BSET filing — read by section

Item 8. Financial Statements and Supplementary Data

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

 Report of Independent Registered Public Accounting Firm 

 To the Stockholders and the Board of Directors of Bassett Furniture Industries, Incorporated and Subsidiaries

 Opinion on the Financial Statements 

 We have audited the accompanying consolidated balance sheets of Bassett Furniture Industries, Incorporated and subsidiaries (the Company) as of November 30, 2024 and November 25, 2023, the related consolidated statements of operations, comprehensive income (loss), stockholders' equity and cash flows for each of the three years in the period ended November 30, 2024, and the related notes and financial statement schedule listed in the Index at Item 15(a)(2) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at November 30, 2024 and November 25, 2023, and the results of its operations and its cash flows for each of the three years in the period ended November 30, 2024, in conformity with U.S. generally accepted accounting principles.

 We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of November 30, 2024, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 10, 2025 expressed an unqualified opinion thereon.

 Basis for Opinion 

 These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

 Critical Audit Matter 

 The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosures to which it relates.

 28

 Measurement of Wholesale Reserves for Excess and Obsolete Inventories 

 Description of the Matter 
 At November 30, 2024, the Company’s inventories were $54.9 million. As discussed in Note 2 and Note 6 to the consolidated financial statements, cost for wholesale, domestic manufactured furniture inventories is determined using the last-in, first-out (“LIFO”) method and are stated at the lower of cost or market. The cost of imported inventories and domestic outdoor furniture products is determined using the first-in, first-out (“FIFO”) method and stated at the lower of cost or net realizable value. Wholesale reserves for excess and obsolete inventories are determined based upon specific identification, historical write-offs, recent and projected sales trends, and, for domestic manufactured furniture, the respective valuations at LIFO.

 Auditing management’s wholesale excess or obsolete inventories was complex due to the highly judgmental nature and estimation uncertainty in determining reserve percentages based on specific identification. 
 
 How We Addressed the Matter in Our Audit 
 We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the Company’s determination of the wholesale reserves for excess and obsolete inventories. For example, we tested the control over management’s review of the calculation of wholesale reserves for excess and obsolete inventories, which included their review of the significant assumptions described above.

 Our audit procedures to test the reserves for wholesale excess and obsolete inventories included, among others, testing the completeness and accuracy of the underlying data used in management’s analyses, including the specific identification of inventory categories. We evaluated the reasonableness of management’s assumptions by performing a retrospective review of historical assumptions to actual activity, including write-off history and changes in on-hand inventory quantities. We also evaluated the Company’s reserve for wholesale excess and obsolete inventories as compared to the wholesale inventory valuation at LIFO. We held discussions with senior financial and operational management to determine whether any strategic or operational changes in the business would impact expected demand for or related carrying value of inventory. We also performed substantive analytical procedures designed to predict the ending inventory reserve balance using historical reserve percentages adjusted for our knowledge of current year sales and inventory levels. We searched for and evaluated information that corroborated or contradicted the Company’s assumptions. 
 
 /s/ Ernst & Young LLP

 We have served as the Company’s auditor since 2002.

 Richmond, Virginia

 February 10, 2025

 29

 Consolidated Balance Sheets 

 Bassett Furniture Industries, Incorporated and Subsidiaries 

 November 30, 2024 and November 25, 2023 

 (In thousands, except share and per share data) 

 2024 

 2023 

 Assets 

 Current assets 

 Cash and cash equivalents

 $ 
 39,551 
 
 $ 
 52,407 
 
 Short-term investments

 20,360 
 
 17,775 
 
 Accounts receivable, net of allowance for credit losses of $ 1,097 and $ 535 as of November 30, 2024 and November 25, 2023, respectively

 13,181 
 
 13,736 
 
 Inventories

 54,965 
 
 62,982 
 
 Recoverable income taxes

 4,240 
 
 2,574 
 
 Other current assets

 9,242 
 
 8,480 
 
 Total current assets

 141,539 
 
 157,954 
 
 Property and equipment, net

 77,047 
 
 83,981 
 
 Other long-term assets 

 Deferred income taxes, net

 6,867 
 
 4,645 
 
 Goodwill and other intangible assets

 14,185 
 
 16,067 
 
 Right of use assets under operating leases

 93,624 
 
 100,888 
 
 Other

 7,908 
 
 6,889 
 
 Total other long-term assets

 122,584 
 
 128,489 
 
 Total assets 

 $ 
 341,170 
 
 $ 
 370,424 
 
 Liabilities and Stockholders ’ Equity 

 Current liabilities 

 Accounts payable

 $ 
 13,303 
 
 $ 
 16,338 
 
 Accrued compensation and benefits

 6,898 
 
 8,934 
 
 Customer deposits

 25,742 
 
 22,788 
 
 Current portion of operating lease obligations

 18,050 
 
 18,827 
 
 Other accrued liabilities

 9,410 
 
 11,003 
 
 Total current liabilities

 73,403 
 
 77,890 
 
 Long-term liabilities 

 Post employment benefit obligations

 10,882 
 
 10,207 
 
 Long-term portion of operating lease obligations

 88,395 
 
 97,357 
 
 Other long-term liabilities

 1,163 
 
 1,529 
 
 Total long-term liabilities

 100,440 
 
 109,093 
 
 Commitments and Contingencies 

 Stockholders ’ equity 

 Common stock, $ 5 par value; 50,000,000 shares authorized; issued and outstanding 8,736,046 at November 30, 2024 and 8,768,221 at November 25, 2023

 43,681 
 
 43,842 
 
 Retained earnings

 122,847 
 
 139,354 
 
 Additional paid-in-capital

 6 
 
 93 
 
 Accumulated other comprehensive income

 793 
 
 152 
 
 Total stockholders' equity

 167,327 
 
 183,441 
 
 Total liabilities and stockholders ’ equity 

 $ 
 341,170 
 
 $ 
 370,424 
 
 The accompanying notes to consolidated financial statements are an integral part of these statements.

 30

 Consolidated Statements of Operations 

 Bassett Furniture Industries, Incorporated and Subsidiaries 

 For the years ended November 30, 2024, November 25, 2023, and November 26, 2022 

 (In thousands, except per share data) 

 2024 

 2023 

 2022 

 Net sales of furniture and accessories

 $ 
 329,923 
 
 $ 
 390,136 
 
 $ 
 485,601 
 
 Cost of furniture and accessories sold

 150,508 
 
 183,648 
 
 237,262 
 
 Gross profit

 179,415 
 
 206,488 
 
 248,339 
 
 Selling, general and administrative expenses

 187,527 
 
 205,227 
 
 218,069 
 
 Asset impairment charges

 5,515 
 
 - 
 
 - 
 
 Loss on contract abandonment

 1,240 
 
 - 
 
 - 
 
 Loss upon realization of cumulative translation adjustment

 962 
 
 - 
 
 - 
 
 Restructuring charges

 440 
 
 - 
 
 - 
 
 Goodwill impairment charge

 - 
 
 5,409 
 
 - 
 
 Gain on revaluation of contingent consideration

 - 
 
 1,013 
 
 - 
 
 Gain on sale of real estate

 - 
 
 - 
 
 4,595 
 
 Income (loss) from continuing operations

 ( 16,269 
 ) 
 
 ( 3,135 
 ) 
 
 34,865 
 
 Interest income

 2,673 
 
 2,528 
 
 302 
 
 Interest expense

 ( 30 
 ) 
 
 ( 22 
 ) 
 
 ( 38 
 ) 
 
 Other loss, net

 ( 744 
 ) 
 
 ( 1,859 
 ) 
 
 ( 1,067 
 ) 
 
 Income (loss) from continuing operations before income taxes

 ( 14,370 
 ) 
 
 ( 2,488 
 ) 
 
 34,062 
 
 Income tax expense (benefit)

 ( 4,675 
 ) 
 
 683 
 
 8,702 
 
 Income (loss) from continuing operations

 ( 9,695 
 ) 
 
 ( 3,171 
 ) 
 
 25,360 
 
 Discontinued operations:

 Income from operations of logistical services

 - 
 
 - 
 
 1,712 
 
 Gain on disposal

 - 
 
 - 
 
 52,534 
 
 Income tax expense

 - 
 
 - 
 
 14,261 
 
 Income from discontinued operations

 - 
 
 - 
 
 39,985 
 
 Net income (loss)

 $ 
 ( 9,695 
 ) 
 
 $ 
 ( 3,171 
 ) 
 
 $ 
 65,345 
 
 Basic earnings (loss) per share:

 Income (loss) from continuing operations

 $ 
 ( 1.11 
 ) 
 
 $ 
 ( 0.36 
 ) 
 
 $ 
 2.70 
 
 Income from discontinued operations

 - 
 
 - 
 
 4.26 
 
 Basic earnings (loss) per share

 $ 
 ( 1.11 
 ) 
 
 $ 
 ( 0.36 
 ) 
 
 $ 
 6.96 
 
 Diluted earnings (loss) per share:

 Income (loss) from continuing operations

 $ 
 ( 1.11 
 ) 
 
 $ 
 ( 0.36 
 ) 
 
 $ 
 2.70 
 
 Income from discontinued operations

 - 
 
 - 
 
 4.25 
 
 Diluted earnings (loss) per share

 $ 
 ( 1.11 
 ) 
 
 $ 
 ( 0.36 
 ) 
 
 $ 
 6.95 
 
 Dividends per share

 Regular dividends

 $ 
 0.76 
 
 $ 
 0.68 
 
 $ 
 0.60 
 
 Special dividend

 $ 
 - 
 
 $ 
 - 
 
 $ 
 1.50 
 
 The accompanying notes to consolidated financial statements are an integral part of these statements.

 31

 Consolidated Statements of Comprehensive Income (Loss) 

 Bassett Furniture Industries, Incorporated and Subsidiaries 

 For the years ended November 30, 2024, November 25, 2023, and November 25, 2022 

 (In thousands) 

 2024 

 2023 

 2022 

 Net income (loss)

 $ 
 ( 9,695 
 ) 
 
 $ 
 ( 3,171 
 ) 
 
 $ 
 65,345 
 
 Other comprehensive income (loss):

 Foreign currency translation adjustments

 652 
 
 ( 378 
 ) 
 
 ( 274 
 ) 
 
 Income taxes related to foreign currency translation adjustments

 ( 166 
 ) 
 
 96 
 
 70 
 
 Actuarial adjustment to

 Long Term Cash Awards (LTCA)

 ( 117 
 ) 
 
 100 
 
 303 
 
 Amortization associated with LTCA

 61 
 
 119 
 
 132 
 
 Income taxes related to LTCA

 14 
 
 ( 59 
 ) 
 
 ( 107 
 ) 
 
 Actuarial adjustment to supplemental executive retirement defined benefit plan (SERP)

 287 
 
 324 
 
 2,200 
 
 Amortization associated with SERP

 ( 22 
 ) 
 
 - 
 
 124 
 
 Income taxes related to SERP

 ( 68 
 ) 
 
 ( 100 
 ) 
 
 ( 575 
 ) 
 
 Other comprehensive income (loss), net of tax

 641 
 
 102 
 
 1,873 
 
 Total comprehensive income (loss)

 $ 
 ( 9,054 
 ) 
 
 $ 
 ( 3,069 
 ) 
 
 $ 
 67,218 
 
 The accompanying notes to consolidated financial statements are an integral part of these statements.

 32

 Consolidated Statements of Cash Flows 

 Bassett Furniture Industries, Incorporated and Subsidiaries 

 For the years ended November 30, 2024, November 25, 2023, and November 26, 2022 

 (In thousands) 

 2024 

 2023 

 2022 

 Operating activities: 

 Net income (loss)

 $ 
 ( 9,695 
 ) 
 
 $ 
 ( 3,171 
 ) 
 
 $ 
 65,345 
 
 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

 Depreciation and amortization

 9,918 
 
 10,141 
 
 11,309 
 
 Gain on disposal of discontinued operations

 - 
 
 - 
 
 ( 52,534 
 ) 
 
 Non-cash goodwill impairment charge

 - 
 
 5,409 
 
 - 
 
 Gain on revaluation of contingent consideration

 - 
 
 ( 1,013 
 ) 
 
 - 
 
 Asset impairment charges

 5,515 
 
 - 
 
 - 
 
 Net loss (gain) on disposals of property and equipment

 7 
 
 5 
 
 ( 4,595 
 ) 
 
 Inventory valuation charges

 5,001 
 
 4,626 
 
 3,648 
 
 Deferred income taxes

 ( 2,442 
 ) 
 
 831 
 
 ( 2,339 
 ) 
 
 Other, net

 2,277 
 
 2,031 
 
 ( 302 
 ) 
 
 Changes in operating assets and liabilities

 Accounts receivable

 555 
 
 4,102 
 
 3,169 
 
 Inventories

 3,016 
 
 17,869 
 
 ( 9,536 
 ) 
 
 Other current and long-term assets

 ( 2,427 
 ) 
 
 1,773 
 
 5,944 
 
 Right of use assets under operating leases

 17,254 
 
 18,680 
 
 20,531 
 
 Customer deposits

 2,954 
 
 ( 13,175 
 ) 
 
 ( 16,588 
 ) 
 
 Accounts payable and accrued liabilities

 ( 7,246 
 ) 
 
 ( 9,188 
 ) 
 
 ( 4,073 
 ) 
 
 Obligations under operating leases

 ( 20,637 
 ) 
 
 ( 20,196 
 ) 
 
 ( 22,949 
 ) 
 
 Net cash provided by (used in) operating activities 

 4,050 
 
 18,724 
 
 ( 2,970 
 ) 
 
 Investing activities: 

 Purchases of property and equipment

 ( 5,211 
 ) 
 
 ( 17,489 
 ) 
 
 ( 21,296 
 ) 
 
 Proceeds from sales of property and equipment

 - 
 
 500 
 
 8,226 
 
 Cash paid for business acquisitions, net of cash acquired

 - 
 
 - 
 
 ( 5,582 
 ) 
 
 Investment in certificates of deposit

 ( 2,585 
 ) 
 
 ( 60 
 ) 
 
 - 
 
 Proceeds from the disposition of discontinued operations

 - 
 
 1,000 
 
 84,534 
 
 Other

 ( 972 
 ) 
 
 ( 1,714 
 ) 
 
 ( 40 
 ) 
 
 Net cash provided by (used in) investing activities 

 ( 8,768 
 ) 
 
 ( 17,763 
 ) 
 
 65,842 
 
 Financing activities: 

 Cash dividends

 ( 6,654 
 ) 
 
 ( 5,982 
 ) 
 
 ( 20,162 
 ) 
 
 Issuance of common stock

 371 
 
 318 
 
 424 
 
 Repurchases of common stock

 ( 1,420 
 ) 
 
 ( 4,176 
 ) 
 
 ( 15,122 
 ) 
 
 Taxes paid related to net share settlement of equity awards

 ( 161 
 ) 
 
 ( 109 
 ) 
 
 ( 19 
 ) 
 
 Repayment of finance lease obligations

 ( 253 
 ) 
 
 ( 278 
 ) 
 
 ( 684 
 ) 
 
 Net cash used in financing activities 

 ( 8,117 
 ) 
 
 ( 10,227 
 ) 
 
 ( 35,563 
 ) 
 
 Effect of exchange rate changes on cash and cash equivalents 

 ( 21 
 ) 
 
 48 
 
 ( 58 
 ) 
 
 Change in cash and cash equivalents 

 ( 12,856 
 ) 
 
 ( 9,218 
 ) 
 
 27,251 
 
 Cash and cash equivalents - beginning of year 

 52,407 
 
 61,625 
 
 34,374 
 
 Cash and cash equivalents - end of year 

 $ 
 39,551 
 
 $ 
 52,407 
 
 $ 
 61,625 
 
 The accompanying notes to consolidated financial statements are an integral part of these statements.

 33

 Consolidated Statements of Stockholders ’ Equity 

 Bassett Furniture Industries, Incorporated and Subsidiaries 

 For the years ended November 30, 2024, November 25, 2023, and November 26, 2022 

 (In thousands, except share and per share data) 

 Accumulated 

 Additional 

 other 

 Common Stock 

 paid-in 

 Retained 

 comprehensive 

 Shares 

 Amount 

 capital 

 earnings 

 income (loss) 

 Total 

 Balance, November 27, 2021 

 9,762,125 
 
 $ 
 48,811 
 
 $ 
 113 
 
 $ 
 115,631 
 
 $ 
 ( 1,823 
 ) 
 
 $ 
 162,732 
 
 Comprehensive income (loss)

 Net income

 - 
 
 - 
 
 - 
 
 65,345 
 
 - 
 
 65,345 
 
 Foreign currency translation adjustments, net of tax

 - 
 
 - 
 
 - 
 
 - 
 
 ( 204 
 ) 
 
 ( 204 
 ) 
 
 Amortization of defined benefit plan costs, net of tax

 - 
 
 - 
 
 - 
 
 - 
 
 192 
 
 192 
 
 Actuarial adjustments to defined benefit plans, net of tax

 - 
 
 - 
 
 - 
 
 - 
 
 1,885 
 
 1,885 
 
 Regular dividends ($ 0.60 per share)

 - 
 
 - 
 
 - 
 
 ( 5,668 
 ) 
 
 - 
 
 ( 5,668 
 ) 
 
 Special dividend ($ 1.50 per share)

 - 
 
 - 
 
 - 
 
 ( 14,494 
 ) 
 
 - 
 
 ( 14,494 
 ) 
 
 Issuance of common stock

 59,024 
 
 295 
 
 129 
 
 - 
 
 - 
 
 424 
 
 Purchase and retirement of common stock

 ( 869,310 
 ) 
 
 ( 4,347 
 ) 
 
 ( 780 
 ) 
 
 ( 10,014 
 ) 
 
 - 
 
 ( 15,141 
 ) 
 
 Stock-based compensation

 - 
 
 - 
 
 538 
 
 - 
 
 - 
 
 538 
 
 Balance, November 26, 2022 

 8,951,839 
 
 44,759 
 
 - 
 
 150,800 
 
 50 
 
 195,609 
 
 Comprehensive income (loss)

 Net loss

 - 
 
 - 
 
 - 
 
 ( 3,171 
 ) 
 
 - 
 
 ( 3,171 
 ) 
 
 Foreign currency translation adjustments, net of tax

 - 
 
 - 
 
 - 
 
 - 
 
 ( 282 
 ) 
 
 ( 282 
 ) 
 
 Amortization of defined benefit plan costs, net of tax

 - 
 
 - 
 
 - 
 
 - 
 
 68 
 
 68 
 
 Actuarial adjustments to defined benefit plans, net of tax

 - 
 
 - 
 
 - 
 
 - 
 
 316 
 
 316 
 
 Regular dividends ($ 0.68 per share)

 - 
 
 - 
 
 - 
 
 ( 5,982 
 ) 
 
 - 
 
 ( 5,982 
 ) 
 
 Issuance of common stock

 74,421 
 
 373 
 
 ( 55 
 ) 
 
 - 
 
 - 
 
 318 
 
 Purchase and retirement of common stock

 ( 258,039 
 ) 
 
 ( 1,290 
 ) 
 
 ( 701 
 ) 
 
 ( 2,293 
 ) 
 
 - 
 
 ( 4,284 
 ) 
 
 Stock-based compensation

 - 
 
 - 
 
 849 
 
 - 
 
 - 
 
 849 
 
 Balance, November 25, 2023 

 8,768,221 
 
 43,842 
 
 93 
 
 139,354 
 
 152 
 
 183,441 
 
 Comprehensive income (loss)

 Net income

 - 
 
 - 
 
 - 
 
 ( 9,695 
 ) 
 
 - 
 
 ( 9,695 
 ) 
 
 Foreign currency translation adjustments, net of tax

 - 
 
 - 
 
 - 
 
 - 
 
 486 
 
 486 
 
 Amortization of defined benefit plan costs, net of tax

 - 
 
 - 
 
 - 
 
 - 
 
 29 
 
 29 
 
 Actuarial adjustments to defined benefit plans, net of tax

 - 
 
 - 
 
 - 
 
 - 
 
 126 
 
 126 
 
 Regular dividends ($ 0.76 per share)

 - 
 
 - 
 
 - 
 
 ( 6,654 
 ) 
 
 - 
 
 ( 6,654 
 ) 
 
 Issuance of common stock

 79,490 
 
 397 
 
 ( 26 
 ) 
 
 - 
 
 - 
 
 371 
 
 Purchase and retirement of common stock

 ( 111,665 
 ) 
 
 ( 558 
 ) 
 
 ( 865 
 ) 
 
 ( 158 
 ) 
 
 - 
 
 ( 1,581 
 ) 
 
 Stock-based compensation

 - 
 
 - 
 
 804 
 
 - 
 
 - 
 
 804 
 
 Balance, November 30, 2024 

 8,736,046 
 
 $ 
 43,681 
 
 $ 
 6 
 
 $ 
 122,847 
 
 $ 
 793 
 
 $ 
 167,327 
 
 The accompanying notes to consolidated financial statements are an integral part of these statements.

 34

 1. 

 Description of Business 

 Bassett Furniture Industries, Incorporated (together with its consolidated subsidiaries, “Bassett”, “we”, “our”, the “Company”) based in Bassett, Virginia, is a leading manufacturer, marketer and retailer of branded home furnishings. Bassett’s full range of furniture products and accessories, designed to provide quality, style and value, are sold through an exclusive nation-wide network of 87 retail stores known as Bassett Home Furnishings (referred to as “BHF”). Of the 87 stores, the Company owns and operates 58 stores (“Company-owned retail stores”) with the other 29 being independently owned (“licensee operated”). We also distribute our products through other multi-line furniture stores, many of which feature Bassett galleries or design centers. Products can also be purchased by the end consumer directly from our website.

 We sourced approximately 20 % of our wholesale products from various foreign countries, with the remaining volume produced at our five domestic manufacturing facilities.

 2. 

 Significant Accounting Policies 

 Basis of Presentation and Principles of Consolidation

 Our fiscal year ends on the last Saturday in November, which periodically results in a 53-week year. Fiscal 2024 contained 53 weeks while fiscal 2023 and 2022 each contained 52 weeks. The Consolidated Financial Statements include the accounts of Bassett Furniture Industries, Incorporated and our majority-owned subsidiaries in which we have a controlling interest. All significant intercompany balances and transactions are eliminated in consolidation. The financial statements have been prepared in accordance with generally accepted accounting principles in the United States ("GAAP"). Unless otherwise indicated, references in the Consolidated Financial Statements to fiscal 2024, 2023 and 2022 are to Bassett's fiscal year ended November 30, 2024, November 25, 2023 and November 26, 2022, respectively. References to the “ASC” included hereinafter refer to the Accounting Standards Codification established by the Financial Accounting Standards Board as the source of authoritative GAAP.

 We analyzed our licensees under the requirements for variable interest entities (“VIEs”). All of these licensees operate as BHF stores and are furniture retailers. We sell furniture to these licensees, and in some cases have extended credit beyond normal terms, made lease guarantees, guaranteed loans, or loaned directly to the licensees. We have recorded reserves for potential exposures related to these licensees. See Note 15 for disclosure of leases and lease guarantees. Based on financial projections and best available information, all licensees have sufficient equity to carry out their principal operating activities without subordinated financial support. Furthermore, we believe that the power to direct the activities that most significantly impact the licensees’ operating performance continues to lie with the ownership of the licensee dealers. Our rights to assume control over or otherwise influence the licensees’ significant activities only exist pursuant to our license and security agreements and are in the nature of protective rights as contemplated under ASC Topic 810. We completed our assessment for other potential VIEs and concluded that there were none. We will continue to reassess the status of potential VIEs including when facts and circumstances surrounding each potential VIE change.

 During the second and third quarters of fiscal 2022, we were the primary beneficiary of one VIE by virtue of our control over the activities that most significantly impacted the entity’s economic performance. This VIE was created to affect a Section 1031 like-kind exchange involving the purchase of real property in the state of Florida and the sale of real property in the state of Texas (see Note 14). 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.

 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. Hunt Transport Services, Inc. (“J.B. Hunt”). The sale was completed on February 28, 2022. Accordingly, the operations of our logistical services segment as well as the gain realized upon disposal are presented in the accompanying condensed consolidated statements of income as discontinued operations. See Note 18 for additional information. Costs incurred by Bassett for logistical services performed for Bassett by Zenith are included in selling, general and administrative expenses.

 On September 2, 2022, we acquired 100 % of the capital stock of Noa Home Inc. (“Noa Home”), a mid-priced e-commerce furniture retailer headquartered in Montreal, Canada. Noa Home had operations in Canada, Australia, Singapore and the United Kingdom. Since acquisition, Noa Home has been consolidated as a wholly-owned subsidiary. During the second quarter of fiscal 2024 we concluded that Noa Home was not likely to achieve profitability in the foreseeable future and decided to cease operations and sell the remaining inventory in an orderly manner. As of November 30, 2024 we have substantially completed the liquidation of Noa Home’s assets and liabilities. See Note 3 for additional information.

 35

 Use of Estimates

 The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Some of the more significant estimates include allowances for doubtful accounts, calculation of inventory reserves, the valuation of our reporting units for the purpose of testing the carrying value of goodwill, and the valuation of our right of use assets. We also utilize estimates in determining the valuation of income tax reserves, insurance reserves, and assumptions related to our post-employment benefit obligations. Actual results could differ from those estimates.

 Revenue Recognition

 ASC Topic 606, Revenue from Contracts with Customers, requires a company to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration the company expects to receive in exchange for those goods or services. For our wholesale and retail segments, revenue is recognized when the risks and rewards of ownership and title to the product have transferred to the buyer.

 At wholesale, transfer occurs and revenue is recognized upon the shipment of goods to independent dealers and licensee-owned BHF stores. We offer payment terms varying from 30 to 60 days for wholesale customers. Estimates for returns and allowances have been recorded as a reduction of revenue based on our historical return patterns. The contracts with our licensee store owners do not provide for any royalty or license fee to be paid to us.

 At retail, transfer occurs and revenue is recognized upon delivery of goods to the customer. We typically collect a significant portion of the purchase price as a customer deposit upon order, with the balance typically collected upon delivery. These deposits are carried on our balance sheet as a current liability until delivery is fulfilled and amounted to $ 25,742 and $ 22,788 as of November 30, 2024 and November 25, 2023, respectively. Substantially all of the customer deposits held at November 25, 2023 related to performance obligations were satisfied during fiscal 2024 and have therefore been recognized in revenue for the year ended November 30, 2024. Estimates for returns and allowances have been recorded as a reduction of revenue based on our historical return patterns. The estimate for returns and allowances was $ 3,970 and $ 4,883 at November 30, 2024 and November 25, 2023, respectively, and is included with other accrued liabilities in the accompanying balance sheets. We also sell furniture protection plans to our retail customers on behalf of a third party which is responsible for the performance obligations under the plans. Revenue from the sale of these plans is recognized upon delivery of the goods net of amounts payable to the third-party service provider.

 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. Sales commissions at wholesale are accrued upon the shipment of goods. Sales commissions at retail are accrued at the time a sale is written (i.e. – 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. At November 30, 2024 and November 25, 2023, our balance of prepaid commissions included in other current assets was $ 2,928 and $ 2,245 , respectively.

 For our accounting and reporting under ASC 606, we apply the following policy elections and practical expedients:

 •

 We exclude from revenue amounts collected from customers for sales tax.

 •

 We do not adjust the promised amount of consideration for the effects of a significant financing component since the period of time between transfer of our goods or services and the collection of consideration from the customer is less than one year.

 •

 We do not disclose the value of unsatisfied performance obligations because the transfer of goods or services is made within one year of the placement of customer orders.

 See Note 20 for disaggregated revenue information.

 Cash Equivalents and Short-Term Investments

 The Company considers cash on hand, demand deposits in banks and all highly liquid investments with an original maturity of three months or less to be cash and cash equivalents. Our short-term investments consist of certificates of deposit that have original maturities of twelve months or less but greater than three months.

 36

 Accounts Receivable

 Substantially all of our trade accounts receivable is due from customers located within the United States. We maintain an allowance for credit losses for estimated losses resulting from the inability of our customers to make required payments. The allowance for credit losses is based on a review of specifically identified accounts in addition to an overall aging analysis which is applied to accounts pooled on the basis of similar risk characteristics. Judgments are made with respect to the collectibility of accounts receivable within each pool based on historical experience, current payment practices and current economic trends based on our expectations over the expected life of the receivables, which is generally ninety days or less. Actual credit losses could differ from those estimates.

 Concentrations of Credit Risk and Major Customers

 Financial instruments that subject us to credit risk consist primarily of investments, accounts and notes receivable and financial guarantees. Investments are managed within established guidelines to mitigate risks. Accounts and notes receivable and financial guarantees subject us to credit risk partially due to the concentration of amounts due from and guaranteed on behalf of independent licensee customers. At November 30, 2024 and November 25, 2023, our aggregate exposure from receivables and guarantees related to customers consisted of the following:

 2024 

 2023 

 Accounts receivable, net of allowances (Note 5)

 $ 
 13,181 
 
 $ 
 13,736 
 
 Contingent obligations under lease and loan guarantees, less amounts recognized (Note 15)

 5,100 
 
 1,819 
 
 Other

 - 
 
 81 
 
 Total credit risk exposure related to customers

 $ 
 18,281 
 
 $ 
 15,636 
 
 At November 30, 2024 and November 25, 2023, approximately 43 % and 35 %, respectively, of the aggregate risk exposure, net of reserves, shown above was attributable to five customers. In fiscal 2024, 2023 and 2022, no customer accounted for more than 10% of total consolidated net sales.

 We have no foreign manufacturing operations. We define export sales from our wholesale segment as sales to any country or territory other than the United States or its territories or possessions. Our wholesale export sales were approximately $ 323 , $ 406 , and $ 731 in fiscal 2024, 2023, and 2022, respectively. All of our export sales are invoiced and settled in U.S. dollars.

 Inventories

 Inventories (retail merchandise, finished goods, work in process and raw materials) accounted for under the first-in, first out (“FIFO”) method are stated at the lower of cost or net realizable value or, in the case of inventory accounted for under the last-in, first out (“LIFO”) method, at the lower of cost or market. Cost is determined for domestic manufactured furniture inventories using the LIFO method because we believe this methodology provides better matching of revenue and expenses. The cost of imported inventories as well as Lane Venture, Bassett Outdoor and Noa Home product inventories are determined on a first-in, first-out (“FIFO”) basis. Inventories accounted for under the LIFO method represented 50 % and 51 % of total inventory before reserves at November 30, 2024 and November 25, 2023, respectively. We estimate inventory reserves for excess quantities and obsolete items based on specific identification and historical write-offs, taking into account future demand and market conditions. If actual demand or market conditions in the future are less favorable than those estimated, additional inventory write-downs may be required.

 Property and Equipment

 Property and equipment is comprised of all land, buildings and leasehold improvements and machinery and equipment used in the manufacturing and warehousing of furniture, our Company-owned retail operations, our logistical services operations, and corporate administration. This property and equipment is stated at cost less accumulated depreciation. Depreciation is computed over the estimated useful lives of the respective assets utilizing the straight-line method. Buildings and improvements are generally depreciated over a period of 10 to 39 years. Machinery and equipment are generally depreciated over a period of 5 to 10 years. Leasehold improvements are amortized based on the underlying lease term, or the asset’s estimated useful life, whichever is shorter.

 37

 Goodwill

 Goodwill represents the excess of the fair value of consideration given over the fair value of the tangible assets and liabilities and identifiable intangible assets of businesses acquired. The acquisition of assets and liabilities and the resulting goodwill is allocated to the respective reporting unit: Wood, Upholstery, Retail or Noa Home. We review goodwill at the reporting unit level annually for impairment or more frequently if events or circumstances indicate that assets might be impaired.

 In accordance with ASC Topic 350, Intangibles – Goodwill & Other, we first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the quantitative goodwill impairment test described in ASC Topic 350. The more likely than not threshold is defined as having a likelihood of more than 50 percent. If, after assessing the totality of events or circumstances, we determine that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the quantitative impairment test is unnecessary and our goodwill is considered to be unimpaired. However, if based on our qualitative assessment we conclude that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, we will proceed with performing the quantitative evaluation process. For the annual test of goodwill performed as of the beginning of the fourth quarter of fiscal 2024, we performed the qualitative assessment as described above with respect to our upholstery reporting unit and concluded that there was no impairment of goodwill. For the annual test of goodwill performed as of the beginning of the fourth quarter of fiscal 2023, we performed the qualitative assessment as described above with respect to our upholstery reporting unit and concluded that there was no impairment of the goodwill allocated to that reporting unit as of November 25, 2023. However, with respect to our Noa Home reporting unit, we proceeded to the quantitative test and concluded that the goodwill allocated to that reporting unit as of November 25, 2023 was fully impaired. For the annual test of goodwill performed as of the beginning of the fourth fiscal quarter of 2022, we performed the qualitative assessment as described above and concluded that there was no impairment of our goodwill as of November 26, 2022.

 The quantitative evaluation compares the carrying value of each reporting unit that has goodwill with the estimated fair value of the respective reporting unit. Should the carrying value of a reporting unit be in excess of the estimated fair value of that reporting unit, a goodwill impairment charge will be recognized in the amount by which the reporting unit’s carrying amount exceeds its fair value, but not to exceed the total goodwill assigned to the reporting unit. The determination of the fair value of our reporting units is based on a combination of a market approach, that considers benchmark company market multiples, an income approach, that utilizes discounted cash flows for each reporting unit and other Level 3 inputs as specified in the fair value hierarchy in ASC Topic 820, Fair Value Measurements and Disclosure (see Note 4), and, in the case of our retail reporting unit, a cost approach that utilizes estimates of net asset value. The cash flows used to determine fair value are dependent on a number of significant management assumptions such as our expectations of future performance and the expected future economic environment, which are partly based upon our historical experience. Our estimates are subject to change given the inherent uncertainty in predicting future results. Additionally, the discount rate and the terminal growth rate are based on our judgment of the rates that would be utilized by a hypothetical market participant. As part of the goodwill impairment testing, we also consider our market capitalization in assessing the reasonableness of the combined fair values estimated for our reporting units. While we believe such assumptions and estimates are reasonable, the actual results may differ materially from the projected amounts. See Note 8 for additional information regarding the results of our goodwill impairment test performed as of the beginning of the fourth quarter of fiscal 2023.

 Leases

 Effective as of the beginning of fiscal 2020, we adopted ASU 2016-02, Leases (Topic 842) and all related amendments. The guidance requires lessees to recognize substantially all leases on their balance sheet as a right-of-use (“ROU”) asset and a lease liability.

 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 at various locations throughout the continental United States for warehouse space used in our retail segment. We also lease local delivery trucks used in our retail segment. We determine if a contract contains a lease at inception based on our right to control the use of an identified asset and our right to obtain substantially all of the economic benefits from the use of that identified asset. Our real estate lease terms range from one to 15 years and generally have renewal options of between five and 15 years. We assess these options to determine if we are reasonably certain of exercising these options based on all relevant economic and financial factors. Any options that meet this criteria are included in the lease term at lease commencement.

 38

 Most of our leases do not have an interest rate implicit in the lease. As a result, for purposes of measuring our ROU asset and lease liability, we determine our incremental borrowing rate by applying a spread above the U.S. Treasury borrowing rates. In the case an interest rate is implicit in a lease we will use that rate as the discount rate for that lease. Some of our leases contain variable rent payments based on a Consumer Price Index or percentage of sales. Due to the variable nature of these costs, they are not included in the measurement of the ROU asset and lease liability.

 We adopted the standard utilizing the transition election to not restate comparative periods for the impact of adopting the standard and recognizing the cumulative impact of adoption in the opening balance of retained earnings. We elected the package of transition expedients available for expired or existing contracts, which allowed the carry-forward of historical assessments of (1) whether contracts are or contain leases, (2) lease classification and (3) initial direct costs. In addition, we have elected the practical expedient to not separate lease and non-lease components when determining the ROU asset and lease liability and have elected the practical expedient related to land easements, allowing us to carry forward our accounting treatment for land easements on existing agreements. We have also elected the hindsight practical expedient to determine the lease term for existing leases. In our application of hindsight, we evaluated the performance of the leased stores and the associated markets in relation to our overall real estate strategies, which resulted in the determination that most renewal options would not be reasonably certain in determining the expected lease term. We have made an accounting policy election to not recognize ROU assets and lease liabilities on the balance sheet for those leases with initial terms of one year or less and instead such lease obligations will be expensed on a straight-line basis over the lease term.

 See Note 15 for additional information regarding our leases.

 Other Intangible Assets

 Intangible assets acquired in a business combination and determined to have an indefinite useful life are not amortized but are tested for impairment annually or between annual tests when an impairment indicator exists. The recoverability of indefinite-lived intangible assets is assessed by comparison of the carrying value of the asset to its estimated fair value. If we determine that the carrying value of the asset exceeds its estimated fair value, an impairment loss equal to the excess would be recorded. During the second quarter of fiscal 2024, in conjunction with our decision to close Noa Home and cease operations by the end of fiscal 2024, we fully impaired the carrying value of the intangible asset for the Noa Home trade name.

 Definite-lived intangible assets are amortized over their respective estimated useful lives and reviewed for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. We estimate the useful lives of our intangible assets and ratably amortize the value over the estimated useful lives of those assets. If the estimates of the useful lives should change, we will amortize the remaining book value over the remaining useful lives or, if an asset is deemed to be impaired, a write-down of the value of the asset may be required at such time.

 Impairment of Long Lived Assets

 We periodically evaluate whether events or circumstances have occurred that indicate long-lived assets may not be recoverable or that the remaining useful life may warrant revision. When such events or circumstances are present, we assess the recoverability of long-lived assets by determining whether the carrying value will be recovered through the expected undiscounted future cash flows resulting from the use and eventual disposition of the asset. In the event the sum of the expected undiscounted future cash flows is less than the carrying value of the asset, an impairment loss equal to the excess of the asset’s carrying value over its fair value is recorded. Fair value is determined based on discounted cash flows or appraised values depending on the nature of the assets. The long-term nature of these assets requires the estimation of cash inflows and outflows several years into the future.

 When analyzing our real estate properties for potential impairment, we consider such qualitative factors as our experience in leasing and selling real estate properties as well as specific site and local market characteristics. Upon the closure of a Bassett Home Furnishings store, we generally write off all tenant improvements which are only suitable for use in such a store. ROU assets under operating leases are written down to their estimated fair value. Our estimates of the fair value of the impaired ROU assets included estimates of discounted cash flows based upon current market rents and other inputs which we consider to be Level 3 inputs as specified in the fair value hierarchy in ASC Topic 820, Fair Value Measurement and Disclosure (see Note 4).

 39

 Income Taxes

 We account for income taxes under the liability method which requires that we recognize deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amount of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

 We recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. Despite our belief that our liability for unrecognized tax benefits is adequate, it is often difficult to predict the final outcome or the timing of the resolution of any particular tax matters. We may adjust these liabilities as relevant circumstances evolve, such as guidance from the relevant tax authority or our tax advisors, or resolution of issues in the courts. These adjustments are recognized as a component of income tax expense in the period in which they are identified.

 We evaluate our deferred income tax assets to determine if valuation allowances are required or should be adjusted. A valuation allowance is established against our deferred tax assets based on consideration of all available evidence, both positive and negative, using a “more likely than not” standard. This assessment considers, among other matters, the nature, frequency and severity of recent losses, forecasts of future profitability, the duration of statutory carryforward or carryback periods, our experience with tax attributes expiring unused and tax planning alternatives. In making such judgments, significant weight is given to evidence that can be objectively verified. See Note 13 for additional information regarding our income taxes.

 Shipping and Handling Costs

 Costs incurred to deliver wholesale merchandise to customers are recorded in selling, general and administrative expense and totaled $ 22,721 , $ 26,125 , and $ 33,029 for fiscal 2024, 2023 and 2022, respectively. Costs incurred to deliver retail merchandise to customers, including the cost of operating regional distribution warehouses, are also recorded in selling, general and administrative expense and totaled $ 20,342 , $ 23,399 , and $ 23,812 for fiscal 2024, 2023 and 2022, respectively.

 Advertising

 Costs incurred for producing and distributing advertising and advertising materials are expensed when incurred and are included in selling, general and administrative expenses. Advertising costs totaled $ 13,256 , $ 19,106 , and $ 16,698 in fiscal 2024, 2023, and 2022, respectively.

 Insurance Reserves

 We have self-funded insurance programs in place to cover workers’ compensation and health insurance. These insurance programs are subject to various stop-loss limitations. We accrue estimated losses using historical loss experience. Although we believe that the insurance reserves are adequate, the reserve estimates are based on historical experience, which may not be indicative of current and future losses. We adjust insurance reserves, as needed, in the event that future loss experience differs from historical loss patterns.

 Supplemental Cash Flow Information

 Refer to the supplemental lease disclosures in Note 15 for cash flow impacts of leasing transactions during fiscal 2024, 2023 and 2022. At November 30, 2024, $ 273 of our fiscal 2024 purchases of property and equipment were unpaid and included in accounts payable in the accompanying balance sheet. Otherwise, there were no material non-cash investing or financing activities during fiscal 2024, 2023 or 2022.

 40

 Recent Accounting Pronouncements

 Recent Pronouncements Not Yet Adopted 

 In June 2022, the FASB issued Accounting Standards Update No. 2022-03 – Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions, to clarify the guidance in Topic 820 when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security. The amendments in ASU 2022-03 clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The amendments also clarify that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction. In addition, the amendments in ASU 2022-03 require certain additional disclosures related to investments in equity securities subject to contractual sale restrictions. The amendments in ASU 2022-03 will become effective for us as of the beginning of our 2025 fiscal year. Early adoption is permitted. As of November 30, 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.

 In November 2023, the FASB issued Accounting Standards Update 2023-07 – Segment Reporting (Topic ASC 740) Improvements to Reportable Segment Disclosures. The ASU improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The amendments in this update require: 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”); 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. 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. The amendments in ASU 2023-07 will become effective for us for our 2025 fiscal year and for interim periods beginning with our 2026 fiscal year. Early adoption is permitted. We do not expect that this guidance will have a material impact upon our financial position and results of operations.

 In December 2023, the FASB issued Accounting Standards Update 2023-09 – Income Taxes (Topic ASC 740) Income Taxes. 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. It also includes certain other amendments to improve the effectiveness of income tax disclosures. The amendments in ASU 2023-09 will become effective for us as of the beginning of our 2026 fiscal year. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. We do not expect that this guidance will have a material impact upon our financial position and results of operations.

 In November 2024, the FASB issued Accounting Standards Update 2024-03 – Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic ASC 220-40) Disaggregation of Income Statement Expenses. The amendments in this ASU require a public business entity to disclose specific information about certain costs and expenses in the notes to its financial statements for interim and annual reporting periods. The objective of the disclosure requirements is to provided disaggregated information about a public business entity's expenses to help investors (a) better understand the entity's performance, (b) better assess the entity's prospects for future cash flows, and (c) compare an entity's performance over time and with that of other entities. The amendments in ASU 2024-03 will become effective for us for our 2028 fiscal year and for interim periods beginning with our 2029 fiscal year. Early adoption is permitted. We do not expect that this guidance will have a material impact upon our financial position and results of operations.

 41

 3. 

 Business Combinations 

 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. Noa Home had operations in Canada, Australia, Singapore and the United Kingdom. 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. 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 goal.

 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. The allocation of the purchase price (translated into U.S. dollars as of the acquisition date) is as follows:

 Fair value of consideration transferred in exchange for 100% of Noa Home:

 Cash

 $ 
 5,878 
 
 Fair value of contingent consideration payable

 1,375 
 
 Total fair value of consideration paid or payable

 $ 
 7,253 
 
 Allocation of the fair value of consideration transferred:

 Identifiable assets acquired:

 Cash

 $ 
 296 
 
 Inventory

 1,585 
 
 Other current assets

 317 
 
 Property & equipment

 155 
 
 Intangible asset - trade name

 1,929 
 
 Total identifiable assets acquired

 4,282 
 
 Liabilities assumed:

 Accounts payable

 ( 1,227 
 ) 
 
 Customer deposits

 ( 1,059 
 ) 
 
 Other current liabilities and accrued expenses

 ( 458 
 ) 
 
 Total liabilities assumed

 ( 2,744 
 ) 
 
 Net identifiable assets acquired

 1,538 
 
 Goodwill

 5,715 
 
 Total net assets acquired

 $ 
 7,253 
 
 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 US tax purposes. Among the factors that contributed to a purchase price resulting in the recognition of goodwill were 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. As part of our annual test for impairment of goodwill as of the beginning of the fourth quarter of fiscal 2023, all of the goodwill recognized at acquisition was fully impaired. See Note 8 for additional information regarding the impairment.

 A portion of the fair value of the consideration transferred in the amount of $ 1,929 was assigned to the identifiable intangible asset associated with the Noa Home trade name. At the time of acquisition, this intangible asset was considered to have an indefinite life and therefore was not amortized but was tested for impairment annually or between annual tests if an indicator of impairment existed. During the second quarter of fiscal 2024 we concluded that Hoa Home was not likely to achieve profitability in the foreseeable future and decided to cease operations by selling the remaining inventory in an orderly fashion through the end of fiscal 2024. Therefore, at the end of the second quarter of fiscal 2024 we fully impaired the trade name intangible asset, which at the time of the impairment had a carrying value of $ 1,827 reflecting currency translation adjustments through the date of the impairment.

 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 . See Note 4.

 42

 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. 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 paid in December of 2024. 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 during fiscal 2023.

 The pro forma impact of the acquisition has not been presented because it was not material to our consolidated results of operations for the fiscal year ended November 26, 2022.

 4. 

 Financial Instruments, Investments and Fair Value Measurements 

 Financial Instruments 

 Our financial instruments include cash and cash equivalents, short-term investments in certificates of deposit, accounts receivable, and accounts payable. Because of their short maturities, the carrying amounts of cash and cash equivalents, short-term investments in certificates of deposit, accounts receivable, and accounts payable approximate fair value.

 Investments 

 Our short-term investments of $ 20,360 and $ 17,775 at November 30, 2024 and November 25, 2023 consisted of certificates of deposit (CDs) with original terms of six to twelve months, bearing interest at rates ranging from 0.7 % to 5.28 %. At November 30, 2024, the weighted average remaining time to maturity of the CDs was approximately three months and the weighted average yield of the CDs was approximately 4.3 %. Except as noted below, each CD is placed with a federally insured financial institution and all deposits are within Federal deposit insurance limits. As the CDs mature, we expect to reinvest them in CDs of similar maturities of up to one year. Due to the nature of these investments and their relatively short maturities, the carrying amount of the short-term investments at November 30, 2024 and November 25, 2023 approximates their fair value.

 Our investment in CDs at November 30, 2024 includes one CD in the amount of $ 2,500 which was placed with a financial institution that provides merchant services for our retail segment. This CD has been pledged as security for the merchant services agreement. The CD has a six-month term, an interest rate of 2.0 % and the requirement to maintain the pledge will be reassessed prior to the end of fiscal 2025, therefore the CD is classified as a current asset with our other CDs. This CD is in excess of the $250 Federal deposit insurance limit.

 Fair Value Measurement 

 The Company accounts for items measured at fair value in accordance with ASC Topic 820, Fair Value Measurements and Disclosures . ASC 820’s valuation techniques are based on observable and unobservable inputs. Observable inputs reflect readily obtainable data from independent sources, while unobservable inputs reflect our market assumptions. ASC 820 classifies these inputs into the following hierarchy:

 Level 1 Inputs – Quoted prices for identical instruments in active markets.

 Level 2 Inputs – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.

 Level 3 Inputs – Instruments with primarily unobservable value drivers.

 We believe that the carrying amounts of our current assets and current liabilities approximate fair value due to the short-term nature of these items. Our primary non-recurring fair value estimates typically involve the following: business acquisitions (Note 3) which involve a combination of Level 2 and Level 3 inputs to determine the fair value of contingent consideration and net assets acquired, including identified intangible assets; goodwill impairment testing (Note 8), which involves Level 3 inputs; and asset impairments (Note 14) which utilize Level 3 inputs.

 43

 5. Accounts Receivable 

 Accounts receivable consist of the following:

 November 30, 2024 
 
 November 25, 2023 
 
 Gross accounts receivable

 $ 
 14,278 
 
 $ 
 14,271 
 
 Allowance for credit losses

 ( 1,097 
 ) 
 
 ( 535 
 ) 
 
 Net accounts receivable

 $ 
 13,181 
 
 $ 
 13,736 
 
 Activity in the allowance for credit losses was as follows:

 2024 

 2023 

 Balance, beginning of the year

 $ 
 535 
 
 $ 
 1,261 
 
 Additions (recoveries) charged to expense

 624 
 
 219 
 
 Reductions to allowance, net

 ( 62 
 ) 
 
 ( 945 
 ) 
 
 Balance, end of the year

 $ 
 1,097 
 
 $ 
 535 
 
 We believe that the carrying value of our net accounts receivable approximates fair value. The inputs into these fair value estimates reflect our market assumptions and are not observable. Consequently, the inputs are considered to be Level 3 as specified in the fair value hierarchy in ASC Topic 820, Fair Value Measurements and Disclosures . See Note 4.

 6. Inventories 

 Inventories consist of the following:

 November 30, 2024 

 November 25, 2023 

 Wholesale finished goods

 $ 
 24,841 
 
 $ 
 27,521 
 
 Work in process

 519 
 
 637 
 
 Raw materials and supplies

 14,921 
 
 18,655 
 
 Retail merchandise

 31,744 
 
 33,090 
 
 Total inventories on first-in, first-out method

 72,025 
 
 79,903 
 
 LIFO adjustment

 ( 11,665 
 ) 
 
 ( 11,738 
 ) 
 
 Reserve for excess and obsolete inventory

 ( 5,395 
 ) 
 
 ( 5,183 
 ) 
 
 $ 
 54,965 
 
 $ 
 62,982 
 
 We source a significant amount of our wholesale product from other countries. During 2024, 2023 and 2022, purchases from our three largest vendors primarily located in Vietnam were $ 11,689 , $ 15,601 and $ 33,253 respectively.

 We estimate an inventory reserve for excess quantities and obsolete items based on specific identification and historical write-offs, taking into account future demand, market conditions and the respective valuations at LIFO. The need for these reserves is primarily driven by the normal product life cycle. As products mature and sales volumes decline, we rationalize our product offerings to respond to consumer tastes and keep our product lines fresh. If actual demand or market conditions in the future are less favorable than those estimated, additional inventory write-downs may be required. In determining reserves, we calculate separate reserves on our wholesale and retail inventories. Our wholesale inventories tend to carry the majority of the reserves for excess quantities and obsolete inventory due to the nature of our distribution model. These wholesale reserves primarily represent design and style obsolescence. Typically, product is not shipped to our retail warehouses until a consumer has ordered and paid a deposit for the product. We do not typically hold retail inventory for stock purposes. Consequently, floor sample inventory and inventory for delivery to customers account for the majority of our inventory at retail. Retail reserves are based on accessory and clearance floor sample inventory in our stores and any inventory that is not associated with a specific customer order in our retail warehouses.

 44

 Activity in the reserves for excess quantities and obsolete inventory by segment are as follows:

 Wholesale Segment 

 Retail Segment 

 Total 

 Balance at November 26, 2022 

 $ 
 4,103 
 
 $ 
 1,064 
 
 $ 
 5,167 
 
 Additions charged to expense

 3,876 
 
 750 
 
 4,626 
 
 Write-offs

 ( 3,834 
 ) 
 
 ( 776 
 ) 
 
 ( 4,610 
 ) 
 
 Balance at November 25, 2023 

 4,145 
 
 1,038 
 
 5,183 
 
 Additions charged to expense

 4,284 
 
 717 
 
 5,001 
 
 Write-offs

 ( 4,271 
 ) 
 
 ( 518 
 ) 
 
 ( 4,789 
 ) 
 
 Balance at November 30, 2024 

 $ 
 4,158 
 
 $ 
 1,237 
 
 $ 
 5,395 
 
 7. Property and Equipment 

 Property and equipment consist of the following:

 November 30, 

 2024 

 November 25, 

 2023 

 Land

 $ 
 10,866 
 
 $ 
 10,866 
 
 Buildings and leasehold improvements

 124,305 
 
 125,290 
 
 Machinery and equipment

 105,667 
 
 106,613 
 
 Property and equipment at cost

 240,838 
 
 242,769 
 
 Less accumulated depreciation

 ( 163,791 
 ) 
 
 ( 158,788 
 ) 
 
 Property and equipment, net

 $ 
 77,047 
 
 $ 
 83,981 
 
 The net book value of our property and equipment by reportable segment is a follows:

 November 30, 

 2024 

 November 25, 

 2023 

 Wholesale

 $ 
 21,659 
 
 $ 
 23,155 
 
 Retail - Company-owned stores

 40,756 
 
 44,799 
 
 Corporate and other

 14,632 
 
 16,027 
 
 Total property and equipment, net

 $ 
 77,047 
 
 $ 
 83,981 
 
 Depreciation expense associated with the property and equipment shown above was included in income from operations in our consolidated statements of operations as follows:

 2024 

 2023 

 2022 

 Cost of goods sold (wholesale segment)

 $ 
 2,106 
 
 $ 
 2,124 
 
 $ 
 2,082 
 
 Selling, general and administrative expenses:

 Wholesale segment

 261 
 
 274 
 
 271 
 
 Retail segment

 4,849 
 
 5,502 
 
 5,738 
 
 Corporate and Other

 2,644 
 
 2,184 
 
 1,895 
 
 Total included in selling, general and administrative expenses

 7,754 
 
 7,960 
 
 7,904 
 
 Total depreciation expense included in income from operations

 $ 
 9,860 
 
 $ 
 10,084 
 
 $ 
 9,986 
 
 45

 8. Goodwill and Other Intangible Assets 

 Goodwill and other intangible assets consisted of the following:

 November 30, 2024 

 Gross 

 Carrying 

 Amount 

 Accumulated 

 Amortization 

 Intangible 

 Assets, Net 

 Intangibles subject to amortization:

 Customer relationships

 $ 
 512 
 
 $ 
 ( 392 
 ) 
 
 $ 
 120 
 
 Intangibles not subject to amortization:

 Trade name

 6,848 
 
 Goodwill

 7,217 
 
 Total goodwill and other intangible assets

 $ 
 14,185 
 
 November 25, 2023 

 Gross 

 Carrying 

 Amount 

 Accumulated 

 Amortization 

 Intangible 

 Assets, Net 

 Intangibles subject to amortization:

 Customer relationships

 $ 
 512 
 
 $ 
 ( 337 
 ) 
 
 $ 
 175 
 
 Intangibles not subject to amortization:

 Trade names

 8,675 
 
 Goodwill

 7,217 
 
 Total goodwill and other intangible assets

 $ 
 16,067 
 
 We performed the annual test for impairment of the carrying value of our goodwill as of the beginning of the fourth quarter of fiscal 2024. Based on the initial qualitative analysis performed under ASC Topic 350, we concluded that is was not more likely than not that the carrying value of our upholstery reporting unit within our wholesale segment exceeded its fair value. We performed the annual test for impairment of the carrying value of our goodwill as of the beginning of the fourth quarter of fiscal 2023. Based on the initial qualitative analysis performed under ASC Topic 350, we concluded that it was not more likely than not that the carrying value of our upholstery reporting unit within our wholesale segment exceeded its fair value. However, due to the actual and expected future underperformance of our Noa Home reporting unit relative to management's original expectations, we performed a strategic review of the operations as of the beginning of the fourth quarter and concluded that Noa Home should exit the Australian market and focus more on the North American market. Coupled with the financial underperformance and the exit of Australia, we performed a quantitative test of the carrying value of the goodwill recognized as part of the 2022 acquisition of Noa Home and concluded that it was necessary to fully impair the carrying value of the Noa Home goodwill, resulting in a non-cash impairment charge of $5,409 in fiscal 2023.

 The determination of the fair value of our reporting units is based on a combination of a market approach, that considers benchmark company market multiples and comparable transactions occurring within the last two years and an income approach, that utilizes discounted cash flows for each reporting unit and other Level 3 inputs as specified in the fair value hierarchy in ASC Topic 820, Fair Value Measurements and Disclosure (see Note 4) The valuation of the Noa Home reporting unit was primarily based on the market approach due to significant uncertainty in the future cash flows of Noa Home. Under the income approach, we determine fair value based on the present value of the most recent cash flow projections for each reporting unit as of the date of the analysis and calculate a terminal value utilizing a terminal growth rate. The significant assumptions under this approach include, among others: income projections, which are dependent on future sales, new product introductions, customer behavior, competitor pricing, operating expenses, the discount rate, and the terminal growth rate. The cash flows used to determine fair value are dependent on a number of significant management assumptions such as our expectations of future performance and the expected future economic environment, which are partly based upon our historical experience. Our estimates are subject to change given the inherent uncertainty in predicting future results. Additionally, the discount rate and the terminal growth rate are based on our judgment of the rates that would be utilized by a hypothetical market participant. As part of the goodwill impairment testing, we also consider our market capitalization in assessing the reasonableness of the combined fair values estimated for our reporting units.

 46

 Changes in the carrying amounts of goodwill by reportable segment were as follows:

 Wholesale 

 Retail 

 Corporate 

 and Other 

 Total 

 Balance as of November 26, 2022

 $ 
 7,217 
 
 $ 
 - 
 
 $ 
 5,554 
 
 $ 
 12,771 
 
 Foreign currency translation adjustment

 - 
 
 - 
 
 ( 145 
 ) 
 
 ( 145 
 ) 
 
 Full impairment of Noa Home goodwill

 - 
 
 - 
 
 ( 5,409 
 ) 
 
 ( 5,409 
 ) 
 
 Balance as of November 25, 2023

 7,217 
 
 - 
 
 - 
 
 7,217 
 
 No changes in fiscal 2024

 - 
 
 - 
 
 - 
 
 - 
 
 Balance as of November 30, 2024

 $ 
 7,217 
 
 $ 
 - 
 
 $ 
 - 
 
 $ 
 7,217 
 
 Accumulated impairment losses were $ 9,306 , $ 9,306 and $ 3,897 at November 30, 2024, November 25, 2023 and November 26, 2022, respectively.

 The weighted average useful lives of our finite-lived intangible assets and remaining amortization periods as of November 30, 2024 are as follows:

 Useful Life 

 in Years 

 Remaining 

 Amortization 

 Period in 

 Years 

 Customer relationships

 9 
 
 3 
 
 Our trade name intangible asset at November 30, 2024 is associated with Lane Venture. Because it is our intention to maintain and grow this brand, it is considered to be an indefinite-lived intangible asset. At November 25, 2023 our trade name intangible assets also included an asset for the Noa Home trade name which had been considered an indefinite-lived intangible asset upon acquisition in 2022. However, in connection with our decision to cease operations at Noa Home and liquidate its assets, the carrying value of the Noa Home trade name was fully impaired during the second quarter of fiscal 2024. The amortization expense associated with finite-lived intangible assets during fiscal 2024, 2023 and 2022 was $ 57 each year and is included in selling, general and administrative expense in our consolidated statement of operations. All expense arising from the amortization of intangible assets is associated with our wholesale segment. Estimated future amortization expense for intangible assets that exist at November 30, 2024 is as follows:

 Fiscal 2025

 57 
 
 Fiscal 2026

 57 
 
 Fiscal 2027

 6 
 
 Fiscal 2028

 - 
 
 Fiscal 2029

 - 
 
 Total

 $ 
 120 
 
 9. Bank Credit Facility 

 On May 15, 2024, we entered into the Eighth Amended and Restated Credit Agreement with our bank (the “Credit Facility”). This Credit Facility provides for a line of credit of up to $ 25,000 . At November 30, 2024, we had $ 6,013 outstanding under standby letters of credit against our line. The line bears interest at the One-Month Term Secured Overnight Financing Rate (“One-Month Term SOFR”) plus 1.75 % and is secured by our accounts receivable and inventory. Our bank charges a fee of 0.25 % on the daily unused balance of the line, payable quarterly. Under the terms of the Credit Facility, Consolidated Minimum Tangible Net Worth (as defined in the Credit Facility) shall at no time be less than $ 120,000 . In addition, we must maintain the following financial covenants, measured quarterly on a rolling twelve-month basis and commencing as of the end of the first fiscal quarter after the first date that the used commitment (the sum of any outstanding advances plus standby letters of credit) equals or exceeds $ 8,250 :

 ●

 Consolidated Fixed Charge Coverage Ratio (as defined in the Credit Facility) of not less than 1.2 times and

 47

 ●

 Consolidated Lease Adjusted Leverage to EBITDAR Ratio (as defined in the Credit Facility) not to exceed 3.35 times.

 Since our used commitment was less than $ 8,250 at November 30, 2024, we were not required to test the Consolidated Fixed Charge Coverage Ratio or the Consolidated Lease Adjusted Leverage to EBITDAR Ratio. Had we been required to test those ratios, we would not have been able to achieve the required levels for either of these ratios. Consequently, our availability under the Credit Facility is currently limited to an additional $2,237.

 Interest paid during fiscal 2024, 2023 and 2022 was not material.

 10. Post-Employment Benefit Obligations 

 Management Savings Plan

 On May 1, 2017, our Board of Directors, upon the recommendation of the Organization, Compensation and Nominating Committee (the “Committee”), adopted the Bassett Furniture Industries, Incorporated Management Savings Plan (the “Plan”). The Plan is an unfunded, nonqualified deferred compensation plan maintained for the benefit of certain highly compensated or management level employees.

 The Plan is an account-based plan under which (i) participants may defer voluntarily the payment of current compensation to future years (“participant deferrals”) and (ii) the Company may make annual awards to participants payable in future years (“Company contributions”). The Plan permits each participant to defer up to 75 % of base salary and up to 100 % of any incentive compensation or other bonus, which amounts would be credited to a deferral account established for the participant. Such deferrals will be fully vested at the time of the deferral. Participant deferrals will be indexed to one or more deemed investment alternatives chosen by the participant from a range of alternatives made available under the Plan. Each participant’s account will be adjusted to reflect gains and losses based on the performance of the selected investment alternatives. A participant may receive distributions from the Plan: (1) upon separation from service, in either a lump sum or annual installment payments over up to a 15 year period, as elected by the participant, (2) upon death or disability, in a lump sum, or (3) on a date or dates specified by the participant (“scheduled distributions”) with such scheduled payments made in either a lump sum or substantially equal annual installments over a period of up to five years, as elected by the participant. Participant contributions commenced during the third quarter of fiscal 2017. Company contributions will vest in full (1) on the third anniversary of the date such amounts are credited to the participant’s account, (2) the date that the participant reaches age 63 or (3) upon death or disability. Company contributions are subject to the same rules described above regarding the crediting of gains or losses from deemed investments and the timing of distributions. Expense (credits) associated with deferred compensation under the Plan was $ 925 , $ 46 and $( 16 ) for fiscal 2024, 2023 and 2022, respectively. Our liability for Company contributions and participant deferrals at November 30, 2024 and November 25, 2023 was $ 3,486 and $ 2,661 , respectively, and is included in post-employment benefit obligations in our consolidated balance sheets.

 On May 2, 2017, we made Long Term Cash Awards (“LTC Awards”) totaling $ 2,000 under the Plan to certain management employees in the amount of $ 400 each. The LTC Awards vest in full on the first anniversary of the date of the award if the participant has reached age 63 by that time, or, if later, on the date the participant reaches age 63, provided in either instance that the participant is still employed by the Company at that time. If not previously vested, the awards will also vest immediately upon the death or disability of the participant prior to the participant’s separation from service. The awards will be payable in 10 equal annual installments following the participant’s death, disability or separation from service. We are accounting for the LTC Awards as a defined benefit pension plan. During fiscal 2024, 2023 and 2022, we invested $ 343 , $ 1,019 and $ 853 in life insurance policies covering all participants in the Plan. At November 30, 2024, these policies have a net death benefit of $ 15,885 for which the Company is the sole beneficiary. These policies are intended to provide a potential source of funds to meet the obligations arising from the deferred compensation and LTC Awards under the Plan and serve as an economic hedge of the financial impact of changes in the liabilities. They are held in an irrevocable trust but are subject to claims of creditors in the event of the Company’s insolvency.

 Supplemental Retirement Income Plan

 We have an unfunded Supplemental Retirement Income Plan (the “Supplemental Plan”) that covers one current and certain former executives. Upon retirement, the Supplemental Plan provides for lifetime monthly payments in an amount equal to 65% of the participant’s final average compensation as defined in the Supplemental Plan, which is reduced by certain social security benefits to be received and other benefits provided by us. The Supplemental Plan also provides a death benefit that is calculated as (a) prior to retirement death, which pays the beneficiary 50% of final average annual compensation for a period of 120 months, or (b) post-retirement death, which pays the beneficiary 200% of final average compensation in a single payment. We own life insurance policies on these executives with a current net death benefit of $1,587 at November 30, 2024. We expect that any death benefit payable out of the plan would be substantially offset by the proceeds received from our life insurance policy upon the death of the executive. Funding for the remaining cash flows is expected to be provided through operations. There are no benefits payable as a result of a termination of employment for any reason other than death or retirement, other than a change of control provision which provides for the immediate vesting and payment of the retirement benefit under the Supplemental Plan in the event of an employment termination resulting from a change of control.

 48

 Aggregated summarized information for the Supplemental Plan and the LTC Awards, measured as of the end of each year presented, is as follows:

 `

 2024 

 2023 

 Change in Benefit Obligation: 

 Projected benefit obligation at beginning of year

 $ 
 6,979 
 
 $ 
 7,262 
 
 Service cost

 13 
 
 27 
 
 Interest cost 

 391 
 
 370 
 
 Actuarial (gains) and losses

 ( 170 
 ) 
 
 ( 424 
 ) 
 
 Benefits paid

 ( 296 
 ) 
 
 ( 256 
 ) 
 
 Projected benefit obligation at end of year

 $ 
 6,917 
 
 $ 
 6,979 
 
 Accumulated Benefit Obligation 

 $ 
 6,917 
 
 $ 
 6,979 
 
 Discount rate used to value the ending benefit obligations: 

 5.00 
 % 
 
 5.92 
 % 
 
 Amounts recognized in the consolidated balance sheet: 

 Current liabilities

 $ 
 792 
 
 $ 
 719 
 
 Noncurrent liabilities

 6,085 
 
 6,260 
 
 Total amounts recognized

 $ 
 6,877 
 
 $ 
 6,979 
 
 Amounts recognized in accumulated other comprehensive income: before income tax effects: 

 Prior service cost

 $ 
 - 
 
 $ 
 103 
 
 Actuarial (gain) loss

 ( 1,066 
 ) 
 
 ( 965 
 ) 
 
 Net amount recognized

 $ 
 ( 1,066 
 ) 
 
 $ 
 ( 862 
 ) 
 
 Total recognized in net periodic benefit cost and accumulated other comprehensive income: 

 $ 
 234 
 
 $ 
 ( 27 
 ) 
 
 2024 

 2023 

 2022 

 Components of Net Periodic Pension Cost: 

 Service cost

 $ 
 13 
 
 $ 
 27 
 
 $ 
 36 
 
 Interest cost 

 391 
 
 370 
 
 231 
 
 Amortization of prior service cost 

 61 
 
 125 
 
 126 
 
 Amortization of other loss 

 ( 22 
 ) 
 
 - 
 
 133 
 
 Net periodic pension cost 

 $ 
 443 
 
 $ 
 522 
 
 $ 
 526 
 
 Assumptions used to determine net periodic pension cost: 

 Discount rate

 5.92 
 % 
 
 5.38 
 % 
 
 2.25 
 % 
 
 Increase in future compensation levels

 3.00 
 % 
 
 3.00 
 % 
 
 3.00 
 % 
 
 Estimated Future Benefit Payments (with mortality): 

 Fiscal 2025

 $ 
 792 
 
 Fiscal 2026

 794 
 
 Fiscal 2027

 791 
 
 Fiscal 2028

 749 
 
 Fiscal 2029

 709 
 
 Fiscal 2030 through 2034

 2,864 
 
 49

 Of the $ 1,066 net gain recognized in accumulated other comprehensive income at November 30, 2024, $ 65 of amortization is expected to be recognized as a component of net periodic pension cost during fiscal 2025.

 The components of net periodic pension cost other than the service cost component are included in other loss, net in our consolidated statements of operations.

 Deferred Compensation Plan

 We have an unfunded Deferred Compensation Plan that covers one current and certain former executives and provides for voluntary deferral of compensation. This plan has been frozen with no additional participants or benefits permitted. We recognized expense of $ 79 , $ 204 , and $ 154 in fiscal 2024, 2023, and 2022, respectively, associated with the plan. Our liability under this plan was $ 1,568 and $ 1,655 as of November 30, 2024 and November 25, 2023, respectively. The non-current portion of this obligation is included in post-employment benefit obligations in our consolidated balance sheets, with the current portion included in accrued compensation and benefits.

 Defined Contribution Plan

 We have a qualified defined contribution plan (Employee Savings/Retirement Plan) that covers substantially all employees who elect to participate and have fulfilled the necessary service requirements. Employee contributions to the Plan are matched at the rate of 25 % of up to 8 % of gross pay, regardless of years of service. Expense for employer matching contributions was $ 943 , $ 998 and $ 1,108 during fiscal 2024, 2023 and 2022, respectively.

 11. Accumulated Other Comprehensive Income (Loss) 

 The activity in accumulated other comprehensive income (loss) for the fiscal years ended November 30, 2024 and November 25, 2023, which is comprised of post-retirement benefit costs related to our SERP and LTC Awards as well as cumulative translation adjustments arising from our investment in Noa Home, is as follows:

 Balance at November 26, 2022

 $ 
 50 
 
 Actuarial gains

 424 
 
 Net pension amortization reclassified from accumulated other comprehensive loss

 119 
 
 Foreign currency translation adjustment

 ( 378 
 ) 
 
 Tax effects

 ( 63 
 ) 
 
 Balance at November 25, 2023

 152 
 
 Actuarial gains

 170 
 
 Net pension amortization reclassified from accumulated other comprehensive loss

 39 
 
 Foreign currency translation adjustment (1) 

 652 
 
 Tax effects

 ( 220 
 ) 
 
 Balance at November 30, 2024

 $ 
 793 
 
 (1)

 Includes the transfer of $ 962 of cumulative translation loss out of accumulated other comprehensive loss into the fiscal 2024 loss from operations upon the substantial completion of the liquidation of Noa Home (See Note 14). 

 50

 12. Capital Stock and Stock Compensation 

 We account for our stock-based employee and director compensation plans in accordance with ASC 718, Compensation – Stock Compensation . ASC 718 requires recognition of the cost of employee services received in exchange for an award of equity instruments in the financial statements over the period the employee is required to perform the services in exchange for the award (presumptively the vesting period) which we recognize on a straight-line basis. Compensation expense related to restricted stock and stock options included in selling, general and administrative expenses in our consolidated statements of operations for fiscal 2024, 2023 and 2022 was as follows:

 2024 

 2023 

 2022 

 Stock based compensation expense

 $ 
 804 
 
 $ 
 849 
 
 $ 
 538 
 
 Incentive Stock Compensation Plans

 2021 Plan 

 On March 10, 2021, our shareholders approved the Bassett Furniture Industries, Incorporated 2021 Stock Incentive Plan (the “2021 Plan”). All present and future non-employee directors, key employees and outside consultants for the Company are eligible to receive incentive awards under the 2021 Plan. Our Organization, Compensation and Nominating Committee (the “OCN Committee”) selects eligible key employees and outside consultants to receive awards under the 2021 Plan in its discretion. Our Board of Directors or any committee designated by the Board of Directors selects eligible non-employee directors to receive awards under the 2021 Plan in its discretion. Five hundred thousand (500,000) shares of common stock are reserved for issuance under the 2021 Plan. Participants may receive the following types of incentive awards under the 2021 Plan: stock options, stock appreciation rights, payment shares, restricted stock, restricted stock units and performance shares. Stock options may be incentive stock options or non-qualified stock options. Stock appreciation rights may be granted in tandem with stock options or as a freestanding award. Non-employee directors and outside consultants are eligible to receive restricted stock and restricted stock units only. The full terms of the 2021 Plan have been filed as an exhibit to our Schedule 14A filed with the United States Securities and Exchange Commission on February 8, 2021.

 We have elected to account for forfeitures as they occur. Compensation cost for awards with graded vesting schedules are accounted for on a straight-line basis.

 Restricted Shares 

 Changes in the outstanding non-vested restricted shares during the year ended November 30, 2024 were as follows:

 Number of Shares 

 Weighted 

 Average 

 Grant Date 

 Fair Value Per 

 Share 

 Non-vested restricted shares outstanding at November 25, 2023

 92,313 
 
 $ 
 17.13 
 
 Granted

 48,109 
 
 16.62 
 
 Vested

 ( 46,013 
 ) 
 
 17.29 
 
 Non-vested restricted shares outstanding at November 30, 2024

 94,409 
 
 $ 
 15.77 
 
 During fiscal 2024, 46,013 restricted shares were vested and released, of which 30,900 shares had been granted to employees and 15,113 shares had been granted to directors. During fiscal 2024, 2023 and 2022, 10,360 shares, 5,985 shares and 1,225 shares, respectively, were withheld to cover withholding taxes of $ 161 , $ 109 and $ 19 , respectively, arising from the vesting of restricted shares. During fiscal 2024, 2023 and 2022, excess tax benefits of $ 9 , $ 10 and $ 1 , respectively, were recognized within income tax expense upon the release of vested shares.

 51

 Additional information regarding our outstanding non-vested restricted shares, which are all subject to service conditions, at November 30, 2024 is as follows:

 Original 

 Remaining 

 Restricted 

 Share Value 

 Vesting 

 Restriction 

 Grant 

 Shares 

 at Grant Date 

 Period 

 Period 

 Date 

 Outstanding 

 Per Share 

 (Years) 

 (Years) 

 January 12, 2022

 15,500 
 
 $ 
 15.82 
 
 3 
 
 0.1 
 
 January 11, 2023

 30,800 
 
 17.55 
 
 3 
 
 1.1 
 
 March 6, 2024

 18,109 
 
 15.46 
 
 1 
 
 0.3 
 
 October 29, 2024

 30,000 
 
 14.11 
 
 3 
 
 2.9 
 
 94,409 
 
 Unrecognized compensation cost related to these non-vested restricted shares at November 30, 2024 is $ 752 , all of which is expected to be recognized in fiscal 2025 through fiscal 2027.

 Employee Stock Purchase Plan

 In March of 2017 we adopted and implemented the 2017 Employee Stock Purchase Plan (“2017 ESPP”) that allows eligible employees to purchase a limited number of shares of our stock at 85 % of market value. Under the 2017 ESPP we sold 30,436 , 28,063 and 30,074 shares to employees during fiscal 2024, 2023 and 2022, respectively, which resulted in an immaterial amount of compensation expense. There are 43,961 shares remaining available for sale under the 2017 ESPP at November 30, 2024.

 13. Income Taxes 

 The components of the income tax provision from continuing operations are as follows:

 2024

 2023

 2022

 Current:

 Federal

 $ 
 ( 1,962 
 ) 
 
 $ 
 ( 121 
 ) 
 
 $ 
 5,659 
 
 State

 ( 273 
 ) 
 
 ( 72 
 ) 
 
 2,154 
 
 Deferred:

 Federal

 ( 1,781 
 ) 
 
 846 
 
 484 
 
 State

 ( 659 
 ) 
 
 30 
 
 405 
 
 Total

 $ 
 ( 4,675 
 ) 
 
 $ 
 683 
 
 $ 
 8,702 
 
 A reconciliation of the statutory federal income tax rate and the effective income tax rate, as a percentage of income before income taxes, is as follows:

 2024

 2023

 2022

 Statutory federal income tax rate

 21.0 
 
 %

 21.0 
 
 %

 21.0 
 
 %

 State income tax, net of federal benefit

 5.4 
 
 3.8 
 
 4.4 
 
 Nondeductible goodwill, restructuring and other charges

 ( 6.9 
 ) 
 
 ( 45.7 
 ) 
 
 - 
 
 Nontaxable gain on revaluation of contingent consideration

 - 
 
 8.6 
 
 - 
 
 Capital loss carryback

 15.9 
 
 - 
 
 - 
 
 Other

 0.4 
 
 3.0 
 
 ( 0.3 
 ) 
 
 Change in valuation allowance

 ( 3.3 
 ) 
 
 ( 18.2 
 ) 
 
 0.4 
 
 Effective income tax rate

 32.5 
 % 
 
 ( 27.5 
 
 )%

 25.5 
 
 %

 52

 Excess tax benefits in the amount of $ 9 , $ 10 and $ 1 were recognized as a component of income tax expense during fiscal 2024, 2023 and 2022, respectively, resulting from the exercise of stock options and the release of restricted shares. The fiscal 2023 adjustment for impairment of non-deductible goodwill reflect the fact that there was no tax basis related to the impaired goodwill.

 The income tax effects of temporary differences and carryforwards, which give rise to significant portions of the deferred income tax assets and deferred income tax liabilities, are as follows:

 November 30, 2024 

 November 25, 2023 

 Deferred income tax assets:

 Trade accounts receivable

 $ 
 278 
 
 $ 
 135 
 
 Inventories

 3,867 
 
 3,847 
 
 Post employment benefit obligations

 2,498 
 
 2,426 
 
 Federal net operating loss and credit carryforwards

 1,107 
 
 151 
 
 State net operating loss carryforwards

 621 
 
 2 
 
 Foreign net operating loss carryforwards

 2,264 
 
 1,791 
 
 Operating lease liabilities

 27,138 
 
 29,185 
 
 Other

 1,182 
 
 1,515 
 
 Gross deferred income tax assets

 38,955 
 
 39,052 
 
 Valuation allowance

 ( 2,264 
 ) 
 
 ( 1,791 
 ) 
 
 Total deferred income tax assets

 36,691 
 
 37,261 
 
 Deferred income tax liabilities:

 Property and equipment

 4,200 
 
 5,894 
 
 Intangible assets

 1,235 
 
 984 
 
 Operating lease assets

 23,771 
 
 25,239 
 
 Prepaid expenses and other

 618 
 
 499 
 
 Total deferred income tax liabilities

 29,824 
 
 32,616 
 
 Net deferred income tax assets

 $ 
 6,867 
 
 $ 
 4,645 
 
 We have foreign net operating loss carryforwards attributable to Noa Home (see Note 3) of $ 10,780 resulting in a deferred tax asset of $ 2,264 upon which we have placed a full valuation allowance. During fiscal 2024, we generated federal net operating loss carryforwards of $ 5,152 and state net operating loss carryforwards of $ 530 .

 Income tax refunds received, net of taxes paid, during fiscal 2024 and 2023 were $ 658 and $ 263 , respectively. Income taxes paid, net of refunds received, during fiscal 2022 was $ 20,176 .

 We regularly evaluate, assess and adjust our accrued liabilities for unrecognized tax benefits in light of changing facts and circumstances, which could cause the effective tax rate to fluctuate from period to period. Our liabilities for uncertain tax positions are not material.

 Significant judgment is required in evaluating the Company's federal and state tax positions and in the determination of its tax provision. Despite our belief that the liability for unrecognized tax benefits is adequate, it is often difficult to predict the final outcome or the timing of the resolution of any particular tax matter. We may adjust these liabilities as relevant circumstances evolve, such as guidance from the relevant tax authority, or resolution of issues in the courts. These adjustments are recognized as a component of income tax expense in the period in which they are identified. The Company also cannot predict when or if any other future tax payments related to these tax positions may occur.

 We remain subject to examination for tax years 2021 through 2024 for all of our major tax jurisdictions.

 53

 14. Other Gains and Losses 

 Asset Impairment Charges 

 During fiscal 2024, we recognized non-cash charges for asset impairments totaling $ 5,515 which consisted of the following:

 ●

 $ 2,887 in our retail segment which included $ 1,978 related to the impairment of leasehold improvements and $ 750 from the impairment of right-of-use assets at certain underperforming retail stores, as well as $ 159 for the impairment of right-of-use assets at certain warehouse locations resulting from the consolidation of our retail warehouses.

 ●

 $ 727 for the impairment of plant and equipment in our wholesale segment related to the consolidation of our domestic wood production facilities.

 ●

 $ 1,901 for the impairment of long-lived assets at Noa Home. During the second quarter we concluded that Noa Home was not likely to achieve profitability in the foreseeable future and decided to cease operations by selling the remaining inventory in an orderly fashion through then end of fiscal 2024. $ 1,827 of these charges are for the full impairment of the Noa Home trade name intangible asset , and $ 74 relates to the full impairment of customized software used in the Noa Home operations.

 Our estimates of the fair value of the impaired right-of-use assets included estimates of discounted cash flows based upon current market rents and other inputs which we consider to be Level 3 inputs as specified in the fair value hierarchy in ASC Topic 820, Fair Value Measurement and Disclosure.

 Loss on Contract Abandonment 

 During fiscal 2024, we recognized a charge of $ 1,240 to accrue the remaining minimum charges payable under a contract for logistical services which our wholesale segment ceased utilizing during the third fiscal quarter of 2024. These minimum payments will continue through January of 2026.

 Loss Upon Realization of Cumulative Translation Adjustment 

 In connection with the liquidation of the Noa Home business, we recognized a pre-tax charge of $ 962 during the fourth quarter of fiscal 2024 for the realization of cumulative translation adjustments previously carried in accumulated other comprehensive loss.

 Restructuring Charges 

 In the fourth quarter of fiscal 2024 we recognized a restructuring charge of $ 440 representing accrued severance pay for certain affected employees. At November 30, 2024, $ 432 of the accrual remained in other current liabilities and is expected to be paid out by the end of the second quarter of fiscal 2025.

 Goodwill Impairment Charge 

 See Note 8 regarding the $ 5,409 non-cash charge during fiscal 2023 to impair goodwill associated with Noa Home.

 Gain on Revaluation of Contingent Consideration 

 See Note 3 regarding a $ 1,013 gain during fiscal 2023 resulting from the revaluation of contingent consideration owed to the former owners of Noa Home.

 Gains on Dispositions of Retail Store Locations 

 During the third quarter of fiscal 2022, we sold one of our Company-owned store locations in Houston, Texas for $ 8,217 net of closing costs, resulting in a gain of $ 4,595 during the year ended November 26, 2022.

 This sale, together with our purchase of real property in Tampa, Florida for $ 7,668 in cash during the second quarter of fiscal 2022 was treated as an exchange of like-kind property under Section 1031 of the Internal Revenue Code of 1986, as amended, for the purpose of deferring approximately $ 4,300 of the taxable gain arising from the sale of the Houston property. A VIE was established during the second quarter of fiscal 2022 for purposes of acquiring the Tampa, Florida property, of which the Company was the primary beneficiary by virtue of our control over the activities that most significantly impact the entity's economic performance. 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.

 54

 Other loss, net for the fiscal 2022 includes a gain of $ 1,441 arising from death benefits from Company-owned life insurance.

 15. Leases and Lease Guarantees 

 Leases

 See “Leases” under Note 2 for a discussion of our accounting policies and elections under Topic 842.

 Supplemental balance sheet information related to our leases as of November 30, 2024 and November 25, 2023 is as follows:

 November 30, 2024 

 November 25, 2023 

 Operating leases: 

 Right of use assets

 $ 
 93,624 
 
 $ 
 100,888 
 
 Lease liabilities, short-term

 18,050 
 
 18,827 
 
 Lease liabilities, long-term

 88,395 
 
 97,357 
 
 Finance leases: 

 Right of use assets (1) 

 $ 
 263 
 
 $ 
 327 
 
 Lease liabilities, short-term (2) 

 122 
 
 246 
 
 Lease liabilities, long-term (3) 

 153 
 
 99 
 
 (1)

 Included in property & equipment, net in our consolidated balance sheet. 

 (2)

 Included in other current liabilities and accrued expenses in our consolidated balance sheet. 

 (3)

 Included in other long-term liabilities and accrued expenses in our consolidated balance sheet. 

 Our right-of-use assets under operating leases by segment as of November 30, 2024 and November 25, 2023 are as follows:

 November 30, 2024 

 November 25, 2023 

 Wholesale

 $ 
 6,861 
 
 $ 
 8,689 
 
 Retail

 86,763 
 
 92,190 
 
 Corporate & other

 - 
 
 9 
 
 Total right of use assets

 $ 
 93,624 
 
 $ 
 100,888 
 
 55

 The components of our lease cost for 2024, 2023 and 2022 were as follows:

 2024 

 2023 

 2022 

 Lease cost: 

 Operating lease cost

 $ 
 24,065 
 
 $ 
 24,287 
 
 $ 
 24,399 
 
 Financing lease cost:

 Amortization of right-of-use assets

 235 
 
 278 
 
 279 
 
 Interest on lease liabilities

 20 
 
 22 
 
 35 
 
 Short-term lease cost

 326 
 
 401 
 
 674 
 
 Variable lease cost (net of abatements received)

 138 
 
 260 
 
 447 
 
 Sublease income

 ( 801 
 ) 
 
 ( 1,093 
 ) 
 
 ( 1,444 
 ) 
 
 Total lease cost

 $ 
 23,983 
 
 $ 
 24,155 
 
 $ 
 24,390 
 
 Supplemental lease disclosures as of November 30, 2024, November 25, 2023 and November 26, 2022 and for the fiscal years then ended are as follows:

 Operating 

 Financing 

 For the year ended November 26, 2022:

 Cash paid for amounts included in the measurements of lease liabilities

 26,913 
 
 302 
 
 Lease liabilities arising from new right-of-use assets

 23,171 
 
 73 
 
 For the year ended November 25, 2023:

 Cash paid for amounts included in the measurements of lease liabilities

 26,854 
 
 301 
 
 Lease liabilities arising from new right-of-use assets

 21,921 
 
 - 
 
 For the year ended November 30, 2024:

 Cash paid for amounts included in the measurements of lease liabilities

 26,558 
 
 287 
 
 Lease liabilities arising from new right-of-use assets

 11,050 
 
 197 
 
 As of November 26, 2022:

 Weighted average remaining lease terms (years)

 6.2 
 
 2.3 
 
 Weighted average discount rates

 5.53 
 % 
 
 4.68 
 % 
 
 As of November 25, 2023:

 Weighted average remaining lease terms (years)

 5.5 
 
 1.4 
 
 Weighted average discount rates

 5.78 
 % 
 
 4.72 
 % 
 
 As of November 30, 2024:

 Weighted average remaining lease terms (years)

 5.6 
 
 3.1 
 
 Weighted average discount rates

 6.28 
 % 
 
 6.56 
 % 
 
 Future payments under our leases and the present value of the obligations as of November 30, 2024 are as follows:

 Operating 

 Leases 

 Financing Leases 

 Fiscal 2025

 $ 
 24,283 
 
 $ 
 136 
 
 Fiscal 2026

 24,840 
 
 56 
 
 Fiscal 2027

 23,078 
 
 52 
 
 Fiscal 2028

 19,739 
 
 44 
 
 Fiscal 2029

 13,042 
 
 19 
 
 Thereafter

 23,548 
 
 - 
 
 Total lease payments

 128,530 
 
 307 
 
 Less: interest

 22,085 
 
 32 
 
 Total lease obligations

 $ 
 106,445 
 
 $ 
 275 
 
 56

 We sublease a small number of our leased locations to certain of our licensees for operation as BHF network stores. The terms of these leases generally match those of the lease we have with the lessor. In addition, we sublease space in certain closed store locations that are still under lease. Minimum future lease payments due to us under these subleases are as follows:

 Fiscal 2025

 $ 
 899 
 
 Fiscal 2026

 586 
 
 Fiscal 2027

 215 
 
 Fiscal 2028

 - 
 
 Fiscal 2029

 - 
 
 Thereafter

 - 
 
 Total minimum future rental income

 $ 
 1,700 
 
 Guarantees

 As part of the strategy for our store program, we have guaranteed certain lease obligations of licensee operators. The remaining term under these lease guarantees extends for six years. We were contingently liable under licensee lease obligation guarantees in the amount of $ 5,131 and $ 1,845 at November 30, 2024 and November 25, 2023, respectively.

 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, liquidating the collateral, and pursuing payment under the personal guarantees of the independent dealer. The proceeds of the above options are estimated to cover the maximum amount of our future payments under the guarantee obligations, net of reserves. The fair value of lease guarantees (an estimate of the cost to the Company to perform on these guarantees) at November 30, 2024 and November 25, 2023, were not material.

 16. Contingencies 

 We are involved in various claims and actions which arise in the normal course of business. 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.

 57

 17. Earnings (Loss) Per Share 

 The following table sets forth the computation of basic and diluted earnings (loss) per share:

 2024 

 2023 

 2022 

 Earnings (loss) per share - continuing operations: 

 Numerator:

 Net income (loss) from continuing operations

 $ 
 ( 9,695 
 ) 
 
 $ 
 ( 3,171 
 ) 
 
 $ 
 25,360 
 
 Denominator:

 Denominator for basic income per share - weighted average shares

 8,733,215 
 
 8,784,759 
 
 9,394,873 
 
 Effect of dilutive securities*

 - 
 
 - 
 
 8,107 
 
 Denominator for diluted income per share — weighted average shares and assumed conversions

 8,733,215 
 
 8,784,759 
 
 9,402,980 
 
 Basic income (loss) per share - continuing operations:

 $ 
 ( 1.11 
 ) 
 
 $ 
 ( 0.36 
 ) 
 
 $ 
 2.70 
 
 Diluted income (loss) per share - continuing operations

 $ 
 ( 1.11 
 ) 
 
 $ 
 ( 0.36 
 ) 
 
 $ 
 2.70 
 
 Earnings per share - discontinued operations: 

 Numerator:

 Net income from discontinued operations

 $ 
 - 
 
 $ 
 - 
 
 $ 
 39,985 
 
 Denominator:

 Denominator for basic income per share - weighted average shares

 8,733,215 
 
 8,784,759 
 
 9,394,873 
 
 Effect of dilutive securities*

 - 
 
 - 
 
 8,107 
 
 Denominator for diluted income per share — weighted average shares and assumed conversions

 8,733,215 
 
 8,784,759 
 
 9,402,980 
 
 Basic income per share - discontinued operations

 $ 
 - 
 
 $ 
 - 
 
 $ 
 4.26 
 
 Diluted income per share - discontinued operations

 $ 
 - 
 
 $ 
 - 
 
 $ 
 4.25 
 
 * Due to the net loss in 2024 and 2023, the potentially dilutive securities would have been anti-dilutive and are therefore excluded. 
 
 For fiscal 2024, 2023 and 2022, the following potentially dilutive shares were excluded from the computations as their effect was anti-dilutive:

 2024 

 2023 

 2022 

 Unvested restricted shares

 94,409 
 
 92,313 
 
 - 
 
 58

 18. Discontinued Operations 

 On January 31, 2022, we entered into a definitive agreement to sell substantially all of the assets of Zenith to J.B. Hunt. The sale was completed on February 28, 2022, at which time we received the following net proceeds:

 Sales price prior to post-closing working capital adjustment

 $ 
 86,939 
 
 Less:

 Amount held in escrow for contingencies related to representations and warranties (1)

 1,000 
 
 Seller expenses paid at closing

 418 
 
 Working capital adjustment paid to buyer

 987 
 
 Net proceeds from the sale

 $ 
 84,534 
 
 (1)

 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. 

 The sales price was subject to customary post-closing working capital adjustments which were paid during the second half of fiscal 2022 and resulted in a pre-tax gain from the sale of Zenith of $ 52,534 .

 The operations of our logistical services segment, which consisted entirely of the operations of Zenith, are presented in the accompanying consolidated statements of operations as discontinued operations.

 Following the sale of Zenith, certain of Zenith’s liabilities primarily representing reserves and accrued liabilities for pre-disposal workers’ compensation, health insurance and auto liability claims were retained by Bassett. The remaining balance of these reserves and accruals totaled $ 114 and $ 358 at November 30, 2024 and November 25, 2023, respectively, and are included in accrued compensation and benefits and other current liabilities and accrued expenses in the accompanying condensed consolidated balance sheets.

 The following table summarizes the major classes of line items constituting income of the discontinued operations, as reported in the consolidated statements of operations for fiscal 2022 (there was no income from discontinued operations in 2024 or 2023):

 2022 

 Major line items constituting pretax income of discontinued operations:

 Logistical services revenue

 $ 
 16,776 
 
 Cost of logistical services

 15,001 
 
 Other loss, net

 ( 63 
 ) 
 
 Income from operations of logistical services

 1,712 
 
 Gain on disposal

 52,534 
 
 Pretax income of discontinued operations

 54,246 
 
 Income tax expense

 14,261 
 
 Income from discontinued operations, net of tax

 $ 
 39,985 
 
 The amounts for revenue and costs of logistical services shown above represent the results of Zenith’s business transactions with third parties. Zenith also charged Bassett for logistical services provided to our wholesale segment in the amount of $ 9,121 during 2022 prior to disposal. We have entered into a service agreement with J.B. Hunt for the continuation of these services for a period of seven years following the sale of Zenith. Subsequent to the sale, we incurred $ 22,721 , $ 26,125 and $ 27,604 of expense during fiscal 2024, 2023 and 2022, respectively, for the performance of logistical services.

 59

 The following table summarizes the cash flows generated by discontinued operations during 2022 (there were no cash flows from discontinued operation in 2024 or 2023):

 2022 (1) 

 Cash provided by operating activities

 $ 
 1,681 
 
 Cash used in investing activities

 ( 81 
 ) 
 
 Cash used in financing activities

 ( 371 
 ) 
 
 Net cash provided by (used in) discontinued operations

 $ 
 1,229 
 
 (1)

 Excludes net proceeds from the sale of Zenith. 

 19. Segment Information 

 We have strategically aligned our business into two reportable segments as defined in ASC 280, Segment Reporting , and as described below:

 ●

 Wholesale. 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.

 ●

 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.

 In addition to the two reportable segments described above, we include our remaining business activities and assets in a reconciling category known as Corporate and other. This category 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. We consider our corporate functions to be other business activities and have aggregated them with any of our operating segments that do not meet the requirements to be reportable segments. As of and for the periods ended November 30, 2024, November 25, 2023 and November 26, 2022, the only such operating segment included in Corporate and other is Noa Home, which was acquired on September 2, 2022. All sales reported in our Corporate and other category are attributable to Noa Home, which generated substantially all of its sales outside of the United States. During the second fiscal quarter of 2024 we concluded that Noa Home was not likely to achieve profitability in the foreseeable future and have ceased operations as of November 30, 2024 by selling the remaining inventory in an orderly fashion over the second half of fiscal 2024.

 Inter-company net sales elimination represents the elimination of wholesale sales to our Company-owned stores. Inter-company income elimination includes the embedded wholesale profit in the Company-owned store inventory that has not been realized. These profits will be recorded when merchandise is delivered to the retail consumer. The inter-company income elimination also includes rent paid by our retail stores occupying Company-owned real estate.

 Our former logistical services segment which represented the operations of Zenith is presented as a discontinued operation in the accompanying condensed consolidated statements of operations (see Note 18).

 60

 The following table presents segment information for each of the last three fiscal years:

 2024 

 2023 

 2022 

 Sales Revenue 

 Wholesale sales of furniture and accessories

 $ 
 207,462 
 
 $ 
 248,911 
 
 $ 
 324,569 
 
 Less: Sales to retail segment

 ( 87,021 
 ) 
 
 ( 103,519 
 ) 
 
 ( 125,889 
 ) 
 
 Wholesale sales to external customers

 120,441 
 
 145,392 
 
 198,680 
 
 Retail sales of furniture and accessories

 204,563 
 
 235,940 
 
 285,119 
 
 Corporate & Other - Noa Home

 4,919 
 
 8,804 
 
 1,802 
 
 Consolidated net sales of furniture and accessories

 $ 
 329,923 
 
 $ 
 390,136 
 
 $ 
 485,601 
 
 Income (loss) from Continuing Operations before Income Taxes 

 Income (loss) from Continuing Operations

 Wholesale

 $ 
 25,357 
 
 $ 
 30,699 
 
 $ 
 41,979 
 
 Retail

 ( 6,604 
 ) 
 
 ( 536 
 ) 
 
 19,352 
 
 Net expenses - Corporate and other

 ( 28,456 
 ) 
 
 ( 29,926 
 ) 
 
 ( 30,997 
 ) 
 
 Inter-company elimination

 1,591 
 
 1,024 
 
 ( 64 
 ) 
 
 Asset impairment charges

 ( 5,515 
 ) 
 
 - 
 
 - 
 
 Loss on contract abandonment

 ( 1,240 
 ) 
 
 - 
 
 - 
 
 Loss upon realization of cumulative translation adjustment

 ( 962 
 ) 
 
 - 
 
 - 
 
 Restructuring charges

 ( 440 
 ) 
 
 - 
 
 - 
 
 Gain on revaluation of contingent consideration

 - 
 
 1,013 
 
 - 
 
 Goodwill impairment charge

 - 
 
 ( 5,409 
 ) 
 
 - 
 
 Gain on sale of real estate

 - 
 
 - 
 
 4,595 
 
 Consolidated income (loss) from continuing operations

 ( 16,269 
 ) 
 
 ( 3,135 
 ) 
 
 34,865 
 
 Interest income

 2,673 
 
 2,528 
 
 302 
 
 Interest expense

 ( 30 
 ) 
 
 ( 22 
 ) 
 
 ( 38 
 ) 
 
 Other loss, net

 ( 744 
 ) 
 
 ( 1,859 
 ) 
 
 ( 1,067 
 ) 
 
 Consolidated income (loss) from continuing operations before income taxes

 $ 
 ( 14,370 
 ) 
 
 $ 
 ( 2,488 
 ) 
 
 $ 
 34,062 
 
 Depreciation and Amortization 

 Wholesale

 $ 
 2,424 
 
 $ 
 2,455 
 
 $ 
 2,410 
 
 Retail

 4,850 
 
 5,502 
 
 5,750 
 
 Corporate and other

 2,644 
 
 2,184 
 
 1,883 
 
 Discontinued operations

 - 
 
 - 
 
 1,266 
 
 Consolidated

 $ 
 9,918 
 
 $ 
 10,141 
 
 $ 
 11,309 
 
 Capital Expenditures 

 Wholesale

 $ 
 1,108 
 
 $ 
 2,295 
 
 $ 
 5,509 
 
 Retail

 2,759 
 
 9,877 
 
 10,549 
 
 Corporate and other

 1,344 
 
 5,317 
 
 5,238 
 
 Consolidated

 $ 
 5,211 
 
 $ 
 17,489 
 
 $ 
 21,296 
 
 Identifiable Assets 

 Wholesale

 $ 
 88,533 
 
 $ 
 99,004 
 
 $ 
 125,433 
 
 Retail

 158,084 
 
 166,604 
 
 162,222 
 
 Corporate and Other

 94,553 
 
 104,816 
 
 118,618 
 
 Consolidated

 $ 
 341,170 
 
 $ 
 370,424 
 
 $ 
 406,273 
 
 See Note 20 for disaggregated revenue information regarding sales of furniture and accessories by product type for the wholesale and retail segments.

 61

 20. Revenue Recognition 

 Disaggregated revenue information for sales of furniture and accessories by product category for fiscal years 2024, 2023 and 2022, excluding intercompany transactions between our segments, is as follows:

 2024 

 2023 

 2022 

 Wholesale

 Retail

 Corporate &

 Other (2)

 Total

 Wholesale

 Retail

 Corporate &

 Other (2)

 Total

 Wholesale

 Retail

 Corporate &

 Other

 Total

 Bassett Custom Upholstery

 $ 
 79,344 
 
 $ 
 111,943 
 
 $ 
 - 
 
 $ 
 191,287 
 
 $ 
 89,005 
 
 $ 
 134,000 
 
 $ 
 - 
 
 $ 
 223,005 
 
 $ 
 124,565 
 
 $ 
 163,755 
 
 $ 
 - 
 
 $ 
 288,320 
 
 Bassett Leather

 15,705 
 
 4,990 
 
 - 
 
 20,695 
 
 26,701 
 
 1,951 
 
 - 
 
 28,652 
 
 35,953 
 
 1,707 
 
 - 
 
 37,660 
 
 Bassett Custom Wood

 14,075 
 
 32,201 
 
 - 
 
 46,276 
 
 17,357 
 
 36,732 
 
 - 
 
 54,089 
 
 22,534 
 
 43,208 
 
 - 
 
 65,742 
 
 Bassett Casegoods

 11,317 
 
 26,179 
 
 - 
 
 37,496 
 
 12,329 
 
 32,252 
 
 - 
 
 44,581 
 
 15,628 
 
 40,146 
 
 - 
 
 55,774 
 
 Accessories, mattresses and other (1)

 - 
 
 29,250 
 
 4,919 
 
 34,169 
 
 - 
 
 31,005 
 
 8,804 
 
 39,809 
 
 - 
 
 36,303 
 
 1,802 
 
 38,105 
 
 Consolidated Furniture and Accessories revenue

 $ 
 120,441 
 
 $ 
 204,563 
 
 $ 
 4,919 
 
 $ 
 329,923 
 
 $ 
 145,392 
 
 $ 
 235,940 
 
 $ 
 8,804 
 
 $ 
 390,136 
 
 $ 
 198,680 
 
 $ 
 285,119 
 
 $ 
 1,802 
 
 $ 
 485,601 
 
 (1)

 Includes the sale of goods other than Bassett-branded products, such as accessories and bedding, and also includes the sale of furniture protection plans. 

 (2)

 Beginning with the fourth quarter of fiscal 2022, our Corporate and other reconciling category includes the sales of Noa Home, which was acquired on September 2, 2022 (see Note 3). 

 62

 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

 None.
BASSETT FURNITURE INDUSTRIES INC 10-K

Item 8. Financial Statements and Supplementary Data
