ATLANTA, May 01, 2018 (GLOBE NEWSWIRE) -- HAVERTYS (NYSE:HVT) and (NYSE:HVT.A) reports earnings per share for the first quarter ended March 31, 2018 of $0.29 compared to $0.28 for the same period of 2017.
Clarence H. Smith, chairman, president and CEO, said, “First quarter earnings were in line with our expectations based on previously released sales results. Promotions in addition to markdowns related to store closures and remodels resulted in slightly lower gross margins for the quarter.
“We continue to separate Havertys from the promotional furniture stores with our quality products, exceptional customer service, and omni-channel capabilities. Our average ticket continues to increase and in-home designer associated sales exceeded 21% of total quarterly sales. Online engagement has grown with increases in website sessions, conversions, and sales volume.
“Our ongoing market and store rationalization is evidenced with the March completion of the market repositioning in Columbia, SC and our upcoming exit from the Sherman, TX market. Total sales in Columbia have increased after we closed two stores and opened a new beautifully located store. We opened in Sherman over 30 years ago and our merchandising shift over the past decade does not align with this market. We will be closing a few additional stores during 2018 and entering the Chattanooga, TN market. The productivity of our store base is a strategic priority as we work to generate better returns for our stockholders."
Financial Highlights
First Quarter 2018 Compared to First Quarter 2017
Expectations and Other
HAVERTY FURNITURE COMPANIES, INC. |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME |
(in thousands, except per share data – Unaudited) |
Three Months Ended March 31, | |||||||||
2018 | 2017 | ||||||||
Net sales | $ | 199,442 | $ | 200,427 | |||||
Cost of goods sold | 90,535 | 90,831 | |||||||
Gross profit | 108,907 | 109,596 | |||||||
Credit service charges | 32 | 45 | |||||||
Gross profit and other revenue | 108,939 | 109,641 | |||||||
Expenses: | |||||||||
Selling, general and administrative | 101,004 | 100,374 | |||||||
Provision for doubtful accounts | 2 | 102 | |||||||
Other (income) expense, net | (995 | ) | (1,158 | ) | |||||
Total expenses | 100,011 | 99,318 | |||||||
Income before interest and income taxes | 8,928 | 10,323 | |||||||
Interest expense, net | 471 | 583 | |||||||
Income before income taxes | 8,457 | 9,740 | |||||||
Income tax expense | 2,144 | 3,754 | |||||||
Net income | $ | 6,313 | $ | 5,986 | |||||
Diluted earnings per share: | |||||||||
Common Stock | $ | 0.29 | $ | 0.28 | |||||
Class A Common Stock | $ | 0.28 | $ | 0.27 | |||||
Diluted weighted average shares outstanding: | |||||||||
Common Stock | 21,605 | 21,540 | |||||||
Class A Common Stock | 1,767 | 1,813 | |||||||
Cash Dividends per share: | |||||||||
Common Stock | $ | 0.18 | $ | 0.1200 | |||||
Class A Common Stock | $ | 0.17 | $ | 0.1125 |
HAVERTY FURNITURE COMPANIES, INC. |
CONDENSED CONSOLIDATED BALANCE SHEETS |
(in thousands – Unaudited) |
March 31, 2018 | December 31, 2017 | March 31, 2017 | ||||||||||
(Unaudited) | (Unaudited) | |||||||||||
ASSETS | ||||||||||||
Current assets | ||||||||||||
Cash and cash equivalents | $ | 72,093 | $ | 79,491 | $ | 61,495 | ||||||
Restricted cash equivalents | 8,141 | 8,115 | 8,047 | |||||||||
Accounts receivable, net | 2,101 | 2,408 | 3,421 | |||||||||
Inventories | 109,024 | 103,437 | 108,258 | |||||||||
Prepaid expenses | 9,058 | 11,314 | 10,581 | |||||||||
Other current assets | 5,981 | 5,922 | 4,926 | |||||||||
Total current assets | 206,398 | 210,687 | 196,728 | |||||||||
Accounts receivable, long-term, net | 212 | 254 | 385 | |||||||||
Property and equipment | 226,995 | 229,215 | 231,584 | |||||||||
Deferred income taxes | 13,095 | 12,375 | 18,367 | |||||||||
Other assets | 9,089 | 8,798 | 8,556 | |||||||||
Total assets | $ | 455,789 | $ | 461,329 | $ | 455,620 | ||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||
Current liabilities | ||||||||||||
Accounts payable | $ | 19,598 | $ | 20,501 | $ | 23,354 | ||||||
Customer deposits | 28,313 | 27,813 | 27,263 | |||||||||
Accrued liabilities | 33,020 | 37,582 | 37,704 | |||||||||
Current portion of lease obligations | 3,835 | 3,788 | 3,568 | |||||||||
Total current liabilities | 84,766 | 89,684 | 91,889 | |||||||||
Lease obligations, less current portion | 49,826 | 50,803 | 52,066 | |||||||||
Other liabilities | 26,675 | 26,700 | 25,198 | |||||||||
Total liabilities | 161,267 | 167,187 | 169,153 | |||||||||
Stockholders’ equity | 294,522 | 294,142 | 286,467 | |||||||||
Total liabilities and stockholders’ equity | $ | 455,789 | $ | 461,329 | $ | 455,620 |
HAVERTY FURNITURE COMPANIES, INC. |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
(in thousands – Unaudited) |
Three Months Ended March 31, | ||||||||
2018 | 2017 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
Net income | $ | 6,313 | $ | 5,986 | ||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||||||
Depreciation and amortization | 7,535 | 7,582 | ||||||
Stock-based compensation expense | 1,571 | 1,316 | ||||||
Gain on insurance recovery | (307 | ) | (1,170 | ) | ||||
Proceeds from insurance recovery | 266 | 311 | ||||||
Other | (762 | ) | 115 | |||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | 347 | 798 | ||||||
Inventories | (5,587 | ) | (6,238 | ) | ||||
Customer deposits | 500 | 2,340 | ||||||
Other assets and liabilities | 2,688 | 1,068 | ||||||
Accounts payable and accrued liabilities | (4,270 | ) | (6,349 | ) | ||||
Net cash provided by operating activities | 8,294 | 5,759 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
Capital expenditures | (7,128 | ) | (5,182 | ) | ||||
Proceeds from insurance for destroyed property and equipment | 55 | 989 | ||||||
Other | - | 32 | ||||||
Net cash used in investing activities | (7,073 | ) | (4,161 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
Payments on lease obligations | (930 | ) | (849 | ) | ||||
Dividends paid | (3,792 | ) | (2,521 | ) | ||||
Common stock repurchased | (3,524 | ) | - | |||||
Other | (347 | ) | (201 | ) | ||||
Net cash used in financing activities | (8,593 | ) | (3,571 | ) | ||||
Decrease in cash, cash equivalents and restricted cash equivalents during the period | (7,372 | ) | (1,973 | ) | ||||
Cash, cash equivalents and restricted cash equivalents at beginning of period | 87,606 | 71,515 | ||||||
Cash, cash equivalents and restricted cash equivalents at end of period | $ | 80,234 | $ | 69,542 | ||||
Cost of Goods Sold and SG&A Expense
We include substantially all our occupancy and home delivery costs in SG&A expense as well as a portion of our warehousing expenses. Accordingly, our gross profit may not be comparable to those entities that include these costs in cost of goods sold.
We classify our SG&A expenses as either variable or fixed and discretionary. Our variable expenses are comprised of selling and delivery costs. Selling expenses are primarily compensation and related benefits for our commission based sales associates, the discount we pay for third party financing of customer sales and transaction fees for credit card usage. We do not outsource delivery so these costs include personnel, fuel, and other expenses related to this function. Fixed and discretionary expenses are comprised of rent, depreciation and amortization and other occupancy costs for stores, warehouses and offices, and all advertising and administrative costs.
Conference Call Information
The company invites interested parties to listen to the live audiocast of the conference call on May 2 at 10:00 a.m. (ET) at its website, havertys.com under the investor relations section. If you cannot 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 May 9. The number to access the telephone playback is 1-888-203-1112 (access code: 9552976).
About Havertys
Havertys (NYSE:HVT) and (NYSE:HVT.A), established in 1885, is a full-service home furnishings retailer with 123 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.
Safe Harbor
This press release includes statements that constitute forward-looking statement within the meaning of the federal securities laws. Generally, the words "believe," "expect," "intend," "estimate," "anticipate," "project," "will" and similar expressions identify forward-looking statements, which are not historical in nature. We intend for all forward-looking statements contained herein or on our website, and all subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf, to be covered by the safe harbor provisions for forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and the provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (which Sections were adopted as part of the Private Securities Litigation Reform Act of 1995). Forward-looking statements may relate to, for example, future operations, financial condition, economic performance (including gross profit margins and expenses), capital expenditures, and demand for our products. The Company cautions that its forward-looking statements involve risks and uncertainties, and while we believe that our expectations for the future are reasonable in view of currently available information, you are cautioned not to place undue reliance on our forward-looking statements. Actual results or events may differ materially from those indicated as a result of various important factors. Such factors may include, among other things, the state of the economy; state of the residential construction and housing markets; the consumer spending environment for big ticket items; effects of competition; management of relationships with our suppliers and vendors and disruptions in their operations; new regulations or taxation plans, as well as other risks and uncertainties discussed in the Company's Annual Report on Form 10-K and from time to time in the Company's filings with the SEC.
Contact:
Haverty Furniture Companies, Inc., 404-443-2900
Richard B. Hare
EVP & CFO
Jenny Hill Parker
SVP, Finance, Secretary and Treasurer
SOURCE: Havertys
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