Good day, and welcome to the Flexsteel Industries fourth quarter fiscal year 2022 earnings result conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch-tone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Alejandro Huerta, CFO. Please go ahead. Thank you, and welcome to today's call to discuss Flexsteel Industries' fourth quarter and fiscal year 2022 financial results. Our earnings release, which we issued after market close yesterday, Monday, August 22, is available on the investor relations section of our website at www.flexsteel.com under News and Events. I am here today with Jerald K. Dittmer, President and CEO, and Derek Schmidt, Chief Operating Officer. On today's call, we will provide prepared remarks, and then we will open the call to your questions. Before we begin, I would like to remind you that the comments on today's call will include forward-looking statements, which can be identified using words such as estimate, anticipate, expect, and similar phrases. Forward-looking statements, by their nature, involve estimates, projections, goals, forecasts, and assumptions, and are subject to risks and uncertainties that could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements. Such risks and uncertainties include, but are not limited to, those that are described in our most recent annual report on Form 10-K as updated by our subsequent quarterly reports on Form 10-Q and other SEC filings as applicable. These forward-looking statements speak only as of the date of this conference call and should not be relied upon as predictions of future events. Additionally, we may refer to non-GAAP measures, which are intended to supplement, but not substitute, for the most directly comparable GAAP measures. The press release available on the website contains the financial and other quantitative information to be discussed today, as well as the reconciliation of the GAAP to non-GAAP measures. With that, I will turn the call over to Jerry Dittmer. Jerry. Good morning, and thank you for joining us today. I'd like to start by welcoming Alejandro. His addition to our team aligns with our strategic focus of building talent across the organization, and we are glad to have him as part of the Flexsteel team. We performed solidly in the fourth quarter, given challenging conditions, which included slowing consumer demand, exacerbated by a glut of retail inventory, continued inflationary pressures, most notably fuel and intensifying competitive pricing pressures. I am encouraged by the fact that we adjusted to these challenges and were able to deliver sales for the quarter of $124 million, which was within the range of our guidance of $120-$135 million. While sales have slowed, revenue from our ongoing residential furnishings business is still ahead of pre-pandemic levels. In addition, we prudently managed our spending to deliver operating income of $3.6 million for the quarter. While near-term challenges may create choppiness in our first half fiscal year 2023 earnings, we remain committed to delivering long-term profitability. Reflecting on fiscal 2022, it was a year of significant challenges, but also many successes. We navigated major disruptions in the supply chain, quickly responded to extraordinary ancillary shipping charges, and adapted to surging inflation while making important strides in advancing our strategic agenda. I am very proud of and grateful to all our dedicated employees around the world. Their agility, resilience, and commitment led to us achieving record home furnishing sales of $544 million, an increase of over 13% from the previous record set last year. While full-year profit results fell short of our expectations due to the exceptionally high ancillary shipping costs and inflationary pressures, I am encouraged by our ability to return to positive operating income in the second half of the fiscal year. We remain committed to focusing on profitable growth over the long term. Notable achievements in advancing our strategic agenda included continued investment in our digital abilities and product content to grow our omni-channel sales capabilities. At the same time, we continued to invest in new and innovative product development. We believe these investments will allow us to effectively compete across retail and e-commerce sales channels. By offering high-quality products consumers want with an ability to conveniently purchase them where and how they would like. We made meaningful investments in our capacity and supply chain by opening a third manufacturing plant in Juárez, Mexico. In addition, we opened a new distribution center in Greencastle, Pennsylvania, to service our customers in the Northeast and created stronger partner alignment to support both domestic and global transportation. The capacity and supply chain investments allowed us to improve our customer service levels, reduce lead times to three to five weeks, which are advantaged compared to many of our competitors, and build a solid foundation for the future. While I am encouraged by our progress and the foundation we have created, there are a few major headwinds that we face entering fiscal year 2023, which may create a drag on sales and profits in our near-term outlook. One significant headwind is slowing consumer demand for the furniture, which we believe is driven by several factors. First, in the fourth quarter, we began to see consumer demand reverting to more normalized levels after an extraordinary period of pandemic-induced consumer buying for everything related to the home. We are consistently hearing from our customers that both online and retail furniture traffic has shifted downward. The second factor influencing demand is macroeconomic uncertainty, especially regarding inflation and fears of an economic recession, which have driven down consumer confidence. The surge in food and gasoline prices are clearly taking a toll on consumer spending habits. At the same time, actions taken by the Federal Reserve to combat inflation have led to an increase in home mortgage rates, slowing the purchase of new homes, as well as tempering the pace of new construction, which are often a catalyst for purchasing new home furnishings. Third, the mix of consumer spending is shifting away from goods and back towards travel, entertainment, and services that were largely abandoned during the peak of the pandemic. For furniture manufacturers like Flexsteel, slowing demand is being further exacerbated by retailer inventories that remain stubbornly high. Many retailers have warehouses full of inventory ordered to support the post-COVID demand that was delayed due to supply chain disruptions. Until retailers are able to move some of this product, they won't have room to replenish their Flexsteel inventories in the short term. Another significant headwind is cost inflation as we continue to feel cost pressures across all areas of our business, including materials, domestic and global wage rates, and all forms of transportation. While ocean container rates have begun to fall, they are still well above historical rates, and the decline is being offset by rising domestic transportation costs due to surging diesel prices and a shortage of truck drivers. We've been largely successful at offsetting these pressures through price increases to both our retail and e-commerce channels, but as consumer demand falls and retail inventories remain high, our pricing power may be squeezed as we look to maintain competitive pricing in the market. As always, our goal is to continue providing customers with products of superior quality, comfort, and durability at attainable prices. Finally, disruptions in the supply chain and logistics have eased somewhat but continue to be a challenge for our industry. We have adjusted to overcome many of these challenges and will remain focused on mitigating our supply chain risks and be ready to adapt quickly to changing market conditions. While current conditions present some near-term challenges, I remain encouraged by the steps we have taken to create a foundation for growth, and we are committed to profitably growing the company over the long term. Now I'll turn the call over to Derek to discuss our operational priorities before Alejandro takes you through further details of our financial results. I'll be back at the end of the call with some closing comments on what we see ahead. Thank you, Jerry, and good morning, everyone. As Jerry noted, business conditions for the furniture industry are challenging at the moment, but we have an experienced management team that's agile and skilled at maneuvering through periods of uncertainty. We're embracing the current environment because in times of disruption, we know there are opportunities to gain share from competitors who are less agile, less financially secure, and take a more defensive posture. While near-term sales will likely be strained for the next 3-6 months due to slowing consumer demand and bloated retail inventories, we're staying on the offense and aggressively pursuing opportunities to gain share in our existing markets, but as important, to enter new growing markets where we believe we can provide differentiated solutions and have a right to win. As we've shared in the past, our long-term growth pursuits for new business have three legs, all of which we are progressing in fiscal year 2023. First, new sales distribution. We know that consumers are broadening where and how they buy furniture, and we are pivoting to where people shop. On the retail side of the business, we are expanding with new customers beyond traditional furniture retail, most notably big box retail. As an example, we recently launched a successful trial of motion product with a large national retailer. We'll be shipping a new program of custom manufactured stationary product to them in the coming months. In the e-commerce channel, our historical sales have predominantly come from our Home Styles brand and have been concentrated with a few major players like Amazon, Wayfair, and homedepot.com. While we'll continue to aggressively grow with these customers, we are also focused on expanding relationships with other leading e-commerce partners like Overstock, Walmart.com, and Cymax to name a few. We are also extending the Flexsteel brand online in a meaningful way with select e-commerce partners in fiscal year 2023. The second leg of our growth strategy is new product categories. Two focus areas where we are driving big innovation this year. First, sleep solutions. Most living room furniture isn't designed with sleep in mind. We have a solution which we intend to launch later in the year, which we believe could define an entirely new furniture category and satisfy a sizable unmet need in the market. Health and wellness continues to present itself as an avenue for growth long term. Our second innovation focus is on small parcel modular furniture, which is growing in popularity as it changes with shifts in people's lifestyles and needs. However, the quality, comfort, and ease of assembly are lacking in current market offerings, and we are leveraging our know-how and patent-pending innovations to bring a better solution to the market in the second half of fiscal year 2023. The third leg of the growth strategy is new consumer segments, and we have two initiatives in progress. First, we're addressing new consumers through a lower-priced soft goods brand. There is a large mass market for value-oriented furniture, which is below where the Flexsteel brand competes due to the large disparity in quality, durability, and comfort. However, we believe we can compete effectively with a new brand at these lower price points by leveraging our engineering prowess and manufacturing capabilities to reach these prices while offering quality and comfort that is superior to the competitive alternatives. This new lineup will start shipping in the second quarter. Second, we're addressing a new consumer segment for modern lifestyle brands, which have been hugely successful in the past several years by becoming a preferred product development and manufacturing partner to some high-profile lifestyle brands. In summary, market conditions will be rough near term, but we remain focused on our growth vision and have a set of ambitious initiatives in fiscal year 2023 that we believe will position the company for long-term profitable growth and shareholder value creation. Many of these efforts should deliver meaningful incremental growth in the second half of the fiscal year as well. Beyond the growth priorities, we've also reinforced efforts in fiscal year 2023 on cost savings initiatives to both offset continued inflationary pressures and lower prices to the market. As Jerry alluded to earlier, competitive pricing pressures are growing exponentially. Competitive manufacturers and retailers alike have amassed large inventories and are accumulating significant ancillary charges on inbound product that they have no place to put at a time when consumer demand is slowing. The result, heavy discounting and promotions. There's nothing too irrational in the market yet, but we expect pricing to remain aggressive until the value chain works through its inventory glut. We worked tirelessly during the last two years to gain significant product placements at retail, which resulted in above-industry growth, and we stand prepared to vigorously defend our positions. To do so, we will have to respond to pricing pressures, but intend to fund these price reductions through continuous improvement in cost savings efforts rather than accept margin erosion. We've strengthened the leadership in all areas of our operations, logistics, manufacturing, and sourcing, and we have the talent in place to drive the savings necessary to compete effectively in the market while generating profit and positive cash flow for the business. With that, I'll turn it over to Alejandro to give you additional details on the financial performance for the fourth quarter and outlook for the first quarter of fiscal year 2023. Thank you, Derek. Good morning, everyone. I'm glad to be with you today and happy to be part of a great team here at Flexsteel. For the fourth quarter, net sales were $124.5 million, down $11.7 million or 8.6% compared to $136.2 million in the prior year period. While down from the prior year, our sales results were within our $120-$135 million guidance range provided during our third quarter earnings call. Sales performance in our retail channel decreased by $7.6 million or 6% versus the prior year. Product sales through e-commerce declined $4 million or 23% versus the prior year. While we are competing well in both the retail and e-commerce channels, several of our customers are reporting sizable declines in both in-store and online traffic compared to last year's robust results that were spurred by pandemic-driven buying. Although the downward shift in traffic is expected to remain a near-term headwind, we remain positive on the long-term prospects as we are pursuing aggressive plans to gain share through new customers, new product launches, and improved content and advertising effectiveness. From a profit perspective in the fourth quarter, the company delivered operating income of $3.6 million or 3% of sales. We recorded a net loss of $0.3 million and a loss per diluted share of $0.05. The net loss was primarily driven by a $3.6 million income tax charge, mainly related to changes in our deferred tax assets, for which we do not receive the tax benefit due to our full valuation allowance. Adjusted net income for the quarter, which excludes the impact of remeasuring our valuation allowance, was $2.2 million, and adjusted income per diluted share was $0.41. Gross margin as a% of net sales in the fourth quarter was 14.2%. The decline from the third quarter was largely driven by competitive pricing pressure due to slowing demand, coupled with inflated retail inventory levels and continued inflation in domestic transportation charges, primarily due to surging fuel prices. Operating income was supported by controlled SG&A spending as fourth quarter SG&A expense dropped to 11.3% as a percent of sales, the lowest quarter of the fiscal year. Moving to the balance sheet and statement of cash flows. The company ended the quarter with a cash balance of $2.2 million and working capital of $125.4 million, which represents a reduction of $13 million during the quarter, largely driven by a $12.9 million decrease in inventory. The result of the strong working capital management was solid operating cash flow of $11.9 million during the quarter. As previously communicated, debt reduction is a key priority, and in the quarter we reduced our outstanding borrowings by approximately 9% or $3.9 million. The strong operating cash flow also enabled us to fund $7.1 million of share repurchases in the period. Looking forward, guidance for first quarter sales is between $80 million and $90 million. While this represents a significant decline from prior year results and the recent quarter, we feel it will be the low point of the fiscal year as most of our retailers have recently pulled back substantially on orders for in-stock products as they are battling full warehouses and containers piling up in yards. We do expect demand for our North American manufactured products to remain solid near-term, given our competitive lead times compared to other manufacturers. Based on discussions with our distribution partners, we're cautiously optimistic that retail inventories should normalize late in calendar 2022 or early 2023. Until then, we expect retailers to be heavily focused on selling the inventory that they have, rather than placing new orders for sourced goods. The result will be a near-term drag on our first quarter and second quarter sales. We do expect that sales will sequentially grow each quarter throughout the fiscal year as the inventory situation improves and we realize the benefits of the various growth initiatives which Derek outlined. Regarding profitability, the significant decline in sales in the first quarter will have an outsized adverse impact on profits. While we have and will continue to take steps to adjust our costs in line with lower sales levels, we are protecting strategic investments that we feel are critical to support our long-term growth ambitions, namely our investments in the new Mexicali manufacturing facility and new Northeast DC. These investments have added structural costs to the P&L and will be under leveraged near term with lower sales. As such, we are projecting operating income as a percentage of sales in the range of -3.5%-0% for the first quarter, with the largest drivers of variability in the range being sales demand and competitive pricing conditions. While there is much uncertainty in the market and demand and pricing conditions could worsen, it is our best view at this time that we would deliver profit in the second quarter and results would sequentially improve in the second half of the year. We expect gross margins in the range of 13%-16% in the first quarter, weighed down by fixed cost deleverage from lower sales and pricing pressures. If sales improve as expected during the fiscal year, gross margin should improve to the mid- to upper-teens% in the second half. We intend to prudently control SG&A costs and expect SG&A costs between $14 million and $15 million in the first quarter. SG&A spending may ramp up later in the year, dependent on gross margin expansion. Regarding our cash flow outlook, working capital is expected to be a source of cash flow in the first quarter and full year as we anticipate inventories to steadily decline throughout the year. Near term priorities for cash remain reducing debt and funding capital expenditures. We may continue to be opportunistic with share repurchases at modest spending levels if the stock price remains at a significant discount to our view of intrinsic value. We expect debt levels at the end of fiscal 2023 in the range of $0-$15 million. For the first quarter, we expect capital expenditures between $2.5-$3.5 million. The effective tax rate for fiscal 2023 is expected to be in the range of 27%-28%, excluding the impact of any revaluation of deferred tax asset valuation allowances. Now, I'll turn the call back over to Jerry to share his perspectives on our outlook. Thanks. We believe the next 12 months will be challenging for our industry due to slowdowns in the economy, continued inflationary pressures, and bloated retailer inventory levels. These challenges, along with decreased furniture demand, will continue to put pressure on our profit margins in the near term. However, I am confident that our team, the investments we made in fiscal 2022 and the fiscal 2023 priorities, which Derek outlined earlier, will provide a solid foundation for long-term profitable growth. Production at our third and newest manufacturing plant in Juárez, Mexico, accelerated the reduction of our backlog and successfully brought our lead times for manufactured products down to 3-5 weeks, faster than many of our competitors. Our new distribution center in Greencastle, Pennsylvania, is supporting improved service levels and growth in the East Coast furniture market. While these recent investments to expand North American capacity may be underutilized in the near term, they will support improved customer service levels, build supply chain resiliency, and provide meaningful capacity for future growth. These initiatives, combined with ongoing investments in talent, product innovation, digital capabilities, and our brand, position us well to compete effectively in the near term as well as achieve our longer-term growth ambitions. In the near term, we remain focused on delivering profitability and generating cash flow to pay down debt and preserve liquidity while supporting critical strategic investments. With that, we open the call to your questions. Operator? We will now begin the question-and-answer session. To ask a question, you may press star, then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we'll pause momentarily to assemble our roster. The first question today comes from Anthony Lebiedzinski with Sidoti. Please go ahead. Yes, good morning. I thank you for taking the questions and welcome, Alejandro. Good to catch up with you guys, as well. First and, you know, just curious, as far as the monthly cadence of revenue during the quarter, was there much variability, you know, in terms of, you know, going from April through June? Or was it fairly consistent throughout the quarter? Just wanted to get a better handle on that. Yeah. For that, Anthony, for the fourth quarter, basically April, May, June were almost identical months. That's on the sales side. We really didn't see much difference. A lot of that has to do with our backlog. We were still, you know, finishing up our backlog and then back down to kind of a historical level, which is where we're at now. The order side was obviously different. The orders have really trended back now, towards the pre-pandemic levels that we would have seen back in calendar 2019. Got it. Okay. Thanks for that. You know, and as far as, you know, the geographic positioning, I mean, are you seeing much variation there, or is it just kind of consistent throughout the different parts of the country? Just curious about that. No, geographic is very consistent. We really haven't seen any shifts. I mean, where we were stronger, we continue to be stronger. No real changes there. Got it. Okay. All right. You know, Derek, in terms of the three main strategies that you outlined, you know, which one out of these you think will be the most impactful, would you say? Yeah. I think in fiscal year 2023, our entry using a new brand in the lower price soft goods is probably gonna have the biggest impact on sales. I think as we think about the next two to three years, all those initiatives that I mentioned, you know, will have a meaningful impact. In terms of 2023, it's really, you know, our launch actually, you know. Here in a couple of months, we'll actually be fulfilling orders for that new brand. And you know, as I mentioned kind of during the call, we feel pretty strongly that not only are we matching competitive price points in the market, but we're doing so and we're providing a product that has superior quality and comfort versus the alternative. We're pretty jazzed up about that opportunity, and our sales team is excited to sell it. Got it. Okay. In terms of this new brand, what will be the distribution of where consumers will find this product? Will this be supported by additional marketing spending? Just curious about that. Yeah. We're thinking about this new brand really omni-channel. We're selling it to our traditional furniture retailers. We're having discussions with, you know, club stores regarding the offering, and we're having discussions with our large, you know, online marketplaces like Wayfair. We will be broadly distributed. Okay, got it. Okay. All right. Just in terms of the near-term outlook, you know, as far as, at this point, you are fulfilling orders within looks like three to five weeks, so, you know, so definitely implies, you know, quite a meaningful, you know, step down. As far as, you know, how you see your own, you know, inventories, like, where would you say, like, you know, like how should we expect that, you know, by the end of the first quarter? I mean, you may have said this, but I may have missed this, but you know, just in terms of how are you thinking as far as your own inventories throughout the course of the year? Yeah, Anthony, this is Alejandro. Thanks. Good question. You know, we're gonna work to bring down inventory levels consistently over the rest of the year, to a meaningful place, go somewhere in the near term of $20-$25 million, as we look towards the end of the year. You know, that will also depend on where our sales demand goes, throughout the year because we may have to reinvest back into inventory as demand may or may not pick up. Got it. Okay. All right. Lastly, I guess, you know, in terms of the SG&A spending, so you guys did a nice job there for the quarter here of roughly 11% of revenue. Kind of, you know, near term and longer term as a% of revenue, kind of what do you think is the right appropriate way to think about that? Yeah, from a normal run rate, Anthony, at this time, you know, we're looking at a normalized 14%-15% SG&A spend as a percent of sales. Got it. Okay. All right. Well, thanks a lot, and best of luck. Thanks, Anthony. The next question comes from JP Geygan with Global Value Investment Corporation. Please go ahead. Hey, good morning. Thank you for taking my questions. You made the decision several quarters ago to invest in inventory, which of course allowed you to continue supplying your customers during COVID, but it's now looking like it might force you to engage in some discounting. Can you talk about retrospectively the ramifications of that decision, either positive or negative, particularly as it pertains to customer relationships and market share? Yeah, JP, good question. Yeah. It did, it really helped us as far as you know, customer demand went high. We were able to do a lot of good things in there. We were able to supply a lot of our customers, which really helped us. We've been able to get decent control over inventories. Obviously, we've been able to get under control all of our ancillary charges and costs, which we had problems with last year. Those are largely behind us, which is great. Some of the discounting, there may be some, mostly because we're seeing it more from a competitive landscape, where we've got competitors out there now that are bringing things down and we're gonna, you know, obviously be smart about it, but we're looking at what else we can possibly do there. We don't think it's gonna be a huge drag, but like I said, we're gonna keep looking at it. A couple of things, JP, I'll add. Number one, in terms of the positive ramifications, you know, in traditional retail, retailers sell what placements they have on their floor. You know, our investment in that inventory, among other things, helped us gain, you know, significant placements during kind of the post-pandemic period. I mean, our retail placements went up double digits, largely because I think we serviced our customers better than the competitive set. Jerry went through, you know, some of the adverse ramifications. The other thing I'd share with you is that we've been really disciplined around product lifecycle management. We are constantly cutting slow-moving items. We do not have a long tail in our inventory of obsolete or slow-moving. Yeah, we're doing, you know, surgical discounting on some product where we've got really deep inventory levels. The good news is the inventory of what we have is stuff that sells and the market still wants. That's helpful. Thanks. Can you give us a sense for how much excess inventory exists across the industry? Recognizing that might be a more nuanced question than on its face. Yeah. From a timeframe standpoint, there's probably six months out there. We're thinking it's gonna take at least to the end of this calendar year, maybe into the first part of calendar 2023. Obviously, it really depends what the demand looks like. We will see a lot of changes hopefully here now after Labor Day. People will kinda know. We'll move into market but we're really feeling that by the end of the calendar year, inventory should be in a pretty good place. Okay, great. Moving on. You mentioned a lot of exciting developments slated for fiscal 2023, sleep-oriented living room furniture, parcel size modular furniture. Can you give us a sense of the expected size of those opportunities, either by dollar amount, by magnitude, or relative to your existing business? The second part of this question, which Anthony addressed a little bit, was what type of investment in design, production, distribution, sales, marketing, et cetera, would be required? Yeah, JP, for competitive reasons, you know, I prefer not to share sales forecasts on specific product initiatives. What I can tell you though, all the growth initiatives that I shared earlier, in aggregate, we believe that those will contribute somewhere between $40 million and $50 million dollars incrementally to our core business. Again, a big part of our growth strategy is going after new markets, new consumers, new products. And we've invested fairly heavily around product development here this past year, and I think we'll start to see the fruits here in fiscal year 2023. In terms of the spending, what I will tell you is, you know, we've managed SG&A in a very prudent manner, but all the growth initiatives that I shared are fully funded, both in terms of IP, product development, as well as, marketing to launch those successfully in the market. We are managing within the SG&A guidance that Alejandro gave and still fully supporting those initiatives. All right. You mentioned some sort of value-oriented product lines. How should we understand the effect of those product lines on your consolidated margin profile? Yeah. The margins are similar, if not better. Okay. There's really no cannibalization with the Flexsteel brand because there is such a huge disparity around kind of price points and the quality. This truly is new incremental business for us. Okay, great. Finally, you previously provided long-term performance guidance, including gross margins in, I think, a three year timeframe ranging in the 20%-22% range, and then longer term, which I think you say is five+ years, potentially exceeding that range. Is that guidance along with the other broad parameters you've put around your kind of midterm and long-term performance still intact considering recent developments? What do I tell you, JP? I think the long, long term goals are still intact. I think given the disruption that we've seen here because of economic slowing, because of inflation, the roadmap on how we get from where we're at today to that will probably look different than the view that we had, you know, six, 12 months ago. As, you know, things become more certain, more clear, we'll certainly provide, you know, the investment community our best view on what that roadmap, that new roadmap might look like. Great. Thank you. I appreciate your time. The intent still is to get gross margins, you know, longer term above 20%, certainly. Great. Okay. Thank you. All right. As a reminder, if you would like to ask a question, please press star then one to enter the question queue. The next question comes from Richard Dearnley with Longford Partners. Please go ahead. Good morning. When would you think that the Juarez plant will be up to normal loading or utilization? Right now, you know, we've obviously had to make some, you know, adjustments because of the slowing demand. It's probably something that we won't probably see again till probably fiscal year 2024. We think 2023 is obviously, as we've mentioned, gonna be a rough year. We gradually will see it increase, especially with some of the new stuff that Derek was talking about. We're probably a good 12 months out until we'll have it totally back to where it was. I think in the first quarter, I mean, we're running in the, you know, 50%-60% utilization in terms of maximum capacity. Given our view of how demand will shape here throughout the year, we'd expect to end the year closer to the 80% utilization range. Certainly, if demand picks up, we'll that'll increase. If we see a more sustainable increase in demand, we will then have the option to start up our new Mexicali facility. Right. What's the current outlook for the Mexicali facility starting? You- Yeah. Right now, as Derek kind of alluded to. Yeah. Fiscal year 2024. It is a strategic long-term asset. We are still focused on our long-term growth ambitions, and having that facility and the capacity is an important part of the strategy. In the near term, you know, the asset's gonna be underutilized, but we still feel confident that it's gonna play a really important role in our success in the future. It would seem as though your new growth initiatives for the next three years or so lean less on the old Flexsteel, you know, steel capability, you know, stronger, better implied by the word steel. Am I reading that incorrectly, or is that less important these days? It's still very, very important to us, and our plans are to continue to grow in there. We've still got a lot of product development and a lot of great new launches that are planned there. Really what we are highlighting here are other ways that we're gonna also grow besides there. We're not gonna be downplaying that at all. It's very, very important and the durability and the whole Flexsteel story and where we've come from and how we'll go forward. We have a lot of capabilities in manufacturing, sales, and customers that are looking for other things, and whether that's more modern furniture, whether it's these sleep solutions, whether it's our new brand at lower price points, these are all great ways for us to grow the company. Right. Have you reexamined at all the buyback versus, you know, paying out dividends and/or accumulating cash? Yeah. Go ahead. Yeah. You know, we continue to look at how to give back to our shareholders. At this time, we are not planning to stop the dividend, but we're in continuous conversations with our board on how to maximize shareholder experience. Right now we have always been examining it, but at this time, we're still planning to have the dividend in place. You know, a little bit too, also, you know, we continue to look at, hey, what investments do we need in inventory? What do we need from, like, a manufacturing and distribution center, equipment, et cetera. We obviously look at investments in talent to support not only our current business, but growth. Acquisitions, you know, that could possibly accelerate our growth in the future. With all that, we also look at both the share buyback and dividends and kinda do it in that order. As Alejandro said, we review our dividend all the time. In the near term, there is no intent to reduce the dividend. Okay. Thank you. This concludes our question and answer session. I would like to turn the conference back over to Jerry Dittmer for any closing remarks. Great. Thanks, everyone. In closing, I'd like again to thank all our Flexsteel employees for their outstanding performance and service during the fiscal year and what they're gonna do for us going forward. I'd also like to thank those of you that had questions today and participated in today's call. Thank you for your questions. If you have anything else, please reach out if you have any additional ones, and we look forward to updating you on our next call. Everybody, have a great day. Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.