Haverty Furniture Companies, Inc. · NYSE:HVT
Haverty Furniture Companies — KBCM 2017 Consumer Conference
52 slides from Haverty Furniture Companies's conference presentation, Dec 5, 2017
Slide 1: KBCM 2017 Consumer Conference
KBCM 2017 Consumer Conference
Slide 2: Cautionary Note on Forward-Looking Statements (Non-GAAP, Safe Harbor)
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 financ
Slide 3: Established 1885, IPO 1929, Cash dividend since 1935
Established 1885 IPO October 1929 Cash dividend since 1935
Slide 4: Retail Footprint: Stores across states
Retail Footprint: 124 Stores across 16 states 4.5 M retail sq.ft. 18 stores 29 stores 24 stores 18 stores 29 stores
Slide 5: New and Existing Home Sales
New and Existing Home Sales —New Home Sales (right axis) —Existing Home Sales (eft axis) 1,400 (S000) ‘uvvs ‘sejes ewoH Man & § ¢ g¢ 8 8 cs a3 go 2 6 ¥ 8 g a z 88 8 8 8 8 8 y co wa vt on a a (so00) uvvs ‘suuN ‘sejes ewoH Bunsixz er-uey er-uer et-uer ot-uer st-uer vr-uer er-uer zr-uer Tr-wer or-uer s
Slide 6: New Single Family Home Sales
NEW SINGLE FAMILY HOME SALES Monthly Data: Seasonally-Adjusted Annualized —— United States ——South ——------ U.S. Avg South Avg 1,600 1,400 1,200 1,000 800 667 600 400 405 200 Ss 6¢ ¢ § ¢ &« g¢ g¢& ¢« « g¢ g¢ ge e gig % aa & & ee % Re ee eh He > 6 .»«» 8 &© © & &§ & 6 6 68 6 8 &8 @ HAVERTYS INVESTOR
Slide 7: August sales above previous peak, 39% above 2009 trough
August sales were slightly above the previous peak, and 39% above the 2009 trough.
Slide 8: Havertys' Strategic Advantages
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
Slide 9: Key attributes of our target consumer
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
Slide 10: Brand/Retailer Landscape: Furniture Price Points
Brand /Retailer Landscape $$$$ $$$ $$ $ Furniture Price Points
Slide 11: The store is the most powerful physical expression of the brand
“The STORE is the most powerful physical expression of the brand”.” Steve Jobs
Slide 12: Slide 12
Slide 13: Slide 13
Slide 14: HAVERTYS
HAVERTYS SEN
Slide 15: Slide 15
Slide 16: HAVERTYS
HAVERTYS NVESTOR PRESENT N
Slide 17: HAVERTYS
HAVERTYS SENT N
Slide 18: Brand partners
haven CS. TEMPUR HAVERTYS NVESTOR PRESENTATION December 5, 2017
Slide 19: Exclusive Merchandise
Exclusive MerchandisePrimarily Havertys BrandMid- to upper middle price pointsLarge array of styles Sourced to our specsVariety of custom optionsRegional diversity
Slide 20: Exclusive Merchandise Variety of Styles
Exclusive Merchandise Variety of Styles
Slide 21: Exclusive Merchandise Variety of Styles
Exclusive Merchandise Variety of Styles
Slide 22: Exclusive Merchandise Variety of Styles
Exclusive Merchandise Variety of Styles
Slide 23: Strategic Sourcing
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
Slide 24: Price Point Array
Price Point Array $2,399 $799 $1,199
Slide 25: Price Point Array
Price Point Array $2,149 $999 $1,599
Slide 26: Price Point Array
Price Point Array $1,949 $2,999 $4,999
Slide 27: Price Point Array
Price Point Array $4,499 $1,799 $999
Slide 28: H Design: Free in-home service
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
Slide 29: Average Ticket Drivers
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%
Slide 30: Omnichannel
Omnichannel Developing a customer experience of frictionless shopping and brand consistencyAcross devicesAcross channels At any point in the shopping journey
Slide 31: Key components of an omnichannel retailer
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 Plan
Slide 32: Havertys.com - Display and feel mimics store presentation
Havertys.com - Display and feel mimics store presentation
Slide 33: Havertys.com
Havertys.com GET INSPIRED ig’ HAVERTYS i | } “ TIMELESS, ‘ just like you HAVERTYS NVESTOR PRESENTATION December 5, 2017
Slide 34: Havertys.com product page
In Wht | Tock Orders | HAVERTYS [soretoccr> a a Signin WishList Track Orde Cart 0 tite tooKs coop. pte. LIVINGROOMS BEDROOMS ACCESSORIES DININGROOMS - HOMEOFFICES ~ MEDIAROOMS == MATTRESSES--RUGS. OUTDOOR CLEARANCE _INSPIRATION Sectionals \_ Amal Sections Amalfi Sectional tetetoiek 45 (627) Classic
Slide 35: 3D Room Planner
HAVERTYS Signin | WishList Track Orders Cart 0 LiEEMOBE 2608 LIVINGROOMS BEDROOMS ACCESSORIES DININGROOMS == HOMEOFFICES += MEDIAROOMS —MATTRESSE! 3D Room Planner c= 7) Ny HAVERTYS INVESTOR PRESENTATION December 5, 2017
Slide 36: ..and mobile
..and mobile HAVERTYS a HAVERTYS = OW sioreioovor | os lS .— Sua ee FSS HAVERTYS NVESTOR PRESENTATION December 5, 2017
Slide 37: Professional Home Delivery
Professional Home Delivery TOP DRAWER DELIVERY HAVERTYS NVESTOR PRESENTATION December 5, 2017
Slide 38: Optimize Flow of Product
Optimize Flow of Product 3 DC’s in largest markets4 cross dock facilitiesExpanded FDCExpanding WDC
Slide 39: Store Capital Expenditures 2010 - 2016
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
Slide 40: Expansion — Transformation
Expansion — Transformation HAVERTYS PRESENTATION 5, 2017 os NVEST
Slide 41: Expansion — Transformation
Expansion — Transformation HAVERTYS NVESTOR PRESENTATION Sey \ December 5, 2017
Slide 42: Revenues by Category — YTD Q3 2017
Revenues by Category — YTD Q3 2017 Case Goods: 37.6% Accessories & Other 11.8% Mattress 10.6% Occasional HAVERTYS NVESTOR PRESENTATION December 5, 2017
Slide 43: Sales per square foot
Sales per square foot $220 sq/ft 2006 High Water Mark $200 sq/ft $180 sq/ft $160 sq/ft $183 $185 $140 sq/ft $148 $148 $120 sq/ft $100 sq/ft s vg a ar ° Ss Annual Net Sales per Weighted Sq. Ft. m1 2006 High Water Mark HAVERTYS INVESTOR PRESENTATION December 5, 2017
Slide 44: Comp Sales Growth: Year Stack
Comp Sales Growth : 5 Year Stack
Slide 45: Net Sales and EBITDA
Net Sales and EBITDA 2014 adj. $21.6 M for pension settlement expense Net Sales(millions) EBITDA % of Sales EBITDA(millions)
Slide 46: Free Cash Flow and Returned to Shareholders
Free Cash Flow and Returned to Shareholders
Slide 47: 2017 Q3 Actual vs Prior Year
2017 Q3 Actual vs Prior Year (in millions, except per share #) Q3 2017 Q3 2016 Actual Actual Change % Change Sales $ 207.6 S$ ong §& (4.1) -1.9% ces 95.6 98.0 (2.4) -2.4% Gross Profit 112.0 113.7 (1.7) -1.5% Credit Service Charges o.4 O.1 : 0.0% Gross Profit and Other Revenue 112.1 113.8 (1.7) 1.5%
Slide 48: 2017 YTD Q3 Actual vs Prior Year
2017 YTD Q3 Actual vs Prior Year
Slide 49: Financial Improvement Strategic Priority
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 Expendi
Slide 50: Experienced Team
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, di
Slide 51: Slide 51
Slide 52: Appendix: Reconciliation of GAAP to Non-GAAP Measures
Appendix: Reconciliation of GAAP to Non-GAAP Measures
Haverty Furniture Companies — KBCM 2017 Consumer Conference on 6ix