On Tuesday, Sept. 26, Bassett Furniture
- 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) |
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) |
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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.