Ladies and gentlemen, thank you for standing by. Welcome to the Hooker Furnishings Corporation First Quarter 2024 Earnings Webcast. At this time, all participants are on the listen- only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automatic message advising your hand is raised. Please be advised that today's conference is being recorded. I will now hand the conference over to your speaker host, Sir Paul Huckfeldt, Chief Financial Officer. Please go ahead, sir. Thank you, Lydia. Good morning, and welcome to our quarterly conference call to review our financial results for our fiscal 2024 first quarter, which ended on April 30, 2023. Joining me this morning is Jeremy Hoff, our Chief Executive Officer. We appreciate your participation this morning. During our call, we may make forward-looking statements which are subject to risks and uncertainties. A discussion of factors that could cause our actual results to differ materially from management's expectations is contained in our press release and SEC filing announcing our fiscal 2024 first quarter results. Any forward-looking statement speaks only as of today, and we undertake no obligation to update or revise any forward-looking statement to reflect events or circumstances after today's call. This morning, we reported consolidated net sales for the fiscal 2024 first quarter of $121.8 million, a decrease of $25.5 million, or 17% compared to last year's first quarter. The revenue decline was driven by a $20 million sales decrease in the Home Meridian segment due to lower sales with major furniture chains and mass merchants, and to a lesser extent, a 15% decrease in Domestic Upholstery after 2 years of sales growth in this segment. Net sales in the Hooker Branded segment remained relatively flat compared to the prior year. Consolidated net income was $1.5 million, or $0.13 per diluted share this quarter, compared to $3.2 million, or $0.26 per diluted share in the prior year period. Now I'll turn the call over to Jeremy to comment on our fiscal 2024 first quarter results. Thank you, Paul. Good morning, everyone. On our call today, we'll discuss our quarterly results and several of our long-term strategic initiatives, which are positioned to begin delivering organic growth. Considering the softer retail environment, economic uncertainties, and our recent exit from the Accentrics Home line, we're pleased to have exceeded external expectations for sales and earnings during the quarter. Our liquidation of ACH inventories and other obsolete inventories at HMI is about 80% complete, which is helping us reduce our domestic warehousing footprint and make progress towards getting profitability back on track at HMI. This quarter, we were able to strengthen our balance sheet. We generated about $22 million in cash from operating activities, which contributed to a $12 million increase in our cash position for the quarter and funded $4.3 million in share repurchases, along with our typical cash requirements. As we moved into May and now June, we are continuing to build cash and further reduce inventories. As of yesterday, we have generated almost $16 million more in cash since the end of our first quarter, bringing our cash balance to $46 million. Inventory levels decreased by $23 million during the quarter, well on our way towards our goal of reducing inventories by $30 million before fiscal year-end. Our new Hooker Legacy Showroom grand opening at the April High Point Market met our expectations as we nearly doubled our attendance from a year ago, attracting new customers and providing a much more meaningful presentation of our legacy brands and the launch of our new brand, M. Many of our strategic organic growth initiatives that will enable us to increase our share of total addressable market and visibility are tied to the new showroom and the Hooker Legacy Brands. One of those strategic growth initiatives, the High Point Market launch of M, domestically produced upholstery and imported occasional furniture brand, surpassed our expectations. This new brand, combining the unique capabilities of HF Custom, Shenandoah, Bradington-Young, and Hooker Casegoods, will enable us to compete in a modern lifestyle aesthetic without disrupting any of those core businesses. Retailers affirmed to us that the new M brand is very much on point with the up-and-coming casual, modern lifestyle that today's younger consumer is gravitating towards. The rebranding of Sam Moore to HF Custom at the Spring High Point Market came at an ideal time, as the timing allowed us to elevate the look of the product with new cover treatments and silhouettes and unveil the brand within a highly updated presentation in Showplace. Just prior to the April High Point Market, we completed the transition to a new ERP system for our outdoor furnishings line, Sunset West. In addition, we completed our positioning of the brand for East Coast distribution by stocking the line both in its current West Coast warehouse and now adding Sunset West inventory to our East Coast Savannah warehouse. At the Spring High Point Market, Sunset West debuted its first comprehensive display in our industry's major East Coast market. We believe that Sunset West's expansion to a national distribution offers a double-digit organic growth opportunity over multiple years. In April, we announced that Hooker Furnishings and leading lifestyle and entertainment company, Scott Brothers Global, have renewed the multi-year licensing agreement, which HMI's Pulaski and Samuel Lawrence Furniture divisions serve as the exclusive bedroom, dining, and occasional furniture suppliers for the Drew & Jonathan Home brand. At the High Point Market, HMI introduced a 26-piece Drew and Jonathan collection in a California casual to further expand the product line. After initial delay due to the pandemic, the Drew & Jonathan Home line now has the retail placements and demand momentum benefiting shipments in the short and long term. Our transition to a new, leaner business model at HMI will continue into this year as we move away from higher risk businesses to focus on our core strength and businesses. Pulaski Furniture, Samuel Lawrence Furniture, Samuel Lawrence Hospitality, and Prime Resources International, we believe are still on track to achieve profitability in this segment by the end of the fiscal year. Importantly, the HMI team is focused on our core competencies as we direct our support and resources behind our key businesses while reducing costs. I want to turn the discussion over to Paul, who will discuss highlights in each of our segments. Thanks, Jeremy. Beginning with our Hooker Branded segment, net sales remained relatively unchanged, decreasing slightly by 0.8% or $339,000 compared to the prior year first quarter. Gross profit and gross margin remained relatively flat as well. Net sales were negatively impacted by higher discounting compared to abnormally low levels of discounting in the prior year period. While we benefited from price increases implemented in the prior year to mitigate product cost inflation, discounting increased by 230 basis points from the prior year due to somewhat softer demand in the current quarter. Higher demurrage and drayage expenses, which heavily impacted the gross margin in previous quarters, were still higher than prior year first quarter, are trending down. At the end of the first quarter, Hooker Branded inventory levels decreased by $14 million compared to the fiscal 2023 year-end. Inventories are still elevated at quarter-end and are higher than pre-pandemic levels in calendar 2019. We continue to work to align our inventory levels with current demand. We're pleased that our inventory management process is working well, so we're in stock on most best-selling items, and inventory obsolescence has not been an issue. Quarter-end backlog for Hooker Branded was lower than the prior year first quarter-end, but remained 50% higher than pre-pandemic levels. Incoming orders decreased by about 16% compared to the prior year quarter, and approached levels similar to fiscal 2020 first quarter, reflecting more normalized post-pandemic demands. Turning to the Home Meridian segment, as Jeremy Hoff noted, the sales decrease was better than our expectations, and the operating loss of $2.1 million was a $1 million-dollar improvement compared to the prior year first quarter. Net sales at HMI decreased by $20 million, or 32% compared to the prior year first quarter, driven by sales decreases with some major furniture chains and mass merchants in a slower retail environment for firms. Other factors contributing to the lower sale include delayed orders from retail customers as they continue to reduce their inventory, and the absence of the clubs and ACH sales businesses since we've exited those divisions. Inventories decreased $9 million from the end of the fiscal 2023 due to the liquidation of obsolete inventories and our efforts to align inventory levels with current demand. On an encouraging note, SLH, our hospitality division's net sales, more than doubled compared to the prior year first quarter, indicating a strong recovery in the hospitality industry after the COVID pandemic. Freight costs have improved due to the stabilization of ocean freight rates. Incoming orders and quarter-end backlog at HMI were lower than the prior year quarter and fiscal 2020 first quarter due to the absence of orders from the clubs channel, which HMI exited during fiscal 2022, and the ACH business, as well as decreased incoming orders from retail customers. In the Domestic Upholstery segment, we experienced the first quarterly sales decline in over two years, after 10 consecutive quarters of year-over-year sales increases. Sales decreased by $6 million, or about 15% compared to prior to last year's first quarter. Sales reductions at HF Custom, Sunset West, and Shenandoah were partially offset by increased net sales at Bradington-Young. Sales decreases at Sunset West are attributed to non-recurring factors, including slowed shipments in February and March, caused by the December conversion to our new ERP system, as well as the expansion of the outdoor brand to our East Coast warehouse, which involved transition costs and startup delays at the Georgia distribution center. These issues were largely resolved by the end of the quarter. We believe that much of the domestic inventory sales dip was driven by the fact that we worked through our large backlogs in these divisions and then experienced somewhat softer demand, which we don't think is a long-term situation. Despite the sales decline and disruption, Domestic Upholstery segment reported operating income of $1.3 million and an operating margin of 3.8%. Quarter-end backlog for Bradington-Young remained three times higher than pre-pandemic levels at the fiscal 2020 first quarter year-end. Backlogs at HF Custom and Shenandoah decreased to levels similar to fiscal 2020. Incoming orders at Bradington-Young and Shenandoah were at similar levels to fiscal 2020, while HF Custom experienced lower orders compared to that period. While it represents a smaller part of our overall business, all other, which includes our H Contract Senior Living Furniture division, contributed a $1.1 million sales increase. Turning now to cash, debt, inventory, and capital allocation. Cash and cash equivalents stood at $31 million at the end of the fiscal 2024 first quarter, an increase of $12 million from the prior year- end. As Jeremy reported earlier, we generated $22 million of cash from operations in the quarter, which we used to fund $4.3 million of share repurchases, 4.5 million of capital expenditures, including investments in our new showroom and our new ERP system, and $2.4 million in cash dividends to our shareholders, which also helped bolster our cash position. We're pleased with the progress we've made reducing inventories, which is a large part of the cash we generated. The repurchase programs announcement around this time last year, we've returned approximately $20 million to our shareholders and retired just under 1.2 million shares. Earlier this week, our board approved an additional $5 million authorization as part of our capital allocation plan for the year. In addition to continuing to execute with the share repurchase plan, our capital allocation priorities for the year include building cash reserves, funding the organic growth initiatives Jeremy noted earlier, continuing our 54-year streak of paying a dividend, and funding our typical capital expenditure requirements. In addition to our cash balance, we have an aggregate $27.2 million available under our existing revolver at year-end to fund other working capital needs, should that become necessary. We believe that our liquidity and capital requirements will be further improved through the liquidation sales of the remaining excess HMI inventories. I'll turn the discussion back to Jeremy for his outlook. Thank you, Paul. While retail conditions remain mixed, along with some economic uncertainties, we have begun to see more positive trends for consolidated incoming orders in May, and that is holding up so far in June. We believe the industry is getting through some of the elevated inventory challenges, and we may be seeing some breakthrough in that area. Following our successful new showroom grand opening at the Spring High Point Market, Hooker Furnishings will continue initiatives to enhance visibility and addressable market reach this summer, debuting a new showroom at the Atlanta Market for Hooker Legacy Brands. In addition to opening the new showroom for Legacy Brands, Sunset West also will debut a new showroom at the Atlanta Market, which is the new sponsor of the casual market for outdoor furniture, relocating from Chicago. Hooker Legacy Brands will show at its fourth Las Vegas Mat this summer as well. At HMI, we expect the previously announced inventory liquidations to be substantially completed by the end of fiscal 2024 second quarter. While we expect some short-term volatility in sales and earnings at HMI, we continue to expect the segment to achieve quarterly profitability by the end of the 2024 fiscal year. The Hooker Furnishings team continues to focus on organic growth opportunities through expanded visibility, strategic product development, operational improvements, and cost reductions. By focusing on these controllables, we will be in the strongest position possible as the demand environment continues to improve. This ends the formal part of our discussion, and at this time, I will turn the call back over to our operator, Lydia, for questions. Certainly. Ladies and gentlemen, to ask a question, you will need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q & A roster. Our first question, coming from the line of Anthony Lebiedzinski with Sidoti & Company. Good morning, thank you for taking the questions. First, just, you know, a couple of questions on the quarter, then on your outlook. As far as for the quarter, I know you'll have some of this information in your 10-Q, but can you just first comment on unit volumes versus pricing? I know you guys talked about the, you know, discounting, just wondering about, you know, just volumes in general versus pricing. I'm gonna pull up our draft of the Q, if you wanna continue another question. Let's go back to that instead of a guess. Here we go. Sure. Yeah, no problem. Okay. Yeah. You know, Oh, you got it? Okay. I've got it. For Hooker, unit volume is down about 6%, ASP is up about 8%. For HMI, unit volume is down 10%. Mm-hmm. Upholstery unit volume is down about 25%, and ASP is up 13%. Gotcha. Okay. Yeah, we. All right. Unit decrease overall. Mm-hmm. Not out a lot. Got it. Okay. You know, just, you know, it was nice to see overall gross margin increase of nearly 3 percentage points on a consolidated basis. I know you guys talked about, you know, the discounting as well as higher demurrage costs, but obviously, you know, we have lower ocean freight costs as well. Kind of, you know, can you just talk about the various puts and takes as to what drove the gross margin increase? Good morning, Anthony. You know, really, we're starting to experience costs just continually starting to come down versus what we were experiencing, you know, during the pandemic. As far as the discount in line, we're really getting back to a little more normalized discount line. We went to an unusual, very low or almost zero discount line during the pandemic for obvious reasons, you know, with all the supply chain challenges and everything that was going on, and the demand at the level that we saw. It changed, you know, our entire approach, and I think the industry's approach from a discount standpoint. Paul, do you want to add to some of the other? Domestic Upholstery, you know, despite the sales decline, domestic upholstery was more efficient. We've seen price, you know, price increases have taken effect. You know, for during the pandemic, we didn't even as prices were increasing pretty dramatically, we didn't raise prices on backlog. You know, our new price lists have come into effect, and that's all helped. You know, I think the strategic decision was made not to raise prices on existing backlog. It took a long time to cycle through because the backlogs were so big. Lastly, we've eliminated a lot of surprises we were experiencing on the HMI side of our business, is what obviously affected our overall gross margin negatively when we were going through that. Got you. Okay, all right. It's good to see some better predictability with HMI. As far as HMI, so I know you guys talked about the reducing the warehousing footprint. Where are you guys with that, you know, as of today, and kind of where do you think you'll be by the end of the fiscal year with that initiative? On Savannah, as we continue to. We're, like we said, we're 80% of the way through, you know, getting out of the products we're trying to get out of. As we do that, the requirement for the footprint in Savannah goes to, much less than we needed before. We've already made arrangements to hand over 200,000 of the million sq. ft. that will happen July first of this year, this fiscal year. We're working on, you know, some other plans that our goal would be to get that down to 500,000, we're hoping by fiscal year-end. If it's not, then it would be shortly after. That's our focus, and all the other cost reduction activities that we talked about are on track for this fiscal year to, again, return HMI to profitable quarterly profitability by the end of fiscal year. Got it. Yeah, thanks, Jeremy. Do you guys have the consolidated backlog number by any chance handy? Yes. Consolidated backlog right now is, or at the end of the quarter, was at $87 million. Got it. Okay. I know you touched on this a little bit on your last call in April, but as far as, you know, Sunset West, that was impacted by the ERP system rollout, I believe you had said it was a couple million dollars, but just correct me if I'm wrong. You know, overall, where do you stand with the ERP rollout? You know, I know it's a work in progress, but could there be potential other issues with other brands as you go through this process? First, your number was close on the Sunset West, what we refer to as far as the disruption. They're pretty much through that at this point, and they're through a lot of the transition of creating the East Coast distribution for them as well. It's going really well. We're optimistic about Sunset West for the rest of the year. Regarding the ERP for the rest of the company, we have a go- live date in early July for our Hooker Legacy portion of our business. We feel very good about it. One reason we candidly did Sunset West first, is we wanted to make sure a lot of those systems that we were needing to work for the rest of the company would work the way we thought they would work. We did, you know, a test on one of our smaller parts of our company, which, you know, we saw the issues and we're able to fix them, but we're aware of those going into the larger go- live. We feel confident and feel good about where we're headed with our ERP system. If we don't, we won't. Got it. Okay. Mm-hmm. Yeah, that's another good point. We track it weekly, where we are with any issues, and there's a lot of visibility, and we will not go- live if we see a disruption that's going to be negative for our company. That's great to hear. Can you also share some more details about the higher incoming orders that you saw in the month of May? Just curious as to what you heard from retailers about the important Memorial Day weekend? Yeah. It's actually really encouraging, I think, really, for our industry. The order rates have consistently been better, you know, as the second quarter has started, we've seen really good, you know, order trends. Really, if you look at throughout our brands, it's somewhat across the board. If you look at HMI, their order rate's been up. If you look at the Hooker Legacy Brands, their order rate's been up, then Sunset's seeing the same thing. It, you know, Memorial Day, feedback from a lot of our partners was positive. You know, if you think back to pre-pandemic, many times our industry was not that happy before Memorial Day from an order rate standpoint. I think all of us, you know, kind of saw a similar trend recently, and then Memorial Day hits and, you know, so we seem to be in a more normalized cycle from what we used to be in. Got it. That's great to hear. Well, thank you very much, and best of luck. Yeah. Thank you, Anthony. Thank you. As a reminder, to ask a question, please press star one. Our next question coming from the line of Barry Haimes with Sage Asset Management. Your line is open. Thanks so much, good quarter. I had a question, one on Sunset West. As you go to the national distribution, did they have an inventory build that would either help your overhead absorption or your revenue, you know, either this quarter or next quarter? Just, you know, a little help on how that works. How seasonal are their orders? Are we kind of past the season there for them and the bigger benefit would be next year? Maybe just a little feel for the seasonality on their business. Last question, you just mentioned orders being better. I presume that's sequentially, and is it still down year-over-year, or are we talking better year-over-year as well? Thanks. Good morning. I'm gonna start with the cyclical nature of outdoor. That's become less and less the case in that category. It's more of a year round than it's ever been before. Really, you asked about the in-inventory build. I mean, we obviously had some build on the East Coast to be able to supply those customers. We do see a big opportunity for growth at Sunset because, you know, all of a sudden, the distribution that we're gaining east versus just being more of a West Coast-centric company, gives us a lot of opportunity, really in pretty major revenue portions of the country that we can take advantage of, so. The other part of your question, Paul, do you want to answer that on the orders? The improvement is year-over-year. Got it. Okay, thank you. Thank you. Thank you. Our next question, coming from the line of John Deysher with Pinnacle Value Fund. Your line is open. Hi, good morning. Thanks for taking my question. On the inventory reduction, I would guess that was sold at a loss, I think. Could you put a number on that? In other words, without the inventory reduction, how much higher would the gross profit have been for the quarter? I've, you know, we took that big charge at the end of Q4, last, at the end of the last fiscal year, that $24 million charge. Okay. The impact of actually selling that stuff off was nominal. You know, we reserved against it, and then we took the reserves back, so there was not much impact to that. Okay, no impact. What were the orders for the first quarter? Orders were $111 million. Sorry, 111? $111, compared to $81 last year. Okay, good. That's going in the right direction. Finally, what would be the CapEx budget for this fiscal year? About $6 million. $6 million for the year? Okay, great. Thank you very much. Thank you. Thanks. Thank you. I'm not showing any further questions on the queue at this time. I will now turn the call back over to Mr. Jeremy Hoff. I would like to thank everyone on the call for their interest in Hooker Furnishings. We look forward to sharing our fiscal 2024 second quarter results in September. Take care. Ladies and gentlemen, that does end our conference call today. Thank you for your participation. You may now disconnect.