8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report : October 29, 2020

Date of Earliest Event Reported: October 28, 2020

HAVERTY FURNITURE COMPANIES INC

(Exact Name of Registrant as Specified in Its Charter)

001-14445

(Commission File Number)

Maryland	58-0281900
(State or Other Jurisdiction of Incorporation)	(I.R.S. Employer Identification No.)

780 Johnson Ferry Road, Suite 800

Atlanta, Georgia 30342

(Address of principal executive offices, including zip code)

(404) 443-2900

(Registrant’s telephone number, including area code)

NOT APPLICABLE

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	HVT	New York Stock Exchange LLC
Class A Common Stock	HVTA	New York Stock Exchange LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter):

Emerging growth company ☐

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. ☐

Item 2.02  Results of Operations and Financial Condition

On October 28, 2020, Havertys issued a press release regarding its results of operations for the quarter ended September 30, 2020. A copy of the press release is furnished as Exhibit 99.1. The attached Exhibit 99.1 is not filed but is furnished to comply with Regulation FD. The information disclosed in this Item 2.02 Current Report on Form 8-K is not considered to be “filed” for purposes of Section 18 of the Securities and Exchange Act of 1934 and is not subject to the liabilities of that section.

Item 9.01  Financial Statements and Exhibits

(d)  Exhibits.  The following exhibit is furnished as part of this Report:

99.1 Press Release dated October 28, 2020 issued by Registrant.

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 hereunto duly authorized.

		HAVERTY FURNITURE COMPANIES, INC.
October 29, 2020	By:
		Jenny Hill Parker Senior Vice President, Finance and Corporate Secretary

EX-99.1

EXHIBIT 99.1

Havertys Reports Earnings for Third Quarter 2020

Atlanta, Georgia, October 28, 2020 – HAVERTYS (NYSE: HVT and HVT.A) reported today its operating results for the 2020 third quarter ended September 30, 2020.

Financial Highlights

Third Quarter ended September 30, 2020 Compared to Same Period of 2019

• EPS of $0.97 per share in 2020 compared to $0.31 in 2019.

• As previously reported, sales of $217.5 million for 2020 compared to $209.3 million for 2019.

Clarence H. Smith, chairman, president and CEO, said, “Our written business since reopening in May has been at a record pace. We had increases in all sales and key financial metrics in the third quarter compared to last year. The surge in demand for home furnishings and the impact of coronavirus on production, when coupled with shipping complications, has generated supply chain challenges. We believe our vendor relationships and system capabilities are a competitive advantage in accelerating receipt of product and setting delivery dates with customers. Increasing our staffing to appropriately serve our customer is a key near term focus and we continue to enhance our online shopping and buying experience.

The impact of COVID-19 on sectors that are aligned with the home is in stark contrast with those connected to travel and entertainment. I am very proud of the commitment of our team members to meet the current challenges and opportunities. We cannot predict the duration of this dynamic business shift or its long-term impact on our industry, but we are confident in our seasoned teams and have the resources to capitalize on the changing retail landscape.”

Financial Summary

Third Quarter ended September 30, 2020 Compared to Same Period of 2019

• Sales rose 3.9% and comparable store sales increased 4.0%. Total written sales were up 22.8% and written comparable store sales rose 22.6%.

• Gross profit margins increased 270 basis points to 56.2% in 2020 from 53.5% for the same period of 2019.

• SG&A expenses decreased $4.1 million in 2020 compared to the same period in 2019 and fell to 46.0% of sales from 49.8%. The primary drivers of this change are:

• reduction in advertising spend of $2.5 million in 2020.

• reduction in salaries, wages, payroll taxes and benefits of $5.6 million given the workforce reduction in the second quarter of 2020.

• reduction in travel, meetings and related expenses of $1.8 million.

• increase in commissions and incentive compensation of $5.6 million.

• Inventories are down $13.9 million from December 31, 2019 levels.

• Customer deposits are up $58.3 million or 193.5% from December 31, 2019. We are not experiencing any appreciable increase in cancelled sales.

• We repurchased 0.6 million shares of Havertys common stock in the open market at an average price of $21.00 for a total of $12.9 million. The remaining authorization under the share repurchase program is $16.8 million.

• We paid $3.7 million in quarterly dividends.

NEWS RELEASE – October 28, 2020

Page 2

Expectations and Other

• We expect gross profit margins for the fourth quarter of 2020 as a percent of sales will be comparable to the third quarter 2020 level based on current estimates of product and freight costs and changes in our LIFO reserve.

• The variable type costs within our SG&A for the fourth quarter of 2020 are expected to be 17.8% compared to 18.2% in the same period of 2019. Our estimate for fixed and discretionary type SG&A expenses for the fourth quarter of 2020 is in the $67.0 to $69.0 million range versus $69.6 million for these same costs in the fourth quarter of 2019. 

• We expect to open a location in a new market, Myrtle Beach, SC in early March 2021. Total capital expenditures are estimated to be approximately $11.4 million in 2020.

NEWS RELEASE – October 28, 2020

Page 3

HAVERTY FURNITURE COMPANIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share data – Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019
Net sales	$	217,513		$	209,320		$	506,913		$	588,455
Cost of goods sold		95,336			97,301			225,537			269,796
Gross profit		122,177			112,019			281,376			318,659
Credit service charges		15			19			53			60
Gross profit and other revenue		122,192			112,038			281,429			318,719
Expenses:
Selling, general and administrative		100,097			104,161			270,281			298,824
Provision for doubtful accounts		20			42			56			66
Other (income) expense, net		(2,406	)		(42	)		(34,301	)		(323	)
Total expenses		97,711			104,161			236,036			298,567
Income before interest and income taxes		24,481			7,877			45,393			20,152
Interest (income) expense, net		(51	)		(292	)		(64	)		(980	)
Income before income taxes		24,532			8,169			45,457			21,132
Income tax expense		6,271			2,072			11,737			5,367
Net income	$	18,261		$	6,097		$	33,720			15,765
Diluted earnings per share:
Common Stock	$	0.97		$	0.31		$	1.77		$	0.77
Class A Common Stock	$	0.93		$	0.30		$	1.70		$	0.73
Diluted weighted average shares outstanding:
Common Stock		18,864			19,893			19,038			20,444
Class A Common Stock		1,526			1,536			1,530			1,637
Cash dividends per share:
Common Stock	$	0.20		$	0.20		$	0.55		$	0.56
Class A Common Stock	$	0.19		$	0.19		$	0.52		$	0.53

Note:  Diluted earnings per share for the nine months ended September 30, 2020 includes $1.24 for gain on sale-leaseback transaction in May 2020.

NEWS RELEASE – October 28, 2020

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HAVERTY FURNITURE COMPANIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands - Unaudited)

	September 30, 2020		December 31, 2019		September 30, 2019
	(Unaudited)				(Unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	211,849	$	75,739	$	89,528
Restricted cash and cash equivalents		6,713		6,663		6,632
Accounts receivable, net		1,521		1,527		1,570
Inventories		90,943		104,817		99,958
Prepaid expenses		9,996		7,652		10,476
Other current assets		9,954		8,125		6,449
Total current assets		330,976		204,523		214,613
Accounts receivable, long-term, net		161		195		204
Property and equipment, net		109,663		156,534		158,087
Right of-use lease assets		235,778		175,474		183,524
Deferred income taxes		12,523		13,198		12,202
Other assets		10,324		10,148		9,873
Total assets	$	699,425	$	560,072	$	578,503
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	27,110	$	27,830	$	27,495
Customer deposits		88,408		30,121		34,852
Accrued liabilities		53,866		39,654		41,163
Current lease liabilities		32,685		29,411		29,283
Total current liabilities		202,069		127,016		132,793
Noncurrent lease liabilities		207,780		149,594		155,046
Other liabilities		22,199		22,959		21,942
Total liabilities		432,048		299,569		309,781
Stockholders’ equity		267,377		260,503		268,722
Total liabilities and stockholders’ equity	$	699,425	$	560,072	$	578,503

NEWS RELEASE – October 28, 2020

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HAVERTY FURNITURE COMPANIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands – Unaudited)

	Nine Months Ended September 30,
	2020			2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	33,720		$	15,765
Adjustments to reconcile net income to net   cash provided by operating activities:
Depreciation and amortization		13,959			15,412
Share-based compensation expense		3,362			2,690
Gain from sale of land, property, and equipment		(34,202	)		(12	)
Other		1,259			(1,249	)
Changes in operating assets and liabilities:
Inventories		13,873			5,882
Customer deposits		58,287			10,387
Operating lease assets and liabilities, net		1,156			3,296
Other assets and liabilities		(4,997	)		(2,761	)
Accounts payable and accrued liabilities		13,404			8,957
Net cash provided by operating activities		99,821			58,367
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures		(7,205	)		(12,446	)
Proceeds from sale of property and equipment		74,399			2,268
Net cash provided by (used in) investing activities		67,194			(10,178	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowing under revolving credit facility		43,800			—
Payments of borrowings under revolving credit facility		(43,800	)		—
Net change in borrowings under revolving credit facility		—			—
Dividends paid		(10,271	)		(11,194	)
Common stock repurchased		(19,708	)		(19,316	)
Other		(876	)		(1,328	)
Net cash used in financing activities		(30,855	)		(31,838	)
Increase in cash, cash equivalents and restricted cash   equivalents during the period		136,160			16,351
Cash, cash equivalents and restricted cash equivalents at beginning   of period		82,402			79,809
Cash, cash equivalents and restricted cash equivalents at end of period	$	218,562		$	96,160

NEWS RELEASE – October 28, 2020

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Adjusted EPS

Earnings per share is a financial measure under generally accepted accounting principles (“GAAP”). Adjusted diluted earnings per share (“Adjusted EPS”) is considered a non-GAAP financial measure under the rules because it excludes certain amounts which are included when diluted earnings per share (“EPS”) are calculated in accordance with U.S. GAAP (EPS), the most directly comparable financial measure calculated in accordance with U.S. GAAP. Management believes that Adjusted EPS is a meaningful measure to share with investors because it best allows comparison of the performance for the comparable period. In addition, Adjusted EPS affords investors a view of what management considers Havertys’ earnings performance, and provides investors the ability to make a more informed assessment of such earnings performance.

We have calculated Adjusted EPS for the nine months ended September 30, 2020 by adjusting EPS for a sale-leaseback transaction in the quarter ended June 30, 2020. There were no such adjustments in the comparable period of 2019.

	Nine months ended September 30, 2020
Diluted earnings per share:
Reported EPS	$	1.77
Adjustments:
Gain from sale-leaseback transaction: pre-tax		1.66
Tax impact of gain(1)		(0.42	)
Net adjustment		1.24
Adjusted EPS	$	0.53

(1) Calculated based on nature of item and rates applied.

Conference Call Information

The company invites interested parties to listen to the live audiocast of the conference call on October 29, 2020 at 10:00 a.m. ET at its website, havertys.com under the investor relations section. If you cannot listen live, a replay will be available on the day of the conference call at the website or via telephone at approximately 1:00 p.m. ET through November 11, 2020. The number to access the telephone playback is 1-888-203-1112 (access code: 9286660).

About Havertys

Havertys (NYSE: HVT and HVT.A), established in 1885, is a full-service home furnishings retailer with 120 showrooms in 16 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 havertys.com.  

Safe Harbor  

This press release contains, and the conference call may contain forward-looking statements subject to the safe harbor provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934. These forward-looking statements are subject to risks and uncertainties and change based on various important factors, many of which are beyond our control.

NEWS RELEASE – October 28, 2020

Page 7

All statements in the future tense and all statements accompanied by words such as “expect,” “likely,” “outlook,” “forecast,” “preliminary,” “would,” “could,” “should,” “position,” “will,” “project,” “intend,” “plan,” “on track,” “anticipate,” “to come,” “may,” “possible,” “assume,” and variations of such words and similar expressions are intended to identify such forward-looking statements. These forward-looking statements include, without limitation, our expected ability to operate and protect our team members and customers during the COVID-19 pandemic, the execution and effect of our cost savings initiatives, the use of proceeds from our sale-leaseback transaction, our expectations for selling square footage and capital expenditures for 2020, our liquidity position to continue to operate during these highly uncertain times, and our efforts and initiatives to help us emerge from the pandemic well-positioned.

We caution that our forward-looking statements involve risks and uncertainties, and while we believe that our expectations for the future are reasonable in view of currently available information you are cautioned not to place undue reliance on our forward-looking statements and they should not be relied upon as a prediction of actual results. Factors that could cause actual results to differ materially from those expressed or implied in any forward-looking statements include, but are not limited to: the extent and duration of the disruption to our business operations caused by the health crisis associated with the COVID-19 pandemic, including the effects on the financial health of our business partners and customers, on supply chains and our suppliers, and on access to capital and liquidity provided by the financial and capital markets; our ability to maintain compliance with debt covenants and amend such credit facilities as necessary; disruptions in our suppliers' operations, including from the impact of COVID-19, including potential problems with inventory availability and the potential result of the volatility or higher cost of product and international freight due to the high demand of products and low supply for an unpredictable period of time; disruptions in our third-party producers’ operations in foreign countries; changes in national and international legislation or government regulations or policies, including changes to import tariffs and the unpredictability of such changes; failure of vendors to meet our quality control standards or to react to changes in legislative or regulatory frameworks; disruptions in our distribution centers; changes in general economic conditions, including unemployment, inflation (including the impact of tariffs); labor shortages and the Company's ability to successfully attract and retain employees in the current labor market; uncertain credit markets and other macroeconomic conditions; competitive product, service and pricing pressures; failure or weakness in our disclosure controls and procedures and internal controls over financial reporting; disruptions caused by a failure or breach of the Company's information systems and information technology infrastructure, as well as other risks and uncertainties discussed in the Company's Annual Report on Form 10-K for 2019 (all of which risks may be amplified by the COVID-19 pandemic) and Quarterly Report on Form 10-Q for the quarterly periods ended March 31, 2020 and June 30, 2020, and from time to time in the Company's subsequent filings with the SEC.

Forward-looking statements describe our expectations only as of the date they are made, and the Company undertakes no duty to update its forward-looking statements except as required by law. You are advised, however, to review any further disclosures we make on related subjects in our subsequent Forms 10-K, 10-Q, 8-K, and other reports filed with the SEC. 

 Contact: 

Havertys 404-443-2900 

Jenny Hill Parker 

SVP, Finance, and Corporate Secretary 

SOURCE:  Havertys

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Document and Entity Information	Oct. 29, 2020
Entity Listings [Line Items]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Oct. 29, 2020
Entity Registrant Name	HAVERTY FURNITURE COMPANIES INC
Entity Incorporation, State or Country Code	MD
Entity File Number	001-14445
Entity Tax Identification Number	58-0281900
Entity Address, Address Line One	780 Johnson Ferry Road
Entity Address, Address Line Two	Suite 800
Entity Address, City or Town	Atlanta
Entity Address, State or Province	GA
Entity Address, Postal Zip Code	30342
City Area Code	404
Local Phone Number	443-2900
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Entity Central Index Key	0000216085
Common Stock [Member]
Entity Listings [Line Items]
Title of 12(b) Security	Common Stock
Trading Symbol	HVT
Security Exchange Name	NYSE
Common Class A [Member]
Entity Listings [Line Items]
Title of 12(b) Security	Class A Common Stock
Trading Symbol	HVTA
Security Exchange Name	NYSE