Note 14 - Segment Information

9 Months Ended

Aug. 27, 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 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 $22,317 and $69,400 for the three and nine months ended August 27, 2016, respectively; $22,850 for the three months ended August 29, 2015 and $49,517 from the date of acquisition through August 29, 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 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						Nine Months Ended
	August 27, 2016			August 29, 2015			August 27, 2016			August 29, 2015
Sales Revenue
Wholesale	$	58,303		$	62,165		$	177,785		$	187,675
Retail - Company-owned stores		61,216			62,009			184,754			183,113
Logistical services		22,991			23,650			71,480			51,607
Inter-company eliminations:
Furniture and accessories		(28,054	)		(27,067	)		(85,682	)		(84,666	)
Logistical services		(9,744	)		(9,746	)		(30,085	)		(22,357	)
Consolidated	$	104,712		$	111,011		$	318,252		$	315,372
Income from Operations
Wholesale	$	5,648		$	3,795		$	14,380		$	11,518
Retail - Company-owned stores		768			2,037			1,465			3,967
Logistical services		674			1,070			2,079			2,089
Inter-company elimination		450			790			1,260			683
Management restructuring costs		-			-			-			(449	)
Lease exit costs		-			-			-			(419	)
Asset impairment charges		-			-			-			(106	)
Consolidated	$	7,540		$	7,692		$	19,184		$	17,283
Depreciation and Amortization
Wholesale	$	538		$	501		$	1,453		$	1,539
Retail - Company-owned stores		1,455			1,326			4,515			4,024
Logistical services		1,262			745			2,898			1,739
Consolidated	$	3,255		$	2,572		$	8,866		$	7,302
Capital Expenditures
Wholesale	$	2,808		$	1,793		$	5,799		$	4,138
Retail - Company-owned stores		1,080			1,448			4,060			5,326
Logistical services		951			100			9,096			1,819
Consolidated	$	4,839		$	3,341		$	18,955		$	11,283

	As of		As of
Identifiable Assets	August 27, 2016		November 28, 2015
Wholesale	$	135,045	$	146,878
Retail - Company-owned stores		89,871		88,878
Logistical services		50,583		46,787
Consolidated	$	275,499	$	282,543