What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-10-08 compared with 2025-07-10 · 119 added, 83 removed, 239 unchanged (46% of the section changed)

26 unchanged sentences

BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES

AUGUST 30, 2025

(Dollars in thousands except share and per share data)

1 unchanged sentence

The prior fiscal year ending November 30, 2024 was a 53-week year, with the additional week being included in the first fiscal quarter.

Accordingly, the information presented below includes 26 weeks of operations for the six months ended May 31, 2025 as compared to 27 weeks included in the six months ended June 1, 2024.

Accordingly, the information presented below includes 39 weeks of operations for the nine months ended August 30, 2025 as compared to 40 weeks included in the nine months ended August 31, 2024.

Bassett is a leading retailer, manufacturer and marketer of branded home furnishings.

14 unchanged sentences

We know that we are driving a significant percentage of the retail foot traffic to our store network and our open market customers through engagement with www.bassettfurniture.com.

Although e-commerce sales continue to be small in relation to in-store sales, we are pleased that we have seen a greater than 35% e-commerce sales increase for the six months ended May 31, 2025 as compared to the same period of 2024.

Although e-commerce sales continue to be small in relation to in-store sales, we are pleased that we have seen a greater than 30% e-commerce sales increase for the nine months ended August 30, 2025 as compared to the same period of 2024.

We will continue to invest in ongoing improvements to the aesthetics and user experience that we provide on our website.

5 unchanged sentences

We have factories in Newton, North Carolina that manufacture both stationary and motion upholstered furniture for inside the home along with our outdoor furniture offerings.

We also have a factory in Martinsville, Virginia that assembles and finishes our custom bedroom and dining offerings.

We have a factory in Martinsville, Virginia that assembles and finishes our custom bedroom and dining offerings.

We also own a facility in Haleyville, Alabama where we manufacture aluminum frames for our outdoor furniture.

3 unchanged sentences

BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES

AUGUST 30, 2025

(Dollars in thousands except share and per share data)

Results of Operations – Periods ended May 31, 2025 compared with the periods ended June 1, 2024:

Consolidated results of operations for the three and six months ended May 31, 2025 and June 1, 2024 are as follows:

Results of Operations – Periods ended August 30, 2025 compared with the periods ended August 31, 2024:

Consolidated results of operations for the three and nine months ended August 30, 2025 and August 31, 2024 are as follows:

Quarter Ended

Six Months Ended*

Nine Months Ended*

August 30, 2025

August 31, 2024

August 30, 2025

August 31, 2024

Net sales of furniture and accessories

1 unchanged sentence

SG&A expenses

Loss on contract abandonment

Asset impairment charges

2 unchanged sentences

Analysis of Quarterly Results:

Total sales revenue for the three months ended May 31, 2025 increased $938 or 1.1% over the prior year period.

This consisted of a $3,764 or 7.5% increase in retail sales from our Company-owned stores partially offset by a $1,742 or 5.5% decline in sales to external wholesale customers and a $1,084 decline in sales by Noa Home, which was closed during the second half of fiscal 2024.

Gross margins for the three months ended May 31, 2025 increased 310 basis points over the prior year period as we recorded $2,700 of additional inventory valuation charges during the three months ended June 1, 2024 ($1,729 in the wholesale segment, $471 in the retail segment and $500 associated with Noa Home).

Excluding those charges, gross margins would have been essentially flat.

Selling, general and administrative (“SG&A”) expenses as a percentage of sales for the three months ended May 31, 2025 decreased 330 basis points from 2024 primarily due to the benefit of cost reductions implemented during the second half of fiscal 2024.

Total sales revenue for the three months ended August 30, 2025 increased $4,484 or 5.9% over the prior year period.

This consisted of a $4,635 or 9.8% increase in retail sales from our Company-owned stores and an $837 or 3.1% increase in sales to external wholesale customers, partially offset by a $988 decline in sales by Noa Home, which was closed during the second half of fiscal 2024.

Gross margins for the three months ended August 30, 2025 increased 320 basis points over the prior year period primarily due to margin improvements at wholesale partially offset by a slight decrease in retail margins from our Company-owned stores.

In addition, the wholesale gross margin in the prior year period was negatively impacted by $609 of unproductive labor costs incurred during the temporary shutdown resulting from the cybersecurity incident that occurred during the third quarter of fiscal 2024.

Selling, general and administrative (“SG&A”) expenses as a percentage of sales for the three months ended August 30, 2025 decreased 440 basis points from 2024 primarily due to the benefit of cost reductions implemented during the second half of fiscal 2024, on-going cost containment activities and greater leverage of fixed costs due to higher sales levels.

Analysis of Year-to-Date Results:

Total sales revenue for the six months ended May 31, 2025 decreased $3,454 or 2.0% from the prior year period.

Normalizing for the additional week in the first half of 2024, consolidated sales increased 1.7% which included a 7.1% increase in retail sales, partially offset by a 2.5% decrease in sales to external wholesale customers and a $2,946 decline due to the closure of Noa Home during the second half of 2024.

Gross margins for the six months ended May 31, 2025 increased 240 basis points over the prior year period.

Excluding the above-mentioned additional inventory valuation charges in 2024, gross margins would have increased 80 basis points primarily due to improved margins in the wholesale segment.

Selling, general and administrative (“SG&A”) expenses as a percentage of sales for the six months ended May 31, 2025 decreased 370 basis points from 2024 primarily due to the benefit of cost reductions implemented during the second half of fiscal 2024.

Total sales revenue for the nine months ended August 30, 2025 increased $1,030 or 0.4% over the prior year period.

Normalizing for the additional week in the first nine months of 2024, consolidated sales increased 3.0% which included a 7.9% increase in retail sales, partially offset by a 0.8% decrease in sales to external wholesale customers and a $3,934 decline due to the closure of Noa Home during the second half of 2024.

Gross margins for the nine months ended August 30, 2025 increased 270 basis points over the prior year period.

Gross margins in the prior year were adversely impacted by increased inventory valuation charges of $1,729 in the wholesale segment, $472 in the retail segment and $500 in the Noa Home operation, as well as $609 of unproductive labor costs incurred during the temporary shutdown resulting from the cybersecurity incident.

Excluding the above-mentioned additional inventory valuation charges and unproductive labor costs in 2024, gross margins would have increased 130 basis points primarily due to improved margins in the wholesale segment.

Selling, general and administrative (“SG&A”) expenses as a percentage of sales for the nine months ended August 30, 2025 decreased 390 basis points from 2024 primarily due to the benefit of cost reductions implemented during the second half of fiscal 2024 coupled with on-going cost containment activities.

PART I-FINANCIAL INFORMATION-CONTINUED

BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES

AUGUST 30, 2025

(Dollars in thousands except share and per share data)

9 unchanged sentences

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 three and six months ended June 1, 2024, the only such operating segment included in Corporate and other is Noa Home, which was acquired on September 2, 2022, subsequently closed during fiscal 2024 and substantially liquidated as of November 30, 2024.

As of and for the three and nine months ended August 31, 2024, the only such operating segment included in Corporate and other is Noa Home, which was acquired on September 2, 2022, subsequently closed during fiscal 2024 and substantially liquidated as of November 30, 2024.

All sales reported in our Corporate and other category during fiscal 2024 were attributable to Noa Home, which generated substantially all of its sales outside of the United States.

5 unchanged sentences

BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES

AUGUST 30, 2025

(Dollars in thousands except share and per share data)

4 unchanged sentences

The reconciliation of this non-GAAP financial measure to the most directly comparable financial measure calculated and presented in accordance with GAAP is presented below along with the effects of various other intercompany eliminations on our consolidated results of operations.

Quarter Ended May 31, 2025

Quarter Ended August 30, 2025

Non-GAAP Presentation

GAAP Presentation

Corporate & Other

Non-Operating

5 unchanged sentences

Income (loss) before income taxes

Quarter Ended June 1, 2024

Quarter Ended August 31, 2024

Non-GAAP Presentation

GAAP Presentation

Corporate & Other

Special Items

Non-Operating

1 unchanged sentence

Cost of furniture and accessories sold

Asset impairment charges

Loss on contract abandonment

Income (loss) from operations

4 unchanged sentences

BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES

AUGUST 30, 2025

(Dollars in thousands except share and per share data)

Six Months Ended May 31, 2025*

Nine Months Ended August 30, 2025*

Non-GAAP Presentation

1 unchanged sentence

Corporate & Other

Special Items

Non-Operating

5 unchanged sentences

Income (loss) before income taxes

Six Months Ended June 1, 2024*

Nine Months Ended August 31, 2024*

Non-GAAP Presentation

5 unchanged sentences

Cost of furniture and accessories sold

Loss on contract abandonment

Asset impairment charges

8 unchanged sentences

Represents the elimination of rent paid by our retail stores occupying Company-owned real estate.

Represents the charge for accruing the remaining minimum payments under a contract for logistical services in Riverside, CA which we no longer utilize.

Represents asset impairment charges of $2,887 and $727 in our retail and wholesale segments, respectively, a $1,827 charge for the impairment of the Noa Home trade name intangible asset, and a $74 charge for the impairment of Noa Home customized software.

1 unchanged sentence

BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES

AUGUST 30, 2025

(Dollars in thousands except share and per share data)

Wholesale Segment

Results for the wholesale segment for the three and six months ended May 31, 2025 and June 1, 2024 are as follows:

Results for the wholesale segment for the three and nine months ended August 30, 2025 and August 31, 2024 are as follows:

Quarter Ended

Six Months Ended*

Nine Months Ended*

August 30, 2025

August 31, 2024

August 30, 2025

August 31, 2024

Gross profit (1)

6 unchanged sentences

Quarter Ended

August 30, 2025

August 31, 2024

Bassett Custom Upholstery

2 unchanged sentences

Bassett Casegoods

Six Months Ended*

Nine Months Ended*

August 30, 2025

August 31, 2024

Bassett Custom Upholstery

4 unchanged sentences

Analysis of Quarterly Results – Wholesale

Net sales for the three months ended May 31, 2025 increased $1,620 or 3.1% over the prior year, consisting of a 12.6% increase in shipments to our retail store network, partially offset by a 2.6% decrease in shipments to the open market, and a 22% decrease in Lane Venture shipments, primarily related to the timing of shipments for a significant customer.

Gross margins for the three months ended May 31, 2025 increased 260 basis points over the prior year period.

Excluding the $1,729 of additional inventory valuation charges in the prior year period, gross margins would have decreased by 70 basis points primarily due to the prior year including a reduction in the warranty and returns reserve from improved experience in warranty and returns claims and improved administration of those claims.

SG&A expenses as a percentage of sales decreased 190 basis points primarily due to lower bad debt costs coupled with the benefit of cost reductions implemented during the second half of fiscal 2024.

Net sales for the three months ended August 30, 2025 increased $2,959 or 6.2% over the prior year, consisting of a 9.2% increase in shipments to our retail store network, a 0.8% increase in shipments to the open market, and a 9.6% increase in Lane Venture shipments.

Gross margins for the three months ended August 30, 2025 increased 440 basis points over the prior year period.

Excluding the $609 of unproductive labor costs incurred during the temporary shutdown resulting from the cybersecurity incident in the prior year period, gross margins would have increased by 310 basis points.

This margin increase was driven by improved pricing strategies in both the upholstery and wood operations coupled with greater leverage of fixed costs from higher sales levels.

SG&A expenses as a percentage of sales decreased 210 basis points primarily due to the benefit of cost reductions implemented during the second half of fiscal 2024 coupled with greater leverage of fixed costs from higher sales levels.

PART I-FINANCIAL INFORMATION-CONTINUED

BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES

AUGUST 30, 2025

(Dollars in thousands except share and per share data)

Analysis of Year-to-Date Results – Wholesale

Net sales for the six months ended May 31, 2025 decreased $154 or 0.1% from the prior year.

Normalizing for the additional the additional week in the first half of 2024, net sales increased 1.7%, consisting of a 9.1% increase in shipments to our retail store network, partially offset by a 2.4% decrease in shipments to the open market and a 9.4% decrease in Lane Venture shipments.

Gross margins for the six months ended May 31, 2025 increased 250 basis points over the prior year.

Excluding the $1,729 of additional inventory valuation charges in the prior year period, gross margins would have increased by 90 basis points due primarily to improved margins in our Bassett Custom Upholstery business from manufacturing efficiency gains, increased margins in our Lane Venture operations due to improved customer mix and improved margins in the Bassett Leather business, partially offset by the prior year including a reduction in the warranty and returns reserve from improved experience in warranty and returns claims and improved administration of those claims.

Net sales for the nine months ended August 30, 2025 increased $2,805 or 1.8% over the prior year.

Normalizing for the additional week in the first nine months of 2024, net sales increased 4.4%, consisting of a 9.1% increase in shipments to our retail store network, partially offset by a 1.5% decrease in shipments to the open market and a 3.4% decrease in Lane Venture shipments.

Gross margins for the nine months ended August 30, 2025 increased 310 basis points over the prior year.

Excluding the $1,729 of increased inventory valuation charges in 2024 and $609 of unproductive labor costs incurred during the temporary shutdown resulting from the cybersecurity incident in 2024, gross margins would have increased by 160 basis points due primarily to improved margins in our Bassett Custom Upholstery business from manufacturing efficiency gains, increased margins in our Lane Venture operations due to improved customer mix and improved margins in the Bassett Leather business, and improved pricing strategies in the remaining wood and upholstery operations, partially offset by the prior year including a reduction in the warranty and returns reserve from improved experience in warranty and returns claims and improved administration of those claims.

SG&A expenses as a percentage of sales decreased 180 basis points primarily due to lower bad debt costs coupled with the benefit of cost reductions implemented during the second half of fiscal 2024.

Wholesale Backlog

Wholesale backlog at May 31, 2025 was $18,418 as compared to $21,750 at November 30, 2024 and $19,373 at June 1, 2024.

Wholesale backlog at August 30, 2025 was $16,596 as compared to $21,750 at November 30, 2024 and $18,481 at August 31, 2024.

Retail – Company-owned Stores Segment

Results for the retail segment for the periods ended May 31, 2025 and June 1, 2024 are as follows:

Results for the retail segment for the periods ended August 30, 2025 and August 31, 2024 are as follows:

Quarter Ended

Six Months Ended*

Nine Months Ended*

August 30, 2025

August 31, 2024

August 30, 2025

August 31, 2024

Gross profit (1)

6 unchanged sentences

Quarter Ended

Six Months Ended*

Nine Months Ended*

August 30, 2025

August 31, 2024

August 30, 2025

August 31, 2024

Bassett Custom Upholstery

7 unchanged sentences

BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES

AUGUST 30, 2025

(Dollars in thousands except share and per share data)

Analysis of Quarterly Results - Retail

Net sales for the three months ended May 31, 2025 increased $3,764 or 7.5% over the prior year period.

Written sales (the value of sales orders taken but not delivered) declined 0.8% from the second quarter of 2024.

Gross margin for the three months ended May 31, 2025 declined 50 basis points over the prior period.

Excluding the $471 of additional inventory valuation charges in the prior year period, gross margins would have decreased by 140 basis points due to lower margins for both in-line and clearance goods as we have become more aggressive in cycling through unproductive inventory.

SG&A expenses as a percentage of sales for the three months ended May 31, 2025 decreased 580 basis points primarily due to the benefit of cost reductions implemented during the second half of fiscal 2024 coupled with lower advertising and marketing costs and efficiency gains in our warehouse and delivery operation.

In addition, SG&A expense for the three months ended May 31, 2025 was reduced by a $569 gain from the receipt of insurance proceeds for a business interruption claim arising from the previously disclosed cyber incident which occurred during the third quarter of fiscal 2024.

Net sales for the three months ended August 30, 2025 increased $4,635 or 9.8% over the prior year period.

Written sales (the value of sales orders taken but not delivered) increased 2.4% from the third quarter of 2024.

Gross margin for the three months ended August 30, 2025 declined 40 basis points from the prior period due to lower margins for both in-line and clearance goods as we have become more aggressive in cycling through unproductive inventory coupled with increased promotional activity.

SG&A expenses as a percentage of sales for the three months ended August 30, 2025 decreased 590 basis points primarily due to the benefit of cost reductions implemented during the second half of fiscal 2024, lower advertising and marketing costs, efficiency gains in our warehouse and delivery operation along with greater leverage of fixed costs due to higher sales levels.

Analysis of Year-to-Date Results – Retail

Net sales for the six months ended May 31, 2025 increased $3,304 or 3.2% over the prior year period.

Normalizing for the additional week in the first half of 2024, net sales increased by 7.1%.

Written sales (the value of sales orders taken but not delivered) declined 1.5% from the second quarter of 2024.

Normalizing for the additional week in the first half of 2024, written sales increased 2.3%.

Gross margin for the six months ended May 31, 2025 declined 60 basis points over the prior period.

Excluding the $471 of additional inventory valuation charges in the prior year period, gross margins would have decreased by 110 basis points due to lower margins for both in-line and clearance goods as we have become more aggressive in cycling through unproductive inventory.

SG&A expenses as a percentage of sales for the six months ended May 31, 2025 decreased 470 basis points primarily due to the benefit of cost reductions implemented during the second half of fiscal 2024 coupled with lower advertising and marketing costs and efficiency gains in our warehouse and delivery operation.

In addition, SG&A expense for the six months ended May 31, 2025 was reduced by a $569 gain from the receipt of insurance proceeds for a business interruption claim arising from the previously disclosed cyber incident which occurred during the third quarter of fiscal 2024.

Net sales for the nine months ended August 30, 2025 increased $7,939 or 5.2% over the prior year period.

Normalizing for the additional week in the first nine months of 2024, net sales increased by 7.9%.

Written sales (the value of sales orders taken but not delivered) declined 0.2% from the prior year period.

Normalizing for the additional week in the first nine months of 2024, written sales increased 2.3%.

Gross margin for the nine months ended August 30, 2025 declined 70 basis points over the prior period.

Excluding the $471 of additional inventory valuation charges in the prior year period, gross margins would have decreased by 100 basis points due to lower margins for both in-line and clearance goods as we have become more aggressive in cycling through unproductive inventory coupled with increased promotional activity.

SG&A expenses as a percentage of sales for the nine months ended August 30, 2025 decreased 510 basis points primarily due to the benefit of cost reductions implemented during the second half of fiscal 2024, lower advertising and marketing costs, efficiency gains in our warehouse and delivery operation along with greater leverage of fixed costs due to higher sales levels.

Retail Backlog

Retail backlog at May 31, 2025 was $34,091 compared to $37,053 at November 30, 2024 and $31,545 at June 1, 2024.

Retail backlog at August 30, 2025 was $32,206 compared to $37,053 at November 30, 2024 and $33,251 at August 31, 2024.

Corporate and Other

1 unchanged sentence

Therefore, prior to fiscal 2025, Noa Home was included within the Corporate and other reconciling category and accounted for all of the sales and gross profit within this reconciling category.

Revenues, costs and expenses of Corporate and other for the periods ended May 31, 2025 and June 1, 2024 are as follows:

Revenues, costs and expenses of Corporate and other for the periods ended August 30, 2025 and August 31, 2024 are as follows:

Quarter Ended

Six Months Ended*

Nine Months Ended*

August 30, 2025

August 31, 2024

August 30, 2025

August 31, 2024

SG&A expenses

2 unchanged sentences

Sales and gross profit declined from the prior year period due to the closure and liquidation of Noa Home during fiscal 2024.

The $559 and $2,981 decrease in SG&A expenses for the three and six months ended May 31, 2025, respectively, was primarily due to closure of Noa Home and decreased corporate overhead spending from better expense management, including the benefit of cost reductions implemented during the second half of fiscal 2024, partially offset by increased incentive compensation.

The $28 and $3,029 decrease in SG&A expenses for the three and nine months ended August 30, 2025, respectively, was primarily due to closure of Noa Home and decreased corporate overhead spending from better expense management, including the benefit of cost reductions implemented during the second half of fiscal 2024, partially offset by increased incentive compensation.

PART I-FINANCIAL INFORMATION-CONTINUED

BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES

AUGUST 30, 2025

(Dollars in thousands except share and per share data)

1 unchanged sentence

Interest Income

Interest income for the three and six months ended May 31, 2025 was $521 and $1,080, respectively, compared to $627 and $1,383, respectively, for the three and six months ended June 1, 2024.

Interest income for the three and nine months ended August 30, 2025 was $472 and $1,552, respectively, compared to $692 and $2,075, respectively, for the three and nine months ended August 31, 2024.

The decline from the prior year period is primarily due to lower balances of interest-bearing cash and cash equivalents, as well as lower average rates earned on our cash and cash equivalents and investments in CDs compared to the preceding year.

Other Loss, Net

Other loss, net, for the three and six months ended May 31, 2025 was $422 and $881, respectively, compared to $276 and $380, respectively, for the three and six months ended June 1, 2024.

The net change from the prior year period was primarily due to higher costs associated with Company-owned life insurance.

Other Income (Loss), Net

Other income (loss), net, for the three and nine months ended August 30, 2025 was $30 and $(851), respectively, compared to $(109) and $(489), respectively, for the three and nine months ended August 31, 2024.

The net change from the prior year quarter and year to date was primarily due to changes in the net costs associated with Company-owned life insurance compared to the prior year periods.

We calculate an anticipated effective tax rate for the year based on our annual estimates of pretax income or loss and use that effective tax rate to record our year-to-date income tax provision.

Any change in annual projections of pretax income or loss could have a significant impact on our effective tax rate for the respective quarter.

Our effective tax rate was 26.1% and 26.8% for the three and six months ended May 31, 2025, respectively.

The effective rates for the three and six months ended May 31, 2025 differ from the federal statutory rate of 21% primarily due to the effects of state income taxes and various permanent differences.

Our effective tax rate was 11.2% and 14.5% for the three and six months ended June 1, 2024, respectively.

The effective rates for the three and six months ended June 1, 2024 differ from the federal statutory rate of 21% primarily due to increases in the valuation allowance placed on deferred tax assets associated with Noa Home, the effects of state income taxes and various permanent differences.

Our effective tax rate was 26.8% and 26.8% for the three and nine months ended August 30, 2025, respectively.

The effective rates for the three and nine months ended August 30, 2025 differ from the federal statutory rate of 21% primarily due to the effects of state income taxes and various permanent differences.

Our effective tax rate was 22.0% and 17.3% for the three and nine months ended August 31, 2024, respectively.

The effective rates for the three and nine months ended August 31, 2024 differ from the federal statutory rate of 21% primarily due to increases in the valuation allowance placed on deferred tax assets associated with Noa Home, the effects of state income taxes and various permanent differences.

In July of 2025, new tax legislation was enacted under the One Big Beautiful Bill Act (the “Act”).

While the Act includes a wide range of provisions that could impact our financial results in future periods, we do not expect the passage of the Act to have a material impact on our results of operations or financial condition in the current fiscal year.

Liquidity and Capital Resources

Cash provided by operating activities for the first half of fiscal 2025 was $6,903 compared to cash used in operations of $1,919 for the first half of fiscal 2024, representing an improvement of $8,822 in cash flows from operations.

This increase was primarily the result of improved operating income and changes in working capital due to the timing impact of expenditures as a result of an additional week in the first half of 2024.

Our overall cash position declined $118 during the first half of 2025.

During the first half of fiscal 2025, we spent $2,275 on purchases of property and equipment.

We also paid $3,476 in dividends during the first half of 2025.

We repurchased $1,158 of shares under our stock repurchase program during the first half of 2025 compared to repurchases of only $489 in the prior year period.

Cash provided by operating activities for the first nine months of fiscal 2025 was $5,726 compared to cash used in operations of $2,323 for the first nine months of fiscal 2024, representing an improvement of $8,049 in cash flows from operations.

Our overall cash position declined $5,138 during the first nine months of 2025.

During the first nine months of fiscal 2025, we spent $3,737 on purchases of property and equipment.

We also paid $5,210 in dividends during the first nine months of 2025.

We repurchased $1,522 of shares under our stock repurchase program during the first nine months of 2025 compared to repurchases of $1,127 in the prior year period.

We expect capital expenditures for the full year to range from $5 million to $7 million.

As of May 31, 2025, $19,245 remains available for future purchases under our stock repurchase plan.

With cash and cash equivalents and short-term investments totaling $59,818 on hand at May 31, 2025, expected future operating cash flows and the availability under our credit line noted below, we believe we have sufficient liquidity to fund operations for the foreseeable future.

As of August 30, 2025, $18,882 remains available for future purchases under our stock repurchase plan.

With cash and cash equivalents and short-term investments totaling $54,634 on hand at August 30, 2025, expected future operating cash flows and the availability under our credit line noted below, we believe we have sufficient liquidity to fund operations for the foreseeable future.

PART I-FINANCIAL INFORMATION-CONTINUED

BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES

AUGUST 30, 2025

(Dollars in thousands except share and per share data)

Debt and Other Obligations

1 unchanged sentence

This Credit Facility provides for a line of credit of up to $25,000.

At May 31, 2025, we had $8,182 outstanding under standby letters of credit against our line.

At August 30, 2025, we had $8,182 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.

3 unchanged sentences

Consolidated Fixed Charge Coverage Ratio of not less than 1.2 times and

PART I-FINANCIAL INFORMATION-CONTINUED

BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES

(Dollars in thousands except share and per share data)

Consolidated Lease Adjusted Leverage to EBITDAR Ratio not to exceed 3.35 times.

Since our used commitment was less than $8,250 at May 31, 2025, we were not required to test the Consolidated Fixed Charge Coverage Ratio or the Consolidated Lease Adjusted Leverage to EBITDAR Ratio.

Since our used commitment was less than $8,250 at August 30, 2025, we were not required to test the Consolidated Fixed Charge Coverage Ratio or the Consolidated Lease Adjusted Leverage to EBITDAR Ratio.

However, had we been required to test those ratios, we would have been in full compliance.

2 unchanged sentences

We also lease certain personal property such as lift trucks, office equipment and local delivery trucks.

The present value of our obligations for leases with terms in excess of one year at May 31, 2025 is $98,405 and is included in our accompanying condensed consolidated balance sheet at May 31, 2025.

We were contingently liable under licensee lease obligation guarantees in the amount of $4,639 at May 31, 2025.

The present value of our obligations for leases with terms in excess of one year at August 30, 2025 is $93,300 and is included in our accompanying condensed consolidated balance sheet at August 30, 2025.

We were contingently liable under licensee lease obligation guarantees in the amount of $4,393 at August 30, 2025.

The remaining terms under these lease guarantees extend for six years.

2 unchanged sentences

We have a substantial investment in real estate acquired for use as retail locations and occupied by Company-owned retail stores.

Such real estate is included in property and equipment, net, in the accompanying condensed consolidated balance sheets and consists of eight properties with an aggregate square footage of 203,465 and a net book value of $23,848 at May 31, 2025.

Such real estate is included in property and equipment, net, in the accompanying condensed consolidated balance sheet and consists of eight properties with an aggregate square footage of 203,465 and a net book value of $23,680 at August 30, 2025.

Critical Accounting Policies and Estimates

7 unchanged sentences

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.

See Note 10 to our condensed consolidated financial statements for further information regarding certain contingencies as of May 31, 2025.

See Note 11 to our condensed consolidated financial statements for further information regarding certain contingencies as of August 30, 2025.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis