Good day, and thank you for standing by. Welcome to the Hooker Furniture Fiscal 2024 Third Quarter Earnings Conference Call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there'll 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 automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised, today's conference call is being recorded. I would now like to turn the conference over to your speaker for today, Paul Huckfeldt. The floor is yours. Thank you, Lisa. Good morning, and welcome to our quarterly conference call to review our financial results for the fiscal 2024 third quarter, which began July 31 and ended October 29, 2023. Joining me this morning is Jeremy Hoff, our Chief Executive Officer. We appreciate your participation. During our call, we may make forward-looking statements which are subject to risks and uncertainties. A discussion of factors which 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 third 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 our fiscal 2024 third quarter of $116.8 million, a decrease of $35 million or about 23% compared to last year's third quarter, driven by continued soft demand for home furnishings, as well as our exit from Accentrics Home product line. Despite the sales decline, operating income and margin both increased due to decreased product costs at Hooker Branded and improved margin at Home Meridian due to the exit from unprofitable categories. Consolidated net income was $7 million or $0.65 per diluted share for the quarter, compared to $4.8 million or $0.42 per diluted share in the prior year period. For fiscal 2024 9-month period, consolidated net sales decreased by $115 million, or 25% to $333.336 million, as compared to last year's same period. Consolidated net income was $9.3 million or $0.85 per diluted share, compared to $13.6 million or $1.14 per diluted share in the prior period. Now I'll turn the call over to Jeremy to comment on our fiscal 2024 third quarter results. Thank you, Paul, and good morning, everyone. On our call today, we'll discuss third quarter and first nine months results, and how our strategy to reposition the Home Meridian segment from a volatile, high-risk model with unpredictable revenue and profitability to a low-risk, more sustainable profit model that is yielding tangible results. While the housing market slowdown, high interest rates and a shift in consumer discretionary spending away from home furnishings continue to challenge, we're encouraged by positive indicators like the normalization of ocean freight rates, eased supply chain constraints, more stable raw material costs, and increased labor availability. As we have forecasted for some time now, profitability improved significantly as we moved into the second half of the year. The Home Meridian segment achieved a quarterly operating income for the first time since calendar year 2021, contributing $900,000 to income in the current year, third quarter, compared to $3.2 million loss in the prior year, third quarter. Despite a challenging macroeconomic environment for the home furnishings industry, we're proud of our team for persevering through some difficult decisions and short-term pain to create a more sustainable and profitable business model for the segment. After spending the last couple of years repositioning HMI to focus on its core products and businesses, it is encouraging to see HMI report a quarterly profit for the first time in two years and contribute to our overall profitability. HMI inventory levels decreased by $15 million as compared to the year-end, and $46 million compared to the prior year, third quarter. In addition, we have realigned our inventory mix to reflect our current business plan and reduced our footprint in the Georgia warehouse by 200,000 sq ft in the second quarter and entered into an agreement in the third quarter to reduce another 200,000 sq ft by early next year. Liquidating excess inventories, rightsizing our overhead, and exiting unprofitable businesses has put us in a much stronger overall position. Our main focus continues to be execution of our strategic growth initiatives and the drivers we can control. Demand has decreased versus prior quarters, but consolidated orders are still up $12.7 million or 15.7% for the third quarter. For the first nine months, consolidated orders increased by $75.8 million or 33.5%. Most of the consolidated increase is driven by Home Meridian segment orders, which were unusually low in the prior year period. We've continued this quarter to bolster our financial position, generating about $49 million in cash from operations in the first nine months of the fiscal year. At the end of the quarter, cash and cash equivalents were at $40 million, an increase of $21 million from the prior year end. Inventory levels decreased by $32 million from the year-end and $69 million from this time a year ago. The recent fall High Point Market was positive by all measurables across the company. Increased visibility is one of our major strategic objectives. Adding two smaller showrooms in Las Vegas and Atlanta, while moving our largest High Point showroom, has created an exponentially larger audience for our products on the legacy side of our business, as well as Sunset West. HMI also had a good market as they focused on strengthening the product assortment for Pulaski, Samuel Lawrence Furniture, and PRI. The efforts by our team at HMI to re-energize and reposition the product offerings for growth received a lot of positive retail feedback and new placements from our major customers. As reported before, the collective impact of our new showrooms in High Point, Atlanta, and Las Vegas has increased our customer contacts from about 3,000 to around 14,000 annually, more than quadrupling the number of existing and potential customers. In the first half, we opened 1,000 new accounts as visibility and engagement increased. This quarter, that pace continued as we added 150 new customers on average per month. The furniture industry as a whole continues to experience softer business conditions. However, we feel very good about all of our controllables. We're in a healthy inventory and overhead position. Most of our cost reductions other than warehousing, are behind us, and we do not expect more personnel reductions. Now, I want to turn the discussion over to Paul, who will discuss highlights in each of our segments. Thanks, Jeremy. Beginning with Hooker Branded, soft home furnishings demand and short-term delays with an impact of about $3 million related to the implementation of our new ERP system over the Labor Day weekend, drove a net sales decrease in the segment of about $17 million or 31%. Without the ERP-related delays, we believe sales would have been about 26% below the prior year. Despite the sales decline, Hooker Branded reported a solid operating income of $7.3 million and an operating margin of 18.6%, an improvement compared to the $5.9 million and 10.3% in the prior year quarter. For fiscal 2024, nine-month period, net sales decreased by $35 million or 23% due to decreased unit volume. Sales decreases underscore the softer demand for home furnishings. Gross profit and margin both increased for the fiscal 2024 third quarter, despite the decline in net sales. This favorable outcome is attributed to significantly decreased product costs, costs driven by lower ocean freight rates. In addition, warehousing costs were lower due to lower demurrage and drayage expenses, as well as lower labor and compensation expenses due to the reduced shipping activities. The higher than average gross profit margin of 45.6% for the quarter is expected to be temporary and as a result of the timing of reduced freight and product costs and recent price reductions across the segment. While price decreases and promotions were implemented in August, the majority of inventory sold in the quarter still carried higher selling prices, which were implemented in the prior years to address the massive freight cost increases, which resulted in unusually high gross margins. We expect Hooker Branded margins to normalize the historical levels in the coming quarters. Incoming orders increased by 7% compared to the prior year's third quarter and this year's second quarter. Although quarter-end order backlog was lower than the prior year quarter end, it increased from this year's second quarter and remained nearly 70% higher than pre-pandemic levels at the end of the fiscal 2023 third quarter. At Home Meridian, Home Meridian segment net sales decreased by $6.9 million, or 13% compared to the prior year third quarter, but increased compared to the first and second quarters of the current year. Sales decreases in the e-commerce channel previously served by Accentrics Home accounted for over 40% of the overall decrease in the segment due to our exit from that line. The remaining decreases in the segment were driven by sales decreases at Samuel Lawrence Furniture, PRI, and Pulaski. All divisions that serve independent furniture stores and major retail chains. These decreases were partially offset by strong sales at Samuel Lawrence Hospitality, which reported sales increases of 152% and 46% for the third quarter and nine months, respectively. Despite the net sales decrease, HMI gross profit and margin increased by 940 basis points or $3.4 million in the fiscal 2024 third quarter. This increase was attributed to improved margin as we exited from unprofitable sales channels and product lines. Decreased product costs and increased profitability in our hospitality division also helped. Furthermore, decreased costs in the Georgia warehouse and decreased wage expenses due to organizational and personnel changes, all contributed to the increase in gross profit margin. For the fiscal 2024 nine-month period, gross profit slightly decreased, driven by sales decreases, while gross margin increased by 530 basis points due to the factors I've just mentioned, as well as the absence of warehouse transition and startup costs incurred in the prior year first quarter. Home Meridian recorded a quarterly operating income of $900,000, compared to a $3.2 million operating loss in the prior year third quarter. The liquidation of inventories that were written down in the fourth quarter of fiscal 2023 were essentially completed during the quarter, and we had an immaterial impact on gross profit. Incoming orders were 19% higher than the prior year third quarter, but lower than the first and second quarter orders, as our retail customers are matching their inventories and orders to current soft demand for home furnishings. The quarter-end backlog was lower than the same period a year ago. At Domestic Upholstery, after two years of sales growth, Domestic Upholstery net sales decreased by $11 million or 25% in the fiscal 2024 third quarter due to lower demand. All four divisions reported sales decreases for the quarter and the 9-month period. Gross profit and margin both decreased in the fiscal 2024 third quarter and nine-month period, driven by net sales decreases. Direct material costs were below prior year periods due to more stable raw material costs. However, these decreases were more than offset by under-absorbed indirect costs, which were higher compared to the prior year, third quarter and nine-month periods, primarily due to indirect labor costs. Incoming orders increased by 39% in comparison to the third quarter of the prior year, as Bradington-Young, HF Custom, and Shenandoah all recorded increased orders. Sunset West orders remained flat as compared to the prior year, third quarter. Quarter -end backlog for the segment slightly decreased from the second quarter end. As Bradington-Young's backlog was 2.5 x that of pre-pandemic levels, while backlogs at HF Custom and Shenandoah decreased to levels comparable to the fiscal 2020 year end. One of our core values at Hooker Furnishings is maintaining a strong balance sheet and financial position. As Jeremy mentioned earlier, we generated $49 million in cash from operations during the first nine months. That cash funded $12 million of share repurchases, $7 million of cash dividends to our shareholders, $5.7 million of capital expenditures, including the investments in our new showrooms, $3.8 million for the development of our cloud-based ERP system, and $2.4 million to acquire BOBO Intriguing Objects in the second quarter. On Tuesday, we announced our quarterly dividend of $0.23 per share, a 4.5% increase over the previous dividend, which will result in an annual dividend yield just under 5%. This increase represents the eighth consecutive year in which we increased our dividend, reflecting our confidence in our business model and our commitment to providing a return to our shareholders. Also relating to shareholder value, during the third quarter, we completed the share repurchase program, which began in the second quarter of last year. Over that time, we spent a total of $25 million in a little over a year to purchase and retire 1.4 million shares of our common stock. With that, I'll turn the discussion back to Jeremy for his outlook. While economic indicators remain mixed and furniture retail traffic is down about 15% from January through October 2023, the long-term outlook has improved. Reduced housing activity, high mortgage and interest rates are still challenging, but several positives have emerged since last quarter. Core inflation is at its lowest level since 2021. The U.S. economy grew nearly at 5% last quarter. Unemployment remains at record lows, and the risk of recession appears to be moderating. As we look to the next quarter, we see flat sales for our Hooker legacy brands, but a continued short-term reduction for HMI sales until the new retail placements begin to generate more sales sometime in the first quarter next year. Early indications in the fourth quarter signal that incoming order activity is returning to better levels we experienced most of this year. We believe our growth initiatives will continue to gain traction in the first half of 2024. Our focus on reducing cost, keeping our balance sheet strong, and judiciously deploying capital, along with our investments to promote higher visibility and future growth, continue to put us in the strongest possible position to leverage a return of furniture demand to more typical levels. This ends the formal part of our discussion, and at this time, I will turn the call back over to our operator, Lisa, for questions. Thank you. 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 stand by while we compile the Q&A roster. Our first question today will be coming from Anthony Lebiedzinski of Sidoti. Your line is open. Good morning, and thank you for taking the questions. You know, nice to see the bottom line outperformance and certainly a stronger balance sheet from a year ago. Thank you. So, yeah, sure. So, I guess, you know, HMI, you know, sort of, certainly, you know, big improvement of profitability versus a year ago. You know, the Gross Margin there was about 20%. So, is this how we should think about segment Gross Margins going forward, or was there anything unusual in the quarter that maybe this pace of Gross Margin expansion is not sustainable? That's close to our targets. You know, there's a little bit of fixed cost in there with our warehousing costs, but Mm-hmm. So, you know, that could dip with sales decline a little bit, but that's the ballpark, you know, in a normalized environment, I think that is what you should be thinking about. Okay. So that's certainly better than it used to be historically. So that's encouraging. Margin historically been getting covered up by the bad businesses that we exited. Correct. Right. Okay, and then, you know, the gross margin at the Hooker Branded was unusually strong on, as, as you pointed out. You know, do you think you'll see any sort of, you know, benefits from the higher-priced products in the fourth quarter, or do you think you've pretty much flushed out the, all of that in the third quarter? We believe that we have flushed a lot of that out, but we still think there may be some benefit left partially in the fourth quarter. Should normalize- Mm-hmm. Yes. Gotcha. And in terms of your outlook, so for the fourth quarter, you gave us some quantifiable numbers for the Hooker Branded. You think sales will be kind of flat, down at the HMI. There was no mention really about domestic upholstery. So I guess, you know, with the orders coming in, you know, 16% higher, which is encouraging, but the talk of softer demand. So in total, how should we think about the fourth quarter revenue? I guess if we put all the pieces together. So I'll speak to that somewhat generally, but, and then Paul can- Mm-hmm ... fill in the blanks. But, you know, you have to remember the backlogs that we were coming out of from last year versus this year in our order. So they were, you know, extremely high, and so the order rate was extremely low against a lot of those businesses. So these high percentages of order rates up are just really, you know, filling the backlogs back up for probably closer to a normalized business level versus the increases it looks like in the order rate. Mm-hmm. Okay. If that makes sense. Yep. Okay. All right, sounds good. And then, you know, lastly, before I pass the call to others. So as far as, you know, the buyback, you completed the repurchase authorization, you know, what is your appetite for doing another share buyback? Or would you say your preference would be to pay off whatever debt you have, given the higher interest rate environment? I think right now our objective is to make sure, you know, make sure that we're right about the economy and maintain the strong balance sheet and fund organic growth. I mean, you know, if you've looked at our investor presentation, we've got a lot of pretty aggressive growth targets. You know, we've got some specific strategies. And I think our primary objective now is to fund those organic growth strategies. You know, we've got Bobo, and we've got Sunset West that we expect to grow pretty significantly. So I think for the short term, those are our higher priorities than another share buyback. And of course, you know- Under- - maintain our dividend. You know, we're very proud of the dividend, and we just increased the dividend again for the eighth consecutive year. So, I think those are all higher priorities than another share repurchase. Understood. All right, well, thank you very much, and best of luck. Thank you, Anthony. Thanks. Thank you. One moment for the next question. Our next question will be coming from David Storms of Stonegate. Your line is open. Good morning. Hi, Dave. Good morning. So just wanted to start with some of the normalization and demand, and kind of how you think about productivity and capacity, specifically in, like, the Home Meridian segment. You know, I noticed that orders were up, but backlog was down. Is this just efficiency is going way up, or is there more capacity that you could get out of that segment? Really, the timing of the order rate increasing on the HMI side didn't happen until later in the third quarter, which created a lower backlog situation, as you mentioned. And that is why we're saying a lot of the placements we have out there, you know, we have a lot of good indicators that those are working, and we're starting to get significantly increased orders on the HMI business. And that's why we believe the backlog will spend its time, you know, getting larger during the fourth quarter, and that's also why we believe the first quarter will be significantly better for HMI in the first quarter. Right. We have the Lunar New Year will change some of the shipping patterns, too. Right. Right. So- But as it relates to backlog and as it relates to orders, it's really the timing of when the- Right ... orders really improved on the HMI side. Understood. Very helpful. That help? Yeah, no, it does. Thank you. Okay. And then just when we're thinking about, you know, the increased visibility you have going forward, as you open up your new showrooms and such, how, what kind of runway do you think there is for that to, you know, improve demand and then ultimately turn into new orders? So, you know, as it relates to the visibility, which is really, when we're talking about the Hooker legacy side of our business, that increased visibility is, as we mentioned, also allowing us to, you know, be able to try and sell a lot more of a customer base than we've had previously. Selling that customer base and the particular types of customers we're talking about takes some time to really get into their wheelhouse of what they're doing from a project level, whether it be the interior designers and, you know, the things we're trying to work on. So step one is the visibility, step two is opening the account, step three is the engagement level that we're able to achieve with those additional accounts, which takes some time. But from our history of doing this with thousands of accounts before, we somewhat know that it will eventually kick in, and we believe it's a significant growth opportunity for us. Okay. And then just one follow-up on that. What kind of timeline do you expect around, you know, going from making contacts to opening accounts to that turning into sales? I would say from when we started the higher visibility, I would say, I believe that, you know, it's a, it's a from now, another 12-18 month timeline to really see significant boost on that legacy side due to the visibility exercise. That's very helpful. Thank you very much, and I'll pass on. Okay, thank you. Thank you. If you would like to ask a question, please press star one, one on your telephone. One moment for the next question. Our next question is coming from Budd Bugatch of Water Tower Research. Your line is open. Good morning, Jeremy, and good morning, Paul. Hi. Congratulations on the profit performance in the quarter. Thank you. And then that, that's notable. Hard to do that with down sales. Yeah, I really appreciate it. Thank you. You talk about getting back to a normalized margins, gross margins in the Hooker legacy business. What are those now, after having gone through COVID and supply chain and inflation and disinflation, and what are those normalized margins today? Okay, on the Hooker Branded, yeah, I mean, it's been a long time since we've seen normalized margins. But, but I think, you know, in that low 30%, high 20, low 30 is a more normal margin. You know, obviously, there are a lot of dynamics that can still affect it, but that would be sort of a once we get through this last round of mismatched prices and costs, which right now are working in our favor, it should be back in that low 30% range for Hooker Branded. Thanks. Hooker, the other part of our Hooker legacy business is the domestic upholstery business, and that's a mid- to low-20s margin. You know, it's a manufacturing business. It's a different dynamic. You know, but our goal was never to increase our Hooker Branded margins and to increase our prices because, you know, we wanted more margin. Our goal was to keep our margins historically where they were while we went through the incredible fluctuations in cost of freight and ocean freight and demurrage. I mean, you name it, and any furniture people on the call know exactly what I'm talking about, too. But it was pretty crazy, the gyrations we had to go through as a business. So, we also protected our backlog for our customers that had orders for customers going into that all of that chaos, which we took hits on the other side of that negatively, which impacted us. But it was the right thing to do, because, you know, we've said publicly, you know, we believe in our relationships and our customers, and that's a big part of what we do and what we believe we are. So, we did that on the front end. Well, on the back end, we're getting some cost reductions that are helping us temporarily. But we have, as we promised all of our customers, we have reduced our prices to what we believe they were, you know, close to where they were from a value proposition standpoint, previous to all the crazy freight rates and everything that we had going on. As a former retailer, I can tell you that, I remember the angst that was created when the price prevailing phrase was abandoned around the industry through a previous inflationary time period, and you do, too, I'm sure. I do, absolutely. I do. You're right. So my question is, how long does it take to get back to those normalized margins? That sounds like that mix is somewhere at the low 20s, high 20s or low 30s, high 20s kind of range, and that's a notable time, notable delta. How long does it take to get back to that normalized gross margin? We expect that it'll be first quarter, we'll be back to what, you know, we said, normalized margins. Okay. Okay, that's, that's encouraging. The next question is, I'm confused a little bit about the 14,000 contact number. Those are not unique accounts. It's, that's... If you're seeing, you're seeing your same account multiple times inside that number and- No. No, those are, those are unique. We don't, and we don't count individuals, we count accounts. And in fact, we had two significant entertainment evenings in High Point. One was a celebration of our opening showroom, and we do it kind of once a market. We don't count those numbers when the, you know, the attendance boosts because we believe those are kind of the same people candidly coming back multiple times to, you know, to have some fun. So we, you know, so we try to make it as... We really want the real picture for ourselves, not just for you. We want to understand what's actually going on, so we can anticipate what will happen. So, we were somewhat, we knew it would be better than what we were on the tenth floor of Commerce before, versus where we are now. We also thought it would improve from our Las Vegas showroom and our Atlanta showroom. We had no idea we would more than quadruple. So this is, this is... We're pretty excited about it, and, and we, we think that this has really set us up for, for a very, very good future for our company, for growth, in, in really across the board, but the legacy in particular from those showroom moves. So, help me out here. Hooker has always been known to have a wide be very widely distributed with a lot of accounts. I mean, those are notable numbers, and maybe just do a comparison of High Point. How much did the moving to Showplace from the tenth floor increase those contacts or those interactions? The increase in High Point in April was around 92%, and the increase in October, I'm just doing April from April, previous showroom. In October, increase was in the 80s, I believe it was around 84%. I think it was 88. 88. Paul believes 88. But the point is, we've almost doubled our attendance in that showroom versus our old showroom. And to answer the first part of your question, yes, we sell, you know, a lot of brick-and-mortar, a lot of retailers. There's only so many retailers at the point you were making, but there's a lot more designers. You know, we used to not let designers in our showroom, period. And so that's, you know, that's- and a lot of our industry was the same way. So, obviously, that changed years ago, but we continued to drive that strategy. And, you know, for us, it's a very significant part of our growth strategy. So that's and that's exactly where I was gonna go next, because, I mean, that seems to be the growth, the delta. Is there a level of volume for even some of the small designers that make it an unprofitable account to handle? Do you have to... How do you manage the profitability of an account? Well, you know, you'll remember this: there's so much digital now. You don't have all the catalog costs, you don't have all of the sending out of price lists, you don't have... There's a lot of things that have changed the dynamics of what it costs to sell an account. So with those dynamics, along with some other things we're doing, you know, we've managed to figure out how to make that work financially. Okay, that's fascinating. And, of the 14,000, can you separate for us maybe the retailers versus the designer or the different type or the alternative type of distribution? No, I really can't right now, Bud. I'm sorry. Okay. That's okay. I understand that, that's competitive, and it's certainly fair for you to tell me, but I... You know, that's our job is to ask, and- No, I appreciate the question. Okay. Thank you very much. Congratulations and good luck on the future. Absolutely. Thank you, Bud. Good talking with you. Thank you. Thank you. That concludes the Q&A session for today. I would like to turn the call back over to Jeremy Hoff for closing remarks. Please go ahead. Thank you, Lisa. I would like to thank everyone on the call for their interest in Hooker Furnishings and wish you all a happy holiday season. We look forward to sharing our fiscal 2024 full year results in April next year. Take care. This concludes today's conference call. Thank you all for joining. You may now disconnect.