Bassett Furniture Industries, Incorporated · NASDAQ:BSET
Bassett Furniture Industries — Investor Presentation (March 2016)
32 slides from Bassett Furniture Industries's investor presentation, Mar 1, 2016
Slide 1: Paramus Investor Meeting
Bassett PARAMUS INVESTOR MEETING NASDAQ; BSET March 2016
Slide 2: Safe Harbor
SAFE HARBOR Certain of the statements in this presentation, particularly those preceded by, followed by or including the words “believes,” “expects,” “anticipates,” “intends, “estimates,” or similar expressions, or those relating to or anticipating financial resukts for periods beyond the end of the
Slide 3: Agenda
AGENDA (gi + Welcome + Review Growth Strategy * Store Tour + 5 Year Financial Look + Qtr
Slide 4: Introduction: Setting the Table
INTRODUCTION: SETTING THE TABLE Leading manufacturer, retailer and wholesale Established Brand of high quality,mid-priced furniture 1113 years of crafting furniture for families Consistently strong sales growth Growing Company 19 of the last 20 quarters with comp store sales increases Consolidated 2
Slide 5: The Landscape
THE LANDSCAPE $ss ie RH AARHAUS rottenyeany Bassett CratesBarrel $$ ® LA@eBoy HAVERTYS
Slide 6: Company history timeline
1902-1996 1997-2006 2007-2010 DRAMATIC GREAT CHANGE RECESSION GROWTH
Slide 7: Growth & Diversification (1902-1996)
1902-1996 1997-2006 2007-2010 2011- GROWTH & DRAMATIC GREAT DIVERSIFICATION - CHANGE RECESSION GROWTH Largest domestic + Asian manufacturers furniture storm US shores manufacturer + Closed 25+ factories Consistently + Began retail strategy profitable + Develop custom Sold to manufacturing model inde
Slide 8: Dramatic Change (1997-2006)
1902-1996 1997-2006 2007-2010 2011- GROWTH & DRAMATIC GREAT DIVERSIFICATION CHANGE RECESSION GROWTH Began closing under-performing stores + Takeover select businesses + Building retail strategy + culture + Design Culture + Custom Capabilities
Slide 9: Great Recession and Growth
1902-1996 1997-2006 2007-2010 2011- GROWTH & DRAMATIC GREAT DIVERSIFICATION CHANGE RECESSION GROWTH ‘+ Transformed balance sheet + Upgrade human talent in stores + Launched partnership with HGTV + Strong store comp growth + Open smaller, successful stores + Reinstated dividend + Acquired Zenith Logi
Slide 10: Positioned to drive enhanced profitability
DRAMATIC GREAT CHANGE RECESSION Positioned to drive enhanced profitability
Slide 11: What has accelerated our growth?
What has accelerated our growth? ‘a 5 . o IE SERVICE & =); J LO®ISTICS EXPERIENCE! 2 y -epggaaie
Slide 12: Reveal
ae REVEAL
Slide 13: Perfecting the Makeover Experience
Perfecting‘the Makeover Expegiente
Slide 14: The Makeover Experience
The Makeover Experience 1 Over 400 skilled designers Rigorously trained to provide design expertise Results in higher average sale + return customer experience
Slide 15: HGTV Home Design Studios partnership
Bassett Began in 2012, renewed thru2019 Transformed desigit centers to HGTV HOME Design Studios to showcase custom upholstery options: sizes, shapes, finishes + fabrics Our team brings the HGTV show experience to life, one client at a time
Slide 16: Custom Furniture
Custom Furniture Built + delivered for each customer in under 30 days Over 60% of our sales our handcrafted in the USA
Slide 17: Growth of Upholstery Cellular Manufacturing
Growth of Upholstery Cellular Manufacturing = One team crafting a piece of furniture as designed by our customer Grew production 80% in 5 years New facility to serve Western US
Slide 18: BenchMade: America's Original
aN AMERICA, ORIGINAL Bassett | bell BenchMade launched. as artisan crafted solid wood dining eel made in Bassett Enthusiastic response led to entertainment + occasional line for 2016
Slide 19: Supply Chain Capabilities
Supply Chain Capabilities Acquisition of Zenith Logistics. Culmination of 16 year partnérship Essential in speed to market and HDL experience Growing player in domestic freight, home delivery; and warehousing
Slide 20: Making the Store More Productive
Making the Store More Productive Increase the number of upholstery settings on the'store floor Measuring +-analyzing each furniture “pad” for productivity Build accessory programs
Slide 21: Investing in the website to grow ecommerce and store sales
Investing in the website to’ grow ecommerce + store sales
Slide 22: Showcasing the Product + Experience
PRESIDENTS’ DAY SALE ‘SAVE 25%" Showcasing the Product + Experience Increasing information available at finger tips Align store + online experience Make custom product easier to understand
Slide 23: Store Tour
STORE TOUR Design Consultants + Product Look
Slide 24: Financial Overview
Slide 25: Consolidated 5-Year Financial Results
Consolidated"5-Year Financial Results 2015 2014 2013 2012 2011 $ in millions Net Sales $ 430.9 $ 340.7 $3213 $ 269.7 $ 253.2 Income (Loss)from Operations $ 26.0 $515.1 $ 100 $f § (20.6) 6.0% 44% 3.1% 1.9% 8.1% Net Income S$ 204 oy) 93. GL Ot $ 267 iSeeoes EPS S$ 188 $ 0.87 $ 0.47 $ 241 $ 4.79 Adjust
Slide 26: 2015 Sources of Revenue
<= “Sad, See 2015 Sources of Revenue = 7 Licensed Retail \ $43.3MM 11%
Slide 27: 2015 Sources of Revenue - Annualized
—— SS ENGI), See 2015 Sources of Revenue- Annualized l = " Licensed Retail $48.3MM A 11%
Slide 28: Corporate Retail 5-Year Financial Results
| ee | Corporate Retail 5-Year Financial Results iil 2015 2014 2013 2012 2011 Net Sales $ 249.4 $ 216.6 $ 199.4 $ 1716 $ 148.0 Income (Loss}from Operations $ 6.2 $ (0.5) $==(1:5): $ (2.4) $ (4.5) 2.5% 0.2% 0.8% 12% 3.0% Comp Store Sales Increases 13.3% 5.7% 56% 9.1% 48% Store Opening Losses $ 07 S22
Slide 29: Capital Allocation
Capital Allocation 2015 2014 2013 2015 (2014 2013 Foo ON NEE > Dividends $5.8 g ¥ Fe aT ms $2.8 $0.5 sa Wiel [Es ES Operating Cash Flow $32.4 $30.0 $10.6 Debt
Slide 30: Looking Ahead
Looking Ahead Long Term Shareholder Value Creation Avg. 3-5% annual comp store sales increase Avg. opening 3-5 net new stores per year Leverage wholesale cost structure which can support significantly larger company Spend $20-$25 million on capital expenditures annually Continue providing shareholde
Slide 31: Year Goals
5 Year Goals Grow top line at 5-7% CAGR Grow operating profit at: 12-14% CAGR Operating profit at 8-9% of consolidated sales Reward BSET shareholders thru increasing dividend Return 40-60% of net income to shareholders thru dividend + share repurchase
Slide 32: Thank You. Questions?
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