ATLANTA, Nov. 2 /PRNewswire-FirstCall/ -- HAVERTY FURNITURE
COMPANIES, INC. (NYSE: HVT; HVT.A) today reported earnings for the
third quarter ended September 30, 2006. Net income for the third
quarter was $4.1 million or $0.18 per diluted share of Common
Stock, as compared to the third quarter 2005 net income of $3.8
million or $0.17 per diluted share of Common Stock. For the nine
months ended September 30, 2006, net income was $12.8 million or
$0.56 per diluted share of Common Stock versus net income of $8.3
million or $0.36 per diluted share of Common Stock for the same
period in 2005. As previously reported, net sales for the third
quarter of 2006 were $222.9 million, an increase of 10.3% over
sales of $202.0 million for the corresponding quarter in 2005.
Comparable-store sales increased 8.2% for the quarter. Clarence H.
Smith, president and chief executive officer, said, "Our third
quarter results reflect strong sales and gross profit relative to
last year, tempered by increased costs and much lower other income.
Sales were helped by better in-stock levels and a reduction in the
time to complete home delivery after a customer's purchase. Gross
profit margin was 135 basis points better than last year due to the
strength of our product line-up but 32 basis points lower than
achieved for the second quarter this year. The sequential quarter
reduction was influenced by the closing of two stores and the sell
through of clearance merchandise. "Total SG&A expenses were up
44 basis points as a percent of net sales compared to the third
quarter last year. Our increased sales productivity leveraged
expenses in advertising, warehouse, occupancy and administrative
areas. Selling expenses were up for the current quarter as compared
to the third quarter of last year as the volume financed by
customers under outsourced no-interest credit promotions grew and
the discount rates we pay increased in this higher interest rate
environment. The total discount expense for these promotions
increased by 73 basis points as a percent of sales for the quarter
compared to last year. We also had an increase in local delivery
expense in the current quarter as compared to last year due to
labor costs and the higher fuel prices in effect for most of the
period. These delivery expenses were comparable to the second
quarter as a percent of net sales. "Last year's results for the
quarter included a $2.6 million gain on the sale of real estate
which was included in the other income line item. "We opened two
new stores in August this year. One was our first store in the Ft.
Lauderdale, Florida area, located near the Sawgrass Mills Mall. The
other was in Cedar Hill, a southern suburb of Dallas, Texas that
replaced an older store in the Redbird shopping area. Our
Texarkana, Texas store was also closed during the quarter. Today we
are opening an additional store in the greater Cincinnati market
area located in Florence, Kentucky. No other openings or closings
are planned for the fourth quarter. "We have separately just
announced a decrease in sales for October compared to last year.
Retail furniture sales as reported by many of the industry
participants have shown a definite slowdown in recent months that
appears to be continuing. We are cautious about making changes
other than minor ones to our pricing and promotional plans but will
review opportunities to increase top line growth if it helps
overall profitability. Given the slow start in October, we believe
total fourth quarter sales are likely to be below last year. Our
policy is not to give specific earnings guidance; however, we
expect that fourth quarter gross profit margins and overhead
expense levels will be similar to the run rates experienced in the
third quarter. "We believe that our investment in the Havertys
Collections(R) brand, together with our reputation as a quality
retailer, will serve us well as we weather any temporary soft
business climate in our space and will allow us to reap benefits as
trends improve in the future." Havertys is a full-service home
furnishings retailer with 120 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 Friday, November 3, 2006 at 10:00 a.m. Eastern Standard Time
to review the third quarter. Listen-only access to the call is
available via the web at http://www.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) Quarter Ended Nine Months Ended September 30, September
30, 2006 2005 2006 2005 Net sales $222,940 $202,044 $643,063
$602,071 Cost of goods sold 113,892 105,947 325,349 315,746 Gross
profit 109,048 96,097 317,714 286,325 Credit service charges 682
837 2,135 2,702 Gross profit and other revenue 109,730 96,934
319,849 289,027 Expenses: Selling, general and administrative
103,774 93,154 300,897 276,827 Interest, net (206) 166 (144) 1,464
Provision for doubtful accounts 151 152 268 668 Other (income)
expense, net (100) (2,645) (1,337) (3,084) Total expenses 103,619
90,827 299,684 275,875 Income before income taxes 6,111 6,107
20,165 13,152 Income taxes 1,975 2,291 7,335 4,852 Net income
$4,136 $3,816 $12,830 $8,300 Basic earnings per share: Common Stock
$0.18 $0.17 $0.58 $0.37 Class A Common Stock $0.17 $0.16 $0.54
$0.35 Diluted earnings per share: Common Stock $0.18 $0.17 $0.56
$0.36 Class A Common Stock $0.17 $0.16 $0.54 $0.35 Weighted average
shares - basic: Common Stock 18,410 18,278 18,295 18,361 Class A
Common Stock 4,237 4,306 4,259 4,311 Weighted average shares -
assuming dilution(1): Common Stock 22,807 22,652 22,715 22,860
Class A Common Stock 4,237 4,306 4,259 4,311 Cash dividends per
common share: Common Stock $0.0675 $0.0625 $0.2025 $0.1875 Class A
Common Stock $0.0625 $0.0575 $0.1875 $0.1725 (1) See additional
details at the end of this release. Condensed Consolidated Balance
Sheets (Amounts in thousands) (Unaudited) September December
September 30, 31, 30, 2006 2005 2005 Assets Cash and cash
equivalents $8,630 $11,121 $8,188 Accounts receivable, net of
allowance 62,413 80,716 84,806 Inventories, at LIFO cost 118,087
107,631 108,928 Other current assets 25,841 21,703 22,901 Total
Current Assets 214,971 221,171 224,823 Accounts receivable,
long-term 12,232 10,394 7,724 Property and equipment, net 219,881
217,391 215,371 Other assets 9,471 14,096 7,854 $456,555 $463,052
$455,772 Liabilities and Stockholders' Equity Notes payable to
banks $-- $4,300 $-- Accounts payable and accrued liabilities
101,964 113,363 112,969 Current portion of long-term debt and
capital lease obligations 13,291 13,139 13,253 Total Current
Liabilities 115,255 130,802 126,222 Long-term debt and capital
lease obligations 26,022 31,022 35,407 Other liabilities 24,441
21,958 19,659 Stockholders' equity 290,837 279,270 274,484 $456,555
$463,052 $455,772 Condensed Consolidated Statements of Cash Flows
(Amounts in thousands) (Unaudited) Nine Months Ended September 30,
2006 2005 Operating Activities Net Income $12,830 $8,300
Adjustments to reconcile net income to net cash provided by
operating activities: Depreciation and amortization 16,092 15,781
Provision for doubtful accounts 268 669 Deferred income taxes 293
206 (Gain) loss on sale of property and equipment (1,178) (2,570)
Other 802 897 Changes in operating assets and liabilities (2,698)
(2,388) Net cash provided by operating activities 26,409 20,895
Investing Activities Capital expenditures (17,968) (27,290)
Proceeds from sale of auction rate securities - 5,000 Proceeds from
sale of land, property and equipment 3,651 7,185 Other investing
activities 215 1,490 Net cash used in investing activities (14,102)
(13,615) Financing Activities Proceeds from borrowings under
revolving credit facilities 543,605 367,850 Payments of borrowings
under revolving credit facilities (547,905) (367,850) Net decrease
in borrowings under revolving credit facilities (4,300) - Payments
on long-term debt and capital lease obligations (8,114) (15,838)
Treasury stock acquired - (3,811) Proceeds from exercise of stock
options 2,026 605 Dividends paid (4,506) (4,185) Other 96 - Net
cash used in financing activities (14,798) (23,229) Decrease in
cash and cash equivalents (2,491) (15,949) Cash and cash
equivalents at beginning of period 11,121 24,137 Cash and cash
equivalents at end of period $8,630 $8,188 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 $7.4 million
at September 30, 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 Nine Months Ended September 30
September 30 2006 2005 2006 2005 Common Stock: Weighted-average
shares outstanding 18,410 18,278 18,295 18,361 Assumed conversion
of Class A Common shares 4,237 4,306 4,259 4,311 Dilutive options
and stock awards 160 68 161 188 Total weighted-average diluted
common shares 22,807 22,652 22,715 22,860 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 and awards
which reduces the amount of undistributed earnings allocated to the
Class A Common Stock. 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, both of Haverty Furniture Companies, Inc.,
+1-404-443-2900 Web site: http://www.havertys.com/
http://www.streetevents.com/
Copyright