Q3 2021 Hooker Furniture Corp Earnings Call
Okay, the furniture quite at the Investor Conference call.
What do you get the operating results for the 2021 third quarter at the.
Hi, all batches of bench I know listen only mode of.
Question and answer session with all of the formal presentation of.
The question during the session you will need the press star one on your telephone.
Michael This conference is being recorded.
It is now my pleasure to introduce your host Paul Huckfeldt, Vice President Finance, the Chief Financial Officer for Hooker Furniture Corporation.
[music]. Thank you George.
Good morning, and welcome to our quarterly conference call to review the financial results from the school 2021 third quarter, which began on August 3rd 2020 and.
End of November 1st on 20.
We certainly appreciate your participation this morning Paul.
Oh, I'm, sorry, <unk>, Chairman and CEO, Jeremy Hall, President of our Hooker legacy brands at LIBOR, The President of our home Meridian Division are joining us today.
The question and answer portion of the call our Chief administrative officer and Smith will also be available in the second question.
During the call we may make forward looking statements, which are subject to risks and uncertainties a discussion of factors that could cause our actual results to differ materially from management's expectations is contained in our press release and as the SEC filing announcing our fiscal 2021 third quarter results anytime.
Any forward looking statement speaks only as of today, we undertake no obligation to update or revise any forward looking statements to reflect events or circumstances after today's call.
This morning, we reported consolidated net sales of $149.7 million. The net income of 10 million or 84 cents per diluted share for our fiscal 2021 third quarter ended November 1st the 20 Twond.
Compared to last year's third order on net sales decreased eight of the half million or 5.4%, while net income increased $6.2 million on 157%.
Earnings per diluted share increased over 150% from 33 cents a year ago.
For the fiscal 2021 first line mugs consolidated net sales were $384.8 million down 61 million or 13.7% compared to the last year period.
We reported a net loss of 19 million or $1.61 per diluted share compared to 85 cents.
Earnings per diluted share in the prior first line.
[music] the year to date net loss was driven by a $34 million or two dollar and 88 cents per share noncash intangible asset impairment charge, we recorded in Q1 the.
The covered lives seen pandemic kind of material impact on our financial performance the market valuation and other factors in the 2021 first quarter, which triggered the needs of performing intangible asset valuation analysis as of the end of Q1.
As a result of this analysis, we wrote down goodwill and certain trade names in our each of my segment and goodwill on our Shenandoah furniture, the vision of the domestic upholstery segment.
Also on December 2nd the company was pleased to announce the our board of directors declared a quarterly cash dividend of 18 cents per share.
Representing a 12 and a half percentage increase over the previous quarterly dividends on the fifth consecutive annual dividend increase.
The dividend is payable on December 31st the shareholders of record on the South as of December 16th now I'll turn the call over to Paul Toms for comments on our fiscal third quarter results.
Thank you Paul and good morning, everyone.
We were encouraged on many fronts, our third quarter financial performance I'm pleased with the business rebound that began in mid may continues to gain traction.
Consolidated incoming orders were up 33.8% during the quarter.
Our consolidated backlog is now what the 87 on the half the first thing compared to a year ago.
Paul overall, we had the small consolidate itself the governed by ongoing disruptions on the supply chain from the COVID-19 pandemic.
Two of our four operating segments achieved cells increase as compared to the prior year.
So sequentially, we're growing weekly cells and reported a 19 million 15.
15% consolidated revenue increase on the third quarter compared to the second quarter.
We believe that furniture continues to be an advantage sector in the economy.
Benefiting from a renewed focus on the home.
Strong housing market at less discretionary spending competition travel.
Moving L and entertainment.
In order to service the robust demand for our products, we are adding employees at most locations.
Fly chain bottlenecks in this environment of surging demand or the greatest business challenge we faced presently.
Limitations on the supply include scarcity of some raw materials and components.
Limited availability of shipping containers on ocean vessel space production delays from some import suppliers on the process of getting our domestic upholstery production ramped back up the capture the factories were temporarily closed the.
During the economic shutdown earlier this year.
In addition, we've had to work around from Kobin related employee absences, all while keeping employee safety a top priority rugs.
Regarding the pandemic related challenges, we are addressing and working through the supply chain disruptions and making slow but steady progress.
Overseas vendors are increasing capacity and production each month.
And all three of our domestic upholstery divisions were operating at current the full capacity at the end of the third quarter were in the process of expanding capacity with the additional personnel hires at each location.
In addition to the brisk incoming orders and weekly sales growth we're experiencing are on.
Operating and net income profitability performance during the quarter with strong consolidated operating income increased by 8 million for 161% of.
Compared to the prior year third quarter.
Recur branded segment reported 7.7 million on operating income and achieved an operating margin at a high level.
The home Meridian segment reported two and a half a million dollars of operating income compared to a 4 million dollar operating loss in the prior year of third quarter.
The majority of the improvement was the result of reduced excess costs.
Versus the prior year, including the lower returns in the allowances with the major customer reduced inventory and carrying costs.
The were inventory write downs.
The domestic upholstery segment reported 2.4 million on operating income for the third quarter.
Presenting solid.
Care to operating losses in the first and second quarter of the current fiscal year at the height of the initial code the 19 crisis.
With that I'll turn the call over to Jeremy at all from President of corporate legacy brands to comment on results for the division. Thank.
Thank you Paul.
Okay branded segment net sales increased by $3.6 million or 8.2% in the fiscal 2021 third quarter compared to the same period, a year ago, both hooker case goods and Hooker upholstery had steady sales growth driven by increased overall demand from most residential distribution channels.
Well, the incoming order surge in 36% compared to prior year.
Order backlog at the end of the quarter were up 159% versus quarter in the prior year same period.
The Hooker branded segment has been able to take advantage of exceptional demand due to our ability to secure manufacturing capacity rash.
Rationalizing our overall assortment, while focusing on our inventory purchases on our top performing collections has helped us further mitigate supply constraints.
Despite the April and October high point markets being disrupted due to COVID-19, we were able to pre cut ship and start selling four major new collections developed.
Developing and utilizing new digital marketing strategies has enabled us to launch new products of successfully.
Considering the many disruptions of 2020, we're pleased that the Hooker branded segment achieved a 7.7 million dollar operating income for the quarter, which represents a 16.3% operating income margin.
The sales increase drove the solid profitability performance, along with lower sales and administrative spending and warehousing and distribution cost reductions.
Our domestic upholstery segment was significantly impacted by kind of in 19 in the first and second quarter and it has taken some time to ramp up production to normal levels. We were pleased to see third quarter sales rebound to prior year levels and profitability increased slightly despite the material price increases and labor inefficiency.
As we ramp back up all three domestic upholstery divisions are seeing strong demand and are working selected overtime and the hiring additional workers to meet the demand and to work down the order backlogs now I'd like to call on leave the to give more detail on the age of my segment this quarter.
Thank you Jeremy.
Hey, Jim Ice third quarter sales were $73.7 million down 14% from prior year on.
Operating profit was 2.5 million an increase of 6.4 million from the loss recorded in the second quarter of last year the.
Third quarter profitability was enhanced by improved gross margins over prior year and numerous spending reductions implemented earlier this year in response to the code the 19 pandemic.
In addition, excess returns and allowances were reduced versus prior year.
The third quarter revenue decline was primarily the result of ongoing disruptions of Carbonite team on our factories and supply chain.
Disrupted supply of raw materials components labor.
And extremely limited availability of shipping containers have all negatively impacted our ability to produce and ship products in the third quarter and into Q4.
Each of these areas are announced sources of potential cost increases, which we are negotiating with factories to minimize the impact on our business.
In addition to the profitability improvements incoming order rates continued to be a bright spot.
As the exceeded prior year orders by 36% on a consolidated basis.
These orders were primarily driven by conventional retailers, placing large orders program to ship well into the future.
As a result, the combination of significant order programming and factory shipping delays drove third quarter backlog up 80% over prior year and 53% above the second quarter ending backlog just three months earlier.
We are working closely with the factory owners and our logistics suppliers to increase production capacity and shipping capacity.
Turning now to divisional highlights Palleschi furniture, PFC third quarter operating profit improved 15% over prior year, despite the 23% sales decline.
This profit improvement is the result of reduced spending and the reduction of overhead costs, we implemented in the first quarter.
Samuel Lawrence furniture, SLF improved third quarter operating profit by $1.5 million, despite flat sales compared to prior year. This.
This performance is also the result of reduced spending in margin improvements versus prior year.
Prime resources International PR I reported the slight profit in the third quarter versus the substantial loss in the third quarter of last year the.
This improvement is the result of reduced returns and allowances and strong retail demand from a large mass channel customer.
Eccentrics home AC H.
Operating results were also vastly improved compared to prior year.
Third quarter operating profits were 1.6 million over last year, despite reduced service in stock levels due to production capacity and shipping issues.
These production and logistics issues are continuing the into the fourth quarter and will likely impact results into Q1 of the next year.
In October the company announced the H a mine will consolidate the east coast warehousing operations in a new 800000 square foot distribution facility strategically located near the major port of Savannah, Georgia.
Progress is continuing on this facility, which is intended to replace multiple older and inefficient warehouse buildings and North Carolina.
With the new built the spec tied to distribution center that is much closer to the port.
This proximity to Port will result in significant inbound freight savings for each of my versus our current locations. In addition, the layout of the Newbuilding provides us with more functional and efficient space designed to enhance our customer service levels and operational efficiencies.
The location near major Interstate corridors, I 95 than Isix team will provide our outbound carriers with easier access, resulting in further cost savings and efficiencies targeted.
Targeted occupancy of the new warehouse is third quarter of next year and we are on schedule to be fully operational in Q4.
As expected customer attendance at the September Highpoint pre market and October high point market was atypical.
Pre market attendance was up five fold.
Two of our market attendance was off about 60%.
Taken together the fall market traffic was down about 40%.
Fortunately were able to see most of our largest customers and we presented virtual markets to many of the customers who did not visit our highpoint showrooms in person.
As a result, our new product introductions pipeline remains healthy while focused on the smaller assortment of top performers.
We expect these well received fresh new looks to arrive at retail in the late spring.
We're making meaningful progress developing new designs of marketing plans for the spring launch of our recently announced Scott Brothers' license retail.
Retail acceptance has been very enthusiastic for the new Scott living and true and Jonathan home brands.
Expect our partnership with Scott Brothers' to drive incremental sales and profits across multiple HD might divisions, beginning in the second quarter of next year.
At this time I'd like to turn the call over to Paul Huckfeldt, who will elaborate further on the quarterly results.
Thanks Blake.
Consolidated net sales decreased primarily due to sales, but the sales decline in the Hooker operating segment, partially offset by increased net sales in the Hooker branded segment average selling price increased 12.3% on a consolidated basis due to increased ASP in all reportable segments and all of it.
Okay branded net sales increased due to a 6.2% increased unit volume and to a lesser extent of 1% increased average selling price.
The home Meridian net sales decrease was driven by a 20% unit volume decrease due to inventory availability as well as well as lower sales in the save a lot of hospitality division due to the negative impact of kind of at 19 on the hospitality industry.
Jim I average selling price increased 7.9%, but it was not sufficient to offset the unit volume losses.
Domestic upholstery average selling price increased by 4.7% due to increases in the Sam Moore of Shenandoah divisions, and an increased the mix of higher price Bradington young product.
Unit volumes were down 3% in the domestic upholstery segment due to production delays as we emerged from temporary plant shutdowns as well as some scarcity of raw materials and components.
Consolidated gross profit increased in absolute terms and as a percentage of net sales from $28 million or 18% to $33 million were 22.4% in the fiscal 2021 third quarter.
Despite the sales declined the most of the increase was in the home Meridian segment. The segment was heavily impacted by excess charge backs with one major customer excess inventory and carrying costs due to the customer returns and surplus inventory.
And inventory write downs, all of which did not repeat in the current year.
Okay of branded gross profit increased primarily due to higher sales Doug.
Mystical bolster gross profit decreased slightly in absolute terms and as a percentage of net sales.
The decreased gross profit on our Shenandoah division, resulting from modest increases in material costs as well as slightly higher direct labor and under absorbed fixed costs as production ramp back up after the earlier slowdown.
Our other domestic manufacturing plants experienced some of these issues during the quarter as well, but all plans are now operating at full capacity on working to income increased capacity since we believe the increased demand while the weather's for some time.
All other net sales decreased 9.4% in the fiscal 2021 third quarter due primarily to a decline at H contract as senior living facilities, which comprise the majority of age contracts business are significantly impacted by the COVID-19 pandemic.
Gross profit decreased in absolute terms and as a percentage of net sales due to the sales declines and unfavorable product.
What was the smaller part of our consolidated results all of the reported an operating income and maintains an operating margin above 10%.
The consolidated selling and administrative expenses decreased in absolute terms and as a percentage of net sales during the third quarter due to lower selling expenses in the home Meridian segment and the cost reduction efforts, we made companywide in response to the COVID-19 pandemic.
The decreases were partially offset by increased sales incentives in the hooker branded segment and to a lesser extent increased bad debt expense, including the recognition of current expected credit losses under a newly adopted accounting standard C 26.
For these reasons operating income for the fiscal 2021 third quarter increased $8 million to $13 million compared to $5 million in the prior year second quarter.
And operating margin improved from 3.2% to 8.7%.
Our cash balance stood at $94 million at the end of the quarter, an increase of nearly 58 million from the fiscal 2020 year end so.
So far this year, we've generated 68 million the cash from operating activities much of it from the reduction of inventory levels and the collection of accounts receivable.
As noted above we are in the process of rebuilding our inventories to meet current demand.
The given current lead times with our agent partners, we have and May continue to experience out of stocks with respect to certain important product.
We are revisiting our sales forecast regularly on adjusting production orders based on incoming demand and.
And were strategically monitoring our inventory levels the focus on getting our best selling products back in stock as quickly as possible.
Now I will turn the discussion back the Paul Toms for his outlook. Thank you Paul.
As we head into the fourth quarter were very encouraged by our significant backlog and Robert robust demand from all residential channels.
We're making progress with our supply chain challenges as our overseas suppliers and own factories ramp our production to allow us to meet the strong demand.
However, some of these challenges will continue to impact us through the fourth quarter and into early next year.
We're concerned about the recent surge in coven infections and hospitalizations nationally.
We continue to maintain rigorous safety protocols and all our workplaces and are proud that we have had essentially no workplace spread and the location.
Those employers who can work remotely continue to do so the safety and health of our employees remains a top priority.
As we look forward to the next two to three quarters were very optimistic and believe we have the backlog order velocity and momentum to continue to deliver very strong results.
This ends the formal part of our discussion and at this time I'll turn the call back over to Joe well for questions.
Thank you as a reminder to ask a question you on the the press Star one on your telephone.
So let's try your question press the pound key please standby when we come out of the committee of Us day.
Our first question comes from the.
The new lifted the Zinski with Sidoti and company. Your line is now open.
Thanks, Good morning.
Thanks for taking the question so.
Just one.
You guys have seen the very robust the strong demand and thanks for providing the data, but the incoming orders and backlog. So what is your sense of the this is the demand the.
How how long do you think this can continue.
One of your sense of that.
Anthony This is Paul Toms and that's a good question, we get the quite a bit on.
From recent Investor presentations, I think it's it's kind of a mixed bag, but.
Generally I think we expect that we're on a very.
Advantage position.
On a lot of it will be longer term in the short shorter terms day in the next.
Six to nine months I think we continue the benefit from.
Less competition for discretionary spending from industries that we typically compete with like travel dining out.
And leisure and entertainment.
However, I believe with the vaccination maybe by.
The second to third quarter next year, some of those industries will bounce back a little bit.
However, I think a bigger impact on our business is what's going on with demographic.
Millennials Gen X.
Becoming a bit of bigger part of home buying.
People moving out of.
Metropolitan areas to the suburbs in more rural areas.
Moving into larger homes.
I think housing looks like it's kind of the good for an extended period of time inventory is obviously a challenge but.
Interest rates are very favorable.
Stability is still good.
I think the housing could benefit us for.
The 234 years or longer it's really been.
Since before the 2008 nine recession that housing has been this robust.
So we're encouraged by housing trends were encouraged by the demographic trends we think the.
Things that have been positive in terms of competing with other debt.
Industries for discretionary spending probably last another six months or so.
Dan I think some travel will take longer to come back to them just.
So when we had the vaccines so I hope that helps.
Yes, absolutely. Thanks, so much for that Paul so.
The gross margin that we saw in this quarter was the best one the and the.
And the while for sure. So what's your sense of the sustainability of this gross margin improvement.
Well the.
I think the word.
We're getting back the to more normal conditions, but the gross margin is a low skewed because.
Our Hooker brand the division has higher gross margins than the age of my Division and so our sales mix was a little bit skewed.
Out of normal I.
I don't think it's it's I don't think that the the margin is going to be sustainable at this level. Once we get the once each of my gets their shipments back on track, but I think that will return to the more historical levels.
Which I think are still healthy, but I think the 22.4 as it is at the high end of the range right now.
Got it okay, thanks for that Paul and as far as the.
The distribution center, the you will be opening up in Georgia.
Can you give us the sounds just of the capex that you'll need to.
Putting or maybe some other quantifiable measures and then as far as what share of that facility up and running is there any way that you guys can quantify the freight savings our operational efficiencies.
Well.
It looks like next next year, we'll probably probably spent three to three and a half million and capital expenditures, we've got and we'll have some expense items that we'll call out too.
Probably in the in the millions of dollars range that we'll call those out as we incur those that will be like moving costs real inventory relocations of advanced training.
So well.
We'll call those out as we as we turn those numbers down.
I think the we can we should be able to do a rough calculation of the freight savings.
Great. So freights of the commodity items and the freight freight rates vary, but I think that we can count the number of containers and calculate the difference. So we can certainly quantify that.
And obviously thats, an important part of the of that and the operational efficiencies of the new building of the new because the.
The side does that building design for us are the reasons with the we're doing this the first place.
Okay got it Okay and then.
So yes.
Yes, first cash cash flow, obviously, you guys talked about benefiting from the.
The inventory reductions of accounts payable so.
Looking forward the other the client inventory increases and kind of the normalization of accounts payable of what would you say are the primary usages of cash flow and the.
What is your outlook on potential acquisitions.
Paying down debt is going to be our first I.
I think on.
Our credit facility expires in February and we're negotiating the new revolver, but I think that we're going to pay down of the $25 million of turned debt that we have on the books, it's not a lot of money, but I think that that's the probably one of the better uses of cash on the short term.
Acquisitions I.
I think the you know Weve stated pretty pretty regularly that we would like that we believe we can grow by acquisition and the we're comfortable making acquisitions. So we're we're looking for acquisitions I can't say that we have anything.
On the books right now, but that's certainly one of our primary.
Capital allocation targets is to grow by making smart acquisitions.
Debt.
Okay, well. Thank you so much and best of luck.
Thanks Evan.
Thank you on our next question comes from Sandy Mehta with evaluate research. Your line is now open.
Yes, congratulations on the very strong on earnings this quarter.
Following up on the prior question you have a very high net cash position strong free cash flow you talked about acquisitions, what about possible special dividend I have noticed that several of the other furniture companies have declared special dividends is that something that you may consider.
This is Paul Toms.
We historically have.
Paydown of the healthy dividend.
Some of the companies that use the paying special dividends on our industry.
Either suspended or reduced their dividend earlier this year, but.
But I think if you look on the payout of our dividend over time as a percent of.
Earnings on the as a percent of the share price is.
The good so at this point no we don't have any.
Intentions of paying out the special dividend, we did just increase the dividend Paul.
Well on a half percentage for the fifth consecutive year of things we've increased the right.
We believe that we pay the dividend for the last 50 years. So it's been very consistent.
Moving on the 2008 2009 downturn, we didn't cut the dividend.
So.
The proud of our record of.
Paying the dividend and consistently increasing at the most environments.
And one follow up question also the.
I know you have shifted lot of the imports to Vietnam and other geographies. So the whole China tariff issued which impacted you in the industry over the last couple of years is that now largely over just I know you have the other suppliers, but the China tariff issue is that sort of behind you now thank.
Sure.
I think that it's mostly behind us.
We do still source some product in China, and especially in this environment, where we're having the hard time getting all the production we need.
We have moved some products back or some excess production back to.
China, but I also believe that we have mostly mitigated the impact of the 25% tariffs through price increases to our.
The customers so.
Definitely less impacted than we were.
You're in the half ago.
It's very manageable at this point also as a percent of our total production the amount of product, we produce and China has dropped from.
Probably north of 40% to less than 20% of our total.
Lifting those tariffs would benefit our customers and the consumers though.
I don't think Thats likely yes.
Thank you very much.
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Thank you on our next question comes from John Deysher with Pinnacle. Your line is now open.
Good morning, Thanks for taking my question.
I was just curious.
What's the backlog was at the end of the quarter. Please.
On that.
I don't have that number handy.
Rather not make it up.
Okay.
In terms of the potential headwinds you highlighted.
Higher shipping container costs.
Issues with supply chain.
How is that tracking quarter to date in the fourth quarter.
This is Paul Toms we're still.
Selling with those challenges I don't think the container availability has really improved signal.
Significantly at this point, we hope it will but honestly, we're looking at probably after Chinese new year.
And debt.
It does.
The vessel space is also a challenge, but probably less of a challenge than the container availability.
And up into this point I would say more in the second quarter than the third quarter, but still.
Trailing into the third quarter just production capacity.
Vietnam was the challenge, but I think our vendors are ramping up every month, they seem to be producing more than the prior month and so that would be behind the challenge of containers on vessels base.
So it's a positive trend.
Going forward, it's not getting worse.
Yes, I would say production is increasing I think vessel space is probably more available now than it was in the second quarter containers and the availability of shipping containers is probably the one area that hasn't improved on quite honestly until that does the.
Production capacity of the vessel space Doug.
It really help us that much unless we can get the cans to put the product so.
I think we're we're managing our way through it but we could certainly have another month or couple of months.
Alan says.
With that.
Okay. Thanks, that's helpful.
You mentioned, possibly paying off the term loan.
Before comes through I think the February 1st of next year.
Oh.
Is that.
Do you think that will happen and what about the revolver, where are you with the negotiations for extending the.
We're in the final stages of of.
Those negotiations on the very comfortable that we'll we'll replace the revolver.
Like I said earlier, we feel like paying off the term loan is the.
His of wise use of capital in this environment and with our capital needs. If we if we make an acquisition that requires additional capital will go back to the capital markets look for another.
For another term loan.
Okay that makes sense just back to the backlog will that be disclosed in the 10-Q on that comes out.
I believe it is.
It is okay.
It would just be helpful to know that so the.
Think of it is.
Thanks, and good luck to you.
Thank you.
As a reminder to ask the question you will need the press star one on your telephone.
Next question comes from Jeff Geygan, the global volume investment your line is open.
Hey, good morning, gentlemen, thank you for taking my question.
The.
For new collections, Jeremy could you give us a little more color on that what it is how do you see it scaling where does it fit in and so on.
Good morning.
This is Jeremy.
You know I would say the four new collections.
Is somewhat typical of what we would probably.
Be able to.
Net loss get out into the marketplace and sell in a full year, which is how we tried to look at the disrupted markets that we had.
As far as putting context around how large they are.
I really can't answer that without guessing, but early indications are there's two of them that I would call.
A category top category for us and the other two would probably be more to be category.
So that I don't know how to help you more than that on the volume.
We hope its its bigger than anything we've done, but I just can't say that at this point.
Yeah, that's fair the JV is helpful. Appreciate it.
Paul Huckfeldt regarding margin I think you mentioned the mix back to each of my which got off to kind of.
One of the.
Unexpected start with the consolidation where should we think about margins for that division or segment in the future as it.
Stabilizes and matures.
They're they're inherently a lower margin business and.
I would say.
They are in the.
In the mid to high teens.
It's probably on a sustainable model.
Obviously, we're trying to push that margin up and.
Some combination of efficiencies price increases, where we need to but I'd say, it's the mid to high teens overall.
All right I appreciate that and last question for you on this is back to the prior question of the supply constraints or disruptions you had on the need of explained it very well in terms of capacity and logistics, which is the bigger issue.
In the short term the logistics just getting.
Containers of products.
And.
Longer term.
Just don't see I think theres plenty of shipping the vessels that are available there's things got kind of out of kilter earlier in the.
Year, and I think they'll get the equipment located on the right spots still make the additional containers.
I don't think those are kind of be long lasting.
Packs and production capacity is they're already doing the job of ramping up.
Spec that we'll see.
Our backlogs come down some as we enter next year.
And.
Also domestically, which is the only about 15% to 20% of our total volume but.
We are ramping up production on all five of our domestic upholstery facilities.
Very bullish on next year, there because of the backlog that we have.
And the increase production that were planning we have to get through the current.
Cobot.
Challenges that we have we do have employees that are either.
Either out the costs of test positive and or the.
Net around somebody that tested positive indeed, the quarantine so.
Probably have 10% of our workforce at any given time that is.
Al.
Part of our safety protocols and I think we will certainly make progress on that but maybe closer to one we have of vaccine.
Alright I appreciate your time today, Congratulations I think you've mentioned the sub pandemic brilliantly. So I look forward to seeing your future results.
Thanks for the thank you yes.
Thank you I'm not showing any further questions at this time of it now I'd like to turn the call back over to Paul Toms The closing remarks, alright. Thank you Joel and thanks, everybody for joining us today for the third quarter earnings call were.
Encouraged by the momentum that we have in the business as.
As previously announced I will be retiring as CEO on January 31, 2020 Watts of this will be my last call.
Alan will remain as chairman of the Board Jeremy Hall from our current President of Hooker legacy will become the CEO effective February Onest 2021.
He and the entire leadership team are well equipped the lead hooker furniture and of the future.
On a bright future. It is we have a great deal of momentum driven by positive demographic than housing trends.
Of numerous strategies to grow both organically.
And through strategic accretive acquisitions.
We have a very strong balance sheet the sustained us through the current.
Cobot challenges, but also 10 or 12 years ago through the economic downturn.
Balance sheet will continue to help us as we go forward and with the acquisitions.
The unique culture that the sustain this company for 96 years.
A very strong cohesive management team with a good runway left ahead on their careers I've never been more bullish on the prospects of poker furniture.
Thanks again for joining us today best wishes to you on your families for of statement of healthy holiday. Thank you.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating you may now disconnect.
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