Haverty Furniture Companies, Inc.

Good day, everyone, and thank you for standing by. Welcome to today's Haverty Furniture Companies, Inc. Fourth Quarter and Full Year 2020 Financial Results. Today's conference is being recorded, and at this time, I'd like to turn the floor over to Richard Hare, CFO.

Thank you, Operator. During this conference call, we'll make forward-looking statements which are subject to risk and uncertainties. Actual results may differ materially from those made or implied in such statements, which speak only as the date they are made in which we undertake no obligation to publicly update or revise. Factors that could cause actual results to differ include economic and competitive conditions and other uncertainties detailed in the company's reports filed with the SEC. Our President, CEO, and Chairman Clarence Smith will now give you an update on our results and provide commentary about our business.

Good morning. Thank you for joining our 2020 fourth quarter and full year conference call. 2020 was a disruptive and wild year for Haverty's, our industry, and our communities. After closing our stores in mid-March and reopening most of them May 1, we came back exceptionally strong and fought to complete deliveries and reduce our record backlog of undelivered sales. For the second half, we were very lucky. and especially blessed to be part of their homebody economy, where the entire country focused on making their home safer and more comfortable to ride through the pandemic. We broke Q4 records with sales of $241.3 million, up 12.9%, and earnings per share of $1.37 versus $0.31 in 2019. Several trends come to the forefront. Higher gross margins due to better pricing discipline, fewer promotions, lower markdowns, and more special orders, an overall trend that we expect to continue. Lower SG&A of 44.3% of sales compared to 50.8% last year with shorter store hours and reduced staff. Our largest markets produced at record levels and were major profit contributors. Internet sales were our highest producing store at 4.3% of sales since reopening. Buy online, pick up in store is running at 16%, up triple over past years, which along with significant chat increases are new growth and service factors. Written sales continue to grow faster than our delivered sales with double digit gain. Undelivered sales backlogs are at record levels due to suppliers experiencing across-the-board shortages of materials, labor, and import containers. We're very excited about next week's opening of our first store in Myrtle Beach, South Carolina, a market that we have served from surrounding locations but did not have a physical presence. We're opening a store in central Florida in the Villages mid-year and are planning an additional store in an existing market in the fourth quarter. We expect to have one store closing and end the year with 122 stores. We are studying all our major markets closely to make sure that we are well positioned for growth in the future. With our strong store position and brand recognition throughout our regions and over half our stores in Florida, Texas, and Georgia, we are well located in the fastest growing markets in the country. 2021 should be the year to finally reach and exceed our long-term productivity goal of sales over $200 per square foot. For the first time since we began tracking, we've seen consistent sales periods where we had increases in all three key performance metrics, average ticket, closing rate, and traffic count. We continue to have very strong increases in our written sales, even while struggling to bring in product to compete with. fleet deliveries. We believe in staying in front of supply challenges that are playing a part in the inevitable disruption in our industry that the industry is experiencing across the board. All our teams have a very high priority of working closely with all our suppliers and shippers to expedite deliveries. We believe we will come out much stronger in this disruption and with improved service levels over our competitors. We recognize the importance of a top-tier website and are planning significant investments in the coming year to make our site an industry leader. We're determined to make it as easy as possible for our customers to interact with us any way she wants. We know that our website is our front door, and we're dedicated to making everything about Havers.com the best in the industry. We believe that one of Havity's major strengths is a fully integrated, unified operating system, which allows our customers and our team members to have better visibility and quicker response on product availability, delivery times, and service levels. We realize the high importance of fast response and full visibility and are passionate about keeping Havity's at the highest standards. 2020 was a wild, extraordinary year. I'm very proud of all the Habities team members and the dedication to serve our customers during this pandemic. I believe we have the best operating teams in the industry. We've set standards and operating disciplines that will contribute to higher performance in the years ahead and strengthen Habities' premier position in serving our region's home furnishings needs. I'll turn it back over to Richard.