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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
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☒ |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the quarterly period ended
September 30, 2022
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OR
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☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the transition period from ___ to
___ |
Commission file number: 1-14445
HAVERTY FURNITURE COMPANIES, INC.
(Exact name of registrant as specified in its charter)
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Maryland |
58-0281900 |
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(State or other jurisdiction of incorporation or
organization) |
(I.R.S. Employer Identification No.) |
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780 Johnson Ferry Road, Suite 800
Atlanta, Georgia
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30342
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(Address of principal executive offices) |
(Zip Code) |
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(404) 443-2900
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(Registrant’s telephone number, including area code) |
Securities registered pursuant to
Section 12(b) of the Securities Exchange Act of 1934
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Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
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Common Stock |
HVT |
NYSE |
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Class A Common Stock |
HVTA |
NYSE |
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes
x
No
o
Indicate by check mark whether the registrant has submitted
electronically every Interactive Data File required to be submitted
pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter)
during the preceding 12 months (or for such shorter period that the
registrant was required to submit such files). Yes
x
No
o
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non‑accelerated filer, a
smaller reporting company or an emerging growth company. See the
definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company” and “emerging growth company” in Rule
12b-2 of the Exchange Act.
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Large accelerated filer |
x |
Accelerated filer |
o |
Non-accelerated filer |
o |
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Smaller reporting company |
o |
Emerging growth company |
o |
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If
an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange
Act.
o
Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act). Yes
☐
No
x
The numbers of shares outstanding of the registrant’s two classes
of $1 par value common stock as of November 1, 2022, were:
Common Stock
–
14,864,273; Class A Common Stock – 1,283,260.
HAVERTY FURNITURE COMPANIES, INC.
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
HAVERTY FURNITURE COMPANIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
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(In thousands) |
September 30,
2022 |
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December 31,
2021 |
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(Unaudited) |
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Assets |
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Current assets |
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Cash and cash equivalents |
$ |
137,226 |
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$ |
166,146 |
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Restricted cash and cash equivalents |
6,753 |
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6,716 |
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Inventories |
137,315 |
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112,031 |
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Prepaid expenses |
11,992 |
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12,418 |
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Other current assets |
16,801 |
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11,746 |
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Total current assets |
310,087 |
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309,057 |
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Property and equipment, net |
135,300 |
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126,099 |
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Right-of-use lease assets |
217,848 |
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222,356 |
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Deferred income taxes |
17,834 |
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16,375 |
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Other assets |
11,877 |
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12,403 |
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Total assets |
$ |
692,946 |
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$ |
686,290 |
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Liabilities and Stockholders’ Equity |
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Current liabilities |
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Accounts payable |
$ |
24,932 |
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$ |
31,235 |
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Customer deposits |
79,746 |
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98,897 |
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Accrued liabilities |
53,366 |
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46,664 |
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Current lease liabilities |
34,702 |
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33,581 |
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Total current liabilities |
192,746 |
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210,377 |
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Noncurrent lease liabilities |
196,799 |
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196,771 |
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Other liabilities |
19,792 |
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23,172 |
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Total liabilities |
409,337 |
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430,320 |
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Stockholders’ equity |
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Capital Stock, par value $1 per share
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Preferred Stock, Authorized – 1,000 shares; Issued:
None
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Common Stock, Authorized – 50,000 shares; Issued: 2022 – 30,006;
2021 – 29,907
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30,006 |
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29,907 |
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Convertible Class A Common Stock, Authorized – 15,000 shares;
Issued: 2022 – 1,806; 2021 – 1,809
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1,806 |
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1,809 |
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Additional paid-in capital |
107,510 |
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102,572 |
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Retained earnings |
395,237 |
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342,983 |
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Accumulated other comprehensive loss |
(2,171) |
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(2,293) |
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Less treasury stock at cost – Common Stock (2022 – 15,142 and 2021
– 14,069 shares) and Convertible Class A Common Stock (2022 and
2021 – 522 shares)
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(248,779) |
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(219,008) |
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Total stockholders’ equity |
283,609 |
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255,970 |
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Total liabilities and stockholders’ equity |
$ |
692,946 |
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$ |
686,290 |
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See notes to these condensed consolidated financial
statements.
HAVERTY FURNITURE COMPANIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE
INCOME
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(In thousands, except per share data - unaudited) |
Three Months Ended
September 30, |
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Nine Months Ended
September 30, |
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2022 |
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2021 |
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2022 |
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2021 |
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Net sales |
$ |
274,495 |
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$ |
260,378 |
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$ |
766,658 |
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$ |
746,858 |
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Cost of goods sold |
117,775 |
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112,375 |
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322,368 |
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322,320 |
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Gross profit |
156,720 |
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148,003 |
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444,290 |
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424,538 |
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Expenses: |
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Selling, general and administrative |
124,534 |
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116,156 |
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357,816 |
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338,315 |
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Other expense (income), net |
58 |
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2 |
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176 |
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(40) |
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Total expenses |
124,592 |
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116,158 |
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357,992 |
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338,275 |
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Income before interest and income taxes |
32,128 |
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31,845 |
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86,298 |
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86,263 |
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Interest income, net |
481 |
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58 |
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699 |
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173 |
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Income before income taxes |
32,609 |
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31,903 |
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86,997 |
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86,436 |
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Income tax expense |
8,058 |
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7,670 |
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21,377 |
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19,939 |
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Net income |
$ |
24,551 |
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$ |
24,233 |
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$ |
65,620 |
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$ |
66,497 |
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Other comprehensive income |
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Adjustments related to retirement plans; net of tax expense of $14
and $41 in 2022 and $16 and $48 in 2021
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$ |
41 |
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$ |
50 |
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$ |
122 |
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$ |
148 |
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Comprehensive income |
$ |
24,592 |
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$ |
24,283 |
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$ |
65,742 |
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$ |
66,645 |
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Basic earnings per share: |
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Common Stock |
$ |
1.51 |
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$ |
1.35 |
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$ |
3.96 |
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$ |
3.67 |
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Class A Common Stock |
$ |
1.43 |
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$ |
1.28 |
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$ |
3.75 |
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$ |
3.45 |
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Diluted earnings per share: |
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Common Stock |
$ |
1.46 |
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$ |
1.31 |
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$ |
3.83 |
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$ |
3.55 |
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Class A Common Stock |
$ |
1.40 |
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$ |
1.25 |
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$ |
3.66 |
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$ |
3.38 |
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Cash dividends per share: |
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Common Stock |
$ |
0.28 |
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$ |
0.25 |
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$ |
0.81 |
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$ |
0.72 |
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Class A Common Stock |
$ |
0.26 |
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$ |
0.23 |
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$ |
0.75 |
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$ |
0.65 |
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See notes to these condensed consolidated financial
statements.
HAVERTY FURNITURE COMPANIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
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(In thousands - unaudited) |
Nine Months Ended
September 30, |
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2022 |
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2021 |
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Cash Flows from Operating Activities: |
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Net income |
$ |
65,620 |
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$ |
66,497 |
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Adjustments to reconcile net income to net cash provided by
operating activities: |
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Depreciation and amortization |
12,744 |
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12,099 |
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Share-based compensation expense |
6,032 |
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6,456 |
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Other |
(450) |
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(1,558) |
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Changes in operating assets and liabilities: |
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Inventories |
(25,284) |
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(29,053) |
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Customer deposits |
(19,151) |
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33,966 |
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Other assets and liabilities |
(7,318) |
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(6,088) |
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Accounts payable and accrued liabilities |
6,007 |
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6,679 |
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Net cash provided by operating activities |
38,200 |
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88,998 |
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Cash Flows from Investing Activities: |
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Capital expenditures |
(22,109) |
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(28,060) |
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Proceeds from sale of land, property and equipment |
66 |
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78 |
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Net cash used in investing activities |
(22,043) |
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(27,982) |
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Cash Flows from Financing Activities: |
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Dividends paid |
(13,366) |
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(13,010) |
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Common stock repurchased |
(29,998) |
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(19,493) |
|
|
Other |
(1,676) |
|
|
(2,894) |
|
|
Net cash used in financing activities |
(45,040) |
|
|
(35,397) |
|
|
|
|
|
|
|
(Decrease) increase in cash, cash equivalents and restricted cash
equivalents during the period |
(28,883) |
|
|
25,619 |
|
|
Cash, cash equivalents and restricted cash equivalents at beginning
of period |
172,862 |
|
|
206,771 |
|
|
Cash, cash equivalents and restricted cash equivalents at end of
period |
$ |
143,979 |
|
|
$ |
232,390 |
|
See notes to these condensed consolidated financial
statements.
HAVERTY FURNITURE COMPANIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE A - Business and Basis of Presentation
Haverty Furniture Companies, Inc. (“Havertys,” “the Company,” “we,”
“our,” or “us”) is a retailer of a broad line of residential
furniture in the middle to upper-middle price ranges. We operate
all of our stores using the Havertys brand and do not franchise our
concept. We operate within a single reportable segment. The
accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with the instructions to Form 10-Q
and, therefore, do not include all information and footnotes
required by United States of America generally accepted accounting
principles (“U.S. GAAP”) for complete financial statements. The
Company believes that the disclosures made are adequate to make the
information not misleading. The financial statements include the
accounts of the Company and its wholly owned subsidiary. All
significant intercompany accounts and transactions have been
eliminated in consolidation. We believe all adjustments, normal and
recurring in nature, considered necessary for a fair presentation
have been included. We suggest that these condensed consolidated
financial statements should be read in conjunction with the
consolidated financial statements and accompanying footnotes
included in our latest Annual Report on Form 10-K.
The preparation of interim condensed consolidated financial
statements in conformity with U.S. GAAP requires management to make
estimates and assumptions that affect the reported amounts of
assets and liabilities, disclosures of contingent assets and
liabilities, and reported amounts of revenue and expenses. Actual
results could differ from those estimates.
The Company is subject to various claims and legal proceedings
covering a wide range of matters, including with respect to product
liability and personal injury claims, that arise in the ordinary
course of its business activities. We currently have no pending
claims or legal proceedings that we believe would be reasonably
likely to have a material adverse effect on our financial
condition, results of operations or cash flows. However, there can
be no assurance that either future litigation or an unfavorable
outcome in existing claims will not have a material impact on our
business, reputation, financial position, cash flows or results of
operations.
Note B – COVID-19 and Economic Conditions
The novel coronavirus disease (“COVID-19”) pandemic, its
contributory effects on the economy and general economic conditions
continue to impact our business and results of operations. During
the nine months ended September 30, 2022, we experienced,
among other things, rising product prices, volatile transportation
costs, rising labor costs and labor shortages, and supply chain
disruptions. Furthermore, discretionary consumer spending has been
adversely impacted by rising inflation, including fuel costs, and
interest rates. Many of these factors impacted our business in the
third quarter of 2022. The extent and duration of any future impact
resulting from the COVID-19 pandemic or general economic conditions
is not fully known, and we may experience additional significant
economic and COVID-19 related disruptions in the future as a
result.
NOTE C – Stockholders’ Equity
The following outlines the changes in each caption of stockholders’
equity for the current and comparative periods and the dividends
per share for each class of shares.
For the three months ended September 30, 2022:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands) |
Common Stock |
|
Class A
Common Stock |
|
Additional
Paid-In Capital |
|
Retained
Earnings |
|
Accumulated Other
Comprehensive Loss |
|
Treasury
Stock |
|
Total |
|
Balances at June 30, 2022 |
$ |
30,006 |
|
|
$ |
1,806 |
|
|
$ |
105,674 |
|
|
$ |
375,234 |
|
|
$ |
(2,212) |
|
|
$ |
(243,782) |
|
|
$ |
266,726 |
|
|
Net income |
|
|
|
|
|
|
24,551 |
|
|
|
|
|
|
24,551 |
|
|
Dividends declared: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock, $0.28 per share
|
|
|
|
|
|
|
(4,214) |
|
|
|
|
|
|
(4,214) |
|
|
Class A Common Stock, $0.26 per share
|
|
|
|
|
|
|
(334) |
|
|
|
|
|
|
(334) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition of treasury stock |
|
|
|
|
|
|
|
|
|
|
(4,997) |
|
|
(4,997) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of restricted stock |
|
|
|
|
1,836 |
|
|
|
|
|
|
|
|
1,836 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income |
|
|
|
|
|
|
|
|
41 |
|
|
|
|
41 |
|
|
Balances at September 30, 2022 |
$ |
30,006 |
|
|
$ |
1,806 |
|
|
$ |
107,510 |
|
|
$ |
395,237 |
|
|
$ |
(2,171) |
|
|
$ |
(248,779) |
|
|
$ |
283,609 |
|
For the nine months ended September 30, 2022:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands) |
Common Stock |
|
Class A
Common Stock |
|
Additional
Paid-In Capital |
|
Retained
Earnings |
|
Accumulated Other
Comprehensive Loss |
|
Treasury
Stock |
|
Total |
|
Balances at December 31, 2021 |
$ |
29,907 |
|
|
$ |
1,809 |
|
|
$ |
102,572 |
|
|
$ |
342,983 |
|
|
$ |
(2,293) |
|
|
$ |
(219,008) |
|
|
$ |
255,970 |
|
|
Net income |
|
|
|
|
|
|
65,620 |
|
|
|
|
|
|
65,620 |
|
|
Dividends declared: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock, $0.81 per share
|
|
|
|
|
|
|
(12,403) |
|
|
|
|
|
|
(12,403) |
|
|
Class A Common Stock, $0.75 per share
|
|
|
|
|
|
|
(963) |
|
|
|
|
|
|
(963) |
|
|
Class A conversion |
3 |
|
|
(3) |
|
|
|
|
|
|
|
|
|
|
— |
|
|
Acquisition of treasury stock |
|
|
|
|
|
|
|
|
|
|
(29,998) |
|
|
(29,998) |
|
|
Restricted stock issuances |
96 |
|
|
|
|
(1,778) |
|
|
|
|
|
|
|
|
(1,682) |
|
|
Amortization of restricted stock |
|
|
|
|
6,032 |
|
|
|
|
|
|
|
|
6,032 |
|
|
Directors' Compensation Plan |
|
|
|
|
684 |
|
|
|
|
|
|
227 |
|
|
911 |
|
|
Other comprehensive income |
|
|
|
|
|
|
|
|
122 |
|
|
|
|
122 |
|
|
Balances at September 30, 2022 |
$ |
30,006 |
|
|
$ |
1,806 |
|
|
$ |
107,510 |
|
|
$ |
395,237 |
|
|
$ |
(2,171) |
|
|
$ |
(248,779) |
|
|
$ |
283,609 |
|
For the three months ended September 30, 2021:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands) |
Common Stock |
|
Class A
Common Stock |
|
Additional
Paid-In Capital |
|
Retained
Earnings |
|
Accumulated Other
Comprehensive Loss |
|
Treasury
Stock |
|
Total |
|
Balances at June 30, 2021 |
$ |
29,903 |
|
|
$ |
1,813 |
|
|
$ |
99,016 |
|
|
$ |
338,341 |
|
|
$ |
(2,462) |
|
|
$ |
(177,199) |
|
|
$ |
289,412 |
|
|
Net income |
|
|
|
|
|
|
24,233 |
|
|
|
|
|
|
24,233 |
|
|
Dividends declared: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock, $0.25 per share
|
|
|
|
|
|
|
(4,164) |
|
|
|
|
|
|
(4,164) |
|
|
Class A Common Stock, $0.23 per share
|
|
|
|
|
|
|
(297) |
|
|
|
|
|
|
(297) |
|
|
Class A conversion |
3 |
|
|
(3) |
|
|
|
|
|
|
|
|
|
|
— |
|
|
Acquisition of treasury stock |
|
|
|
|
|
|
|
|
|
|
(19,493) |
|
|
(19,493) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of restricted stock |
|
|
|
|
1,800 |
|
|
|
|
|
|
|
|
1,800 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income |
|
|
|
|
|
|
|
|
50 |
|
|
|
|
50 |
|
|
Balances at September 30, 2021 |
$ |
29,906 |
|
|
$ |
1,810 |
|
|
$ |
100,816 |
|
|
$ |
358,113 |
|
|
$ |
(2,412) |
|
|
$ |
(196,692) |
|
|
$ |
291,541 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the nine months ended September 30, 2021:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands) |
Common Stock |
|
Class A
Common Stock |
|
Additional
Paid-In Capital |
|
Retained
Earnings |
|
Accumulated Other
Comprehensive Loss |
|
Treasury
Stock |
|
Total |
|
Balances at December 31, 2020 |
$ |
29,600 |
|
|
$ |
1,996 |
|
|
$ |
96,850 |
|
|
$ |
304,626 |
|
|
$ |
(2,560) |
|
|
$ |
(177,545) |
|
|
$ |
252,967 |
|
|
Net income |
|
|
|
|
|
|
66,497 |
|
|
|
|
|
|
66,497 |
|
|
Dividends declared: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock, $0.72 per share
|
|
|
|
|
|
|
(12,142) |
|
|
|
|
|
|
(12,142) |
|
|
Class A Common Stock, $0.65 per share
|
|
|
|
|
|
|
(868) |
|
|
|
|
|
|
(868) |
|
|
Class A conversion |
186 |
|
|
(186) |
|
|
|
|
|
|
|
|
|
|
— |
|
|
Acquisition of treasury stock |
|
|
|
|
|
|
|
|
|
|
(19,493) |
|
|
(19,493) |
|
|
Restricted stock issuances |
120 |
|
|
|
|
(3,014) |
|
|
|
|
|
|
|
|
(2,894) |
|
|
Amortization of restricted stock |
|
|
|
|
6,456 |
|
|
|
|
|
|
|
|
6,456 |
|
|
Directors' Compensation Plan |
|
|
|
|
524 |
|
|
|
|
|
|
346 |
|
|
870 |
|
|
Other comprehensive income |
|
|
|
|
|
|
|
|
148 |
|
|
|
|
148 |
|
|
Balances at September 30, 2021 |
$ |
29,906 |
|
|
$ |
1,810 |
|
|
$ |
100,816 |
|
|
$ |
358,113 |
|
|
$ |
(2,412) |
|
|
$ |
(196,692) |
|
|
$ |
291,541 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOTE D – Interim LIFO Calculations
Inventories are measured using the last-in, first-out (LIFO) method
of valuation using an annual LIFO index. Accordingly, interim LIFO
calculations must necessarily be based on management’s estimates of
inventory levels and inflation rates. Since these estimates may be
affected by factors beyond management’s control, interim results
are subject to change based upon the final year-end LIFO inventory
valuations.
NOTE E – Fair Value of Financial Instruments
The fair values of our cash and cash equivalents, restricted cash
and cash equivalents, accounts payable and customer deposits
approximate their carrying values due to their short-term nature.
The assets related to our self-directed, non-qualified deferred
compensation plans for certain executives and employees are valued
using quoted market prices multiplied by the number of shares held,
a Level 1 valuation technique.
NOTE F – Credit Agreement
At September 30, 2022, we had a $60.0 million revolving credit
facility (the “Credit Agreement”) secured primarily by our
inventory and maturing on September 27, 2024. Availability
fluctuates based on a borrowing base calculation reduced by
outstanding letters of credit.
At September 30, 2022 and December 31, 2021, there were
no outstanding borrowings under the Credit Agreement. The borrowing
base and net availability was $55.7 million at September 30,
2022.
In October 2022 we amended the Credit Agreement to, among other
things, increase the revolving credit facility to
$80.0 million, extend the maturity date to October 24, 2027,
and replace the LIBOR Rate with the SOFR Rate as the interest rate
benchmark.
Note G – Revenues
We recognize revenue from merchandise sales and related service
fees, net of expected returns and sales tax, at the time the
merchandise is delivered to the customer. We record customer
deposits when payments are received in advance of the delivery of
merchandise. Such deposits totaled $79.7 million and $98.9 million
at September 30, 2022 and December 31, 2021,
respectively. Of the customer deposit liabilities at
December 31, 2021, approximately $1.2 million have not been
recognized through net sales in the nine months ended
September 30, 2022.
The following table presents our revenues disaggregated by each
major product category and service (dollars in thousands, amounts
and percentages may not always add due to rounding):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands) |
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
Net Sales |
|
% of
Net Sales |
|
Net Sales |
|
% of
Net Sales |
|
Net Sales |
|
% of
Net Sales |
|
Net Sales |
|
% of
Net Sales |
|
Merchandise: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Case Goods |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bedroom Furniture |
$ |
46,068 |
|
|
16.8 |
% |
|
$ |
41,438 |
|
|
15.9 |
% |
|
$ |
118,953 |
|
|
15.5 |
% |
|
$ |
121,848 |
|
|
16.3 |
% |
|
Dining Room Furniture |
31,793 |
|
|
11.6 |
|
|
29,047 |
|
|
11.2 |
|
|
82,971 |
|
|
10.8 |
|
|
84,965 |
|
|
11.4 |
|
|
Occasional |
23,874 |
|
|
8.7 |
|
|
21,955 |
|
|
8.4 |
|
|
60,881 |
|
|
7.9 |
|
|
66,128 |
|
|
8.9 |
|
|
|
101,735 |
|
|
37.1 |
|
|
92,440 |
|
|
35.5 |
|
|
262,805 |
|
|
34.3 |
|
|
272,941 |
|
|
36.5 |
|
|
Upholstery |
112,682 |
|
|
41.1 |
|
|
109,375 |
|
|
42.0 |
|
|
333,507 |
|
|
43.5 |
|
|
305,842 |
|
|
41.0 |
|
|
Mattresses |
22,646 |
|
|
8.3 |
|
|
23,616 |
|
|
9.1 |
|
|
64,389 |
|
|
8.4 |
|
|
68,257 |
|
|
9.1 |
|
|
Accessories and Other
(1)
|
37,432 |
|
|
13.6 |
|
|
34,947 |
|
|
13.4 |
|
|
105,957 |
|
|
13.8 |
|
|
99,818 |
|
|
13.4 |
|
|
|
$ |
274,495 |
|
|
100.0 |
% |
|
$ |
260,378 |
|
|
100.0 |
% |
|
$ |
766,658 |
|
|
100.0 |
% |
|
$ |
746,858 |
|
|
100.0 |
% |
|
|
|
|
|
|
|
(1) |
Includes delivery charges and product protection. |
NOTE H – Leases
We have operating leases for retail stores, offices, warehouses,
and certain equipment. Our leases have remaining lease terms of 1
year to 13 years, some of which include options to extend the
leases for up to 20 years. We determine if an arrangement is or
contains a lease at lease inception. Our leases do not have any
residual value guarantees or any restrictions or covenants imposed
by lessors. We have lease agreements for real estate with lease and
non-lease components, which are accounted for
separately.
Certain of our lease agreements for retail stores include variable
lease payments, generally based on sales volume. The variable
portion of payments are not included in the initial measurement of
the right-of-use asset or lease liability due to uncertainty of the
payment amount and are recorded as lease expense in the period
incurred. Certain of our equipment lease agreements include
variable lease costs, generally based on usage of the underlying
asset (mileage, fuel, etc.). The variable portions of payments are
not included in the initial measurement of the right-of-use asset
or lease liability due to uncertainty of the payment amount and are
recorded in the period incurred.
Lease expense is charged to selling, general and administrative
expenses. Components of lease expense were as follows (in
thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
Operating lease cost |
$ |
11,517 |
|
|
$ |
11,440 |
|
|
$ |
35,230 |
|
|
$ |
35,140 |
|
|
Variable lease cost |
1,706 |
|
|
1,739 |
|
|
5,183 |
|
|
4,856 |
|
|
Total lease expense |
$ |
13,223 |
|
|
$ |
13,179 |
|
|
$ |
40,413 |
|
|
$ |
39,996 |
|
Supplemental cash flow information related to leases is as follows
(in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, |
|
2022 |
|
2021 |
|
Cash paid for amounts included in the measurement of lease
liabilities: |
|
|
|
|
Operating cash flows from operating leases |
$ |
29,601 |
|
|
$ |
35,428 |
|
|
Right-of-use assets obtained in exchange for lease
obligations: |
|
|
|
|
Operating leases |
$ |
22,231 |
|
|
$ |
24,213 |
|
NOTE I – Income Taxes
Our effective tax rate for the nine months ended September 30,
2022 and 2021 was 24.6% and 23.1%, respectively. The primary
difference in the effective rate and the statutory rate was due to
state income taxes and the impact from vested stock
awards.
NOTE J – Stock Based Compensation Plans
As more fully discussed in Note 12 of the notes to the consolidated
financial statements in our 2021 Annual Report on Form 10-K, we
have awards outstanding for Common Stock under stock-based employee
compensation plans.
The following table summarizes our award activity during the nine
months ended September 30, 2022:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service-Based
Restricted Stock Awards |
|
Performance-Based
Restricted Stock Awards |
|
Shares or Units (#) |
|
Weighted-Average
Award Price ($) |
|
Shares or Units (#) |
|
Weighted-Average
Award Price ($) |
|
Outstanding at December 31, 2021 |
219,082 |
|
|
$ |
27.10 |
|
|
328,267 |
|
|
$ |
23.96 |
|
|
Granted/Issued |
153,681 |
|
|
28.86 |
|
|
103,104 |
|
|
28.86 |
|
|
Awards vested or rights exercised(1)
|
(122,080) |
|
|
27.12 |
|
|
(34,940) |
|
|
20.28 |
|
|
Forfeited |
(3,900) |
|
|
31.86 |
|
|
— |
|
|
— |
|
|
Additional units earned due to performance |
— |
|
|
— |
|
|
59,249 |
|
|
31.39 |
|
|
Outstanding at September 30, 2022 |
246,783 |
|
|
$ |
28.10 |
|
|
455,680 |
|
|
$ |
26.54 |
|
|
Restricted units expected to vest |
246,783 |
|
|
$ |
28.10 |
|
|
455,680 |
|
|
$ |
26.54 |
|
|
|
|
|
|
|
|
(1) |
Includes shares repurchased from employees for employee’s tax
liability. |
The total fair value of service-based restricted stock awards that
vested during the nine months ended September 30, 2022 was
approximately $3.3 million. The aggregate intrinsic value of
outstanding service-based restricted stock awards was approximately
$6.1 million at September 30, 2022. The restrictions on the
service-based awards generally lapse or vest annually, primarily
over one-year and three-year periods.
The total fair value of performance-based restricted stock awards
that vested during the nine months ended September 30, 2022
was approximately $1.0 million. The aggregate intrinsic value of
outstanding performance awards at September 30, 2022 expected
to vest was approximately $11.3 million. The performance awards are
based on one-year performance periods but cliff vest in
approximately three years from grant date.
The compensation for all awards is charged to selling, general and
administrative expenses over the respective grants’ vesting
periods, primarily on a straight-line basis. The amount charged was
approximately $6.0 million and $6.5 million for the nine months
ended September 30, 2022 and 2021, respectively. Forfeitures
are recognized as they occur. As of September 30, 2022, the
total compensation cost related to unvested equity awards was
approximately $8.0 million and is expected to be recognized over a
weighted-average period of two years.
NOTE K – Earnings Per Share
We report our earnings per share using the two-class method. The
income per share for each class of common stock is calculated
assuming 100% of our earnings are distributed as dividends to each
class of common stock based on the contractual rights of the
classes.
The Common Stock of the Company has a preferential dividend rate of
at least 105% of the dividend paid on the Class A Common Stock. The
Class A Common Stock, which has ten votes per share as opposed to
one vote per share for the Common Stock (on all matters other than
the election of directors), may be converted at any time on a
one-for-one basis into Common Stock at the option of the holder of
the Class A Common Stock.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
Numerator: |
|
|
|
|
|
|
|
|
Common: |
|
|
|
|
|
|
|
|
Distributed earnings |
$ |
4,214 |
|
|
$ |
4,164 |
|
|
$ |
12,403 |
|
|
$ |
12,142 |
|
|
Undistributed earnings |
18,498 |
|
|
18,424 |
|
|
48,398 |
|
|
49,713 |
|
|
Basic |
22,712 |
|
|
22,588 |
|
|
60,801 |
|
|
61,855 |
|
|
Class A Common earnings |
1,839 |
|
|
1,645 |
|
|
4,819 |
|
|
4,642 |
|
|
Diluted |
$ |
24,551 |
|
|
$ |
24,233 |
|
|
$ |
65,620 |
|
|
$ |
66,497 |
|
|
|
|
|
|
|
|
|
|
|
Class A Common: |
|
|
|
|
|
|
|
|
Distributed earnings |
$ |
334 |
|
|
$ |
297 |
|
|
$ |
963 |
|
|
$ |
868 |
|
|
Undistributed earnings |
1,505 |
|
|
1,348 |
|
|
3,856 |
|
|
3,774 |
|
|
|
$ |
1,839 |
|
|
$ |
1,645 |
|
|
$ |
4,819 |
|
|
$ |
4,642 |
|
|
Denominator: |
|
|
|
|
|
|
|
|
Common: |
|
|
|
|
|
|
|
|
Weighted average shares outstanding - basic |
15,015 |
|
|
16,794 |
|
|
15,347 |
|
|
16,862 |
|
|
Assumed conversion of Class A Common Stock |
1,283 |
|
|
1,290 |
|
|
1,284 |
|
|
1,344 |
|
|
Dilutive options, awards and common stock equivalents |
518 |
|
|
478 |
|
|
507 |
|
|
506 |
|
|
Total weighted-average diluted Common Stock |
16,816 |
|
|
18,562 |
|
|
17,138 |
|
|
18,712 |
|
|
|
|
|
|
|
|
|
|
|
Class A Common: |
|
|
|
|
|
|
|
|
Weighted average shares outstanding |
1,283 |
|
|
1,290 |
|
|
1,284 |
|
|
1,344 |
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share: |
|
|
|
|
|
|
|
|
Common Stock |
$ |
1.51 |
|
|
$ |
1.35 |
|
|
$ |
3.96 |
|
|
$ |
3.67 |
|
|
Class A Common Stock |
$ |
1.43 |
|
|
$ |
1.28 |
|
|
$ |
3.75 |
|
|
$ |
3.45 |
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share: |
|
|
|
|
|
|
|
|
Common Stock |
$ |
1.46 |
|
|
$ |
1.31 |
|
|
$ |
3.83 |
|
|
$ |
3.55 |
|
|
Class A Common Stock |
$ |
1.40 |
|
|
$ |
1.25 |
|
|
$ |
3.66 |
|
|
$ |
3.38 |
|
Item 2. Management’s Discussion and Analysis
of Financial Condition and Results of Operations
The following discussion should be read in conjunction with the
unaudited condensed consolidated financial statements and
accompanying notes contained herein and with the audited
consolidated financial statements, accompanying notes, related
information and Management’s Discussion and Analysis of Financial
Condition and Results of Operations included in our Annual Report
on Form 10-K for the year ended December 31, 2021 (“Form
10-K”).
Forward-Looking Statements
Statements in this Form 10-Q that are not historical facts,
including statements about our estimates, expectations, beliefs,
intentions, projections or strategies for the future, may be
"forward-looking statements" as defined in the Private Securities
Litigation Reform Act of 1995. Forward-looking statements involve
risks and uncertainties that could cause actual results to differ
materially from historical experience or our present expectations.
Known material risk factors applicable to us that could cause our
actual results to differ from these forward-looking statements are
described in "Item 1A. Risk Factors" of our Form 10-K and in the
subsequent reports we file with the SEC. All forward‑looking
statements speak only as of the date made, and we undertake no
obligation to publicly update or revise any forward-looking
statements to reflect events or circumstances that may arise after
the date of this report except as required by law.
Net Sales
Our sales are generated by customer purchases of home furnishings.
Revenue is recognized upon delivery to the customer.
Comparable-store or “comp-store” sales is a measure which indicates
the performance of our existing stores and website by comparing the
growth in sales in store and online for a particular month over the
corresponding month in the prior year. Stores are considered
non-comparable if they were not open during the corresponding month
in the prior year or if the selling square footage has been changed
significantly. Stores closed due to COVID-19 were excluded from
comp-store sales. The method we use to compute comp-store sales may
not be the same method used by other retailers. We record our sales
when the merchandise is delivered to the customer. We also track
“written sales” and “written comp-store sales,” which represent
customer orders prior to delivery. The disruptions to our supply
chain have resulted in lower inventory in certain categories, and
out-of-stock merchandise delivery times can be 8 to 12 weeks. As a
retailer, comp-store sales and written comp-store sales are an
indicator of relative customer spending and store performance.
Comp-store sales, total written sales and written comp-store sales
are intended only as supplemental information and none are
substitutes for net sales presented in accordance with US
GAAP.
The following table outlines our sales and comp-store sales
increases and decreases for the periods indicated:
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2022 |
|
2021 |
|
|
Net Sales |
|
Comp-Store Sales |
|
Net Sales |
|
Comp-Store Sales |
|
Period |
|
Total
Dollars |
|
%
Change |
|
$
Change |
|
%
Change |
|
$
Change |
|
Total
Dollars |
|
%
Change |
|
$
Change |
|
%
Change |
|
$
Change |
|
Q1 |
|
$ |
238.9 |
|
|
1.0 |
% |
|
$ |
2.5 |
|
|
0.2 |
% |
|
$ |
0.4 |
|
|
$ |
236.5 |
|
|
31.8 |
% |
|
$ |
57.1 |
|
|
11.5 |
% |
|
$ |
15.4 |
|
|
Q2 |
|
$ |
253.2 |
|
|
1.3 |
% |
|
$ |
3.2 |
|
|
1.1 |
% |
|
$ |
2.7 |
|
|
$ |
250.0 |
|
|
127.3 |
% |
|
$ |
140.0 |
|
|
46.9 |
% |
|
$ |
48.8 |
|
|
Q3 |
|
$ |
274.5 |
|
|
5.4 |
% |
|
$ |
14.1 |
|
|
6.3 |
% |
|
$ |
16.2 |
|
|
$ |
260.4 |
|
|
19.7 |
% |
|
$ |
42.9 |
|
|
17.7 |
% |
|
$ |
38.4 |
|
|
YTD Q3 |
|
$ |
766.7 |
|
|
2.7 |
% |
|
$ |
19.8 |
|
|
2.6 |
% |
|
$ |
19.3 |
|
|
$ |
746.9 |
|
|
47.3 |
% |
|
$ |
240.0 |
|
|
22.5 |
% |
|
$ |
102.6 |
|
Total sales for the third quarter of 2022 increased $14.1 million,
or 5.4%, compared to 2021. Our comp-store sales increased 6.3%, or
$16.2 million, in the third quarter of 2022 compared to
2021.
Our free in-home design service continues to grow, and designer
sales were 25.2% of our total written business for the third
quarter of 2022 compared to 24.7% for 2021. COVID-19 disruptions to
our supply chain are beginning to abate, and case goods inventory
received is helping to reduce our customer back orders. Sales in
this category as a percent of our total sales were 37.1% in the
third quarter of 2022 compared to 35.5% in 2021.
The declines in in-store traffic and written business, which began
in March 2022, continued through September 2022. Written business
for the third quarter of 2022 was down 7.2% compared to 2021. We
continued to experience a return to increased consumer interest
around traditional shopping events and had very strong business for
the Labor Day holiday. Our written business for the third quarter
of 2022 compared
Item 2. Management’s Discussion and Analysis
of Financial Condition and Results of Operations
to the "normal" pre-pandemic second quarter of 2019 was up 15.8%,
as customers are still investing in their homes. In the fourth
quarter of 2022, we expect that our business will continue to be
affected as rising inflation, including fuel costs, stock market
volatility, higher interest rates, and recessionary concerns,
impacts discretionary consumer spending.
Gross Profit
Gross profit for the third quarter of 2022 was 57.1%, up 30 basis
points compared to the prior year period of 56.8%. The increase is
primarily due to pricing discipline and merchandise
mix.
We expect annual gross profit margins for 2022 will be 57.7% to
58.0%. Gross profit margins fluctuate quarter to quarter in
relation to our promotional cadence. Our estimated gross profit
margins are based on anticipated changes in product and freight
costs and their impact on our LIFO reserve.
Substantially all of our occupancy and home delivery costs are
included in selling, general and administrative expenses
(“SG&A”), as are a portion of our warehousing expenses.
Accordingly, our gross profit may not be comparable to those
entities that include these costs in cost of goods
sold.
Selling, General and Administrative Expenses
Our SG&A costs as a percent of sales for the third quarter of
2022 were 45.4% versus 44.6% for 2021. SG&A dollars increased
$8.4 million, or 7.2%, for the third quarter of 2022 compared to
the same prior year period. The increase is driven by higher costs
associated with selling expense of $4.9 million, advertising and
marketing expenses of $1.1 million, administrative costs of $1.5
million, and occupancy expenses of $0.5 million.
We classify our SG&A expenses as either variable or fixed and
discretionary. Our variable expenses include the costs in the
selling and delivery categories and certain warehouse and
distribution expenses, as these amounts will generally move in
tandem with our level of sales. The remaining categories and
expenses for occupancy, advertising, and administrative costs are
classified as fixed and discretionary because these costs do not
fluctuate with sales.
The following table outlines our SG&A expenses by
classification:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands) |
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
$ |
|
% of
Net Sales |
|
$ |
|
% of
Net Sales |
|
$ |
|
% of
Net Sales |
|
$ |
|
% of
Net Sales |
|
Variable |
|
$ |
50,228 |
|
|
18.3 |
% |
|
$ |
43,708 |
|
|
16.8 |
% |
|
$ |
140,566 |
|
|
18.3 |
% |
|
$ |
126,374 |
|
|
16.9 |
% |
|
Fixed and discretionary |
|
74,306 |
|
|
27.1 |
% |
|
72,448 |
|
|
27.8 |
% |
|
217,250 |
|
|
28.3 |
% |
|
211,941 |
|
|
28.4 |
% |
|
|
|
$ |
124,534 |
|
|
45.4 |
% |
|
$ |
116,156 |
|
|
44.6 |
% |
|
$ |
357,816 |
|
|
46.6 |
% |
|
$ |
338,315 |
|
|
45.3 |
% |
The variable expenses in dollars were higher in the third quarter
of 2022 compared to 2021 due to the increase in compensation costs
for selling and delivery personnel and rising fuel
costs.
Fixed and discretionary expenses were impacted in the third quarter
of 2022 primarily by increases in warehouse and other occupancy
costs compared to the prior year quarter.
Our variable expenses within SG&A for the full year of 2022 are
anticipated to be 18.2% to 18.4%, an increase from our previous
estimate based on increases in selling and delivery costs. Fixed
and discretionary expenses are expected to be approximately $293.0
to $295.0 million for the full year of 2022, a decrease from our
previous guidance based on changes in our marketing
spend.
Liquidity and Capital Resources
Cash and Cash Equivalents at End of Year
At September 30, 2022, we had $137.2 million in cash and cash
equivalents, and $6.8 million in restricted cash equivalents. We
believe that our current cash position, cash flow generated from
operations, funds
Item 2. Management’s Discussion and Analysis
of Financial Condition and Results of Operations
available from our credit agreement, and access to the long-term
debt capital markets should be sufficient for our operating
requirements and to enable us to fund our capital expenditures,
dividend payments, and lease obligations through the next several
years. In addition, we believe we have the ability to obtain
alternative sources of financing. We expect capital expenditures of
approximately $30.0 million for the full year of 2022.
Long-Term Debt
In May 2020, we entered into the Third Amendment to our Amended and
Restated Credit Agreement (as amended, the “Credit Agreement”) with
a bank. The Credit Agreement, which matures September 27,
2024, provides for a $60.0 million revolving credit facility.
Amounts available to borrow fluctuate and availability at
September 30, 2022 was $55.7 million, and we had no amounts
outstanding. In October 2022, we amended the Credit Agreement to
increase the revolving credit facility to $80.0 million and extend
the maturity date to October 24, 2027.
Leases
We use operating leases to fund a portion of our real estate,
including our stores, distribution centers, and store support
space.
Share Repurchases
In November 2021, our Board of Directors authorized $25.0 million
for our share repurchase program. During the six months ended June
30, 2022, we purchased 899,890 shares of common stock for
approximately $25.0 million. All funds were used under this
authorization.
In August 2022, our Board of Directors authorized an additional
$25.0 million for our share repurchase program. During the three
months ended September 30, 2022, we purchased 187,488 shares
of common stock for approximately $5.0 million. The balance on the
current authorization for purchases was approximately $20.0 million
at September 30, 2022.
The timing, manner and number of shares repurchased in future
periods will depend on a variety of factors, including, but not
limited to, the level of cash balances, credit availability,
financial performance, general business conditions, the market
price of the Company’s stock and the availability of alternative
investment opportunities.
Cash Flows Summary
Operating Activities. Cash
flow generated from operations provides us with a significant
source of liquidity. Our operating cash flows result primarily from
cash received from our customers, offset by cash payments we make
for products and services, employee compensation, operations, and
occupancy costs.
Cash provided by or used in operating activities is also subject to
changes in working capital. Working capital at any specific point
in time is subject to many variables, including seasonality,
inventory selection, the timing of cash receipts and payments, and
vendor payment terms.
Net cash provided by operating activities was $38.2 million in the
first nine months of 2022 compared to $89.0 million during the same
period in 2021. This difference was primarily driven by changes
associated with customer deposits.
Investing Activities.
Cash used in investing activities decreased by $5.9 million in the
first nine months of 2022 compared to the first nine months of
2021, as the result of less capital expenditures.
Financing Activities.
Cash used in financing activities increased by $9.6 million in the
first nine months of 2022 compared to the first nine months of
2021, primarily due to increased share repurchases in
2022.
Item 2. Management’s Discussion and Analysis
of Financial Condition and Results of Operations
Store Plans and Capital Expenditures
|
|
|
|
|
|
|
|
|
|
Location |
Opening Quarter
Actual or Planned |
Category |
|
Austin, TX |
Q-1-22 |
Open |
|
Atlanta, GA |
Q-2-22 |
Closure |
|
Metro DC |
Q-4-22 |
Open |
|
Indianapolis, IN |
Q-4-22 |
Relocation |
|
Durham, NC |
Q-1-23 |
Open |
|
|
|
|
|
|
Net selling space at the end of 2022 is expected to be relatively
flat compared to 2021. Total capital expenditures are estimated to
be $30.0 million in 2022 depending on the timing of spending for
new projects.
Critical Accounting Estimates
Critical accounting estimates are those that we believe are both
significant and that require us to make difficult, subjective or
complex judgments, often because we need to estimate the effect of
inherently uncertain matters. We base our estimates and judgments
on historical experiences and various other factors that we believe
to be appropriate under the circumstances. Actual results may
differ from these estimates, and we might obtain different
estimates if we used different assumptions or conditions. We
reviewed our accounting estimates, and none were deemed to be
considered critical for the accounting periods presented in our
Form 10-K. We had no significant changes in those accounting
estimates since our last annual report.
Item 3. Quantitative and Qualitative
Disclosures about Market Risk
For quantitative and qualitative disclosures about market risk, see
Item 7A, “Quantitative and Qualitative Disclosures About Market
Risk,” of our Form 10-K. Our exposure to market risk has not
changed materially since December 31, 2021.
Item 4. Controls and Procedures
As of the end of the period covered by this report, an evaluation
was performed under the supervision and with the participation of
our management, including the Chief Executive Officer (CEO) and
Chief Financial Officer (CFO), of the effectiveness of the design
and operation of the Company’s disclosure controls and procedures.
Based on that evaluation, our management, including the CEO and
CFO, concluded that the Company’s disclosure controls and
procedures were effective as of the end of the period covered by
this report and provide reasonable assurance that information
required to be disclosed in the reports the Company files or
submits under the Securities Exchange Act of 1934 is recorded,
processed, summarized, and reported within the time periods
specified in the Securities and Exchange Commission’s rules and
forms and that such information is accumulated and communicated to
our management, including the CEO and CFO, as appropriate, to allow
timely decisions regarding disclosure.
There have been no changes in the Company’s internal control over
financial reporting identified in connection with the evaluation
required by paragraph (d) of Exchange Act Rule 13a-15 that occurred
during the Company’s fiscal quarter ended September 30, 2022
that have materially affected, or are reasonably likely to
materially affect, the Company’s internal control over financial
reporting. As a result of the COVID-19 pandemic, team members have
shifted to a rotating work from home and office environment. We
have reviewed our financial reporting process to provide reasonable
assurance that we could report our financial results accurately and
timely, and we will continue to evaluate the impact of any related
changes to our internal control over financial
reporting.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Information regarding legal proceedings is described under the
subheading “Business and Basis of Presentation” in Note A of the
Notes to the Condensed Consolidated Financial Statements set forth
in this Form 10-Q.
Item 1A. Risk Factors
"Item 1A. Risk Factors” in our Form 10-K includes a discussion of
our known material risk factors. There have been no material
changes from the risk factors described in our Form
10-K.
Item 2. Unregistered Sales of Equity
Securities and Use of Proceeds
The board of directors has authorized management, at its
discretion, to purchase and retire limited amounts of our Common
Stock and Class A Common Stock. A program was initially approved by
the board on November 3, 1986. On November 5, 2021 and August 5,
2022, the board authorized additional amounts under such stock
repurchase program. The stock repurchase program has no expiration
date but may be terminated by our board at any time.
The following table presents information with respect to our
repurchase of Havertys’ common stock during the third quarter of
2022:
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(a)
Total Number of
Shares Purchased |
|
(b)
Average Price
Paid Per Share |
|
(c)
Total Number of
Shares Purchased
as Part of Publicly
Announced Plans or
Programs |
|
(d)
Approximate Dollar
Value of Shares That
May Yet Be Purchased
Under the Plans or
Programs |
|
July 1 - July 31 |
— |
|
|
$ |
— |
|
|
— |
|
|
$ |
4,700 |
|
|
August 1 - August 31 |
— |
|
|
$ |
— |
|
|
— |
|
|
$ |
25,004,700 |
|
|
September 1 - September 30 |
187,488 |
|
|
$ |
26.65 |
|
|
187,488 |
|
|
$ |
20,007,700 |
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Total |
187,488 |
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|
|
187,488 |
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Item 6. Exhibits
(a)Exhibits
The exhibits listed below are filed with or incorporated by
reference into this report (those filed with this report are
denoted by an asterisk). Unless otherwise indicated, the exhibit
number of documents incorporated by reference corresponds to the
exhibit number in the referenced documents.
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Exhibit Number |
|
Description of Exhibit (Commission File No. 1-14445) |
|
|
|
Articles of Amendment and Restatement of the Charter of Haverty
Furniture Companies, Inc. effective May 26, 2006 (Exhibit 3.1 to
our Second Quarter 2006 Form 10-Q). |
|
|
|
By-laws of Haverty Furniture Companies, Inc. as amended and
restated effective May 8, 2018 (Exhibit 3.1 to our Current Report
on Form 8-K dated May 10, 2018). |
|
|
|
Fourth Amendment to Amended and Restated Credit Agreement by and
among Haverty Furniture Companies, Inc. and Havertys Credit
Services, Inc., as the Borrowers, Truist Bank (as successor to
SunTrust Bank), as the Administrative Agent and Issuing Bank and
Administrative Agent and Lead Arranger (as successor to SunTrust
Robinson Humphrey, Inc,), dated September 1, 2011. |
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Certification of Chief Executive Officer pursuant to Rules
13a-14(a) and 15d‑14(a) under the Securities Exchange Act of 1934,
as amended. |
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Certification of Chief Financial Officer pursuant to Rules
13a-14(a) and 15d‑14(a) under the Securities Exchange Act of 1934,
as amended. |
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|
Certification of Chief Executive Officer and Chief Financial
Officer pursuant to 18 U.S.C. Section 1350. |
|
101 |
|
The following financial statements from Haverty Furniture
Companies, Inc.’s Quarterly Report on Form 10-Q for the quarter
ended June 30, 2022, formatted in inline XBRL, include: (i)
Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated
Statements of Comprehensive Income, (iii) Condensed Consolidated
Statements of Cash Flows and (iv) the Notes to Condensed
Consolidated Financial Statements. |
|
104 |
|
Cover Page Interactive Data File (formatted as inline XBRL and
contained in Exhibit 101). |
* Filed herewith.
** Furnished herewith.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly
authorized.
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HAVERTY FURNITURE COMPANIES, INC.
(Registrant)
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Date: November 4, 2022
|
By: |
/s/ Clarence H. Smith |
|
|
Clarence H. Smith
Chairman of the Board
and Chief Executive Officer
(principal executive officer) |
|
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|
|
By: |
/s/ Richard B. Hare |
|
|
Richard B. Hare
Executive Vice President and
Chief Financial Officer
(principal financial and accounting officer) |
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