Haverty Furniture Companies (HVT) 8-K Havertys Reports Results for First Quarter 2010

N E W S   R E L E A S E

HAVERTYS REPORTS RESULTS FOR FIRST QUARTER 2010

ATLANTA, GEORGIA, May 5, 2010 -- HAVERTY FURNITURE COMPANIES, INC. (NYSE: HVT and HVT.A) reports solid first quarter 2010 operating results, with increased sales of 8.2%, strong gross profit margins and decreased operating costs.  Earnings per share for the first quarter of 2010 are $0.11 compared to a loss per share of ($0.34) for the same period of 2009.

Clarence H. Smith, president and chief executive officer, said, “We continued to grow our market share for the second consecutive quarter through the strength of our brand as comparable store sales were up 10.1%.  We recorded our third consecutive quarter of profits with our disciplined approach to product pricing and operating costs.  As Havertys marks its 125th anniversary, we are inspired by the tenacity shown by associates of previous eras during difficult economic conditions.  Despite today’s economic uncertainty, we continue to invest in our current store base and technology.  We believe that our strategies of focusing on the customer and essential operations will provide for profitable and sustainabl e long-term growth.”

Financial Highlights

First Quarter 2010 Compared to First Quarter 2009

·   Net sales increased 8.2% to $156.0 million and comparable store sales increased 10.1%.

·   Gross profit margins increased to 52.1% as a percent of sales from 51.1% due to reductions in the volume of close-out merchandise, pricing discipline and product mix.

·   Selling, general and administrative costs decreased $2.0 million with reductions in all major categories either measured in dollars or efficiencies as a percentage of sales.

·   Income tax expense reflects a reduction in our valuation allowance on deferred tax assets of $0.9 million or $0.04 per share compared to an increase in the allowance in the prior period of $2.7 million or $0.13 per share.

·   Our retail store count is 119 versus 121 in 2009.

Other

·   Cash at the end of the first quarter of 2010 totaled $52.4 million.

·   We have no funded debt and $39.0 million of availability under our credit facility. Our debt to total capital ratio at the end of the first quarter of 2010 is 2.8%.

·   Our written business for the second quarter to date of 2010 is up 8.8%.

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NEWS  RELEASE – May 5, 2010	Page 2
HAVERTY FURNITURE COMPANIES, INC. and SUBSIDIARIES
Condensed Consolidated Statements of Operations (In thousands, except per share data) (Unaudited)
	Three Months Ended March 31,
	2010			2009
Net sales	$	156,036		$	144,238
Cost of goods sold		74,771			70,475
Gross profit		81,265			73,763
Credit service charges		214			393
Gross profit and other revenue		81,479			74,156
Expenses:
Selling, general and administrative		78,879			80,879
Interest, net		208			176
Provision for doubtful accounts		162			415
Other income, net		(202	)		(121	)
Total expenses		79,047			81,349
Income (loss) before income taxes		2,432			(7,193	)
Income taxes		78			70
Net income (loss)	$	2,354		$	(7,263	)
Basic earnings (loss) per share:
Common Stock	$	0.11		$	(0.34	)
Class A Common Stock	$	0.11		$	(0.33	)
Diluted earnings (loss) per share:
Common Stock	$	0.11		$	(0.34	)
Class A Common Stock	$	0.10		$	(0.33	)
Basic weighted average common shares outstanding:
Common Stock		17,578			17,322
Class A Common Stock		3,874			4,005
Diluted weighted average common shares outstanding:
Common Stock		21,821			21,327
Class A Common Stock		3,874			4,005

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NEWS  RELEASE – May 5, 2010	Page 3
HAVERTY FURNITURE COMPANIES, INC. and SUBSIDIARIES
Condensed Consolidated Balance Sheets (In thousands)
	March 31,		December 31,		March 31,
	2010		2009		2009
	(Unaudited)
ASSETS
Cash and cash equivalents	$	52,445	$	44,466	$	9,478
Accounts receivable, net of allowance		14,458		15,299		18,191
Inventories, at LIFO cost		93,651		93,301		99,384
Other current assets		14,096		15,235		16,227
Total current assets		174,650		168,301		143,280
Accounts receivable, long-term		736		844		1,607
Property and equipment		172,620		176,363		188,052
Deferred income taxes		9,935		9,114		7,813
Other assets		6,479		6,311		6,330
	$	364,420	$	360,933	$	347,082
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued liabilities		43,961		49,336		39,220
Customer deposits		18,197		14,002		14,303
Deferred income taxes		7,680		7,750		6,891
Current portion of lease obligations		381		357		323
Total current liabilities		70,219		71,445		60,737
Lease obligations, less current portion		6,718		6,826		7,100
Other liabilities		38,503		38,105		41,017
Total liabilities		115,440		116,376		108,854
Stockholders' equity		248,980		244,557		238,228
	$	364,420	$	360,933	$	347,082
more. . . . .

NEWS  RELEASE – May 5, 2010	Page 4
HAVERTY FURNITURE COMPANIES, INC. and SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows (Amounts in thousands) (Unaudited)
	Three Months Ended March 31,
	2010			2009
Operating Activities
Net income (loss)	$	2,354		$	(7,263	)
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation and amortization		4,305			5,149
Share-based compensation expense		622			521
Provision for doubtful accounts		162			415
Net gain on sale of property and equipment		(127	)		(16	)
Other		(904	)		(48	)
Changes in operating assets and liabilities		1,174			886
Net cash provided by (used in) operating activities		7,586			(356	)
Investing Activities
Capital expenditures		(873	)		(537	)
Proceeds from sale-leaseback transaction		-			6,625
Proceeds from sale of property and equipment		205			21
Other investing activities		-			99
Net cash (used in) provided by investing activities		(668	)		6,208
Financing Activities
Proceeds from borrowings under revolving credit facility		-			5,800
Payments of borrowings under revolving credit facility		-			(5,800	)
Net change in borrowings under revolving credit facility		-			-
Payments on lease obligations		(84	)		(71	)
Proceeds from exercise of stock options		1,593			-
Other financing activities		(448	)		-
Net cash provided by (used in) financing activities		1,061			(71	)
Increase in cash and cash equivalents		7,979			5,781
Cash and cash equivalents at beginning of period		44,466			3,697
Cash and cash equivalents at end of period	$	52,445		$	9,478
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NEWS RELEASE -- May 5, 2010	Page 5
HAVERTY FURNITURE COMPANIES, INC. and SUBSIDIARIES
Valuation Allowance and GAAP to Non-GAAP Reconciliation
Our income tax expense for the first quarters in 2010 and 2009 included a non-cash (benefit) or charge for a valuation allowance related to our deferred tax assets.  The adjustments to this valuation allowance do not result in ongoing cash expenditures, and, in our view, do not otherwise have a material impact on our ongoing business operations. Accordingly, we believe that providing non-GAAP financial measures that exclude the impact of this valuation expense allows investors and analysts to make meaningful comparisons of our ongoing core business operating results.  The following table excludes the effect of changes in this valuation allowance from our calculation of the following: non-GAAP net income (loss) and non-GAAP diluted earnings (loss) per common share and reconciles these amounts to our GAAP results (amount s in thousands except per share data):

	Quarter Ended										Quarter Ended
	March 31, 2010										March 31, 2009
	GAAP						Non-GAAP				GAAP						Non-GAAP
Income (loss) before income taxes	$	2,432		$	0.11		$	2,432	$	0.11	$	(7,193	)	$	(0.34	)	$	(7,193	)	$	(0.34	)
Income taxes:
Current and deferred tax        expense (benefit)		969			0.04			969		0.04		(2,666	)		(0.13	)		(2,666	)		(0.13	)
Valuation allowance		(891	)		(0.04	)						2,736			0.13
Total tax expense                (benefit)		78			0.00			969		0.04		70			0.00			(2,666	)		(0.13	)
Net income (loss)	$	2,354		$	0.11		$	1,463	$	0.07	$	(7,263	)	$	(0.34	)	$	(4,527	)	$	(0.21	)

Havertys, established in 1885, is a full-service home furnishings retailer with 119 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, May 6, 2010 at 10:00 a.m. Eastern Daylight Time to review the first quarter.  Listen-only access to the call is available via the web at www.havertys.com (For Investors) and at www.streetevents.com (Individual Investor Center), both live and for a limited time, on a replay basis.

SOURCE:  Haverty Furniture Companies, Inc.

Dennis L. Fink, EVP & CFO

404-443-2900

or

Jenny Hill Parker, VP, Secretary & Treasurer

404-443-2900