Havertys Reports Earnings for First Quarter 2014

GlobeNewswire

Atlanta, Georgia, May 1, 2014 - HAVERTYS  (NYSE:HVT and HVT.A) reports earnings per share for the first quarter ended March 31, 2014 of $0.27 compared to $0.36 for the same period of 2013. The first quarter of 2013 included an out-of-period adjustment which favorably impacted gross profit by $0.8 million or $.02 per share after tax.  

Clarence H. Smith, chairman, president and CEO, said, "In early April we announced that first quarter comparable store sales were 0.9% lower than the same quarter last year when comps had been up 11.5%.  Earnings for the first quarter are slightly better than anticipated at the time of the sales release as we achieved very good gross profit margins due to our exclusive merchandise and pricing discipline and contained our fixed and discretionary costs.

We are glad to report that our sales momentum has picked up in April.  Our comparable store written business is currently trending up 7.5% quarter to date after adjusting for the Easter calendar shift.  Total written business is up 6.4% on top of the 19% produced last year for this period after adjusting for the calendar differences.  

Our store growth and repositioning is well underway as we work to open three new stores in our largest markets, including a smaller format designed for dense urban areas.  These combined with the three store relocations and two closures will increase our retail square footage about 1.8% by the end of 2014.  We believe measured expansion and our ongoing focus on the customer and her Havertys shopping experience will provide growth in the near and long term."

Financial Highlights

First Quarter 2014 Compared to First Quarter 2013

  • Total net sales declined 2.3% to $181.7 million.  Comparable store sales were down 0.9% from the 11.5% increase for the same period last year.  Comparable store sales increased 7.3% in 30 of our southern locations not impacted by the severe winter weather. 
  • Total written sales were up 0.9% and written comparable store sales were up 2.6%. Our stores are closed on Easter, so both of these amounts were adjusted downward 1.3% to compensate for that holiday falling in March last year and April this year.
  • Average written ticket continues to grow, up 5.1% over the comparable period and up 3.3% sequentially.  The custom order portion of upholstery sales increased 11.0%.
  • Gross profit margins increased 30 basis points to 53.8% as a percent of sales compared to 53.5%, which excludes the 45 basis point positive impact the adjustment noted above.
  •  Selling, general and administrative costs increased $1.0 million due to additional expenses for advertising of $0.6 million, higher warehouse and delivery costs of $0.9 million, partly offset by reduced administrative expenses of $0.4 million.  Total SG&A costs were 160 basis points higher due to the deleveraging of fixed and discretionary costs on the lower sales.
  • Pre-tax earnings of $10.0 million decreased 170 basis points to 5.5% from 7.2% as a percent of sales.
  • Our retail store count at March 31, 2014 was 119 versus 121 at March 31, 2013.

Expectations and Other

  • We expect that our annual gross profit margins for 2014 will be approximately 53.8%, slightly ahead of the adjusted 53.7% achieved in 2013.
  • Planned capital expenditures for 2014 are $35.0 million.


HAVERTY FURNITURE COMPANIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In Thousands, except per share data - Unaudited)

      Three Months Ended
March 31,
   2014       2013
Net sales   $ 181,737   $ 186,090
Cost of goods sold 83,875 85,781
      Gross profit 97,862 100,309
Credit service charges 81 86
      Gross profit and other revenue 97,943 100,395
     
Expenses:
      Selling, general and administrative 87,674 86,662
      Interest, net 273 278
      Provision for doubtful accounts 48 13
      Other (income) expense, net (8 ) (8 )
      87,987 86,945
     
Income before income taxes 9,956 13,450
Income tax expense 3,827 5,190
      Net income   $ 6,129   $ 8,260
     
Basic earnings per share:
      Common Stock   $ 0.27   $ 0.37
      Class A Common Stock   $ 0.26   $ 0.35
     
Diluted earnings per share:
      Common Stock   $ 0.27   $ 0.36
      Class A Common Stock   $ 0.26   $ 0.34
     
Basic weighted average shares outstanding:
      Common Stock 20,157 19,717
      Class A Common Stock 2,358 2,781
     
Diluted weighted average shares outstanding:
      Common Stock 22,928 22,955
      Class A Common Stock 2,358 2,781
     
Cash dividend per common share:
Common Stock   $ 0.080 0.0400
Class A common Stock   $ 0.075 0.0375



HAVERTY FURNITURE COMPANIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands - Unaudited)

       March 31,
2014
   December 31,
2013
   March 31,
2013
     (Unaudited) (Unaudited)
ASSETS
Current assets         
      Cash and cash equivalents  $ 84,508  $ 83,185  $ 53,869
      Restricted cash and cash equivalents 8,017 7,016 7,014
      Accounts receivable 7,421 8,172 9,102
      Inventories 95,964 91,483 97,567
      Prepaid expenses 6,853 6,494 7,545
      Other current assets 2,796 4,349 4,886
            Total current assets 205,559 200,699 179,983
Accounts receivable, long-term 752 832 823
Property and equipment 187,850 189,242 190,812
Deferred income taxes 13,203 13,253 24,184
Other assets 14,479 13,829 4,112
           Total assets  $ 421,843  $ 417,855  $ 399,914
     
LIABILITIES AND STOCKHOLDERS` EQUITY
Current liabilities
      Accounts payable  $ 18,082  $ 21,810  $ 20,780
      Customer deposits 24,745 19,008 20,859
      Accrued liabilities 32,208 36,338 40,089
      Current portion of lease obligations 1,012 959 908
            Total current liabilities 76,047 78,115 82,636
Lease obligations, less current portion 15,916 16,196 17,229
Other liabilities 26,270 25,280 32,261
            Total liabilities 118,233 119,591 132,126
     
Stockholders` equity 303,610 298,264 267,788
       $ 421,843  $ 417,855  $ 399,914



HAVERTY FURNITURE COMPANIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands - Unaudited)

     Three Months Ended
March 31,
     2014    2013
            
CASH FLOW FROM OPERATING ACTIVITIES
Net income    $ 6,129    $ 8,260
     Adjustments to reconcile net income to net cash
   provided by operating activities:
     Depreciation and amortization 5,380 5,342
     Share-based compensation expense 926 803
     Provision for doubtful accounts 48 13
     Other 120 (216 )
Changes in operating assets and liabilities:
     Accounts receivable 783 586
     Inventories (4,481 ) (665 )
     Customer deposits 5,737 (104 )
     Other assets and liabilities 1,664 (1,454 )
     Accounts payable and accrued liabilities (7,858 ) (7,176 )
          Net cash provided by operating activities 8,448 5,389
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (4,518 ) (3,972 )
Restricted cash and cash equivalents (1,000 ) (1 )
Proceeds from sale of assets 409 2
     Net cash used in investing activities (5,109 ) (3,971 )
CASH FLOWS FROM FINANCING ACTIVITIES
Payments on lease obligations (227 ) (216 )
Dividend paid (1,789 ) (883 )
     Net cash used in financing activities (2,016 ) (1,099 )
    
Increase in cash and cash equivalents during the period 1,323 319
Cash and cash equivalents at beginning of period 83,185 53,550
    
Cash and cash equivalents at end of period    $ 84,508    $ 53,869

About Havertys

Havertys (NYSE:HVT and HVT.A), established in 1885, is a full-service home furnishings retailer with 119 showrooms in 16 states in the Southern and Midwestern regions providing its customers with a wide selection of quality merchandise in middle to upper-middle price ranges.  Additional information is available on the company`s website at www.havertys.com

News releases include forward-looking statements, which are subject to risks and uncertainties.  Factors that might cause actual results to differ materially from future results expressed or implied by such forward-looking statements include, but are not limited to, general economic conditions, the consumer spending environment for large ticket items, competition in the retail furniture industry and other uncertainties detailed from time to time in the company`s reports filed with the SEC.

Conference Call Information

The company invites interested parties to listen to the live audiocast of the conference call on Friday, May 2, 2014 at its website, www.havertys.com under the investor relations section. If you can not listen live, a replay will be available on the day of the conference call at the website or via telephone at approximately 12:00 p.m. EDT through Friday, May 9, 2014. The number to access the telephone playback is 1-800-406-7325 (access code: 4680924#).

Contact:
Haverty Furniture Companies, Inc., 404-443-2900
Dennis L. Fink
   EVP & CFO
Jenny Hill Parker
   SVP, Finance, Secretary and Treasurer

SOURCE:  Havertys




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Source: Haverty Furniture Company via GlobeNewswire

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