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Havertys Reports Earnings for Fourth Quarter and Full Year 2013

Atlanta, Georgia, February 24, 2014 - HAVERTYS (NYSE:HVT and HVT.A) reports earnings per share for the fourth quarter ended December 31, 2013 of $0.42 compared to $0.30 for the same period of 2012. The earnings per share for the full year 2013 were $1.41 compared to $0.67 for 2012.

Clarence Smith, chairman, president and CEO, said "2013 was a continuation of the turnaround that we truly began in 2011. Many aspects of our business have been fine tuned to enhance our customer`s perception of Havertys and her purchasing experience. We have improved our stores and highlighted our fashion identity in our advertising and merchandise. The "on trend" customer`s response has been favorable.

Our comp-store sales for the year increased 11.0% over 2012 driven by an increase in average ticket of 7.8%. We continued to expand gross profit margins as we focused on higher price point products and pricing discipline. Our expenses were well controlled and our 2013 net income was double that of 2012. We have certainly been aided by the improving economy and recovery in housing but believe our strategies have compounded their effect."

Financial Highlights

Fourth Quarter 2013 Compared to Fourth Quarter 2012

  • Net sales increased 7.6% to $196.2 million. Comparable store sales were up 9.5%. Total written business was up 6.3% and average ticket rose 5.7%.

  • Gross profit margins increased 120 basis points to 54.0% as a percent of sales. This includes a year-over-year benefit of $0.5 million, or 30 basis points, from changes in the LIFO reserve.

  • Selling, general and administrative costs as a percent of sales declined 110 basis points to 46.1% from 47.2%.

  • Pre-tax earnings of $15.8 million increased 250 basis points to 8.0% from 5.5% as a percent of sales.

  • Our retail store count at December 31, 2013 was 119 versus 122 at the end of 2012.

Twelve Months ended December 31, 2013 Compared to Same Period of 2012

  • Net sales increased 11.3% to $746.1 million. Comparable store sales were up 11.0% and average ticket rose 7.8%.

  • Gross profit was $401.5 million, or 53.8% of net sales, which includes a year-over-year benefit of $1.1 million from changes in the LIFO reserve and $0.8 million from an out-of-period adjustment recorded in the first quarter. Excluding the impact of the out-of-period adjustment, gross profit was 53.7%, up 120 basis points compared to 52.5% in 2012.

  • Selling, general and administrative costs declined 240 basis points as a percent of sales to 46.7% from 49.1%.

  • Pre-tax earnings of $52.5 million increased 350 basis points to 7.0% from 3.5% as a percent of sales.

Expectations and Other

  • Comparable store written business for the first quarter to date of 2014 is up approximately 3.6% over the same period last year. Total written business quarter to date is up 2.0% over the 14% increase for the same period last year.

  • We plan to continue to highlight our fashionable quality merchandise in 2014 and use promotional pricing judiciously. We expect our annual gross profit margins for 2014 will be 53.8%, up slightly from the adjusted 53.7% level achieved in 2013.

  • SG&A expenses in 2014 should be leveraged with continuing sales growth. We do expect some increases in our period costs due to inflation, expansion, staffing, technology improvements and advertising spend. Fixed and discretionary type expenses within SG&A costs for 2014 are expected to be $232 to $234 million, up approximately 4.1% to 5.0% over those same costs in 2013. These expenses are expected to be incurred at a slightly higher rate in the second half of the year in connection with our expansion activity. Variable SG&A expenses should be in the 17.0% to 17.2% range as a percent of sales for 2014 and other non-SG&A costs, net of credit revenues, are expected to be $1.3 million.

  • Our effective tax rate for 2014 is expected to be in the 38.5% to 38.8% range.

  • Planned Capital expenditures for 2014 are $35.0 million. We have scheduled to open six new locations in existing markets and complete one major expansion during the year. Three of the new stores are relocations and we plan to close two additional stores at the end of their lease term. These changes will increase selling square footage approximately 1.8% and our store count to 120 assuming the store changes occur as planned.

HAVERTY FURNITURE COMPANIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data - Unaudited)


Three Months Ended
December 31,

Year Ended
December 31,

2013

2012

2013

2012

Net sales

$

196,164

$

182,307

$

746,090

$

670,073

Cost of goods sold

90,164

86,036

344,594

318,038

Gross profit

106,000

96,271

401,496

352,035

Credit service charges

79

77

320

293

Gross profit and other revenue

106,079

96,348

401,816

352,328

Expenses:

Selling, general and administrative

90,454

86,098

348,599

328,826

Interest, net

270

150

1,107

624

Provision for doubtful accounts

24

65

120

165

Other income, net

(452

)

(58

)

(497

)

(803

)

Total expenses

90,296

86,255

349,329

328,812

Income before income taxes

15,783

10,093

52,487

23,516

Income tax expense (benefit)

6,102

3,314

20,222

8,605

Net income

$

9,681

$

6,779

$

32,265

$

14,911

Basic earnings per share:

Common Stock

$

0.43

$

0.31

$

1.45

$

0.69

Class A Common Stock

$

0.41

$

0.28

$

1.37

$

0.58

Diluted earnings per share:

Common Stock

$

0.42

$

0.30

$

1.41

$

0.67

Class A Common Stock

$

0.41

$

0.29

$

1.35

$

0.59

Basic weighted average shares outstanding:

Common Stock

20,097

19,330

19,865

19,096

Class A Common Stock

2,417

2,815

2,558

2,943

Diluted weighted average shares outstanding:

Common Stock

22,901

22,566

22,815

22,382

Class A Common Stock

2,417

2,815

2,558

2,943

Cash dividends per share:

Common Stock

$

0.080

$

1.0400

$

0.240

$

1.1200

Class A Common Stock

$

0.075

$

0.9875

$

0.225

$

1.0625


HAVERTY FURNITURE COMPANIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands - Unaudited)


December 31,

2013

2012

ASSETS

Current assets

Cash and cash equivalents

$

83,185

$

53,550

Restricted cash and cash equivalents

7,016

7,013

Accounts receivable

8,172

9,710

Inventories

91,483

96,902

Prepaid expenses

6,494

9,532

Other current assets

4,349

3,187

Total current assets

200,699

179,894

Accounts receivable, long-term

832

814

Property and equipment

189,242

193,085

Deferred income taxes

13,253

24,366

Other assets

13,829

3,937

Total assets

$

417,855

$

402,096

LIABILITIES AND STOCKHOLDERS` EQUITY

Current liabilities

Accounts payable

$

21,810

$

28,178

Customer deposits

19,008

20,963

Accrued liabilities

36,338

33,272

Deferred income taxes

-

6,595

Current portion of lease obligations

959

881

Total current liabilities

78,115

89,889

Lease obligations, less current portion

16,196

18,473

Other liabilities

25,280

34,306

Total liabilities

119,591

142,668

Stockholders` equity

298,264

259,428

Total liabilities and stockholders` equity

$

417,855

$

402,096


HAVERTY FURNITURE COMPANIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands - Unaudited)


Year Ended December 31,

2013

2012

Cash Flows from Operating Activities:

Net income

$

32,265

$

14,911

Adjustments to reconcile net income to net cash
provided by operating activities:

Depreciation and amortization

21,450

19,415

Stock-based compensation expense

3,323

2,553

Tax benefit from stock-based plans

(1,754

)

(289

)

Deferred income taxes

(652

)

(2,209

)

Provision for doubtful accounts

120

165

Other

459

614

Changes in operating assets and liabilities:

Accounts receivable

1,400

1,210

Inventories

5,419

(3,458

)

Customer deposits

(1,955

)

6,391

Other assets and liabilities

(2,638

)

1,819

Accounts payable and accrued liabilities

(1,548

)

11,046

Net cash provided by operating activities

55,889

52,168

Cash Flows from Investing Activities:

Capital expenditures

(20,202

)

(25,014

)

Restricted cash and cash equivalents

(3

)

(200

)

Other investing activities

85

448

Net cash used in investing activities

(20,120

)

(24,766

)

Cash Flows from Financing Activities:

Payments on lease obligations

(867

)

(766

)

Proceeds from exercise of stock options

872

2,457

Tax benefit from stock-based plans

1,754

289

Dividend paid

(5,353

)

(24,684

)

Other financing activities

(2,540

)

(733

)

Net cash used in financing activities

(6,134

)

(23,437

)

Increase in cash and cash equivalents

29,635

3,965

Cash and cash equivalents at beginning of year

53,550

49,585

Cash and cash equivalents at end of year

$

83,185

$

53,550

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 Tuesday, February 25, 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 Tuesday, March 4, 2014. The number to access the telephone playback is 1-800-406-7325 (access code: 4670299#).

Contact:
Havertys 404-443-2900
Dennis L. Fink
EVP & CFO
Jenny Hill Parker
SVP, finance, secretary and treasurer

SOURCE: Havertys



This announcement is distributed by NASDAQ OMX Corporate Solutions on behalf of NASDAQ OMX Corporate Solutions clients.

The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Haverty Furniture Company via GlobeNewswire

HUG#1764294