Havertys
HVT
#7776
Rank
A$0.64 B
Marketcap
A$39.96
Share price
0.11%
Change (1 day)
25.41%
Change (1 year)

Havertys - 10-Q quarterly report FY


Text size:
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


FORM 10-Q

(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2005

OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 1-14445


HAVERTY FURNITURE COMPANIES, INC.
(Exact name of registrant as specified in its charter)


MARYLAND 58-0281900
(State or other (I.R.S. Employer
jurisdiction of Identification No.)
incorporation or
organization)

780 Johnson Ferry Road, Suite 800
Atlanta, Georgia 30342
(Address of principal executive office) (Zip Code)

Registrant's telephone number, including area
code: (404) 443-2900


Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No[ ]

Indicate by check mark whether the registrant is an
accelerated filer (as defined in Rule 12b-2 of the Exchange Act).
Yes [X] No [ ]

Indicate by check mark whether the registrant is a shell
company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ]
No [X]

The numbers of shares outstanding of the registrant's two
classes of $1 par value common stock as of October 31, 2005 were:
Common Stock - 18,121,350; Class A Common Stock - 4,305,521.
HAVERTY FURNITURE COMPANIES, INC.



INDEX



Page No.
--------
PART I. FINANCIAL INFORMATION:


Item 1. Financial Statements

Condensed Consolidated Balance Sheets -
September 30, 2005 and December 31, 2004 1

Condensed Consolidated Statements of Income
Nine Months ended September 30, 2005 and 2004 2

Condensed Consolidated Statements of Cash
Flows - Nine Months ended September 30, 2005
and 2004 3

Notes to Condensed Consolidated Financial
Statements 4


Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 11


Item 3. Quantitative and Qualitative Disclosures about
Market Risk 17


Item 4. Controls and Procedures 17


PART II OTHER INFORMATION

Item 2. Unregistered Sales of Equity Securities and
Use of Proceeds 18

Item 5. Other Information 18

Item 6. Exhibits 19
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements


HAVERTY FURNITURE COMPANIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)



September 30 December 31
2005 2004
------------ ------------
(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents $ 764 $ 10,122
Auction rate securities -- 5,000
Accounts receivable, net 84,806 81,132
Inventories 108,928 110,812
Prepaid expenses 12,036 6,654
Deferred income taxes 2,044 2,249
Other current assets 8,821 14,453
------------ ------------
Total current assets 217,399 230,422
Accounts receivable, net 7,724 9,396
Property and equipment 215,371 205,037
Other assets 7,854 12,711
------------ ------------
$ 448,348 $ 457,566
============ ============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Notes payable to banks $ - $ -
Accounts payable 28,965 31,202
Customer deposits 32,092 24,040
Accrued liabilities 44,488 45,460
Current portion of long-term debt and
capital lease obligations 13,253 20,270
------------ ------------
Total current liabilities 118,798 120,972
Long-term debt and capital lease
obligations, less current portion 35,407 44,228
Other liabilities 19,659 20,108
------------ ------------
Total liabilities 173,864 185,308
============ ============

Stockholders' Equity
Capital stock, par value $1 per share:
Preferred Stock, Authorized: 1,000
shares; Issued: None
Common Stock, Authorized: 50,000
shares; Issued: 2005 - 24,375;
2004 - 24,293 shares 24,375 24,293
Convertible Class A Common Stock,
Authorized: 15,000 shares;
Issued: 2005 - 4,828;
2004 - 4,840 shares 4,828 4,840
Additional paid-in capital 55,624 55,108
Long-term incentive plan deferred
compensation (2,116) (2,971)
Retained earnings 254,625 250,511
Accumulated other comprehensive loss (859) (1,295)
Less treasury stock at cost -
Common Stock
(2005 - 6,232; 2004 - 5,937 shares)
and Convertible Class A Common Stock
(2005 and 2004 - 522 shares) (61,993) (58,228)
------------ ------------
Total stockholders' equity 274,484 272,258
------------ ------------
$ 448,348 $ 457,566
============ ============

See notes to condensed consolidated financial statements.
HAVERTY FURNITURE COMPANIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data - Unaudited)

Quarter Ended Nine Months Ended
September 30 September
---------------------- ------------------
2005 2004 2005 2004
---------- ----------- -------- --------
(Restated (Restated
See Note B) See Note B)


Net sales $ 202,044 $ 197,445 $ 602,071 $ 567,360
Cost of goods sold 105,947 102,865 315,746 292,473
---------- ---------- ---------- ----------
Gross profit 96,097 94,580 286,325 274,887
Credit service charge 837 992 2,702 3,459
---------- ---------- ---------- ----------
Gross profit and other revenue 96,934 95,572 289,027 278,346



Expenses:
Selling, general and
administrative 93,154 88,964 276,827 254,806
Interest 165 741 1,464 2,830
Provision for doubtful accounts 152 116 668 445
Other (income) expense, net (2,645) (987) (3,084) (1,840)
---------- ---------- ---------- ----------
90,827 88,834 275,875 256,241

Income before income taxes 6,107 6,738 13,152 22,105
Income taxes 2,291 2,501 4,852 8,175
---------- ---------- ---------- ----------
Net income $ 3,816 $ 4,237 $ 8,300 $ 13,930
========== ========== ========== ==========


Basic earnings per share:
Common Stock $0.17 $0.19 $0.37 $0.63
Class A Common Stock $0.16 $0.18 $0.35 $0.59

Diluted earnings per share:
Common Stock $0.17 $0.18 $0.36 $0.60
Class A Common Stock $0.16 $0.18 $0.35 $0.58

Weighted average shares -
basic:
Common Stock 18,278 18,252 18,361 18,187
Class A Common Stock 4,306 4,338 4,311 4,348

Weighted average shares -
assuming dilution:
Common Stock 22,652 22,965 22,860 23,066
Class A Common Stock 4,306 4,338 4,311 4,348

Cash dividends per share:
Common Stock $0.0625 $0.0625 $0.1875 $0.1875
Class A Common Stock $0.0575 $0.0575 $0.1725 $0.1725

See notes to condensed consolidated financial statements.
HAVERTY FURNITURE COMPANIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands - Unaudited)

Nine Months Ended
September 30
-----------------------
2005 2004
---------- ----------
(Restated -
See Note B)
Cash Flows from Operating Activities:
Net income $ 8,300 $ 13,930
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation and amortization 15,781 14,145
Provision for doubtful accounts 669 445
Gain on sale of property and
equipment (2,570) (703)
Other 1,103 (27)
Changes in operating assets and
liabilities:
Accounts receivable (2,670) 10,118
Inventories 1,884 (8,658)
Customer deposits 8,052 5,152
Other assets and liabilities 146 (718)
Accounts payable and accrued
liabilities (3,209) (10,699)
----------- ------------
Net cash provided by operating
activities 27,486 22,985
----------- ------------
Cash Flows from Investing Activities:
Capital expenditures (27,290) (28,216)
Purchases of auction rate securities -- (15,000)
Proceeds from sale of property and
equipment 7,185 2,501
Sales of auction rate securities 5,000 --
Other investing activities 1,490 2,246
----------- ------------
Net cash used in investing
activities (13,615) (38,469)
----------- ------------
Cash Flows from Financing Activities:
Proceeds from borrowings under
revolving credit facilities 367,850 --
Payments of borrowings under revolving
credit facilities (367,850) --
----------- ------------
Net increase in borrowings under
revolving credit facilities -- --

Payments on long-term debt and capital
lease obligations (15,838) (8,503)
Treasury stock acquired (3,811) --
Proceeds from exercise of stock options 605 2,165
Dividends paid (4,185) (4,157)
----------- ------------
Net cash used in financing
activities (23,229) (10,495)
----------- ------------
Decrease in cash and cash equivalents (9,358) (25,979)

Cash and cash equivalents at beginning of
the year 10,122 31,591
----------- ------------
Cash and cash equivalents at end of
period $ 764 $ 5,612
=========== ============

See notes to condensed consolidated financial statements.




HAVERTY FURNITURE COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE A - Basis of Presentation
---------------------

Haverty Furniture Companies, Inc. ("Havertys" or the "Company") is a
full-service home furnishings retailer. The Company operates all of
its stores using the Havertys brand and does not franchise its
concept. The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with the instructions to
Form 10-Q and therefore do not include all information and footnotes
required by generally accepted accounting principles in the United
States for complete financial statements. The financial statements
include the accounts of the Company and its wholly-owned subsidiaries
and one variable interest entity under FIN 46. All significant
intercompany accounts and transactions have been eliminated in
consolidation. In the opinion of management, all adjustments of a
normal recurring nature considered necessary for a fair presentation
have been included.

The preparation of condensed consolidated financial statements in
conformity with accounting principles in the United States requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosures of contingent assets
and liabilities as of the date of the consolidated financial
statements and reported amounts of revenue and expenses during the
reporting period. Actual results could differ from those estimates.

For further information, refer to the consolidated financial
statements and footnotes thereto included in Havertys Annual Report on
Form 10-K for the fiscal year ended December 31, 2004. As a result of
the lease adjustments discussed in Note B below, certain information
included in that Form 10-K was restated in Form 10-K/A, which was
filed with the Securities and Exchange Commission ("SEC") on June 27,
2005. Certain prior-year amounts have been reclassified to conform to
the 2004 financial statement presentation.

NOTE B - Restatement and Reclassification Adjustments
--------------------------------------------

The Company reviewed its lease accounting during the second quarter of
2005 and determined that it was appropriate to restate its
consolidated financial statements for the fiscal years ended December
31, 2002 through 2004. These adjustments related to lease accounting
matters, including those discussed by the SEC in its February 7, 2005
letter ("SEC Letter") to the American Institute of Certified Public
Accountants ("AICPA"). In the SEC Letter, the SEC expressed its views
on the amortization of leasehold improvements, rent holidays and
landlord/tenant incentives.

In its earnings release for the year and quarter ended December 31,
2004, the Company first reported recording adjustments totaling $0.4
million to adjust straight-line rent expense and to correct its
accounting for leases. As then discussed, it had been our policy to
depreciate our property and equipment, including assets on leased
properties, over the estimated useful lives of those assets. In some
cases, these assets on leased properties were depreciated over a
period of time that included both the initial term of the lease and
one or more option periods. However, in certain instances, when
calculating straight-line rent expense, the Company excluded option
periods which had been included for depreciation purposes. In
December 2004, the Company revised its computation of straight-line
rent to include certain option periods where failure to exercise such
options would result in an economic penalty. As a result, the Company
concluded that rent expense was cumulatively understated by $0.4
million as of December 31, 2004, and as the amount was immaterial,
recorded the adjustment in the quarter then ended.
HAVERTY FURNITURE COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)


Subsequent to the issuance of the SEC Letter and the additional
clarification from the SEC concerning the acceptable accounting
methods, we undertook an additional review of our accounting policies
relative to rent holidays. The adjustment described below changes our
accounting practices to expense straight-line rent from the point at
which the Company takes control and possession of a leased site
(generally at the beginning of construction). Previously, the Company
began straight-lining of rent at the earlier of the dates actual rent
payments commenced or the opening of the store. The cumulative pre-
tax adjustment of $2.8 million reflects the correct treatment for rent
holidays and the adjustment for option periods noted above.

The Company corrected these errors through restatement of its
consolidated financial statements reported on Form 10-K for the fiscal
year ended December 31, 2004. The Company filed a Form 10-K/A for
the fiscal year ended December 31, 2004 on June 27, 2005. The
condensed consolidated balance sheet as of December 31, 2004 contained
herein reflects all adjustments included in that Form 10-K/A.

The Company capitalizes certain expenses related to handling and
transportation into inventory which flows through its distribution
centers. All warehouse, transportation and distribution costs are
included in the line item Selling, General and Administrative (SG&A).
In prior periods, expenditures capitalized into inventory were
recognized through SG&A rather than cost of goods sold. The Company
has completed its transition to a distribution model that has
increased the level of inventory flowing through the distribution
centers. Accordingly, the Company now includes those costs
capitalized into inventory for handling and transportation in cost of
goods sold and has reclassified the prior periods for comparability.

The impact of these changes is outlined below for the periods noted
(in thousands, except per share data):

Quarter Ended
September 30, 2004
----------------------------------------------------
as
as restated
previously restatement and
Income statement data reported adjustment reclassification reclassified
- ---------------------- ---------- ----------- ---------------- ------------

Cost of goods sold $ 98,326 $ - $ 4,539 $ 102,865
Selling, general and
administrative 93,406 97 (4,539) 88,964
Income before income taxes 6,835 (97) -- 6,738
Income taxes 2,551 (50) -- 2,501
Net income 4,284 (47) -- 4,237
Diluted earnings per
share - Common Stock $ 0.19 ($0.01) -- $0.18
HAVERTY FURNITURE COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)


Nine Months Ended
September 30, 2004
-----------------------------------------------------
as
as restated
previously restatement and
Income statement data reported adjustment reclassification reclassified
- ---------------------- ---------- ----------- ---------------- ------------

Cost of goods sold $ 279,625 $ -- $ 12,848 $ 292,473
Selling, general and
administrative 267,143 511 (12,848) 254,806
Income before income taxes 22,616 (511) -- 22,105
Income taxes 8,437 (262) -- 8,175
Net income 14,179 (249) -- 13,930
Diluted earnings per
share - Common Stock $0.61 ($0.01) -- $0.60



As of September 30,
2004
------------------------
as
previously As
Balance Sheet Data reported restated
- ------------------- ------------ ----------

Accounts payable and
accrued expenses, including
customer deposits $ 82,223 $ 88,535

Other liabilities (long term) 13,780 20,808

Stockholders' equity 265,484 263,655


The liability for accrued straight-line rent has been reclassified
from current to long-term in connection with the restatement in
recognition of the portion which will be realized in periods beyond
one year.

These changes did not affect total cash flows provided by or used in
operating, investing or financing activities for the three or nine
months ended September 30, 2004.


NOTE C - Earnings Per Share
------------------

The Company reports its earnings per share using the two-class method
as required by the Emerging Issues Task Force (EITF). The EITF
reached final consensus on Issue No. 03-6, "Participating Securities
and the Two-Class Method under FASB Statement No. 128, Earnings Per
Share (SFAS 128)," at their March 17, 2004 meeting. EITF 03-6
requires the income per share for each class of common stock to be
calculated assuming 100% of the Company's earnings are distributed as
dividends to each class of common stock based on their contractual
rights.

The Common Stock of the Company has a preferential dividend rate of
at least 105% of the dividend paid on the Class A Common Stock. The
Class A Common Stock, which has ten votes per share as opposed to one
vote per share for the Common Stock (on all matters other than the
election of directors), may be converted at any time on a one-for-one
basis into Common Stock at the option of the holder of the Class A
Common Stock.

The effective result of EITF 03-6 is that the basic earnings per share
for the Common Stock is 105% of the basic earnings per share of the
Class A Common Stock. Additionally, given the Company's current
capital structure, diluted earnings per share for Common Stock under
EITF 03-6 will be the same as was previously reported using the if-
converted method.

The amount of earnings used in calculating diluted earnings per share
of Common Stock is equal to net income since the Class A shares are
assumed to be converted. Diluted earnings per share of Class A Common
HAVERTY FURNITURE COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

Stock includes the effect of dilutive common stock options which
reduces the amount of undistributed earnings allocated to the Class A
Common Stock.

The following is a reconciliation of the number of shares used in
calculating the diluted earnings per share for Common Stock under SFAS
128 and EITF 03-6 (shares in thousands):


Quarter Ended Nine Months Ended
September 30 September 30
--------------- ----------------
2005 2004 2005 2004
----- ----- ------ ------

Common:
Weighted average shares
outstanding 18,278 18,252 18,361 18,187

Assumed conversion of
Class A Common shares 4,306 4,338 4,311 4,348


Diluted options 68 375 188 531
------- ------- -------- --------
Total weighted-average
diluted common shares 22,652 22,965 22,860 23,066
======= ======= ======== ========


NOTE D - Stock-Based Compensation
------------------------

At September 30, 2005, the Company had three stock-based employee
compensation plans under which awards have been made: a non-
compensatory employee stock purchase plan, a stock option plan and a
long-term incentive plan. The Company accounts for those plans under
the recognition and measurement principles of APB Opinion No. 25,
"Accounting for Stock Issued to Employees," and related
Interpretations. No stock-based employee compensation cost for any
options is reflected in net income, as all options granted under those
plans had an exercise price equal to the market value of the
underlying common stock on the date of grant. Restricted stock
compensation is charged to expense over the vesting periods of the
grants.

On August 18, 2005, the Board of Directors of Haverty Furniture
Companies, Inc. upon the recommendation of the Board's Executive
Compensation Committee, approved the acceleration of vesting of all
"out-of-the-money", unvested stock options held by current employees,
including executive officers and certain employee directors. An
option was considered out-of-the-money if the stated option exercise
price was greater than $12.57, the closing price of the Company's
common stock on August 18, 2005. Options to purchase approximately
482,650 shares of common stock, which otherwise would have vested on a
yearly basis through 2008 became immediately exercisable. The
weighted average exercise price of the accelerated options is $17.49.
The decision to initiate the acceleration was made primarily to reduce
compensation expense that would be expected to be recorded in future
periods following the Company's adoption on January 1, 2006 of
Statement of Financial Accounting Standards No. 123R, "Share-Based
Payment (revised 2004)". As a result of the acceleration, the Company
reduced this expected compensation expense, net of tax, by a total of
approximately $3.7 million (approximately $2.0 million in 2006, $1.1
million in 2007, and $0.6 million in 2008). These amounts are based
on fair value calculations using the Black-Scholes methodology.
HAVERTY FURNITURE COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

The following table illustrates the effect on net income and earnings
per share if the Company had applied the fair value recognition
provisions of FASB Statement No. 123, "Accounting for Stock-Based
Compensation," to stock-based employee compensation and includes the
impact of the accelerated vesting in the third quarter of the 482,650
"out-of-the-money" options (in thousands, except per share amounts):


Quarter Ended Nine Months Ended
September 30 September 30
----------------- -------------------
2005 2004 2005 2004
------- ------ ------ -------
(Restated (Restated
See Note B) See Note B)

Net income, as reported $ 3,816 $ 4,237 $ 8,300 $ 13,930

Add: Reported stock-based
compensation expense,
net of tax 154 -- 540 --


Less: Pro forma stock-based
employee compensation
expense, net of tax (5,042) (722) (6,761) (2,123)
--------- -------- -------- ---------
Pro forma net (loss) income $ (1,072) $ 3,515 $ 2,079 $ 11,807
========= ======== ======== =========

Earnings (loss) per share:
As reported
Basic:
Common $0.17 $0.19 $0.37 $0.63
Class A $0.16 $0.18 $0.35 $0.59
Diluted:
Common $0.17 $0.18 $0.36 $0.60
Class A $0.16 $0.18 $0.35 $0.58

Pro Forma:
Basic:
Common $(0.05) $0.16 $0.09 $0.53
Class A $(0.05) $0.15 $0.08 $0.50

Diluted:
Common $(0.05) $0.15 $0.09 $0.50
Class A $(0.05) $0.14 $0.08 $0.49


NOTE E- Interim LIFO Calculations
-------------------------

An actual valuation of inventory under the LIFO method can be made
only at the end of each year based on the inventory levels and costs
at that time. Accordingly, interim LIFO calculations must necessarily
be based on management's estimates of expected year-end inventory
levels and costs. Since these are affected by factors beyond
management's control, interim results are subject to the final year-
end LIFO inventory valuation.
HAVERTY FURNITURE COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

NOTE F - Other (income) expense, net
---------------------------

The Company includes in this line item any gains or losses on sales of
land, property and equipment, impairment losses and changes in
previously estimated losses and other miscellaneous income or expense
items which are non-recurring in nature. The following are the
significant gains or losses that have been included in "other (income)
expense, net." During the third quarter of 2005, the Company had
gains of approximately $2.6 million from the sale of two retail
locations and a local market warehouse. Gains from the sales of land,
property and equipment were approximately $0.8 million and $0.7
million for the quarter and nine months ended September 30, 2004,
respectively. During the third quarter of 2004, the Company had
facilities and inventory damaged by hurricanes and the insurance
proceeds to repair these facilities generally offset the deductible
expense.

NOTE G - Comprehensive Income
- -----------------------------

Total comprehensive income was comprised of the following (in
thousands):

Quarter Ended Nine Months Ended
September 30 September 30
----------------- ------------------
2005 2004 2005 2004
--------- ------- ------- -------

Net income $ 3,816 $ 4,237 $ 8,300 $ 13,930
Changes in derivatives,
net of applicable income tax 145 145 435 435
-------- -------- -------- ---------
Total comprehensive
income $ 3,961 $ 4,382 $ 8,735 $ 14,365
======== ======== ======== =========

NOTE H - Pension Plans
- ----------------------

Net pension cost included the following components (in thousands):

Quarter Ended Nine Months Ended
September 30 September 30
---------------- -----------------
2005 2004 2005 2004
-------- ------- ------- -------

Service cost-benefits
earned during the period $ 705 $ 639 $ 2,115 $ 1,917
Interest cost on projected
benefit obligations 814 782 2,442 2,346
Expected return on plan assets (1,015) (980) (3,045) (2,940)
Amortization of prior service costs 33 33 99 99
-------- ------- -------- --------

Net pension cost $ 537 $ 474 $ 1,611 $ 1,422
======== ======= ======== ========
HAVERTY FURNITURE COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

The Company disclosed in its financial statements for the year ended
December 31, 2004, a planned $3.5 million contribution to the pension
plan in 2005. No contributions were made to the plan in the first
nine months of 2005, but $3.5 million is expected to be contributed
prior to December 31, 2005.


NOTE I - Accounts Receivable
- ----------------------------

Accounts receivable balances resulting from certain credit promotions
have scheduled payment amounts which extend beyond one year. In the
aggregate, and based on historical experience, the receivables are
collected in seven to eight months. The Company classifies a portion
of the receivables as long-term based on the specific programs'
historical collection rate, which is generally faster than the
scheduled rate. The portions of receivables contractually due beyond
one year classified as current and long-term are estimates. The
timing of actual collections that are contractually due beyond one
year may be different from the amounts estimated to be collected
within one year. However, based on experience, management does not
believe the collection rate will differ significantly. At September
30, 2005 and 2004, the accounts receivable contractually due beyond
one year from the respective balance sheet dates totaled approximately
$23.7 million and $26.2 million, respectively.


Note J - Recently Issued Accounting Pronouncements
- --------------------------------------------------

SFAS 123R, "Share-Based Payment" (Revised 2004): Statement of
Financial Accounting Standard No. 123 (SFAS No. 123R) was revised in
December 2004. We adopted the disclosure provisions of SFAS 123 when
it became effective in 1996 but, as discussed in Note D above,
continue to account for stock options under APB No. 25. Beginning in
the first quarter of 2006, we will be required to record stock-based
compensation costs in our income statement expect to choose the
modified prospective method of adoption of SFAS No. 123R. We currently
use the Black-Scholes method to calculate pro forma compensation
expense, and we expect to continue using this method for future
expense fair value calculations to the extent that we make stock
option grants in the future.

SFAS No. 151 "Inventory Costs": SFAS No. 151 is an amendment to ARB
No. 43, Chapter 4 that will be effective in fiscal 2006. The standard
clarifies the accounting for abnormal amounts of idle facility
expense, freight and handling costs to require that those costs be
expensed currently, as opposed to being included in overhead costs.
We do not expect a material impact, if any, from the implementation of
SFAS No. 151 on our financial statements.

SFAS No. 154 "Accounting for Changes and Error Corrections - a
Replacement of APB Opinion 20 and FASB Statement No. 3": SFAS No. 154
was issued in June 2005 and requires retrospective application of
voluntary changes in accounting principles, unless impracticable.
SFAS No. 154 supersedes the guidance in APB Opinion No. 20 and SFAS
No. 3; but does not change any transition provisions of existing
pronouncements. Generally, elective accounting changes will no longer
result in cumulative effect of a change in accounting in the income
statement, because the effects of any elective changes will be
reflected as prior period adjustments to all periods presented. SFAS
No. 154 will be effective beginning with our 2006 fiscal year and
could affect any accounting changes that we elect to make thereafter.
Item 2.  Management's Discussion  and  Analysis of Financial Condition
and Results of Operations

Forward-Looking Information

Certain statements we make in this report, and other written or oral
statements made by or on behalf of the Company, may constitute
"forward-looking statements" within the meaning of the Securities Act
of 1933, and the Securities Exchange Act of 1934, as amended by the
Private Securities Litigation Reform Act of 1995, 15 U.S.C.A. Sections
77Z-2 and 78U-5 (Supp. 1996). Examples of such statements in this
report include descriptions of our plans with respect to new store
openings and relocations, our plans to enter new markets and
expectations relating to our continuing growth. The forward-looking
statements regarding future events and our future results are based
on current expectations, estimates, forecasts and projections about
the industry and markets in which we operate and the beliefs and
assumptions of our management. Readers are cautioned that these
forward-looking statements are only predictions and are subject to
risks, uncertainties and assumptions that are difficult to predict.
Therefore, actual results may differ materially and adversely from
those expressed in any forward-looking statement. Such statements speak
only as of the date they are made and we undertake no obligation
to publicly update or revise any forward-looking statement, whether
as a result of future events, new information or otherwise. The
following are some of the factors that could cause Havertys' actual
results to differ materially from the expected results described
in our forward-looking statements: the ability to maintain favorable
arrangements and relationships with key suppliers (including domestic
and international sourcing); any disruptions in the flow of imported
merchandise; conditions affecting the availability and affordability
of retail and distribution real estate sites; the ability to attract,
train and retain highly qualified associates to staff existing and
new stores, distribution facilities and corporate positions; general
economic and financial market conditions, which affect consumer
confidence and the spending environment for big ticket items;
competition in the retail furniture industry; and changes in laws
and regulations, including changes in accounting standards, tax
statutes or regulations.

Operating Results and Financial Condition

The following discussion of Havertys' financial condition and results
of operations should be read together with our condensed consolidated
financial statements and related notes thereto included herein.

Net Sales
Our sales are generated by customer purchases of home furnishings in
our retail stores and revenue is recognized upon delivery to the
customer. The following outlines our sales and comp-store sales
increases for the periods indicated:


<TABLE>
<CAPTION


2005 2004 2003
---------------------------- ----------------------------- -----------------------------
Comp-Store Comp-Store Comp-Store
Net Sales Sales Net Sales Sales Net Sales Sales
----------------- ---------- ------------------ ---------- ----------------- -----------
% % % % % %
Increase Increase Increase Increase Increase Increase
(decrease) (decrease) (decrease) (decrease) (decrease) (decrease)
over over over over over over
Period Dollars prior prior Dollars prior prior Dollars prior prior
Ended (000)s period period (000)s period period (000)s period period
- ------ ------- -------- --------- ------- --------- ---------- ------- ---------- ----------
<s> <c> <c> <c> <c> <c> <c> <c> <c> <c>

Q1 207.6 9.1 4.7 190.3 8.5 4.0 175.4 0.2 (6.6)

Q2 192.4 7.1 2.3 179.6 6.5 2.6 168.6 2.3 (2.2)

Q3 202.0 2.3 (1.0) 197.4 1.1 (1.0) 195.4 11.2 6.1

Q4 - - - 216.8 5.6 3.0 205.3 8.9 5.7
-------------------------- ------------------------- ---------------------------
Year 602.1 6.1 2.0 784.2 5.3 2.1 744.6 5.8 1.0
========================== ========================= ===========================

</TABLE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations (Continued)


Total sales increased $4.6 million or 2.3% and $34.7 million or 6.1%
in the third quarter and the first nine months of 2005, respectively.
Comparable store sales declined 1.0% or $1.9 million in the third
quarter and rose 2.0% or $11.0 million during the first nine months of
2005. The remaining $6.5 million and $23.7 million of the increases
in the third quarter and first nine months of 2005, respectively, were
from new and otherwise non-comparable stores. Stores are non-
comparable if open for less than one year or if the selling square
footage has been changed significantly during the past 12 full months.
Large clearance sales events from warehouses or temporary locations
are excluded from comparable store sales, as are periods when stores
are closed for remodeling.

Retail sales of big-ticket home goods were weak from mid 2002 to mid
2003, which was widely reported to be due to consumer anxiety about
employment uncertainty, threats of war, war and geopolitical unrest.
There was also a lingering negative effect from lower stock market
values. Beginning in June 2003 we had positive comp-store monthly
sales results that continued throughout the remainder of 2003 and
through April 2004 (excluding November 2003 which was 0.4% negative).
Sales in our Florida and Southeast markets during August and September
of 2004 were negatively impacted by record-breaking severe weather
from four hurricanes within a six-week period. These lost sales were
particularly significant because our Florida stores normally produce
approximately 23% of our total sales.

Sales during the fourth quarter of 2004 and the first half of 2005
improved but still reflected some continued reluctance by consumers to
make big-ticket purchases. Results during the third quarter of 2005
were not as strong as expected relative to last year's quarter given
the significant impact on the 2004 results from the hurricane
activity.

We believe that although the overall economy has improved, higher
energy costs and rising interest rates have contributed to consumers
reluctance to increase spending for big-ticket furniture items.
During the third quarter of 2005 there was increased discounting
activity in many of our markets related to the bankruptcy of a
regional competitor. Many other retailers have been advertising
aggressive sales promotions to stimulate business and increase their
sales volume. We believe that this approach would negatively impact
our "everyday low pricing" integrity with our customers over the
longer term. Instead, we have used some promotional pricing during
traditional holiday sales events. Supplementing the pricing promotions,
we also offer free-interest and deferred payment financing promotions.
During the remainder of the year we expect to continue with this
approach of providing a selection of specially priced merchandise and
competitive financing promotions to increase traffic in our stores.
We will also be using additional advertising methods to reach our
target customers such as an 80 page catalogue mailed to select
customers in mid-October.
Item 2.  Management's Discussion and Analysis of Financial Condition
and Results of Operations (Continued)


Our sales during the first nine months of 2005 increased across most
of our major categories of furnishings, with casual dining and
recliners and sleeper sofas performing better than the average. Our
average price per item was slightly down and our average sales
transaction was modestly higher in the third quarter over the prior
year period. Net sales for each period by category were as follows
(in millions):

<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
-------------------------------- -------------------------------
% of Net % of Net % of Net % of Net
2005 Sales 2004 Sales 2005 Sales 2004 Sales
------- -------- ------ -------- ------- ------ ------ -------
<s> <c> <c> <c> <c> <c> <c> <c> <c>
Upholstery $49.6 24.6% $48.1 24.3% $148.9 24.7% $140.2 24.7%
Bedroom 43.9 21.7 45.2 22.9 130.7 21.7 128.0 22.6
Formal Dining 14.1 7.1 15.4 7.8 42.8 7.1 43.9 7.7
Casual Dining 12.0 5.9 9.2 4.7 35.1 5.9 27.4 4.8
Recliners and
Sleeper Sofas 14.3 7.0 13.2 6.7 44.4 7.4 40.4 7.1
Occasional 33.0 16.3 32.3 16.4 100.6 16.7 95.2 16.8
------ ------ ------- ------ ------- ----- ------ -----
Total
Furniture
Sales 166.9 82.6 163.4 82.8 502.5 83.5 475.1 83.7
------ ------ ------- ------ ------- ----- ------ -----
Bedding 20.9 10.3 21.2 10.7 57.8 9.6 55.3 9.8
Accessories
and Other 14.2 7.1 12.8 6.5 41.8 6.9 37.0 6.5
------ ------ ------- ------ ------- ----- ------ -----
Net Sales $202.0 100.0% $197.4 100.0% $602.1 100.0% $567.4 100.0%
====== ====== ======= ====== ======= ====== ====== =====

</TABLE>

Gross Profit

Cost of goods sold consists primarily of the purchase price of the
merchandise together with inbound freight costs. Inventory that flows
through our distribution centers, and the regional warehouses in prior
periods, is capitalized with additional costs for certain expenses
related to handling and transportation to local markets. The amounts
shown in cost of goods sold previously included only the product
costs, certain vendor allowances, in-bound freight and LIFO
adjustments. All warehouse, transportation and distribution costs
were included in the line item Selling, General and Administrative
(SG&A). In prior periods, expenditures capitalized into inventory
were recognized through SG&A rather than cost of goods sold. We have
completed our transition to a distribution model that has increased
the level of inventory flowing through the distribution centers.
Accordingly, beginning in the third quarter of 2005 we are including
in cost of goods sold the amounts capitalized into inventory for
handling and transportation, and reclassified the prior periods for
comparability.

Our gross profit is largely dependent upon merchandising capabilities,
vendor pricing and the mix of products sold. The continued
improvements related to the products imported from Asia and pricing
pressure on domestic suppliers have also generated good values for us.
Many retailers have used the decreased costs to support their heavy
promotional pricing. Our approach has been to offer products with
greater value at our established middle to upper-middle price points.

Gross profit for the third quarter declined 30 basis points compared
to the prior year period and was flat on a sequential basis over the
second quarter of this year. During the first nine months of 2005 we
closed five local warehouses and our Florida regional warehouse
facility. This generated higher than normal markdowns which, combined
with pricing pressure on certain products and higher handling and
transportation costs, has impacted gross profit margins. Gross
profit for the nine months ended September 30, 2005 declined
approximately 90 basis points as compared to the respective prior
year period. We expect the fourth quarter 2005 gross profit
margin level to be relatively flat with year to date results.

Substantially all of our occupancy and home delivery costs are
included in selling, general and administrative expenses as are a
portion of our warehousing expenses. Accordingly our gross profit may
not be comparable to those entities that include these costs in cost
of goods sold.


Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (Continued)


Selling, General and Administrative Expenses

Selling, general and administrative ("SG&A") expenses are comprised of
five categories: selling; occupancy; warehouse and delivery;
administrative; and advertising. Selling expenses are primarily
comprised of compensation of sales associates and sales support staff
and bank card charges. Occupancy costs include rents, depreciation
charges, insurance and property taxes, repairs and maintenance
expenses and utility costs. Warehouse and delivery costs include
certain personnel expenses, fuel costs, and depreciation and rental
charges for equipment and rolling stock. Administrative expenses
are comprised of compensation costs for store management, information
systems, executive, finance, merchandising, real estate and human
resource departments, as well as retirement costs for all Havertys
employees. Advertising expenses are primarily media production and
space, direct mail costs and market research expenses.

During the third quarter we incurred approximately $0.5 million or 25
basis points of pre-opening expenses for new stores. We expect that
these will increase to $0.6 million in the fourth quarter, an amount
comparable to the respective prior year period.

Our SG&A costs in the third quarter were up 100 basis points as a
percent of sales compared to the prior year period and declined 50
basis points on a sequential basis over the second quarter of 2005.
Our distribution system is designed to support the expansion of our
business efficiently. However, the system is more transportation
oriented and rising fuel costs have an immediate impact on
profitability. Demurrage costs for the third quarter were $0.4
million or 18 basis points versus negligible amounts in the prior year
period. These costs are incurred when imported containers are not
unloaded and returned to the port within the required time period. We
have made changes to our supply chain that we believe will result in
improved efficiency and reduce costs in flowing containers from Asia
in 2006. This improvement is expected to result from lower rates,
increased reliability and reduced demurrage.

Our SG&A costs were up 110 basis points as a percent of sales on a
comparable basis during the first nine months of 2005. Our operations
were affected by the last major phase of our distribution transition.
The overall impact from closing and consolidating six warehouses into
our new Florida Distribution Center was costly. Our efficiency and
timeliness in delivering to our customers was hampered in part due to
challenges with our imported merchandise flow relative to space in our
distribution center. Backing up our steady move to imported product
as well as quick-turning domestic upholstery and supporting store
growth, we will be completing the first phase of the expansion of our
Eastern Distribution Center in Braselton, Georgia by late this year.
The second phase will be complete in Spring 2006 and will bring the
size of this key east coast facility to over 800,000 square feet. We
believe that this expansion and a narrowed merchandise line up will
allow us to significantly grow our volume and much better support the
move to primarily exclusive Havertys Collectionr products. While
these changes have been difficult and demonstrably expensive in period
costs and human capital, we believe they are necessary.

We also experienced increased costs during the first nine months
related to ongoing operations for group insurance, utilities and
professional service fees. Medical insurance costs were up $0.5
million in the third quarter and $2.2 million for the nine months
ended September 30, 2005 compared to the respective periods of 2004.
Utilities have increased approximately 37.2% over the prior year for
the quarter and 27.0% the nine months ended September 30, 2005. The
new regulatory requirements and the cost of compliance with the
Sarbanes-Oxley Act contributed to a $0.2 million increase in the third
quarter and a $1.0 million increase for the first nine months of 2005
in professional service fees as compared to the 2004 periods.
Item 2.  Management's Discussion and Analysis of Financial Condition
and Results of Operations (Continued)

Credit Service Charge Revenue and Allowance for Doubtful Accounts

Our credit service charge revenue has continued to decline as
customers choose credit promotions with no interest features. The in-
house financing program most frequently chosen by our customers during
the third quarter was a no interest offer requiring 14 to 16 equal
monthly payments. This program and the similar 12-month program
generates very minor credit revenue, but helps us reduce our interest
expense and bad debts due to the faster payout relative to our
deferred payment in-house credit programs. In addition, we offer our
customers the opportunity to apply for credit with a third party
credit provider. Sales financed by this provider are not Havertys'
receivables and accordingly we do not have any credit risk or service
responsibility for these accounts, and there is no credit or
collection recourse to Havertys. The most popular program offered
through the third party provider for the third quarter was a no
interest offer requiring 19 to 22 equal monthly payments. The third
party also offers our customers a deferred payment for 12 months with
an interest accrual that is waived if the entire balance is paid in
full at the end of the deferral period.

During the third quarter of 2005, the amounts financed under all
credit programs as a percent of sales was 39.2% as compared to 42.5%
in the third quarter of 2004. The following highlights the impact
these changes have had on our credit service charge revenue and
related accounts receivable and allowance for doubtful accounts (in
thousands):

Three Months Nine Months
ended Ended
September 30 September 30
----------------- -----------------
2005 2004 2005 2004
------ -------- ------- -------

Credit Service Charge Revenue $ 837 $ 992 $ 2,702 $ 3,459

Amount Financed as a % of Sales

Havertys 19.2% 21.7% 21.7% 22.8%
Third-Party 20.1% 20.8% 17.6% 18.6%
-------- -------- --------- --------
39.2% 42.5% 39.3% 41.4%

% Financed by Havertys with
No Interest for 12 months 30.4% 33.6% 27.2% 43.9%
No Interest for >12 months 42.0% 41.3% 49.1% 30.5%
No Interest < 12 months 13.0% 12.9% 11.0% 13.7%
Other 14.6% 12.2% 12.7% 11.9%
-------- -------- --------- --------
100.0% 100.0% 100.0% 100.0%


September 30
-----------------------
2005 2004
---------- ----------
Accounts receivable $ 94,930 $ 100,869
Allowance for doubtful accounts 2,400 3,350
Allowance as a % of accounts receivable 2.5% 3.3%



Our allowance for doubtful accounts as a percentage of the receivables
pool is lower in 2005 due to improvements in the delinquency and
problem category percentages from 2004. We believe that the amounts
we pay for the third party credit program are justified compared to
the increased costs associated with a larger receivables portfolio and
the collection risks of the more promotional credit offers needed to
remain competitive.


Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (Continued)


Balance Sheet Changes for the Nine Months Ended September 30, 2005

Cash balances declined by approximately $9.4 million from December 31,
2004 to September 30, 2005 as we utilized cash balances and cash
generated from operations to make capital expenditures.

Accounts receivable increased approximately $1.5 million since the end
of last year due to the popularity of our in-house no interest credit
promotion offered during the first half of this year.

Prepaid expenses increased approximately $5.4 million primarily due to
payments of estimated income taxes.

Other current assets declined by approximately $5.6 million as we
utilized cash held in escrow to acquire a property previously financed
under a capital lease, collected vendor rebates receivables; and had a
lower amount receivable at September 30, 2005 from our third-party
customer credit provider.

Accounts payable decreased $2.2 million due to lower purchases as
overall inventory was reduced during the third quarter and there was a
reduction in the level of inventory in transit.

Customer deposits increased $8.1 million as written sales orders
increased and deliveries were somewhat hampered by product flow and
weather.

Capital lease obligations declined as we elected to purchase a
property under a capital lease.

Liquidity and Capital Resources

The following discusses the sources of our cash flows and commitments
which impact our liquidity and capital resources on both a short-term
and long-term basis.

Cash flows generated from operations provide us with a significant
source of liquidity. Cash provided by operations remained positive at
$27.5 million in spite of increases in accounts receivables and
reductions in accounts payable and accrued liabilities. Net income
was $8.3 million and depreciation and amortization was $15.8 million.

Cash flows used in investing activities of $13.6 million in the first
nine months of 2005 were primarily for capital expenditures of $27.3
million offset in part by $7.2 million in proceeds from the sales of
property and equipment and $5.0 million from the sale of auction rate
securities.

Cash flows used in financing activities were $23.2 million as we
repaid $15.8 million of debt and capital lease obligations, purchased
$3.8 million in treasury stock and paid $4.2 million in dividends.

Stock Repurchases

The Company's Board of Directors approved a stock repurchase program
on November 3, 1986 and has at various times subsequent to that date
increased the number of shares which may be purchased under the
program. Stock repurchases may be made through open market and
privately negotiated transactions at times and in such amounts as
management deems appropriate. The timing and actual number of shares
repurchased will depend on a variety of factors including price,
corporate and regulatory requirements and other market conditions.
The stock repurchase program does not have an expiration date and may
be limited or terminated at any time without prior notice.
Approximately 1.8 million shares remain authorized for purchase as of
September 30, 2005.

Financings

In addition to term borrowings and capital leases, we have revolving
lines of credit available for general corporate purposes and as
interim financing for capital expenditures. These credit facilities
are syndicated with five commercial banks and are comprised of two
revolving lines totaling $80.0 million that terminate in August 2010.
These facilities which were entered into in late August replace
facilities totaling the same amount that were to terminate in
September. Borrowings under the new facilities are unsecured and
accrue interest at LIBOR plus a spread that is based on our fixed-
charge coverage ratio, as defined. We did not have any amounts
outstanding under these facilities at September 30, 2005. Our letters
of credit totaling $4.7 million are considered part of the facilities
usage. Accordingly, we had unused capacity of $63.9 million at
September 30, 2005.

Store Expansion and Capital Expenditures

We have entered several new markets and made continued improvements
and relocations of our store base. Our compounded annual growth rate
for selling square footage over the last fifteen years was
approximately 5%.

We are expecting to add approximately 1.9% retail square footage
net of closures during 2005. We opened an additional store in the
Metro DC market during the first quarter. We opened a new store in the
new market of Indianapolis, Indiana in October. We also expect to
enter the new market of Columbus, Ohio with a new store by the end of
the year. Two older stores in Shreveport, Louisiana were replaced
by a single, better located showroom which opened in October. Three
of our best stores also were physically expanded during 2005. We will
also be closing one store in Austin, Texas in the fourth quarter and
expect to replace this store by the end of 2006.

We plan to open approximately five or six stores in 2006. These include
a store in Ft. Lauderdale, Florida; a location near Stonecrest Mall,
east of Atlanta; a relocated store in South Dallas, Texas in the Cedar
Hill area; and two or three additional stores. We are aggressively
evaluating other possible new locations which we believe will become
available in existing retail sites in the near term. Our strategy is
to pursue opportunities in densely populated markets which we can serve
using our existing distribution.

Our planned expenditures for 2005 are $40.0 million for stores,
distribution and information technology. Capital expenditures for
stores do not necessarily coincide with the years in which the store
opens. Cash balances, funds from operations, proceeds from sales of
properties and bank lines of credit are expected to be adequate to
finance our 2005 capital expenditures.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes with respect to the Company's
derivative financial instruments and other financial instruments and
their related market risk since the date of the Company's most recent
annual report.


Item 4. Controls and Procedures

As of the end of the period covered by this report, an evaluation was
performed under the supervision and with the participation of the
Company's management, including the Chief Executive Officer (CEO) and
Chief Financial Officer (CFO) of the effectiveness of the design and
operation of the Company's disclosure controls and procedures. Based
on that evaluation, the Company's management, including the CEO and
CFO, concluded that the Company's disclosure controls and procedures
were effective to provide reasonable assurance that information
required to be disclosed in the Company's reports under the Securities
Exchange Act of 1934 is recorded, processed, summarized, and reported
within the time periods specified in the Securities and Exchange
Commission's rules and forms and that such information is accumulated
and communicated to the Company's management, including the CEO and
CFO, as appropriate, to allow timely decisions regarding disclosure.

There have been no changes in the Company's internal control over
financial reporting identified in connection with the evaluation
described in the immediately preceding paragraph that occurred during
the period covered by this report that have materially affected, or
are reasonably likely to materially affect, the Company's internal
control over financial reporting.
PART II. OTHER INFORMATION


Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table provides information about the Company's purchases
of shares of the Company's common stock during the quarter ended
September 30, 2005:


<TABLE>
<CAPTION>


(c)
Total Number of
Shares (d)
Purchased as Maximum
(a) (b) Part of Number that
Total Average Publicly May Yet Be
Number of Price Announced Purchased
Shares Paid Per Plans or Under the Plans
Purchased Share Programs(1) or Programs
- ------------------------------------------------------------------------------------
<s> <c> <c> <c> <c>
July 1 - July 30, 2005 47,900 $13.19 47,900 2,104,946

August 1 - August 30, 2005 181,500 12.74 181,500 2,057,046

September 1 - September 30, 2005 70,600 12.28 70,600 1,875,546
----------- -------- ---------
Total 300,000 $12.70 300,000

</TABLE>

(1) The Board of Directors has authorized management, at its
discretion, to purchase and retire the Company's Common Stock and
Class A Common Stock under the Company's stock repurchase program.
The stock repurchase program was initially approved by the Board of
Directors on November 3, 1986 with subsequent authorizations made as
to the number of shares to be purchased.



Item 5. Other Information

On August 26, 2005, the Company completed the replacement of its $80
million bank revolving credit facilities which were scheduled to
terminate September 30, 2005. The new facilities are syndicated with
five commercial banks and are comprised of two revolving lines
totaling $80 million and terminate in August 2010. Borrowings under
these facilities are unsecured and accrue interest at LIBOR plus a
spread that is based on our fixed-charge coverage ratio, as defined.
The facilities also have provisions for commitment fees.

On September 6, 2005, Janet E. Taylor joined the Company as Vice
President, Law. Her hiring was announced in a press release dated
October 6, 2005. Ms. Taylor, 44, served as a partner in the corporate
department at the Atlanta office of King & Spalding from 2000 to 2005.
Her experience includes a broad range of transactions and advisory
work for several large public companies.


Item 6. Exhibits

(a) Exhibits

The exhibits listed below are filed with or incorporated by
reference into this Report (those filed with this report are denoted
by an asterisk). Unless otherwise indicated, the exhibit number of
documents incorporated by reference corresponds to the exhibit number
in the referenced document.

Exhibit
Number Description of Exhibit (Commission File No. 1-14445)

3.1 Articles of Incorporation of Haverty Furniture
Companies, Inc. as amended and restated on March
6, 1973, and amended on April 24, 1979, and as
amended on April 24, 1985 (Exhibit 3.1 to our 1985
Second Quarter Form 10-Q); Amendment to the
Articles of Incorporation dated April 26, 1986
(Exhibit 3.1.1 to our 1986 First Quarter Form 10-
Q); Amendment to the Articles of Incorporation
dated April 28, 1989 (Exhibit 3.1.2 to our 1989
Form 10-Q); Amendment to the Articles of
Incorporation dated April 28, 1995 (Exhibit 3.1.3
to our 1996 Form 10-K).

3.2 Amended and Restated By-laws of Haverty Furniture
Companies, Inc. as amended on February 26, 2004
(Exhibit 3.2 to our 2003 Form 10-K).

*10.1 Revolving Credit Agreement dated as of August 26,
2005 among Haverty Furniture Companies, Inc., as
Borrower, the Lenders from time to time Party
hereto, Bank of America, N.A. and Regions Bank, as
Co-Documentation Agents, Wachovia Bank, National
Association, as Syndication Agent and SunTrust
Bank, as Administrative Agent.

*10.2 Revolving Credit Agreement dated as of August 26,
2005 among Haverty Credit Services, Inc. as
Borrower, the Lenders from time to time Party
hereto, Bank of America, N.A. and Regions Bank, as
Co-Documentation Agents, Wachovia Bank, National
Association, as Syndication Agent and SunTrust
Bank, as Administrative Agent.

*31.1 Certification of Chief Executive Officer pursuant
to sec. 302 of the Sarbanes-Oxley Act of 2002.

*31.2 Certification of Chief Financial Officer pursuant
to sec. 302 of the Sarbanes-Oxley Act of 2002.

*32.1 Certification of Chief Executive Officer and the
Chief Financial Officer pursuant to 18 U.S.C. sec
1350, as adopted, pursuant to sec. 906 of the
Sarbanes-Oxley Act of 2002.



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf
by the undersigned, thereunto duly authorized.

HAVERTY FURNITURE COMPANIES, INC.
(Registrant)

Date November 9, 2005 By: /s/ Clarence H. Smith
----------------------------------
Clarence H. Smith
President and Chief Executive Officer


By: /s/ Dennis L. Fink
---------------------------------
Dennis L. Fink
Executive Vice President and
Chief Financial Officer