Haverty Furniture Companies, Inc.

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 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 our president, Steve Burdett, will provide additional commentary about our business.

Good morning. Thank you for joining our 2022 third quarter conference call. We're very pleased to report the third quarter sales performance of $274.5 million and earnings per share of $1.46. The third quarter was the all-time highest sales and operating profit in the company's history. Average has produced the highest sales quarters in our history over the past eight quarters, going back to the fourth quarter of 2020. While we have seen a slowdown in store traffic, which has impacted written orders, we particularly like our position of appealing to a higher-income customer in the fastest-growing states in the country. we're seeing stronger custom orders and more design sales, which is increasing our average sale and helping build profitable market share across our regions. Compared to Q3 2019 pre-COVID, our written sales are up 15.8%. Average sale ticket is up 35% compared to 2019, with a double-digit higher closing rate. Store traffic and units continue to be lower compared to Q3 2019, but with the average ticket over $3,000, a higher closing rate, and strong margins, our focus teams are producing record profits. We continue to see a return to more historically normal sales patterns with holiday events and weekend sales more than the middle-week sales of 2021. Our merchandising teams have recently returned from the High Point Furniture Market. This year, the importance of partnerships and relationships was especially emphasized. With the dramatic change we're struggling with out-of-stock shipping delays these past months, Haverty's long history of solid partnerships with our suppliers was evident and emphasized more than I can. Suppliers are now scrambling with the need for orders in every category, especially in imports. Our solid relationship over many years is a major strength of Haverty's and will help keep our best sellers in stock and provide strong values in the months ahead. In the third quarter, bedroom and dining room sales were higher because we were filling heavy back orders, which will continue in the fourth quarter. We expect to see a return to the historic percentage of sales by class later this year into the first quarter of 2023. We're very excited about the extensive collection of new merchandise coming to our floors in the next several months. We've had great success with new products moving quickly to top sellers after almost two years of holding back on new fashions due to prioritizing the large unfilled backlog. Our management and store sales and designers are already selling into some of these new collections en route. We are very pleased with our record performance. We do have challenges with lower traffic and lower written orders because of high inflation and slowing housing sales. We're encouraged by our team's commitment to serving our customers better with fashion, value, design, and customization. We strongly believe that we will earn a larger share by helping our customers' vision of their home come true in the months ahead. I'll now turn the call over to Steve Burdette, President.

Thank you, Clarence, and good morning. Our record results for the third quarter were fantastic thanks to the outstanding efforts of our team members. It was nice to see our written business continue to improve from Q2 on a comparable basis, powered by our record performance over the Labor Day weekend. At the end of September, our momentum was hurt by Hurricane Ian's landfall just north of Fort Myers. The impact was devastating to the communities in Southwest Florida and was felt throughout Central and North Florida, as well as the Carolinas. We were very fortunate with only a small number of team members directly impacted. and nominal damage to our locations. Approximately 15% of our stores were closed for three days, impacting deliveries and written business for the quarter. However, we feel that the delivery business missed due to the closings will be shifted to Q4. The written business is lost from the closings in Q3. It should come back with upside for 2023 and 2024 in the highly impacted areas. Our supply chain network continues to improve with our domestic vendors inching closer and closer to pre-pandemic lead times of four to six weeks, while our import vendors' production has returned to pre-pandemic lead times. However, we are seeing longer shipping times with continued port delays in Savannah and the rail disruptions out of Long Beach. We are encouraged that the Savannah port should return to normal operations by the end of November. Our inventories are 15.4% over last year in Q3, while our backlogs remain healthy, but does continue to decrease with our average age remaining consistent at 11 weeks. We are continuing to experience a reduction in our freight rates, both on the spot market, as well as with our new contracted rates from May 2022. Our special order business has made tremendous improvements in Q3. moving to 22.5% of our total upholstered sales from 19% in Q2. Our sales and design team's confidence has been restored due to the continued improvement in our lead times as we move back to our special order goal of 25% of upholstered sales. We are continuing to be encouraged by our design business as it grew to over 25% of our written business for Q3. We have just finished conducting proprietary qualitative and quantitative research to better understand the barriers and triggers for our design business. We'll use these insights to better focus our marketing efforts on building awareness of our design service, as well as communicating the benefits to consumers. We believe there's tremendous upside by exposing more consumers to our design capabilities. Staffing in our distribution centers home delivery areas, and customer service centers is that our expected goals needed to serve our billion-dollar-plus business. Our focus for our teams will remain on training, execution, and retention. We are appreciative to all our team members for their dedication and passion, furnishing happiness to all our customers every day. Now I'll turn the call over to Richard.