Feb 21, 2017 5:35 PM
“The payment of the
“We remain confident in our ability to serve the on-trend furniture customer and grow our business, despite challenges in the current economic and political climate.”
Financial Highlights
Fourth Quarter 2016 Compared to Fourth Quarter 2015
Twelve Months ended
Expectations and Other
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME |
(In thousands, except per share data – Unaudited) |
Three Months Ended | Year Ended | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Net sales | $ | 220,595 | $ | 215,886 | $ | 821,571 | $ | 804,870 | |||||||
Cost of goods sold | 99,575 | 99,681 | 378,234 | 374,094 | |||||||||||
Gross profit | 121,020 | 116,205 | 443,337 | 430,776 | |||||||||||
Credit service charges | 56 | 73 | 229 | 286 | |||||||||||
Gross profit and other revenue | 121,076 | 116,278 | 443,566 | 431,062 | |||||||||||
Expenses: | |||||||||||||||
Selling, general and administrative | 104,427 | 101,034 | 399,236 | 384,801 | |||||||||||
Provision for doubtful accounts | 97 | 147 | 383 | 314 | |||||||||||
Other income, net | (1,308 | ) | (671 | ) | (4,107 | ) | (1,617 | ) | |||||||
Total expenses | 103,216 | 100,510 | 395,512 | 383,498 | |||||||||||
Income before interest and income taxes | 17,860 | 15,768 | 48,054 | 47,564 | |||||||||||
Interest expense, net | 513 | 675 | 2,233 | 2,289 | |||||||||||
Income before income taxes | 17,347 | 15,093 | 45,821 | 45,275 | |||||||||||
Income tax expense | 6,400 | 5,912 | 17,465 | 17,486 | |||||||||||
Net income | $ | 10,947 | $ | 9,181 | $ | 28,356 | $ | 27,789 | |||||||
Other comprehensive income, net of tax: | |||||||||||||||
Defined benefit pension plan adjustments: | $ | 51 | $ | 55 | $ | 108 | 230 | ||||||||
Comprehensive income | $ | 10,998 | $ | 9,236 | $ | 28,464 | $ | 28,019 | |||||||
Basic earnings per share: | |||||||||||||||
Common Stock | $ | 0.52 | $ | 0.42 | $ | 1.32 | $ | 1.24 | |||||||
Class A Common Stock | $ | 0.50 | $ | 0.40 | $ | 1.27 | $ | 1.18 | |||||||
Diluted earnings per share: | |||||||||||||||
Common Stock | $ | 0.51 | $ | 0.41 | $ | 1.30 | $ | 1.22 | |||||||
Class A Common Stock | $ | 0.51 | $ | 0.39 | $ | 1.27 | $ | 1.17 | |||||||
Basic weighted average shares outstanding: | |||||||||||||||
Common Stock | 19,127 | 20,109 | 19,492 | 20,430 | |||||||||||
Class A Common Stock | 1,977 | 2,045 | 2,014 | 2,067 | |||||||||||
Diluted weighted average shares outstanding: | |||||||||||||||
Common Stock | 21,476 | 22,473 | 21,506 | 22.798 | |||||||||||
Class A Common Stock | 1,977 | 2,045 | 2,014 | 2,067 | |||||||||||
Cash dividends per share: | |||||||||||||||
Common Stock | $ | 1.1200 | $ | 0.100 | $ | 1.440 | $ | 0.36 | |||||||
Class A Common Stock | $ | 1.0625 | $ | 0.095 | $ | 1.365 | $ | 0.34 | |||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
(In thousands - Unaudited) |
2016 | 2015 | |||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 63,481 | $ | 70,659 | ||||
Investments | — | 12,725 | ||||||
Restricted cash and cash equivalents | 8,034 | 8,005 | ||||||
Accounts receivable | 4,244 | 5,948 | ||||||
Inventories | 102,020 | 108,896 | ||||||
Prepaid expenses | 8,836 | 6,137 | ||||||
Other current assets | 7,500 | 6,341 | ||||||
Total current assets | 194,115 | 218,711 | ||||||
Accounts receivable, long-term | 462 | 655 | ||||||
Property and equipment | 233,667 | 229,283 | ||||||
Deferred income tax | 18,376 | 17,245 | ||||||
Other assets | 7,885 | 5,357 | ||||||
Total assets | $ | 454,505 | $ | 471,251 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities | ||||||||
Accounts payable | $ | 25,662 | $ | 27,815 | ||||
Customer deposits | 24,923 | 21,036 | ||||||
Accrued liabilities | 41,904 | 42,060 | ||||||
Current portion of lease obligations | 3,461 | 3,051 | ||||||
Total current liabilities | 95,950 | 93,962 | ||||||
Lease obligations, less current portion | 52,013 | 50,074 | ||||||
Other liabilities | 24,671 | 25,476 | ||||||
Total liabilities | 172,634 | 169,512 | ||||||
Stockholders’ equity | 281,871 | 301,739 | ||||||
Total liabilities and stockholders’ equity | $ | 454,505 | $ | 471,251 | ||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
(In thousands – Unaudited) |
Year Ended | ||||||||||
2016 | 2015 | |||||||||
Cash Flows from Operating Activities: | ||||||||||
Net income | $ | 28,356 | $ | 27,789 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||
Depreciation and amortization | 29,045 | 25,756 | ||||||||
Gain on insurance recovery | (3,338 | ) | — | |||||||
Proceeds from insurance recovery received for business interruption and destroyed inventory | 2,599 | — | ||||||||
Stock-based compensation expense | 3,872 | 4,033 | ||||||||
Excess tax benefit from stock-based plans | (80 | ) | (397 | ) | ||||||
Deferred income taxes | (1,120 | ) | (3,019 | ) | ||||||
Provision for doubtful accounts | 383 | 314 | ||||||||
Other | (400 | ) | (160 | ) | ||||||
Changes in operating assets and liabilities: | ||||||||||
Accounts receivable | 1,514 | 960 | ||||||||
Inventories | 6,876 | (2,305 | ) | |||||||
Customer deposits | 3,887 | (2,650 | ) | |||||||
Other assets and liabilities | (9,508 | ) | (590 | ) | ||||||
Accounts payable and accrued liabilities | (2,032 | ) | 2,501 | |||||||
Net cash provided by operating activities | 60,054 | 52,232 | ||||||||
Cash Flows from Investing Activities: | ||||||||||
Capital expenditures | (29,838 | ) | (27,143 | ) | ||||||
Maturities of certificates of deposit | 12,725 | 7,250 | ||||||||
Purchase of commercial paper and certificates of deposit | — | (9,975 | ) | |||||||
Proceeds from insurance for destroyed property and equipment | 3,011 | — | ||||||||
Restricted cash and cash equivalents | (29 | ) | 12 | |||||||
Other investing activities | 944 | 1,501 | ||||||||
Net cash used in investing activities | (13,187 | ) | (28,355 | ) | ||||||
Cash Flows from Financing Activities: | ||||||||||
Construction allowance receipts | 1,574 | 6,701 | ||||||||
Payments on lease obligations | (3,125 | ) | (2,534 | ) | ||||||
Excess tax benefit from stock-based plans | 80 | 397 | ||||||||
Dividend paid | (30,409 | ) | (8,060 | ) | ||||||
Common stock repurchased and retired | (21,282 | ) | (14,002 | ) | ||||||
Taxes on vested restricted shares | (883 | ) | (1,201 | ) | ||||||
Net cash used in financing activities | (54,045 | ) | (18,699 | ) | ||||||
(Decrease) increase in cash and cash equivalents | (7,178 | ) | 5,178 | |||||||
Cash and cash equivalents at beginning of year | 70,659 | 65,481 | ||||||||
Cash and cash equivalents at end of year | $ | 63,481 | $ | 70,659 | ||||||
SG&A Expense Classification
We classify our SG&A expenses as either variable or fixed and discretionary. Our variable expenses are comprised of selling and delivery costs. Selling expenses are primarily compensation and related benefits for our commission based sales associates, the discount we pay for third party financing of customer sales and transaction fees for credit card usage. We do not outsource delivery so these costs include personnel, fuel, and other expenses related to this function. Fixed and discretionary expenses are comprised of rent, depreciation and amortization and other occupancy costs for stores, warehouses and offices, and all advertising and administrative costs.
Conference Call Information
The company invites interested parties to listen to the live audiocast of the conference call on
About Havertys
Havertys (NYSE:HVT) (NYSE:HVT.A), established in 1885, is a full-service home furnishings retailer with 124 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, havertys.com.
Safe Harbor
This press release includes statements that constitute forward-looking statement within the meaning of the federal securities laws. Generally, the words "believe," "expect," "intend," "estimate," "anticipate," "project," "will" and similar expressions identify forward-looking statements, which are not historical in nature. We intend for all forward-looking statements contained herein or on our website, and all subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf, to be covered by the safe harbor provisions for forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and the provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (which Sections were adopted as part of the Private Securities Litigation Reform Act of 1995). Forward-looking statements may relate to, for example, future operations, financial condition, economic performance (including gross profit margins and expenses), capital expenditures, and demand for our products. The Company cautions that its 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. Actual results or events may differ materially from those indicated as a result of various important factors. Such factors may include, among other things, the state of the economy; state of the residential construction and housing markets; the consumer spending environment for big ticket items; effects of competition; management of relationships with our suppliers and vendors and disruptions in their operations; new regulations or taxation plans, as well as other risks and uncertainties discussed in the Company's Annual Report on Form 10-K and from time to time in the Company's filings with the
Contact: Havertys 404-443-2900Source:Dennis L. Fink EVP & CFOJenny Hill Parker SVP, finance, secretary and treasurer