Subsequent Events

3 Months Ended

Mar. 31, 2020

Subsequent Events [Abstract]

Subsequent Events

NOTE L – Subsequent Events

Store Reopenings

See Note B for details concerning the reopening of certain of our stores in May 2020 in connection with the COVID-19 pandemic.

Credit Agreement

We amended our Credit Agreement described in Note F on May 15, 2020.  The amendment in May was done primarily to permit the sale and leaseback transaction of three properties.

Sale and Leaseback Transaction

On May 18, 2020, Havertys completed a sale and leaseback transaction of three properties.  The Coppell, Texas location has approximately 394,000 distribution square feet used to serve our western stores, 44,000 retail square feet, and 20,000 square feet of office space for call center and general management purposes. The Lakeland, Florida facility has approximately 335,000 distribution square feet, and the Colonial Heights, Virginia facility has approximately 129,000 distribution square feet. The net book value of the three properties is approximately $39.8 million at March 31, 2020. The purchase price, excluding costs and taxes, is $70.0 million. Net proceeds from the sales will be used to strengthen the Company’s liquidity and support corporate initiatives.

The three properties were leased back to Havertys via 15-year operating lease agreements with renewal options.

The following is a schedule of the future minimum lease payments under the lease agreements for the three properties for each of the next five years ending December 31 and thereafter (in thousands):

Seven months ended December 31, 2020	$	2,557
Year ended December 31, 2021		4,434
Year ended December 31, 2022		4,523
Year ended December 31, 2023		4,613
Year ended December 31, 2024		4,706
Subsequent to 2024		54,967
Total future minimum lease payments	$	75,800