Good day, and thank you for standing by. Welcome to the Hooker Furnishings Second Quarter 2024 Earnings Webcast. At this time, all participants are in listen-only mode. After the speaker's presentation, there'll be a Q&A session. To ask a question during this session, you'll need to press star one one on your telephone. You will then hear an automated message advising you that your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Paul Huckfeldt, Chief Financial Officer. Please go ahead. Thanks, Catherine. Good morning, and welcome to our quarterly conference call to review our financial results for the fiscal 2024 second quarter, which began May 1st and ended on July 30th, 2023. Joining me this morning is Jeremy Hoff, our Chief Executive Officer. We certainly appreciate your participation today. 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 second quarter results. Any forward-looking statement speaks only as of today, and we undertake no obligation to update or revise any forward-looking statements to reflect events or circumstances after today's call. This morning, we reported consolidated net sales for the fiscal 2024 second quarter of $97.8 million, a decrease of $55 million or 36% as compared to last year's second quarter, driven by industry-wide weak demand for home furnishings and the planned exit of unprofitable operations within our Home Meridian segment. Net sales decreased by $30 million in the Home Meridian segment and $18 million in our Hooker Branded segment, as well as $7.4 million in the Domestic Upholstery segment. Consolidated net income was $785,000, or $0.07 per diluted share for the quarter, compared to $5.5 million, or $0.46 per diluted share in the prior year period. For the fiscal 2024 first half, consolidated net sales were $219 million, down $80 million, or 26.8% compared to last year's first half. Consolidated net income was $2.2 million, or $0.20 per diluted share, compared to $8.7 million or $0.73 per diluted share in the prior year six-month period. Now I'll turn the call over to Jeremy to comment on our fiscal 2024 second quarter results. Thank you, Paul, and good morning, everyone. On our call today, we'll discuss second quarter and first half results. In addition, we will report on our progress in strengthening our financial position in this challenging environment and strategically deploying capital and other resources to invest in future growth and higher visibility with potential customers. We believe the current industry-wide softer demand is driven by retailers continuing to sell through over-inventory positions and a glut of heavily discounted home furnishings in the market. In addition, the year-over-year comparisons reflect our exit from the higher-risk, unprofitable operations in the Home Meridian segment. We are encouraged that incoming orders have trended higher each month through the summer compared to prior year, and consolidated orders are up by double digits versus a year ago. During the quarter, we bolstered our financial position, generating over $51 million in cash from operations and ending the quarter with cash and cash equivalents of $50 million. Additionally, we reduced inventory levels by $70 million from a year ago and completed most of our targeted liquidation sales of the Home Meridian segment's discontinued inventories. The quality of our inventories is much better than it was at the end of last year and is aligned with expected demand. In addition, our investments focused on building a larger customer base are working. For example, the collective impact of our new showrooms in High Point, Atlanta, and Las Vegas increased our customer contacts from about 3,000 to around 14,000 annually, quadrupling our interactions with existing and potential customers. While we expect that the full impact of this investment will be mostly longer term, we've already opened 1,000 new accounts in the first half of the year as visibility and engagement have increased. The transformation of the Home Meridian segment to a sustainably profitable business model is well underway. Most of the excess inventories connected to the business unit closures at the end of the last fiscal year have been sold, and the related cost reduction efforts are paying off. In addition, we reduced our Georgia warehouse footprint by 200,000 sq ft during the quarter and expect to reduce another 100,000-200,000 sq ft in early calendar 2024. Right-sizing our footprint to align with our current demand when we no longer stock significant volumes of inventory for Accentrics Home will not only reduce cost, it will improve liquidity and working capital levels. HMI recorded a small operating income in fiscal July, and while we continue to expect some short-term volatility in sales and earnings, we expect it to achieve profitability in the second half of this fiscal year. The hard work and difficult decisions we've made over the past 18 months are beginning to show benefits. We have reduced our overhead run rate from a high of over $40 million to about $32 million now and expect to be below $30 million by year's end. Coupled with improvements in contribution margin, we believe we will have lowered Home Meridian's breakeven point by over $150 million and will be able to focus on building stable, profitable volume for the segment. During the quarter, we were pleased to have completed the acquisition of Atlanta-based decorative accessories specialist, BOBO Intriguing Objects. This acquisition broadens our product diversity to include lighting, decor, textiles, and wall art. Adding BOBO to our brand portfolio positions us as an even more valuable and comprehensive partner for our customer base. Like last year's Sunset West acquisition, we intend to scale BOBO using our existing sales, marketing, and operations teams to make it a material part of our consolidated sales in the medium to longer term. Now I wanna turn the discussion over to Paul, who will discuss highlights in each of our segments. Thanks, Jeremy. Beginning with Hooker Branded. Net sales in the segment decreased by $18 million, or 34% in the fiscal 2024 second quarter, due to decreased unit volume. Furthermore, discounting was 240 basis points higher than the prior year quarter, which was unusually low. For the fiscal 2024 first half, Hooker Branded sales decreased by $18.5 million, or 19% compared to the prior year six-month period. Sales decreases in both periods underscore the softer demand for home furnishings. Despite a decrease in net sales, gross margin increased due primarily to favorable product costs from lower freight rates, and to a lesser extent, decreased warehousing costs. The segment reported operating income of $3.2 million and an operating margin of 9.3%, compared to $6.1 million and 11.5% in the prior year's second quarter. While the order backlog was lower than the prior-year quarter end, it remains 40% higher than pre-pandemic levels at the end of the fiscal 2022 quarter. Incoming orders increased by almost 19% compared to the prior-year quarter. A significant portion of Hooker Branded's backlog consists of orders from new products received late last year and earlier this year, which are expected to ship in the second half of this year, and position the segment positively for upcoming quarters. Turning to Home Meridian, Net sales decreased by $30 million, or 51% in the fiscal 2024 second quarter due to reduced demand for home furnishings and the absence of sales from exited higher-risk, unprofitable operations. Sales decreases in the major furniture chains accounted for about 70% of the decline, and e-commerce, the e-commerce channel accounted for about 15% of the decrease. Gross profit and margin both decreased in the 2024 second quarter, resulting from the net sales decline and under-absorbed operating costs. Product costs decreased as a percentage of net sales due to lower freight costs, but fixed costs due to warehousing rent and labor expenses adversely impacted the gross margin due to significant lower net sales. For the six-month period, Home Meridian sales decreased due to these same factors. As Jeremy mentioned earlier, we reduced our Georgia warehouse footprint by 200,000 sq ft during the quarter and expect to further reduce that in the future, bringing total square footage to around 500,000 sq ft in early calendar 2024, versus 1 million sq ft a year ago. This right-sizing will reduce costs and improve liquidity and working capital. Due to the significant sales decline, under-absorbed operating costs, Home Meridian reported a $3.3 million operating loss for the quarter. However, its first half operating loss was consistent with management's expectations. Quarter and backlog was lower than the previous year's quarter and fiscal 2022 quarter. This decline is attributed to the absence of orders from the exited operations, as well as a reduction in incoming orders from our retail customers, who are still carrying excess inventories ordered during the previous year. In domestic upholstery, net sales decreased by $7.4 million, or 19% in the second quarter due to sales decreases at Shenandoah and HF Custom, formerly known as Sam Moore. Partially offset by a 10% increase at Sunset West. Bradington-Young net sales were about the same as the prior year's second quarter. Despite the sales decrease, gross margin was 200 basis points higher than the prior year due to decreased direct costs, including more stable raw material costs and lower direct labor costs due to reduced production at HF Custom and Shenandoah, partially offset by under-absorbed indirect costs. For the fiscal 2024 first half, net sales decreased at HF Custom, Shenandoah, and Sunset West. Bradington-Young reported a small sales increase in the six-month period. Incoming orders increased by 36% compared to the prior year quarter. However, orders in the prior year period were relatively low due to higher backlogs and longer lead times. Quarter and backlog for Bradington-Young remains three times that of pre-pandemic levels at the fiscal 2020 second quarter. While the backlogs at HF Custom and Shenandoah decreased to levels similar to fiscal 2020. All other net sales increased in both the second quarter and first half, driven by higher sales at H Contract, as the senior living industry continues to recover after the COVID pandemic, and to a lesser extent, the addition of BOBO net sales. Gross profit and margin also increased in the all other sales. On the balance sheet, we made considerable progress in our cash and inventory position and in strategic capital investments. Cash and cash equivalents stood at $50 million at the fiscal 2024 quarter end, an increase of $31 million from the prior year. Inventory levels decreased by $35 million from year-end and $70 million from a year ago. During the six-month period, $51 million of cash generated from operating activities funded $8.7 million in share repurchases, $4.9 million in cash dividends, $4 million in capital expenditures, including investments in our new showrooms, $2.6 million for the development of our cloud-based ERP system, as well as $2.4 million for the BOBO acquisition. Since the share repurchase program began in the second quarter of last year, we've spent approximately $22 million to purchase and retire 1.3 million shares of our common stock as of the end of this quarter. In addition to cash balances, an aggregate $27 million was available under our existing revolver at quarter end. For the remainder of the year, we plan to continue to strengthen our balance sheet, continue our share repurchase program as appropriate, and continue to invest in organic growth opportunities, which we believe will position us favorably as business continues to improve. Now I'll turn the discussion back to Jeremy for his outlook. We believe there are mixed signals in the economy. A housing shortage and the over 20-year high on fixed mortgage rates has slowed down housing activity. The continued rise in interest rates has suppressed consumer confidence. However, overall retail spending and activity in the manufacturing sector and new business startups is healthy, while the unemployment rate remains near a 30-year low. As we anticipated, the first half of the year was difficult as the industry worked through bloated inventories and changing consumer spending habits. We expect demand and business to pick up in the second half for several reasons. First, consolidated orders are up in the mid-double digits over this time a year ago, with orders trending up in each segment for the past few months. Secondly, a significant portion of Hooker branded backlog consists of orders for new products launched at the High Point Market and are expected to ship in the second half of this year. Thirdly, in the second half, Home Meridian expects to ship over 1,000 retail floors, what we believe to be the largest number of new product placements in its history. We believe all the right pieces are in place to return Home Meridian to profitability in the second half of the year. While we are focused on reducing overhead costs, keeping our balance sheet strong and judiciously deploying capital, we have continued to invest significantly in initiatives that promote higher visibility with potential customers and ensure future growth, and believe these things will put us in the strongest position as demand 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, Catherine, for questions. As a reminder to ask a question please 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, please stand by while we compile the Q&A roster. And our first question come from Anthony Lebiedzinski from Sidoti & Company. Your line is open. Good morning, and thank you for taking the questions. Good morning, Anthony. Hi, good morning. So, yeah, first, just curious about the cadence of sales from May through July, if you could comment on that. And then can you give us an early read on Q3? And then curious to hear your thoughts as far as what are you hearing from your retail customers about Labor Day, which is an important holiday for the furniture industry? Sure. When you say cadence of sales, you mean shipments or orders? The shipments. Okay, just making sure we're on the same page. Mm-hmm. So as far as shipments, you know, obviously, our backlogs got to, you know, a level that wasn't really great for sustainable shipments throughout the quarter, is how I would summarize it. As the quarter progressed, orders increased, as we mentioned, and, our backlogs are improving. But that definitely, the timing issue on all that definitely affected us for the quarter. Our feedback from Labor Day has been really positive. I would say in almost every area that we've checked, the reports back were either they were above last year or they were just barely, they were either at it or just below last year, which last year was really big. So we think that's really positive, a positive sign for us overall. That's good to hear, Jeremy. And then, you know, so, so nice job with your own balance sheet improvements with lower inventories and improved cash position. So, do you think you can make further progress with inventories or, or do you think that as quarters pick up, further that you're kind of this is maybe the low point of inventories? Just, just maybe if you could just help us understand, like, where, where do we, where do you think inventories go from here? We think inventories are gonna stabilize from here. We believe this is as healthy of an inventory position that we've been in since I started, particularly with the ACH, that we've gone through the Accentrics Home and everything that's been public. But from our standpoint, what I would really say is, I feel the best about all of our controllables as an overall company, as I have since I started. So, and it has a lot- Mm-hmm ... to do with the balance sheet. It has a lot to do with the inventories. We're in a great position from a demand standpoint as it relates to our inventories, and our order rates are significantly up. So all the things we believe we can actually affect, I feel really good about. Gotcha. Okay. And then so, so as order rates improve, as you talked about double-digit order increases that you've seen, does that imply that you'll see shipment and sales increases in the back half of the year, or you think there'll still be somewhat of a disconnect there? And my question is on a year-over-year basis, by the way. I would, I would say year-over-year, we're gonna compete pretty well in the second half versus what we did in the first half. I'm not ready to say that we'll beat the second half last year, because it was a pretty substantial shipping half, because we were still somewhat inflated from, you know, sales from pandemic. But, I do, I do feel like it's gonna be a little bit the tale of two halves for us, and we're gonna, we're gonna have a lot more positive shipping and order rate throughout the second half. We've reduced operating costs. ... Yes, right. So we're really going against a whole different denominator throughout that half as well. Understood. Okay, got you. Yeah, I know it looks, looks like you're making further progress with the Home Meridian Overhead and their warehousing space. So, it looks like Sunset West was one of the key highlights in the quarter here. You know, what's driving that? And do you think that growth is sustainable? We do. It's actually one of our larger growth initiatives throughout the whole company, and we see it as on several levels, a big opportunity. One is that when we bought the company, they're very West Coast centric, so our ability to span their distribution throughout the U.S. with our sales team throughout our territories, you know, whether you're talking Florida, South Carolina, Texas, anywhere, you know, throughout the U.S., we definitely have more representation and stronger relationships than what they had when before we bought them. Number two, being able to position Savannah with Sunset West, also doing some cut and sew, cushion stuffing, things we need to do out of our HF Custom facility in Bedford. We've created, we've created the supply chain, really, on both sides of the U.S., which is going to really feed growth in the eastern half of the United States due to the cost savings of freight and really just the visibility again. Before we bought them, they didn't have a High Point showroom. Now they're in, of course, our show place. They were in Chicago for the casual show there. Now they're in Atlanta. Their, their visibility has gone up, you know, exponentially and, and their ability to ship from both sides of the country. So all those factors are gonna contribute in a pretty major way to their growth. That's good to hear. And then, so you made a small acquisition in the quarter. Just curious, about your appetite for additional acquisitions. You know, we're always, we're always open-minded in what comes along. We're pretty candidly, we're pretty particular at this point. It has to really be a wide space. We don't want anything that will cannibalize what we currently are focused on within our portfolio. However, you know, in this instance, for example, Bobo, you know, our number one question when our customers look at Hooker casegoods is, you know, "Who did this lighting? Can I buy the lighting?" And the number one reason we bought Bobo is so that we can change the no to a yes on that question. That makes a lot of sense. Okay, I guess, and then my last question, as far as, you know, the buyback, so you guys have certainly done a good job of having a well-balanced, I think, capital allocation between dividends and buybacks. So, do you guys have much left on the buyback, or have you exhausted the repurchase authorization? If you can give us an update on that, that'd be very helpful. We have... As of the end of the quarter, I think we had about $2 million-$2.5 million left. It's since then, yeah, since then, we've purchased another $1 million or so. So, it's. We have just a fairly small amount left on that repurchase, which we'll continue, you know, we'll continue to execute. That's been a 10b5-1 plan. I think it's worked really well. But, you know, we have to balance that with, with bolstering the balance sheet. You know, the economy is still a little bit uncertain, so, we're trying to balance that, you know, our capital allocation strategy along with, with maintaining a strong balance sheet. Understood. Well, thank you very much and best of luck. Thank you, Anthony. Thank you. One moment for our next question. Our next question came, comes from Dave Storms with Stonegate. Your line is open. Good morning. Good morning. Good morning, Dave. Appreciate you taking my call. Just wanted to start towards the top of the balance sheet. It looks like gross profit margin is up about, you know, 350, 355 basis points or so. Can you just talk about what the drivers are of that on a year-over-year basis? Right now, we're benefiting from lower costs. You know, well, as mentioned on the call, you know, our upholstery margins are up because costs have stabilized, and we've been able to balance our labor better. On the imported product side, we're benefiting from somewhat reduced factory costs, but mostly from the benefit of freight costs and increased our. The last of our higher prices, as we've had to, we've reduced prices in corresponding with these freight decreases. But the last of the higher priced inventories or the last of the higher costs are now rolling out. So all those combined with exiting, you know, some difficult businesses. This time last year, we were burdened with the upside down cost structure of the ACH business, which is why we chose to exit it. So I think these margins are probably at the gross margins are probably a little bit high compared to what we'll see going forward, but more normal than they were this time last year. Would it be fair to say that, it's more a factor of pricing as opposed to volumes at this point? Yes. That's perfect. That's very helpful. Thank you. And then just looking downstream, you've mentioned that orders are really starting to increase, but, you know, downstream supplies are still working through some of their inventory, are you seeing that come to some sort of turning point, just with the orders increasing, or do you expect destocking to continue, going forward? Yeah, we're actually seeing some of that loosening up. But it definitely has been a factor, and it's continued to be a factor. You know, that situation seems to be a little different with each retailer, so it's not really a. It's hard to give a blanket answer, you know. One retailer is dealing with this, and another retailer may have bought differently during that time. So, but overall, we definitely are feeling now a little bit looser environment with regards to inventory, for sure. I think the strong Labor Day sales are going to help us, although I can't say that to this point, because we're. We'll see that in the next few weeks. Very helpful. Thank you. And then just going back to, Paul, I think you mentioned about maintaining a strong balance sheet and how that's very important for you guys. Can you just talk about your comfortability with, you know, your current debt position and the revolver availability that you have? Well, this company's always managed the balance sheet pretty conservatively, and I think it served us very well over the almost 100-year history of the company. And so that's a core value to try to maintain a strong balance sheet. We have, at this point, $27 million of availability on our revolver. We've got $7 million tied up above that. We've got a $35 million revolver. $7 million is tied up in letters of credit. But we've got $27 million available there. We've got $22 million in debt? So it's a pretty low level of debt. I know this industry is pretty debt averse, but I think still pretty comfortable with that level of debt. We've got, you know, $50 million in cash. So I think that's a pretty comfortable level. And so anyway, that's a pretty comfortable level, so but we'd like to, you know, as we see the economy develop over this next year, the rest of this year, I think, you know, we're going to try to manage things cautiously and then, you know, make our capital allocation decisions for next year as we see, you know, as we see what happens the remainder of this year. You know, we always mention we have an over 50-year history of paying our dividend as well. Right. Right, which dividend yield is just under 4% right now. Right. Right. We think that's, you know, that's important for many of us. That's a priority. Yeah. Understood. One more for me, if I could. Just from a modeling perspective, CapEx budgets running around $4 million-$5 million a quarter. Is that fair to extrapolate for the foreseeable, the, excuse me, for the remainder of 2023? CapEx for the remainder of this year is probably $1 million-ish. In a normal year, our CapEx is probably $5 million or $6 million. This one, this year has been a little bit bigger with, you know, with new showrooms, with our ERP projects. So, if you're modeling, going forward, I would probably put $6 million a year in, just for CapEx. That's all very helpful. Thank you for taking my questions. Yeah, you're welcome. Thank you. Thank you. One moment for our next question. We have a question from Budd Bugatch from Water Tower Research. Your line is open. Thank you very much, and thank you for taking my questions as well. Congratulations. I want to echo the congratulations on the way you've maintained your balance sheet and your financial condition in what's got to have been, I think, the most volatile time we've ever seen in the industry, and maybe in society. We appreciate that. Thank you. You're welcome, and, well deserved. When I think about Hooker, Hooker has the widest diversity of, of customers in terms of, geography, number of customers, and, type of business model. And I was wondering, Jeremy, if you could give us maybe a read on what you're hearing from various levels of customers and maybe de- you know, delve in. I, I know the majors have had a big or seem to have had a big problem with the order book in HMI. So what are you seeing, as you look around the country and hearing from the retailers? What's their... What are they talking about? So, it's interesting, Budd, it's a really good question. So what I've observed and things I've heard is, you know, it seems like the type of model that each customer is really flowing their inventories through, has a lot to do with what position they've been in from an inventory standpoint. So you know, the larger customers, of course, they're bringing in containers, they're bringing in larger positions of inventory, so those are more difficult to just turn around quickly. So the model of container and case goods, I would say, has been the toughest model across our industry. As you get into domestically inventoried positioned by manufacturers, where they can buy anything kind of one at a time, that model has been less disruptive because, you know, you could fit—you could actually get some orders into some places that didn't have the situation I just described, which is typically probably more of a medium to smaller customer, also interior designers, and of course, e-commerce. Then, if you get into another segment which is, you know, domestically made upholstery, that again, that was probably, in my opinion, the most advantaged place to be... throughout the situation we've all been in, for all the reasons I just stated from an inventory position, it's a lot of it's custom order, a lot of it's one at a time. So really, the different models kind of, in my opinion, determined, you know, what type of position each retailer was in. And going, digging down on that in Labor Day, which you may have heard, and I realize it's only anecdotal at this time. What do you? Are you hearing any differences in how the demand is coming back to these retailers and to the various classes of retailers and the health of the inventories? You mentioned, I think, that the inventory seems to be. Do you think you've seen the end of destocking? So how are inventories at retail and, among the majors, obviously, because the smaller guys would have, as you said, order one by one. So what are we hearing on? We believe, they're getting in a, in a much better position, but I think, you know, Labor Day, we're going to find out if that really put them over the, you know, over that line of, of feeling better about ordering more products. You know, I think, I think a lot of that has affected, you know, producers overseas. You know, of course, it's been slow, and in my opinion, and it's just strictly my opinion, I think that, there will be some maybe overreaction in letting inventories get possibly too low, and then there might be a, "Okay, how do I get things quick enough?" And we may be in a little bit of a bottleneck towards the end of the year. I don't know this, by the way, I'm just telling you what I think may happen. Oh, well, that we've seen it before in the industry. That's happened before. Right. Right. Exactly. Won't be the first. When you look at sales on a comparable basis, I realize we've got the ACH discontinuation, we've got some other things. How does it look on a same kind of, same base, same location basis, segment by segment or overall company? I want to make sure I understand your question. Are you asking how we'll look across the different businesses now that ACH and the clubs business and whatnot are gone? Well, I'm not looking at the future, I'm looking at the quarter or at the year to date. How was it on that basis, with taking out the discontinued operations or the things that you, the initiatives that you are paring back? So I'm sure you look at it on a kind of a comparable basis as well as an overall consolidated basis. Yes. So ACH would have been, you know, $8 million-$10 million of that picture. I don't have the exact number you're looking for, but we'd be happy to jump on a call and figure that number out and give that to you later. That would be great. Yeah. And when you look at. You, you've talked about the, the destocking with the majors, and the, and the way you flow goods, you've got probably maybe the largest, one of the larger import, businesses as well. So what are you seeing? You, you talked about, I think, before, you're going to try and move away from your sourcing from China, and, obviously, that's a big issue in society and in the country. What are you seeing? What's your progress on that, and what's the health of your suppliers in the Pacific Rim? We feel really good about the health of our suppliers overseas. We're less than 10% now in China. We were as much as, I believe, I think we were around 35% at one point in China. So we've made a significant reduction in that. You know, also, a major improvement for us that we haven't talked about is the number of factories we used to deal with when we had the clubs business, when we had Accentrics Home, when we had RTA. I mean, just to give you an idea, just Accentrics Home had over 60 factories. So when you think about, you know, the people we have overseas, which is a really pretty substantial team, but them being able to focus on the number of factories we have now, which is, we feel, the correct number for our business, and it's not spreading out our team. Because we have quality and other individuals that have to be in those factories. So as you do that, you lose sight and focus on the things that actually matter, which is a big benefit to what we've done as well. So Vietnam now the largest of your supply countries? Yes. Okay. And last for me would be HMI. Any other actions you're contemplating there that you can talk about? Obviously, if you've got some that may affect people, you probably can't talk about it, but any other things strategically that you see that you think they need to do with the Home Meridian? No, our. The nice thing about Home Meridian at this point is, it's just we need to grow, and we're focused on growing Pulaski, growing Samuel Lawrence, PRI and also our hospitality division. And we have a lot of things, as we mentioned, over 1,000 store placements going out between right before this call and after, which is going to, we believe, feed a lot of future revenues for HMI. And because we, as we mentioned, the overhead, the break-even point for HMI is such a different place now. That's why we feel so confident about how we're going to do within that business for the future. We're in a whole different- I would have thought hospitality would have been a real strong point during the quarter with what's going on in the country. Is that true? I missed the first part of your question. I'm sorry. I would say hospitality should have been very strong during the quarter, I believe- Yeah, it was a bright spot. It was definitely a bright spot for us. Also, the H Contract, which is focused on senior living, was another bright spot for us throughout the quarter. Thank you. Thank you very much. I'm sorry, say again? I'm sorry, but the remaining cost reductions are those warehouse reductions that we've got planned. We don't have any personnel related- No. Actually say we don't have any personnel related- No, we feel really good about our overhead position and also the next cost reductions all have to do with more space in Savannah, getting out of more space in Savannah to get to the 500,000 we talked about. And also, we believe there's labor efficiency that will save us down there as well. So, but most of our cost reductions have been taken care of, and our plan moving forward is just run a solid, sustainable business that is actually predictable, and we don't have the surprises we've had to report in the past. Okay. Paul, I would have thought one thing you did say is that the higher freight costs are—is that out of the inventory now, as it impacted inventory, it had to flow in there. Do you think all those excessive container rate costs are gone? Yes, I think through the summer, you know, we worked our way out of it by the end of the summer. I think most of the excess costs were gone. Thank you. Well, congratulations. Good luck on the next part of the year. We thank you, Bud. We appreciate it. One moment. Our next question comes from Barry Haimes with Sage Asset Management. Your line is open. Thanks very much. I had a couple of questions. First is, could you give the, the backlog number at the end of the quarter, and then what the comparison was both a quarter ago and a year ago? End of July, the Backlog was $88 million, versus $201 million a year ago. What was it at the end of the first quarter? End of the first quarter, it was $87 million, versus $282 million the prior year. Got it. Thank you so much. That, that's very helpful. And then, just on BOBO, it seems like the acquisition certainly makes sense, but could you give us. Is it already closed? And if so, what was the closing date? And, could you give us the price that you paid for it? Thanks. It was mid-June, June 12, and we paid $2.4 million. It was a small acquisition. Got it. Thanks so much. Appreciate it. Thank you. Thank you. And our last question comes from John Deysher with Pinnacle Value Fund. Your line is open. Hi, good morning. Thanks for taking my questions. Just back to BOBO for a second. Can you share with us what the revenue run rate was, when you bought it? When we bought it, the revenue run rate was around $5 million. It's been, you know. Yeah. Okay. And obviously, you have growth expectations for it. How soon before, you know, that product line is integrated in terms of your sales force and distribution capabilities? When will that be accomplished? It'll be fully integrated with our sales force and distribution as of the October market coming up. Okay. Well, when is that? At the end of October? Believe me- Mid-October. It's second or third week of October. Okay. All right, good. And what do you think that business is capable of? I mean, once it's fully integrated, do you—what would the dream be in terms of revenue for that business? We believe, you know, it'll be a smaller brand for us on the top line. So, you know, $15 million-ish is what we believe it can do fairly, you know, in a couple of years, two to three years. But the bottom line, you know, the margins and whatnot in those categories are different from kind of anything we do now. So it's, it is, it's somewhat impactful for us, even at that volume level. Right. And it, and it's supporting our, you know, our sales, our brand. Right. It helps us complete a more whole home picture, and we can sell really the entire room in many ways. Yeah, no, I mean, it makes total sense. So you would say the margin profile is better than the core business? Correct. Okay, fair enough. Good. One final minor question: What were the orders for the quarter? $96 million. Okay, great. Thanks very much, and good luck. Okay. Thank you. Thank you. Thank you. I would now like to turn the conference over to Jeremy Hoff for closing remarks. I would like to thank everyone on the call for their interest in Hooker Furnishings. We look forward to sharing our fiscal 2024 third quarter results in December. Take care. This concludes today's conference call. Thank you for participating. You may now disconnect.