Note 13 - Segment Information

6 Months Ended

May 30, 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 operations.

● 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 operations. 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 $17,101 and $37,581 for the three and six months ended May 30, 2020, respectively, and $19,841 and $40,880 for the three and six months ended June 1, 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						Six Months Ended
	May 30, 2020			June 1, 2019			May 30, 2020			June 1, 2019
Sales Revenue
Wholesale	$	33,128		$	63,131		$	98,145		$	135,912
Retail - Company-owned stores		33,171			62,568			99,017			132,197
Logistical services		15,259			20,093			36,574			41,844
Inter-company eliminations:
Furniture and accessories		(13,299	)		(29,875	)		(45,220	)		(64,929	)
Logistical services		(4,458	)		(7,727	)		(12,595	)		(15,993	)
Consolidated	$	63,801		$	108,190		$	175,921		$	229,031
Income (Loss) from Operations
Wholesale	$	(7,381	)	$	3,173		$	(4,668	)	$	7,355
Retail - Company-owned stores		(9,170	)		(2,953	)		(10,419	)		(5,999	)
Logistical services		(1,842	)		252			(1,007	)		964
Inter-company elimination		2,369			229			2,280			165
Early retirement program		-			-			-			(835	)
Asset impairment charges		(12,184	)		-			(12,184	)		-
Goodwill impairment charge		(1,971	)		-			(1,971	)		-
Litigation expense		(1,050	)		-			(1,050	)		-
Consolidated	$	(31,229	)	$	701		$	(29,019	)	$	1,650
Depreciation and Amortization
Wholesale	$	782		$	827		$	1,591		$	1,645
Retail - Company-owned stores		1,712			1,544			3,442			3,049
Logistical services		1,122			994			2,206			2,041
Consolidated	$	3,616		$	3,365		$	7,239		$	6,735
Capital Expenditures
Wholesale	$	271		$	1,075		$	693		$	2,140
Retail - Company-owned stores		42			1,373			603			5,390
Logistical services		138			313			495			783
Consolidated	$	451		$	2,761		$	1,791		$	8,313

	As of		As of
Identifiable Assets	May 30, 2020		November 30, 2019
Wholesale	$	144,580	$	144,392
Retail - Company-owned stores		183,776		91,997
Logistical services		58,617		39,377
Consolidated	$	386,973	$	275,766

Wholesale shipments by type

	Quarter Ended								Six Months Ended
	May 30, 2020				June 1, 2019				May 30, 2020				June 1, 2019
Bassett Custom Upholstery	$	19,234	58.1	%	$	36,853	58.4	%	$	59,267	60.4	%	$	78,391	57.7	%
Bassett Leather		3,055	9.2	%		4,463	7.1	%		7,755	7.9	%		10,234	7.5	%
Bassett Custom Wood		5,632	17.0	%		10,526	16.7	%		16,922	17.2	%		22,201	16.3	%
Bassett Casegoods		5,207	15.7	%		9,979	15.8	%		14,201	14.5	%		22,619	16.6	%
Accessories (1)		-	0.0	%		1,310	2.1	%		-	0.0	%		2,467	1.8	%
Total	$	33,128	100.0	%	$	63,131	100.0	%	$	98,145	100.0	%	$	135,912	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.