Bassett Furniture Industries (BSET) investor relations material

Executive summary

• Net sales for Q3 FY25 increased 5.9% year-over-year to $80.1 million, with retail sales up 9.8% and wholesale sales up 6.2%; excluding Noa Home, revenues rose 7.3%.

• Operating income reached $0.6 million, reversing a $6.4 million loss in the prior year, which included a $1.2 million contract loss and cyber incident costs.

• Gross margin improved by 320 basis points to 56.2%, driven by wholesale margin gains and cost reductions.

• Diluted EPS was $0.09, compared to a loss of $0.52 per share in Q3 FY24.

• Closure and liquidation of Noa Home in 2024 reduced sales and expenses in the current period.

Financial highlights

• Net sales were $80.1 million for the quarter, up from $75.6 million in Q3 FY24; nine-month net sales rose 0.4% to $246.6 million.

• Gross margin for the quarter was 56.2%, up 320 basis points year-over-year; for nine months, gross margin improved by 270 basis points.

• SG&A expenses as a percentage of sales decreased 420 basis points for the quarter and 390 basis points for the nine months.

• Net income was $801,000 (1.0% of sales), compared to a net loss of $4.5 million (-6.0% of sales) in Q3 FY24.

• Cash and short-term investments totaled $54.6 million at quarter-end.

Outlook and guidance

• No expectation for a robust industry recovery until a sustained pickup in home sales occurs.

• Gross margin expected to remain in the 55–56% range, with only slight potential for improvement.

• Fourth quarter anticipated to be the strongest for business and cash generation.

• Capital expenditures for the full year are expected to range from $5 million to $7 million.

• Management believes liquidity is sufficient to fund operations for the foreseeable future.