Haverty Furniture Reports Results for First Quarter 2001

Apr 24, 2001, 01:00 ET from Haverty Furniture Companies, Inc.

    ATLANTA, April 24 /PRNewswire Interactive News Release/ -- Haverty
 Furniture Companies, Inc. (NYSE:   HVT HVT.A) today reported sales and earnings
 for the first quarter ended March 31, 2001.  Net income for the first quarter
 was $4.3 million or $0.20 per diluted share as compared to the first quarter
 2000 pro forma net income of $6.5 million or $0.30 pro forma diluted earnings
 per share.
     Net sales for the first quarter of 2001 were $167.6 million, an increase
 of 2.4% over sales of $163.7 million for the corresponding quarter in 2000.
 As previously reported, comparable-store sales decreased 3.0% for the quarter.
     John E. Slater, Jr., President and CEO, said, "Our first quarter results
 were at the high end of the $0.18 to $0.20 per share revised expectations.
 The slowing of discretionary spending has certainly impacted our business,
 particularly as the stock market declines have created uneasiness even among
 more affluent consumers.  Strong comparable-store increases for the past three
 years have resulted in difficult comparisons to this year's sales in a
 sluggish economy.  The five new stores that we opened in existing markets late
 last year have also put negative pressure on comparable-store sales and have
 increased our fixed overhead.  Our margins have remained relatively stable in
 relation to the preceding years as we have chosen not to use heavy promotional
 or discounting activity to stimulate sales.
     "We are pleased that our inventory levels are not out of line even though
 sales have been lower than planned and that the accounts receivable portfolio
 remains in good shape," Slater continued.
     "April sales activity thus far has been below our expectations and below
 last year's results.  It is difficult to predict when the mood of the consumer
 might rebound to create a more typical appetite for big-ticket purchases.  The
 recent interest rate cuts by the Federal Reserve should help stimulate the
 economy and prompt consumers' spending on home furnishings to be in line with
 the more respectable levels of housing and mortgage refinancing activities.
 We will assess our progress after we have our final April sales results and
 give further guidance on our prospects for the remainder of 2001 at that
 time," Slater concluded.
     As previously announced, the Company changed its accounting method for
 recognizing revenues in 2000 and is now recording merchandise sales upon
 delivery to the customer.  Historically, sales were recognized and "billed"
 prior to delivery when certain criteria were met, such as receipt of full
 payment, credit approval for charge sales and merchandise in stock.  The
 change is consistent with new guidance on revenue recognition provided by the
 Securities and Exchange Commission Staff Accounting Bulletin No. 101 -
 "Revenue Recognition in Financial Statements."  The implementation of this
 change was accounted for as a change in accounting principle and applied
 cumulatively as if the change occurred at January 1, 2000.
     As a result of the change in accounting method, the Company recorded a
 one-time non-cash reduction in earnings of approximately $3.4 million or
 $0.15 per diluted share in the first quarter of 2000.
     Havertys is a full-service home furnishings retailer with 106 showrooms in
 14 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 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.
 
 
                    Condensed Consolidated Statements of Income
                    (Amounts in thousands except per share data)
                                    (Unaudited)
 
                                                       Three Months Ended
                                                            March 31,
 
                                                     2001               2000
 
     Net sales                                     $167,599           $163,741
     Cost of goods sold                              88,108             85,113
       Gross profit                                  79,491             78,628
 
     Credit service charges                           3,053              3,370
       Gross profit and other revenue                82,544             81,998
 
     Expenses:
       Selling, general and
        administrative                               71,495             68,016
       Interest                                       3,164              2,865
       Provision for doubtful accounts                1,011                933
       Other expense (income), net                       62                (66)
         Total expenses                              75,732             71,748
 
     Income before income taxes and
      cumulative effect of a change in
      accounting principle                            6,812             10,250
 
     Income taxes                                     2,505              3,741
     Income before cumulative effect of a
       change in accounting principle                 4,307              6,509
     Cumulative effect on prior years (to
      December 31, 1999) of changing to a
      different revenue recognition method              ---             (3,356)
 
       Net income                                    $4,307             $3,153
 
     Weighted average shares - basic                 20,807             21,097
     Weighted average shares - assuming
      dilution                                       21,344             21,529
 
     Basic earnings per share:
       Income before cumulative effect of
        a change in accounting principle              $0.21              $0.31
       Cumulative effect on prior years
        (to December 31, 1999) of
        changing to a different revenue
        recognition method                              ---              (0.15)
 
       Net income                                     $0.21              $0.16
 
     Diluted earnings per share:
       Income before cumulative effect of
        a change in accounting principle              $0.20              $0.30
       Cumulative effect on prior years
        (to December 31, 1999) of
        changing to a different revenue
        recognition method                              ---              (0.15)
 
       Net income                                     $0.20              $0.15
 
 
 
                       Condensed Consolidated Balance Sheets
                              (Amounts in thousands)
                                    (Unaudited)
 
 
 
                                             March 31,  December 31, March 31,
                                               2001        2000        2000
 
     Assets
       Cash and cash equivalents               $1,397      $3,256      $1,786
       Accounts receivable,
         net of allowance                     165,285     175,716     161,083
       Inventories at LIFO cost               110,079     109,068     107,702
       Other current assets                     9,983       7,952       9,211
         Total Current Assets                 286,744     295,992     279,782
 
       Property and equipment, net            147,590     144,525     129,000
       Deferred income taxes                    5,618       5,430       3,137
       Other assets                             2,386       2,216       2,117
           Total Assets                      $442,338    $448,163    $414,036
 
 
 
     Liabilities and Stockholders' Equity
       Notes payable to banks                 $29,400      $3,600     $23,200
       Accounts payable and
         accrued expenses                      64,509      78,355      81,676
       Deferred income taxes                      175       2,436         ---
       Current portion of long-term debt       10,664      11,129      11,912
           Total Current Liabilities          104,748      95,520     116,788
 
       Long-term debt and capital
         lease obligations                    151,091     170,369     132,629
       Other liabilities                        3,422       2,899       2,760
       Stockholders' equity                   183,077     179,375     161,859
           Total Liabilities and
           Stockholders' Equity              $442,338    $448,163    $414,036
 
               Contact:  Dennis L. Fink, EVP & CFO, 404-443-2900
 
     The company will sponsor a conference call Tuesday, April 24, 2001 at
  10:00 a.m. Eastern 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.
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X82756526
 
 

SOURCE Haverty Furniture Companies, Inc.
    ATLANTA, April 24 /PRNewswire Interactive News Release/ -- Haverty
 Furniture Companies, Inc. (NYSE:   HVT HVT.A) today reported sales and earnings
 for the first quarter ended March 31, 2001.  Net income for the first quarter
 was $4.3 million or $0.20 per diluted share as compared to the first quarter
 2000 pro forma net income of $6.5 million or $0.30 pro forma diluted earnings
 per share.
     Net sales for the first quarter of 2001 were $167.6 million, an increase
 of 2.4% over sales of $163.7 million for the corresponding quarter in 2000.
 As previously reported, comparable-store sales decreased 3.0% for the quarter.
     John E. Slater, Jr., President and CEO, said, "Our first quarter results
 were at the high end of the $0.18 to $0.20 per share revised expectations.
 The slowing of discretionary spending has certainly impacted our business,
 particularly as the stock market declines have created uneasiness even among
 more affluent consumers.  Strong comparable-store increases for the past three
 years have resulted in difficult comparisons to this year's sales in a
 sluggish economy.  The five new stores that we opened in existing markets late
 last year have also put negative pressure on comparable-store sales and have
 increased our fixed overhead.  Our margins have remained relatively stable in
 relation to the preceding years as we have chosen not to use heavy promotional
 or discounting activity to stimulate sales.
     "We are pleased that our inventory levels are not out of line even though
 sales have been lower than planned and that the accounts receivable portfolio
 remains in good shape," Slater continued.
     "April sales activity thus far has been below our expectations and below
 last year's results.  It is difficult to predict when the mood of the consumer
 might rebound to create a more typical appetite for big-ticket purchases.  The
 recent interest rate cuts by the Federal Reserve should help stimulate the
 economy and prompt consumers' spending on home furnishings to be in line with
 the more respectable levels of housing and mortgage refinancing activities.
 We will assess our progress after we have our final April sales results and
 give further guidance on our prospects for the remainder of 2001 at that
 time," Slater concluded.
     As previously announced, the Company changed its accounting method for
 recognizing revenues in 2000 and is now recording merchandise sales upon
 delivery to the customer.  Historically, sales were recognized and "billed"
 prior to delivery when certain criteria were met, such as receipt of full
 payment, credit approval for charge sales and merchandise in stock.  The
 change is consistent with new guidance on revenue recognition provided by the
 Securities and Exchange Commission Staff Accounting Bulletin No. 101 -
 "Revenue Recognition in Financial Statements."  The implementation of this
 change was accounted for as a change in accounting principle and applied
 cumulatively as if the change occurred at January 1, 2000.
     As a result of the change in accounting method, the Company recorded a
 one-time non-cash reduction in earnings of approximately $3.4 million or
 $0.15 per diluted share in the first quarter of 2000.
     Havertys is a full-service home furnishings retailer with 106 showrooms in
 14 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 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.
 
 
                    Condensed Consolidated Statements of Income
                    (Amounts in thousands except per share data)
                                    (Unaudited)
 
                                                       Three Months Ended
                                                            March 31,
 
                                                     2001               2000
 
     Net sales                                     $167,599           $163,741
     Cost of goods sold                              88,108             85,113
       Gross profit                                  79,491             78,628
 
     Credit service charges                           3,053              3,370
       Gross profit and other revenue                82,544             81,998
 
     Expenses:
       Selling, general and
        administrative                               71,495             68,016
       Interest                                       3,164              2,865
       Provision for doubtful accounts                1,011                933
       Other expense (income), net                       62                (66)
         Total expenses                              75,732             71,748
 
     Income before income taxes and
      cumulative effect of a change in
      accounting principle                            6,812             10,250
 
     Income taxes                                     2,505              3,741
     Income before cumulative effect of a
       change in accounting principle                 4,307              6,509
     Cumulative effect on prior years (to
      December 31, 1999) of changing to a
      different revenue recognition method              ---             (3,356)
 
       Net income                                    $4,307             $3,153
 
     Weighted average shares - basic                 20,807             21,097
     Weighted average shares - assuming
      dilution                                       21,344             21,529
 
     Basic earnings per share:
       Income before cumulative effect of
        a change in accounting principle              $0.21              $0.31
       Cumulative effect on prior years
        (to December 31, 1999) of
        changing to a different revenue
        recognition method                              ---              (0.15)
 
       Net income                                     $0.21              $0.16
 
     Diluted earnings per share:
       Income before cumulative effect of
        a change in accounting principle              $0.20              $0.30
       Cumulative effect on prior years
        (to December 31, 1999) of
        changing to a different revenue
        recognition method                              ---              (0.15)
 
       Net income                                     $0.20              $0.15
 
 
 
                       Condensed Consolidated Balance Sheets
                              (Amounts in thousands)
                                    (Unaudited)
 
 
 
                                             March 31,  December 31, March 31,
                                               2001        2000        2000
 
     Assets
       Cash and cash equivalents               $1,397      $3,256      $1,786
       Accounts receivable,
         net of allowance                     165,285     175,716     161,083
       Inventories at LIFO cost               110,079     109,068     107,702
       Other current assets                     9,983       7,952       9,211
         Total Current Assets                 286,744     295,992     279,782
 
       Property and equipment, net            147,590     144,525     129,000
       Deferred income taxes                    5,618       5,430       3,137
       Other assets                             2,386       2,216       2,117
           Total Assets                      $442,338    $448,163    $414,036
 
 
 
     Liabilities and Stockholders' Equity
       Notes payable to banks                 $29,400      $3,600     $23,200
       Accounts payable and
         accrued expenses                      64,509      78,355      81,676
       Deferred income taxes                      175       2,436         ---
       Current portion of long-term debt       10,664      11,129      11,912
           Total Current Liabilities          104,748      95,520     116,788
 
       Long-term debt and capital
         lease obligations                    151,091     170,369     132,629
       Other liabilities                        3,422       2,899       2,760
       Stockholders' equity                   183,077     179,375     161,859
           Total Liabilities and
           Stockholders' Equity              $442,338    $448,163    $414,036
 
               Contact:  Dennis L. Fink, EVP & CFO, 404-443-2900
 
     The company will sponsor a conference call Tuesday, April 24, 2001 at
  10:00 a.m. Eastern 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.
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X82756526
 
 SOURCE  Haverty Furniture Companies, Inc.