May 20, 2020 5:20 PM
The Company also announced today that, on
“The Havertys team has performed remarkable tasks: pausing our operations, handling key support functions remotely, and communicating with our customers, vendors, lender and landlords as we traversed unfamiliar ground. Our teams thought outside the box as existing communication tools were put to greater use by larger numbers and in creative ways. We reopened 103 of our 120 stores on
There will certainly be new challenges in the months ahead but the Havertys teams’ experience, tenaciousness, flexibility, and compassion was evident these past weeks. We have all been changed by these events, people are more focused on their homes than ever before, and we believe that Havertys is well suited to connect and fulfill the desires of customers as they create the special place they call home.”
Financial Highlights
First Quarter 2020 Compared to First Quarter 2019
Expectations and Other
Sale-Leaseback Transaction
On
The facilities will be leased back to Havertys via 15-year operating lease agreements with renewal options.
Recap of Response to COVID-19
Q-1
Q-2
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data – Unaudited)
Three Months Ended | |||||||
(In thousands, except per share data - unaudited) | 2020 | 2019 | |||||
Net sales | $ | 179,432 | $ | 187,242 | |||
Cost of goods sold | 79,879 | 84,159 | |||||
Gross profit | 99,553 | 103,083 | |||||
Credit service charges | 19 | 22 | |||||
Gross profit and other revenue | 99,572 | 103,105 | |||||
Expenses: | |||||||
Selling, general and administrative | 97,535 | 98,879 | |||||
Provision for doubtful accounts | 34 | 4 | |||||
Other (income) expense, net | (83 | ) | (154 | ) | |||
Total expenses | 97,486 | 98,729 | |||||
Income before interest and income taxes | 2,086 | 4,376 | |||||
Interest income, net | 214 | 349 | |||||
Income before income taxes | 2,300 | 4,725 | |||||
Income tax expense | 481 | 1,104 | |||||
Net income | $ | 1,819 | $ | 3,621 | |||
Other comprehensive income | |||||||
Adjustments related to retirement plans; net of tax expense of | $ | 31 | $ | 9 | |||
Comprehensive income | $ | 1,850 | $ | 3,630 | |||
Basic earnings per share: | |||||||
Common Stock | $ | 0.10 | $ | 0.18 | |||
Class A Common Stock | $ | 0.09 | $ | 0.17 | |||
Diluted earnings per share: | |||||||
Common Stock | $ | 0.09 | $ | 0.17 | |||
Class A Common Stock | $ | 0.09 | $ | 0.17 | |||
Cash dividends per share: | |||||||
Common Stock | $ | 0.20 | $ | 0.18 | |||
Class A Common Stock | $ | 0.19 | $ | 0.17 |
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands - Unaudited)
2020 | 2019 | 2019 | ||||||||
(Unaudited) | (unaudited) | |||||||||
ASSETS | ||||||||||
Current assets | ||||||||||
Cash and cash equivalents | $ | 84,570 | $ | 75,739 | $ | 72,951 | ||||
Restricted cash equivalents | 6,699 | 6,663 | 6,549 | |||||||
Accounts receivable, net | 1,374 | 1,527 | 1,716 | |||||||
Inventories | 110,547 | 104,817 | 109,379 | |||||||
Prepaid expenses | 9,989 | 7,652 | 8,590 | |||||||
Other current assets | 7,004 | 8,125 | 8,573 | |||||||
Total current assets | 220,183 | 204,523 | 207,758 | |||||||
Accounts receivable, long-term, net | 167 | 195 | 213 | |||||||
Property and equipment, net | 153,215 | 156,534 | 158,316 | |||||||
Right-of-use lease assets | 180,058 | 175,474 | 188,400 | |||||||
Deferred income taxes | 12,067 | 13,198 | 10,757 | |||||||
Other assets | 9,189 | 10,148 | 9,639 | |||||||
Total assets | $ | 574,879 | $ | 560,072 | $ | 575,083 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||
Current liabilities | ||||||||||
Accounts payable | $ | 16,819 | $ | 27,830 | $ | 22,134 | ||||
Customer deposits | 26,174 | 30,121 | 29,437 | |||||||
Accrued liabilities | 29,759 | 39,654 | 32,078 | |||||||
Current lease liabilities | 30,201 | 29,411 | 28,799 | |||||||
Notes payable to bank | 43,800 | — | — | |||||||
Total current liabilities | 146,753 | 127,016 | 112,448 | |||||||
Noncurrent lease liabilities | 153,824 | 149,594 | 157,499 | |||||||
Other liabilities | 21,855 | 22,959 | 23,210 | |||||||
Total liabilities | 322,432 | 299,569 | 293,157 | |||||||
Stockholders’ equity | 252,447 | 260,503 | 281,926 | |||||||
Total liabilities and stockholders’ equity | $ | 574,879 | $ | 560,072 | $ | 575,083 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands – Unaudited)
Three Months Ended | |||||||
2020 | 2019 | ||||||
(unaudited) | (unaudited) | ||||||
Cash Flows from Operating Activities: | |||||||
Net income | $ | 1,819 | $ | 3,621 | |||
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | |||||||
Depreciation and amortization | 5,124 | 5,105 | |||||
Share-based compensation expense | 972 | 1,061 | |||||
Other | 1,241 | (485 | ) | ||||
Changes in operating assets and liabilities: | |||||||
Inventories | (5,731 | ) | (3,539 | ) | |||
Customer deposits | (3,947 | ) | 4,972 | ||||
Other assets and liabilities | (826 | ) | (1,224 | ) | |||
Accounts payable and accrued liabilities | (20,231 | ) | (4,093 | ) | |||
Net cash (used in) provided by operating activities | (21,579 | ) | 5,418 | ||||
Cash Flows from Investing Activities: | |||||||
Capital expenditures | (2,480 | ) | (3,764 | ) | |||
Proceeds from sale of property and equipment | 4 | 2,255 | |||||
Net cash used in investing activities | (2,476 | ) | (1,509 | ) | |||
Cash Flows from Financing Activities: | |||||||
Proceeds from borrowings under revolving credit facilities | 43,800 | — | |||||
Payments of borrowings under revolving credit facilities | — | — | |||||
Net change in borrowings under revolving credit facilities | 43,800 | — | |||||
Dividends paid | (3,750 | ) | (3,685 | ) | |||
Common stock repurchased | (6,810 | ) | — | ||||
Other | (318 | ) | (533 | ) | |||
Net cash provided by (used in) financing activities | 32,922 | (4,218 | ) | ||||
Increase (decrease) in cash, cash equivalents and restricted cash equivalents during the period | 8,867 | (309 | ) | ||||
Cash, cash equivalents and restricted cash equivalents at beginning of period | 82,402 | 79,809 | |||||
Cash, cash equivalents and restricted cash equivalents at end of period | $ | 91,269 | $ | 79,500 |
Conference Call Information
The company invites interested parties to listen to the live audiocast of the conference call on
About Havertys
Safe Harbor
This press release contains, and the conference call may contain forward-looking statements subject to the safe harbor provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934. These forward-looking statements are subject to risks and uncertainties and change based on various important factors, many of which are beyond our control.
All statements in the future tense and all statements accompanied by words such as “expect,” “likely,” “outlook,” “forecast,” “preliminary,” “would,” “could,” “should,” “position,” “will,” “project,” “intend,” “plan,” “on track,” “anticipate,” “to come,” “may,” “possible,” “assume,” and variations of such words and similar expressions are intended to identify such forward-looking statements. These forward-looking statements include, without limitation, our expected ability to operate and protect our team members and customers during the COVID-19 pandemic, the execution and effect of our cost savings initiatives, the use of proceeds from our sale-leaseback transaction, our expectations for selling square footage and capital expenditures for 2020, our liquidity position to continue to operate during these highly uncertain times, and our efforts and initiatives to help us emerge from the pandemic well-positioned.
We caution that our forward-looking statements involve risks and uncertainties, and while we believe that our expectations for the future are reasonable in view of currently available information you are cautioned not to place undue reliance on our forward-looking statements and they should not be relied upon as a prediction of actual results. Factors that could cause actual results to differ materially from those expressed or implied in any forward-looking statements include, but are not limited to: the extent and duration of the disruption to our business operations caused by the health crisis associated with the COVID-19 pandemic, including the effects on the financial health of our business partners and customers, on supply chains and our suppliers, and on access to capital and liquidity provided by the financial and capital markets; our ability to maintain compliance with debt covenants and amend such credit facilities as necessary; disruptions in our suppliers' operations, including from the impact of COVID-19, including potential problems with inventory availability and the potential result of the volatility or higher cost of product and international freight due to the high demand of products and low supply for an unpredictable period of time; disruptions in our third-party producers’ operations in foreign countries; changes in national and international legislation or government regulations or policies, including changes to import tariffs and the unpredictability of such changes; failure of vendors to meet our quality control standards or to react to changes in legislative or regulatory frameworks; disruptions in our distribution centers; changes in general economic conditions, including unemployment, inflation (including the impact of tariffs); labor shortages and the Company's ability to successfully attract and retain employees in the current labor market; uncertain credit markets and other macroeconomic conditions; competitive product, service and pricing pressures; failure or weakness in our disclosure controls and procedures and internal controls over financial reporting; disruptions caused by a failure or breach of the Company's information systems and information technology infrastructure, as well as other risks and uncertainties discussed in the Company's Annual Report on Form 10-K for 2019 (all of which risks may be amplified by the COVID-19 pandemic) and from time to time in the Company's subsequent filings with the
Forward-looking statements are only as of the date they are made, and the Company undertakes no duty to update its forward-looking statements except as required by law. You are advised, however, to review any further disclosures we make on related subjects in our subsequent Forms 10-K, 10-Q, 8-K and other reports filed with the SEC.
Contact:
Havertys 404-443-2900
Jenny Hill Parker
SVP, Finance, and Corporate Secretary
SOURCE: Havertys
Source: