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| 8-K - HAVERTY FURNITURE COMPANIES INC | hvt8k9302013.htm |
EXHIBIT 99.1
Havertys Reports Record Third Quarter 2013 EPS of $0.42
Atlanta, Georgia, October 30, 2013 – HAVERTYS (NYSE: HVT and HVT.A) reports earnings per share for the third quarter ended September 30, 2013 of $0.42 compared to $0.15 for the same period of 2012. The earnings per share for the nine months ended September 30, 2013 is $0.99 compared to $0.36 for the same period of 2012.
Clarence Smith, chairman, president and CEO, said “We are reaching our customers in new ways and providing inspiration, information and assistance so she can confidently turn her vision of home into a reality. Our teams have been engaged in enriching the shopping experience across all channels and offering captivating products with great fabrics, finishes and function. Operationally we are refining productivity benchmarks and continue to strive to grow market share and comparable store sales. We believe the geographic regions in which our stores are located coupled with our financial strength and positioning of the Havertys brand will fuel our growth as housing and employment improve.
Financial Highlights
Third Quarter 2013 Compared to Third Quarter 2012
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Net sales increased 11.6% to $192.7 million. Comparable store sales were up 11.8%. Total written business was up 7.3% and average ticket rose 5.6%.
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Gross profit margins increased 140 basis points to 53.9% from 52.5% as a percent of sales. This includes a year-over-year benefit of 40 basis points from changes in the LIFO reserve.
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Selling, general and administrative costs as a percent of sales decreased by 350 basis points to 45.8% from 49.3% as fixed and discretionary costs were leveraged.
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Pre-tax earnings of $15.4 million increased 470 basis points to 8.0% from 3.3% as a percent of sales.
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Our retail store count at September 30, 2013 was 119 versus 120 at September 30, 2012.
Nine Months ended September 30, 2013 Compared to Same Period of 2012
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Net sales increased 12.7% to $549.9 million. Comparable store sales were up 11.5%. Average ticket increased 8.6%.
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Gross profit margins increased 130 basis points to 53.7%. Excluding LIFO and the impact of a $0.8 million out-of-period adjustment in the first quarter, gross profit margin increased 110 basis points to 53.6% from 52.5% as a percent of sales.
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Selling, general and administrative costs as a percent of sales decreased 290 basis points to 46.9% from 49.8% due to leveraging fixed and discretionary costs. The $15.4 million increase in dollars is primarily related to increases in: commissions, wages, incentive compensation, related payroll costs, delivery expense, depreciation and advertising.
NEWS RELEASE - OCTOBER 30, 2013
PAGE 2
Expectations and Other
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Written business for the fourth quarter to date of 2013 is up approximately 5.6% over the 16.7% increase that had been achieved for the same period last year.
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Our year-to-date gross profit margin excluding the out-of-period adjustment and assuming no LIFO impact was 53.6% as a percent of net sales. We anticipate this run rate is a reasonable expectation for the next few quarters barring the effect of LIFO accounting for any future changes in landed merchandise costs.
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Fixed and discretionary type expenses within SG&A costs for the full year 2013 are expected to be slightly above the high end of the $220 to $222 million range we have previously discussed. 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 slightly below the lower end of the range of 17.0% to 17.5% as a percent of sales.
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Selling square footage is estimated to decrease 2.2% in 2013 based on the net effect of closing three stores in the first half and the recently completed remodeling and expansion of three stores. Planned capital expenditures are expected to be $22 million in 2013.
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We expect to increase selling square footage approximately 3% in 2014 based on increasing our store count by a net three locations. Capital expenditures are estimated in the $25 to $29 million range in 2014 depending on the timing of expenditures for new locations.
NEWS RELEASE - OCTOBER 30, 2013
PAGE 3
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HAVERTY FURNITURE COMPANIES, INC.
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CONDENSED CONSOLIDATED STATEMENTS OF INCOME
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(In thousands, except per share data – Unaudited)
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Three Months Ended
September 30,
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Nine Months Ended
September 30,
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2013
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2012
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2013
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2012
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Net sales
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$ | 192,722 | $ | 172,677 | $ | 549,926 | $ | 487,766 | ||||||||
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Cost of goods sold
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88,845 | 82,004 | 254,430 | 232,002 | ||||||||||||
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Gross profit
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103,877 | 90,673 | 295,496 | 255,764 | ||||||||||||
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Credit service charges
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78 | 69 | 240 | 216 | ||||||||||||
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Gross profit and other revenue
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103,955 | 90,742 | 295,736 | 255,980 | ||||||||||||
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Expenses:
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Selling, general and administrative
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88,286 | 85,082 | 258,145 | 242,728 | ||||||||||||
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Interest, net
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282 | 154 | 837 | 473 | ||||||||||||
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Provision for doubtful accounts
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51 | 30 | 96 | 101 | ||||||||||||
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Other (income) expense, net
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(52 | ) | (160 | ) | (46 | ) | (745 | ) | ||||||||
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88,567 | 85,106 | 259,032 | 242,557 | ||||||||||||
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Income before income taxes
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15,388 | 5,636 | 36,704 | 13,423 | ||||||||||||
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Income tax expense
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5,894 | 2,322 | 14,120 | 5,291 | ||||||||||||
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Net income
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$ | 9,494 | $ | 3,314 | $ | 22,584 | $ | 8,132 | ||||||||
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Basic earnings per share:
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Common Stock
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$ | 0.42 | $ | 0.15 | $ | 1.01 | $ | 0.37 | ||||||||
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Class A Common Stock
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$ | 0.40 | $ | 0.14 | $ | 0.96 | $ | 0.35 | ||||||||
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Diluted earnings per share:
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Common Stock
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$ | 0.42 | $ | 0.15 | $ | 0.99 | $ | 0.36 | ||||||||
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Class A Common Stock
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$ | 0.40 | $ | 0.14 | $ | 0.95 | $ | 0.35 | ||||||||
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Basic weighted average shares outstanding:
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Common Stock
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20,047 | 19,163 | 19,786 | 19,018 | ||||||||||||
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Class A Common Stock
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2,455 | 2,887 | 2,606 | 2,986 | ||||||||||||
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Diluted weighted average shares outstanding:
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Common Stock
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22,855 | 22,371 | 22,783 | 22,319 | ||||||||||||
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Class A Common Stock
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2,455 | 2,887 | 2,606 | 2,986 | ||||||||||||
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Cash dividends per share:
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Common Stock
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$ | 0.080 | $ | 0.0400 | $ | 0.16 | $ | 0.080 | ||||||||
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Class A Common Stock
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$ | 0.075 | $ | 0.0375 | $ | 0.15 | $ | 0.075 | ||||||||
NEWS RELEASE - OCTOBER 30, 2013
PAGE 4
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HAVERTY FURNITURE COMPANIES, INC.
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CONDENSED CONSOLIDATED BALANCE SHEETS
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(In thousands - Unaudited)
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September 30,
2013
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December 31,
2012
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September 30,
2012
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(Unaudited)
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(Unaudited)
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ASSETS
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Current assets
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Cash and cash equivalents
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$ | 72,078 | $ | 53,550 | $ | 75,026 | ||||||
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Restricted cash and cash equivalents
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7,016 | 7,013 | 7,011 | |||||||||
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Accounts receivable
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8,102 | 9,710 | 9,564 | |||||||||
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Inventories
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91,600 | 96,902 | 84,530 | |||||||||
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Prepaid expenses
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7,298 | 9,532 | 9,762 | |||||||||
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Other current assets
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4,052 | 3,187 | 5,509 | |||||||||
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Total current assets
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190,146 | 179,894 | 191,402 | |||||||||
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Accounts receivable, long-term
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845 | 814 | 529 | |||||||||
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Property and equipment
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191,491 | 193,085 | 187,033 | |||||||||
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Deferred income taxes
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23,823 | 24,366 | 23,526 | |||||||||
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Other assets
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4,243 | 3,937 | 3,908 | |||||||||
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Total assets
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$ | 410,548 | $ | 402,096 | $ | 406,398 | ||||||
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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Current liabilities
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Accounts payable
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$ | 20,281 | $ | 28,178 | $ | 23,451 | ||||||
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Customer deposits
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23,045 | 20,963 | 21,676 | |||||||||
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Accrued liabilities
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35,312 | 33,272 | 34,146 | |||||||||
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Deferred income taxes
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6,601 | 6,595 | 6,996 | |||||||||
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Current portion of lease obligations
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928 | 881 | 819 | |||||||||
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Total current liabilities
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86,167 | 89,889 | 87,088 | |||||||||
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Lease obligations, less current portion
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16,451 | 18,473 | 12,447 | |||||||||
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Other liabilities
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27,006 | 34,306 | 34,442 | |||||||||
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Total liabilities
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129,624 | 142,668 | 133,977 | |||||||||
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Stockholders’ equity
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280,924 | 259,428 | 272,421 | |||||||||
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Total liabilities and stockholders’ equity
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$ | 410,548 | $ | 402,096 | $ | 406,398 | ||||||
NEWS RELEASE - OCTOBER 30, 2013
PAGE 5
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HAVERTY FURNITURE COMPANIES, INC.
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
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(In thousands – Unaudited)
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Nine Months Ended
September 30,
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2013
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2012
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CASH FLOWS FROM OPERATING ACTIVITIES:
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Net income
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$ | 22,584 | $ | 8,132 | ||||
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Adjustments to reconcile net income to net
cash provided by operating activities:
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Depreciation and amortization
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15,811 | 14,334 | ||||||
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Share-based compensation expense
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2,682 | 1,944 | ||||||
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Provision for doubtful accounts
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96 | 101 | ||||||
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Other
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394 | 534 | ||||||
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Changes in operating assets and liabilities:
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Accounts receivable
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1,481 | 1,706 | ||||||
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Inventories
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5,302 | 8,914 | ||||||
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Customer deposits
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2,082 | 7,104 | ||||||
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Other assets and liabilities
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(3,538 | ) | (1,647 | ) | ||||
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Accounts payable and accrued liabilities
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(5,857 | ) | 7,193 | |||||
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Net cash provided by operating activities
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41,037 | 48,315 | ||||||
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CASH FLOWS FROM INVESTING ACTIVITIES:
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Capital expenditures
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(16,720 | ) | (20,166 | ) | ||||
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Other
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7 | 244 | ||||||
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Net cash used in investing activities
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(16,713 | ) | (19,922 | ) | ||||
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CASH FLOWS FROM FINANCING ACTIVITIES:
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Payments on lease obligations
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(643 | ) | (553 | ) | ||||
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Dividends paid
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(3,564 | ) | (1,750 | ) | ||||
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Proceeds from exercise of stock options
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872 | 84 | ||||||
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Taxes on vested restricted shares
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(2,461 | ) | (515 | ) | ||||
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Treasury stock acquired
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— | (218 | ) | |||||
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Net cash used in financing activities
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(5,796 | ) | (2,952 | ) | ||||
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Increase in cash and cash equivalents during the period
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18,528 | 25,441 | ||||||
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Cash and cash equivalents at beginning of period
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53,550 | 49,585 | ||||||
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Cash and cash equivalents at end of period
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$ | 72,078 | $ | 75,026 | ||||
NEWS RELEASE- OCTOBER 30, 2013
PAGE 6
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 31, 2013 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 12:00 p.m. EDT through Thursday, November 7, 2013. The number to access the telephone playback is 1-800-406-7325 (access code: 4647482#).
Contact:
Havertys 404-443-2900
Dennis L. Fink
EVP & CFO
Jenny Hill Parker
SVP, Finance, Secretary and Treasurer
SOURCE: Havertys