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Bassett Announces 11% Sales Increase For The Fourth Quarter & The Potential Sale Of The International Home Furnishings Center

About Bassett Furniture Industries, Inc.

Bassett Furniture Industries, Inc. (Nasdaq:BSET), is a leading manufacturer and marketer of high quality, mid-priced home furnishings. With 101 licensee- and company- owned stores, Bassett has leveraged its strong brand name in furniture into a network of corporate and licensed stores that focus on providing consumers with a friendly environment for buying furniture and accessories. The most significant growth opportunity for Bassett continues to be the Company's dedicated retail store program. Bassett's retail strategy includes affordable custom-built furniture that is ready for delivery in the home within 30 days. The stores also feature the latest on-trend furniture styles, more than 750 upholstery fabrics, free in-home design visits, and coordinated decorating accessories. For more information, visit the Company's website at bassettfurniture.com. (BSET-E)

Certain of the statements in this release, particularly those preceded by, followed by or including the words "believes," "expects," "anticipates," "intends," "should," "estimates," or similar expressions, or those relating to or anticipating financial results for periods beyond the end of the fourth quarter of fiscal 2010, constitute "forward looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended. For those statements, Bassett claims the protection of the safe harbor for forward looking statements contained in the Private Securities Litigation Reform Act of 1995. In many cases, Bassett cannot predict what factors would cause actual results to differ materially from those indicated in the forward looking statements. Expectations included in the forward-looking statements are based on preliminary information as well as certain assumptions which management believes to be reasonable at this time. The following important factors affect Bassett and could cause actual results to differ materially from those indicated in the forward looking statements: the effects of national and global economic or other conditions and future events on the retail demand for home furnishings and the ability of Bassett's customers and consumers to obtain credit; and the economic, competitive, governmental and other factors identified in Bassett's filings with the Securities and Exchange Commission. Any forward-looking statement that Bassett makes speaks only as of the date of such statement, and Bassett undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. Comparisons of results for current and any prior periods are not intended to express any future trends or indication of future performance, unless expressed as such, and should only be viewed as historical data.

BASSETT FURNITURE INDUSTRIES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations - Unaudited
(In thousands, except for per share data)
                 
  Quarter Ended Quarter Ended Year Ended Year Ended
  November 27, 2010 November 28, 2009 November 27, 2010 November 28, 2009
    Percent of   Percent of   Percent of   Percent of
  Amount Net Sales Amount Net Sales Amount Net Sales Amount Net Sales
Net sales  $ 65,991 100.0%  $ 59,523 100.0%  $ 235,254 100.0%  $ 232,722 100.0%
                 
Cost of sales  34,097 51.7%  31,845 53.5%  122,566 52.1%  129,882 55.8%
                 
Gross profit  31,894 48.3%  27,678 46.5%  112,688 47.9%  102,840 44.2%
                 
Selling, general and administrative expense  excluding bad debt and notes receivable valuation charges  29,660 44.9%  24,850 41.7%  110,808 47.1%  103,789 44.6%
Bad debt and notes receivable valuation charges  1,431 2.2%  2,241 3.8%  6,567 2.8%  15,205 6.5%
Income from Continued Dumping & Subsidy Offset Act  (488) -0.7%  (1,627) -2.7%  (488) -0.2%  (1,627) -0.7%
Restructuring and asset impairment charges  -  -   1,599 2.7%  -  -   2,987 1.3%
Lease exit costs  -  -   372 0.6%  -  -   2,434 1.0%
                 
Income (loss) from operations  1,291 2.0%  243 0.4%  (4,199) -1.8%  (19,948) -8.6%
                 
Other income (loss), net  556 0.8%  825 1.4%  1,991 0.8%  (4,505) -1.9%
                 
Income (loss) before income taxes  1,847 2.8%  1,068 1.8%  (2,208) -0.9%  (24,453) -10.5%
                 
Income tax benefit  94 0.1%  1,498 2.5%  206 0.1%  1,754 0.8%
Net income (loss)  $ 1,941 2.9%  $ 2,566 4.3%  $ (2,002) -0.9%  $ (22,699) -9.8%
                 
Basic income (loss) per share  $ 0.17    $ 0.22    $ (0.17)    $ (1.99)  
                 
Diluted income (loss) per share  $ 0.17    $ 0.22    $ (0.17)    $ (1.99)  
                 
                 
BASSETT FURNITURE INDUSTRIES, INC. AND SUBSIDIARIES  
Condensed Consolidated Balance Sheets  
(In thousands)  
   
  (Unaudited)   
Assets November 27, 2010 November 28, 2009
Current assets    
Cash and cash equivalents   $ 11,071  $ 23,221
Accounts receivable, net  31,621  34,605
Inventories  41,810  33,388
Other current assets   6,969  13,312
Total current assets  91,471  104,526
     
Property and equipment    
Cost  142,362  152,153
Less accumulated depreciation  96,112  101,517
Property and equipment, net  46,250  50,636
     
Investments   15,111  14,931
Retail real estate  27,513  28,793
Notes receivable, net  7,508  8,309
Other  9,464  9,034
   59,596  61,067
Total assets  $ 197,317  $ 216,229
     
Liabilities and Stockholders' Equity    
Current liabilities    
Accounts payable  $ 24,893  $ 14,711
Accrued compensation and benefits  6,652  6,490
Customer deposits  9,171  5,946
Other accrued liabilities  11,594  11,730
Current portion of real estate notes payable  9,521  4,393
Total current liabilities  61,831  43,270
     
Long-term liabilities    
Post employment benefit obligations  11,004  10,841
Bank debt  -  15,000
Real estate notes payable  4,295  16,953
Distributions in excess of affiliate earnings  7,356  10,954
Other long-term liabilities  6,526  8,877
   29,181  62,625
     
Commitments and Contingencies    
     
Stockholders' equity    
Common stock  57,795  57,274
Retained earnings  48,459  50,461
Additional paid-in-capital  478  481
Accumulated other comprehensive income   (427)  2,118
Total stockholders' equity  106,305  110,334
Total liabilities and stockholders' equity  $ 197,317  $ 216,229
     
     
BASSETT FURNITURE INDUSTRIES, INC. AND SUBSIDIARIES  
Consolidated Statements of Cash Flows - Unaudited  
(In thousands)  
  Year Ended Year Ended
  November 27, 2010 November 28, 2009
Operating activities:    
Net loss  $ (2,002)  $ (22,699)
Adjustments to reconcile net loss to net cash provided by operating activities:    
Depreciation and amortization  5,966  6,604
Equity in undistributed income of investments and unconsolidated affiliated companies  (4,737)  (2,319)
Provision for restructuring and asset impairment charges  -  2,987
Lease exit costs  -  2,434
Provision for lease and loan guarantees  1,407  2,834
Provision for losses on accounts and notes receivable  6,567  15,205
Other than temporary impairment of investments  -  1,255
Realized income from investments  (2,272)  (764)
Payment to terminate lease   -  (400)
Other, net  504  (2,364)
Changes in operating assets and liabilities     
Accounts receivable  (4,467)  (6,744)
Inventories  (5,443)  11,704
Other current assets   5,262  3,451
Accounts payable and accrued liabilities  7,003  (7,064)
Net cash provided by operating activities  7,788  4,120
     
Investing activities:    
Purchases of property and equipment  (2,013)  (1,096)
Proceeds from sales of property and equipment  4,247  129
Acquisition of retail licensee stores, net of cash acquired  (378)  (481)
Proceeds from sales of investments  9,101  26,234
Purchases of investments  (8,851)  (6,939)
Dividends from affiliates  937  3,847
Net cash received on licensee notes  494  645
Net cash provided by investing activities  3,537  22,339
     
Financing activities:     
Net repayments under revolving credit facility  (15,000)  (4,000)
Repayments of real estate notes payable  (7,530)  (812)
Issuance of common stock  142  95
Repurchases of common stock  -  (75)
Cash dividends   -  (1,142)
Payments on other notes  (1,087)  (1,081)
Net cash used in financing activities  (23,475)  (7,015)
Change in cash and cash equivalents  (12,150)  19,444
Cash and cash equivalents - beginning of period  23,221  3,777
     
Cash and cash equivalents - end of period  $ 11,071  $ 23,221
     
     
BASSETT FURNITURE INDUSTRIES, INC. AND SUBSIDIARIES 
Segment Information - Unaudited
(In thousands)
                 
  Quarter ended   Quarter ended   Year Ended   Year Ended  
  November 27, 2010   November 28, 2009   November 27, 2010   November 28, 2009  
Net Sales                
Wholesale  $ 49,322  (a)   $ 44,803  (a)   $ 176,255  (a)   $ 179,534 (a)
Retail  34,842    27,501    122,241    105,378  
Inter-company elimination  (18,173)    (12,781)    (63,242)    (52,190)  
Consolidated  $ 65,991    $ 59,523    $ 235,254    $ 232,722  
                 
Operating Income (Loss)                
Wholesale  $ 1,561  (b)   $ 1,340  (b)   $ 2,431  (b)   $ (9,100) (b)
Retail  (863)    (799)    (7,387)    (8,131)  
Inter-company elimination  105    46    269    1,077  
Income from CDSOA  488    1,627    488    1,627  
Restructuring and asset impairment charges  -    (1,599)    -    (2,987)  
Lease exit costs  -    (372)    -    (2,434)  
Consolidated  $ 1,291    $ 243    $ (4,199)    $ (19,948)  
                 
(a) Excludes wholesale shipments for dealers where collectibility is not reasonably assured at time of shipment as follows:      
  November 27, 2010   November 28, 2009          
Quarter ended  $ 85    $ 174          
Year ended  947    7,149          
                 
(b) Includes bad debt and notes receivable valuation charges as follows:            
  November 27, 2010   November 28, 2009          
Quarter ended  $ 1,431    $ 2,241          
Year Ended  6,567    15,205          
 
 
BASSETT FURNITURE INDUSTRIES, INC. AND SUBSIDIARIES 
Reconciliation of Net Income (Loss) as Reported to Net Income (Loss) as Adjusted (Unaudited)
(In thousands, except for per share data)
                 
  Quarter ended Per  Quarter ended Per  Year Ended Per  Year Ended Per 
  November 27, 2010 Share November 28, 2009 Share November 27, 2010 Share November 28, 2009 Share
                 
Net income (loss) as reported  $ 1,941  $ 0.17  $ 2,566  $ 0.22  $ (2,002)  $ (0.17)  $ (22,699)  $ (1.99)
                 
One-time tax benefit (1)  -   -   (1,672)  (0.15)  -   -   (1,672)  (0.15)
Income from CDSOA  (488)  (0.04)  (1,627)  (0.14)  (488)  (0.04)  (1,627)  (0.14)
Restructuring and asset impairment charges  -   -   1,599  0.14  -   -   2,987  0.26
Lease exit costs  -   -   372  0.03  -   -   2,434  0.21
Other than temporary impairment of securities  -   -   -   -   -   -   1,255  0.11
Closed stores and idle retail facility charges  804  0.07  450  0.04  2,256  0.20  2,062  0.18
Net income (loss) as adjusted  $ 2,257  $ 0.20  $ 1,688  $ 0.14  $ (234)  $ (0.01)  $ (17,260)  $ (1.51)
                 
(1) $1.7 million tax benefit in 2009 associated with the one-time carryback of net operating losses resulting from a change in tax law.    

The Company has included the "as adjusted" information because it uses, and believes that others may use, such information in comparing the Company's operating results from period to period. The "as adjusted" information is not presented in conformity with generally accepted accounting principals in the United States. However, the items excluded in determining the "as adjusted" information are significant components in understanding and assessing the Company's overall financial performance for the periods covered.

 
BASSETT FURNITURE INDUSTRIES, INC. AND SUBSIDIARIES
Supplemental Retail Information - Unaudited
(In thousands)
                 
   35 Comparable Stores  27 Comparable Stores
  Quarter Ended Quarter Ended Year Ended Year Ended
  November 27, 2010 November 28, 2009 November 27, 2010 November 28, 2009
    Percent of   Percent of   Percent of   Percent of
  Amount Net Sales Amount Net Sales Amount Net Sales Amount Net Sales
                 
Net sales  $ 26,928 100.0%  $ 26,734 100.0%  $ 82,063 100.0%  $ 86,131 100.0%
                 
Cost of sales  13,782 51.2%  13,661 51.1%  41,982 51.2%  45,293 52.6%
                 
Gross profit  13,146 48.8%  13,073 48.9%  40,081 48.8%  40,838 47.4%
                 
Selling, general and administrative expense*  13,492 50.1%  13,747 51.4%  43,288 52.8%  46,279 53.7%
                 
 Loss from operations  $ (346) -1.3%  $ (674) -2.5%  $ (3,207) -3.9%  $ (5,441) -6.3%
                 
                 
  All Other Stores All Other Stores
  Quarter Ended Quarter Ended Year Ended Year Ended
  November 27, 2010 November 28, 2009 November 27, 2010 November 28, 2009
    Percent of   Percent of   Percent of   Percent of
  Amount Net Sales Amount Net Sales Amount Net Sales Amount Net Sales
                 
Net sales  $ 7,914 100.0%  $ 767 100.0%  $ 40,178 100.0%  $ 19,247 100.0%
                 
Cost of sales  4,318 54.6%  431 56.2%  21,631 53.8%  10,535 54.7%
                 
 Gross profit  3,596 45.4%  336 43.8%  18,547 46.2%  8,712 45.3%
                 
Selling, general and administrative expense  4,113 52.0%  461 60.0%  22,727 56.6%  11,402 59.2%
                 
 Loss from operations  $ (517) -6.5%  $ (125) -16.3%  $ (4,180) -10.4%  $ (2,690) -14.0%
                 
*Comparable store SG&A includes retail corporate overhead and administrative costs.          
CONTACT:  J. Michael Daniel, Vice-President 
          and Chief Accounting Officer
          (276) 629-6614 - Investors

          Jay S. Moore, Director of 
          Communications
          (276) 629-6450 - Media

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