Ladies and gentlemen, thank you for standing by. Welcome to the Havertys Q4 and Year 2012 Results. [Operator Instructions] I will now turn the conference over to your host, Mr. Dennis Fink, the Executive Vice President and CFO. Please go ahead, sir.

Thank you, operator. Good morning, everyone. During this conference, we'll make forward-looking statements which are subject to risks and uncertainties. Actual results may differ materially from those made or implied in such statements which speak only as of the date they are made and which we undertake no obligation to publicly update or revise. Factors that could cause actual results to differ include economic and competitive conditions and other uncertainties detailed in the company's reports filed with the SEC. Our President and CEO, Clarence Smith, will now give you an update. Clarence?

Good morning. Thank you for joining our 2012 fourth quarter and year-end conference call. We're pleased to report our fourth quarter pre-tax earnings of $10.1 million versus $6.1 million last year. Pre-tax income for the full year of 2012 increased to $23.5 million compared to $4.6 million for 2011. Earnings per share for the full year 2012 were $0.67 compared to $0.70 for 2011. Last year included a benefit from income taxes of $14.1 million or $0.64 in the fourth quarter related to the release of almost all of the valuation allowance of our net deferred tax assets. As we announced earlier, net sales for the fourth quarter were 8.4% higher than Q4 2011. On a comp store basis, sales for the quarter increased 6%, the fifth consecutive quarter of positive same-store sales. Total written business for the fourth quarter of 2012 increased 12.7% over the same quarter of 2011. We are pleased with both our delivered and written sales this year, which were up 14% and ahead of expectations. Through January this year, we've had 6 consecutive months of double-digit total written sales increases. However, the remainder of the quarter has some inherent challenges with 1 less day in February and an early Easter at the end of March. This year, we're in a better inventory position with our bestsellers and have the lowest out-of-stock position we've had for several years. We believe that our in-stock position and our supply chain management is an advantage over several of our competitors and will allow us to more quickly serve our customers. Our focus on better quality goods has helped drive our average ticket, as well as increase our gross margins. Our merchandising team and sourcing group had developed a strong lineup of exclusive products under Havertys' brand, created by some…

Thank you, Clarence. The strength of our Q4 earnings helped us produce $52.2 million of net cash provided by operating activities for 2012. We are pleased to increase cash by $4 million during the full year 2012 even with relatively high CapEx for us at $25 million and total dividends paid out to shareholders of $24.7 million. Our 2013 planned capital expenditures of $20 million is approximately the same amount as expected depreciation and amortization, which are noncash items. And we expect working capital requirements in 2013 to grow modestly. I'll remind you that our book value as of year-end 2012 is $259.4 million or $11.66 per share outstanding. We regard this figure as conservative, since our LIFO inventory reserve is at $19 million, we have no intangible assets, which is goodwill recorded, and we own 45 of our 122 retail locations clean and clear. That's 35 -- 37% of our locations. Operator, at this time, we'll be happy to take questions from the audience.

Our first question is from Todd Schwartzman from Sidoti & Company.

Can you give a sense of how a Presidents Day weekend went?

We were pleased with it that we had a really good one last year, but we were pleased with it and I think it's going to contribute nicely to the quarter.

On the written business, Clarence, I know you gave the caveats about the month of March in particular, but -- in terms of deliveries for this year. With regard to the fourth quarter, can you talk a little about the written business by market, by geographic market?

We don't want to give you too much about that, Todd. We've said in the past that Texas has been good and it is, that the oil and gas have been good for Texas. But frankly, we're seeing pretty good balance across all of our company right now. To be up double digits that many months in a row, it's got to be across the board. Our major markets are producing well for us. And we're seeing a pretty good balance, and Florida has come back from when it was down so significantly. But I'd say we have a pretty good overall balance between regions.

And for the full year, the average ticket, I think, you noted was up a little under 8%, if I'm not mistaken. What was the number for Q4?

I think it was about $1,850. And that was up nicely, and we're still seeing some nice increases there. Our goal is to get it up to $2,000 so we're closing in on that.

And the year-over-year delta in the fourth quarter?

Actually, I think it was up a little higher than that. I think it was up a double-digit number.

Okay, great. With respect to the supply chain, you mentioned that you're in-stock position has improved and you do consider this supply chain a competitive advantage. How closely are you watching the ILA labor situation? What are the risks there? What are the potential impact, if any, on Havertys?

Well, we're watching it very closely. I mean, it clearly will have an impact. If we have a strike on the entire East Coast and panhandle, I mean, there's going to be a significant impact to everybody. But we are able to move it from different ports, and I think we're as flexible as anybody. We did anticipate the Chinese New Year coming on this year better than last year, and we've got a lot of shipments in advance of that, which was -- would also be in advance of any strikes. So I think we're in a pretty good position there. And I think -- I don't think that we'd be out-positioned by anybody else if there is a strike.

Is there any set duration of any potential strike that you could easily handle without having any adverse effect on your results or your in-stock position?

Well, the fact that it's later in the spring, or could be later in the spring, is a plus because we do feel like we're in a really good position now. If the strike lasts -- if it goes 2 weeks, 3 weeks, then that starts to impact us. If it's a couple of weeks, it may not. But we expect this to be settled. I don't think that there'll be a significant impact there.

Okay. And just sticking with the supply chain, just as a reminder maybe or an update, what is the number -- impact of the envelope number of vendor relationships that you have these days?

I don't know if I can give you that number. Are you talking about as far as imports or just overall?

Imports, yes, sorry.

That would be a guess. Todd, I'd have to guess there. I really don't know. I really can't -- I couldn't answer that right now. We'll get back to you on that.

Great. Lastly, the 1% decrease in retail square footage that you alluded to in the release, does that pertain to full year '13, or just the front half of the year?

It's full year '13. We -- I mentioned that we have 3 stores we're closing this quarter and into next quarter with leases expiring, and they were weaker stores. So we've been trying to reposition in several markets. There'll be a couple of stores that we'll be closing and consolidating into another location in some markets. So I think it actually is strengthening our position, and we feel pretty good about what we've done in repositioning our stores and getting them in the right locations and now closing the weaker stores.

The next question is from Budd Bugatch from Raymond James.

Talk to us a little bit about merchandise differential. What are you seeing? I think you had told us, at least last time I recall, that you are seeing now better strength in upholstery versus Bedding, and I think that had been a bit of a change. Is that still what you're seeing now?

We are seeing more strength in upholstery. Bedding is still strong, but the growth has been mostly in upholstery, and I credit our special order emphasis and some of the new vendors we've put in place. We've got systems that allow us to -- allow the salespeople to more easily order, special order or custom choice merchandise and that's really helped us. It's also something that feeds the business more into the future than in the past because we have to get the goods back in here and it's helped build up some backlog, which again we're delivering some of what we've sold in the fourth quarter, this quarter. And I think we'll have a little bit more backlog because of this special order. But I think our marketing and our merchandising and our presentation of upholstery, particularly, and more fashion has helped our business. We're being perceived as a fashion leader, a place to go to get the look that they want in their home, and I think we're able to execute it better than our competition, and that's helping our business.

Okay, very good. Have you disclosed which of the 3 stores you're closing? Is that -- and have they been notified so that you can disclose them to us and where they might be?

They are actually being closed now. So yes, we could. That would be Roanoke. We are closing -- our lease ended in Clearwater. We're looking for another location there. And the other one is Jackson, Mississippi.

Okay. And you're looking at some more major sites elsewhere. How about giving within your distribution footprint, anything you'd like to tip your hand on or is it...

Not yet. There are number of things we're working on. We are focusing on strengthening our position in our major markets. The major markets would be Dallas, Atlanta, Central Florida, D.C., the markets we're already in.

So it's not -- even though it might in be your distribution footprint, not necessarily a new advertising market?

That's correct.

And when might you make those decisions, what's the likelihood...

We've got a number that we're working on right now, but not ready to announce anything because we don't have any deals set.

Okay. And lastly for me, you have that 14% written so far in the first quarter and you've got the issues and the challenges as you end the quarter. What might you think comps where you would get that draw down? What's the mathematical way to think about that just to help us to figure out where the first quarter might end?

Budd, the written business will probably be impacted more than delivered because the biggest impact is really that Easter weekend where furniture retailers, for most part, don't advertise and we're actually closed on Easter Sunday. The delivered business is more impacted just by the comparison and by the February -- the loss of the day in February. So I think if you look at the number of days on deliveries, it's 1 day out of 65. That can kind of give you an idea and then the rest just depends on how good business is, to be honest.

There appear to be no further questions. Please continue with any other point you wish to raise. Thank you.

We appreciate you joining us on our earnings call, and we appreciate your interest in Havertys. Thank you.

Thank you, ladies and gentlemen. This concludes the Havertys Q4 and Year 2012 Results Conference Call. Thank you for participating. You may now disconnect.