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

EXHIBIT 99.1

N E W S   R E L E A S E

HAVERTYS REPORTS RESULTS FOR THIRD QUARTER 2010

ATLANTA, GEORGIA, November 3, 2010 -- HAVERTY FURNITURE COMPANIES, INC. (NYSE: HVT and HVT.A) reports third quarter 2010 operating results, with increased sales of 3.4% and improved earnings.  The earnings per share for the third quarter of 2010 are $0.05 compared to $0.02 for the same period of 2009.  The earnings for the nine months ended September 30, 2010 are $0.13 compared to a loss per share of ($0.62) for 2009.

Clarence H. Smith, president and chief executive officer, said, “Although our performance in 2010 has improved over last year, we have previously reported a softening of demand trends in the most recent months.  The fourth quarter is historically our strongest of the year and our results will be against more difficult comparisons. We are confident that our shopping experience, both in-store and on-line, the stylish and affordable merchandise we offer, excellent service and strength of our brand will allow us to continue to grow market share.  Our ongoing evaluation of stores will result in future new store locations and the exiting of other sites similar to our entrance in the Columbus, Georgia market in October and the closing of our Abilene, Texas location in December.  We will also be investing in our operations to upgrade information systems.  The competitive advantages that we have developed and our financial strength will support our efforts in growing our business.”

Financial Highlights

Third Quarter 2010 Compared to Third Quarter 2009

·   Net sales increased 3.4% to $157.1 million and comparable store sales increased 4.3%.

·   Gross profit margins were 51.3% as a percent of sales compared to 52.1%.  The decrease is mostly due to the negative impact of a $0.4 million (0.3% of sales) increase in the LIFO inventory reserve due to inflation compared to the positive impact of a $0.5 million (0.3% of sales) reduction in the reserve in 2009.

·   Selling, general and administrative costs decreased 1.1% as a percent of net sales.  Occupancy costs continued to benefit from lower depreciation expense and improved efficiencies were realized in most major cost categories.

·   Income tax expense includes a decrease to our valuation allowance on deferred tax assets of $0.4 million, an increase of $0.02 in per share earnings compared to the prior period increase in the allowance of $0.1 million, which had a negligible impact on earnings per share.

·   Our retail store count at September 30 was 118 versus 121.

Nine Months ended September 30, 2010 Compared to Same Period of 2009

 ·Net sales increased 7.6% to $458.2 million and comparable store sales increased 9.0%.

·   Gross profit margins remained flat at 51.5% as a percent of sales due to pricing discipline and product mix, offset by the negative impact of a $1.0 million increase in the LIFO inventory reserve compared to a $0.5 million reduction in the reserve in 2009.

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NEWS RELEASE – November 3, 2010 Page 2

HAVERTY FURNITURE COMPANIES, INC. and SUBSIDIARIES

·   Selling, general and administrative costs decreased by 3.6% as a percent of net sales.  Improved efficiencies were realized in the major categories as fixed costs were leveraged.

·   Income tax expense includes a reduction in our valuation allowance on deferred tax assets of $1.1 million, an increase of $0.05 in per share earnings compared to the prior period increase in the allowance of $5.2 million, which decreased earnings $0.24 per share.

Expectations and Other

·   Total delivered sales for the fourth quarter to date of 2010 are 2.5% lower than the same period last year while total written business is up slightly.

·   Gross profit margins for the remainder of the year will be impacted by increased costs as recognized under our LIFO inventory accounting method.  We expect that gross profit margins for the full year will be near the third quarter levels.

·   We closed our store in Bowling Green, Kentucky as its lease expired at the end of the third quarter.  We opened a store in Columbus, Georgia, a new market for us in early October.  During the fourth quarter, we will also close our Abilene, Texas, store as its lease expires.

·   Cash flow from operations for the nine months ended September 30, 2010 was $26.8 million.

·   Cash at the end of the third quarter of 2010 totaled $67.1 million.  We have no funded debt and $34.1 million of availability under our credit facility.

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NEWS RELEASE -- November 3, 2010	Page 3
HAVERTY FURNITURE COMPANIES, INC. and SUBSIDIARIES
Condensed Consolidated Statements of Operations
(In thousands, except per share data - Unaudited)

	Quarter Ended					Nine Months Ended
	September 30,					September 30,
	2010			2009		2010				2009
Net sales	$	157,137		$	151,945	$	458,248			$	425,865
Cost of goods sold		76,558			72,840		222,130				206,376
Gross profit		80,579			79,105		236,118				219,489
Credit service charges		167			267		566				971
Gross profit and other revenue		80,746			79,372		236,684				220,460
Expenses:
Selling, general and administrative		79,272			78,314		233,025				232,052
Interest, net		202			212		616				592
Provision for doubtful accounts		71			150		277				812
Other (income) expense, net		(45	)		-		(255	)			20
Total expenses		79,500			78,676		233,663				233,476
Income (loss) before income taxes		1,246			696		3,021				(13,016	)
Income tax expense		59			195		86				328
Net income (loss)	$	1,187		$	501	$	2,935			$	(13,344	)
Basic earnings (loss) per share:									��
Common Stock	$	0.05		$	0.02	$	0.14			$	(0.63	)
Class A Common Stock	$	0.05		$	0.02	$	0.13			$	(0.60	)
Diluted earnings (loss) per share:
Common Stock	$	0.05		$	0.02	$	0.13			$	(0.62	)
Class A Common Stock	$	0.05		$	0.02	$	0.13			$	(0.60	)
Basic weighted average shares outstanding:
Common Stock		18,472			17,437		18,040				17,386
Class A Common Stock		3,371			3,983		3,637				3,991
Diluted weighted average shares outstanding:
Common Stock		22,013			21,607		21,955				21,377
Class A Common Stock		3,371			3,983		3,637				3,991
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NEWS  RELEASE – November 3, 2010	Page 4
HAVERTY  FURNITURE  COMPANIES,  INC.  and  SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands)

September 30,	December 31,	September 30,
2010	2009	2009
(Unaudited)		(Unaudited)

Assets
Current assets
Cash and cash equivalents	$	67,084	$	44,466	$	46,125
Accounts receivable		13,682		15,299		14,488
Inventories		88,184		93,301		88,188
Prepaid expenses		8,804		8,813		9,229
Other current assets		6,304		6,422		5,042
Total current assets		184,058		168,301		163,072
Accounts receivable, long-term		632		844		977
Property and equipment		172,547		176,363		179,804
Deferred income taxes		11,249		9,114		7,730
Other assets		5,674		6,311		6,367
	$	374,160	$	360,933	$	357,950
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable	$	21,179	$	19,128	$	18,461
Customer deposits		17,849		14,002		19,470
Accrued liabilities		32,166		30,208		30,549
Deferred income taxes		7,450		7,750		6,901
Current portion of lease obligations		501		357		337
Total current liabilities		79,145		71,445		75,718
Lease obligations, less current portion		8,727		6,826		6,929
Other liabilities		33,938		38,105		42,341
Total liabilities		121,810		116,376		124,988
Stockholders' equity		252,350		244,557		232,962
	$	374,160	$	360,933	$	357,950
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NEWS RELEASE -- November 3, 2010	Page 5
HAVERTY FURNITURE COMPANIES, INC. and SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(In thousands - Unaudited)

	Nine Months Ended September 30,
	2010			2009
Cash flows from Operating Activities
Net income (loss)	$	2,935		$	(13,344	)
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation and amortization		12,689			14,809
Share-based compensation expense		1,373			1,363
Provision for doubtful accounts		277			812
Deferred income taxes		(2,322	)		93
Net gain on sale of property and equipment		(107	)		(19	)
Other		(212	)		300
Changes in operating assets and liabilities		12,213			34,342
Net cash provided by operating activities		26,846			38,356
Cash flows from Investing Activities
Capital expenditures		(6,906	)		(1,921	)
Proceeds from sale-leaseback transaction		-			6,625
Proceeds from sale of property and equipment		207			29
Other investing activities		-			43
Net cash (used in) provided by investing activities		(6,699	)		4,776
Cash flows from 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		(255	)		(229	)
Proceeds from exercise of stock options		3,319			-
Other financing activities		(593	)		(475	)
Net cash provided by (used in) financing activities		2,471			(704	)
Increase in cash and cash equivalents during the period		22,618			42,428
Cash and cash equivalents at beginning of period		44,466			3,697
Cash and cash equivalents at end of period	$	67,084		$	46,125
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NEWS RELEASE -- November 3, 2010	Page 6
HAVERTY FURNITURE COMPANIES, INC. and SUBSIDIARIES
Valuation Allowance and GAAP to Non-GAAP Reconciliation
Our income tax expense (benefit) 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 (amounts in thousand s except per share data).  Because of rounding the per share data will not necessarily add.

	Quarter Ended										Quarter Ended
	September 30, 2010										September 30, 2009
	GAAP						Non-GAAP				GAAP				Non-GAAP
Increase before income taxes	$	1,246		$	0.06		$	1,246	$	0.06	$	696	$	0.03	$	696	$	0.03
Income taxes:
Current and deferred
tax expense		448			0.02			448		0.02		102		0.00		102		0.00
Valuation allowance (decrease)
increase		(389	)		(0.02	)						93		0.00
Total tax expense		59			0.00			448		0.02		195		0.00		102		0.00
Net income	$	1,187		$	0.05		$	798	$	0.04	$	501	$	0.02	$	594	$	0.03

	Nine Months Ended										Nine Months Ended
	September 30, 2010										September 30, 2009
	GAAP						Non-GAAP				GAAP						Non-GAAP
Income (loss) before income taxes	$	3,021		$	0.14		$	3,021	$	0.14	$	(13,016	)	$	(0.61	)	$	(13,016	)	$	(0.61	)
Income taxes:
Current and deferred
tax expense (benefit)		1,148			0.05			1,148		0.05		(4,870	)		(0.23	)		(4,870	)		(0.23	)
Valuation allowance (decrease)
increase		(1,062	)		(0.05	)						5,198			0.24
Total tax expense (benefit)		86			0.00			1,148		0.05		328			0.01			(4,870	)		(0.23	)
Net income (loss)	$	2,935		$	0.13		$	1,873	$	0.09	$	(13,344	)	$	(0.62	)	$	(8,146	)	$	(0.38	)

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, November 4, 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.

Contacts:

Haverty Furniture Companies, Inc.

Dennis L. Fink, 404-443-2900

EVP & CFO

or

Jenny Hill Parker, 404-443-2900

SVP, Finance, Secretary and Treasurer

Source:  Haverty Furniture Companies, Inc.