8-K
HAVERTY FURNITURE COMPANIES INC (HVT)
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: April 6, 2020
(Date of earliest event reported: April 1, 2020)
______________
HAVERTY FURNITURE COMPANIES, INC.
(Exact name of registrant as specified in its charter)
______________
| Maryland | 1-14445 | 58-0281900 |
|---|---|---|
| (State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer<br><br> <br>Identification No.) |
| 780 Johnson Ferry Road, Suite 800,<br><br> <br>Atlanta, Georgia 30342 | ||
| (Address of principal executive officers) ( Zip Code) | ||
| Telephone number, including area code: (404)<br> 443-2900 |
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 (see General Instruction A.2. below):
□ 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 (17CFR240.14a-12)
□ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17CFR240.14d-2(b))
□ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17CFR240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock | HVT | NYSE |
| Class A Common Stock | HVTA | 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 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
On April 1, 2020, Haverty Furniture Companies, Inc. (the “Company” or “Havertys”) announced updates to the Company’s actions in response to the COVID-19 health emergency. These actions include temporary reductions in the base salaries of its officers. Effective April 1, 2020, the base salary for Clarence H. Smith, president and chief executive officer, will be reduced by 40%, and the base salaries of the Company’s other named executive officers will be reduced by 25%. In addition, the base salaries of all other members of Havertys’ officers and managers will be reduced by graduated amounts.
Item 7.01 Regulation FD Disclosure
On April 1, 2020, Havertys updated the impact and uncertainty caused by the COVID-19 pandemic on its business. The Company reported that its retail stores would remain closed through the month of April. This action also led to the furlough of virtually all of the Company’s store and distribution personnel, a majority of warehouse staff and a number of corporate office personnel. The CEO elected to reduce his base salary by 40%. The base salaries for the other NEOs will be reduced by 25% and the base salaries of all other officers and managers will be reduced in graduated amounts. The disclosure set forth in Item 5.02(e) above is incorporated by reference into and furnished under this Item 7.01.
Attached as Exhibit 99.1 is a copy of the Company’s news release dated April 1, 2020, relating to the impact of COVID-19. Except for the disclosure set forth in Item 5.02, such information, including the Exhibit attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.
Item 8.01 Other Events
In light of the rapidly evolving COVID-19 pandemic, we are filing this Current Report on Form 8-K to supplement the risk factors described in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2019. The following risk factor disclosure should be read in conjunction with the risk factors described in the Annual Report on Form 10-K, which may be further impacted by the COVID-19 pandemic.
In December 2019, a new coronavirus, now labelled COVID-19 was detected in China and has now spread globally. On March 1, 2020, the COVID-19 outbreak was declared a national health emergency by the United States. Federal, state and local governments, and businesses have implemented significant actions in an effort to mitigate this public health crisis. Although the ultimate severity of the COVID-19 outbreak is uncertain at this time, the pandemic has had and may continue to have adverse impacts on the Company's financial condition and results of operations, including, but not limited to:
| • | Currently all of our stores are closed and will remain closed until it is safe to reopen. Additionally, social distancing measures or<br> changes in consumer spending behaviors due to COVID-19 may continue to impact traffic in our stores after they resume normal operations and such actions could result in a loss of sales and profit. |
|---|---|
| • | The Company may experience significant reductions or volatility as customer demand is impacted by a decline in their<br> actual or perceived financial condition. |
| --- | --- |
| • | The Company may experience temporary or long-term disruptions in its supply chain, as the outbreak has resulted in travel<br> disruptions and has impacted manufacturing and distribution throughout the world. We anticipate that the receipt of merchandise sourced from impacted areas will be slowed or disrupted in the coming months and our merchandise suppliers are<br> expected to face similar challenges in receiving materials and fulfilling our orders. Furthermore, transportation delays and cost increases, more extensive travel restrictions, closures or disruptions of businesses and facilities or<br> social, economic, political or labor instability in the affected areas, may impact our or our suppliers' operations. |
| --- | --- |
| • | The Company may be required to change its plan for inventory receipts which would place financial pressure on our<br> merchandise suppliers. Such actions may negatively impact our relationships with our merchandise suppliers or adversely impact their financial performance and position. If this occurs, our current merchandise suppliers’ ability to meet<br> their obligations to the Company may be impacted or we may also be required to identify new merchandise suppliers’ relationships. |
| --- | --- |
| • | The Company's liquidity may be negatively impacted if its stores do not resume normal operations and the Company may be<br> required to pursue additional sources of financing to meet its financial obligations. Obtaining such financing is not guaranteed and is largely dependent upon market conditions and other factors. Further actions may be required to improve<br> the Company's cash position, including but not limited to, monetizing Company assets, and foregoing capital expenditures and other discretionary expenses. |
| --- | --- |
| • | The extent of the impact of COVID-19 on the Company's operations and financial results depends on future developments and<br> is highly uncertain due to the unknown duration and severity of the outbreak. The situation is changing rapidly, and future impacts may materialize that are not yet known. |
| --- | --- |
Item 9.01 Financial Statements and Exhibits
(d) Exhibits. The following exhibit is furnished as part of this Report:
99.1 Press Release dated April 1, 2020 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. | ||
|---|---|---|
| April 6, 2020 | By: |  |
| Jenny Hill Parker<br><br> <br>Senior Vice President, Finance and<br><br> <br>Corporate Secretary |
EXHIBIT 99.1
Havertys Provides COVID-19 Update and Extends Store Closures
ATLANTA, April 1, 2020 (GLOBE NEWSWIRE) -- HAVERTYS (NYSE: HVT and HVT.A) announced today it would extend the suspension of its operations through April 30, 2020 in response to the COVID-19 outbreak. Havertys closed its stores March 19 and halted deliveries March 21 with an anticipated reopening of stores on April 2, 2020. Affected team members were paid during these periods of operational pause and most Havertys’ corporate office personnel transitioned to working remotely.
The national health emergency has not abated and in response to the extended closure of its stores through April 30, 2020, Havertys is taking the following actions:
| • | Furlough of virtually all store and distribution personnel, and majority of warehouse staff |
|---|---|
| • | Furlough of corporate office personnel to a minimum level for necessary operations |
| --- | --- |
| • | Salary reduction of 40% for the chief executive officer, and tiered salary reductions for an indefinite period for officers and<br> managers not furloughed |
| --- | --- |
| • | A suspension of directors’ cash retainer fees |
| --- | --- |
| • | A freeze of Havertys’ 401(k) match |
| --- | --- |
| • | Deferral and cancellation of most orders for inventory |
| --- | --- |
| • | Reduction of controllable costs and elimination of non-essential capital expenditures |
| --- | --- |
| • | Suspension of share repurchases and evaluation of dividend program. |
| --- | --- |
Teammates will continue to receive enrolled health benefits while on furlough, with Havertys covering 100% of the premiums through this announced period of closure.
Customers can use the company’s website to access decorating tools and ideas, information on furniture cleaning, and make online purchases for delivery after April 30, 2020.
Clarence H. Smith, president and chief executive officer said, “The decision to furlough our valuable and loyal teammates was extremely difficult to make and not made lightly. The economic effect of this health emergency has had a sudden and severe impact on our business. The actions we are taking must be done to help reduce risk and allow Havertys to reopen its stores, when appropriate, and return to providing work for our teammates and vendors.
Havertys was founded in 1885 and has survived the impact of wars, the Great Depression, numerous recessions, and various natural disasters. We entered this period in history with a strong balance sheet and a determination that, as in the past, we will prevail and continue our mission of helping customers bring the vision of their home to life.”
Guidance
Given the uncertainty regarding the potential duration and impact of COVID-19, the company is withdrawing the 2020 guidance issued on February 18, 2020 and is not providing an updated outlook at this time. More information will be provided during the company’s first quarter 2020 conference call in May 2020.
About Havertys
Havertys (NYSE: HVT and HVT.A), established in 1885, is a full-service home furnishings retailer with 120 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.
Safe Harbor
This press release includes statements that constitute forward-looking statements within the meaning of the federal securities laws.
These forward-looking statements are subject to risks and uncertainties and change based on various important factors, many of which may be beyond the Company's control. The Company's future performance and actual results may differ materially from those expressed or implied in such forward-looking statements. Forward-looking statements should not be relied upon by investors 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: changes or declines in consumer discretionary spending, including those caused by the impact of COVID-19; the duration of our store closings due to COVID-19; risks relating to private brands and new retail concepts; the amount devoted to strategic investments and the timing and success of those investments; inventory turn; changes in the competitive market and competition amongst retailers, including an increase in promotional activity; changes in consumer demand or shopping patterns and the ability to identify new trends and have the right trending products in stores and online; changes in existing tax, labor, foreign trade and other laws and regulations, including those imposing new taxes, surcharges, or tariffs; supply chain or manufacturing disruptions, including those caused by extreme weather, natural disasters, COVID-19, and other public health concerns; limitations on the availability of attractive retail store sites; unauthorized disclosure of sensitive or confidential customer information; website downtime, disruptions or other problems with the eCommerce platform, deficiencies in design or implementation, or platform enhancements; disruptions or other problems with information systems; factors affecting vendors, including supply chain and currency risks; and talent needs. For additional information on these and other factors that could affect the Company's actual results, see the risk factors set forth in the Company's filings with the Securities and Exchange Commission ("SEC"), including the most recent Annual Report filed with the SEC on March 5, 2020. The Company disclaims and does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except as required by applicable law or regulation.
Contact:
Havertys 404-443-2900
Jenny Hill Parker
SVP, finance and
corporate secretary
SOURCE: Havertys