Havertys loses $2.3 million
By Clint Engel -- Furniture Today, August 10, 2008
ATLANTA — Havertys reported a second-quarter net loss of $2.3 million and said that with no end in sight to “brutal” business conditions, its focus is on controlling costs and preserving cash.
The loss for the period ended June 30 compared with a net loss of $1.4 million for the same period a year ago.
For the first six months, the Top 100 company posted a $1.3 million loss, compared with a $520,000 loss a year ago.
As previously reported, net sales for the quarter decreased 10% to $168.4 million and same-stores said fell 12.7%.
The company, with 124 stores in 17 Southern and Midwestern states, also announced that its July sales were $62.9 million, down 7.3% from the same month last year, as same-store sales decreased 10%. The company also announced that it will no longer release monthly sales figures.
Through the first seven months, sales declined 6.6% to $416.5 million and same-store sales decreased 9.5%.
“The current economic conditions, which have had a brutal impact on the residential furniture industry, show few signs of abating in the near term,” said President and CEO Clarence Smith. “Our focus is on cost containment and maintaining our strong balance sheet while enhancing our competitive positions in the markets we serve.”
Smith said gross margin in the second quarter improved to 51.2% from 48.6%, reflecting “our continuing commitment to closely managing our inventories” and the decision to shift more of the customers on long-term financing plans to third-party lenders.
Smith said selling, general and administrative expenses were mostly lower, but the reductions were partly offset by increases in delivery fuel costs and third-party credit expense.
In a conference call with the investment community, Smith noted several cost-cutting initiatives under way, including the use of new Web conferencing technology to cut travel and training costs; adjusting distribution and delivery schedules and staffing; revising its outsourced credit programs, moving to “more cost effective” promotions; adjusting advertising by market; and reviewing real estate leases for possible rent reductions.
He added that the company has cut its store growth plans and that its $7 million in capital expenditures related to stores are for projects that were initiated in prior periods and normal store maintenance. Planned capital expenditures during 2008 for distribution and information technology are $5.7 million.
| Haverty Furniture | |||
|---|---|---|---|
| Earnings per share are fully diluted, and all figures in parentheses are losses or declines. | |||
| (a) Includes income tax benefit of $1.6 million in the 2008 quarter, $818,000 in the 2007 quarter, $799,000 in the 2008 six months and $296,000 in the 2007 six months. |
|||
| Quarter ended 6/30 | 2008 | 2007 | Change |
| Sales | $168,412,000 | $187,104,000 | (10.0%) |
| Operating income | (3,968,000) | (2,806,000) | — |
| Net income (a) | (2,309,000) | (1,351,000) | — |
| Earnings per share | (0.11) | (0.06) | — |
| 6 months ended 6/30 | 2008 | 2007 | Change |
| Sales | $353,665,000 | $378,177,000 | (6.5%) |
| Operating income | (2,570,000) | (2,502,000) | — |
| Net income (a) | (1,277,000) | (520,000) | — |
| Earnings per share | (0.06) | (0.02) | — |
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Havertys posts $2.3 million loss
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