Flexsteel Industries, ticker symbol FLXS. We are very pleased to have Flexsteel present at our conference today, and it is my pleasure to introduce Derek Schmidt, President and Chief Executive Officer, and Mike Ressler, Chief Financial Officer of the company. The format for today will be a management presentation for the first 20 or so minutes, followed by Q&A. For those of you in the audience, if you do have a question, please type it into the Q&A box at the bottom of your Zoom screen, and I'll read the question out loud after management's prepared remarks. So, with no further delay, Derek, the floor is yours. All right. Thanks, Anthony, and good afternoon, everyone. Before we begin, just to note that there are some forward-looking statements, certainly in this presentation, for you to be aware of, and we reserve the right to certainly change those forward-looking estimates based upon changing business conditions. But I want to start by giving you a high-level overview of the company. Certainly, our strategies, where we're at, where we're going, how we're going to get there, and why we're confident that we can continue to outperform the industry and continue to create value for our shareholders. For those of you who may not be intimately familiar with Flexsteel, we're a 132-year-old company, and we are a top 10 manufacturer in the U.S. Last year, we finished around $413 million of sales. This year, our latest guidance was $427 million-$440 million. We do have what I believe is a unique and advantaged supply chain, and we'll talk more about that. But in terms of where we source our product, it's kind of a balanced mix between 50% sourced globally, you know, outside of North America, and then roughly half we actually manufacture at our own facilities within North America, and we do have seven facilities in the U.S. and Mexico that do comprise our manufacturing and distribution. Ultimately, you know, how we go to market and how we differentiate ourselves is our product value proposition. We're known for superior comfort, quality, durability that's backed by innovation. We do have a competitive advantage that, you know, we go to market both through traditional furniture retailers as well as big box retailers and do business with online marketplaces. It's really that breadth that it's the brand power, it's the breadth of our sales distribution, and I think it's an advantage product differentiation that continues to make us successful. I'm going to describe our business in multiple views, and I'll start with product. We are a whole-home solution provider, but if you look at where primarily our sales are derived from, it's in the primary living spaces like the living room. Almost 83% of our sales come from that space in the home. That said, our brand has power. We're going to continue to grow and gain share within the living room, but we believe we've got a huge growth opportunity to penetrate other relevant spaces in the house. That spans everything from bedroom, dining, outdoor, and some of the other areas that we'll talk about on this slide. If you look at how we go to market, while Flexsteel is certainly the most well-known brand that we carry, we do go to market through multiple brands, and the idea here is that these brands, these unique brands and sub-brands are positioned or tuned and tailored to specific needs of various consumer segments, so the Flexsteel brand is our premium brand that's really, again, like I said, known for comfort, quality, durability, backed by innovation, and is premium priced because of that differentiation. We have a couple of sub-brands. Flex is a new brand that really is catered to younger consumers. It's modular, reconfigurable, and so appeals to those individuals who, I mean, they may be expanding in their life, going from an apartment to a first home, etc., and will expand upon our innovation with that product. The other sub-brand under Flexsteel is a product called Zecliner, and it's really a product that was completely designed to sleep in comfortably eight hours a night, and will describe the consumer need and how we're meeting that need better than the other solutions in the market. Then we've also launched another brand called Charisma here in the last two years, and Charisma was really meant to appeal to younger consumers as well. So it's lower priced, certainly than Flexsteel. It has a little bit more modern, contemporary look, but again, it's differentiated versus other alternatives at that price point because of its comfort, quality, and durability. And then the last brand in our portfolio is Homestyles. That is ready-to-assemble furniture, largely sold online, Amazon, Wayfair, HomeDepot.com, and the like. So that's our brand portfolio. Then you look at how we go to market through sales distribution. You can see that we've got some unique channels. By far, the largest channel is independent furniture retail. That comprises, you know, 82%-86% of our sales. It's core to us. It involves, you know, 1,400 different retailers, 2,700 different stores, you know, fronts across the U.S., and so we've got really good geographical distribution. At the same time, we know that furniture, you can purchase furniture in a lot of different places, so we do have a strong history with retailers like Amazon, Wayfair that originated certainly from our brand, Homestyles, but we are migrating and expanding what we sell through those platforms, including our Charisma brand and our Flexsteel brand. The big box channel is growing in terms of relevancy to overall furniture, and we are starting to expand our relationships in that channel. We started a relationship with Costco about a year and a half ago, and we continue to nurture other, I think, attractive retailers in that space, and then lastly, direct-to-consumer, we do have two sites, the Flexsteelstore.com and Homestylesfurniture.com, that we sell directly to consumers. It comprises a very small portion of our sales, but it is a capability that we want to continue to evolve and grow long-term. Our operations, as I suggested earlier, include seven different locations. You see the light green here is where our distribution centers are. We also have pool points in the northwest, southwest, as well as the southeast, so we can efficiently and effectively service customers throughout the U.S. Our manufacturing is concentrated in Mexico. We currently have three plants in Juarez, which is across the border from El Paso, that are producing products. And we do have another facility in Mexicali, which we're currently subleasing, but it is there as a strategic asset to support long-term growth in our manufactured business. From a global sourcing perspective, today, we largely source from Vietnam, but also have a small portion. I would say our exposure to China is less than 5% as it currently stands today. And then we do Thailand, Indonesia, and we continue to expand and look for new sources not only throughout Asia, but you can see on the right-hand side in other areas such as Europe. This is, I think, particularly relevant as, you know, we start to prepare for potential tariff risks and how we make sure that our supply chain is agile and resilient to react to that risk if it does become reality. I mentioned earlier our differentiation, simply said, it's compelling designs with superior quality, comfort, and durability. And there is an origin story around how that comfort, quality, and durability is derived, and it comes from innovation that we believe is unique to the Flexsteel brand. For those of you familiar with Flexsteel, our legacy innovation is our Blue Steel Spring, and it tells a really powerful story around why our product is stronger, better quality, more comfortable. And it's a story that our retail sales associates tell really, really well at the retail level to drive consumer demand towards our products. We also have some other recent examples of where we've differentiated with our Flex product and our Zecliner product, and I'll expand to those when I talk about innovation here momentarily. So innovation, it is an important aspect of our business model. We know that competitors, we've got a target on our back. Our competitors are knocking off our product, and we have to continue to innovate and continue to stay ahead of the competition and meaningfully differentiate our value to consumers vis-à-vis kind of the competitive set. So a couple of examples of recent innovation. I mentioned this product called Flex. As you can see, it's a modular product that can be reconfigured in a very broad set of configurations. It has proprietary intellectual property around the assembly process, which is significantly easier than the competition. We've got performance fabrics. We've got a sustainability story that appeals to this target consumer. And then most recently, we came out with a set of what we call hubs that really allow and bring different functionality. It's everything from a storage hub to an integrated pet bed, and we're going to continue to kind of innovate around the hubs, but we believe that we've got a really compelling product compared to the competition, and we're going to continue to innovate in this area. The other example I mentioned is Zecliner. So we did a bunch of consumer research and found that 7% of U.S. adults do not regularly sleep in their bed at night. And that could be due to a host of factors, everything from sleep apnea to acid reflux to, you know, snoring, and you get kicked out of bed by your spouse or, you know, health ailments. And so where do people typically sleep outside the bed? They sleep in their recliner or sofa, which was never designed to sleep comfortably for eight hours a night. And so Zecliner was really designed and developed with this specific need in mind. And we really understood, again, the pressure points where people sleep in and how to configure the materials and the functionality to address kind of these sleep needs. And we've done independent kind of research and studies on our product versus the current alternatives, and the results are compelling. People do sleep better in our product, and we're seeing great momentum and great results in terms of growth with the Zecliner product. And we'll continue to expand this lineup and innovate going forward as well. So now I'm going to turn it over to Mike, and he's going to walk through kind of the investment thesis and the key components. Thanks, Derek. Yeah, there are five, excuse me, five key components to the thesis, and I'll touch on all five of those. Number one, there is a compelling long-term industry outlook. Second, you know, we feel good about the promising growth prospects that we have at Flexsteel, including market expansion. Third, sizable operating margin expansion potential of the business, strong cash flow generation, and then disciplined capital allocation. So when looking at, you know, the industry outlook long-term, while the conditions remain, you know, challenged near-term, largely due to a shift in the consumer spending towards experiences and away from things that we experienced, you know, during the pandemic, from a longer-term view, you know, we're very bullish on the prospects for industry growth due to three factors. Number one, we expect that there's the significant demographic change and purchasing power shift to millennials and Gen Zs will continue to drive substantial churn and demand for furniture well into the future. Second, the domestic state-to-state migration that accelerated during the pandemic is expected to continue due to broad adoption of remote working, and when people move, it creates a furniture purchase event. Similarly, housing production has not kept pace with population growth and new household formation, so strong demand for new housing will remain robust for many, many years, which will drive demand for new furniture. While we expect the industry to grow long-term, we're more excited about the opportunities for Flexsteel to gain share and penetrate into our core markets, but then also penetrate into new markets, and at a high level, our growth priorities are threefold. First, we intend to continue to gain share in the core markets where we compete today by leveraging and strengthening our market leadership, aligning ourselves with the strongest distribution partners, and continually developing fresh, on-trend, and compelling new products. Second, as Derek highlighted in his overview, we have multiple pathways to expand into newer markets. We're transforming our brand portfolio to reach younger consumers. We're rapidly expanding our sales distribution into big box and leading retailers, and we intend to grow in major product categories where we are under-penetrated but have a right to win today. And at the same time, we're investing in key capabilities such as consumer research, innovation, marketing, and brand awareness. All of those are critical enablers to accelerate our growth in both our core and new markets. I'll just explain what gives us confidence in gaining share and expanding our market stems from our current performance. So from a top-line perspective, we're winning in a challenging environment because of the growth strategies I just outlined. If you look at the chart on the left, you can see home furnishings retail sales have seen sizable year-over-year declines for several months. If you look at the chart on the right, despite the challenging conditions, which we expect to continue near-term, we delivered four consecutive quarters of year-over-year growth with 9.9% growth reported in our most recent quarter, which ended on September 30th of 2024. In addition, we just provided growth forecast for our second quarter ended December 31st of 3%-7% and full-year growth of 3.5%-6.5%. What we're equally encouraged about is the margin expansion potential of the business. We more than doubled our operating margin in fiscal 2024 and expect continued expansion for fiscal 2025. The three margin improvement drivers include number one, we've got strong leaders over manufacturing, logistics, global sourcing, and their teams are executing well and driving sizable savings, and we feel that that momentum is sustainable and critical to offsetting inflation. Secondly, we raised the margin hurdle rate for new products above our current portfolio average, so as new products make up a larger and larger portion of our overall sales, we expect company margins to improve, and lastly, we expect to realize operating leverage as we grow sales as we have adequate capacity and resources to support our growth without significant investment and additive fixed costs. Another attractive aspect of our business is the capital requirements are relatively low, so for example, capital expenditures run roughly 1% of sales on an annualized basis. So we expect to generate strong free cash flow so we can reinvest into the business for growth, including acquisitions, or we will return cash to shareholders through both dividends and share buybacks. We do have a demonstrated history of capital allocation. So over the past five years, we've returned almost $92 million to shareholders. And as we think about our capital allocation priorities, we expect to reinvest, you know, roughly 70% of our operating cash back into the business to accelerate our growth, but only if we have confidence in delivering an ROI above our cost of capital. Otherwise, we'll continue to look to return capital to shareholders in a similar manner as we've done in the past. Looking longer-term, we feel confident in our strategies and our ability to grow, increase, you know, sales leverage, ongoing cost savings initiatives, disciplined product portfolio management are key levers to continue to improve profitability and generate strong cash flow. Future at Flexsteel is really exciting. We've got a lot of positive momentum and aggressive agenda of sales and profit growth, and we got a really experienced leadership team that's having fun and committed to winning, so in closing, we appreciate your time, and we'll open the call up to questions. Thank you. Thanks very much, Derek and Mike, for sharing the Flexsteel story. So as a quick reminder for those in the audience, if you do have a question, please type it into the Q&A box at the bottom of your Zoom screen. I'll read the questions out loud. So yeah, we do have a couple of questions here already. I guess, you know, with the change in leadership in Washington, top of mind here are potential tariffs. I know you touched on a little bit as far as your production in Mexico. What can you share with us today as far as what your outlook is as far as how the impact would be on your business? Yeah, I think maybe I'll speak to, you know, the broader uncertainty around policy changes in general with the new administration. And there's really, it falls into two buckets. One is when you think about some of the proposed policy changes around taxes, regulation, trade, immigration, you know, all those individually or collectively could have inflationary impacts. When, with renewed inflation comes two things. One, more pressure on consumer spending. And two, probably a postponement of a U.S. housing recovery that is somewhat dependent on mortgage rates coming down. So again, that's the uncertainty around that we're watching. The second one is specifically tariffs. And the overall U.S. furniture industry still imports a substantial amount of product from outside the U.S. As it relates to Flexsteel specifically, you saw from the slides, our two main exposure points are Vietnam and Mexico. In Mexico, there was a question: would tariffs impact, you know, Mexico? For Flexsteel, absolutely. So, roughly, about today, 40% of our sales are supported through Mexico production. What I will tell, you know, the participants on the line is that we've been discussing and preparing certainly for a major event around tariffs for several months. And those strategies really combine or fall into two different buckets. One, we continue to identify new sources of supply outside of Vietnam and Mexico that have lower tariff exposure that we could potentially move our supply to if meaningful tariffs were hit on either of those countries. The second strategy that we're taking is we're broadening the number of products in our portfolio that could be dual source from multiple countries. So again, if something happens in, say, Vietnam but not Mexico, we could bring more into Mexico or vice versa. Something happens to Mexico but not Vietnam, again, we could source more from that. So we are trying to position the company to be as agile and as resilient as possible. Obviously, if tariffs hit on February 1st, it's not an easy task to completely reconfigure your global supply chain, but I believe that we're as prepared as anybody in terms of our competitive set to react to a changing reality. Right, so just switching gears, so when you look at your, you know, just overall product portfolio, obviously you're still very much focused on the living room space, you know, so how are you looking to develop products for the bedroom, for the dining room? Do you have a specific timeframe as to, you know, when you want to get those to be meaningful contributors to your profitability, and, you know, how do you think you could do this internally, or do you need to do, you know, more, you know, in terms of, you know, outside sourcing? Yeah, I think the answer to all those questions is yes. So in terms of expanding beyond the living room, we're already pursuing multiple strategies currently. In the last year, we've actually launched a fairly expansive lineup of dining room furniture, bedroom furniture, occasional furniture. The response from the market has been overwhelmingly positive, and we are just now starting to see, you know, sales of some of those new products kind of pick up. So I'm encouraged by the market feedback and believe that we have to continue to drive new product development in those areas. And as we do that, case goods, you know, in general, that's what we call bedroom dining and occasional will become a much more meaningful part of our business. I talked about Zecliner, and we classify Zecliner really as health and wellness. It's the start of, you know, I think more expansive new product launches in that area. So that's going to be more meaningful for us. We've dabbled in outdoor. It is a different channel for us. We may need to do an acquisition to gain a meaningful foothold, I think, in that market. But near-term, health and wellness and probably bedroom dining, we're definitely making significant progress. So you talked about new products having higher margins. Now, can you talk to as far as, you know, how much of your revenue, broadly speaking, how much of that is coming from new products? And do you have a goal in mind as to, like, how much of your revenue you want to drive from new products? Yeah. So, you know, our goal has been products that are launched in the last three years should comprise at least 40% of our sales. What I can tell you is it varies by category, but we've got one of our largest categories that today, 70% of our sales come from products launched in the last three years. And there was a question I hear, you know, what separates you from our competition and why are we growing when others aren't? I think it is a combination of we've been very aggressive around new product introductions that are resonating well. We are pushing innovation, and we are pushing the limits in terms of enhancing our value proposition, especially to our largest, most strategic customers. And again, we're creating more value for them than the competitive set it is. Right. So just thinking about the industry, so, you know, it's been almost five years since COVID first started, you know, and, you know, the bulk of your sales come from upholstered furniture. So just maybe talk about, like, what you've seen historically as far as just the, you know, replacement cycle, and are we close to an inflection point there? You know, just, you know, what are your thoughts on the, you know, on that subject? Yeah. Typically, when it comes to soft seating, whether it's, you know, motion or stationary upholstered, it's probably a five-to-seven-year life. Now, as all of us remember, when the pandemic hit, it spurred spending on household goods of all types, including furniture. So there is a potential thesis there, Anthony, that, hey, there's a whole bunch of people that bought furniture during the pandemic. It was difficult to get your hands on furniture. And so a lot of people bought probably lower quality furniture because that's all they could get. And there is a replenishment cycle. So I think there's some validity to the fact that we may be coming up on, you know, turnover. The big driver of industry demand that I think will be unleashed at some point here in the next two-to-three years is the housing recovery. When people move, their spaces are different, and they tend to replace their furniture. I think it may be challenging to see a housing recovery in 2025, potentially due to inflation and higher interest rates. But at some point, I think in the next several years, supply demand has to reach some form of equilibrium. There's just so much pent-up demand. So the question there is really timing and magnitude, but that will be a larger kind of macro driver for the industry at some point in the next two to three years, in my opinion. Gotcha. All right. And then, you know, thinking about your go-to-market strategy, you know, how do you think your sales channels of distribution will change over time? And do you see a notable margin difference between the different sales channels? Yeah, I think, I mean, our, so if you go back to the slide that we shared that showed today, hey, 82%-86% of our sales are in independent retail. Another, I think it was 6%-8% in e-tail, another 6% in big box. I think there are absolutely over the next 5-10 years will be a shift to get to a more balanced perspective between those three channels. That said, the independent retail channel is extremely important to us. It's profitable. It's where we continue to thrive. So we are not by any means moving away from the independent retail channel. We are investing, and we intend on growing. But I think the opportunity for us is to get our fair share of these other sales distribution channels where we haven't participated in the past, where we know that consumers are going to buy furniture. That makes a lot of sense. So it looks like we're pretty much out of time here. It was, you know, great to speak with you guys. And thanks for all the questions that came in through the chat box here. So with that, we'll wrap it up, and I hope everyone enjoys a productive conference here. Thanks very much. All right. Thanks, Anthony, and appreciate everyone's consideration and time. All right. Thank you, guys. Take care. Thank you. Bye.