Note 14 - Segment Information

6 Months Ended

May 28, 2016

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

14. 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 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. Also included in our wholesale segment are our short-term investments and our holdings of retail real estate previously leased as licensee stores. The earnings and costs associated with these assets are included in other income (loss), net, in our condensed consolidated statements of income.

● 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 logistical services revenue in our condensed consolidated statement of income. Zenith’s operating costs are included in selling, general and administrative expenses and were $23,149 and $47,084 for the three and six months ended May 28, 2016, respectively; $20,931 for the three months ended May 30, 2015 and $26,938 from the date of acquisition through May 30, 2015. 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 income (loss), net, in the accompanying statements of income.

Inter-company net 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.

The following table presents our segment information:

	Quarter Ended						Six Months Ended
	May 28, 2016			May 30, 2015			May 28, 2016			May 30, 2015
Sales Revenue
Wholesale	$	59,906		$	66,705		$	119,482		$	125,510
Retail - Company-owned stores		61,943			63,921			123,538			121,104
Logistical services		23,810			21,958			48,489			27,957
Inter-company eliminations:
Furniture and accessories		(28,859	)		(31,159	)		(57,628	)		(57,599	)
Logistical services		(10,133	)		(9,872	)		(20,341	)		(12,612	)
Consolidated	$	106,667		$	111,553		$	213,540		$	204,360
Income from Operations
Wholesale	$	4,334		$	4,796		$	8,732		$	7,723
Retail - Company-owned stores		381			1,971			697			1,929
Logistical services		661			1,027			1,405			1,019
Inter-company elimination		477			(631	)		810			(106	)
Management restructuring costs		-			(449	)		-			(449	)
Lease exit costs		-			-			-			(419	)
Asset impairment charges		-			-			-			(106	)
Consolidated	$	5,853		$	6,714		$	11,644		$	9,591
Depreciation and Amortization
Wholesale	$	459		$	504		$	915		$	1,038
Retail - Company-owned stores		1,529			1,343			3,060			2,698
Logistical services		806			736			1,636			993
Consolidated	$	2,794		$	2,583		$	5,611		$	4,729
Capital Expenditures
Wholesale	$	1,454		$	1,384		$	2,991		$	2,345
Retail - Company-owned stores		959			1,767			2,980			3,878
Logistical services		3,135			873			8,145			1,719
Consolidated	$	5,548		$	4,024		$	14,116		$	7,942

	As of		As of
	May 28, 2016		November 28, 2015
Identifiable Assets
Wholesale	$	133,608	$	146,878
Retail - Company-owned stores		90,254		88,878
Logistical services		52,385		46,787
Consolidated	$	276,247	$	282,543