| Headline: | Havertys Announces Increase In Quarterly Dividend and First Quarter 2024 Results |
| Location: | US |
| Post Date: | May 1, 2024 4:16 PM |
| TAG ID: | awire157911 |
| DocID: | 858503 |
| Word Count: | approx. 2376 words |
| Full story: | |
| ATLANTA, GA / ACCESSWIRE / May 1, 2024 / HAVERTYS (NYSE:HVT and HVT.A), today announced an increase to its quarterly dividend (the 12th consecutive annual increase) and reported operating results for the first quarter ended March 31, 2024. Dividend The board of directors declared a 6.7% increase in the quarterly dividend, from $0.30 per share to $0.32 per share on the company's common stock. The quarterly dividend for the company's Class A common stock is also being increased from $0.28 to $0.30 per share. The dividend is payable on June 14, 2024, to stockholders of record at the close of business on May 24, 2024. Havertys has paid a cash dividend in each year since 1935. First quarter 2024 versus first quarter 2023: Diluted earnings per common share ("EPS") of $0.14 versus $0.74. Consolidated sales decreased 18.1% to $184.0 million. Comparable-store sales decreased 18.5%. Gross profit margin increased to 60.3% from 59.1%. Clarence H. Smith, Chairman and CEO said, "Our sales reflect the challenges from the ongoing weak housing market. The decline in demand requires exceptional customer engagement and operational flexibility. We began highlighting our regret-free guarantee early in 2024 and continued promoting our free-in home design service which grew 10.4% in the first quarter compared to last year and was 32.3% of our total written business. Our teams generated another quarter of excellent gross margins of 60.3% and the prudent reductions in operating costs generated positive results for the quarter. We are investing capital to expand our business and are on track to open five new stores this year and five in 2025. Our new store located in Southaven, MS in the Memphis, TN market opened at the end of March. The three stores we previously announced are in-fill opportunities in growing areas of Florida and should open in the second and third quarter this year. We plan to enter the Houston, TX market later this year with one store slated to open in the fourth quarter and additional locations in early 2025. This is a sizeable new market within our distribution footprint that we believe aligns well with the Havertys brand. We are making important investments in our stores and online presence to be well-positioned to gain additional market share at the reversal of this near-term demand cycle. The board's decision to increase the quarterly dividend reflects our strong financial position and long-term outlook as we invest in our business and return capital to our stockholders." Key Results (amounts in millions, except per share amounts) Results of Operations Three Months Ended March 31, 2024 2023 Sales $ 184.0 $ 224.8 Gross Profit 111.0 132.8 Gross profit as a % of sales 60.3 % 59.1 % SGA Variable 37.0 44.9 Fixed 72.4 73.5 Total 109.4 118.4 SGA as a % of sales Variable 20.1 % 20.0 % Fixed 39.3 % 32.7 % Total 59.4 % 52.7 % Pre-tax income 3.2 15.4 Pre-tax income as a % of sales 1.7 % 6.9 % Net income 2.4 12.4 Net income as a % of sales 1.3 % 5.5 % Diluted earnings per share ("EPS") $ 0.14 $ 0.74 Other Financial and Operations Data Three Months Ended March 31, 2024 2023 EBITDA (in millions) (1) $ 6.6 $ 18.8 Sales per square foot $ 169 $ 208 Average ticket $ 3,208 $ 3,192 Liquidity Measures Three Months Ended March 31, Three Months Ended March 31, Free Cash Flow 2024 2023 Cash Returns to Shareholders 2024 2023 Operating cash flow $ 3.1 $ 11.1 Share repurchases $ - $ - Dividends 4.8 4.5 Capital expenditures (6.4 ) (6.7 ) Cash returns to shareholders $ 4.8 $ 4.5 Free cash flow $ (3.3 ) $ 4.4 Cash at period end $ 117.9 $ 127.0 (1) See the reconciliation of the non-GAAP metrics at the end of the release. First Quarter ended March 31, 2024 Compared to Same Period of 2023 Total sales down 18.1%, comp-store sales down 18.5% for the quarter. Total written sales were down 12.6% and written comp-store sales declined 13.0% for the quarter. Gross profit margins increased to 60.3% in 2024 from 59.1% in 2023. SG&A expenses were 59.4% of sales versus 52.7% and decreased $9.0 million. The primary drivers of this change are: decrease of $4.8 million in selling expenses, primarily variable costs tied to commissioned-based compensation expense and third-party creditor costs. decrease in warehouse and delivery costs of $3.2 million primarily from reduced headcount via attrition and lower expenditures for supplies and fuel. decrease of $0.6 million in advertising expenses driven by reduced spending on television and interactive marketing partly offset by increased technology costs. Balance Sheet and Cash Flow for the Three Months ended March 31, 2024 Cash, cash equivalents, and restricted cash equivalents at March 31, 2024 are $117.9 million. Generated $3.1 million in cash from operating activities primarily from earnings and changes in working capital including a $5.1 million increase in customer deposits, a $1.9 million reduction in inventories, and a $12.8 million decrease in vendor repayments and accrued liabilities. Invested $6.4 million in capital expenditures. Paid $4.8 million in quarterly cash dividends. No debt outstanding at March 31, 2024 and credit availability of $80.0 million. Expectations and Other We are increasing our expectations for gross profit margins for 2024 to be between 60.0% to 60.5%. The adjustment is based on our merchandising mix and anticipated changes in product and freight costs. Gross profit margins fluctuate quarter to quarter in relation to our promotional cadence. Fixed and discretionary expenses within SG&A for the full year of 2024 are expected to be in the $290.0 to $292.0 million range, a reduction in our previous guidance related to advertising and other costs. Variable SG&A expenses for the full year of 2024 are anticipated to be in the 19.9% to 20.2% range. Our effective tax rate for 2024 is expected to be 26.5% excluding the impact from discrete items and any new tax legislation. Planned capital expenditures for the full year of 2024 are approximately $32.0 million. We expect retail square footage will increase approximately 3.4% in 2024 over 2023. HAVERTY FURNITURE COMPANIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Three Months Ended March 31, (In thousands, except per share data) 2024 2023 Net sales $ 183,997 $ 224,754 Cost of goods sold 72,978 91,969 Gross profit 111,019 132,785 Expenses: Selling, general and administrative 109,356 118,361 Other expense (income), net 23 (4 ) Total expenses 109,379 118,357 Income before interest and income taxes 1,640 14,428 Interest income, net 1,555 1,010 Income before income taxes 3,195 15,438 Income tax expense 802 3,066 Net income $ 2,393 $ 12,372 Basic earnings per share: Common Stock $ 0.15 $ 0.77 Class A Common Stock $ 0.13 $ 0.72 Diluted earnings per share: Common Stock $ 0.14 $ 0.74 Class A Common Stock $ 0.13 $ 0.71 Cash dividends per share: Common Stock $ 0.30 $ 0.28 Class A Common Stock $ 0.28 $ 0.26 HAVERTY FURNITURE COMPANIES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands) March 31, 2024 December 31, 2023 March 31, 2023 Assets Current assets Cash and cash equivalents $ 111,818 $ 120,635 $ 120,170 Restricted cash and cash equivalents 6,045 7,142 6,876 Inventories 92,078 93,956 114,254 Prepaid expenses 17,361 17,067 11,430 Other current assets 13,697 12,793 19,590 Total current assets 240,999 251,593 272,320 Property and equipment, net 173,128 171,588 139,212 Right-of-use lease assets 196,976 202,306 207,673 Deferred income taxes 15,594 15,641 16,332 Other assets 13,832 13,005 12,878 Total assets $ 640,529 $ 654,133 $ 648,415 Liabilities and Stockholders' Equity Current liabilities Accounts payable $ 16,980 $ 18,781 $ 15,632 Customer deposits 40,912 35,837 46,382 Accrued liabilities 35,681 46,289 40,372 Current lease liabilities 37,572 37,357 36,180 Total current liabilities 131,145 138,264 138,566 Noncurrent lease liabilities 174,680 180,397 185,866 Other liabilities 28,014 27,106 27,571 Total liabilities 333,839 345,767 352,003 Stockholders' equity 306,690 308,366 296,412 Total liabilities and stockholders' equity $ 640,529 $ 654,133 $ 648,415 HAVERTY FURNITURE COMPANIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands) Three Months Ended March 31, 2024 2023 Cash Flows from Operating Activities: Net income $ 2,393 $ 12,372 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 4,946 4,362 Share-based compensation expense 2,643 1,957 Other 58 (840 ) Changes in operating assets and liabilities: Inventories 1,878 4,079 Customer deposits 5,075 (1,587 ) Other assets and liabilities (1,104 ) 5,721 Accounts payable and accrued liabilities (12,754 ) (14,990 ) Net cash provided by operating activities 3,135 11,074 Cash Flows from Investing Activities: Capital expenditures (6,399 ) (6,655 ) Proceeds from sale of land, property and equipment 48 13 Net cash used in investing activities (6,351 ) (6,642 ) Cash Flows from Financing Activities: Dividends paid (4,845 ) (4,528 ) Taxes on vested restricted shares (1,853 ) (2,788 ) Net cash used in financing activities (6,698 ) (7,316 ) Decrease in cash, cash equivalents and restricted cash equivalents during the period (9,914 ) (2,884 ) Cash, cash equivalents and restricted cash equivalents at beginning of period 127,777 129,930 Cash, cash equivalents and restricted cash equivalents at end of period $ 117,863 $ 127,046 GAAP to Non-GAAP Reconciliation We report our financial results in accordance with accounting principles generally accepted in the United States ("GAAP"). We supplement the reporting of our financial information under GAAP with certain non-GAAP financial information. The non-GAAP information presented provides additional useful information but should not be considered in isolation or as substitutes for the related GAAP measures. We believe that EBITDA is a meaningful measure to share with investors. Reconciliation of GAAP measures to EBITDA Three Months Ended March 31, (in thousands) 2024 2023 Income before income taxes, as reported $ 3,195 $ 15,438 Interest income, net (1,555 ) (1,010 ) Depreciation 4,946 4,362 EBITDA $ 6,586 $ 18,790 Comparable Store Sales Comparable-store or "comp-store" sales is a measure which indicates the performance of our existing stores and website by comparing the sales growth for stores 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 or if the selling square footage has been changed significantly. Cost of Goods Sold and SG&A Expense We include substantially all our occupancy and home delivery costs in SG&A expense as well as 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. We classify our SG&A expenses as either variable or fixed and discretionary. Our variable expenses are comprised of selling and delivery costs. Selling expenses are primarily compensation and related benefits for our commission-based sales associates, the discount we pay for third party financing of customer sales and transaction fees for credit card usage. We do not outsource delivery, so these costs include personnel, fuel, and other expenses related to this function. Fixed and discretionary expenses are comprised of rent, depreciation and amortization and other occupancy costs for stores, warehouses and offices, and all advertising and administrative costs. Conference Call Information The company invites interested parties to listen to the live webcast of the conference call on May 2, 2024 at 10:00 a.m. ET at its website, ir.havertys.com . If you cannot listen live, a replay will be available on the day of the conference call at the website at approximately 1:00 p.m. ET. About Havertys Havertys (NYSE:HVT and HVT.A), established in 1885, is a full-service home furnishings retailer with 124 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 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. 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 expectations for retail and operating margins, selling square footage and capital expenditures for 2024, our liquidity position to continue to fund our growth plans, and our efforts and initiatives to execute our strategic plan. 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: disruptions in our suppliers' operations; 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 2023 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 View the original press release on accesswire.com |
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