Flexsteel Industries, Inc.

Good day and welcome to the Flex Steel Industries second quarter fiscal year 2026 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch tone phone. To withdraw your question, please press star then two. Please note that this event is being recorded. I would now like to turn the conference over to Mike Ressler, Chief Financial Officer for Flex Steel Industries. Please go ahead.

Thank you, and welcome to today's call to discuss Flex Steel Industries' second quarter fiscal year 2026 financial results. Our earnings release, which we issued after market closed yesterday, Monday, February 2nd, begin, I would like to remind you that the comments on today's call will include forward-looking statements, which can be identified using words such as estimate, anticipate, expect, and similar phrases. Forward-looking statements by their nature involve estimates, projections, goals, forecasts, and assumptions, and are subject to risks and uncertainties that could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements. Such risks and uncertainties include, but are not limited to, those that are described in our most recent annual report on Form 10-K, as updated by our subsequent quarterly reports on Form 10-Q, and other SEC filings as applicable. These forward-looking statements speak only as of the date of this conference call and should not be relied upon as prediction of future events. Additionally, we may refer to non-GAAP measures, which are intended to supplement but not substitute for the most directly comparable GAAP measures. The press release available on the website contain the financial and other quantitative information to be discussed today. And with that, I'll turn the call over to Derek Schmidt.

Derek? Good morning, and thank you for joining us today. I'm pleased to share our second quarter results and to spend some time discussing how Flex Steel is performing in an environment that continues to be highly dynamic. Industry demand remains uneven, tariff policy is evolving quickly, and consumer behavior continues to shift. Against that backdrop, I'm encouraged not only by the financial results we delivered this quarter, but by how our organization is operating with agility, discipline, and a clear focus on long-term value creation. During the quarter, we delivered strong year-over-year sales growth of 9% in meaningful profit improvement, extending the momentum we've built over the past two years. Importantly, this performance was achieved while navigating a very choppy external environment, underscoring the progress we've made building an organization that can adapt quickly to change without losing focus on execution. What's particularly encouraging is the quality and balance of our growth. We are performing well in our core business with new product introductions and share gains with strategic accounts. At the same time, we're seeing steady progress in newer and expanded markets, including health and wellness and case goods. The diversity of these growth drivers gives us confidence that our momentum is becoming more resilient and less dependent on any single product category, customer, or market condition. What's notable this quarter is that our growth drivers are reinforcing one another and scaling more effectively across the portfolio. Our investments in consumer insights, product development, and innovation are improving the effectiveness of new launches, while stronger partnerships with retailers are helping accelerate adoption of new products across multiple categories. This breadth of contribution gives us confidence that our growth is becoming more durable, even as industry demand remains uneven. While we're encouraged by our continued sales growth, I'm equally pleased with the progress we're making on profitability. This quarter's operating margin of 7.6% and the continued year-over-year profitability improvement reflects the disciplined way our teams are managing the business amid a complex and changing environment. Our margin performance continues to benefit from a combination of sales leverage, productivity improvements, and thoughtful product portfolio management. Importantly, these gains are increasingly structural in nature. Through consistent execution, we've strengthened our cost discipline improved operational efficiency, and enhanced the margin profile of new and existing products. This operating discipline has been particularly important as we've navigated significant external volatility. The ability to manage costs, adjust pricing thoughtfully, and protect margins while continuing to invest in growth initiatives speaks to how the organization has evolved over the past several years. As we look ahead, While the U.S. economy continues to show areas of resilience, housing activity, consumer competence, and discretionary spending patterns remain inconsistent and continue to weigh on overall industry demand. Feedback from our retail partners suggests that consumer behavior remains highly variable with periods of engagement followed by pullbacks driven by economic uncertainty and inflation concerns. In this environment, visibility remains limited and demand patterns can shift quickly. That said, our teams are staying close to our customers and adjusting as conditions evolve. This flexibility, combined with disciplined execution, allows us to respond quickly to changes in demand while remaining focused on our long-term growth objectives. Tariffs continue to represent a significant source of uncertainty for the furniture industry, and the policy environment remains fluid. As tariff structures evolve, the implications for sourcing, pricing, and demand can change quickly, requiring companies to adapt in real time. Flex Steel has faced similar disruptions in the past, from prior tariff cycles to global supply chain disruptions and rapid demand swings. And those experiences have shaped how we operate today. Our organization is built to respond decisively to external change while remaining disciplined in execution and capital allocation. While the current tariff environment presents meaningful challenges, we believe it also underscores why we've invested in building a more agile and disciplined operating model, including the ability to adjust pricing thoughtfully, manage cost, evaluate sourcing alternatives, and maintain strong customer relationships. all which we believe will be critical in the periods ahead. We believe our agility, combined with disciplined execution and continued investment in our growth platforms, positions us to not only manage near-term volatility, but to continue gaining share over time. Looking further ahead, we are actively evaluating broader cost reduction opportunities and alternative supply chain options that can strengthen our position over the long term. While we expect tariffs and pricing actions to create pressure on both demand and margins in the second half of our fiscal 2026, we are confident in our ability to identify and execute the right actions to support profitable growth over time. We enter this period with a strong balance sheet, solid profitability, and a clear strategic roadmap. Our focus remains on navigating near-term challenges while continuing to invest in the capabilities that drive long-term shareholder value. In summary, our second quarter results reflect an organization that is executing consistently today, while positioning itself to compound growth and profitability over time, even in a volatile environment. With that, I'll turn the call over to Mike, who will give you some additional details on the financial performance for the second quarter and our financial outlook.