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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
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WASHINGTON, D.C. 20599
FORM 8-K
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CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
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Date of Report (Date of earliest event reported) March 28, 2000
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BASSETT FURNITURE INDUSTRIES, INCORPORATED
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(Exact name of registrant as specified in its charter)
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<S> <C> <C>
VIRGINIA 0-209 54-0135270
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(State or other jurisdiction of (Comission File No.) (I.R.S. Employer
incorporation or organization) Identification No.)
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3525 FAIRYSTONE PARK HIGHWAY
BASSETT, VIRGINIA 24055
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 540/629-6000
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Item 5. Other Events
On March 28, 2000, Bassett Furniture Industries issued the news release
attached hereto as Exhibit (99) to this report (the "News Release")relating to,
among other things, the election of Robert H. Spilman, Jr., formerly president
and chief operating officer, as chief executive officer. The News Release is
incorporated herein by reference.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
(99) New release issued March 28, 2000
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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
BASSETT FURNITURE INDUSTRIES, INCORPORATED
Date: March 28, 2000 By: /s/ BARRY C. SAFRIT
-----------------------------
Barry C. Safrit
Title: Vice President, Chief Accounting
Officer
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EXHIBIT INDEX
Description
Exhibit No. News release issued March 28,2000
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Exhibit 99
[BASSETT LOGO]
Bassett Furniture Industries, Inc. Grover S. Elliott, Investor Relations
P.O. Box 626 (336) 725-7996 - Investors
Bassett, VA 24055 (336) 725-7993 - Fax
Jay S. Moore, Dir. Of Corporate Affairs
(540) 629-6450 - Media
For Immediate Release
Bassett Furniture News Release
BASSETT HOLDS ANNUAL MEETING, ANNOUNCES SPILMAN CEO AND FIRST QUARTER EARNINGS
- ----------------------------------------------------------------------------
(Thomasville, NC) - March 28, 2000 - Bassett Furniture Industries, Inc., a
leading manufacturer and marketer of branded home furnishings, in its annual
meeting of shareholders today announced that Robert H. Spilman Jr., formerly
president and chief operating officer, has been elected chief executive officer.
The company also announced earnings results for the first quarter of fiscal
2000, which ended February 26.
Speaking to shareholders, outgoing CEO Paul Fulton, said, "Bassett's board
of directors this morning elected Rob Spilman Jr. chief executive officer. He
continues as president. I will remain board chairman, but effective immediately,
I will be a non-executive chairman. This company is in excellent hands with Rob
Spilman as its leader. He knows the company and the industry better than anyone,
and he has demonstrated again and again his ability to lead Bassett into its
very bright future."
Commenting on the transformation of Bassett during Fulton's three years as
chief executive, Spilman described a consolidation of manufacturing capacity
from 42 to 14 plants, refinement of distribution channels to focus on major
retailers, Bassett Furniture Direct stores (BFD) and At Home with Bassett
retailers, a major investment in development of the Bassett brand, a four
percentage point improvement in manufacturing gross margin, and a doubling of
operating profit. Mr. Spilman outlined long range plans that include a continued
aggressive expansion of BFD stores and significant top line growth.
For the first quarter of fiscal 2000, diluted earnings per share were $.39
before the cumulative effect of an accounting change versus $.34 in the prior
year. Net sales for the quarter were $95.0 million, down from $99.8 million;
sales declined because of the spin off of two operations, the bedding division
and retail operations, from sales since the first quarter of 1999. The bedding
division was sold in May 1999; Bassett continues to receive royalties on sales
of bedding under the Bassett brand name. The company's retail stores were
consolidated in December 1999 with those of the licensed Bassett Furniture
Direct (BFD) stores operated by Phillip and Ronnie Ladin, forming a joint
venture known as The Ladin Retail Group (LRG). Bassett's interest in profits and
losses from this joint venture are reported in other income.
The consolidation of the retail business with the LRG joint venture was a
factor in lower levels of both gross profit and selling, general and
administrative expenses in 2000 versus 1999. Also, the Company's new table top
plant negatively impacted Wood Division gross margins, due to continued startup
related costs. Other income was $3.7 million in 2000, versus $3.4 million in
1999. Other income was affected by Bassett's share of the loss in the LRG joint
venture, which approximated $1 million; this loss was more than offset by income
from other investments.
In the first quarter of fiscal 2000, the Company recognized a cumulative
effect of an accounting change of $535,000 ($364,000 after tax) or $.03 per
diluted share as result of changing its accounting policy regarding start-up
costs. Pursuant to the AICPA issued SOP 98-5, "Reporting on the Costs of
Start-up Activities," any previously
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capitalized start-up costs were required to be written-off as a cumulative
effect of an accounting change. Accordingly, the Company has written-off the
unamortized balance of the previously capitalized store opening related start-up
costs.
Commenting on earnings for the quarter, Robert H. Spilman Jr., stated, "We
are generally pleased with the results, particularly with the strength in sales
volume of our wood products. The transition of our retail operations to the LRG
joint venture is moving somewhat more slowly that originally expected, but we
are beginning to see good progress. Retail sales were strong in both January and
February, and we anticipate that our media advertising in March will result in
further positive comparisons."
At the meeting of shareholders, Bassett stated that it is continuing its
share repurchase program and has increased the number of shares it is authorized
to repurchase under the current program. As of February 26, approximately 63% of
the current $40 million share repurchase program had been completed.
Also today, Bassett's Board of Directors declared a regular quarterly
dividend of $.20 per share payable June 1, 2000, to shareholders of record May
16, 2000.
Bassett Furniture Industries, Inc., based in Bassett, Va., is a
manufacturer and marketer of branded home furnishings. The company operates 14
plants in five states, and licenses 52 Bassett Furniture Direct stores
nationwide. The company's common stock is traded on the NASDAQ market under the
symbol BSET. More information about Bassett is available on the company's new
Internet site at www.bassettfurniture.com.
CERTAIN OF THE STATEMENTS IN THE IMMEDIATELY PRECEDING PARAGRAPHS, PARTICULARLY
THOSE PRECEDED BY, FOLLOWED BY OR INCLUDING THE WORDS "BELIEVES," "EXPECTS,"
"ANTICIPATES," "INTENDS," "ESTIMATES," OR SIMILAR EXPRESSIONS, OR THOSE RELATING
TO OR ANTICIPATING FINANCIAL RESULTS FOR PERIODS BEYOND THE FIRST QUARTER OF
FISCAL YEAR 2000, PROFITABLE GROWTH POTENTIAL, INCREASED FUTURE EARNINGS,
IMPROVED MARGINS AND THE IMPACT OF MEDIA ADVERTISING ON RETAIL SALES CONSTITUTE
"FORWARD LOOKING STATEMENTS" WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES
ACT OF 1933, AS AMENDED. FOR THOSE STATEMENTS, BASSETT CLAIMS THE PROTECTION OF
THE SAFE HARBOR FOR FORWARD LOOKING STATEMENTS CONTAINED IN THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995. IN MANY CASES, BASSETT CANNOT PREDICT
WHAT FACTORS WOULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE
INDICATED IN THE FORWARD LOOKING STATEMENTS. EXPECTATIONS INCLUDED IN THE
FORWARD-LOOKING STATEMENTS ARE BASED ON PRELIMINARY INFORMATION AS WELL AS
CERTAIN ASSUMPTIONS WHICH MANAGEMENT BELIEVES TO BE REASONABLE AT THIS TIME. THE
FOLLOWING IMPORTANT FACTORS AFFECT BASSETT AND COULD CAUSE THOSE RESULTS TO
DIFFER MATERIALLY FROM THOSE EXPRESSED IN THE FORWARD LOOKING STATEMENTS: ACTUAL
PRE-TAX LOSSES FOR THE LRG RETAIL OPERATION, SUCCESSFUL COMPLETION OF THE
ACTIONS DESCRIBED IN THIS PRESS RELEASE, AND OTHER ITEMS. IN ADDITION TO THE
FACTORS SET FORTH IN THIS PRESS RELEASE, THE ECONOMIC, COMPETITIVE,
GOVERNMENTAL, TECHNOLOGICAL AND OTHER FACTORS IDENTIFIED IN BASSETT'S FILINGS
WITH THE SECURITIES AND EXCHANGE COMMISSION COULD AFFECT THE FORWARD LOOKING
STATEMENTS IN THIS PRESS RELEASE.
#####
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BASSETT FURNITURE INDUSTRIES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations - Unaudited
(Stated in thousands of dollars except for per share data)
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Quarter Ended Quarter Ended
February 26, 2000 February 27, 1999
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Percent of Percent of Percent
Amount Net Sales Amount Net Sales Change
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Net sales $ 94,981 100.0% $ 99,809 100.0% (4.8)%
Cost of sales 76,408 80.4% 80,233 80.4% (4.8)%
Selling, general and administrative 15,293 16.1% 16,530 16.6% (7.5)%
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91,701 96.5% 96,763 96.9% (5.2)%
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Income from operations 3,280 3.5% 3,046 3.1% 7.7%
Other income, net 3,658 3.8% 3,352 3.4% 9.1%
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Income before income taxes 6,938 7.3% 6,398 6.4% 8.4%
Income taxes 2,220 2.3% 1,983 2.0% 12.0%
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Income before cumulative effect
of accounting change 4,718 $ 4,415 6.9%
Cumulative effect of accounting
change (net of income taxes of $171) (364) -
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NET INCOME $ 4,354 4.6% $ 4,415 4.4% (1.4)%
=========== ============
Basic Earnings per share:
Income before cumulative effect of
accounting change $ 0.39 $ 0.34
Cumulative effect of accounting
change (0.03) -
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Net income per share $ 0.36 $ 0.34
=========== ============
Diluted Earnings per share:
Income before cumulative effect of
accounting change 0.39 0.34
Cumulative effect of accounting
change (0.03) -
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Net income per share 0.36 0.34
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BASSETT FURNITURE INDUSTRIES, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
Preliminary and Unaudited
February 26, 2000 November 27, 1999
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ASSETS
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CURRENT ASSETS
Cash and cash equivalents $2,599 $5,740
Trade accounts receivable, net 69,556 64,731
Inventories, net of LIFO 49,584 50,206
Prepaid expenses 4,583 5,260
Refundable income taxes 1,006 1,006
Deferred income taxes 9,314 9,314
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136,642 136,257
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PROPERTY AND EQUIPMENT
Cost 233,317 227,439
Less accumulated depreciation 135,964 134,284
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97,353 93,155
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OTHER ASSETS
Investment securities 21,964 23,057
Investment in affiliated companies 71,803 67,558
Investment in joint venture 4,768 0
Other 21,332 22,802
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119,867 113,417
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$353,862 $342,829
=========================== ===========================
LIABILITIES AND STOCKHOLDERS' EQUITY
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CURRENT LIABILITIES
Accounts payable $26,606 $30,122
Accrued liabilities 20,662 26,806
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47,268 56,928
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LONG-TERM LIABILITIES
Employee benefits 10,919 10,998
Deferred income taxes 3,429 1,152
Notes payable 37,000 18,000
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51,348 30,150
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STOCKHOLDERS' EQUITY
Common stock 59,446 60,474
Additional paid in capital 0 0
Retained earnings 188,904 187,973
Unrealized holding gains, net of tax 7,174 7,993
Unamortized stock compensation (278) (689)
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255,246 255,751
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$353,862 $342,829
=========================== ===========================
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BASSETT FURNITURE INDUSTRIES, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows - Unaudited/Preliminary
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Quarter Ended Quarter Ended February
February 26, 2000 27, 1999
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Net income $4,354 $4,415
Adjustments to reconcile net income to net cash provided
by (used in) operating activities:
Depreciation and amortization 2,677 2,161
Equity in undistributed income of affiliated companies (4,080) (2,288)
Deferred income taxes 2,277 1,202
Net (gain) loss from sales of investment securities - (391)
Net (gain) loss from sales of property and equipment - -
Compensation earned under restricted stock plan 60 60
Changes in long-term liabilities (79) (117)
Changes in operating assets and liabilities:
Trade accounts receivable (5,054) (5,006)
Inventories (5,386) 1,506
Prepaid expenses 481 (400)
Income taxes - 820
Accounts payable and accrued liabilities (739) (2,360)
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Net cash provided by (used in) operating activities (5,489) (398)
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Investing Activities:
Purchases of property and equipment (7,979) (5,411)
Proceeds from sales of property and equipment 0 970
Proceeds from sales of investment securities 0 14,076
Investments in affiliated companies (4,200) (5,850)
Other 863 308
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Net cash provided by (used in) investing activities (11,316) 4,093
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Financing Activities:
Borrowings under notes payable 19,000 0
Issuance of common stock 0 15
Repurchases of common stock (2,943) (3,778)
Cash dividends (2,393) (2,551)
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Net cash provided by (used in) financing activities 13,664 (6,314)
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Change in Cash and Cash Equivalents (3,141) (2,619)
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Cash and Cash Equivalents, beginning of year 5,740 5,499
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Cash and Cash Equivalents, end of quarter $2,599 $2,880
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Note: Changes in operating assets and liabilities include the contribution of
retail segment net operating assets and liabilities of $1.6 million to the LRG
joint venture.
