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Water Tower Research is a leading equity research firm that provides research on micro, small and mid cap companies.

Water Tower Research was founded by Wall Street veterans after witnessing a fundamental shift in the investment research industry with the result being a declining knowledge base among investors, a lack of awareness and a shrinking pool of fundamental research being conducted on companies across the small-cap and micro-cap spectrum. The same issues are now increasingly occurring in the mid-cap space. This sea change within the investment community is impacting not only the companies themselves but also current shareholders and potential investors. With significantly less active sell-side sponsorship by Wall Street, a substantial information gap has developed between companies and various constituents in the financial community. The net result is fewer channels for insight and information to flow between companies and investors.

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Bassett Furniture Inds / Equity Bottom-Up

<ul><li>Bassett announced an additional set of restructuring initiatives today in its continued effort to bring its cost structure in line with current demand, preserve its balance sheet strength, and free cash flow generation over the longer term, and improve its operating leverage.</li><li>The company said that it will eliminate additional headcount in an effort to reduce overhead (bringing total headcount reductions to 11%) in light of continued adverse industry conditions. Bassett will record a $500k charge in 4QFY24, affecting GAAP EPS by $0.04.</li><li>The restructuring and headcount actions announced today should save the company $2.5 million annually, or about $0.21 in EPS.</li></ul>

Bassett announced an additional set of restructuring initiatives today in its continued effort to bring its cost structure in line with current demand, preserve its balance sheet strength, and free cash flow generation over the longer term, and improve its operating leverage.The company said that it will eliminate additional headcount in an effort to reduce overhead (bringing total headcount reductions to 11%) in light of continued adverse industry conditions. Bassett will record a $500k charge in 4QFY24, affecting GAAP EPS by $0.04.The restructuring and headcount actions announced today should save the company $2.5 million annually, or about $0.21 in EPS.

BSET - Additional Restructuring Initiative

<ul><li>We are updating our 4QFY24 and revenue and adjusted EPS estimates for BSET following the company’s earnings release and investor call (see 1 for our summary of the quarter).</li><li>As noted, industry conditions for residential furniture remain challenging, with the housing market (still) stuck and consumer spending on furniture and furnishings subdued after the COVID pull-through, when many people renovated their homes.</li><li>Near term, we expect demand to remain subdued, even as easier comps and some return to normal demand dynamics gain traction over the next several quarters.</li></ul>

We are updating our 4QFY24 and revenue and adjusted EPS estimates for BSET following the company’s earnings release and investor call (see 1 for our summary of the quarter).As noted, industry conditions for residential furniture remain challenging, with the housing market (still) stuck and consumer spending on furniture and furnishings subdued after the COVID pull-through, when many people renovated their homes.Near term, we expect demand to remain subdued, even as easier comps and some return to normal demand dynamics gain traction over the next several quarters.

Bassett Furniture Industries, Inc. - New Revenue and EPS Estimates

<ul>
<li>BSET posted an adjusted EPS loss of ($0.41) for 3QFY24, down $0.11 from the prior year and $0.08 below our estimate of ($0.33).</li>
<li>While the quarter was affected by continued challenging industry conditions, including the weak housing market (housing is a traditional driver of residential furniture sales) and wary consumers (many of whom updated their homes during COVID), the earnings miss was also, in part, a consequence of a July hack of Bassett’s IT systems that forced the firm to sideline production for a week, costing the firm $1-2 million on the bottom line from lost sales and associated manufacturing inefficiencies.</li>
<li>We estimate that this production shutdown cost Bassett $0.085 to $0.17 in EPS.</li>
</ul>


BSET posted an adjusted EPS loss of ($0.41) for 3QFY24, down $0.11 from the prior year and $0.08 below our estimate of ($0.33).
While the quarter was affected by continued challenging industry conditions, including the weak housing market (housing is a traditional driver of residential furniture sales) and wary consumers (many of whom updated their homes during COVID), the earnings miss was also, in part, a consequence of a July hack of Bassett’s IT systems that forced the firm to sideline production for a week, costing the firm $1-2 million on the bottom line from lost sales and associated manufacturing inefficiencies.
We estimate that this production shutdown cost Bassett $0.085 to $0.17 in EPS.


Bassett Furniture Industries, Inc. - 3QFY24 Adjusted EPS Of ($0.41) As Conditions Remain Tough

<ul><li>Herein, we analyze and discuss Bassett’s 2QFY24 earnings report.</li><li>Management reported its results for the interim period that ended on June 1, 2024, on Wednesday after market close.</li><li>It also conducted its “first-ever” management-sponsored and conducted earnings conference call on Thursday before market open, taking and answering analyst questions live.</li></ul>

Herein, we analyze and discuss Bassett’s 2QFY24 earnings report.Management reported its results for the interim period that ended on June 1, 2024, on Wednesday after market close.It also conducted its “first-ever” management-sponsored and conducted earnings conference call on Thursday before market open, taking and answering analyst questions live.

Bassett Furniture Industries, Inc. - 2QFY24 Results Were Ugly

<ul><li>Bassett’s 1QFY24 operating results disappointing, but not surprising.</li><li>In its 2023 Annual Report, Bassett CEO Rob Spilman’s opening line was, “The other side of the COVID sales boom has proven to a rough ride for the home furnishings sector.”</li><li>It remains challenging. Several untimely winter storms hit on important selling days, including the MLK holiday sale period. </li></ul>

Bassett’s 1QFY24 operating results disappointing, but not surprising.In its 2023 Annual Report, Bassett CEO Rob Spilman’s opening line was, “The other side of the COVID sales boom has proven to a rough ride for the home furnishings sector.”It remains challenging. Several untimely winter storms hit on important selling days, including the MLK holiday sale period. 

Bassett Furniture Industries, Inc. - 1QFY24 Disappointing but Not Surprising

United States

Bassett Furniture Industries, Incorporated manufactures and sells a full line of furniture for the home.  The Company offers bedroom and dining suites, occasional tables and entertainment units, upholstered sofas and love seats, recliners, and mattresses, among other products.  Bassett's products are sold through retailers, including Bassett Furniture Direct.

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Bassett Furniture Inds (BSET US)

BSET - Additional Restructuring Initiative

Bassett announced an additional set of restructuring initiatives today in its continued effort to bring its cost structure in line with current...

Water Tower Research

Bassett Furniture Industries, Inc. - New Revenue and EPS Estimates

We are updating our 4QFY24 and revenue and adjusted EPS estimates for BSET following the company’s earnings release and investor call (see 1 for...

Water Tower Research

Bassett Furniture Industries, Inc. - 3QFY24 Adjusted EPS Of ($0.41) As Conditions Remain Tough

BSET posted an adjusted EPS loss of ($0.41) for 3QFY24, down $0.11 from the prior year and $0.08 below our estimate of ($0.33).

Water Tower Research

Bassett Furniture Industries, Inc. - 2QFY24 Results Were Ugly

Herein, we analyze and discuss Bassett’s 2QFY24 earnings report. Management reported its results for the interim period that ended on June 1, 2024,...

Water Tower Research

Bassett Furniture Industries, Inc. - 1QFY24 Disappointing but Not Surprising

In its 2023 Annual Report, Bassett CEO Rob Spilman’s opening line was, “The other side of the COVID sales boom has proven to a rough ride for the...

Water Tower Research

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