Good morning, welcome to the Herman Miller's fourth quarter earnings conference call. As a reminder, this call is being recorded. I would now like to introduce your host for today's conference, Kevin Veltman, Vice President of Investor Relations and Treasurer. Good morning. Joining me today on our fourth quarter earnings call are Andi Owen, President and Chief Executive Officer, Jeff Stutz, Chief Financial Officer, John Michael, President of North America Contract, Debbie Propst, President of Herman Miller Retail, and Jeremy Hocking, President of International Contract. We have posted yesterday's press release on our investor relations website at hermanmiller.com. Wherever any figures are presented on a non-GAAP basis, we have reconciled the GAAP and non-GAAP amounts within the press release. Before I turn it over to Andi for a brief review of the quarter, I would like to remind everyone that this call will include forward-looking statements. For information on factors that could cause actual results to differ materially from these forward-looking statements, please refer to the earnings press release, as well as our annual and quarterly SEC filings. Any forward-looking statements that we make today are based on assumptions as of this date, and we undertake no obligation to update these statements as a result of new information or future events. At the conclusion of our prepared remarks, we will have a Q&A session. Today's call is scheduled for 60 minutes. With that, I'll turn the call over to Andi. Thanks, Kevin. Good morning, everyone. Thank you for joining us today. In addition to the announcement of our planned acquisition of Knoll during the quarter, our fourth quarter results reflect the continued rebound from the pandemic and highlight the resilience and diversity of our business model. Consolidated sales for the quarter were up 31% compared to last year, and orders were up 29% compared to the prior year. Sales and orders also increased sequentially from third quarter levels, highlighting the increased levels of activity that we're seeing in the markets that we serve. Our Retail business delivered another quarter of record-breaking performance with the best quarterly field performance in our company's history. Sales for the Retail segment were up 106% over last year, and orders were up 81%. Segment operating margin of 19.2% for the quarter reflects strong profitability levels as well. We continue to see growing demand beyond the home office and DWR contract categories. Excluding those two categories, fourth quarter order growth was up 96% over last year. Our Contract business is also feeling the positive impact of recovery from the pandemic as customers begin accelerating their plans to return to the office, especially in the second half of the quarter. Order rates for the North American Contract segment increased sequentially by 21% from Q3 and were flat compared to prior year. Leading indicators around the project funnel, mock-ups, and proposal center activities have also been supportive, and external measures such as the architectural billings and office demand indices have been trending positively. We continue to see rising demand across the international Contract segment as well, with orders up 55% compared to last year. Diluted earnings per share on a GAAP basis for the quarter of $0.12, while adjusted EPS, which excluded the impact of acquisition-related costs, restructuring, and other special charges, totaled $0.56. This is an increase of over 400% from adjusted earnings per share in the same quarter last year. Adjusted operating margins of 7%, or 370 basis points over the same quarter last year. Higher sales levels and year-over-year gross margin improvement, despite the near-term challenges of higher commodity costs, drove profitability improvement during the quarter. Looking ahead, as the pandemic continues to subside, we are reestablishing quarterly sales and earnings guidance. We expect sales in the first quarter of $640 million-$670 million and earnings per share between $0.52-$0.58. Just a reminder, our outlook does not include any impact from the pending acquisition of Knoll. We've navigated the challenges of the past year exceptionally well, accelerating our own transformation and further strengthening our leadership position across every segment of our business. We're entering this new era in our industry in a position of incredible strength, and we're confident in our ability to continue to grow the business and create value for all of our shareholders. Our differentiated capabilities enable us to serve both contract and consumer audiences in every way and everywhere they want to do business with us, and we will continue to differentiate ourselves with a customer and digital-first approach in everything we do. Looking to the future, we're very pleased with the progress we're making towards finalizing our agreements to acquire Knoll. We expect the deal will close within one week of the scheduled July 13th shareholder meeting, assuming, of course, we receive both Herman Miller and Knoll shareholder approvals at those meetings. In anticipation of deal close, our integration planning teams are preparing our day one readiness plans, designing organizational structures and operating processes, and creating detailed synergy plans for their respective areas. Our goal is to bring the best of both companies together as we unite to create our new combined organization. We expect the integration process will be seamless for all our stakeholders. As the preeminent leader in modern design, the combined Herman Miller and Knoll will be at the forefront of transforming our industry during this period of unprecedented disruption. We'll be placed to serve our customers everywhere with a broad portfolio of design-driven brands and products, advanced technologies and digital capabilities, and a deep bench of talent. Together, we'll continue to drive sustainable design and innovation for years to come. I have to say that none of this would be possible without the incredible people who make up the Herman Miller community, and I'm so grateful for their efforts this past year. I'll close with a huge thank you to our teams around the world who continue to power our transformation and have helped make fiscal 2021 one for the record books despite many obstacles. It's a very bright future, and it's an exciting time to be part of our organization. With that, I'll turn it over to you, operator, for questions. Ladies and gentlemen, if you would like to ask a question, please press star and one on your touchtone keypad. Your first question comes from the line of Greg Burns with SIDOTI & Company. Your line is open. Morning. Relative to the guidance for the first quarter, your revenue was strong, a little bit better than we were looking for, but EPS was a little bit light. If you could just walk us through your outlook for margins for the first quarter, what's kind of driving that EPS that you're looking for? Good morning, Greg. This is Jeff. I'll start and others can join in if they have some additional color they want to add. Maybe the first thing that I would say is just to level set, and Greg, I think you made reference to this in your note that you published this morning, but I think it's important that everyone understand. Our fourth quarter earnings per share reflect a lower than normal effective tax rate. Let me start with our adjusted effective tax rate for the fourth quarter was just under 12%, and it was lower as a result of some favorable items that were all good news and will generate favorable cash flow for the business, but it lowered that rate from typical levels. Our normalized tax rate you can think of as being somewhere between 21%-23%, as you probably know, Greg. What were those favorable items? We had about $4 million of favorable tax items, $2 million of which came from the utilization of an NOL, as well as we sold off some state tax credits that we were able to find a buyer for, which was a great benefit to us. Then we had true-ups that made up about another $2 million. There's about $4 million of favorability in the tax rate. If you normalize for that in the fourth quarter, then you'd see sequential improvement going from Q4 to Q1 in earnings per share, which is what you would expect because our guide for revenue is higher in Q1. I just wanted to make sure we level set with the effective rate. Now, to your question, within the guide, you look at the drivers of gross margin. It's no secret. We're feeling the impact of inflationary pressures in the business. We expect commodity pressures sequentially from Q4 into Q1 will drive an estimated $4 million of increased cost that will pressure gross margins. We're doing everything that we can, and there are things we can do. We put a larger than normal price increase in effect, effective the beginning of June. As you know, it takes time for that to layer itself into the results on a Contract business. We'll start to feel the benefits of that as we move through the first half of the fiscal year. We're also feeling it in the area of direct labor costs, like so many companies are, and we expect that that's going to drive an estimated $1 million of sequential increased cost. Those are two inflationary pressures that we're going to feel the impact of in our Q1 gross margin. Now we will offset some of that, not all of it, but some of it, with improved leverage because as we've said, order rates are improving in the North American Contract business, and that will translate itself into higher production levels, and that helps our gross margin story. Then you also have, it's probably worth highlighting, as that North American Contract business begins to pick up steam in terms of revenue, you have a channel mix, basically difference in the business from where we've been, right? As the Contract business continues to grow, you'll see a higher blend of Contract gross margins, which are structurally lower than you see in the Retail business. That's just a mix issue as much as anything. Lastly, and I'll pause, make sure that I'm getting to your question. In the area of operating expenses, you've got higher sequential revenue in Q1, and with that, you've got variability in the operating expenses that come with that, as well as some additional investments that we're making in the area of IT and digital, which isn't new news. These are initiatives that we've been talking about that are going to cause operating expenses to be up a little bit sequentially from Q4. Hopefully that gives you the kind of the major pieces that speak to the earnings per share trend. Yeah, no, that was perfect. In terms of the price increases, is that June? Is that your second for this year or your first, and what's your view on where we are in terms of the need for maybe additional price increases? Yeah, that's our first one in this calendar year, Greg. We are keeping very tight watch on the commodity trends, and we will not hesitate to take additional action if we think that's needed. We're also doing, like we always have, everything we can to reduce costs by working with our suppliers, by looking at things like value engineering within the manufacturing plant. Those are all standard fare here at Herman Miller, and our teams are doing a great job leaning into those. However, the ramp up in costs are real. They're upon us, and we're looking closely at it, and if we have to, we will certainly consider an additional price increase. I don't know, John Michael, if you have anything that you'd add there from the North American Contract side, because so much of these commodity costs are impacting the Contract business. Feel free to add any other commentary. I think you covered it well, Jeff. We're feeling the pressure, so are our competitors as well from a commodity perspective. It goes with the general inflationary trend across our economy right now. Lastly, in terms of the order patterns in the North America Contract business, I guess we're starting to see some green shoots pop up here and pointing to recovering that market. Can you just give us some insight into maybe how the order patterns have trended as we move into the first quarter here in the first couple of weeks? John, you want to take that one for North America? Sure, I'd be happy to. As Andi mentioned in our opening comments, from a year-over-year perspective in Q4, we saw a significant strengthening in the second half of the quarter as opposed to the first half of the quarter. From Q3 to Q4, again, significant increase as well, 21% sequentially from Q3 to Q4. Starting Q1, year-over-year comps were up just a tick under 30% from a year-over-year basis. We're seeing strengthening really across the board. I think, one other thing of note is many of the largest markets in North America, from Boston, New York City, the Bay Area, Chicago, Toronto, are markets that are slower to open up than a number of other markets across North America that are already open. We're encouraged to see the strength that we're seeing already, and I think as some of these larger metro areas begin to open up even more in late summer and fall, that should continue to have a positive impact. Yeah. Greg Burns, this is Jeff Stutz. I might just add one other bit for you, just to give you a sense for pacing through the quarter. At the consolidated group level, orders averaged in the months of March and April combined, about $48 million a week. We saw a nice improvement in the month of May. They jumped up to $60 million, and in the first three weeks of the new quarter, they've maintained at that $60 million level. We've seen a nice acceleration. I think it just speaks to the fact that, it was late in the quarter that we saw the pickup. The good news is it's continued through the early part of the first quarter. As John Michael mentioned, there's a lot of signs out there that give us reason for increased optimism going forward. Yeah, I would add we're seeing the same in the international markets as well. That's another good point. Yep. Okay, great. Thank you. Your next question comes from Steven Ramsey with Thompson Research Group. Your line's open. Hi, good morning. Hi, Steven. Yeah, curious. I guess a couple of questions thinking about supply chain challenges. I guess, does the Q2 sales guide reflect these challenges, I guess, holding back the ability to deliver demand in a timely manner? Or another way to ask it, is demand exceeding sales currently? Steven, this is Jeff. You referenced Q2, you mean Q1 guide, just to clarify. Clearly, there's some outlet, Debbie and others might have some color that are real specific to their business. What I can tell you is that on the edges, we are feeling some of the impact of things like container shortages and container delays. We've tried to do everything we can, and we're managing it quite well to date by selectively adding inventory, and doing some expedited freight, which obviously comes at a cost. We're trying everything we can to manage that. I think we're doing an okay job. There's nothing there that is terribly alarming right now, but it's something we're watching, and there's a lot of news these days on that. There are some additional challenges around availability of some inputs like glue. We had talked about foam earlier in the year, some other additives in the manufacturing process that we're working through those. Again, nothing super significant. I think our biggest challenge right now is labor from a manufacturing standpoint. This is mainly a U.S.-based issue, although not exclusively in the U.S., but it's principally a U.S. contract. As it stands right now, there are some extended lead times that we're seeing in pockets. I don't know, Debbie, on the Retail business, if you want to add any additional thoughts here. We're managing it as best we can, but it's top of mind for sure, and there are issues on the edges. Absolutely. In Retail, in particular, our sales as a percent of demand in Q4 was about 91%. That's actually pretty typical for what we would expect in Q4, given that we have one of our largest promotional events of the year at the end of May. We typically expect to see those products ship in June and July. Looking into June, we'll see that those two numbers closer to even, which is what we would expect coming out of that large promotional period at the end of the quarter. I'd say the place where supply chain issues are really impacting us is in our product lead times, which affects our conversion rate. Certainly as we bring customers into the funnel, we leave dollars on the table when those customers don't convert because of longer lead times than normal. We believe that had a fairly significant impact in Q4. Of course, we're very happy with the performance of our sales growth and order growth in Q4. There is some missed opportunity because of these order lead times. I will say, as I look across the competitive set, I feel like we've been in a relatively strong position, especially given the amount of our overall offering that we manufacture ourselves and do so domestically. That's been a real benefit for us versus the competitive set. There's some places where our in-stock rates are not quite where I'd like them to be. At DWR in particular, has seen impact there. As Jeff said, we're working very diligently to continue to mitigate these supply chain challenges, but they are very real. Helpful color. I have a couple other questions on Retail. Maybe to start with on margins, the self-help story, meeting strong demand, clearly bearing fruit. I know self-help never ends, but you come off this low base sustainably. How much further is left on the big improvements you can make in Retail? As you open up new stores, how much are the new store openings reducing near-term margins? Well, the great news is that the new stores that we've been opening have been performing well above our operating income targets. We're exceptionally pleased with the performance and have a roll-out plan that paces about the same rate as what you've seen from us in terms of store openings over the last six months. Those stores are adding to our operating income rates and our margin rates in what will become a meaningful way as that fleet grows. In terms of the current mix of margin improvement that we're seeing within Q4 year-over-year, is that the biggest element of margin improvement comes from department mix. We're monitoring closely as we see shifting relationships between Workspace and our non-Workspace categories within Retail. However, given that absolute sales in Workspace demand increased 4% in Q4 over Q3, the total base increased. Then within our non-Workspace categories, we're actually seeing accelerated growth there versus what we're seeing in Workspace. That's indicative of an improving overall opportunity in our decorative furnishings categories. That is an area where I believe we have the opportunity to increase the amount of exclusivity in our assortment and the amount of private label development where there's enriched margin opportunities. Yeah, just to add in. Thank you, Debbie. We really are at the infancy of our residential Retail growth spurt. What Debbie and the team have been doing, have been really sort of building the business model for the future so that we can gain market share in our DWR concept. Our Herman Miller are brand new store concepts. You have to remember too, that HAY is also at just the beginning to get off the ground from a Retail standpoint. It's hard to low-hanging fruit. The operational processes, the discipline, the assortment opportunities that Debbie has in the business are just beginning to take hold. As we increase our market share in the residential part of the business, we see a long runway of opportunity in all of the brands that we have in our direct-to-consumer front. Thank you for that. Then on the Retail margin moving from the high teens, low 20s% range in the last few quarters, can you maybe bridge that to the low teens targets you have over the long term? Trying to get a sense of how much of this is elevated sales and drop through, and if there's the impact of reduced expenses coming in that segment a little. Steven, I view this as an investment year for our Retail organization. We have seen tremendous growth over the last 12 months, and that is on an infrastructure that was developed to support a very analog showroom model. This is the year that we will be building out the infrastructure to support a multi-brand omnichannel business that is focused on both customer acquisition and LTV growth. What that looks like is the build-out of an omnichannel POS, applying an allocation system, an order management system refresh. All of these things are critical to scaling the business on the vision that I've been pursuing along with my team over the last 12 months. As Andi said, we're at the infancy of executing that vision. These infrastructure investments are critical to allow us to continue to grow. Great. Last one from me. As you think about the office look and feel post-pandemic, what you see in your order book and backlogs and conversations, does that look much different than the pre-pandemic office? It looks quite different. John, you're nodding your head. You want to step into that one? Sure, be happy to, Andi. Thank you, Steven. Just a couple anecdotes to add some color to your question. We had, in the last couple of weeks, a roundtable with a number of A&D firm principals talking a bit about pre-pandemic versus post-pandemic client engagements that they're having. They all shared that pre-pandemic conversations were about cost per square foot and densification and those types of topics that have now switched to how do we attract and retain employees, how do we facilitate collaboration and connection across our employee base. Totally different set of criteria, if you will, that people are thinking about in terms of what they want their space to do for them. That obviously drives some change and modification in terms of the specification and the product solution set that we provide for individual projects and clients. We're seeing that shift and quite frankly, we're encouraged by it because those types of conversations about using space strategically as an asset to improve business results is what we talk about and what we do well and what our products support. We're definitely, I think, seeing the market conversation kind of move right into some areas where we've got a lot of help to provide. Thanks, John. This is Jeremy. Let me just add some color from an International perspective. I'd say a couple of things here. One is, some have said, well, some large users are talking about the need for less office space going forward because more people are working from home. What we've been finding is that maybe the 90% of space that will be left, most all of it may not be quite fit for purpose. All of it needs to be dealt with. We are well-placed with all of the investment we've made in research and insight to have those conversations with customers around the world. There's another piece that I think is extremely interesting development in recent years. As we've acquired more companies and as we're on the brink of acquiring another large one, we bring more global industrial design talent into the stable. These are people who are well-versed in the needs of global markets and are bringing to market products like OE1, which has just launched to rave reviews. It's a British industrial design firm, tremendous credentials, and we're excited about the impact that's having as we preview that product line because it looks just like it was designed for this time, which it was. That comes to market now, and so we think we're extremely well-placed to take advantage of the conversations that our customers are having as they scramble in these coming months to return to work. Great. Thank you. Your next question comes from Reuben Garner with The Benchmark Company. Your line is open. Thank you. Good morning, everybody. My first question, apologies if this was asked, I had some connection issues at the end of Greg's questions. Can you just comment on the recent order trends? It sounds like it got better as the quarter progressed. I mean, even into June. What can you tell us about where orders are, whether it's year-over-year or maybe even relative to pre-pandemic levels in North American Contract specifically? Yeah, Reuben, we did touch on that briefly, but I'm happy to just recap it because I think it's really an important point to emphasize. Order trends, let me start first just talking about sequential order trends from the third quarter to the fourth quarter. In total, we saw orders at the consolidated level grow 23% sequentially. What was kind of fascinating is that across each of the three business segments, it was quite consistent sequential order growth. The North American Contract business was 21%-22%. Retail was up, I think, 26% sequentially. The International business was up 23%. Those are all very similar percentage changes, all positive sequentially, and I think very reflective of that growing momentum that we're seeing. When you look at intra-quarter order pacing, I made this comment earlier, but I'll just repeat it. In dollar terms, the average orders were $48 million per week in the months of March and April combined. That increased in May. We saw a nice acceleration to $60 million. In the first three weeks of June, fiscal June, it's maintained at about that $60 million level. It's a good sign. It's not as though it bumped up in May and fell off a cliff in the early part of the quarter. As Andi said at the beginning of the call, there's a lot of external factors, I know you're aware of this, but there's a lot of external factors that continue to point to reasons for continued optimism and ongoing growth moving forward. Hopefully that gives you some color that's helpful to your question. It does. Jeff, what the run rates have been in this time in 2019 relative to that $60 million? Are we 20% off still? Any rough estimates there? I'll take this to Retail w hile Jeff's pulling the Contract numbers. In Retail in particular, we're really focused on our performance to last year, 2019, given that we're now coming a quarter where we had stores closed and a surge in our e-commerce channel. Our order growth in Q4 was up 73% to 2019. We feel very positive about that new watermark in the overall Retail business. Yeah. Reuben, on a consolidated level, just in total for the business, if you look at the month, orders were for the full quarter. Now I'm comparing Q4 just completed to Q4 of 2019, so pre-pandemic fourth quarter. They were down, I think, 7% organically in total. Still down, but here's the encouraging part. In the month of May, the orders were up 6% at the consolidated level versus pre-pandemic. At this early phase of a recovery, that was a very encouraging metric to see the total orders for the entire group up to May of that 2019 year. It is. That's perfect. On the price cost, just to follow up. I think you said there was $4 million of incremental cost pressure sequentially from Q4 to your Q1 guide, and then $1 million of direct labor. Did I hear that right? That is correct. Yep. Okay. The follow-up question to that is maybe in terms of price cost, how much price cost pressure did you have in Q4? What does that look like in Q1? I know you're just starting to layer in a price increase. When do we see that price cost pressure on a year-over-year basis dissipate? Will it be as soon as Q2, or will you not be quite caught up yet? Yeah. We had commodity pressures. I just want to be clear on the reference points here. If you look Q4, just completed fiscal 2021 versus the prior year fourth quarter, commodities accounted for about 50 basis points of gross margin decline. Kevin, keep me honest here. In dollar terms, $3 million? About $3 million. Yeah. Year- over- year. Really no price increase to speak of to help offset that, Reuben. Now moving forward, we do have a price increase effective June 1. You referenced the $4 million expected additional pressure. We've got a lot of history to look back to see how this plays out. Obviously, there's lots of parts to this equation, including what happens to commodity prices from here forward. If they continue escalating, that's a very different answer. We should start to see the effect of that price increase layer in. We won't get much benefit in Q1. We should definitely start to feel the effect of it as we move into Q2. Our hope and belief is we'll start to see some of these commodity pressures begin to abate in the back half of the calendar year. Pure speculation at this point. That's our belief. Even if it doesn't, that price increase will continue to escalate and benefit our results as we move into the latter part of FY 2022. Okay. I think a couple of your competitors have a couple of price increases out there. Can you comment on maybe what the level of your one increase is? You mentioned, I think it was larger than usual. Is your one increase sort of in the ballpark of what the others are out with two increases and that's the right way to look at it? Yeah. Our price increase in June is 5%. As we look forward, I know you guys may or may not remember that we revamped our kind of process around pricing increases, so we're able to take them much more quickly if we need to. As Jeff alluded to earlier, we're going with the 5% because we're believing that the commodity pressure is going to ease up later on in the year. If we have to follow up with another, we will. We feel good about what we've done so far to offset. As you said, the Retail is more fluid. That's related to the Contract business. Understood. Last one for me, if I could squeeze one more in, is just a follow-up, and I don't know if this question is best for Debbie or Jeff or whoever. The Retail margins this year close to 20% for the year and that bridge to getting to the low teens. Is low teens the target for your fiscal 2022? The difference between where you are today and there is you're investing in the business? After 2022, assuming those investments go away, is there anything stopping the margins from going back towards the level that you've done over the last year? I guess, are there any other elements besides the investments that you're going to make this year to grow the business that take you from 20% to the low teens? What I outlined already is really an FY 2022 investment plan, and beyond FY 2022, we will start to expect to see margin rates begin to build again. Those obviously investments we're making in growth which I feel very bullish about. We will be continuing to invest in digital this year with the relaunch of the HAY website in the U.S. and the launch of a European HAY direct-to-consumer website experience at the beginning of next calendar year. From an assortment perspective, we're continuing to drive newness on a monthly basis, and that had a significant impact for the last fiscal year. In fact, our assortment newness between all the various categories in decorative furnishings and gaming drove $87 million of incremental volume in the full year. As we continue to expand in newness, we'll be watching the impact on margin mix very carefully. As I said, the private label development is an important part of that new strategy so that we're protecting those margins longer term. We continue to have really positive results in our marketing strategy as we've adjusted both our marketing channel mix and the quality of our content. Our marketing spend as a percent of sales was down below 5% in Q4, and that's versus 7.5% same period last year. Our cost to acquire customers is down below $50 versus above $90 for FY 2020. As we continue to enhance our data capabilities and our CRM capabilities, we should see continued growth in the LTV of our customer base as well as continuing to drive down our customer acquisition. Just to recap, it's an investment year, and we anticipate we'll go from high teens, and this is a mid-year point, but to mid-teens, not low teens. We also anticipate that getting back to high teens and beyond will be a definite possibility as we move out of this year, for sure. Great. Thank you guys so much. That is very helpful, and good luck going forward. Thanks. Your next question comes from the line of Alex Fuhrman with Craig-Hallum Capital. Your line is open. Great. Thanks very much for taking my question. Would love to get a little bit more color on where you started to see the demand coming back in North America. Has there been any big variations in terms of regions of the country or industry groups? Then in particular, I'd be curious to see, just recently, I guess only a couple of months ago, you launched Herman Miller Professional. I would be curious to see what you're seeing from small and medium-sized businesses and if that could be a big growth vertical and a big part of your business in the post-COVID economy. Yeah. I think it absolutely will. Jeff, did you want to add to that? Well, I was going to speak. I can speak to a few details on HM Professional, but I don't know if Andi or John, if you want to talk a little bit about what we're seeing regionally in North America. Sure, I'd be happy to, Jeff. Hi, Alex. I think from a regional perspective, clearly South and Midwest seem to have bounced back a bit more quickly in terms of their economies opening up, which obviously drives demand. As I mentioned it earlier in the call, I also think a number of the largest markets in North America from a Contract perspective, Chicago, New York City, the Bay Area, Toronto, have been a bit slower to recover. We're starting to see that activity in those markets now and believe that will bode well for continued demand increase in the fall. Yeah. Alex, by the way. I'm sorry, Jeremy, go ahead. The world's a big place, Alex. In fact, customers that are operating, sorry, they're operating on a global basis. Maybe a little quieter on one coast or another in North America, but in fact are very active in global markets. Let me give you a couple of examples. In India, we recently landed a $6 million order for one of the big tech companies and for another one in Okay. Sorry, can you hear me now? Yeah. Yeah. We also landed an $8 million order in Tokyo, Japan, with a West Coast-based big tech company just in recent weeks. I always like to think about us globally, not just regionally North America, because many of these clients are global clients of ours. No, that's great. Alex Fuhrman, this is Jeff. It's great to have you on the call. Welcome. I might just tag on a couple metrics on Herman Miller Professional, which we're very excited about. Now it's early days, right? We're two months in as of the end of the quarter. Early signs are really good, and we have fairly high confidence that this is in effect incremental to what would be our typical book of business. I think it really gets to that small and medium-sized business question that you're asking. Early metrics are encouraging. We had almost 770 new customer registrations just in the first couple of months. Over 500 projects created. Now, the Average Order Value of these is pretty small, which by the way you would expect it to be because of the nature of the customers that are registering on the site. We've got a great digital team that is sitting behind this and helping support it and a terrific group of dealers that are also supporting this as well. Anyway, we're very encouraged, and we expect big things from this going forward. That's terrific. Thank you all very much. Thank you. Your last question comes from Rudy Yang with Berenberg. Your line's open. Hey, good morning, guys. Thanks for taking my questions. Could you just talk a little bit about some of the spending patterns you've been seeing in Retail? I guess specifically, are you noticing the average spend per customer starting to increase as work from home starts to become more permanent for some workers? As our channel mix has shifted quite a bit, we're seeing movement in our average order value. Average order value is much higher in our studio channels, and then for the e-com channel, it's a little bit lower. Average Order Value is up in Q4 year-over-year, and we'll continue to monitor that as we have channel mix shift. Got it. Back to your brick and mortar, things like store traffic is getting stronger and DWR sales. Can you just discuss some of the maybe new customer acquisition rates you've seen from your physical stores, and given the continued success there, what does your plan look like to open more throughout the upcoming fiscal year? We've been happy with the new customer acquisition we're seeing from those stores. We're about half of the volume that we're doing through those new stores, particularly under the Herman Miller brand, are new customers. Both our repeat customer and new customer segments increased year-over-year. Our customer acquisitions for the full year in total across our whole business was up 136% to the prior year. The new stores are an important part of our awareness strategy. We know that this category of ergonomic seating in particular is a category that customers need a lot of help with. For a lot of our residential customers, it's a first-time purchase. That store experience is crucial. Given where the operating margins are actualizing at a much higher rate than what we modeled, we feel bullish about a physical Retail growth strategy. We believe that the positioning of the Herman Miller seating stores as positioning the product as a performance and health and wellness tool is proving to engage a new customer beyond a customer that just thinks about an ergonomic office chair and a piece of furniture to sit on. We believe that there's plenty of longevity in this model beyond the short-term pandemic needs. I think, Debbie, do you want to touch a little bit on the recent openings with HAY and the kind of demographic that is touching from a customer standpoint? Absolutely. Within Q4, we opened a seating store on Greenwich Avenue in Greenwich, Connecticut, then we opened Fulton Market, which is a multi-brand Retail experience that includes HAY, Design Within Reach, and Herman Miller. Then we also opened within the quarter a HAY location in Berkeley, California, and a new small format Design Within Reach location in Southampton. All of the locations we opened within the quarter are performing well above our modeling expectations. HAY, in particular, is the first location in North America where I'd say we're appropriately engaging with the right demographics. We believe that we now have a line of sight to a HAY physical Retail model that will perform where we need it to. The small format Design Within Reach in Southampton is a much lower investment way for us to get into secondary markets. That particular location, coupled with the Design Within Reach within Fulton Market, is the first expression of our assortment expansion strategy, which covers a broader range of modern style that is then curated to the particular market that we're presenting it in. We feel very positive about the brick-and-mortar opportunities across all three of these Retail brands. I think the way that Debbie and Ben Groom and the teams have managed our investment in our digital capabilities, coupled with brick-and-mortar expansion in a prudent and thoughtful way, will really enable us to reach a variety of customers more efficiently than we've been able to do before. We're very excited about that. Got it. Super helpful. Last one from me is just on backlog. Obviously it increased a bit since last quarter, but can you just break down what's driving most of your backlogs currently and how much of it is possibly being built up from the delay in shipments and deliveries? Yeah. This is Jeff. You broke up a little bit there with the question, but I think the question, in essence, is the schedule of the backlog. Correct me if I'm wrong on that, and we can speak to it. What I would tell you is that the backlog, and this is, I think, an encouraging sign. As order momentum has begun to pick up, and it happened later in the quarter, we are seeing some projects, particularly in the North America Contract side, that our schedule had pushed out beyond Q1, which I think informs part of the reason why orders were as strong as they were in Q4. The revenue guide might be a little lower than it normally looks in relation to the order rates. It's because that backlog has a few more projects than normal that are dated beyond the first quarter. A little bit of a timing issue there. Let me pause there and make sure that that's the essence of your question, or if there was something a little deeper. No, that's perfect. Great. Great. Thanks so much, guys. Appreciate it. Thank you. All right, I'm showing no further questions at this time. I would now like to turn the conference back to Andi Owen. Thanks, operator. Thanks, everyone. Really appreciate you joining us today. We appreciate your continued interest in Herman Miller, and we're looking forward to updating you again next quarter. Be well, everyone. Bye. Ladies and gentlemen, this concludes today's conference. Thank you for your participation, and have a wonderful day. You may all disconnect.