UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~August~~March 311, ~~2024~~2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________________________ to _______________________

Commission File No. 000-00209

BASSETT FURNITURE INDUSTRIES, INCORPORATED

(Exact name of Registrant as specified in its charter)

Virginia	54-0135270
(State or other jurisdiction	(I.R.S. Employer
of incorporation or organization)	Identification No.)

3525 Fairystone Park Highway

Bassett, Virginia 24055

(Address of principal executive offices)

(Zip Code)

(276) 629-6000

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol		Name of exchange on which registered
Common Stock ($5.00 par value)		BSET		NASDAQ

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer	☐	Accelerated Filer	☒
Non-accelerated Filer	☐	Smaller Reporting Company	☒
		Emerging Growth Company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐________

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

At ~~October~~March 428, ~~2024,~~2025 8,~~801~~704,~~137~~115 shares of common stock of the Registrant were outstanding.

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BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES

TABLE OF CONTENTS

ITEM		PAGE
PART I - FINANCIAL INFORMATION
1.	Condensed Consolidated Financial Statements as of ~~August~~March 311, ~~2024~~2025 (unaudited) and November 2530, ~~2023~~2024 and for the three ~~and nine~~ months ended ~~August~~March 311, ~~2024~~2025 (unaudited) and ~~August~~March 262, ~~2023~~2024 (unaudited)	3
	Condensed Consolidated Statements of Operations	3
	Condensed Consolidated Statements of Comprehensive Income (Loss)	4
	Condensed Consolidated Balance Sheets	5
	Condensed Consolidated Statements of Cash Flows	6
	Notes to Condensed Consolidated Financial Statements	7
2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	2120
3.	Quantitative and Qualitative Disclosures About Market Risk	3429
4.	Controls and Procedures	3429
PART II - OTHER INFORMATION
1.	Legal Proceedings	3530
1A.	Risk Factors	35
2.	Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities	30
2.	Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities	35
3.	Defaults Upon Senior Securities	30
3.	Defaults Upon Senior Securities	35
5.	Other Information	30
5.	Other Information	35
6.	Exhibits	31
6.	Exhibits	36

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PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE PERIODS ENDED ~~AUGUST~~MARCH 311, ~~2024~~2025 AND ~~AUGUST~~MARCH 262, ~~2023~~2024 – UNAUDITED

(In thousands except per share data)

	Quarter Ended						~~Nine Months Ended~~
	August 31, 2024			August 26, 2023			August 31, 2024			August 26, 2023
	March 1, 2025			March 2, 2024
Net sales of furniture and accessories	$	7582,~~619~~162		$	8786,~~217~~554		$	~~245,583~~		$	~~295,434~~
Cost of furniture and accessories sold		35,~~526~~332			4238,~~173~~687			~~113,863~~			~~140,360~~
Gross profit		4046,~~093~~830			4547,~~044~~867			~~131,720~~			~~155,074~~
Selling, general and administrative expenses		4544,~~210~~375			4850,~~848~~224			~~142,141~~			~~154,709~~
Loss on contract abandonment		1,240			-			1,240			-
Income (loss) from operations		2,455			(2,357	)
Asset impairment charges		-			-			5,515			-
Interest income		559			756
Gain on revaluation of contingent consideration		-			-			-			1,013
Other loss, net		(459	)		(104	)
Income (loss) from operations		(6,357	)		(3,804	)		(17,176	)		1,378
Income (loss) before income taxes		2,555			(1,705	)
Interest income		692			923			2,075			1,644
Income tax expense (benefit)		701			(512	)
Other loss, net		(109	)		(309	)		(489	)		(1,381	)
Net income (loss)	$	1,854		$	(1,193	)
Income (loss) before income taxes		(5,774	)		(3,190	)		(15,590	)		1,641
Basic earnings (loss) per share	$	0.21		$	(0.14	)
Income tax expense (benefit)		(1,269	)		(599	)		(2,691	)		711
Diluted earnings (loss) per share	$	0.21		$	(0.14	)
Net income (loss)	$	(4,505	)	$	(2,591	)	$	(12,899	)	$	930
Regular dividends per share	$	0.20		$	0.18
Basic earnings (loss) per share	$	(0.52	)	$	(0.30	)	$	(1.48	)	$	0.11
Diluted earnings (loss) per share	$	(0.52	)	$	(0.30	)	$	(1.48	)	$	0.11
Regular dividends per share	$	0.20		$	0.18		$	0.54		$	0.50

The accompanying notes to condensed consolidated financial statements are an integral part of the condensed consolidated financial statements.

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PART I – FINANCIAL INFORMATION – CONTINUED

ITEM 1. FINANCIAL STATEMENTS

BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

FOR THE PERIODS ENDED ~~AUGUST~~MARCH 311, ~~2024~~2025 AND ~~AUGUST~~MARCH 262, ~~2023~~2024 – UNAUDITED

(In thousands)

	Quarter Ended						~~Nine Months Ended~~
	August 31, 2024			August 26, 2023			August 31, 2024			August 26, 2023
	March 1, 2025			March 2, 2024
Net income (loss)	$	(41,~~505~~854	)	$	(21,~~591~~193	)	$	~~(12,899~~	)	$	~~930~~
Other comprehensive income (loss):
Foreign currency translation adjustments		~~(32~~-	)		42(225	)		~~(266~~	)		~~(237~~	)
Income taxes related to foreign currency translation adjustments		8-			~~(11~~58	)		68			63
Amortization associated with
Long Term Cash Awards (LTCA)		16			3115			46			98
Income taxes related to LTCA		(4	)		(84	)		~~(12~~	)		~~(28~~	)
Amortization associated with supplemental executive retirement defined benefit plan (SERP)		(5-	)		-(6	)		~~(16~~	)		-
Income taxes related to SERP		1-			-1			4			-
Other comprehensive income (loss), net of tax		~~(16~~12	)		54(161	)		~~(176~~	)		~~(104~~	)
Total comprehensive income (loss)	$	(41,~~521~~866	)	$	(21,~~537~~354	)	$	~~(13,075~~	)	$	~~826~~

The accompanying notes to condensed consolidated financial statements are an integral part of the condensed consolidated financial statements.

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PART I – FINANCIAL INFORMATION – CONTINUED

ITEM 1. FINANCIAL STATEMENTS

BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

~~AUGUST~~MARCH 311, ~~2024~~2025 AND NOVEMBER 2530, ~~2023~~2024

(In thousands)

	(Unaudited)
	August 31, 2024			November 25, 2023
	March 1, 2025			November 30, 2024
Assets
Current assets
Cash and cash equivalents	$	3836,~~329~~062		$	5239,~~407~~551
Short-term investments		1720,~~834~~360			1720,~~775~~360
Accounts receivable, net		1214,~~974~~218			13,~~736~~181
Inventories		5658,~~138~~103			6254,~~982~~965
Recoverable income taxes		24,~~846~~240			24,~~574~~240
Other current assets		9,~~421~~857			89,~~480~~242
Total current assets		~~137~~142,~~542~~840			~~157~~141,~~954~~539
Property and equipment, net		7875,~~564~~408			8377,~~981~~047
Deferred income taxes		76,~~410~~280			46,~~645~~867
Goodwill and other intangible assets		14,~~199~~170			1614,~~067~~185
Right of use assets under operating leases		9089,~~274~~413			~~100~~93,~~888~~624
Other		7,~~873~~675			67,~~889~~908
Total long-term assets		~~119~~117,~~756~~538			~~128~~122,~~489~~584
Total assets	$	335,~~862~~786		$	~~370~~341,~~424~~170
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable	$	14,~~232~~682		$	1613,~~338~~303
Accrued compensation and benefits		6,~~595~~721			86,~~934~~898
Customer deposits		2325,~~700~~352			2225,~~788~~742
Current portion operating lease obligations		18,~~504~~141			18,~~827~~050
Other current liabilites and accrued expenses		108,~~086~~841			119,~~003~~410
Total current liabilities		73,~~117~~737			7773,~~890~~403
Long-term liabilities
Post employment benefit obligations		10,~~885~~958			10,~~207~~882
Long-term portion of operating lease obligations		8583,~~310~~371			9788,~~357~~395
Other long-term liabilities		~~1,514~~922			1,~~529~~163
Total long-term liabilities		9795,~~709~~251			~~109~~100,~~093~~440
Stockholders’ equity
Common stock		43,~~674~~462			43,~~842~~681
Retained earnings		~~121~~122,~~387~~555			~~139~~122,~~354~~847
Additional paid-in capital		-			936
Accumulated other comprehensive income (loss)		(25	)		152
Accumulated other comprehensive income		781			793
Total stockholders' equity		~~165~~166,~~036~~798			~~183~~167,~~441~~327
Total liabilities and stockholders’ equity	$	335,~~862~~786		$	~~370~~341,~~424~~170

The accompanying notes to condensed consolidated financial statements are an integral part of the condensed consolidated financial statements.

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PART I – FINANCIAL INFORMATION – CONTINUED

ITEM 1. FINANCIAL STATEMENTS

BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE PERIODS ENDED ~~AUGUST~~MARCH 311, ~~2024~~2025 AND ~~AUGUST~~MARCH 262, ~~2023~~2024 – UNAUDITED

(In thousands)

	Nine Months Ended
	Three Months Ended
	August 31, 2024			August 26, 2023
	March 1, 2025			March 2, 2024
Operating activities:
Net income (loss)	$	~~(12~~1,~~899~~854	)	$	~~930~~(1,193	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Adjustments to reconcile net income (loss) to net cash provided by(used in) operating activities:
Depreciation and amortization		72,~~613~~246			72,~~502~~664
Asset impairment charges		5,515			-
Deferred income taxes		587			(922	)
Gain on revaluation of contingent consideration		-			(1,013	)
Other, net		454			302
Inventory valuation charges		4,954			3,814
Deferred income taxes		(2,765	)		473
Other, net		937			1,781
Changes in operating assets and liabilities:
Accounts receivable		~~762~~(1,037	)		~~2,499~~(206	)
Inventories		1(3,~~890~~138	)		~~14,797~~25
Other current assets		(~~1,213~~615	)		(~~289~~3,167	)
Right of use assets under operating leases		134,~~029~~211			134,~~668~~375
Customer deposits		~~912~~(390	)		(~~12,337~~24	)
Accounts payable and other liabilities		~~(5,364~~709	)		(63,~~586~~374	)
Obligations under operating leases		(154,~~694~~933	)		(146,~~990~~219	)
Net cash provided by (used in) operating activities		(2,323	)		10,249
Net cash used in operating activities		(52	)		(7,739	)
Investing activities:
Purchases of property and equipment		(~~4,720~~871	)		(142,~~657~~076	)
Proceeds from the disposal of discontinued operations, net		-			1,000
Other		(11	)		(270	)
Other		(909	)		(1,664	)
Net cash used in investing activities		(882	)		(2,346	)
Net cash used in investing activities		(5,629	)		(15,321	)
Financing activities:
Cash dividends		(41,~~909~~734	)		(41,~~406~~573	)
Other issuance of common stock		~~275~~80			~~275~~86
Repurchases of common stock		(~~1,127~~721	)		~~(4,056~~-	)
Taxes paid related to net share settlement of equity awards		(~~161~~136	)		(~~109~~161	)
Repayments of finance lease obligations		(~~210~~44	)		(~~208~~74	)
Net cash used in financing activities		(62,~~132~~555	)		(81,~~504~~722	)
Effect of exchange rate changes on cash and cash equivalents		6-			~~(37~~9	)
Change in cash and cash equivalents		(143,~~078~~489	)		(1311,~~613~~798	)
Cash and cash equivalents - beginning of period		5239,~~407~~551			6152,~~625~~407
Cash and cash equivalents - end of period	$	38,329		$	48,012
					.
Cash and cash equivalents - end of period	$	36,062		$	40,609

The accompanying notes to condensed consolidated financial statements are an integral part of the condensed consolidated financial statements.

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PART I-FINANCIAL INFORMATION-CONTINUED BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-UNAUDITED MARCH 1, 2025 (Dollars in thousands except share and per share data)

BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-UNAUDITED

AUGUST 31, 2024

(Dollars in thousands except share and per share data)

1. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and footnotes required by accounting principles generally accepted in the United States (“GAAP”) for complete financial statements. In our opinion, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included.

References to “ASC” included hereinafter refer to the Accounting Standards Codification established by the Financial Accounting Standards Board (“FASB”) as the source of authoritative GAAP.

The condensed consolidated financial statements include the accounts of Bassett Furniture Industries, Incorporated (“Bassett”, “we”, “our”, or the “Company”) and our wholly-owned subsidiaries of which we have a controlling interest. In accordance with ASC Topic 810, we have evaluated our licensees and certain other entities to determine whether they are variable interest entities (“VIEs”) of which we are the primary beneficiary and thus would require consolidation in our financial statements. To date we have concluded that none of our licensees represent VIEs.

Revenue from the sale of furniture and accessories is reported in the accompanying condensed consolidated statements of operations net of estimates for returns and allowances.

Our fiscal year, which ends on the last Saturday of November, periodically results in a 53-week year instead of the normal 52 weeks. The ~~current~~prior fiscal year ~~ending~~ended November 30, 2024 iswas a 53-week year, with the additional week being included in ~~our~~the first fiscal quarter. Accordingly, the information presented below includes 4013 weeks of operations for the ~~nine~~three months ended ~~August~~March 311, ~~2024~~2025 as compared with 3914 weeks included in the ~~nine~~three months ended ~~August~~March 262, ~~2023~~2024.

Certain prior year amounts in the consolidated financial statements have been reclassified to conform to the current year presentation with no effect on previously reported net income or Stockholders' equity.

2. Interim Financial Presentation and Other Information

All intercompany accounts and transactions have been eliminated in the condensed consolidated financial statements. The results of operations for the three ~~and nine~~ months ended ~~August~~March 311, ~~2024~~2025 are not necessarily indicative of results for the full fiscal year. These interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended November 2530, ~~2023~~2024.

Income Taxes

We calculate an anticipated effective tax rate for the year based on our annual estimates of pretax income or loss and use that effective tax rate to record our year-to-date income tax provision. Any change in annual projections of pretax income or loss could have a significant impact on our effective tax rate for the respective quarter.

Our effective tax rate was 2227.04% ~~and 17.3%~~ for the three ~~and nine~~ months ended ~~August~~March 311, ~~2024, respectively~~2025. The effective ~~rates~~rate for the three ~~and nine~~ months ended ~~August~~March 311, ~~2024~~2025 ~~differ~~differs from the federal statutory rate of 21% primarily due to ~~increases in~~ the ~~valuation allowance placed on deferred tax assets associated with Noa Home Inc. (“Noa Home”), the~~ effects of state income taxes and various permanent differences.

Our effective tax rate was 1830.80% ~~and 43.3%~~ for the three ~~and nine~~ months ended ~~August~~March 262, ~~2023, respectively~~2024. The effective ~~rates~~rate for the three ~~and nine~~ months ended ~~August~~March 262, ~~2023~~2024 ~~differ~~differs from the federal statutory rate of 21% primarily due to ~~the non-taxable gain on revaluation of contingent consideration associated with the acquisition of Noa Home (see Note 9),~~ increases in the valuation allowance placed on deferred tax assets associated with Noa Home ~~and~~Inc. (“Noa Home”), the effects of state income taxes and various permanent differences.

Non-cash Investing and Financing Activity

During the ~~nine~~three months ended ~~August~~March 311, ~~2024~~2025 and ~~August~~March 262, ~~2023~~2024, $~~3,476~~0 and $63,~~026~~044, respectively, of lease right-of-use assets were added through the recognition of the corresponding lease obligations.

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BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-UNAUDITED

AUGUST 31, 2024

(Dollars in thousands except share and per share data)

3. Financial Instruments and Investments

Financial Instruments

Our financial instruments include cash and cash equivalents, short-term investments in certificates of deposit (CDs), accounts receivable, and accounts payable. Because of their short maturities, the carrying amounts of cash and cash equivalents, short-term investments in CDs, accounts receivable, and accounts payable approximate fair value.

Investments

Our short-term investments of $1720,~~834~~360 ~~and $17,775~~ at ~~August~~both 31March 1, ~~2024~~2025 and November 2530, ~~2023,~~2024 ~~respectively,~~ consisted of CDs. At ~~August~~March 311, ~~2024~~2025, the CDs had original terms averaging seven months, bearing interest at rates ranging from 0.7% to 5.415% and the weighted average remaining time to maturity was approximately five months and the weighted average yield of the CDs was approximately 43.699%. Each CD is placed with a federally insured financial institution and, except as noted below, all deposits are within federal deposit insurance limits. Due to the nature of these investments and their relatively short maturities, the carrying amount of the short-term investments at ~~August~~March 311, ~~2024~~2025 and November 2530, ~~2023~~2024 approximates their fair value.

Our investment in CDs at March 1, 2025 and November 30, 2024 includes one CD in the amount of $2,500 which was placed with a financial institution that provides merchant services for our retail segment. This CD has been pledged as security for the merchant services agreement. The CD has a six-month term maturing in April 2025 and an interest rate of 2.0%. The requirement to maintain the pledge will be reassessed prior to the end of fiscal 2025, therefore the CD is classified as a current asset with our other CDs. This CD is in excess of the $250 Federal deposit insurance limit.

4. Accounts Receivable

Accounts receivable consists of the following:

	August 31, 2024			November 25, 2023
	March 1, 2025			November 30, 2024
Gross accounts receivable	$	14,~~026~~715		$	14,~~271~~278
Allowance for doubtful accounts		(~~1,052~~497	)		(~~535~~1,097	)
Accounts receivable, net	$	1214,~~974~~218		$	13,~~736~~181

We maintain an allowance for credit losses for estimated losses resulting from the inability of our customers to make required payments. The allowance for credit losses is based on a review of specifically identified accounts in addition to an overall aging analysis which is applied to accounts pooled on the basis of similar risk characteristics. Judgments are made with respect to the collectability of accounts receivable within each pool based on historical experience, current payment practices and current economic trends based on our expectations over the expected life of the receivables, which is generally ninety days or less. Actual credit losses could differ from those estimates.

8Activity ofin 37the allowance for credit losses for the three months ended March 1, 2025 was as follows:

PART I-FINANCIAL INFORMATION-CONTINUED

	2025

Balance at November 30, 2024	$	1,097
Additions charged to expense		18
Write-offs against allowance		(618	)
Balance at March 1, 2025	$	497

~~BASSETT~~Substantially ~~FURNITURE~~all ~~INDUSTRIES~~of the accounts receivable written off against the reserve during the three months ended March 1, ~~INCORPORATED~~2025 ~~AND~~originated ~~SUBSIDIARIES~~during fiscal 2024.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-UNAUDITED

AUGUST 31, 2024

(Dollars in thousands except share and per share data)

Activity in the allowance for credit losses for the nine months ended August 31, 2024 was as follows:

Balance at November 25, 2023	$	535
Additions charged to expense		595
Write-offs against allowance		(78	)
Balance at August 31, 2024	$	1,052

We believe that the carrying value of our net accounts receivable approximates fair value. The inputs into these fair value estimates reflect our market assumptions and are not observable. Consequently, the inputs are considered to be Level 3 as specified in the fair value hierarchy in ASC Topic 820, Fair Value Measurements and Disclosures.

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PART I-FINANCIAL INFORMATION-CONTINUED
BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-UNAUDITED
MARCH 1, 2025
(Dollars in thousands except share and per share data)

5. Inventories

Domestic furniture inventories are valued at the lower of cost, which is determined using the last-in, first-out (LIFO) method, or market. Imported inventories and those applicable to our Lane Venture and Bassett Outdoor lines are valued at the lower of cost, which is determined using the first-in, first-out (FIFO) method, or net realizable value.

Inventories were comprised of the following:

	August 31, 2024			November 25, 2023
	March 1, 2025			November 30, 2024
Wholesale finished goods	$	2425,~~188~~680		$	2724,~~521~~841
Work in process		~~453~~566			~~637~~519
Raw materials and supplies		16,~~223~~602			1814,~~655~~921
Retail merchandise		3332,~~285~~637			3331,~~090~~744
Total inventories on first-in, first-out method		7475,~~149~~485			7972,~~903~~025
LIFO adjustment		(11,~~942~~803	)		(11,~~738~~665	)
Reserve for excess and obsolete inventory		(65,~~069~~579	)		(5,~~183~~395	)
	$	5658,~~138~~103		$	6254,~~982~~965

We estimate an inventory reserve for excess quantities and obsolete items based on specific identification and historical write-offs, taking into account future demand, market conditions and the respective valuations at LIFO. The need for these reserves is primarily driven by the normal product life cycle. As products mature and sales volumes decline, we rationalize our product offerings to respond to consumer tastes and keep our product lines fresh. If actual demand or market conditions in the future are less favorable than those estimated, additional inventory write-downs may be required. In determining reserves, we calculate separate reserves on our wholesale and retail inventories. Our wholesale inventories tend to carry the majority of the reserves for excess quantities and obsolete inventory due to the nature of our distribution model. These wholesale reserves primarily represent design and/or style obsolescence. Typically, product is not shipped to our retail warehouses until a consumer has ordered and paid a deposit for the product. We do not typically hold retail inventory for stock purposes. Consequently, floor sample inventory and inventory for delivery to customers account for the majority of our inventory at retail. Retail reserves are based on accessory and clearance floor sample inventory in our stores and any inventory that is not associated with a specific customer order in our retail warehouses.

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PART I-FINANCIAL INFORMATION-CONTINUED

BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-UNAUDITED

AUGUST 31, 2024

(Dollars in thousands except share and per share data)

Activity in the reserves for excess quantities and obsolete inventory by segment are as follows:

	Wholesale Segment			Retail Segment			~~Corporate & Other (1)~~Total			~~Total~~
Balance at November 25, 2023	$	4,145		$	1,038		$	-		$	5,183
Balance at November 30, 2024	$	4,158		$	1,237		$	5,395
Additions charged to expense		~~3,930~~365			~~524~~161			~~500~~526			~~4,954~~
Write-offs		(~~3,700~~192	)		(~~368~~150	)		-(342	)		~~(4,068~~	)
Balance at August 31, 2024	$	4,375		$	1,194		$	500		$	6,069
Balance at March 1, 2025	$	4,331		$	1,248		$	5,579

~~(1)~~Our ~~Consists~~estimates ofand aassumptions ~~$500~~have ~~reserve~~been ~~established~~reasonably ~~against~~accurate in the ~~retail~~past. ~~inventory~~We ~~held~~have bynot ~~Noa~~made ~~Home~~any ~~due~~significant changes to our ~~decision~~methodology tofor ~~cease~~determining ~~operations~~inventory byreserves ~~selling~~in ~~the~~2025 ~~remaining~~and ~~inventory~~do innot ananticipate ~~orderly~~that ~~fashion~~our ~~over~~methodology ~~the~~is ~~next~~likely ~~several~~to ~~months~~change in the future.

~~Our~~9 ~~estimates~~of and assumptions have been reasonably accurate in the past. We have not made any significant changes to our methodology for determining inventory reserves in 2024 and do not anticipate that our methodology is likely to change in the future.32

PART I-FINANCIAL INFORMATION-CONTINUED
BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-UNAUDITED
MARCH 1, 2025
(Dollars in thousands except share and per share data)

6. Goodwill and Other Intangible Assets

Goodwill and other intangible assets consisted of the following:

August 31, 2024

March 1, 2025

Gross Carrying Amount

Accumulated Amortization

Intangible Assets, Net

Intangibles subject to amortization

Customer relationships

512

(~~379~~408

)

~~133~~104

Intangibles not subject to amortization:

Trade names

6,849

Goodwill

7,217

Total goodwill and other intangible assets

14,~~199~~170

November 25, 2023

November 30, 2024

Gross Carrying Amount

Accumulated Amortization

Intangible Assets, Net

Intangibles subject to amortization

Customer relationships

512

(~~337~~392

)

~~175~~120

Intangibles not subject to amortization:

Trade names

86,~~675~~848

Goodwill

7,217

Total goodwill and other intangible assets

1614,~~067~~185

~~See~~There ~~Note~~were 9no ~~regarding~~changes in the ~~impairment~~carrying amounts of ~~the~~goodwill ~~trade~~during ~~name~~the ~~intangible~~three ~~asset~~months ~~for~~ended ~~Noa~~March ~~Home~~1, 2025.

~~There~~The ~~were~~carrying noamounts ~~changes~~of ingoodwill ~~the~~by ~~carrying~~reportable ~~amounts~~segment, ofincluding ~~goodwill~~accumulated ~~during~~impairment ~~the~~losses, ~~nine~~at ~~months~~both ~~ended~~March ~~August~~1, 312025 and November 30, 2024. were as follows:

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PART I-FINANCIAL INFORMATION-CONTINUED

BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-UNAUDITED

AUGUST 31, 2024

(Dollars in thousands except share and per share data)

The carrying amounts of goodwill by reportable segment, including accumulated impairment losses, at both August 31, 2024 and November 25, 2023 were as follows:

	Original		Accumulated
	Recorded		Impairment			Carrying
	Value		Losses			Amount

Wholesale	$	9,188	$	(1,971	)	$	7,217
Retail		1,926		(1,926	)		-
Corporate and other		5,409		(5,409	)		-

Total goodwill	$	16,523	$	(9,306	)	$	7,217

Amortization expense associated with intangible assets during the three ~~and nine~~ months ended ~~August~~March 311, ~~2024~~2025 and ~~August~~March 262, ~~2023~~2024 was as follows:

	Quarter Ended				~~Nine Months Ended~~
	August 31, 2024		August 26, 2023		August 31, 2024		August 26, 2023
	March 1, 2025		March 2, 2024
Intangible asset amortization expense	$	14	$	14	$	43	$	43

~~Estimated~~10 ~~future~~of ~~amortization expense for intangible assets that exist at August 31, 2024 is as follows:~~32

Remainder of fiscal 2024	$	14
Fiscal 2025		57
Fiscal 2026		57
Fiscal 2027		5
Fiscal 2028		-
Fiscal 2029		-
Total	$	133

PART I-FINANCIAL INFORMATION-CONTINUED
BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-UNAUDITED
MARCH 1, 2025
(Dollars in thousands except share and per share data)

Estimated future amortization expense for intangible assets that exist at March 1, 2025 is as follows:

Remainder of fiscal 2025	$	43
Fiscal 2026		57
Fiscal 2027		4
Fiscal 2028		-
Fiscal 2029		-
Fiscal 2030		-
Total	$	104

7. Bank Credit Facility

On May 15, 2024, we entered into the Eighth Amended and Restated Credit Agreement with our bank (the “Credit Facility”). This ~~credit~~Credit ~~facility~~Facility provides for a line of credit of up to $25,000. At ~~August~~March 311, ~~2024~~2025, we had $65,~~013~~682 outstanding under standby letters of credit against our line. The line bears interest at the One-Month Term Secured Overnight Financing Rate (“One-Month Term SOFR”) plus 1.75% and is secured by our accounts receivable and inventory. Our bank charges a fee of 0.25% on the daily unused balance of the line, payable quarterly. Under the terms of the Credit Facility, Consolidated Minimum Tangible Net Worth (as defined in the Credit Facility) shall at no time be less than $120,000. In addition, we must maintain the following financial covenants, measured quarterly on a rolling twelve-month basis and commencing as of the end of the first fiscal quarter after the first date that the used commitment (the sum of any outstanding advances plus standby letters of credit) equals or exceeds $8,250:

●

Consolidated Fixed Charge Coverage Ratio (as defined in the Credit Facility) of not less than 1.2 times and

●

Consolidated Lease Adjusted Leverage to EBITDAR Ratio (as defined in the Credit Facility) not to exceed 3.35 times.

Since our used commitment was less than $8,250 at ~~August~~March 311, ~~2024~~2025, we were not required to test the Consolidated Fixed Charge Coverage Ratio or the Consolidated Lease Adjusted Leverage to EBITDAR Ratio. Had we been required to test those ratios, we would not have been ~~able~~in tofull ~~achieve the required levels for either of these ratios~~compliance. Consequently, our availability under the Credit Facility is currently limited to an additional $2,~~237~~568.

11 of 37

PART I-FINANCIAL INFORMATION-CONTINUED

BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-UNAUDITED

AUGUST 31, 2024

(Dollars in thousands except share and per share data)

8. Post Employment Benefit Obligations

Defined Benefit Plans

We have an unfunded Supplemental Retirement Income Plan (the “Supplemental Plan”) that covers one current and certain former executives. The liability for the Supplemental Plan was $5,~~851~~600 and $5,~~778~~557 as of ~~August~~March 311, ~~2024~~2025 and November 2530, ~~2023~~2024, respectively.

We also have the Bassett Furniture Industries, Incorporated Management Savings Plan (the “Management Savings Plan”) which was established in the second quarter of fiscal 2017. The Management Savings Plan is an unfunded, nonqualified deferred compensation plan maintained for the benefit of certain highly compensated or management level employees. As part of the Management Savings Plan, we have made Long Term Cash Awards (“LTC Awards”) totaling $2,000 to five management employees in the amount of $400 each. We are accounting for the LTC Awards as a defined benefit pension plan. Currently, two of those employees have retired and are receiving benefits. The liability for the LTC Awards was $1,~~221~~381 and $1,~~234~~360 as of ~~August~~March 311, ~~2024~~2025 and November 2530, ~~2023~~2024, respectively.

11 of 32

PART I-FINANCIAL INFORMATION-CONTINUED
BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-UNAUDITED
MARCH 1, 2025
(Dollars in thousands except share and per share data)

The combined pension liability for the Supplemental Plan and LTC Awards is recorded as follows in the condensed consolidated balance sheets:

	August 31, 2024		November 25, 2023
	March 1, 2025		November 30, 2024
Accrued compensation and benefits	$	792	$	792
Post employment benefit obligations		6,~~280~~189		6,~~220~~085
Total pension liability	$	76,~~072~~981	$	76,~~012~~877

Components of net periodic pension costs for our defined benefit plans for the three ~~and nine~~ months ended ~~August~~March 311, ~~2024~~2025 and ~~August~~March 262, ~~2023~~2024 are as follows:

	Quarter Ended						~~Nine Months Ended~~
	August 31, 2024			August 26, 2023			August 31, 2024			August 26, 2023
	March 1, 2025			March 2, 2024
Service cost	$	34		$	73		$	10		$	20
Interest cost		9881			9398			~~293~~			~~278~~
Amortization of prior service costs		26-			3125			77			94
Amortization of loss		(16	)		-(16	)		~~(48~~	)		-
Net periodic pension cost	$	~~111~~69		$	~~131~~110		$	~~332~~		$	~~392~~

The components of net periodic pension cost other than the service cost component, which is included in selling, general and administrative expenses, are included in other loss, net in our condensed consolidated statements of operations.

Deferred Compensation Plans

We have an unfunded deferred compensation plan that covers one current executive and certain former executives and provides for voluntary deferral of compensation. This plan has been frozen with no additional participants or deferrals permitted. Our liability under this plan was $1,~~657~~560 and $1,~~655~~568 as of ~~August~~March 311, ~~2024~~2025 and November 2530, ~~2023~~2024, respectively.

We also have an unfunded, nonqualified deferred compensation plan maintained for the benefit of certain highly compensated or management level employees which was established under the Management Savings Plan. Our liability under this plan, including both accrued Company contributions and participant salary deferrals, was $3,~~277~~540 and $~~2661~~3,486 as of ~~August~~March 311, ~~2024~~2025 and November 2530, ~~2023~~2024, respectively.

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PART I-FINANCIAL INFORMATION-CONTINUED

BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-UNAUDITED

AUGUST 31, 2024

(Dollars in thousands except share and per share data)

Our combined liability for all deferred compensation arrangements, including Company contributions and participant deferrals under the Management Savings Plan, is recorded as follows in the condensed consolidated balance sheets:

	August 31, 2024		November 25, 2023
	March 1, 2025		November 30, 2024
Accrued compensation and benefits	$	~~329~~330	$	~~329~~330
Post employment benefit obligations		4,~~605~~770		34,~~987~~724
Total deferred compensation liability	$	45,~~934~~100	$	45,~~316~~054

We recognized expense under our deferred compensation arrangements during the three ~~and nine~~ months ended ~~August~~March 311, ~~2024~~2025 and ~~August~~March 262, ~~2023~~2024 as follows:

	Quarter Ended				~~Nine Months Ended~~
	August 31, 2024		August 26, 2023		August 31, 2024		August 26, 2023
	March 1, 2025		March 2, 2024
Deferred compensation expense (benefit)	$	255	$	166	$	881	$	363
Deferred compensation expense	$	34	$	455

9.12 ~~Other~~of ~~Gains and Losses~~32

~~Fiscal~~PART ~~2024~~I-FINANCIAL INFORMATION-CONTINUED BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-UNAUDITED MARCH 1, 2025 (Dollars in thousands except share and per share data)

During the three and nine months ended August 31, 2024, we recognized a charge of $1,240 to accrue the remaining minimum charges payable under a contract for logistical services which our wholesale segment ceased utilizing during the third fiscal quarter of 20249. ~~These minimum payments will continue through January of 2026.~~Restructuring

~~During~~In the ~~nine~~fourth ~~months~~quarter ~~ended~~of ~~August~~fiscal ~~31,~~ 2024, we recognized ~~non-cash~~a ~~charges~~restructuring charge of $440 representing accrued severance pay for ~~asset~~certain ~~impairments~~affected ~~totaling~~employees. At March 1, 2025 and November 30, 2024, $569 and $432,~~515~~ ~~which~~respectively, ~~consisted~~of the accrual remained in other current liabilities. The remainder is expected to be paid out by the end of the ~~following:~~second quarter of fiscal 2025.

● $2,887 in our retail segment which included $1,978 related to the impairment of leasehold improvements and $750 from the impairment of right-of-use assets at certain underperforming retail stores, as well as $159 for the impairment of right-of-use assets at certain warehouse locations resulting from the consolidation of our retail warehouses.

● $727 for the impairment of plant and equipment in our wholesale segment related to the consolidation of our domestic wood production facilities.

● $1,901 for the impairment of long-lived assets at Noa Home. During the second quarter we concluded that Noa Home was not likely to achieve profitability in the foreseeable future and have decided to cease operations by selling the remaining inventory in an orderly fashion over the next several months. $1,827 of these charges are for the full impairment of the Noa Home trade name intangible asset, and $74 relates to the full impairment of customized software used in the Noa Home operations.

Our estimates of the fair value of the impaired right-of-use assets included estimates of discounted cash flows based upon current market rents and other inputs which we consider to be Level 3 inputs as specified in the fair value hierarchy in ASC Topic 820, Fair Value Measurement and Disclosure.

Fiscal 2023

During the nine months ended August 26, 2023, we recognized a non-cash gain of $1,013 resulting from the write-down of our contingent consideration obligation to the former owners of Noa Home. Subsequent to the acquisition of Noa Home on September 2, 2022, the parties concluded that the revenue and EBITDA targets originally set forth in the purchase agreement by which the Noa Home co-founders were to earn the contingent consideration were likely not to be met within the originally anticipated time frame and therefore agreed to replace the contingent consideration payable that was recognized at the acquisition date with two fixed payments of C$200 each. The first payment was made in June of 2023 and the second payment will be made in December of 2024.

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PART I-FINANCIAL INFORMATION-CONTINUED

BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-UNAUDITED

AUGUST 31, 2024

(Dollars in thousands except share and per share data)

10. Commitments and Contingencies

Lease Guarantees

We were contingently liable under licensee lease obligation guarantees in the amounts of $54,~~226~~885 and $15,~~845~~131 at ~~August~~March 311, ~~2024~~2025 and November 2530, ~~2023~~2024, respectively. The remaining term under these lease guarantees extends for six years.

In the event of default by the licensee, we believe that the risk of loss is mitigated through a combination of options that include, but are not limited to, arranging for a replacement licensee or liquidating the collateral (primarily inventory). The proceeds of the above options are expected to cover the estimated amount of our future payments under the guarantee obligation, net of recorded reserves. The fair value of these lease guarantees (an estimate of the cost to the Company to perform on the guarantee) at ~~August~~March 311, ~~2024~~2025 and November 2530, ~~2023~~2024 was not material.

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BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-UNAUDITED

AUGUST 31, 2024

(Dollars in thousands except share and per share data)

11. Earnings (Loss) Per Share

The following reconciles basic and diluted earnings (loss) per share:

	Net Income (Loss)			Weighted Average Shares		Net Income (Loss) Per Share
For the quarter ended August 31, 2024:
For the quarter ended March 1, 2025:
Basic loss per share	$	(4,505	)		8,725,008	$	(0.52	)
Basic earnings per share	$	1,854			8,678,770	$	0.21
Add effect of dilutive securities:
Restricted shares*		-			-		-
Restricted shares		-			27,665		-
Diluted loss per share - continuing operations	$	(4,505	)		8,725,008	$	(0.52	)
Diluted earnings per share	$	1,854			8,706,435	$	0.21
For the quarter ended August 26, 2023:
For the quarter ended March 2, 2024:
Basic earnings per share	$	(2,591	)		8,736,096	$	(0.30	)
Basic loss per share	$	(1,193	)		8,740,637	$	(0.14	)
Add effect of dilutive securities:
Restricted shares*		-			-		-
Diluted earnings per share	$	(2,591	)		8,736,096	$	(0.30	)
Diluted loss per share	$	(1,193	)		8,740,637	$	(0.14	)
For the nine months ended August 31, 2024:
Basic earnings per share - continuing operations	$	(12,899	)		8,742,766	$	(1.48	)
Add effect of dilutive securities:
Restricted shares*		-			-		-
Diluted earnings per share - continuing operations	$	(12,899	)		8,742,766	$	(1.48	)
For the nine months ended August 26, 2023:
Basic earnings per share - continuing operations	$	930			8,804,718	$	0.11
Add effect of dilutive securities:
Restricted shares		-			15,934		-
Diluted earnings per share - continuing operations	$	930			8,820,652	$	0.11

*Due to the net loss for the period, potentially dilutive securities would have been anti-dilutive and are therefore excluded.

For the three ~~and nine~~ months ended ~~August~~March 311, ~~2024~~2025 and ~~August~~March 262, ~~2023~~2024, the following potentially dilutive shares were excluded from the computations as their effect was anti-dilutive:

Quarter Ended

~~Nine Months Ended~~

August 31, 2024

August 26, 2023

August 31, 2024

August 26, 2023

March 1, 2025

March 2, 2024

Unvested shares

~~64,409~~-

~~100~~61,~~313~~413

~~64,409~~

~~66,113~~

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-UNAUDITED

AUGUST 31, 2024

(Dollars in thousands except share and per share data)

12. Segment Information

We have strategically aligned our business into two reportable segments as defined in ASC 280, Segment Reporting, and as described below:

●

Wholesale. The wholesale home furnishings segment is involved principally in the design, manufacture, sourcing, sale and distribution of furniture products to a network of Bassett stores (Company-owned and licensee-owned retail stores) and independent furniture retailers. Our wholesale segment includes our wood and upholstery operations, which includes Lane Venture.

●

Retail – Company-owned stores. Our retail segment consists of Company-owned stores and includes the revenues, expenses, assets and liabilities and capital expenditures directly related to these stores and the Company-owned distribution network utilized to deliver products to our retail customers.

In addition to the two reportable segments described above, we include our remaining business activities and assets in a reconciling category known as Corporate and other. This category includes the shared costs of corporate functions such as treasury and finance, information technology, accounting, human resources, legal and others, including certain product development and marketing functions benefitting both wholesale and retail operations. In addition to property and equipment and various other assets associated with the shared corporate functions, the identifiable assets of Corporate and other include substantially all of our cash and our investments in CDs. We consider our corporate functions to be other business activities and have aggregated them with any of our operating segments that do not meet the requirements to be reportable segments. As of and for the ~~periods~~period ended ~~August~~March 312, 2024 ~~and August 26~~, ~~2023,~~ the only such operating segment included in Corporate and other is Noa Home, which was acquired on September 2, 2022, subsequently closed during fiscal 2024 and substantially liquidated as of November 30, 2024. All sales reported in our Corporate and other category ~~are~~during fiscal 2024 were attributable to Noa Home, which ~~generates~~generated substantially all of its sales outside of the United States. During the second fiscal quarter of 2024 we concluded that Noa Home was not likely to achieve profitability in the foreseeable future and have decided to cease operations by selling the remaining inventory in an orderly fashion over the next several months.

Inter-company net sales elimination represents the elimination of wholesale sales to our Company-owned stores. Inter-company income elimination includes the embedded wholesale profit in the Company-owned store inventory that has not been realized. These profits will be recorded when merchandise is delivered to the retail consumer. The inter-company income elimination also includes rent paid by our retail stores occupying Company-owned real estate.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-UNAUDITED

AUGUST 31, 2024

(Dollars in thousands except share and per share data)

The following table presents our segment information:

	Quarter Ended						~~Nine Months Ended~~
	August 31, 2024			August 26, 2023			August 31, 2024			August 26, 2023
	March 1, 2025			March 2, 2024
Sales Revenue
Wholesale sales of furniture and accessories	$	4752,~~828~~927		$	5654,~~660~~700		$	~~155,138~~		$	~~188,318~~
Less: Sales to retail segment		(2024,~~453~~059	)		(23,~~503~~762	)		~~(64,967~~	)		~~(77,932~~	)
Wholesale sales to external customers		2728,~~375~~868			3330,~~157~~938			~~90,171~~			~~110,386~~
Retail sales of furniture and accessories		4753,~~256~~294			5253,~~264~~754			~~151,478~~			~~178,004~~
Corporate and other - Noa Home		~~988~~-			1,~~796~~862			~~3,934~~			~~7,044~~
Consolidated net sales of furniture and accessories	$	7582,~~619~~162		$	8786,~~217~~554		$	~~245,583~~		$	~~295,434~~
Income (Loss) before Income Taxes:
Income (loss) from operations:
Wholesale	$	48,~~440~~685		$	6,~~340~~760		$	~~16,886~~		$	~~22,339~~
Retail - Company-owned stores		(~~2,840~~48	)		(31,~~036~~612	)		~~(6,674~~	)		~~(751~~	)
Net expenses - Corporate and other		(6,~~963~~226	)		(7,~~420~~595	)		~~(21,500~~	)		~~(22,140~~	)
Inter-company elimination		~~246~~44			~~312~~90			~~867~~			~~917~~
Asset impairment charges (see Note 9)		-			-			(5,515	)		-
Consolidated income (loss) from operations		2,455			(2,357	)
Loss on contract abandonment (see Note 9)		(1,240	)		-			(1,240	)
Interest income		559			756
Gain on revaluation of contingent consideration (see Note 9)		-			-			-			1,013
Other loss, net		(459	)		(104	)
Consolidated income (loss) from operations		(6,357	)		(3,804	)		(17,176	)		1,378
Consolidated income (loss) before income taxes	$	2,555		$	(1,705	)
Interest income		692			923			2,075			1,644
Depreciation and Amortization
Other loss, net		(109	)		(309	)		(489	)		(1,381	)
Wholesale	$	590		$	619
Consolidated income (loss) before income taxes	$	(5,774	)	$	(3,190	)	$	(15,590	)	$	1,641
Retail - Company-owned stores		1,010			1,380
Depreciation and Amortization
Corporate and other		646			665
Wholesale	$	587		$	618		$	1,835		$	1,838
Consolidated	$	2,246		$	2,664
Retail - Company-owned stores		1,073			1,335			3,790			4,167
Capital Expenditures
Corporate and other		662			640			1,988			1,497
Wholesale	$	753		$	163
Consolidated	$	2,322		$	2,593		$	7,613		$	7,502
Retail - Company-owned stores		69			1,333
Capital Expenditures
Corporate and other		48			580
Wholesale	$	385		$	715		$	919		$	2,064
Consolidated	$	870		$	2,076
Retail - Company-owned stores		510			4,776			2,680			7,798
Corporate and other		142			1,761			1,121			4,795
Consolidated	$	1,037		$	7,252		$	4,720		$	14,657

	As of		As of
	August 31, 2024		November 25, 2023
Identifiable Assets	March 1, 2025		November 30, 2024
Identifiable Assets
Wholesale	$	90,593	$	88,533
Wholesale	$	88,835	$	99,004
Retail - Company-owned stores		154,454		158,084
Retail - Company-owned stores		155,271		166,604
Corporate and other		90,739		94,553
Corporate and other		91,756		104,816
Consolidated	$	335,786	$	341,170
Consolidated	$	335,862	$	370,424

See Note 13, Revenue Recognition, for disaggregated revenue information regarding sales of furniture and accessories by product type for the wholesale and retail segments.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-UNAUDITED

AUGUST 31, 2024

(Dollars in thousands except share and per share data)

13. Revenue Recognition

We recognize revenue when we transfer promised goods or services to our customers in an amount that reflects the consideration we expect to receive in exchange for those goods or services. For our wholesale and retail segments, revenue is recognized when the risks and rewards of ownership and title to the product have transferred to the buyer. At wholesale, transfer occurs and revenue is recognized upon the shipment of goods to independent dealers and licensee-owned BHF stores. At retail, transfer occurs and revenue is recognized upon delivery of goods to the customer. All wholesale and retail revenues are recorded net of estimated returns and allowances based on historical patterns. We typically collect a significant portion of the purchase price from our retail customers as a deposit upon order, with the balance typically collected at the time delivery is scheduled. These customer deposits are carried on our balance sheet as a current liability until delivery is fulfilled and amounted to $2325,~~700~~352 and $2225,~~788~~742 as of ~~August~~March 311, ~~2024~~2025 and November 2530, ~~2023~~2024, respectively. Substantially all of the customer deposits held as of November 2530, ~~2023~~2024 related to performance obligations that were satisfied during the current year-to-date period and have therefore been recognized in revenue for the ~~nine~~three months ended ~~August~~March 311, ~~2024~~2025.

Sales commissions are expensed as part of selling, general and administrative expenses at the time revenue is recognized because the amortization period would have been one year or less. Sales commissions at wholesale are accrued upon the shipment of goods. Sales commissions at retail are accrued at the time a sale is written (i.e. – when the customer’s order is placed) and are carried as prepaid commissions in other current assets until the goods are delivered and revenue is recognized. At ~~August~~March 311, ~~2024~~2025 and November 2530, ~~2023~~2024, our balance of prepaid commissions included in other current assets was $2,~~559~~805 and $2,~~245~~928, respectively.

We exclude from revenue all amounts collected from customers for sales tax. We do not disclose amounts allocated to remaining unsatisfied performance obligations as they are expected to be satisfied within one year or less.

Disaggregated revenue information for sales of furniture and accessories by product category for the three ~~and nine~~ months ended ~~August~~March 311, ~~2024~~2025 and ~~August~~March 262, ~~2023~~2024, excluding intercompany transactions between our segments, is a follows:

Quarter Ended

August 31, 2024

August 26, 2023

March 1, 2025

March 2, 2024

Wholesale

Retail

Corporate & Other ~~(2)~~

Total

Wholesale

Retail

Corporate & Other (2)

Total

Bassett Custom Upholstery

1718,~~854~~849

2529,~~631~~494

4348,~~485~~343

1920,~~985~~375

3029,~~177~~803

50,~~162~~178

Bassett Leather

34,~~730~~112

1,~~229~~927

46,~~959~~039

63,~~743~~955

~~337~~827

74,~~080~~782

Bassett Custom Wood

23,~~748~~308

7,~~617~~706

1011,~~365~~014

3,~~564~~751

78,~~697~~198

11,~~261~~949

Bassett Casegoods

32,~~043~~599

56,~~909~~652

89,~~952~~251

2,~~865~~857

7,~~027~~385

910,~~892~~242

Accessories, mattresses and other (1)

67,~~870~~515

~~988~~-

7,~~858~~515

7,~~026~~541

1,~~796~~862

89,~~822~~403

Consolidated net sales of furniture and accessories

2728,~~375~~868

4753,~~256~~294

~~988~~-

7582,~~619~~162

3330,~~157~~938

5253,~~264~~754

1,~~796~~862

8786,~~217~~554

	Nine Months Ended
	August 31, 2024								August 26, 2023
	Wholesale		Retail		Corporate & Other (2)		Total		Wholesale		Retail		Corporate & Other		Total
Bassett Custom Upholstery	$	60,046	$	82,690	$	-	$	142,736	$	68,641	$	101,047	$	-	$	169,688
Bassett Leather		11,254		3,173		-		14,427		19,630		1,408		-		21,038
Bassett Custom Wood		9,933		24,336		-		34,269		12,642		27,164		-		39,806
Bassett Casegoods		8,938		19,684		-		28,622		9,473		24,848		-		34,321
Accessories, mattresses and other (1)		-		21,595		3,934		25,529		-		23,537		7,044		30,581
Consolidated net sales of furniture and accessories	$	90,171	$	151,478	$	3,934	$	245,583	$	110,386	$	178,004	$	7,044	$	295,434

(1)

Includes the sale of goods other than Bassett-branded products, such as accessories and bedding, and also includes the sale of furniture protection plans.

(2) Corporate and other for the three ~~and nine~~ months ended ~~August~~March 312, 2024 ~~and August 26, 2023~~ includes the sales of Noa Home, which was closed during fiscal 2024 and substantially liquidated as of November 30, 2024.

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BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-UNAUDITED

AUGUST 31, 2024

(Dollars in thousands except share and per share data)

14. Changes to Stockholders’ Equity

The following changes in our stockholders’ equity occurred during the three ~~and nine~~ months ended ~~August~~March 311, ~~2024~~2025 and ~~August~~March 262, ~~2023~~2024:

	Quarter Ended						~~Nine Months Ended~~
	August 31, 2024			August 26, 2023			August 31, 2024			August 26, 2023
	March 1, 2025			March 2, 2024
Common Stock:
Beginning of period	$	43,~~808~~681		$	43,~~900~~842		$	~~43,842~~		$	~~44,759~~
Issuance of common stock		~~100~~79			~~101~~93			~~291~~			~~288~~
Purchase and retirement of common stock		(~~234~~298	)		(~~201~~52	)		~~(459~~	)		~~(1,247~~	)
End of period	$	43,~~674~~462		$	43,~~800~~883		$	~~43,674~~		$	~~43,800~~
Common Shares Issued and Outstanding:
Beginning of period		8,~~761~~736,~~332~~046			8,~~779~~768,~~912~~221			~~8,768,221~~			~~8,951,839~~
Issuance of common stock		2015,~~139~~735			1918,~~996~~488			~~58,256~~			~~57,406~~
Purchase and retirement of common stock		(4659,~~843~~647	)		(4010,~~143~~360	)		~~(91,849~~	)		~~(249,480~~	)
End of period		8,~~734~~692,~~628~~134			8,~~759~~776,~~765~~349			~~8,734,628~~			~~8,759,765~~
Additional Paid-in Capital:
Beginning of period	$	526		$	-93		$	93		$	-
Issuance of common stock		(42	)		(27	)		~~(16~~	)		~~(12~~	)
Purchase and retirement of common stock		(~~246~~148	)		(~~210~~109	)		~~(671~~	)		~~(624~~	)
Stock based compensation		~~198~~140			~~212~~198			~~594~~			~~636~~
End of period	$	-		$	-175		$	-		$	-
Retained Earnings:
Beginning of period	$	~~127~~122,~~807~~847		$	~~149~~139,~~393~~354		$	~~139,354~~		$	~~150,800~~
Net income (loss) for the period		(41,~~505~~854	)		(21,~~591~~193	)		~~(12,899~~	)		~~930~~
Purchase and retirement of common stock		(~~158~~411	)		~~(196~~-	)		~~(158~~	)		~~(2,293~~	)
Cash dividends declared		(1,~~756~~734	)		(1,~~575~~573	)		~~(4,909~~	)		~~(4,406~~	)
End of period	$	~~121~~122,~~388~~556		$	~~145~~136,~~031~~588		$	~~121,388~~		$	~~145,031~~
Accumulated Other Comprehensive Loss:
Accumulated Other Comprehensive Income (Loss):
Beginning of period	$	(7793	)	$	~~(108~~152	)	$	~~152~~		$	50
Cumulative translation adjustments, net of tax		~~(24~~-	)		31(167	)		~~(198~~	)		~~(174~~	)
Amortization of pension costs, net of tax		6(12	)		237			21			70
End of period	$	~~(25~~781	)	$	(548	)	$	~~(25~~	)	$	~~(54~~	)

The balance of cumulative translation adjustments, net of tax, was azero ~~net loss of $684 and $486~~ at ~~August~~both 31March 1, ~~2024~~2025 and November 2530, ~~2023, respectively~~2024.

1918 of 3732

BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-UNAUDITED

AUGUST 31, 2024

(Dollars in thousands except share and per share data)

15. Recent Accounting Pronouncements

In ~~June~~November ~~2022~~2023, the FASB issued Accounting Standards Update ~~No. 2022~~2023-0307 – ~~Fair~~Segment ~~Value~~Reporting ~~Measurement~~ (Topic ~~820~~ASC 740): ~~Fair~~Improvements ~~Value~~to ~~Measurement~~Reportable ofSegment ~~Equity~~Disclosures. ~~Securities~~The ~~Subject~~ASU toimproves ~~Contractual~~reportable ~~Sale~~segment ~~Restrictions~~disclosure requirements, toprimarily ~~clarify~~through ~~the~~enhanced ~~guidance~~disclosures inabout ~~Topic~~significant ~~820~~segment ~~when~~expenses. ~~measuring~~The ~~the~~amendments ~~fair~~in ~~value~~this ofupdate anrequire: ~~equity~~that ~~security~~a ~~subject~~public toentity ~~contractual~~disclose, ~~restrictions~~on ~~that~~an ~~prohibit~~annual ~~the~~and ~~sale~~interim ofbasis, ansignificant ~~equity~~segment ~~security.~~expenses ~~The~~that ~~amendments~~are inregularly ~~ASU~~provided ~~2022-03~~to ~~clarify~~the ~~that~~chief aoperating ~~contractual~~decision ~~restriction~~maker on(CODM) ~~the~~and ~~sale~~included within each reported measure of ansegment ~~equity~~profit ~~security~~or isloss ~~not~~(collectively ~~considered~~referred ~~part~~to ofas the ~~unit~~“significant ofexpense ~~account~~principle”); ofand ~~the~~that ~~equity~~a ~~security~~public ~~and,~~entity ~~therefore~~disclose, ison ~~not~~an ~~considered~~annual inand ~~measuring~~interim ~~fair~~basis, ~~value.~~an ~~The~~amount ~~amendments~~for ~~also~~other ~~clarify~~segment ~~that~~items anby ~~entity~~reportable ~~cannot,~~segment asand a ~~separate~~description ~~unit~~ of ~~account,~~its ~~recognize~~composition. ~~and~~The ~~measure~~other asegment ~~contractual~~items ~~sale~~category ~~restriction.~~is Inthe ~~addition,~~difference ~~the~~between ~~amendments~~segment inrevenue ~~ASU~~less ~~2022-03~~the ~~require~~segment ~~certain~~expenses ~~additional~~disclosed ~~disclosures~~under ~~related~~the tosignificant ~~investments~~expense inprinciple ~~equity~~and ~~securities~~each ~~subject~~reported tomeasure ~~contractual~~of ~~sale~~segment ~~restrictions~~profit or loss. The amendments in ASU ~~2022~~2023-0307 will become effective for us asfor ofour ~~the~~2025 fiscal year and for interim periods beginning ofwith our ~~2025~~2026 fiscal year. Early adoption is permitted. AsWe ~~of August 31, 2024 we~~ do not ~~hold any investments in equity securities, therefore we do not currently~~ expect that this guidance will have a material impact upon our financial position and results of operations.

In ~~November~~December 2023, the FASB issued Accounting Standards Update 2023-0709 – ~~Segment~~Income ~~Reporting~~Taxes (Topic ASC 740) ~~Improvements~~Income ~~to Reportable Segment Disclosures~~Taxes. The ASU improves ~~reportable~~the ~~segment~~transparency ~~disclosure~~of ~~requirements,~~income ~~primarily~~tax ~~through enhanced~~ disclosures ~~about~~by ~~significant~~requiring ~~segment~~(1) ~~expenses.~~consistent ~~The~~categories ~~amendments in this update require: that a public entity disclose, on an annual~~ and ~~interim~~greater ~~basis,~~disaggregation ~~significant~~of ~~segment~~information ~~expenses~~in ~~that are regularly provided to~~ the ~~chief~~rate ~~operating~~reconciliation ~~decision maker (CODM)~~ and ~~included within each reported measure of segment profit or loss~~ (~~collectively referred to as the “significant expense principle”~~2); ~~and~~income ~~that~~taxes apaid ~~public~~disaggregated ~~entity disclose, on an annual and interim basis, an amount for other segment items~~ by ~~reportable~~jurisdiction. ~~segment~~It ~~and~~also aincludes ~~description~~certain ~~of its composition. The~~ other ~~segment~~amendments ~~items~~to ~~category~~improve is the ~~difference~~effectiveness ~~between segment revenue less the segment expenses disclosed under the significant expense principle and each reported measure~~ of ~~segment~~income ~~profit~~tax ~~or loss~~disclosures. The amendments in ASU ~~2022~~2023-0309 will become effective for us ~~for~~as ~~our~~of ~~2025~~the ~~fiscal year and for interim periods~~ beginning ~~with~~of our 2026 fiscal year. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. We do not expect that this guidance will have a material impact upon our financial position and results of operations.

In ~~December~~November ~~2023~~2024, the FASB issued Accounting Standards Update ~~2023~~2024-0903 – Income ~~Taxes~~Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (~~Topic~~Subtopic ASC ~~740~~220-40) Disaggregation of Income ~~Taxes~~Statement Expenses. The amendments in this ASU ~~improves~~require ~~the~~a ~~transparency~~public ofbusiness ~~income~~entity ~~tax~~to ~~disclosures~~disclose byspecific ~~requiring~~information ~~(1)~~about ~~consistent~~certain ~~categories~~costs and ~~greater~~expenses ~~disaggregation~~in the notes to its financial statements for interim and annual reporting periods. The objective of the disclosure requirements is to provided disaggregated information inabout ~~the~~a ~~rate~~public ~~reconciliation~~business ~~and~~entity's expenses to help investors (2a) ~~income~~better ~~taxes~~understand ~~paid~~the ~~disaggregated~~entity's byperformance, ~~jurisdiction.~~(b) Itbetter ~~also~~assess ~~includes~~the ~~certain~~entity's ~~other~~prospects ~~amendments~~for tofuture ~~improve~~cash ~~the~~flows, ~~effectiveness~~and of(c) ~~income~~compare ~~tax~~an ~~disclosures~~entity's performance over time and with that of other entities. The amendments in ASU ~~2022~~2024-03 will become effective for us asfor ~~of the beginning of~~ our ~~2026~~2028 fiscal year. ~~Early~~and ~~adoption is permitted~~ for ~~annual~~interim ~~financial~~periods ~~statements~~beginning ~~that~~with ~~have~~our ~~not~~2029 ~~yet~~fiscal ~~been~~year. ~~issued~~Early oradoption ~~made~~is ~~available for issuance~~permitted. We do not expect that this guidance will have a material impact upon our financial position and results of operations.

2019 of 3732

PART I-FINANCIAL INFORMATION-CONTINUED BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES MARCH 1, 2025 (Dollars in thousands except share and per share data)

BASSETT FURNITURE INDUSTRIES INCORPORATED AND SUBSIDIARIES

AUGUST 31, 2024

(Dollars in thousands except share and per share data)

Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Safe-harbor, forward-looking statements:

This report contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations and business of Bassett Furniture Industries, Incorporated and subsidiaries. Such forward-looking statements are identified by use of forward-looking words such as “anticipates”, “believes”, “plans”, “estimates”, “expects”, “aims” and “intends” or words or phrases of similar expression. These forward-looking statements involve certain risks and uncertainties. No assurance can be given that any such matters will be realized. Important factors that could cause actual results to differ materially from those contemplated by such forward-looking statements include:

• fluctuations in the cost and availability of raw materials, fuel, labor, delivery costs and sourced products, including those which may result from supply chain disruptions and shortages and the imposition of new or increased ~~duties,~~ tariffs, retaliatory tariffs, duties and trade limitations with respect to foreign-sourced products

•	competitive conditions in the home furnishings industry

•	overall retail traffic levels in stores and on the web and consumer demand for home furnishings

•	ability of our customers and consumers to obtain affordable credit due to increased interest rates

•	the profitability of the stores (independent licensees and Company-owned retail stores) which may result in future store closings

•	the risk of additional asset impairment charges arising from the ongoing efforts to consolidate our retail warehouses.

• ability to implement our Company-owned retail strategies and realize the benefits from such strategies~~, including our initiatives to expand and improve our digital marketing and advertising capabilities, as they are implemented~~

• the risk of additional charges arising from our decision to close Noa Home Inc. (“Noa Home”) during the fourth quarter of fiscal 2024.

•	effectiveness and security of our information technology systems and possible disruptions due to cybersecurity threats, including any impacts from a network security incident; and the sufficiency of our insurance coverage, including cybersecurity insurance

•	future tax legislation, or regulatory or judicial positions

•	ability to efficiently manage the import supply chain to minimize business interruption

•	concentration of domestic manufacturing, particularly of upholstery products, and the resulting exposure to business interruption from accidents, weather and other events and circumstances beyond our control

Additionally, other risks that could cause actual results to differ materially from those contemplated by such forward-looking statements are set forth in Part I, Item 1A. Risk Factors in the Company’s Annual Report on Form 10-K for the fiscal year ended November 2530, ~~2023~~2024.

You should keep in mind that any forward-looking statement made by us in this report or elsewhere speaks only as of the date on which such forward-looking statement is made. New risks and uncertainties arise from time to time, and it is impossible for us to predict these events or how they may affect us. We have no duty to, and do not intend to, update or revise the forward-looking statements in this discussion after the date hereof, except as may be required by law. In light of these risks and uncertainties, you should keep in mind that the events described in any forward-looking statement made in this report or elsewhere might not occur.

2120 of 3732

PART I-FINANCIAL INFORMATION-CONTINUED BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES MARCH 1, 2025 (Dollars in thousands except share and per share data)

~~BASSETT~~Our ~~FURNITURE~~fiscal ~~INDUSTRIES~~year, ~~INCORPORATED~~which ~~AND~~ends ~~SUBSIDIARIES~~on the last Saturday of November, periodically results in a 53-week year instead of the normal 52 weeks. The prior fiscal year ending November 30, 2024 was a 53-week year, with the additional week being included in the first fiscal quarter. Accordingly, the information presented below includes 13 weeks of operations for the quarter ended March 1, 2025 as compared to 14 weeks included in the quarter ended March 2, 2024.

AUGUST 31, 2024

(Dollars in thousands except share and per share data)

Our fiscal year, which ends on the last Saturday of November, periodically results in a 53-week year instead of the normal 52 weeks. The current fiscal year ending November 30, 2024 is a 53-week year, with the additional week being included in our first fiscal quarter. Accordingly, the information presented below includes 40 weeks of operations for the nine months ended August 31, 2024 as compared to 39 weeks included in the quarter ended August 26, 2023.

Overview

Bassett is a leading retailer, manufacturer and marketer of branded home furnishings. Our products are sold primarily through a network of Company-owned and licensee-owned branded stores under the Bassett Home Furnishings (“BHF”) name, with additional distribution through other wholesale channels including multi-line furniture stores, many of which feature Bassett galleries or design centers. We ~~also sell our products through our newly redesigned website at www.bassettfurniture.com. We~~ were founded in 1902 and incorporated under the laws of Virginia in 1930. Our rich ~~122~~123-year history has instilled the principles of quality, value, and integrity in everything we do, while simultaneously providing us with the expertise to respond to ever-changing consumer tastes and meet the demands of a global economy.

~~With~~Approximately 8760% ~~BHF stores~~of atour ~~August~~wholesale ~~31,~~sales ~~2024,~~arise wefrom ~~have leveraged~~ our ~~strong brand name in furniture into a~~ network of 87 Company-owned and ~~licensed~~licensee-owned ~~stores~~Bassett ~~that~~Home ~~focus~~Furnishings ~~on providing consumers with a friendly and casual environment for buying furniture and accessories~~(“BHF”) stores. Our store program is designed to provide a single source home furnishings retail store ~~that~~with ~~provides~~ a unique combination of stylish, quality furniture and accessories with a high level of customer service. In The ~~order~~stores ~~for~~highlight ~~the~~our ~~Bassett~~custom ~~brand~~furniture todesign ~~reach~~and ~~markets~~manufacturing ~~that~~capabilities, ~~cannot~~free bein-home ~~effectively~~or ~~served~~virtual bydesign ~~our~~visits ~~retail~~(“home ~~store~~makeovers”) ~~network,~~and wecoordinated ~~also~~decorating ~~distribute~~accessories. Our ~~our~~philosophy ~~products~~is ~~through~~based ~~other~~on ~~wholesale~~building ~~channels~~strong ~~including multi~~long-~~line~~term ~~furniture~~relationships ~~stores,~~with ~~many~~each ofcustomer. Salespeople ~~which~~are ~~feature~~referred ~~Bassett~~to ~~galleries~~as or“Design ~~design~~Consultants” ~~centers.~~and Weare ~~use~~trained ato ~~network~~evaluate ofcustomer ~~over~~needs 30and ~~independent~~provide ~~sales~~comprehensive ~~representatives~~solutions ~~who~~for ~~have~~their ~~stated~~home ~~geographical territories~~decor. Until ~~These sales representatives are compensated based on~~ a ~~standard~~rigorous ~~commission~~training ~~rate.~~and Wedesign ~~believe~~certification ~~this~~program ~~blended~~is ~~strategy~~completed, ~~provides~~Design usConsultants ~~the~~are ~~greatest~~not ~~ability~~authorized to ~~effectively~~perform ~~distribute~~in-home ~~our~~or ~~products~~virtual ~~throughout~~design ~~the~~services ~~United~~for ~~States~~our ~~and ultimately gain market share~~customers.

~~The~~Bassett ~~BHF~~also ~~stores~~has ~~feature~~a ~~custom~~significant ~~order~~traditional ~~furniture~~wholesale business with more than 1,000 ~~free~~open ~~in-home~~market oraccounts. ~~virtual~~Most ~~design~~of ~~visits~~the ~~(“home~~open ~~makeovers”)~~market sales are through Bassett Design Centers and ~~coordinated~~Bassett ~~decorating~~Custom ~~accessories. Our~~Studios ~~philosophy~~which isfunction ~~based~~as ona ~~building~~store ~~strong~~within ~~long~~a multi-~~term~~line ~~relationships~~store ~~with~~featuring ~~each~~the ~~customer~~Company’s custom furniture capabilities. ~~Salespeople~~ ~~are~~The ~~referred~~wholesale tobusiness, asincluding ~~“Design~~the ~~Consultants”~~Lane ~~and~~Venture ~~are~~outdoor ~~trained~~brand, toalso ~~evaluate~~services ~~customer~~general ~~needs~~furniture stores and ~~provide~~a ~~comprehensive~~growing ~~solutions~~number ~~for~~of ~~their~~interior ~~home~~design ~~decor. Until~~firms athrough ~~rigorous~~network ~~training~~of ~~and~~over ~~design~~30 ~~certification~~independent ~~program~~sales isrepresentatives ~~completed,~~who ~~Design~~have ~~Consultants~~stated ~~are~~geographical ~~not~~territories. ~~authorized~~These tosales ~~perform~~representatives ~~in-home~~are orcompensated ~~virtual~~based ~~design~~on ~~services~~a ~~for~~standard ~~our~~commission ~~customers~~rate.

We consider our website to be the front door to our brand experience where customers can research our furniture and accessory offerings and subsequently buy online or engage with an in-store design consultant. ~~Digital outreach strategies have become the primary vehicle for brand advertising and customer acquisition.~~ We introduced a new web platform late in ~~August of~~ 2023 that leverages world class features including enhanced customer research capabilities and streamlined navigation. ~~Since~~We ~~the~~know ~~debut~~that ofwe ~~the~~are ~~new~~driving ~~site,~~a wesignificant ~~have~~percentage ~~seen~~of ~~increased~~the ~~engagement~~retail ~~with~~foot ~~the~~traffic ~~brand~~to ~~through~~our astore ~~greater~~network ~~number~~and ofour ~~page~~open ~~views~~market ~~per~~customers ~~customer~~through ~~along~~engagement with ~~more~~www.bassettfurniture.com. ~~time~~Although ~~spent~~e-commerce onsales ~~the~~continue ~~site.~~to Webe ~~have~~small ~~also~~in ~~seen~~relation anto ~~increase~~ in-store ~~average~~sales, ~~order~~we ~~value~~are pleased that ~~has~~we ~~resulted~~have inseen ~~increased~~a greater than 20% e-commerce ~~revenue.~~sales ~~While~~increase wesince ~~have~~the ~~made~~middle itof ~~easier~~2024. We will continue to ~~purchase~~invest ~~on-line,~~in weongoing ~~will~~improvements ~~not~~to ~~compromise~~the ~~our~~aesthetics ~~in-store~~and user experience orthat ~~the~~we ~~quality~~provide ofon our ~~in-home makeover capabilities~~website.

During the fourth quarter of fiscal 2022 we acquired Noa Home, aInc. (“Noa Home”). A mid-priced e-commerce furniture retailer headquartered in Montreal, Canada., Noa Home ~~has~~had operations in Canada, ~~Singapore~~Australia, ~~the~~Singapore ~~United States~~ and the United Kingdom. After nearly two years of operating losses, we concluded during the second quarter of 2024 that Noa Home was not likely to achieve profitability at any time in the foreseeable future and ~~have~~ decided to cease operations by selling the inventory in an orderly fashion ~~over the next several months~~. InAs ~~the~~of ~~second~~November ~~quarter~~30, of 2024, we ~~recognized~~had ~~non-cash~~substantially ~~charges~~completed ~~totaling $2,401 related to~~ the ~~impairment~~liquidation of ~~certain long-lived assets of~~ Noa Home ~~and the establishment of a reserve against Noa Home~~’s ~~remaining~~assets ~~inventory~~and liabilities.

We have factories in Newton, North Carolina that manufacture both stationary and motion upholstered furniture for inside the home along with our outdoor furniture offerings. We also have ~~factories~~a factory in Martinsville ~~and Bassett~~, Virginia that ~~assemble~~assembles and ~~finish~~finishes our custom bedroom and dining offerings. InWe ~~2022,~~also weown ~~purchased~~ a facility ~~which we had formerly leased~~ in Haleyville, Alabama where we manufacture aluminum frames for our outdoor furniture.

In addition to the furniture that we manufacture domestically, we source most of our formal bedroom and dining room furniture (casegoods) and certain leather upholstery offerings from several foreign plants, primarily in Vietnam ~~and China~~. ~~Over~~Approximately 7580% of our wholesale revenues are derived from products that are manufactured in the United States using a mix of domestic and globally sourced components and raw materials.

2221 of 3732

PART I-FINANCIAL INFORMATION-CONTINUED BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES MARCH 1, 2025 (Dollars in thousands except share and per share data)

~~BASSETT~~Results ~~FURNITURE~~of ~~INDUSTRIES~~Operations ~~INCORPORATED~~– ~~AND~~Period ~~SUBSIDIARIES~~ended March 1, 2025 compared with the period ended March 2, 2024:

~~AUGUST~~Consolidated 31results of operations for the three months ended March 1, 2025 and March 2, 2024 are as follows:

(Dollars in thousands except share and per share data)

	Quarter Ended*									Change
	March 1, 2025				March 2, 2024					Dollars			Percent

Net sales of furniture and accessories	$	82,162	100.0	%	$	86,554		100.0	%	$	(4,392	)		-5.1	%
Cost of furniture and accessories sold		35,332	43.0	%		38,687		44.7	%		(3,355	)		-8.7	%
Gross profit		46,830	57.0	%		47,867		55.3	%		(1,037	)		-2.2	%
SG&A expenses		44,375	54.0	%		50,224		58.0	%		(5,849	)		-11.6	%

Income (loss) from operations	$	2,455	3.0	%	$	(2,357	)	-2.7	%	$	4,812		N/M

~~Retail~~*13 ~~Stores~~weeks for fiscal 2025 as compared with 14 weeks for fiscal 2024.

During the first quarter of 2024 we opened two new Corporate-owned stores located in Tampa, Florida and Houston, Texas. As of August 31, 2024, we had 58 Corporate-owned stores operating. One licensee-owned store in La Jolla, California was closed during the first quarter of 2024 and two licensee-owned stores in Seattle, Washington were closed during the third quarter of 2024. As of August 31, 2024 there were 29 licensee-owned stores in operation.

Cybersecurity Incident

On July 10, 2024, we detected unauthorized occurrences on a portion of our information technology (IT) systems. Upon detecting the unauthorized occurrences, we immediately began taking steps to contain, assess and remediate the cybersecurity incident, including beginning an investigation with leading external cybersecurity specialists, activating our incident response plan, and shutting down some systems. As a result of these and other measures, we believe the threat actor was ejected from our IT systems on July 10, 2024.

After we shut down some of our systems, we experienced disruption to certain of our operations, including interrupted manufacturing at our domestic plants and delayed order fulfillment for our retail network and delay of some wholesale shipments. Within a few days of the incident, we were able to resume retail order fulfillment and caught up on fulfilling wholesale orders that were delayed as a result of the cybersecurity incident. We have fully restored the IT systems and data and our investigation has not found evidence that any of our core operating systems for manufacturing, wholesale and retail order processing and fulfillment, or financial reporting were impacted.

While we believe the impacts were not material to our financial condition and results of operations for the fiscal year, we estimate that between $1,000 and $2,000 of sales were lost due to the shutdown during the cybersecurity incident. During the third quarter of 2024, we also incurred legal and remediation costs related to the incident of approximately $98 which are included in selling, general and administrative expenses. In addition, cost of goods sold for the three and nine months ended August 31, 2024 includes $609 for wages paid to hourly production employees during the work stoppage resulting from the cybersecurity incident. Because no inventory was produced during the temporary shutdown of our manufacturing operations, these wages were charged directly to expense. We will be seeking reimbursement of costs, expenses and losses stemming from the cybersecurity incident by submitting claims to our cybersecurity insurers. While the timing and amount of any such reimbursements is not known at this time, we are currently in the process of documenting our claim and expect to resolve the final amount during the fourth fiscal quarter of 2024.

23 of 37

PART I-FINANCIAL INFORMATION-CONTINUED

BASSETT FURNITURE INDUSTRIES INCORPORATED AND SUBSIDIARIES

AUGUST 31, 2024

(Dollars in thousands except share and per share data)

Results of Operations – Periods ended August 31, 2024 compared with the periods ended August 26, 2023:

Consolidated results of operations for the three and nine months ended August 31, 2024 and August 26, 2023 are as follows:

	Quarter Ended										Change						Nine Months Ended									Change
	August 31, 2024					August 26, 2023					Dollars			Percent			August 31, 2024*					August 26, 2023				Dollars			Percent
Net sales of furniture and accessories	$	75,619		100.0	%	$	87,217		100.0	%	$	(11,598	)		-13.3	%	$	245,583		100.0	%	$	295,434	100.0	%	$	(49,851	)		-16.9	%
Cost of furniture and accessories sold		35,526		47.0	%		42,173		48.4	%		(6,647	)		-15.8	%		113,863		46.4	%		140,360	47.5	%		(26,497	)		-18.9	%
Gross profit		40,093		53.0	%		45,044		51.6	%		(4,951	)		-11.0	%		131,720		53.6	%		155,074	52.5	%		(23,354	)		-15.1	%
SG&A expenses		45,210		59.8	%		48,848		56.0	%		(3,638	)		-7.4	%		142,141		57.9	%		154,709	52.4	%		(12,568	)		-8.1	%
Loss on contract abandonment		1,240		1.6	%		-		0.0	%		1,240			100.0	%		1,240		0.5	%		-	0.0	%		1,240			100.0	%
Asset impairment charges		-		0.0	%		-		0.0	%		-			100.0	%		5,515		2.2	%		-	0.0	%		5,515			100.0	%
Gain on revaluation of contingent consideration		-		0.0	%		-		0.0	%		-			-100.0	%		-		0.0	%		1,013	0.3	%		(1,013	)		-100.0	%
Income (loss) from operations	$	(6,357	)	-8.4	%	$	(3,804	)	-4.4	%	$	(2,553	)		-67.1	%	$	(17,176	)	-7.0	%	$	1,378	0.5	%	$	(18,554	)	N/M

*40 weeks for fiscal 2024 as compared with 39 weeks for fiscal 2023.

Analysis of Quarterly Results:

Total sales revenue for the three months ended ~~August~~March 311, ~~2024~~2025 decreased $114,~~598~~392 or 135.1% from the prior year period due primarily to athe ~~16%~~additional ~~decline~~week in ~~wholesale~~the ~~sales~~prior ~~and~~year aquarter. ~~10%~~Normalizing ~~decrease in retail sales through~~ the ~~Company-owned~~first ~~stores.~~fiscal Inquarter ~~addition,~~of we2024 ~~estimate~~to ~~that~~adjust ~~between~~for ~~$1,000~~the ~~and~~additional $2week,~~000~~ of sales ~~were~~revenue ~~lost~~for ~~due~~the tofirst ~~the~~quarter ~~shutdown~~of ~~during~~fiscal ~~the~~2025 ~~cybersecurity~~increased ~~incident~~$1,790 or 2.2%.

Gross margins for the three months ended ~~August~~March 311, ~~2024~~2025 increased ~~140~~170 basis points over the prior year period primarily due to improved margins in ~~both~~ the ~~retail and~~ wholesale ~~segments, partially offset by $609 of unproductive labor costs incurred during the temporary shutdown resulting from the cybersecurity incident~~segment. ~~Excluding these unproductive labor costs, our consolidated gross margin would have been 53.8%.~~

Selling, general and administrative (“SG&A”) expenses as a percentage of sales for the three months ended ~~August~~March 311, ~~2024~~2025 ~~increased~~decreased ~~380~~150 basis points from ~~2023~~2024 primarily due to the ~~deleverage~~benefit of ~~fixed~~cost ~~costs~~reductions ~~caused~~implemented byduring ~~lower~~the ~~sales~~second ~~volumes~~half of fiscal 2024.

~~Analysis~~22 of ~~Year-to-Date Results:~~32

~~Total~~PART ~~sales~~I-FINANCIAL ~~revenue~~INFORMATION-CONTINUED BASSETT ~~for~~FURNITURE ~~the~~INDUSTRIES, ~~nine~~INCORPORATED ~~months~~AND ~~ended~~SUBSIDIARIES MARCH ~~August 31~~1, ~~2024~~2025 (Dollars ~~decreased $49,851 or 17% from the prior year period primarily due to a 18% decline~~ in ~~wholesale~~thousands ~~sales~~except share and aper ~~15%~~share ~~decrease in retail sales through the Company-owned stores.~~data)

Gross margins for the nine months ended August 31, 2024 increased 110 basis points over the prior year period. Included in the current year gross margin are increased inventory valuation charges of $1,729 in the wholesale segment, $472 in the retail segment and $500 in the Noa Home operation, and unproductive labor costs of $609 incurred during the temporary shutdown resulting from the cybersecurity incident. Excluding these charges, our consolidated gross margin would have been 55.0%. SG&A expenses as a percentage of sales for the nine months ended August 31, 2024 increased 550 basis points from 2023 primarily due to the deleverage of fixed costs caused by lower sales volumes.

24 of 37

PART I-FINANCIAL INFORMATION-CONTINUED

BASSETT FURNITURE INDUSTRIES INCORPORATED AND SUBSIDIARIES

AUGUST 31, 2024

(Dollars in thousands except share and per share data)

Reconciliation of Gross Profit as Reported to Adjusted Gross Profit:

	Quarter Ended										Nine Months Ended
	August 31, 2024					August 26, 2023					August 31, 2024					August 26, 2023
			Percent of					Percent of					Percent of					Percent of
	Amount		Net Sales			Amount		Net Sales			Amount		Net Sales			Amount		Net Sales
Gross profit as reported	$	40,093		53.0	%	$	45,044		51.6	%	$	131,720		53.6	%	$	155,074		52.5	%
Wages paid during cyber incident shutdown		609		0.8	%		-		0.0	%		609		0.2	%		-		0.0	%
Additional inventory valuation charges		-		0.0	%		893		1.0	%		2,701		1.1	%		1,896		0.6	%
Adjusted gross profit	$	40,702		53.8	%	$	45,937		52.7	%	$	135,030		55.0	%	$	156,970		53.1	%

Segment Information

We have strategically aligned our business into two reportable segments as defined in ASC 280, Segment Reporting, and as described below:

●

In addition to the two reportable segments described above, we include our remaining business activities and assets in a reconciling category known as Corporate and other. This category includes the shared costs of corporate functions such as treasury and finance, information technology, accounting, human resources, legal and others, including certain product development and marketing functions benefitting both wholesale and retail operations. In addition to property and equipment and various other assets associated with the shared corporate functions, the identifiable assets of Corporate and other include substantially all of our cash and our investments in CDs. We consider our corporate functions to be other business activities and have aggregated them with any of our operating segments that do not meet the requirements to be reportable segments. As of and for the ~~periods~~period ended ~~August~~March 312, 2024 ~~and August 26~~, ~~2023,~~ the only such operating segment included in Corporate and other is Noa Home, which was acquired on September 2, 2022, subsequently closed during fiscal 2024 and substantially liquidated as of November 30, 2024. All sales reported in our Corporate and other category ~~are~~during fiscal 2024 were attributable to Noa Home, which ~~generates~~generated substantially all of its sales outside of the United States. During the second quarter of 2024 we concluded that Noa Home was not likely to achieve profitability in the foreseeable future and decided to cease operations by selling the inventory in an orderly fashion over the next several months.

2523 of 3732

PART I-FINANCIAL INFORMATION-CONTINUED BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES MARCH 1, 2025 (Dollars in thousands except share and per share data)

BASSETT FURNITURE INDUSTRIES INCORPORATED AND SUBSIDIARIES

AUGUST 31, 2024

(Dollars in thousands except share and per share data)

Reconciliation of Segment Results to Consolidated Income (Loss) Before Income Taxes

To supplement the financial measures prepared in accordance with GAAP, we present gross profit by segment inclusive of the effects of intercompany sales by our wholesale segment to our retail segment. Because these intercompany transactions are not eliminated from our segment presentations and because we do not present gross profit as a measure of segment profitability in the accompanying condensed consolidated financial statements, the presentation of gross profit by segment is considered to be a non-GAAP financial measure. In addition, certain special gains or charges as well as non-operating income and expenses are included in consolidated income (loss) before income taxes are not included in the measures of segment profitability. The reconciliation of this non-GAAP financial measure to the most directly comparable financial measure calculated and presented in accordance with GAAP is presented below along with the effects of various other intercompany eliminations on our consolidated results of operations.

	Quarter Ended August 31, 2024
	Quarter Ended March 1, 2025
	Non-GAAP Presentation																			~~GAAP Presentation~~	GAAP Presentation
	Wholesale		Retail			Corporate & Other			Eliminations				~~Special Items~~	Special Items		~~Non-Operating~~	Non-Operating			~~Consolidated~~	Consolidated
Net sales of furniture and accessories	$	4752,~~828~~927	$	4753,~~256~~294		$	~~988~~-		$	(2024,~~453~~059	) ~~(1)~~	(1)	$	-$	-	$	-$	-		$	~~75,619~~$	82,162
Cost of furniture and accessories sold		3334,~~147~~191		2224,~~285~~937			~~504~~-			(2023,~~410~~796	) ~~(2)~~	(2)		-	-		-	-			~~35,526~~	35,332
Gross profit		1418,~~681~~736		2428,~~971~~357			~~484~~-			(43263	)			-	-		-	-			~~40,093~~	46,830
SG&A expense		10,~~241~~051		2728,~~811~~405			76,~~447~~226			(~~289~~307	) ~~(3)~~	(3)		-	-		-	-			~~45,210~~	44,375
Loss on contract abandonment		-		-			-			-				1,240	(4)		-				1,240
Income (loss) from operations		8,685		(48	)		(6,226	)		44					-			-				2,455
Income (loss) from operations		4,440		(2,840	)		(6,963	)		246				(1,240	)		-				(6,357	)
Interest income		-		-			-			-					-			559				559
Interest income		-		-			-			-				-			692				692
Other loss, net		-		-			-			-					-			(459	)			(459	)
Other loss, net		-		-			-			-				-			(109	)			(109	)
Income (loss) before income taxes	$	8,685	$	(48	)	$	(6,226	)	$	44				$	-		$	100			$	2,555
Income (loss) before income taxes	$	4,440	$	(2,840	)	$	(6,963	)	$	246			$	(1,240	)	$	583			$	(5,774	)

	Quarter Ended August 26, 2023
	Quarter Ended March 2, 2024
	Non-GAAP Presentation																			~~GAAP Presentation~~	GAAP Presentation
	Wholesale		Retail			Corporate & Other			Eliminations				~~Special Items~~	Special Items		~~Non-Operating~~	Non-Operating			~~Consolidated~~	Consolidated
Net sales of furniture and accessories	$	5654,~~660~~700	$	5253,~~264~~754		$	1,~~796~~862		$	(23,~~503~~762	) ~~(1)~~	(1)	$	-$	-	$	-$	-		$	~~87,217~~$	86,554
Cost of furniture and accessories sold		3936,~~536~~709		2524,~~318~~741			~~881~~809			(23,~~562~~572	) ~~(2)~~	(2)		-	-		-	-			~~42,173~~	38,687
Gross profit		17,~~124~~991		2629,~~946~~013			~~915~~1,053			59(190	)			-	-		-	-			~~45,044~~	47,867
SG&A expense		1011,~~784~~231		2930,~~982~~625			8,~~335~~648			(~~253~~280	) ~~(3)~~	(3)		-	-		-	-			~~48,848~~	50,224
Income (loss) from operations		6,~~340~~760		(31,~~036~~612	)		(7,~~420~~595	)		~~312~~90				-	-		-	-			~~(3,804~~	)(2,357	)
Interest income		-		-			-			-				-	-		~~923~~	756			~~923~~	756
Other loss, net		-		-			-			-				-	-		~~(309~~	)(104	)		~~(309~~	)(104	)
Income (loss) before income taxes	$	6,~~340~~760	$	(31,~~036~~612	)	$	(7,~~420~~595	)	$	~~312~~90			$	-$	-	$	~~614~~$	652		$	~~(3,190~~$	)(1,705	)

26 of 37

PART I-FINANCIAL INFORMATION-CONTINUED

BASSETT FURNITURE INDUSTRIES INCORPORATED AND SUBSIDIARIES

AUGUST 31, 2024

(Dollars in thousands except share and per share data)

	Nine Months Ended August 31, 2024
	Non-GAAP Presentation																	GAAP Presentation
	Wholesale		Retail			Corporate & Other			Eliminations			Special Items			Non-Operating			Consolidated
Net sales of furniture and accessories	$	155,138	$	151,478		$	3,934		$	(64,967	) (1)	$	-		$	-		$	245,583
Cost of furniture and accessories sold		105,763		70,805			2,239			(64,944	) (2)		-			-			113,863
Gross profit		49,375		80,673			1,695			(23	)		-			-			131,720
SG&A expense		32,489		87,347			23,195			(890	) (3)		-			-			142,141
Loss on contract abandonment		-		-			-			-			1,240	(4)		-			1,240
Asset impairment charges		-		-			-			-			5,515	(5)		-			5,515
Income from operations		16,886		(6,674	)		(21,500	)		867			(6,755	)		-			(17,176	)
Interest income		-		-			-			-			-			2,075			2,075
Other loss, net		-		-			-			-			-			(489	)		(489	)
Income (loss) before income taxes	$	16,886	$	(6,674	)	$	(21,500	)	$	867		$	(6,755	)	$	1,586		$	(15,590	)

	Nine Months Ended August 26, 2023
	Non-GAAP Presentation																	GAAP Presentation
	Wholesale		Retail			Corporate & Other			Eliminations			Special Items			Non-Operating			Consolidated
Net sales of furniture and accessories	$	188,318	$	178,004		$	7,044		$	(70,888	) (1)	$	-					$	295,434
Cost of furniture and accessories sold		130,693		84,550			3,212			(78,095	) (2)		-						140,360
Gross profit		57,625		93,454			3,832			7,207			-						155,074
SG&A expense		35,286		94,205			25,972			(754	) (3)		-						154,709
Gain on revaluation of contingent consideration		-		-			-			-			1,013	(6)					1,013
Income from operations		22,339		(751	)		(22,140	)		7,961			1,013			-			1,378
Interest income		-		-			-			-			-			1,644			1,644
Other loss, net		-		-			-			-			-			(1,381	)		(1,381	)
Income (loss) before income taxes	$	22,339	$	(751	)	$	(22,140	)	$	7,961		$	1,013		$	263		$	1,641

Notes to segment consolidation table:

(1)	Represents the elimination of sales from our wholesale segment to our Company-owned BHF stores.
(2)	Represents the elimination of purchases by our Company-owned BHF stores from our wholesale segment, as well as the change for the period in the elimination of intercompany profit in ending retail inventory.
(3)	Represents the elimination of rent paid by our retail stores occupying Company-owned real estate.
(4)	Represents the charge for accruing the remaining minimum payments under a contract for logistical services in Riverside, CA which we no longer utilize.
(5)	Represents asset impairment charges of $2,887 and $727 in our retail and wholesale segments, respectively, a $1,827 charge for the impairment of the Noa Home trade name intangible asset, and a $74 charge for the impairment of Noa Home customized software.
(6)	Represents the gain resulting from the write-down of the contingent consideration payable on the acquisition of Noa Home.

(1)	Represents the elimination of sales from our wholesale segment to our Company-owned BHF stores.

27(2) Represents the elimination of 37purchases by our Company-owned BHF stores from our wholesale segment, as well as the change for the period in the elimination of intercompany profit in ending retail inventory.

~~PART~~(3) ~~I-FINANCIAL~~Represents ~~INFORMATION~~the elimination of rent paid by our retail stores occupying Company-~~CONTINUED~~owned real estate.

~~BASSETT~~24 ~~FURNITURE~~of ~~INDUSTRIES INCORPORATED AND SUBSIDIARIES~~32

~~AUGUST~~PART 31I-FINANCIAL INFORMATION-CONTINUED BASSETT FURNITURE INDUSTRIES, ~~2024~~INCORPORATED AND SUBSIDIARIES MARCH 1, 2025 (Dollars in thousands except share and per share data)

(Dollars in thousands except share and per share data)

Wholesale Segment

Results for the wholesale segment for the three ~~and nine~~ months ended ~~August~~March 311, ~~2024~~2025 and ~~August~~March 262, ~~2023~~2024 are as follows:

	Quarter Ended								Change						Nine Months Ended								Change
	Quarter Ended*								Change
	August 31, 2024				August 26, 2023				Dollars			Percent			August 31, 2024*				August 26, 2023				Dollars			Percent
	March 1, 2025				March 2, 2024				Dollars			Percent
Net sales	$	4752,~~828~~927	100.0	%	$	5654,~~660~~700	100.0	%	$	(81,~~832~~773	)		-153.62	%	$	~~155,138~~	~~100.0~~	%	$	~~188,318~~	~~100.0~~	%	$	~~(33,180~~	)		~~-17.6~~	%
Gross profit (1)		1418,~~681~~736	3035.74	%		17,~~124~~991	3032.29	%		~~(2,443~~745	)		~~-14~~4.31	%		~~49,375~~	~~31.8~~	%		~~57,625~~	~~30.6~~	%		~~(8,250~~	)		~~-14.3~~	%
SG&A expenses		10,~~241~~051	2119.40	%		1011,~~784~~231	1920.05	%		(~~543~~1,180	)		-510.05	%		~~32,489~~	~~20.9~~	%		~~35,286~~	~~18.7~~	%		~~(2,797~~	)		~~-7.9~~	%
Income from operations	$	48,~~440~~685	916.34	%	$	6,~~340~~760	1112.24	%	$	(1,~~900~~925	)		~~-30~~28.05	%	$	~~16,886~~	~~10.9~~	%	$	~~22,339~~	~~11.9~~	%	$	~~(5,453~~	)		~~-24.4~~	%

(1) Gross profit at the segment level is considered a Non-GAAP financial measure due to the included effects of intercompany transactions. Refer to the reconciliation of gross profit by segment to consolidated gross profit presented under the Reconciliation of Segment Results to Consolidated Results of Operations above. *40 weeks for fiscal 2024 as compared with 39 weeks for fiscal 2023.

*13 weeks for fiscal 2025 as compared with 14 weeks for fiscal 2024.

Wholesale sales by major product category are as follows:

	Quarter Ended
	Quarter Ended*
	August 31, 2024								August 26, 2023*								Total Change
	March 1, 2025								March 2, 2024								Total Change
	External		Intercompany		Total				External		Intercompany		Total				Dollars			Percent
Bassett Custom Upholstery	$	1718,~~854~~849	$	1315,~~069~~561	$	3034,~~923~~410	6465.70	%	$	1920,~~985~~375	$	1514,~~170~~767	$	35,~~155~~142	6264.02	%	$	(~~4,232~~732	)		-122.01	%
Bassett Leather		34,~~730~~112		~~535~~632		4,~~265~~744	8.9.0	%		63,~~743~~955		~~278~~535		74,~~021~~490	128.42	%		~~(2,756~~254	)		~~-39~~5.37	%
Bassett Custom Wood		23,~~748~~308		34,~~638~~166		67,~~386~~474	1314.41	%		3,~~564~~751		4,~~564~~892		8,~~128~~643	1415.38	%		(1,~~742~~169	)		-2113.45	%
Bassett Casegoods		32,~~043~~599		3,~~211~~700		6,~~254~~299	1311.19	%		2,~~865~~857		3,~~491~~568		6,~~356~~425	11.27	%		(~~102~~126	)		-12.60	%
Total	$	2728,~~375~~868	$	2024,~~453~~059	$	4752,~~828~~927	100.0	%	$	3330,~~157~~938	$	23,~~503~~762	$	5654,~~660~~700	100.0	%	$	(81,~~832~~773	)		-153.62	%

	Nine Months Ended
	August 31, 2024								August 26, 2023*								Total Change
	External		Intercompany		Total				External		Intercompany		Total				Dollars			Percent
Bassett Custom Upholstery	$	60,046	$	40,845	$	100,891	65.0	%	$	68,641	$	50,427	$	199,068	63.2	%	$	(18,177	)		-15.3	%
Bassett Leather		11,254		1,462		12,716	8.2	%		19,630		550		20,180	10.7	%		(7,464	)		-37.0	%
Bassett Custom Wood		9,933		12,639		22,572	14.5	%		12,642		15,031		27,673	14.7	%		(5,101	)		-18.4	%
Bassett Casegoods		8,938		10,021		18,959	12.2	%		9,473		11,924		21,397	11.4	%		(2,438	)		-11.4	%
Total	$	90,171	$	64,967	$	155,138	100.0	%	$	110,386	$	77,932	$	188,318	100.0	%	$	(33,180	)		-17.6	%

*13 weeks for fiscal 2025 as compared with 14 weeks for fiscal 2024.

*27 weeks for fiscal 2024 as compared with 26 weeks for fiscal 2023.

Analysis of Quarterly Results – Wholesale

Net sales for the three months ended ~~August~~March 311, ~~2024~~2025 decreased $81,~~832~~773 or 163.2% from the prior year period due primarily to athe ~~22%~~additional ~~decrease~~week in ~~shipments to~~ the ~~open~~prior ~~market,~~year aquarter. ~~13%~~Normalizing ~~decrease~~the infirst ~~shipments~~fiscal toquarter ~~our~~of ~~retail~~2024 ~~store~~to ~~network~~adjust ~~and a 6% decrease in Lane Venture shipments. Gross margins~~ for the ~~three~~additional ~~months ended August 31~~week, ~~2024~~sales ~~increased~~revenue 50for ~~basis points over~~ the ~~prior~~first ~~year~~quarter ~~primarily~~of ~~due~~fiscal to2025 ~~the~~increased ~~expected~~$2,134 ~~improvement~~or in4.2%, ~~the~~consisting ~~Bassett~~of ~~Leather~~a ~~business~~6.1% Asincrease ~~the~~in ~~Bassett~~shipments ~~Leather~~to ~~product~~our ~~line~~retail isstore ~~internationally sourced with extended lead times~~network, wea ~~received~~2.2% ~~significant~~decrease ~~amounts~~in ofshipments ~~inventory~~to ~~during~~ the ~~second~~open market, and ~~third~~an ~~quarters~~11% ofincrease ~~2022~~in ~~just~~Lane asVenture ~~product~~shipments. ~~demand~~Gross ~~was~~margins ~~weakening~~for ~~due to~~ the ~~market~~three ~~downturn~~months inended ~~home~~March ~~furnishings. Also~~1, ~~the~~2025 ~~ocean~~increased ~~freight~~250 ~~costs~~basis ~~associated~~points ~~with~~over the ~~majority~~prior ofyear ~~the~~due ~~product~~primarily ~~received~~to ~~was~~improved ~~at significantly higher costs than are currently being realized on current product receipts. This improvement was partially offset by lower~~ margins in ~~the~~our Bassett Custom Upholstery business ~~due to deleverage of fixed costs~~ from ~~lower~~manufacturing ~~sales~~efficiency ~~volumes~~gains, ~~and~~increased ~~$609~~margins ofin ~~unproductive~~our ~~labor~~Lane ~~costs,~~Venture oroperations ~~1.3%~~due ofto ~~sales,~~improved ~~incurred~~customer ~~during~~mix ~~the~~and ~~temporary~~improved ~~shutdown~~margins ~~resulting~~in ~~from~~ the ~~cybersecurity~~Bassett ~~incident~~Leather business. SG&A expenses as a percentage of sales ~~increased~~decreased ~~240~~150 basis points primarily due to ~~reduced~~the ~~leverage~~benefit of ~~fixed~~cost ~~costs~~reductions ~~from~~implemented ~~decreased~~during ~~sales~~the second half of fiscal 2024.

28 of 37

PART I-FINANCIAL INFORMATION-CONTINUED

BASSETT FURNITURE INDUSTRIES INCORPORATED AND SUBSIDIARIES

AUGUST 31, 2024

(Dollars in thousands except share and per share data)

Analysis of Year-to-Date Results – Wholesale

Net sales for the nine months ended August 31, 2024 decreased $33,180 or 18% from the prior year period due primarily to a 20% decrease in shipments to the open market, a 17% decrease in shipments to our retail store network and a 9% decrease in Lane Venture shipments. Gross margins for the nine months ended August 31, 2024 increased 120 basis points over the prior year primarily due to the expected improvement in the Bassett Leather business. As the Bassett Leather product line is internationally sourced with extended lead times, we received significant amounts of inventory during the second and third quarters of 2022 just as product demand was weakening due to the market downturn in home furnishings. Also, the ocean freight costs associated with the majority of the product received was at significantly higher costs than are currently being realized on current product receipts. This increase was partially offset by significantly higher costs than are currently being realized on current product receipts. Margins in our Bassett Casegoods business also improved as expected primarily due to shipping more product that contained lower in-bound freight costs partially offset by increased inventory valuation charges as we plan to be more aggressive in selling certain slow-moving products. These improvements were partially offset by lower margins in the Bassett Custom Upholstery business due to deleverage of fixed costs from lower sales volumes. SG&A expenses as a percentage of sales increased 220 basis points primarily due to reduced leverage of fixed costs from decreased sales.

Wholesale Backlog

Wholesale backlog at ~~August~~March 311, ~~2024~~2025 was $1819,~~481~~515 as compared to $1821,~~478~~750 at November 2530, ~~2023~~2024 and $19,~~895~~491 at ~~August~~March 262, ~~2023~~2024.

25 of 32

PART I-FINANCIAL INFORMATION-CONTINUED
BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES
MARCH 1, 2025
(Dollars in thousands except share and per share data)

Retail – Company-owned Stores Segment

Results for the retail segment for the periods ended ~~August~~March 311, ~~2024~~2025 and ~~August~~March 262, ~~2023~~2024 are as follows:

	Quarter Ended										Change						Nine Months Ended										Change
	Quarter Ended*										Change
	August 31, 2024					August 26, 2023					Dollars			Percent			August 31, 2024*					August 26, 2023					Dollars			Percent
	March 1, 2025					March 2, 2024					Dollars			Percent
Net sales	$	4753,~~256~~294		100.0	%	$	5253,~~264~~754		100.0	%	$	(~~5,008~~460	)		-90.69	%	$	~~151,478~~		~~100.0~~	%	$	~~178,004~~		~~100.0~~	%	$	~~(26,526~~	)		~~-14.9~~	%
Gross profit (1)		2428,~~971~~357		5253.82	%		2629,~~946~~013		5154.60	%		(~~1,975~~656	)		-72.3	%		~~80,673~~		~~53.3~~	%		~~93,454~~		~~52.5~~	%		~~(12,781~~	)		~~-13.7~~	%
SG&A expenses		2728,~~811~~405		5853.93	%		2930,~~982~~625		57.40	%		(2,~~171~~220	)		-7.2	%		~~87,347~~		~~57.7~~	%		~~94,205~~		~~52.9~~	%		~~(6,858~~	)		~~-7.3~~	%
Income (loss) from operations	$	(2,840	)	-6.0	%	$	(3,036	)	-5.8	%	$	196			-6.5	%	$	(6,674	)	-4.4	%	$	(751	)	-0.4	%	$	(5,923	)		788.7	%
Loss from operations	$	(48	)	-0.1	%	$	(1,612	)	-3.0	%	$	1,564			-97.0	%

29*13 ofweeks 37for fiscal 2025 as compared with 14 weeks for fiscal 2024.

PART I-FINANCIAL INFORMATION-CONTINUED

BASSETT FURNITURE INDUSTRIES INCORPORATED AND SUBSIDIARIES

AUGUST 31, 2024

(Dollars in thousands except share and per share data)

Retail sales by major product category are as follows:

	Quarter Ended								Change						Nine Months Ended								Change
	Quarter Ended*								Change
	August 31, 2024				August 26, 2023				Dollars			Percent			August 31, 2024*				August 26, 2023				Dollars			Percent
	March 1, 2025				March 2, 2024				Dollars			Percent
Bassett Custom Upholstery	$	2529,~~631~~494	5455.23	%	$	3029,~~177~~803	5755.74	%	$	(~~4,546~~309	)		-~~15.~~1.0	%	$	~~82,690~~	~~54.6~~	%	$	~~101,047~~	~~56.8~~	%	$	~~(18,357~~	)		~~-18.2~~	%
Bassett Leather		1,~~229~~927	23.6	%		~~337~~827	01.65	%		~~892~~1,100			~~264~~133.70	%		~~3,173~~	~~2.1~~	%		~~1,408~~	~~0.8~~	%		~~1,765~~			~~125.4~~	%
Bassett Custom Wood		7,~~617~~706	1614.15	%		78,~~697~~198	1415.73	%		(80492	)		-16.0	%		~~24,336~~	~~16.1~~	%		~~27,164~~	~~15.3~~	%		~~(2,828~~	)		~~-10.4~~	%
Bassett Casegoods		56,~~909~~652	12.5	%		7,~~027~~385	13.47	%		(~~1,118~~733	)		-159.9	%		~~19,684~~	~~13.0~~	%		~~24,848~~	~~14.0~~	%		~~(5,164~~	)		~~-20.8~~	%
Accessories, mattresses and other (1)		67,~~870~~515	14.51	%		7,~~026~~541	1314.40	%		(~~156~~26	)		-20.23	%		~~21,595~~	~~14.3~~	%		~~23,537~~	~~13.2~~	%		~~(1,942~~	)		~~-8.3~~	%
Total	$	4753,~~256~~294	100.0	%	$	5253,~~264~~754	100.0	%	$	(~~5,008~~460	)		-90.69	%	$	~~151,478~~	~~100.0~~	%	$	~~178,004~~	~~100.0~~	%	$	~~(26,526~~	)		~~-14.9~~	%

(1)

Includes the sale of goods other than Bassett-branded products, such as accessories and bedding, and also includes the sale of furniture protection plans.

*4013 weeks for fiscal ~~2024~~2025 as compared with 3914 weeks for fiscal 2023.

Analysis of Quarterly Results - Retail

Net sales for the three months ended ~~August~~March 311, ~~2024~~2025 decreased $~~5,008~~460 or 90.69% from the prior year period. Written sales (the value of sales orders taken but not delivered) declined 42.81% from the ~~third~~first quarter of ~~2023~~2024. Normalizing the first fiscal quarter of 2024 to adjust for the additional week, sales revenue for the first quarter of fiscal 2025 increased $3,380 or 6.8% over the prior year period while written sales increased 5.4%. Gross margin for the three months ended ~~August~~March 311, ~~2024~~2025 ~~improved~~declined ~~120~~80 basis points over the prior period due to ~~higher~~lower margins onfor both in-line and clearance goods. Inas ~~addition,~~ we ~~were~~have ~~running~~become ~~two~~slightly ~~store~~more ~~closure~~aggressive ~~sales~~ in ~~2023~~cycling ~~that~~through ~~reduced~~unproductive ~~the gross margin for the third quarter of 2023~~inventory. SG&A expenses as a percentage of sales for the three months ended ~~August~~March 311, ~~2024~~2025 ~~increased~~decreased ~~150~~370 basis points primarily due to ~~decreased~~the ~~leverage~~benefit of ~~fixed~~cost ~~costs~~reductions ~~from~~implemented ~~lower~~during ~~sales~~the ~~volumes~~second ~~partially~~half ~~offset~~of byfiscal ~~reduced~~2024 coupled with lower advertising and ~~fixed~~marketing costs and efficiency gains in our warehouse and delivery ~~costs~~operation.

Analysis of Year-to-Date Results - Retail

Net sales for the nine months ended August 31, 2024 decreased $26,526 or 15% from the prior year period. Written sales (the value of sales orders taken but not delivered) declined 3.6% from the first nine months of 2023. Gross margin for the nine months ended August 31, 2024 improved 80 basis points over the prior period primarily due to higher margins on both in-line and clearance goods partially offset by $472 of additional inventory valuation charges in the second quarter of 2024 due to our strategy to be more aggressive in selling clearance goods to better control inventory levels. SG&A expenses as a percentage of sales for the nine months ended August 31, 2024 increased 480 basis points primarily due to decreased leverage of fixed costs from lower sales volumes.

Retail Backlog

Retail backlog at ~~August~~March 311, ~~2024~~2025 was $3336,~~251~~143 compared to $3037,~~902~~053 at November 2530, ~~2023~~2024 and $3231,~~702~~307 at ~~August~~March 262, ~~2023~~2024.

3026 of 3732

PART I-FINANCIAL INFORMATION-CONTINUED BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES MARCH 1, 2025 (Dollars in thousands except share and per share data)

BASSETT FURNITURE INDUSTRIES INCORPORATED AND SUBSIDIARIES

AUGUST 31, 2024

(Dollars in thousands except share and per share data)

Corporate and Other

In addition to the two reportable segments discussed above, we include our remaining business activities and assets in a reconciling category known as Corporate and other, which includes the shared costs of various corporate functions along with any operating segments that do not meet the requirements to be reportable segments. Therefore, prior to fiscal 2025, Noa Home iswas included within the Corporate and other reconciling category and ~~accounts~~accounted for all of the sales and gross profit within this reconciling category. Revenues, costs and expenses of Corporate and other for the periods ended ~~August~~March 311, ~~2024~~2025 and ~~August~~March 262, ~~2023~~2024 are as follows:

	Quarter Ended						Change						Nine Months Ended						Change
	Quarter Ended*						Change
	August 31, 2024			August 26, 2023			Dollars			Percent			June 1, 2024*			August 26, 2023			Dollars			Percent
	March 1, 2025			March 2, 2024			Dollars			Percent
Net sales	$	~~988~~-		$	1,~~796~~862		$	(~~808~~1,862	)		-45100.0	%	$	~~3,934~~		$	~~7,044~~		$	~~(3,110~~	)		~~-44.2~~	%
Gross profit		~~484~~-			~~915~~1,053			(~~431~~1,053	)		-47100.10	%		~~1,695~~			~~3,832~~			~~(2,137~~	)		~~-55.8~~	%
SG&A expenses		76,~~447~~226			8,~~335~~648			(~~888~~2,422	)		-1028.70	%		~~23,195~~			~~25,972~~			~~(2,777~~	)		~~-10.7~~	%
Net expenses	$	(6,~~963~~226	)	$	(7,~~420~~595	)	$	~~457~~1,369			-618.20	%	$	~~(21,500~~	)	$	~~(22,140~~	)	$	~~640~~			~~-2.9~~	%

*40 weeks for fiscal 2024 as compared with 39 weeks for fiscal 2023.

Analysis of Quarterly Results – Corporate and Other

Sales and gross profit declined from the prior year period asdue weto ~~began~~the ~~our~~closure ~~wind-down~~and liquidation of Noa Home’s ~~operations~~during ~~and~~fiscal ~~continued to sell the remaining inventory over the next several months~~2024. The $~~888~~2,422 decrease in SG&A expenses was primarily due to ~~reduced~~closure ~~advertising~~of ~~and warehouse costs for~~ Noa Home ~~as a result of the on-going wind-down of operations~~ and decreased corporate overhead spending from better expense management, ~~partially~~including ~~offset~~the bybenefit ~~costs~~of ~~incurred~~cost inreductions ~~connection~~implemented ~~with~~during the ~~cybersecurity~~second ~~incident~~half of fiscal 2024.

Analysis of Year-to-Date Results – Corporate and Other

Sales and gross profit declined from the prior year period as we began our wind-down of Noa Home’s operations and continued to sell the remaining inventory over the next several months. Included in the gross profit is an inventory valuation charge of $500 recognized during the second quarter of 2024 due to our decision to cease operations at Noa Home. The $2,777 decrease in SG&A expenses was primarily due to decreased advertising and warehouse costs for Noa Home as a result of the on-going wind-down of operations and decreased corporate overhead spending from better expense management.

Other Gains and Losses

Fiscal 2024

During the three and nine months ended August 31, 2024, we recognized a charge of $1,240 to accrue the remaining minimum charges under a logistical services contract with a vendor in Riverside, California. We ceased utilizing those services during the third quarter of 2024 and expect to pay the minimum monthly charge through January of 2026.

During the nine months ended August 31. 2024, we recognized non-cash charges for asset impairments totaling $5,515 which consisted of the following:

● $727 for the impairment of plant and equipment in our wholesale segment related to the consolidation of our domestic wood production facilities.

● $1,901 for the impairment of long-lived assets at Noa Home. During the second quarter we concluded that Noa Home was not likely to achieve profitability in the foreseeable future and decided to cease operations by selling the remaining inventory in an orderly fashion over the next several months. $1,827 of these charges are for the full impairment of the Noa Home trade name intangible asset, and $74 relates to the full impairment of customized software used in the Noa Home operations.

31 of 37

PART I-FINANCIAL INFORMATION-CONTINUED

BASSETT FURNITURE INDUSTRIES INCORPORATED AND SUBSIDIARIES

AUGUST 31, 2024

(Dollars in thousands except share and per share data)

Fiscal 2023

Other Items Affecting Net Income (Loss)

Interest Income

Interest income for the three ~~and nine~~ months ended ~~August~~March 311, ~~2024~~2025 was $~~692~~559 ~~and $2,075, respectively,~~ compared to $~~923~~756 ~~and $1,644~~ for the three ~~and nine~~ months, ~~respectively,~~ ended ~~August~~March 262, ~~2023~~2024. The ~~third quarter~~ decline from the prior year period is primarily due to lower balances of interest-bearing cash and cash equivalents, ~~while~~as ~~for~~well ~~the~~as ~~nine~~lower ~~months~~average ~~ended August 31, 2024 the~~ rates earned on our cash and cash equivalents and investments in CDs ~~averaged~~compared ~~higher~~to ~~than~~ the preceding year.

Other Loss, Net

Other loss, net, for the three ~~and nine~~ months ended ~~August~~March 311, ~~2024~~2025 was $~~276~~459 ~~and $380, respectively,~~ compared to $~~505~~104 ~~and $1,072~~ for the three ~~and nine~~ months, ~~respectively,~~ ended ~~August~~March 262, ~~2023~~2024. The net change from the prior year ~~periods~~period was primarily due to ~~lower~~higher costs associated with Company-owned life insurance.

Income Taxes

Our effective tax rate was 2227.04% ~~and 17.3%~~ for the three ~~and nine~~ months ended ~~August~~March 311, ~~2024, respectively~~2025. The effective ~~rates~~rate for the three ~~and nine~~ months ended ~~August~~March 311, ~~2024~~2025 ~~differ~~differs from the federal statutory rate of 21% primarily due to ~~increases in~~ the ~~valuation allowance placed on deferred tax assets associated with Noa Home, the~~ effects of state income taxes and various permanent differences.

Our effective tax rate was 1830.80% ~~and 43.3%~~ for the three ~~and nine~~ months ended ~~August~~March 262, ~~2023, respectively~~2024. The effective ~~rates~~rate for the three ~~and nine~~ months ended ~~August~~March 262, ~~2023~~2024 ~~differ~~differs from the federal statutory rate of 21% primarily due to ~~the non-taxable gain on revaluation of contingent consideration associated with the acquisition of Noa Home,~~ increases in the valuation allowance placed on deferred tax assets associated with Noa Home, ~~and~~ the effects of state income taxes and various permanent differences.

27 of 32

PART I-FINANCIAL INFORMATION-CONTINUED
BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES
MARCH 1, 2025
(Dollars in thousands except share and per share data)

Liquidity and Capital Resources

Cash Flows

Cash used in operations for the first ~~nine~~quarter ~~months~~ of fiscal ~~2024~~2025 was $~~2,323~~52 compared to cash ~~provided~~used byin operations of $107,~~249~~739 for the first ~~nine~~quarter of fiscal ~~2023~~2024, representing aan ~~decrease~~improvement of $127,~~572~~687 in cash flows from operations. This ~~decrease~~increase was primarily the result of improved operating income and changes in working capital due to the timing impact of expenditures as a result of an additional week in the first quarter of 2024 ~~coupled with lower net income~~.

Our overall cash position declined $143,~~078~~489 during the first ~~nine~~quarter ~~months~~ of ~~2024~~2025. During the first ~~nine~~quarter ~~months~~ of fiscal ~~2024~~2025, we spent $~~4,720~~871 on purchases of property and equipment primarily consisting of the upfit of the new Tampa, Florida and Houston, Texas stores that opened in the first quarter of 2024, final payments on the Austin, Texas store remodel, update of the façade of the Greensboro, North Carolina store location and expenditures related to various information technology and manufacturing plant projects. We also paid $41,~~909~~734 in dividends during the first ~~nine~~quarter ~~months~~ of ~~2024~~2025. ~~During~~We ~~the~~repurchased ~~second~~$721 ~~quarter~~ of ~~2024 we resumed purchasing~~ shares under our stock repurchase program ~~and repurchased $1,127~~ during the first ~~nine~~quarter ~~months~~ of ~~2024~~2025 compared to ~~$4,056~~no ~~repurchased~~repurchases in the prior year period. We expect capital expenditures for the full year to range from $68 million to $812 million. As of ~~August~~March 311, ~~2024~~2025, $2019,~~696~~682 remains available for future purchases under our stock repurchase plan. With cash and cash equivalents and short-term investments totaling $56,~~163~~422 on hand at ~~August~~March 311, ~~2024~~2025, expected future operating cash flows and the availability under our credit line noted below, we believe we have sufficient liquidity to fund operations for the foreseeable future.

32 of 37

PART I-FINANCIAL INFORMATION-CONTINUED

BASSETT FURNITURE INDUSTRIES INCORPORATED AND SUBSIDIARIES

AUGUST 31, 2024

(Dollars in thousands except share and per share data)

Debt and Other Obligations

On May 15, 2024, we entered into the Credit Facility with our bank. This ~~credit~~Credit ~~facility~~Facility provides for a line of credit of up to $25,000. At ~~August~~March 311, ~~2024~~2025, we had $65,~~013~~682 outstanding under standby letters of credit against our line. The line bears interest at the One-Month Term Secured Overnight Financing Rate (“One-Month Term SOFR”) plus 1.75% and is secured by our accounts receivable and inventory. Our bank charges a fee of 0.25% on the daily unused balance of the line, payable quarterly. Under the terms of the Credit Facility, Consolidated Minimum Tangible Net Worth shall at no time be less than $120,000. In addition, we must maintain the following financial covenants, measured quarterly on a rolling twelve-month basis and commencing as of the end of the first fiscal quarter after the first date that the used commitment (the sum of any outstanding advances plus standby letters of credit) equals or exceeds $8,250:

●

Consolidated Fixed Charge Coverage Ratio of not less than 1.2 times and

●

Consolidated Lease Adjusted Leverage to EBITDAR Ratio not to exceed 3.35 times.

Since our used commitment was less than $8,250 at ~~August~~March 311, ~~2024~~2025, we were not required to test the Consolidated Fixed Charge Coverage Ratio or the Consolidated Lease Adjusted Leverage to EBITDAR Ratio. Had we been required to test those ratios, we would not have been ~~able~~in tofull ~~achieve the required levels for either ratio~~compliance. Consequently, our availability under the Credit Facility is currently limited to an additional $2,~~237~~568.

We lease land and buildings that are used in the operation of our Company-owned retail stores as well as in the operation of one of our licensee-owned stores, and we lease land and buildings used in our wholesale manufacturing operations. We also lease local delivery trucks used in our retail segment. The present value of our obligations for leases with terms in excess of one year at ~~August~~March 311, ~~2024~~2025 is $~~104~~101,~~133~~742 and is included in our accompanying condensed consolidated balance sheet at ~~August~~March 311, ~~2024~~2025. We were contingently liable under licensee lease obligation guarantees in the amount of $54,~~226~~885 at ~~August~~March 311, ~~2024~~2025. The remaining terms under these lease guarantees extend for six years. See Note 10 to our condensed consolidated financial statements for additional details regarding our lease guarantees.

Investment in Retail Real Estate

We have a substantial investment in real estate acquired for use as retail locations and occupied by Company-owned retail stores. Such real estate is included in property and equipment, net, in the accompanying condensed consolidated balance sheets and consists of eight properties with an aggregate square footage of 203,465 and a net book value of $2423,~~306~~969 at ~~August~~March 311, ~~2024~~2025.

28 of 32

PART I-FINANCIAL INFORMATION-CONTINUED
BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES
MARCH 1, 2025
(Dollars in thousands except share and per share data)

Critical Accounting Policies and Estimates

There have been no material changes to our critical accounting policies and estimates from the information provided in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, included in our Annual Report on Form 10-K for the fiscal year ended November 2530, ~~2023~~2024.

Off-Balance Sheet Arrangements

We utilize stand-by letters of credit in the procurement of certain goods in the normal course of business. In addition, we have guaranteed certain lease obligations of licensee operators for some of their store locations. See Note 910 to our condensed consolidated financial statements for further discussion of lease guarantees, including descriptions of the terms of such commitments and methods used to mitigate risks associated with these arrangements.

33 of 37

PART I-FINANCIAL INFORMATION-CONTINUED

BASSETT FURNITURE INDUSTRIES INCORPORATED AND SUBSIDIARIES

AUGUST 31, 2024

(Dollars in thousands except share and per share data)

Contingencies

We are involved in various legal and environmental matters which arise in the normal course of business. Although the final outcome of these matters cannot be determined, based on the facts presently known, it is our opinion that the final resolution of these matters will not have a material adverse effect on our financial position or future results of operations. See Note 10 to our condensed consolidated financial statements for further information regarding certain contingencies as of ~~August~~March 311, ~~2024~~2025.

Item 3. Quantitative and Qualitative Disclosure about Market Risk:

We are exposed to market risk from changes in the value of foreign currencies. Substantially all of our imports purchased outside of North America are denominated in U.S. dollars. Therefore, we believe that gains or losses resulting from changes in the value of foreign currencies relating to foreign purchases not denominated in U.S. dollars would not be material to our results from operations in fiscal ~~2024~~2025. We are also exposed to foreign currency market risk through our investment in Noa Home. Our investment in Noa Home is subject to changes in the value of the Canadian dollar versus the U.S. dollar. Additionally, Noa Home is exposed to other local currency fluctuation risk through its operations in Singapore, the United Kingdom and the United States. The impact of currency fluctuations on our financial position and results of operations of Noa Home has not been significant.

We are exposed to market risk from changes in the cost and availability of raw materials used in our manufacturing processes, principally wood, woven fabric, and foam products. The cost of foam products, which are petroleum-based, is sensitive to changes in the price of oil.

We are also exposed to commodity price risk related to diesel fuel prices for fuel used in our retail segment for home delivery as well as through amounts we are charged for logistical services by our service providers. We manage our exposure to that risk primarily through the application of fuel surcharges to our customers.

We have potential exposure to market risk related to conditions in the commercial real estate market. Our retail real estate holdings of $2423,~~306~~969 at ~~August~~March 311, ~~2024~~2025 for Company-owned stores could suffer significant impairment in value if we are forced to close additional stores and sell or lease the related properties during periods of weakness in certain markets. Additionally, if we are required to assume responsibility for payment under the lease obligations of $54,~~226~~885 which we have guaranteed on behalf of certain licensees as of ~~August~~March 311, ~~2024~~2025 we may not be able to secure sufficient sub-lease income in the current market to offset the payments required under the guarantees. We are also exposed to risk related to conditions in the commercial real estate rental market with respect to the right-of-use assets we carry on our balance sheet for leased retail store locations, manufacturing and warehouse facilities. At ~~August~~March 311, ~~2024~~2025, the unamortized balance of such right-of-use assets used in continuing operations totaled $9089,~~076~~307. Should we have to close or otherwise abandon one of these leased locations, we could incur additional impairment charges if rental market conditions do not support a fair value for the right of use asset in excess of its carrying value.

Item 4. Controls and Procedures:

The Company’s principal executive officer and principal financial officer have evaluated the Company’s disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based upon their evaluation, the principal executive officer and principal financial officer concluded that the Company’s disclosure controls and procedures are effective. There has been no change in the Company’s internal control over financial reporting during the Company’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

3429 of 3732

PART II - OTHER INFORMATION BASSETT FURNITURE INDUSTRIES INCORPORATED AND SUBSIDIARIES MARCH 1, 2025 (Dollars in thousands except share and per share data)

BASSETT FURNITURE INDUSTRIES INCORPORATED AND SUBSIDIARIES

AUGUST 31, 2024

(Dollars in thousands except share and per share data)

Item 1. Legal Proceedings

None

Item 1A. Risk Factors

We discuss in our Annual Report on Form 10-K for the year ended November 25, 2023 various risks that may materially affect our business. We use this section to update this discussion to reflect material developments since our Form 10-K was filed.

We rely extensively on computer systems to process transactions, summarize results and manage our business. Disruptions in both our primary and back-up systems could adversely affect our business and operating results.

Our primary and back-up computer systems are subject to damage or interruption from power outages, computer and telecommunications failures, computer viruses, security breaches, natural disasters and errors by employees. Though losses arising from some of these issues would be covered by insurance, interruptions of our critical business computer systems or failure of our back-up systems could reduce our sales or result in longer production times. If our critical business computer systems or back-up systems are damaged or cease to function properly, we may have to make a significant investment to repair or replace them. For example, we disclosed a cybersecurity incident in Item 1.05 of Current Reports on Form 8-K and 8-K/A filed on July 15, 2024 and August 6, 2024, respectively, relating to the detection of unauthorized occurrences on a portion of our information technology (IT) systems.

Item 2. Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities

The following table summarizes the stock repurchase activity by or on behalf of the Company or any “affiliated purchaser,” as defined by Rule 10b-18(a)(3) of the Exchange Act, for the three months ended ~~August~~March 311, ~~2024~~2025 and the approximate dollar value of shares that may yet be purchased pursuant to our stock repurchase program:

	Total Shares Purchased		Average Price Paid		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)		Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1)
June 2, 2024 - July 6, 2024		21,472	$	13.97		21,472	$	21,033
December 1, 2024 - January 4, 2025		24,522	$	14.39		24,522	$	20,051
July 7, 2024 - August 3, 2024		4,528	$	13.59		4,528	$	20,972
January 5, 2025 - February 1, 2025		22,810	$	13.96		12,975	$	19,868
August 4, 2024 - August 31, 2024		20,843	$	13.24		20,843	$	20,696
February 2, 2025 - March 1, 2025		12,315	$	15.12		12,315	$	19,682

(1) The Company is authorized to repurchase Company stock under a plan which was originally announced in 1998. On March 9, 2022, the Board of Directors increased the remaining limit of the repurchase plan to $40,000. At ~~August~~March 311, ~~2024~~2025, $2019,~~696~~682 remained available for share repurchases under the plan.

Item 3. Defaults Upon Senior Securities

None.

Item 5. Other Information

(c) During the fiscal quarter ended ~~August~~March 311, ~~2024~~2025, none of our directors or officers (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934, as amended) adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement (in each case, as defined in Item 408(a) of Regulation S-K) for the purchase or sale of the Company’s securities.

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PART II - OTHER INFORMATION-CONTINUED BASSETT FURNITURE INDUSTRIES INCORPORATED AND SUBSIDIARIES MARCH 1, 2025 (Dollars in thousands except share and per share data)

BASSETT FURNITURE INDUSTRIES INCORPORATED AND SUBSIDIARIES

AUGUST 31, 2024

(Dollars in thousands except share and per share data)

Item 6. Exhibits

a. Exhibits:

a.	Exhibits:

	Exhibit 3a – Articles of Incorporation as amended to date are incorporated herein by reference to the Exhibit to Form 10-Q for the fiscal quarter ended February 28, 1994.

	Exhibit 3b – By-laws as amended to date are incorporated herein by reference to Exhibit 3.1 to Form 8-K filed with the SEC on January 16, 2024.

	Exhibit 10 – Eighth Amended and Restated Credit Agreement with Truist Bank dated May 15, 2024 is incorporated herein by reference to Exhibit 10 to Form 10-Q filed with the SEC on July 11, 2024. Registrant hereby agrees to furnish the SEC, upon request, other instruments defining the rights of holders of long-term debt of the Registrant.

	Exhibit 31a – Chief Executive Officer’s certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

	Exhibit 31b – Chief Financial Officer’s certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

	Exhibit 32a – Chief Executive Officer’s certification pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

	Exhibit 32b – Chief Financial Officer’s certification pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

	Exhibit 101.INS Inline XBRL Instance

	Exhibit 101.SCH Inline XBRL Taxonomy Extension Schema

	Exhibit 101.CAL Inline XBRL Taxonomy Extension Calculation

	Exhibit 101.DEF Inline XBRL Taxonomy Extension Definition

	Exhibit 101.LAB Inline XBRL Taxonomy Extension Labels

	Exhibit 101.PRE Inline XBRL Taxonomy Extension Presentation

	Exhibit 104. Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

~~Exhibit~~31 ~~3a – Articles~~ of ~~Incorporation as amended to date are incorporated herein by reference to the Exhibit to Form 10-Q for the fiscal quarter ended February 28, 1994.~~32

Exhibit 3b – By-laws as amended to date are incorporated herein by reference to Exhibit 3.1 to Form 8-K filed with the SEC on January 16, 2024.

Exhibit 10 – Eighth Amended and Restated Credit Agreement with Truist Bank dated May 15, 2024 is incorporated herein by reference to Exhibit 10 to Form 10-Q filed with the SEC on July 11, 2024. Registrant hereby agrees to furnish the SEC, upon request, other instruments defining the rights of holders of long-term debt of the Registrant.

Exhibit 31a – Chief Executive Officer’s certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Exhibit 31b – Chief Financial Officer’s certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Exhibit 32a – Chief Executive Officer’s certification pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Exhibit 32b – Chief Financial Officer’s certification pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Exhibit 101.INS Inline XBRL Instance

Exhibit 101.SCH Inline XBRL Taxonomy Extension Schema

Exhibit 101.CAL Inline XBRL Taxonomy Extension Calculation

Exhibit 101.DEF Inline XBRL Taxonomy Extension Definition

Exhibit 101.LAB Inline XBRL Taxonomy Extension Labels

Exhibit 101.PRE Inline XBRL Taxonomy Extension Presentation

Exhibit 104. Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.

BASSETT FURNITURE INDUSTRIES, INCORPORATED

/s/	Robert H. Spilman, Jr.
Robert H. Spilman, Jr., Chairman and Chief Executive Officer
October 10, 2024
April 3, 2025

/s/ J. Michael Daniel J. Michael Daniel, Senior Vice President and Chief Financial Officer October 10, 2024

/s/	J. Michael Daniel
J. Michael Daniel, Senior Vice President and Chief Financial Officer
April 3, 2025

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