Q4 2020 Hooker Furniture Corp Earnings Call

Thanks Josh. Good morning, and Welcome to our quarterly conference call to review our financial results for the fiscal 2021 fourth-quarter and full-year both of which ended on January thirty. First two thousand joining me. This morning is Jeremy Hoff Archie Finance chief executive officer. We certainly appreciate your participation today during our call. We may make certain forward-looking statements which are subject to a discussion of factors that could cause our actual results to differ materially from Management's expectations is contained in our press release and SEC files announcing our system twenty-twenty wage. Any forward-looking statement speaks only as of today, we undertake no obligation to update or revise any color looking statements to reflect events or circumstances after today's call log for a fiscal 2021 fourth-quarter, which began on November 2nd and ended on January 31st, 2021.

Reported Consolidated net sales of 155.3 made with a net income of 8 and 1/2 million for one and a half million dollar or 22% increase compared to the prior quarter earnings per share for the quarter was seventy-one cents per diluted share an increase 20% to 20%

Net sales for the quarter decreased by nine point six million dollars or 5.8% compared to last year's fourth-quarter quarterly sales increased in two of the companies three reportable segments with home, and it sells up almost ten million dollars or 25% over the prior year and domestic upholstery sales of 1.4 million or about 6% compared to a year ago. The Consolidated sales decrease was driven by a $20 sales decline from the Home Meridian say we were Global Supply Chain disruptions constrained these statements ability to shift their strong order background for the 2012 fiscal year, which began on February 3rd, 2020 and ended on January 31st, 2021. We recorded sales of 540 million and 11.6% decrease from the prior Year's General by a fifty fifty eight million dollar decrease in the Home Meridian state.

for the year the company reported in

Ten point four million dollars for eighty eight cents per diluted share compared to net sales of 610 million and they didn't count of 17 million or $1.44 per diluted share name.

That loss was due to a 44.3 million-dollar non-cash impairment charge for thirty three point seven million dollars in debt of income tax.

To write down the Goodwill and trade names of the home arena in the Home Meridian segment and Goodwill in the Shenandoah division of our culture domestic upholstery second.

Adverse economic effects of the COVID-19 pandemic on first-quarter orders and our share price of the time triggered an intangible asset impairment analysis in the first quarter of the Super Bowl 21 in the depths of the COVID-19 economic crisis, which required the company to perform a evaluation if it's intangible assets.

Evaluation led to the impairment charge resulting in a ten point four million dollar loss Hooker Furniture corporations first annual net loss since nineteen $29 excluding impairment charges operating income for the fiscal year improved by seven point two million dollars hooker ended the year on a strong note with Consolidated orders up almost 6% And in order of more than double the same time but a year ago now, I'll turn the call over to Jeremy to comment on our official twenty Twenty-One and fourth-quarter results. Thank you Paul and good morning everyone else. Well the volatile economic environment driven by the COVID-19 pandemic resulted in one of the most challenging years in our 97 year history were very pleased with our recovery in the second half of the month and we believe that our company emerged stronger through adversity considering the once and a century Global Health crisis that occurred during fiscal twenty Twenty-One and how severe the down

In our industry was during much of the first half of the year are recovery in the second half was significant particularly in the areas of profitability and demand our fourth-quarter results, including a 22% increase in net income and higher sales and two of our three reportable segments are solid profitability performance and the fourth quarter built on momentum from the third quarter in which reported net income of 10 million and increase of 6.2 million or 158% compared to the same period a year ago.

Beginning in June the company experienced historically high levels of demand and backlogs that continue to be strong. We believe this level of demand sets us up for a Samsung Gear in fiscal 2022 assuming Global Logistics bottlenecks such as the scarcity of ocean vessels and containers higher Transportation costs raw materials shortages and Lounge worldwide production capacity improve another indicator of our strong second-half recovery. Is that about 75% of the Consolidated net sales decreased for the year occurred in the first half of fiscal 2021 caused by the initial severity of the COVID-19 related economic crisis to our company and the industry as a whole during that time many of our life Partners closed for weeks Global Production was on hold our q1 orders plummeted by over 40% and we had to temporarily close 5 of our sixth upholstery plans for more money.

after around

10 weeks of significantly lower demand orders surged as Furniture emerged as an advantage sector during the economic downturn Home Furnishings benefited and continue to take advantage of pent-up demand may strengthen the housing market and less competition from other discretionary spending such as travel dining out apparel and entertainment since summer of 2020. We have been working to ramp up production are domestic factories and with our International suppliers to keep up with demand as our company responded to multiple disruptions during the year. We believe our strategic adaptation a place the company in a stronger competitive position than pre pandemic the scale of our company strength of our balance sheet and the skills and dedication of our us and International Teams enable us to successfully navigate a devastating macroeconomic event in a way. We believe positions the company

To take advantage of the positive momentum and favorable demographics for the home furnishings minister.

Some of the enduring strategic adaptations Hooker Furniture Corporation made during the year including reduced dependency on suppliers in China a faster product to Market strategies video for customer showroom tours and improved photography and the rationalization of our product line to maximize production capacity and capital utilization at hm. I'm a significant progress was made on multiple fronts that positively impacted profitability for the year operating profit for the fiscal year was nearly two million at HMI and Improvement of almost nine months compared to the previous year and after excluding the impact of the intangibles charge. This profit Improvement was primarily the result of significant spending reductions implemented early last year off to mitigate the impact of the pandemic disruptions in addition HMI strategies to minimize the impact of China tariffs were largely accomplished in fiscal 21 Club.

Returns and allowances were significantly reduced versus the prior-year as well growth and profit enhancement strategies have been put in place at HMI to mitigate the global supply chain headwinds and the money is entering fiscal 2022 with record backlogs reduced overhead proven product sales performance strong customer relationships in the exciting new Scott Brothers brand launch on track for the year for the Consolidated company during the year. We launched our one company one culture initiative designed to bring together the best practices processes people and culture. There are twelve divisions to build a stronger and more cohesive organization centered around a common Erp System project one will bring the entire company on to a single system and standards of best practices across the company and Industry.

Year-end we made changes in our management structure as our longtime CEO Paul Toms retired as I succeeded him on February 1st, 2021, the transition provides an opportunity to combine our operations and marketing teams to support the growth of our twelve unique businesses. Each of the twelve has a leader product line price point focus and distribution Channel Tom that keep them distinct are one team approach ensures all are supported with the full scope and scale of our company. We cannot say enough how appreciative we are of our entire team who gave exemplary effort under trying circumstances over the past year our team pulled together and produced extraordinary results under difficult conditions. They found new ways to work to show product stay in touch with customers and suppliers throughout the world while staying positive productive and engaged our employees dealt with personal and business disruptions while working from home and other remote location.

Many employees who could not work.

Remotely, followed strict safety protocols and warehouses and factories. All of these adaptations were made with energy and a spirit of teamwork that will serve us. Well as we strive to become one company culture now, I want to turn the discussion back to Paul who will discuss highlights in each of our reportable segments. Thanks Jeremy. Let's look at highlights from each segment beginning with hooker branded wage. That's a brand a segment recovered from the pandemic downturn at the fastest Pace to all of our segments with sales rebounding in the third and fourth quarters in the fourth quarter hooker branded hooker branded sales before I'm forty nine point two million up almost ten million or 25% of net sales for the full fiscal year. We're essentially flat increasing by about $450,000 or 3% off despite. The pandemic related shortfalls are in q1 Q2 incoming orders increased at a double-digit rate starting in June sustaining through year-end and the segment finish the year for the backlog birth.

A year ago. The segment is in the process of rebuilding inventory to meet this current higher demand.

For the year hooker branded segment reported 22.8 million of operating income increased at one point three million dollars or about 6% compared to the prior-year given the economic circumstances were especially pleased to not only maintain but improve hooker branded segment profitability compared to a year ago. We believe increased sales of Demands are driven by a few factors in the second half of 2019. We pre-ordered our twenty-twenty introductions of three collections that have been among our most well-received introductions several years with all three Rising into the table and of our best sellers.

Two of the collections still style void in our line in the soft modern and Coastal Design representing incremental business for us. We never canceled production orders for these collection which helps a product flow and availability. We were disappointed hooker tastes good and hooker upholstery to rationalize our inventory and job under-performing fuse in order to maximize production capacity Around song.

Reduced expenses and higher sales helped us make improvements on already solid profitability record programs.

That's the Home Meridian like you should like you for sales with eighty million dollars down 20% from the prior. The Q4 sales decline was a direct result of disruption Global Logistics driven by the economic impact of COVID-19 on manufacturing capacity raw materials and the cost and availability of shipping containers.

Fourth quarter operating income was $683,000 a decrease of 1.2 million versus the prior-year the reduction of process in profits is caused by the smaller Top Line as long as well as increased Freight expenses and a bad debt approval of about six hundred thousand which more than offset improved gross margins and operating cost reductions in New Mexico.

retail demand

Remain strong for Home Meridian products and we ended Q4 with that Clause more than doubled their levels a year ago.

Orders in the quarter would down 26% versus last year after being up 36% in Q3. However, this decline it's primarily the result of earlier ordering an extended shipping refund on a full year results also was significantly impacted by the pandemic related economic now HDMI fiscal year 2021 Revenue was off 17% vs driven by the same Dynamics at the plate of people in addition current dramatic downturn in the hospitality industry, which is highly dependent on travel resulted a sales decrease in our Samuel Lawrence Hospitality decision that accounted for 45% of our total revenues decline in the hmic.

This is she in the highlights in hm. I include for Pulaski Furniture Sales were off year-over-year before limited production capacity and Grant and shipping issues. This is the case in most hm. I. However like other brands last he finished the year with a record backlog interestingly with the exception of our Hospitality business and ACH Which is less dependent on back law that was fruit and each of our residential positions each my residential division, in excess of the divisional sales shortfall between these comparisons suggest that retail demand remains strong and took the prior-year freak, man.

Samuel Lawrence furniture all those sales were down compared to the prior-year quarter's backlog and profits were up significantly in FY 21.

These improvements are validations of our Mega account sales strategy and our low-cost sourcing strategy for the sizeable backlog program. Through November Samuel Lawrence shipments are expected to remain strong throughout.

Regarding standard Hospitality. It's no secret that the hospitality business in the US was severely disrupted by the pandemic as a result Samuel Lawrence came up short of break even and pissed off and will continue to struggle and for business conditions improve you're watching that segment careful.

Although Prime resources. Our import upholstery division is not yet at Target performance Prime resources generated significant turnaround in last year finishing off with a hundred percent increase in backlog and a significantly improved operating system.

This Improvement is the result of our strategies to move away from lower profit businesses and dramatically improve returns and allowances as well as focused and spending reductions extension home page start of the year strong and benefited from consumer shift e-commerce early in the pandemic But ultimately struggled with service problems in the latter part of this for 21. These issues were especially impact achs performance given the unprecedented demand in the e-commerce Channel despite service challenges ACH performed.

improve significantly do to lower

Customer chargebacks and enhance the pricing strategy lastly at hm idea our business units focused on upscale ready to assemble furniture at our club system. We experienced improved our sales and backlogs. Unfortunately, excessive returns and allowances from the club business and prior years negatively impacted. Hm is results from here accordingly. You've taken strong message including significant additional Reserve to minimize the impact of these issues going forward. We believe we're appropriately priced and reserved for the future also of note business disruptions from Thursday, and then it's delayed and reduce the launch of our new ready-to-assemble product category.

Yeah, strong consumer demand for ready to assemble products. We have confidence that will make good progress in this category in the future. Especially branded line sold through our e-commerce chance.

Turning out the domestic policy the most upholstery segment the year ended on a high note with this segment with net sales up 1.4 million or 6% in the fourth quarter compared to a year-long operating income also increased by one point two million dollars during the quarter as all three domestic upholstery divisions ramped up production during the third quarter and returned to full capacity and a normal shipping cycle.

For the full twenty Twenty-One year the domestic upholstery segment net sales decreased by 12 or 12. 5% Do temporary Factory shutdowns and production delays and all three of our domestic upholstery operation at the onset of the pandemic related economic downturn the same at resume production in the second quarter and all three divisions operated at full capacity for much of the fourth quarter and into early fiscal 22.

Since March production has been temporarily slowed by a shortage of upholstery foam resulting from A disruption in petroleum. It's finally it all other net sales decreased by about a million dollars or 7.9% Do the sales declines in a contract and this business unit which Services Senior Living facility was adversely impacted by the pandemic these decreases were offset by the addition of net sales in our lifestyle Brands business units, which targets the interior design challenge.

H contract incoming orders decreased by about 12% for fiscal 2021. However, the company expects the code back soon roll out to help Senior Living industry begins to recover contacts ordered deterioration key fourth-quarter and finally our balance sheet remains strong cash and cash equivalents stood at sixty five point eight million at the end of fiscal 2026 an increase of nearly Thirty million dollars compared to the balance of the prior-year even after we paid off 24.3 million dollars in turmoil at the end of January 2021 month. Additionally we have access to twenty eight point seven million under our revolving credit facility to find our working capital need and about twenty-five million dollars in cash surrender value of company owns life insurance policy with the confidence that are strong financial position, whether the expected short-term impacts of COVID-19 off.

disruptions to the supply chain raw material

And the overall inventory stood at 70.2 million year end compared to ninety two point eight million at the prior-year end building inventory to meet increased demand in order off the top management priorities.

In early, March our directors approved in eighteen cents per share dividends, which is current share price is gives us a dividend yield of about 1.9%

Turn the discussion back to Jeremy for his help. Thank you. Paul Hooker Furniture is entering fiscal 22 with confidence and a positive outlook for our company and our industry has demanded strong with incoming orders up substantially in all segments and order backlogs more than double the prior-year optimized in these high levels of demand and backlogs will be our operational priority in the near-term as we also work to continue the momentum of improved profitability during the last two quarters moving forward. We are confronted with what we believe to be temporary headwinds including glass manufacturer capacities raw materials Logistics and upholstery foam issues all of which we believe to be short to mid-term constraints while competition for the consumers discretion a spending such as travel restaurants and entertainment will increase as COVID-19 vaccination vaccinations rollout. We see sustainable positive market conditions for Home Furnishings. We are Optima

Think about the economic and Industry environment and we're even more confident in our team's ability to execute our strategies to grow profitably in each of our 12 businesses and adapt to the unexpected challenge. That is the formal part of our discussion. And at this time I will turn the call back over to our operator Josh for questions.

Thank you, as a reminder to ask a question. You'll need the press star one on your telephone to withdraw your question. Press the pound key, please standby with the pilot and a roster.

Our first question comes from Anthony lebiedzinski with sidoti and Company. May I proceed with your question?

Yeah, good morning, and thank you for taking the questions. So first. I have a multi-part question about Home Meridian. So first just curious as to whether you're seeing any improvements as far as ocean shipping container issues. You know how has that situation evolved the last month the second part of that package and you know in terms of the reduce overhead that you highlighted. Can you give us a sense as to if you could quantify that and then third part of the question is as far as the inflation comments you taking price increases to offset and whether those price increases will fully offset the some of the inflationary issues and they have a couple of other questions after that as well. Thank you.

To the first part Anthony, first of all, good morning, you know, I would say that we're seeing somewhat positive momentum towards an improvement in the constraint. We've been having with containers and availability. It's definitely not where we need it to be but it's showing Improvement. We're looking at new contract rates and whatnot and we are seeing Improvement, but we're not there yet. So definitely not trying to say that and I'm going to let Paul have the other two.

We made across the company. We made cost reductions last year. Now some of those many of those are temporary and and obviously, you know, the response to this improve business environment, you know, we probably more of them are turned out to be temporary than we expected. You know, we we brought our most of our staff back we had as as we've disclosed in Prior calls month. We had a limited number of layoffs about a dozen across the whole company and and you know, we're pleased that it didn't get any worse than that. So we're back to full Staffing the page generally operating at full speed with you know, with full Staffing. In fact trying to hire more except right now. We're in a little bit of a temporary delay because of this phone situation, I would say that we've tightened up on you know, things like travel where we probably never going to go back to the to the level of travel. We did in the past, you know, if I was going to try to put a number on it, I would suck.

Probably reduce spending by a half a million to a million dollars. I don't think it's any bigger than that because you know right now business is good. So it's hard to compare but I would say that you know, we've we've taken some overhead out wage, but I don't think it's it's not a huge number.

Got it. Okay, and and then as far as it's a wrap up that multi-part question as far as inflationary issues is if you highlighted how long we think about your ability to raise prices to offset that

Anthony I would I would say that in this environment. We're on a I would call it a Level Playing Field with everything going on so long the things that are creating the inflation through the raw materials and increased Logistics costs or everything we're talking about, you know competitors the entire industry is going through all of those same things. So, you know raising prices in in that environment where you're not alone with what's going on is is is definitely a lot easier than it would be otherwise

Got it. Okay, and then Switching gears to the domestic upholstery. It's just curious other than the phone issues that highlighted and I know everyone in the industry going through. Are you seeing any other issues and as far as the phone issue, when would you expect that to to get better? So first of all on phone allocation are easing with an expected returned to near-normal levels in May and then, you know, the potential issue coming next is plywood so that we don't know exactly, you know what that means yet because we're not in it, but we're seeing it coming but we don't know what level that will be. But definitely foam is already proving and we see full Improvement there that we're anticipating May right now.

Got it.

Right and just you know overall looking at the the the company overall, where would you say you are with as far as penetration to say you're to e-commerce customers. I know it was about fifteen to twenty percent of your sale that you've highlighted before. Is that still the case? Yeah. That's that's pretty much still in that in that same area for sure.

Okay. And a couple of questions a couple more questions here. So as far as overall sg8 came in higher than what I had modeled here it was there anything unusual in the what? I think Paul said something about a bad that comes but if you could just just to go over that please we we reserve six hundred thousand of a bad data cruel, you know, we've got a payment arrange that particular customer but we in the interest of caution. We agreed 600,000 there which you know that I think that accounts for most of the $0.04 minutes from your from a number and by the time it's time you taxes back that other than that, I think you you know, you probably modeled based on birth need your cost. But like I said earlier the the volume is increasing and being so busy, you know, we we've except for travel we've pretty much restored most of our our regular table.

Everybody's working full-time layoffs and and furloughs are all done. So it's kind of back to business as usual but I would also add to you know, we did figure out that took many people as we were sending overseas don't for example don't need to go overseas. So there's things like that kind of all over the place that I would tell you that I'm not sure what that adds up to at this point as far as saving money, but it's a big deal when you figure we figure it out a lot of ways to do product development virtually where you don't have as many people travelling back and forth and marketing wise we're doing we're doing better photography, but we're doing it in a way that's it really doesn't cost us as much we're not doing it off site. We're not taking the products out of the showroom all those little things add up as you know, and I I can't put a number on it yet. But obviously we'll we'll as time goes by

God okay and last question for me. How should we think about the the tax rate and capex for for this fiscal year now?

Tax rate should be back to our sort of normal tax rate of twenty three twenty three and a half percent, you know barring of course a tax change is going to be a little higher this year. We're you know watching this project. So I would say, you know, the five to seven million depending on how things go wrong with the with the with the RP project, you know still not a lot. Yeah, absolutely. Well, thanks very much and best of luck Chuck.

Thank you, and next question comes from Jeff Griffin from Global value. May you may proceed with your question?

Thank you. Hey, good morning. Gentlemen. Congratulations on a really solid year after a challenging start. Thank you Jeff. Can you talk a little bit about your bank balance sheet cash and what your thoughts are in terms of deploying that other than some obvious inventory rebuild?

Well, yeah inventory rebuild has got to be our highest priority. We like to think of, you know, working capital in general like to think some of it's going to be invested in receivables to beyond that way, you know we

I think again, you know going getting some weathering a downturn. We're really comfortable having what what other people might say is too much cash on our balance sheet beyond that. We also I think I think we've been over the over the years pretty clear that we intend to continue to grow by acquisition as we find appropriate white space acquisition and Thursday. I think that some of this is involved is building a war chest for for that opportunity. But again, you know, I think we've been a pretty cautiously manage company. I think we get pretty good pretty good reviews for dead for being conservative. So I think that it's it's it's building both cushion and Acquisitions acquisition resources are primary.

Yeah, and I agree. I think you've been quite judicious over the years with your balance sheet. Can you talk a little bit more about your acquisition pipeline what that looks like, you know potential size segment that you might have more or less interest in.

So I would tell you that, you know, our our team has has a profile that that we follow as far as what would interest interest us with a company and it and it really has a lot to do with white space that we're currently not in product wise. You know, one thing that we talked about is white space from a from a superb standpoint. So, you know, if there's a different avenue to getting products through a company that we could that we could buy that would be attractive to us because it diversifies the company even more so culturally, you know, that's a huge one for us. We we really are not interested in buying something just to buy it and if it's not really our culture and we feel like it won't be a creative dust, you know in a in a we're really we're so we're we're you know, we're in a in a position where we wage.

Would be very interested in the right company. We're not in a hurry for anything else. We have good borrowing capacity. And and so you know size is is more a function of whether the company whether it's it's the rest of the profile, you know, they're you know you whether it's a tuck-in like a product line acquisition or a bigger acquisition. I think, you know we can scale that based on the rest of the upon how it fits them through rest of the profile.

Great that that's helpful. I appreciate it and said going a little bit on comment you made earlier. Can you show what is your view of the future in terms of brick-and-mortar versus Commerce and your outlook and the trends that you see affecting that

well, you know, we have a lot of really good partners in both in both channels and and it's interesting the pandemic showed the strength really of both. You know, there's a there's a lot of success going on in both channels at this point and and it doesn't seem to have from what we can see an end in the short-term. So strategically we are our goal is to win in any channel that we compete in so we're very focused on our strategies for each of the twelve business and how they approach the channels. They are targeting and if they're targeting brick-and-mortar we want to be the best and brick-and-mortar for for that product line and for that price point and what we are targeting same thing with e-commerce, we want to be the best partner and the best at product the best Logistics that we can be for that channel as well.

Yep, great. Thank you that last question a little bit curious about your labor and specifically the availability where we've seen many labor-intensive businesses using skilled or semi-skilled labor having some availability issues and secondly related to that what type of wage inflation are you experiencing in attracting and retaining that. Labor? Thank you.

So your labor definitely is a challenge particularly in our domestic manufacturing and also in our warehouse in we've got a programs in place Thursday that are different from what we even had last year to try and attract employees. It is working. We're I think we're doing a relatively good job in our domestic facilities attracting new people. We actually have a person that we've added that that's their primary job is to search for good people that we could add to our team and that has shown Improvement and you know with the demand environment we're in you know, you really have to you you've got to be on what you just asked every day. I mean, it's it's an everyday activity and Thursday. It's trying to figure out how do we need to change to make sure that we not only attract new people but we retain people and and create an environment that they want to be in and stay so it's it's a it's a challenge.

I feel like we're meeting that it's not where we want it to be but we we have we have things in place and we're putting new things in Place daily to get there.

And can you share anything on wage inflation?

All you would you like to answer. Well, I think you know, the the industry is is seeing inflation across, you know, all categories and I think that you know, what we are going to see wage wage inflation. I think we're going to be able to pass out a lot of that law.

I wouldn't be surprised to say, you know, three to five percent wage inflation, but I think that that's going to be you know, it's going to be part of the overhead and and subsequent price increases. You know, we're seeing the same the same thing coming out of Asia and and everything is being priced up a whole industry is basically you currently, you know, if we experience some wage inflation, but we do a better job with the with our capacity. It really does end up either canceling or off. It shows an improvement because our our model if we get more out the door, it makes a lot of those mixed cost up.

Thank you for the comments. Good luck. Thank you.

Thank you. And as a reminder, you'll need to press star one to ask you questions. Our next question comes from Sandy with evaluate research. May I proceed with your question?

Yes. Congratulations on a strong quarter. Could you talk a little bit quantitatively or qualitatively about the backlog and what trends you're seeing in south of incoming order rates is your backlog expanding because anecdotally there seems to be a lot of news reports about, you know, strong demand for housing and furniture.

Yeah, so it's and you're exactly right. You know, it it's it's an environment that we just it kind of surprises us quite a bit on a on a daily weekly monthly quarterly basis and it really we have not seen a Slowdown, you know from that at all. So backlogs continue to grow and as Logistics continue to get better for us and and the other constraints that we talked about earlier again, we're we're optimistic. So and I you know what you just said about the housing market is obviously a major thing for our industry and then and then the demographics as well. There's a lot of it. There's a lot of things that stay in place. We believe as the discretionary spending model changes due to the vaccines rollout. We think we think we're in a really good position as an industry.

And you know, there's there's a lot of news reports about people leaving big cities. Are you people would say you're you're fleeing the big cities and I am moving from cities. I would I would have to think they have a lot of purchasing power of their moving to a suburban area or rural area a lot of purchasing power to buy furniture and would that cause you know that and other factors would you believe that this industry has legs for one or two years in terms of Housing and Furniture. It's not just a short-term phenomenon, but some of these thoughts a little bit, you know more structural at least for a few years. Thank you. I think you're absolutely right and you know, not only is there additional as you said money from home from a bigger city out into the suburbs, but you also typically It's a larger space larger home, which is an advantage for selling more furniture as well.

and you know when you get into

Larger home typically larger rims, you know, we we saw a lot of big furniture in several of Our Brands so that plays in for us as well.

Thank you. You're welcome.

Thank you. I'm not showing any further questions at this time. I would now like to turn the call back over to Jeremy offer any further remarks.

Thank you Josh. I appreciate it. We want to thank everyone for for participating in the call and look forward to reporting our quarter next quarter and thank you very much.

Thank you. Ladies and gentlemen, this concludes today's conference call. Thank you for participating you may now disconnect.

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