Welcome to the Haverty Furniture Company, Inc.’s second quarter 2008 earnings release conference call. (Operator Instructions) I would now like to turn the conference over to Dennis Fink, EVP and CFO.

During this conference we’ll make forward-looking statements which are subject to risks and uncertainties and assumptions that are difficult to predict. Actual results may differ materially from those made in such statements, which speak only as of the date they are made, and which we undertake no obligation to publicly update or revise. Factors that could cause Haverty’s actual results to differ materially from expected results are disclosed in the company’s reports filed with the SEC and we caution you to give consideration to those possibilities. Our President and CEO, Clarence Smith, will now give you his update.

Thanks for joining our second quarter conference call. As we released earlier, we had a very tough second quarter. Total sales were $168.4 million, down 10% with comparative store sales down 12.7%. The weak top line produced a $2.3 million loss compared to last year’s second quarter of $1.4 million loss. Gross margins remained strong which reflects our commitment to our quality brand and maintaining balance and clean inventories. The strong gross margins are also related to our decision to move our longer term customer financing to third-party credit resources. Gross margins were up 263 basis points over last year’s second quarter. Because of the very difficult conditions, we’re firmly focused on controlling costs and preserving cash. We realize that protecting our balance sheet is paramount to assure that we’ll be able to be in a strong position as our industry pulls out of this downturn. As of today, our current cash position is good, and we’re presently not drawing on our bank revolver. We have under contract a $7 million sale lease [pack] agreement involving one of our newer store locations. This is still in the due diligence phase, but we expect to close early next quarter. We believe that we can maintain the current level of inventory through the remainder of the year at approximately $105 million to $110 million, a level that we believe allows us to properly serve our customers. We have curtailed our capital expenditures to be approximately $13 million for 2008 with a similar number likely for 2009. We did not buy any stock back in the second quarter. All of our management team has been involved in a deep dive into our operating budgets for the remainder of the year and for 2009. We’ve adjusted any programs and projects that are not critical…

The gross profit for the second quarter of 2008 was 51.2%, an increase of 263 basis points compared to the prior years second quarter. Better inventory management reduced the levels of damaged and closeout merchandise during the second quarter compared to last year. The level of sales financed internally using long term no interest credit promotions also affects our gross profit. During the second quarter of 2008, more of these promotions were handled by a third party finance company so there was less of the charge to gross profit than last year’s period. These improvements in gross profit were partially offset as our second quarter LIFO provision increased $500,000 or 31 basis points compared to last year’s second quarter. These changes, along with improvements, generated by our new merchandise groups, improved product mix, and better pricing discipline, affected our gross profit year to date. It was 49.3% for the six months last year versus 51.7% for the six months this year, an increase of 239 basis points. Many of our suppliers have experienced cost increases and we are working diligently with them on our product cost and our LIFO provision will be higher in the remainder of 2008 than it was in the second quarter. That is the main reason we currently expect our second half 2008 gross profit margin to be lower than the 51.7% we recorded for the first half this year, but we do expect the gross profit margin will be above last year’s second half of the 50.1%. Most of our competitors use FIFO as in inventory valuation method. Our LIFO accounting recognizes increasing product costs more rapidly by charging a non-cash provision to the P&L and putting a reserve on the balance sheet that reduces total inventory value. We will be able to closely estimate…

(Operator Instructions) Your first question comes from Rex Henderson with Raymond James. Rexford Henderson – Raymond James: I had a couple questions on the cost s and your efforts to reduce the cost structure. First of all, if you’d kind of quantify how much of those cost cutting efforts we’ve seen reflected in the results just announced, and how much more of them there are to go in the second half of the year. Secondly, it’s helpful I think to look at this, with a reduced cost structure, what the sales run rate would be required to reach break even and if you could address those I’d appreciate that.

It becomes difficult to call out the actual decreases because of cost cutting. The first half numbers and the second quarter numbers compared to last year speak to the reduction, the $3.5 million, and it’s net of several increases and several decreases. We noted that the two big increases were fuel costs and the cost of having outsourced credit promotions that were a little more aggressive, actually, quite a bit more aggressive than a year ago, so those are the two major items and we’ve made several other cuts. I think what we’re trying to do is to give you a second half guidance that tells you what’s still to come and so we’re trying to benchmark ourselves versus the first half and the comment was $2.3 million lower expenses in the second half than in the first, except that you have to take whatever sales you want to model and put some kind of variable costs in there for those. In terms of a break even, we’re running in the little over $61 million to $62 million a month so it’s probably in the range of $183 million to $185 million on a quarterly basis. That is going to be a little bit higher with the heavy LIFO expense we’re expected to incur in the second half and if inflation starts leveling out, or I should say prices start leveling out next year, the break even would be a lower figure. Does that help you?

Your next question comes from Laura Champine with Morgan Keegan. Laura Champine – Morgan, Keegan & Company, Inc.: Your comments about the SG&A being lower than sales or even is a little frightening to me given that sales are historically much higher in the back half of the year. Did you mean to imply that sales might be flat in the back half compared to the first half of the year?

No, not at all. We just wanted to give kind of an apples and apples comparison that we could let you know how much cost we believe we’ve chased out and that’s all that’s an indication of. We could have said it a variety of ways and it just seemed like people would be most interested in what we have done to reduce costs and sales are higher, which we hope they are, then you’d just have to plug in some variable costs for sales dollars higher than the first half. Laura Champine – Morgan, Keegan & Company, Inc.: Okay, and then on your inventory, your comment that it’s in line with where you want it and need it to be, but it is outpacing your revenues on a year-over-year basis and it looks like if it stays at that $105 million or $110 million level that trend is likely to continue. Can you comment on what’s happening there and what you need in terms of service levels? My concern is obviously that you might have to be more promotional to clear some of this. If you can give us some comfort around that, that’d be great.

Laura, I think our inventories are in as good a shape as we’ve ever had them. Actually, last year at this time, for the second quarter, we had some markdowns which we did not have to take this year because we’re in good shape. You might recall that at the end of last year, we were too low and said that in our call, and we felt like it hurt our sales late in the year because we weren’t able to fill orders, so we think the level that we’re at is well-balanced and in pretty good line. I gave us a little bit of leeway when I said up to maybe $110 million and you also need to know that about half of that is on our floors, so we had to beef up a little bit here because of the Olympics and we have some goods coming in, on the way, already here, that we had to order ahead of time because of the disruption that we knew would happen around some of the factories that are affiliated with the Olympics, so we think it’s a good level. I wish we had that level at the end of last year. I think it would have helped our sales, so we feel good about our inventory levels.

We have no further questions.

We really appreciate your joining us on the call and thank you for your interest in Haverty’s.