<PAGE>
--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2000
OR
[ ] TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER: 1-14445
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.)
780 JOHNSON FERRY ROAD, SUITE 800, ATLANTA, GEORGIA 30342
--------------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (404) 443-2900
--------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
---- ----
The number of shares outstanding of the registrant's two classes of $1
par value common stock as of October 20, 2000 were: Common Stock - 15,986,366,
Class A Common Stock - 4,755,414.
<PAGE>
HAVERTY FURNITURE COMPANIES, INC.
INDEX
<TABLE>
<CAPTION>
PAGE NO.
--------
<S> <C>
Part I. Financial Information:
Condensed Consolidated Balance Sheets -
September 30, 2000 and December 31, 1999 1
Condensed Consolidated Statements of Income -
Quarter and nine months ended September 30, 2000 and 1999 3
Condensed Consolidated Statements of Cash Flows -
Nine months ended September 30, 2000 and 1999 5
Notes to Condensed Consolidated Financial Statements 6
Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
Quantitative and Qualitative Disclosure of Market Risk 13
Part II. Other Information 14
</TABLE>
<PAGE>
PART 1. FINANCIAL INFORMATION
--------------------------------------------------------------------------------
HAVERTY FURNITURE COMPANIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
<TABLE>
<CAPTION>
September 30 December 31
2000 1999
--------------- ---------------
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 1,951 $ 1,762
Accounts receivable 174,227 186,090
Less allowance for doubtful accounts ( 6,750) ( 7,000)
--------------- ---------------
167,477 179,090
Inventories, at LIFO 106,184 84,447
Other current assets 6,717 6,379
--------------- ---------------
Total Current Assets 282,329 271,678
Property and equipment 237,654 222,999
Less accumulated depreciation and amortization ( 101,538) ( 96,002)
--------------- ---------------
136,116 126,997
Other assets 4,801 5,973
--------------- ---------------
$ 423,246 $ 404,648
=============== ===============
</TABLE>
1
<PAGE>
HAVERTY FURNITURE COMPANIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Continued)
<TABLE>
<CAPTION>
September 30 December 31
2000 1999
--------------- ---------------
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Notes payable to banks $ -- $ 8,800
Accounts payable and accrued expenses 81,109 77,543
Current portion of long-term debt and
capital lease obligations 11,164 12,091
--------------- ---------------
Total Current Liabilities 92,273 98,434
Long-term debt and capital lease obligations,
less current portion 156,125 134,687
Other liabilities 2,870 2,734
Stockholders' Equity
Capital stock, par value $1 per share - -
Preferred Stock, Authorized: 1,000 shares;
Issued: None
Common Stock, Authorized:
50,000 shares; Issued: 2000 - - 21,923 shares;
1999 - - 21,639 shares (including shares in treasury:
2000 and 1999 - - 5,939 and 4,810, respectively) 21,923 21,639
Convertible Class A Common Stock, Authorized:
15,000 shares; Issued: 2000 - - 5,278 shares;
1999 - - 5,303 shares (including shares in
treasury: 2000 and 1999 - - 522) 5,278 5,303
Additional paid-in capital 33,335 32,004
Retained earnings 169,669 156,428
--------------- ---------------
230,205 215,374
Less cost of Common Stock and
Convertible Class A Common Stock in treasury ( 58,227) ( 46,581)
--------------- ---------------
171,978 168,793
--------------- ---------------
$ 423,246 $ 404,648
=============== ===============
</TABLE>
See notes to condensed consolidated financial statements.
2
<PAGE>
HAVERTY FURNITURE COMPANIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
<TABLE>
<CAPTION>
Quarter Ended Nine Months Ended
September 30 September 30
------------------------------- ------------------------------
2000 1999 2000 1999
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Net sales $ 177,345 $ 157,875 $ 505,499 $ 449,895
Cost of goods sold 93,660 82,769 265,716 236,979
------------- ------------- ------------- -------------
Gross profit 83,685 75,106 239,783 212,916
Credit service charges 3,105 3,643 9,669 11,457
------------- ------------- ------------- -------------
Gross profit and other revenue 86,790 78,749 249,452 224,373
Expenses:
Selling, general and administrative 71,600 63,697 207,125 183,589
Interest 2,888 2,797 8,813 8,820
Provision for doubtful accounts 789 1,008 2,610 3,208
Other (income) expense, net ( 103) 10 ( 69) ( 75)
------------ ------------- ------------ ------------
Total expenses 75,174 67,512 218,479 195,542
------------- ------------- ------------- -------------
Income before income taxes and
cumulative effect of a change in
accounting principle 11,616 11,237 30,973 28,831
Income taxes 4,240 4,045 11,305 10,379
------------- ------------- ------------- -------------
Income before cumulative effect of a
change in accounting principle 7,376 7,192 19,668 18,452
Cumulative effect on prior years
(to December 31, 1999) of changing to
a different revenue recognition method -- -- ( 3,356) --
------------- ------------- ------------- -------------
Net income $ 7,376 $ 7,192 $ 16,312 $ 18,452
============= ============= ============= =============
</TABLE>
3
<PAGE>
HAVERTY FURNITURE COMPANIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Continued)
<TABLE>
<CAPTION>
Quarter Ended Nine Months Ended
September 30 September 30
------------------------------- ------------------------------
2000 1999 2000 1999
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Weighted average common shares 20,632 22,258 20,806 22,313
Weighted average diluted common shares 21,075 23,182 21,244 23,098
Earnings per common share:
Income before cumulative effect of a
change in accounting principle $0.36 $0.32 $0.94 $0.83
Cumulative effect on prior years
(to December 31, 1999) of changing to
a different revenue recognition method -- -- ( 0.16) --
============= ============= ============ =============
Net income $0.36 $0.32 $0.78 $0.83
============= ============= ============ =============
Diluted earnings per common share:
Income before cumulative effect of a
change in accounting principle $0.35 $0.31 $0.93 $0.80
Cumulative effect on prior years
(to December 31, 1999) of changing to
a different revenue recognition method -- -- ( 0.16) --
------------- ------------- ------------ -------------
Net income $0.35 $0.31 $0.77 $0.80
============= ============ ============= =============
Cash dividends per common share:
Common Stock $0.0500 $0.0500 $0.1500 $0.1400
Class A Common Stock $0.0475 $0.0475 $0.1425 $0.1325
</TABLE>
See notes to condensed consolidated financial statements.
4
<PAGE>
HAVERTY FURNITURE COMPANIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30
----------------------------------------------
2000 1999
--------------- ---------------
<S> <C> <C>
Operating Activities
Net income $ 16,312 $ 18,452
Adjustments to reconcile net income to net cash
provided by operating activities:
Cumulative effect of a change in accounting principle 3,356 --
Depreciation and amortization 11,818 11,011
Provision for doubtful accounts 2,610 3,208
Deferred income taxes 1,170 ( 206)
Gain on sale of property and equipment ( 1,793) ( 14)
--------------- ---------------
Subtotal 33,473 32,451
Changes in operating assets and liabilities:
Accounts receivable ( 1,636) 12,093
Inventories ( 11,164) ( 2,358)
Other current assets ( 106) ( 832)
Accounts payable and accrued expenses 2,425 20,555
Income taxes ( 2,726) 122
--------------- ---------------
Net cash provided by operating activities 20,266 62,031
--------------- ---------------
Investing Activities
Purchases of property and equipment ( 23,743) ( 22,524)
Proceeds from sale of property and equipment 4,599 215
Other investing activities 347 156
--------------- ---------------
Net cash used in investing activities ( 18,797) ( 22,153)
--------------- ---------------
Financing Activities
Net increase (decrease) in borrowings under
revolving credit facilities 21,100 ( 17,500)
Payment of long-term debt and capital lease obligations ( 9,389) ( 13,485)
Purchase of treasury stock ( 11,646) ( 11,145)
Exercise of stock options 1,590 4,101
Dividends paid ( 3,071) ( 3,087)
Other financing activities 136 101
--------------- ---------------
Net cash used in financing activities ( 1,280) ( 41,015)
--------------- ---------------
Increase (decrease) in cash and cash equivalents 189 (1,137)
Cash and cash equivalents at beginning of period 1,762 1,874
--------------- ---------------
Cash and cash equivalents at end of period $ 1,951 $ 737
=============== ===============
</TABLE>
See notes to condensed consolidated financial statements.
5
<PAGE>
HAVERTY FURNITURE COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with the instructions to Form 10-Q and, therefore, do not
include all information and footnotes required by generally accepted accounting
principles for complete financial statements. The financial statements include
the accounts of the Company and its wholly-owned subsidiaries. All significant
intercompany accounts and transactions have been eliminated in consolidation. In
the opinion of management, all adjustments considered necessary for a fair
presentation have been included and all such adjustments are of a normal
recurring nature.
Earnings per share and all shares outstanding have been restated to record the
effect of the 2-for-1 stock split on August 25, 1999.
NOTE B - CHANGE IN ACCOUNTING PRINCIPLE
In December 1999, the Securities and Exchange Commission issued Staff Accounting
Bulletin No. 101, Revenue Recognition in Financial Statements. This bulletin
provides guidance on revenue recognition matters and, in accordance therewith,
the Company changed its method of recognizing sales effective January 1, 2000.
Under the new method, revenue from merchandise sales is recognized upon delivery
to the customer. Previously, the Company recognized revenue for sales of
merchandise when certain criteria were met, such as receipt of full payment,
credit approval for charge sales and merchandise in stock. These conditions were
typically met at the point of sale. The Company changed its method of revenue
recognition on January 1, 2000. Accordingly, it is impractical to determine
income utilizing the billed method for 2000. Revenues recognized in the first
quarter of 2000 that were included in undelivered sales at December 31, 1999,
aggregated approximately $19,000,000. The cumulative effect of the accounting
change decreased net income by $3,356,000 and was recorded in the three month
period ended March 31, 2000. The pro forma amounts shown below have been
adjusted assuming that the change in the revenue recognition method had occurred
prior to January 1, 1999 (in thousands, except per share data):
<TABLE>
<CAPTION>
Quarter Ended Nine Months Ended
September 30 September 30
------------------------ --------------------------
Proforma Proforma Proforma
2000 1999 2000 1999
------------------------ ----------- -----------
<S> <C> <C> <C> <C>
Net income $ 7,376 $ 6,885 $ 19,668 $ 17,254
Basic earnings per share $0.36 $0.31 $0.94 $0.77
Diluted earnings per share $0.35 $0.30 $0.93 $0.75
</TABLE>
6
<PAGE>
HAVERTY FURNITURE COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
NOTE C - INTERIM LIFO CALCULATIONS
An actual valuation of inventory under the LIFO method can be made only at the
end of each year based on the inventory levels and costs at that time.
Accordingly, interim LIFO calculations must necessarily be based on management's
estimates of expected year-end inventory levels and costs. Since these are
affected by factors beyond management's control, interim results are subject to
the final year-end LIFO inventory valuation.
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
FORWARD-LOOKING INFORMATION
Certain statements we make in this report, and other written or oral statements
made by or on behalf of the Company, may constitute "forward-looking statements"
within the meaning of the federal securities laws. Examples of such statements
in this report include descriptions of our plans with respect to new store
openings and relocations, our plans to enter new markets and expectations
relating to our continuing growth. These statements are subject to certain risks
and uncertainties that could cause actual results to differ materially from the
Company's historical experience and its present expectations or projections.
Management believes that these forward-looking statements are reasonable;
however, you should not place undue reliance on such statements. Such statements
speak only as of the date they are made and we undertake no obligation to
publicly update or revise any forward-looking statement, whether as a result of
future events, new information or otherwise. The following are some of the
factors that could cause the Company's actual results to differ materially from
the expected results described in the Company's forward-looking statements: the
ability to maintain favorable arrangements and relationships with key suppliers
(including domestic and international sourcing); conditions affecting the
availability and affordability of retail real estate sites; the ability to
attract, train and retain highly qualified associates to staff corporate
positions, existing and new stores and distribution facilities; general economic
and financial market conditions, which affect consumer confidence and the
spending environment for big ticket items; competition in the retail furniture
industry; changes in laws and regulations, including changes in accounting
standards, tax statutes or regulations.
CHANGE IN ACCOUNTING PRINCIPLE
The Company changed its accounting method for recognizing revenues on January 1,
2000, and is now recording merchandise sales upon delivery to the customer.
Historically, sales were recognized and "billed" prior to delivery when certain
criteria were met, such as receipt of full payment, credit approval for charge
sales and merchandise in stock. The change is consistent with new guidance on
revenue recognition provided by the Securities and Exchange Commission Staff
Accounting Bulletin No. 101 - Revenue Recognition in Financial Statements. The
implementation of this change was accounted for as a change in accounting
principle and applied cumulatively as if the change occurred at January 1, 2000.
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(Continued)
The following table outlines the results for the third quarter and the nine
months ended September 30, 2000, 1999, and 1999 pro forma results, assuming that
the change in the revenue recognition method had occurred prior to January 1,
1999 (in thousands):
<TABLE>
<CAPTION>
Quarter Ended Nine Months Ended
September 30, September 30,
------------------------------------------ ---------------------------------------
Pro forma Pro forma
2000 1999 1999 2000 1999 1999
------------ ------------ ------------ ------------ ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net sales $ 177,345 $ 157,875 $ 156,181 $ 505,499 $ 449,895 $ 443,533
Cost of goods sold 93,660 82,769 81,843 265,716 236,979 233,501
------------ ------------ ------------ ------------ ------------- ----------
Gross profit 83,685 75,106 74,338 239,783 212,916 210,032
Credit service charges 3,105 3,643 3,643 9,669 11,457 11,457
------------ ------------ ------------ ------------ ------------- ----------
Gross profit and other revenue 86,790 78,749 77,981 249,452 224,373 221,489
Expenses:
Selling, general and administrative 71,600 63,697 63,409 207,125 183,589 182,577
Interest 2,888 2,797 2,797 8,813 8,820 8,820
Provision for doubtful accounts 789 1,008 1,008 2,610 3,208 3,208
Other (income) expense, net (103) 10 10 (69) (75) (75)
------------ ------------ ------------ ------------ ------------- ----------
Total expenses 75,174 67,512 67,224 218,479 195,542 194,530
------------ ------------ ------------ ------------ ------------- ----------
Income before income taxes
and cumulative effect of a change
in accounting principle 11,616 11,237 10,757 30,973 28,831 26,959
Income taxes 4,240 4,045 3,872 11,305 10,379 9,705
------------ ------------ ------------ ------------ ------------- -----------
Income before cumulative effect of a
change in accounting principle 7,376 7,192 6,885 19,668 18,452 17,254
Cumulative effect on prior years
(to December 31, 1999) of changing to a
different revenue recognition method -- -- -- (3,356) -- --
------------ ------------ ------------ ------------ ------------- -----------
Net income $ 7,376 $ 7,192 $ 6,885 $ 16,312 $ 18,452 $ 17,254
============ ============ ============ ============ ============= ===========
</TABLE>
9
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(Continued)
RESULTS OF OPERATIONS
Net sales for the third quarter and nine months ended September 30, 2000,
increased 13.6% and 14.0% over the pro forma sales for the same periods for
1999, respectively. It is not practical for the Company to compute
comparable-store sales utilizing the new delivered basis of revenue recognition.
Calculated on the billed basis, comparable-store sales increased 10.1% and 9.7%
for the third quarter and nine month period, respectively. The Company's two
largest markets, Dallas and Atlanta, and its Florida and Texas regions continued
to experience the strongest comparable-store sales increases. A store's results
are included in the comparable-store sales computation beginning with the
one-year anniversary of its opening, expansion, or the date when it was
otherwise non-comparable. Management believes that the sales increases are
attributable to the economic strength of its target customer, the Company's
focus on brand name products and effective merchandising in its stores.
Gross profit, as a percent of net sales, decreased to 47.2% for the third
quarter of 2000 from 47.6%, the pro forma amount in the 1999 period, and was
unchanged at 47.4% for the nine months ended September 30, 2000 and 1999 on a
pro forma basis. Gross profit was impacted by product mix changes and an
increase in the Company's LIFO reserve. The LIFO charge increased as a percent
of sales to .18% for the third quarter and .09% for the nine months ended
September 30, 2000, as compared to the pro forma amounts of .06% and .04% in
the prior year periods, respectively. Management anticipates that margins for
the fourth quarter will improve somewhat from the third quarter level in the
typically stronger last quarter of the year.
Third quarter credit service charge revenues decreased to 1.8% of net sales from
2.3% on a pro forma basis in the prior year period and decreased to 1.9% from
2.6% for the nine months ended September 30, 2000 and 1999, respectively. This
reduction is due to a lower average outstanding accounts receivable portfolio
and a shift toward more consumer usage of the "12 month no interest with 12
equal payments" promotion rather than deferred-payment promotions.
Selling, general and administrative expenses, as a percent of net sales,
decreased to 40.4% from 40.6% for the third quarter and to 41.0% from 41.2%
for the nine months ended September 30, 2000, as compared to the prior year
periods on a pro forma basis. Continued leveraging of fixed costs,
particularly administrative and occupancy costs, have contributed to these
improvements. These gains were partially offset by increases in advertising,
warehouse, and delivery costs as labor and fuel costs remained higher than the
prior periods and as the Company focuses on shortening the delivery cycle to
the customer.
Interest expense decreased as a percent of net sales, to 1.6% from 1.8% and to
1.7% from 2.0%, for the quarter and nine months September 30, 2000 and 1999 on a
pro forma basis, respectively. The Company's effective interest rate was
relatively unchanged at 7.2% for the third quarter and nine-month period with an
increase in average debt levels of 12.6% for the third quarter and 1.2% for the
nine-month period, respectively, from the year-earlier periods.
The provision for doubtful accounts, as a percentage of net sales, decreased to
0.4% from 0.6% and to 0.5% from 0.7% for the third quarter and nine months ended
September 30, 2000 and 1999 on a pro forma basis, respectively. This reduction
reflects the continuing trend of decreased delinquencies and customer
bankruptcies experienced by the Company over the last two years. Management
does not expect any significant changes in the current consumer credit
environment with respect to its target customers for the remainder of 2000.
10
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(Continued)
Diluted earnings per share before the cumulative effect of an accounting change
were $0.35 and $0.30 pro forma for the third quarter and $0.93 and $0.75 pro
forma for the nine months ended September 30, 2000 and 1999, respectively, on
approximately 2.1 million fewer and 1.9 million fewer weighted average diluted
shares outstanding, respectively.
LIQUIDITY AND SOURCES OF CAPITAL
The Company has historically used internally generated funds, bank borrowings
and private placements with institutions to finance its continuing operations
and growth. Net cash provided by operating activities was $20.3 million during
the first nine months of 2000. Inventory increased $12.7 million during the
first quarter (not including the increase resulting from the cumulative effect
of the accounting change) and an additional $1.1 million during the second
quarter. These inventory increases were higher than management's expectations
and inventory levels were reviewed in those markets which exceeded their
targeted inventory levels. Inventory decreased $2.7 million during the third
quarter and management expects that inventory in existing locations may continue
to decrease slightly by the end of the historically stronger fourth quarter.
Offsetting this decrease will be the showroom inventories added for four stores
opening near the end of the year.
Investing activities used $18.8 million of cash during the nine months ended
September 30, 2000. Capital expenditures during the period were $23.7 million
for new store construction and renovation, some of which will be completed later
in the year and into 2001 as well as leasehold improvements, equipment and
furniture and fixtures associated with the Company's relocation of its corporate
offices.
Financing activities used $1.3 million of cash during the nine months ended
September 30, 2000. Borrowings under the Company's revolving credit facilities
increased $21.1 million. Financing activities also included the use of $11.6
million for the stock repurchase program.
In addition to cash flow from operations, the Company uses bank lines of credit
on an interim basis to finance capital expenditures and repay long-term debt.
Longer-term transactions such as private placements of senior notes,
sale/leasebacks and mortgage financings are used periodically to reduce
short-term borrowings and manage interest-rate risk. The Company pursues a
diversified approach to its financing requirements and balances its overall
capital structure, as determined by the interest rate environment, with
fixed-rate debt and interest rate swap agreements to reduce the impact of
changes in interest rates on its variable rate debt (61.5% of total debt was
fixed or interest rate protected as of September 30, 2000). The Company's
average effective interest rate on all borrowings (excluding capital leases) was
7.0% at September 30, 2000.
Capital expenditures for the remainder of 2000 are presently expected to include
the construction of two new store locations in existing markets, improvements to
two new leased store locations and the expansion and remodeling of one existing
store. The estimate of capital expenditures for the fourth quarter of 2000 is
approximately $15 million, which also includes a portion of the construction
costs for two new stores which will open in the first half of 2001 and the
purchase of land for a future store site. 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.
11
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(Continued)
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.
IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities" (FAS 133), as amended by FAS 137 and FAS 138.
Management will adopt the new requirements effective January 1, 2001. The
Statement will require the Company to recognize its derivatives on the balance
sheet at fair value. Management has assessed its derivatives and believes that
the implementation of FAS 133 will not have a material impact on the Company's
earnings and financial position.
12
<PAGE>
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE OF MARKET RISK
During the second quarter, the Company terminated four interest rate swap
agreements, entered into a new agreement, and one agreement matured. At
September 30, 2000, the Company had two outstanding agreements, having notional
amounts of $30,000,000 and $10,000,000, at rates of 5.57% maturing in 2003 and
5.74% maturing in 2000, respectively. Under the agreements, the Company makes
payments at fixed rates and receives payments at variable rates which are based
on LIBOR, adjusted quarterly.
13
<PAGE>
PART II. OTHER INFORMATION
Item 5. OTHER INFORMATION
As stated in the Company's 2000 Proxy Statement, proposals by stockholders
intended to be presented at the 2001 Annual Meeting must be received at the
office of the Company no later than November 21, 2000, for inclusion in the
Company's Proxy Statement for the 2001 Annual Meeting.
In connection with the Company's Annual Meeting of Shareholders to be held in
2001, if the Company does not receive notice of a matter or proposal to be
considered by February 5, 2001, then the persons appointed by the Board of
Directors to act as the proxies for such Annual Meeting (named in the form of
proxy) will be allowed to use their discretionary voting authority with respect
to any such matter or proposal at the Annual Meeting, if such matter or proposal
is raised at the Annual Meeting.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits filed with this report.
27 -- Financial Data Schedule.
(b) Reports on Form 8-K.
None.
14
<PAGE>
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 OCTOBER 24, 2000 By: /s/ DENNIS L. FINK
------------------ -----------------------------------------
Dennis L. Fink,
Executive Vice President and
Chief Financial Officer
(principal financial officer)
By: /s/ DAN C. BRYANT
-----------------------------------------
Dan C. Bryant,
Vice President and Controller
(principal accounting officer)
By: /s/ JENNY H. PARKER
-----------------------------------------
Jenny H. Parker,
Vice President,
Secretary and Treasurer
15
