Haverty Furniture Company : Havertys Reports Improved Operating Results for Fourth Quarter and Full Year 2012

 Haverty Furniture Company : Havertys Reports Improved Operating Results for
                      Fourth Quarter and Full Year 2012

ATLANTA, GEORGIA,  February  25, 2013  --  HAVERTY FURNITURE  COMPANIES,  INC. 
(NYSE: HVT  and HVT.A)  reports fourth  quarter and  full year  2012  results. 
Pre-tax income  for the  fourth quarter  of 2012  increased to  $10.1  million 
versus $6.1 million for the same period of 2011. Pre-tax income for the  full 
year of 2012  increased to $23.5  million compared to  $4.6 million for  2011. 
The earnings per share for the fourth quarter of 2012 were $0.30 compared  to 
$0.76 for the same period of 2011.  The earnings per share for the full  year 
2012 were $0.67 compared to  $0.70 for 2011. The  results of both periods  of 
2011 included a favorable non-cash special item of $14.1 million, or $0.64  in 
per share earnings, for the release  of almost all of the valuation  allowance 
against the company's net deferred tax assets.

As previously reported, net sales for the fourth quarter were 8.4% higher than
in the same period of 2011 and 7.9% ahead for the full year 2012. Written
sales for the fourth quarter of 2012 increased 12.7% over the same quarter of
2011.

Clarence H. Smith,  chairman, president and  CEO, said, "We  are very  pleased 
with these  results  and look  forward  to  the opportunities  in  2013.  The 
initiatives towards attracting the "on  trend" customer are gaining  traction. 
This customer wants to express herself  and we convey this in our  successful 
"discover something you" advertising campaign. To meet her desire for  unique 
and personally  styled products,  we expanded  and simplified  our custom  and 
special order upholstery programs which in 2012 were up almost 18% over  2011. 
Our store improvements  and stylish  accessories better showcase  all of  our 
merchandise and the appeal  of our higher price  point products resulted in  a 
7.8% increase in  average ticket and  improved gross profit  margins for  2012 
compared to 2011.

"The higher  sales  volume  enabled  us  to  better  leverage  our  fixed  and 
discretionary costs. We will manage these  and our variable costs closely  to 
ensure profitable sales growth. Our positive cash flow enabled us to meet our
working capital requirements, planned capital expenditures, and make a special
$22.0 million cash dividend without drawing on our credit facility. 

"We will  be adjusting  our  square footage  during  2013, closing  stores  in 
certain  markets  and  expanding  showrooms  in  desirable  locations.    Our 
merchandising and customer centric focus  distinguishes us in the  marketplace 
and gives us an edge over our competitors. The improving housing and  overall 
economic data bode  well for  Havertys as  we are  prepared operationally  and 
financially to exploit shifts in demand."

Financial Highlights

Fourth Quarter 2012 Compared to Fourth Quarter 2011

  *Net sales were up $14.0 million  or 8.4% to $182.3 million and  comparable 
    store sales increased 6.0%.

  *Gross profit margins were 52.8% as a percent of sales compared to 52.3%, a
    50 basis point improvement. 

  *Selling, general  and  administrative  costs increased  $4.5  million  and 
    declined 1.3% as a percent of sales. 

  *Pre-tax income for 2012 increased 66.5% to $10.1 million or 5.5% of  sales 
    versus $6.1 million or 3.6% of sales.

  *Income tax  expense  in  2012  included a  decrease  in  our  reserve  for 
    uncertain tax positions of $0.7 million, compared to a decrease in 2011 in
    the valuation allowance of $14.1 million.

  *Our retail store count at December 31, 2012 was 122 versus 119 at the  end 
    of 2011.

Twelve Months ended December 31, 2012 Compared to Same Period of 2011

  *Net sales increased  $49.2 million  and comparable  store sales  increased 
    6.8%.

  *Gross profit margins increased by 0.8% to 52.5% as a percent of sales  due 
    to shifts in our merchandising and successful new product introductions.

  *Selling, general  and administrative  costs  increased $13.0  million  and 
    declined 1.8% as a percent of sales. 

  *Pre-tax income for 2012 increased 410.9% to $23.5 million or 3.5% of sales
    versus $4.6 million or 0.7% of sales.

  *Income tax  expense  in  2012  included a  decrease  in  our  reserve  for 
    uncertain tax positions of  $0.7 compared to a  decrease in 2011 of  $14.1 
    million in the valuation allowance.

Expectations and Other

  *Both total written business and delivered  sales for the first quarter  to 
    date of 2013  are up  approximately 14% over  the same  period last  year. 
    Comparisons for the remainder of the quarter will be more difficult given
    last year's strong March, one less  day in February this year, and  Easter 
    weekend, which  is slow  for furniture  sales, falls  in March  this  year 
    versus April last year. 

  *We  plan  to  continue  our  merchandising  approach  in  2013  and   use 
    promotional pricing selectively during traditional holiday and other sales
    events. We expect that our annual  gross profit margins for 2013 will  be 
    similar to or slightly ahead of the annual 2012 level.

  *SG&A expenses in  2013 should  be leveraged with  continuing sales  growth 
    since  we  have  considerable  additional   capacity  in  our  store   and 
    distribution infrastructure. We  do expect some  increases in our  period 
    costs due to additional advertising and personnel expense and believe  our 
    fixed/discretionary costs will be $220  to $222 million, up  approximately 
    4.5% over  those same  costs in  2012.  These costs  are expected  to  be 
    incurred evenly on a quarterly basis in 2013 versus prior years, in  which 
    the second  quarter  costs  were  lower.  Variable  SG&A  expenses  should 
    continue to be in the 17.3% to 17.5% range as a percent of sales for 2013.
    

  *Our effective tax rate for  2013 is expected to be  in the 38.5% to  38.8% 
    range.

  *Planned capital expenditures  for 2013  are $20.0 million.  We expect  to 
    expand three  of  the  stores undergoing  major  remodeling  and  complete 
    another 18 of  our Bright  Inspirations store refreshes.  Our plans  also 
    include closing  three store  locations  during the  first half  of  2013, 
    these and other changes should result in a 1.0% decrease in total  retail 
    square footage from 2012.

HAVERTY FURNITURE COMPANIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, except per share data - Unaudited)

                            Three Months Ended              Year Ended
                            December 31,                December 31,
                            2012          2011          2012          2011
                                                             
Net sales                $ 182,307   $ 168,259   $ 670,073   $ 620,903
Cost of goods sold            86,036        80,338       318,038       300,187
 Gross profit            96,271        87,921       352,035       320,716
Credit service
charges                           77            98           293           460
      Gross profit
      and other
 revenue                 96,348        88,019       352,328       321,176

Expenses:
      Selling,
      general and
 administrative          86,098        81,583       328,826       315,865
 Interest, net              150           160           624           737
      Provision for
      doubtful
 accounts                    65            43           165           167
      Other (income)
 expense, net               (58 )         172          (803 )        (196 )
                         86,255        81,958       328,812       316,573

Income before income
taxes                         10,093         6,061        23,516         4,603
Income tax expense
(benefit)                      3,314       (10,897 )       8,605       (10,860 )
 Net income         $   6,779   $  16,958   $  14,911   $  15,463

Basic earnings per
share:
 Common Stock       $    0.31   $    0.78   $    0.69   $    0.71
      Class A Common
 Stock              $    0.28   $    0.74   $    0.58   $    0.67

Diluted earnings per
share:
 Common Stock       $    0.30   $    0.76   $    0.67   $    0.70
      Class A Common
 Stock              $    0.29   $    0.73   $    0.59   $    0.67

Basic weighted
average shares
outstanding:
 Common Stock            19,330        18,731        19,096        18,633
      Class A Common
 Stock                    2,815         3,218         2,943         3,287

Diluted weighted
average shares
outstanding:
 Common Stock            22,566        22,218        22,382        22,153
      Class A Common
 Stock                    2,815         3,218         2,943         3,287
  
Cash dividend per
common share:
  Common Stock       $  1.0400   $  0.1200   $  1.1200   $  0.1200
      Class A Common
  Stock              $  0.9875   $  0.1125   $  1.0625   $  0.1125

HAVERTY FURNITURE COMPANIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands - Unaudited)

                                                         December 31,
                                                      2012         2011
ASSETS
Current assets                                                   
 Cash and cash equivalents                        $  53,550  $  49,585
 Restricted cash and cash equivalents                  7,013       6,813
 Accounts receivable                                   9,710      11,451
 Inventories                                          96,902      93,713
 Prepaid expenses                                      9,532      11,195
 Other current assets                                  3,187       4,918
  Total current assets                          179,894     177,675

Accounts receivable, long-term                                814         449
Property and equipment                                    193,085     179,333
Deferred income taxes                                      24,366      22,681
Other assets                                                3,937       4,962
  Total assets                               $ 402,096  $ 385,100

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
 Accounts payable                                 $  28,178  $  21,218
 Customer deposits                                    20,963      14,572
 Accrued liabilities                                  33,272      29,186
 Deferred income taxes                                 6,595       6,635
 Current portion of lease obligations                    881         762
  Total current liabilities                      89,889      72,373

Lease obligations, less current portion                    18,473      12,284
Other liabilities                                          34,306      37,774
  Total liabilities                             142,668     122,431

Stockholders' equity                                      259,428     262,669
  Total liabilities and stockholders' equity $ 402,096  $ 385,100

HAVERTY FURNITURE COMPANIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands - Unaudited)

                                                 Year Ended December 31,
                                                      2012       2011
Cash Flows from Operating Activities:
    Net income                                 $  14,911      $  15,463
        Adjustments to reconcile net income to
        net cash
    provided by operating activities:
      Depreciation and amortization            19,415         18,242
      Deferred income taxes                    (2,209 )       (7,947 )
      Share-based compensation expense          2,553          2,060
      Provision for doubtful accounts             165            167
              Net loss (gain) on sale of
      property and equipment                      (12 )           94
      Other                                       337            237
        Changes in operating assets and
    liabilities:
      Accounts receivable                       1,210          2,299
      Inventories                              (3,458 )       (1,775 )
      Customer deposits                         6,391            987
      Other assets and liabilities              1,818        (11,714 )
              Accounts payable and accrued
      liabilities                              11,047            959
                     Net cash provided by
         operating activities              52,168         19,072

Cash Flows from Investing Activities:
    Capital expenditures                          (25,014 )      (17,566 )
    Restricted cash and cash equivalents             (200 )       (6,813 )
        Proceeds from sale of property and
    equipment                                          38            157
    Other                                             410              -
                     Net cash used in investing
         activities                       (24,766 )      (24,222 )

Cash Flows from Financing Activities:
    Payments on lease obligations                    (766 )         (588 )
        Proceeds from exercise of stock options         2,457            285
    Dividends paid                                (24,684 )       (2,609 )
    Other financing activities                       (444 )         (398 )
                     Net cash used in financing
         activities                       (23,437 )       (3,310 )
Increase (decrease) in cash and cash
equivalents during the year                             3,965         (8,460 )
Cash and cash equivalents at beginning of year         49,585         58,045
Cash and cash equivalents at end of year            $  53,550      $  49,585

The following table summarizes the impact of various items on our tax expense
(in thousands):

                                                 2012        2011
Statutory rates applied  to income before  income 
taxes                                             $  8,231     $   1,565
State income taxes, net of Federal tax benefit           769             143
Net non-deductible permanent differences                   8              33
                                                     9,008           1,741
Change in deferred tax asset valuation allowance      (1,207 )       (14,121 )
Change in state credits                                1,129             717
Change for net operating loss carrybacks, amended
returns
and related receivables                             342             422
Change in deferred tax rate                             (125 )           274
Change in reserve for uncertain tax positions           (674 )            42
Other                                                    132              65
                                                     (403 )       (12,601 )
          Income tax expense (benefit)         $  8,605     $ (10,860 )

About Havertys

Havertys, established in  1885, is  a full-service  home furnishings  retailer 
with 121  showrooms  in 17  states  in  the Southern  and  Midwestern  regions 
providing its customers with a wide selection of quality merchandise in middle
to upper-middle  price ranges.  Additional information  is available  on  the 
company's website at www.havertys.com

News releases include forward-looking statements,  which are subject to  risks 
and  uncertainties.  Factors  that  might  cause  actual  results  to  differ 
materially from future  results expressed or  implied by such  forward-looking 
statements include, but are not  limited to, general economic conditions,  the 
consumer spending  environment  for large  ticket  items, competition  in  the 
retail furniture industry and other  uncertainties detailed from time to  time 
in the company's reports filed with the SEC.

Conference Call Information

The company will sponsor a conference call Tuesday, February 26, 2013 at 10:00
a.m. Eastern Standard Time to review  its results. Listen-only access to  the 
call is  available via  the web  at www.havertys.com  (For Investors)  and  at 
www.streetevents.com (Individual Investor Center), both live and for a limited
time, on a replay basis.

Contact:
Haverty Furniture Companies, Inc., 404-443-2900
Dennis L. Fink
 EVP & CFO
Jenny Hill Parker
 SVP, Finance, Secretary and Treasurer

SOURCE: Haverty Furniture Companies, Inc.

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Source: Haverty Furniture Company via Thomson Reuters ONE
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