ATLANTA, May 6 /PRNewswire-FirstCall/ -- HAVERTY FURNITURE COMPANIES, INC. today reported a loss for the first quarter ended March 31, 2009. The net loss for the first quarter of 2009 was $7.3 million or $.34 per diluted common share, as compared to the first quarter 2008 net earnings of $1.0 million or $0.05 per diluted common share.
As previously reported, net sales for the first quarter of 2009 were $144.2 million, a decrease of 22.1% compared to sales of $185.3 million for the corresponding quarter in 2008. On a comparable-store basis, sales declined 22.9% for the quarter.
Total written business in 2009 for the second quarter to date is down approximately 27% versus the same period last year. The Company opened a new store in Little Rock, Arkansas on May 1st completing its strategy of strengthening its position in that market with one new location from two older stores.
Clarence H. Smith, president and chief executive officer, said, "Our focus remains on three strategic factors: adjusting costs to market conditions, managing for cash, and taking meaningful and measured steps to drive sales. We believe that these important points are the foundation to positioning Havertys for future growth and profitability.
"During the first quarter our SG&A expenses were reduced by $5.1 million or 5.9% from the fourth quarter of 2008 and $14.2 million or 14.9% versus last year's first quarter. Staff changes resulting in decreases in compensation costs and alterations in our advertising media mix generated the largest cost reductions. We closed an under-performing store in March of this year and there are no current plans for additional closures during 2009. However, we continue to scrutinize all of our locations particularly those nearing the end of their lease terms and additional closures may result if satisfactory renewal terms can not be reached. We are leveraging our technology investment by increasing the use of internal web-meetings and video training for real-time sharing of information to adjust key aspects of our business and reduce travel expenditures.
"We completed a $6.8 million sale lease-back transaction of one store during the first quarter in spite of the difficult real estate financing market. Steady collections and continued outsourcing generated a reduction in our accounts receivable of $6.2 million during the quarter. We slowed merchandise purchases in the wake of the deteriorating demand and our inventories are $10.2 million lower than at March 31, 2008 and $4.4 million lower than at December 31, 2008. The reductions in purchases and expense cuts have lowered our payables and accrued liabilities by $12.5 million in the current quarter. Our cash is up $5.8 million from year-end and we continued to have no borrowings outstanding at the end of the first quarter.
"Stimulating store traffic and sales are vital during this downturn as we compete for a scarce and hyper cost-conscious consumer. We offered more promotional pricing during the first quarter and our gross margins were 92 basis points lower than in the first quarter of 2008. The industry's very weak demand has created very attractive purchasing opportunities with a number of manufacturers. We expect to highlight a number of great values at good margins to our customers in the coming months. Our sales associates offer superior customer service and combined with exciting new products at substantial values we believe that we will be a winner in the battle for our share of the consumer's dollar."
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 website at http://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, May 7, 2009 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 http://www.havertys.com/ (For Investors) and at http://www.streetevents.com/ (Individual Investor Center), both live and for a limited time, on a replay basis.
HAVERTY FURNITURE COMPANIES, INC. and SUBSIDIARIES Condensed Consolidated Statements of Operations (Amounts in thousands except per share data) (Unaudited) Three Months Ended March 31, --------- 2009 2008 ---- ---- Net sales $144,238 $185,253 Cost of goods sold 70,475 88,818 ------ ------ Gross profit 73,763 96,435 Credit service charges 393 565 --- --- Gross profit and other revenue 74,156 97,000 Expenses: Selling, general and administrative 80,879 95,037 Interest, net 176 (131) Provision for doubtful accounts 415 328 Other income, net (121) (42) ---- --- Total expenses 81,349 95,192 ------ ------ (Loss) income before income taxes (7,193) 1,808 Income taxes 70 776 -- --- Net (loss) income $(7,263) $1,032 ======= ====== Basic and diluted (loss) earnings per share: Common Stock ($0.34) $0.05 Class A Common Stock ($0.33) $0.05 Weighted average shares - basic: Common Stock 17,322 17,112 Class A Common Stock 4,005 4,127 Weighted average shares - assuming dilution: Common Stock 21,327 21,443 Class A Common Stock 4,005 4,127 Cash dividends per share: Common Stock - $0.0675 Class A Common Stock - $0.0625 HAVERTY FURNITURE COMPANIES, INC. and SUBSIDIARIES Condensed Consolidated Balance Sheets (Amounts in thousands) (Unaudited) March 31, December 31, March 31, 2009 2008 2008 ---- ---- ---- Assets Cash and cash equivalents $9,848 $3,697 $2,195 Accounts receivable, net of allowance 18,191 24,301 49,866 Inventories, at LIFO cost 99,384 103,743 109,598 Other current assets 16,227 18,005 16,825 ------ ------ ------ Total Current Assets 143,650 149,746 178,484 Accounts receivable, long-term 1,607 2,082 4,863 Property and equipment, net 188,052 197,423 206,161 Other assets 14,143 14,142 25,021 ------ ------ ------ $347,452 $363,393 $414,529 ======== ======== ======== Liabilities and Stockholders' Equity Notes payable to banks $- $- $8,250 Accounts payable and accrued liabilities 60,784 71,359 73,322 Current portion of lease obligations 323 311 6,357 --- --- ----- Total Current Liabilities 61,107 71,670 87,929 Lease obligations, less current portion 7,100 7,183 20,261 Other liabilities 41,017 39,572 29,232 Stockholders' equity 238,228 244,968 277,107 ------- ------- ------- $347,452 $363,393 $414,529 ======== ======== ======== HAVERTY FURNITURE COMPANIES, INC. and SUBSIDIARIES Condensed Consolidated Statements of Cash Flows (Amounts in thousands) (Unaudited) Quarter Ended March 31, 2009 2008 ---- ---- Operating Activities Net (loss) income $(7,263) $1,032 Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: Depreciation and amortization 5,149 5,447 Provision for doubtful accounts 415 328 (Gain) loss on sale of property and equipment (16) 18 Other 473 329 Changes in operating assets and liabilities 886 (6,674) --- ------ Net cash (used in) provided by operating activities (356) 480 ---- --- Investing Activities Capital expenditures (537) (1,852) Proceeds from sale-leaseback transaction 6,625 - Proceeds from sale of property and equipment 21 197 Other investing activities 99 237 -- --- Net cash provided by (used in) investing activities 6,208 (1,418) ----- ------ Financing Activities Proceeds from borrowings under revolving credit facilities 5,800 69,075 Payments of borrowings under revolving credit facilities (5,800) (60,825) ------ ------- Net increase in borrowings under revolving credit facilities - 8,250 Payments on long-term debt and lease obligations (71) (2,066) Treasury stock acquired - (1,806) Dividends paid - (1,412) --- ------ Net cash (used in) provided by financing activities (71) 2,966 --- ----- Increase in cash and cash equivalents 5,781 2,028 Cash and cash equivalents at beginning of period 3,697 167 ----- --- Cash and cash equivalents at end of period $9,478 $2,195 ====== ====== Contact for Information: Dennis L. Fink, EVP & CFO or Jenny Hill Parker, VP, Secretary & Treasurer 404-443-2900
Haverty Furniture Companies, Inc.
CONTACT: Dennis L. Fink, EVP & CFO, Jenny Hill Parker, VP, Secretary &
Treasurer, +1-404-443-2900, Haverty Furniture Companies, Inc.
Web Site: http://www.havertys.com/
