Havertys Reports Loss for Second Quarter 2009

Furniture World Magazine

HAVERTY FURNITURE COMPANIES, INC. reported a loss for the second quarter ended June 30, 2009. The net loss for the second quarter of 2009 was $6.6 million or $0.31 per diluted share of Common Stock, as compared to the second quarter 2008 net loss of $2.3 million or $0.11 per diluted share of Common Stock. For the six months ended June 30, 2009, the net loss was $13.8 million or $0.65 per diluted share of Common Stock versus a net loss of $1.3 million or $0.06 per diluted share of Common Stock for the same period in 2008. As previously reported, net sales for the second quarter of 2009 were $129.7 million, a decrease of 23.0% compared to sales of $168.4 million for the corresponding quarter in 2008. Comparable-store sales decreased 22.6% for the quarter. Total written business for the third quarter to date is down 19.6% versus the same period last year. Clarence H. Smith, president and chief executive officer, said, "Our efforts remain concentrated on necessary operational adjustments to the difficult market conditions, closely managing our capital and clearly communicating Havertys' strong value proposition to the consumer. We believe these initiatives are imperative to maintaining our financial and brand strength. "The second quarter is historically the weakest of the year. We began during this time to highlight our high value price point merchandise and became somewhat more promotional to reach the spending-conscious consumer. Our careful merchandising and inventory management kept second quarter gross margins slightly higher both sequentially for the year and compared to last year's period. "During the second quarter our SG&A expenses were reduced by $17.4 million or 19.2% compared to last year's second quarter and were down $31.5 million or 17.0% for the first half of the year. We have improved our warehousing and delivery throughput efficiencies as we adjusted our scale of operations to lower volume levels. Alterations in our advertising and marketing spend have also generated additional cost reductions. "We have continued to outsource most customer financing and our accounts receivable have been reduced by $3.3 million in the second quarter and $9.5 million in the first six months of 2009. Inventories are $6.0 lower than at March 31, 2009 and $10.3 lower than at the end of 2008 as we reduced merchandise purchases given the weakened demand. We have no funded borrowings and our cash at June 30, 2009 is $22.4 million, up $12.9 million during the second quarter and $18.7 million during the first half of the year. "Our efforts to emphasize the value attribute in addition to the quality and service hallmarks of the Havertys brand are important to our current sales efforts. We are carefully conveying in this value message that there has not been a fundamental change in our merchandise or how we interact with the customer. This approach and conservative financial management are essential to our survival of this economic firestorm and future success." Havertys 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 web site at www.havertys.com.