Havertys Reports Results for Third Quarter 2009

ATLANTA, Nov. 4 /PRNewswire-FirstCall/ -- HAVERTY FURNITURE COMPANIES, INC. (NYSE: HVT and HVT.A) today reported earnings for the third quarter ended September 30, 2009. The earnings for the third quarter of 2009 were $501,000 or $0.02 per diluted share of Common Stock, as compared to the third quarter 2008 net loss of $1.5 million or $0.07 per diluted share of Common Stock.

For the nine months ended September 30, 2009, the net loss was $13.3 million or $0.62 per diluted share of Common Stock versus the net loss of $2.8 million or $0.13 per diluted share of Common Stock for the same period in 2008.

As previously reported, net sales for the third quarter of 2009 were $151.9 million, a decrease of 13.5% compared to sales of $175.6 million for the corresponding quarter in 2008. Comparable-store sales declined 11.9% for the quarter.

Clarence H. Smith, president and chief executive officer, said, "In light of the weak demand for home furnishings, we are pleased with our third quarter operating performance. The results reflect the considerable effort and difficult decisions that have been made by the Havertys team over the past few quarters. Our third quarter sales were off 13.5% and we were able to reduce SG&A by 15.7% compared to the same period last year. Cost controls and improvements across all facets of our business have led to leaner and more agile operating structures.

"Advancements in the availability of real-time information allow our supply chain team to more closely follow our import orders from the manufacturing plant through each stage of transit. This helps us to better manage our inventory and merchandise flow, and to more accurately set customer delivery dates prior to receipt of product. Our warehouse and delivery teams are benefiting from new computer applications which help reduce levels of damaged merchandise, provide real-time tracking of our delivery trucks and improve the customer's post-store experience. A new prospecting and communications tool, which helps foster the relationship between our sales associates and their customers after a store visit, has been rolled out chain-wide. These improvements to the "back-end" of our business are being complemented by new merchandise which carry both strong fashion statements and an obvious value.

"Gross margin was flat for the first nine months of the year but up modestly for third quarter due to the slight deflation we experienced in our LIFO inventory valuation. We have worked closely with our suppliers to create values for our target consumers. These new products, which are across all of our price points, are receiving good reviews from our customers. The combination of very attractive merchandise and effective periodic promotions are key elements in our strategy to hold margins and gain market share.

"Given that the portion of our third quarter 2009 SG&A costs which are mostly fixed in nature were approximately 36% of the quarter's sales we are encouraged by the opportunities for leveraging these expenses and generating future earnings should sales improve from current levels. Although we will continue looking for ways to contain spending and improve efficiencies, we do not anticipate achieving further significant fixed cost reductions as compared to the third quarter level. Variable type expenses making up the remainder of our third quarter SG&A costs were approximately 16% of sales, a rate we believe will continue as sales fluctuate.

"We have maintained a strong balance sheet throughout this economic maelstrom. We have no funded borrowings and our cash at September 30, 2009 is $46.1 million. Our written business to date in the fourth quarter is flat compared to the same period last year. We believe that in these difficult times the home furnishings customers in our markets will gravitate to Havertys' strong merchandise values and tradition of service."

Havertys is a full-service home furnishings retailer with 121 showrooms in 17 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 at www.havertys.com.

News releases include forward-looking statements, which are subject to risks and uncertainties. Factors that might cause actual results to differ materially from future results expressed or implied by such forward-looking statements include, but are not limited to, general economic conditions, the consumer spending environment for large ticket items, competition in the retail furniture industry and other uncertainties detailed from time to time in the Company's reports filed with the SEC.

The Company will sponsor a conference call Thursday, November 5, 2009 at 10:00 a.m. Eastern Standard Time to review the third quarter. Listen-only access to the call is available via the web at www.havertys.com (About Us) and at www.streetevents.com (Individual Investor Center), both live and for a limited time, on a replay basis.

                 HAVERTY FURNITURE COMPANIES, INC. and SUBSIDIARIES

                                     Condensed Consolidated Statements of
                                                  Operations
                                 (Amounts in thousands except per share data)
                                                 (Unaudited)

                                    Quarter Ended        Nine Months Ended
                                    September 30,          September 30,
                                    -------------          -------------
                                     2009     2008        2009         2008
                                     ----     ----        ----         ----

    Net sales                    $151,945 $175,579    $425,865     $529,243
    Cost of goods sold             72,840   85,104     206,376      256,079
                                  -------  -------     -------      -------
      Gross profit                 79,105   90,475     219,489      273,164

    Credit service charges            267      468         971        1,530
                                  -------  -------     -------      -------
      Gross profit and other
       revenue                     79,372   90,943     220,460      274,694

    Expenses:
      Selling, general and
       administrative              78,314   92,879     232,052      278,139
      Interest, net                   212      273         592          348
      Provision for doubtful
       accounts                       150      432         812        1,044
      Other (income) expense,
       net                              -     (359)         20         (479)
                                  -------  -------     -------      -------
      Total expenses               78,676   93,225     233,476      279,052
                                  -------  -------     -------      -------

    Income (loss) before income
     taxes                            696   (2,282)    (13,016)      (4,358)

    Income tax expense (benefit)      195     (767)        328       (1,566)
                                  -------  -------     -------      -------

      Net income (loss)              $501  $(1,515)   $(13,344)     $(2,792)
                                  =======  =======     =======      =======

    Basic earnings (loss) per share:
      Common Stock                  $0.02   ($0.07)     ($0.63)      ($0.13)
      Class A Common Stock          $0.02   ($0.07)     ($0.60)      ($0.13)

    Diluted earnings (loss) per share:
      Common Stock                  $0.02   ($0.07)     ($0.62)      ($0.13)
      Class A Common Stock          $0.02   ($0.07)     ($0.60)      ($0.13)

    Weighted average shares - basic:
      Common Stock                 17,437   17,213      17,386       17,163
      Class A Common Stock          3,983    4,090       3,991        4,107

    Weighted average shares
     - assuming dilution(1):
      Common Stock                 21,607   21,303      21,377       21,270
      Class A Common Stock          3,983    4,090       3,991        4,107

    Cash dividends per common share:
      Common Stock                      -  $0.0675           -      $0.2025
      Class A Common Stock              -  $0.0625           -      $0.1875


      (1) See additional details at the end of this release.



               HAVERTY FURNITURE COMPANIES, INC. and SUBSIDIARIES

                    Condensed Consolidated Balance Sheets
                            (Amounts in thousands)
                                 (Unaudited)


                                     September 30, December 31,  September 30,
                                         2009          2008          2008
                                     ------------  -----------  -------------

    Assets
      Cash and cash equivalents           $46,125       $3,697        $18,724
      Accounts receivable,
       net of allowance                    14,488       24,301         31,773
      Inventories, at LIFO cost            88,188      103,743         99,830
      Other current assets                 14,271       18,005         19,214
                                        ---------     --------      ---------
      Total current assets                163,072      149,746        169,541

      Accounts receivable, long-term          977        2,082          2,536
      Property and equipment, net         179,804      197,423        201,565
      Other assets                         14,097       14,142         23,562
                                        ---------     --------      ---------

                                         $357,950     $363,393       $397,204
                                        =========     ========      =========

    Liabilities and Stockholders' Equity
      Notes payable to banks                  $--          $--           $--
      Accounts payable and
       accrued liabilities                 75,381       71,359        73,652
      Current portion of long-term debt
       and lease obligations                  337          311        15,191
                                        ---------     --------     ---------
      Total current liabilities            75,718       71,670        88,843

      Lease obligations, less current
       portion                              6,929        7,183         7,265
      Other liabilities                    42,341       39,572        29,546
      Stockholders' equity                232,962      244,968       271,550
                                        ---------     --------     ---------

                                         $357,950     $363,393      $397,204
                                        =========     ========     =========




        HAVERTY FURNITURE COMPANIES, INC. and SUBSIDIARIES

            Condensed Consolidated Statements of Cash Flows
                         (Amounts in thousands)
                              (Unaudited)

                                           Nine Months Ended
                                            September 30,
                                         2009           2008
                                         ----           ----
    Operating Activities
    Net loss                         $(13,344)       $(2,792)
    Adjustments to reconcile net
     loss to net cash provided
     by operating activities:
      Depreciation and amortization    14,809         16,217
      Provision for doubtful
       accounts                           812          1,044
      (Gain) loss on sale of
       property and equipment             (19)             8
      Other                             1,756            794

    Changes in operating assets and
     liabilities                       34,342         23,290
                                       ------        -------

               Net cash provided by
                operating activities   38,356         38,561
                                       ------        -------

    Investing Activities
    Capital expenditures               (1,921)        (8,307)
    Proceeds from sale-leaseback
     transaction                        6,625             --
    Proceeds from sale of property
     and equipment                         29            256
    Other investing activities             43            141
                                       ------        -------

          Net cash provided by (used
            in) investing activities    4,776         (7,910)
                                       ------        -------
    Financing Activities
    Proceeds from borrowings under
     revolving credit facilities        5,800        128,365
    Payments of borrowings under
     revolving credit facilities       (5,800)      (128,365)
                                       ------        -------
    Net decrease in borrowings
     under revolving credit
     facilities                            --             --
    Payments on long-term debt and
     lease obligations                   (229)        (6,228)
    Treasury stock acquired                --         (1,806)
    Dividends paid                         --         (4,246)
    Other financing activities           (475)           186
                                       ------        -------

          Net cash used in
          financing activities           (704)       (12,094)
                                       ------        -------

    Increase in cash and cash
     equivalents                       42,428         18,557

    Cash and cash equivalents at
     beginning of period                3,697            167
                                      -------        -------

    Cash and cash equivalents at
     end of period                    $46,125        $18,724
                                      =======        =======



          HAVERTY FURNITURE COMPANIES, INC. and SUBSIDIARIES

    Earnings per Share
    ------------------

    The following details how the loss and number of shares in
    calculating the diluted earnings (loss) per share for Common
    Stock and Class A Common Stock are derived (amounts in thousands):

                                  Quarter Ended  Nine Months Ended
                                   September 30,     September 30,
                                   ------------     --------------
                                   2009    2008      2009     2008
                                   ----    ----      ----     ----
    Numerator:

    Common:

      Distributed earnings          $--  $1,162       $--   $3,476

      Undistributed earnings
       (loss)                       411  (2,391)  (10,950)  (5,732)
                                 ------  ------   -------   ------

        Basic                       411  (1,229)  (10,950)  (2,256)

      Class A Common earnings
       (loss)                        90    (286)   (2,394)    (536)
                                 ------  ------   -------   ------

        Diluted                    $501 $(1,515) $(13,344) $(2,792)
                                 ======  ======   =======   ======

    Class A Common:

      Distributed earnings          $--    $255       $--     $770

      Undistributed earnings
       (loss)                        90    (541)   (2,394)  (1,306)
                                 ------  ------   -------   ------

                                    $90   $(286)  $(2,394)   $(536)
                                 ======  ======   =======   ======

    Denominator:

    Common:

    Weighted average shares
     outstanding - basic         17,437  17,213    17,386   17,163

    Assumed conversion of Class
     A Common Stock               3,983   4,090     3,991    4,107

    Dilutive stock awards and
     Common Stock equivalents       187      --        --       --
                                 ------  ------    ------   ------

    Total weighted-average
     diluted Common Stock        21,607  21,303    21,377   21,270
                                 ======  ======    ======   ======

    Class A Common:
    Weighted average shares
     outstanding                  3,983   4,090     3,991    4,107
                                 ======  ======    ======   ======


    Contact for information:
    Dennis L. Fink, EVP & CFO or
    Jenny Hill Parker, VP, Secretary & Treasurer
    404-443-2900