Jul 30, 2014 4:55 PM
ATLANTA, GEORGIA ,July 30, 2014 --HAVERTYS (NYSE: HVT and HVT.A) reports earnings per share for the second quarter endedJune 30, 2014 of$0.21 compared to$0.21 for the same period of 2013. The earnings per share for the six months ended June 30, 2014 is$0.48 compared to$0.58 for the same period of 2013. The year to date earnings for 2013 included an out-of-period adjustment recorded in the first quarter which favorably impacted gross profit by$0.8 million or$0.02 per share after tax.Clarence H. Smith , chairman, president and chief executive officer, said, "Our repositioning in key markets continues in the second half of this year with the opening of three store relocations, three new stores including one new urban scaled format, and one store closure. Accessibility and a great shopping experience extends, and often begins, outside of our brick and mortar stores, and our website will soon feature additional tools to engage the customer in her home furnishings exploration. We also expect to be providing quicker delivery response times and reducing our costs by receiving and maintaining certain inventory closer to the customer as a result of increased storage capacity in ourFlorida andVirginia distribution centers. We believe our appealing merchandise, expanded special order capabilities, and great customer shopping and service experience are important competitive differentiators and drivers of our business. Financial Highlights Second Quarter 2014 Compared to Second Quarter 2013 * As previously announced, net sales increased 2.4% to$175.1 million . Comparable store sales were up 3.2%. * Total written sales were up 4.7% and written comparable store sales were up 5.3%. Our stores are closed on Easter, so both of these amounts were adjusted upward 1.4% to compensate for that holiday falling in March last year and April this year. * Average written ticket continues to grow, up 3.6% over the comparable period and up 5.6% sequentially. The custom order portion of upholstery written sales increased 12.8%. * Gross profit margins increased 40 basis points to 53.8% from 53.4% as a percent of sales, in line with our expectations. * Selling, general and administrative costs as a percent of sales increased 70 basis points to 49.3% from 48.6%. The$3.1 million increase is primarily related to increases in warehouse and delivery costs, selling expenses such as commissions, and advertising, offset by reductions in administrative expenses. Six Months endedJune 30, 2014 Compared to Same Period of 2013 * Net sales were virtually flat in 2014 compared against 2013. Comparable store sales were up 1.1%. Average written ticket increased 4.4%. * Gross profit margins, excluding the impact of the first quarter adjustment in 2013 noted above, increased 40 basis points to 53.8% from 53.4% as a percent of sales. * Selling, general and administrative costs as a percent of sales increased 110 basis points to 48.7% from 47.6% due to the deleveraging of the fixed and discretionary costs in advertising, warehouse and delivery, primarily in the first quarter. * We closed one store and expanded one showroom in the first half of 2014. Our retail store count atJune 30, 2014 was 118 versus 119 atJune 30, 2013 . Expectations and Other * Total written sales for the third quarter to date of 2014 are up approximately 2.8% over the same period last year and written comparable store sales are up approximately 3.3%. * We expect that gross profit margins for the second half of 2014 will be similar to that achieved in the first half of the year. * Fixed and discretionary type expenses within SG&A costs for the full year 2014 are expected to be approximately$232 million to$233 million versus the$224 million for the same costs in 2013. Approximately$112 million of these expenses were incurred in the first half of 2014 versus$110 million last year. The variable type costs within SG&A for the full year of 2014 are anticipated to be approximately 17.2% as a percent of sales, with such expenses having run at a 17.4% rate in the first half. * Selling square footage is estimated to increase 2.0% during 2014 based on three new stores, three store relocations, one expansion, and two closures. The store count at the end of 2014 should be 120.HAVERTY FURNITURE COMPANIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In Thousands, except per share data - Unaudited) Three Months Ended Six Months Ended June 30, June 30, --------------------------- --------------------------- 2014 2013 2014 2013 ------------- ------------- ------------- ------------- Net sales $ 175,132 $ 171,114 $ 356,869 $ 357,204 Cost of goods sold 80,988 79,803 164,863 165,585 ------------- ------------- ------------- ------------- Gross profit 94,144 91,311 192,006 191,619 Credit service charges 71 76 151 162 ------------- ------------- ------------- ------------- Gross profit and other revenue 94,215 91,387 192,157 191,781 ------------- ------------- ------------- ------------- Expenses: Selling, general and administrative 86,266 83,197 173,940 169,859 Interest, net 218 277 490 555 Provision for doubtful accounts 85 32 133 45 Other (income) expense, net (166 ) 15 (174 ) 6 ------------- ------------- ------------- ------------- 86,403 83,521 174,389 170,465 ------------- ------------- ------------- ------------- Income before income taxes 7,812 7,866 17,768 21,316 Income tax expense 2,983 3,036 6,810 8,226 ------------- ------------- ------------- ------------- Net income $ 4,829 $ 4,830 $ 10,958 $ 13,090 ------------- ------------- ------------- ------------- Basic earnings per share: Common Stock $ 0.21 $ 0.22 $ 0.49 $ 0.59 Class A Common Stock $ 0.20 $ 0.20 $ 0.46 $ 0.56 Diluted earnings per share: Common Stock $ 0.21 $ 0.21 $ 0.48 $ 0.58 Class A Common Stock $ 0.20 $ 0.20 $ 0.46 $ 0.55 Basic weighted average shares outstanding: Common Stock 20,454 19,807 20,307 19,654 Class A Common Stock 2,162 2,614 2,259 2,682 Diluted weighted average shares outstanding: Common Stock 22,940 22,791 22,934 22,754 Class A Common Stock 2,162 2,614 2,259 2,682 Cash dividends per share: Common Stock $ 0.0800 $ 0.0400 $ 0.1600 $ 0.0800 Class A Common Stock $ 0.0750 $ 0.0375 $ 0.1500 $ 0.0750HAVERTY FURNITURE COMPANIES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In Thousands - Unaudited) December June 30, 31, June 30, 2014 2013 2013 ------------- ------------ ---------------- (Unaudited) (Unaudited) ASSETS Current assets Cash and cash equivalents $ 87,843 $ 83,185 $ 52,260 Restricted cash and cash equivalents 8,017 7,016 7,015 Accounts receivable 6,730 8,172 8,290 Inventories 94,799 91,483 97,738 Prepaid expenses 7,983 6,494 7,711 Other current assets 2,299 4,349 5,263 ------------- ------------ ---------------- Total current assets 207,671 200,699 178,277 ------------- ------------ ---------------- Accounts receivable, long- term 709 832 825 Property and equipment 203,643 189,242 191,917 Deferred income taxes 13,153 13,253 24,002 Other assets 15,116 13,829 4,116 ------------- ------------ ---------------- Total assets $ 440,292 $ 417,855 $ 399,137 ------------- ------------ ---------------- LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $ 19,385 $ 21,810 $ 20,370 Customer deposits 27,277 19,008 22,643 Accrued liabilities 30,746 36,338 30,009 Deferred income taxes - - 6,595 Current portion of lease obligations 1,537 959 929 ------------- ------------ ---------------- Total current liabilities 78,945 78,115 80,546 ------------- ------------ ---------------- Lease obligations, less current portion 29,353 16,196 16,988 Other liabilities 26,072 25,280 29,511 ------------- ------------ ---------------- Total liabilities 134,370 119,591 127,045 ------------- ------------ ---------------- Stockholders' equity 305,922 298,264 272,092 ------------- ------------ ---------------- Total liabilities and stockholders' equity $ 440,292 $ 417,855 $ 399,137 ------------- ------------ ----------------HAVERTY FURNITURE COMPANIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands - Unaudited) Six Months Ended June 30, -------------------------- 2014 2013 ----------- ----------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income$ 10,958 $ 13,090 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 10,960 10,486 Share-based compensation expense 1,767 2,038 Provision for doubtful accounts 133 45 Other 553 448 Changes in operating assets and liabilities: Accounts receivable 1,432 1,364 Inventories (3,316 ) (836 ) Customer deposits 8,269 1,680 Other assets and liabilities 328 (4,267 ) Accounts payable and accrued liabilities (8,017 ) (11,071 ) --------- --------- Net cash provided by operating activities 23,067 12,977 --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (11,699 ) (10,225 ) Restricted cash and cash equivalents (1,001 ) (2 ) Other 406 6 --------- --------- Net cash used in investing activities (12,294 ) (10,221 ) --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: Payments on lease obligations (462 ) (437 ) Dividends paid (3,593 ) (1,776 ) Proceeds from exercise of stock options - 623 Taxes on vested restricted shares (2,060 ) (2,456 ) --------- --------- Net cash used in financing activities (6,115 ) (4,046 ) --------- --------- Increase (decrease) in cash and cash equivalents during the period 4,658 (1,290 ) Cash and cash equivalents at beginning of period 83,185 53,550 --------- --------- Cash and cash equivalents at end of period$ 87,843 $ 52,260 --------- --------- About HavertysHavertys (NYSE: HVT and HVT.A), established in 1885, is a full-service home furnishings retailer with 118 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 theSEC . Conference Call Information The company invites interested parties to listen to the live audiocast of the conference call onThursday, July 31, 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 approximately12:00 p.m. EDT throughThursday, August 7, 2014 . The number to access the telephone playback is 1-888-203-1112 (replay passcode: 7322378#). Contact:Haverty Furniture Companies, Inc. , 404-443-2900Dennis L. Fink EVP & CFOJenny Hill Parker SVP, Finance, Secretary and Treasurer SOURCE: Havertys This announcement is distributed byGlobeNewswire on behalf ofGlobeNewswire clients. The owner of this announcement warrants that: (i) the releases contained herein are protected by copyright and other applicable laws; and (ii) they are solely responsible for the content, accuracy and originality of the information contained therein. Source:Haverty Furniture Company viaGlobeNewswire [HUG#1844211]