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| 8-K - HAVERTY FURNITURE COMPANIES INC | hvt8k102915.htm |
EXHIBIT 99.1
Havertys Reports Earnings for Third Quarter 2015
Atlanta, Georgia, October 28, 2015 – HAVERTY (NYSE: HVT and HVT.A) reports earnings per share of $0.34 for the third quarter of 2015 which are the same earnings per share results as the comparable period in 2014. The earnings per share for the nine months ended September 30, 2015 is $0.81 compared to $0.82 for the same period of 2014.
Clarence H. Smith, chairman, president and chief executive officer, said, "We are looking forward to a strong finish to 2015 with the seasonally strongest sales events of the year about to begin. Our efforts in building the average sales ticket are resulting in solid increases and we see potential for continued growth. The revival of dining room and bedroom furniture sales and the increasing popularity of custom upholstery signals a consumer expressing their personal style with more economic confidence. Havertys is well positioned to serve today's on trend customer beginning with upgraded stores, an improved website, knowledgeable sales associates, free in-home design consultations and excellent customer service. We remain committed to improving our business, maintaining strong cash flow, and returning profits to our shareholders."
Financial Highlights
Third Quarter 2015 Compared to Third Quarter 2014
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·
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As previously announced, net sales increased 5.7% to $209.9 million. Comparable store sales were up 3.0%.
|
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·
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Total written sales increased 5.2% and written comparable store sales rose 2.3%.
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·
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Average written ticket was up 6.9% and sales of custom upholstery increased 10.4%.
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·
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Gross profit margins were 53.2% versus 53.5% as a percent of sales as efforts continued to reduce closeout inventory items.
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·
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SG&A costs as a percent of sales was down slightly to 47.0% compared to 47.1%. We have the overhead in place for four additional stores versus last year and have increased our in-home design staff. Total SG&A dollars increased $5.1 million largely due to increases in selling costs of $2.0 million, occupancy expense of $1.4 million, and administrative costs of $1.4 million.
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·
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Interest expense increased $0.4 million in 2015 as we had additional financing lease obligations for new stores recorded on our balance sheet.
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·
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We purchased 524,464 shares of our common stock during the quarter at an average price of $23.00.
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Nine Months ended September 30, 2015 Compared to Same Period of 2014
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·
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Net sales increased 6.0% to $589.0 million. Comparable store sales were up 3.8%.
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·
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Average written ticket was up 5.0% and sales of custom upholstery increased 11.0%.
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·
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Gross profit margins were 53.4% versus 53.7% as a percent of sales due to higher inventory closeouts.
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NEWS RELEASE - OCTOBER 28, 2015 Page 2
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·
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SG&A costs as a percent of sales was unchanged at 48.2%. We have the overhead in place for four additional stores versus last year and have increased our in-home design staff. Total SG&A dollars increased $16.3 million largely due to increases in selling costs of $7.4 million, occupancy expense of $3.6 million, and administrative costs of $3.6 million.
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·
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Interest expense rose $0.9 million as we had additional financing lease obligations for new stores recorded on our balance sheet.
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·
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Other income includes $0.8 million from the settlement of credit card antitrust litigation.
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·
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We purchased 617,021 shares of our common stock at an average price of $22.69.
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·
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We opened two stores in the new markets of Rogers, Arkansas and Waco, Texas and strengthened our position in Southeast Florida with new stores in Coconut Creek and Ft. Lauderdale during the first nine months of 2015. Our store count was 123 at September 30, 2015 versus 119 at September 30, 2014.
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Expectations and Other
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·
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Total delivered sales for the fourth quarter to date of 2015 are up approximately 4.2% over the same period last year and comparable store sales are up 1.9%. Total written sales for the fourth quarter to date of 2015 are up approximately 3.7% over the same period last year and written comparable store sales are up approximately 0.6%.
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·
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We had very good sales growth last year with delivered comparable store sales for the full fourth quarter of 2014 up 8.3% and written comparable store sales up 5.9%.
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·
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We expect that gross profit margins for the full year 2015 will be approximately 53.4%, a change from our previous expectation of 53.3%.
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·
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Our estimate for fixed and discretionary type SG&A expenses for 2015 remains $240 to $241 million versus the $233 million for these same costs in 2014. The variable type costs within SG&A for the full year of 2015 are now expected to be 17.8% percent of sales, a change from our previous estimate of 17.7%.
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·
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We closed a store in Memphis, Tennessee in October that had reached the end of its lease term.
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·
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We expect to increase selling square footage approximately 3.0% in 2015 based on increasing our store count by a net three locations. Total capital expenditures are estimated to be in the $32 to $33 million range in 2015 depending on the timing of spending for new projects.
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NEWS RELEASE - OCTOBER 28, 2015 Page 3
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HAVERTY FURNITURE COMPANIES, INC.
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CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
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(In thousands, except per share data – Unaudited)
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Three Months Ended September 30,
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Nine Months Ended September 30,
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|||||||||||||||
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2015
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2014
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2015
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2014
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|||||||||||||
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Net Sales
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$
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209,921
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$
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198,541
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$
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588,984
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$
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555,411
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||||||||
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Cost of goods sold
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98,179
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92,338
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274,413
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257,201
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||||||||||||
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Gross Profit
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111,742
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106,203
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314,571
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298,210
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||||||||||||
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Credit service charges
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71
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72
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213
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223
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||||||||||||
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Gross profit and other revenue
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111,813
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106,275
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314,784
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298,433
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Expenses:
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Selling, general and administrative
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98,720
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93,575
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283,767
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267,515
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||||||||||||
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Provision for doubtful accounts
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83
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69
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167
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203
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||||||||||||
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Other income, net
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2
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(12
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)
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(945
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)
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(186
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)
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|||||||||
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Total expenses
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98,805
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93,632
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282,989
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267,532
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Income before income and income taxes
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13,008
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12,643
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31,795
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30,901
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||||||||||||
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Interest expense, net
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594
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175
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1,614
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666
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Income before income taxes
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12,414
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12,468
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30,181
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30,235
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Income tax expense
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4,759
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4,644
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11,574
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11,454
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Net income
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$
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7,655
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$
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7,824
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$
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18,607
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$
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18,781
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Other comprehensive income
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||||||||||||||||
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Adjustments related to retirement
plans; net of tax expense of $36 and $109 in 2015 and $50 and $150 in 2014 |
$
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59
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$
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82
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$
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175
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$
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244
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||||||||
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Comprehensive income
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$
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7,714
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$
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7,906
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$
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18,782
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$
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19,025
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Basic earnings per share:
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||||||||||||||||
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Common Stock
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$
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0.34
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$
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0.35
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$
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0.83
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0.84
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|||||||||
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Class A Common Stock
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$
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0.32
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$
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0.33
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$
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0.78
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0.75
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Diluted earnings per share:
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||||||||||||||||
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Common Stock
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$
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0.34
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$
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0.34
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$
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0.81
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0.82
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|||||||||
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Class A Common Stock
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$
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0.32
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$
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0.33
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$
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0.78
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0.76
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Basic weighted average shares outstanding:
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||||||||||||||||
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Common Stock
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20,448
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20,535
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20,538
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20,383
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||||||||||||
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Class A Common Stock
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2,061
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2,151
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2,074
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2,223
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||||||||||||
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Diluted weighted average shares outstanding:
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||||||||||||||||
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Common Stock
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22,791
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22,939
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22,907
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22,936
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||||||||||||
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Class A Common Stock
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2,061
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2,151
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2,074
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2,223
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||||||||||||
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Cash dividends per share:
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||||||||||||||||
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Common Stock
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$
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0.100
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$
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1.080
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$
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0.260
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1.240
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|||||||||
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Class A Common Stock
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$
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0.095
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$
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1.025
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$
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0.245
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1.175
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|||||||||
NEWS RELEASE - OCTOBER 28, 2015 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,
2015 |
December 31,
2014 |
September 30,
2014 |
||||||||||
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(Unaudited)
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(Unaudited)
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|||||||||||
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ASSETS
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||||||||||||
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Current assets
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||||||||||||
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Cash and cash equivalents
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$
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73,287
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$
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65,481
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$
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78,659
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||||||
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Investments
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6,750
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7,250
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-
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|||||||||
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Restricted cash and cash equivalents
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8,003
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8,017
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8,017
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|||||||||
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Accounts receivable
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6,113
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7,146
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6,647
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|||||||||
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Inventories
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105,165
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107,139
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94,822
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|||||||||
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Prepaid expenses
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6,991
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6,418
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7,265
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|||||||||
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Other current assets
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7,459
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8,010
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4,292
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|||||||||
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Total current assets
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213,768
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209,461
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199,702
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Accounts receivable, long-term
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714
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731
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692
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|||||||||
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Property and equipment
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231,699
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225,162
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213,254
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Deferred income taxes
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19,964
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17,610
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13,197
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|||||||||
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Other assets
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6,336
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8,023
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15,623
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|||||||||
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Total assets
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$
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472,481
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$
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460,987
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$
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442,468
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||||||
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LIABILITIES AND STOCKHOLDERS' EQUITY
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||||||||||||
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Current liabilities
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||||||||||||
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Accounts payable
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$
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25,486
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$
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24,152
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$
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23,984
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||||||
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Customer deposits
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30,265
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23,687
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28,821
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|||||||||
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Accrued liabilities
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37,759
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39,960
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36,964
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|||||||||
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Deferred income taxes
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5,701
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5,689
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-
|
|||||||||
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Current portion of lease obligations
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3,007
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2,387
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1,820
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|||||||||
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Total current liabilities
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102,218
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95,875
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91,589
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|||||||||
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Lease obligations, less current portion
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50,909
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46,678
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34,792
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|||||||||
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Other liabilities
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25,741
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26,351
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26,059
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|||||||||
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Total liabilities
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178,868
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168,904
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152,440
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|||||||||
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Stockholders' equity
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293,613
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292,083
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290,028
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|||||||||
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Total liabilities and stockholders' equity
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$
|
472,481
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$
|
460,987
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$
|
442,468
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||||||
NEWS RELEASE - OCTOBER 28, 2015 Page 5
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HAVERTY FURNITURE COMPANIES, INC.
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CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
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(In thousands – Unaudited)
|
|
Nine Months Ended
September 30, |
||||||||
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2015
|
2014
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|||||||
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CASH FLOWS FROM OPERATING ACTIVITIES:
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||||||||
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Net income
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$
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18,607
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$
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18,781
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||||
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Adjustments to reconcile net income to net
cash provided by operating activities: |
||||||||
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Depreciation and amortization
|
18,967
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16,632
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||||||
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Share-based compensation expense
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3,142
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2,530
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||||||
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Provision for doubtful accounts
|
167
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203
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||||||
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Other
|
618
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549
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||||||
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Changes in operating assets and liabilities:
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||||||||
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Accounts receivable
|
883
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1,462
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||||||
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Inventories
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1,974
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(3,339
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)
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|||||
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Customer deposits
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6,578
|
9,813
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||||||
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Other assets and liabilities
|
(1,078
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)
|
(379
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)
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||||
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Accounts payable and accrued liabilities
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(4,027
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)
|
2,800
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|||||
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Net cash provided by operating activities
|
45,831
|
49,052
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||||||
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CASH FLOWS FROM INVESTING ACTIVITIES:
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||||||||
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Capital expenditures
|
(22,523
|
)
|
(22,049
|
)
|
||||
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Maturities of certificates of deposit
|
2,500
|
-
|
||||||
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Restricted cash and cash equivalents
|
14
|
(1,001
|
)
|
|||||
|
Other
|
21
|
407
|
||||||
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Net cash used in investing activities
|
(19,988
|
)
|
(22,643
|
)
|
||||
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CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
|
Construction allowance receipts
|
4,773
|
-
|
||||||
|
Payments on lease obligations
|
(1,801
|
)
|
(729
|
)
|
||||
|
Taxes on vested restricted shares
|
(1,152
|
)
|
(2,060
|
)
|
||||
|
Dividends paid
|
(5,855
|
)
|
(27,976
|
)
|
||||
|
Common stock purchased
|
(14,002
|
)
|
-
|
|||||
|
Other
|
-
|
(170
|
)
|
|||||
|
Net cash used in financing activities
|
(18,037
|
)
|
(30,935
|
)
|
||||
|
Increase (decrease) in cash and cash equivalents during the period
|
7,806
|
(4,526
|
)
|
|||||
|
Cash and cash equivalents at beginning of period
|
65,481
|
83,185
|
||||||
|
Cash and cash equivalent at end of period
|
$
|
73,287
|
$
|
78,659
|
||||
NEWS RELEASE - OCTOBER 28, 2015 Page 6
About Havertys
Havertys (NYSE: HVT and HVT.A), established in 1885, is a full-service home furnishing retailer with 122 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, 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 detail 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 29, 2015 at its website, 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. ET through Thursday, November 5, 2015. The number to access the telephone playback is 1-888-203-1112 (access code: 5872514).
Contact:
Haverty Furniture Companies, Inc. (404) 443-2900
Dennis L. Fink
EVP & CFO
Jenny Hill Parker
SVP, Finance, Secretary and Treasurer
SOURCE: Havertys