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Here's How Bassett Furniture Performed In FY 2014

William Bias profile picture
William Bias


  • Desirable merchandise brought customers through Bassett Furniture’s doors.
  • Bassett Furniture saw decent profitability gains due to pricing and superior margins in its wholesale segment.
  • Bassett Furniture is free cash flow positive for the fourth time in a decade.

On Jan. 22, furniture maker, seller and marketer Bassett Furniture (NASDAQ: NASDAQ:BSET) came out with its FY 2014 earnings announcement and 10-k. Bassett Furniture registered a solid year thanks to an improving housing market and overall economy. Let's take a look to see what's going on with the company and where it's heading.

Expansion in revenue and net income

Bassett Furniture's revenue and net income increased 6% and 82% respectively during its FY 2014. Increased store locations and market share gains within its wholesale segment contributed to the overall revenue gains. Company management gave indication that its recent inventory offerings are setting well with customers. This is a good thing because pleasing the customer is crucial to winning in retailing.

With that said, net income increased a whopping 82% during FY 2014. Bassett Furniture's income from operations also increased 51%. Pricing strategies played a role. Customers were willing to pay full price for furniture they considered stylish. In a related matter, superior margins in its wholesale segment, stemming from the salability of its merchandise to retailers outside of its store network, also contributed to net income gains.

Free cash flow positive

FY 2014 only represents the fourth year in the past decade where Bassett Furniture registered positive free cash flow, according to Morningstar. I like to invest in companies that grow free cash flow consistently. Bassett Furniture's free cash flow clocked in at $17.1 million vs. a negative $2.7 million last year, stemming from favorable changes in assets and liabilities, particularly accounts payable and "tenant improvement allowance received from lessors".

Excellent balance sheet

Bassett Furniture does maintain an excellent balance sheet. Its $50 million in cash and short term investments came to 32% of stockholder's equity. I like to see companies maintain a cash and short term investments position amounting to 20% or greater of

This article was written by

William Bias profile picture
I have been analyzing stocks since 1992 and a freelance writer since 2012.

Analyst’s Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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