Good day and welcome to the Bassett Furniture Industries' third quarter 2025 earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. Instructions will be given at that time. As a reminder, this call may be recorded. I would like to turn the call over to Mike Daniel, CFO. Please go ahead. Thank you, Michelle, for the introduction. Welcome to Bassett Furniture's earnings call for the third quarter of fiscal 2025, ended August 30th, 2025. Joining me today is our Chairman and CEO, Rob Spilman. We issued our news release and filed our Form 10-Q yesterday after the market closed, and it's available on our website. After today's remarks, we will open up the call for a Q&A session. We will also post a transcript of the call on Bassett's investor website following the call. During today's call, certain statements we make may be considered forward-looking and inherently involve risks and uncertainties that could cause actual results to differ materially from management's present view. These statements are made pursuant to the Safe Harbor provision of the Private Securities Litigation Reform Act, 1995. The company cannot guarantee the accuracy of any forecast or estimate, nor does it undertake any obligation to update such forward-looking statements. For more information, including important cautionary notes, please see the company's annual report on Form 10-K for the fiscal year ended November 30th, 2024. Other filings with the SEC describing risks related to our business are available on our corporate website under the Investor tab. Now I'll turn things over to Rob. Rob? Okay. Thank you, Mike. Morning everyone, and thank you for joining us today. I'm pleased for the third quarter. Despite the continuing challenges and challenging environment in the industry, Bassett reported increases in revenue, operating income, and gross margin. We also continue to look for ways to lower operating expenses, which continues the work that began in the summer of 2024, last year. We planned that this year would remain impacted by the slow housing market, and that is very much the reality. We remain nimble in managing our business and our focus on driving innovation into our product lines, becoming more aggressive in our marketing initiatives, leveraging technology, and adjusting to the challenges affecting the industry in general. In short, we've adjusted to the new normal of furniture demand. We're pleased with our progress so far this fiscal year as we strive to be resilient in this environment. Mortgage rates have come down slightly from last quarter, and we've all seen the recent news about rate decreases. While it's slowly moving in the right direction for the housing market, we don't expect our industry to feel a more robust change until we can point to a sustained pickup in home sales. Many consumers are still cautious about making significant investments in home furnishings, and they remain concerned about the price of houses and the lack of inventory. We're recognized as one of the premier quality brands for furniture, and we concentrate on creating custom design solutions for our customers that align with their personal style. The decisions and the investment we've made in creating new lines, refreshing existing products, expanding e-commerce capabilities, and modifying our marketing activities are making a difference in our results. That said, while we can't control these areas, we have been adjusting to the impact that tariffs have on our supply chain in some respects on consumer confidence in general. We have a competitive advantage with approximately 80% of our wholesale shipments manufactured or assembled in our U.S. factories. However, we are still being impacted by tariffs, particularly from Vietnam and India, on imported fabrics, plywood, componentry, and finished goods, and we passed along those surcharges for these materials during the third quarter. We made the difficult decision to raise retail prices slightly in July to cover the tariff impact. Our teams continue to intently monitor the gossip and the reality about tariff activity daily, and I'm sure this will be the number one topic at the upcoming High Point Furniture Market later this month. Now let's move on to a discussion about our third quarter results. Let me remind you that the third quarter is generally our weakest reporting period of the year. We grew consolidated sales 5.9%, with August the strongest month for orders in the quarter. Excluding sales from Noa Home, which closed in late 2024 as part of our restructuring plan, consolidated revenues increased 7.3%. Ongoing operating efficiencies produced $600,000 of consolidated operating profit, due primarily to the wholesale business, compared to a loss of $6.4 million this time last year. Recall that in last year's third quarter, we had a cyber incident that suspended our manufacturing financial systems for seven days, resulting in negative impacts on operating income, gross margin, and expenses. Gross margin this quarter improved 320 basis points due to better wholesale margins, slightly offset by a decrease in retail margins at company-owned stores, as well as the comparison of last year's impact of wages paid during the cyber shutdown. Orders from our combined network of corporate and licensed stores grew by 5.9%, driven by a 9.8% increase in company-owned retail stores. Wholesale sales to the open market were up approximately 1%. True Custom Upholstery offers more than 450 fabrics and 40 leathers and drove the majority of our wholesale improvement. We had a double-digit increase in case goods, which offset a slight decrease in our domestic custom wood lines. We continue to be pleased with the response to our new whole-home product collections. Copenhagen is doing well across the board. The Newberry line has arrived in stores, and based on initial feedback, we believe it has great potential. Our U.S. manufactured BenchMade HideAway dining line is also off to a good start in both retail and wholesale. Outdoor sales were up 18%. Written retail sales increased by 2.4% in the quarter. I mentioned that retail gross margins were down slightly, and this was due to lower margins for both in-line and clearance goods. We continue to be aggressive this year on moving through discontinued, as-is inventory. Ongoing operating expense efficiencies implemented this year, coupled with higher sales, delivered a decrease of 590 basis points on the SG&A expenses as a percentage of retail sales. We were able to do more with less in the quarter, and we must continue to challenge ourselves to improve. We're integrating new ideas and changes into our marketing mix without adding to our budget. We shifted slightly away from digital in the third quarter and produced a high-quality 52-page catalog and several smaller mailers for our fall promotions. We feature True Custom, Motion, and BenchMade. Customers are coming in at retail with the mailers, and the response has been very positive. We also added spot TV placements in key markets with new professional quality ads. The stores in these markets outperform those without the TV campaign. We will continue to test and learn from these approaches and use those that are delivering the highest return on investment. The marketing changes have enhanced our omnichannel experience, as more of our target customers are integrating with their experience, their online experience, and our in-person business. We are now lapping the double-digit e-commerce sales growth numbers from last year. Sales are still up, now with single-digit increases. Website traffic declined slightly in the third quarter, but conversion rates continue to rise, and we're up 18%, driven by improvements in our website experience to our shoppers. We remain pleased with the progress of our Bassett Custom Studio program and now have 57 locations open. Orders were up in Bassett Custom Studio 35% in Q3, and growth is coming from new and existing stores. Shipments were up 38%. We will be focused on emphasizing the value of Custom Studio and High Point and are optimistic that we will bring on additional locations to the program. This plan leverages our core competency of providing custom upholstery over a broader range of the United States. We reopened our Concord, North Carolina, corporate store in the last few weeks, which has been closed since April for remodeling. We are also in the architectural planning phase of two new Bassett stores set to open in 2026. Our board of directors approved our regular quarterly cash dividend of $0.20 per share, and our balance sheet remains strong. Now I'll turn things back over to Mike for more details on our financial results. Thanks, Rob. In my commentary, the comparisons I'll discuss will be the third quarter of fiscal 2025 compared to the third quarter of fiscal 2024, unless otherwise noted. As Rob previously noted, total consolidated revenue increased $4.5 million or 5.9%. Excluding sales from Noa Home, which closed late in 2024, consolidated revenues increased 7.3%. Gross margin at 56.2% represented a 320 basis point improvement over the prior year, driven by improved wholesale margins partially offset by slightly lower retail margins. Selling, general and administrative expenses were 55.4% of sales, 440 basis points lower than the prior year, reflecting the benefits from last year's restructuring plan, ongoing cost optimization activities, and greater leverage of fixed costs due to higher sales levels. Operating income was $600,000 or 0.7% of sales as compared to a prior year loss of $6.4 million, which included a $1.2 million loss on the abandonment of a logistical services contract. Diluted earnings per share were $0.09 versus a loss of $0.52 in the last year quarter. Let me cover a little more detail on our wholesale operations. Net sales increased $3 million or 6.2% over the prior year, consisting of a 9.2% increase in shipments to our retail store network, approximately 1% increase in shipments to the open market, and a 9.6% increase in Lane Venture shipments. Gross margins increased 440 basis points over the prior year. Excluding $600,000 of unproductive labor costs incurred during the temporary shutdown for the cyber incident last year, gross margins would have increased by 310 basis points. This margin increase was driven by improved pricing strategies in both the upholstery and wood operations, coupled with greater leverage of fixed costs from higher sales levels. SG&A expenses as a percentage of sales decreased 210 basis points, primarily due to the benefit of cost reductions implemented during the second half of fiscal 2024. Again, greater leverage of fixed costs from higher sales. Wholesale backlog was $16.6 million compared to $21.8 million on November 30th, 2024, and $18.5 million at August 31, 2024. Now moving on to the retail store operations, net sales increased $4.6 million or 9.8%. Gross margin declined 40 basis points due to the lower margins on both in-line and clearance goods. As Rob said, we've been more aggressive in cycling through the as-is inventory and also coupled with increased promotional activity. SG&A expenses as a percentage of sales decreased 590 basis points due to several factors: improved efficiency gains in warehouse and delivery operations, lower advertising and marketing expenditures, overall lower operating costs due to benefits from the cost reductions implemented during the restructuring, and of course, greater leverage of fixed costs due to higher sales levels. Retail backlog was $32.2 million compared to $37.1 million at November 30th, 2024, and $33.3 million at August 31st, 2024. Our liquidity position remains solid, although we generated an operating cash flow deficit for the quarter and ultimately reduced our cash and short-term investments by $5.2 million. We ended the quarter with $54.6 million of cash and short-term investments and no outstanding debt. As Rob mentioned, our third quarter is typically the slowest quarter for business and consequently our lowest cash generation period. We have reduced our projected range of annual capital investment in our business to between $5 million - $7 million. As previously planned, build-outs of the two new stores Rob previously mentioned have been pushed to early fiscal 2026. Our prior CapEx range was between $7 million and $9 million. We continue to pay our quarterly dividend and repurchase shares optimistically. We spent $1.7 million on dividends and $400,000 on share buybacks in the quarter. We remain committed to delivering shareholder returns through dividends and, when appropriate, share buybacks. Now we'll open up the line for questions. Michelle, please provide instructions on how to do so. Thank you. If you'd like to ask a question, please press star one one. If your question has been answered and you'd like to remove yourself from the queue, please press star one one again. Our first question comes from Anthony Lebiedzinski with Sidoti. Your line is open. Good morning, everyone, and thanks for taking the questions. It's really nice to see the improvement in sales and profitability in the quarter. Rob, I think you said that August was your strongest month for delivered sales. Did you see the same case with your written sales as well? Also, maybe if you could just comment on what trends you saw during the Labor Day holiday season and any sort of commentary on quarter-to-date trends would be very helpful. That didn't take long to ask that question. We were predicting that was coming. All right. August was the best month of the three. We had good order momentum both at wholesale and retail. I would say that trend has continued so far through the Labor Day period and into September. By any means, I wouldn't say we're happy with our level of sales and we're fighting hammer and tong like everyone else for every order we can get our hands on. I wouldn't say the environment is really a lot different, but frankly, the last couple of months have been a little better than we've been slogging through since the end of the COVID boom. That's great to hear. In terms of dealing with the tariffs, you mentioned the increased pricing. I'm just wondering if you could comment on the extent of the pricing as well as what you've seen as far as unit volumes, whether you've seen a notable change in response to the higher pricing that you put in. Our primary areas in the world that are affected by this are Vietnam and India. Of course, Vietnam has 20%. India has the eye-popping 50% tariff. We have levied surcharges on those products from those countries, and we've had to increase those as, you know, they finally figured out what they were going to do on both of those countries. Hopefully, that's, well, who knows what's going to happen? That's basically what we're doing. We still have a surcharge on our imported goods. You know, what's really going to be interesting is two weeks down in High Point and how everybody's feeling about this and what everybody else is doing because obviously, we're not the only ones talking about this, and it's going to be the big topic down there. I think on the new things, what we will do is roll the surcharge into the price of the goods and just not have a surcharge on those. That's what we're thinking about anyway. We will address the rest of the line at the end of the year. For the short term right now, we have the tariff surcharges. Understood. Okay. The gross margin was certainly impressive in terms of the year-over-year expansion. I certainly understand that the environment is still choppy and difficult, but as revenue does eventually come back on a more consistent basis, hopefully sooner rather than later, how should we think about further upside to your gross margins? Yeah, we were talking about this the other day. Honestly, I don't think you're going to see it improve dramatically. I mean, you know, that 55, 56 range is kind of where we think we're going to be. We're going to have to leverage that with expenses and more sales. I'm not saying we can't improve slightly, but I think that's kind of where we're going to be. Gotcha. Okay. My last question before I pass it on to others. You talked about the success with your new product introductions, which was great to hear. How does your pipeline look for additional new products going forward? We have introduced a lot of stuff this year, particularly on these whole-home collections, which we haven't done in a while. We brought three of them out there. Expensive, that's part of our cash flow deficit for the quarter. You see the inventory has gone up on those things. Some of those things just kind of came in at the end of the quarter. We really hadn't been able to ship them out. We have now shipped them out. We are going to have a little more focused introduction strategy this market, although we still have plenty of new things. We are going to absorb what we've just done. The good news on that, of course, is we're pleased with what's happening so far with that stuff. We have got a lot of new, exciting things, and we're looking forward to showing them to you in two weeks, Anthony. Yeah, looking forward to that, seeing you at High Point. Thank you very much and best of luck. Yes, sir. Thank you. Thank you. Our next question comes from Doug Lane with Water Tower Research. Your line is open. Yes. Hi. Good morning, everybody. Just a housekeeping issue. Good morning. I noticed that in your segment reporting, you moved some dollars last year out of custom upholstery into custom wood and case goods. I just wanted to find out maybe what the thought process was there. Frankly, that was fixing an immaterial error. Okay. Fair enough. It's just, you know, you've never done that before, so it just kind of stuck out. Getting back to the margins, I think the impressive gain in the margins, particularly in the wholesale gross margins, is really this quarter and all year. What has been driving that improvement in the wholesale gross margin, and yet you're still cautious on the future outlook for gross margins? We have narrowed our focus on our line, and we are selling more of slightly fewer things in some cases, and we are getting some efficiencies that way. The upholstery operation is running extremely well, and that has really been a major contributor. We have really looked at our pricing strategies, which are hard to do when you have all these tariffs going on. I would say a combination of those things. I do not want to publicly state that we can drive a lot past where we are right now because we are pleased with where we have ended up so far with all this. That is why I exhibit a little caution on my answer to Anthony's question. Not only that, Rob, where we are in the tariff rollout, the tariff changes, and how that gets rolled into the cost and how that's perceived, I think there's still uncertainty around how the consumer, ultimately, the consumer is going to react to the higher prices that are coming through on everybody's goods. That's a good point. There has just been an incredible amount of stuff going on this year for everybody. We have half a sentence in there about fabrics, but fabric is a major deal for us. Half of our fabrics were from China. We have had to discontinue a lot of our fabric line and reintroduce other things. Of course, that's expensive to make all the swatches and get all that stuff out there and go through the inventory that you're having to drop. It has been a real chaotic thing. It's kind of hard to really comment on the future as accurately as we hope to, until this tariff thing blows over, if it ever blows over. I just want to know where we're going fast. I hope that answered your question. No, that's all fair. It certainly has been chaotic and uncertain out there. While we're on the subject, have you quantified what you expect the net tariff impact to be to your financials this year? I'm not sure that I can. Okay. I can tell you that I guess the philosophy has been, and we're still a little bit wrestling with the philosophy about, you know, how we price the goods. Are we going to price it so that with the tariff in there, we get the same margin or we get the same margin dollars? I'd say to ultimately say what we think it's going to be, I don't think we can answer it. That's kind of what we're wrestling with there a little bit. There are so many little nuances to this, as I've just alluded to the fabrics, but the metal, the mechanisms, the componentry, the plywood, a lot. I mean, for you to really give an accurate answer to your question, you're going to have to dig through a lot of raw materials, finished goods, different kinds of materials, different countries, different tariffs. It's hard, kind of an unprecedented period. I'm not saying that we have totally realized the effect of all of this, but so far, we're navigating it relatively well. No, it changes every week, it seems. On the flip side, with 80% of your manufacturing in the U.S., do you see an opportunity for market share gains here? You know, it depends on the category to a certain extent. I'm going to have a much better answer to that question in two weeks from now than I have right now. We have had a couple of instances that I can point to where the guys have said, "Hey, we got this because we're domestic." I wouldn't say it's a landslide. It does give us pause to think that we may benefit from this in some perverse way that the other guys won't. You know, there's still a lot of domestic upholstery out there, and that's the biggest portion of our business. The tariff, maybe it'll help the upholstery business in general. There's plenty of it made in America right within a 10 mi radius of our factories down in North Carolina. Okay. Fair enough. Just one last thing. I know your balance sheet is strong and your free cash flow is improving nicely, but it still doesn't cover the dividend. When do you think the free cash flow will be able to cover the dividend in the future? It has in the past. I think it will again soon. This quarter was a little unusual in the inventory and just the periodic slowness of the third quarter, which we experienced. Doug, the fourth quarter is typically our, it might be the strongest quarter both for business and for cash generation. I'm not saying that we know exactly what we'll do, but typically, the fourth quarter is the best quarter, and we generate usually really good cash flow. Okay. Fair enough. Thanks, guys. Thank you. There are no further questions at this time. I'd like to turn the call back over to Rob Spilman for closing remarks. All righty. Thank you. We've got to remain agile in the environment. The fluctuating tariff rules have made the day-to-day running of the business challenging. We are, as the question alluded to, somewhat insulated by our domestic manufacturing platform. Today's furniture industry is truly a global enterprise. Nevertheless, we are pleased to have posted growth in the quarter. Our new product lines are selling, and we look forward to unveiling new ideas to the marketplace in High Point, North Carolina, in two weeks. Thank you today for your time and for your interest in Bassett Furniture. Thank you for your participation. You may now disconnect. Everyone, have a great day.