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, which now include Lane Venture (see Note

Business Combinations), 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 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 statements 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

$24,640

and

$49,559

for the

three

and

six

months ended

May 26, 2018,

and

$23,828

and

$46,388

for the

three

and

six

months ended

May 27, 2017,

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						Six Months Ended
	May 26, 2018			May 27, 2017			May 26, 2018			May 27, 2017
Sales Revenue
Wholesale	$	63,788		$	62,293		$	126,888		$	124,268
Retail - Company-owned stores		68,682			67,144			133,343			128,737
Logistical services		24,929			24,626			50,178			46,960
Inter-company eliminations:
Furniture and accessories		(29,795	)		(29,143	)		(61,433	)		(59,013	)
Logistical services		(10,624	)		(10,795	)		(21,724	)		(20,935	)
Consolidated	$	116,980		$	114,125		$	227,252		$	220,017

Income from Operations
Wholesale	$	3,039		$	4,783		$	6,103		$	10,676
Retail - Company-owned stores		1,626			1,367			113			24
Logistical services		289			798			619			572
Inter-company elimination		709			652			878			992
Consolidated	$	5,663		$	7,600		$	7,713		$	12,264

Depreciation and Amortization
Wholesale	$	757		$	664		$	1,460		$	1,308
Retail - Company-owned stores		1,536			1,496			3,064			2,968
Logistical services		1,091			1,195			2,164			2,430
Consolidated	$	3,384		$	3,355		$	6,688		$	6,706

Capital Expenditures
Wholesale	$	1,113		$	2,218		$	2,330		$	3,845
Retail - Company-owned stores		1,854			1,211			4,455			4,914
Logistical services		737			133			877			413
Consolidated	$	3,704		$	3,562		$	7,662		$	9,172

	As of		As of
Identifiable Assets	May 26, 2018		November 25, 2017
Wholesale	$	139,906	$	152,181
Retail - Company-owned stores		89,859		89,271
Logistical services		51,583		52,296
Consolidated	$	281,348	$	293,748