NEWS DETAILS

Havertys Reports Earnings for Third Quarter 2014

Oct 29, 2014 4:47 PM




Atlanta,  Georgia, October  29, 2014 - HAVERTYS   (NYSE: HVT  and HVT.A) reports
earnings  per  share  for  the  third  quarter ended September 30, 2014 of $0.34
compared  to $0.42 for the same period  of 2013.  The earnings per share for the
nine  months ended  September 30, 2014 is  $0.82 compared  to $0.99 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  Smith,  chairman,  president  and  CEO,  said  "Our execution of store
repositioning  and  expansion  began  to  accelerate  in the second half of this
year.  Three store relocations and three new stores have opened or are slated to
open  by the end  of 2014.  This includes  the new urban  scaled store, Havertys
Style  Studio, which  opened this  past week  in Atlanta, Georgia. As previously
announced,  we are also working on opening four  new stores in the first half of
2015, three  in  new  markets.   Our  store  portfolio  does an excellent job of
conveying  our brand, and by the end of next year over 95% of our locations will
either  have  been  opened  since  2010 or  undergone  our "Bright Inspirations"
refresh program.

We  are placing  great new  Havertys branded  merchandise in  our stores.  These
latest  collections are varied  in styles including  classic looks, transitional
and  contemporary designs,  and industrial  chic. Our  custom upholstery program
continues  to be a  favorite with our  customers growing 14% in written business
over  the past nine months against  last year's 16% increase.  Our point-of-sale
custom  order upholstery configurator has aided  in driving this business and in
the fourth quarter this important tool will be on our website for our customers'
use.

We  are pleased to  see an increased  pace in the  shipments from our vendors of
both  new products and  current best sellers.   The fresh merchandise and better
flow  of inventory should  normalize our case  good sales and  is enabling us to
more  timely complete deliveries.  The fourth  quarter has historically been our
strongest  sales period  and we  believe that  this year's  quarter should be no
different."


Financial Highlights

Third Quarter 2014 Compared to Third Quarter 2013

  * As previously announced, net sales increased 3.0% to $198.5 million.
    Comparable store sales were up 3.5%.
  * Total written sales were up 4.4% and written comparable store sales were up
    4.6%.
  * Case goods sales were off approximately 2% and the custom order portion of
    upholstery written sales increased 19.4%.
  * Gross profit margins decreased 40 basis points to 53.5% from 53.9% as a
    percent of sales primarily because the LIFO reserve increased $0.2 million
    in 2014 versus a $0.4 million decrease in 2013.  Also impacting gross profit
    margins was clearance sales in preparation to close four stores and three
    local warehouses in the second half of 2014.
  * Selling, general and administrative costs as a percent of sales increased
    130 basis points to 47.1% from 45.8%.  The variable type costs were
    approximately 17.5% of sales, or 40 basis points higher than our previous
    estimates, due to increased delivery expenses and sales commissions.  The
    fixed and discretionary expenses of $58.8 million were $2.1 million above
    last year and approximately $1.0 million lower than the metric previously
    provided mostly due to advertising spending and occupancy expense being
    lower than planned.
  * A special dividend of $1.00 per share was paid to our common stockholders
    and $0.95 to our Class A common stockholders.


Nine Months ended September 30, 2014 Compared to Same Period of 2013

  * Net sales increased 1.0% to $555.4 million.  Comparable store sales were up
    1.9%.  Average written ticket increased 2.7%.
  * Gross profit margins, excluding the impact of the first quarter adjustment
    in 2013 noted above, increased 10 basis points to 53.7% from 53.6% as a
    percent of sales.
  * Selling, general and administrative costs as a percent of sales increased
    130 basis points to 48.2% from 46.9%.  The variable type costs were
    approximately 17.5% of sales, 20 basis points higher than planned due to
    increased delivery expense and sales commissions.  The fixed and
    discretionary expenses were approximately $170.5 million, $4.2 million above
    last year and $1.0 million less than anticipated as third quarter
    advertising spending and occupancy expenses were lower than previously
    planned.
  * We opened one new store, relocated another, closed one location, and
    expanded one showroom during the first nine months of 2014.   Our retail
    store count was 119 at September 30, 2014 and 2013.


Expectations and Other

  * Total written sales for the fourth quarter to date of 2014 are up
    approximately 4.0% over the same period last year and written comparable
    store sales are up approximately 3.5%.  Total delivered sales for the fourth
    quarter to date of 2014 are up approximately 9.5% over the same period last
    year.
  * We expect that gross profit margins for the last quarter of 2014 will be
    approximately 53.6%, a change in our previous expectations of 53.8%, due to
    higher than normal clearance sale activity from store and local warehouse
    closings and an estimated increase in the LIFO reserve.
  * Fixed and discretionary type expenses within SG&A for the fourth quarter are
    expected to be approximately $61 to $62 million versus $57.5 million last
    year.  For the year the estimate for these costs remains $232 to $233
    million versus the $224 million for the costs in 2013 with the increases due
    to new stores, and higher advertising and personnel expenses.  The variable
    type costs within SG&A for the full year of 2014 are anticipated to be
    approximately 17.4% as a percent of sales, with such expenses for the fourth
    quarter expected to be approximately 17.2%.
  * Our new urban format store, Havertys Style Studio, opened in mid-October in
    Atlanta, Georgia. We also closed our Florence, Kentucky store in October and
    plan to open two store relocations and a new store during the fourth
    quarter.  The store count at the end of 2014 is expected to be 120.
    Weighted average retail square footage is estimated to increase 0.4% during
    the fourth quarter.  Planned capital expenditures are estimated to be $34
    million.
  * We expect to increase selling square footage approximately 2.6% in 2015
    based on increasing our store count by a net three locations.  Total capital
    expenditures are estimated to be in the $30 to $33 million range in 2015
    depending on the timing of spending for new locations.



  HAVERTY FURNITURE COMPANIES, INC.

  CONDENSED CONSOLIDATED STATEMENTS OF INCOME

  (In thousands, except per share data - Unaudited)



                              Three Months Ended        Nine Months  Ended
                                 September 30,             September 30,
                           ------------------------- -------------------------
                               2014         2013         2014         2013
                           ------------ ------------ ------------ ------------


 Net sales                   $ 198,541    $ 192,722    $ 555,411    $ 549,926

 Cost of goods sold             92,338       88,845      257,201      254,430
                           ------------ ------------ ------------ ------------
   Gross profit                106,203      103,877      298,210      295,496

 Credit service charges             72           78          223          240
                           ------------ ------------ ------------ ------------
   Gross profit and other
   revenue                     106,275      103,955      298,433      295,736
                           ------------ ------------ ------------ ------------


 Expenses:

   Selling, general and
   administrative               93,575       88,286      267,515      258,145

   Interest, net                   175          282          666          837

   Provision for doubtful
   accounts                         69           51          203           96

   Other (income)
   expense, net                    (12 )        (52 )       (186 )        (46 )
                           ------------ ------------ ------------ ------------
                                93,807       88,567      268,198      259,032
                           ------------ ------------ ------------ ------------


 Income before income
 taxes                          12,468       15,388       30,235       36,704

 Income tax expense              4,644        5,894       11,454       14,120
                           ------------ ------------ ------------ ------------
   Net income                $   7,824    $   9,494    $  18,781    $  22,584
                           ------------ ------------ ------------ ------------


 Basic earnings per
 share:

   Common Stock              $    0.35    $    0.42    $    0.84    $    1.01

   Class A Common Stock      $    0.33    $    0.40    $    0.75    $    0.96



 Diluted earnings per
 share:

   Common Stock              $    0.34    $    0.42    $    0.82    $    0.99

   Class A Common Stock      $    0.33    $    0.40    $    0.76    $    0.95



 Basic weighted average
 shares outstanding:

   Common Stock                 20,535       20,047       20,383       19,786

   Class A Common Stock          2,151        2,455        2,223        2,606



 Diluted weighted average
 shares outstanding:

   Common Stock                 22,939       22,855       22,936       22,783

   Class A Common Stock          2,151        2,455        2,223        2,606



 Cash dividends per
 share:

   Common Stock              $   1.080    $   0.080    $   1.240    $    0.16

   Class A Common Stock      $   1.025    $   0.075    $   1.175    $    0.15






  HAVERTY FURNITURE COMPANIES, INC.

  CONDENSED CONSOLIDATED BALANCE SHEETS

  (In thousands - Unaudited)


                                     September     December
                                        30,          31,       September 30,
                                       2014          2013           2013
                                   ------------- ------------ ----------------
                                    (Unaudited)                   (Unaudited)

 ASSETS

 Current assets

   Cash and cash equivalents         $   78,659    $  83,185    $      72,078

   Restricted cash and cash
   equivalents                            8,017        7,016            7,016

   Accounts receivable                    6,647        8,172            8,102

   Inventories                           94,822       91,483           91,600

   Prepaid expenses                       7,265        6,494            7,298

   Other current assets                   4,292        4,349            4,052
                                   ------------- ------------ ----------------
     Total current assets               199,702      200,699          190,146



 Accounts receivable, long-term             692          832              845

 Property and equipment                 213,254      189,242          191,491

 Deferred income taxes                   13,197       13,253           23,823

 Other assets                            15,623       13,829            4,243
                                   ------------- ------------ ----------------
     Total assets                    $  442,468    $ 417,855    $     410,548
                                   ------------- ------------ ----------------


 LIABILITIES AND STOCKHOLDERS'
 EQUITY

 Current liabilities

   Accounts payable                  $   23,984    $  21,810    $      20,281

   Customer deposits                     28,821       19,008           23,045

   Accrued liabilities                   36,964       36,338           35,312

   Deferred income taxes                      -            -            6,601

   Current portion of lease
   obligations                            1,820          959              928
                                   ------------- ------------ ----------------
     Total current liabilities           91,589       78,115           86,167



 Lease obligations, less current
 portion                                 34,792       16,196           16,451

 Other liabilities                       26,059       25,280           27,006
                                   ------------- ------------ ----------------
     Total liabilities                  152,440      119,591          129,624



 Stockholders' equity                   290,028      298,264          280,924
                                   ------------- ------------ ----------------
     Total liabilities and
     stockholders' equity            $  442,468    $ 417,855    $     410,548
                                   ------------- ------------ ----------------





  HAVERTY FURNITURE COMPANIES, INC.

  CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

  (In thousands - Unaudited)


                                                          Nine Months Ended
                                                            September 30,
                                                       -----------------------
                                                          2014        2013
                                                       ----------- -----------
 CASH FLOWS FROM OPERATING ACTIVITIES:

   Net  income                                          $  18,781   $  22,584

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

     Depreciation and amortization                         16,632      15,811

     Share-based compensation expense                       2,530       2,682

     Provision for doubtful accounts                          203          96

     Other                                                    549         394

   Changes in operating assets and liabilities:

     Accounts receivable                                    1,462       1,481

     Inventories                                           (3,339 )     5,302

     Customer deposits                                      9,813       2,082

     Other assets and liabilities                            (379 )    (3,538 )

     Accounts payable and accrued liabilities               2,800      (5,857 )
                                                         ---------   ---------
       Net cash provided by operating activities           49,052      41,037
                                                         ---------   ---------


 CASH FLOWS FROM INVESTING ACTIVITIES:

   Capital expenditures                                   (22,049 )   (16,720 )

   Restricted cash and cash equivalents                    (1,001 )         -

   Other                                                      407           7
                                                         ---------   ---------
       Net cash used in investing activities              (22,643 )   (16,713 )
                                                         ---------   ---------


 CASH FLOWS FROM FINANCING ACTIVITIES:

   Payments on lease obligations                             (729 )      (643 )

   Dividends paid                                         (27,976 )    (3,564 )

   Proceeds from exercise of stock options                      -         872

   Taxes on vested restricted shares                       (2,060 )    (2,461 )

   Other                                                     (170 )         -
                                                         ---------   ---------
       Net cash used in financing activities              (30,935 )    (5,796 )
                                                         ---------   ---------
 (Decrease) Increase in cash and cash equivalents
 during the period                                         (4,526 )    18,528

 Cash and cash equivalents at beginning of period          83,185      53,550
                                                         ---------   ---------
 Cash and cash equivalents at end of period             $  78,659   $  72,078
                                                         ---------   ---------




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 Thursday, October 30,  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 1:00 p.m. EDT through Thursday, November 6, 2014. The number to
access the telephone playback is 1-888-203-1112 (access code: 6172199).


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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