Bassett Furniture Industries, Incorporated · NASDAQ:BSET
Bassett Furniture Industries — Proxy Contest (April 2008)
12 slides from Bassett Furniture Industries's proxy contest presentation, Apr 2, 2008
Slide 1: Bassett Furniture: A Lack of Leadership
Bassett Furniture A Lack of Leadership April 2, 2008
Slide 2: Economic Environment
Economic Environment o The domestic furniture business has been in a several year contraction. o Asian imports have severely undercut pricing, driving consumers away from sellers of domestically produced products. o The contraction of the housing market has also reduced consumer demand for new furni
Slide 3: Bassett Has a Unique Balance Sheet
Bassett Has a Unique Balance Sheet o Cash and Investments on 11/24/07 of $80.462 million. o International Home Furnishings Center (Recorded as a $12.24 million liability on the 11/24/07 balance sheet). o Hedge Fund investments of $51.78 million, Marketable Securities of $25.15 million. o A 47% owner
Slide 4: What is Bassett's business?
What is Bassett's business? o The IHFC and the Hedge Funds have subsidized the furniture business for years. o As the next page demonstrates, Bassett Furniture has not been able to generate stable cash flow from its furniture operations this decade. o In fact, combining all the operational losses si
Slide 5: Erosion of Capital This Century
Bast Furie Erosionof Capita This Century Tamm Sma ‘Net Losses on Furdture Business Income Before Taxes eo (13959) 6485 13.1951 48eT§S 9.10 (B61) Income tom ivestrerts oa 57318643 70D 550828277 Income torn HEC BIB 528 (4464 OSG IS] 4715 (GSD) ‘Net income (Joss) anieutettetofuriture business (1) aay (
Slide 6: Why does this behavior continue?
Why does this behavior continue? o As seen on the next two slides, neither management or the BOD own much stock. o They do have options, but with much higher strike prices than the present price of Bassett Furniture. o They do know furniture manufacturing. But discussions about capital allocation de
Slide 7: Director share and option ownership
Actual Director Name Shares Options Shares. Peter W. Brown, M.D. 13,915 3,000 10915 Paul Futon 39,724 15,000 24724 Howard H. Haworth 12,603 6000 6803 George W. Henderson 3622 E 3822 Kristina Herbig - : - Dale C. Pond 8844 4.500 4344 Robert H. Spillrnan Jr 280873 195,668 «84 205 Wiliam C, Wampler, Jr
Slide 8: EquityCN
EquityCN <MENU> to Undo “wsas" 95)_Options _.}._ 96) Save/Alert BASSETT FURN(BSET US)
Slide 9: EquityCN
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Slide 10: It's about Capital Allocation!
It's about Capital Allocation! o The furniture business employs 1,500 people, unprofitably, with high operational risks. o The Hedge Fund investments are farmed out. o The IHFC is managed by a separate LLC. All the value resides in the least risky assets, yet management is proposing to dedicate capi
Slide 11: Costa Brava's Plan
Costa Brava's Plan o We have BOD nominees with vast experience over many different businesses. o We have BOD nominees with experience in real estate. o We have BOD nominees with experience in Funds of Funds/Hedge Funds. Bassett is over capitalized. Let's return much of the liquid capital back to sha
Slide 12: Management Says They Need It All
Management Says They Need It All o But they haven't used it wisely this decade. o They still will have substantial cash remaining. o They still will have the $90 million in IHFC equity remaining.
Bassett Furniture Industries — Proxy Contest (April 2008) on 6ix