Financial Analysis

8. Bank Credit Facility On May 15, 2024, we entered into the Eighth Amended and Restated Credit Agreement with our bank (the Credit Facility). This Credit Facility provides for a line of credit of up to $25,000. At May 30, 2026, we had $5,866 outstanding under standby letters of credit against our line. The line bears interest at the One-Month Term Secured Overnight Financing Rate (One-Month Term SOFR) plus 1.75% and is secured by our accounts receivable and inventory. Our bank charges a fee of 0.25% on the daily unused balance of the line, payable quarterly. Under the terms of the Credit Facility, Consolidated Minimum Tangible Net Worth (as defined in the Credit Facility) shall at no time be less than $120,000. In addition, we must maintain the following financial covenants, measured quarterly on a rolling twelve-month basis and commencing as of the end of the first fiscal quarter after the first date that the used commitment (the sum of any outstanding advances plus standby letters of credit) equals or exceeds $8,250: Consolidated Fixed Charge Coverage Ratio (as defined in the Credit Facility) of not less than 1.2 times and Consolidated Lease Adjusted Leverage to EBITDAR Ratio (as defined in the Credit Facility) not to exceed 3.35 times. At May 30, 2026, we were in compliance with the Consolidated Minimum Tangible Net Worth requirement. Since our used commitment was less than $8,250 at May 30, 2026, we were not required to test the Consolidated Fixed Charge Coverage Ratio o …

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Quarter Ended May 30, 2026 May 31, 2025 (1) Wholesale Retail Total Wholesale Retail Total Bassett Custom Upholstery $ 19,132 $ 32,301 $ 51,433 $ 20,004 $ 30,998 $ 51,002 Bassett Leather Imports 4,012 772 4,784 3,917 333 4,250 Bassett Custom Wood 2,693 8,119 10,812 3,021 8,468 11,489 Bassett Casegoods 2,368 7,080 9,448 3,174 7,072 10,246 Accessories, mattresses and other (2) - 7,276 7,276 - 7,361 7,361 Consolidated net sales of furniture and accessories $ 28,205 $ 55,548 $ 83,753 $ 30,116 $ 54,232 $ 84,348 Six Months Ended May 30, 2026 May 31, 2025 (1) Wholesale Retail Total Wholesale Retail Total Bassett Custom Upholstery $ 37,111 $ 61,625 $ 98,736 $ 38,850 $ 62,185 $ 101,035 Bassett Leather Imports 8,103 1,319 9,422 8,030 568 8,598 Bassett Custom Wood 5,514 16,261 21,775 6,006 16,174 22,180 Bassett Casegoods 5,272 14,807 20,079 6,098 13,724 19,822 Accessories, mattresses and other (2) - 14,081 14,081 - 14,875 14,875 Consolidated net sales of furniture and accessories $ 56,000 $ 108,093 $ 164,093 $ 58,984 $ 107,526 $ 166,510

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3. Financial Instruments and Investments Financial Instruments Our financial instruments include cash and cash equivalents, short-term investments in certificates of deposit (CDs), accounts receivable, and accounts payable. Because of their short maturities, the carrying amounts of cash and cash equivalents, accounts receivable, and accounts payable approximate fair value. Investments Our short-term investments of $17,988 and $17,963 at May 30, 2026 and November 29, 2025, respectively, consisted of CDs. At May 30, 2026, the CDs had original terms averaging seven months, bearing interest at rates ranging from 2.0% to 4.1% and the weighted average remaining time to maturity was approximately three months and the weighted average yield of the CDs was approximately 3.6%. Each CD is placed with a federally insured financial institution and all deposits are within federal deposit insurance limits. Due to the nature of these investments and their relatively short maturities, the carrying amount of the short-term investments at May 30, 2026 and November 29, 2025 approximates their fair value.

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10. Commitments and Contingencies We are involved in various legal and environmental matters which arise in the normal course of business. Although the final outcome of these matters cannot be determined, based on the facts presently known, we believe that the final resolution of these matters will not have a material adverse effect on our financial position or future results of operations. Lease Guarantees We were contingently liable under licensee lease obligation guarantees in the amounts of $3,656 and $4,148 at May 30, 2026 and November 29, 2025, respectively. The remaining term under these lease guarantees extends for approximately five years. In the event of default by the licensee, we believe that the risk of loss is mitigated through a combination of options that include, but are not limited to, arranging for a replacement licensee or liquidating the collateral (primarily inventory). The proceeds of the above options are expected to cover the estimated amount of our future payments under the guarantee obligation, net of recorded reserves. The fair value of these lease guarantees (an estimate of the cost to the Company to perform on the guarantee) at May 30, 2026 and November 29, 2025 was not material. Lease Commitments At May 30, 2026, we had a commitment for one lease of real property which is expected to commence during fiscal 2026. This lease calls for total annual rents averaging approximately $403 per year for an initial term of ten years. The lease has two five …

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13. Revenue Recognition We recognize revenue when we transfer promised goods or services to our customers in an amount that reflects the consideration we expect to receive in exchange for those goods or services. For our wholesale and retail segments, revenue is recognized when the risks and rewards of ownership and title to the product have transferred to the buyer. At wholesale, transfer occurs and revenue is recognized upon the shipment of goods to independent dealers and licensee-owned BHF stores. At retail, transfer occurs and revenue is recognized upon delivery of goods to the customer. All wholesale and retail revenues are recorded net of estimated returns and allowances based on historical patterns. Our accounts receivable, net, which are associated with our wholesale segment, were $12,559, $14,410, $12,883 and $13,181 at May 30, 2026, November 29, 2025, May 31, 2025 and November 30, 2024, respectively. We typically collect a significant portion of the purchase price from our retail customers as a deposit upon order, with the balance typically collected at the time delivery is scheduled. These customer deposits are carried on our balance sheet as a current liability until delivery is fulfilled and amounted to $25,568, $24,969, $24,029 and $25,742 as of May 30, 2026, November 29, 2025, May 31, 2025 and November 30, 2024, respectively. Substantially all of the customer deposits held as of November 29, 2025 related to performance obligations that were satisfied during th …

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12. Segment Information We report segment information consistent with the way our chief operating decision maker (the CODM), a single individual who serves as our Board Chair, President and Chief Executive Officer, evaluates the operating results and performance of the Company. We have strategically aligned our business into two reportable segments as defined in ASC 280, Segment Reporting , and as described below: Wholesale. The wholesale home furnishings segment is involved principally in the design, manufacture, sourcing, sale and distribution of furniture products to a network of Bassett stores (Company-owned and licensee-owned retail stores) and independent furniture retailers. Our wholesale segment includes our wood and upholstery operations, which includes Lane Venture. Retail Company-owned stores. Our retail segment consists of Company-owned stores and includes the revenues, expenses, assets and liabilities and capital expenditures directly related to these stores and the Company-owned distribution network utilized to deliver products to our retail customers. In addition to the two reportable segments described above, we include our remaining business activities and assets in a reconciling category known as Corporate and other. This category includes the shared costs of corporate functions such as treasury and finance, information technology, accounting, human resources, legal and others, including certain product development and marketing functions benefiting both who …

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14. Changes to Stockholders Equity The following changes in our stockholders equity occurred during the three and six months ended May 30, 2026 and May 31, 2025: Quarter Ended Six Months Ended May 30, 2026 May 31, 2025 May 30, 2026 May 31, 2025 Common Stock: Beginning of period $ 43,249 $ 43,462 $ 43,256 $ 43,681 Issuance of common stock 85 87 148 166 Purchase and retirement of common stock (177 ) (139 ) (247 ) (437 ) End of period $ 43,157 $ 43,410 $ 43,157 $ 43,410 Common Shares Issued and Outstanding: Beginning of period 8,649,567 8,692,134 8,651,054 8,736,046 Issuance of common stock 16,956 17,454 29,584 33,189 Purchase and retirement of common stock (35,230 ) (27,737 ) (49,345 ) (87,384 ) End of period 8,631,293 8,681,851 8,631,293 8,681,851 Additional Paid-in Capital: Beginning of period $ - $ - $ - $ 6 Issuance of common stock 10 (3 ) 25 (1 ) Purchase and retirement of common stock (139 ) (163 ) (259 ) (311 ) Stock based compensation 129 166 234 306 End of period $ - $ - $ - $ - Retained Earnings: Beginning of period $ 120,484 $ 122,556 $ 121,128 $ 122,847 Net income for the period 2,039 1,918 3,155 3,772 Purchase and retirement of common stock (193 ) (135 ) (223 ) (546 ) Cash dividends declared and paid (1,713 ) (1,742 ) (3,443 ) (3,476 ) End of period $ 120,617 $ 122,597 $ 120,617 $ 122,597 Accumulated Other Comprehensive Income: Beginning of period $ 713 $ 781 $ 723 $ 793 Amortization of pension costs, net of tax (11 ) (12 ) (21 ) (24 ) End of period $ 702 $ 769 $ 7 …

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