Shares of Bassett Furniture Industries Inc (NASDAQ: BSET) are up 30% on Monday after the furniture manufacturer and retailer announced an $87 million deal with J.B. Hunt Transport Services Inc. Bassett also reported its Q4 results this morning.
Fourth-quarter financial results
Bassett said its net income for the fourth quarter printed at $5.0 million that translates to 52 cents a share. In the comparable quarter of last year, it had posted a higher $6.5 million in net income or 65 cents per share.
On the plus side, however, sales jumped 9.7% YoY to $129.9 million. The Virginia-headquartered company said it minimised backlog in the recent quarter but still has $90.1 million worth of wholesale backlog versus $54.9 million last year and $20 million in 2019.
Including the price action on Monday, BSET is now up 5.0% for the year. The $174 million company trades at a PE multiple of 9.02.
J.B. Hunt to buy Bassett’s furniture hauler
In a separate announcement, Bassett Furniture said J.B. Hunt has agreed to buy its Zenith Freight Lines business for $87 million. The Nasdaq-listed company plans on using the proceeds to return money to shareholders via a special dividend and share repurchase.
Bassett will increase its regular quarterly dividend as well. In the earnings press release, it agreed that stock outages have improved in recent weeks but said:
For the past five quarters, we’ve passed higher costs to our customers. Unfortunately, our spiralling costs coupled with late shipments from suppliers have eroded our wholesale margins as we continue to produce goods today with higher material costs than when finished goods were sold months ago.
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