Note 12 - Segment Information

6 Months Ended

Jun. 01, 2024

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

12. Segment Information

We have strategically aligned our business into two 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 includes Lane Venture.

● 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.

In addition to the two reportable segments described above, we include our remaining business activities and assets in a reconciling category known as Corporate and other. This category includes the shared costs of corporate functions such as treasury and finance, information technology, accounting, human resources, legal and others, including certain product development and marketing functions benefitting both wholesale and retail operations. In addition to property and equipment and various other assets associated with the shared corporate functions, the identifiable assets of Corporate and other include substantially all of our cash and our investments in CDs. We consider our corporate functions to be other business activities and have aggregated them with any of our operating segments that do not meet the requirements to be reportable segments. As of and for the periods ended June 1, 2024 and May 27, 2023, the only such operating segment included in Corporate and other is Noa Home, which was acquired on September 2, 2022. All sales reported in our Corporate and other category are attributable to Noa Home, which generates substantially all of its sales outside of the United States. During the second quarter we concluded that Noa Home was not likely to achieve profitability in the foreseeable future and have decided to cease operations by selling the remaining inventory in an orderly fashion over the next several months.

Inter-company net sales elimination represents the elimination of wholesale sales to our Company-owned stores. 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.

The following table presents our segment information:

	Quarter Ended						Six Months Ended
	June 1, 2024			May 27, 2023			June 1, 2024			May 27, 2023
Sales Revenue
Wholesale sales of furniture and accessories	$	52,609		$	61,774		$	107,310		$	131,658
Less: Sales to retail segment		(20,751	)		(24,330	)		(44,514	)		(54,429	)
Wholesale sales to external customers		31,858			37,444			62,796			77,229
Retail sales of furniture and accessories		50,468			60,778			104,222			125,740
Corporate and other - Noa Home		1,084			2,297			2,946			5,248
Consolidated net sales of furniture and accessories	$	83,410		$	100,519		$	169,964		$	208,217
Income (Loss) before Income Taxes:
Income (loss) from operations:
Wholesale	$	5,687		$	7,005		$	12,446		$	15,999
Retail - Company-owned stores		(2,222	)		755			(3,834	)		2,285
Net expenses - Corporate and other		(6,942	)		(6,949	)		(14,537	)		(14,720	)
Inter-company elimination		530			656			621			605
Asset impairment charges (see Note 9)		(5,515	)		-			(5,515	)		-
Gain on revaluation of contingent consideration (see Note 9)		-			1,013			-			1,013
Consolidated income (loss) from operations		(8,462	)		2,480			(10,819	)		5,182
Interest income		627			569			1,383			721
Other loss, net		(276	)		(505	)		(380	)		(1,072	)
Consolidated income (loss) before income taxes	$	(8,111	)	$	2,544		$	(9,816	)	$	4,831
Depreciation and Amortization
Wholesale	$	629		$	614		$	1,248		$	1,220
Retail - Company-owned stores		1,337			1,533			2,717			2,832
Corporate and other		661			422			1,326			857
Consolidated	$	2,627		$	2,569		$	5,291		$	4,909
Capital Expenditures
Wholesale	$	371		$	712		$	534		$	1,349
Retail - Company-owned stores		837			1,740			2,170			3,022
Corporate and other		399			1,612			979			3,034
Consolidated	$	1,607		$	4,064		$	3,683		$	7,405

	As of		As of
	June 1, 2024		November 25, 2023
Identifiable Assets
Wholesale	$	91,280	$	99,004
Retail - Company-owned stores		159,721		166,604
Corporate and other		94,263		104,816
Consolidated	$	345,264	$	370,424

See Note 13, Revenue Recognition, for disaggregated revenue information regarding sales of furniture and accessories by product type for the wholesale and retail segments.