Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Jul. 31, 2018 | |
Entity Information [Line Items] | ||
Entity Registrant Name | HAVERTY FURNITURE COMPANIES INC | |
Entity Central Index Key | 216,085 | |
Current Fiscal Year End Date | --12-31 | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2018 | |
Common Stock [Member] | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 19,201,878 | |
Class A Common Stock [Member] | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 1,766,131 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Current assets | ||
Cash and cash equivalents | $ 74,643 | $ 79,491 |
Restricted cash and cash equivalents | 8,179 | 8,115 |
Accounts receivable, net | 1,918 | 2,408 |
Inventories | 107,482 | 103,437 |
Prepaid expenses | 12,167 | 11,314 |
Other current assets | 6,266 | 5,922 |
Total current assets | 210,655 | 210,687 |
Accounts receivable, long-term, net | 210 | 254 |
Property and equipment, net | 226,120 | 229,215 |
Deferred income taxes | 12,648 | 12,375 |
Other assets | 9,232 | 8,798 |
Total assets | 458,865 | 461,329 |
Current liabilities | ||
Accounts payable | 22,055 | 20,501 |
Customer deposits | 29,352 | 27,813 |
Accrued liabilities | 36,570 | 37,582 |
Current portion of lease obligations | 3,883 | 3,788 |
Total current liabilities | 91,860 | 89,684 |
Lease obligations, less current portion | 48,836 | 50,803 |
Other liabilities | 26,391 | 26,700 |
Total liabilities | 167,087 | 167,187 |
Capital Stock, par value $1 per share | ||
Preferred Stock, Authorized - 1,000 shares; Issued: None | 0 | 0 |
Additional paid-in capital | 89,650 | 88,978 |
Retained earnings | 292,465 | 287,390 |
Accumulated other comprehensive loss | (2,094) | (2,144) |
Less treasury stock at cost - Common Stock (2018 - 9,864; 2017 - 9,498) and Convertible Class A Common Stock (2018 and 2017 - 522) | (119,597) | (111,322) |
Total stockholders' equity | 291,778 | 294,142 |
Total liabilities and stockholders' equity | 458,865 | 461,329 |
Common Stock [Member] | ||
Capital Stock, par value $1 per share | ||
Common Stock | 29,065 | 28,950 |
Convertible Class A Common Stock [Member] | ||
Capital Stock, par value $1 per share | ||
Common Stock | $ 2,289 | $ 2,290 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares shares in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Stockholders' equity | ||
Preferred Stock, par value (in dollars per share) | $ 1 | $ 1 |
Preferred Stock, shares authorized (in shares) | 1,000 | 1,000 |
Preferred Stock, shares issued (in shares) | 0 | 0 |
Common Stock, par value (in dollars per share) | $ 1 | $ 1 |
Common Stock [Member] | ||
Stockholders' equity | ||
Common Stock, shares authorized (in shares) | 50,000 | 50,000 |
Common Stock, shares issued (in shares) | 29,065 | 28,950 |
Treasury Stock, common stock shares (in shares) | 9,864 | 9,498 |
Convertible Class A Common Stock [Member] | ||
Stockholders' equity | ||
Common Stock, shares authorized (in shares) | 15,000 | 15,000 |
Common Stock, shares issued (in shares) | 2,289 | 2,290 |
Treasury Stock, common stock shares (in shares) | 522 | 522 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Net sales | $ 198,775 | $ 196,829 | $ 398,218 | $ 397,257 |
Cost of goods sold | 90,978 | 89,710 | 181,514 | 180,542 |
Gross profit | 107,797 | 107,119 | 216,704 | 216,715 |
Credit service charges | 25 | 42 | 57 | 87 |
Gross profit and other revenue | 107,822 | 107,161 | 216,761 | 216,802 |
Expenses: | ||||
Selling, general and administrative | 98,753 | 96,837 | 199,756 | 197,212 |
Provision for doubtful accounts | 22 | 61 | 24 | 163 |
Other expense (income), net | 183 | 4 | (811) | (1,155) |
Total expenses | 98,958 | 96,902 | 198,969 | 196,220 |
Income before interest and income taxes | 8,864 | 10,259 | 17,792 | 20,582 |
Interest expense, net | 454 | 565 | 925 | 1,148 |
Income before income taxes | 8,410 | 9,694 | 16,867 | 19,434 |
Income tax expense | 2,196 | 3,509 | 4,340 | 7,263 |
Net income | 6,214 | 6,185 | 12,527 | 12,171 |
Other comprehensive income | ||||
Adjustments related to retirement plan; net of tax expense of $9 and $18 in 2018 and 2017 | 25 | 11 | 50 | 27 |
Comprehensive income | $ 6,239 | $ 6,196 | $ 12,577 | $ 12,198 |
Common Stock [Member] | ||||
Basic earnings per share: | ||||
Common Stock (in dollars per share) | $ 0.30 | $ 0.29 | $ 0.60 | $ 0.58 |
Diluted earnings per share: | ||||
Common Stock (in dollars per share) | 0.29 | 0.29 | 0.58 | 0.56 |
Cash dividends per share: | ||||
Common Stock (in dollars per share) | 0.18 | 0.12 | 0.36 | 0.24 |
Class A Common Stock [Member] | ||||
Basic earnings per share: | ||||
Common Stock (in dollars per share) | 0.28 | 0.28 | 0.56 | 0.55 |
Diluted earnings per share: | ||||
Common Stock (in dollars per share) | 0.28 | 0.27 | 0.56 | 0.54 |
Cash dividends per share: | ||||
Common Stock (in dollars per share) | $ 0.17 | $ 0.1125 | $ 0.34 | $ 0.2250 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Other comprehensive income | ||||
Adjustments related to retirement plans, tax expense | $ 9 | $ 9 | $ 18 | $ 18 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Cash Flows from Operating Activities: | ||
Net income | $ 12,527 | $ 12,171 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 15,061 | 15,201 |
Share-based compensation expense | 2,557 | 2,175 |
Deferred income taxes | (335) | (1,790) |
Gain on insurance recovery | (307) | (1,170) |
Proceeds from insurance recovery | 266 | 311 |
Provision for doubtful accounts | 24 | 163 |
Other | 18 | 629 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 510 | 1,276 |
Inventories | (4,044) | (1,802) |
Customer deposits | 1,539 | 3,558 |
Other assets and liabilities | (484) | 2,558 |
Accounts payable and accrued liabilities | 1,525 | (13,183) |
Net cash provided by operating activities | 28,857 | 20,097 |
Cash Flows from Investing Activities: | ||
Capital expenditures | (14,642) | (10,457) |
Proceeds from sale of property and equipment | 846 | 79 |
Proceeds from insurance for destroyed property and equipment | 55 | 989 |
Net cash used in investing activities | (13,741) | (9,389) |
Cash Flows from Financing Activities: | ||
Payments on lease obligations | (1,872) | (1,708) |
Taxes on vested restricted shares | (1,162) | (1,539) |
Dividends paid | (7,585) | (5,053) |
Common stock repurchased | (9,281) | 0 |
Net cash used in financing activities | (19,900) | (8,300) |
Increase (decrease) in cash, cash equivalents and restricted equivalents during the period | (4,784) | 2,408 |
Cash, cash equivalents and restricted cash equivalents at beginning of period | 87,606 | 71,515 |
Cash, cash equivalents and restricted cash equivalents at end of period | $ 82,822 | $ 73,923 |
Business and Reporting Policies
Business and Reporting Policies | 6 Months Ended |
Jun. 30, 2018 | |
Business and Reporting Policies [Abstract] | |
Business and Reporting Policies | NOTE A – Business and Reporting Policies Haverty Furniture Companies, Inc. (“Havertys,” “the Company,” “we,” “our,” or “us”) is a retailer of a broad line of residential furniture in the middle to upper-middle price ranges. We operate all of our stores using the Havertys brand and do not franchise our concept. We operate within a single reportable segment. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and, therefore, do not include all information and footnotes required by United States of America generally accepted accounting principles (“U.S. GAAP”) for complete financial statements. The Company believes that the disclosures made are adequate to make the information not misleading. The financial statements include the accounts of the Company and its wholly-owned subsidiary. All significant intercompany accounts and transactions have been eliminated in consolidation. We believe all adjustments, normal and recurring in nature, considered necessary for a fair presentation have been included. We suggest that these condensed consolidated financial statements be read in conjunction with the consolidated financial statements and accompanying footnotes included in our latest Annual Report on Form 10-K. The preparation of interim condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities, and reported amounts of revenue and expenses. Actual results could differ from those estimates. The Company is subject to various claims and legal proceedings covering a wide range of matters that arise in the ordinary course of its business activities. We believe that any liability that may ultimately result from the resolution of these matters will not have a material adverse effect on our financial condition, results of operations or cash flows. |
Recently Issued and Adopted Acc
Recently Issued and Adopted Accounting Pronouncements | 6 Months Ended |
Jun. 30, 2018 | |
Recently Issued and Adopted Accounting Pronouncements [Abstract] | |
Recently Issued and Adopted Accounting Pronouncements | NOTE B - Recently Issued and Adopted Accounting Pronouncements Changes to U.S. GAAP are established by the Financial Accounting Standards Board (FASB) in the form of accounting standards updates (ASU’s) to the FASB’s Accounting Standards Codification (ASC). The Company considers the applicability and impact of all ASU’s. Newly effective ASU’s not noted herein were assessed and determined to be either not applicable or are expected to have minimal impact on our consolidated financial position or results of operations. Leases. |
Recently Adopted Accounting Sta
Recently Adopted Accounting Standards | 6 Months Ended |
Jun. 30, 2018 | |
Recently Adopted Accounting Standards [Abstract] | |
Recently Adopted Accounting Standards | NOTE C – Recently Adopted Accounting Standards ASU 2014-09 On January 1, 2018, we adopted ASU 2014-09, Revenue - Revenue from Contracts with Customers (ASC Topic 606 or “the new standard”). The new standard requires a company to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration the company expects to receive in exchange for those goods or services. We sell home furnishings and recognize revenue at delivery. Havertys does not have a loyalty program or sell gift certificates. We also do not offer coupons for redemption for future purchases, such as those that other retailers might issue for general marketing purposes or for those issued based in conjunction with prior purchases. The product protection plan we offer is handled by a third-party and we have no performance obligation or inventory risk associated with this service. Havertys is acting as an agent for these sales and records this revenue at the time the covered products are delivered to the customer. Estimated refunds for returns and allowances are recorded based on estimated margin using our historical return patterns. Under the new standard, we record estimated refunds for sales returns on a gross basis rather than on a net basis. The standard requires the carrying value of the return asset to be presented separately from inventory and subject to impairment testing on its own, separately from inventory on hand. At June 30, 2018, the estimated return inventory was $ 0. We record customer deposits when payments are received in advance of the delivery of merchandise, which totaled $29.4 million and $27.8 million at June 30, 2018 and December 31, 2017, respectively. Of the customer deposit liabilities at December 31, 2017, approximately $27.5 million was recognized through net sales in the six months ended June 30, 2018. We adopted ASU 2014-09 using the modified retrospective method. Results for reporting periods beginning after January 1, 2018 are presented under the new standard, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting. We expect the impact of the adoption of the new standard to be immaterial to our net income on an ongoing basis. The cumulative effect of the changes made to our consolidated January 1, 2018 balance sheet for the adoption of the new revenue standard were as follows (in thousands): Balance at December 31, 2017 Adjustments Due to ASU 2014-09 Balance at January 1, 2018 Balance Sheet Assets Estimated to be returned inventory $ — $ 786 $ 786 Deferred income taxes 12,375 (44 ) 12,331 Liabilities Refund on estimated returns and allowances — 2,072 2,072 Reserve for cancelled sales and allowances 1,463 (1,463 ) — Equity Retained earnings 287,390 133 287,523 Upon adoption of ASC Topic 606, we adopted the following policy elections and practical expedients: · Our contracts are similar as to customer types, deliverables, timing of transfer of goods and other characteristics and we elected to use the portfolio method in accounting for our contracts. · We exclude from revenue amounts collected from customers for sales tax. · We finance less than 1% of sales. We do not adjust the promised amount of consideration for the effects of a significant financing component since receivables from financed sales are paid within one year of delivery. · We expense sales commissions within SG&A at the time revenue is recognized because the amortization period would be one year or less. · We do not disclose the value of unsatisfied performance obligations because delivery is made within one year of the customer purchase. The following table presents the differences resulting from the adoption of ASC Topic 606 on line items in our condensed consolidated balance sheet. The impact of the adoption on line items in our other financial statements was not material. June 30, 2018 (in thousands) As Reported Balances Without Adoption of ASC 606 Effect of Change Higher/(Lower) Balance Sheet Assets Estimated to be returned inventory (included in other current assets) 769 — 769 Deferred income taxes 12,648 12,692 (44 ) Liabilities Refund on estimated returns and allowances (included in other current liabilities) 2,026 — 2,026 Reserve for cancelled sales and allowances (included in other current liabilities) — 1,437 (1,437 ) Equity Retained Earnings 292,465 292,329 136 The following table presents our revenues disaggregated by revenue source. Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 (In thousands) Net Sales % of Net Sales Net Sales % of Net Sales Net Sales % of Net Sales Net Sales % of Net Sales Merchandise: Case Goods Bedroom Furniture $ 33,550 16.9 % $ 32,055 16.3 % $ 64,665 16.2 % $ 64,021 16.1 % Dining Room Furniture 22,121 11.1 22,268 11.3 43,755 11.0 43,680 11.0 Occasional 17,044 8.6 17,849 9.1 35,502 8.9 37,053 9.3 72,715 36.6 72,172 36.7 143,922 36.1 144,754 36.4 Upholstery 78,472 39.5 79,666 40.5 160,269 40.3 161,791 40.7 Mattresses 21,350 10.7 21,514 10.9 41,029 10.3 42,756 10.8 Accessories and Other (1) 26,238 13.2 23,477 11.9 52,998 13.3 47,956 12.1 $ 198,775 100.0 % $ 196,829 100.0 % $ 398,218 100.0 % $ 397,257 100.0 % (1) Includes delivery charges and product protection. ASU 2016-18 We adopted ASU 2016-18, Statement of Cash Flows (ASC Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force) on January 1, 2018 using the required retrospective transition method. This ASU requires companies to include amounts generally described as restricted cash and restricted cash equivalents in cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown on the statement of cash flows. Our restricted cash equivalents are funds used to collateralize a portion of our workers’ compensation obligations as required by our insurance carrier. These escrowed funds are shown as restricted cash and cash equivalents on our balance sheets and are investments in money market funds held by an agent. The annual agreement with our carrier governing these funds expires on December 31, 2018. The following table provides a reconciliation of cash, cash equivalents, and restricted cash equivalents reported within the balance sheet that sum to the total of the same such amounts shown in the statements of cash flows. June 30, 2018 December 31, 2017 June 30, 2017 December 31, 2016 (In thousands) (Unaudited) (Unaudited) Cash and cash equivalents $ 74,643 $ 79,491 $ 65,858 $ 63,481 Restricted cash equivalents 8,179 8,115 8,065 8,034 Total cash, cash equivalents and restricted cash equivalents $ 82,822 $ 87,606 $ 73,923 $ 71,515 |
Interim LIFO Calculations
Interim LIFO Calculations | 6 Months Ended |
Jun. 30, 2018 | |
Interim LIFO Calculations [Abstract] | |
Interim LIFO Calculations | NOTE D – Interim LIFO Calculations An actual valuation of inventory under the LIFO method can be made only at the end of each year based on actual inventory levels and costs at that time. Accordingly, interim LIFO calculations must necessarily be based on management’s estimates of inventory levels and inflation rates. Since these estimates may be affected by factors beyond management’s control, interim results are subject to change based upon the final year-end LIFO inventory valuations. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 6 Months Ended |
Jun. 30, 2018 | |
Fair Value of Financial Instruments [Abstract] | |
Fair Value of Financial Instruments | NOTE E – Fair Value of Financial Instruments The fair values of our cash and cash equivalents, restricted cash and cash equivalents, accounts receivable, accounts payable and customer deposits approximate their carrying values due to their short-term nature. The assets related to our self-directed, non-qualified deferred compensation plans for certain executives and employees are valued using quoted market prices multiplied by the number of shares held, a Level 1 valuation technique. The assets related to our deferred compensation plans totaled approximately $6.6 million at June 30, 2018 and $6.0 million at December 31, 2017 and are included in other assets. The related liabilities of the same amounts are included in other liabilities. |
Credit Arrangement
Credit Arrangement | 6 Months Ended |
Jun. 30, 2018 | |
Credit Arrangement [Abstract] | |
Credit Arrangement | NOTE F – Credit Arrangement We have a $60.0 million revolving credit facility secured by our inventory, accounts receivable, cash, and certain other personal property. Availability fluctuates based on a borrowing base calculation reduced by outstanding letters of credit. Amounts available to borrow are based on the lesser of the borrowing base or the $60.0 million line amount, reduced by $6.0 million if a fixed charge coverage ratio test for the immediately preceding 12 months are not met. The credit facility contains covenants that, among other things, limit our ability to incur certain types of debt or liens, pay dividends, enter into mergers and consolidations or use proceeds of borrowing for other than permitted uses. The borrowing base was $54.4 million at June 30, 2018, there were no outstanding letters of credit, and the net availability was $48.4 million. We have not had any borrowings under the facility, which matures March 31, 2021, since its origination in 2008. |
Other income, net
Other income, net | 6 Months Ended |
Jun. 30, 2018 | |
Other income, net [Abstract] | |
Other income, net | NOTE G – Other income, net Other income includes gains and losses related to fixed assets. We had gains from real estate sales and insurance recoveries on stores damaged or destroyed of approximately $0.7 million and $1.1 million for the six months ended June 30, 2018 and 2017, respectively. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2018 | |
Income Taxes [Abstract] | |
Income Taxes | NOTE H – Income Taxes The Tax Cuts and Jobs Act (the “Tax Act”) was signed into law on December 22, 2017. The Tax Act significantly revised the U.S. corporate income tax by lowering the statutory corporate tax rate from 35% to 21%. It also eliminated certain deductions and enhanced and extended through 2026 the option to claim accelerated depreciation deductions on qualified property. Under the guidance provided in the SEC’s Staff Accounting Bulletin No. 118 (“SAB 118”), we recorded provisional amounts for the impact of the Tax Act during the fourth quarter of 2017. We did not make any adjustments to the provisional amounts during the first six months of 2018 . Our tax provision for interim periods is determined using an estimate of our annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter we update our estimate of the annual effective tax rate, and if our estimated tax rate changes, we make a year to date adjustment. Our effective tax rate for the six months ended June 30, 2018 and 2017 was 25.7% and 37.4%, respectively. The primary difference in the effective rate and the statutory rate is due to state income taxes and additional tax expenses of $0.1 million in 2018 and tax benefit of $0.2 million in 2017 from vested stock awards. |
Stock Based Compensation Plan
Stock Based Compensation Plan | 6 Months Ended |
Jun. 30, 2018 | |
Stock Based Compensation Plan [Abstract] | |
Stock Based Compensation Plan | NOTE I – Stock Based Compensation Plan As more fully discussed in Note 12 of the notes to the consolidated financial statements in our 2017 Annual Report on Form 10-K, we have awards outstanding for Common Stock under stock-based employee compensation plans . The following table summarizes our award activity during the six months ended June 30, 2018: Service-Based Restricted Stock Awards Performance-Based Restricted Stock Awards Stock-Settled Appreciation Rights Shares or Units Weighted- Average Award Price Shares or Units Weighted- Average Award Price Rights Weighted- Average Award Price Outstanding at December 31, 2017 254,490 $ 21.88 179,774 $ 21.42 57,000 $ 18.14 Granted/Issued 116,035 22.95 103,940 22.95 — — Awards vested or rights exercised (1) (124,550 ) 22.50 (48,661 ) 24.10 — — Forfeited (1,100 ) 22.74 (7,033 ) 21.25 — — Outstanding at June 30, 2018 244,875 $ 22.07 228,020 $ 21.55 57,000 $ 18.14 Exercisable at June 30, 2018 — — 57,000 $ 18.14 Awards expected to vest 244,875 $ 22.07 206,330 $ 21.50 (1) Includes shares repurchased from employees for employee’s tax liability. Grants of equity awards are made to certain officers and key employees under stockholder approved long-term incentive plans. The service-based awards generally vest over one or four years. The number of performance-based awards to be issued is based on the achievement of the criteria established at the time of the grant and cliff vest after three years. All awards are settled in shares of our common stock. The total fair value of performance-based awards that vested in 2018 was approximately $1.0 million. The total fair value of service-based awards that vested in 2018 was approximately $2.4 million. The aggregate intrinsic value of service-based and performance-based awards at June 30, 2018 was approximately $5.3 million and $4.9 million, respectively. The aggregate intrinsic value of vested and outstanding stock-settled appreciation rights at June 30, 2018 was approximately $0.2 million. The compensation for all awards is being charged to selling, general and administrative expenses over the respective grant's vesting periods, primarily on a straight-line basis. Stock based compensation expense for the six months ended June 30, 2018 and 2017 was approximately $2.6 million and $2.2 million, respectively. As of June 30, 2018, the remaining unamortized compensation cost related to unvested equity awards was approximately $6.7 million and is expected to be recognized over a weighted-average period of 2.4 years. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | NOTE J – Earnings Per Share We report our earnings per share using the two-class method. The income per share for each class of common stock is calculated assuming 100% of our earnings are distributed as dividends to each class of common stock based on their contractual rights. The Common Stock of the Company has a preferential dividend rate of at least 105% of the dividend paid on the Class A Common Stock. The Class A Common Stock, which has ten votes per share as opposed to one vote per share for the Common Stock (on all matters other than the election of directors), may be converted at any time on a one-for-one basis into Common Stock at the option of the holder of the Class A Common Stock. Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Numerator: Common: Distributed earnings $ 3,494 $ 2,330 $ 6,984 $ 4,646 Undistributed earnings 2,226 3,355 4,547 6,536 Basic 5,720 5,685 11,531 11,182 Class A Common earnings 494 500 996 989 Diluted $ 6,214 $ 6,185 $ 12,527 $ 12,171 Class A Common: Distributed earnings $ 300 $ 203 $ 601 $ 407 Undistributed earnings 194 297 395 582 $ 494 $ 500 $ 996 $ 989 Denominator: Common: Weighted average shares outstanding - basic 19,312 19,377 19,364 19,337 Assumed conversion of Class A Common Stock 1,766 1,801 1,767 1,807 Dilutive options, awards and common stock equivalents 313 418 367 424 Total weighted-average diluted Common Stock 21,391 21,596 21,498 21,568 Class A Common: Weighted average shares outstanding 1,766 1,801 1,767 1,807 Basic earnings per share: Common Stock $ 0.30 $ 0.29 $ 0.60 $ 0.58 Class A Common Stock $ 0.28 $ 0.28 $ 0.56 $ 0.55 Diluted earnings per share: Common Stock $ 0.29 $ 0.29 $ 0.58 $ 0.56 Class A Common Stock $ 0.28 $ 0.27 $ 0.56 $ 0.54 |
Recently Issued and Adopted A17
Recently Issued and Adopted Accounting Pronouncements (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
Recently Issued and Adopted Accounting Pronouncements [Abstract] | |
Leases | Leases. |
Recently Adopted Accounting S18
Recently Adopted Accounting Standards (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Recently Adopted Accounting Standards [Abstract] | |
Impacts of Adopting ASC 606 | The cumulative effect of the changes made to our consolidated January 1, 2018 balance sheet for the adoption of the new revenue standard were as follows (in thousands): Balance at December 31, 2017 Adjustments Due to ASU 2014-09 Balance at January 1, 2018 Balance Sheet Assets Estimated to be returned inventory $ — $ 786 $ 786 Deferred income taxes 12,375 (44 ) 12,331 Liabilities Refund on estimated returns and allowances — 2,072 2,072 Reserve for cancelled sales and allowances 1,463 (1,463 ) — Equity Retained earnings 287,390 133 287,523 The following table presents the differences resulting from the adoption of ASC Topic 606 on line items in our condensed consolidated balance sheet. The impact of the adoption on line items in our other financial statements was not material. June 30, 2018 (in thousands) As Reported Balances Without Adoption of ASC 606 Effect of Change Higher/(Lower) Balance Sheet Assets Estimated to be returned inventory (included in other current assets) 769 — 769 Deferred income taxes 12,648 12,692 (44 ) Liabilities Refund on estimated returns and allowances (included in other current liabilities) 2,026 — 2,026 Reserve for cancelled sales and allowances (included in other current liabilities) — 1,437 (1,437 ) Equity Retained Earnings 292,465 292,329 136 |
Disaggregated by Revenue Source | The following table presents our revenues disaggregated by revenue source. Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 (In thousands) Net Sales % of Net Sales Net Sales % of Net Sales Net Sales % of Net Sales Net Sales % of Net Sales Merchandise: Case Goods Bedroom Furniture $ 33,550 16.9 % $ 32,055 16.3 % $ 64,665 16.2 % $ 64,021 16.1 % Dining Room Furniture 22,121 11.1 22,268 11.3 43,755 11.0 43,680 11.0 Occasional 17,044 8.6 17,849 9.1 35,502 8.9 37,053 9.3 72,715 36.6 72,172 36.7 143,922 36.1 144,754 36.4 Upholstery 78,472 39.5 79,666 40.5 160,269 40.3 161,791 40.7 Mattresses 21,350 10.7 21,514 10.9 41,029 10.3 42,756 10.8 Accessories and Other (1) 26,238 13.2 23,477 11.9 52,998 13.3 47,956 12.1 $ 198,775 100.0 % $ 196,829 100.0 % $ 398,218 100.0 % $ 397,257 100.0 % (1) Includes delivery charges and product protection. |
Reconciliation of Cash, Cash Equivalents, and Restricted Cash Equivalents | The following table provides a reconciliation of cash, cash equivalents, and restricted cash equivalents reported within the balance sheet that sum to the total of the same such amounts shown in the statements of cash flows. June 30, 2018 December 31, 2017 June 30, 2017 December 31, 2016 (In thousands) (Unaudited) (Unaudited) Cash and cash equivalents $ 74,643 $ 79,491 $ 65,858 $ 63,481 Restricted cash equivalents 8,179 8,115 8,065 8,034 Total cash, cash equivalents and restricted cash equivalents $ 82,822 $ 87,606 $ 73,923 $ 71,515 |
Stock Based Compensation Plan (
Stock Based Compensation Plan (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Stock Based Compensation Plan [Abstract] | |
Stock Award Activity | The following table summarizes our award activity during the six months ended June 30, 2018: Service-Based Restricted Stock Awards Performance-Based Restricted Stock Awards Stock-Settled Appreciation Rights Shares or Units Weighted- Average Award Price Shares or Units Weighted- Average Award Price Rights Weighted- Average Award Price Outstanding at December 31, 2017 254,490 $ 21.88 179,774 $ 21.42 57,000 $ 18.14 Granted/Issued 116,035 22.95 103,940 22.95 — — Awards vested or rights exercised (1) (124,550 ) 22.50 (48,661 ) 24.10 — — Forfeited (1,100 ) 22.74 (7,033 ) 21.25 — — Outstanding at June 30, 2018 244,875 $ 22.07 228,020 $ 21.55 57,000 $ 18.14 Exercisable at June 30, 2018 — — 57,000 $ 18.14 Awards expected to vest 244,875 $ 22.07 206,330 $ 21.50 (1) Includes shares repurchased from employees for employee’s tax liability. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Reconciliation of Earnings (Loss) and Number of Shares used in Calculating Diluted Earnings (Loss) Per Share | The Common Stock of the Company has a preferential dividend rate of at least 105% of the dividend paid on the Class A Common Stock. The Class A Common Stock, which has ten votes per share as opposed to one vote per share for the Common Stock (on all matters other than the election of directors), may be converted at any time on a one-for-one basis into Common Stock at the option of the holder of the Class A Common Stock. Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Numerator: Common: Distributed earnings $ 3,494 $ 2,330 $ 6,984 $ 4,646 Undistributed earnings 2,226 3,355 4,547 6,536 Basic 5,720 5,685 11,531 11,182 Class A Common earnings 494 500 996 989 Diluted $ 6,214 $ 6,185 $ 12,527 $ 12,171 Class A Common: Distributed earnings $ 300 $ 203 $ 601 $ 407 Undistributed earnings 194 297 395 582 $ 494 $ 500 $ 996 $ 989 Denominator: Common: Weighted average shares outstanding - basic 19,312 19,377 19,364 19,337 Assumed conversion of Class A Common Stock 1,766 1,801 1,767 1,807 Dilutive options, awards and common stock equivalents 313 418 367 424 Total weighted-average diluted Common Stock 21,391 21,596 21,498 21,568 Class A Common: Weighted average shares outstanding 1,766 1,801 1,767 1,807 Basic earnings per share: Common Stock $ 0.30 $ 0.29 $ 0.60 $ 0.58 Class A Common Stock $ 0.28 $ 0.28 $ 0.56 $ 0.55 Diluted earnings per share: Common Stock $ 0.29 $ 0.29 $ 0.58 $ 0.56 Class A Common Stock $ 0.28 $ 0.27 $ 0.56 $ 0.54 |
Recently Adopted Accounting S21
Recently Adopted Accounting Standards, ASU 2014-09, Cumulative Impact of Changes on Balance Sheet (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Dec. 31, 2017 | |
Recently Adopted Accounting Standards, ASU 2014-09 [Abstract] | ||
Customer deposits | $ 29,352 | $ 27,813 |
Customer deposits, revenue recognized | 27,500 | |
Assets [Abstract] | ||
Estimated to be returned inventory | 769 | 0 |
Deferred income taxes | 12,648 | 12,375 |
Liabilities [Abstract] | ||
Refund on estimated returns and allowances | 2,026 | 0 |
Reserve for cancelled sales and allowances | 0 | 1,463 |
Equity [Abstract] | ||
Retained earnings | $ 292,465 | 287,390 |
Maximum [Member] | ||
Recently Adopted Accounting Standards, ASU 2014-09 [Abstract] | ||
Percentage of sales financed | 1.00% | |
Payment period for receivables | 1 year | |
Delivery period | 1 year | |
ASU 2014-09 [Member] | ||
Assets [Abstract] | ||
Estimated to be returned inventory | 786 | |
Deferred income taxes | 12,331 | |
Liabilities [Abstract] | ||
Refund on estimated returns and allowances | 2,072 | |
Reserve for cancelled sales and allowances | 0 | |
Equity [Abstract] | ||
Retained earnings | 287,523 | |
Adjustments Due to ASC 606 [Member] | ASU 2014-09 [Member] | ||
Assets [Abstract] | ||
Estimated to be returned inventory | $ 769 | 786 |
Deferred income taxes | (44) | (44) |
Liabilities [Abstract] | ||
Refund on estimated returns and allowances | 2,026 | 2,072 |
Reserve for cancelled sales and allowances | (1,437) | (1,463) |
Equity [Abstract] | ||
Retained earnings | 136 | $ 133 |
Balance Without Adoption of ASC 606 [Member] | ASU 2014-09 [Member] | ||
Assets [Abstract] | ||
Estimated to be returned inventory | 0 | |
Deferred income taxes | 12,692 | |
Liabilities [Abstract] | ||
Refund on estimated returns and allowances | 0 | |
Reserve for cancelled sales and allowances | 1,437 | |
Equity [Abstract] | ||
Retained earnings | $ 292,329 |
Recently Adopted Accounting S22
Recently Adopted Accounting Standards, Revenues Disaggregated by Source (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | ||
Disaggregated by revenue source [Abstract] | |||||
Net sales | $ 198,775 | $ 196,829 | $ 398,218 | $ 397,257 | |
Percentage of net sales | 100.00% | 100.00% | 100.00% | 100.00% | |
Case Goods [Member] | |||||
Disaggregated by revenue source [Abstract] | |||||
Net sales | $ 72,715 | $ 72,172 | $ 143,922 | $ 144,754 | |
Percentage of net sales | 36.60% | 36.70% | 36.10% | 36.40% | |
Bedroom Furniture [Member] | |||||
Disaggregated by revenue source [Abstract] | |||||
Net sales | $ 33,550 | $ 32,055 | $ 64,665 | $ 64,021 | |
Percentage of net sales | 16.90% | 16.30% | 16.20% | 16.10% | |
Dining Room Furniture [Member] | |||||
Disaggregated by revenue source [Abstract] | |||||
Net sales | $ 22,121 | $ 22,268 | $ 43,755 | $ 43,680 | |
Percentage of net sales | 11.10% | 11.30% | 11.00% | 11.00% | |
Occasional [Member] | |||||
Disaggregated by revenue source [Abstract] | |||||
Net sales | $ 17,044 | $ 17,849 | $ 35,502 | $ 37,053 | |
Percentage of net sales | 8.60% | 9.10% | 8.90% | 9.30% | |
Upholstery [Member] | |||||
Disaggregated by revenue source [Abstract] | |||||
Net sales | $ 78,472 | $ 79,666 | $ 160,269 | $ 161,791 | |
Percentage of net sales | 39.50% | 40.50% | 40.30% | 40.70% | |
Mattresses [Member] | |||||
Disaggregated by revenue source [Abstract] | |||||
Net sales | $ 21,350 | $ 21,514 | $ 41,029 | $ 42,756 | |
Percentage of net sales | 10.70% | 10.90% | 10.30% | 10.80% | |
Accessories and Other [Member] | |||||
Disaggregated by revenue source [Abstract] | |||||
Net sales | [1] | $ 26,238 | $ 23,477 | $ 52,998 | $ 47,956 |
Percentage of net sales | [1] | 13.20% | 11.90% | 13.30% | 12.10% |
[1] | Includes delivery charges and product protection. |
Recently Adopted Accounting S23
Recently Adopted Accounting Standards, ASU 2016-18, Statement of Cash Flows (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | Dec. 31, 2016 |
Statement of Cash Flows [Abstract] | ||||
Cash and cash equivalents | $ 74,643 | $ 79,491 | ||
Restricted cash equivalents | 8,179 | 8,115 | ||
Total cash, cash equivalents and restricted cash equivalents | 82,822 | 87,606 | $ 73,923 | $ 71,515 |
ASU 2016-18 [Member] | ||||
Statement of Cash Flows [Abstract] | ||||
Cash and cash equivalents | 74,643 | 79,491 | 65,858 | 63,481 |
Restricted cash equivalents | 8,179 | 8,115 | 8,065 | 8,034 |
Total cash, cash equivalents and restricted cash equivalents | $ 82,822 | $ 87,606 | $ 73,923 | $ 71,515 |
Fair Value of Financial Instr24
Fair Value of Financial Instruments (Details) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Level 1 [Member] | ||
Fair Values of Financial Instruments [Abstract] | ||
Deferred compensation plans | $ 6.6 | $ 6 |
Credit Arrangement (Details)
Credit Arrangement (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2018USD ($) | |
Credit Agreement [Member] | |
Line of Credit Facility, Amount [Abstract] | |
Maximum borrowing capacity | $ 60 |
Reduction in borrowing base due to deficit in fixed charges coverage ratio test | $ 6 |
Number of trailing months to compute fixed charges coverage ratio | 12 months |
Current borrowing base | $ 54.4 |
Net availability | $ 48.4 |
Maturity date | Mar. 31, 2021 |
Letter of Credit [Member] | |
Line of Credit Facility, Amount [Abstract] | |
Outstanding letters of credit | $ 0 |
Other income, net (Details)
Other income, net (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Other income, net [Abstract] | ||||
Other income from real estate sales and insurance recoveries | $ (183) | $ (4) | $ 811 | $ 1,155 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Income Taxes [Abstract] | |||
Statutory corporate tax rate | 21.00% | 35.00% | |
Effective tax rate | 25.70% | 37.40% | |
Excess tax expense (benefit) from vested stock awards and state income taxes | $ 0.1 | $ (0.2) |
Stock Based Compensation Plan28
Stock Based Compensation Plan (Details) - USD ($) $ / shares in Units, $ in Millions | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | ||
Additional Disclosures [Abstract] | |||
Stock based compensation expense | $ 2.6 | $ 2.2 | |
Total compensation cost related to unvested equity awards | $ 6.7 | ||
Weighted-average period of recognition of cost | 2 years 4 months 24 days | ||
Service-Based Restricted Stock Awards [Member] | |||
Shares or Units and Rights [Roll Forward] | |||
Outstanding, beginning balance (in shares) | 254,490 | ||
Granted/Issued (in shares) | 116,035 | ||
Awards vested or rights exercised (in shares) | [1] | (124,550) | |
Forfeited (in shares) | (1,100) | ||
Outstanding, ending balance (in shares) | 244,875 | ||
Exercisable, ending balance (in shares) | 0 | ||
Awards expected to vest (in shares) | 244,875 | ||
Weighted-Average Award Price [Roll Forward] | |||
Outstanding, beginning balance (in dollars per share) | $ 21.88 | ||
Granted/Issued (in dollars per share) | 22.95 | ||
Awards vested or rights exercised (in dollars per share) | [1] | 22.50 | |
Forfeited (in dollars per share) | 22.74 | ||
Outstanding, ending balance (in dollars per share) | 22.07 | ||
Awards expected to vest (in dollars per share) | $ 22.07 | ||
Additional Disclosures [Abstract] | |||
Fair value of vested shares | $ 2.4 | ||
Aggregate intrinsic value of outstanding awards | $ 5.3 | ||
Service-Based Restricted Stock Awards [Member] | Minimum [Member] | |||
Additional Disclosures [Abstract] | |||
Vesting period of awards | 1 year | ||
Service-Based Restricted Stock Awards [Member] | Maximum [Member] | |||
Additional Disclosures [Abstract] | |||
Vesting period of awards | 4 years | ||
Performance-Based Restricted Stock Awards [Member] | |||
Shares or Units and Rights [Roll Forward] | |||
Outstanding, beginning balance (in shares) | 179,774 | ||
Granted/Issued (in shares) | 103,940 | ||
Awards vested or rights exercised (in shares) | [1] | (48,661) | |
Forfeited (in shares) | (7,033) | ||
Outstanding, ending balance (in shares) | 228,020 | ||
Exercisable, ending balance (in shares) | 0 | ||
Awards expected to vest (in shares) | 206,330 | ||
Weighted-Average Award Price [Roll Forward] | |||
Outstanding, beginning balance (in dollars per share) | $ 21.42 | ||
Granted/Issued (in dollars per share) | 22.95 | ||
Awards vested or rights exercised (in dollars per share) | [1] | 24.10 | |
Forfeited (in dollars per share) | 21.25 | ||
Outstanding, ending balance (in dollars per share) | 21.55 | ||
Awards expected to vest (in dollars per share) | $ 21.50 | ||
Additional Disclosures [Abstract] | |||
Vesting period of awards | 3 years | ||
Fair value of vested shares | $ 1 | ||
Aggregate intrinsic value of outstanding awards | $ 4.9 | ||
Stock-Settled Appreciation Rights [Member] | |||
Shares or Units and Rights [Roll Forward] | |||
Outstanding, beginning balance (in shares) | 57,000 | ||
Granted/Issued (in shares) | 0 | ||
Awards vested or rights exercised (in shares) | [1] | 0 | |
Forfeited (in shares) | 0 | ||
Outstanding, ending balance (in shares) | 57,000 | ||
Exercisable, ending balance (in shares) | 57,000 | ||
Weighted-Average Award Price [Roll Forward] | |||
Outstanding, beginning balance (in dollars per share) | $ 18.14 | ||
Granted/Issued (in dollars per share) | 0 | ||
Awards vested or rights exercised (in dollars per share) | [1] | 0 | |
Forfeited (in dollars per share) | 0 | ||
Outstanding, ending balance (in dollars per share) | 18.14 | ||
Exercisable, ending balance (in dollars per share) | $ 18.14 | ||
Additional Disclosures [Abstract] | |||
Aggregate intrinsic value of outstanding awards | $ 0.2 | ||
Aggregate intrinsic value of vested awards | $ 0.2 | ||
[1] | Includes shares repurchased from employees for employee's tax liability. |
Earnings Per Share (Details)
Earnings Per Share (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018USD ($)Vote$ / sharesshares | Jun. 30, 2017USD ($)$ / sharesshares | Jun. 30, 2018USD ($)Vote$ / sharesshares | Jun. 30, 2017USD ($)$ / sharesshares | |
Earnings Per Share, by Common Class Method [Abstract] | ||||
Percentage of earnings or losses assumed in calculation | 100.00% | 100.00% | ||
Preferential dividend rate of dividend paid on Class A Common Stock | 105.00% | |||
Common Stock [Member] | ||||
Earnings Per Share, by Common Class Method [Abstract] | ||||
Number of votes per share | Vote | 1 | 1 | ||
Numerator [Abstract] | ||||
Distributed earnings | $ 3,494 | $ 2,330 | $ 6,984 | $ 4,646 |
Undistributed earnings | 2,226 | 3,355 | 4,547 | 6,536 |
Basic | 5,720 | 5,685 | 11,531 | 11,182 |
Class A Common earnings | 494 | 500 | 996 | 989 |
Diluted | $ 6,214 | $ 6,185 | $ 12,527 | $ 12,171 |
Denominator [Abstract] | ||||
Weighted average shares outstanding - basic (in shares) | shares | 19,312 | 19,377 | 19,364 | 19,337 |
Assumed conversion of Class A Common Stock (in shares) | shares | 1,766 | 1,801 | 1,767 | 1,807 |
Dilutive options, awards and common stock equivalents (in shares) | shares | 313 | 418 | 367 | 424 |
Total weighted-average diluted Common Stock (in shares) | shares | 21,391 | 21,596 | 21,498 | 21,568 |
Basic earnings per share [Abstract] | ||||
Common Stock (in dollars per share) | $ / shares | $ 0.30 | $ 0.29 | $ 0.60 | $ 0.58 |
Diluted earnings per share [Abstract] | ||||
Common Stock (in dollars per share) | $ / shares | $ 0.29 | $ 0.29 | $ 0.58 | $ 0.56 |
Class A Common [Member] | ||||
Earnings Per Share, by Common Class Method [Abstract] | ||||
Number of votes per share | Vote | 10 | 10 | ||
Numerator [Abstract] | ||||
Distributed earnings | $ 300 | $ 203 | $ 601 | $ 407 |
Undistributed earnings | 194 | 297 | 395 | 582 |
Class A Common earnings | $ 494 | $ 500 | $ 996 | $ 989 |
Denominator [Abstract] | ||||
Weighted average shares outstanding (in shares) | shares | 1,766 | 1,801 | 1,767 | 1,807 |
Basic earnings per share [Abstract] | ||||
Common Stock (in dollars per share) | $ / shares | $ 0.28 | $ 0.28 | $ 0.56 | $ 0.55 |
Diluted earnings per share [Abstract] | ||||
Common Stock (in dollars per share) | $ / shares | $ 0.28 | $ 0.27 | $ 0.56 | $ 0.54 |