Haverty Furniture Companies, Inc.

Good day, and welcome to the HVT second quarter 2021 financial results conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Richard Hare, chief financial officer. Please go ahead.

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 Securities Exchange Commission. Our chairman and CEO, Clarence Smith, will now give you an update on our results, and then our president, Steve Burdett, will provide additional commentary about our business.

Thank you for joining our 2021 second quarter conference call. We're very pleased with the record results in the second quarter with sales at $250 million. We've done a good job in our expense controls across the board, and combined with pricing disciplines from the merchandising teams and stores, we achieved solid gross margins and 11.7% pre-tax operating profits. Our ongoing objectives are to grow market share in our existing distribution footprint and maintain double-digit operating margins. We believe that the increased importance of home that was jump-started with the impact of COVID last spring is a longer-term trend. While we don't expect the rush that impacted our industry to be at the elevated levels we experienced in recent quarters, we do believe that home is a priority and a sustainable trend for the near future. The strong desire for homeownership combined with Haverty's strong positioning in Florida, Texas, and the Southeast puts us in an ideal position for today and for the future. Our supply, merchandising, and distribution teams are working with our factories and shippers to bring in product to fill orders and reduce our record backlog. The shipping challenges that home-related industries are experiencing have caused major delays for furniture, which we believe will be problems until the spring of 2022. We're working to increase our inventories as the production and product flow improves. We're investing in our distribution capacity to support growth over $1 billion over our regions. We just completed additional racking to our mothership, the Eastern Distribution Center in Brazelton, Georgia, which adds 20% more storage capacity. We will evaluate potential expansions to our network to better serve our planned growth. Our current focus is on building market share in our key markets with store positioning and target marketing to our core customer and new homeowners. Examples of this were the opening of Myrtle Beach earlier this year, the opening of a third store in Austin, and the fast-growing Pflugerville Round Rock markets and a store opening tomorrow in the villages in Central Florida. We're in a deep dive reviewing potential locations in our best markets, which will reach the fastest growing areas and leverage our existing infrastructure. We expect to announce several new fill-in locations for the 2022 openings. We're very excited about the rollout of the We Furnish Happiness marketing campaign, which we believe more clearly separates Havreys from our competitors and continues to raise the bar on service, quality, furniture, and design. We continue to be focused on our front door, Haverty's.com. We've committed to significant investments in IT and state of the art systems to better reach and appeal to our customers. We have a major ongoing investment in reworking our website for better presentation and ease of use. We've contracted with Adobe, to bring on a collection of applications and services that will lay the foundation for an unmatched customer experience. The new foundation will improve functionality, help us create content easier and faster, provide better personalizations using AI-driven automation, and enhance our analytics and reporting. Our goal is to have the best-in-class website experience. And now we'll turn the call over to Steve Burdette, President.