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| 8-K - HAVERTY FURNITURE COMPANIES INC | hvt8k33111.htm |
EXHIBIT 99.1
N E W S R E L E A S E
HAVERTYS REPORTS RESULTS FOR FIRST QUARTER 2011
ATLANTA, GEORGIA, May 4, 2011 -- HAVERTY FURNITURE COMPANIES, INC. (NYSE: HVT and HVT.A) reports a loss for the first quarter ended March 31, 2011 of ($0.03) compared to earnings per share of $0.11 for the same period of 2010.
Clarence H. Smith, president and chief executive officer, said, “As we reported in early April, sales were 1.2% less than last year’s first quarter during which we produced an 8.2% sales increase. Our target customer is a homeowner and our business is influenced by housing market activity which has suffered historic declines. Housing trends improved modestly last year until the new buyer tax credits expired. Since then, further declines in home values and increased foreclosures have not helped the environment for furniture sales. Although we have lowered our operating costs over the last few years, our SG&A costs were impacted this quarter by rising fuel prices, wage increases and higher group insurance premiums.
“Our supply chain management continued to perform well as we flowed additional import goods in advance of the Chinese New Year plant closings in Asia and still ended the quarter with inventory levels $3.9 million lower than at year end 2010 and $5.6 million below one year ago. New products are arriving on our showroom floors that will improve our merchandise offerings in several key categories. We are continuing to make important investments in our current store base, technology and associate training which are essential to our strategies of focusing on the customer and effective support operations for sustainable long-term growth.”
Financial Highlights
First Quarter 2011 Compared to First Quarter 2010
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Net sales decreased 1.2% to $154.2 million. Comparable store sales were down 0.6% following five consecutive quarters of positive results including a strong 10.1% first quarter 2010 increase.
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Gross profit margins decreased to 51.2% from 52.1% as a percent of sales but in line with results for the last three consecutive quarters.
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Freight rates on imported products have progressively risen since late 2009 and it is difficult to fully recover the higher costs through our retail pricing.
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Selling, general and administrative costs increased $0.6 million primarily related to higher fuel prices, employee wage increases and increased group insurance premiums.
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Income tax expense includes approximately $0.2 million related to a non-cash adjustment to our recorded income tax receivables.
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Our retail store count is 118 versus 119 in 2010.
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Other
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Cash at the end of the first quarter of 2011 totaled $66.1 million, an $8.1 million increase from year end 2010 and $13.7 million higher than the year ago balance.
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We have no funded debt and $37.0 million of availability under our credit facility. Our debt to total capital ratio at the end of the first quarter of 2011 is 3.4%.
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Our total written business for the second quarter to date of 2011 is off approximately 1%.
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NEWS RELEASE – May 4, 2011 Page 2
HAVERTY FURNITURE COMPANIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data – Unaudited)
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Three Months Ended
March 31,
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2011
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2010
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Net sales
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$ | 154,171 | $ | 156,036 | ||||
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Cost of goods sold
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75,220 | 74,771 | ||||||
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Gross profit
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78,951 | 81,265 | ||||||
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Credit service charges
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134 | 214 | ||||||
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Gross profit and other revenue
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79,085 | 81,479 | ||||||
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Expenses:
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Selling, general and administrative
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79,469 | 78,879 | ||||||
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Interest, net
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222 | 208 | ||||||
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Provision for doubtful accounts
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19 | 162 | ||||||
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Other income, net
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(98 | ) | (202 | ) | ||||
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79,612 | 79,047 | ||||||
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Income (loss) before income taxes
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(527 | ) | 2,432 | |||||
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Income tax expense
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144 | 78 | ||||||
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$ | (671 | ) | $ | 2,354 | |||
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Basic earnings (loss) per share:
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Common Stock
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$ | (0.03 | ) | $ | 0.11 | |||
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Class A Common Stock
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$ | (0.03 | ) | $ | 0.11 | |||
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Diluted earnings (loss) per share:
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Common Stock
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$ | (0.03 | ) | $ | 0.11 | |||
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Class A Common Stock
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$ | (0.03 | ) | $ | 0.10 | |||
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Basic weighted average common shares outstanding:
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Common Stock
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18,534 | 17,578 | ||||||
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Class A Common Stock
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3,331 | 3,874 | ||||||
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Diluted weighted average common shares outstanding:
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Common Stock
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21,865 | 21,821 | ||||||
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Class A Common Stock
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3,331 | 3,874 | ||||||
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NEWS RELEASE – May 4, 2011 Page 3
HAVERTY FURNITURE COMPANIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
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March 31,
2011
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December 31, 2010
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March 31,
2010
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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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$ | 66,122 | $ | 58,045 | $ | 52,445 | ||||||
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Accounts receivable
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12,802 | 13,778 | 14,458 | |||||||||
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Inventories
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88,030 | 91,938 | 93,651 | |||||||||
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Prepaid expenses
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9,064 | 7,685 | 9,864 | |||||||||
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Other current assets
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3,441 | 5,489 | 4,232 | |||||||||
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Total current assets
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179,459 | 176,935 | 174,650 | |||||||||
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Accounts receivable, long-term
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519 | 588 | 736 | |||||||||
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Property and equipment
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172,959 | 175,511 | 172,620 | |||||||||
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Deferred income taxes
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11,524 | 11,524 | 9,935 | |||||||||
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Other assets
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5,342 | 5,681 | 6,479 | |||||||||
| $ | 369,803 | $ | 370,239 | $ | 364,420 | |||||||
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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Current liabilities
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Accounts payable
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$ | 19,004 | $ | 18,088 | $ | 16,501 | ||||||
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Customer deposits
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16,173 | 13,585 | 18,197 | |||||||||
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Accrued liabilities
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27,434 | 31,357 | 27,460 | |||||||||
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Deferred income taxes
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7,052 | 7,052 | 7,680 | |||||||||
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Current portion of lease obligations
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533 | 525 | 381 | |||||||||
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Total current liabilities
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70,196 | 70,607 | 70,219 | |||||||||
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Lease obligations, less current portion
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8,437 | 8,574 | 6,718 | |||||||||
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Other liabilities
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37,490 | 37,876 | 38,503 | |||||||||
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Total liabilities
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116,123 | 117,057 | 115,440 | |||||||||
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Stockholders’ equity
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253,680 | 253,182 | 248,980 | |||||||||
| $ | 369,803 | $ | 370,239 | $ | 364,420 | |||||||
NEWS RELEASE – May 4, 2011 Page 4
HAVERTY FURNITURE COMPANIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands – Unaudited)
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Three Months Ended March 31,
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2011
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2010
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Cash Flows from Operating Activities:
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Net income (loss)
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$ | (671 | ) | $ | 2,354 | |||
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Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
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Depreciation and amortization
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4,525 | 4,305 | ||||||
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Share-based compensation expense
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540 | 622 | ||||||
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Provision for doubtful accounts
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19 | 162 | ||||||
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Net gain on sale of property and equipment
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(21 | ) | (127 | ) | ||||
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Other
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(3 | ) | (904 | ) | ||||
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Changes in operating assets and liabilities:
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Accounts receivable
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1,026 | 787 | ||||||
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Inventories
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3,908 | (350 | ) | |||||
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Customer deposits
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2,588 | 4,195 | ||||||
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Other assets and liabilities
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708 | 1,917 | ||||||
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Accounts payable and accrued liabilities
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(3,007 | ) | (5,375 | ) | ||||
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Net cash provided by operating activities
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9,612 | 7,586 | ||||||
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Cash Flows from Investing Activities:
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Capital expenditures
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(1,970 | ) | (873 | ) | ||||
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Proceeds from sale of property and equipment
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21 | 205 | ||||||
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Other investing activities
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274 | — | ||||||
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Net cash used in investing activities
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(1,675 | ) | (668 | ) | ||||
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Cash Flows from Financing Activities:
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Payments on lease obligations
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(129 | ) | (84 | ) | ||||
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Proceeds from exercise of stock options
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270 | 1,593 | ||||||
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Other financing activities
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(1 | ) | (448 | ) | ||||
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Net cash provided by financing activities
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140 | 1,061 | ||||||
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Increase in cash and cash equivalents during the period
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8,077 | 7,979 | ||||||
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Cash and cash equivalents at beginning of period
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58,045 | 44,466 | ||||||
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Cash and cash equivalents at end of period
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$ | 66,122 | $ | 52,445 | ||||
Havertys, established in 1885, is a full-service home furnishings retailer with 118 showrooms in 17 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 RELEASE – May 4, 2011 Page 5
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.
The company will sponsor a conference call Thursday, May 5, 2011 at 10:00 a.m. Eastern Daylight Time to review the results. Listen-only access to the call is available via the web at www.havertys.com (For Investors) and at www.streetevents.com (Individual Investor Center), both live and for a limited time, on a replay basis.
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.