Greetings. Welcome to the La-Z-Boy Fiscal 2023 Fourth Quarter Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. Please note this conference is being recorded. I will now turn the conference over to your host, Bob Lucian, Chief Financial Officer of La-Z-Boy Incorporated. Mr. Lucian, you may begin.

Thank you, Holly. Good morning everyone and thank you for joining us to discuss our fiscal 2023 fourth quarter and full-year results. Before we get started, I like to take a moment to introduce Mark Becks, who recently joined La-Z-Boy as our new Director of Investor Relations and Corporate Development. Many on this call will know him, given his diverse background in retail research and consumer and retail investment banking advising global public and private brands. Mark's contact information can be found in yesterday's press release. Welcome, Mark.

Thank you, Bob. Good morning, everyone. It is a pleasure to be with you. Joining Bob and me on the call this morning is Melinda Whittington, La-Z-Boy’s President and Chief Executive Officer. Melinda will open and close the call and Bob will speak to segment performance in the financials midway through. We will 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 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 will now turn the call over to Melinda Whittington, La-Z-Boy's President and Chief Executive Officer. Melinda?

Thanks, Mark, and good morning, everyone. Thank you for joining us to walk through our fourth quarter results. I'm excited to share that we have delivered a second consecutive year of record results during continued economic and industry volatility. Yesterday, following the close of market, we reported record results for fiscal 2023. Highlights for the year included: record consolidated operating profits, operating margin, and earnings per share for the fiscal year; delivered sales were also a record for a 52-week fiscal year; record delivered sales profits and operating margin for our company-owned retail segment; strong cash flow generated from operating activities of over $200 million; improved delivery lead times back essentially to pre-COVID levels; and continued progress against our Century Vision growth strategy. All-in, we’re proud of our performance against a challenging macro backdrop. Sales were $2.3 billion, up 2% after adjusting for last year's 53rd week. Strong top line results led to an all-time non-GAAP operating margin of 9.5%, a 140 basis point improvement versus fiscal year 2022. Improvements in profitability drove record full-year non-GAAP earnings per share of $3.86, 24% ahead of last year, and 80% more than pre-pandemic fiscal 2019. Importantly, our supply chain team has collectively reduced delivery lead times back to pre-pandemic levels, enabling our customers and consumers to experience our brand promise once again. Custom furniture with speed to market, a key differentiator in our fragmented marketplace. The success achieved in fiscal year 2023 is a testament to the continued hard work and perseverance of our dedicated and talented teams across the enterprise. I'm proud of the leadership team we have built and the bench we are developing across the company. Our employees have been and continue to be among our greatest assets, and they're the key drivers of these amazing results. Going a bit deeper on trends. Total written sales for our retail segment were up 4% versus last year's fourth quarter. This reflects an increase of 41% versus the pre-pandemic 2019 fourth quarter, a 9% CAGR over those four years as a result of higher pricing, improved conversion, higher design sales, new store openings, and independent furniture gallery acquisitions. Same-store written sales for our retail segment in the fourth quarter were about flat versus prior year. Positive comps in February and April were offset by negative comps in March as the banking crisis temporarily impacted consumer spending patterns. Our commitment to improving lead times restoring La-Z-Boy brand marketing support to pre-pandemic levels, and strong in-store execution enabled our company-owned retail segment to deliver positive same-store written sales in four of the last five months and growth of 1.4% over the second half of the fiscal year versus prior year. This represents a significant strengthening versus the negative 13% same-store sales comparison in the first half of the fiscal year, which was up against a strong pandemic-driven base period. More importantly, our retail business is growing share as our second half results compare favorably to the overall furniture and furnishings industry, which saw a decline of 1.9% over the same period. Our objective remains the same: to continuously gain share in this fragmented market regardless of existing market conditions. We are leveraging the discipline of our team, industry-leading marketing, and the strength of our balance sheet to drive continuous improvements in our approach and value for our consumers. Our retail network is growing and our vertical supply chain is a true differentiator. These competitive advantages are unlocking a long-term runway for growth. Fourth quarter written same-store sales for the entire La-Z-Boy Furniture Galleries Network, including independently-owned galleries were down 3% versus the prior year period, but up 19% against the pre-pandemic fiscal 2019 fourth quarter, a 4% CAGR over that period. Turning to Joybird. Written sales for the fourth quarter were down 24% versus a year ago, reflecting challenging consumer trends similar to those experienced across many online furniture retailers, compounded by the impact of the banking crisis. Some of this performance resulted from our decisive action to reduce marketing spend given the softer overall demand environment, reflecting our balanced focus on profitability. Notably, comparable written sales improved sequentially by month, as our fourth quarter progressed. We anticipate Joybird comps inflecting mid-year of fiscal year 2024 when we lap the industry-wide online slowdown experienced last summer and early fall. As we face a challenging macroeconomic environment and the disruption to the retail industry and furniture market in fiscal year 2023, we remain focused on investing prudently to strengthen our capabilities and drive profitable long-term growth through our Century Vision strategic pillars. During the last year, we made significant progress against a number of our Century Vision objectives. Specifically to the La-Z-Boy brand, we acquired eight independent Furniture Gallery stores and opened six new Furniture Gallery stores with five of those being in our own retail segment, continuing our path to increasing our retail penetration. We opened two outlets by La-Z-Boy stores in Columbus, Ohio and Chicago, Illinois to test potential formats to expand our reach to value-seeking consumers. We completed significant consumer research and segmentation, which will inform future product innovation over the coming years and we've leveraged these consumer research results to develop a new marketing campaign aimed at broadening the appeal of La-Z-Boy to more consumers, which will be launched this fall, and we initiated a test market to assess the potential of new products aimed at consumers looking for a modern furniture look. We also strengthened foundational capabilities across the company as furniture demand has reverted to pre-pandemic levels and normal seasonality. We have improved efficiency of our operations resulting in lower costs and improved cash flow through a significant reduction in inventory. We have made significant investments back into our business to modernize key systems and improve HR and supply chain capabilities for future growth. Finally, we recently announced leadership organization changes, which more effectively align the operation of our business units across the La-Z-Boy brand, our entire Furniture Gallery network, and our portfolio of other brands. And finally on Joybird, we opened six new small format urban showrooms, including The ROW in Downtown, Los Angeles; and Capitol Hill in Seattle. This brings our total store count to 10 as we seek to continue to grow Joybird with a true omnichannel experience for consumers. Improvement in gross margin, as the fiscal year progresses, will continue to fuel consistent levels of marketing support to profitably grow the business in a sustainable manner. The brand continues to have significant opportunity to grow share, which will be the focus as we make prudent choices to return to profitability. As we begin fiscal year 2024, we'll leverage the foundations we built in 2023 and our strong balance sheet to make continued progress against our Century Vision objectives. Specifically, we're focused on, first, continuing to grow and update our La-Z-Boy Furniture Galleries stores through new stores, acquired stores, and remodels to provide an outstanding end-to-end consumer experience. This will deliver more profit to the enterprise as we increase the size of our company-owned retail business leverage its fixed cost structure and benefit from the integrated wholesale retail margin. We expect to open up to nine new stores during the fiscal year and we will continue to complete acquisitions of independent furniture gallery stores when they become available. We recently announced an agreement to purchase two stores in Colorado in the first quarter of fiscal year 2024. Second, we are refining our brand channel strategy to expand the distribution and availability of La-Z-Boy products in order to meet our consumers with the right products where they prefer to shop. With this strategy, we will achieve greater Comfort Studio penetration and an increase in La-Z-Boy branded space, as well as expand into new distribution markets with select product offerings. Third, we are honing our brand message by leveraging consumer insights and our brand heritage of comfort and quality to resonate with a broader consumer base via an enhanced marketing campaign and continuing to test product brand and channel format offerings to increase La-Z-Boy’s brand reach and consideration. Fourth, we're strengthening our foundational capabilities. We remain committed to improving the agility of our supply chain to manage volatility in consumer demand and improve gross margins to support marketing investment for top line results and improve wholesale operating margins. And finally, we're improving Joybird gross margins and increasing marketing efficiency to regain and sustain profitability as we continue to grow the brand. Now, let me turn the call over to Bob to review the results in more detail. Bob?

Thank you, Melinda. As a reminder, we present our results on both a GAAP and non-GAAP basis. We believe the non-GAAP presentation better reflects 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. Finally, please note that the comparison year of fiscal 2022 includes 53-weeks of business, while fiscal 2023 included a normal 52-weeks. On a consolidated basis, fiscal 2023 fourth quarter sales decreased 18% to $561 million versus the prior year quarter, reflecting lower delivered unit volume, partially offset by favorable product and channel mix in the effects of pricing and surcharge actions. Excluding the extra week in the prior year’s fourth quarter, worth approximately $49 million, fourth quarter sales decreased 12%, reflecting lower delivered unit volume as the backlog returned to pre-pandemic levels. Consolidated GAAP operating income decreased to $54 million and non-GAAP operating income was $55 million, a decrease of 15% versus last year's 14-week fourth quarter on the lower sales. Consolidated GAAP operating margin was 9.6% and non-GAAP operating margin was 9.8%, reflecting a 40 basis point improvement versus last year. GAAP diluted EPS was $0.79 for fiscal 2023 fourth quarter versus $1.33 in the prior year quarter. Non-GAAP diluted EPS was $0.99 in the current year quarter, versus $1.07 in last year's 14-week quarter. As I move to the segments discussion, my comments from here will focus on our non-GAAP reporting unless specifically stated otherwise. Starting with the retail segment, for the quarter, retail's delivered sales were $243 million, a record for the fourth quarter. A 4% increase over the prior year’s fourth quarter and a 12% higher sales adjusting for prior year’s extra week, led by a 7% increase in delivered same-store sales versus the adjusted year ago quarter. Retail posted record high non-GAAP operating profit dollars for our fourth quarter and non-GAAP operating margin increased to 15.5% versus 13% in the prior year quarter, driven primarily by fixed cost leverage on the higher delivered sales volume. As Melinda noted, growing the La-Z-Boy Furniture Galleries network is a key element of Century Vision and we look forward to our company-owned retail segment continuing to grow and becoming an even larger contributor to our long-term success. For our wholesale segment, delivered sales for the quarter declined to $395 million, a 23% decrease versus the prior year period, and 17% lower after adjusting for last year's extra week. The decrease was primarily due to lower delivered unit volume as the backlog returned to pre-pandemic levels, partially offset by pricing and surcharge actions. Non-GAAP operating margin for the wholesale segment was 8.7% versus 8.8% in last year's fourth quarter. This is primarily due to fixed cost deleveraging on lower unit volume, mostly offset by lower material and freight costs, improved product mix and pricing and surcharge actions. Sequentially, from Q3, non-GAAP operating margin increased 210 basis points reflecting continued operational efficiency improvements even on lower post-pandemic volumes. Joybird, which is reported in Corporate and Other, recorded delivered sales of $37 million, a 31% decrease versus the prior year quarter, and 25% lower after adjusting for last year's extra week. The decline was driven by lower unit volume from more cautious consumer spending and reduced marketing investment as we work to balance growth and profitability. As noted, we anticipate Joybird written sales to inflect in mid-year fiscal 2024 once we've lapped the online industry-wide slowdown. For the quarter, Joybird significantly narrowed its loss versus the prior three quarters due to improvements in gross margin, lower marketing spend, and other SG&A reductions. SG&A spending included the opening of three new stores during the quarter, which are expected to add momentum to written sales throughout fiscal 2024. Moving on to full-year results for fiscal 2023, sales were roughly flat versus the prior year at $2.3 billion and excluding the extra week in fiscal 2022’s fourth quarter, delivered sales were up 2%, due to improved product mix and the effects of pricing and surcharge actions, partially offset by lower unit volume. Consolidated GAAP operating income increased to a record $211 million, and non-GAAP operating income was a record $223 million, a 17% increase versus last year. Consolidated GAAP operating margin was 9% and non-GAAP operating margin was a record 9.5%, 140 basis points higher than fiscal 2022. GAAP diluted EPS was a record $3.48 for fiscal 2023 versus $3.39 in fiscal 2022. Finally, non-GAAP diluted EPS was a record $3.86 for the year versus $3.11 in fiscal 2022, representing a 24% increase. Pulling all this together for the fiscal year, consolidated non-GAAP gross margin for the entire company was 410 basis points higher than the prior year, primarily due to segment mix with a higher percentage of sales from retail, which carries a higher gross margin, and the benefits of favorable pricing and surcharge actions, partially offset by higher full-year material and freight costs. Consolidated non-GAAP SG&A as a percentage of sales for the full year increased by 270 basis points, primarily reflecting segment mix with a higher percentage of sales from retail, which carries higher fixed costs and an increase in marketing spend back to pre-pandemic levels for the La-Z-Boy brand. Our effective tax rate on a GAAP basis for fiscal 2023 was 26.2% versus 25.9% in fiscal 2022. Our effective tax rate varies from the 21% federal statutory rate, primarily due to state taxes. The slight increase in the effective tax rate was due to a higher retail profit mix, resulting in higher state income tax. We expect our effective tax rate to be in the range of 25.5% to 26.5% for fiscal 2024. Turning to cash. For the year, we generated $205 million in cash from operating activities, an increase of 160% versus fiscal 2022 finishing the year strong with $78 million in operating cash generated in Q4 alone. Strong cash generation in the quarter was driven by profit performance and significant progress in reducing receivables and inventories, partially offset by a decrease in customer deposits. We ended fiscal 2023 with $347 million in cash and no debt. We spent $69 million in capital during the year, primarily related to retail store openings and upgrades, plant upgrades at our manufacturing and distribution facilities and technology projects. We also spent $22 million on acquisitions of independent La-Z-Boy furniture gallery stores, as well as guaranteed payments from prior year acquisitions. For the full fiscal 2023 year, we returned $35 million to shareholders via dividends and share repurchases, including $8 million paid in dividends in the fourth quarter. Before turning the call back to Melinda, let me highlight several important items for fiscal 2024. As a reminder, fiscal years 2022 and 2023 included a significant increase in delivered sales due to the backlog of COVID-related furniture orders. Fiscal 2023 results included approximately $300 million of backlog related delivered sales, which will not repeat in fiscal 2024. La-Z-Boy sales at this level of normalized demand, excluding the backlog represent a 17% increase over our pre-COVID fiscal 2019 sales. Due to the uncertainties surrounding geopolitical and macroeconomic trends, we are planning with the expectation that industry furniture demand will in dollar terms be flat to down 5% in fiscal 2024 versus fiscal 2023. We expect to perform better than that and grow total company sales ahead of the industry from our backlog adjusted base. Consistent with our Century Vision strategy, we continue to target sales growth exceeding the industry growth rate and double-digit operating margins over the long term. As one considers a cadence throughout fiscal 2024, we expect seasonality and a weaker near-term economic outlook will result in a stronger back half of our fiscal year versus the front half. Additionally, we will increase investment in support of our new marketing campaign in Q2. To start out this fiscal year, we expect sales in Q1 fiscal 2024, which is generally the lowest sales quarter in the fiscal, to be in the range of $470 million to $490 million, 14% to 18% higher than our most recent pre-pandemic first quarter, and we see operating margins to be in the range of 6.5% to 7.5%. We anticipate non-GAAP adjustments for purchase accounting charges for the year to be in the range of $0.01 to $0.03 per share. We expect capital expenditures to be in the range of $55 million to $60 million for fiscal 2024 as we continue to invest to strengthen the company for the future consistent with our Century Vision strategy. Our capital allocation strategy over the long-term is to invest approximately half of operating cash flow into the business and return the other half to shareholders for dividends and share repurchases. This 50-50 split may vary in any given year. In the near-term, including fiscal 2024, we have numerous strategic investments to make as we execute Century Vision and anticipate capital allocation to be skewed towards investments in the business where our ROIs are 2x to 3x our cost of capital. In addition, presuming no significant worsening in macroeconomic trends, we expect to resume share repurchases at dollar levels consistent with pre-COVID repurchase activity. As a reminder, we have 7.3 million shares available under our share repurchase authorization as of our fiscal year-end. And now, I will turn the call back to Melinda.

Thanks Bob. I'm more excited than ever about the future of La-Z-Boy Incorporated. At our core, we have great brands, a strong and growing company-owned retail segment, and an increasingly agile supply chain. We are instilling a renewed focus on the consumer and new product innovation and have a talented and focused team in place to execute our Century Vision strategy, growing ahead of the industry and delivering double-digit non-GAAP operating margins over the long term. While the macroeconomic environment will remain volatile, our balance sheet is strong and will allow us to move through this uncertain period while making important investments to strengthen our business for the future. We have every intention of growing from our normalized post-COVID base, gaining share, and believe the best is yet to come as we deliver long-term profitable growth and returns for all stakeholders. We thank you for your time this morning and I'll turn the call back to Mark.

Thank you, Melinda. We will begin the question-and-answer period now. Holly, please review the instructions for getting into the queue to ask questions.

Certainly. Your first question for today is coming from Anthony Lebiedzinski at Sidoti and Company.

Good morning and thank you for taking the questions. So, first, just a housekeeping question if I may, you know, in terms of the quarterly sales breakdown, maybe Bob you can speak to the pricing versus volume for the quarter?

In specific percentages?

Well, or if you don't have those numbers in front of you, just maybe more in general terms?

I don't have those numbers right in front of me right now. You're saying, if this is for Q4 four, you're saying?

Yeah. Just curious as far as you know, for pricing, you know, as far as pricing and surcharge actions, obviously, those help the revenue numbers versus unit volumes, which were down. So, I was just wondering if you had. If not, we can follow up later if you don't have that in front of you.

Directionally, Anthony, all of our big pricing, so you'll recall the industry over the last three plus years priced up about 30% and we were more or less in-line with that. If I look at Q4 a year ago versus now, you know, all of those surcharge, all those increases in pricing, there’d be no actions taken in that was more than a year behind and that, so that would be true on our wholesale business and then pass-through to retail as well. What you would see in pricing and it's why it's not as big of a driver as some of what you saw over the last couple of years is, certainly mix. Mix is strong and as we were, you know, as we were kind of going through and delivering well in our retail business, when mix is strong to retail, that tends to help us, because, you know, the average product sold in our retail stores and our Furniture Galleries tends to be a bit stronger.

Got it. Yes, thank you for that color Melinda. So, you know, as far as inventory levels, your retail partners that you sell into on a wholesale basis, can you comment on that? I mean, I know, last year it seemed like there was, you know, or even earlier this year, a lot of inventory levels with I think, you know, a lot of retailers saying that they have too much inventory. So, what is your sense now as to, you know, are we in better shape now versus earlier this year, you know, just wanted to get some color on that, please?

Yeah, Anthony things are better than they were early this year. First couple of quarters this year was extremely difficult for folks to take on product because their other inventories were so high. So, things have gotten better. I wouldn't say it's back to normal, what we hear from some of our customers, some customers are actually back to normal inventories, but they're planning on going to lower than that. And the reason why is, in the current environment, with a potential recession in the future, folks are actually looking at lowering what they’ve normally been – they've normally been carrying from an inventory standpoint. So, if they used to carry 10, and they're back to 10, they're looking at continuing to move that down into like 7. I'm making up numbers as an example of a reduction, and that will reduce their risk from a cash flow – improve their cash flow and reduce the risk if we get into a recession. So, they are trying to right size their inventories with the consumers as the consumer demand is a little bit volatile right now.

So, we're seeing that type of activity and we are still seeing some smaller dealers with just too much and they haven't gotten – if their number needs to be 10, they're still at 12 or at 13. So, we're seeing a combination of those things. It's still much better than it was in Q1 and Q2. That's encouraging to hear. And then, you know, in terms of your own retail segment, it did very well once again here in this quarter. How should we think about the sustainability of these trends? And then as a follow-up as far as the retail segment, I know you talked about opening up to nine stores, I assume that's on a gross basis or is that, are you – or is that not of any closings that you're planning to do?

Yeah. So, overall retail, you know what we've continued, obviously, the market is volatile, the furniture industry, you know, is volatile, but what we continue to see quarter-after-quarter, particularly in our Furniture Galleries and very specifically in our company-owned retail that where we're playing offense, where we're investing in the marketing, where we are out executing the consumer is still buying. And so, that is very much our intention is to keep that going. We believe very much in our company-owned retail as a huge differentiator for us, because we best know the consumer there, which can inform everything about our product and our approach. But it also gives us full control end-to-end from raw material to end consumer delivery of that experience. And so, we do believe our retail will be a disproportionate growth factor over the long-term. And to your point, you know that's organic, that's inorganic, that's executional excellence. So, part of that is, as part of our Century Vision, we've talked about across the network. We're at about, in round numbers, when we started Century Vision, we were around about 350 stores and we believe current footprint, everything else being equal, there's room for about 400 at the current kind of style and footprint that we have. So, our overall intention is to net close to 10 new stores a year across the Furniture Gallery. Now, to your point on any given year, you know, this past year, we were a bit under that as we were starting that machine up and we'll still, you know, aggressively close underperforming stores, you know, rather than keep them open just to track a number, but yes, we do intend to net increase our stores both total Furniture Gallery network as well as company-owned.

Well, sounds good and thank you very much and best of luck.

Thanks, Anthony.

Thank you, Anthony.

Hey Bob. Hey Melinda. Thanks for taking our questions. So, I know you mentioned that comps were positive in February, were negative in March with the bank failures that kind of took place during that time and then turned back to positive in April. I just want to make sure first I have that right? And then, kind of following April, can you provide any sort of information or detail on how comps are performing following the end of the quarter?

Yes, so I'll take that, Zach. First of all, yes, you have that right. There was a little bit of mid-quarter slow down, but then we were back on again. And of course, these are trends on our retail business, right, where again we're playing offense to make sure we're driving strong results. As far as how we were a couple of weeks into our new fiscal year here, you know, Memorial Day, I think for the industry, results were mixed, given overall lower traffic trends. And again, some of that is still getting back to normal seasonality. It's always been a slower period. But I think across the industry, we're definitely seeing the consumers slower this year. In our own retail though, you know, we felt like Memorial Day was solid, pretty much in-line with our expectations and you know, our intention is to keep playing offense and keep those comps coming in, you know, positive and ahead of the industry.

Got you. Thank you. I appreciate that. And then on the wholesale segment, I know you mentioned that favorable channel and product mix kind of helps offset lower delivered unit volume with product mix and channel mix, can you maybe just remind us on product whether or not upholstery or case goods kind of helps you out there and then on channel mix as well within the wholesale? If you saw any benefit from La-Z-Boy Network of Furniture Galleries versus major dealers versus retailers outside of the network, that would just be really helpful?

Sure. Yeah, let me clarify. When we talk channel mix, for us – the vast majority of our business is really upholstery. So, when we talk channel and product mix, it tends to be more around, are you talking about like an opening price point based chair versus are you talking a high-end sofa sectional with power and leather and all those type of things. So, you know what we're manufacturing in our wholesale business, let's say, you know, ballpark a little over half of what we're manufacturing is selling through furniture galleries and those tend to be higher cost products, higher value products that tend to be more upgrades, more custom, more bells and whistles added to the product, whereas the other kind of less than half of our business that tends to sell through general dealer channels. So, entities that sell products, you know, a variety of manufacturers, we're one of a series of brands, those tend to be less customized, maybe more opening price point and type product. So, what we see is when our Furniture Galleries are doing well and when our own retail is doing well, you tend to get a product mix that is the higher-end product of what we offer. Is that cleared up?

Yeah, that clears that up. Thank you very much. And then I know last time we spoke, you kind of mentioned that you weren't really seeing any sort of huge discounts or promotions within the furniture space and La-Z-Boy themselves were keeping to more targeted promotions more so at entry price point assortments and things of that nature. Is that still the case today or are you seeing competitors become more promotional, maybe given the more volatile economic backdrop?

We've seen a slight increase in some promotional activity and we've taken some additional steps during the fourth quarter that we announced that market as it related to ensuring that we remain competitive across our portfolio of products, and how we merchandise our products to the different customers and to the different channels. So, we've seen a little bit of that, but it's not a major concerning factor for us right now. We keep our eye on it obviously, but it's not having a major, what I'll call a negative impact on our margins and our sales at this time.

Got you. Thank you. That's it for me. I really appreciate the time. Thank you.

Thanks, Zach.

We have reached the end of the question-and-answer session and I will now turn the call over to the management team for closing remarks.

Thank you for joining us on the conference call. Melinda, Bob, and I will be available to answer any questions, should you have any follow-ups. Thanks and have a great day.

Thank you. This concludes today's conference and you may disconnect your lines at this time. Thank you for your participation.