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 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

$23,396

and

$72,955

for the

three

and

nine

months ended

August 25, 2018,

and

$23,761

and

$70,149

for the

three

and

nine

months ended

August 26, 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						Nine Months Ended
	August 25, 2018			August 26, 2017			August 25, 2018			August 26, 2017
Sales Revenue
Wholesale	$	63,847		$	61,757		$	190,735		$	186,025
Retail - Company-owned stores		65,430			67,402			198,773			196,139
Logistical services		23,536			24,925			73,714			71,885
Inter-company eliminations:
Furniture and accessories		(29,470	)		(29,007	)		(90,903	)		(88,020	)
Logistical services		(10,387	)		(10,816	)		(32,111	)		(31,751	)
Consolidated	$	112,956		$	114,261		$	340,208		$	334,278

Income from Operations
Wholesale	$	3,298		$	4,466		$	9,401		$	15,142
Retail - Company-owned stores		858			1,353			971			1,377
Logistical services		139			1,164			758			1,736
Inter-company elimination		29			277			907			1,269
Consolidated	$	4,324		$	7,260		$	12,037		$	19,524

Depreciation and Amortization
Wholesale	$	793		$	668		$	2,253		$	1,976
Retail - Company-owned stores		1,333			1,530			4,397			4,498
Logistical services		1,106			1,156			3,270			3,586
Consolidated	$	3,232		$	3,354		$	9,920		$	10,060

Capital Expenditures
Wholesale	$	1,154		$	304		$	3,484		$	4,149
Retail - Company-owned stores		3,519			1,155			7,974			6,069
Logistical services		297			186			1,174			599
Consolidated	$	4,970		$	1,645		$	12,632		$	10,817

	As of		As of
Identifiable Assets	August 25, 2018		November 25, 2017
Wholesale	$	140,100	$	152,181
Retail - Company-owned stores		93,557		89,271
Logistical services		50,827		52,296
Consolidated	$	284,484	$	293,748