You don't have to live in North Carolina and hear the stories of furniture plant layoffs to know that the industry is in rough shape. It seems that business has been challenging for many furniture makers as they struggle with uneven demand and Asian (especially Chinese) imports.

With that in mind, BassettFurniture's (NASDAQ:BSET) earnings report wasn't especially bad, nor was it anything to get the growth crowd excited. Revenue climbed a bit more than 3% in the quarter as shipments to Bassett Furniture Direct stores outpaced declines at more traditional retail outlets.

On a more positive note, margins looked pretty good. Stripping out a $2.5 million impairment charge tied to the acquisition of eight stores in Texas, net income climbed almost 37% for the quarter.

The balance sheet and cash flow statements were also encouraging. Although sales growth is a bit sluggish, inventory and receivables levels both seem reasonable. With minimal debt and solid assets on Bassett Furniture's balance sheet, not only is liquidity looking all right, but there's also still room to fund a rather ample dividend.

Seeing the bad news here in North Carolina, the ongoing fights over Chinese furniture import tariffs, and the rather sluggish results of other furniture companies, I can't say I'm terribly excited about the idea of buying a company in this sector.

But maybe that's actually a good sign.

Bassett Furniture is owned by a couple of investment groups that I happen to respect, seems cheap by some metrics (especially price-to-book), and offers a fat dividend yield. Of course, Bassett also has a meager return on equity and return on assets when compared with Stanley Furniture (NASDAQ:STLY), Hooker Furniture (NASDAQ:HOFT), or Ethan Allen (NYSE:ETH), so some of that discount may be well-deserved.

Baron von Rothschild supposedly said that the best time to buy was when "blood runs in the streets." Now, I'm not saying it's that bad in furnitureland -- industry valuations are still comfortably above past lows -- but there are a lot of out-of-work North Carolinians who might disagree.

Value investors might be tempted to check out the furniture sector, but any who do should be careful to do their own due diligence. If blood really is starting to run in the streets, there's no point in adding your own.

Furniture companies may look a bit rickety, but these Takes are solid:

Stanley Furniture and Hooker Furniture are selections in the Motley Fool Hidden Gems newsletter.

Fool contributor Stephen Simpson has no financial interest in any stocks mentioned.