EXHIBIT 99.1
Havertys Reports Earnings for First Quarter 2013
ATLANTA, GEORGIA, May 1, 2013 -- HAVERTY FURNITURE COMPANIES, INC. (NYSE: HVT and HVT.A) reports earnings per share for the first quarter ended March 31, 2013 of $0.36 compared to $0.11 for the same period of 2012. The first quarter of 2013 includes an out-of-period adjustment which favorably impacted gross profit by $0.8 million or $.02 per share after tax.
Clarence H. Smith, chairman, president and CEO, said, "We are very pleased with the continued positive trends in our results. The execution of our strategy to focus on the “on trend” customer with fashionable products and a great shopping experience is delivering growth in sales and operating margins. We remain alert to the uncertainty of a sustained housing recovery and the shifts in consumer confidence but believe Havertys’ agile operating structure and financial strength provide a competitive advantage."
Financial Highlights
First Quarter 2013 Compared to First Quarter 2012
Net sales increased 13.8% to $186.1 million. Comparable store sales were up 11.5%.
We recorded an out-of-period adjustment related to our long-standing accrual process and the timing of recognizing certain vendors' pricing allowances. This $0.8 million non-cash adjustment increased gross profit margins by 45 basis points.
Gross profit margins, excluding the impact of the adjustment noted above, increased 130 basis points to 53.5 % from 52.2% as a percent of sales, ahead of expectations for the quarter.
Selling, general and administrative costs as a percent of sales decreased 310 basis points to 46.6% from 49.7%. The $5.4 million increase in dollars is primarily related to increases in: commissions, wages, incentive compensation, and occupancy expense.
We closed our Clearwater, Florida location in January 2013. Our retail store count at March 31, 2013 was 121 versus 119 at March 31, 2012.
Expectations and Other
Total delivered sales for the second quarter to date of 2013 are up approximately 14% over the same period last year. Written business, which was relatively flat in 2012 for this period, is currently trending up approximately 19% after adjusting for favorable calendar differences.
We expect that our annual gross profit margins for 2013 will be somewhat ahead of the annual 2012 level of 52.5% and below the adjusted 53.5% Q-1 result.
Our effective tax rate for 2013 is expected to be in the 38.5% to 38.6% range.
Planned capital expenditures for 2013 are $20.0 million. We expect to expand three of the stores undergoing major remodeling and complete another 18 of our Bright Inspirations store refreshes. We closed our store in Mississippi in mid-April and will close a Virginia location in early May. These and other changes should result in a 1.0% to 2.0% decrease in total retail square footage from 2012.
NEWS RELEASE – MAY 1, 2013
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For the second half of 2013, percentage increases in total sales will likely be slightly less than the comparable store sales increases.
During Q-2, approximately 184,500 additional shares will be issued due to vesting of stock grants and will increase the average shares outstanding. Additional stock compensation expense of $0.5 million will be recognized in Q-2 due to the accelerated vesting of a portion of these grants.
Named to Forbes 2013 Amercia’s Most Trustworthy Companies.
NEWS RELEASE – MAY 1, 2013
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| HAVERTY FURNITURE COMPANIES, INC. |
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME |
| (In Thousands, except per share data – Unaudited) |
| | | Three Months Ended March 31, | |
| | | 2013 | | | 2012 | |
| | | | | | | |
| Net sales | | $ | 186,090 | | | $ | 163,569 | |
| Cost of goods sold | | | 85,781 | | | | 78,228 | |
| Gross profit | | | 100,309 | | | | 85,341 | |
| Credit service charges | | | 86 | | | | 76 | |
| Gross profit and other revenue | | | 100,395 | | | | 85,417 | |
| | | | | | | | | |
| Expenses: | | | | | | | | |
| Selling, general and administrative | | | 86,662 | | | | 81,237 | |
| Interest, net | | | 278 | | | | 161 | |
| Provision for doubtful accounts | | | 13 | | | | 66 | |
| Other income, net | | | (8 | ) | | | (68 | ) |
| | | | 86,945 | | | | 81,396 | |
| | | | | | | | | |
| Income before income taxes | | | 13,450 | | | | 4,021 | |
| Income tax expense | | | 5,190 | | | | 1,564 | |
| Net income | | $ | 8,260 | | | $ | 2,457 | |
| | | | | | | | | |
| Basic earnings per share: | | | | | | | | |
| Common Stock | | $ | 0.37 | | | $ | 0.11 | |
| Class A Common Stock | | $ | 0.35 | | | $ | 0.11 | |
| | | | | | | | | |
| Diluted earnings per share: | | | | | | | | |
| Common Stock | | $ | 0.36 | | | $ | 0.11 | |
| Class A Common Stock | | $ | 0.34 | | | $ | 0.11 | |
| | | | | | | | | |
| Basic weighted average shares outstanding: | | | | | | | | |
| Common Stock | | | 19,717 | | | | 18,865 | |
| Class A Common Stock | | | 2,781 | | | | 3,084 | |
| | | | | | | | | |
| Diluted weighted average shares outstanding: | | | | | | | | |
| Common Stock | | | 22,955 | | | | 22,272 | |
| Class A Common Stock | | | 2,781 | | | | 3,084 | |
| | | | | | | | | |
| Cash dividend per common share: | | | | | | | | |
| Common Stock | | $ | 0.0400 | | | | — | |
| Class A common Stock | | $ | 0.0375 | | | | — | |
NEWS RELEASE – MAY 1, 2013
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| HAVERTY FURNITURE COMPANIES, INC. |
| CONDENSED CONSOLIDATED BALANCE SHEETS |
| (In Thousands – Unaudited) |
| | | March 31, 2013 | | | December 31, 2012 | | | March 31, 2012 | |
| | | (Unaudited) | | | | | | (Unaudited) | |
| ASSETS | | | | | | | | | |
| Current assets | | | | | | | | | |
| Cash and cash equivalents | | $ | 53,869 | | | $ | 53,550 | | | $ | 56,696 | |
| Restricted cash and cash equivalents | | | 7,014 | | | | 7,013 | | | | 7,006 | |
| Accounts receivable | | | 9,102 | | | | 9,710 | | | | 10,660 | |
| Inventories | | | 97,567 | | | | 96,902 | | | | 91,643 | |
| Prepaid expenses | | | 7,545 | | | | 9,532 | | | | 10,014 | |
| Other current assets | | | 4,886 | | | | 3,187 | | | | 4,724 | |
| Total current assets | | | 179,983 | | | | 179,894 | | | | 180,743 | |
| | | | | | | | | | | | | |
| Accounts receivable, long-term | | | 823 | | | | 814 | | | | 386 | |
| Property and equipment | | | 190,812 | | | | 193,085 | | | | 179,496 | |
| Deferred income taxes | | | 24,184 | | | | 24,366 | | | | 22,681 | |
| Other assets | | | 4,112 | | | | 3,937 | | | | 4,160 | |
| Total assets | | $ | 399,914 | | | $ | 402,096 | | | $ | 387,466 | |
| | | | | | | | | | | | | |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | | | | | |
| Current liabilities | | | | | | | | | | | | |
| Accounts payable | | $ | 20,780 | | | $ | 28,178 | | | $ | 17,799 | |
| Customer deposits | | | 20,859 | | | | 20,963 | | | | 18,176 | |
| Accrued liabilities | | | 33,494 | | | | 33,272 | | | | 27,962 | |
| Deferred income taxes | | | 6,595 | | | | 6,595 | | | | 6,635 | |
| Current portion of lease obligations | | | 908 | | | | 881 | | | | 778 | |
| Total current liabilities | | | 82,636 | | | | 89,889 | | | | 71,350 | |
| | | | | | | | | | | | | |
| Lease obligations, less current portion | | | 17,229 | | | | 18,473 | | | | 12,083 | |
| Other liabilities | | | 32,261 | | | | 34,306 | | | | 37,649 | |
| Total liabilities | | | 132,126 | | | | 142,668 | | | | 121,082 | |
| | | | | | | | | | | | | |
| Stockholders’ equity | | | 267,788 | | | | 259,428 | | | | 266,384 | |
| | | $ | 399,914 | | | $ | 402,096 | | | $ | 387,466 | |
NEWS RELEASE – MAY 1, 2013
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| HAVERTY FURNITURE COMPANIES, INC. |
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
| (In Thousands – Unaudited) |
| | | Three Months Ended March 31, | |
| | | 2013 | | | 2012 | |
| | | | | | | |
| CASH FLOW FROM OPERATING ACTIVITIES | | | | | | |
| Net income | | $ | 8,260 | | | $ | 2,457 | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | | |
| Depreciation and amortization | | | 5,342 | | | | 4,644 | |
| Share-based compensation expense | | | 803 | | | | 666 | |
| Provision for doubtful accounts | | | 13 | | | | 66 | |
| Other | | | (216 | ) | | | 89 | |
| Changes in operating assets and liabilities: | | | | | | | | |
| Accounts receivable | | | 586 | | | | 788 | |
| Inventories | | | (665 | ) | | | 1,801 | |
| Customer deposits | | | (104 | ) | | | 3,604 | |
| Other assets and liabilities | | | (1,454 | ) | | | 1,934 | |
| Accounts payable and accrued liabilities | | | (7,176 | ) | | | (4,857 | ) |
| Net cash provided by operating activities | | | 5,389 | | | | 11,192 | |
| | | | | | | | | |
| CASH FLOWS FROM INVESTING ACTIVITIES | | | | | | | | |
| Capital expenditures | | | (3,972 | ) | | | (3,707 | ) |
| Restricted cash and cash equivalents | | | (1 | ) | | | (193 | ) |
| Other investing activities | | | 2 | | | | 4 | |
| Net cash used in investing activities | | | (3,971 | ) | | | (3,896 | ) |
| | | | | | | | | |
| CASH FLOWS FROM FINANCING ACTIVITIES | | | | | | | | |
| Payments on lease obligations | | | (216 | ) | | | (185 | ) |
| Dividend paid | | | (883 | ) | | | — | |
| Net cash used in financing activities | | | (1,099 | ) | | | (185 | ) |
| | | | | | | | | |
| Increase in cash and cash equivalents during the period | | | 319 | | | | 7,111 | |
| Cash and cash equivalents at beginning of period | | | 53,550 | | | | 49,585 | |
| | | | | | | | | |
| Cash and cash equivalents at end of period | | $ | 53,869 | | | $ | 56,696 | |
About Havertys
Havertys, established in 1885, is a full-service home furnishings retailer with 120 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.
NEWS RELEASE – MAY 1, 2013
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Conference Call Information
The company will sponsor a conference call Thursday, May 2, 2013 at 10:00 a.m. Eastern Daylight Time to review its results. Listen-only access to the call is available via the web at www.havertys.com (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.
