Haverty Furniture Companies, Inc. (NYSE: HVT) CEO Clarence Smith said the furniture retailer’s top priority for 2008 is maintaining a strong balance sheet and hitting budgeted goals. Smith made the comments during a morning conference call.

“In this difficult economy, we know that cash is king,” Smith said. “We’re very strong financially.”

At the end of 2007, Haverty’s liabilities totaled $92.9 million, from $122.4 million at the end of 2006.

He said the Atlanta, Ga.-based firm plans to open new locations and close some old locations as leases expire or the local market deteriorates. Haverty also plans to continue paying its regular dividend to stockholders, Smith said.

The chief executive also said Haverty is working on its customer service levels, which he believes gives the company an edge over competition and will lead to additional sales.

Before the opening, Haverty posted fourth-quarter earnings of $1.6 million, or $0.07 per share, down 50% from $3.2 million, or $0.14 per share, a year earlier.

Quarterly sales totaled $205.8 million, down 4.7% from $216 million during the year-ago period. Wall Street analysts projected $205.8 million in revenue.

Total expenses declined to $102.3 million for the three months ended Dec. 31, from $103.7 million in the year-ago quarter.

Smith said Haverty has centralized its media buying and has a better idea of what’s happening in individual markets after hiring consulting firms. Haverty is spending less money on newspaper ads and more in Internet and direct mail advertisements.

“I am very confident that in the last 60 to 90 days, we significantly improved our ability to get our message out,” Smith said. “The advertising is changing dramatically and we’re dedicated to staying on top of that.”

Smith said performance for the company’s President’s Day weekend sale was “strong and very encouraging.” To date, he said the firm’s February sales are up slightly from 2006.

Smith said Haverty’s website traffic is up dramatically from last year. Additional improvements, including an enhanced transaction system, will be released next month, the CEO said.
 
“We believe that our improved Havertys.com website has helped drive pre-sold buyers into our stores,” he said.

In midday trading, HVT shares are up 10.64%, or $0.97, at $10.09. Over the last 52 weeks, shares have ranged from $7.21 to $16.21.