| REPORTS RESULTS FOR SECOND QUARTER 2009 |
ATLANTA, GEORGIA, August 5, 2009 -- HAVERTY FURNITURE COMPANIES, INC. (NYSE: HVT and HVT.A) today reported a loss for the second quarter ended June 30, 2009. The net loss for the second quarter of 2009 was $6.6 million or $0.31 per diluted share of Common Stock, as compared to the second quarter 2008 net loss of $2.3 million or $0.11 per diluted share of Common Stock.
For the six months ended June 30, 2009, the net loss was $13.8 million or $0.65 per diluted share of Common Stock versus a net loss of $1.3 million or $0.06 per diluted share of Common Stock for the same period in 2008.
As previously reported, net sales for the second quarter of 2009 were $129.7 million, a decrease of 23.0% compared to sales of $168.4 million for the corresponding quarter in 2008. Comparable-store sales decreased 22.6% for the quarter.
Total written business for the third quarter to date is down 19.6% versus the same period last year.
Clarence H. Smith, president and chief executive officer, said, “Our efforts remain concentrated on necessary operational adjustments to the difficult market conditions, closely managing our capital and clearly communicating Havertys’ strong value proposition to the consumer. We believe these initiatives are imperative to maintaining our financial and brand strength.
“The second quarter is historically the weakest of the year. We began during this time to highlight our high value price point merchandise and became somewhat more promotional to reach the spending-conscious consumer. Our careful merchandising and inventory management kept second quarter gross margins slightly higher both sequentially for the year and compared to last year’s period.
“During the second quarter our SG&A expenses were reduced by $17.4 million or 19.2% compared to last year’s second quarter and were down $31.5 million or 17.0% for the first half of the year. We have improved our warehousing and delivery throughput efficiencies as we adjusted our scale of operations to lower volume levels. Alterations in our advertising and marketing spend have also generated additional cost reductions.
“We have continued to outsource most customer financing and our accounts receivable have been reduced by $3.3 million in the second quarter and $9.5 million in the first six months of 2009. Inventories are $6.0 lower than at March 31, 2009 and $10.3 lower than at the end of 2008 as we reduced merchandise purchases given the weakened demand. We have no funded borrowings and our cash at June 30, 2009 is $22.4 million, up $12.9 million during the second quarter and $18.7 million during the first half of the year.
“Our efforts to emphasize the value attribute in addition to the quality and service hallmarks of the Havertys brand are important to our current sales efforts. We are carefully conveying in this value message that there has not been a fundamental change in our merchandise or how we interact with the customer. This approach and conservative financial management are essential to our survival of this economic firestorm and future success.”
NEWS RELEASE – August 5, 2009
HAVERTY FURNITURE COMPANIES, INC. | Page 2 |
Havertys is a full-service home furnishings retailer with 121 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 web site 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.
The company will sponsor a conference call Thursday, August 6 at 10:00 a.m. Eastern Daylight Time to review the second quarter. Listen-only access to the call is available via the web at www.havertys.com (About Us, Investor Information) and at www.streetevents.com (Individual Investor Center), both live and for a limited time, on a replay basis.
NEWS RELEASE – August 5, 2009
HAVERTY FURNITURE COMPANIES, INC. | Page 3 |
Condensed Consolidated Statements of Operations (Amounts in thousands except per share data) (Unaudited) |
| Quarter Ended June 30, | | | Six Months ended June 30, | |
| 2009 | | | 2008 | | | 2009 | | | 2008 | |
| | | | | | | | | | | | | | | |
Net sales | $ | 129,683 | | | $ | 168,412 | | | $ | 273,921 | | | $ | 353,665 | |
Cost of goods sold | | 63,062 | | | | 82,158 | | | | 133,537 | | | | 170,975 | |
Gross profit | | 66,621 | | | | 86,254 | | | | 140,384 | | | | 182,690 | |
| | | | | | | | | | | | | | | |
Credit service charges | | 311 | | | | 497 | | | | 704 | | | | 1,062 | |
Gross profit and other revenue | | 66,932 | | | | 86,751 | | | | 141,088 | | | | 183,752 | |
| | | | | | | | | | | | | | | |
Expenses: | | | | | | | | | | | | | | | |
Selling, general and administrative | | 72,860 | | | | 90,222 | | | | 153,738 | | | | 185,260 | |
Interest, net | | 203 | | | | 206 | | | | 380 | | | | 75 | |
Provision for doubtful accounts | | 247 | | | | 284 | | | | 662 | | | | 612 | |
Other expense (income), net | | 141 | | | | (77 | ) | | | 20 | | | | (119 | ) |
Total expenses | | 73,451 | | | | 90,635 | | | | 154,800 | | | | 185,828 | |
| | | | | | | | | | | | | | | |
Loss before income taxes | | (6,519 | ) | | | (3,884 | ) | | | (13,712 | ) | | | (2,076 | ) |
| | | | | | | | | | | | | | | |
Income tax expense (benefit) | | 63 | | | | (1,575 | ) | | | 133 | | | | (799 | ) |
| | | | | | | | | | | | | | | |
Net loss | $ | (6,582 | ) | | $ | (2,309 | ) | | $ | (13,845 | ) | | $ | (1,277 | ) |
| | | | | | | | | | | | | | | |
Basic and diluted loss per share1: | | | | | | | | | | | | | | | |
Common Stock | $ | (0.31 | ) | | $ | (0.11 | ) | | $ | (0.65 | ) | | $ | (0.06 | ) |
Class A Common Stock | $ | (0.30 | ) | | $ | (0.11 | ) | | $ | (0.62 | ) | | $ | (0.06 | ) |
| | | | | | | | | | | | | | | |
Weighted average shares — basic: | | | | | | | | | | | | | | | |
Common Stock | | 17,397 | | | | 17,162 | | | | 17,360 | | | | 17,137 | |
Class A Common Stock | | 3,987 | | | | 4,105 | | | | 3,996 | | | | 4,116 | |
Weighted average shares — assuming dilution1: | | | | | | | | | | | | | | | |
Common Stock | | 21,384 | | | | 21,267 | | | | 21,356 | | | | 21,253 | |
Class A Common Stock | | 3,987 | | | | 4,105 | | | | 3,996 | | | | 4,116 | |
| | | | | | | | | | | | | | | |
Cash dividends per common share: | | | | | | | | | | | | | | | |
Common Stock | | — | | | $ | 0.0675 | | | | — | | | $ | 0.1350 | |
Class A Common Stock | | — | | | $ | 0.0625 | | | | — | | | $ | 0.1250 | |
1See additional details at the end of this release. |
more. . .
NEWS RELEASE – August 5, 2009
HAVERTY FURNITURE COMPANIES, INC. | Page 4 |
Condensed Consolidated Balance Sheets (Amounts in thousands) (Unaudited) |
| June 30, 2009 | | December 31, 2008 | | June 30, 2008 | |
Assets | | | | | | | | | |
Cash and cash equivalents | $ | 22,355 | | $ | 3,697 | | $ | 1,926 | |
Accounts receivable, net of allowance | | 14,982 | | | 24,301 | | | 40,017 | |
Inventories, at LIFO cost | | 93,421 | | | 103,743 | | | 104,873 | |
Other current assets | | 14,147 | | | 18,005 | | | 19,814 | |
Total current assets | | 144,905 | | | 149,746 | | | 166,630 | |
| | | | | | | | | |
Accounts receivable, long-term | | 1,240 | | | 2,082 | | | 3,185 | |
Property and equipment, net | | 183,825 | | | 197,423 | | | 204,114 | |
Other assets | | 14,140 | | | 14,142 | | | 25,054 | |
| $ | 344,110 | | $ | 363,393 | | $ | 398,983 | |
| | | | | | | | | |
Liabilities and Stockholders' Equity | | | | | | | | | |
Notes payable to banks | $ | - | | $ | - | | $ | 5,400 | |
Accounts payable and accrued liabilities | | 63,321 | | | 71,359 | | | 66,206 | |
Current portion of long-term debt and lease obligations | | 332 | | | 311 | | | 17,179 | |
Total current liabilities | | 63,653 | | | 71,670 | | | 88,785 | |
| | | | | | | | | |
| | | | | | | | | |
Long-term debt and lease obligations, less current portion | | 7,014 | | | 7,183 | | | 7,346 | |
Other liabilities | | 41,440 | | | 39,572 | | | 28,995 | |
Stockholders' equity | | 232,003 | | | 244,968 | | | 273,857 | |
| $ | 344,110 | | $ | 363,393 | | $ | 398,983 | |
more. .
NEWS RELEASE – August 5, 2009
HAVERTY FURNITURE COMPANIES, INC. | Page 5 |
Condensed Consolidated Statements of Cash Flows (Amounts in thousands) (Unaudited) |
| | Six Months Ended June 30, | |
| | 2009 | | 2008 | |
Operating Activities: | | | | | | | |
Net loss | | $ | (13,845 | ) | $ | (1,277 | ) |
Adjustments to reconcile net loss to net cash
provided by operating activities: | | | | | | | |
Depreciation and amortization | | | 10,115 | | | 10,853 | |
Provision for doubtful accounts | | | 662 | | | 612 | |
Gain on sale of property and equipment | | | (19 | ) | | — | |
Other | | | 1,255 | | | 690 | |
Changes in operating assets and liabilities | | | 15,679 | | | (1,039 | ) |
Net cash provided by operating activities | | | 13,847 | | | 9,839 | |
| | | | | | | |
Investing Activities: | | | | | | | |
Capital expenditures | | | (1,263 | ) | | (5,171 | ) |
Proceeds from sale-leaseback transaction | | | 6,625 | | | — | |
Proceeds from sale of property and equipment | | | 29 | | | 203 | |
Other investing activities | | | 43 | | | 282 | |
Net cash provided by (used in) investing activities | | | 5,434 | | | (4,686 | ) |
| | | | | | | |
Financing Activities: | | | | | | | |
Proceeds from borrowings under revolving credit facilities | | | 5,800 | | | 127,765 | |
Payments of borrowings under revolving credit facilities | | | (5,800 | ) | | (122,365 | ) |
Net increase (decrease) in borrowings under revolving credit facilities | | | — | | | 5,400 | |
Payments on long-term debt and lease obligations | | | (148 | ) | | (4,159 | ) |
Treasury stock acquired | | | — | | | (1,806 | ) |
Dividends paid | | | — | | | (2,829 | ) |
Other financing activities | | | (475 | ) | | — | |
Net cash used in financing activities | | | (623 | ) | | (3,394 | ) |
Increase (decrease) in cash and cash equivalents | | | 18,658 | | | 1,759 | |
Cash and cash equivalents at beginning of period | | | 3,697 | | | 167 | |
Cash and cash equivalents at end of period | | $ | 22,355 | | $ | 1,926 | |
more. .
NEWS RELEASE – August 5, 2009
HAVERTY FURNITURE COMPANIES, INC. | Page 6 |
Earnings per Share
The following details how the loss and number of shares in calculating the diluted loss per share for Common Stock are derived under SFAS 128 and EITF 03-6 (amounts in thousands):
| | Quarter Ended June 30, | | | Six Months Ended June 30, | |
| | 2009 | | | 2008 | | | 2009 | | | 2008 | |
Numerator: | | | | | | | | | | | | |
Common: | | | | | | | | | | | | |
Distributed earnings | $ | — | | $ | 1,161 | | $ | — | | $ | 2,315 | |
Undistributed loss | | (5,403 | ) | | (3,035 | ) | | (11,356 | ) | | (3,342 | ) |
Basic | | (5,403 | ) | | (1,874 | ) | | (11,356 | ) | | (1,027 | ) |
Class A Common loss | | (1,179 | ) | | (435 | ) | | (2,489 | ) | | (250 | ) |
Diluted | $ | (6,582 | ) | $ | (2,309 | ) | $ | (13,845 | ) | $ | (1,277 | ) |
| | | | | | | | | | | | |
Class A Common: | | | | | | | | | | | | |
Distributed earnings | $ | — | | $ | 256 | | $ | — | | $ | 514 | |
Undistributed loss | | (1,179 | ) | | (691 | ) | | (2,489 | ) | | (764 | ) |
| $ | (1,179 | ) | $ | (435 | ) | $ | (2,489 | ) | $ | (250 | ) |
| | | | | | | | | | | | |
Denominator: | | | | | | | | | | | | |
Common: | | | | | | | | | | | | |
Weighted average shares outstanding - basic | | 17,397 | | | 17,162 | | | 17,360 | | | 17,137 | |
Assumed conversion of Class A Common Stock | | 3,987 | | | 4,105 | | | 3,996 | | | 4,116 | |
| | | | | | | | | | | | |
Total weighted-average diluted Common Stock | | 21,384 | | | 21,267 | | | 21,356 | | | 21,253 | |
| | | | | | | | | | | | |
Class A Common: | | | | | | | | | | | | |
Weighted average shares outstanding | | 3,987 | | | 4,105 | | | 3,996 | | | 4,116 | |
# # # # #
Contact for information:
Dennis L. Fink, EVP & CFO or
Jenny Hill Parker, VP, Secretary & Treasurer
404-443-2900
