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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, 2002
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OR
[ ] TRANSACTION 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
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HAVERTY FURNITURE COMPANIES, INC.
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(Exact name of registrant as specified in its charter)
MARYLAND 58-0281900
------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
780 JOHNSON FERRY ROAD, SUITE 800, ATLANTA, GEORGIA 30342
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (404) 443-2900
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(Former name, former address and former fiscal year,
if changed since last report)
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 [ ]
The number of shares outstanding of the registrant's two classes of $1
par value common stock as of October 31, 2002 were: Common Stock - 17,198,558
Class A Common Stock - 4,536,076.
HAVERTY FURNITURE COMPANIES, INC.
INDEX
Page No.
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PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements -
Condensed Consolidated Balance Sheets -
September 30, 2002 and December 31, 2001 1
Condensed Consolidated Statements of Income -
Quarter and nine months ended September 30, 2002 and 2001 3
Condensed Consolidated Statements of Cash Flows -
Nine months ended September 30, 2002 and 2001 4
Condensed Consolidated Statements of Comprehensive Income -
Quarter and nine months ended September 30, 2002 and 2001 5
Notes to Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
Item 3. Quantitative and Qualitative Disclosure of Market Risk 11
Item 4. Controls and Procedures 11
PART II. OTHER INFORMATION:
Item 6. Exhibits and Reports on Form 8-K 12
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
HAVERTY FURNITURE COMPANIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
September 30 December 31
2002 2001
--------- ---------
ASSETS
Current Assets
Cash and cash equivalents $ 7,057 $ 727
Accounts receivable 144,141 192,685
Less allowance for doubtful accounts (6,300) (6,900)
--------- ---------
137,841 185,785
Inventories, at LIFO 116,947 103,662
Other current assets 16,550 15,581
--------- ---------
Total Current Assets 278,395 305,755
Property and equipment 236,607 258,658
Less accumulated depreciation and amortization (107,206) (112,259)
--------- ---------
129,401 146,399
Deferred income taxes 7,673 6,640
Other assets 3,141 2,111
--------- ---------
$ 418,610 $ 460,905
========= =========
2
HAVERTY FURNITURE COMPANIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Continued)
September 30 December 31
2002 2001
--------- ---------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Notes payable to banks $ 9,300 $ 25,000
Accounts payable and accrued expenses 97,619 87,533
Current portion of long-term debt and
capital lease obligations 11,615 11,370
--------- ---------
Total Current Liabilities 118,534 123,903
Long-term debt and capital lease obligations,
less current portion 75,460 131,599
Other liabilities 8,223 4,005
Stockholders' Equity
Capital stock, par value $1 per share --
Preferred Stock, Authorized: 1,000 shares;
Issued: None
Common Stock, Authorized:
50,000 shares; Issued: 2002 -- 23,110;
2001 -- 22,509 shares (including shares in treasury:
2002 and 2001 -- 5,927 and 5,932, respectively) 23,110 22,509
Convertible Class A Common Stock, Authorized:
15,000 shares; Issued: 2002 -- 5,060 shares;
2001 -- 5,247 shares (including shares in
treasury: 2002 and 2001 -- 522) 5,060 5,247
Additional paid-in capital 40,727 37,396
Retained earnings 208,042 195,119
Accumulated other comprehensive income (loss) (2,420) (697)
--------- ---------
274,519 259,574
Less cost of Common Stock and
Convertible Class A Common Stock in treasury (58,126) (58,176)
--------- ---------
216,393 201,398
--------- ---------
$ 418,610 $ 460,905
========= =========
See notes to condensed consolidated financial statements.
3
HAVERTY FURNITURE COMPANIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
Quarter Ended Nine Months Ended
September 30 September 30
--------------------------- ---------------------------
2002 2001 2002 2001
--------- --------- --------- ---------
Net sales $ 175,680 $ 170,645 $ 515,525 $ 490,359
Cost of goods sold 91,044 89,022 268,475 256,985
--------- --------- --------- ---------
Gross profit 84,636 81,623 247,050 233,374
Credit service charges 2,148 2,711 6,682 8,599
--------- --------- --------- ---------
Gross profit and other revenue 86,784 84,334 253,732 241,973
Expenses:
Selling, general and administrative 79,379 72,268 222,346 211,135
Interest 1,487 2,134 5,326 8,059
Provision for doubtful accounts 629 943 2,778 2,922
Other (income) expense, net (4,165) (112) (2,928) (114)
--------- --------- --------- ---------
77,330 75,233 227,522 222,002
--------- --------- --------- ---------
Income before income taxes 9,454 9,101 26,210 19,971
Income taxes 3,545 3,490 9,829 7,490
--------- --------- --------- ---------
Net income $ 5,909 $ 5,611 $ 16,381 $ 12,481
========= ========= ========= =========
Weighted average common shares - basic 21,693 21,058 21,578 20,935
Weighted average diluted common shares 21,994 21,528 22,213 21,445
Basic earnings per share $ 0.27 $ 0.27 $ 0.76 $ 0.60
========= ========= ========= =========
Diluted earnings per share $ 0.27 $ 0.26 $ 0.74 $ 0.58
========= ========= ========= =========
Cash dividends per common share:
Common Stock $ 0.0575 $ 0.0525 $ 0.1625 $ 0.1575
Class A Common Stock $ 0.0525 $ 0.0500 $ 0.1525 $ 0.1500
See notes to condensed consolidated financial statements.
4
HAVERTY FURNITURE COMPANIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Nine Months Ended September 30
------------------------------
2002 2001
---------- ---------
Operating Activities
Net income $ 16,381 $ 12,481
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 11,739 12,109
Provision for doubtful accounts 2,778 2,922
Gain on sale of property and equipment (3,760) (29)
--------- ---------
Subtotal 27,138 27,483
Changes in operating assets and liabilities:
Accounts receivable 45,166 10,546
Inventories (13,285) (2,720)
Other current assets (969) (2,000)
Accounts payable and accrued expenses 10,086 859
--------- ---------
Net cash provided by operating activities 68,136 34,168
--------- ---------
Investing Activities
Purchases of property and equipment (35,856) (18,161)
Proceeds from sale-leaseback transaction 41,485 --
Proceeds from sale of property and equipment 6,828 502
Other investing activities (1,030) 128
--------- ---------
Net cash provided by (used in) investing activities 11,427 (17,531)
--------- ---------
Financing Activities
Net (decrease) increase in borrowings under
revolving credit facilities (63,700) (9,900)
Payments on long-term debt and capital lease obligations( (7,894) (7,252)
Proceeds from exercise of stock options 3,745 2,281
Dividends paid (3,458) (3,263)
Other financing activities (1,926) 58
--------- ---------
Net cash used in financing activities (73,233) (18,076)
--------- ---------
Increase (decrease) in cash and cash equivalents 6,330 (1,439)
Cash and cash equivalents at beginning of period 727 3,256
--------- ---------
Cash and cash equivalents at end of period $ 7,057 $ 1,817
========= =========
See notes to condensed consolidated financial statements.
5
HAVERTY FURNITURE COMPANIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
Quarter Ended Nine Months Ended
September 30 September 30
------------------------- -------------------------
2002 2001 2002 2001
-------- -------- -------- --------
Net income $ 5,909 $ 5,611 $ 16,381 $ 12,481
Other comprehensive income:(1)
Cumulative effect of adopting SFAS 133 -- -- -- 53
Change in fair value of derivatives accounted
for as hedges (1,258) (420) (1,723) (797)
-------- -------- -------- --------
Total other comprehensive income (loss) (1,258) (420) (1,723) (744)
-------- -------- -------- --------
Comprehensive income $ 4,651 $ 5,191 $ 14,658 $ 11,737
======== ======== ======== ========
(1) Components of comprehensive income are reported net of related taxes.
See notes to condensed consolidated financial statements.
6
HAVERTY FURNITURE COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE A - Basis of Presentation
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 for complete financial statements. The financial
statements include the accounts of the Company and its wholly-owned
subsidiaries. All significant intercompany accounts and transactions have been
eliminated in consolidation. In the opinion of management, all adjustments
considered necessary for a fair presentation have been included and all such
adjustments are of a normal recurring nature.
NOTE B - 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.
7
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 federal securities laws. 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. These statements are subject to certain
risks and uncertainties that could cause actual results to differ materially
from the Company's historical experience and our present expectations or
projections. Management believes that these forward-looking statements are
reasonable; however, you should not place undue reliance on such statements.
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 the Company's actual results to differ
materially from the anticipated results described in the Company's
forward-looking statements: the ability to maintain favorable arrangements and
relationships with key suppliers (including domestic and international
sourcing); conditions affecting the availability and affordability of retail
real estate sites; the ability to attract, train and retain highly qualified
associates to staff corporate positions, existing and new stores and
distribution facilities; 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.
RESULTS OF OPERATIONS
Net sales for the third quarter and nine months ended September 30, 2002,
increased 3.0% and 5.1% over the same periods in 2001, respectively.
Comparable-store sales increased 0.3% and 3.3% for the third quarter and
nine-month period, respectively.
A store's results are included in the comparable-store sales computation
beginning with the one-year anniversary of its opening, expansion, or the date
when it was otherwise non-comparable. Consumers are continuing to be influenced
by concerns over the economy, the equity markets and hostilities in the Middle
East. These concerns have caused many consumers to postpone some big ticket
purchases such as furniture. Management believes it is best to continue to
provide a consistent message of the Company's breadth of fashionable
merchandise in its advertising rather than marketing a variety of discount and
promotional opportunities and risk losing its pricing integrity with its
customers.
Gross profit, as a percent of sales, was 48.2% for the third quarter of 2002
versus 47.8% for the comparable period of 2001 and 47.9% compared to 47.6% for
the nine months ended September 30, 2002 and 2001, respectively. Management
believes that the increase in margins is attributable to an increase in the mix
of products imported from Asia and the Havertys brand products, since these
items generally carry a modestly higher gross margin. The Company expanded its
private-label merchandise line from approximately 18% of items selected for
inclusion in the Company's core assortment at the end of the first quarter of
2001 to 30% at the end of the third quarter of 2002.
Third quarter credit service charge revenues decreased to 1.2% of net sales
from 1.6% in the prior year period. This reduction is due to the continuing
trend toward more customer usage of financing alternatives, offered by or
through the Company, which allow for longer periods of free interest.
8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
(Continued)
Selling, general and administrative expenses, as a percent of net sales,
increased to 45.2% from 42.3% for the third quarter and were unchanged at 43.1%
for the nine months ended September 30 as compared to the prior year periods.
During the third quarter of 2002, the Company incurred and recorded expenses of
approximately $3.1 million associated with the openings of seven new stores and
two distribution facilities.
The provision for doubtful accounts, as a percent of net sales, was 0.4% for
the third quarter and 0.5% for the nine months ended September 30, 2002.
Management does not expect the provision to vary much from this rate for the
remainder of 2002. The impact of a possible difficult economic environment is
likely to be offset by a lower overall level of accounts receivable due to the
outsourcing of one credit program late last year.
Interest expense decreased $0.6 million for the quarter and $2.7 million for
the nine months ended September 30, 2002. This is due to a 29.4% and 22.0%
decrease in the Company's average debt level and a decrease in the effective
interest rate by 10 and 90 basis points in the comparable periods.
Other income includes $3.7 million related to fixed assets, primarily gains
from the sale of two vacated warehouses.
Net income, as a percent of sales, was 3.4% and 3.3% for the third quarter, and
3.2% and 2.6% for the nine months ended September 30, 2002 and 2001,
respectively. Diluted earnings per share were $0.27 and $0.26 for the third
quarter and $0.74 and $0.58 for the nine months ended September 30, 2002 and
2001, respectively.
LIQUIDITY AND SOURCES OF CAPITAL
The Company has historically used internally generated funds, bank borrowings
and private placements with institutions to finance its operations and growth.
Net cash provided by operating activities was $68.1 million during the first
nine months of 2002 versus only $34.2 million for the same period last year.
Accounts receivable during the first nine months decreased at a faster pace
than in the prior year due to the outsourcing to a third-party finance company
of one credit program offered to customers. During 2001, accounts payable
increased only in the latter part of the first nine months since purchases had
been previously reduced in reaction to slower sales.
Investing activities provided $11.4 million during the nine months ended
September 30, 2002. Capital expenditures during the period were $35.9 million
for new store construction and renovations and for distribution facilities. The
Company used the proceeds from a sale-leaseback transaction to finance a
portion of its store and distribution expansion. Proceeds from this
transaction, which was completed in the third quarter, totaled $41.5 million.
The resulting lease is being accounted for as an operating lease and the
deferred gain of $3.4 million is being amortized over the lease term. The
Company also sold two of its vacated warehouses, which generated proceeds of
approximately $6.8 million.
Financing activities used $73.2 million of cash during the nine months ended
September 30, 2002. The Company reduced its borrowings under its revolving and
short-term credit facilities by $63.7 million, and made $7.9 million in
long-term debt repayments.
The Company has two revolving credit facilities totaling $80 million with three
and one-half year terms and a $45 million short-term revolving note. These
unsecured facilities were syndicated with six commercial banks and
9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
(Continued)
accrue interest at LIBOR plus a spread which is based on a fixed charge
coverage ratio. At September 30, 2002, borrowings under the facilities were
$26.3 million, of which $17.0 million was classified as long-term debt. The
Company has used $3.6 million of availability for letters of credit and,
accordingly, at September 30, 2002, there was $95.1 million of unused borrowing
capacity under these facilities.
In addition to cash flow from operations, the Company uses bank lines of credit
on an interim basis to finance capital expenditures and repay long-term debt.
Longer-term transactions, such as private placements of senior notes,
sale/leasebacks and mortgage financings, are used periodically to reduce
short-term borrowings and manage interest-rate risk. The Company pursues a
diversified approach to its financing requirements and balances its overall
capital structure as determined by the interest rate environment with
fixed-rate debt and interest rate swap agreements to reduce the impact of
changes in interest rates on its variable rate debt (72% of total debt was
fixed or interest rate protected as of September 30, 2002). The Company's
average effective interest rate on all borrowings (excluding capital leases)
was 6.0% at September 30, 2002.
Capital expenditures for the remainder of 2002 are expected to be approximately
$20 million. The preliminary estimate for 2003 capital expenditures is
approximately $32 million. These expenditures are presently expected to include
the following: construction of a new store in the San Antonio market; the
remodeling of one existing Haverty store and two former big-box retail stores;
the exercise of a purchase option on one leased location; the initial
construction costs for a new retail location and home delivery center; the
purchase of trailers and equipment for shuttling prepped merchandise to local
markets for home delivery; and various information systems and software.
The Company funded a portion of its store development program through a
sale-leaseback transaction that was completed during the third quarter of 2002.
This transaction generated approximately $41.5 million from the sale of 11
retail store locations. Management expects that the resulting increase in rent
expense will average approximately $4.4 million annually for the initial
20-year lease term, largely offset by lower depreciation and interest expense.
Management expects additional funding for capital expenditures of approximately
$1.4 million will be generated during the remainder of 2002 from the sale of an
exited warehouse facility. Additional warehouse facilities are expected to be
exited and made available for sale in 2003 and 2004.
10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
(Continued)
The following summarizes the approximate amounts of the Company's contractual
obligations and com-mercial commitments as of September 30, 2002:
Payments Due by Period
(in thousands)
------------------------------------------------------------------------
Less Than After
Contractual Obligations Total l Year 1-3 Years 4-5 Years 5 Years
- ----------------------------------------------------------------------------------------------------------------------
Short-term debt $ 9,300 $ 9,300 $ -- $ -- $ --
Long-term debt(a) 85,697 11,531 24,660 21,457 28,049
Capital lease obligations 1,378 84 168 184 942
Operating leases(b),(c) 279,514 26,601 61,691 44,282 146,940
- ----------------------------------------------------------------------------------------------------------------------
Total contractual cash obligations $375,889 $ 47,516 $ 86,519 $ 65,923 $175,931
- ----------------------------------------------------------------------------------------------------------------------
(a) - Includes $17,000 of borrowings under revolving credit facilities excluded
from short-term borrowings as this amount is expected to be outstanding
for an uninterrupted period during the next 12 months. Since the
revolving credit facilities are expected to be renewed, the repayment is
presented as after five years.
(b) - Included in these lease obligations are the full amount of the lease
payments related to $38 million in construction and lease facilities that
were used for the development of the Company's Dallas, Texas regional
distribution facility and seven retail locations. Since the resulting
leases are operating leases, no debt obligation is recorded on the
Company's balance sheet. These facilities contain residual guarantee
provisions and guarantees under events of default. Although management
believes the likelihood of funding to be remote, the maximum guarantee
obligation under these facilities is approximately $38 million at
September 30, 2002.
(c) - Lease obligations have not been reduced for minimum sublease rentals,
which approximate $8 million.
Amount of Commitment Expiration Per Period
(in thousands)
- -----------------------------------------------------------------------------------------------------------------
Less Than Over
Other Commercial Commitments Committed 1 Year 1-3 Years 4-5 Years 5 Years
- -----------------------------------------------------------------------------------------------------------------
Lines of credit(a) $ 95,115 $ 45,000 $ 50,115 $ -- $ --
- -----------------------------------------------------------------------------------------------------------------
(a) - Represents unused balance of the Company's $125 million revolving credit
facilities. Amounts are reduced for outstanding letters of credit of
$3,585. Standby letters of credit are provided to insurers and have terms
of one year or less but have automatic renewal options at which time they
may change based on the insurers' requirements.
11
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
At September 30, 2002, the Company had two outstanding interest-rate swap
agreements, each having a notional amount of $10 million at rates of 5.75% and
5.72% and maturing September 30, 2005. Under the agreements, the Company makes
payments at the fixed rate and receives payments at variable rates that are
based on LIBOR, adjusted quarterly.
The Company also had a Treasury lock agreement having a notional amount of $25
million at a base Treasury yield of 5.27% which was terminated during the third
quarter of 2002. This instrument was related to the sale-leaseback transaction
which was also completed in the third quarter. The Company made a $2.0 million
payment since the yield at termination was below the base Treasury yield. This
amount is being amortized over the term of the lease.
ITEM 4. CONTROLS AND PROCEDURES
The Chief Executive Officer and the Chief Financial Officer of the Company (its
principal executive officer and principal financial officer, respectively) have
concluded, based on their evaluation as of a date within 90 days prior to the
date of the filing of this Report, that the Company's disclosure controls and
procedures are effective to ensure that information required to be disclosed by
the Company in the reports filed or submitted by it under the Securities
Exchange Act of 1934, as amended, is recorded, processed, summarized and
reported within the time periods specified in the SEC's rules and forms, and
include controls and procedures designed to ensure that information required to
be disclosed by the Company in such reports is accumulated and communicated to
the Company's management, including the Chief Executive Officer and Chief
Financial Officer, as appropriate to allow timely decisions regarding required
disclosure.
There were no significant changes in the Company's internal controls or in
other factors that could significantly affect these controls subsequent to the
date of such evaluation.
12
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits filed with this report.
Exhibit
Number -- Description of Exhibit
------- ----------------------
10.1 -- Lease Agreement and its First and Second Amendments dated July 26, 2001,
November 2001 and July 29, 2002, respectively, between Haverty Furniture
Companies, Inc., as Tenant and John W. Rooker, LLC, as Landlord.
10.2 -- Contract of Sale dated August 6, 2002 between Haverty Furniture Companies,
Inc., as Seller and HAVERTACQ11 LLC, as Purchaser.
10.3 -- Lease Agreement dated August 6, 2002 between Haverty Furniture Companies,
Inc., as Tenant and HAVERTACQ11 LLC, as Landlord.
99.1 -- Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
(b) Reports on Form 8-K.
None.
SIGNATURE
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 14, 2002 By: /s/ Dennis L. Fink
------------------------ ------------------------------------
Dennis L. Fink,
Executive Vice President and
Chief Financial Officer
13
CERTIFICATIONS
I, John E. Slater, Jr., Chief Executive Officer, of Haverty Furniture
Companies, Inc., certify that:
1. I have reviewed this quarterly report on Form 10-Q of Haverty Furniture
Companies, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the periods covered
by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date
of this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of the registrant's board of directors (or persons performing
the equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.
Date: November 14, 2002 By: /s/ John E. Slater, Jr.
--------------------- -----------------------------------
John E. Slater, Jr.
Chief Executive Officer
14
I, Dennis L. Fink, Executive Vice President and Chief Financial Officer, of
Haverty Furniture Companies, Inc., certify that:
1. I have reviewed this quarterly report on Form 10-Q of Haverty Furniture
Companies, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the periods covered
by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date
of this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of the registrant's board of directors (or persons performing
the equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.
Date: November 14, 2002 By: /s/ Dennis L. Fink
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Dennis L. Fink
Executive Vice President and
Chief Financial Officer
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