Margins for the quarter and the year are up due to both increased retail sales largely attributable to the BFD acquisitions and an increased sales mix of imported products.
Bassett

Bassett Furniture Industries announced earnings for its fiscal fourth quarter and year ended November 26, 2005.

Sales for the fourth quarter of 2005 were $88.6 million, up 10.6 percent from fourth quarter 2004 levels, led by an $8 million increase in shipments to Bassett Furniture Direct (BFD) stores. This 17% increase in BFD shipments outpaced approximately $5 million of expected attrition with traditional furniture stores. Additionally, the acquisition of 15 BFD stores in Dallas, Atlanta, and upstate New York (the "BFD acquisitions") increased net sales by approximately $5 million in the fourth quarter of 2005. For fiscal 2005, sales were $335.2 million, up 6.2 percent from 2004 levels. Wholesale shipments to the BFD channel for 2005 were up $32.5 million (18%) more than offsetting $22.6 million in expected attrition from traditional stores and other channels. The remaining increase in net sales for 2005 resulted from the BFD acquisitions.

The Bassett Furniture Direct retail store program continues to grow with 132 stores currently in operation. Licensees opened three stores during the fourth quarter of 2005. The Company expects licensees to open 18 new BFD stores in fiscal 2006, including three opened in December. BFD stores accounted for 68 percent of total wholesale shipments in 2005, compared to 60 percent in 2004. During the year, the Company acquired 15 BFD stores in Dallas, Atlanta and upstate New York bringing the total number of Company-owned stores to 27, more than one-fifth of the BFD store network.

"We are pleased with our improvement in continuing operating earnings and the solid performance posted by our upholstery division and imported products within our wood division," said Robert H. Spilman Jr., president and chief executive officer. "We remain squarely focused on retail, using our expanded Corporate store program to build a platform for providing solutions to our customers and to develop best practices which will serve the entire BFD store program."

Margins for the quarter and the year are up due to both increased retail sales largely attributable to the BFD acquisitions and an increased sales mix of imported products. Additionally, margins for the quarter and year were positively impacted by lower domestic wood inventory levels which caused reductions in accompanying LIFO inventory reserves. SG & A expenses also increased due to the BFD acquisitions and greater marketing spending.