"Our focus continues to be on better execution at the store level and the profitability of our Wood Division. Our Upholstery Division continued its solid performance even as we consolidated two plants into one facility..."
Robert H. Spilman Jr., president and chief executive officer

Bassett Furniture Industries announced today that sales for the first quarter of 2004 were $76.6 million, down 1.3% from first quarter 2003 levels. The net growth in the Company's ongoing distribution channels, fueled by increased shipments to Bassett Furniture Direct stores (BFDs) and greater demand for juvenile products, offset most of the expected $3.8 million sales decrease with JCPenney. Shipments into the BFD channel were up 11% over 2003 but were below what the Company anticipated due to lower than expected written retail business in January. February and March written retail sales have rebounded to expected levels.

The Company reported net income for the quarter of $2.3 million or $.20 per share after realizing a $3.9 million gain on the sale of its former California upholstery facility and recognizing a $2.8 million restructuring and impaired asset charge. The Company continues to transition its business, examine its domestic manufacturing cost structure and focus on its core assets and competencies. These efforts resulted in the impaired asset and restructuring charge which included closing the Company's Hiddenite, N.C., upholstery manufacturing facility, restructuring its Macon, Ga., wood manufacturing facility and plans to sell certain non-core assets.

The two percentage point reduction in selling, general and administrative expenses year-over-year was primarily the result of actions taken in 2003 which lowered the expense structure in an effort to improve the profitability of the Company-owned retail stores.

"We are pleased with our year-over-year earnings improvement and our continued positive cash flow," said Robert H. Spilman Jr., president and chief executive officer. "However, we are not satisfied with our current level of earnings. Our focus continues to be on better execution at the store level and the profitability of our Wood Division. Our Upholstery Division continued its solid performance even as we consolidated two plants into one facility, and we were pleased that our Company-owned stores in Texas (LRG) posted positive earnings for the quarter."

Bassett also announced that its Board of Directors has declared a regular quarterly dividend of $.20 per share payable on June 1, 2004, to shareholders of record on May 17, 2004.

Bassett Furniture operates over 100 Bassett Furniture Direct stores. While the Company continues to sell its products to other retailers, the most significant growth vehicle for Bassett continues to be the Company's dedicated retail store program.