EX-99.2 3 hvtex99212417.htm
EXHIBIT 99.2
 
 KBCM 2017 Consumer Conference 
 

 Cautionary Note on Forward-Looking Statements (Non-GAAP, Safe Harbor)  This presentation may include forward-looking statements. These statements represent the Company’s belief regarding future events that, by their nature, are uncertain and outside of our control. Havertys’ actual results and financial condition may differ, possibly materially, from what is indicated in those forward-looking statements. For a discussion of some of the risks and factors that could affect Havertys’ future results and financial condition, please see the description of “Risk Factors” in our annual report on Form 10-K for the year ended December 31, 2016. This presentation refers to certain non‐GAAP information which excludes the effects of pension settlement costs and certain other items recorded during the periods presented. Reconciliations of this non‐GAAP information to the most directly comparable GAAP measure are provided in the Appendix. Non-GAAP financial measures are supplemental, should not be considered a substitute for financial information presented in accordance with GAAP and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. Our management team uses these non-GAAP financial measures in assessing Havertys’ operating results, as well as when planning, forecasting and analyzing future periods. The statements in the presentation are current only as of its date, November 15, 2017. 
 

  Established 1885 IPO October 1929 Cash dividend since 1935 
 

    Retail Footprint: 124 Stores across 16 states 4.5 M retail sq.ft.   18 stores  29 stores  24 stores  18 stores  29 stores          
 

  
 

 

    August sales were slightly above the previous peak, and 39% above the 2009 trough. 
 

 HAVERTYS’ Strategic Advantages  Attractive Target CustomerBrand StrengthAppealing Store Base in Good MarketsExclusive Merchandise – Flexibly SourcedIn-Home DesignOmnichannel CapabilitiesState-of-Art Store / Distribution SystemsFinancially Sound Experienced Management Team 
 

   Key attributes of our target consumer  Style-conscious, trend aware Pays attention to value but favors right item over right price  College educatedHomeownerMarriedHousehold income > $75k  Seeks information from multiple sources – online & offlineLooks to social media for trends, opinions & ideas 
 

       Brand /Retailer Landscape                                                                              $$$$  $$$  $$  $  Furniture Price Points 
 

 “The STORE is the most powerful physical expression of the brand”.” Steve Jobs 
 

 

 

 

 

 

 

   Strategic Use of Name Brands 
 

 Exclusive MerchandisePrimarily Havertys BrandMid- to upper middle price pointsLarge array of styles  Sourced to our specsVariety of custom optionsRegional diversity 
 

 Exclusive Merchandise Variety of Styles 
 

 Exclusive Merchandise Variety of Styles 
 

 Exclusive Merchandise Variety of Styles    
 

 Strategic Sourcing  Substantially all case goods are importedDirect Imports - 34% of 2016 case goods salesWork with outside designers to develop collectionsSelect factoriesUse dedicated quality control team to inspect product in factories 
 

 Price Point Array  $2,399  $799  $1,199 
 

 Price Point Array  $2,149  $999  $1,599 
 

   Price Point Array  $1,949  $2,999  $4,999 
 

 Price Point Array  $4,499  $1,799  $999 
 

 H Design: Free in-home service   YTD Q3 2017 – 20.7% of sales, FY 2016 – 19.7% and 16.2% in 2015H Designer sales ticket twice overall averageStrongest in Florida and in major markets120 designers at Q3 2017 
 

 Average Ticket Drivers   Custom orders – YTD Q3 – 23.5% of upholstery sales – total custom order sales up 6.2% Accessories & rugs – YTD Q3 – sales up 7.7%  
 

 Omnichannel  Developing a customer experience of frictionless shopping and brand consistencyAcross devicesAcross channels At any point in the shopping journey 
 

 Key components of an omnichannel retailer (NRF)   Shipping and Fulfillment Options  Ability to research & shop consistently across channels  Website and Mobile Optimized Experiences  Customer Service Options  HVTCurrentCapabilities  Product information Product availability  Fully responsive site2D & 3D PlannersCustomization functionality   Schedule delivery across store footprintDelivery confirmation at POPSelf service  FAQs & reviewsCentralized customer service across channels 
 

 Havertys.com - Display and feel mimics store presentation 
 

 Havertys.com 
 

 

 

   …and mobile 
 

 Professional Home Delivery  
 

 Optimize Flow of Product   3 DC’s in largest markets4 cross dock facilitiesExpanded FDCExpanding WDC 
 

   Total Stores   $116,000,000     Other improvements   $24,600,000     102 stores  Remodels/expansions         $44,700,000    21 stores  New Locations $46,700,000   Store Capital Expenditures 2010 - 2016 
 

 Expansion – Transformation 
 

 Expansion – Transformation 
 

 

 Sales per square foot 
 

 Comp Sales Growth : 5 Year Stack 
 

 Net Sales and EBITDA   2014 adj. $21.6 M for pension settlement expense   Net Sales(millions)  EBITDA % of Sales   EBITDA(millions) 
 

 Free Cash Flow and Returned to Shareholders  
 

 2017 Q3 Actual vs Prior Year 
 

 2017 YTD Q3 Actual vs Prior Year 
 

 Financial Improvement  Strategic Priority    Increase Sales per Square Foot  Customer focusOn trend merchandiseOmnichannel engagement    Driving higher gross margins  Lower markdownsQuality / HandlingAssortment rationalizationSourcing    Leverage Advertising  Change mixMore efficient spend    Reduce Capital Expenditures (Beyond 2017)  Low store growthNo new DC’sCompleted Bright Inspiration & Design Centers    Financial improvements driven by strategic priorities 
 

 Experienced Team  Senior Leadership                     Clarence Smith Chairman, President and CEO   Steve Burdette EVP, Operations   Richard Gallagher EVP, Merchandising   Richard Hare EVP, CFO   Ed Clary EVP, CIO  Chairman since 2012.President and CEO since 2003. Over 43 years with Havertys with experience in merchandising, distribution, and store operations.  Responsible for all retail, distribution, home delivery, and customer service operations. Over 34 years with Havertys including 9 years in merchandising.  Responsible for product selection, acquisition, supply chain, and marketing.Over 29 years with Havertys including 17 years in store operations.  Responsible for managing financial risks, financial planning, internal and external reporting.Joined Havertys in 2017, with over 20 years of experience, most recently with Carmike Cinemas, Inc.  Responsible for information technology, its applications in the business, and its integration into long-term strategy.Over 27 years with Havertys including 7 years with distribution functions as additional responsibilities. 
 

 

 Appendix: Reconciliation of GAAP to Non-GAAP Measures