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Note 13 - Segment Information
 9 Months Ended
Aug. 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 income (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 $16,826 and $54,407 for the three and nine months ended August 29, 2020, respectively, and $18,289 and $59,169 for the three and nine months ended August 31, 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

  

Nine Months Ended

 
  

August 29,

2020

  

August 31,

2019

  

August 29,

2020

  

August 31,

2019

 

Sales Revenue

                

Wholesale

 $55,443  $62,690  $153,588  $198,602 

Retail - Company-owned stores

  48,144   66,539   147,161   198,736 

Logistical services

  17,848   18,899   54,422   60,743 

Inter-company eliminations:

                

Furniture and accessories

  (23,246)  (30,860)  (68,466)  (95,789)

Logistical services

  (6,630)  (7,849)  (19,225)  (23,842)

Consolidated

 $91,559  $109,419  $267,480  $338,450 
                 

Income (Loss) from Operations

                

Wholesale

 $3,324  $3,044  $(1,344) $10,399 

Retail - Company-owned stores

  (1,585)  (431)  (12,004)  (6,430)

Logistical services

  1,022   610   15   1,574 

Inter-company elimination

  (14)  177   2,266   342 

Early retirement program

  -   -   -   (835)

Asset impairment charges

  -   -   (12,184)  - 

Goodwill impairment charge

  -   -   (1,971)  - 

Litigation expense

  -   -   (1,050)  - 

Consolidated

 $2,747  $3,400  $(26,272) $5,050 
                 

Depreciation and Amortization

                

Wholesale

 $747  $752  $2,338  $2,397 

Retail - Company-owned stores

  1,516   1,612   4,958   4,661 

Logistical services

  747   993   2,953   3,034 

Consolidated

 $3,010  $3,357  $10,249  $10,092 
                 

Capital Expenditures

                

Wholesale

 $286  $670  $979  $2,810 

Retail - Company-owned stores

  92   1,482   695   6,872 

Logistical services

  45   186   540   969 

Consolidated

 $423  $2,338  $2,214  $10,651 

 

  

As of

  

As of

 

Identifiable Assets

 

August 29,

2020

  

November 30,

2019

 

Wholesale

 $156,464  $144,392 

Retail - Company-owned stores

  180,252   91,997 

Logistical services

  57,600   39,377 

Consolidated

 $394,316  $275,766 

 

Wholesale shipments by type

  

Quarter Ended

  

Nine Months Ended

 
  

August 29, 2020

  

August 31, 2019

  

August 29, 2020

  

August 31, 2019

 
                                 

Bassett Custom Upholstery

 $31,016   55.9% $36,809   58.7% $90,283   58.8% $115,200   58.0%

Bassett Leather

  5,804   10.5%  4,480   7.1%  13,559   8.8%  14,714   7.4%

Bassett Custom Wood

  9,582   17.3%  11,757   18.8%  26,504   17.3%  33,958   17.1%

Bassett Casegoods

  9,041   16.3%  9,644   15.4%  23,242   15.1%  32,263   16.2%

Accessories (1)

  -   0.0%  -   0.0%  -   0.0%  2,467   1.2%

Total

 $55,443   100.0% $62,690   100.0% $153,588   100.0% $198,602   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.