Haverty Furniture Companies, Inc. Reports 2000 Second Quarter Results

Furniture World News

Haverty Furniture Companies, Inc. (NYSE: HVT HVT.A) reported record operating earnings for the second quarter and six-month period ended June 30, 2000. Income for the quarter ended June 30, 2000 was $5.8 million or $0.28 per diluted share, a 17.2% and 33.3% increase, respectively, over the pro forma second quarter 1999 net income of $4.9 million and $0.21 per diluted share. For the six months ended June 30, 2000, income before the cumulative effect of an accounting change was $12.3 million or $0.58 per diluted share, compared to 1999 pro forma net income of $10.4 million or $0.45 per diluted share, a 18.5% and 28.9% increase, respectively, over the prior-year period. As previously announced, the Company changed its accounting method for recognizing revenues in 2000 and is now recording merchandise sales upon delivery to the customer. Historically, sales were recognized and "billed" prior to delivery when certain criteria were met, such as receipt of full payment, credit approval for charge sales and merchandise in stock. The change is consistent with new guidance on revenue recognition provided by the Securities and Exchange Commission Staff Accounting Bulletin No. 101 - Revenue Recognition in Financial Statements. The implementation of this change was accounted for as a change in accounting principle and applied cumulatively as if the change occurred at January 1, 2000 and was recorded in the first quarter. As a result of the change in accounting method, the Company recorded a one-time non-cash reduction in earnings of approximately $3.4 million. Net sales for the second quarter of 2000 were $164.4 million, an increase of 16.0% over pro forma delivered sales of $141.8 million for the second quarter of 1999. For the six months ended June 30, 2000, sales grew to $328.2 million, a 14.2% increase over pro forma delivered sales of $287.4 million in the prior-year period. As previously reported, comparable- store sales on the billed basis increased 9.6% for the quarter and six-month period. It is not practical for the Company to provide comparable-store sales information on the new "delivered" basis during 2000. John E. Slater, Jr., President and CEO, said, "Our comp-store sales continued to be strong, building on the prior year's double-digit performance. These results confirm the economic strength of our target customer, as well as Havertys' ability to gain market share. "As we enter the second half of the year, we look forward to continued sales growth and earnings expansion," Slater concluded. Havertys is a full-service home furnishings retailer with 103 showrooms in 14 southern and central states 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 http://www.havertys.com .