Tile Shop Holdings, Inc.

Good day, and thank you for standing by. Welcome to the Q3 2022 Tile Shop Holdings, Inc. Earnings Conference Call. At this time, all participants are in a 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. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Mark Davis, Vice President Investor Relations and Chief Accounting Officer. Please go ahead.

Thank you. Good morning to everyone and welcome to the Tile Shop's third quarter earnings call. Joining me today are Tad Loma, our Chief Executive Officer, and Carla Lunen, our Chief Financial Officer. Certain statements made during the call today constitute forward-looking statements made pursuant to and within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 as amended. Such forward-looking statements are subject to both known and unknown risks and uncertainties that could cause actual results to differ materially from such statements. Those risks and uncertainties are described in our earnings press release issued earlier and in our filings with the SEC. Forward-looking statements made today are as the date of this call, and we do not undertake any obligation to update these forward-looking statements. Today's call will also include certain non-GAAP measurements. Please see our earnings release for a reconciliation of those non-GAAP financial measures, which has also been posted on our company website. With that, let me now turn the call over to Cam.

Thanks, Mark. Good morning, everyone, and thank you for joining us today for an update on our business and a review of our third quarter financial results. Our team is pleased with the quarterly results we announced earlier this morning. While the macro environment remained volatile, we continued to grow sales at comparable stores and ended the quarter with $97.2 million of revenue. This represents our sixth consecutive quarterly sales record for the respective quarter. We also delivered good flow through to the bottom line. Our sales strength, combined with disciplined expense management practices and share repurchases, resulted in earnings per share that doubled what we reported in the third quarter last year. These results have been made possible by focusing on our team, refining our processes, and investing in technology. We've made significant progress over the last year, and I'm proud of what we've been able to accomplish. I'm also pleased to announce that we completed our share repurchase program. Carla will discuss the details of the repurchases in just a few minutes. At the same time, I see new challenges on the horizon. We've enjoyed a period of very strong demand for home improvement products over the last two years. Rising interest rates and decreases in housing turnover signal that a slowdown in remodeling activity may be coming. Now, I've been with the tile shop for over 20 years, and I know this is a resilient organization. In fact, we've shown that we can grow even when the macro environment is challenging. We're focused on staying proactive with the goal of sustaining our current level of success. As we look ahead to 2023, I believe we can position the company to grow even in a challenging environment by executing the following objectives. First, we're expanding our line of luxury vinyl tile products. For several years, LVT has been one of the fastest growing product categories in hard surface flooring. Initially, we were hesitant to enter this market given product quality concerns, a lower margin profile, and the question of whether our customer base would accept it as a viable option. Over time, product innovations have led to a number of higher quality LVT products and consumer demand has increased. Several quarters ago, we initiated a test to pilot a small line of LVT products in our stores. This test showed us that LVT lines had broad appeal with both pro and retail customers. We've also learned that many customers who buy LVT from us also buy tile from us, and often on the same order. Over the summer, we have actively worked with our suppliers to expand our assortment of LVT products that launched at the end of October. We've added over 40 products to our assortment at a range of price points that we believe will resonate with our customers. While the margin profile of an LVT sale is lower than the margin profile of a tile sale, we believe that the additional volume will help us leverage our investments in store and distribution assets and improve overall profitability. Second, we're planning to open new stores in 2023. New store openings have been on pause since our Wayne, New Jersey store opened in the first quarter of 2021. We felt it was prudent to focus on our existing store base until the vast majority of our stores were operating with historical norms. We've made significant progress over the last two years and believe we have a path for continued improvements within our existing store base. Given the volatile macro environment, we're planning to take a conservative approach to store growth. At this time, we anticipate opening two new stores and relocating a third store in 2023. Over the last year, we've added to our construction and design teams to help position the company for growth. We've invested in talent initiatives to establish a bench of managers ready to take on new stores. We're currently refining our new store opening process, and I'm excited for the opportunity for measured growth in 2023. Third, we'll continue to invest in initiatives to expand our digital capabilities and reach. We've made some nice progress over the last year in this area, but believe there's still significant untapped potential. We've recently added to our e-commerce team and look forward to accelerating the pace of change and effectiveness of our digital strategies. Last, and perhaps most importantly, we will continue to focus on developing our team and improving execution in our existing stores. We've seen some nice improvements in pro-growth, conversion rates, discretionary discounting practices, and shrink losses across many of our stores. This has helped drive improvement in store-level financial measures such as sales per store, and store-level EBITDA. As we look ahead to 2023, I believe continued focus on talent development and sales excellence will be a key catalyst to propel the company's performance to the next level. With that, I'll now hand the call over to Carla to walk us through the third quarter results. Carla?