Note 15 - Segment Information

9 Months Ended

Aug. 29, 2015

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

1

5

. Segment Information

We have strategically aligned our business into three reportable segments as defined in ASC 280,

Segment Reporting

, and as described below:

● Wholesale. The wholesale home furnishings segment is involved principally in the design, manufacture, sourcing, sale and distribution of furniture products to a network of Bassett stores (Company-owned and licensee-owned stores retail stores) and independent furniture retailers. Our wholesale segment includes our wood and upholstery operations as well as all corporate selling, general and administrative expenses, including those corporate expenses related to both Company- and licensee-owned stores.

● Retail – Company-owned s tores. Our retail segment consists of Company-owned stores and includes the revenues, expenses, assets and liabilities and capital expenditures directly related to these stores.

● Logistical services . With our acquisition of Zenith on February 2, 2015, we created the logistical services operating segment which reflects the operations of Zenith. In addition to providing shipping, delivery and warehousing services for the Company, Zenith also provides similar services to other customers, primarily in the furniture industry. Revenue from the performance of these services to other customers is included in logistics revenue in our condensed consolidated statement of income. Zenith’s operating costs are included in selling, general and administrative expenses and total $22,580 and $49,517 for the three and nine months ended August 29, 2015, respectively, since the date of acquisition. Amounts charged by Zenith to the Company for logistical services prior to the date of acquisition are included in selling, general and administrative expenses, and our equity in the earnings of Zenith prior to the date of acquisition is included in other loss, net, in the accompanying statements of income.

Inter-company sales elimination represents the elimination of wholesale sales to our Company-owned stores and the elimination of Zenith logistics revenue from our wholesale and retail segments. Inter-company income elimination includes the embedded wholesale profit in the Company-owned store inventory that has not been realized. These profits will be recorded when merchandise is delivered to the retail consumer. The inter-company income elimination also includes rent paid by our retail stores occupying Company-owned real estate, and the elimination of shipping and handling charges from Zenith for services provided to our wholesale and retail operations.

Prior to the beginning of fiscal 2015, our former investments and real estate segment included our short-term investments, our holdings of retail real estate previously leased as licensee stores, and our former equity investment in Zenith prior to acquisition. This segment has been eliminated and the assets formerly reported therein are now considered to be part of our wholesale segment. The earnings and costs associated with these assets, including our equity in the income of Zenith prior to the date of acquisition, will continue to be included in other loss, net, in our condensed consolidated statements of income.

The following table presents our segment information:

	Quarter Ended						Nine Months Ended
	August 29, 2015			August 30, 2014			August 29, 2015			August 30, 2014
Sales Revenue
Wholesale	$	62,165		$	56,069		$	187,675		$	163,339
Retail - Company-owned stores		62,009			53,987			183,113			154,401
Logistical services		23,650			-			51,607			-
Inter-company eliminations:
Furniture and accessories		(27,067	)		(24,870	)		(84,666	)		(71,722	)
Logistical services		(9,746	)		-			(22,357	)
Consolidated	$	111,011		$	85,186		$	315,372		$	246,018
Income (loss) from Operations
Wholesale	$	3,795		$	3,216		$	11,518		$	9,821
Retail - Company-owned stores		2,037			(167	)		3,967			(2,605	)
Logistical services		1,070			-			2,089			-
Inter-company elimination		790			350			683			1,160
Management restructuring costs		-			-			(449	)		-
Lease exit costs		-			-			(419	)		-
Asset impairment charges		-			-			(106	)		-
Consolidated	$	7,692		$	3,399		$	17,283		$	8,376
Depreciation and Amortization
Wholesale	$	501		$	539		$	1,539		$	1,420
Retail - Company-owned stores		1,326			1,451			4,024			4,008
Logistical services		745			-			1,739			-
Consolidated	$	2,572		$	1,990		$	7,302		$	5,428
Capital Expenditures
Wholesale	$	1,793		$	788		$	4,138		$	4,013
Retail - Company-owned stores		1,448			2,690			5,326			11,674
Logistical services		100			-			1,819			-
Consolidated	$	3,341		$	3,478		$	11,283		$	15,687

	As of		As of
	August 29, 2015		November 29, 2014
Identifiable Assets
Wholesale	$	137,228	$	154,275
Retail - Company-owned stores		90,728		86,471
Logistical services		42,661		-
Consolidated	$	270,617	$	240,746