Culp (CULP) 29 Jun 232023 Q4 Earnings call transcript

Good day, and welcome to the Culp, Inc. Fourth Quarter Fiscal 2023 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded.

to conference like Anderson. to now would turn over the Dru I go Please ahead.

morning, the quarter welcome to you. and Thank Good to year. company's for XXXX review results Culp the fiscal fourth and the call conference

As we this will the condition forward-looking contain company. financial state about business, prospects morning's the call statements and let start, me that of

The the are or events or future could statements statements not of from by Forward-looking statements about that are of risks that because the beliefs include uncertainties. actual historical materially differ forward-looking fact. or company of projections, otherwise performance and expectations indicated results various statements

These risks including on filings, recent and SEC filings are uncertainties Form XX-K our XX-Q. regular company's Form most in the and described

about may currently to Additional risks and affect uncertainties also that and know that be consider or we financial immaterial, business presently do operations our results. we not

reliance to not and no of cautioned obligation place each to revise statement are today. speaks such today You forward-looking as update statements. forward-looking only undue statements made undertake or We on

website on company's company's as filed In company the available financial part the summary to slide the exhibit A addition, the most an is presentation to discussing in comparable supporting the financial included non-GAAP release, website GAAP yesterday be the to directly measurements of the of and included X-K will at posted company's call, with of these A measurements. financial reconciliation also tables call. financial today's measurements culp.com. information on webcast is non-GAAP press as this during the

of over ahead, Culp. and turn Culp, Executive I Officer President sir. call the Iv go Mr. now will to Please Chief

Bowling, would Mattress to With Fabrics call analysts for the everyone Upholstery our Chumbley, and joining welcome Ken the Dru, of our good investors. thank Culp you, morning, Chief business. Financial quarterly Bruno, us Boyd today. Fabrics President our President on and Officer; are and you of I Business like call Thank Tommy conference me with to and

with we for call of topics financial will the will and outlook full of a our first as take then I some Ken from will opening ahead. quarter for results the will the fiscal the key and look that, discussion questions. begin business review points then priorities including the year. I for quarter After and XXXX your the comments, quarter review we

So state our discussed when we we expanding furthering themes last Culp, them is today. think we with quarter where about and the important few of current business, a that the illustrate Inc. points are

demand our within are and service. softness we year-over-year we improvement quarter, sequential industries encouraged the two despite First, by for ongoing the

a the we unwavering reemphasize and comprehensive on we business. our are third, our focus position. ongoing excited maintaining Second, managing CHF our by Mattress Fabrics within strong cash transformation balance sheet And

our and during driven dollars and home The furnishings results, units, Mattress remained our as quarterly in improvement was operating the in demand soft by in our new performance the even sequentially both of both industries. Regarding strong year-over-year Fabrics improvement reflected sales rollout mattress period. solid and segment the customer and programs and residential sequential

are priced operational also on locations, is programs line our and this seeing been grow expected Home reduction shortly. some in are and The from new in XXXX. more position to time expand improvement Fashions some have and across market I now, current we As with benefit for business fiscal these initiatives this cost in Culp commenting costs segment's efficiencies will

solid Fabrics contract demand hospitality Upholstery business. remained our segment, in For the

with holiday a Chinese New cut QX, cut Our shutdowns reduced Year for seasonal cut and also And as the residential current third our kits. non-recurring due market following a terms align in improved pickup in related $X of fabrics million terms demand negotiated new as and and sew levels. well sew to upholstery connection with to rationalization the to These newly upholstery are with payment a and international quarter for demand sew related platforms business customer.

for segments. business for spending, are is of and pandemic a our high manufacturers are positive factors macroenvironment The in demand consumer much solid. volatility pressure at believe of levels this tough a following we inventory remains shift outcome pressures XXXX our year both in inflationary trends and affecting retailers spending control. our ongoing customer all Importantly, with Fiscal the was surge, out Culp stay-at-home furniture consumer the business and in that the and relationship both our residential

and initiatives to This are the we year-over-year sequential pleased business with have improvement some control what towards undertaken operating and have we recovery to and our in repositioned especially the stabilization and reflects bottom Fabrics year, the fiscal our ended early from internally recovered can manage But and an Mattress business we year control results. in and next we we've our segment. of believe sales quarterly our

an our pace improving affected overall could but in sustainable We in of improvement be and operating macroenvironment ongoing expect continued backdrop, do demand progress state, tough understand the we even by results. and to in our recovery the

market If Our the we is fully and we well-positioned and extremely results. are supply that inventory through expect will occurs, conditions will excess at stronger macro chain we stabilize and solid position flush believe some point.

position. a conditions cash manage the have of this control main the Now I'll year. its shift our is strong solid is regardless diligence point, for our some financial team management of balance with the and business unwavering to maintaining to position commitment which very sheet our This maintain over, in we one second things I'm to and pleased

no We since ended the year with reductions of end a throughout of We favorable quarter cash a inventory the excellent last cash an $XX.X of million third borrowings. the cash the with position job year with year. prior $XX impact with higher the did year, and in fiscal than million outstanding

navigating impact. receivable our with without three accounts managed also and We major effectively improving bankruptcies terms any key customers by

This compared associates enough. flow cash a last million. operations Additionally, million in $XX.X free I $X.X $XX we operations flow cash management to cash improvement positive turnaround of negative million and our thank and during million and and fiscal significant is cash flow for of cash times $X.X Outstanding generated year flow free free flow. challenging the from can't year's million $XX.X respectively, cash a negative of negative from

continue we and and we and liquidity recent ever sales. our credit have support Importantly, enhances recognize outstanding strong growing the it. revolving global investing to based on us our is optimizing a need initiative on manufacturing of allows fully We to and focus focus position to balance our profitable asset facility should platform sheet debt no management our Culp's in critical

is we Fashions, third The important both our Fabrics ahead look the business transformation underway segment. is point quarter and Mattress Culp as Home ongoing the which for in

levels. commented scope believe control. areas our certainly CHF the within As growth this we before, falls for is we've can from current improvement of opportunity And best we

business with marketing the team. Tommy Our Division chain plan Culp on business a and business transformation for management Bruno, a operational structure. supply is management plan, processes, focuses under the organizational Home comprehensive improvement including restructured foundation President, laying steady along and facet sequential Fashions This executing leadership quality, engagement of the sales, long-term optimization, improvement transformation of every in employee

schedules. mix are production team as Tommy excellence, as relentlessly our management, run to on product volumes and proper and improving steady efficiency management operational focused well and the quality and leading balancing the CHF team

sustainable the getting the laying progress improvement We fiscal and have places XXXX. in right blocks excellent in the personnel made with for right building

can improve may slowness performance operations. improved is and industry remain still this but soft some for bedding our period, through The we

Assuming the improvement would materially progress not fiscal below our CHF. upcoming year with significant last sustainable sales we to volumes in in did year, see fall expect steady

and this of planting seeds this transformation. we the business strengthen, the for are as see future We will further macro benefit of conditions

solid is new we position market and growing with program placements. CHF Our are

about are quarters. although We those the launches planned also could of swing launches year additional program during calendar optimistic this among timing

performance Fabrics. long-term to of remains with offerings, popular this softness, well-positioned scalable portfolio industry our Despite product CULP our platform technologies. the Upholstery and products and segment including new innovative now some Pivoting global LiveSmart product for

expect platform. in rationalized also will fiscal business a contract our this Read We hospitality solid sew improved Window management, XXXX and and inventory cut from segment improvement in a business, benefit

within look and provides to management is more platform a supply supply fabrics provide and base. options a and Fabrics, for We risk chain are Culp managing Culp hallmark Upholstery within platform and global service also Customer kits. stable as our for diligently our sewn improved a we diversified cut both

of higher business, solid our than is our note, accounted for sales segment. sales, of contract lower the normal now strategy for overall the as percentage importance performance hospitality business contract to XX% the its ongoing it for segment due residential product our reflect fourth Of hospitality well as this to quarter. while diversification And does of

I'll of for year. over review and I'll who Ken, the fiscal now back quarter for turn to quarter results come the the financial call this then review outlook and the fourth will

Thanks, Iv.

posted information. slide presentation a certain we mentioned Relations our earlier Presentation. on that financial our the As also website updated summary covers have posted Investor call, to Investor We've

the Here financial are quarter. highlights the for fourth

up divisional with with loss compared year million, the as $XX.X The year of were of X.X% compared sales prior from reported in of the of loss this in fiscal sales comment prior million performance operations included company a million a a on $X operations for $X.X operating Net a the period. of operations $XXX,XXX in and year, from and detail period quarter loss for million $X.X which moment. more restructuring third I'll expense.

for million, diluted fourth the diluted net the or year for with loss per $X compared or $X.XX of was per share million, $X.X a Net share period. quarter prior loss $X.XX

lower fourth quarter the compared improved the positively in period also affected as It sales a lower by quarter, quarter products, favorable new Upholstery affected as during customer prior in segment overall was as efficiencies costs was earlier, the improvement Fabrics and in mix. performance to well our in Iv Our Fabrics for on divisions. discussed by receipt during non-recurring both operating year markdowns, inventory higher operating costs overhead as lower our a Mattress and product of segment the a overhead payment margins

the during and the and the during costs this Upholstery this restructuring segment's fiscal related sew to of The the mattress in initiated year. overhead in platform the overhead second this during Carolina to cut North sew initiated quarter cut Fabrics platforms our segment of this segment lower and of rationalization related in cover costs earlier quarter rationalization lower and in The quarter Mattress our year. fiscal Fabrics restructuring segment's

higher and The prior compensation the partially by to offset expense higher performance improvement was during incentive segment period. corporate, expense the year Upholstery due Fabrics the fourth to as SG&A period the in operating mostly compared in for unallocated quarter

For the million, net $XXX.X previous the fiscal down full were to XX.X% year, compared year. sales

for $X.X income sales, loss for fiscal from operations impairment year close-out from inventory $XXX,XXX includes $XX.X related million, million share to of with was diluted year million or fiscal million $X.X year fiscal per full expense the loss operations and related inventory $XX.X of losses year. compared The from compared during markdowns full of charges, and this diluted net the charges with prior was a the for year. operations prior $X.XX period. per Net Loss the for $X.XX certain restructuring loss share inventory the from or

for fourth the full year same negative The XX% with a X.X% a ago. effective income tax the XXXX negative fiscal rate prior in year year a was quarter for rate of compared a this income tax XXX% for the effective XX.X% negative was with The fiscal negative the compared fiscal of period a year.

the U.S. rate at China quarter Our earnings rates was U.S., and the income impacted full fiscal in while the our of foreign for between and the as for higher loss fourth compared that U.S. with effective subsidiaries, by the to taxed was an year operating generated company's income mix and Canada tax

fiscal payments tax expect the income of this year. we million for year $X.X Our totaled next income $X.X payments cash and million for tax fiscal cash currently

course Importantly, projections a year. for by of the affected fiscal of can payments factors variety XXXX and only management's current our be cash income the estimated tax over are

a at take let's business Now look our segments.

the X.X% the fourth Mattress this fourth year's quarter. sales the sales of the of XX.X% was a fiscal driven The difficult during $XX.X for industry up and last new demand third million, up the sequentially improvement environment Segment, compared with rollout by programs in quarter compared year. Fabrics customer mostly with For quarter were quarter despite

and across expand the programs a line in with rollouts are sales product expect new channels calendar cost these launches new retail -- benefit additional we product as year. floors Importantly, current as and more rollout they priced new and during

of loss operating Operating the quarter. year the operating million and of ago loss an million quarter million an a previous in for was $X.X with compared loss $X.X $X.X

of initiated on this for of performance quarter the by new fiscal sequentially resulting restructuring segment's period quarter was this second as margins affected sales, operating from both the the to and mattress and the improvement higher Carolina Our the in year lower rationalization favorably and year. platform North efficiencies of prior during compared cover better costs year in operating products, fourth

quarter. affected quarter For sales $XX.X period, which were adversely Upholstery year compared the during the were by prior for Fabrics fiscal in XX.X% segment, fourth this China COVID-related XX.X% of was shutdowns the up sales to third quarter million, up over the year. Sequentially,

residential our seasonal quarter as entirely a the relating the $X due New Chinese pickup within year. products compared also non-recurring demand holiday, the were following for third Sales third a in of sew to to with earlier quarter Year the sequentially positively to improved fell which million in shutdowns newly this by Sales mentioned receipt Iv the of negotiated customer. affected payment cut and terms a

a operations loss hospitality of business this with ago. of the quarter Fabrics Upholstery quarter fourth the contract business million Income our operations total the year in approximately solid for XX% sales during $X.X $XXX,XXX remained for a of for was sales. segment's with from Demand compared accounted

for this million restructuring year as period the positively due year. These the for sales, including were factors costs partially cut mix, resulting fiscal with was affected favorable offset this higher well expense as Our by cash segment's as to and from and the of the of above payment year I overhead segment's both inventory incentive sequentially the $X sew flow higher to markdowns earlier this quarter lower period and compensation significant during during product compared performance operating this platforms periods. mentioned by fourth prior contribution non-recurring company's free the lower

year. fiscal cash debt respectively last and flow outstanding year. cash We million a for million as with of end year. turn flow the million $XX.X cash $XX.X fiscal outstanding the no this sheet. total of with I'll and end and million operations for were $XX $XX.X and of and this year compares respectively as to free Now, of from as no flow flow and Cash cash free in in balance This the of reported $X.X compared total million million from fiscal cash debt $X.X negative negative last operations fiscal

management, Our from favorably cash flow during capital fiscal were reductions inventory. affected operations in namely free and year cash flow working the by

Importantly, contributed million quarter reduction has fiscal since position. for the third company's year, the end the $XX.X last cash of inventory of

with managed inventory, tightly our our Additionally, during emphasis an our only. on with business consistent in spending focus we projects year capital critical the

year. spending Depreciation Capital Based of on be fiscal $X last in XXXX be CapEx to year on $X.X the for expenditures is maintenance projects were quality with compared expected and million current fiscal and expectations, for million capital in on to XXXX range our to million million. center $X improving mostly $X.X million approximately efficiency for focused fiscal projected will and for Mattress Fabrics $X is business. the

any had availability this in With million facility. as year total cash million dividends following the respect of not a pay million, on and fiscal on early The of XXXX, cash domestic company's consisting quarterly basis. $XX.X asset-based end our certain liquidity, did stock the using this the dividend a is borrowing calculation common during we in our based of our year. in of determined and $XX under suspension of under availability receivable on $XX.X monthly the company accounts to inventory Borrowing credit facility fiscal

of The company fiscal authorization, not position and not year, liquidity repurchase remain the opportunities. our current activity during shares Despite on during $X.X expect also a XXXX share any first in this to quarter support the available million do leaving we repurchase future current preserving repurchase did any share as fiscal growth we focused program. being under

will I call over back the turn to that, With Iv.

limited macroenvironment, we volatility continued to Due provided for quarter the first XXXX. only financial of guidance in have the Ken. Thanks, fiscal the

fiscal Home well quarter sales to compared lower the some current new to additional for the Fabrics to segment. of We Mattress slightly first as be timing the the due mostly and industry, of in first in program demand the the softness Furnishings expect launches net Residential XXXX, quarter consolidated of slowing as

$X.X range million loss expect compared loss million, We quarter million of to for improvement first $X operating a solid the negative $X.X consolidated is fiscal the This XXXX. year prior the period. the for to a operating negative of

continues decline for know in are the industry, Yes, Residential here's fourth be in business first Also, quarter. our makes the sales about Upholstery how contract Furnishings one-time the that that. environment. remember to seasonality some quarter favorable. slowness residential recur quarter I is by There look to possibly for the hospitality won't that. the weakness But payment residential slight our were which there business discussed we've expected that first a overweighing it challenging our a continues in questions sales Fabrics Now revenue and affected Home and

scheduled to the in side, industry, is for fabric still expect swing programs continue won launch it a guidance. mattress in and planned account launches our during of the while to we the there the have tried new we that from is could calendar to This malaise overall that but those quarters of we and benefit timing quarterly between to customers. is XXXX, for launch On business our

decline want we and the reflecting improvements internal the improvement are this performance, operational solid operating in sales Importantly, in quarter, a highlight even to once forecasted expecting more, the are for we I first with making. still

we XXXX to position and improve year. during As business a the we organically expect market commented, quarterly sequentially operating during our return fiscal profit with to via

pace our recovery by and macroenvironment the need to the recovery dictated improvement for of in some we is happen However, macro the quicker. tailwinds

on a regard strategic as management, to strong we financial continue be the maintaining a weather ensuring sheet, of prudent our to balance current with especially Lastly, goal will with capital. working laser the in challenges, focused always we balance

we about We stability our and to paramount know future success. the optimistic financial is Culp's are

with be some take we'll that, So happy questions. to

Our with Anthony Instructions] question [Operator Please go begin Lebiedzinski now comes question-and-answer Company. & will Sidoti session. first We ahead. the from

maintain able despite first, you thank business. strong balance questions. the sheet And difficulties in the taking Good congratulations on for to morning, the a and being

question underway I talked So guess, Iv, about the are and comprehensive improvements at that the first here, transformation you CHF. operational

this guess, inning if we baseball So just these put far terms, could as what are as -- actually I operational improvements? in you in

happy Yeah. little And plan the you with speed transformation thank first But really Thank I'll better. going all was on CHF is are left he I'm bit, improvement. to you, us, you -- you the the as thank going of you as this process going. speak a how comment just glad the deal Tommy saying you in comments sheet. Tommy, let and better be He you you hello, for to to if market That we see some I'm that recognize Anthony. because to that with is executing let want and want you to would I for if have where big balance execute. is to go. the fast and I'm a can where

Yeah. innings. question, point my From innings view, would I we're for that Sure. later middle towards in the Thanks of getting the Anthony. the say

So structure all We've And a a plan. manage activities established good have a transformation to in we've good and that execute foundation. of our how the going brought is them. to inform we we really team good

I getting of matter long-term through possible as them and the benefit way and most a benefit. quickly as So that just financial now think it's drives a in

operate needs it and run that want par have up to some the do sure speed for sheet we want balance Anthony comments with equipment to the that's our because through platform. CapEx what some And the and be maintenance the that Tommy techniques you started on we is interesting do we have is, to to of

hand-in-hand. So the do to sheet go his to spending transformation, they balance capital our do that is position support in some fact a

Got you.

Okay. Understood.

talked you with increased about new center. more of to terms able come see been in you Okay. think the there collaboration then, segments or also in that I is do know do innovation just you And about to the having more? past to two Have the guys

that Anthony Yeah. operated technologies locations time But believe strong the and Culp's two most we've businesses. two I recent and and recognizing teams. platform work strategies we there all history, have of they are that certainly leadership those businesses for for history or intentionally both are separately very

whether do we was So sort to personalities to there having fantastic. operate can. the and residential, customers share The business, it's ideas want center our be best that customers but our bedding, been with ever and one, teams product we want furniture, and practices innovation of we where don't we're lines the concurrently the watching of it'd lose realize step in, different commercial,

together, like been nice that's boost as I atmosphere expected, our -- provides and our the to nice customers think the being people enjoy a a business. that

Terrific.

Okay.

great. Sounds

So switching upholstery to gears side. the

hospitality out So you the business. called the demand and in being solid contract

guess I part two there. So question

you then, that any are is, getting clients from getting wins both? any part maybe first, business? are slowdown sub-segment client that of the question or new second business or So the you are of more And of in current you seeing signs actually

business, is And the the Boyd. is This really question, that experiences. shift segment. to there benefit that customers as first contribution travel consumer to benefiting It's existing the customers and both segment Anthony. the of say, in continuing Yes, and as from from all to in some I'd strength the spending certainly

is a backlog seeing we customer related we but customers, are certainly So strength have incoming existing lot as in position contributions that the new the well. of to order solid and and

fronts it's really overall. So are contributing both

really segment And to your point, in part seeing your of second no, we're question, yet. any downturns not for signs that any this of

timeframe those orders backlogs a installation. have do for longer As and and you completion know,

backlog seeing any really months signs of this solid. at pretty good slowdown It out not carrying a got number remains we've So point over of there. a very yet and

Okay. Got you.

confidence product properly own Thanks level a price continue being in then, costs? And terms to products lot. to Okay. your terms in your what current of able pricing, last is of question, to reflect

which didn't was mattress to not the maybe just on didn't feel job cost. them going the were Anthony. compared did side. it's than a a the we a last just always that. us up of fiscal behind pace in ball allowed where about fabrics terms tough confidence mattress it's talk confident a us outcome. faster a year, being And -- keep in that, -- We we pass We we were. Upholstery eight I the just it's very better industry in things this management -- We can on did year, lot And different through. than on catching thing,

And of As where freshened their point our we're we've feels to floors, remerchandised retailers that's and and have much coming sounds, now weren't we was new some wanting we be margin. business that margins but a gotten needs it proper obvious, able lot so just -- getting of it from of like introductions that weren't to set customers lingering. business at to fair on the the

we just So new come it -- comes now as things a at they launch better prospect.

So I don't business. used feel that history. -- competitive it's always to a entire our We're for

improving and we have But fairly. we that can new technologies new price products have we costs with

-- So am for business, I don't it's price but pressure us. about a worried competitive I not

of hear. That's best thank Well, luck. and very great you to much

Thank you, Anthony.

you. Thank

question next Henderson go from ahead. Research. Please Tower Water The with Rex comes

are to get wondering very yet. I'm that how entire gross long you? and where Good margin And negative team it positive lineup want and gross the a this of turned where getting in in but I the margin -- positive is to particular there focused that's for products take point margin making my to money many for And still quarter, process think. to are the going to not the offer was showing just are for to morning. time of strongly you kind call. is how SKUs The while. taking whole congratulations encouraging. there, the on line executive my I particularly which start my progress And Tommy Thanks in was I in for the first some CHF, questions

question, for you the Thank Rex. Yeah.

We're rationalization daily. And us, aren't the all conversations working expect talked next For newer through new we worked or SKUs programs lot I steady through the they lower on Iv we on of that the as on our we're we a as and that us. would that follow estimate in would items a SKU productive phase are about the process be that become well. quarter out as part rationalize as previously. the diligently to of those two bottom launched, line, but over programs mentioned, of that profitability our we've the improvement mix, expect launching and for having top only the we not larger and line we that in get

Okay. Great.

reasonable really a So a get to couple quarters number. That's that's more encouraging. of to --

to long-term, our need mean, that's Rex, make We which sure customers we point, you just aware be selling through can, for a -- be not fully right out are that our this. it expedient the a option support to to make an stop a we and phase process I way these rush always just would transition a responsible period. the of the but to those I'm would items, hopefully it need will most We customers to do short and we over can't happen in just it. make but supplier.

in you and bit? Okay. mentioned The Can a you operating release that comments, press on efficiencies. also in efficiencies operating quantify CHF? your little What's going in of terms

it's Ken. Yeah. Rex,

that we've calmed mix labor, part with that's labor, the had. of challenge the getting issues the one obviously right We've down. of had of focuses that think has that I the

business, line cost the focus. getting getting So been rates consistent Obviously, there. right we're mean run and unit there. that's -- a the more I in labor rightsizing the

high been know concurrent through we've all is your priorities last So months. several that's Tommy, the your have And now, focus I or focus gone those as going been forward.

our quantify. to we hard are performance Iv It's operating number it's So time we've we're those. that reflect just over that And will as got confident of on. working a initiatives said,

were to thing at proper Rex, margin volume most is if the ranking we to us new important first. profitability, return the

it. right then And And inclusive thing. things improved also help. improvements costing behind that's starting freight costs are the first operational the that's and to like of materials, So that, are that

programs. costing. volume to and be in new really But main the better addition So it's driver going better operating to is

and you behind about and Okay. you progress Actually, that had there that's Ken, labor touched still be is, front? or earlier made Do on is on another like question feel labor inefficiencies. talked had that you some I turnover you to fully

U.S. Tommy employees, some I think, today was. a than we was say some comment, and is we hours mean I finding labor the We better but it their in because to having certainly offer aren't got be workers. Rex, he a we it There where anyone. difficult there hard there retaining just through still most has workers can time I to retain and jobs would it's is the aren't went are -- are long period -- anymore, of skilled problem challenge jobs. there.

much So better.

you're lot fair, attention a that Tommy? of on what got retaining we've Is Is focused people. those Now, that seeing?

Yeah. retention. on we're employee to able hard and engagement working recruit We're effectively very and

attention furnishings want right. And All CUF, the business. my home to finally, Okay. in I turn to

some you how You color mentioned you you clear? any downstream where how Do you give have stands take that to going on see Can there's that's issues. inventory down visibility us that? it, on to I and you long mentioned, think think any that --

This Rex. large and a and say manufacturer level of those degree of certainly cleared retailer levels the addressed, lower course there Yeah, Boyd. last pipeline in downstream had year. has in been the much than over I been at And would of inventories the inventory number the to in months the is

So greatly that has improved. situation

-- us now retail purchases ordering triggering, seeing more a on of regular the there. to We true at of now consumer are more are the fabrics basis

big couple macro phase but probably some position lot to and has some still there quarters. of it been factor past as reduced a that’s -- in pockets the a addressed. level as various been inventory incoming to is of has in on significantly not that But areas, orders been So our of a

Okay.

encouragement little a incur, of Sounds there. bit

questions, the my guy. I'll pass and next you for on Thank it taking Okay. to

Thank Rex. you,

Rex. Thanks,

remarks. Iv question-and-answer the would to over like to turn conference Culp I for This session. closing any concludes our

you look Thank to your our quarter. you, again, participation forward next updating on your for And operator. and Culp. progress interest everyone We in thanks to

presentation. now The today's for you Thank conference concluded. attending is

now may disconnect. You