Bassett Net Balloons 469 Percent in Third Quarter
BASSETT, Va.-Benefiting from a sales increase and a gain in income-tax benefit, Bassett Furniture Industries posted a whopping 469 percent increase in net income in its fiscal third quarter, to $2.3 million.
Net sales rose 8.5 percent to finish the quarter, which ended on Aug. 25, at $64.4 million. Robert H. Spilman Jr., Bassett's president and CEO, said the company realized sales gains in both its wholesale and retail segments, thanks to "new product introductions, comparable corporate retail sales gains and greater penetration with open-market independent retailers."
Bassett also reported an income-tax benefit of $1.9 million, compared to a benefit from income taxes of $342,000 in last year's third quarter. This resulted mostly from a favorable provision to return adjustments related to the company's 2011 federal income tax return, and the release of a portion of its valuation allowance against certain deferred tax assets, according to Bassett's statement on its results.
These factors and a gain of 330 basis points in gross margin, which was 52.5 percent, helped offset rising expenses in the quarter. Selling, general and administrative expenses were up 12.4 percent in dollars and 180 basis points as a percentage of sales to 51 percent. Bassett attributed the jump in expenses primarily to the increase in the number of company-owned stores.
Looking ahead, Spilman said Bassett soon hopes to realize the benefits from its partnership with HGTV. "The in-store design centers in our Bassett Home Furnishings network have been co-branded with HGTV to more forcefully market the concept of a home makeover, an important point of differentiation for our stores that also mirrors much of the programming content on the HGTV network," he said. "In addition, new HGTV Home-branded furniture will hit independent retailers' floors during the fourth quarter."