On Tuesday, Sept. 26, Bassett Furniture (NASDAQ:BSET) released fiscal third-quarter 2006 earnings for the period ended Aug. 26. Here are the quick and dirty details for the quarter.

  • Total sales fell 6.3% to $77.6 million, as flat retail results were not enough to offset an 8.3% fall in wholesale sales to other furniture retailers.

  • Net income plummeted to $0.04 per share, while operating cash flow was negative for the nine-month period ended in August. CEO Robert Spilman characterized the quarter as "tough" and detailed that "retail conditions continue to be challenging."

  • Long-term debt increased 36.2%. Management has been repurchasing retail stores from licensees to gain more control over improving sales at stores committed to only selling Bassett-brand furniture.

  • The migration to foreign-based manufacturing is wreaking havoc on the entire industry; Bassett is working overtime to cut domestic production and procure goods from lower-cost overseas locations. The company expects half of its wholesale furniture needs to be sourced from overseas within the next year or two, up from 34% for 2005.

(Figures in thousands, except per-share data)

Income Statement Highlights

Avg. Est.

Q3 2006

Q3 2005

Change

Sales

$77,020

$77,560

$82,743

(6.3%)

Net Profit

--

$433

$1,886

(77%)

EPS

$0.12

$0.04

$0.16

(75%)

Diluted Shares

--

10,825

11,788

(8.2%)



Get back to basics with a look at the income statement.

Margin Checkup

Q3 2006

Q3 2005

Change*

Gross Margin

30.89%

30.78%

0.11

Operating Margin

(1.15%)

0.26%

(1.41)

Net Margin

0.56%

2.28%

(1.72)

*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

Q3 2006

Q3 2005

Change

Cash + ST Invest.

$5,741

$5,057

13.5%

Accounts Rec.

$40,943

$42,182

(2.9%)

Inventory

$50,877

$49,827

2.1%



Liabilities

Q3 2006

Q3 2005

Change

Accounts Payable

$17,272

$19,968

(13.5%)

Long-Term Debt

$8,606

$6,318

36.2%



Learn the ways of the balance sheet.

Cash Flow Highlights

Q3 2006

Q3 2005

Change

Cash From Ops.

($7,365)

$3,707

($11,072)

Capital Expenditures

$2,712

$2,739

($27)

Free Cash Flow

($10,077)

$968

($11,045)
*Nine-month period ended 8/26/06 & 8/27/05

Find out why Fools always follow the money.

Related Companies:

  • Culp (NYSE:CFI)
  • Furniture Brands (NYSE:FBN)
  • Ethan Allen (NYSE:ETH)
  • Stanley Furniture (NASDAQ:STLY)
  • Natuzzi (NYSE:NTZ)
  • Hooker Furniture (NASDAQ:HOFT)

Stanley and Hooker are Hidden Gems picks.

Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean.

Fool contributor Ryan Fuhrmann has no financial interest in any company mentioned. Feel free to email Ryan with feedback or to further discuss any companies mentioned. The Fool has an ironclad disclosure policy.