Good morning, ladies and gentlemen, and welcome to the La-Z-Boy Fiscal 2022 Third Quarter Conference Call. At this time, all participants have been placed on a listen-only mode, and the floor will be opened for your questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Kathy Liebmann. Ma'am, the floor is yours.

Thank you, Holly. Good morning, and thank you for joining us to discuss our fiscal 2022 third quarter results. With us this morning are Melinda Whittington, La-Z-Boy’s President and Chief Executive Officer, and Bob Lucian, CFO. Melinda will open and close the call, and Bob will speak to segment performance and the financials midway through. We’ll then open the call to questions. Slides will accompany this presentation, and you may view them through our webcast link, which will be available for one year, and a telephone replay of the call will be available for one week beginning this afternoon. Before we begin the presentation, I’d like to remind you that some statements made in today’s call include forward-looking statements about La-Z-Boy’s future performance and other matters. Although we believe these statements to be reasonable, our actual results could differ materially. The most significant risk factors that could affect our future results are described in our annual report on Form 10-K. We encourage you to review those risk factors, as well as other key information detailed in our SEC filings. Also, our earnings release is available under the News and Events tab on the Investor Relations page of our website, and it includes reconciliations of certain non-GAAP measures which are also included as an appendix at the end of our conference call slide deck. With that, I’d now turn over the call to Melinda Whittington, La-Z-Boy’s President and Chief Executive Officer. Melinda?

Thank you, Kathy, and good morning, everyone. Yesterday afternoon following the close of the market, we reported our fiscal '22 third quarter results, which included delivered consolidated sales of a strong 22% versus last Q3, including record delivered sales and operating profit for our company-owned retail segment. Ongoing strong demand versus pre-pandemic levels of $32 million has returned to shareholders through dividends and share repurchases in the quarter, bringing our year-to-date total up to $96 million, an all-time high, and closing on two important acquisitions to five La-Z-Boy furniture gallery stores in the Alabama market and the Furnico Manufacturing Company in the UK. While delivering strong top-line growth, the quarter also had significant challenges. After a very strong November across the majority of our business, supply chain volatility amplified in the balance of the quarter, even beyond our previous expectations. This had a significant near-term impact on the efficiency of our manufacturing capacity ramp plans, affecting both sales and profit performance. Within our own manufacturing operations, which comprise the majority of our wholesale business, the lack of availability of component parts, including electronic chips and actuators, continued to disrupt production plans but at a higher level than we expected. Beyond the obvious direct production delays, these outages drove inefficiencies as manufacturing cells are trained on specific unit styles and need to retrain on other styles until parts are available. This was exacerbated by such a large portion of our manufacturing staff being relatively new, given our significant capacity expansion, including three new facilities in Mexico over the past year. Further, these parts outages disproportionately affected our higher-end products, which sell at a greater level in our La-Z-Boy Furniture Galleries stores, including our own retail, thereby magnifying the near-term financial impact. With the goal of meeting consumer demand and to best serve our customers in this environment, our procurement team continues to invest in inventory for key component parts and diversify our supplier base, including creative solutions. In one particular instance, we have sent a La-Z-Boy team to work in the plant of one of our domestic suppliers to help increase their production of component parts for La-Z-Boy, as they too are experiencing labor challenges. We will continue to make progress here. The global supply chain disruptions remain prevalent, and we will likely be managing them for a while. Additionally, the 14-week COVID-related shutdowns in Vietnam, where the majority of our case goods product is sourced, significantly impacted our wholesale segment resulting from minimal inventory available to ship to consumers and high freight costs during the quarter. Product is flowing again, and we expect case goods sales and profits to normalize during the first half of fiscal '23 when we receive product to ship to customers more consistently. Further exacerbating the disruption this quarter, the Omicron variant impacted plant operations and production across all geographies. In January, at times we had as much as 20% of our manufacturing workforce out due to contraction of the virus or exposure. As the health and safety of our team remains our highest priority, these peaks are orders of magnitude higher than our previous worst peaks last winter. As with much of North America, we're now seeing the number of COVID cases trend downward quickly, but it will take time to recover from the disruption. Managing across these challenges, as well as the ongoing tight labor market and increasing input costs, has resulted in production gains being slower than expected, impacting the pace of delivered sales and profitability growth in the near term. Our number one focus across the company is to improve the agility of our supply chain to increase production more quickly and efficiently. We have deployed SWAT teams comprised of some of our most experienced leaders to our newer, most challenged locations to assist in training and increasing output. We have hired additional key leadership with expertise from other industries to bring fresh perspectives to our challenges, working alongside our industry veterans. And as noted, we continue to identify and act on creative solutions to upstream supply challenges, including expanded sourcing diversity, protective inventory builds, and even helping suppliers staff extra shifts to supply key component parts. These challenges, while significant, are temporary in nature, and each day we get better at managing through them. Ultimately, demand for our product is strong, and we are already delivering sales at all-time record levels. But we must do better to weather each disruption, continue to increase our capacity, improve cost efficiencies, work down our backlog, and service our customers and consumers. While working toward the double-digit profitability levels, we know we can achieve in the longer term with our expanded North American footprint. Turning back to the top line and demand for our products, written same-store sales for the La-Z-Boy Furniture Galleries Network increased 3% in the fiscal '22 third quarter and we are at 9% compared with the pre-pandemic fiscal '20 quarter for a compound annual growth rate of 4% across the two years. Sales to the La-Z-Boy Furniture Galleries network represent about half of our total manufactured La-Z-Boy products and are directionally indicative of the continued strength of demand for our product over time. For our company-owned stores, our retail segment written same-store sales were down 1% versus the prior year third quarter and up across the two years at a compound annual growth rate of 4%. Given the unusual nature of the past two years, written same-store sales comparisons in any given period may shift positive or negative slightly compared with prior year periods, even as the underlying business remains very strong. In fact, our annual sales per store across the network now average about $5 million versus $4 million pre-pandemic. And as part of our Century Vision, in addition to sustained strong same-store sales, we intend to also grow La-Z-Boy with additional new stores and, specific to our company retail business, opportunistic company acquisitions of existing independently owned stores such as the recent Alabama network acquisition. Our Joybird business continues on its strong growth trajectory this quarter, writing 27% more business this Q3 than last year's third quarter with an extremely impressive compound annual growth rate of 51% across the last two years. Now let me turn the call over to Bob to review the results in more detail. Bob?

Thank you, Melinda, and good morning, everyone. As a reminder, we present our results on both a GAAP and non-GAAP basis. We believe a non-GAAP presentation better reflects the underlying operating trends and performance of the business. Non-GAAP results exclude items which are detailed in our press release and in the tables in the appendix section of our conference call slides. On a consolidated basis, fiscal '22 third quarter sales increased 22% to $572 million versus the prior year quarter, reflecting continued strong demand and ongoing manufacturing capacity increases as well as the effects of pricing and surcharge actions. Compared with the pre-pandemic fiscal '20 third quarter, sales were 20% higher for a compound annual growth rate of about 10% over the last two years. Consolidated GAAP operating income increased to $39 million versus the prior year period. And non-GAAP operating income was $40 million. Consolidated GAAP operating margin was 6.9% and non-GAAP operating margin was 7.0%. GAAP diluted EPS was $0.65 for the fiscal '22 third quarter versus $0.62 in the prior year quarter. Non-GAAP diluted EPS was $0.65 in the current year quarter versus $0.74 in last year's third quarter. As I move to the segment discussion, my comments from here will focus on our non-GAAP reporting unless specifically stated otherwise. Demand for and delivery of product across the enterprise remains strong. Starting with our wholesale segment, delivered sales for the quarter grew 21% to $423 million compared with the prior year period, driven by pricing and surcharge actions as well as higher volume. Non-GAAP operating margin for the wholesale segment was 6.5% versus 10.2% in last year’s third quarter. This reflects higher raw material and freight costs, sourcing related tariff and duty increases, and disruption from component parts shortages. We also experienced continued labor challenges and plant inefficiencies related to manufacturing startup activities, which are exacerbated by the latest COVID peaks. Additionally, COVID-related shutdowns in Vietnam significantly impacted the product flow and margin performance of our case goods business, driving an approximate 130 basis point decline in non-GAAP operating margin of the total 370 basis point decline for the period. These challenges were partially offset by pricing and surcharges, fixed cost leverage on higher volume, and lower marketing spend as a percentage of sales. For the quarter, our retail segment delivered sales increased 19% to an all-time record $197 million, delivered same-store sales increased 16% versus the year-ago quarter. Retail posted record high non-GAAP operating profit dollars, and non-GAAP operating margin increased to 12.2% versus 8.9% in the prior year quarter, driven primarily by fixed cost leverage on the higher delivered sales volume and disciplined expense management. Joybird, which is reported in corporate and other, posted record sales of $45 million, a 56% increase versus the prior year quarter. On a two-year basis compared with the pre-pandemic fiscal '20 third quarter, delivered sales more than doubled, representing a compound annual growth rate of 43%. This reflects the momentum Joybird is building in the direct-to-consumer marketplace as we continue to acquire customers and strengthen brand awareness through new digital marketing channels. Joybird's profit for the quarter was roughly breakeven as we invested significantly in marketing to grow the business while experiencing increased raw material and freight costs, which negatively impacted gross margin. Moving forward, we expect pricing actions to continue to work their way through our delivered sales, which will improve gross margin back to target levels. And we will continue to invest in marketing to deliver disproportionate brand growth while sustaining profitability. Putting all of this together, consolidated non-GAAP gross margin for the entire company for fiscal '22 third quarter decreased 440 basis points versus the prior year quarter, due primarily to the challenges noted in wholesale, offset partially by pricing and surcharge actions. Consolidated non-GAAP SG&A as a percent of sales for the quarter decreased 190 basis points, primarily reflecting fixed costs leverage on a higher sales volume across our wholesale and retail segments. Our effective tax rate on a GAAP basis for the fiscal '22 third quarter was 24.8% versus 27.7% in last year's third quarter. The third quarter of last year was unfavorably impacted by a non-deductible fair value adjustment of the contingent liability related to the acquisition of our Joybird business. Our effective tax rate varies from the 21% federal statutory rate, primarily due to state taxes. We expect our effective tax rate for the full fiscal '22 year to be between 25.5% and 26.5%. Turning to cash year-to-date, we generated $45 million in cash from operating activities. We ended the period with $240 million in cash and no debt and held $30 million in investments to enhance returns on cash. Year-to-date, we've invested $83 million in higher inventory levels to help protect against supply chain disruptions and support increased production and delivered sales. We also spent $59 million in capital year-to-date primarily related to improving stores, new upholstery manufacturing capacity in Mexico, plant upgrades at our manufacturing and distribution facilities, and technology upgrades. Regarding cash returned to shareholders, during the quarter, we continued to buy back shares, spending $25 million repurchasing more than 700,000 shares of stock in the open market, leaving 7.9 million shares in our existing authorized share repurchase program. Year-to-date, we have returned $76 million to shareholders via share repurchase and $21 million through dividends, including $70 million paid in dividends in the third quarter. Before turning the call back to Melinda, let me highlight several important items for the remainder of fiscal '22. As noted, demand trends are strong across the business and remain much higher than pre-COVID levels, and our backlog remains high. To address this strong demand, we will continue to improve our agility and ability to increase production capacity, although our near-term gains will be slower than previously anticipated. Efficient plant expansion will also benefit when global supply chain disruptions begin to stabilize, although this timing is unknown, and these challenges will likely continue to disproportionately impact our higher-end products, which sell at a greater level through our La-Z-Boy Furniture Gallery Stores. Specifically, the case goods import business, we expect operations to normalize during the first half of fiscal '23 as we more consistently receive product and ship it to our customers. The fourth quarter will benefit from containing 14 production weeks compared to 12 production weeks in our third quarter. To recall, fiscal '22 will include 53 weeks of results versus 52 weeks last year. Taking all of these factors into consideration, we now expect delivered sales per week in Q4 to be flat to slightly up versus the third quarter, and consolidated non-GAAP operating margin to strengthen to a range of 7.5% to 8.5%. We maintain our long-term commitment to steady margin progress as we deliver incremental capacity increases with our rebalanced North American manufacturing footprint and improve our ability to adjust to supply chain disruptions. This will enable us to better service the demand for our highest value products, which disproportionately sell through our furniture gallery stores. However, as noted, many variables will affect the next several quarters' progress against these goals. Finally, as we make investments in the business to strengthen the company for the future, including work related to our Century Vision strategy, we expect capital expenditures to be in the range of $80 million to $85 million for fiscal '22. And now I will turn the call back to Melinda.

Thanks, Bob. While near-term supply chain headwinds are impacting our ability to efficiently ramp production to the extent we would like, demand for our products is strong. Delivered sales are at all-time highs. We believe the momentum is sustainable, and we are poised to grow from this new base of nearly $2.2 billion of trailing 12 months sales. In the immediate term, we are laser-focused on driving efficient supply chain expansion to benefit our end consumers, our customer business partners, and our top and bottom line financial performance. And looking further out, our focus remains on long-term profitable growth as we execute our Century Vision, our strategy to leverage our strong consumer brands to drive sales growth ahead of the industry and deliver double-digit non-GAAP operating margins and value to all stakeholders. We thank you for your time this morning. And I'll turn the call back to Kathy.

Thank you, Melinda. We will begin the Q&A period now. Holly, please review the instructions for getting in the queue to ask a question.

Your first question for today is coming from Bobby Griffin. Please announce your affiliation, then pose your question.

Good morning, buddy. This is Bobby Griffin from Raymond James. Thanks for taking my questions and hope everybody's doing well.

Good morning, Bobby.

Good morning.

I guess, first, I want to just touch on the price increases and maybe help us connect where we are on the pricing that you've passed through and how much has been realized? And I guess how much is still left to be realized as you move forward?

The vast majority of the pricing is now coming through delivered sales for the La-Z-Boy brand. We've got a little bit more pricing on both the case goods side and the Joybird side that will come through Q4 and a little bit into Q1, just given some of the increases that we've seen in freight and what we import out of Vietnam.

Okay. So Bob, is the cost pressures that we're seeing in supply chain wise more in efficiencies and just having to expedite things and challenges that way versus just pure cost of items, or based on some of these more recent challenges you caught out, you're gonna have to take more pricing to get whole again, as well?

It's more of a, it's more of what you talked about relative to some of the inefficiencies that we have in our operations and the hits that we're taking as it relates to supply chain disruptions, and the extra work and money and effort we have to spend to deal with that.

Okay.

Now, that said, we're constantly watching input costs, and we'll continue to price as needed as we go forward.

Okay, that makes sense. I appreciate the detail on the last point. I know we usually disclose the backlog once a year in the 10-K, but the current situation is quite unique and considering the backlog size, I was hoping to get some insight on where it stands. Year-to-date trends have been positive and production has increased. However, it's challenging to determine if the backlog has significantly decreased given that business has been strong so far, even with the increase in production.

Yeah, the backlog is about the same, honestly. And, we exactly, as you said, it's an equation of strength of demand and our ramping capacity. And, truthfully, we want to see that backlog start to come down because that's how we better service our customers and our consumers. But right now, we're at about the same place. And again, it's an equation of strong demand continued, and capacity ramping, but not fast enough to shorten our lead times.

Okay, that’s helpful. And then I guess, lastly for me, we have gotten a couple of questions. When you look at the written same-store sales for the owned and licensed stores, sort of the whole La-Z-Boy network. On a two-year basis, they did slow sequentially, and now, I guess my question is, I understand timing-wise, the price increases and stuff last year can mess with the seasonality. So if you put written into, I guess, if you take and look at just dollars of written business, as is that materially changed from 1Q to 2Q to 3Q? Is there anything to read more into that slowdown on a two-year percentage basis?

I think the thing to keep in mind overall is that the business is about 30% bigger than it was pre-pandemic, and it's sustaining. And, as we think about growth across that demand continues high, to your point on any given quarter that the base period comparisons get so strange. December and January was more affected by Omicron. And Canada, they were shut down a year ago, for the most part; you get a lot of different wiggles at any given period. But overall, the written trends still stay strong, and our businesses is 30% bigger than it was before the pandemic. So our focus is on continuing to grow that; obviously, we want to keep that same-store sales, written business strong. I mentioned in my prepared comments that right now, our average is about $5 million per store on existing stores. And before the pandemic, it was $4 million. But at the same time, we'll look to expand stores and expand the number of stores we own as well. And, of course, that's just speaking to our retail business; half of our business is selling through other outlets, other customers, and that business remains strong as well.

Okay, that's very helpful. I'll jump back – jump back in the queue and turn it over to somebody else. Thank you for taking my questions. And best of luck going forward.

Thanks, Bobby.

Thank you.

Your next question is coming from Anthony Lebiedzinski. Please announce your affiliation, then pose your question.

Oh, yes. Good morning. This is Anthony Lebiedzinski from Sidoti and Company, and good morning, and thank you for taking the questions. So looking at the guidance for operating margin for Q4, what are the biggest factors as far as driving that sequential increase that you expect?

The biggest factors are continuing to make progress against increasing our capacity, getting the hire – continuing to hire and train and retain the folks that we need for that capacity, as well as opportunities that we have to improve our mix with better, I should say, slightly improving parts outages on some of the higher cost products that we make and sell through our retail outlets. So those are the key factors that we expect will help us to drive a sequentially higher margin versus what we just delivered.

And those are really, Anthony, the same factors we've been looking at all along; we're marching towards stronger capacity and more efficient capacity builds. Unfortunately, this quarter, we had more setbacks than we expected on that trajectory. And it's going to recognize, and it's going to take time, but it's really all about driving that capacity, servicing the consumer, and getting more efficient as we go.

Got it. Okay. And then in terms of the component shortages that you spoke about, so since the quarter ended last month, but has there been any notable change? Or is it just kind of more of the same?

There has been – there's been incremental sequential improvement. It's not fixed. I mean, some of the work that we're doing with some of our suppliers, and some of the extra suppliers that we're bringing online, are starting to have a more positive impact relative to their shortages. But it's not a just flip a switch, turn it on, and all the problems go away. So that will just continue to improve as we move through the quarter and into the first half of next year.

That's okay, so that's encouraging to hear. And the last question for me, so Joybird again did very well, now accounting for 8% of total sales for the quarter. Longer-term hub, how should we think about the growth of that business as to how big it could ultimately become and as that happens? How should we think about profitability of that segment? Longer-term?

Yeah, we have, as we've laid out our Century Vision, we obviously have a huge building block of that Century Vision for growth over time. We've said as a total company, we believe we can grow ahead of the industry. One pillar that is the La-Z-Boy brand, and really reinvigorating that brand. A second pillar is really leveraging the opportunity that we believe we have for Joybird to grow as a consumer brand, so we will continue to invest in that brand. And we do believe it will disproportionately grow within our business, and our focus is on maintaining a reasonable profitability with that business, but not necessarily expecting it to look like an integrated profit on our La-Z-Boy brand because it is in growth mode and in different modes of its maturity.

Understood. Okay. Thank you very much and best of luck going forward.

Thanks, Anthony.

Your next question is from Brad Thomas. Please share your affiliation and then ask your question.

Hi, good morning. Yes, it’s Brad Thomas with Keybanc Capital Markets. Good morning, Melinda, Bob, and Kathy.

Hi, Brad.

Good morning.

All right, just a few more for me here along probably similar vein as some of the earlier questions. But maybe just wanted to follow up on the cadence of the written orders and wondering if you could provide any color on how things trended through the quarter, what you're seeing thus far. In February, we've obviously heard broader concerns about Omicron weather, and lapping stimulus payments as having been headwinds for the consumer of late. Just curious if you're seeing any of that in your business.

Yes. I can't say there's any dramatic trend change through the quarter other than, as I noted, we saw January hit by Omicron temporarily, right? That was fairly fast. If you think about, again, from a comparison standpoint, Canada was essentially shut down last year. Now they're open. So on a comparison basis, Canada looks great. But from a more long-term trend, I don't think we're seeing any dramatic change per se.

That's helpful. And so with what you're seeing today, you feel like your fiscal fourth quarter is tracking up so far on a written basis, is that right?

I won't comment on the fourth quarter written results at this moment due to the various factors in play, particularly regarding our existing asset base. However, I want to highlight a few points. Written same-store sales are important for evaluating our performance over time, but they are not the sole metric to consider, especially given how different the current base period is compared to the past. Currently, our stores average $5 million in annual delivered sales, compared to $4 million two years ago before COVID, which means we’re achieving 30% more from that same store base. Moving forward, we'll focus on maximizing performance from that same base while also considering our Century Vision initiative to expand the number of stores. We see potential for approximately 50 additional stores in existing markets that can support them. Furthermore, we will look to grow through acquisitions, similar to how we expanded with the Alabama stores recently, and through our other business ventures. While written same-store sales will remain an important metric and we expect it to trend positively over time, it won't be the only measure for assessing our growth in the future or that of any business, particularly after the unusual circumstances of the pandemic.

Got you. That's helpful context. Thank you. And then I guess just as we think some of the product inability or longer-than-usual times that you're quoting and some of the mix dynamics, I guess just as we're thinking about on whatever basis you want to talk about, delivered sales and reported sales or written sales, is there any way that you think that sales of any sort are being impacted right now by what your offering is like? And if so, any ability to quantify it? Again, I'm just trying to put context around it. Some of the stuff.

Sure, absolutely. So from – a couple of things. Right now, we're quoting 4 to 6 months lead time, and that is not where we would be. That's on our La-Z-Boy business. We're shorter on our Joybird business right now. That's not good service to our customers or our consumers, right? And so it all sort of comes down to our whole focus is on getting that supply chain expansion up and running as efficiently as our plants have run over time. That's got to happen. As we do that, just simply with what's in our backlog, our backlog is still at all-time highs on our La-Z-Boy business. So just with what's in our backlog alone, we will continue to drive increased delivered sales and improve profitability quarter-on-quarter. This quarter, a little bit slower than what we had hoped, but we will continue to work through that, and through, as Bob noted, for quarters to come, we expect to see incremental improvement in capacity. And given even just the orders on the books, that turns into delivered sales right away. At the same time, as we're looking at how do you keep filling the coffer again, right? We want to drive that backlog down because we want to be delivering better service to our customers and our consumers. But as we drive that backlog down, we want to be filling that coffer with more sales to deliver. And so with that, we will continue to drive strengthening written sales. And we believe we can do that through the strength of our brands. And with our Century Vision, I'm really reinvigorating the brand equities as well, to ensure we're growing for the long term. Now the exact pace of that on any given quarter may shift around a little bit, but we feel confident that our last – our trailing 12 months is about $2.2 billion in sales for the total company. Pre-pandemic, we were at $1.7 billion. So business is up 30% pre-pandemic, and we do believe we will grow – we have the building blocks to grow off of that base ongoing and improve margins over time.

One thing I'd like to add is my perspective on the business. When a consumer enters the store and is willing to pay higher prices for a product while being informed it will still take 4 to 6 months to receive that product, and our written sales remain robust, it's a positive sign that the brand is strong. Despite concerns related to stimulus checks ending and a pessimistic outlook for the industry, we are feeling more optimistic. We are managing to cope with the increased prices and extended wait times. While we are not pleased with either of these situations, our goal is to ensure that consumers who come in looking for furniture are able to get it.

Absolutely. And no question the industry is facing just untested levels of complexities and challenges right now, and you're navigating many of those very well. Just on some of the guidance for the fourth quarter, I just want to make sure people are doing the math right here. I think if we looked at 12 weeks versus 14 weeks and on a per-week basis being flat to up, that implies that sales may be up in your fiscal fourth quarter, perhaps high 20s to low 30s percent. Just with the consensus sitting here now, I think only 23% growth. I just want to make sure we're doing the math right there. Bob?

The math is correct to take your Q3 divided by 12, multiply it by 14, and it will be that or slightly better than that.

Perfect. And then just a last one for me about coming back to margins that are clearly a focal point here. I guess as you reflect on the third quarter and some of the guidance here for 4Q, how much do you think is kind of clear cut? Oh, this should go away if we just give it time? This is part of the transitory issues we're dealing with in the pandemic, versus issues that may be a little bit more structural. And I guess, how, if at all, is your kind of long-term outlook for operating margins for La-Z-Boy changing?

I'll discuss that shortly, and then Bob can chime in. It's a combination of factors. Firstly, we have three new plants operating in Mexico, alongside labor challenges in the U.S. We have many new employees in furniture production, and it typically takes 6 to 9 months for them to reach average productivity. With a large number of new hires, this likely slows down the process. This quarter, we have been integrating the newly opened plant from January and are continuously increasing our sales and production capacity. However, we faced significant disruptions related to parts availability and the impact of Omicron, which affected our efficiency. Manufacturing remains an artisanal process, and we have to adapt with different team members each time we produce furniture. As a result, we didn't achieve the efficiency gains we anticipated this quarter, but that does not mean these gains aren't possible. A substantial part of our margin improvement is within our control. We are focused on effectively training our employees to improve efficiency in furniture production and managing the unavoidable disruptions. While there will continue to be challenges that lead to inefficiencies, our commitment to getting better and training our team will help us progress. In the end, we will have a more strategically placed network of manufacturing facilities across North America, enhancing our overall structure, costs, and services compared to pre-pandemic levels, despite persistent external challenges like inflation.

Very helpful. Thank you so much, Melinda.

Thanks, Brad.

There appear to be no further questions in the queue. Do you have any closing comments you'd like to finish with?

Thanks, Holly. Thank you, everyone, for your time this morning. If you have follow-up questions, please be in touch and have a great day. Bye bye.

Thank you, ladies and gentlemen. This does conclude today's conference call. You may disconnect your phone lines at this time and have a wonderful day. Thank you for your participation.