ATLANTA, May 1 /PRNewswire-FirstCall/ -- HAVERTY FURNITURE
COMPANIES, INC. (NYSE: HVT; HVT.A) today reported earnings for the
first quarter ended March 31, 2006. Net income for the first
quarter of 2006 was $5.1 million or $0.23 per diluted common share,
a 60.8% and 64.3% increase, respectively, compared to the first
quarter 2005 net income of $3.2 million or $0.14 per diluted common
share. As previously reported, net sales for the first quarter of
2006 were $209.1 million, an increase of 0.7% over sales of $207.6
million for the corresponding quarter in 2005. Comparable-store
sales decreased 0.6% for the quarter. Clarence H. Smith, president
and chief executive officer, said, "Much improved gross profit
margins led to an earnings increase even as our sales volume was
less than planned and operating costs were higher than last year.
"Gross profit margins were positively impacted by the continuing
migration to proprietary Havertys Collections(R) branded products,
more imported merchandise and less reliance on widely distributed
manufacturer brands. We also had a positive impact on gross profit
in the first quarter from a $0.5 million favorable inventory
adjustment that is not expected to recur. "Our SG&A expenses
were higher due to additional advertising expenditures and the cost
of more competitive free-interest credit promotions, both designed
to stimulate sales after a slower than expected start to the
quarter. These were partly offset by lower warehouse expenses
compared to the high cost of consolidating our Florida distribution
facilities and relocating to a new center in early 2005. Stores
added in two large new markets near the end of 2005 contributed to
overall higher occupancy, delivery and administrative expenses.
"Both interest expense and bad debt expense were considerably lower
in the first quarter this year. Other income increased almost $0.8
million versus last year's first quarter due to gains on the sale
of real estate. "We are encouraged by the improved profitability
and are determined to make necessary adjustments to enhance top
line performance and exert greater leverage on our operating
costs." Havertys is a full-service home furnishings retailer with
119 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 Tuesday, May 2, 2006 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. Contact: Dennis L. Fink, EVP & CFO or Jenny Hill Parker,
VP, Secretary & Treasurer 404-443-2900 Condensed Consolidated
Statements of Income (Amounts in thousands except per share data)
(Unaudited) Three Months Ended March 31, 2006 2005 Net sales
$209,088 $207,634 Cost of goods sold 104,314 108,951 Gross profit
104,774 98,683 Credit service charges 762 989 Gross profit and
other revenue 105,536 99,672 Expenses: Selling, general and
administrative 98,550 93,962 Interest, net (34) 901 Provision for
doubtful accounts 34 206 Other (income) expense, net (1,218) (459)
Total expenses 97,332 94,610 Income before income taxes 8,204 5,062
Income taxes 3,101 1,888 Net income $5,103 $3,174 Basic earnings
per share: Common Stock $0.23 $0.14 Class A Common Stock $0.22
$0.13 Diluted earnings per share: Common Stock $0.23 $0.14 Class A
Common Stock $0.22 $0.13 Weighted average shares - basic: Common
Stock 18,163 18,374 Class A Common Stock 4,286 4,316 Weighted
average shares - assuming dilution(1): Common Stock 22,620 23,015
Class A Common Stock 4,286 4,316 Cash dividends per common share:
Common Stock $0.0675 $0.0625 Class A Common Stock $0.0625 $0.0575
(1) See additional details at the end of this release. Condensed
Consolidated Balance Sheets (Amounts in thousands) (Unaudited)
March 31, December 31, March 31, 2006 2005 2005 Assets Cash and
cash equivalents $7,823 $11,121 $5,979 Auction rate securities - -
5,000 Accounts receivable, net of allowance 71,031 80,716 82,983
Inventories, at LIFO cost 120,364 107,631 116,013 Other current
assets 19,966 21,703 15,324 Total Current Assets 219,184 221,171
225,299 Accounts receivable, long-term 8,514 10,394 10,361 Property
and equipment, net 218,373 217,391 206,817 Other assets 13,454
14,096 12,298 $459,525 $463,052 $454,775 Liabilities and
Stockholders' Equity Notes payable to banks $10,000 $4,300 $2,100
Accounts payable and accrued liabilities 99,888 113,363 102,700
Current portion of long-term debt and capital lease obligations
13,139 13,139 13,202 Total Current Liabilities 123,027 130,802
118,002 Long-term debt and capital lease obligations 29,522 31,022
42,335 Other liabilities 22,970 21,958 19,383 Stockholders' equity
284,006 279,270 275,055 $459,525 $463,052 $454,775 Condensed
Consolidated Statements of Cash Flows (Amounts in thousands)
(Unaudited) Quarter Ended March 31, 2006 2005 Operating Activities
Net Income $5,103 $3,174 Adjustments to reconcile net income to net
cash provided by operating activities: Depreciation and
amortization 5,278 5,272 Provision for doubtful accounts (34) 206
Deferred income taxes 73 63 (Gain) loss on sale of property and
equipment (1,253) 57 Other 355 343 Changes in operating assets and
liabilities (10,956) (13,399) Net cash used in operating activities
(1,434) (4,284) Investing Activities Capital expenditures (7,323)
(7,172) Proceeds from sale of property and equipment 2,112 63 Other
investing activities 124 960 Net cash used in investing activities
(5,087) (6,149) Financing Activities Proceeds from borrowings under
revolving credit facilities 317,365 7,000 Payments of borrowings
under revolving credit facilities (311,665) (4,900) Net increase in
borrowings under revolving credit facilities 5,700 2,100 Payments
on long-term debt and capital lease obligations (1,500) (8,961)
Proceeds from exercise of stock options 516 534 Dividends paid
(1,493) (1,397) Net cash provided by (used in) financing activities
3,223 (7,724) Decrease in cash and cash equivalents (3,298)
(18,157) Cash and cash equivalents at beginning of period 11,121
24,137 Cash and cash equivalents at end of period $7,823 $5,980
Reclassifications Certain reclassifications have been made to the
prior period financial statements to conform to the current period
presentation. Prior to December 31, 2005, cash on hand in
depository bank accounts and checks outstanding for disbursing bank
accounts were both classified as cash and cash equivalents in the
balance sheets and statements of cash flows. At December 31, 2005
and all prior periods, checks outstanding for disbursing bank
accounts have been reclassified to accounts payable. For balance
sheet and statement of cash flow purposes, the amount of checks
outstanding for disbursing bank accounts reclassified from cash and
cash equivalents to accounts payable totaled approximately $2.9
million at March 31, 2005. Earnings per Share The following details
how the number of shares in calculating the diluted earnings per
share for Common Stock are derived under SFAS 128 and EITF 03-6
(shares in thousands): Quarter Ended March 31 2006 2005 Common
Stock: Weighted-average shares outstanding 18,163 18,374 Assumed
conversion of Class A Common shares 4,286 4,316 Dilutive options
and awards 171 325 Total weighted-average diluted common shares
22,620 23,015 The amount of earnings used in calculating diluted
earnings per share of Common Stock is equal to net income since the
Class A shares are assumed to be converted. Diluted earnings per
share of Class A Common Stock includes the effect of dilutive
common stock options which reduces the amount of undistributed
earnings allocated to the Class A Common Stock. 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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