Business conditions continue to be fairly tough at the retail level, especially in certain key markets
Robert H. Spilman Jr., Bassett President and CEO

Bassett Furniture Industries announced sales for the second quarter of 2005 were $83.1 million, up 3.4% from second quarter 2004 levels, led by a $9 million or 22% increase in shipments to Bassett Furniture Direct (BFD) stores, which outpaced approximately $6 million of expected attrition with traditional furniture stores.

The Bassett Furniture Direct retail store program continues to grow with 121 stores currently in operation. Licensees opened two stores and closed two during the second quarter. The Company expects licensees to open another 10 to 12 stores in the second half for a total of 20 to 22 new BFD stores in fiscal 2005.

Margins were up slightly due to an increased sales mix of imported products.

The Company reported net income for the quarter of $1.0 million or $.09 per share including a $2.5 million pretax impairment charge for the previously announced acquisition and consolidation of eight BFD stores in Dallas, Texas (see story). Excluding this charge, net income was $2.6 million or $.22 per share compared to net income of $1.9 million or $.16 per share in the second quarter of 2004.

"We are pleased with the growth of our Bassett Furniture Direct program and the continued strong performance from imported products within our wood division," said Robert H. Spilman Jr., president and chief executive officer. "Business conditions continue to be fairly tough at the retail level, especially in certain key markets. We are focused on continuing to improve every aspect of the BFD store program, enhancing our marketing strategies, and improving the performance of our domestic wood operations."

The Company generated positive cash flow during the quarter through a combination of earnings and reductions in domestic wood inventories. The Company paid its regular quarterly dividend to shareholders during the quarter.

Bassett also announced that its Board of Directors has declared a regular quarterly dividend of $.20 per share payable on September 1, 2005, to shareholders of record on August 17, 2005.

www.bassettfurniture.com.