10-Q

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 1934For the quarterly period ended June 30, 2014

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period fromto

Commission file number:     1-14445

HAVERTY FURNITURE COMPANIES, INC.

(Exact name of registrant as specified in its charter)

Maryland	58-0281900
(State of incorporation)	(I.R.S. Employer Identification No.)
780 Johnson Ferry Road, Suite 800 Atlanta, Georgia	30342
(Address of principal executive office)	(Zip Code)
(404) 443-2900
(Registrant's telephone number, including area code)

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 has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes x   No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨	Accelerated filer	x
Non-accelerated filer	¨	Smaller reporting company	¨

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 July 31, 2014, were: Common Stock – 20,531,215; Class A Common Stock – 2,154,000.

HAVERTY FURNITURE COMPANIES, INC.

INDEX

		Page No.
PART I.	FINANCIAL INFORMATION
	Item 1.Financial Statements
	Condensed Consolidated Balance Sheets – June 30, 2014 (unaudited) and December 31, 2013	1
	Condensed Consolidated Statements of Income – Six Months ended June 30, 2014 and 2013 (unaudited)	2
	Condensed Consolidated Statements of Comprehensive Income – Six Months ended June 30, 2014 and 2013 (unaudited)	3
	Condensed Consolidated Statements of Cash Flows – Six Months ended June 30, 2014 and 2013 (unaudited)	4
	Notes to Condensed Consolidated Financial Statements (unaudited)	5
	Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations	9
	Item 3.Quantitative and Qualitative Disclosures about Market Risk	12
	Item 4.Controls and Procedures	12
PART II.	OTHER INFORMATION
	Item 1A.  Risk Factors	13
	Item 6.Exhibits	13

PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

HAVERTY FURNITURE COMPANIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except per share data)

	June 30, 2014		December 31, 2013
	(Unaudited)
Assets
Current assets
Cash and cash equivalents	$	87,843	$	83,185
Restricted cash and cash equivalents		8,017		7,016
Accounts receivable		6,730		8,172
Inventories		94,799		91,483
Prepaid expenses		7,983		6,494
Other current assets		2,299		4,349
Total current assets		207,671		200,699
Accounts receivable, long-term		709		832
Property and equipment		203,643		189,242
Deferred income taxes		13,153		13,253
Other assets		15,116		13,829
Total assets	$	440,292	$	417,855
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable	$	19,385	$	21,810
Customer deposits		27,277		19,008
Accrued liabilities		30,746		36,338
Current portion of lease obligations		1,537		959
Total current liabilities		78,945		78,115
Lease obligations, less current portion		29,353		16,196
Other liabilities		26,072		25,280
Commitments		—		—
Total liabilities		134,370		119,591
Stockholders' equity
Capital Stock, par value $1 per share
Preferred Stock, Authorized – 1,000 shares; Issued:  None
Common Stock, Authorized – 50,000 shares; Issued: 2014 – 28,253; 2013 – 27,853;		28,253		27,853
Convertible Class A Common Stock, Authorized – 15,000 shares; Issued: 2014 – 2,676; 2013 – 2,915		2,676		2,915
Additional paid-in capital		77,289		77,406
Retained earnings		288,586		281,222
Accumulated other comprehensive loss		(15,250		(15,412	)
Less treasury stock at cost – Common Stock (2014 – 7,722; 2013 – 7,731) and Convertible Class A Common  Stock (2014 and 2013 – 522)		(75,632		(75,720	)
Total stockholders' equity		305,922		298,264
Total liabilities and stockholders' equity	$	440,292	$	417,855

See notes to these condensed consolidated financial statements.

1

HAVERTY FURNITURE COMPANIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data – Unaudited)

	Three Months Ended June 30,					Six Months Ended June 30,
	2014			2013		2014			2013
Net sales	$	175,132		$	171,114	$	356,869		$	357,204
Cost of goods sold		80,988			79,803		164,863			165,585
Gross profit		94,144			91,311		192,006			191,619
Credit service charges		71			76		151			162
Gross profit and other revenue		94,215			91,387		192,157			191,781
Expenses:
Selling, general and administrative		86,266			83,197		173,940			169,859
Interest, net		218			277		490			555
Provision for doubtful accounts		85			32		133			45
Other (income) expense, net		(166	)		15		(174	)		6
		86,403			83,521		174,389			170,465
Income before income taxes		7,812			7,866		17,768			21,316
Income tax expense		2,983			3,036		6,810			8,226
Net income	$	4,829		$	4,830	$	10,958		$	13,090
Basic earnings per share:
Common Stock	$	0.21		$	0.22	$	0.49		$	0.59
Class A Common Stock	$	0.20		$	0.20	$	0.46		$	0.56
Diluted earnings per share:
Common Stock	$	0.21		$	0.21	$	0.48		$	0.58
Class A Common Stock	$	0.20		$	0.20	$	0.46		$	0.55
Basic weighted average shares outstanding:
Common Stock		20,454			19,807		20,307			19,654
Class A Common Stock		2,162			2,614		2,259			2,682
Diluted weighted average shares outstanding:
Common Stock		22,940			22,791		22,934			22,754
Class A Common Stock		2,162			2,614		2,259			2,682
Cash dividends per share:
Common Stock	$	0.0800		$	0.0400	$	0.1600		$	0.0800
Class A Common Stock	$	0.0750		$	0.0375	$	0.1500		$	0.0750

See notes to these condensed consolidated financial statements.

2

HAVERTY FURNITURE COMPANIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands – Unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
Net income	$	4,829	$	4,830	$	10,958	$	13,090
Other comprehensive income
Defined benefit pension plans:
Amortization of prior service cost		32		32		64		64
Amortization of net loss		48		266		98		532
Total other comprehensive income		80		298		162		596
Comprehensive income	$	4,909	$	5,128	$	11,120	$	13,686

See notes to these condensed consolidated financial statements.

3

HAVERTY FURNITURE COMPANIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands – Unaudited)

	Six Months Ended June 30,
	2014			2013
Cash Flows from Operating Activities:
Net  income	$	10,958		$	13,090
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		10,960			10,486
Share-based compensation expense		1,767			2,038
Provision for doubtful accounts		133			45
Other		553			448
Changes in operating assets and liabilities:
Accounts receivable		1,432			1,364
Inventories		(3,316	)		(836	)
Customer deposits		8,269			1,680
Other assets and liabilities		328			(4,267	)
Accounts payable and accrued liabilities		(8,017	)		(11,071	)
Net cash provided by operating activities		23,067			12,977
Cash Flows from Investing Activities:
Capital expenditures		(11,699	)		(10,225	)
Restricted cash and cash equivalents		(1,001	)		(2	)
Other		406			6
Net cash used in investing activities		(12,294	)		(10,221	)
Cash Flows from Financing Activities:
Payments on lease obligations		(462	)		(437	)
Dividends paid		(3,593	)		(1,776	)
Proceeds from exercise of stock options		—			623
Taxes on vested restricted shares		(2,060	)		(2,456	)
Net cash used in financing activities		(6,115	)		(4,046	)
Increase (decrease) in cash and cash equivalents during the period		4,658			(1,290	)
Cash and cash equivalents at beginning of period		83,185			53,550
Cash and cash equivalents at end of period	$	87,843		$	52,260

See notes to these condensed consolidated financial statements.

4

HAVERTY FURNITURE COMPANIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE A – Business and Reporting Policies

Haverty Furniture Companies, Inc. ("Havertys," "the Company," "we," "our," or "us") is a retailer of a broad line of residential furniture in the middle to upper-middle price ranges. We operate all of our stores using the Havertys brand and do not franchise our concept. We operate in one reportable segment, home furnishings retailing. 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 U.S. generally accepted accounting principles ("U.S. GAAP") for complete financial statements. The financial statements include the accounts of the Company and its wholly-owned subsidiary.  All significant intercompany accounts and transactions have been eliminated in consolidation. We believe all adjustments, normal and recurring in nature, considered necessary for a fair presentation have been included.

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities, and reported amounts of revenue and expenses. Actual results could differ from those estimates.

The Company is subject to various claims and legal proceedings covering a wide range of matters that arise in the ordinary course of its business activities.  We believe that any liability that may ultimately result from the resolution of these matters will not have a material adverse effect on our financial condition, results of operations or cash flows.

Changes to U.S. GAAP are established by the Financial Accounting Standards Board (FASB) in the form of accounting standards updates (ASU's) to the FASB's Accounting Standards Codification. The Company considers the applicability and impact of all ASU's. Newly effective ASU's not noted herein were assessed and determined to be either not applicable or are expected to have minimal impact on our consolidated financial position or results of operations.

In the first quarter of 2013, we recorded an out-of-period adjustment related to our historical accrual process for certain vendors' pricing allowances.  The non-cash adjustment increased gross profit by $0.8 million or $0.02 per diluted share after tax for the six months ended June 30, 2013.  After evaluating the quantitative and qualitative aspects of this correction, management determined that our previously issued quarterly and annual consolidated financial statements were not materially misstated and that the out-of-period adjustment is immaterial to our full year 2013 results.

For further information, refer to the consolidated financial statements and footnotes thereto included in Havertys' Annual Report on Form 10-K for the year ended December 31, 2013.

NOTE B – Restricted Cash and Cash Equivalents

Our insurance carrier requires us to collateralize a portion of our workers' compensation obligations. These escrowed funds are shown as restricted cash and cash equivalents on our consolidated balance sheet and are investments in money market funds held by an agent.  The annual agreement with our carrier governing these funds expires on December 31, 2014.

NOTE C – Accounts Receivable

Amounts financed under our in-house credit programs were, as a percent of net sales, approximately 3.4% and 4.0% during the first six months of 2014 and 2013, respectively. The in-house credit program selected most often by our customers is "12 months no interest with equal monthly payments."  The terms of the other programs vary as to payment terms (30 days to three years) and interest rates (0% to 21%).  The receivables are collateralized by the merchandise sold.

5

HAVERTY FURNITURE COMPANIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Accounts receivable balances resulting from certain credit promotions have scheduled payment amounts which extend beyond one year. These receivable balances have been historically collected earlier than the scheduled dates. The amounts due per the scheduled payment dates approximate as follows: $6.7 million in one year, $0.9 million in two years, and $0.2 million beyond two years for receivables outstanding at June 30, 2014.

Accounts receivable are shown net of the allowance for doubtful accounts of $0.4 million at June 30, 2014 and December 31, 2013. We provide an allowance utilizing a methodology which considers the balances in problem and delinquent categories of accounts, historical write-offs, existing economic conditions and management judgment. Interest assessments are continued on past-due accounts but no "interest on interest" is recorded. Delinquent accounts are generally written off automatically after the passage of nine months without receiving a full scheduled monthly payment. Accounts are written off sooner in the event of a discharged bankruptcy or other circumstances that make further collections unlikely.

We believe that the carrying value of existing customer receivables, net of allowances, approximates fair value because of their short average maturity. Concentrations of credit risk with respect to customer receivables are limited due to the large number of customers comprising our account base and their dispersion across 16 states.

NOTE D – Interim LIFO Calculations

An actual valuation of inventory under the LIFO method can be made only at the end of each year based on actual inventory levels. Accordingly, interim LIFO calculations must necessarily be based on management's estimates. Since these estimates may be affected by factors beyond management's control, interim results are subject to change based upon the final year-end LIFO inventory valuations.

NOTE E – Income Taxes

Our tax provision for interim periods is determined using an estimate of our annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter we update our estimate of the annual effective tax rate, and if our estimated tax rate changes, we make a year to date adjustment.

Our effective tax rates for the six months ended June 30, 2014 and 2013 were 38.3% and 38.6%, respectively.  The primary difference in the effective rate and the statutory rate is due to state income taxes.

NOTE F – Fair Value of Financial Instruments

The fair values of our cash and cash equivalents, restricted cash and cash equivalents, accounts receivable, accounts payable and customer deposits approximate their carrying values due to their short-term nature. The assets related to our self-directed, non-qualified deferred compensation plans for certain executives and employees are valued using quoted market prices multiplied by the number of shares held, a Level 1 valuation technique. The assets related to our deferred compensation plans totaled approximately $2.6 million at June 30, 2014 and $2.1 million at  December 31, 2013 and are included in other assets.  The related liability of the same amount is included in other liabilities.

NOTE G – Pension Plans

We have a defined benefit pension plan covering substantially all employees hired on or before December 31, 2005.  The pension plan was closed to any employee hired after that date.  The benefits are based on years of service and the employee's final average compensation.  Effective January 1, 2007, no new benefits are earned under this plan for additional years of service after December 31, 2006.

6

HAVERTY FURNITURE COMPANIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

On May 13, 2014 this plan was terminated effective July 20, 2014.  The termination process is expected to take 12 to 18 months with the settlement of most of the plan's obligations by the end of 2014.

We also have a non-qualified, non-contributory supplemental executive retirement plan (SERP) for employees whose retirement benefits are reduced due to their annual compensation levels.  The SERP limits the total amount of annual retirement benefits that may be paid to a participant in the SERP from all sources (Retirement Plan, Social Security and the SERP) to $125,000.  The SERP is not funded so we pay benefits directly to participants.

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
Service cost-benefits earned during period	$	31		$	27		$	62		$	54
Interest cost on projected benefit obligations		954			877			1,908			1,754
Expected return on plan assets		(1,214	)		(1,243	)		(2,428	)		(2,486	)
Amortization of prior service costs		52			52			104			104
Amortization of actuarial loss		79			428			158			856
Net pension costs	$	(98	)	$	141		$	(196	)	$	282

NOTE H – Stock Based Compensation Plan

As more fully discussed in Note 11 of the notes to the consolidated financial statements in our 2013 Annual Report on Form 10-K, we have awards outstanding for Common Stock under stock-based employee compensation plans.

The following table summarizes our award activity during the six months ended June 30, 2014:

	Restricted Stock Awards					Stock-Settled Appreciation Rights
	Shares or Units			Weighted-Average Award Price		Rights			Weighted-Average Award Price
Outstanding at December 31, 2013		437,000		$	14.46		149,700		$	15.78
Granted		146,248			28.73		—			—
Restrictions lapsed or exercised		(235,925	)		14.01		(11,875	)		12.80
Forfeited		(16,060	)		21.25		(6,000	)		18.14
Outstanding at June 30, 2014		331,263		$	20.75		131,825		$	15.94
Exercisable at June 30, 2014		—			—		53,825		$	12.75

Grants of equity awards are made to certain officers and key employees under the 2004 and 2014 LTIP Plans. The restrictions on most of the awards generally lapse annually, primarily over four year periods. During 2014, the Company granted 39,890 awards for which the shares ultimately issued will be based upon the achievement of various performance measures.  The restricted units earned under most of these awards vest after three years. The compensation is being charged to selling, general and administrative expense over the respective grants' vesting periods, primarily on a straight-line basis.  Stock based compensation expense for the six months ended June 30, 2014 was approximately $1.8 million and $2.0 million in 2013. The aggregate intrinsic value of outstanding restricted common stock grants was $8.3 million at June 30, 2014. The aggregate intrinsic value of vested and outstanding stock-settled appreciation rights at June 30, 2014 was approximately $0.7 million and $1.2 million, respectively.

7

HAVERTY FURNITURE COMPANIES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

As of June 30, 2014, the remaining unamortized compensation cost related to unvested equity awards was approximately $6.1 million and scheduled to be recognized over a weighted-average period of 2.5 years.

NOTE I – Earnings Per Share

We report our earnings per share using the two-class method.  The income per share for each class of common stock is calculated assuming 100% of our 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 following is a reconciliation of the earnings and number of shares used in calculating the diluted earnings per share for Common Stock and Class A Common Stock (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
Numerator:
Common:
Distributed earnings	$	1,642	$	797	$	3,253	$	1,577
Undistributed earnings		2,748		3,497		6,659		10,013
Basic		4,390		4,294		9,912		11,590
Class A Common earnings		439		536		1,046		1,500
Diluted	$	4,829	$	4,830	$	10,958	$	13,090
Class A Common:
Distributed earnings	$	162	$	96	$	340	$	199
Undistributed earnings		277		440		706		1,301
	$	439	$	536	$	1,046	$	1,500
Denominator:
Common:
Weighted average shares outstanding - basic		20,454		19,807		20,307		19,654
Assumed conversion of Class A Common Stock		2,162		2,614		2,259		2,682
Dilutive options, awards and common stock equivalents		324		370		368		418
Total weighted-average diluted Common Stock		22,940		22,791		22,934		22,754
Class A Common:
Weighted average shares outstanding		2,162		2,614		2,259		2,682

8

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

Net Sales

Our sales are generated by customer purchases of home furnishings.  Revenue is recognized upon delivery to the customer.

The following outlines our sales and comp-store sales increases and decreases for the periods indicated (dollars in millions, amounts and percentages may not always add to totals due to rounding):

	2014														2013
	Net Sales								Comp-Store Sales						Net Sales							Comp-Store Sales
Period	Total Dollars		% Change			$ Change			% Change			$ Change			Total Dollars		% Change			$ Change		% Change			$ Change
Q1	$	181.7		(2.3	)%	$	(4.4	)		(0.9	)%	$	(1.6	)	$	186.1		13.8	%	$	22.5		11.5	%	$	18.7
Q2		175.1		2.4			4.0			3.2			5.3			171.1		12.9			19.6		11.2			16.7
First Half	$	356.9		(0.1	)%	$	(0.3	)		1.1	%	$	3.7		$	357.2		13.4	%	$	42.1		11.3	%	$	35.4
Q3		—		—			—			—			—			192.7		11.6			20.0		11.8			20.0
Q4		—		—			—			—			—			196.2		7.6			13.9		9.5			16.6
Year		—		—			—			—			—		$	746.1		11.3	%	$	76.0		11.0	%	$	72.0

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 warehouse or temporary locations are excluded from comparable store sales as are periods when stores are closed.

Sales for the second quarter showed growth in all product categories except case goods.  Supplier order fulfillment of wood products continued to challenge sales in this important category.  We expect lead times to stabilize over the remainder of the year.  Our sales for the first half of 2014 were virtually flat against 2013 and were hampered by the severe winter weather during the first quarter of 2014 which impacted approximately 75% of our locations.

Our average written ticket continues to grow and rose 3.6% for the second quarter and 4.4% for the first half of the year. This growth was driven by product mix and our in-home design program.  The custom order segment of our upholstery continued to show strength as written business increased 12.8%  in the second quarter of 2014 and 11.8% for the first half.

Gross Profit

Gross profit for the second quarter of 2014 was 53.8%, up 40 basis points compared to the prior year period. Gross profit for the six months ended June 30, 2014 was 53.8%.  In the second quarter of 2013 gross profit was 53.4%, excluding the 20 basis point positive impact of an $0.8 million or $0.02 per share out-of-period adjustment recorded in the first quarter.

Factors in generating the improvement in gross profit were: our expansion of upper-middle price point products in our assortment, our focus on pricing discipline, and continued favorable trends for inbound ocean freight costs.

We plan to remain competitive, but not overly aggressive with our pricing structure.  We expect our gross profit for the 2014 year will be 53.8% barring the effect of LIFO accounting for any future changes in landed merchandise costs.

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.

9

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; delivery and certain warehousing costs; advertising and marketing; and administrative.

Total SG&A expenses as a percent of sales for the three months ended June 30, 2014 increased 70 basis points to 49.3% from 48.6% in the prior year period.  Total SG&A dollars for the second quarter of 2014 increased $3.1 million compared to the prior year period.  Our warehouse and delivery expenses increased $1.5 million due to increased wages and benefits and insurance costs.  Selling expenses rose in line with sales and increased $0.9 million.  Our planned advertising costs were $0.8 million higher in the current year and store expansion and improvement increased depreciation expense $0.5 million.  The reductions in incentive compensation and other personnel costs were partly offset by greater technology expense as administrative costs declined $0.8 million.

SG&A costs for the first half of 2014 increased 110 basis points to 48.7% as a percent of sales from 47.6%.  Total SG&A dollars for the six months ended June 30, 2014 rose $4.1 million compared to the prior year period. We had higher planned expenditures for advertising and marketing in 2014 compared to 2013 and ran fewer vendor supported events in 2014 resulting in a $1.5 million increase in expense in the first half.  Our warehouse and delivery expenses rose $2.4 million in the current year period as personnel and insurance costs increases together with some disruptions from winter storms were not offset by reductions from slightly fewer deliveries.  Our administrative expenses declined $1.3 million as decreased incentive compensation expense and related costs and benefits were offset by increases in technology and travel expenses.

Our expectations for SG&A costs for 2014 are substantially unchanged from that described in our annual report on Form 10-K filed on March 7, 2014.  Our normal fixed and discretionary type expenses within SG&A costs for the full year 2014 are expected to be approximately $232 million to $233 million versus the $224 million for the same costs in 2013.  Approximately $112 million of these expenses were incurred in the first half of 2014. The variable type costs within SG&A for the full year of 2014 are anticipated to be approximately 17.2% as a percent of sales, with such expenses having run at a 17.4% rate in the first half.

Liquidity and Capital Resources

Our primary cash requirements include working capital needs, contractual obligations, benefit plan contributions, income tax obligations and capital expenditures.  We have funded these requirements primarily through cash generated from operations.  We have no funded debt and our lease obligations are primarily due to arrangements that are not considered capital leases but must be recorded on our balance sheets.  We believe funds generated from our expected results of operations and available cash and cash equivalents will be sufficient to fund our primary obligations, dividends, stock repurchases and complete capital projects that we have underway or currently contemplate.

We also have a $50.0 million revolving credit facility.  Availability fluctuates under a borrowing base calculation and is reduced by outstanding letters of credit.  The borrowing base was $50.0 million and there were no outstanding letters of credit at June 30, 2014.  Amounts available are based on the lesser of the borrowing base of $49.6 million or the $50.0 million line amount and reduced by $6.2 million since a fixed charge coverage ratio test was not met for the immediately preceding twelve months, resulting in a net availability of $43.4 million.  There were no borrowed amounts outstanding under the facility at June 30, 2014.

10

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

Summary of Cash Activities

Our cash flows provided by operating activities totaled $23.1 million in the first half of 2014 compared to $13.0 million for the same period of 2013. This increase was primarily due to an increase in customer deposits and a decrease in accrued liabilities partially offset by increased inventories and lower earnings in 2014. For additional information about the changes in our assets and liabilities refer to our Balance Sheet Changes discussion.

Our cash flows used in investing activities totaled $12.3 million in the first six months of 2014 versus $10.2 million for the same period of 2013. This increase was primarily due to increased funds held in an escrow account as collateral for our insurance coverages.

Financing activities used cash of $6.1 million in the first six months of 2014 compared to $4.0 million for the same period of 2013.  The increase was due to the doubling of the dividend per share paid.

Balance Sheet Changes for the Six Months Ended June 30, 2014

Our balance sheet as of June 30, 2014, as compared to our balance sheet as of December 31, 2013, changed as follows:

· increase in inventories of $3.3 million as December 31 inventory levels were low and vendor delays continue;

· increase in property and equipment of $14.4 million primarily due to five additional leased properties recorded on our balance sheet;

· increase in customer deposits of $8.3 million as special order and undelivered sales increased;

· decrease in accrued liabilities of $5.6 million primarily due to timing of payments; and

· increase in lease obligations of $13.7 million for five additional properties recorded on our balance sheet.

Store Plans and Capital Expenditures

Planned capital expenditures for 2014 are $35.0 million.  We expect to open six new locations in existing markets and complete one major expansion during the year.  Three of the new stores are relocations and we plan to close two additional stores at the end of their lease term.  These changes will increase selling square footage approximately 2.0% and increase our store count to 120 assuming the store changes occur as scheduled.

Our current plans for 2015 include opening five stores each in a new market within our distribution network.

Off-Balance Sheet Arrangements

As of June 30, 2014 we had no off-balance sheet arrangements or obligations.

Critical Accounting Estimates

Critical accounting estimates are those that we believe are both significant and that require us to make difficult, subjective or complex judgments, often because we need to estimate the effect of inherently uncertain matters. We base our estimates and judgments on historical experiences and various other factors that we believe to be appropriate under the circumstances. Actual results may differ from these estimates, and we might obtain different estimates if we used different assumptions or conditions. Our critical accounting estimates are identified and described in our annual report on Form 10-K for the year ended December 31, 2013. We had no significant changes in those critical accounting estimates since our last annual report.

11

Forward-Looking Information

Certain of the statements in this Form 10-Q, particularly those anticipating future performance, business prospects, growth and operating strategies and similar matters, and those that include the words "believes," "anticipates," "estimates" or similar expressions constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended.  For those statements, Havertys claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.  There can be no assurance that the forward-looking statements will be accurate because they are based on many assumptions, which involve risks and uncertainties.  The following important factors could cause future results to differ: changes in the economic environment; changes in the housing market; changes in industry conditions; competition; merchandise costs; energy costs; timing and level of capital expenditures; introduction of new products; rationalization of operations; and other risks identified in Havertys' SEC reports and public announcements.

Item 3.Quantitative and Qualitative Disclosures about Market Risk

There have been no material changes with respect to our financial instruments and their related market risks 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 our 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, our management, including the CEO and CFO, concluded that the Company's disclosure controls and procedures were effective as of the end of the period covered by this report to provide reasonable assurance that information required to be disclosed in the reports the Company files or submits 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 our management, including the CEO and CFO, as appropriate, to allow timely decisions regarding disclosure.

There were no changes in our internal control over financial reporting that occurred during the quarter ended June 30, 2014 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

12

PART II.  OTHER INFORMATION

Item 1A.  Risk Factors

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2013, which could materially affect our business, financial condition or future results.  The risks described in this report and in our Annual Report on Form 10-K are not the only risks facing the Company.  Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or future results.

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 documents.

Exhibit Number	Description of Exhibit (Commission File No. 1-14445)
3.1	Articles of Amendment and Restatement of the Charter of Haverty Furniture Companies, Inc. effective May 26, 2006 (Exhibit 3.1 to our Second Quarter 2006 Form 10-Q).
3.2	By-laws of Haverty Furniture Companies, Inc. as amended effective May 12, 2010 (Exhibit 3.2 to our First Quarter 2010 Form 10-Q).
10.1	2014 Long-Term Incentive Compensation Plan effective as of May 12, 2014 (Appendix A to our Definitive Proxy Statement for the 2014 Annual Meeting of Stockholders).
*31.1	Certification of Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended.
*31.2	Certification of Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended.
*32.1	Certification pursuant to 18 U.S.C. Section 1350.
*101	The following financial information from Haverty Furniture Companies, Inc. Quarterly Report on Form 10-Q for the quarter ended June 30, 2014, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets at June 30, 2014, and December 31, 2013, (ii) Condensed Consolidated Statements of Income for the six months ended June 30, 2014 and 2013, (iii) Condensed Consolidated Statements of Comprehensive Income for the six  months ended June 30, 2014 and 2013, (iv) Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2014 and 2013, and (v) the Notes to Condensed Consolidated Financial Statements.

13

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:	August 6, 2014	By:	/s/ Clarence H. Smith
			Clarence H. Smith
			Chairman of the Board, President and Chief Executive Officer
			(principal executive officer)
		By:	/s/ Dennis L. Fink
			Dennis L. Fink
			Executive Vice President and Chief Financial Officer (principal financial and accounting officer)

14

EX-31.1

Exhibit 31.1

I, Clarence H. Smith, certify that:

1. I have reviewed this quarterly report on Form 10-Q for the quarter ended June 30, 2014 of Haverty Furniture Companies, Inc.;

2. Based on my knowledge, this 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 period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this 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 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-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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 report is being prepared;

(b) Designed such internal control over  financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that  occurred during the registrant's most recent fiscal quarter (the registrant's fiscal fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:August 6, 2014	/s/ Clarence H. Smith
	Clarence H. Smith Chairman of the Board, President and Chief Executive Officer

EX-31.2

Exhibit 31.2

I, Dennis L. Fink, certify that:

1. I have reviewed this quarterly report on Form 10-Q for the quarter ended June 30, 2014 of Haverty Furniture Companies, Inc.;

2. Based on my knowledge, this 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 period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this 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 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-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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 report is being prepared;

(b) Designed such internal control over  financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that  occurred during the registrant's most recent fiscal quarter (the registrant's fiscal fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:  August 6, 2014	/s/ Dennis L. Fink
	Dennis L. Fink Executive Vice President and Chief Financial Officer

EX-32

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Haverty Furniture Companies, Inc. (the "Company") on Form 10-Q for the quarter ended June 30, 2014 (the "Report"), I, Clarence H. Smith, Chairman of the Board, President and Chief Executive Officer of the Company, and I, Dennis L. Fink, Executive Vice President and Chief Financial Officer of the Company, each certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of  1934, as amended; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:August 6, 2014	/s/ Clarence H. Smith
	Clarence H. Smith Chairman of the Board, President and Chief Executive Officer
	/s/ Dennis L. Fink
	Dennis L. Fink Executive Vice President and Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to Haverty Furniture Companies, Inc. and will be retained by Haverty Furniture Companies, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

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Earnings Per Share (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014 Vote	Jun. 30, 2013	Jun. 30, 2014 Vote	Jun. 30, 2013
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Percentage of earnings or losses assumed in calculation (in hundredths)	100.00%		100.00%
Preferential dividend rate of dividend paid on Class A Common Stock (in hundredths)	105.00%		105.00%
Common Stock [Member]
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Number of votes per share	1		1
Numerator [Abstract]
Distributed earnings	$ 1,642	$ 797	$ 3,253	$ 1,577
Undistributed earnings	2,748	3,497	6,659	10,013
Basic	4,390	4,294	9,912	11,590
Class A Common earnings (loss)	439	536	1,046	1,500
Diluted	4,829	4,830	10,958	13,090
Denominator [Abstract]
Weighted average shares outstanding - basic (in shares)	20,454	19,807	20,307	19,654
Assumed conversion of Class A Common Stock (in shares)	2,162	2,614	2,259	2,682
Dilutive options, awards and common stock equivalents (in shares)	324	370	368	418
Total weighted-average diluted Common Stock (in shares)	22,940	22,791	22,934	22,754
Class A Common [Member]
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Number of votes per share	10		10
Numerator [Abstract]
Distributed earnings	162	96	340	199
Undistributed earnings	277	440	706	1,301
Class A Common earnings (loss)	$ 439	$ 536	$ 1,046	$ 1,500
Denominator [Abstract]
Weighted average shares outstanding - basic (in shares)	2,162	2,614	2,259	2,682
Total weighted-average diluted Common Stock (in shares)	2,162	2,614	2,259	2,682
Weighted average shares outstanding (in shares)	2,162	2,614	2,259	2,682

XML

Accounts Receivable

6 Months Ended

Jun. 30, 2014

Accounts Receivable [Abstract]

Accounts Receivable

NOTE C – Accounts Receivable

Amounts financed under our in-house credit programs were, as a percent of net sales, approximately 3.4% and 4.0% during the first six months of 2014 and 2013, respectively. The in-house credit program selected most often by our customers is "12 months no interest with equal monthly payments."  The terms of the other programs vary as to payment terms (30 days to three years) and interest rates (0% to 21%).  The receivables are collateralized by the merchandise sold.

Accounts receivable balances resulting from certain credit promotions have scheduled payment amounts which extend beyond one year. These receivable balances have been historically collected earlier than the scheduled dates. The amounts due per the scheduled payment dates approximate as follows: $6.7 million in one year, $0.9 million in two years, and $0.2 million beyond two years for receivables outstanding at June 30, 2014.

Accounts receivable are shown net of the allowance for doubtful accounts of $0.4 million at June 30, 2014 and December 31, 2013. We provide an allowance utilizing a methodology which considers the balances in problem and delinquent categories of accounts, historical write-offs, existing economic conditions and management judgment. Interest assessments are continued on past-due accounts but no "interest on interest" is recorded. Delinquent accounts are generally written off automatically after the passage of nine months without receiving a full scheduled monthly payment. Accounts are written off sooner in the event of a discharged bankruptcy or other circumstances that make further collections unlikely.

We believe that the carrying value of existing customer receivables, net of allowances, approximates fair value because of their short average maturity. Concentrations of credit risk with respect to customer receivables are limited due to the large number of customers comprising our account base and their dispersion across 16 states.

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Restricted Cash and Cash Equivalents

6 Months Ended

Jun. 30, 2014

Restricted Cash and Cash Equivalents [Abstract]

Restricted Cash and Cash Equivalents

NOTE B – Restricted Cash and Cash Equivalents

Our insurance carrier requires us to collateralize a portion of our workers' compensation obligations. These escrowed funds are shown as restricted cash and cash equivalents on our consolidated balance sheet and are investments in money market funds held by an agent.  The annual agreement with our carrier governing these funds expires on December 31, 2014.

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CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Current assets
Cash and cash equivalents	$ 87,843	$ 83,185
Restricted cash and cash equivalents	8,017	7,016
Accounts receivable	6,730	8,172
Inventories	94,799	91,483
Prepaid expenses	7,983	6,494
Other current assets	2,299	4,349
Total current assets	207,671	200,699
Accounts receivable, long-term	709	832
Property and equipment	203,643	189,242
Deferred income taxes	13,153	13,253
Other assets	15,116	13,829
Total assets	440,292	417,855
Current liabilities
Accounts payable	19,385	21,810
Customer deposits	27,277	19,008
Accrued liabilities	30,746	36,338
Current portion of lease obligations	1,537	959
Total current liabilities	78,945	78,115
Lease obligations, less current portion	29,353	16,196
Other liabilities	26,072	25,280
Commitments
Total liabilities	134,370	119,591
Capital Stock, par value $1 per share
Preferred Stock, Authorized - 1,000 shares; Issued: None
Additional paid-in capital	77,289	77,406
Retained earnings	288,586	281,222
Accumulated other comprehensive loss	(15,250)	(15,412)
Less treasury stock at cost - Common Stock (2014 - 7,722; 2013 - 7,731) and Convertible Class A Common Stock (2014 and 2013 - 522)	(75,632)	(75,720)
Total stockholders' equity	305,922	298,264
Total liabilities and stockholders' equity	440,292	417,855
Common Stock [Member]
Capital Stock, par value $1 per share
Common Stock	28,253	27,853
Convertible Class A Common Stock [Member]
Capital Stock, par value $1 per share
Common Stock	$ 2,676	$ 2,915

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Cash Flows from Operating Activities:
Net income	$ 10,958	$ 13,090
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	10,960	10,486
Share-based compensation expense	1,767	2,038
Provision for doubtful accounts	133	45
Other	553	448
Changes in operating assets and liabilities:
Accounts receivable	1,432	1,364
Inventories	(3,316)	(836)
Customer deposits	8,269	1,680
Other assets and liabilities	328	(4,267)
Accounts payable and accrued liabilities	(8,017)	(11,071)
Net cash provided by operating activities	23,067	12,977
Cash Flows from Investing Activities:
Capital expenditures	(11,699)	(10,225)
Restricted cash and cash equivalents	(1,001)	(2)
Other	406	6
Net cash used in investing activities	(12,294)	(10,221)
Cash Flows from Financing Activities:
Payments on lease obligations	(462)	(437)
Dividends paid	(3,593)	(1,776)
Proceeds from exercise of stock options	0	623
Taxes on vested restricted shares	(2,060)	(2,456)
Net cash used in financing activities	(6,115)	(4,046)
Increase (decrease) in cash and cash equivalents during the period	4,658	(1,290)
Cash and cash equivalents at beginning of period	83,185	53,550
Cash and cash equivalents at end of period	$ 87,843	$ 52,260

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Fair Value of Financial Instruments (Details) (Level 1 [Member], USD $) In Millions, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Level 1 [Member]
Assets [Abstract]
Deferred compensation plans	$ 2.6	$ 2.1

XML

Stock Based Compensation Plan (Details) (USD $) In Millions, except Share data, unless otherwise specified	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Weighted-Average Award Price [Roll Forward]
Period of restrictions over awards	4 years
Compensation expense	$ 1.8	$ 2.0
Total compensation cost related to unvested equity awards	6.1
Weighted-average period of recognition of cost	2 years 6 months
Restricted Stock Award [Member]
Shares or Units and Rights [Roll Forward]
Outstanding, beginning balance (in shares)	437,000
Granted (in shares)	146,248
Restrictions lapsed or exercised (in shares)	(235,925)
Forfeited (in shares)	(16,060)
Outstanding, ending balance (in shares)	331,263
Exercisable, ending balance (in shares)	0
Weighted-Average Award Price [Roll Forward]
Outstanding, beginning balance (in dollars per share)	$ 14.46
Granted (in dollars per share)	$ 28.73
Restrictions lapsed or exercised (in dollars per share)	$ 14.01
Forfeited (in dollars per share)	$ 21.25
Outstanding, ending balance (in dollars per share)	$ 20.75
Exercisable, ending balance (in dollars per share)	$ 0
Vesting period	3 years
Aggregate intrinsic value of outstanding awards	8.3
Stock-Settled Appreciation Rights [Member]
Shares or Units and Rights [Roll Forward]
Outstanding, beginning balance (in shares)	149,700
Granted (in shares)	0
Restrictions lapsed or exercised (in shares)	(11,875)
Forfeited (in shares)	(6,000)
Outstanding, ending balance (in shares)	131,825
Exercisable, ending balance (in shares)	53,825
Weighted-Average Award Price [Roll Forward]
Outstanding, beginning balance (in dollars per share)	$ 15.78
Granted (in dollars per share)	$ 0
Restrictions lapsed or exercised (in dollars per share)	$ 12.80
Forfeited (in dollars per share)	$ 18.14
Outstanding, ending balance (in dollars per share)	$ 15.94
Exercisable, ending balance (in dollars per share)	$ 12.75
Aggregate intrinsic value of outstanding awards	1.2
Aggregate intrinsic value of vested awards	$ 0.7
Performance Shares [Member]
Shares or Units and Rights [Roll Forward]
Granted (in shares)	39,890

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Business and Reporting Policies

6 Months Ended

Jun. 30, 2014

Business and Reporting Policies [Abstract]

Business and Reporting Policies

NOTE A – Business and Reporting Policies

Haverty Furniture Companies, Inc. ("Havertys," "the Company," "we," "our," or "us") is a retailer of a broad line of residential furniture in the middle to upper-middle price ranges. We operate all of our stores using the Havertys brand and do not franchise our concept. We operate in one reportable segment, home furnishings retailing. 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 U.S. generally accepted accounting principles ("U.S. GAAP") for complete financial statements. The financial statements include the accounts of the Company and its wholly-owned subsidiary.  All significant intercompany accounts and transactions have been eliminated in consolidation. We believe all adjustments, normal and recurring in nature, considered necessary for a fair presentation have been included.

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities, and reported amounts of revenue and expenses. Actual results could differ from those estimates.

The Company is subject to various claims and legal proceedings covering a wide range of matters that arise in the ordinary course of its business activities.  We believe that any liability that may ultimately result from the resolution of these matters will not have a material adverse effect on our financial condition, results of operations or cash flows.

Changes to U.S. GAAP are established by the Financial Accounting Standards Board (FASB) in the form of accounting standards updates (ASU's) to the FASB's Accounting Standards Codification. The Company considers the applicability and impact of all ASU's. Newly effective ASU's not noted herein were assessed and determined to be either not applicable or are expected to have minimal impact on our consolidated financial position or results of operations.

In the first quarter of 2013, we recorded an out-of-period adjustment related to our historical accrual process for certain vendors' pricing allowances.  The non-cash adjustment increased gross profit by $0.8 million or $0.02 per diluted share after tax for the six months ended June 30, 2013.  After evaluating the quantitative and qualitative aspects of this correction, management determined that our previously issued quarterly and annual consolidated financial statements were not materially misstated and that the out-of-period adjustment is immaterial to our full year 2013 results.

For further information, refer to the consolidated financial statements and footnotes thereto included in Havertys' Annual Report on Form 10-K for the year ended December 31, 2013.

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) In Thousands, except Per Share data, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Stockholders' equity
Preferred Stock, par value (in dollars per share)	$ 1	$ 1
Preferred Stock, shares authorized (in shares)	1,000	1,000
Preferred Stock, shares issued (in shares)	0	0
Common Stock, par value (in dollars per share)	$ 1	$ 1
Common Stock [Member]
Stockholders' equity
Common Stock, shares authorized (in shares)	50,000	50,000
Common Stock, shares issued (in shares)	28,253	27,853
Treasury stock, Common stock shares (in shares)	7,722	7,731
Convertible Class A Common Stock [Member]
Stockholders' equity
Common Stock, shares authorized (in shares)	15,000	15,000
Common Stock, shares issued (in shares)	2,676	2,915
Treasury stock, Common stock shares (in shares)	522	522

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Stock Based Compensation Plan (Tables)

6 Months Ended

Jun. 30, 2014

Stock Based Compensation Plan [Abstract]

Stock Award Activity

The following table summarizes our award activity during the six months ended June 30, 2014:

	Restricted Stock Awards					Stock-Settled Appreciation Rights
	Shares or Units			Weighted-Average Award Price		Rights			Weighted-Average Award Price
Outstanding at December 31, 2013		437,000		$	14.46		149,700		$	15.78
Granted		146,248			28.73		—			—
Restrictions lapsed or exercised		(235,925	)		14.01		(11,875	)		12.80
Forfeited		(16,060	)		21.25		(6,000	)		18.14
Outstanding at June 30, 2014		331,263		$	20.75		131,825		$	15.94
Exercisable at June 30, 2014		—			—		53,825		$	12.75

XML

Document and Entity Information	6 Months Ended
	Jun. 30, 2014	Jul. 31, 2014 Common Stock [Member]	Jul. 31, 2014 Class A Common Stock [Member]
Entity Information [Line Items]
Entity Registrant Name	HAVERTY FURNITURE COMPANIES INC
Entity Central Index Key	0000216085
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		20,531,215	2,154,000
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q2
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2014

XML

Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2014

Earnings Per Share [Abstract]

Reconciliation of Earnings and Number of Shares Used in Calculating Diluted Earnings (Loss) Per Share

The following is a reconciliation of the earnings and number of shares used in calculating the diluted earnings per share for Common Stock and Class A Common Stock (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
Numerator:
Common:
Distributed earnings	$	1,642	$	797	$	3,253	$	1,577
Undistributed earnings		2,748		3,497		6,659		10,013
Basic		4,390		4,294		9,912		11,590
Class A Common earnings		439		536		1,046		1,500
Diluted	$	4,829	$	4,830	$	10,958	$	13,090
Class A Common:
Distributed earnings	$	162	$	96	$	340	$	199
Undistributed earnings		277		440		706		1,301
	$	439	$	536	$	1,046	$	1,500
Denominator:
Common:
Weighted average shares outstanding - basic		20,454		19,807		20,307		19,654
Assumed conversion of Class A Common Stock		2,162		2,614		2,259		2,682
Dilutive options, awards and common stock equivalents		324		370		368		418
Total weighted-average diluted Common Stock		22,940		22,791		22,934		22,754
Class A Common:
Weighted average shares outstanding		2,162		2,614		2,259		2,682

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CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) [Abstract]
Net sales	$ 175,132	$ 171,114	$ 356,869	$ 357,204
Cost of goods sold	80,988	79,803	164,863	165,585
Gross profit	94,144	91,311	192,006	191,619
Credit service charges	71	76	151	162
Gross profit and other revenue	94,215	91,387	192,157	191,781
Expenses:
Selling, general and administrative	86,266	83,197	173,940	169,859
Interest, net	218	277	490	555
Provision for doubtful accounts	85	32	133	45
Other (income) expense, net	(166)	15	(174)	6
Total expenses	86,403	83,521	174,389	170,465
Income before income taxes	7,812	7,866	17,768	21,316
Income tax expense	2,983	3,036	6,810	8,226
Net income	$ 4,829	$ 4,830	$ 10,958	$ 13,090
Common Stock [Member]
Basic earnings per share:
Common Stock (in dollars per share)	$ 0.21	$ 0.22	$ 0.49	$ 0.59
Diluted earnings per share:
Common Stock (in dollars per share)	$ 0.21	$ 0.21	$ 0.48	$ 0.58
Basic weighted average shares outstanding:
Common Stock (in shares)	20,454	19,807	20,307	19,654
Diluted weighted average shares outstanding:
Common Stock (in shares)	22,940	22,791	22,934	22,754
Cash dividends per share:
Common Stock (in dollars per share)	$ 0.0800	$ 0.0400	$ 0.1600	$ 0.0800
Class A Common Stock [Member]
Basic earnings per share:
Common Stock (in dollars per share)	$ 0.20	$ 0.20	$ 0.46	$ 0.56
Diluted earnings per share:
Common Stock (in dollars per share)	$ 0.20	$ 0.20	$ 0.46	$ 0.55
Basic weighted average shares outstanding:
Common Stock (in shares)	2,162	2,614	2,259	2,682
Diluted weighted average shares outstanding:
Common Stock (in shares)	2,162	2,614	2,259	2,682
Cash dividends per share:
Common Stock (in dollars per share)	$ 0.0750	$ 0.0375	$ 0.1500	$ 0.0750

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Fair Value of Financial Instruments

6 Months Ended

Jun. 30, 2014

Fair Value of Financial Instruments [Abstract]

Fair Value of Financial Instruments

NOTE F – Fair Value of Financial Instruments

The fair values of our cash and cash equivalents, restricted cash and cash equivalents, accounts receivable, accounts payable and customer deposits approximate their carrying values due to their short-term nature. The assets related to our self-directed, non-qualified deferred compensation plans for certain executives and employees are valued using quoted market prices multiplied by the number of shares held, a Level 1 valuation technique. The assets related to our deferred compensation plans totaled approximately $2.6 million at June 30, 2014 and $2.1 million at  December 31, 2013 and are included in other assets.  The related liability of the same amount is included in other liabilities.

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Income Taxes

6 Months Ended

Jun. 30, 2014

Income Taxes [Abstract]

Income Taxes

NOTE E – Income Taxes

Our tax provision for interim periods is determined using an estimate of our annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter we update our estimate of the annual effective tax rate, and if our estimated tax rate changes, we make a year to date adjustment.

Our effective tax rates for the six months ended June 30, 2014 and 2013 were 38.3% and 38.6%, respectively.  The primary difference in the effective rate and the statutory rate is due to state income taxes.

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Pension Plans (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Net pension cost [Abstract]
Amortization of prior service costs	$ (32,000)	$ (32,000)	$ (64,000)	$ (64,000)
Amortization of actuarial loss	(48,000)	(266,000)	(98,000)	(532,000)
Pension Plans [Member]
Net pension cost [Abstract]
Service cost-benefits earned during period	31,000	27,000	62,000	54,000
Interest cost on projected benefit obligations	954,000	877,000	1,908,000	1,754,000
Expected return on plan assets	(1,214,000)	(1,243,000)	(2,428,000)	(2,486,000)
Amortization of prior service costs	52,000	52,000	104,000	104,000
Amortization of actuarial loss	79,000	428,000	158,000	856,000
Net pension costs	(98,000)	141,000	(196,000)	282,000
Pension Plans [Member] | Minimum [Member]
Defined Benefit Plan Disclosure [Line Items]
Duration of termination process of defined benefit pension plan			12 months
Pension Plans [Member] | Maximum [Member]
Defined Benefit Plan Disclosure [Line Items]
Duration of termination process of defined benefit pension plan			18 months
Supplemental Executive Retirement Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Maximum amount of annual retirement benefits			$ 125,000

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Business and Reporting Policies (Details) (USD $) In Millions, except Per Share data, unless otherwise specified	6 Months Ended
	Jun. 30, 2014 Segment	Jun. 30, 2013
Business and Reporting Policies [Abstract]
Number of reportable segments	1
Increase in gross profit due to out of period adjustment		$ 0.8
Increase (decrease) in gross profit due to out of period adjustment (in dollars per share)		$ 0.02

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Earnings Per Share

6 Months Ended

Jun. 30, 2014

Earnings Per Share [Abstract]

Earnings Per Share

NOTE I – Earnings Per Share

We report our earnings per share using the two-class method.  The income per share for each class of common stock is calculated assuming 100% of our 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 following is a reconciliation of the earnings and number of shares used in calculating the diluted earnings per share for Common Stock and Class A Common Stock (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
Numerator:
Common:
Distributed earnings	$	1,642	$	797	$	3,253	$	1,577
Undistributed earnings		2,748		3,497		6,659		10,013
Basic		4,390		4,294		9,912		11,590
Class A Common earnings		439		536		1,046		1,500
Diluted	$	4,829	$	4,830	$	10,958	$	13,090
Class A Common:
Distributed earnings	$	162	$	96	$	340	$	199
Undistributed earnings		277		440		706		1,301
	$	439	$	536	$	1,046	$	1,500
Denominator:
Common:
Weighted average shares outstanding - basic		20,454		19,807		20,307		19,654
Assumed conversion of Class A Common Stock		2,162		2,614		2,259		2,682
Dilutive options, awards and common stock equivalents		324		370		368		418
Total weighted-average diluted Common Stock		22,940		22,791		22,934		22,754
Class A Common:
Weighted average shares outstanding		2,162		2,614		2,259		2,682

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Pension Plans

6 Months Ended

Jun. 30, 2014

Pension Plans [Abstract]

Pension Plans

NOTE G – Pension Plans

We have a defined benefit pension plan covering substantially all employees hired on or before December 31, 2005.  The pension plan was closed to any employee hired after that date.  The benefits are based on years of service and the employee's final average compensation.  Effective January 1, 2007, no new benefits are earned under this plan for additional years of service after December 31, 2006.

On May 13, 2014 this plan was terminated effective July 20, 2014.  The termination process is expected to take 12 to 18 months with the settlement of most of the plan's obligations by the end of 2014.

We also have a non-qualified, non-contributory supplemental executive retirement plan (SERP) for employees whose retirement benefits are reduced due to their annual compensation levels.  The SERP limits the total amount of annual retirement benefits that may be paid to a participant in the SERP from all sources (Retirement Plan, Social Security and the SERP) to $125,000.  The SERP is not funded so we pay benefits directly to participants.

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
Service cost-benefits earned during period	$	31		$	27		$	62		$	54
Interest cost on projected benefit obligations		954			877			1,908			1,754
Expected return on plan assets		(1,214	)		(1,243	)		(2,428	)		(2,486	)
Amortization of prior service costs		52			52			104			104
Amortization of actuarial loss		79			428			158			856
Net pension costs	$	(98	)	$	141		$	(196	)	$	282

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Stock Based Compensation Plan

6 Months Ended

Jun. 30, 2014

Stock Based Compensation Plan [Abstract]

Stock Based Compensation Plan

NOTE H – Stock Based Compensation Plan

As more fully discussed in Note 11 of the notes to the consolidated financial statements in our 2013 Annual Report on Form 10-K, we have awards outstanding for Common Stock under stock-based employee compensation plans.

The following table summarizes our award activity during the six months ended June 30, 2014:

	Restricted Stock Awards					Stock-Settled Appreciation Rights
	Shares or Units			Weighted-Average Award Price		Rights			Weighted-Average Award Price
Outstanding at December 31, 2013		437,000		$	14.46		149,700		$	15.78
Granted		146,248			28.73		—			—
Restrictions lapsed or exercised		(235,925	)		14.01		(11,875	)		12.80
Forfeited		(16,060	)		21.25		(6,000	)		18.14
Outstanding at June 30, 2014		331,263		$	20.75		131,825		$	15.94
Exercisable at June 30, 2014		—			—		53,825		$	12.75

Grants of equity awards are made to certain officers and key employees under the 2004 and 2014 LTIP Plans. The restrictions on most of the awards generally lapse annually, primarily over four year periods. During 2014, the Company granted 39,890 awards for which the shares ultimately issued will be based upon the achievement of various performance measures.  The restricted units earned under most of these awards vest after three years. The compensation is being charged to selling, general and administrative expense over the respective grants' vesting periods, primarily on a straight-line basis.  Stock based compensation expense for the six months ended June 30, 2014 was approximately $1.8 million and $2.0 million in 2013. The aggregate intrinsic value of outstanding restricted common stock grants was $8.3 million at June 30, 2014. The aggregate intrinsic value of vested and outstanding stock-settled appreciation rights at June 30, 2014 was approximately $0.7 million and $1.2 million, respectively.

As of June 30, 2014, the remaining unamortized compensation cost related to unvested equity awards was approximately $6.1 million and scheduled to be recognized over a weighted-average period of 2.5 years.

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Pension Plans (Tables)

6 Months Ended

Jun. 30, 2014

Pension Plans [Abstract]

Net Pension Costs

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
Service cost-benefits earned during period	$	31		$	27		$	62		$	54
Interest cost on projected benefit obligations		954			877			1,908			1,754
Expected return on plan assets		(1,214	)		(1,243	)		(2,428	)		(2,486	)
Amortization of prior service costs		52			52			104			104
Amortization of actuarial loss		79			428			158			856
Net pension costs	$	(98	)	$	141		$	(196	)	$	282

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Income Taxes (Details)	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Income Taxes [Abstract]
Effective tax rate (in hundredths)	38.30%	38.60%

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) [Abstract]
Net income	$ 4,829	$ 4,830	$ 10,958	$ 13,090
Defined benefit pension plans:
Amortization of prior service cost	32	32	64	64
Amortization of net loss	48	266	98	532
Total other comprehensive income	80	298	162	596
Comprehensive income	$ 4,909	$ 5,128	$ 11,120	$ 13,686

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Interim LIFO Calculations

6 Months Ended

Jun. 30, 2014

Interim LIFO Calculations [Abstract]

Interim LIFO Calculations

NOTE D – Interim LIFO Calculations

An actual valuation of inventory under the LIFO method can be made only at the end of each year based on actual inventory levels. Accordingly, interim LIFO calculations must necessarily be based on management's estimates. Since these estimates may be affected by factors beyond management's control, interim results are subject to change based upon the final year-end LIFO inventory valuations.

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Accounts Receivable (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2014 State	Dec. 31, 2013	Jun. 30, 2013
Accounts Receivable [Abstract]
Percentage of amounts financed under in-house credit programs, as a percent of net sales (in hundredths)	3.40%		4.00%
Duration of no interest credit programs	12 months
Term of other programs, minimum	30 days
Term of other programs, maximum	3 years
Interest rate of other programs, minimum (in hundredths)	0.00%
Interest rate of other programs, maximum (in hundredths)	21.00%
Accounts receivable due per scheduled payment [Abstract]
Accounts receivables collectible in one year	$ 6.7
Accounts receivables collectible in two years	0.9
Accounts receivables collectible beyond two years	0.2
Allowance for doubtful accounts	$ 0.4	$ 0.4
Account write-off period	9 months
Number of states in which accounts receivable originated	16