Haverty Furniture Reports Results for First Quarter 2004 ATLANTA,
April 28 /PRNewswire-FirstCall/ -- HAVERTY FURNITURE COMPANIES,
INC. (NYSE: HVT; HVT.A) today reported earnings for the first
quarter ended March 31, 2004. Net income for the first quarter was
$6.2 million or $0.27 per diluted share, a 25.6% and 22.7%
increase, respectively, compared to the first quarter 2003 net
income of $4.9 million or $0.22 per diluted share. As previously
reported, net sales for the first quarter of 2004 were $190.3
million, an increase of 8.5% over sales of $175.4 million for the
corresponding quarter in 2003. Comparable-store sales increased
4.0% for the quarter. Clarence H. Smith, president and chief
executive officer, said, "We are pleased to report a 22.7% increase
in earnings per share for the first quarter. Our pricing
discipline, merchandising strategy and efforts to leverage all
aspects of our business contributed to these results. The primary
driver however is sales, and we are optimistic that the recently
improving economic news and strong housing activity will fuel our
customers' desires for new home furnishings. "Our Havertys
Collections merchandise boosted our gross profit margin and sales
in the first quarter. We have increased the number of Havertys
branded products and added Havertys Collections Premium to our
merchandise mix. Sales of our Havertys branded products were more
than double that of last year's first quarter and are now
approximately 31% of our total sales. Our more disciplined and
consistent pricing methods implemented during 2003 also contributed
to our improved margins. On a comparable basis, gross profit margin
increased 70 basis points over last year's quarter. "As we first
noted in our 2003 year-end earnings release and discussed in our
2003 Form 10-K, the impact of the changes in the accounting rules
for the classification of vendor allowances for advertising or
rebates would be more pronounced beginning in 2004. This change in
classification increased gross profits by $3.4 million, or 180
basis points, and increased SG&A expenses by the same amount.
"We make available to our customers various financings options,
including some through a third-party finance company. As the
popularity of the third- party programs has increased, the level of
our accounts receivables has decreased. Accordingly, our credit
service charge revenue is lower than last year. The total amounts
financed by our customers under all programs decreased during the
first quarter to 42% of sales from 46% last year. Our provision for
bad debts is $0.4 million lower this year due to the decline in
receivables and favorable collection trends. "SG&A expenses
were flat as a percent of sales on a comparable basis. We did have
modest improvements in occupancy, warehouse and delivery expenses
as a percent of sales. "We have announced our expansion plans into
Cincinnati, Ohio and the additional stores to be opened in the
Metro-DC and San Antonio markets. Our Florida distribution center
is currently under construction and is scheduled to open this fall.
We are excited about our growth programs that will extend our reach
and continue to strengthen our presence in key markets by investing
in great locations and the distribution network needed to
efficiently support that growth." Havertys is a full-service home
furnishings retailer with 113 showrooms in 15 southern and central
states 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
http://www.havertys.com/ . This release includes 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 Wednesday, April 28, 2004 at
10:00 a.m. Eastern Daylight Time to review the first quarter.
Listen-only access to the call is available via the web at
havertys.com (For Investors) and at streetevents.com (Individual
Investor Center), both live and for a limited time, on a replay
basis. Condensed Consolidated Statements of Income (Amounts in
thousands except per share data) (Unaudited) Three Months Ended
March 31, 2004 2003 Net sales $190,301 $175,380 Cost of goods sold
92,339 89,468 Gross profit 97,962 85,912 Credit service charges
1,304 1,892 Gross profit and other revenue 99,266 87,804 Expenses:
Selling, general and administrative 88,791 78,616 Interest 1,125
1,133 Provision for doubtful accounts 131 573 Other (income)
expense, net (589) (355) Total expenses 89,458 79,967 Income before
income taxes 9,808 7,837 Income taxes 3,658 2,939 Net income $6,150
$4,898 Weighted average shares - basic 22,451 21,827 Weighted
average shares - assuming dilution 23,185 21,920 Basic earnings per
share $0.27 $0.22 Diluted earnings per share $0.27 $0.22 Condensed
Consolidated Balance Sheets (Amounts in thousands) (Unaudited)
March 31, December 31, March 31, 2004 2003 2003 Assets Cash and
cash equivalents $39,535 $31,591 $3,051 Accounts receivable, net of
allowance 87,522 97,654 114,749 Inventories at LIFO cost 109,604
106,264 120,441 Other current assets 12,729 15,578 10,008 Total
Current Assets 249,390 251,087 248,249 Property and equipment, net
170,253 171,546 140,406 Other assets 9,615 10,569 9,637 Total
Assets $429,258 $433,202 $398,292 Liabilities and Stockholders'
Equity Notes payable to banks $-- $-- $-- Accounts payable and
accrued expenses 78,939 87,770 74,763 Current portion of long-term
debt 13,481 13,528 11,163 Total Current Liabilities 92,420 101,298
85,926 Long-term debt and capital lease obligations 63,547 65,402
73,039 Other liabilities 14,258 13,766 10,709 Stockholders' equity
259,033 252,736 228,618 Total Liabilities and Stockholders' Equity
$429,258 $433,202 $398,292 Condensed Consolidated Statements of
Cash Flows (Amounts in thousands) (Unaudited) Quarter Ended March
31, 2004 2003 Operating Activities Net Income $6,150 $4,898
Adjustments to reconcile net income to net cash provided by
operating activities: Depreciation and amortization 4,774 4,229
Provision for doubtful accounts 131 573 Loss (gain) on sale of
property and equipment 103 (13) Changes in operating assets and
liabilities 424 (976) Net cash provided by operating activities
11,582 8,711 Investing Activities Capital expenditures (4,486)
(6,885) Purchases of properties previously under leases -- (4,238)
Proceeds from sale of property and equipment 902 704 Other
investing activities 1,790 518 Net cash used in investing
activities (1,794) (9,901) Financing Activities Net increase
(decrease) in borrowings under revolving credit facilities -- 5,100
Payments on long-term debt and capital lease obligations (1,902)
(3,396) Treasury stock acquired -- (245) Proceeds from exercise of
stock options 1,381 271 Dividends paid (1,379) (1,233) Other
financing activities 56 (20) Net cash (used in) provided by
financing activities (1,844) 477 Increase (decrease) in cash and
cash equivalents 7,944 (713) Cash and cash equivalents at beginning
of period 31,591 3,764 Cash and cash equivalents at end of period
$39,535 $3,051 Contact: Dennis L. Fink, EVP & CFO or Jenny Hill
Parker, VP, Secretary & Treasurer 404-443-2900 DATASOURCE:
Haverty Furniture Companies, Inc. CONTACT: Dennis L. Fink, EVP
& CFO, or Jenny Hill Parker, VP, Secretary & Treasurer of
Haverty Furniture Companies, Inc., +1-404-443-2900 Web site:
http://www.havertys.com/
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