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Item 1. Financial Statements

2026-04-01 compared with 2025-10-08 · 156 added, 225 removed, 284 unchanged (57% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE PERIODS ENDED AUGUST 30, 2025 AND AUGUST 31, 2024 – UNAUDITED

FOR THE PERIODS ENDED FEBRUARY 28, 2026 AND MARCH 1, 2025 – UNAUDITED

(In thousands)

Nine Months Ended

August 30, 2025

August 31, 2024

Three Months Ended

February 28, 2026

March 1, 2025

Operating activities:

Net income (loss)

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

Depreciation and amortization

Asset impairment charges

Inventory valuation charges

Deferred income taxes

6 unchanged sentences

Obligations under operating leases

Net cash provided by (used in) operating activities

Net cash used in operating activities

Investing activities:

8 unchanged sentences

Net cash used in financing activities

Effect of exchange rate changes on cash and cash equivalents

Change in cash and cash equivalents

5 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-UNAUDITED

AUGUST 30, 2025

FEBRUARY 28, 2026

(Dollars in thousands except share and per share data)

3 unchanged sentences

References to “ASC” included hereinafter refer to the Accounting Standards Codification established by the Financial Accounting Standards Board (“FASB”) as the source of authoritative GAAP.

The condensed consolidated financial statements include the accounts of Bassett Furniture Industries, Incorporated (“Bassett”, “we”, “our”, or the “Company”) and our wholly-owned subsidiaries of which we have a controlling interest.

The condensed consolidated financial statements include the accounts of Bassett Furniture Industries, Incorporated (“Bassett”, “we”, “our”, or the “Company”) and our subsidiaries, all of which are wholly owned.

In accordance with ASC Topic 810, we have evaluated our licensees and certain other entities to determine whether they are variable interest entities (“VIEs”) of which we are the primary beneficiary and thus would require consolidation in our financial statements.

As of and for the periods ended August 30, 2025 and August 31, 2024 and as of November 30, 2024 we have concluded that none of the evaluated entities represent VIEs.

Revenue from the sale of furniture and accessories is reported in the accompanying condensed consolidated statements of operations net of estimates for returns and allowances.

As of and for the periods ended February 28, 2026 and March 1, 2025 and as of November 29, 2025 we have concluded that none of the evaluated entities represent VIEs.

Revenue from the sale of furniture and accessories is reported in the accompanying condensed consolidated statements of income net of estimates for returns and allowances.

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

Our fiscal year, which ends on the last Saturday of November, periodically results in a 53-week year instead of the normal 52 weeks.

The prior fiscal year ended 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 39 weeks of operations for the nine months ended August 30, 2025 as compared with 40 weeks included in the nine months ended August 31, 2024.

Certain amounts for the three months ended March 1, 2025 have been reclassified to conform to the current year’s presentation.

See Note 13, Revenue Recognition.

Interim Financial Presentation and Other Information

All intercompany accounts and transactions have been eliminated in the condensed consolidated financial statements.

The results of operations for the three and nine months ended August 30, 2025 are not necessarily indicative of results for the full fiscal year.

The results of operations for the three months ended February 28, 2026 are not necessarily indicative of results for the full fiscal year.

These interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended November 29, 2025.

2 unchanged sentences

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 26.8 % 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 Inc.

(“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.

Our effective tax rate was 26.5 % for the three months ended February 28, 2026.

The effective rate differs 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 27.4 % for the three months ended March 1, 2025.

The effective rate differs from the federal statutory rate of 21 % primarily due to the effects of state income taxes and various permanent differences.

Supplemental Cash Flow Information

During the nine months ended August 30, 2025 and August 31, 2024, $ 378 and $ 3,476 , respectively, of lease right-of-use assets were added through the recognition of the corresponding lease obligations.

Taxes paid net of refunds received during the nine months ended August 30, 2025 and August 31, 2024 was $ 388 and $ 48 , respectively.

Interest paid during the nine months ended August 30, 2025 and August 31, 2024 was $ 25 and $ 16 , respectively.

During the three months ended February 28, 2026 and March 1, 2025, $ 2,787 and $ 0 , respectively, of lease right-of-use assets were added through the recognition of the corresponding lease obligations.

Income tax refunds received, net of taxes paid, during the three months ended February 28, 2026 and March 1, 2025 were as follows:

Quarter Ended

March 1, 2025

Total income tax refunds received, net

Interest paid during the three months ended February 28, 2026 and March 1, 2025 was $ 15 and $ 4 , respectively.

PART I-FINANCIAL INFORMATION-CONTINUED

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-UNAUDITED

AUGUST 30, 2025

FEBRUARY 28, 2026

(Dollars in thousands except share and per share data)

1 unchanged sentence

We receive lease income as the lessor on a small number of leased premises which we have subleased to other tenants.

Sublease income for closed stores and warehouses is included in selling general and administrative expense in the accompanying condensed consolidated statements of operations and was $ 149 and $ 399 for the three and nine months ended August 30, 2025, respectively, and $ 103 and $ 308 for the three and nine months ended August 31, 2024.

Sublease income for closed stores and warehouses is included in selling, general and administrative expense in the accompanying condensed consolidated statements of income and was $ 155 and $ 103 for the three months ended February 28, 2026 and March 1, 2025, respectively.

We also sublease one location to a licensee.

This sublease income is included in other loss, net in the accompanying condensed consolidated statements of operations and was $ 114 and $ 343 for the three and nine months ended August 30, 2025, respectively, and $ 114 and $ 343 for the three and nine months ended August 31, 2024, respectively.

This sublease income is included in other loss, net in the accompanying condensed consolidated statements of income and was $ 118 and $ 114 for the three months ended February 28, 2026 and March 1, 2026, respectively.

Financial Instruments and Investments

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Because of their short maturities, the carrying amounts of cash and cash equivalents, accounts receivable, and accounts payable approximate fair value.

Our short-term investments of $ 20,221 and $ 20,360 at August 30, 2025 and November 30, 2024, respectively, consisted of CDs.

At August 30, 2025, the CDs had original terms averaging seven months, bearing interest at rates ranging from 1.0 % to 4.4 % and the weighted average remaining time to maturity was approximately five months and the weighted average yield of the CDs was approximately 3.8 %.

Each CD is placed with a federally insured financial institution and, except as noted below, all deposits are within federal deposit insurance limits.

Due to the nature of these investments and their relatively short maturities, the carrying amount of the short-term investments at August 30, 2025 and November 30, 2024 approximates their fair value.

Our investment in CDs at August 30, 2025 and 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 maturing in October 2025 and an interest rate of 2.0 %.

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.

Our short-term investments of $ 17,963 at both February 28, 2026 and November 29, 2025 consisted of CDs.

At February 28, 2026, the CDs had original terms averaging seven months, bearing interest at rates ranging from 2.0 % to 4.1 % and the weighted average remaining time to maturity was approximately five months and the weighted average yield of the CDs was approximately 3.6 %.

Each CD is placed with a federally insured financial institution and all deposits are within federal deposit insurance limits.

Due to the nature of these investments and their relatively short maturities, the carrying amount of the short-term investments at February 28, 2026 and November 29, 2025 approximates their fair value.

Accounts Receivable

Accounts receivable consists of the following:

August 30, 2025

November 30, 2024

February 28, 2026

Gross accounts receivable

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Actual credit losses could differ from those estimates.

We have elected to use the practical expedient under ASC Topic 326 which allows us to assume that current conditions as of the balance sheet date do not change over the expected life of the receivables, which is generally ninety days or less (see Note 16 regarding the early adoption of ASU 2025-05).

PART I-FINANCIAL INFORMATION-CONTINUED

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-UNAUDITED

AUGUST 30, 2025

FEBRUARY 28, 2026

(Dollars in thousands except share and per share data)

Activity in the allowance for credit losses for the nine months ended August 30, 2025 was as follows:

Balance at November 30, 2024

Net recoveries credited to expense

Activity in the allowance for credit losses for the three months ended February 28, 2026 and March 1, 2025 was as follows:

Three Months Ended

February 28, 2026

March 1, 2025

Beginning balance

Additions charged to expense

Write-offs against allowance

Balance at August 30, 2025

Substantially all of the accounts receivable written off against the reserve during the three and nine months ended August 30, 2025 originated during fiscal 2024.

Ending balance

Substantially all of the accounts receivable written off against the reserve during the three months ended February 28, 2026 and March 1, 2025 originated during our fiscal years ended November 29, 2025 and November 30, 2024, respectively.

We believe that the carrying value of our net accounts receivable approximates fair value.

4 unchanged sentences

Inventories were comprised of the following:

August 30, 2025

February 28, 2026

November 29, 2025

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-UNAUDITED

AUGUST 30, 2025

FEBRUARY 28, 2026

(Dollars in thousands except share and per share data)

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

Three Months Ended February 28, 2026

Retail Segment

1 unchanged sentence

Additions charged to expense

Balance at August 30, 2025

Balance at February 28, 2026

Three Months Ended March 1, 2025

Retail Segment

Balance at November 30, 2024

Additions charged to expense

Balance at March 1, 2025

Our estimates and assumptions have been reasonably accurate in the past.

We have not made any significant changes to our methodology for determining inventory reserves in 2025 and do not anticipate that our methodology is likely to change in the future.

The carrying amounts of goodwill by reportable segment, including accumulated impairment losses, at both August 30, 2025 and November 30, 2024 were as follows:

We have not made any significant changes to our methodology for determining inventory reserves in 2026 and do not anticipate that our methodology is likely to change in the foreseeable future.

The carrying amounts of goodwill by reportable segment, including accumulated impairment losses, at both February 28, 2026 and November 29, 2025 were as follows:

Corporate and other

1 unchanged sentence

Intangible Assets

Intangible assets at August 30, 2025 and November 30, 2024 consisted of the following:

August 30, 2025

Intangible assets at February 28, 2026 and November 29, 2025 consisted of the following:

February 28, 2026

November 29, 2025

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Total intangible assets

Amortization expense associated with intangible assets during the three and nine months ended August 30, 2025 and August 31, 2024 was as follows:

Quarter Ended

Nine Months Ended

August 30, 2025

August 31, 2024

August 30, 2025

August 31, 2024

Intangible asset amortization expense

PART I-FINANCIAL INFORMATION-CONTINUED

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-UNAUDITED

AUGUST 30, 2025

FEBRUARY 28, 2026

(Dollars in thousands except share and per share data)

Estimated future amortization expense for intangible assets that exist at August 30, 2025 is as follows:

Amortization expense associated with intangible assets during the three months ended February 28, 2026 and March 1, 2025 was as follows:

Quarter Ended

February 28, 2026

March 1, 2025

Intangible asset amortization expense

Estimated future amortization expense for intangible assets that exist at February 28, 2026 is as follows:

Remainder of fiscal 2026

2 unchanged sentences

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

At August 30, 2025, we had $ 8,182 outstanding under standby letters of credit against our line.

At February 28, 2026, we had $ 5,866 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.

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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 August 30, 2025, we were not required to test the Consolidated Fixed Charge Coverage Ratio or the Consolidated Lease Adjusted Leverage to EBITDAR Ratio.

At February 28, 2026, we were in compliance with the Consolidated Minimum Tangible Net Worth requirement.

Since our used commitment was less than $ 8,250 at February 28, 2026, 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.

Our availability under the Credit Facility is currently $ 19,134 .

On January 9, 2026, the Credit Facility was amended to extend the expiration to January 31, 2029.

Post Employment Benefit Obligations

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We have an unfunded Supplemental Retirement Income Plan (the “Supplemental Plan”) that covers one current and certain former executives.

The liability for the Supplemental Plan was $ 5,588 and $ 5,557 as of August 30, 2025 and November 30, 2024, respectively.

The liability for the Supplemental Plan was $ 5,617 and $ 5,611 as of February 28, 2026 and November 29, 2025, respectively.

We also have the Bassett Furniture Industries, Incorporated Management Savings Plan (the “Management Savings Plan”) which was established in the second quarter of fiscal 2017.

The Management Savings Plan is an unfunded, nonqualified deferred compensation plan maintained for the benefit of certain highly compensated or management level employees.

As part of the Management Savings Plan, we have made Long Term Cash Awards (“LTC Awards”) totaling $ 2,000 to five management employees in the amount of $ 400 each.

The Management Savings Plan is an unfunded, non-qualified deferred compensation plan maintained for the benefit of certain highly compensated or management level employees.

As part of the Management Savings Plan, we have made Long Term Cash Awards (“LTC Awards”) totaling $ 2,000 to five current and former management employees in the amount of $ 400 each.

We are accounting for the LTC Awards as a defined benefit pension plan.

Currently, two of those employees have retired and are receiving benefits.

The liability for the LTC Awards was $ 1,421 and $ 1,360 as of August 30, 2025 and November 30, 2024, respectively.

The combined pension liability for the Supplemental Plan and LTC Awards is recorded as follows in the condensed consolidated balance sheets:

August 30, 2025

November 30, 2024

Accrued compensation and benefits

Post employment benefit obligations

Total pension liability

The liability for the LTC Awards was $ 1,393 and $ 1,379 as of February 28, 2026 and November 29, 2025, respectively.

PART I-FINANCIAL INFORMATION-CONTINUED

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-UNAUDITED

AUGUST 30, 2025

FEBRUARY 28, 2026

(Dollars in thousands except share and per share data)

Components of net periodic pension costs for our defined benefit plans for the three and nine months ended August 30, 2025 and August 31, 2024 are as follows:

Components of net periodic pension costs for our defined benefit plans for the three months ended February 28, 2026 and March 1, 2025 are as follows:

Quarter Ended

Nine Months Ended

August 30, 2025

August 31, 2024

August 30, 2025

August 31, 2024

February 28, 2026

March 1, 2025

Interest cost

Amortization of prior service costs

Amortization of loss

Net periodic pension cost

The components of net periodic pension cost other than the service cost component, which is included in selling, general and administrative expenses, are included in other loss, net in our condensed consolidated statements of operations.

Deferred Compensation Plans

1 unchanged sentence

This plan has been frozen with no additional participants or deferrals permitted.

Our liability under this plan was $ 1,584 and $ 1,601 as of August 30, 2025 and November 30, 2024, respectively.

Our liability under this plan was $ 1,580 and $ 1,562 as of February 28, 2026 and November 29, 2025, respectively.

We also have an unfunded, nonqualified deferred compensation plan maintained for the benefit of certain highly compensated or management level employees which was established under the Management Savings Plan.

Our liability under this plan, including both accrued Company contributions and participant salary deferrals, was $ 3,616 and $ 3,486 as of August 30, 2025 and November 30, 2024, respectively.

Our combined liability for all deferred compensation arrangements, including Company contributions and participant deferrals under the Management Savings Plan, is recorded as follows in the condensed consolidated balance sheets:

August 30, 2025

Our liability under this plan, including both accrued Company contributions and participant salary deferrals, was $ 4,181 and $ 3,968 as of February 28, 2026 and November 29, 2025, respectively.

The non-current portion of the obligations under our defined benefit and deferred compensation plans are included in post employment benefit obligations in the accompanying balance sheets as follows:

February 28, 2026

November 29, 2025

Accrued compensation and benefits

Defined benefit plans:

Supplemental Plan

Total defined benefit plans

Deferred compensation plans:

Management Savings Plan

Deferred Compensation Plan

Total deferred compensation plans

Post employment benefit obligations

Total deferred compensation liability

We recognized expense under our deferred compensation arrangements during the three and nine months ended August 30, 2025 and August 31, 2024 as follows:

Quarter Ended

Nine Months Ended

August 30, 2025

August 31, 2024

August 30, 2025

August 31, 2024

Deferred compensation expense

Other Gains and Losses

For the nine months ended August 30, 2025, selling, general and administrative expenses include a gain of $ 698 for proceeds received from a business interruption insurance claim arising from the previously disclosed cybersecurity incident which occurred during the third quarter of fiscal 2024.

$ 569 of the gain is allocated to our retail segment and $ 129 is allocated to our wholesale segment.

These insurance proceeds are included in cash provided by operating activities in the accompanying condensed consolidated statement of cash flows for the nine months ended August 30, 2025.

The current portion of these post employment benefit obligations totaled $ 1,142 at both February 28, 2026 and November 29, 2025 and is included in accrued compensation and benefits in the accompanying condensed consolidated balance sheets.

We recognized expense under our deferred compensation arrangements during the three months ended February 28, 2026 and March 1, 2025 of $ 12 and $ 34 , respectively.

PART I-FINANCIAL INFORMATION-CONTINUED

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-UNAUDITED

AUGUST 30, 2025

FEBRUARY 28, 2026

(Dollars in thousands except share and per share data)

During the three and nine months ended August 31, 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.

As of August 30, 2025, this liability has been settled with no remaining minimum charges due.

During the nine months ended August 31, 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.

$ 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.

All remaining Noa Home assets were substantially liquidated as of November 30, 2024.

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 .

Restructuring Reserve

In the fourth quarter of fiscal 2024 we recognized a restructuring charge of $ 440 representing accrued severance pay for certain affected employees.

At August 30, 2025 and November 30, 2024, $ 0 and $ 432 , respectively, of the accrual remained in other current liabilities.

As of August 30, 2025, the cumulative total cost incurred for this restructuring was $ 440 , of which $ 190 was incurred by our retail segment, $ 83 by our wholesale segment, and $ 167 was charged to corporate and other.

Commitments and Contingencies

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Lease Guarantees

We were contingently liable under licensee lease obligation guarantees in the amounts of $ 4,393 and $ 5,131 at August 30, 2025 and November 30, 2024, respectively.

We were contingently liable under licensee lease obligation guarantees in the amounts of $ 3,902 and $ 4,148 at February 28, 2026 and November 29, 2025, respectively.

The remaining term under these lease guarantees extends for six years.

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The proceeds of the above options are expected to cover the estimated amount of our future payments under the guarantee obligation, net of recorded reserves.

The fair value of these lease guarantees (an estimate of the cost to the Company to perform on the guarantee) at August 30, 2025 and November 30, 2024 was not material.

PART I-FINANCIAL INFORMATION-CONTINUED

BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-UNAUDITED

AUGUST 30, 2025

(Dollars in thousands except share and per share data)

The fair value of these lease guarantees (an estimate of the cost to the Company to perform on the guarantee) at February 28, 2026 and November 29, 2025 was not material.

Lease Commitments

At August 30, 2025, we had commitments for two leases of real property which are expected to commence by the end of fiscal 2025.

At February 28, 2026, we had commitments for two leases of real property which are expected to commence during fiscal 2026.

Together, these leases call for total annual rents averaging approximately $ 757 per year for an initial term of ten years.

Both leases have two five -year renewal options.

Earnings (Loss) Per Share

Basic earnings (loss) per common share is computed by dividing net income (loss) allocable to common shares by the weighted average number of common shares outstanding, adjusted for participating securities, if any.

The following reconciles basic and diluted earnings (loss) per share:

Earnings Per Share

Basic earnings per common share is computed by dividing net income allocable to common shares by the weighted average number of common shares outstanding, adjusted for participating securities, if any.

The following reconciles basic and diluted earnings per share:

Weighted Average

For the quarter ended August 30, 2025:

For the quarter ended February 28, 2026:

Basic earnings per share

2 unchanged sentences

Diluted earnings per share

For the quarter ended August 31, 2024:

Basic loss per share

Add effect of dilutive securities:

Restricted shares*

Diluted loss per share

For the nine months ended August 30, 2025:

For the quarter ended March 1, 2025:

Basic earnings per share

2 unchanged sentences

Diluted earnings per share

For the nine months ended August 31, 2024:

Basic loss per share

Add effect of dilutive securities:

Restricted shares*

Diluted loss per share

* Due to the net loss for the period, potentially dilutive securities would have been anti-dilutive and are therefore excluded.

For the three and nine months ended August 30, 2025 and August 31, 2024, the following potentially dilutive shares were excluded from the computations as their effect was anti-dilutive:

For the three months ended February 28, 2026 and March 1, 2025, the following potentially dilutive shares were excluded from the computations as their effect was anti-dilutive:

Quarter Ended

Nine Months Ended

August 30, 2025

August 31, 2024

August 30, 2025

August 31, 2024

February 28, 2026

March 1, 2025

Unvested shares

2 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-UNAUDITED

AUGUST 30, 2025

FEBRUARY 28, 2026

(Dollars in thousands except share and per share data)

Segment Information

We report segment information consistent with the way our chief operating decision maker (the “CODM”), a single individual who serves as our Board Chair, President and Chief Executive Officer, evaluates the operating results and performance of the Company.

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

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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 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.

As of and for the three months ended February 28, 2026 and March 1, 2025, Corporate and other included no other operating segments.

Inter-company net sales elimination represents the elimination of wholesale sales to our Company-owned stores.

2 unchanged sentences

The inter-company income elimination also includes rent paid by our retail stores occupying Company-owned real estate.

For the purpose of evaluating segment performance and allocating resources, our CODM uses a measure of income (loss) from operations excluding special items.

These excluded items include such things as asset impairment charges, restructuring charges, and other unusual or infrequent gains and losses which management does not expect to recur on a regular routine basis.

During the three months ended February 28, 2026 and March 1, 2025, there were no special items recognized in our results of operations.

The CODM assesses performance by regularly reviewing each segment’s significant expense categories which include total cost of goods sold and total SG&A expenses.

If these significant expense categories deviate from expected results, the CODM will delegate to his direct reports the task of investigating the underlying causes and, when necessary, making recommendations for remedial action to the CODM for his consideration and approval.

PART I-FINANCIAL INFORMATION-CONTINUED

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-UNAUDITED

AUGUST 30, 2025

FEBRUARY 28, 2026

(Dollars in thousands except share and per share data)

The following table presents our segment information:

Quarter Ended

Nine Months Ended

August 30, 2025

August 31, 2024

August 30, 2025

August 31, 2024

Sales Revenue

Wholesale sales of furniture and accessories

Sales to retail segment

Wholesale sales to external customers

Retail sales of furniture and accessories

Corporate and other - Noa Home

Consolidated net sales of furniture and accessories

Income (Loss) before Income Taxes:

The following tables present our segment information:

Quarter Ended February 28, 2026

Net sales to external customers

Intersegment sales

Total net sales

Cost of goods sold

Other segment items - new store pre-opening costs

Income (loss) from operations

Retail - Company-owned stores

Net expenses - Corporate and other

Inter-company elimination

Asset impairment charges (see Note 10)

Loss on contract abandonment (see Note 10)

Consolidated income (loss) from operations

Interest income

Other income (loss), net

Consolidated income (loss) before income taxes

Other loss, net

Income before income taxes

Quarter Ended March 1, 2025

Net sales to external customers

Intersegment sales

Total net sales

Cost of goods sold

Income (loss) from operations

Interest income

Other loss, net

Income before income taxes

Quarter Ended

February 28, 2026

March 1, 2025

Depreciation and Amortization

4 unchanged sentences

Corporate and other

August 30, 2025

November 30, 2024

Identifiable Assets

February 28, 2026

November 29, 2025

Retail - Company-owned stores

4 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-UNAUDITED

AUGUST 30, 2025

FEBRUARY 28, 2026

(Dollars in thousands except share and per share data)

5 unchanged sentences

All wholesale and retail revenues are recorded net of estimated returns and allowances based on historical patterns.

Our accounts receivable, net, which are associated with our wholesale segment, were $ 13,135 , $ 13,181 and $ 13,736 at August 30, 2025, November 30, 2024 and November 25, 2023.

Our accounts receivable, net, which are associated with our wholesale segment, were $ 14,662 , $ 14,410 , $ 14,218 and $ 13,181 at February 28, 2026, November 29, 2025, March 1, 2025 and November 30, 2024, respectively.

We typically collect a significant portion of the purchase price from our retail customers as a deposit upon order, with the balance typically collected at the time delivery is scheduled.

These customer deposits are carried on our balance sheet as a current liability until delivery is fulfilled and amounted to $ 23,149 , $ 25,742 and $ 22,788 as of August 30, 2025, November 30, 2024 and November 25, 2023, respectively.

Substantially all of the customer deposits held as of November 30, 2024 related to performance obligations that were satisfied during the current year-to-date period and have therefore been recognized in revenue for the nine months ended August 30, 2025.

Similarly, substantially all of the customer deposits held at August 30, 2025 are expected to be recognized as revenue within the next twelve months.

These customer deposits are carried on our balance sheet as a current liability until delivery is fulfilled and amounted to $ 24,745 , $ 24,969 , $ 25,352 and $ 25,742 as of February 28, 2026, November 29, 2025, March 1, 2025 and November 30, 2024, respectively.

Substantially all of the customer deposits held as of November 29, 2025 related to performance obligations that were satisfied during the current year-to-date period and have therefore been recognized in revenue for the three months ended February 28, 2026.

Similarly, substantially all of the customer deposits held at February 28, 2026 are expected to be recognized as revenue within the next twelve months.

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.

2 unchanged sentences

– 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 August 30, 2025 and November 30, 2024, our balance of prepaid commissions included in other current assets was $ 2,537 and $ 2,928 , respectively.

At February 28, 2026, November 29, 2025, March 1, 2025 and November 30, 2024, our balance of prepaid commissions included in other current assets was $ 2,656 , $ 2,662 , $ 2,805 and $ 2,928 , respectively.

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

We do not disclose amounts allocated to remaining unsatisfied performance obligations as they are expected to be satisfied within one year or less.

Disaggregated revenue information for sales of furniture and accessories by product category for the three and nine months ended August 30, 2025 and August 31, 2024, excluding intercompany transactions between our segments, is a follows:

Disaggregated revenue information for sales of furniture and accessories by product category for the three months ended February 28, 2026 and March 1, 2025, excluding intercompany transactions between our segments, is as follows:

Quarter Ended

August 30, 2025

August 31, 2024

Bassett Custom Upholstery

Bassett Leather

Bassett Custom Wood

Bassett Casegoods

Accessories, mattresses and other (1)

Consolidated net sales of furniture and accessories

Nine Months Ended

August 30, 2025

August 31, 2024

February 28, 2026

March 1, 2025 (1)

Bassett Custom Upholstery

Bassett Leather

Bassett Leather Imports

Bassett Custom Wood

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Consolidated net sales of furniture and accessories

(1) Certain amounts within each category have been reclassified to conform to the 2026 presentation.

(2) 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) Corporate and other for the three and nine months ended August 31, 2024 includes the sales of Noa Home, which was acquired on September 2, 2022, closed during fiscal 2024 and substantially liquidated as of November 30, 2024.

PART I-FINANCIAL INFORMATION-CONTINUED

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-UNAUDITED

AUGUST 30, 2025

FEBRUARY 28, 2026

(Dollars in thousands except share and per share data)

Changes to Stockholders ’ Equity

The following changes in our stockholders’ equity occurred during the three and nine months ended August 30, 2025 and August 31, 2024:

The following changes in our stockholders’ equity occurred during the three months ended February 28, 2026 and March 1, 2025:

Quarter Ended

Nine Months Ended

August 30, 2025

August 31, 2024

August 30, 2025

August 31, 2024

February 28, 2026

March 1, 2025

Common Stock:

16 unchanged sentences

Beginning of period

Net income (loss) for the period

Net income for the period

Purchase and retirement of common stock

1 unchanged sentence

End of period

Accumulated Other Comprehensive Income (Loss):

Accumulated Other Comprehensive Income:

Beginning of period

Cumulative translation adjustments, net of tax

Amortization of pension costs, net of tax

End of period

The balance of cumulative translation adjustments, net of tax, was zero at both August 30, 2025 and November 30, 2024.

PART I-FINANCIAL INFORMATION-CONTINUED

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-UNAUDITED

AUGUST 30, 2025

FEBRUARY 28, 2026

(Dollars in thousands except share and per share data)

Recent Accounting Pronouncements

In November 2023, the FASB issued Accounting Standards Update 2023-07 – Segment Reporting (Topic ASC 740) Improvements to Reportable Segment Disclosures.

Effective November 29, 2025, we adopted 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.

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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.

While we do not expect that this guidance will have a material impact upon our financial position and results of operations, it will result in a significant change to our segment disclosures for the year ending November 29, 2025.

The enhanced disclosures required by ASU 2023-07 are reflected in our segment disclosures in Note 12.

The adoption of this guidance related solely to disclosures and did not have an impact upon our financial position or results of operations.

In December 2023, the FASB issued Accounting Standards Update 2023-09 – Income Taxes (Topic ASC 740) Income Taxes.

1 unchanged sentence

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.

The amendments in ASU 2023-09 become effective for us as of the end of our 2026 fiscal year.

We are still assessing the impact of this guidance on our disclosures and plan to adopt ASU 2023-09 for our financial statements for the year ending November 28, 2026.

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 objective of the disclosure requirements is to provide 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.

1 unchanged sentence

We do not expect that this guidance will have a material impact upon our financial position and results of operations.

In July 2025, the FASB issued Accounting Standards Update 2025-05 – Financial Instruments – Credit Losses (Topic ASC 326) Measurement of Credit Losses for Accounts Receivable and Contract Assets.

The amendments in this ASU provide entities with a practical expedient they may elect to use when developing an estimate of expected credit losses on current accounts receivable and current contract asset balances arising from transactions accounted for under Topic ASC 606 – Revenue from Contracts with Customers.

Under this practical expedient, entities may elect to assume that current conditions as of the balance sheet date do not change for the remaining life of the asset.

The amendments in ASU 2025-05 become effective for fiscal years and for interim periods beginning after December 15, 2025, and early adoption is permitted.

We have elected to adopt ASU 2025-05 beginning with the third quarter of fiscal 2025 and have elected to utilize the practical expedient provided therein.

The adoption of this ASU did not have a material impact on our financial position or results of operations.

PART I-FINANCIAL INFORMATION-CONTINUED

BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES

AUGUST 30, 2025

FEBRUARY 28, 2026

(Dollars in thousands except share and per share data)

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

What changed 10-Q

Item 1. Financial Statements