<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
Amendment No. 1 to
Annual Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the fiscal year ended December 31, 1994
-----------------
Commission file number 33-44285
HAVERTY FURNITURE COMPANIES, INC.
- -------------------------------------------------------------------------------
(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.)
866 West Peachtree Street, N.W., Atlanta, Georgia 30308
- ---------------------------------------------------- -------------
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (404) 881-1911
--------------
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
None None
-------------------------------- -------------------------
Securities registered pursuant to Section 12(g) of the Act:
Common Stock $1.00 par value, Class A Common Stock, $1.00 par value
- -------------------------------------------------------------------------------
(Title of class)
<PAGE> 2
The undersigned Registrant hereby amends the following items,
financial statements, exhibits or other portions of its Annual Report on Form
10-K for the year ending December 31, 1994, as set forth below:
Part II, Item 5. The last page of the annual report to
stockholders for the year ended December 31, 1994 (Exhibit
13.1 as amended) is incorporated by reference herein in
response to this item.
Part IV, Item 14(a)(3).
Exhibits.
Exhibit 99. The information required by Form 11-K with
respect to the Haverty Furniture Companies, Inc. Thrift Plan
(the "Plan"), which exhibit is filed as part of the
above-referenced Form 10-K in lieu of a separate filing of an
annual report on Form 11-K for the Plan for the fiscal year
ended December 31, 1994, in accordance with Rule 15d-21.
Exhibit 13.1. This exhibit is hereby amended to include the
information on the last page of the annual report to
stockholders for the year ended December 31, 1994.
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this amendment to be signed on its behalf by the
undersigned thereunto duly authorized.
HAVERTY FURNITURE COMPANIES, INC.
By s/ Dennis L. Fink
-------------------------
Dennis L. Fink
Senior Vice President and
Chief Financial Officer
(principal financial officer)
Date: June 29, 1995
<PAGE> 1
EXHIBIT 13.1
HAVERTY FURNITURE COMPANIES, INC.
Management's Discussion and Analysis of
Financial Condition and Results of Operations
General
In the last five years, the Company's net sales have increased from
approximately $250 million to approximately $370 million. During this period,
actions were taken to better target the home furnishings preferences of the
Company's primary customers, the middle to upper-middle income household. A new
upscale interiors presentation was developed featuring professionally designed
and fully-accessorized room settings. The merchandise assortment was also
upgraded and expanded by carrying moderately higher priced items from certain
suppliers and by adding the Thomasville and Drexel Heritage lines. Management
took a conservative approach toward increasing the total number of stores
during this period but systematically sought better locations and market areas
by opening 16 new stores while closing 11 under-performing stores. The new
upscale interiors presentation was incorporated in 14 of these 16 new stores
opened since 1990. In addition, the Company began in 1991 a program of
remodeling and expanding existing stores to present the wider selection of
better furniture in fully-decorated room settings.
The stores' average selling area increased 17.0% from 22,542 square feet
during 1989 to 26,383 square feet in 1994 as management implemented its
strategy to remodel and expand the size of the stores. Sales productivity per
square foot increased 30% to $160 over this time period. Net income declined to
$6,431,000 in 1990 and declined again the following year during a difficult
economic environment marked by the beginning of the Company's implementation of
its strategic changes. Net income more than doubled in 1992 to $4,532,000 and
doubled again in 1993 to $9,716,000 as the economy strengthened and the
Company's business strategies gained acceptance. Net income in 1994 increased
to $12,538,000 as the Company continued to expand its base of primary customers
who were experiencing growth in disposable income.
In 1995, management will continue to focus on the upscale remodeling and
expansion program, with plans to expand and remodel six stores and expand two
stores which already have the upscale look. The Company is also planning to
open five new stores (one of which will replace an existing location) that
feature classical exteriors and larger showrooms designed for better traffic
flow. These new stores will provide target customers a wider selection of
choice merchandise combined with quality service which will further emphasize
the differentiation of the Company from its competition.
- -6-
<PAGE> 2
Results of Operations
The following table sets forth for the periods indicated certain items
from the Company's statements of income as a percentage of net sales.
<TABLE>
<CAPTION>
Year Ended December 31,
------------------------------------------
1994 1993 1992
--------- -------- ------
<S> <C> <C> <C>
Net sales............................. 100.0% 100.0% 100.0%
Gross profit.......................... 47.4 47.2 46.6
Credit service charges................ 3.2 3.3 3.7
Selling, general and administrative... 41.7 42.3 44.0
Interest expense...................... 2.3 2.2 2.7
Provision for doubtful accounts....... 0.8 1.0 1.0
Other expense, net.................... ( 0.3) ( 0.1) .0
Income before income taxes............ 5.5 4.8 2.5
Net income............................ 3.4 3.0 1.6
========= ======== ======
Effective tax rate.................... 38.2% 37.9% 37.0%
</TABLE>
1994 Compared to 1993
Net sales increased 14.6% as comparable-store sales (sales from stores
opened or expanded for one year or more) increased 10.0%. Management attributes
the improvement to several factors including a favorable general economic
climate. The program of remodeling and expanding stores in certain markets,
coupled with the success of upgraded merchandise lines, enabled sales to grow
at a faster pace than the home furnishings industry's estimated average of
6.5%, according to the American Furniture Manufacturers Association. Sales
growth for first-year expanded stores, which feature wider merchandise
assortments, was 36% during 1994. The well-known quality furniture lines of
Thomasville, and more recently, Drexel Heritage, continued to appeal to
upper-middle income customers and generate higher sales per transaction. The
promotional environment of retail furniture led to the continuation of
interest-free financing packages in 1994, at a pace similar to 1993. The
Company believes that responding to the terms of advertised financing
promotions offered by many of its competitors reduces the need to emphasize
off-price promotional activity and allows for more consistent pricing and gross
margins on its merchandise.
Gross profit as a percent of net sales improved 0.2% primarily due to the
effect of improved merchandise purchasing and lower inflation under the LIFO
accounting method which was partially offset by strong sales growth in large
metropolitan markets which have greater price competition. The increase in
sales of higher-price-point furniture lines, which typically yield slightly
lower gross margins, was also a factor.
The LIFO provision was 0.1% of net sales in 1994 versus 0.5% in 1993.
During the fourth quarter of 1994, the Company changed its method of accounting
for LIFO inventories from applying U.S. Bureau of Labor Statistics (BLS)
indices to internally developed indices. The Company believes the internally
developed indices more accurately measure increases and decreases in the
Company's cost of merchandise and produce a better matching of current costs
and revenues. The LIFO provision would have been 0.3% of net sales in 1994 had
the BLS indices been used. The cumulative effect of such change at the
beginning of the year and proforma amounts for prior years are not
determinable.
-7-
<PAGE> 3
HAVERTY FURNITURE COMPANIES, INC.
Management's Discussion and Analysis (continued)
Credit service charges declined to 3.2% of net sales from 3.3% in 1993 as
customer financing at lower promotional interest rates increased slightly.
Free-interest promotions for specified periods up to one year were available on
a periodic basis to stimulate sales and meet competition. The Company plans to
continue to offer promotional interest-free financing packages at a level such
that credit service charges as a percent of net sales are not expected to
decline during 1995.
Selling, general and administrative expenses decreased 0.6% as a percent
of net sales in 1994 reflecting the fixed cost nature of many expenses in this
category as well as improvements in cost control by the Company. General
insurance costs declined 0.3% as a percent of net sales due to more favorable
claims experience and improved safety programs. Occupancy expense, as well as
personnel expenses, each declined 0.2% as a percent of net sales due to the
larger sales base. Advertising expense decreased 0.2% as a percent of net sales
as the Company continued to perform more production work in-house. In absolute
dollars, advertising expenses increased 12.3% as the Company moved to reinforce
the quality merchandise and service themes which management uses to
differentiate the Company. During 1994, the Company produced and broadcast in
all of its television markets a series of infomercials offering decorating
ideas featuring Haverty merchandise.
Interest expense increased 0.1% as a percent of net sales due to an
increase of 18.8% in average debt levels to support higher accounts receivable
and capital expenditures. Also, the Company's effective interest rate increased
17 basis points reflecting increased short-term rates.
A provision for doubtful accounts of 0.8% and 1.0% of net sales was
made in 1994 and 1993, respectively. The Company's accounts receivable rose
from the strong sales volume and the increase in credit versus cash sales to
80% of net sales versus 78% last year. The Company continued to experience bad
debt write-offs consistent with its expectations.
Other expenses increased from 0.1% to 0.3% of net sales. During the fourth
quarter of 1994, the Company determined that land originally purchased in 1987
for warehouse expansion in its Dallas market was no longer suitable in size or
location given the growth of that market and lack of improvements in the
immediate vicinity's infrastructure. The Company plans to sell this property
and a store site and in connection therewith, made a write-down of these
properties of $1.1 million which was charged to other expenses.
The Company will adopt AICPA Statement of Position 93-7 regarding
accounting for advertising costs in the first quarter of 1995. The adoption of
this statement is not expected to have a material impact on the Company's
financial position or results of operations.
1993 Compared to 1992
Net sales increased 14.5% while comparable-store sales (sales from stores
opened or expanded one year or more) increased 13.1%. Management attributes the
increase in sales to its remodeling and expansion program, the upscaling of its
merchandise lines and to an improvement in the general economy. Management
believes that its remodeling and upscaling programs enabled the Company to
increase sales to its targeted customer base and to attract additional
customers from higher income levels. Special free-interest financing promotions
continued as an important selling tool in 1993, although less frequently than
in 1992.
- -8-
<PAGE> 4
Gross profit as a percent of net sales improved 0.6% primarily due to
improved inventory control as well as the more consistent, orderly programs of
closing out discontinued and slow moving merchandise permitted in a better
economic climate. The LIFO provision was 0.5% of net sales in 1993 versus 0.6%
in 1992, based on changes in a U.S. Department of Labor, Bureau of Labor
Statistics price index.
Credit service charges declined to 3.3% of net sales from 3.7% in 1992
reflecting lower standard rates charged by the Company. In late 1992, the
Company's standard (non-promotional) credit service charge rate was lowered to
a more competitive 14.9% per annum (except in Arkansas where it is lower due to
state laws). The Company also offers a lower credit service charge rate for
individual purchases of over $3,000. Free-interest promotions for specified
periods up to one year were available on a periodic basis to stimulate sales
and meet competition.
Selling, general and administrative expenses decreased 1.7% as a percent
of net sales in 1993 reflecting the fixed cost nature of many expenses in this
category as well as improvements in cost control by the Company. Advertising
expense decreased 0.6% as a percent of net sales due to the better selection
and negotiation of media space and efficiencies from more in-house,
computer-aided production work. Occupancy expense, as well as personnel
expenses, declined 0.6% and 0.5%, respectively, as a percent of net sales due
to the larger sales base. General insurance costs declined 0.2% as a percent of
net sales.
Interest expense decreased 0.5% as a percent of net sales due in part to
the proceeds of the common stock public offering in April plus a 30-basis point
decline in the Company's average effective interest rate. This improvement was
realized despite the funding of capital expenditures of over $13 million and
significantly higher accounts receivable.
A provision for doubtful accounts of 1.0% of net sales was made in both
1993 and 1992. The Company's accounts receivable rose from the strong sales
volume and the increase in credit versus cash sales to 78% of net sales versus
75% last year. The Company continued to experience bad debt write-offs
consistent with its expectations.
In 1993, the Company adopted FASB statement No. 109, "Accounting for
Income Taxes" with no material impact on the Company's financial position or
results of operations. The Company does not provide a valuation allowance for
its net deferred tax asset as future income is expected to be sufficient to
fully realize the recorded benefit.
Liquidity and Sources of Capital
Although the Company is a retail furniture store chain, it has certain
characteristics of a finance company as a result of carrying its own customer
accounts receivable. There was a $1.9 million use of cash in operating
activities for 1994 as shown on the statements of cash flows since strong sales
increases led to a $25.9 million increase in accounts receivable. Stronger
earnings and somewhat higher depreciation charges offset a large portion of
this increase.
Receivables which bear no interest for specified periods up to one
year decreased as a percent of total accounts receivable due to slightly less
use of free-interest and delayed payment promotions during 1994. Such
promotions are expected to continue at a similar pace during 1995. Inventory
levels were 15.3% higher due to the 14.6% sales increase, a broader line of
merchandise and the new regional warehouse in Florida which was stocked in
November and December. Turnover was positively influenced by further
improvements to the Company's computerized inventory management system, more
reliance on the regional distribution centers and increases in sales of certain
upscale merchandise which are filled from special orders.
-9-
<PAGE> 5
HAVERTY FURNITURE COMPANIES, INC.
Management's Discussion and Analysis (continued)
Investing activities used $24.6 million of cash in 1994 as the Company
constructed its new regional distribution warehouse in Ocala, Florida. Also,
one new store was opened and nine stores were remodeled with four of those also
being expanded. In addition, four stores which had been previously remodeled
were expanded in 1994. Approximately one-third of 1994 capital expenditures was
for additional expansion which will be completed in 1995. Financing activities
provided $27.8 million during the year, mostly from short-term bank borrowings.
The Company has arrangements with eight banks under line-of-credit
agreements to borrow up to $104 million. At December 31, 1994, of this amount,
$64 million were committed lines ($14.8 million unused) and $40 million were
uncommitted lines ($30.0 million unused). Borrowings accrue interest at
competitive money-market rates and all lines are reviewed annually for renewal.
The Company has a revolving credit/term loan agreement with a commercial bank
providing for borrowings of $10 million through 1997, at which time it converts
to a term loan, maturing in 1999. If utilized, this facility would replace a
$10 million short-term committed line. The Company's financial covenants under
various loan agreements allow for securitization of up to 55% of the
outstanding balances of accounts receivable. The Company plans to enter into a
financing transaction of this type in 1995, the proceeds of which would reduce
accounts receivable and notes payable to banks while improving cash flow from
operating activities.
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 sale/leasebacks, private placements and
mortgage financing 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 with
fixed-rate or capped-rate debt (45% of total debt was interest-rate protected
at December 31, 1994). The Company's average effective interest rates on all
borrowings (without capital leases) were 7.3%, 7.0% and 7.0% in 1994, 1993 and
1992, respectively.
Capital expenditures are presently expected to include for the two-year
period of 1995 and 1996 the addition of 13 new stores and the remodeling and
expansion of 10 existing locations and the expansion of two stores which
already have the new upscale format. Although the preliminary estimate of gross
capital expenditures over this two-year period is $55 million, the amount
recorded on the Company's balance sheet will exclude any new properties which
are arranged under operating leases. The Company intends to seek operating
leases for up to one-third of the total expenditures projected. Funds available
from operations, bank lines of credit and other possible financing transactions
are expected to be adequate to finance the Company's planned expenditures.
Seasonality
Although the Company does not consider its business to be seasonal, sales
are somewhat higher in the second half of the year, particularly in the fourth
quarter.
- -10-
<PAGE> 6
HAVERTY FURNITURE COMPANIES, INC.
Selected 10-Year Financial Data
(In thousands, except per share data)
<TABLE>
<CAPTION>
10-Year/5-Year
Compounded
Annual Growth Rate
(1984-94) (1989-94) 1994 1993 1992 1991 1990 1989 1984
- -------------------------------------------------------------------------------------------------------------------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Sales..................... 8.9% 9.8% $370,132 $322,859 $282,022 $246,390 $250,448 $232,081 $158,398
- -------------------------------------------------------------------------------------------------------------------- ---------
Cost of Goods Sold............ 8.5% 10.0% 194,688 170,348 150,725 129,581 132,427 120,917 86,149
Credit Service Charges........ 2.4% 1.4% 11,664 10,500 10,489 11,566 10,351 10,893 9,216
Depreciation and Amortization. 14.0% 11.8% 8,602 6,875 6,069 5,479 5,233 4,934 2,329
Interest Expense.............. 6.3% 0.4% 8,470 7,240 7,518 8,190 8,713 8,298 4,582
- -------------------------------------------------------------------------------------------------------------------- ---------
Income Before Income Taxes.... 4.8% 13.2% $ 20,279 $ 15,650 $ 7,188 $ 3,555 $ 8,795 $ 10,903 $ 12,685
Income Taxes.................. 2.9% 20.0% 7,741 5,934 2,656 1,315 2,364 3,110 5,814
---------------------------------------------------------------- --------
Net Income.................... 6.2% 10.0% $ 12,538 $ 9,716 $ 4,532 $ 2,240 $ 6,431 $ 7,793 $ 6,871
- -------------------------------------------------------------------------------------------------------------------- ---------
Income Before Income Taxes
as a % of Net Sales........ -- -- 5.5% 4.8% 2.5% 1.4% 3.5% 4.7% 8.0%
Net Income as a % of Net Sales -- -- 3.4% 3.0% 1.6% 0.9% 2.6% 3.4% 4.3%
==================================================================================================================== =========
Earnings Per Share (a)........ 3.6% 4.1% $ 1.10 $ .91 $ .53 $ .26 $ .75 $ .90 $ .77
==================================================================================================================== =========
Purchases of Property &
Equipment ................. $ 24,387 $ 13,721 $ 9,701 $ 8,353 $ 10,271 $ 5,794 $ 12,705
Additional Capitalized Leases -- -- -- 2,100 -- -- --
==================================================================================================================== =========
Cash Dividends-
Amount..................... 8.0% 8.7% $ 3,082 $ 2,772 $ 2,120 $ 2,102 $ 2,061 $ 2,034 $ 1,429
Per Share:
Old Common Stock......... n/a n/a n/a n/a n/a n/a .3200
Common Stock (a)......... .2750 .2650 .2550 .2533 .2467 .2400 n/a
Class A Common Stock (a). .2550 .2490 .2417 .2400 .2333 .2267 n/a
==================================================================================================================== =========
Working Capital............... 8.8% 6.6% $139,695 $147,733 $103,467 $ 99,190 $107,641 $101,363 $ 59,944
Current Ratio................. 2.50 to 1 4.11 to 1 2.66 to 1 3.02 to 1 3.49 to 1 4.89 to 1 3.09 to 1
==================================================================================================================== =========
Long-term Debt and Capital
Lease Obligations ......... 5.5% 0.9% $ 87,164 $ 94,197 $ 79,630 $ 74,406 $ 80,149 $ 83,392 $ 50,911
==================================================================================================================== =========
Stockholders' Equity ......... 10.4% 11.2% $131,055 $120,418 $ 83,567 $ 80,804 $ 80,969 $ 76,960 $ 48,775
Equity Per Common Share (a)... 7.6% 4.9% 11.40 10.59 9.77 9.54 9.51 8.97 5.98
==================================================================================================================== =========
Accounts Receivable, Net 11.0% 15.3% $160,405 $137,630 $109,301 $ 92,931 $ 94,796 $ 78,748 $ 56,694
==================================================================================================================== =========
Inventories .................. 8.9% 7.7% $ 64,582 $ 54,739 $ 50,573 $ 49,483 $ 50,443 $ 44,616 $ 27,658
==================================================================================================================== =========
Property and Equipment,
Net Carrying Value ........ 7.4% 5.6% $ 80,198 $ 67,439 $ 61,296 $ 57,899 $ 55,481 $ 61,082 $ 39,243
==================================================================================================================== =========
Total Assets ................. 9.2% 10.5% $315,103 $264,353 $229,184 $208,653 $208,862 $191,097 $130,124
==================================================================================================================== =========
Number of Retail Stores:
Open at beginning of period -- -- 89 88 86 86 85 82 68
Opened during period....... -- -- 1 3 5 -- 7 3 3
Closed/relocated
during period........... -- -- -- 2 3 -- 6 -- 3
----------------------------------------------------------------- ---------
Open at end of period...... -- -- 90 89 88 86 86 85 68
----------------------------------------------------------------- ---------
Remodeled and/or
expanded during period.... -- -- 13 16 12 4 -- -- --
==================================================================================================================== =========
</TABLE>
(a) Adjusted for all stock dividends and splits.
-11-
<PAGE> 7
HAVERTY FURNITURE COMPANIES, INC.
Statements of Income
(In thousands, except per share data)
<TABLE>
<CAPTION>
Year Ended December 31
---------------------------------------
1994 1993 1992
--------- ---------- ----------
<S> <C> <C> <C>
Net sales........................................................................ $ 370,132 $ 322,859 $ 282,022
Cost of goods sold............................................................... 194,688 170,348 150,725
--------- ---------- ----------
Gross profit.................................................................. 175,444 152,511 131,297
Credit service charges........................................................... 11,664 10,500 10,489
--------- ---------- ----------
187,108 163,011 141,786
Costs and expenses:
Selling, general and administrative........................................... 154,491 136,551 124,226
Interest..................................................................... 8,470 7,240 7,518
Provision for doubtful accounts............................................... 2,773 3,154 2,793
--------- ---------- ----------
165,734 146,945 134,537
--------- ---------- ----------
21,374 16,066 7,249
Other expense, net............................................................... ( 1,095) ( 416) ( 61)
--------- ---------- ----------
INCOME BEFORE INCOME TAXES 20,279 15,650 7,188
Income taxes (Note 8)............................................................ 7,741 5,934 2,656
--------- ---------- ----------
NET INCOME $ 12,538 $ 9,716 $ 4,532
========= ========== ==========
Average number of common and common equivalent shares outstanding................ 11,425 10,733 8,571
========= ========== ==========
Earnings per share............................................................... $ 1.10 $ .91 $ .53
========= ========== ==========
</TABLE>
See notes to financial statements.
- -12-
<PAGE> 8
HAVERTY FURNITURE COMPANIES, INC.
Balance Sheets
(In thousands, except share data)
<TABLE>
<CAPTION>
December 31
------------------------
1994 1993
--------- ---------
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents...................................................................... $ 1,925 $ 614
Accounts receivable (Note 2)................................................................... 160,405 137,630
Inventories (Note 3)........................................................................... 64,582 54,739
Other current assets........................................................................... 2,686 998
Deferred income taxes (Note 8)................................................................. 3,396 1,193
--------- ---------
TOTAL CURRENT ASSETS 232,994 195,174
Property and equipment (Notes 4 and 7)............................................................ 80,198 67,439
Deferred income taxes (Note 8)................................................................... -- 158
Other assets...................................................................................... 1,911 1,582
--------- ---------
$ 315,103 $ 264,353
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Notes payable to banks (Note 5)................................................................ $ 49,200 $ 11,900
Accounts payable and accrued expenses (Note 6)................................................. 32,809 27,062
Income taxes (Note 8).......................................................................... 3,332 --
Current portion of long-term debt and capital lease obligations (Notes 7 and 12)............... 7,958 8,479
--------- ---------
TOTAL CURRENT LIABILITIES 93,299 47,441
Long-term debt and capital lease obligations, less current portion (Notes 7 and 12)............... 87,164 94,197
Deferred income taxes (Note 8).................................................................... 1,347 --
Other liabilities................................................................................. 2,238 2,297
Commitments (Note 12)
Stockholders' Equity (Notes 9 and 11):
Capital Stock, par value $1 per share-
Preferred Stock, Authorized-1,000,000 shares; Issued: None
Common Stock, Authorized-15,000,000 shares;
Issued: 1994-8,928,532 shares; 1993-8,765,231 shares
(including shares in treasury: 1994 and 1993-498,948)................................. 8,929 8,765
Convertible Class A Common Stock, Authorized-5,000,000 shares;
Issued: 1994-3,313,606 shares; 1993-3,354,475 shares
(including shares in treasury: 1994 and 1993-249,055)................................ 3,314 3,354
Additional paid-in capital................................................................. 31,500 30,443
Retained earnings........................................................................... 92,889 83,433
--------- ---------
136,632 125,995
Less cost of Common Stock and Convertible Class A Common Stock in treasury.................. 5,577 5,577
--------- ---------
TOTAL STOCKHOLDERS' EQUITY 131,055 120,418
--------- ---------
$ 315,103 $ 264,353
========= =========
</TABLE>
See notes to financial statements.
-13-
<PAGE> 9
HAVERTY FURNITURE COMPANIES, INC.
Statements of Stockholders' Equity
(In thousands, except per share data)
<TABLE>
<CAPTION>
Class A Additional
Common Stock Common Stock Paid-in Retained
($1 Par Value) ($1 Par Value) Capital Earnings Treasury Stock Total
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
BALANCE AT JANUARY 1, 1992............... $ 5,330 $ 3,887 $ 3,087 $ 74,077 $(5,577) $ 80,804
Net income............................... -- -- -- 4,532 -- 4,532
Cash dividends on common stock:
Amount................................ -- -- -- (2,120) -- (2,120)
Per share:
Common-$.255
Class A Common-$.2417
Conversion of Class A Common Stock....... 139 (139) -- -- -- --
Stock option transactions, net........... 30 26 295 -- -- 351
Stock split (3 for 2).................... 84 ( 56) ( 28) -- -- --
-------- -------- -------- -------- ------- --------
BALANCE AT DECEMBER 31, 1992............. 5,583 3,718 3,354 76,489 (5,577) 83,567
Net income............................... -- -- -- 9,716 -- 9,716
Cash dividends on common stock:
Amount................................ -- -- -- (2,772) -- (2,772)
Per share:
Common-$.265
Class A Common-$.249
Conversion of Class A Common Stock....... 359 (359) -- -- -- --
Stock option transactions, net........... 470 100 4,321 -- -- 4,891
Sale of Common Stock..................... 1,391 -- 23,625 -- -- 25,016
Stock split (3 for 2).................... 962 ( 105) ( 857) -- -- --
-------- -------- -------- -------- ------- --------
BALANCE AT DECEMBER 31, 1993............. 8,765 3,354 30,443 83,433 (5,577) 120,418
Net income............................... -- -- -- 12,538 -- 12,538
Cash dividends on common stock:
Amount................................ -- -- -- (3,082) -- (3,082)
Per share:
Common-$.2750
Class A Common-$.2550
Conversion of Class A Common Stock....... 80 ( 80) -- -- -- --
Stock option transactions, net........... 84 40 1,057 -- -- 1,181
-------- -------- -------- -------- ------- --------
BALANCE AT DECEMBER 31, 1994............. $ 8,929 $ 3,314 $ 31,500 $ 92,889 $(5,577) $131,055
======== ======== ======== ======== ======= ========
</TABLE>
See notes to financial statements.
- -14-
<PAGE> 10
HAVERTY FURNITURE COMPANIES, INC.
Statements of Cash Flows
(In thousands)
<TABLE>
<CAPTION>
Year Ended December 31
--------------------------------------
1994 1993 1992
-------- -------- ---------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income....................................................................... $ 12,538 $ 9,716 $ 4,532
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization................................................. 8,602 6,875 6,069
Provision for doubtful accounts............................................... 2,773 3,154 2,793
Reduction of cost to market value of property held for sale................... 1,100 -- --
Deferred income taxes......................................................... ( 698) 456 ( 810)
Loss (gain) on sale of property and equipment................................. 86 ( 85) 212
-------- -------- ---------
Subtotal 24,401 20,116 12,796
Changes in operating assets and liabilities:
Accounts receivable........................................................ (25,548) (31,483) (19,163)
Inventories................................................................ ( 9,843) ( 4,166) ( 1,090)
Other current assets....................................................... 24 375 ( 22)
Accounts payable and accrued expenses...................................... 5,747 1,769 2,300
Income taxes............................................................... 3,332 (1,789) ( 81)
-------- -------- ---------
NET CASH USED IN OPERATING ACTIVITIES ( 1,887) (15,178) ( 5,260)
-------- -------- ---------
INVESTING ACTIVITIES
Purchases of property and equipment.............................................. (24,387) (13,721) ( 9,701)
Proceeds from sale of property and equipment..................................... 128 822 60
Other investing activities....................................................... ( 329) 635 121
-------- -------- ---------
NET CASH USED IN INVESTING ACTIVITIES (24,588) (12,264) ( 9,520)
-------- -------- ---------
FINANCING ACTIVITIES
Net increase (decrease) in short-term borrowings................................. 37,300 (14,900) 10,350
Proceeds from issuance of long-term debt......................................... 925 30,000 13,502
Payment of long-term debt and capital lease obligations.......................... ( 8,479) (15,242) ( 7,832)
Exercise of stock options........................................................ 1,181 4,891 351
Dividends paid................................................................... ( 3,082) ( 2,772) ( 2,120)
Sale of Common Stock............................................................. -- 25,016 --
Other financing activities....................................................... ( 59) ( 126) ( 23)
-------- -------- ---------
NET CASH PROVIDED BY FINANCING ACTIVITIES 27,786 26,867 14,228
-------- -------- ---------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS.................................... 1,311 ( 575) ( 552)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR...................................... 614 1,189 1,741
-------- -------- ---------
CASH AND CASH EQUIVALENTS AT END OF YEAR............................................ $ 1,925 $ 614 $ 1,189
======== ======== =========
</TABLE>
See notes to financial statements.
-15-
<PAGE> 11
HAVERTY FURNITURE COMPANIES, INC.
Notes To Financial Statements
NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash Equivalents: The Company considers all liquid investments with a
maturity of three months or less when purchased to be cash equivalents. Cash
equivalents are stated at cost, which approximates fair market value.
Inventories: Inventories are stated at the lower of cost or market. Cost
is determined using the last-in, first-out (LIFO) method. As discussed in Note
3, the Company changed its method of accounting for LIFO inventories in 1994.
Property and Equipment and Depreciation: Property and equipment are stated
at cost less accumulated depreciation and amortization. Depreciation is
provided over the estimated useful lives of the assets using the straight-line
method. Leasehold improvements are amortized over the shorter of the estimated
useful life or the lease term of the related asset. Investments in property
under capital leases are amortized over the related lease term.
Fair Values of Financial Instruments: The Company's financial instruments
consist of cash, accounts receivable, accounts payable and long-term debt.
Cash, accounts receivable and accounts payable are stated at fair market value;
the carrying amount of long-term debt approximates fair market value based on
current interest rates.
Advertising Costs: During 1994, the American Institute of Certified Public
Accountants issued Statement of Position (SOP) 93-7 regarding accounting for
advertising costs. This SOP requires expensing the costs of all advertising in
the periods in which those costs are incurred, or the first time the
advertising takes place. The Company will adopt the new SOP in the first
quarter of 1995. The adoption of this SOP is not expected to have a material
impact on the Company's financial position or results of operations.
Income Taxes: Effective January 1, 1993, the Company adopted Statement of
Financial Accounting Standards ("SFAS") No. 109, "Accounting for Income Taxes."
SFAS No. 109 required a change from the deferred method to the asset and
liability method of computing deferred income taxes. SFAS No. 109 generally
requires recognition of deferred tax assets and liabilities for the expected
future tax consequences of events that have been included in the financial
statements or tax returns. Under this method, deferred tax assets and
liabilities are determined based on the difference between the financial
reporting and tax bases of assets and liabilities, using enacted tax rates in
effect for the year in which the differences are expected to reverse. The
Company elected not to restate the financial statements of any prior years and
the cumulative effect of this change in accounting was immaterial.
Earnings Per Share: Earnings per share are computed based on the weighted
average number of common shares plus the common stock equivalents related to
stock options, once the latter causes dilution in net income per share in
excess of 3%. The 1992 earnings per share amounts have been restated to record
the effect of the 3-for-2 stock split on June 30, 1993.
Reclassifications: Certain amounts in the 1993 financial statements have
been reclassified to conform to the 1994 presentation.
NOTE 2-ACCOUNTS RECEIVABLE
The Company is engaged in the sale of retail home furnishings in 11
Southeastern and Southwestern states. During 1994, credit sales under Company
credit programs were $294,620,000 or 80% of sales compared with 78% in 1993 and
75% in 1992. Accounts receivable are shown net of the allowance for doubtful
accounts of $7,105,000 and $6,485,000 at December 31, 1994 and 1993,
respectively. Accounts receivable terms vary as to payment terms (30 days to
three years) and interest rates (0% to 21%) and are generally collateralized by
the merchandise sold. Accounts receivables having balances due after one year
at December 31, 1994 and 1993 were approximately $121,142,000 and $98,220,000,
respectively and have been included in current assets in accordance with trade
practice.
- -16-
<PAGE> 12
HAVERTY FURNITURE COMPANIES, INC.
NOTE 2-ACCOUNTS RECEIVABLE (continued)
The Company believes that the carrying value of existing customer
receivables is the best estimate of fair value because of their short average
maturity and estimated bad debt losses have been reserved. Concentrations of
credit risk with respect to customer receivables are limited due to the large
number of customers comprising the Company's account base and their dispersion
across eleven states.
NOTE 3-INVENTORIES
Inventories are measured using the last-in, first-out (LIFO) method of
inventory valuation. The excess of current cost over the value of inventories
based upon the LIFO method was approximately $12,698,000 and $12,264,000 at
December 31, 1994 and 1993, respectively. A number of the Company's competitors
use the first-in, first-out (FIFO) basis of inventory valuation which
approximates current costs. The use of the LIFO valuation method as compared to
the FIFO method had the effect of decreasing net income by $.02, $.09 and $.12
per share for the years ended 1994, 1993 and 1992, respectively had the
Company's effective tax rate been applied to changes in income resulting
therefrom, and had no other assumptions been made as to changes in income.
During the fourth quarter of 1994, the Company changed its method of
accounting for LIFO inventories from applying U.S. Bureau of Labor Statistics
indices to internally developed indices. The Company believes the internally
developed indices more accurately measure increases and decreases in the
Company's cost of merchandise and produce a better matching of current costs
and revenues. The effect of the change in the accounting for LIFO inventories
was to increase net income by approximately $330,000 or $.03 per share in the
year ended December 31, 1994. The cumulative effect of such change at the
beginning of the year and proforma income amounts for prior years are not
determinable.
NOTE 4-PROPERTY AND EQUIPMENT
Property and equipment is summarized as follows (in thousands):
<TABLE>
<CAPTION>
1994 1993
--------- ---------
<S> <C> <C>
Land $ 17,552 $ 13,145
Buildings and improvements 60,368 53,726
Equipment 40,159 35,215
Capital leases 9,989 10,288
Construction in progress 1,350 --
--------- ---------
129,418 112,374
Less accumulated depreciation ( 43,103) ( 38,954)
Less accumulated capital lease amortization ( 6,117) ( 5,981)
--------- ---------
Property and equipment, net $ 80,198 $ 67,439
========= =========
</TABLE>
During the year ended December 31, 1994 the Company determined that land
with a cost of $2,812,000 was no longer suitable for future operating use and
transferred the cost from land to other current assets.
NOTE 5-CREDIT ARRANGEMENTS
Under short-term line-of-credit arrangements with banks, the Company may
borrow up to $104,000,000 upon such terms as the Company and the banks mutually
agree. These arrangements are reviewed annually for renewal.
Committed lines of credit totaled $64,000,000 with customary fees payable
on the unused portion ($14,800,000 unused at December 31, 1994). No fees or
compensating balances are required for the remaining $40,000,000 uncommitted
lines of credit ($30,000,000 unused at December 31, 1994).
-17-
<PAGE> 13
HAVERTY FURNITURE COMPANIES, INC.
NOTE 5-CREDIT ARRANGEMENTS (continued)
At December 31, 1994, the Company owed $59,200,000 in short-term loans to
banks, of which $10,000,000 was classified as long-term debt as described in
Note 7. The weighted average interest rate for these borrowings outstanding at
December 31, 1994 and 1993 was 6.3% and 3.5%, respectively.
NOTE 6-ACCOUNTS PAYABLE AND ACCRUED EXPENSES
The components of accounts payable and accrued expenses are as follows (in
thousands):
<TABLE>
<CAPTION>
1994 1993
--------- ---------
<S> <C> <C>
Accounts payable, trade............................... $ 12,495 $ 13,840
Accrued compensation.................................. 7,043 5,494
Taxes other than income taxes......................... 5,866 5,019
Other................................................. 7,405 2,709
--------- ---------
$ 32,809 $ 27,062
========= =========
</TABLE>
NOTE 7-LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS
Long-term debt and capital lease obligations are summarized as follows (in
thousands):
<TABLE>
<CAPTION>
1994 1993
------- --------
<S> <C> <C>
10.1% unsecured note payable (a)...................... $27,500 $ 32,500
7.16% unsecured note payable (b)...................... 30,000 30,000
Secured debt (c)...................................... 22,056 24,108
6.3% to 10.5% capital lease obligations,
due through 2016.................................... 5,566 6,068
Unsecured notes (d)................................... 10,000 10,000
------- --------
95,122 102,676
Less portion classified as current liability.......... 7,958 8,479
------- --------
$87,164 $ 94,197
======= ========
</TABLE>
(a) The note is payable in semi-annual installments of $2,500,000 plus
interest payable quarterly and matures in April 2000.
(b) The note is payable in semi-annual principal payments of $2,143,000
commencing in October 2000 and matures in April 2007. Interest
is payable quarterly.
(c) Secured debt is comprised of various first mortgage notes and first
deeds of trust including some with fixed rates of interest
ranging from 6.5% to 7.9% which were repaid during 1994 and some with
floating rates of interest ranging from LIBOR plus .875% (note rate of
7.39% at December 31, 1994) to 94% of prime rate due through 2007. The
Company may prepay the floating-rate notes at any time without penalty.
Property and equipment with a net book value at December 31, 1994 of
$31,442,000 is pledged as collateral on secured debt.
(d) The Company has a revolving credit/term loan agreement with a
commercial bank providing for borrowings of $10,000,000
revolving through 1997, at which time it converts to a term loan,
maturing in 1999. If utilized, this facility would replace a
$10,000,000 short-term committed line. Interest is charged at the
bank's prime rate, or any fixed rate as offered at that time acceptable
to the Company. The Company may prepay the loan at any interest payment
date without penalty. Under the terms of this agreement, the Company
has the option to refinance short-term notes and, accordingly,
$10,000,000 was classified as long-term debt at December 31, 1994.
The Company's debt agreements require, among other things, that the
Company: (a) meet certain working capital requirements; (b) limit the type and
amount of indebtedness incurred; (c) limit the operating lease rentals; and (d)
grant certain lenders identical security for any liens placed upon the
Company's assets, other than those liens specifically permitted in the loan
agreements. The Company is in compliance with these covenants at December 31,
1994.
The note agreement which governs the 10.1% and 7.16% unsecured notes
payable allows for the issuance of additional notes of up to $30 million in the
aggregate at any time over the next three years if requested by the Company.
This uncommitted "shelf" facility would be funded at prevailing market interest
rates for similar credit-rated borrowers and would mature in no more than 13
years with an average life of 10 years or less.
- -18-
<PAGE> 14
HAVERTY FURNITURE COMPANIES, INC.
NOTE 7-LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS (continued)
The aggregate maturities of long-term debt and capital lease obligations
during the five years subsequent to December 31, 1994 are as follows:
1995-$7,958,000; 1996-$7,972,000; 1997-$11,805,000; 1998-$13,101,000;
1999-$10,065,000. Such scheduled maturities assume that the short-term notes
are refinanced under the maximum term available under the related $10,000,000
revolving credit/term loan agreement.
Cash payments for interest were approximately $8,156,000, $7,325,000 and
$7,796,000 in 1994, 1993 and 1992, respectively.
NOTE 8-INCOME TAXES
Income tax expense (benefit) consists of the following (in thousands):
<TABLE>
<CAPTION>
1994 1993 1992
------- ------- -------
<S> <C> <C> <C>
Current:
Federal............................... $ 7,269 $ 4,721 $ 3,121
State................................. 1,170 757 345
------- ------- -------
8,439 5,478 3,466
------- ------- -------
Deferred:
Federal.............................. ( 607) 444 (730)
State................................ ( 91) 12 ( 80)
------- ------- -------
( 698) 456 (810)
------- ------- -------
$ 7,741 $ 5,934 $ 2,656
======= ======= =======
</TABLE>
Income tax expense differs from the amount computed by applying the
statutory Federal income tax rate. The differences are summarized as follows
(in thousands):
<TABLE>
<CAPTION>
1994 1993 1992
------- ------- -------
<S> <C> <C> <C>
Statutory rates applied to income
before income taxes................. $ 7,097 $ 5,376 $ 2,444
State income taxes, net of federal
tax benefit......................... 761 497 175
Other.................................. ( 117) 61 37
------- ------- -------
$ 7,741 $ 5,934 $ 2,656
======= ======= =======
</TABLE>
Deferred tax assets and liabilities as of December 31, 1994 and 1993 were
as follows (in thousands):
<TABLE>
<CAPTION>
1994 1993
------- -------
<S> <C> <C>
Deferred tax assets:
Allowance for doubtful accounts.................... $ 1,628 $ 1,631
Retirement and compensation obligations............ 1,028 952
Inventory related.................................. 645 685
Retrospective and self-insurance accruals.......... 593 563
Capitalized leases................................. 501 477
Loss on property write-down........................ 429 --
Other.............................................. -- 99
------- -------
Total deferred tax assets 4,824 4,407
------- -------
Deferred tax liabilities:
Net property and equipment......................... 2,667 3,056
Other.............................................. 108 --
------- -------
Total deferred tax liabilities 2,775 3,056
------- -------
Net deferred tax assets............................... $ 2,049 $ 1,351
======= =======
</TABLE>
Deferred income tax benefit of $810,000 in 1992 resulted primarily from
benefits of $295,000 for allowance for doubtful accounts, $212,000 for
insurance reserves and $181,000 for excess book depreciation.
-19-
<PAGE> 15
HAVERTY FURNITURE COMPANIES, INC.
NOTE 8-INCOME TAXES (continued)
The Company made income tax payments of $5,107,000, $5,895,000 and
$3,201,000 in 1994, 1993 and 1992, respectively. Income tax benefit related to
stock options of approximately $156,000 and $1,331,000 was recorded as an
increase in additional paid-in capital in 1994 and 1993, respectively.
NOTE 9-STOCKHOLDERS' EQUITY
Common Stock has a preferential dividend rate, while Class A Common Stock
has greater voting rights (including the ability to elect a majority of the
Board of Directors). Class A Common Stock is convertible at the holder's option
at any time into Common Stock on a 1-for-1 basis; Common Stock is not
convertible into Class A Common Stock. There is no present plan for issuance of
Preferred Stock.
NOTE 10-BENEFIT PLANS
The Company has a defined benefit pension plan covering substantially all
employees. The benefits are based on years of service and the employee's final
average compensation. The Company's funding policy is to contribute annually an
amount which is within the range of the minimum required contribution and the
maximum amount that can be deducted for federal income tax purposes.
Contributions are intended to provide not only for benefits attributed to
service to date but also for those expected to be earned in the future.
The following table sets forth the plan's funded status and amounts
recognized in the Company's balance sheet at December 31 (in thousands):
<TABLE>
<CAPTION>
1994 1993
--------- --------
<S> <C> <C>
Actuarial present value of projected benefit obligations:
Accumulated benefit obligations, including vested benefits
of $17,360 in 1994 and $17,967 in 1993................ $ 17,989 $ 18,363
Increase for projected salary increases................... 4,543 4,550
--------- --------
Projected benefit obligations for service rendered to date 22,532 22,913
Plan assets at fair value........................................ 19,391 21,386
--------- --------
Plan assets less than projected benefit obligations.............. (3,141) (1,527)
Unrecognized net gain from past experience different
from that assumed and effects of changes in assumptions... 2,314 1,186
Unrecognized prior service cost.................................. 1,127 1,154
Unrecognized net asset........................................... (1,150) (1,352)
--------- --------
Accrued pension expense included in the balance sheet............ $ ( 850) $ ( 539)
========= ========
</TABLE>
Net pension cost included the following components (in thousands):
<TABLE>
<CAPTION>
1994 1993 1992
------- ------- -------
<S> <C> <C> <C>
Service cost-benefits earned
during the period..................... $ 1,130 $ 763 $ 602
Interest cost on projected benefit obligations 1,676 1,547 1,458
Actual loss (return) on plan assets...... 1,292 (2,747) (2,120)
Net amortization and deferral............ (3,173) 1,133 649
------- ------- -------
Net pension cost......................... $ 925 $ 696 $ 589
======= ======= =======
</TABLE>
The weighted-average discount rates used in determining the actuarial
present value of benefit obligations were 8.5% and 7.0% at December 31, 1994
and 1993, respectively. The annual rate of increase for future compensation was
6.0% for 1994 and 1993. The expected long-term rate of return on plan assets
was 8.5% for 1994, 1993 and 1992.
The plan's assets consist primarily of U.S. Government securities and
listed stocks and bonds. Included in the plan assets at December 31, 1994 were
34,000 shares of the Company's Common Stock and 42,000 shares of the Company's
Class A Common Stock with an aggregate fair value of $1,919,000.
- -20-
<PAGE> 16
HAVERTY FURNITURE COMPANIES, INC.
NOTE 10-BENEFIT PLANS (continued)
The Company has a non-qualified, non-contributory Supplemental Executive
Retirement Plan (SERP) which covers one executive officer and four retired
executive officers. The plan provides annual supplemental retirement benefits
to the executives amounting to 55% of final average earnings less benefits
payable from the Company's defined benefit pension plan and Social Security
benefits. Under the plan, which is not funded, the Company pays benefits
directly to covered executives beginning at their retirement. At December 31,
1994, the projected benefit obligation for this plan totaled $2,124,000, of
which $1,701,000 is included in the accompanying balance sheet. Pension expense
recorded under the SERP amounted to $246,000, $196,000, and $208,000 for 1994,
1993 and 1992, respectively.
The Company has an employee savings/retirement (401k) plan to which
substantially all employees may contribute. The Company matches employee
contributions to the extent of 50% of the first 2% of earnings and 25% of the
next 4% contributed by participants. The Company expensed approximately
$744,000 in 1994, $561,000 in 1993 and $557,000 in 1992 in matching employer
contributions to this plan.
The Company offers no postretirement benefits other than pensions and no
significant postemployment benefits.
NOTE 11-STOCK OPTION PLANS
The Stock Option Committee of the Board of Directors serves as
Administrator for the Company's incentive and non-qualified stock option plans.
Options are granted by the Committee under both stock plans to officers and
non-officer employees. In accordance with certain provisions of the
non-qualified plan, options granted to non-employee directors of the Company
are automatic annual grants on a pre-determined date to purchase a specific
number of shares at the fair market value of the shares on such date. As of
December 31, 1994 the maximum number of options which may be granted under
incentive and non-qualified stock option plans were 237,348 and 412,000,
respectively.
The table below summarizes options activity for the past three years under
the Company's stock option plans.
<TABLE>
<CAPTION>
Incentive Stock Non-Qualified
Option Plans Stock Option Plans
----------------------- ---------------------
Option Average Option Average
Shares Price Shares Price
---------- ------- -------- --------
<S> <C> <C> <C> <C>
Outstanding at January 1, 1992.......... 795,413 $ 6.77 337,500 $ 6.23
Granted........................... 277,875 5.79 36,000 6.75
Exercised......................... ( 84,735) 6.15 (69,000) 5.99
Cancelled or expired.............. ( 107,040) 7.38 (36,000) 7.13
---------- ------- -------- --------
Outstanding at December 31, 1992........ 881,513 6.44 268,500 6.23
Granted........................... 234,375 12.65 57,000 16.13
Exercised......................... (778,818) 6.54 (106,000) 6.35
Cancelled or expired.............. ( 225) 7.00 -- --
---------- ------- -------- --------
Outstanding at December 31, 1993........ 336,845 10.55 219,500 8.74
Granted........................... 287,500 14.17 88,000 15.29
Exercised......................... ( 68,447) 8.67 ( 39,000) 6.99
Cancelled or expired.............. ( 24,698) 12.06 ( 7,000) 8.45
---------- ------- -------- --------
Outstanding at December 31, 1994........ 531,200 $ 12.68 261,500 $ 11.22
========== ======= ======== ========
</TABLE>
Of the options outstanding at December 31, 1994, 746,200 shares were for
Common Stock and 46,500 shares were for Class A Common Stock. All non-qualified
options outstanding were exercisable and 227,295 shares of options under the
incentive plans were exercisable at December 31, 1994.
-21-
<PAGE> 17
HAVERTY FURNITURE COMPANIES, INC.
NOTE 12-COMMITMENTS
The Company leases certain property and equipment. Initial lease terms
range from 5 years to 30 years and certain leases contain renewal options
ranging from 1 to 25 years or provide for options to purchase the related
property at fair market value. The leases generally require the Company to pay
all maintenance, property taxes and insurance costs.
At December 31, 1994, aggregate future minimum payments under capital
leases and non-cancelable operating leases with initial or remaining terms in
excess of one year consisted of the following (in thousands):
<TABLE>
<CAPTION>
Capital Operating
Leases Leases
------- ---------
<S> <C> <C>
1995.................................................. $ 983 $ 9,726
1996.................................................. 979 9,275
1997.................................................. 1,011 8,654
1998.................................................. 1,002 8,282
1999.................................................. 797 7,775
Subsequent to 1999.................................... 3,919 47,573
Less total minimum sublease rentals................... -- (2,761)
------- ---------
Net minimum lease payments............................ $ 88,524
=========
Total minimum lease amounts........................... 8,691
Amounts representing interest......................... 3,125
-------
Present value of future minimum lease payments........ $ 5,566
=======
</TABLE>
Rental expense applicable to operating leases consisted of the following
(in thousands):
<TABLE>
<CAPTION>
1994 1993 1992
-------- -------- --------
<S> <C> <C> <C>
Property
Minimum......................................... $ 9,477 $ 8,390 $ 8,148
Additional rentals based on sales............... 689 508 389
Sublease income................................. (858) (753) ( 727)
-------- -------- --------
9,308 8,145 7,810
Equipment.......................................... 1,584 1,235 1,161
-------- -------- --------
$ 10,892 $ 9,380 $ 8,971
======== ======== ========
</TABLE>
NOTE 13-SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
The following is a summary of the unaudited quarterly results of
operations for the years ended December 31, 1994 and 1993:
<TABLE>
<CAPTION>
1994 Quarter Ended
--------------------------------------------
March 31 June 30 Sept. 30 Dec. 31
-------- -------- -------- --------
(In thousands, except per share data)
<S> <C> <C> <C> <C>
Net sales........................... $ 88,016 $ 84,747 $ 94,529 $ 102,840
Gross profit......................... 41,509 39,832 44,391 49,712
Credit service charges............... 2,883 2,892 2,902 2,987
Income before income taxes........... 4,398 3,321 4,754 7,806
Net income........................... 2,726 2,060 2,947 4,805
Earnings per share................... .24 .18 .26 .42 (a)
</TABLE>
- -22-
<PAGE> 18
HAVERTY FURNITURE COMPANIES, INC.
NOTE 13-SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (continued)
<TABLE>
<CAPTION>
1993 Quarter Ended
---------------------------------------------
March 31 June 30 Sept. 30 Dec. 31
-------- -------- -------- --------
(In thousands, except per share data)
<S> <C> <C> <C> <C>
Net sales........................... $ 77,734 $ 71,876 $ 81,179 $ 92,070
Gross profit......................... 36,387 34,164 38,222 43,738
Credit service charges............... 2,572 2,595 2,638 2,695
Income before income taxes........... 3,019 2,435 3,849 6,347
Net income........................... 1,902 1,534 2,396 3,884
Earnings per share (b)............... .21 .14 .21 .34
</TABLE>
(a) Reflects fourth quarter adjustments including a write-down of property
to fair value which reduced net income by approximately $680,000
or $.06 per share and the effect of a change in accounting for LIFO
inventories (Note 3) which increased net income by approximately
$330,000 or $.03 per share.
(b) Adjusted to reflect the 3-for-2 stock split in June 1993.
- -------------------------------------------------------------------------------
HAVERTY FURNITURE COMPANIES, INC.
Report of Ernst & Young LLP, Independent Auditors
Board of Directors
Haverty Furniture Companies, Inc.
We have audited the accompanying balance sheets of Haverty Furniture
Companies, Inc. as of December 31, 1994 and 1993, and the related statements of
income, stockholders' equity and cash flows for each of the three years in the
period ended December 31, 1994. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Haverty Furniture
Companies, Inc. at December 31, 1994 and 1993, and the results of its
operations and its cash flows for each of the three years in the period ended
December 31, 1994, in conformity with generally accepted accounting principles.
Ernst & Young LLP
Atlanta, Georgia
January 30, 1995
-23-
<PAGE> 19
Market Prices and Dividend Information
The Company's two classes of Common Stock are quoted on The Nasdaq Stock Market
(National Market). The trading symbol for the Common Stock is HAVT and for
Class A Common Stock is HAVTA. Based on the number of holders of record and an
estimate of the number of individual participants represented by security
position listings, there are approximately 3,700 holders of the Common Stock
and 600 holders of the Class A Common Stock. High and low sales prices
reported by the Nasdaq National Market and dividends for the last two years
were (in dollars):
<TABLE>
<CAPTION>
1994
- --------------------------------------------------------------------------------------------------------
Common Stock Class A Common Stock
------------------------------------------- ------------------------------------
Quarter Dividend Dividend
Ended High Low Declared High Low Declared
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
March 31 19-1/4 14-1/4 .0675 19-1/4 14-1/4 .0625
June 30 16 12 .0675 15-3/4 11-3/4 .0625
Sept. 30 14-1/2 10-3/4 .0700 15 11-1/4 .0650
Dec. 31 14 10-7/8 .0700 14-1/4 10-3/4 .0650
<CAPTION>
1993 (a)
- --------------------------------------------------------------------------------------------------------
Common Stock Class A Common Stock
------------------------------------------- ----------------------------------
Quarter Dividend Dividend
Ended High Low Declared High Low Declared
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
March 31 13-3/4 10-3/4 .0650 13-3/4 10-3/8 .0617
June 30 15 11-7/8 .0650 15-3/8 11-3/4 .0617
Sept. 30 17-1/2 12-3/8 .0675 18 12 .0625
Dec. 31 19-5/8 16-1/2 .0675 19-3/4 16-3/4 .0625
</TABLE>
(a) The prices and dividends have been adjusted to reflect the 3-for 2 stock
split in June 1993. Prices have been rounded to the nearest eighth.
<PAGE> 1
EXHIBIT 99
Information required by Form 11-K with respect to the
Haverty Furniture Companies, Inc. Thrift Plan
For the Fiscal Year Ended December 31, 1994
(a) The following financial statements are
furnished for the above-referenced Plan:
Report of Independent Auditors;
Statements of Net Assets Available for Benefits
December 31, 1994 and 1993;
Statements of Changes in Net Assets Available for
Benefits for the Years Ended December 31,
1994 and 1993;
Notes to Financial Statements;
Schedule I - Schedule of Assets Held for Investment; and
Schedule II - Transactions or Series of Transactions in
Excess of 5% of the Fair Value of Plan Assets;
(b) Exhibits:
Consent of Independent Auditors
<PAGE> 2
Audited Financial Statements
and Supplemental Schedules
Haverty Furniture Companies, Inc.
Thrift Plan
Years ended December 31, 1994 and 1993
with Report of Independent Auditors
<PAGE> 3
Haverty Furniture Companies, Inc.
Thrift Plan
Audited Financial Statements
and Supplemental Schedules
Years ended December 31, 1994 and 1993
CONTENTS
<TABLE>
<S> <C>
Report of Independent Auditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Audited Financial Statements
Statements of Net Assets Available for Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Statements of Changes in Net Assets Available for Benefits . . . . . . . . . . . . . . . . . . . . 3
Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Supplemental Schedules
Schedule I - Assets Held for Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Schedule II - Transactions or Series of Transactions in Excess of
5% of the Fair Value of Plan Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
</TABLE>
<PAGE> 4
Report of Independent Auditors
Employee Benefits Committee of
Haverty Furniture Companies, Inc.
We have audited the accompanying statements of net assets available for
benefits of the Haverty Furniture Companies, Inc. Thrift Plan as of December
31, 1994 and 1993, and the related statements of changes in net assets
available for benefits for the years then ended. These financial statements
are the responsibility of the Plan's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. These standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 1994 and 1993, and the changes in its net assets available for
benefits for the years then ended, in conformity with generally accepted
accounting principles.
Our audits were made for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedules of Assets
Held for Investment as of December 31, 1994, and Transactions or Series of
Transactions in Excess of 5 Percent of the Fair Value of Plan Assets for the
year then ended, are presented for purposes of complying with the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974, and are not a required part of the
financial statements. The supplemental schedules have been subjected to the
auditing procedures applied in our audit of the 1994 financial statements and,
in our opinion, are fairly stated in all material respects in relation to the
1994 financial statements taken as a whole.
June 16, 1995
1
<PAGE> 5
Haverty Furniture Companies, Inc.
Thrift Plan
Statements of Net Assets Available for Benefits
<TABLE>
<CAPTION>
DECEMBER 31
1994 1993
---------------------------
<S> <C> <C>
ASSETS
Cash $ - $10,113,558
Dividends and interest receivable 849 7,796
Contributions receivable 671,146 464,025
Investments, at fair value:
Short term investment 22,293 2,848,103
Commingled trust investment funds 13,470,262 -
Common stock 1,408,555 817,770
---------------------------
Net assets available for benefits $15,573,105 $14,251,252
===========================
</TABLE>
See accompanying notes.
2
<PAGE> 6
Haverty Furniture Companies, Inc.
Thrift Plan
Statements of Changes in Net Assets Available for Benefits
Years ended December 31, 1994 and 1993
<TABLE>
<CAPTION>
1994 1993
------------------------------
<S> <C> <C>
Additions to net assets attributed to:
Contributions:
Employer $ 788,340 $ 603,362
Employee 2,931,283 2,336,462
------------------------------
3,719,623 2,939,824
Net realized and unrealized (depreciation) appreciation in
fair value of investments (1,230,074) 1,015,913
Investment income 588,685 135,767
------------------------------
3,078,234 4,091,504
Deductions from net assets attributed to:
Benefit payments 1,744,716 1,165,113
Forfeitures 11,665 13,115
Other - 14,799
------------------------------
Net increase 1,321,853 2,898,477
Net assets available for benefits at beginning of year
14,251,252 11,352,775
------------------------------
Net assets available for benefits at end of year $15,573,105 $14,251,252
==============================
</TABLE>
See accompanying notes.
3
<PAGE> 7
Haverty Furniture Companies, Inc.
Thrift Plan
Notes to Financial Statements
December 31, 1994
1. SIGNIFICANT ACCOUNTING POLICIES
VALUATION OF INVESTMENTS
The Plan's investments are stated at aggregate fair value. Fair values of
investments in Trust Company Bank and Bank South common trust funds are based
on the fair values of the underlying securities. Securities traded on a
national securities exchange are valued at the last reported sales price on the
last business day of the year. For investments in securities that do not have
an established market, the trustee has established a fair value for such
securities. Purchases and sales of investments are recorded on a trade-date
basis.
2. DESCRIPTION OF THE PLAN
The Plan is a "qualified cash or deferred arrangement" plan under Section
401(k) of the Internal Revenue Code. Such an employee benefit plan is
generally known as a 401(k) plan.
Any employee of the Company who attains 21 years of age, completes three months
of eligibility service and who is not a member of a collective bargaining unit
(unless there is a written agreement providing for this participation) can
become a participant in the Plan. Participation is voluntary and eligible
employees may elect to defer up to 16% of their compensation through payroll
deductions, subject to statutory limitations. The Company matches employee
contributions at the rate of 50% for all contributions up to and including 2%,
and 25% for all contributions between 3% and 6% of each participant's annual
compensation. All contributions are remitted to the Plan monthly.
Upon enrollment in the Plan, a participant may direct employer and employee
contributions in 10% increments in any of five investment options. The Money
Market Fund invests in U.S. Treasury securities and other obligations issued or
guaranteed by the U.S. government or government agencies. The Bond Fund
invests in Treasury and agency obligations issued by the U.S. government, its
agencies or instrumentalities. The Equity Fund invests primarily in common
stocks of large, well-established companies. The Haverty's Stock Fund invests
in the common stock of Haverty Furniture Companies, Inc. purchased in the open
market. The Balanced Fund invests in common stocks of large, well-established
companies and fixed income securities.
4
<PAGE> 8
Haverty Furniture Companies, Inc.
Thrift Plan
Notes to Financial Statements (continued)
2. DESCRIPTION OF THE PLAN (CONTINUED)
Earnings of the plan are allocated to participants based on account holdings at
the beginning of the quarter plus one third of contributions made in that
quarter. All administrative expenses are paid by the Plan sponsor.
Participants are immediately vested in their contributions plus actual earnings
thereon. These accounts totaled $12,286,710 and $11,141,576 at
December 31, 1994 and 1993, respectively. Vesting in the Company contribution
plus actual earnings thereon is based on the years of service with the Company,
including any years of service when the participant was eligible and did not
participate in the Plan. A participant is 100 percent vested after five years
of credited service.
All amounts credited to a participant's account are distributed with no
forfeiture upon termination of employment, after participant's death, total
disability, retirement at age 65, or completion of five or more years of
service. Forfeitures of employer contributions are used to offset employer
matching contributions for the same and/or future plan year.
Further information about the Plan Agreement is contained in the Summary Plan
Description Your 401(k) Thrift Plan. Copies of this booklet are available at
the Company's Human Resources office.
3. INCOME TAX STATUS
The Internal Revenue Service has ruled that the Plan qualifies under Section
401(a) of the Internal Revenue Code (IRC) and the Trust established thereunder
is exempt from tax under IRC Section 501(a). The Plan has subsequently been
amended and restated. A request for a determination letter on the amended and
restated plan was filed with the Internal Revenue Service on March 27, 1995.
The plan administrator is not aware of any course of action or series of events
that have occurred that might adversely affect the Plan's qualified status.
5
<PAGE> 9
Haverty Furniture Companies, Inc.
Thrift Plan
Notes to Financial Statements (continued)
4. TRANSACTIONS WITH PARTIES-IN-INTEREST
At December 31, 1994 and 1993, the Plan held 119,877 and 47,753 shares of
Haverty Furniture Companies, Inc. Common Stock, respectively. The fair value
of this stock at December 31, 1994 and 1993 was $1,408,555 and $817,770,
respectively.
During 1994 and 1993, the Plan received $24,148 and $10,814, respectively, in
dividends on Haverty Furniture Companies, Inc. Common Stock.
5. INVESTMENTS
The Plan's assets are held by a bank-administered trust fund.
Net realized and unrealized (depreciation) appreciation of the Plan's
investments are as follows for 1994 and 1993:
<TABLE>
<CAPTION>
NET
DEPRECIATION IN
FAIR VALUE DURING FAIR VALUE AT END
YEAR OF YEAR
---------------------------------------
<S> <C> <C>
YEAR ENDED DECEMBER 31, 1994
Fair value as determined by quoted market price:
Common stock $ (473,512) $ 1,408,555
Fair value estimated by trustee:
Short term investment - 22,293
Commingled trust investment funds (756,562) 13,470,262
---------------------------------------
$(1,230,074) $14,901,110
=======================================
</TABLE>
6
<PAGE> 10
Haverty Furniture Companies, Inc.
Thrift Plan
Notes to Financial Statements (continued)
5. INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
Net
Appreciation
(Depreciation) in
Fair Value During Fair Value at End
Year of Year
-------------------------------------
<S> <C> <C>
YEAR ENDED DECEMBER 31, 1993
Fair value as determined by quoted market price:
U.S. Treasury notes $ (8,966) $ -
Common stock 243,292 817,770
Fair value estimated by trustee:
Short term investment - 2,848,103
Commingled trust investment funds 781,587 -
-------------------------------------
$1,015,913 $3,665,873
=====================================
The fair value of individual investments that represent 5% or more of the Plan's net assets are as follows:
<CAPTION>
1994 1993
----------------------------
<S> <C> <C>
Bank South Temporary Investment Fund $ - $2,848,103
Federated Short-Term U.S. Government Fund 1,449,989 -
Weiss, Peck & Greer Government Securities Fund 918,825 -
Dodge & Cox Balanced Fund 5,677,305 -
Fidelity Magellan Fund 5,424,143 -
Haverty Furniture Companies, Inc. Common Stock 1,408,555 817,770
</TABLE>
6. INVESTMENT FUND ACTIVITY
The activity in the Plan's funds (excluding contributions receivable) during
the years ended December 31, 1994 and 1993 was as follows:
7
<PAGE> 11
Haverty Furniture Companies, Inc.
Thrift Plan
Notes to Financial Statements (continued)
6. INVESTMENT FUND ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1994
-----------------------------------------------------------------------------------
MONEY MARKET BOND BALANCED EQUITY COMPANY
FUND FUND FUND FUND STOCK FUND TOTAL
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Contributions:
Employer $ 62,756 $ 66,383 $ 269,069 $ 245,625 $ 98,899 $ 742,732
Employee 235,165 247,028 1,004,129 902,701 380,747 2,769,770
-----------------------------------------------------------------------------------
297,921 313,411 1,273,198 1,148,326 479,646 3,512,502
Investment income 67,562 86,304 275,477 132,618 26,724 588,685
-----------------------------------------------------------------------------------
365,483 399,715 1,548,675 1,280,944 506,370 4,101,187
Deductions from net assets attributed to:
Benefit payments 378,054 160,245 533,753 559,923 112,741 1,744,716
Forfeitures transfers 2,279 944 4,518 2,556 1,368 11,665
Net transfers (667,697) (721,099) (1,077,964) 1,796,925 669,835 -
Net realized and unrealized depreciation in
fair value of investments - (235,312) (275,764) (245,486) (473,512) (1,230,074)
-----------------------------------------------------------------------------------
Net increase (decrease) (682,547) (717,885) (343,324) 2,269,904 588,584 1,114,732
Net assets by investment option at beginning
of year 2,145,256 1,641,411 6,021,104 3,154,647 824,809 13,787,227
-----------------------------------------------------------------------------------
Net assets by investment option at end of
year $1,462,709 $ 923,526 $5,677,780 $5,424,551 $1,413,393 $14,901,959
===================================================================================
</TABLE>
8
<PAGE> 12
Haverty Furniture Companies, Inc.
Thrift Plan
Notes to Financial Statements (continued)
6. INVESTMENT FUND ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1993
---------------------------------------------------------------------------------
MONEY BOND BALANCED EQUITY COMPANY
MARKET FUND FUND FUND FUND FUND TOTAL
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Contributions:
Employer $ 55,283 $ 58,635 $ 226,670 $ 135,455 $ 22,615 $ 498,658
Employee 227,373 252,175 869,953 518,654 108,986 1,977,141
---------------------------------------------------------------------------------
282,656 310,810 1,096,623 654,109 131,601 2,475,799
Investment income 65,240 9,031 44,571 5,053 11,872 135,767
---------------------------------------------------------------------------------
347,896 319,841 1,141,194 659,162 143,473 2,611,566
Deductions from net assets attributed to:
Benefit payments 262,988 85,376 347,636 415,168 53,945 1,165,113
Forfeitures 3,223 1,333 4,828 3,294 437 13,115
Other 2,468 1,623 6,582 3,422 704 14,799
Net transfers (423,666) 236,385 (84,010) 293,798 (22,507) -
Net realized and unrealized appreciation
in fair value of investments - 105,744 403,200 263,678 243,291 1,015,913
---------------------------------------------------------------------------------
Net increase (decrease) (344,449) 573,638 1,101,338 794,754 309,171 2,434,452
Net assets by investment option at
beginning of year 2,489,705 1,067,773 4,919,766 2,359,893 515,638 11,352,775
---------------------------------------------------------------------------------
Net assets by investment option at
end of year $2,145,256 $1,641,411 $6,021,104 $3,154,647 $824,809 $13,787,227
=================================================================================
</TABLE>
9
<PAGE> 13
Supplemental
Schedules
<PAGE> 14
Schedule I
Haverty Furniture Companies, Inc.
Thrift Plan
Assets Held for Investment
December 31, 1994
<TABLE>
<CAPTION>
MARKET
UNITS DESCRIPTION COST VALUE
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMINGLED TRUST INVESTMENT FUNDS
22,293 Trust Company Short-Term Investment Fund $ 22,293 $ 22,293
1,449,989 Federated Short-Term U.S. Government Fund 1,449,989 1,449,989
104,175 Weiss, Peck & Greer Government Securities Fund 1,068,596 918,825
125,576 Dodge & Cox Balanced Fund 5,915,521 5,677,305
81,200 Fidelity Magellan Fund 5,652,398 5,424,143
COMMON STOCK
119,877 Haverty Furniture Companies., Inc. 1,518,293 1,408,555
---------------------------------
$15,627,090 $14,901,110
=================================
</TABLE>
10
<PAGE> 15
Schedule II
Haverty Furniture Companies, Inc.
Thrift Plan
Transactions or Series of Transactions in Excess of 5% of the Fair Value of
Plan Assets
December 31, 1994
<TABLE>
<CAPTION>
CURRENT VALUE
NUMBER OF ASSET ON
OF COST OF DATE OF NET GAIN
DESCRIPTION OF ASSETS TRANSACTIONS PURCHASES SALES ASSET TRANSACTION (LOSS)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CATEGORY (I) - INDIVIDUAL TRANSACTIONS IN EXCESS OF 5% OF PLAN ASSETS.
Fidelity Money Market Portfolio 1 $ 2,139,000 $ - $2,139,000 $ - $ -
Fidelity Money Market Portfolio 1 - 2,139,000 2,139,000 2,139,000 -
Trust Company Short-Term Investment Fund 1 784,000 - 784,000 - -
Trust Company Short-Term Investment Fund 1 - 783,707 783,707 783,707 -
Trust Company Short-Term Cash Management
Fund 1 2,166,267 - 2,166,267 - -
Trust Company Short-Term Cash Management
Fund 1 1,641,411 - 1,641,411 - -
Trust Company Short-Term Cash Management
Fund 1 6,021,103 - 6,021,103 - -
Trust Company Short-Term Cash Management
Fund 1 3,154,648 - 3,154,648 - -
Trust Company Short-Term Cash Management
Fund 1 - 2,150,000 2,150,000 2,150,000 -
Trust Company Short-Term Cash Management
Fund 1 - 1,673,000 1,673,000 1,673,000 -
Trust Company Short-Term Cash Management
Fund 1 - 6,133,000 6,133,000 6,133,000 -
</TABLE>
11
<PAGE> 16
Schedule II
Haverty Furniture Companies, Inc.
Thrift Plan
Transactions or Series of Tranactions in Excess of 5% of the Fair Value of Plan
Assets
December 31, 1994
<TABLE>
<CAPTION>
CURRENT VALUE
NUMBER OF ASSET ON
OF COST OF DATE OF NET GAIN
DESCRIPTION OF ASSETS TRANSACTIONS PURCHASES SALES ASSET TRANSACTION (LOSS)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CATEGORY (I) - INDIVIDUAL TRANSACTIONS IN EXCESS OF 5% OF PLAN ASSETS.
Trust Company Short-Term Cash Management
Fund 1 - 3,220,999 3,220,999 3,220,999 -
Federated Short-Term U.S. Government Fund 1 2,150,000 - 2,150,000 - -
Federated Short-Term U.S. Government Fund 1 - 784,000 784,000 784,000 -
Weiss, Peck & Greer Government Securities
Fund 1 1,673,000 - 1,673,000 - -
Dodge & Cox Balanced Fund 1 6,133,000 - 6,133,000 - -
Dodge & Cox Balanced Fund 1 - 1,084,020 1,050,000 1,084,020 34,020
Fidelity Magellan Fund 1 3,221,000 - 3,221,000 - -
Fidelity Magellan Fund 1 1,757,000 - 1,757,000 - -
CATEGORY (III) - A SERIES OF SECURITY TRANSACTIONS, WHEN AGGREGATED REGARDLESS OF GAIN OR LOSS, EXCEEDS 5% OF PLAN ASSETS.
Fidelity Money Market Portfolio 2 2,145,000 - 2,145,000 - -
Fidelity Money Market Portfolio 2 - 2,145,000 2,145,000 2,145,000 -
Trust Company Short-Term Investment
Fund 119 3,494,031 - 3,494,031 - -
Trust Company Short-Term Investment
Fund 142 - 3,442,125 3,442,125 3,442,125 -
</TABLE>
12
<PAGE> 17
Schedule II
Haverty Furniture Companies, Inc.
Thrift Plan
Transactions or Series of Transactions in Excess of 5% of the Fair Value of
Plan Assets
December 31, 1994
<TABLE>
<CAPTION>
CURRENT VALUE
NUMBER OF ASSET ON
OF COST OF DATE OF NET GAIN
DESCRIPTION OF ASSETS TRANSACTIONS PURCHASES SALES ASSET TRANSACTION (LOSS)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CATEGORY (III) - A SERIES OF SECURITY TRANSACTIONS, WHEN AGGREGATED REGARDLESS OF GAIN OR LOSS, EXCEEDS 5% OF PLAN ASSETS
(CONTINUED).
Trust Company Short-Term Cash Management
Fund 113 14,742,864 - 14,742,864 - -
Trust Company Short-Term Cash Management
Fund 105 - 14,742,864 14,742,864 14,742,864 -
Federated Short-Term U.S. Government Fund 21 2,719,637 - 2,719,637 - -
Federated Short-Term U.S. Government Fund 13 - 1,279,648 1,279,648 1,279,648 -
Weiss, Peck & Greer Government Securities
Fund 20 1,952,637 - 1,952,637 - -
Weiss, Peck & Greer Government Securities
Fund 11 - 798,500 884,040 798,500 (85,540)
Dodge & Cox Balanced Fund 19 7,190,068 - 7,190,068 - -
Dodge & Cox Balanced Fund 8 - 1,237,000 1,274,809 1,237,000 (37,809)
Fidelity Magellan Fund 14 5,905,630 - 5,905,630 - -
Haverty Furniture Cos., Inc. Common Stock 15 1,156,175 - 1,156,175 - -
</TABLE>
THERE WERE NO CATEGORY (II) OR (IV) TRANSACTIONS DURING THE YEAR ENDED DECEMBER
31, 1994.
NOTE: THE COMMISSIONS AND FEES RELATED TO PURCHASES AND SALES OF INVESTMENTS
ARE INCLUDED IN THE COST OF THE INVESTMENTS OR THE PROCEEDS FROM THE SALE
AND ARE NOT SEPARATELY IDENTIFIED BY THE TRUSTEE.
13
<PAGE> 18
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement
(Form S-8 No. 33-44285) pertaining to the Haverty Furniture Companies, Inc.
Thrift Plan of our report dated June 16, 1995, with respect to the financial
statements and schedules of Haverty Furniture Companies, Inc. Thrift Plan
included in this Form 10-K/A, Amendment No. 1 to the Annual Report on Form 10-K
for the year ended December 31, 1994.
Ernst & Young LLP
Atlanta, Georgia
June 28, 1995
<PAGE> 19
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan
has caused this annual report to be signed on the 29th day of June 1995, by the
undersigned thereunto duly authorized.
HAVERTY FURNITURE COMPANIES, INC.
THRIFT PLAN
By /s/ Dennis L. Fink
-----------------------------
Dennis L. Fink,
Senior Vice President and
Chief Financial Officer
(principal financial officer)
By /s/ Hugh G. Wells
-----------------------------
Hugh G. Wells,
Vice President and Treasurer
By /s/ Dan C. Bryant
-----------------------------
Dan C. Bryant, Controller
(Principal accounting officer)
