BASSETT, VA - Bassett Furniture first quarter sales were $92.8 million, up 23%, boosted by revenue from Zenith Freight Lines. Net income rose exponentially to $6 million, versus $800,000 in the prior year quarter. Wthout Zenith
During he quarter, Bassett acquired the remaining 51% interest in Zenith for $19.1 million, and recorded a $7.2 million gain as its previous investment in Zenith rose to fair value prior to the closing.
"We continued to take market share in the quarter," says Robert H. Spilman, Jr., CEO.
Spilman said one-time costs associated with the Zenith deal and start-up expenses in its recently introduced Bassett Baby and Kids and Benchmade product lines amounted to $400,000.
"We are very excited by the strategic implications and potential of the ownership of Zenith," Spilman said.
Gross margins for Bassett's wholesale segment fell slightly in the first quarter of 2015 "driven largely by increased discounting of wood products as the company prepares for a significant makeover of its imported wood furniture line," Spilman said.
"Strong growth in our domestically produced custom dining and upholstery programs maintained their robust pace," Spilman says. "These products are a key point of differentiation in our stores and our independently operated Bassett Design Centers."
Spilman also said, "Our Benchmade dining program has been greeted with a level of acceptance that has caused us to restrict sales to new customers as we strive to match our production capacity with demand."
When Zenith was acquired in February 2015, Bassett accounted for half of Zenith's revenue, says Spilman."This acquisition was inevitable. Their information technology platform drives a speed to market capability that provides a competitive advantage to Bassett."
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