Earnings Disclosure

Q2 2013 Haverty Furniture Companies, Inc. Earnings Conference Call

Thursday, August 1, 2013 10:00 a.m. ET  

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HVT (Common Stock)

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Havertys Reports Earnings for Second Quarter 2013

ATLANTA, GEORGIA, July 31, 2013 -- HAVERTY FURNITURE COMPANIES, INC. (NYSE: HVT and HVT.A) reports earnings per share for the second quarter ended June 30, 2013 of  $0.21 compared to $0.11 for the same period of 2012.  The earnings per share for the six months ended June 30, 2013 is $0.58 compared to $0.22 for the same period of 2012.  The year to date earnings for 2013 include 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 initiatives to improve the productivity of our stores and the efficiency of our operations continue delivering positive results.  The execution of our merchandising and marketing strategies increased our average sales ticket and improved store traffic.  Housing sales in our regions, a key driver of business, are growing.  We believe our financial strength and positioning of the Havertys brand will allow us to outpace our competition as housing and employment improves.

Financial Highlights

Second Quarter 2013 Compared to Second Quarter 2012

  • Net sales increased 12.9% to $171.1 million.  Comparable store sales were up 11.2%.  Total written business was up 16.7% and average ticket rose 7.7%.  

  • Gross profit margins increased 80 basis points to 53.4% from 52.6% as a percent of sales, slightly ahead of our expectations. 

  • Selling, general and administrative costs as a percent of sales decreased by 180 basis points to 48.6% from 50.4% as fixed and discretionary costs were leveraged.  The increase in dollars of $6.8 million primarily resulted from variable selling costs such as commissions, delivery and credit costs which rose with the $19.6 million sales increase.  Salaries, management and incentive compensation and advertising expense were also higher.  

  • We closed our Jackson, Mississippi and Roanoke, Virginia locations midway through the quarter.  Our retail store count at June 30, 2013 was 119 versus 120 at June 30, 2012.   

Six Months ended June 30, 2013 Compared to Same Period of 2012

  • Net sales increased 13.4% to $357.2 million.  Comparable store sales were up 11.3%.  Average ticket increased 10.3%. 

  • Gross profit margins, excluding the impact of the first quarter adjustment noted above, increased 100 basis points to 53.4% from 52.4% as a percent of sales. 

  • Selling, general and administrative costs as a percent of sales decreased 240 basis points to 47.6% from 50.0% due to leveraging fixed and discretionary costs.  The $12.2 million increase in dollars is primarily related to increases in:  commissions, wages, incentive compensation, related payroll costs, and advertising.  

Expectations and Other

  • Total delivered sales for the third quarter to date of 2013 are up approximately 9.8% over the same period last year.  Written business is up approximately 11.8%. 

  • We expect that gross profit margins for the second half of 2013 will be better than the 52.7% margin for the second half of 2012 but modestly below the first half adjusted rate of 53.4%. 

  • Fixed and discretionary type expenses within SG&A costs for the full year 2013 are expected to be at the high end of the $220 to $222 million range we discussed in our 2012 Form 10-K representing an increase of approximately 4.5% over the same costs for 2012.  These expenses will generally increase 3% to 5% annually due to inflation, expansion, staffing, and decisions made on the level of advertising spend.   The variable costs within SG&A for the full year 2013 are anticipated to be at the lower end of the range of 17.0% to 17.5% as a percent of sales. 

  • Selling square footage is estimated to decrease 2.0% in 2013 based on the three stores closed in the first half and the remodeling and expansion of stores currently in process.   

HAVERTY FURNITURE COMPANIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In Thousands, except per share data - Unaudited)

    Three Months Ended
June 30,
Six Months  Ended
June 30,
2013 2012 2013 2012
           
Net sales   $ 171,114   $ 151,519   $ 357,204   $ 315,088
Cost of goods sold 79,803 71,770 165,585 149,997
      Gross profit 91,311 79,749 191,619 165,091
Credit service charges 76 71 162 147
      Gross profit and other revenue 91,387 79,820 191,781 165,238
     
Expenses:
      Selling, general and administrative 83,197 76,409 169,859 157,646
      Interest, net 277 158 555 319
      Provision for doubtful accounts 32 5 45 71
      Other (income) expense, net 15 (518 ) 6 (585 )
      83,521 76,054 170,465 157,451
     
Income before income taxes 7,866 3,766 21,316 7,787
Income tax expense 3,036 1,405 8,226 2,969
      Net income   $ 4,830   $ 2,361   $ 13,090   $ 4,818
     
Basic earnings per share:
      Common Stock   $ 0.22   $ 0.11   $ 0.59   $ 0.22
      Class A Common Stock   $ 0.20   $ 0.10   $ 0.56   $ 0.21
     
Diluted earnings per share:
      Common Stock   $ 0.21   $ 0.11   $ 0.58   $ 0.22
      Class A Common Stock   $ 0.20   $ 0.10   $ 0.55   $ 0.21
     
Basic weighted average shares outstanding:
      Common Stock 19,807 19,023 19,654 18,944
      Class A Common Stock 2,614 2,989 2,682 3,037
     
Diluted weighted average shares outstanding:
      Common Stock 22,791 22,313 22,754 22,292
      Class A Common Stock 2,614 2,989 2,682 3,037
         
Cash dividends per share:
     Common Stock   $ 0.0400   $ 0.0400   $ 0.0800   $ 0.0400
     Class A Common Stock   $ 0.0375   $ 0.0375   $ 0.0750   $ 0.0375

HAVERTY FURNITURE COMPANIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands - Unaudited)

       June 30,
2013
   December 31,
2012
   June 30,
2012
     (Unaudited) (Unaudited)
ASSETS
Current assets         
      Cash and cash equivalents  $ 52,260  $ 53,550  $ 55,718
      Restricted cash and cash equivalents 7,015 7,013 7,009
      Accounts receivable 8,290 9,710 9,700
      Inventories 97,738 96,902 93,343
      Prepaid expenses 7,711 9,532 11,121
      Other current assets 5,263 3,187 4,749
            Total current assets 178,277 179,894 181,640
    
Accounts receivable, long-term 825 814 314
Property and equipment 191,917 193,085 183,829
Deferred income taxes 24,002 24,366 22,572
Other assets 4,116 3,937 3,830
            Total assets  $ 399,137  $ 402,096  $ 392,185
     
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
      Accounts payable  $ 20,370  $ 28,178  $ 16,236
      Customer deposits 22,643 20,963 16,762
      Accrued liabilities 30,009 33,272 35,371
      Deferred income taxes 6,595 6,595 6,696
      Current portion of lease obligations 929 881 793
            Total current liabilities 80,546 89,889 75,858
    
Lease obligations, less current portion 16,988 18,473 11,880
Other liabilities 29,511 34,306 35,495
            Total liabilities 127,045 142,668 123,233
     
Stockholders' equity 272,092 259,428 268,952
            Total liabilities and stockholders' equity  $ 399,137  $ 402,096  $ 392,185

HAVERTY FURNITURE COMPANIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands - Unaudited)

    Six Months Ended
June 30,
2013      2012
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net  income $ 13,090 $ 4,818
     Adjustments to reconcile net income to net
  cash provided by operating activities:
          Depreciation and amortization 10,486 9,418
          Share-based compensation expense 2,038 1,321
          Provision for doubtful accounts 45 71
          Other 448 545
     Changes in operating assets and liabilities:
          Accounts receivable 1,364 1,815
          Inventories (836 ) 101
          Customer deposits 1,680 2,190
          Other assets and liabilities (4,267 ) (954 )
          Accounts payable and accrued liabilities (11,071 ) 1,203
               Net cash provided by operating activities 12,977 20,528
    
CASH FLOWS FROM INVESTING ACTIVITIES:
     Capital expenditures (10,225 ) (12,821 )
     Other 4 236
               Net cash used in investing activities (10,221 ) (12,585 )
    
CASH FLOWS FROM FINANCING ACTIVITIES:
     Payments on lease obligations (437 ) (373 )
     Dividends paid (1,776 ) (875 )
     Proceeds from exercise of stock options 623 -
     Taxes on vested restricted shares (2,456 ) (515 )
     Other financing activities - (47 )
               Net cash used in financing activities (4,046 ) (1,810 )
(Decrease) increase in cash and cash equivalents during the period (1,290 ) 6,133
Cash and cash equivalents at beginning of period 53,550 49,585
Cash and cash equivalents at end of period $ 52,260 $ 55,718

We report our earnings per share using the two-class method.  The income or loss per share for each class of common stock is calculated assuming 100% of our earnings or losses are distributed as dividends to each class of common stock based on their contractual rights.

The Common Stock of the Company has a preferential dividend rate of at least 105% of the dividend paid on the Class A Common Stock. The Class A Common Stock, which has ten votes per share as opposed to one vote per share for the Common Stock (on all matters other than the election of directors), may be converted at any time on a one-for-one basis into Common Stock at the option of the holder of the Class A Common Stock.

The following is a reconciliation of the earnings and number of shares used in calculating the diluted earnings per share for Common Stock and Class A Common Stock (in thousands):

    Three Months Ended
June 30,
    Six Months Ended
June 30,
2013     2012 2013      2012
Numerator:                
Common:
     Distributed earnings  $ 797  $ 762 $ 1,577 $ 762
     Undistributed earnings 3,497 1,293 10,013 3,421
Basic 4,294 2,055 11,590 4,183
     Class A Common earnings 536 306 1,500 635
          Diluted $ 4,830 2,361 $ 13,090 4,818
    
Class A Common:
     Distributed earnings $ 96 $ 113 $ 199 $ 113
     Undistributed earnings 440 193 1,301 522
$ 536 $ 306 $ 1,500 $ 635
Denominator:
Common:
Weighted average shares outstanding - basic 19,807 19,023 19,654 18,944
Assumed conversion of Class A Common Stock 2,614 2,989 2,682 3,037
Dilutive options, awards and common stock equivalents 370 301 418 311
Total weighted-average diluted Common Stock 22,791 22,313 22,754 22,292
Class A Common:
Weighted average shares outstanding 2,614 2,989 2,682 3,037
Antidilutive shares excluded from the denominator due to
 options' exercise prices being greater than the average
 market price
- 292 - 292

About Havertys

Havertys, 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 at its website, www.havertys.com under the investor relations section.  If you can not listen live, a replay will be available at the website or via telephone at approximately 12:00 p.m. EDT through Thursday, August 8, 2013. The number to access the telephone playback is 1-800-406-7325 (access code: 4632971#).

Contact:
Haverty Furniture Companies, Inc., 404-443-2900
Dennis L. Fink
  EVP & CFO
Jenny Hill Parker
  SVP, Finance, Secretary and Treasurer

SOURCE:  Haverty Furniture Companies, Inc.


HUG#1720319

Havertys Announces Timing of Second Quarter Earnings Release and Investor Conference Call

ATLANTA, GEORGIA, July 25, 2013  -  HAVERTY FURNITURE COMPANIES, INC., (NYSE: HVT and HVT.A) will release second quarter 2013 financial results on Wednesday, July 31, 2013, after the market closes.  Havertys will host a conference call with investors and analysts on Thursday, August 1, 2013 at 10:00 a.m. EDT to discuss the results of its operations.

The company invites interested parties to listen to the live audiocast of the conference call at its website, www.havertys.com/investors.  A replay will be available at the website or via telephone at approximately 12:00 p.m. EDT through Thursday, August 8, 2013.  The number to access the telephone playback is 1 (800) 406-7325 (access code: 4632971#).

The aforementioned conference call will contain forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995.  The statements may be made a number of times throughout the call and may be identified by such forward-looking terminology as "expect," "believe," "may," "will," "intend" or similar statements or variations of such terms.  Such forward-looking statements involve certain substantial risks and uncertainties including levels of sales and competitive pressures from other home furnishings retailers.  These and other important factors that may cause actual results to differ materially from such forward-looking statements are detailed from time to time in the company's reports filed with the Securities and Exchange Commission.  You are urged to consider such factors.  The company assumes no obligation for updating any such forward-looking statements.

Havertys 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.

Contact:
Haverty Furniture Companies, Inc., 404-443-2900
Jenny Hill Parker
  SVP, Finance, Secretary and Treasurer

SOURCE:  Haverty Furniture Companies, Inc.


HUG#1718978