Note 12 - Segment Information

9 Months Ended

Aug. 31, 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 August 31, 2024 and August 26, 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 fiscal quarter of 2024 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						Nine Months Ended
	August 31, 2024			August 26, 2023			August 31, 2024			August 26, 2023
Sales Revenue
Wholesale sales of furniture and accessories	$	47,828		$	56,660		$	155,138		$	188,318
Less: Sales to retail segment		(20,453	)		(23,503	)		(64,967	)		(77,932	)
Wholesale sales to external customers		27,375			33,157			90,171			110,386
Retail sales of furniture and accessories		47,256			52,264			151,478			178,004
Corporate and other - Noa Home		988			1,796			3,934			7,044
Consolidated net sales of furniture and accessories	$	75,619		$	87,217		$	245,583		$	295,434
Income (Loss) before Income Taxes:
Income (loss) from operations:
Wholesale	$	4,440		$	6,340		$	16,886		$	22,339
Retail - Company-owned stores		(2,840	)		(3,036	)		(6,674	)		(751	)
Net expenses - Corporate and other		(6,963	)		(7,420	)		(21,500	)		(22,140	)
Inter-company elimination		246			312			867			917
Asset impairment charges (see Note 9)		-			-			(5,515	)		-
Loss on contract abandonment (see Note 9)		(1,240	)		-			(1,240	)
Gain on revaluation of contingent consideration (see Note 9)		-			-			-			1,013
Consolidated income (loss) from operations		(6,357	)		(3,804	)		(17,176	)		1,378
Interest income		692			923			2,075			1,644
Other loss, net		(109	)		(309	)		(489	)		(1,381	)
Consolidated income (loss) before income taxes	$	(5,774	)	$	(3,190	)	$	(15,590	)	$	1,641
Depreciation and Amortization
Wholesale	$	587		$	618		$	1,835		$	1,838
Retail - Company-owned stores		1,073			1,335			3,790			4,167
Corporate and other		662			640			1,988			1,497
Consolidated	$	2,322		$	2,593		$	7,613		$	7,502
Capital Expenditures
Wholesale	$	385		$	715		$	919		$	2,064
Retail - Company-owned stores		510			4,776			2,680			7,798
Corporate and other		142			1,761			1,121			4,795
Consolidated	$	1,037		$	7,252		$	4,720		$	14,657

	As of		As of
	August 31, 2024		November 25, 2023
Identifiable Assets
Wholesale	$	88,835	$	99,004
Retail - Company-owned stores		155,271		166,604
Corporate and other		91,756		104,816
Consolidated	$	335,862	$	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.