Note 13 - Segment Information

3 Months Ended

Feb. 29, 2020

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

13. 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 include Lane Venture, 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 stores. Our retail segment consists of Company-owned stores and includes the revenues, expenses, assets and liabilities and capital expenditures directly related to these stores and the Company-owned distribution network utilized to deliver products to our retail customers.

● 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 $20,480 and $21,039 for the quarters ended February 29, 2020 and March 2, 2019, 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
	February 29, 2020			March 2, 2019
Sales Revenue
Wholesale	$	65,017		$	72,781
Retail - Company-owned stores		65,846			69,629
Logistical services		21,315			21,751
Inter-company eliminations:
Furniture and accessories		(31,921	)		(35,054	)
Logistical services		(8,137	)		(8,266	)
Consolidated	$	112,120		$	120,841
Income from Operations
Wholesale	$	2,713		$	4,182
Retail - Company-owned stores		(1,249	)		(3,046	)
Logistical services		835			712
Inter-company elimination		(89	)		(64	)
Early retirement program		-			(835	)
Consolidated	$	2,210		$	949
Depreciation and Amortization
Wholesale	$	809		$	818
Retail - Company-owned stores		1,730			1,505
Logistical services		1,084			1,047
Consolidated	$	3,623		$	3,370
Capital Expenditures
Wholesale	$	422		$	1,065
Retail - Company-owned stores		561			4,017
Logistical services		357			470
Consolidated	$	1,340		$	5,552

	As of		As of
	February 29, 2020		November 30, 2019
Identifiable Assets
Wholesale	$	142,014	$	144,392
Retail - Company-owned stores		211,784		91,997
Logistical services		61,436		39,377
Consolidated	$	415,234	$	275,766

Wholesale shipments by type
	Quarter Ended
	February 29, 2020				March 2, 2019
Bassett Custom Upholstery	$	40,033	61.6	%	$	41,538	57.1	%
Bassett Leather		4,700	7.2	%		5,771	7.9	%
Bassett Custom Wood		11,290	17.4	%		11,675	16.0	%
Bassett Casegoods		8,994	13.8	%		12,640	17.4	%
Accessories (1)		-	0.0	%		1,157	1.6	%
Total	$	65,017	100.0	%	$	72,781	100.0	%

(1) Beginning with the third quarter of fiscal 2019, our wholesale segment no longer purchases accessory items for resale to our retail segment or to third party customers such as licensees or independent furniture retailers. Our retail segment and third party customers now source their accessory items directly from the accessory vendors.