This was a tough quarter for the Company.
Robert H. Spilman, president, Bassett

Bassett sales for the third quarter of 2006 were $77.6 million, down 6.3% from third quarter 2005 levels. The Company reported net income of $.4 million or $.04 per share as compared to net income of $1.9 million or $.16 per share in the third quarter of 2005.

Year-to-date, sales were $251.7 million, up 2.1% from the prior year. Gross margins increased 3.6 percentage points as compared to 2005.

The Bassett Furniture Direct retail store program had 135 stores (109 licensed and 26 Company-owned) in operation at the end of the third quarter. Licensees opened three stores during the quarter and closed two. As previously announced, two Company-owned stores were closed in the quarter. Also, Bassett expects to open one new Company-owned BFD store in the fourth quarter of 2006.

“This was a tough quarter for the Company,” said Robert H. Spilman, Bassett president and chief executive officer. “As we previously released, retail conditions continue to be challenging and our focus remains on improving the store program and building the Bassett brand. Last month, we launched our first-ever catalog targeted directly toward consumers. The 84-page book was shipped to 1.2 million households. In addition to the catalog, the Company has several other marketing and merchandising initiatives underway including a new quick delivery program, new product introductions centered around the Company’s core middle price point category and the development of a new store prototype to open in the spring of 2007. The combination of these initiatives should drive more traffic into our stores and better position us for future sales growth.”