May 02, 2022 4:11 PM
First quarter 2022 versus first quarter 2021:
"During the early part of the quarter our delivered and written business was good compared to the historic results in 2021. We experienced a return to increased consumer interest around traditional shopping holiday events and had a record
"We have a forward-thinking and resilient team and coupled with our competitive and financial strengths, we are confident in meeting near-term challenges and progressing on long-term goals. We remain governed by our mission: to delight our customers with personalized and outstanding customer service, with a commitment to our team members, and to deliver consistent value to our shareholders."
Key Results
(amounts in millions, except per share amounts)
Results of Operations | Q1 2022 | Q1 2021 | ||||||
Sales | $ | 238.9 | $ | 236.5 | ||||
Gross Profit | 141.0 | 135.0 | ||||||
Gross profit as a % of sales | 59.0 | % | 57.1 | % | ||||
SGA | ||||||||
Variable | 44.4 | 40.7 | ||||||
Fixed | 70.8 | 69.1 | ||||||
Total | 115.2 | 109.8 | ||||||
SGA as a % of sales | ||||||||
Variable | 18.6 | % | 17.2 | % | ||||
Fixed | 29.6 | % | 29.2 | % | ||||
Total | 48.2 | % | 46.4 | % | ||||
Pre-tax income | 25.7 | 25.4 | ||||||
Pre-tax income as a % of sales | 10.8 | % | 10.7 | % | ||||
Net income | $ | 19.4 | $ | 19.4 | ||||
Net income as a % of sales | 8.1 | % | 8.2 | % | ||||
Diluted earnings per share (“EPS”) | $ | 1.11 | $ | 1.04 |
Other Financial and Operations Data | Q1 2022 | Q1 2021 | |||||
EBITDA (in millions)(1) | $ | 29.9 | $ | 29.3 | |||
Sales per square foot | $ | 222 | $ | 222 | |||
Average ticket | $ | 3,066 | $ | 2,685 |
Liquidity Measures | ||||||||||||||
Free Cash Flow | Q1 2022 | Q1 2021 | Cash Returns to Shareholders | Q1 2022 | Q1 2021 | |||||||||
Operating cash flow | $ | 20.6 | $ | 19.6 | Share repurchases | $ | 12.5 | $ | — | |||||
Dividends | 4.3 | 4.0 | ||||||||||||
Capital expenditures | 7.1 | 4.7 | ||||||||||||
Free cash flow | $ | 13.5 | $ | 14.9 | Cash returns to shareholders | $ | 16.8 | $ | 4.0 | |||||
(1) See the reconciliation of the non-GAAP metrics at the end of the release.
First Quarter ended
Balance Sheet and Cash Flow
Expectations and Other
CONDENSED CONSOLIDATED STATEMENTS OF INCOME |
(In thousands, except per share data – Unaudited) |
Three Months Ended | |||||||||
2022 | 2021 | ||||||||
Net sales | $ | 238,946 | $ | 236,491 | |||||
Cost of goods sold | 97,985 | 101,457 | |||||||
Gross profit | 140,961 | 135,034 | |||||||
Expenses: | |||||||||
Selling, general and administrative | 115,154 | 109,762 | |||||||
Other expense (income), net | 161 | (36 | ) | ||||||
Total expenses | 115,315 | 109,726 | |||||||
Income before interest and income taxes | 25,646 | 25,308 | |||||||
Interest income, net | 74 | 56 | |||||||
Income before income taxes | 25,720 | 25,364 | |||||||
Income tax expense | 6,359 | 5,958 | |||||||
Net income | $ | 19,361 | $ | 19,406 | |||||
Other comprehensive income | |||||||||
Adjustments related to retirement plans; net of tax expense of | $ | 40 | $ | 49 | |||||
Comprehensive income | $ | 19,401 | $ | 19,455 | |||||
Basic earnings per share: | |||||||||
Common Stock | $ | 1.14 | $ | 1.07 | |||||
Class A Common Stock | $ | 1.08 | $ | 1.00 | |||||
Diluted earnings per share: | |||||||||
Common Stock | $ | 1.11 | $ | 1.04 | |||||
Class A Common Stock | $ | 1.05 | $ | 0.98 | |||||
Cash dividends per share: | |||||||||
Common Stock | $ | 0.25 | $ | 0.22 | |||||
Class A Common Stock | $ | 0.23 | $ | 0.20 |
CONDENSED CONSOLIDATED BALANCE SHEETS |
(In thousands - Unaudited) |
2022 | 2021 | 2021 | ||||||||||
ASSETS | ||||||||||||
Current assets | ||||||||||||
Cash and cash equivalents | $ | 162,340 | $ | 166,146 | $ | 210,124 | ||||||
Restricted cash and cash equivalents | 6,715 | 6,716 | 6,715 | |||||||||
Inventories | 119,857 | 112,031 | 103,569 | |||||||||
Prepaid expenses | 10,633 | 12,418 | 12,335 | |||||||||
Other current assets | 13,585 | 11,746 | 9,957 | |||||||||
Total current assets | 313,130 | 309,057 | 342,700 | |||||||||
Property and equipment, net | 128,721 | 126,099 | 108,836 | |||||||||
Right-of-use lease assets | 221,083 | 222,356 | 228,089 | |||||||||
Deferred income taxes | 18,252 | 16,375 | 16,713 | |||||||||
Other assets | 12,699 | 12,403 | 11,934 | |||||||||
Total assets | $ | 693,885 | $ | 686,290 | $ | 708,272 | ||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||
Current liabilities | ||||||||||||
Accounts payable | $ | 32,415 | $ | 31,235 | $ | 25,031 | ||||||
Customer deposits | 98,528 | 98,897 | 104,728 | |||||||||
Accrued liabilities | 48,876 | 46,664 | 51,409 | |||||||||
Current lease liabilities | 33,923 | 33,581 | 33,760 | |||||||||
Total current liabilities | 213,742 | 210,377 | 214,928 | |||||||||
Noncurrent lease liabilities | 197,265 | 196,771 | 199,344 | |||||||||
Other liabilities | 22,478 | 23,172 | 23,686 | |||||||||
Total liabilities | 433,485 | 430,320 | 437,958 | |||||||||
Stockholders’ equity | 260,400 | 255,970 | 270,314 | |||||||||
Total liabilities and stockholders’ equity | $ | 693,885 | $ | 686,290 | $ | 708,272 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
(In thousands – Unaudited) |
Three Months Ended | ||||||||||
2022 | 2021 | |||||||||
Cash Flows from Operating Activities: | ||||||||||
Net income | $ | 19,361 | $ | 19,406 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||
Depreciation and amortization | 4,272 | 3,992 | ||||||||
Share-based compensation expense | 2,307 | 2,679 | ||||||||
Other | (1,877 | ) | (915 | ) | ||||||
Changes in operating assets and liabilities: | ||||||||||
Inventories | (7,826 | ) | (13,661 | ) | ||||||
Customer deposits | (369 | ) | 18,545 | |||||||
Other assets and liabilities | 1,120 | (2,777 | ) | |||||||
Accounts payable and accrued liabilities | 3,590 | (7,668 | ) | |||||||
Net cash provided by operating activities | 20,578 | 19,601 | ||||||||
Cash Flows from Investing Activities: | ||||||||||
Capital expenditures | (7,107 | ) | (4,745 | ) | ||||||
Net cash used in investing activities | (7,107 | ) | (4,745 | ) | ||||||
Cash Flows from Financing Activities: | ||||||||||
Proceeds from borrowings under revolving credit facilities | — | — | ||||||||
Payments of borrowings under revolving credit facilities | — | — | ||||||||
Net change in borrowings under revolving credit facilities | — | — | ||||||||
Dividends paid | (4,260 | ) | (3,987 | ) | ||||||
Common stock repurchased | (12,501 | ) | — | |||||||
Other | (517 | ) | (801 | ) | ||||||
Net cash used in financing activities | (17,278 | ) | (4,788 | ) | ||||||
(Decrease) increase in cash, cash equivalents and restricted cash equivalents during the period | (3,807 | ) | 10,068 | |||||||
Cash, cash equivalents and restricted cash equivalents at beginning of period | 172,862 | 206,771 | ||||||||
Cash, cash equivalents and restricted cash equivalents at end of period | $ | 169,055 | $ | 216,839 |
GAAP to Non-GAAP Reconciliation
We report our financial results in accordance with accounting principles generally accepted in the United States ("GAAP"). We supplement the reporting of our financial information under GAAP with certain non-GAAP financial information. The non-GAAP information presented provides additional useful information but should not be considered in isolation or as substitutes for the related GAAP measures. We believe that EBITDA is a meaningful measure to share with investors.
Reconciliation of GAAP measures to EBITDA
(in thousands) | Q1 2022 | Q1 2021 | ||||||
Income before income taxes, as reported | $ | 25,720 | $ | 25,364 | ||||
Interest (income), net | (74 | ) | (56 | ) | ||||
Depreciation | 4,272 | 3,992 | ||||||
EBITDA | $ | 29,918 | $ | 29,300 |
Comparable Store Sales
Comparable-store or “comp-store” sales is a measure which indicates the performance of our existing stores and website by comparing the sales growth for stores and online for a particular month over the corresponding month in the prior year. Stores are considered non-comparable if they were not open during the corresponding month or if the selling square footage has been changed significantly. Stores closed due to COVID-19 were excluded from comp-store sales.
Cost of Goods Sold and SG&A Expense
We include substantially all our occupancy and home delivery costs in SG&A expense as well as a portion of our warehousing expenses. Accordingly, our gross profit may not be comparable to those entities that include these costs in cost of goods sold.
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
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 expectations for retail and operating margins, selling square footage and capital expenditures for 2022, our liquidity position to continue to fund our growth plans, and our efforts and initiatives to execute our strategic plan.
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 COVID-19 pandemic; disruptions in our suppliers' operations; 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 2021 and from time to time in the Company's subsequent filings with the SEC.
Forward-looking statements describe our expectations 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