Bassett Furniture Industries, Incorporated

Good day, and thank you for standing by. Welcome to the Bassett Furniture fourth quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Mike Daniels, CFO. Please go ahead.

Thank you, DeeDee, for the introduction. Welcome to the Bassett Furniture Industry's earnings call for the fourth quarter of fiscal 2025, which ended November 29, 2025. Joining me today is our chairman and CEO, Rob Spillman. We issued our earnings release for the fourth quarter yesterday after the market closed, and it's available on our website. We plan to file our Form 10-K with the Securities and Exchange Commission in the next couple of days. After today's remarks, Rob and I will open up for questions. We will also post a transcript of this call on Bassett's Investor Relations website following the call. During this call, certain statements we make may be considered forward-looking statements and inherently involve risks and uncertainties that could cause actual results to differ materially from management's present view. These statements are made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. The company cannot guarantee the accuracy of any forecast or estimate, nor does it undertake any obligation to update such forward-looking statements. Other filings with the SEC describing risks related to our business are available on our corporate website under the tab. Now, I'll turn things over to Rob. Rob?

Okay. Good morning, everyone. Thank you, Mike. The reality is that the market has not changed much from what we saw throughout the first three quarters of fiscal 2025. Housing sales very slow and this of course impacts our business. So we're pleased that given this environment and with our fourth quarter closed on November 29th, the day after Black Friday, we increased sales and profits. Last year at this time, we noted that our 2024 restructuring plan was mostly complete. But I want to point out that the restructuring mindset and the focus of running a leaner, smarter business is as much on the front burner today as it was then. We're still at it, taking costs out, driving operating efficiencies, integrating technology, emphasizing product newness, innovation, and design, along with adapting to a changing marketplace. We've managed through the tariffs, and Bassett's flexible sourcing model is central to our company's ability to be resilient. We are hopeful that the tariff situation is stabilized, but we will react again if that changes. Bassett finished the year with a solid fourth quarter, increasing consolidated revenue 5.1%, And excluding the impact of last year's NOAA home closure, consolidated revenues were up 6.4%. Wholesale sales were up 8.3%. Retail sales were strong as well, increasing 7.9%. Two years ago, we invested in a fresh approach to Bassett Case Goods, and those investments have begun to pay off for us. Our wood business needed to be reinvented and pleased with the progress we've made. Sales of these offerings were up over 50% in the quarter. The Copenhagen line has been in retail locations for a year now and is a top seller across all product categories. Our homework line of desk and related office products has successfully repositioned us in the home office category. On the domestic front, our U.S.-made hideaway solid dining program, solid wood dining, is a good start. In upholstery, sales of true custom leather that we launched in 2023 continues to exceed expectations, and sales of that program were up 19% in the quarter. We are also selling better fabrics, and we have consolidated our grading system to simplify the special order transaction and to offer more obvious values on better fabrics. The reception to our new styles at the High Point Market indicates that club level motion is poised for further growth in 2026. And we are also excited about the innovation behind our Z4 sleeper program that makes for easy opening with this European hardware. Our Bassett outdoor line is being absorbed into the Lane Venture outdoor collection, which we have owned for eight years, resulting in the Lane Venture brand being offered in the Bassett home furnishing stores starting this month. Lane Venture has very strong brand recognition in outdoor. This will be a more efficient operating model for us with fewer assets to support and will generate better inventory turns. We tweaked our marketing activities in the quarter, again supplementing digital with print and spot TV. Provide assets to our licensed stores and many took the opportunity to run local TV ads to drive traffic in their markets. We were encouraged by the ROI we saw on our direct mail pieces in the third and fourth quarter, and this is important to our strategy for 2026. We're moving from one catalog to two this year to supplement our digital plans. During the past year, our teams worked hard on enhancing the consumer-facing e-commerce site, and e-commerce sales were up 14% in the quarter. Conversion rates continue to rise double digits. For the full year, e-commerce sales were up 27%. We will continue to add stores in 2026 with Cincinnati opening in the second quarter and Orlando opening in the third quarter. Both are new markets for us. We will also relocate our existing Long Island store in Westbury to Melville, New York in September. Things are certainly changing in the open market furniture world outside of the Bassett store network. The retirement of independent furniture store operators is a nationwide generational trend that has picked up steam in the post-pandemic world. We have several strategies in place to adapt and continue to grow our wholesale channels. We are adding new elements to both of our dedicated distribution concepts. The 3 to 5,000 square foot Bassett Design Center is our largest channel outside of retail. Sales were up 5% in the BDCs in the quarter. Our Bassett Custom Studio, the 1,000 square foot footprint, specializing in true custom upholstery, we're up 21% in the quarter. We now have 57 Bassett Custom Studio partners. Another important element of our strategy is accelerating our pursuit of America's robust interior design community. We have implemented new programs to address the needs of the design trade, and this is a priority for 2026. In a similar vein, we have launched a new division, Bassett Hospitality, to grow sales we've been building in the boutique, hotel, country club, and senior living channels. Under experienced leadership, we're building a portfolio of table stakes assets. to address this business properly. As it closed the fiscal year with a strong balance sheet, Mike will get into the financial details on the quarter. Our fiscal 2026 is well underway. We believe the tariff situation stabilized and we've adjusted prices to account for the impact. We will reassess if that changes. Industry data points to ongoing challenges with housing and mortgage rates. So we must control what we can, molding a leaner organization and business model to position us well in this environment. Our team is smaller. We reduced headcount by 11% last year, and we recently reduced headcount again by 4%. We made meaningful progress in 2025. from positioning buses to weather a marketplace where discretionary demand is moderated. Innovation, change, and operating discipline remain critical to our future. After 124 years of history, our future is dependent on these changes, flexibility, and new ideas. Now, I'll turn things over to Mike. Thank you, Rob.