Natural Grocers by Vitamin Cottage, Inc.

Good day, ladies and gentlemen. Welcome to the Natural Grocers by Vitamin Cottage fourth quarter fiscal year 2021 earnings conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session, and instructions will be given at that time. As a reminder, today's call is being recorded. I'd now like to turn the conference over to Ms. Jessica Thiessen, Assistant Treasurer for Natural Grocers. Ms. Kusin, you may begin.

Good afternoon, everyone, and thank you for joining us for the Natural Grocers by Vitamin Cottage fourth quarter and fiscal year 2021 earnings conference call. On the call with me today are Kemper Isley, co-president, and Todd Dissinger, chief financial officer. As a reminder, certain information provided during this conference call are forward-looking statements based on current expectations and assumptions and are subject to risks and uncertainties. Actual results could differ materially from those described in the forward-looking statements due to a variety of factors, including the risks and uncertainties detailed in the company's most recently filed forms 10-Q and 10-K. The company undertakes no obligation to update forward-looking statements. Today's press release is available on the company's website, and a recording of this call will be available on the website at investors.naturalgrocers.com. Now, I will turn the call over to Kemper.

Thank you, Jessica, and good afternoon, everyone. Thank you for joining us today. We had a record performance in fiscal 2021 with net sales of $1.1 billion and diluted earnings per share of 91 cents. Fiscal 2021 marked our 18th consecutive year of positive daily average comparable store sales growth. I take great pride in all of the company's accomplishments this year. We finished the year with a strong fourth quarter, accelerating sales comps, higher margins, and lower store expenses drove 100% earnings per share growth, exceeding our expectations. Our commitment to our founding principles continues to drive our success as evidenced by our strong results. We have seen an increase in customer engagement and loyalty. We believe our carefully vetted offerings of natural and organic products at always affordable prices continue to resonate with consumers as they have developed a strong appreciation for the value of healthy nutrition and dietary supplements as a result of the pandemic. Today, we announced that we are increasing our quarterly cash dividend to 10 cents per share from 7 cents per common share, a 43% increase. The dividend increase reflects our strong operating performance and financial position, our confidence in our business model, and our commitment of returning value to our shareholders. During the quarter, we opened one new store in Springfield, Missouri, relocated our store in Columbia, Missouri, and remodeled one of our stores in Wichita, Kansas. For the fiscal year 2021, we opened a total of three stores and relocated or remodeled five stores. We are pleased with the performance of our new stores and relocations over the past several years. Our unique approach to marketing and promotional activity, including our NPower loyalty program, continued to drive customer engagement as well as sales growth during the fourth quarter. Our 66th anniversary event in August was very successful and featured exciting promotions, free products, and a sweepstakes. In September, our stores and marketing efforts focused on Organic Harvest Month with promotional events, discounts, and a fundraiser to support Beyond Pesticides, which helps cities convert parks to being chemical-free. Our Empower Loyalty Program ended the quarter with over 1.5 million members, up 19% versus a year ago. Net sales penetration for Empower was 72% in the fourth quarter, up slightly from the third quarter, and compared to 68% a year earlier. Consistent with our company branding, our natural grocers brand products, which we position as a premium quality product at an affordable price, remain a key point of differentiation and a sales growth driver. In the fourth quarter, private brands represented 7.1% of sales. In total, for fiscal 2021, we grew our private brand offerings by 185 SKUs. Our total number of natural grocers SKUs was approximately 1,000 at fiscal year end. Our natural grocers brand supplements relaunch began in March of this year. Our branded supplements growth exceeded the category growth in the fourth quarter. demonstrating customers' interest in our high-quality and affordable offerings. Natural Grocers has a legacy of being a values-driven company. Our commitment to building a healthy, sustainable future for our customers, our Good For You crew, and our communities is authentic. We work hard to ensure our stores, operations, and supply chain reflect these values. We have been a value-driven company since 1955. In fiscal 2021, the combination of company donations and customer fundraisers resulted in $1 million in monetary donations and more than $3 million in in-kind food and product donations to local food banks. Beginning in October 2021, we implemented a permanent pay increase for our hourly Good4U store crew of $1 per hour. This increase represents our second $1 per hour increase in the past 18 months and reflects our long-standing commitment to investing in our crew. With the increase, the company-wide average hourly pay for full-time crew is $18.43 an hour, including $1 per hour in vitamin bucks store credit. In closing, I want to thank every member of our Good4U crew for their continued hard work and commitment to helping us deliver the highest quality natural and organic products at always affordable prices. and their commitment to our founding principles. I would also like to take a moment to reflect on Natural Grocers' accomplishments over the past 10 years. In those 10 years, we have grown our sales by four times to over $1 billion. Our store base has grown by three times and earnings by six times. Even more importantly, we have brought healthy nutritional options at affordable prices and free science-based nutrition education to over 100 additional communities and created over 2,500 jobs. While I am very proud of our achievements over the last decade, I am equally excited about the opportunity that lies ahead of us. With that, let me turn the call over to Todd to discuss our financial results and guidance.