Haverty Furniture Companies, Inc.

Good day and welcome to the HVT fourth quarter and year-end 2021 results conference call. Today's conference is being recorded. At this time, I'd 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 of the date they are made and 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 Chairman and CEO, Clarence Smith, will now give you an update on our results, and then our President, Steve Burdette, will provide additional commentary about our business.

Good morning. Thank you for joining our 2021 fourth quarter and full year conference call. We're very pleased to report a record fourth quarter and full year performance. For the first time in our history, we reached $1 billion in net sales and had record earnings per share of $4.90 versus our previous record earnings last year of $3.12. We're well positioned in the fastest growing markets in the country. Housing in our regions continues to be a tailwind for growth. With our best-in-class balance sheet, we're continuing to invest in all parts of our company, as well as the important and evolving e-commerce business. We're particularly proud of all our teams who operated in challenging circumstances related to COVID-19 concerns, unrelenting supply chain disturbances, and ongoing price increases in our product and in shipping costs. We believe that we outperform many of our competitors by working closer with our suppliers to bring in products and providing better service levels. We believe that because we manage the entire distribution process from shipping containers to the final mile home delivery, we offer a faster and more reliable service level. Our store positioning in the 16 state footprint. It's focused on adding stores in the hottest real estate markets in the United States. We have the most stores in Florida, Texas, Georgia, North Carolina, and Virginia. This year, we plan to open stores in Northern Virginia Gateway, Austin, Pflugerville, and a relocation in Indianapolis, and a branch store in an existing market. We're positioned in nine out of the top 10 hottest housing markets recently noted by Zillow. We plan to open four and net two stores this year. We'll have 10 LED lighting conversions, completing our multi-year effort to upgrade all of our stores. We have six major remodeling projects planned for the year. Our real estate portfolio is in the best position in our long history. We're planning five stores a year for the next three years beginning in 2023. We're strengthening our distribution capabilities to better serve all the markets that we can reach with quicker deliveries and better service. In 2021, we added capacity to allow for 20% more storage in our main distribution center in Brazelton, Georgia. We're investing in regional facilities to allow for further growth in the Mid-Atlantic and Mid-American regions. We plan to relocate to a larger home delivery facility in Cincinnati, Ohio later this year. We have plans underway to double the size of a Virginia home delivery center and convert that to a full DC in 2023. The expansion will increase that storage capacity by 150%. Virginia DC will allow us to support more Atlantic Coast store growth with quicker deliveries and to be able to import directly through the Norfolk, Virginia port, reducing our inbound and transfer costs. We expect that our capital expenditures for 2022 will be approximately $37 million, depending on the timing of several properties. The key investments are in stores, distribution, and IT enhancements. These investments allow us to serve 100% of our footprint and set us up for continued sales growth into the future. We're using the Adobe suite of applications and services as the foundation to re-platform our website. Haverty's.com is our front door, and almost all our customers utilize the site in the sales process. While our pure internet sales transactions are in the mid-single-digit percent of sales, after the relaunch, we believe that we can move to the 10% range. Our top merchandising priority is to bring in product to reduce our backlog and to build back inventory to serve our customers more quickly. We're also working with our suppliers to provide curated product selections that are held in third-party warehouses. This will allow us to expand our selections, more quickly serve our customers, and move into new home furnishings categories. We began this program in 2021 and we're pleased with the customer's response. We saw new and expanded success in outdoor furnishings, occasional home office, and upholstery. We have a goal of tripling our third-party curated collections this year. Our merchandising teams are excited to finally be developing and bringing in new designs, which we put on the back burners due to the supply chain and factory delays over the past year. We expect to see these products coming in beginning in the second quarter. 2021 was a record in almost every measure. I am so proud of all our team's terrific efforts to serve our customers and to create this performance. We have set a foundation and operations level which we will build on to reach new records in the years ahead. I'll now turn the call over to Steve Burdette, our president.