Hooker Furnishings Corporation

good day and thank you for standing by welcome to the hooker furnishings corp second quarter 2025 earnings webcast at this time all participants are in the listen-only mode after the speaker's presentation there will be a question and answer session to ask a question during the session you will need to press star 1 1 on your telephone you will then hear an automated message advising your hand is raised to withdraw your question please press star 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.

Thank you, Daniel. Good morning and welcome to our quarterly conference call to review financial results for the fiscal 2025 second quarter, which began April 29th and ended July 28th of 2024. Joining me this morning is Jeremy Hoff, our Chief Financial Officer. We appreciate your participation. I mean, our chief executive officer. I'm sorry. We 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 2025 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. Despite persistent weak market conditions, sales in the second quarter, typically our slowest quarter, outperformed the first quarter. This morning, we reported consolidated net sales of $95 million for the fiscal 2025 second quarter, a decrease of 2.7 million or 2.8% as compared to the last year's second quarter. The low single-digit sales decrease was a solid sequential improvement from last quarter's double-digit sales reduction. Net sales decreased by $2.3 million at Domestic Upholstery and $1.6 million at Cooker Branded, while Home Meridian saw an increase of $1.6 million driven by strong sales in its hospitality business, which more than offset the loss of $3.5 million of liquidation sales from the unprofitable ACH product line we exited last year. We recorded a consolidated operating loss of 3.1 million and a net loss of 2 million, or 19 cents, per diluted share. Both operating and net losses improved compared to the first quarter's losses of 5.2 million and 4.1 million, respectively. During the fiscal 2025 six-month period, consolidated net sales decreased by 31 million, or 14%, compared to the same period last year, also due to persistent low demand for home furnishings. driven by macroeconomic uncertainties. The absence of $11 million in revenue from the ACH product line accounted for approximately 35% of the sales decrease. We reported a consolidated operating loss of $8.2 million and a net loss of $6 million or $0.57 per diluted share for the first half. Now I'll turn the call over to Jeremy to comment on our fiscal 2025 second quarter results.

Thank you, Paul, and good morning, everyone. Challenges in the macroeconomic and furniture retail environment have extended well beyond our expectations. The combination of high interest rates, a housing shortage, and elevated home prices have created a sustained housing downturn for over two years. While retail sales are doing well overall, furniture retail is not. In response, we continue to focus on the things we can control to ensure we're in the best possible position to grow when the macro environment improves. As we announced last quarter, we have begun a cost reduction plan aimed at reducing fixed costs by 10% for a total of $10 million in annualized savings. As of now, we expect to exceed that target. Approximately $5 million in savings is expected to be realized this fiscal year, split between the third and fourth quarters. In our cost reduction measures, we are focused on reducing non-strategic costs while continuing to invest in revenue and profit generating initiatives. Reductions will come from the consolidation of certain operations and fixed cost reductions, including reducing the company's Savannah warehouse footprint by half and restructuring the Bobo business into the Hooker branded business, eliminating Bobo's retail store and separate warehouse, among other measures. In addition, the company just completed an early retirement offer to qualifying employees and just yesterday further reduced our workforce for an annualized savings of almost $6 million. We expect to record $3 million of severance expenses in our fiscal 25 third quarter. While we continue to focus on our growth, in April, industry veteran Caroline Hippel joined us in the new position of Chief Creative Officer to lead a re-merchandising of Hooker Legacy Brands, which aims to position the company as a more integrated, whole-home, consumer-centric resource with an elevated aesthetic and presentation. While early in this shift in our merchandising strategy, we have had a very positive reaction from customers in previews of new products targeted for the next high point market. Our partners' positive feedback has given us the confidence to place initial cuttings prior to the October high point market launch. Essentially, this gives us a three-month head start on selling these products. The increased speed to market mentality helps strengthen our assortment for next year. We remain confident that the strategies we are pursuing in operations, marketing, and merchandising are transformative. Extended downturns present opportunities to recalibrate and reinvent aspects of our business. Now I want to turn the discussion over to Paul, who will discuss highlights in each of our segments.