Bassett Looking to Sell IHFC Shares

January 26, 2011  by in UnCategorized   

By Home Furnishings Business in Financial Reports on January 27, 2011

Bassett Furniture Inds. (NASDAQ: BSET) announced the potential sale of High Point's International Home Furnishings Center along with an 11 percent fourth-quarter 2010 sales increase.

Bassett is engaged in negotiations for the sale of its 46.9 percent interest in  the IHFC and said no definitive agreement for the sale has been reached. Any such sale would be made only as part of the simultaneous sale of 100 percent of the ownership interests in IHFC to the prospective purchaser. The Bassett, Va.-based company is one of four shareholders of IHFC.

"The proposed sale of IHFC offers us the opportunity to unlock value in a key non-core asset that we believe is not currently fully recognized in the Company's stock price as well as to significantly strengthen our already strong balance sheet," said Bassett President and CEO Rob Spilman. "Although there can be no assurance that an agreement among all of the required parties will be reached, we hope to complete the sale by the end of February."

In the fourth quarter, which ended Nov. 28, sales of $66 million rose 11 percent from the prior-year period's $59.5 million. The company reported net income of $1.9 million, or $0.17 per share, for the fourth quarter, compared with $2.6 million, or $0.22 per share, for fourth-quarter 2009.

"We are pleased to report an 11% sales increase for the fourth quarter of 2010," said Spilman said. "While we do not believe that the overall pace of sales has improved significantly on an industry-wide basis, we are making progress on several fronts to grow our top line. This includes slight improvements in sales in our Company-owned retail fleet, the addition of new accounts outside our store network, and improved service levels on our imported products by virtue of our strategy to carry higher levels of inventory on our key items. The profit that we generated during the quarter resulted from a higher level of sales enhanced by an expense structure that has been aggressively trimmed for several quarters. We are very focused on doing everything that we can to generate future growth while continuing to monitor our operating expenses."

As of Nov. 27 Bassett's Bassett Furniture Direct store network included 54 licensee-owned stores and 47 Company-owned and operated stores. During the quarter, the company acquired certain assets of, and now operates one additional licensee store, while another store acquired during the first quarter of 2010 was closed at the end of the fourth quarter.

Company-owned stores had sales of $34.8 million in the fourth quarter of 2010 as compared to $27.5 million in the fourth quarter of 2009, an increase of 26.6 percent.