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. Our wholesale segment also includes our holdings of short-term investments and 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

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

Our logistical services operating segment 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 total operating costs, including those associated with providing logistical services to the Company as well as to

third

-party customers, are included in selling, general and administrative expenses and were

$23,761

and

$70,149

for the

three

and

nine

months ended

August 26, 2017,

and

$22,317

and

$69,401

for the

three

and

nine

months ended

August 27, 2016,

respectively.

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 26, 2017			August 27, 2016			August 26, 2017			August 27, 2016
Sales Revenue
Wholesale	$	61,757		$	58,303		$	186,025		$	177,785
Retail - Company-owned stores		67,402			61,216			196,139			184,754
Logistical services		24,925			22,991			71,885			71,480
Inter-company eliminations:
Furniture and accessories		(29,007	)		(28,054	)		(88,020	)		(85,682	)
Logistical services		(10,816	)		(9,744	)		(31,751	)		(30,085	)
Consolidated	$	114,261		$	104,712		$	334,278		$	318,252

Income from Operations
Wholesale	$	4,466		$	5,648		$	15,142		$	14,380
Retail - Company-owned stores		1,353			768			1,377			1,465
Logistical services		1,164			674			1,736			2,079
Inter-company elimination		277			450			1,269			1,260
Consolidated	$	7,260		$	7,540		$	19,524		$	19,184

Depreciation and Amortization
Wholesale	$	668		$	538		$	1,976		$	1,453
Retail - Company-owned stores		1,530			1,455			4,498			4,515
Logistical services		1,156			1,262			3,586			2,898
Consolidated	$	3,354		$	3,255		$	10,060		$	8,866

Capital Expenditures
Wholesale	$	304		$	2,808		$	4,149		$	5,799
Retail - Company-owned stores		1,155			1,080			6,069			4,060
Logistical services		186			951			599			9,096
Consolidated	$	1,645		$	4,839		$	10,817		$	18,955

	As of		As of
Identifiable Assets	August 26, 2017		November 26, 2016
Wholesale	$	138,323	$	139,477
Retail - Company-owned stores		90,517		88,855
Logistical services		50,916		49,935
Consolidated	$	279,756	$	278,267