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 (Date of Earliest Event Reported): May 2, 2023 (May 2, 2023)

Haverty Furniture Companies, Inc.

(Exact Name of Registrant as Specified in Its Charter)

1-14445

(Commission File Number)

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

780 Johnson Ferry Road, NE, 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
Class A Common Stock	HVTA	NYSE
Common Stock	HVT	NYSE

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 May 2, 2023, Havertys issued a press release regarding its results of operations for the quarter ended March 31, 2023. 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 May 2, 2023 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.
May 2, 2023	By:
		Jenny Hill Parker Senior Vice President, Finance and Corporate Secretary

EX-99.1

EXHIBIT 99.1

Havertys Reports Operating Results for First Quarter 2023

Atlanta, Georgia, May 2, 2023– HAVERTYS (NYSE: HVT and HVT.A), today reported its operating results for the first quarter ended March 31, 2023.

First quarter 2023 versus first quarter 2022:

• Diluted earnings per common share (“EPS”) of $0.74 versus $1.11.

• Consolidated sales decreased 5.9% to $224.8 million. Comparable-store sales decreased 6.7%.

• Gross profit margin increased to 59.1% from 59.0%.

Clarence H. Smith, chairman and CEO, said, “Our team delivered a strong quarter against difficult headwinds of shifts in consumer spending and persistent inflationary pressures. Sales reflect the reduction in traffic and written business that we have reported in recent quarters as our business transitioned from the pandemic's explosive pace to a more measured one. Our written business for the first quarter of 2023 compared to the "normal" pre-pandemic first quarter of 2019 was up 10.9% and written comp-store sales were up 6.9%.

Our first quarter’s average sales ticket was up over last year’s and the sales generated by our free in-home design service exceeded 25% of total sales. We are receiving new products, which were delayed during the pandemic, addressing a key part of our merchandise plan. We remain disciplined in our pricing and protective of the gross profit margin gains we have steadily achieved. Operationally, our experienced leaders are focused on ensuring we are efficiently meeting our objectives.

Our financial strength allows us to capitalize during weak cycles, making investments and executing on our growth strategy with the addition of new stores and improving the shopping experience in-store and online. We are adapting and evolving to stay ahead and grow in a changing retail and economic landscape.”

NEWS RELEASE – May 2, 2023

Page 2

Key Results

(amounts in millions, except per share amounts)

Results of Operations
	Three Months Ended March 31,
	2023			2022
Sales	$	224.8		$	238.9
Gross Profit		132.8			141.0
Gross profit as a % of sales		59.1	%		59.0	%
SGA
Variable		44.9			44.4
Fixed		73.5			70.8
Total		118.4			115.2
SGA as a % of sales
Variable		20.0	%		18.6	%
Fixed		32.7	%		29.6	%
Total		52.7	%		48.2	%
Pre-tax income		15.4			25.7
Pre-tax income as a % of sales		6.9	%		10.8	%
Net income		12.4			19.4
Net income as a % of sales		5.5	%		8.1	%
Diluted earnings per share (“EPS”)	$	0.74		$	1.11

Other Financial and Operations Data
	Three Months Ended March 31,
	2023		2022
EBITDA (in millions)(1)	$	18.8	$	29.9
Sales per square foot	$	208	$	222
Average ticket	$	3,192	$	3,066

Liquidity Measures
	Three Months Ended March 31,							Three Months Ended March 31,
Free Cash Flow	2023			2022			Cash Returns to Shareholders	2023		2022
Operating cash flow	$	11.1		$	20.6		Share repurchases	$	—	$	12.5
							Dividends		4.5		4.3
Capital expenditures		(6.7	)		(7.1	)	Cash returns to shareholders	$	4.5	$	16.8
Free cash flow	$	4.4		$	13.5
Cash at period end	$	127.0		$	169.1

(1) See the reconciliation of the non-GAAP metrics at the end of the release.

NEWS RELEASE – May 2, 2023

Page 3

First Quarter ended March 31, 2023 Compared to Same Period of 2022

• Total sales down 5.9%, comp-store sales down 6.7% for the quarter. Total written sales were down 11.7% and written comp-store sales declined 12.7% for the quarter.

• Gross profit margins increased to 59.1% in 2023 from 59.0% in 2022.

• SG&A expenses were 52.7% of sales versus 48.2% and increased $3.2 million. The primary drivers of this change are:

◦ increase of $1.4 million in selling expenses due to the impact of rising interest rates on third-party credit costs partially offset by lower commissioned-based compensation expense.

◦ increase of $2.0 million in occupancy costs driven by higher maintenance and tax costs.

◦ increase in administrative expense of $1.3 million primarily from higher health insurance costs and professional services.

◦ decrease in warehouse and delivery costs of $1.4 million primarily from $0.9 million lower demurrage fees and a reduction in usage of temporary labor.

Balance Sheet and Cash Flow

• Cash, cash equivalents, and restricted cash equivalents at March 31, 2023 are $127.0 million.

• Generated $11.1 million in cash from operating activities primarily from solid earnings performance and changes in working capital including $15.0 million in vendor repayments and accrued liabilities, a decrease in inventories of $4.1 million, and an increase in other assets and liabilities of $5.7 million.

• Paid $4.5 million in quarterly cash dividends during the three months ended March 31, 2023.

• No debt outstanding at March 31, 2023 and credit availability of $80.0 million.

Expectations and Other

• We expect gross profit margins for 2023 will be between 58.5% to 59.0%. 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 its impact on our LIFO reserve.

• Fixed and discretionary expenses within SG&A for the full year of 2023 are expected to be in the $289.0 to $292.0 million range, a reduction in our previous guidance related to advertising and warehouse and delivery costs. Variable SG&A expenses for the full year of 2023 are anticipated to be in the 19.5% to 19.7% range.

• Our effective tax rate for 2023 is expected to be 25% excluding the impact from the vesting of stock-based awards, potential tax credits, and any new tax legislation.

• Planned capital expenditures for 2023 have changed from our previous guidance and are approximately $53.1 million in 2023. We expect retail square footage will increase approximately 1.6% as we plan to open four stores and close one. Our capital expenditures estimate also includes the expected purchase of our Florida distribution center from our landlord in May for approximately $28.2 million.

NEWS RELEASE – May 2, 2023

Page 4

HAVERTY FURNITURE COMPANIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	Three Months EndedMarch 31,
(In thousands, except per share data)	2023			2022
Net sales	$	224,754		$	238,946
Cost of goods sold		91,969			97,985
Gross profit		132,785			140,961
Expenses:
Selling, general and administrative		118,361			115,154
Other (income) expense, net		(4	)		161
Total expenses		118,357			115,315
Income before interest and income taxes		14,428			25,646
Interest income, net		1,010			74
Income before income taxes		15,438			25,720
Income tax expense		3,066			6,359
Net income	$	12,372		$	19,361
Basic earnings per share:
Common Stock	$	0.77		$	1.14
Class A Common Stock	$	0.72		$	1.08
Diluted earnings per share:
Common Stock	$	0.74		$	1.11
Class A Common Stock	$	0.71		$	1.05
Cash dividends per share:
Common Stock	$	0.28		$	0.25
Class A Common Stock	$	0.26		$	0.23

NEWS RELEASE – May 2, 2023

Page 5

HAVERTY FURNITURE COMPANIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands)	March 31,2023		December 31,2022		March 31,2022
Assets
Current assets
Cash and cash equivalents	$	120,170	$	123,126	$	162,340
Restricted cash and cash equivalents		6,876		6,804		6,715
Inventories		114,254		118,333		119,857
Prepaid expenses		11,430		9,707		10,633
Other current assets		19,590		18,283		13,585
Total current assets		272,320		276,253		313,130
Property and equipment, net		139,212		137,475		128,721
Right-of-use lease assets		207,673		207,390		221,083
Deferred income taxes		16,332		15,501		18,252
Other assets		12,878		12,430		12,699
Total assets	$	648,415	$	649,049	$	693,885
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable	$	15,632	$	23,345	$	32,415
Customer deposits		46,382		47,969		98,528
Accrued liabilities		40,372		48,676		48,876
Current lease liabilities		36,180		34,442		33,923
Total current liabilities		138,566		154,432		213,742
Noncurrent lease liabilities		185,866		186,845		197,265
Other liabilities		27,571		18,373		22,478
Total liabilities		352,003		359,650		433,485
Stockholders’ equity		296,412		289,399		260,400
Total liabilities and stockholders’ equity	$	648,415	$	649,049	$	693,885

NEWS RELEASE – May 2, 2023

Page 6

HAVERTY FURNITURE COMPANIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)	Three Months EndedMarch 31,
	2023			2022
Cash Flows from Operating Activities:
Net income	$	12,372		$	19,361
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		4,362			4,272
Share-based compensation expense		1,957			2,307
Other		(840	)		(1,877	)
Changes in operating assets and liabilities:
Inventories		4,079			(7,826	)
Customer deposits		(1,587	)		(369	)
Other assets and liabilities		5,721			1,120
Accounts payable and accrued liabilities		(14,990	)		3,590
Net cash provided by operating activities		11,074			20,578
Cash Flows from Investing Activities:
Capital expenditures		(6,655	)		(7,107	)
Proceeds from sale of land, property and equipment		13			—
Net cash used in investing activities		(6,642	)		(7,107	)
Cash Flows from Financing Activities:
Dividends paid		(4,528	)		(4,260	)
Common stock repurchased		—			(12,501	)
Other		(2,788	)		(517	)
Net cash used in financing activities		(7,316	)		(17,278	)
Decrease in cash, cash equivalents and restricted cash equivalents during the period		(2,884	)		(3,807	)
Cash, cash equivalents and restricted cash equivalents at beginning of period		129,930			172,862
Cash, cash equivalents and restricted cash equivalents at end of period	$	127,046		$	169,055

NEWS RELEASE – May 2, 2023

Page 7

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)	2023			2022
Income before income taxes, as reported	$	15,438		$	25,720
Interest income, net		(1,010	)		(74	)
Depreciation		4,362			4,272
EBITDA	$	18,790		$	29,918

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 3, 2023 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 123 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.  

NEWS RELEASE – May 2, 2023

Page 8

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 2023, 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 2022 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	May 02, 2023
Entity Listings [Line Items]
Document Type	8-K
Amendment Flag	false
Document Period End Date	May 02, 2023
Entity File Number	1-14445
Entity Registrant Name	Haverty Furniture Companies, Inc.
Entity Central Index Key	0000216085
Entity Incorporation, State or Country Code	MD
Entity Tax Identification Number	58-0281900
Entity Address, Address Line One	780 Johnson Ferry Road, NE
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
Entity Emerging Growth Company	false
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
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