricted shares
−Removed: Diluted earnings per share - continuing operations
−Removed: Basic earnings per share - discontinued operations
+Added: For the quarter ended February 25, 2023:
+Added: Basic earnings per share
Add effect of dilutive securities:
Options and restricted shares
−Removed: Diluted earnings per share - discontinued operations
+Added: Diluted earnings per share
*Due to the net loss for the period, potentially dilutive securities would have been anti-dilutive and are therefore excluded.
2 unchanged sentences
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-UNAUDITED
−Removed: AUGUST 26, 2023
+Added: MARCH 2, 2024
(Dollars in thousands except share and per share data)
−Removed: For the three and nine months ended August 26, 2023 and August 27, 2022, the following potentially dilutive shares were excluded from the computations as their effect was anti-dilutive:
+Added: For the three months ended March 2, 2024 and February 25, 2023, the following potentially dilutive shares were excluded from the computations as their effect was anti-dilutive:
Quarter Ended
−Removed: Nine Months Ended
−Removed: August 26, 2023
−Removed: August 27, 2022
−Removed: August 26, 2023
−Removed: August 27, 2022
+Added: March 2, 2024
+Added: February 25, 2023
Unvested shares
−Removed: Discontinued Operations
−Removed: On January 31, 2022, we entered into a definitive agreement to sell substantially all of the assets of Zenith to J.B.
−Removed: The sale was completed on February 28, 2022.
−Removed: During the second quarter of fiscal 2022, we received the following net proceeds:
−Removed: Sales price prior to post-closing working capital adjustment
−Removed: Amount held in escrow for contingencies related to representations and warranties (1)
−Removed: Seller expenses paid at closing
−Removed: Working capital adjustment paid to buyer
−Removed: Net proceeds from the sale
−Removed: This was held in escrow until the first anniversary of the sale, at which time the full amount was released to the Company on March 2, 2023.
−Removed: As of November 26, 2022, this amount is included in other current assets in the accompanying condensed consolidated balance sheets.
−Removed: The sales price was subject to customary post-closing working capital adjustments.
−Removed: For the three and nine months ended August 27, 2022 we recognized a pre-tax gain (less post-closing adjustments) on the sale of $ (193) and $ 53,061 , respectively.
−Removed: Upon final settlement of the post-closing adjustments, which were paid in the second half of fiscal 2022, the final pre-tax gain was $ 52,534 .
−Removed: The operations of our logistical services segment, which consisted entirely of the operations of Zenith, are presented in the accompanying condensed consolidated statements of operations as discontinued operations.
−Removed: The following table summarizes the major classes of line items constituting income of the discontinued operations, as reported in the condensed consolidated statements of operations for the three and nine months ended August 27, 2022:
−Removed: Quarter Ended
−Removed: Nine Months Ended
−Removed: August 27, 2022
−Removed: August 27, 2022
−Removed: Major line items constituting pretax income of discontinued operations:
−Removed: Logistical services revenue
−Removed: Cost of logistical services
−Removed: Other loss, net
−Removed: Income from operations of logistical services
−Removed: Gain on disposal (less adjustments)
−Removed: Pretax income (loss) of discontinued operations
−Removed: Income tax expense (benefit)
−Removed: Income (loss) from discontinued operations, net of tax
−Removed: PART I-FINANCIAL INFORMATION-CONTINUED
−Removed: BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES
−Removed: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-UNAUDITED
−Removed: AUGUST 26, 2023
−Removed: (Dollars in thousands except share and per share data)
−Removed: The amounts for revenue and costs of logistical services shown above represent the results of Zenith’s business transactions with third parties.
−Removed: Zenith also charged Bassett for logistical services provided to our wholesale segment in the amount of $ 9,121 during the nine months ended August 27, 2022.
−Removed: Upon the sale of Zenith we entered into a service agreement with J.B.
−Removed: Hunt for the continuation of these services for a period of seven years.
−Removed: We incurred expense for logistical services performed by J.B.
−Removed: Hunt of $ 6,278 and $ 21,429 during the three and nine months ended August 26, 2023, respectively, and $ 10,307 and $ 19,852 for the three and nine months ended August 27, 2022, respectively.
−Removed: Included in other loss, net, is interest arising from finance leases assumed by J.B.
−Removed: Hunt as part of the transaction.
−Removed: Such interest amounted to $ 78 for the nine months ended August 27, 2022.
−Removed: The following table summarizes the cash flows generated by discontinued operations during the nine months ended August 27, 2022:
−Removed: Nine Months Ended
−Removed: August 27, 2022
−Removed: Cash provided by operating activities
−Removed: Cash used in investing activities
−Removed: Cash used in financing activities
−Removed: Net cash provided by discontinued operations
Segment Information
−Removed: As of the beginning of fiscal 2023 we have strategically aligned our business into three reportable segments as defined in ASC 280, Segment Reporting , and as described below:
+Added: We have strategically aligned our business into three reportable segments as defined in ASC 280, Segment Reporting , and as described below:
The wholesale home furnishings segment is involved principally in the design, manufacture, sourcing, sale and distribution of furniture products to a network of Bassett stores (Company-owned and licensee-owned retail stores) and independent furniture retailers.
Our wholesale segment includes our wood and upholstery operations, which includes Lane Venture.
−Removed: Retail –
−Removed: Company-owned stores.
+Added: Retail – Company-owned stores.
Our retail segment consists of Company-owned stores and includes the revenues, expenses, assets and liabilities and capital expenditures directly related to these stores and the Company-owned distribution network utilized to deliver products to our retail customers.
−Removed: Corporate and other –
−Removed: Corporate and other includes the shared costs of corporate functions such as treasury and finance, information technology, accounting, human resources, legal and others, including certain product development and marketing functions benefitting both wholesale and retail operations.
+Added: Corporate and other – Corporate and other includes the shared costs of corporate functions such as treasury and finance, information technology, accounting, human resources, legal and others, including certain product development and marketing functions benefitting both wholesale and retail operations.
In addition to property and equipment and various other assets associated with the shared corporate functions, the identifiable assets of Corporate and other include substantially all of our cash and our investments in CDs.
−Removed: We consider our corporate functions to be other business activities and have aggregated them with our other insignificant operating segment, the recently acquired Noa Home (see Note 3).
+Added: We consider our corporate functions to be other business activities and have aggregated them with our other insignificant operating segment, Noa Home, which was acquired on September 2, 2022.
Inter-company net sales elimination represents the elimination of wholesale sales to our Company-owned stores.
2 unchanged sentences
The inter-company income elimination also includes rent paid by our retail stores occupying Company-owned real estate.
−Removed: Prior to the beginning of fiscal 2023, the functions included in Corporate and other were included in our wholesale reportable segment, and Noa Home was included in our retail reportable segment for the fourth quarter of fiscal 2022 following its acquisition on September 2, 2022.
−Removed: We believe that the new alignment of our reporting segments provides our chief operating decision maker with clearer information with which to assess the operating results of our wholesale segment.
−Removed: Noa Home does not meet the requirements to be a separate reportable segment as it is below the thresholds of the revenue, income and asset tests.
−Removed: The segment information presented below for the three and nine months ended August 27, 2022 and as of November 26, 2022 has been restated to reflect the new alignment of our reportable segments.
PART I-FINANCIAL INFORMATION-CONTINUED
1 unchanged sentence
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-UNAUDITED
−Removed: AUGUST 26, 2023
+Added: MARCH 2, 2024
(Dollars in thousands except share and per share data)
−Removed: Our former logistical services segment which represented the operations of Zenith is now presented as a discontinued operation in the accompanying condensed consolidated balances sheets and statements of operations (see Note 12).
The following table presents our segment information:
Quarter Ended
−Removed: Nine Months Ended
−Removed: August 26, 2023
−Removed: August 27, 2022
−Removed: August 26, 2023
−Removed: August 27, 2022
+Added: March 2, 2024
+Added: February 25, 2023
Sales Revenue
9 unchanged sentences
Inter-company elimination
−Removed: Gain on revaluation of contingent consideration
−Removed: Gain on sale of real estate
Depreciation and Amortization
4 unchanged sentences
Corporate and other
−Removed: August 26, 2023
−Removed: November 26, 2022
Identifiable Assets
+Added: March 2, 2024
+Added: November 25, 2023
Retail - Company-owned stores
4 unchanged sentences
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-UNAUDITED
−Removed: AUGUST 26, 2023
+Added: MARCH 2, 2024
(Dollars in thousands except share and per share data)
6 unchanged sentences
We typically collect a significant portion of the purchase price from our retail customers as a deposit upon order, with the balance typically collected at the time delivery is scheduled.
−Removed: These customer deposits are carried on our balance sheet as a current liability until delivery is fulfilled and amounted to $ 23,626 and $ 35,963 as of August 26, 2023 and November 26, 2022, respectively.
−Removed: Substantially all of the customer deposits held at November 26, 2022 were satisfied during the current year-to-date period and have therefore been recognized in revenue for the nine months ended August 26, 2023.
+Added: These customer deposits are carried on our balance sheet as a current liability until delivery is fulfilled and amounted to $ 22,763 and $ 22,788 as of March 2, 2024 and November 25, 2023, respectively.
+Added: Approximately 85 % of the customer deposits held as of November 25, 2023 related to performance obligations that were satisfied during the current year-to-date period and have therefore been recognized in revenue for the three months ended March 2, 2024.
Sales commissions are expensed as part of selling, general and administrative expenses at the time revenue is recognized because the amortization period would have been one year or less.
1 unchanged sentence
Sales commissions at retail are accrued at the time a sale is written (i.e.
−Removed: when the customer’s order is placed) and are carried as prepaid commissions in other current assets until the goods are delivered and revenue is recognized.
−Removed: At August 26, 2023 and November 26, 2022, our balance of prepaid commissions included in other current assets was $ 2,374 and $ 3,768 , respectively.
+Added: – when the customer’s order is placed) and are carried as prepaid commissions in other current assets until the goods are delivered and revenue is recognized.
+Added: At March 2, 2024 and November 25, 2023, our balance of prepaid commissions included in other current assets was $ 2,451 and $ 2,245 , respectively.
We exclude from revenue all amounts collected from customers for sales tax.
We do not disclose amounts allocated to remaining unsatisfied performance obligations as they are expected to be satisfied within one year or less.
−Removed: Disaggregated revenue information for sales of furniture and accessories by product category for the three and nine months ended August 26, 2023 and August 27, 2022, excluding intercompany transactions between our segments, is a follows:
+Added: Disaggregated revenue information for sales of furniture and accessories by product category for the three months ended March 2, 2024 and February 25, 2023, excluding intercompany transactions between our segments, is a follows:
Quarter Ended
−Removed: August 26, 2023
−Removed: August 27, 2022
−Removed: Bassett Custom Upholstery
−Removed: Bassett Leather
−Removed: Bassett Custom Wood
−Removed: Bassett Casegoods
−Removed: Accessories, mattresses and other (1)
−Removed: Consolidated net sales of furniture and accessories
−Removed: Nine Months Ended
−Removed: August 26, 2023
−Removed: August 27, 2022
+Added: March 2, 2024
+Added: February 25, 2023
Corporate & Other (2)
7 unchanged sentences
Includes the sale of goods other than Bassett-branded products, such as accessories and bedding, and also includes the sale of furniture protection plans.
−Removed: (2) Our Corporate and other segment for the three and nine months ended August 26, 2023 includes the sales of Noa Home, which was acquired on September 2, 2022 (see Note 3).
+Added: Our Corporate and other segment for the three months ended March 2, 2024 and February 25, 2023 includes the sales of Noa Home.
PART I-FINANCIAL INFORMATION-CONTINUED
1 unchanged sentence
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-UNAUDITED
−Removed: AUGUST 26, 2023
+Added: MARCH 2, 2024
(Dollars in thousands except share and per share data)
−Removed: Changes to Stockholders ’
−Removed: The following changes in our stockholders’
−Removed: equity occurred during the three and nine months ended August 26, 2023 and August 27, 2022:
+Added: Changes to Stockholders ’ Equity
+Added: The following changes in our stockholders’ equity occurred during the three months ended March 2, 2024 and February 25, 2023:
Quarter Ended
−Removed: Nine Months Ended
−Removed: August 26, 2023
−Removed: August 27, 2022
−Removed: August 26, 2023
−Removed: August 27, 2022
+Added: March 2, 2024
+Added: February 25, 2023
Common Stock:
25 unchanged sentences
End of period
−Removed: The balance of cumulative translation adjustments, net of tax, was a net loss of $ 378 and $ 204 at August 26, 2023 and November 26, 2022, respectively.
+Added: The balance of cumulative translation adjustments, net of tax, was a net loss of $ 654 and $ 486 at March 2, 2024 and November 25, 2023, respectively.
PART I-FINANCIAL INFORMATION-CONTINUED
1 unchanged sentence
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-UNAUDITED
−Removed: AUGUST 26, 2023
+Added: MARCH 2, 2024
(Dollars in thousands except share and per share data)
Recent Accounting Pronouncements
−Removed: In October 2021, the FASB issued Accounting Standards Update No.
−Removed: 2021-08 –
−Removed: Business Combinations (Topic 805) Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, to improve the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency related to the recognition of an acquired contract liability and to payment terms and their effect on subsequent revenue recognized by the acquirer.
−Removed: The amendments in ASU 2021-08 require that an entity (acquirer) recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606.
−Removed: At the acquisition date, an acquirer should account for the related revenue contracts in accordance with Topic 606 as if it had originated the contracts.
−Removed: The amendments in ASU 2021-08 will become effective for us as of the beginning of our 2024 fiscal year.
−Removed: Early adoption is permitted, including adoption in any interim period.
−Removed: We do not expect that this guidance will have a material impact upon our financial position and results of operations.
−Removed: In March 2022, the FASB issued Accounting Standards Update No.
−Removed: 2022-02 –
−Removed: Financial Instruments –
−Removed: Credit Losses (Topic 326):
−Removed: Troubled Debt Restructurings and Vintage Disclosures, to address certain concerns identified in the Post-Implementation Review process for ASU Topic 326.
−Removed: The amendments in ASU 2022-02 eliminate the accounting guidance for troubled debt restructurings by creditors in ASC Subtopic 310-40, Receivables –
−Removed: Troubled Debt Restructurings by Creditors, while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty.
−Removed: In addition, for public business entities, the amendments in ASU 2022-02 require that an entity disclose current-period gross write-offs by year of origination for financing receivables and net investments in leases within the scope of ASC Subtopic 326-20, Financial Instruments –
−Removed: Credit Losses –
−Removed: Measured at Amortized Cost.
−Removed: The amendments in ASU 2022-02 will become effective for us as of the beginning of our 2024 fiscal year.
−Removed: Early adoption is permitted.
−Removed: We expect that the adoption of this standard will primarily impact our disclosures but do not expect that this guidance will have a material impact upon our financial position and results of operations.
In June 2022, the FASB issued Accounting Standards Update No.
−Removed: 2022-03 –
2022-03 – Fair Value Measurement (Topic 820):
5 unchanged sentences
Early adoption is permitted.
−Removed: As of August 26, 2023 we do not hold any investments in equity securities, therefore we do not currently expect that this guidance will have a material impact upon our financial position and results of operations.
−Removed: PART I-FINANCIAL INFORMATION-CONTINUED
−Removed: BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES
−Removed: AUGUST 26, 2023
−Removed: (Dollars in thousands except share and per share data)
−Removed: Item 2. 
−Removed: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
−Removed: Safe-harbor, forward-looking statements:
−Removed: This report contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations and business of Bassett Furniture Industries, Incorporated and subsidiaries.
−Removed: Such forward-looking statements are identified by use of forward-looking words such as “
−Removed: anticipates ”, “
−Removed: believes ”, “
−Removed: plans ”, “
−Removed: estimates ”, “
−Removed: expects ”, “
−Removed: aims ”
−Removed: intends ”
−Removed: or words or phrases of similar expression.
−Removed: These forward-looking statements involve certain risks and uncertainties.
−Removed: No assurance can be given that any such matters will be realized.
−Removed: Important factors that could cause actual results to differ materially from those contemplated by such forward-looking statements include:
−Removed: fluctuations in the cost and availability of raw materials, fuel, labor, delivery costs and sourced products, including those which may result from supply chain disruptions and shortages and the imposition of new or increased duties, tariffs, retaliatory tariffs and trade limitations with respect to foreign-sourced products
−Removed: competitive conditions in the home furnishings industry
−Removed: overall retail traffic levels in stores and on the web and consumer demand for home furnishings
−Removed: ability of our customers and consumers to obtain affordable credit due to rising interest rates
−Removed: inflation and rising interest rates and resulting impacts on financial market prices of equity securities
−Removed: the profitability of the stores (independent licensees and Company-owned retail stores) which may result in future store closings
−Removed: ability to implement our Company-owned retail strategies and realize the benefits from such strategies, including our initiatives to expand and improve our digital marketing and advertising capabilities, as they are implemented
−Removed: the risk that we may not achieve the strategic benefits of our acquisition of Noa Home Inc.
−Removed: effectiveness and security of our information technology systems and possible disruptions due to cybersecurity threats, including any impacts from a network security incident;
−Removed: and the sufficiency of our insurance coverage, including cybersecurity insurance
−Removed: future tax legislation, or regulatory or judicial positions
−Removed: ability to efficiently manage the import supply chain to minimize business interruption
−Removed: concentration of domestic manufacturing, particularly of upholstery products, and the resulting exposure to business interruption from accidents, weather and other events and circumstances beyond our control
−Removed: Additionally, other risks that could cause actual results to differ materially from those contemplated by such forward-looking statements are set forth in Part I, Item 1A.
−Removed: Risk Factors in the Company’s Annual Report on Form 10-K for the fiscal year ended November 26, 2022.
−Removed: You should keep in mind that any forward-looking statement made by us in this report or elsewhere speaks only as of the date on which such forward-looking statement is made.
−Removed: New risks and uncertainties arise from time to time, and it is impossible for us to predict these events or how they may affect us.
−Removed: We have no duty to, and do not intend to, update or revise the forward-looking statements in this discussion after the date hereof, except as may be required by law.
−Removed: In light of these risks and uncertainties, you should keep in mind that the events described in any forward-looking statement made in this report or elsewhere might not occur.
−Removed: PART I-FINANCIAL INFORMATION-CONTINUED
−Removed: BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES
−Removed: AUGUST 26, 2023
−Removed: (Dollars in thousands except share and per share data)
−Removed: Bassett is a leading retailer, manufacturer and marketer of branded home furnishings.
−Removed: Our products are sold primarily through a network of Company-owned and licensee-owned branded stores under the Bassett Home Furnishings (“BHF”) name, with additional distribution through other wholesale channels including multi-line furniture stores, many of which feature Bassett galleries or design centers.
−Removed: We also sell our products through our newly-redesigned website at www.bassettfurniture.com .
−Removed: We were founded in 1902 and incorporated under the laws of Virginia in 1930.
−Removed: Our rich 121-year history has instilled the principles of quality, value, and integrity in everything we do, while simultaneously providing us with the expertise to respond to ever-changing consumer tastes and meet the demands of a global economy.
−Removed: With 89 BHF stores at August 26, 2023, we have leveraged our strong brand name in furniture into a network of Company-owned and licensed stores that focus on providing consumers with a friendly and casual environment for buying furniture and accessories. 
−Removed: Our store program is designed to provide a single source home furnishings retail store that provides a unique combination of stylish, quality furniture and accessories with a high level of customer service. 
−Removed: In order for the Bassett brand to reach markets that cannot be effectively served by our retail store network, we also distribute our products through other wholesale channels including multi-line furniture stores, many of which feature Bassett galleries or design centers.
−Removed: We use a network of over 30 independent sales representatives who have stated geographical territories.
−Removed: These sales representatives are compensated based on a standard commission rate.
−Removed: We believe this blended strategy provides us the greatest ability to effectively distribute our products throughout the United States and ultimately gain market share.  
−Removed: The BHF stores feature custom order furniture, free in-home or virtual design visits (“home makeovers”) and coordinated decorating accessories. 
−Removed: Our philosophy is based on building strong long-term relationships with each customer. 
−Removed: Sales people are referred to as “Design Consultants”
−Removed: and are trained to evaluate customer needs and provide comprehensive solutions for their home decor. 
−Removed: Until a rigorous training and design certification program is completed, Design Consultants are not authorized to perform in-home or virtual design services for our customers.
−Removed: We consider our website to be the front door to our brand experience where customers can research our furniture and accessory offerings and subsequently buy online or engage with an in-store design consultant.
−Removed: Digital outreach strategies have become the primary vehicle for brand advertising and customer acquisition.
−Removed: As a result, we have been engaged in a multi-year cross-functional digital transformation initiative with the first phase consisting of the examination and improvement of our underlying data management processes.
−Removed: During fiscal 2022, we implemented a comprehensive Product Information Management system which allows us to enhance and standardize our product development and data management and governance processes.
−Removed: This results in more consistent data that our merchandizing and sales teams can use in analyzing various product and sales trends in order to make better informed decisions.
−Removed: We also introduced a new web platform in August of 2023 that leverages world class features including enhanced customer research capabilities and streamlined navigation.
−Removed: We believe the new website will result in increased web and store traffic and e-commerce sales.
−Removed: Early feedback from customers and in-store designers has been positive and the Company looks forward to utilizing the new navigation features, coupled with fresh brand imagery, to drive an enhanced user experience. While we have made it easier to purchase on-line, we will not compromise our in-store experience or the quality of our in-home makeover capabilities.
−Removed: Through August 26, 2023, we have spent approximately $4,200 in capital and consulting on the implementation of the new website.
−Removed: During the fourth quarter of fiscal 2022 we acquired Noa Home (see Note 3 to the Consolidated Financial Statements for additional information regarding the acquisition).
−Removed: A mid-priced e-commerce furniture retailer headquartered in Montreal, Canada, Noa Home has operations in Canada, Australia, Singapore and the United Kingdom.
−Removed: With a lean staffing model, the Noa Home team has built an operational blueprint that has the potential for significant growth.
−Removed: We believe the acquisition will provide Bassett with a greater online presence and will allow us to attract more digitally native consumers.
−Removed: We are currently in the process of expanding Noa Home’s product assortment and categories offered on the Canadian website.
−Removed: In August, we introduced the Noa Home brand in the United States and will begin advertising in select markets during the fourth quarter of 2023.
−Removed: In 2018, we added outdoor furniture to our offerings with the acquisition of the Lane Venture brand.
−Removed: Our strategy is to distribute these products outside of our BHF store network through independent sales representatives each of which have a stated geographic territory.
−Removed: Using Lane Venture as a platform, we developed the Bassett Outdoor brand that is only marketed through the BHF store network.
−Removed: This allows Bassett branded products to move from inside the home to outside the home to capitalize on the growing trend of outdoor living.
−Removed: In the second quarter of 2023, we debuted the Bassett Outdoor contract line at the HD Expo Show in Las Vegas targeting the hospitality segment.
−Removed: PART I-FINANCIAL INFORMATION-CONTINUED
−Removed: BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES
−Removed: AUGUST 26, 2023
−Removed: (Dollars in thousands except share and per share data)
−Removed: We have factories in Newton, North Carolina that manufacture both stationary and motion upholstered furniture for inside the home along with our outdoor furniture offerings.
−Removed: We also have factories in Martinsville and Bassett, Virginia that assemble and finish our custom bedroom and dining offerings.
−Removed: Late in the third quarter of fiscal 2022, we purchased a facility which we had formerly leased in Haleyville, Alabama where we manufacture aluminum frames for our outdoor furniture.
−Removed: With the purchase, we also obtained two additional buildings which have allowed us to expand our footprint at that facility.
−Removed: In addition to the furniture that we manufacture domestically, we source most of our formal bedroom and dining room furniture (casegoods) and certain leather upholstery offerings from several foreign plants, primarily in Vietnam and China.
−Removed: Over 75% of our wholesale revenues are derived from products that are manufactured in the United States using a mix of domestic and globally sourced components and raw materials.
−Removed: Company-owned Retail Stores
−Removed: As we continually monitor the performance of our Company-owned retail store locations, we may occasionally determine that it is necessary to close underperforming stores in certain markets.
−Removed: During 2022, we closed three stores with the operations of one those stores being consolidated into another store in the same market.
−Removed: During the third quarter of 2023 we closed our northeast clearance center and our store located in Birmingham, Alabama.
−Removed: All of the above-mentioned closures occurred at or near the lease expirations.
−Removed: We also may occasionally identify opportunities to enhance our presence in existing markets by relocating stores to better locations within the same market.
−Removed: During 2022, we sold the store property of one of our Houston, Texas locations and leased a new 9,600 square foot store property in a more upscale shopping area in the vicinity of the former location.
−Removed: We are in the process of upfitting the store and expect to open in early 2024.
−Removed: During late 2022 at the end of the lease term, we closed our Dallas, Texas store located at the intersection of McKinney and Knox streets.
−Removed: We opened a new 11,600 square foot store in the nearby iconic Inwood Village shopping center during the first quarter of 2023.
−Removed: In 2022, we acquired a 25,000 square foot property in Tampa, Florida.
−Removed: We are in the process of upfitting the space with a planned opening date in the fourth quarter of 2023.
−Removed: As of August 26, 2023, we had 57 Corporate-owned stores operating.
−Removed: Sale of the Assets of Zenith Freight Lines, LLC
−Removed: During the first quarter of 2022, we entered into a definitive agreement to sell substantially all of the assets of our wholly-owned subsidiary, Zenith, to J.B.
−Removed: Hunt and the transaction was completed at the beginning of the second quarter of fiscal 2022.
−Removed: As a result of the sale, the operations of our former logistical services segment, which consisted entirely of the operations of Zenith, are presented in the accompanying condensed consolidated statements of operations and in the following discussion as discontinued operations (see Note 12 to the Condensed Consolidated Statements of Income).
−Removed: PART I-FINANCIAL INFORMATION-CONTINUED
−Removed: BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES
−Removed: AUGUST 26, 2023
−Removed: (Dollars in thousands except share and per share data)
−Removed: Results of Continuing Operations –
−Removed: Periods ended August 26, 2023 compared with the periods ended August 27, 2022:
−Removed: Consolidated results of continuing operations for the three and nine months ended August 26, 2023 and August 27, 2022 are as follows:
−Removed: Quarter Ended
−Removed: Nine Months Ended
−Removed: August 26, 2023
−Removed: August 27, 2022
−Removed: August 26, 2023
−Removed: August 27, 2022
−Removed: Net sales of furniture and accessories
−Removed: Cost of furniture and accessories sold
−Removed: SG&A expenses
−Removed: Gain on sale of real estate
−Removed: Gain on revaluation of contingent consideration
−Removed: Income (loss) from operations
−Removed: Analysis of Quarterly Results:
−Removed: Total sales revenue for the three months ended August 26, 2023 decreased $30,795 or 26% from the prior year period due to a 28% decline in wholesale sales along with a 23% decrease in retail sales through the Company-owned stores, partially offset by the addition of Noa Home in 2023.
−Removed: Gross margins for the three months ended August 26, 2023 are materially unchanged from the prior year period.
−Removed: Selling, general and administrative (“SG&A”) expenses as a percentage of sales for the three months ended August 26, 2023 increased 970 basis points from 2022 primarily due to the deleverage of fixed costs caused by lower sales volumes.
−Removed: During the three months ended August 27, 2022 we recognized a gain of $4,595 from the sale of the real estate at a former retail location in Houston, Texas.
−Removed: Analysis of Year-to-Date Results:
−Removed: Total sales revenue for the nine months ended August 26, 2023 decreased $69,148 or 19% from the prior year period primarily due to a 25% decline in wholesale sales along with a 16% decrease in retail sales through the Company-owned stores partially offset by the addition of Noa Home in 2023.
−Removed: Gross margins for the nine months ended August 26, 2023 increased 200 basis points from 2022 primarily due to higher-margin retail sales constituting a larger share of total sales in 2023 as compared to the prior year period coupled with margin improvement in the wholesale segment.
−Removed: SG&A expenses as a percentage of sales for the nine months ended August 26, 2023 increased 830 basis points from 2022 primarily due to the deleverage of fixed costs caused by lower sales volumes.
−Removed: During the nine months ended August 26, 2023 we recognized a gain of $1,013 resulting from the write-down of our contingent consideration obligation associated with the acquisition of Noa Home.
−Removed: See Note 3 to the condensed consolidated financial statements.
−Removed: During the nine months ended August 27, 2022 we recognized a gain of $4,595 from the sale of the real estate at a former retail location in Houston, Texas.
−Removed: PART I-FINANCIAL INFORMATION-CONTINUED
−Removed: BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES
−Removed: AUGUST 26, 2023
−Removed: (Dollars in thousands except share and per share data)
−Removed: Segment Information
−Removed: Beginning in fiscal 2023, we strategically aligned our business into three reportable segments as defined in ASC 280, Segment Reporting , and as described below:
−Removed: The wholesale home furnishings segment is involved principally in the design, manufacture, sourcing, sale and distribution of furniture products to a network of Bassett stores (Company-owned and licensee-owned retail stores) and independent furniture retailers.
−Removed: Our wholesale segment includes our wood and upholstery operations, which includes Lane Venture.
−Removed: Retail –
−Removed:  Company-owned stores.
−Removed: Our retail segment consists of Company-owned stores and includes the revenues, expenses, assets and liabilities and capital expenditures directly related to these stores and the Company-owned distribution network utilized to deliver products to our retail customers.
−Removed: Corporate and other – Corporate and other includes the shared costs of corporate functions such as treasury and finance, information technology, accounting, human resources, legal and others, including certain product development and marketing functions benefitting both wholesale and retail operations.
−Removed: We consider our corporate functions to be other business activities and have aggregated them with our other insignificant operating segment, the recently acquired Noa Home.
−Removed: Inter-company net sales elimination represents the elimination of wholesale sales to our Company-owned stores.
−Removed: Inter-company income elimination includes the embedded wholesale profit in the Company-owned store inventory that has not been realized.
−Removed: These profits will be recorded when merchandise is delivered to the retail consumer.
−Removed: The inter-company income elimination also includes rent paid by our retail stores occupying Company-owned real estate.
−Removed: Prior to the beginning of fiscal 2023, the functions included in Corporate and other were included in our wholesale reportable segment, and Noa Home was included in our retail reportable segment for the fourth quarter of fiscal 2022 following its acquisition on September 2, 2022.
−Removed: We believe that the new alignment of our reporting segments provides our chief operating decision maker with clearer information with which to assess the operating results of our wholesale segment.
−Removed: Noa Home does not meet the requirements to be a separate reportable segment.
−Removed: The segment information presented below for the three and nine months ended August 27, 2022 has been restated to reflect the new alignment of our reportable segments.
−Removed: Our former logistical services segment which represented the operations of Zenith is now presented as a discontinued operation.
−Removed: Reconciliation of Segment Results to Consolidated Results of Operations
−Removed: To supplement the financial measures prepared in accordance with GAAP, we present gross profit by segment inclusive of the effects of intercompany sales by our wholesale segment to our retail segment.
−Removed: Because these intercompany transactions are not eliminated from our segment presentations and because we do not present gross profit as a measure of segment profitability in the accompanying condensed consolidated financial statements, the presentation of gross profit by segment is considered to be a non-GAAP financial measure.
−Removed: In addition, certain special gains or charges are included in consolidated income from operations are not included in the measures of segment profitability.
−Removed: The reconciliation of this non-GAAP financial measure to the most directly comparable financial measure calculated and presented in accordance with GAAP is presented below along with the effects of various other intercompany eliminations on our consolidated results of operations.
−Removed: PART I-FINANCIAL INFORMATION-CONTINUED
−Removed: BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES
−Removed: AUGUST 26, 2023
−Removed: (Dollars in thousands except share and per share data)
−Removed: Quarter Ended August 26, 2023
−Removed: Non-GAAP Presentation
−Removed: GAAP Presentation
−Removed: Net sales of furniture and accessories
−Removed: Cost of furniture and accessories sold
−Removed: Income (loss) from operations
−Removed: Quarter Ended August 27, 2022
−Removed: Non-GAAP Presentation
−Removed: GAAP Presentation
−Removed: Net sales of furniture and accessories
−Removed: Cost of furniture and accessories sold
−Removed: Gain on sale of real estate
−Removed: Income from operations
−Removed: Nine Months Ended August 26, 2023
−Removed: Non-GAAP Presentation
−Removed: GAAP Presentation
−Removed: Net sales of furniture and accessories
−Removed: Cost of furniture and accessories sold
−Removed: Gain revaluation of contingent consideration
−Removed: Income from operations
−Removed: Nine Months Ended August 27, 2022
−Removed: Non-GAAP Presentation
−Removed: GAAP Presentation
−Removed: Net sales of furniture and accessories
−Removed: Cost of furniture and accessories sold
−Removed: Gain on sale of real estate
−Removed: Income from operations
−Removed: PART I-FINANCIAL INFORMATION-CONTINUED
−Removed: BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES
−Removed: AUGUST 26, 2023
−Removed: (Dollars in thousands except share and per share data)
−Removed: Notes to segment consolidation table:
−Removed: Represents the elimination of sales from our wholesale segment to our Company-owned BHF stores.
−Removed: Represents the elimination of purchases by our Company-owned BHF stores from our wholesale segment, as well as the change for the period in the elimination of intercompany profit in ending retail inventory.
−Removed: Represents the elimination of rent paid by our retail stores occupying Company-owned real estate.
−Removed: Represents the gain on the sale of the real estate at a former retail location.
−Removed: Represents the gain resulting from the write-down of the contingent consideration payable on the acquisition of Noa Home.
−Removed: Wholesale Segment
−Removed: Results for the wholesale segment for the three and nine months ended August 26, 2023 and August 27, 2022 are as follows:
−Removed: Quarter Ended
−Removed: Nine Months Ended
−Removed: August 26, 2023
−Removed: August 27, 2022
−Removed: August 26, 2023
−Removed: August 27, 2022
−Removed: Gross profit (1)
−Removed: SG&A expenses
−Removed: Income from operations
−Removed: Gross profit at the segment level is considered a Non-GAAP financial measure due to the included effects of intercompany transactions.
−Removed: Refer to the reconciliation of gross profit by segment to consolidated gross profit presented under the Reconciliation of Segment Results to Consolidated Results of Operations above.
−Removed: Wholesale sales by major product category are as follows:
−Removed: Quarter Ended
−Removed: August 26, 2023
−Removed: August 27, 2022
−Removed: Bassett Custom Upholstery
−Removed: Bassett Leather
−Removed: Bassett Custom Wood
−Removed: Bassett Casegoods
−Removed: Nine Months Ended
−Removed: August 26, 2023
−Removed: August 27, 2022
−Removed: Bassett Custom Upholstery
−Removed: Bassett Leather
−Removed: Bassett Custom Wood
−Removed: Bassett Casegoods
−Removed: PART I-FINANCIAL INFORMATION-CONTINUED
−Removed: BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES
−Removed: AUGUST 26, 2023
−Removed: (Dollars in thousands except share and per share data)
−Removed: Analysis of Quarterly Results –
−Removed: Net sales for the three months ended August 26, 2023 decreased $22,299 or 28% from the prior year period due primarily to a 25% decrease in shipments to the open market, a 28% decrease in shipments to our retail store network and a 32% decrease in Lane Venture shipments.
−Removed: Gross margins for the three months ended August 26, 2023 declined 80 basis points from the prior year primarily due to lower margins in the Bassett Leather business due to increased product discounting and excess and obsolete reserve charges, partially offset by increased margins in our Custom Upholstery business as we were able to recognize a greater portion of previously implemented price increases in current period sales coupled with overall lower unit costs as measured on a last-in, first-out (LIFO) basis.
−Removed: As the Bassett Leather product line is internationally sourced with extended lead times, we received significant amounts of inventory during the second and third quarters of 2022 just as product demand was weakening due to the market downturn in home furnishings.
−Removed: Also, the ocean freight costs associated with the majority of the product received was at significantly higher costs than are currently being realized on current product receipts.
−Removed: We expect improved margins in fiscal 2024.
−Removed: Lastly, margins for Bassett Custom Wood products were lower due to lower sales volume.
−Removed: SG&A expenses as a percentage of sales increased 60 basis points primarily due to reduced leverage of fixed costs from decreased sales.
−Removed: Analysis of Year-to-Date Results –
−Removed: Net sales for the nine months ended August 26, 2023 decreased $61,627 or 25% from the prior year period due primarily to a 28% decrease in shipments to the open market, a 21% decrease in shipments to our retail store network and a 23% decrease in Lane Venture shipments.
−Removed: Gross margins for the nine months ended August 26, 2023 improved 70 basis points over the prior year primarily due to increased margins in our Custom Upholstery business as we were able to recognize a greater portion of previously implemented price increases in current period sales coupled with improved overall product warranty and returns experience and overall lower unit costs as measured on a last-in, first-out (LIFO) basis.
−Removed: These margin improvements were partially offset by lower margins in the Bassett Leather business due to increased product discounting and excess and obsolete reserve charges.
−Removed: As the Bassett Leather product line is internationally sourced with extended lead times, we received significant amounts of inventory during the second and third quarters of 2022 just as product demand was weakening due to the market downturn in home furnishings.
−Removed: Also, the ocean freight costs associated with the majority of the product received was at significantly higher costs than are currently being realized on current product receipts.
−Removed: We expect improved margins in fiscal 2024.
−Removed: Margins in the Bassett Casegoods business were lower due primarily to realizing the high freight costs incurred during mid-2022 in the results of operations for the current period.
−Removed: Margins improved in the third quarter of 2023 and we expect more improvement in the fiscal fourth quarter of 2023.
−Removed: Lastly, margins for Bassett Custom Wood products were lower due to lower sales volume.
−Removed: SG&A expenses as a percentage of sales increased 150 basis points primarily due to reduced leverage of fixed costs from decreased sales.
−Removed: Wholesale Backlog
−Removed: Wholesale backlog at August 26, 2023 was $19,895 as compared to $35,336 at November 26, 2022 and $41,693 at August 27, 2022.
−Removed: PART I-FINANCIAL INFORMATION-CONTINUED
−Removed: BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES
−Removed: AUGUST 26, 2023
−Removed: (Dollars in thousands except share and per share data)
−Removed: Retail –
−Removed: Company-owned Stores Segment
−Removed: Results for the retail segment for the periods ended August 26, 2023 and August 27, 2022 are as follows:
−Removed: Quarter Ended
−Removed: Nine Months Ended
−Removed: August 26, 2023
−Removed: August 27, 2022
−Removed: August 26, 2023
−Removed: August 27, 2022
−Removed: Gross profit (1)
−Removed: SG&A expenses
−Removed: Income (loss) from operations
−Removed: Gross profit at the segment level is considered a Non-GAAP financial measure due to the included effects of intercompany transactions.
−Removed: Refer to the reconciliation of gross profit by segment to consolidated gross profit presented under the Reconciliation of Segment Results to Consolidated Results of Operations above.
−Removed: Retail sales by major product category are as follows:
−Removed: Quarter Ended
−Removed: Nine Months Ended
−Removed: August 26, 2023
−Removed: August 27, 2022
−Removed: August 26, 2023
−Removed: August 27, 2022
−Removed: Bassett Custom Upholstery
−Removed: Bassett Leather
−Removed: Bassett Custom Wood
−Removed: Bassett Casegoods
−Removed: Accessories, mattresses and other (1)
−Removed: Includes the sale of goods other than Bassett-branded products, such as accessories and bedding, and also includes the sale of furniture protection plans.
−Removed: Analysis of Quarterly Results - Retail
−Removed: Net sales for the three months ended August 26, 2023 decreased $18,622 or 26% from the prior year period.
−Removed: Written sales (the value of sales orders taken but not delivered) declined 13% from the third quarter of 2022.
−Removed: Gross margin for the three months ended August 26, 2023 was essentially flat compared to the prior period as lower margins from store closure sales in the current quarter were offset by improved margins on in-line goods.
−Removed: SG&A expenses as a percentage of sales for the three months ended August 26, 2023 increased 1,130 basis points primarily due to decreased leverage of fixed costs from lower sales volumes coupled with increased advertising, warehousing and delivery costs.
−Removed: Analysis of Year-to-Date Results - Retail
−Removed: Net sales for the nine months ended August 26, 2023 decreased $32,609 or 16% from the prior year period.
−Removed: Written sales (the value of sales orders taken but not delivered) declined 15% from the first nine months of 2022.
−Removed: Gross margin for the nine months ended August 26, 2023 was essentially flat compared to the prior period as lower margins from store closure sales in the current year were offset by improved margins on in-line goods and lower unit costs as measured on a LIFO basis.
−Removed: SG&A expenses as a percentage of sales for the nine months ended August 26, 2023 increased 690 primarily due to decreased leverage of fixed costs from lower sales volumes coupled with increased advertising and warehousing and delivery costs.
−Removed: Retail Backlog
−Removed: Retail backlog at August 26, 2023 was $32,702 compared to $51,041 at November 26, 2022 and $59,981 at August 27, 2022.
−Removed: PART I-FINANCIAL INFORMATION-CONTINUED
−Removed: BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES
−Removed: AUGUST 26, 2023
−Removed: (Dollars in thousands except share and per share data)
−Removed: Corporate and Other
−Removed: Revenues, costs and expenses of corporate and other for the three and nine months ended August 26, 2023 and August 27, 2022 are as follows:
−Removed: Quarter Ended
−Removed: Nine Months Ended
−Removed: August 26, 2023
−Removed: August 27, 2022
−Removed: August 26, 2023
−Removed: August 27, 2022
−Removed: SG&A expenses
−Removed: Analysis of Quarterly Results –
−Removed: Corporate and Other
−Removed: The increases in sales and gross profit over the prior year period were due to the acquisition of Noa Home on September 2, 2022.
−Removed: The $496 increase in SG&A expenses was primarily due to the addition of Noa Home partially offset by decreased corporate spending associated with incentive compensation and national advertising.
−Removed: Analysis of Year-to-Date Results –
−Removed: Corporate and Other
−Removed: The increases in sales and gross profit over the prior year period were due to the acquisition of Noa Home on September 2, 2022.
−Removed: The $4,339 increase in SG&A expenses was primarily due to the addition of Noa Home and increased corporate consulting expenses associated with our digital transformation efforts and the development of a new store prototype design partially offset by lower corporate incentive compensation expenses.
−Removed: Discontinued Operations –
−Removed: Logistical Services
−Removed: Quarter Ended
−Removed: Nine Months Ended
−Removed: August 27, 2022
−Removed: August 27, 2022
−Removed: Logistical services revenue
−Removed: Cost of logistical services
−Removed: Other loss, net
−Removed: Income from discontinued operations before tax
−Removed: The amounts shown above represent the results of Zenith’s business transactions with third parties.
−Removed: Because the sale of Zenith was closed on the first business day of the second fiscal quarter of 2022, operating results for that period are insignificant.
−Removed: Zenith also charged Bassett for logistical services provided to our wholesale segment in the amount of $9,121 during the nine months ended August 27, 2022.
−Removed: These shipping and handling costs are included in selling, general and administrative expenses in the accompanying condensed consolidated statements of operations.
−Removed: Upon the sale of Zenith we entered into a service agreement with J.B.
−Removed: Hunt for the continuation of these services for a period of seven years.
−Removed: We incurred expense for logistical services performed by J.B.
−Removed: Hunt of $6,278 and $21,429 during the three and nine months ended August 26, 2023, respectively, and $10,307 and $19,852 for the three and nine months ended August 27, 2022, respectively.
−Removed: PART I-FINANCIAL INFORMATION-CONTINUED
−Removed: BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES
−Removed: AUGUST 26, 2023
−Removed: (Dollars in thousands except share and per share data)
−Removed: Other Items Affecting Net Income (Loss)
−Removed: Interest Income
−Removed: Interest income for the three and nine months ended August 26, 2023 was $923 and $1,644, respectively, compared to $120 and $132 for the three and nine months ended August 27, 2022.
−Removed: The net change from the prior year periods was primarily due to higher interest income on our cash equivalents and investments in certificates of deposit, along with the increase in invested cash following the sale of Zenith at the beginning of the second quarter of fiscal 2022.
−Removed: Other Income (Loss), Net
−Removed: Other loss, net, for the three and nine months ended August 26, 2023 was $309 and $1,381, respectively, compared to $714 and $1,982 for the three and nine months ended August 27, 2022.
−Removed: The net change from the prior year periods was primarily due to lower costs associated with Company-owned life insurance.
−Removed: We calculate an anticipated effective tax rate for the year based on our annual estimates of pretax income and use that effective tax rate to record our year-to-date income tax provision. 
−Removed: Any change in annual projections of pretax income could have a significant impact on our effective tax rate for the respective quarter.
−Removed: Our effective tax rate was 18.8% and 43.3% for the three and nine months ended August 26, 2023, respectively, and 22.8% and 25.6% for the three and nine months ended August 27, 2022, respectively.
−Removed: The effective rate for the three months ended August 26, 2023 differs from the federal statutory rate of 21% primarily due to the effect of a change in our estimate of annual pretax income on our anticipated effective rate for the full year, offset by increases in the valuation allowance placed on deferred tax assets associated with Noa Home and the effects of state income taxes and various permanent differences.
−Removed: For the nine months ended August 26, 2023, the effective rate differs from the federal statutory rate primarily due to the non-taxable gain on revaluation of contingent consideration associated with the acquisition of Noa Home, increases in the valuation allowance placed on deferred tax assets associated with Noa Home and the effects of state income taxes and various permanent differences.
−Removed: For the three and nine months ended August 27, 2022, the effective rates differ from the federal statutory rate of 21% primarily due to the effects of state income taxes and various permanent differences, including tax of $522 associated with the non-deductible goodwill written off in connection with the sale of Zenith and included in income tax on discontinued operations.
−Removed: Liquidity and Capital Resources
−Removed: Cash provided by operations for the first nine months of fiscal 2023 was $10,250 compared to cash used in operations of $12,295 for the first nine months of fiscal 2022, representing an increase of $22,545 in cash flows from operations.
−Removed: Cash provided by the operating activities of our discontinued operations was $1,681 for the first nine months of fiscal 2022.
−Removed: Excluding the decline in operating cash flow from discontinued operations, cash flows from continuing operations increased $24,226 for the first nine months of fiscal 2023 from the prior year period.
−Removed: This increase was primarily the result of significantly lower investment in inventory partially offset by lower income from continuing operations and other changes in working capital.
−Removed: Our overall cash position declined $13,613 during the first nine months of 2023 compared to an increase of $32,496 for the first nine months of 2022, which had included the proceeds from the sale of Zenith.
−Removed: During the first nine months of fiscal 2023, we spent $14,657 on purchases of property and equipment primarily consisting of expenditures related to our digital transformation project, upfit of the new Tampa, Florida store that is expected to open in the fourth quarter of 2023, the opening of the Inwood Village store in Dallas, Texas, the remodel of the Austin, Texas store and the remodeling of two other stores in the Dallas, Texas market.
−Removed: We also paid $4,407 in dividends during the nine months ended August 26, 2023, a $14,327 decrease from the corresponding period in 2022 as the prior year included a $1.50 per share special dividend.
−Removed: Finally, we repurchased 249,480 shares spending $4,056 during the current year, a $6,207 decrease compared to the prior period.
−Removed: We expect capital expenditures for the full year to range from $17 million to $19 million.
−Removed: As of August 26, 2023, $21,943 remains available for future purchases under our stock repurchase plan.
−Removed: With cash and cash equivalents and short-term investments totaling $65,755 on hand at August 26, 2023, expected future operating cash flows and the availability under our credit line noted below, we believe we have sufficient liquidity to fund operations for the foreseeable future.
−Removed: PART I-FINANCIAL INFORMATION-CONTINUED
−Removed: BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES
−Removed: AUGUST 26, 2023
−Removed: (Dollars in thousands except share and per share data)
−Removed: Debt and Other Obligations
−Removed: Our bank credit facility provides for a line of credit of up to $25,000.
−Removed: At August 26, 2023, we had $3,731 outstanding under standby letters of credit against our line, leaving availability under our credit line of $21,269.
−Removed: The line bears interest at the One-Month Term SOFR plus 1.5% and is unsecured.
−Removed: Our bank charges a fee of 0.25% on the daily unused balance of the line, payable quarterly.
−Removed: Under the terms of the bank credit facility, we must maintain the following financial covenants, measured quarterly on a rolling twelve-month basis:
−Removed: Consolidated fixed charge coverage ratio of not less than 1.4 times,
−Removed: Consolidated lease-adjusted leverage ratio not to exceed 3.0 times, and
−Removed: Minimum tangible net worth of $140,000.
−Removed: We were in compliance with these covenants at August 26, 2023.
−Removed: The credit facility will mature on January 27, 2025, at which time any amounts outstanding under the facility will be due.
−Removed: We lease land and buildings that are used in the operation of our Company-owned retail stores as well as in the operation of certain of our licensee-owned stores, and we lease land and buildings used in our wholesale manufacturing operations.
−Removed: We also lease local delivery trucks used in our retail segment.
−Removed: The present value of our obligations for leases with terms in excess of one year at August 26, 2023 is $105,900 and is included in our accompanying condensed consolidated balance sheet at August 26, 2023.
−Removed: We were contingently liable under a licensee lease obligation guarantee in the amount of $1,906 at August 26, 2023.
−Removed: The remaining term under this lease guarantee extends for five years.
−Removed: See Note 10 to our condensed consolidated financial statements for additional details regarding our lease guarantees.
−Removed: Investment in Retail Real Estate
−Removed: We have a substantial investment in real estate acquired for use as retail locations and occupied by Company-owned retail stores, including a site in Tampa, Florida acquired in 2022 with a planned opening late in fiscal 2023.
−Removed: Such real estate is included in property and equipment, net, in the accompanying condensed consolidated balance sheets and consists of eight properties with an aggregate square footage of 203,465 and a net book value of $20,905 at August 26, 2023.
−Removed: Critical Accounting Policies and Estimates
−Removed: There have been no material changes to our critical accounting policies and estimates from the information provided in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, included in our Annual Report on Form 10-K for the fiscal year ended November 26, 2022.
−Removed: Off-Balance Sheet Arrangements
−Removed: We utilize stand-by letters of credit in the procurement of certain goods in the normal course of business.
−Removed: In addition, we have guaranteed certain lease obligations of licensee operators for some of their store locations.
−Removed: See Note 10 to our condensed consolidated financial statements for further discussion of lease guarantees, including descriptions of the terms of such commitments and methods used to mitigate risks associated with these arrangements.
−Removed: Contingencies
−Removed: We are involved in various legal and environmental matters which arise in the normal course of business.
−Removed: Although the final outcome of these matters cannot be determined, based on the facts presently known, it is our opinion that the final resolution of these matters will not have a material adverse effect on our financial position or future results of operations.
−Removed: See Note 10 to our condensed consolidated financial statements for further information regarding certain contingencies as of August 26, 2023.
+Added: As of March 2, 2024 we do not hold any investments in equity securities, therefore we do not currently expect that this guidance will have a material impact upon our financial position and results of operations.
+Added: In November 2023, the FASB issued Accounting Standards Update 2023-07 – Segment Reporting (Topic ASC 740) Improvements to Reportable Segment Disclosures.
+Added: The ASU improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.
+Added: The amendments in this update require:
+Added: that a public entity disclose, on an annual and interim basis, significant segment expenses that are regularly provided to the chief operating decision maker (CODM) and included within each reported measure of segment profit or loss (collectively referred to as the “significant expense principle”);
+Added: and that a public entity disclose, on an annual and interim basis, an amount for other segment items by reportable segment and a description of its composition.
+Added: The other segment items category is the difference between segment revenue less the segment expenses disclosed under the significant expense principle and each reported measure of segment profit or loss.
+Added: The amendments in ASU 2022-03 will become effective for us as for our 2025 fiscal year and for interim periods beginning with our 2026 fiscal year.
+Added: Early adoption is permitted.
+Added: We do not expect that this guidance will have a material impact upon our financial position and results of operations.
+Added: In December 2023, the FASB issued Accounting Standards Update 2023-09 – Income Taxes (Topic ASC 740) Income Taxes.
+Added: The ASU improves the transparency of income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction.
+Added: It also includes certain other amendments to improve the effectiveness of income tax disclosures.
+Added: The amendments in ASU 2022-03 will become effective for us as of the beginning of our 2026 fiscal year.
+Added: Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance.
+Added: We do not expect that this guidance will have a material impact upon our financial position and results of operations.
PART I-FINANCIAL INFORMATION-CONTINUED
BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES
−Removed: AUGUST 26, 2023
+Added: NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-UNAUDITED
+Added: MARCH 2, 2024
(Dollars in thousands except share and per share data)
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.