Bassett Furniture Industries (BSET) has reported a 77.54 percent jump in profit for the quarter ended May 30, 2015. The company has earned $4.53 million, or $0.42 a share in the quarter, compared with $2.55 million, or $0.24 a share for the same period last year. Revenue during the quarter surged 30.95 percent to $111.55 million from $85.18 million in the previous year period. Gross margin for the quarter expanded 474 basis points over the previous year period to 57.94 percent. Total expenses were 93.98 percent of quarterly revenues, down from 95.43 percent for the same period last year. This has led to an improvement of 145 basis points in operating margin to 6.02 percent.
Operating income for the quarter was $6.71 million, compared with $3.89 million in the previous year period.
"We continued to improve the execution of our strategy in the second quarter as consolidated revenue increased by 31%", commented Robert H. Spilman, Jr. president and CEO. "Across the board, our business segments grew sales and increased profits. Propelled by our store network and independent dealers, wholesale sales grew by 19%. The 17% comparable store sales growth turned in by our corporate retail division marked the fourth consecutive quarter of double digit gains and the successful integration of our recently acquired Zenith Freight Lines, LLC significantly contributed to our operating results."
Operating cash flow drops significantly
Bassett Furniture Industries has generated cash of $9.20 million from operating activities during the first half, down 33.46 percent or $4.62 million, when compared with the last year period. The company has spent $13.66 million cash to meet investing activities during the first six months as against cash outgo of $3.27 million in the last year period. It has incurred net capital expenditure of $4.99 million on net basis during the first six months, down 53.80 percent or $5.81 million from year ago period.
Cash flow from financing activities was $0.26 million for the first six months as against cash outgo of $6.40 million in the last year period. It has made net debt repayment of $0.09 million. It has raised net of $2.91 million by selling common stocks.
Cash and cash equivalents stood at $22.47 million as on May 30, 2015, up 33.08 percent or $5.58 million from $16.88 million on May 31, 2014.
Working capital remains almost stable
Working capital of Bassett Furniture Industries remained almost stable for the quarter at $70.35 million, when compared with the previous year period. Current ratio was at 1.95 as on May 30, 2015, down from 2.35 on May 31, 2014.
Cash conversion cycle (CCC) has decreased to 93 days for the quarter from 95 days for the last year period. Days sales outstanding were almost stable at 16 days for the quarter, when compared with the last year period.
Days inventory outstanding was almost stable at 121 days for the quarter, when compared with the last year period. At the same time, days payable outstanding was almost stable at 43 days for the quarter, when compared with the previous year period.
Debt increases substantially
Bassett Furniture Industries has witnessed an increase in total debt over the last one year. It stood at $15.18 million as on May 30, 2015, up 554.14 percent or $12.86 million from $2.32 million on May 31, 2014. Short-term debt stood at $4.43 million as on May 30, 2015. Total debt was 5.58 percent of total assets as on May 30, 2015, compared with 1.02 percent on May 31, 2014. Debt to equity ratio was at 0.09 as on May 30, 2015, up from 0.02 as on May 31, 2014.
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