EXHIBIT 99.1
Havertys Reports Earnings for First Quarter 2014
Atlanta, Georgia, May 1, 2014 – HAVERTYS (NYSE: HVT and HVT.A) reports earnings per share for the first quarter ended March 31, 2014 of $0.27 compared to $0.36 for the same period of 2013. The first quarter of 2013 included 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, "In early April we announced that first quarter comparable store sales were 0.9% lower than the same quarter last year when comps had been up 11.5%. Earnings for the first quarter are slightly better than anticipated at the time of the sales release as we achieved very good gross profit margins due to our exclusive merchandise and pricing discipline and contained our fixed and discretionary costs.
We are glad to report that our sales momentum has picked up in April. Our comparable store written business is currently trending up 7.5% quarter to date after adjusting for the Easter calendar shift. Total written business is up 6.4% on top of the 19% produced last year for this period after adjusting for the calendar differences.
Our store growth and repositioning is well underway as we work to open three new stores in our largest markets, including a smaller format designed for dense urban areas. These combined with the three store relocations and two closures will increase our retail square footage about 1.8% by the end of 2014. We believe measured expansion and our ongoing focus on the customer and her Havertys shopping experience will provide growth in the near and long term."
Financial Highlights
First Quarter 2014 Compared to First Quarter 2013
Total net sales declined 2.3% to $181.7 million. Comparable store sales were down 0.9% from the 11.5% increase for the same period last year. Comparable store sales increased 7.3% in 30 of our southern locations not impacted by the severe winter weather.
Total written sales were up 0.9% and written comparable store sales were up 2.6%. Our stores are closed on Easter, so both of these amounts were adjusted downward 1.3% to compensate for that holiday falling in March last year and April this year.
Average written ticket continues to grow, up 5.1% over the comparable period and up 3.3% sequentially. The custom order portion of upholstery sales increased 11.0%.
Gross profit margins increased 30 basis points to 53.8% as a percent of sales compared to 53.5%, which excludes the 45 basis point positive impact the adjustment noted above.
Selling, general and administrative costs increased $1.0 million due to additional expenses for advertising of $0.6 million, higher warehouse and delivery costs of $0.9 million, partly offset by reduced administrative expenses of $0.4 million. Total SG&A costs were 160 basis points higher due to the deleveraging of fixed and discretionary costs on the lower sales.
Pre-tax earnings of $10.0 million decreased 170 basis points to 5.5% from 7.2% as a percent of sales.
Our retail store count at March 31, 2014 was 119 versus 121 at March 31, 2013.
NEWS RELEASE – MAY 1, 2014 Page 2
Expectations and Other
We expect that our annual gross profit margins for 2014 will be approximately 53.8%, slightly ahead of the adjusted 53.7% achieved in 2013.
Planned capital expenditures for 2014 are $35.0 million.
NEWS RELEASE – MAY 1, 2014 Page 3
| HAVERTY FURNITURE COMPANIES, INC. |
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME |
| (In Thousands, except per share data – Unaudited) |
| | | Three Months Ended March 31, | |
| | | 2014 | | | 2013 | |
| | | | | | | |
| Net sales | | $ | 181,737 | | | $ | 186,090 | |
| Cost of goods sold | | | 83,875 | | | | 85,781 | |
| Gross profit | | | 97,862 | | | | 100,309 | |
| Credit service charges | | | 81 | | | | 86 | |
| Gross profit and other revenue | | | 97,943 | | | | 100,395 | |
| | | | | | | | | |
| Expenses: | | | | | | | | |
| Selling, general and administrative | | | 87,674 | | | | 86,662 | |
| Interest, net | | | 273 | | | | 278 | |
| Provision for doubtful accounts | | | 48 | | | | 13 | |
| Other (income) expense, net | | | (8 | ) | | | (8 | ) |
| | | | 87,987 | | | | 86,945 | |
| | | | | | | | | |
| Income before income taxes | | | 9,956 | | | | 13,450 | |
| Income tax expense | | | 3,827 | | | | 5,190 | |
| Net income | | $ | 6,129 | | | $ | 8,260 | |
| | | | | | | | | |
| Basic earnings per share: | | | | | | | | |
| Common Stock | | $ | 0.27 | | | $ | 0.37 | |
| Class A Common Stock | | $ | 0.26 | | | $ | 0.35 | |
| | | | | | | | | |
| Diluted earnings per share: | | | | | | | | |
| Common Stock | | $ | 0.27 | | | $ | 0.36 | |
| Class A Common Stock | | $ | 0.26 | | | $ | 0.34 | |
| | | | | | | | | |
| Basic weighted average shares outstanding: | | | | | | | | |
| Common Stock | | | 20,157 | | | | 19,717 | |
| Class A Common Stock | | | 2,358 | | | | 2,781 | |
| | | | | | | | | |
| Diluted weighted average shares outstanding: | | | | | | | | |
| Common Stock | | | 22,928 | | | | 22,955 | |
| Class A Common Stock | | | 2,358 | | | | 2,781 | |
| | | | | | | | | |
| Cash dividend per common share: | | | | | | | | |
| Common Stock | | $ | 0.080 | | | | 0.0400 | |
| Class A common Stock | | $ | 0.075 | | | | 0.0375 | |
NEWS RELEASE – MAY 1, 2014 Page 4
| HAVERTY FURNITURE COMPANIES, INC. |
| CONDENSED CONSOLIDATED BALANCE SHEETS |
| (In Thousands – Unaudited) |
| | | March 31, 2014 | | | December 31, 2013 | | | March 31, 2013 | |
| | | (Unaudited) | | | | | | (Unaudited) | |
| ASSETS | | | | | | | | | |
| Current assets | | | | | | | | | |
| Cash and cash equivalents | | $ | 84,508 | | | $ | 83,185 | | | $ | 53,869 | |
| Restricted cash and cash equivalents | | | 8,017 | | | | 7,016 | | | | 7,014 | |
| Accounts receivable | | | 7,421 | | | | 8,172 | | | | 9,102 | |
| Inventories | | | 95,964 | | | | 91,483 | | | | 97,567 | |
| Prepaid expenses | | | 6,853 | | | | 6,494 | | | | 7,545 | |
| Other current assets | | | 2,796 | | | | 4,349 | | | | 4,886 | |
| Total current assets | | | 205,559 | | | | 200,699 | | | | 179,983 | |
| | | | | | | | | | | | | |
| Accounts receivable, long-term | | | 752 | | | | 832 | | | | 823 | |
| Property and equipment | | | 187,850 | | | | 189,242 | | | | 190,812 | |
| Deferred income taxes | | | 13,203 | | | | 13,253 | | | | 24,184 | |
| Other assets | | | 14,479 | | | | 13,829 | | | | 4,112 | |
| Total assets | | $ | 421,843 | | | $ | 417,855 | | | $ | 399,914 | |
| | | | | | | | | | | | | |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | | | | | |
| Current liabilities | | | | | | | | | | | | |
| Accounts payable | | $ | 18,082 | | | $ | 21,810 | | | $ | 20,780 | |
| Customer deposits | | | 24,745 | | | | 19,008 | | | | 20,859 | |
| Accrued liabilities | | | 32,208 | | | | 36,338 | | | | 40,089 | |
| Current portion of lease obligations | | | 1,012 | | | | 959 | | | | 908 | |
| Total current liabilities | | | 76,047 | | | | 78,115 | | | | 82,636 | |
| | | | | | | | | | | | | |
| Lease obligations, less current portion | | | 15,916 | | | | 16,196 | | | | 17,229 | |
| Other liabilities | | | 26,270 | | | | 25,280 | | | | 32,261 | |
| Total liabilities | | | 118,233 | | | | 119,591 | | | | 132,126 | |
| | | | | | | | | | | | | |
| Stockholders’ equity | | | 303,610 | | | | 298,264 | | | | 267,788 | |
| | | $ | 421,843 | | | $ | 417,855 | | | $ | 399,914 | |
NEWS RELEASE – MAY 1, 2014 Page 5
| HAVERTY FURNITURE COMPANIES, INC. |
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
| (In Thousands – Unaudited) |
| | | Three Months Ended March 31, | |
| | | 2014 | | | 2013 | |
| | | | | | | |
| CASH FLOW FROM OPERATING ACTIVITIES | | | | | | |
| Net income | | $ | 6,129 | | | $ | 8,260 | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | | |
| Depreciation and amortization | | | 5,380 | | | | 5,342 | |
| Share-based compensation expense | | | 926 | | | | 803 | |
| Provision for doubtful accounts | | | 48 | | | | 13 | |
| Other | | | 120 | | | | (216 | ) |
| Changes in operating assets and liabilities: | | | | | | | | |
| Accounts receivable | | | 783 | | | | 586 | |
| Inventories | | | (4,481 | ) | | | (665 | ) |
| Customer deposits | | | 5,737 | | | | (104 | ) |
| Other assets and liabilities | | | 1,664 | | | | (1,454 | ) |
| Accounts payable and accrued liabilities | | | (7,858 | ) | | | (7,176 | ) |
| Net cash provided by operating activities | | | 8,448 | | | | 5,389 | |
| | | | | | | | | |
| CASH FLOWS FROM INVESTING ACTIVITIES | | | | | | | | |
| Capital expenditures | | | (4,518 | ) | | | (3,972 | ) |
| Restricted cash and cash equivalents | | | (1,000 | ) | | | (1 | ) |
| Proceeds from sale of assets | | | 409 | | | | 2 | |
| Net cash used in investing activities | | | (5,109 | ) | | | (3,971 | ) |
| | | | | | | | | |
| CASH FLOWS FROM FINANCING ACTIVITIES | | | | | | | | |
| Payments on lease obligations | | | (227 | ) | | | (216 | ) |
| Dividend paid | | | (1,789 | ) | | | (883 | ) |
| Net cash used in financing activities | | | (2,016 | ) | | | (1,099 | ) |
| | | | | | | | | |
| Increase in cash and cash equivalents during the period | | | 1,323 | | | | 319 | |
| Cash and cash equivalents at beginning of period | | | 83,185 | | | | 53,550 | |
| | | | | | | | | |
| Cash and cash equivalents at end of period | | $ | 84,508 | | | $ | 53,869 | |
NEWS RELEASE – MAY 1, 2014 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 Friday, May 2, 2014 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 Friday, May 9, 2014. The number to access the telephone playback is 1-800-406-7325 (access code: 4680924#).
Contact:
Haverty Furniture Companies, Inc., 404-443-2900
Dennis L. Fink
EVP & CFO
Jenny Hill Parker
SVP, Finance, Secretary and Treasurer
SOURCE: Havertys
