• fluctuations in the cost and availability of raw materials, fuel, labor,

delivery costs and sourced products, including those which may result from

general price inflation, supply chain disruptions and the imposition of new or

• competitive conditions in the home furnishings industry

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

• ability of our customers and consumers to obtain credit

• the profitability of the Bassett stores (independent licensees and

• ability to implement our Company-owned retail strategies and realize the

benefits from such strategies, including our initiatives to expand and improve

• results of marketing and advertising campaigns

• effectiveness and security of our information and technology systems and

possible disruptions due to cybersecurity threats, including any impacts from a

• future tax legislation, or regulatory or judicial positions

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

• concentration of domestic manufacturing, particularly of upholstery products,

and the resulting exposure to business interruption from accidents, weather and

• the impact of the COVID-19 pandemic and resulting supply chain disruptions upon

our ability to maintain normal operations at our retail stores and

manufacturing facilities, and the resulting effects any future interruption of

those operations may have upon our financial condition, results of operations

and liquidity, as well as the impact of the pandemic upon general economic

conditions, including consumer spending and the strength of the housing market

During the second quarter of 2022, we acquired a 25,000 square foot store property in Tampa, Florida for $7,668. We are currently in the process of developing plans for store buildout and upfit with a planned opening date in the second quarter of 2023.

We currently have 62 Corporate-owned stores operating and expect to end fiscal 2022 with 58 stores.

Sale of the Assets of Zenith Freight Lines, LLC

Results of Continuing Operations - Periods ended May 28, 2022 compared with the periods ended May 29, 2021:

Consolidated results of continuing operations for the three and six months ended May 28, 2022 and May 29, 2021 are as follows:

We have strategically aligned our business into two reportable segments as described below:

Our former logistical services segment which represented the operations of Zenith is now presented as discontinued operations.

Reconciliation of Segment Results to Consolidated Results of Operations

Net sales of furniture and accessories $ 87,501 $ 75,620 $

Net sales of furniture and accessories $ 76,034 $ 62,483 $

Net sales of furniture and accessories $ 170,986 $ 139,727 $

Cost of furniture and accessories sold 120,792 65,390

Net sales of furniture and accessories $ 146,298 $ 122,878 $

Cost of furniture and accessories sold 98,146 59,628

Notes to segment consolidation table:

(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

(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

Wholesale sales by major product category are as follows:

Analysis of Quarterly Results - Wholesale

Analysis of Year-to-Date Results - Wholesale

Retail - Company-owned Stores Segment

(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

Retail sales by major product category are as follows:

(1) Includes the sale of goods other than Bassett-branded products, such as

accessories and bedding, and also includes the sale of furniture protection

Quarterly Analysis of Results - Retail

Year-to-Date Analysis of Results - Retail

Discontinued Operations - Logistical Services

Other Items Affecting Net Income

Investment in Retail Real Estate

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 27, 2021.

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