(CULP) 2024 Q3 法說會逐字稿

Good day and welcome to the Culp, Inc third quarter fiscal 2024 earnings conference call.

美好的一天，歡迎參加 Culp, Inc 2024 財年第三季財報電話會議。

(Operator Instructions)

（操作員說明）

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

我現在想把會議交給德魯·安德森。

Please go ahead.

請繼續。

Thank you.

謝謝。

Good morning and welcome to the Culp conference call to review the company's results for the third quarter of fiscal 2024.

早安，歡迎參加卡爾普電話會議，回顧公司 2024 財年第三季的表現。

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

首先，我要聲明，今天早上的電話會議將包含有關公司業務、財務狀況和前景的前瞻性陳述。

Forward-looking statements are statements that include projections, expectations or beliefs about future events or results or otherwise are not statements of historical fact.

前瞻性陳述是指包括對未來事件或結果的預測、期望或信念的陳述，或不是歷史事實的陳述。

The actual performance of the company could differ materially from that indicated by the forward-looking statements because of various risks and uncertainties.

由於各種風險和不確定性，公司的實際業績可能與前瞻性陳述所示的業績有重大差異。

These risks and uncertainties are described in our regular SEC filings, including the company's most recent filings on Form 10-K and Form 10-Q.

這些風險和不確定性在我們定期向 SEC 提交的文件中進行了描述，包括公司最近提交的表格 10-K 和表格 10-Q。

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

我們目前不了解或我們目前認為不重要的其他風險和不確定性也可能影響我們的業務營運和財務表現。

You are cautioned not to place undue reliance on forward-looking statements made today, and each such statement speaks only as of today.

請注意不要過度依賴今天發表的前瞻性聲明，每項此類聲明僅代表今天的情況。

We undertake no obligation to update or to revise forward-looking statements.

我們不承擔更新或修改前瞻性陳述的義務。

In addition, during this call, the company will be discussing non-GAAP financial measurements.

此外，在這次電話會議中，該公司將討論非公認會計準則財務衡量標準。

A reconciliation of these non-GAAP financial measurements to the most directly comparable GAAP financial measurement is included in the tables to the press release included as an exhibit to the company's 8-K filed yesterday and posted on the company's website at culp.com.

這些非GAAP 財務衡量指標與最直接可比較的GAAP 財務衡量指標的調節表包含在新聞稿的表格中，該新聞稿作為該公司昨天提交的8-K 報表的附件，並發佈在該公司網站culp. com 上。

I will now turn the call over to Iv Culp, President and Chief Executive Officer.

我現在將把電話轉給總裁兼執行長 Iv Culp。

Please go ahead.

請繼續。

Thank you, Dru, and good morning, everyone, and thank you for joining us today.

謝謝你，德魯，大家早安，謝謝你今天加入我們。

I would like to welcome you to the Culp quarterly conference call with analysts and investors.

歡迎您參加卡爾普與分析師和投資者舉行的季度電話會議。

Joining me on the call today are Ken Bowling, our Chief Financial Officer, Tommy Bruno, President of our Mattress Fabrics Business, and Boyd Chumbley, President of our Upholstery Fabrics Business.

今天與我一起參加電話會議的有我們的財務長 Ken Bowling、我們的床墊布料業務總裁 Tommy Bruno 和我們的室內裝飾布料業務總裁 Boyd Chumbley。

I'll begin the call today with some detailed comments, and Ken will then review the financial results for the quarter.

我將在今天的電話會議中提出一些詳細的評論，然後肯將審查本季的財務表現。

After that, I will briefly review our business outlook for the fourth quarter of this fiscal year, and we will then take your questions.

接下來，我將簡要回顧我們對本財年第四季的業務展望，然後我們將回答大家的提問。

We are pleased to report continued year-over-year and sequential improvement in our consolidated sales and operating performance for the third quarter, both of our core business segments reported increased revenue year-over-year, which is impressive considering the challenging demand environment in the bedding and furniture industries.

我們很高興地報告第三季度的綜合銷售和營運業績持續同比和連續改善，我們的兩個核心業務部門均報告收入同比增長，考慮到充滿挑戰的需求環境，這令人印象深刻床上用品和家具行業。

Additionally, our consolidated operating performance for the quarter was better than our revised outlook announced on January 17, 2024 due to stronger improvement in our Upholstery fabrics segment.

此外，由於我們的室內裝飾布料部門取得了更強勁的改善，我們本季的綜合營運業績優於我們於 2024 年 1 月 17 日宣布的修訂後前景。

In short, Q3 was in line with our sequential improvement story that we have been executing throughout the first nine months of this fiscal year.

簡而言之，第三季與我們在本財年的前九個月中一直在執行的連續改進故事是一致的。

Culp Upholstery fabrics achieved a year-over-year increase in residential sales for the first quarterly period since the end of last fiscal year, driven by both the timing of the Chinese New Year holiday and some improvement during the quarter and customer demand for residential fabric products.

Culp 室內裝飾布料自上一財年末以來的第一個季度實現住宅銷售同比增長，這得益於中國農曆新年假期的時機和本季度的一些改善以及客戶對住宅面料的需求產品。

While this increase in residential sales was offset somewhat by lower sales in our hospitality contract business due partly to weather-related events in January and short-term supply chain issues that affected Read Window.

雖然住宅銷售的成長在一定程度上被我們的飯店合約業務銷售額的下降所抵消，部分原因是一月份與天氣相關的事件以及影響閱讀窗口的短期供應鏈問題。

Overall demand remained solid for our hospitality contract business.

我們的酒店合約業務的整體需求依然強勁。

Also, our Upholstery fabrics segment, once again saw a significant improvement in operating performance, driven primarily by higher sales, a more profitable mix of sales and fixed cost savings.

此外，我們的室內裝潢布料部門的營運表現再次顯著改善，這主要是由於銷售增加、利潤較高的銷售組合和固定成本節省所致。

We are encouraged by several factors within the poultry fabrics, especially the recent hiring and steady transition underway with Mary Beth Hunsberger.

家禽布料領域的幾個因素令我們感到鼓舞，特別是最近瑪麗貝絲洪斯伯格 (Mary Beth Hunsberger) 的招募和穩定過渡。

Boyd Chumbley and Mary Beth are working well together, and we are grateful to have time for an orderly and successful transition of leadership.

博伊德·查布利 (Boyd Chumbley) 和瑪麗·貝絲 (Mary Beth) 合作良好，我們很高興有時間有序、成功地進行領導交接。

We are also excited about a cadence of new residential fabric placements that we saw at the previous Las Vegas furniture market and that our plan for the upcoming High Point Market.

我們也對我們在之前的拉斯維加斯家具市場上看到的新住宅織物佈局的節奏以及我們對即將到來的高點市場的計劃感到興奮。

Our Upholstery product designs are being received well, as we are continuing to see a desire for new fabrics for manufacturers and our portfolio of LiveSmart performance products remains quite popular.

我們的室內裝飾產品設計深受好評，因為我們不斷看到製造商對新面料的需求，而且我們的 LiveSmart 高性能產品組合仍然很受歡迎。

The acceptance and the innovation of our product instills confidence for our future.

我們產品的接受度和創新為我們的未來注入了信心。

Additionally, we remain pleased with the solid demand and back order in our hospitality contract business and outside of some pressure we incurred in Q3 due to weather and other events that affected Read Window.

此外，我們仍然對我們的酒店合約業務的強勁需求和延期交貨感到滿意，除了由於天氣和其他影響閱讀窗口的事件而在第三季度遭受的一些壓力之外。

We do expect go forward improvement from our hospitality contract segment.

我們確實預計我們的酒店合約部門將取得進步。

Lastly, we are furthering our pivot within our production and sourcing capabilities to establish more varied global options in our supply chain for improved costs and to optimize supply to best service our customers.

最後，我們正在進一步加強我們的生產和採購能力，在我們的供應鏈中建立更多樣化的全球選擇，以降低成本並優化供應，為我們的客戶提供最好的服務。

In our mattress fabrics segment, we continued our significant year-over-year improvement in sales and operating performance, driven largely by our focus on new fabric and cover placements that are priced with proper margins and are in line with current raw material costs.

在我們的床墊布料領域，我們的銷售和經營業績繼續實現同比顯著改善，這主要是由於我們對新布料和覆蓋物佈局的關注，這些布料和覆蓋物的定價具有適當的利潤並符合當前的原料成本。

However, the sequential results for this segment as compared to the second quarter reflects some ongoing market weakness in the bedding industry as well as internal efficiency issues primarily related to the startup and production of certain new products and the cost for these program launches that occurred during the quarter.

然而，與第二季度相比，該細分市場的連續結果反映出床上用品行業持續的市場疲軟以及主要與某些新產品的啟動和生產以及這些計劃啟動期間發生的成本相關的內部效率問題。該季度。

As we have been noting this year, we are driving hard to win profitable new business on both fabrics and sewn covers, and we are having success with this initiative.

正如我們今年一直指出的那樣，我們正在努力贏得面料和縫製封面的有利可圖的新業務，而我們的這一舉措取得了成功。

Our competitive market position is improving in a difficult macro market, and we are flexing our strengths across our global platform.

在困難的宏觀市場中，我們的競爭市場地位正在改善，我們正在全球平台上展示我們的優勢。

But in some cases, as we expedite production schedules and push to meet accelerated deadlines, there are some inherent costs and internal quality pressure that impact results.

但在某些情況下，當我們加快生產計劃並努力滿足加速的最後期限時，會存在一些影響結果的固有成本和內部品質壓力。

These are not long-term impacts, rather they affect current profitability and the ramp-up.

這些不是長期影響，而是影響當前的獲利能力和成長。

In addition, CHF also have some lingering legacy products that are still operating at lower than desired margins due to hangover from improper pricing at previous elevated cost levels.

此外，瑞士法郎還有一些揮之不去的遺留產品，由於先前成本水平較高的定價不當所帶來的影響，這些產品的營運利潤率仍低於預期。

Our mattress fabrics team is working daily to replace or remerchandise SKUs while supporting customers and maintaining attention on new products.

我們的床墊布料團隊每天都在努力更換或重新銷售 SKU，同時為客戶提供支援並保持對新產品的關注。

As I just mentioned, but we do still have some more work to do.

正如我剛才提到的，但我們還有一些工作要做。

We are encouraged by the management team and Mattress Fabrics and some new faces.

我們的管理團隊和床墊布料以及一些新面孔讓我們深受鼓舞。

We have onboard to strategically target new sales opportunities.

我們已經開始策略性地瞄準新的銷售機會。

We were pleased with our customer placements in the Las Vegas market, and we have our largest trade show for the mattress business, which is called ISPA occurring next week.

我們對拉斯維加斯市場的客戶佈局感到滿意，我們最大的床墊業務貿易展將於下週舉行，名為 ISPA。

And that will give us a chance to present our newest innovative offerings to the vast majority of our customers.

這將使我們有機會向絕大多數客戶展示我們最新的創新產品。

We maintained our solid balance sheet during the quarter with a continued focus on prudent financial management while allowing for critical capital expenditures and ensuring a strategic level of working capital to support the needs of our business.

我們在本季度保持了穩健的資產負債表，繼續注重審慎的財務管理，同時允許關鍵的資本支出並確保策略性的營運資本水準來支持我們的業務需求。

We ended the quarter with $12.6 million in cash, no outstanding borrowings and $26.2 million in borrowing availability under our domestic credit facility.

截至本季末，我們的現金為 1,260 萬美元，無未償還借款，國內信貸安排下的可用借款為 2,620 萬美元。

So now as we enter the fourth quarter we continued to implement improvement initiatives within our mattress fabrics segment to support future profitable sales growth and enhance operating efficiencies.

因此，現在進入第四季度，我們繼續在床墊布料領域實施改進舉措，以支持未來的獲利銷售成長並提高營運效率。

As I discussed a moment ago, we are diligently focused on winning new placements to drive revenue and increase margins, and we are optimistic about mid to long-term growth potential for this business.

正如我剛才討論的那樣，我們正在努力贏得新的職位以增加收入和提高利潤，並且我們對該業務的中長期成長潛力感到樂觀。

However, while we knew the timing of Chinese New Year would be an impact to quarterly revenue.

然而，儘管我們知道農曆新年的時間會對季度收入產生影響。

The industry demand backdrop and both of our businesses has weakened much further than expected during the first few weeks of the fourth quarter, especially in our Upholstery fabrics segment.

在第四季度的前幾週，行業需求背景和我們的兩項業務都比預期更加疲軟，特別是在我們的室內裝飾布料領域。

We are currently trying to ascertain what that means for the remainder of our Q4 in March and April.

我們目前正在嘗試確定這對 3 月和 4 月第四季剩餘時間意味著什麼。

It is important to note that we do not expect to remain at low level of February demand.

值得注意的是，我們預期 2 月的需求不會維持在較低水準。

And we are not altering our view of our trajectory of growth for the mid term, but the near term is certainly unpredictable.

我們不會改變對中期成長軌跡的看法，但短期肯定是不可預測的。

We remain confident in our market position in both of our businesses.

我們對這兩項業務的市場地位仍然充滿信心。

But to keep our sequential progress, we need some macro industry in consumer support and also the internal efficiencies relating to the startup and production of new products and Mattress Fabrics.

但為了保持我們的連續進展，我們需要一些宏觀產業的消費者支持，以及與新產品和床墊布料的啟動和生產相關的內部效率。

That impact us in the third quarter will also affect operating performance during the fourth quarter.

這對我們第三季的影響也將影響第四季的經營業績。

So as a result of these challenges, we now expect that our return to consolidated operating profitability will be delayed from the end of our current Q4 into fiscal 2025.

因此，由於這些挑戰，我們現在預計，我們恢復合併營業利潤的時間將從當前第四季末推遲到 2025 財年。

In the face of these various ongoing macroeconomic headwinds, our attention is on managing the aspects of our business we can't control.

面對這些持續存在的宏觀經濟逆風，我們的注意力集中在管理我們無法控制的業務方面。

With the uncertainty of consumer demand in the near term, we are also evaluating strategic actions to adjust and right size our global platform to align with the current demand levels, while of course, still supporting our valued customers.

由於短期內消費者需求的不確定性，我們也正在評估策略行動，以調整和調整我們的全球平台規模，以適應當前的需求水平，同時仍為我們尊貴的客戶提供支援。

Two points are very clear to us.

有兩點我們非常清楚。

First, we understand that near-term demand is uncertain, and we must adjust our capacity levels and costs to match demand.

首先，我們知道近期需求是不確定的，我們必須調整產能水準和成本以符合需求。

And we cannot tolerate continued operating losses.

我們不能容忍持續的經營虧損。

We have been making our intended progress through the first nine months of this fiscal year, but we expect a step back in volume and profitability in Q4.

在本財年的前九個月中，我們一直在取得預期進展，但我們預計第四季度的銷售和獲利能力將有所回落。

We have the potential to see up to 10% or more consolidated revenue reduction, both year-over-year and sequentially.

我們有可能看到綜合收入年比和環比減少高達 10% 或更多。

With more pressure Upholstery fabrics, which is currently are solidly profitable business.

室內裝潢布料面臨更大的壓力，這是目前利潤豐厚的業務。

This revenue reduction is mainly driven by macro and consumer demand in our space and to some degree, the timing of Chinese New Year.

收入減少主要是由我們領域的宏觀和消費者需求以及某種程度上的農曆新年時間所推動的。

Second, specifically in mattress fabrics, we are finding some growth opportunities in fabric accessory products and cotton sew and covers that we'll likely not need the same level of North American capacity.

其次，特別是在床墊布料方面，我們在布料配件產品和棉縫製品和覆蓋物方面發現了一些成長機會，而我們可能不需要相同水準的北美產能。

Therefore, we are reviewing all possible actions and synergies across both of our segments to adjust our business, our capacity and our costs to focus on restoring profitability in fiscal year '25.

因此，我們正在審查兩個部門之間所有可能的行動和協同效應，以調整我們的業務、產能和成本，以專注於恢復 25 財年的獲利能力。

Importantly, we remain well positioned with our solidly performing Upholstery fabrics business and recovering mattress fabrics business.

重要的是，我們的室內裝飾布料業務和正在復甦的床墊布料業務表現強勁，仍處於有利地位。

And I will repeat that we are not wavering on our growth trajectory for the mid to long term.

我要重申的是，我們不會動搖中長期的成長軌跡。

And again, we are committed to taking steps to position our business for renewed profitability in fiscal '25.

我們再次致力於採取措施，使我們的業務在 25 財年恢復獲利能力。

And we are confident in our ability to leverage our competitive advantages, including our innovative product offerings, creative designs, global manufacturing and sourcing platform and solid financial management to support our future growth and especially when market conditions improve.

我們對利用我們的競爭優勢（包括我們的創新產品、創意設計、全球製造和採購平台以及穩健的財務管理）的能力充滿信心，以支持我們未來的成長，尤其是在市場狀況改善時。

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

我現在將把電話轉給肯，他將審查本季的財務業績，然後我將回來審查本財年第四季的前景。

Thanks, Iv.

謝謝，四。

Here are the financial highlights of the third quarter, starting with consolidated results.

以下是第三季的財務亮點，從綜合業績開始。

Net sales were $60.4 million, up 15% compared with the prior year period.

淨銷售額為 6,040 萬美元，比去年同期成長 15%。

Gross margin for the third quarter of this fiscal year was 12.7% compared with 4% for the same period last fiscal year, an 870 basis points improvement.

本財年第三季毛利率為12.7%，比上財年同期的4%提高了870個基點。

The company reported a loss from operations of $1.7 million for the quarter, which included $111,000 in restructuring related credits.

該公司報告本季營運虧損 170 萬美元，其中包括 111,000 美元的重組相關信貸。

This compares with a loss from operations of $7.8 million for the prior year period, which included $711,000 related to certain restructuring expenses.

相比之下，去年同期營運虧損為 780 萬美元，其中包括與某些重組費用相關的 711,000 美元。

Importantly, the $1.7 million loss from operations for the quarter compares favorably with the $2.2 million loss from operations for the previous quarter.

重要的是，本季 170 萬美元的營運虧損與上一季 220 萬美元的營運虧損相比相當不錯。

Net loss for the third quarter was $3.2 million, or $0.26 per diluted share, compared with a net loss of $9 million or $0.73 per diluted share for the prior-year period.

第三季淨虧損為 320 萬美元，即稀釋後每股虧損 0.26 美元，去年同期淨虧損為 900 萬美元，即稀釋後每股虧損 0.73 美元。

The key drivers for this improvement included higher sales and more profitable mix of sales for both the mattress fabrics and Upholstery fabric segment.

這項改善的關鍵驅動因素包括床墊布料和室內裝飾布料領域的更高銷售額和更有利可圖的銷售組合。

A more favorable foreign exchange rate associated with our Upholstery fabrics operation in China and fixed cost savings in our Upholstery fabric segment.

與我們在中國的室內裝飾布料業務相關的更有利的外匯匯率以及我們的室內裝飾布料部門的固定成本節省。

These factors were partially offset by higher SG&A expense during the period as well as production inefficiencies related to the startup of certain new product launches in the mattress fabrics segment.

這些因素被期內較高的銷售管理費用以及與床墊布料領域某些新產品推出相關的生產效率低下所部分抵消。

SG&A expense during the quarter was up compared to the prior year period due mostly to wage inflation and higher personnel costs, an increase in the provision for bad debts, higher travel and tradeshow costs and an increase in sampling expense driven by new product rollouts, partially offset by lower incentive compensation expense.

本季的 SG&A 費用與上年同期相比有所增加，主要是由於工資上漲和人員成本上升、壞帳撥備增加、差旅和貿易展覽成本增加以及新產品推出導致的抽樣費用增加，部分原因是被較低的激勵補償費用所抵銷。

Importantly, with regard to SG&A expense, as business conditions improve and demand for our products rise, we believe that we will get significant leverage from the increased sales.

重要的是，就銷售管理費用而言，隨著業務狀況的改善和對我們產品的需求的增加，我們相信我們將從銷售增加中獲得巨大的槓桿作用。

Adjusted EBITDA for the 12 month period ending with Q3 was a negative $3.3 million as compared to adjusted EBITDA of negative $20.5 million for the comparable prior year period.

截至第三季的 12 個月期間，調整後 EBITDA 為負 330 萬美元，而去年同期調整後 EBITDA 為負 2,050 萬美元。

The effective income tax rate for the third quarter of this fiscal year was a negative 47.5% compared with a negative 3.3% for the same period a year ago.

本財年第三季的有效所得稅率為負47.5%，而上年同期為負3.3%。

Our effective income tax rate for the quarter continues to be impacted by the company's mix of earnings between our US, and foreign subsidiaries with an operating loss in the US, while China generated an income that was taxed at a higher rate compared to the US.

我們本季的有效所得稅率繼續受到公司美國子公司和在美國經營虧損的外國子公司之間的收入組合的影響，而中國產生的收入的稅率高於美國。

Based on our current assumptions, we expect cash income tax payments of approximately $3.2 million for this fiscal year.

根據我們目前的假設，我們預計本財年的現金所得稅支付約為 320 萬美元。

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

重要的是，我們對本財年的現金和所得稅支付的估計只是管理層當前的預測，可能會受到全年各種因素的影響。

Now let's take a look at our business segments, for the mattress fabrics segment, sales for the third quarter were $30 million, up 21.6% compared with last year's third quarter.

現在我們來看看我們的業務板塊，床墊布料板塊，第三季銷售額為3000萬美元，比去年第三季成長21.6%。

This increase in sales was mostly driven by new fabric and sewn cover placements that are priced in line with current costs and to a lesser extent, SKU rationalization and the repricing of some underperforming SKUs reflect current costs.

銷售的成長主要是由新面料和縫製封面佈局推動的，這些佈局的定價與當前成本一致，在較小程度上，SKU 合理化和一些表現不佳的 SKU 的重新定價反映了當前成本。

In each case, this has resulted in a higher average selling price compared to historical unit prices.

在每種情況下，這都會導致平均售價高於歷史單價。

Operating loss for the quarter was $1.6 million, a significant improvement compared to $4.2 million operating loss in the prior year period.

本季的營運虧損為 160 萬美元，與去年同期的 420 萬美元營運虧損相比有了顯著改善。

This substantial reduction in losses was driven by higher sales coming mostly from better pricing and a more favorable product mix, partially offset by production inefficiencies related to the startup of certain new product launches as well as higher SG&A expense during the period.

虧損大幅減少的原因是銷售增加，主要來自更好的定價和更有利的產品組合，部分抵消了與某些新產品發布啟動相關的生產效率低下以及期內較高的銷售管理費用。

For the Upholstery fabrics segment, sales for the third quarter were $30.4 million, up 9.2% compared with last year's third quarter.

對於室內裝潢布料業務，第三季銷售額為 3,040 萬美元，比去年第三季成長 9.2%。

Sales for residential Upholstery fabric products were higher than the prior year period, driven by the timing of the Chinese New Year holiday, which this year fell primarily in the fourth quarter rather than the third quarter last fiscal year, along with some improvement during the quarter and customer demand for residential fabric products.

受農曆新年假期影響，住宅室內裝飾織物產品的銷售額高於去年同期，今年的銷售額主要在第四季度而不是上一財年的第三季度下降，但本季度有所改善以及客戶對住宅織物產品的需求。

However, sales for our hospitality contract business were moderately lower than the prior year period, due primarily to the impact of winter weather events and short-term supply chain issues that affected production in our Read Window business.

然而，我們的飯店合約業務的銷售額略低於去年同期，這主要是由於冬季天氣事件和影響我們閱讀窗業務生產的短期供應鏈問題的影響。

Notably, sales for the both hospitality contract business accounted for approximately 26% of the Upholstery Fabric segment total sales during the quarter.

值得注意的是，飯店合約業務的銷售額約佔本季室內裝飾布料部門總銷售額的 26%。

Operating income was $2.1 million for the third quarter, up significantly compared with an operating loss of $420,000 in the third quarter of last fiscal year.

第三季營業收入為210萬美元，較上一財年第三季42萬美元的營業虧損大幅成長。

Operating margin for the third quarter was 6.9%, again, a significant improvement compared to the prior-year period.

第三季營業利益率為 6.9%，與去年同期相比再次顯著改善。

The key reasons for this improvement were higher sales volume, a more profitable mix of sales, a more favorable foreign exchange rate associated with operations in China and lower fixed costs resulting from the previous restructuring actions.

這項改善的主要原因是銷售增加、銷售組合利潤更高、與中國業務相關的更有利的匯率以及先前重組行動帶來的固定成本降低。

These factors were partially offset by lower hospitality contract sales and higher SG&A expense during the period.

這些因素被同期酒店合約銷售額下降和銷售、一般管理費用上升部分抵消。

Now turn to the balance sheet.

現在轉向資產負債表。

We reported $12.6 million of cash and investments and no outstanding debt as of the end of the third quarter.

截至第三季末，我們有 1,260 萬美元的現金和投資，沒有未償債務。

For the first nine months of this fiscal year, cash flow from operations and free cash flow were negative $6 million and negative $8.2 million, respectively.

本財年的前 9 個月，營運現金流和自由現金流分別為負 600 萬美元和負 820 萬美元。

As expected, the company's cash flow from operations and free cash flow during the period were affected by operating losses and planned strategic investments and capital expenditures mostly related to the mattress fabrics transformation plan.

如預期，公司期間的營運現金流量和自由現金流量受到營運虧損以及主要與床墊布料轉型計畫相關的計畫策略投資和資本支出的影響。

Importantly, both segments have done a solid job of managing the key components of working capital, which are accounts receivable, inventory and accounts payable.

重要的是，這兩個部門在管理營運資金的關鍵組成部分（即應收帳款、庫存和應付帳款）方面都做得很紮實。

Capital expenditures for the first nine months of this fiscal year were $3.2 million.

本財年前 9 個月的資本支出為 320 萬美元。

Based on current expectations, cash capital spending for this fiscal year as it is projected to be in the range of $4 million to $4.5 million and will center mostly on maintenance CapEx and quick payback projects focused on improving quality and efficiency in our mattress fabrics business.

根據目前的預期，本財年的現金資本支出預計在400 萬美元至450 萬美元之間，並將主要集中在維護資本支出和快速投資回收項目上，重點是提高我們床墊布料業務的品質和效率。

Based on current expectations, depreciation for this fiscal year is expected to be approximately $7 million.

根據目前的預期，本財年的折舊預計約為 700 萬美元。

With respect to liquidity, as of the end of the third quarter, we had $38.8 million, consisting of the $12.6 million in total cash and $26.2 million in borrowing availability under our asset-based domestic credit facility.

在流動性方面，截至第三季末，我們擁有 3,880 萬美元，其中包括 1,260 萬美元的現金總額和基於資產的國內信貸安排下的 2,620 萬美元的可用借款。

The company did not repurchase any shares during the third quarter of this fiscal year, leaving $3.2 million available under our current share repurchase program.

該公司在本財年第三季沒有回購任何股票，因此我們目前的股票回購計畫還剩下 320 萬美元。

We do not expect any share repurchase activity during the fourth quarter of this fiscal year as we remain focused on preserving liquidity and being positioned to support future growth opportunities.

我們預計本財年第四季不會有任何股票回購活動，因為我們仍然專注於保持流動性並準備好支持未來的成長機會。

With that, I'll turn the call over to Iv, to discuss the general outlook for the fourth quarter of this fiscal year, and we will then take your questions.

接下來，我將把電話轉給 Iv，討論本財年第四季的整體前景，然後我們將回答你們的問題。

Iv?

四號？

Thank you, Ken.

謝謝你，肯。

Due to the uncertainty in the macro environment, we are only providing financial guidance for the fourth quarter of this fiscal year.

由於宏觀環境的不確定性，我們僅提供本財年第四季的財務指引。

We expect consolidated net sales for the fourth quarter to be lower as compared to the fourth quarter of fiscal 2023.

我們預計第四季的合併淨銷售額將低於 2023 財年第四季。

This is due partly to the timing of Chinese New Year holiday, which this year falls primarily in the fourth quarter as compared to the third quarter last year, but more due to weakness in the industry demand environment that is expected to pressure sales in both of the company's business segments, especially in the residential Upholstery fabrics business.

部分原因是由於與去年第三季度相比，今年春節假期主要集中在第四季度，但更多的原因是行業需求環境疲軟，預計將給兩地的銷售帶來壓力。該公司的業務板塊，尤其是住宅室內裝飾布料業務。

We expect consolidated operating loss for the fourth quarter of this fiscal year that is comparable to the $4 million operating loss in the fourth quarter of last fiscal year.

我們預計本財年第四季的綜合營運虧損將與上一財年第四季 400 萬美元的營運虧損相當。

While macro industry conditions are certainly pressuring near term demand, we believe these demand conditions represent bottom levels and will improve over the mid to long term as consumer spending trends return to more normalized levels.

雖然宏觀產業狀況肯定會對近期需求造成壓力，但我們認為這些需求狀況代表了底部水平，並且隨著消費者支出趨勢恢復到更正常化的水平，中長期內將有所改善。

We are well-positioned with our strong market positions in both businesses when this occurs.

當這種情況發生時，我們在這兩項業務中都處於有利的市場地位。

However, in the face of these headwinds, we are evaluating and we are committed to strategic actions in both of our businesses to align our capacity and costs with demand and to restore profitability to fiscal year 2025.

然而，面對這些不利因素，我們正在評估並致力於在兩項業務中採取策略行動，以使我們的產能和成本與需求保持一致，並在 2025 財年恢復獲利能力。

So with that, we'll take some questions.

因此，我們將回答一些問題。

We will now begin the question-and-answer session.

我們現在開始問答環節。

(Operator Instructions)

（操作員說明）

Budd Bugatch, Water Tower Research.

巴德·布加奇，水塔研究。

Good morning, Iv, good morning, Ken.

早安，艾弗，早安，肯。

First, congratulations on keeping the balance sheet in good positioning during this troubling time in difficult times.

首先，恭喜您在困難時期保持資產負債表處於良好狀態。

So I think you all deserve credit for that.

所以我認為你們都應該為此受到讚揚。

I would like to just make sure we understand the third quarter mattress sales were up significantly.

我想確保我們了解第三季床墊銷量大幅成長。

Is that pretty much or price, is that the way to think about that?

這是相當多的還是價格，是這樣考慮的嗎？

Yeah, but I think this is you have, and I'll turn let Tommy comment to it as well.

是的，但我認為這是你的，我也會讓湯米對此發表評論。

We're making a really big deal in our comments about how we are driving very hard to win new business at proper pricing and factored in actual cost.

我們在評論中非常重視我們如何努力以適當的價格贏得新業務並考慮到實際成本。

So yeah, we're improving our margins and so a lion's share in a weak environment is price for our increase and proud of that.

所以，是的，我們正在提高我們的利潤率，因此在疲軟的環境中，我們的利潤成長的最大份額是我們的成長的代價，並為此感到自豪。

We'll pay more dividends when volumes are better, but it is primarily just the execution of price and margin.

當交易量更好時，我們將支付更多股息，但這主要只是價格和利潤的執行。

Tom, anything you would say different.

湯姆，你有什麼不同的說法嗎？

No, I think that's spot on.

不，我認為這是正確的。

We're seeing about an 18% increase in our ASP.

我們看到 ASP 成長了約 18%。

So it's primarily price and a little bit of mix.

所以主要是價格和一點點混合。

And Tommy, I think, there are still some legacy programs out there at less than favorable pricing.

湯米，我認為，仍然有一些遺留項目的價格不太優惠。

You maybe give us a quantification of what you may have left in the sales book from mattresses that are not add up prices you would like or the margins you would prefer?

您也許可以向我們提供您在銷售手冊中可能剩下的床墊的量化數據，這些床墊的總價格或利潤不是您想要的？

Yeah, I think as a part of our initiative to improve our margins.

是的，我認為這是我們提高利潤計劃的一部分。

We probably have about a third of our book that we need to optimize in order to get in line with our expectations.

我們可能需要優化書中大約三分之一的內容，以符合我們的期望。

And how long do you think that will take?

您認為這需要多長時間？

We're going to make that a major priority to address it very quickly.

我們將把它作為一個主要優先事項來快速解決它。

I don't know exactly how long it will take.

我不知道具體需要多長時間。

Those are individual conversations by customer by SKU.

這些是客戶按 SKU 進行的單獨對話。

But ultimately, that is something that we're going to it may go faster than it has so far.

但最終，我們要做的事情可能會比迄今為止更快。

But investors should think about that as a one quarter, two quarter, one year, two year kind of situation.

但投資者應該將其視為一個季度、兩個季度、一年、兩年的情況。

How many -- how would you?

有多少——你會怎樣？

Yeah, I would quantify in quarters of no more than a year, but I think and a lot of it will get addressed within the first two quarters, I would assume.

是的，我會在不超過一年的季度內進行量化，但我認為其中許多問題將在前兩個季度內解決，我認為。

Okay, I think, Budd, maybe I would just comment on the legacy sales.

好吧，我想，巴德，也許我只想評論一下遺留銷售。

We've been dealing with this for some time, and we are a very well respected and very -- we lost business.

我們已經處理這個問題有一段時間了，我們是一家非常受人尊敬的公司，但我們失去了業務。

So, we're trying to do the right thing by our customer base.

因此，我們正在努力為我們的客戶群做正確的事情。

But as we're starting to think about some strategic actions we need to take in the face of the pressure demand.

但當我們開始考慮面對壓力需求時需要採取的一些策略行動時。

That's obviously something we just going to have to do faster.

這顯然是我們必須做得更快的事情。

We want to be responsible to our customer and do things the right way, but we'll likely have to accelerate that.

我們希望對客戶負責並以正確的方式做事，但我們可能必須加快這一速度。

I totally concur with the view that uses you espoused in terms of the way cultivars respected so that some, I would expect nothing different on that.

我完全同意您在尊重品種方面所擁護的觀點，因此我認為在這方面沒有什麼不同。

Are you talking about the inefficiencies for the startup of new products, how close are we to being it through that particular those particular challenges?

您是在談論新產品啟動的低效率嗎？我們離克服這些特定挑戰還有多遠？

Hey, Budd it's Tommy, I would expect that we would be primarily through that by the end of Q4 at the very beginning of Q1.

嘿，巴德，我是湯米，我預計我們將在第四季末、第一季初基本完成這個任務。

You would not expect it to continue beyond just the very beginning of Q1 of 2025.

您不會期望這種情況會持續到 2025 年第一季初之後。

Okay.

好的。

And if we've seen the mattress business go through some travails before and obviously we've gone through an anti-dumping refreshes, well, shouldn't that help both copes volume in the intermediate term?

如果我們之前看到床墊業務經歷過一些困難，而且顯然我們已經經歷了反傾銷更新，那麼，這難道不應該有助於雙方應對中期的銷售嗎？

Yes, Budd, I would agree with you.

是的，巴德，我同意你的觀點。

I think there's a lot -- it's an interesting thing to talk about in the face of weak current demand.

我認為有很多——面對當前需求疲軟的情況，這是一件有趣的事。

But I do believe and tried to stated in the remarks that we are confident in the mid to long term volume potential for us.

但我確實相信並試圖在演講中表示，我們對中長期的銷售潛力充滿信心。

We think we're positioned very well.

我們認為我們的定位非常好。

We think we're winning more than our fair share.

我們認為我們贏得的利益超出了我們應得的份額。

And we think that the industry dynamics are playing to our favor, whether that be antidumping or consolidation.

我們認為，無論是反傾銷或整合，產業動態都對我們有利。

We just think there are advantages that we can flex to grow our business.

我們只是認為我們可以利用一些優勢來發展我們的業務。

But we've just been so surprised by the current demand level which we know won't last.

但我們對目前的需求水準感到非常驚訝，我們知道這種需求水準不會持續太久。

But obviously, we're just trying to get our arms around the timelines for that improvement.

但顯然，我們只是想按時完成改進。

As you step back and think about that, and the surprise is there any change in the structure of the industry, I know the industry has got some structural changes that are going on anyway.

當你退後一步思考這一點時，你會驚訝地發現行業結構發生了任何變化，我知道該行業無論如何都在發生一些結構性變化。

But in terms of where you think that the demand issue is in terms of -- are there different types of mattresses that are winning some share or something going on there like we had for Visco back at the turn of the century or Bed In A Box starts to develop?

但就你認為需求問題在於——是否有不同類型的床墊贏得了一些份額，或者像我們在世紀之交的 Visco 或 Bed In A Box 那樣正在發生的事情開始發展？

I don't know that there's anything dramatically fundamentally different, Budd, but we are in our remarks, we did note that we are seeing unique growth opportunities in products and aren't necessarily traditional fabrics by the yard sale.

巴德，我不知道有什麼根本上的不同，但我們在評論中確實指出，我們在產品中看到了獨特的增長機會，而且不一定是按碼出售的傳統面料。

So whether that be a fabric accessory product or a cotton sewn cover that becomes a roll-back bed in some of those unique opportunities don't necessarily flex all of our North American assets.

因此，無論是織物配件產品還是在某些獨特機會中成為可折疊床的棉縫製罩，並不一定會充分利用我們在北美的所有資產。

Now we have really strong manufacturing and sourcing capabilities worldwide.

現在我們在全球擁有非常強大的製造和採購能力。

And that doesn't, in any way deter our positive nature, but it may be a little different.

這無論如何都不會阻止我們積極的本性，但可能會有所不同。

We may supply a little different.

我們的供應可能略有不同。

And so maybe that's fundamentally changed but it's not changing to impact our ability to attack the market.

因此，也許這已經從根本上改變了，但它的改變並沒有影響我們攻擊市場的能力。

There's traditional players and, E-Commerce, players and omnichannel players.

有傳統參與者，也有電子商務參與者和全通路參與者。

But we have a way through our fabric and cover manufacturing and sourcing platform to reach all of them.

但我們有辦法透過我們的布料和覆蓋物製造和採購平台來接觸所有這些人。

So I'm confident with some normalized demand that we're in really good position.

因此，我對一些正常化的需求充滿信心，我們處於非常有利的位置。

Okay.

好的。

And last two things for me.

最後兩件事對我來說。

One, you talk about rightsizing the business, any idea as how long that will take when you make those decisions, what's the timeframe looking in that?

第一，您談到調整業務規模，您知道做出這些決定需要多長時間嗎？其中的時間範圍是多少？

Budd, we just don't have time for that decision to be long.

巴德，我們只是沒有時間做出長期的決定。

So, as we said, we just can't tolerate further operating losses.

因此，正如我們所說，我們無法容忍進一步的經營虧損。

Our business is too good and too strong to be performing in this demand environment.

我們的業務太好、太強大，無法在這種需求環境中發揮作用。

So in the current demand environment, we have to make those changes quick.

因此，在當前的需求環境下，我們必須快速做出這些改變。

We want to do this ASAP, and we're reviewing all possible actions, whether it be synergized operations or capacity reductions or cost management or everything's on the table.

我們希望盡快做到這一點，我們正在審查所有可能的行動，無論是協同營運、產能削減、成本管理還是一切都在考慮之中。

And we're looking at it in the immediate near term.

我們正在近期考慮這個問題。

Okay.

好的。

And is there a risk that you might cut too far?

是否有削減幅度過大的風險？

Budd, that's something we always will think about.

巴德，這是我們永遠會想到的事情。

And I would love to have the problem of needing more capacity.

我很樂意解決需要更多容量的問題。

We'll find it.

我們會找到它的。

So I don't anticipate cutting too far.

所以我預計不會削減太多。

And I do think that as I was touching on our really strong manufacturing and sourcing capabilities that we have ways to react to any demand that might be in front of us.

我確實認為，當我談到我們真正強大的製造和採購能力時，我們有辦法應對可能擺在我們面前的任何需求。

So I'm not I'm not worried about that, but we'll be careful.

所以我不擔心這一點，但我們會小心的。

Ken, your inventory metrics look like they are back to somewhat normal at pre-COVID levels in terms of days outstanding.

肯，您的庫存指標看起來已恢復到新冠疫情爆發前的正常水平（就未償還天數而言）。

Is that the right way to look at it?

這是正確的看待方式嗎？

We don't really have an over-inventory problem, at least not inside the company right now, maybe some of our customers do.

我們確實不存在庫存過多的問題，至少目前在公司內部沒有，也許我們的一些客戶存在。

But although the company doesn't?

但儘管公司沒有​​？

Yeah, I think that's fair.

是的，我認為這是公平的。

I think both divisions have done over the last year and a half a fantastic job of getting inventory in line with demand.

我認為這兩個部門在過去一年半的時間裡在庫存滿足需求方面都做得非常出色。

And again, we look at inventory, they look at inventory every day.

再說一遍，我們查看庫存，他們每天都會查看庫存。

We look at it every day, and we are committed to keeping that in line with demand.

我們每天都會關注它，並致力於使其符合需求。

So right now, I think Tommy Boyd, I think we feel that we're in line with what we expect for the coming weeks and months.

所以現在，我認為湯米·博伊德，我認為我們覺得我們符合未來幾週和幾個月的期望。

Okay.

好的。

I'll let others have a have a crack.

我會讓其他人也嚐嚐鮮。

Thank you very much for answering my questions.

非常感謝您回答我的問題。

Good luck.

祝你好運。

Have a good day.

祝你有美好的一天。

Anthony Lebiedzinski, Sidoti and Company.

安東尼‧萊別津斯基 (Anthony Lebiedzinski)，西多蒂公司 (Sidoti and Company)。

Good morning, gentlemen, and thank you for taking the questions.

早安，先生們，感謝您提出問題。

And certainly nice to see the balance sheet remaining strong and certainly great to see the sequential and year-over-year improvement in sales and operating metrics as well.

當然很高興看到資產負債表保持強勁，也很高興看到銷售和營運指標的連續和同比改善。

So I guess first, just a follow up as far as the question, as far as the rightsizing of the business and taking actions.

所以我想首先，只是對問題、業務規模調整和採取行動的後續行動。

So does your guidance for the fourth quarter, does that include any restructuring action or anything else or just wanted to get a better understanding of that?

那麼，您對第四季度的指導是否包括任何重組行動或其他任何措施，或者只是想更好地了解這一點？

No, Anthony, this is Ken, it does not work.

不，安東尼，這是肯，這是行不通的。

As Iv said, we are in the middle of planning for that, but it does not include any of those actions, potential actions.

正如艾夫所說，我們正在為此進行規劃，但它不包括任何這些行動，潛在的行動。

Understood.

明白了。

Thanks for clarifying that.

感謝您澄清這一點。

And yeah, so it could be potential upside, I guess, I suppose.

是的，所以我想，這可能是潛在的好處。

And then you've done a nice job certainly of pricing products in line with the costs.

然後，您在根據成本對產品進行定價方面確實做得很好。

I know at this point and kind of going forward, just curious to get your take as to what you're seeing from a cost perspective, if you could just go over the various puts and takes in regard to your cost structure and whether or not you think the price increases that you put in place, whether those are sustainable going forward?

我知道在這一點上以及未來的發展，只是想知道您從成本角度來看您所看到的情況，您是否可以回顧一下有關您的成本結構的各種投入和投入以及是否您認為您實施的價格上漲未來是否可持續？

Yeah, it's Ken, I think from a raw material standpoint, I think things are stable and obviously, we're monitoring that very carefully.

是的，是肯，我認為從原材料的角度來看，我認為事情很穩定，顯然，我們正在非常仔細地監控。

I think labor that part of it is for a demand that seems to be steady as well.

我認為這部分是為了滿足似乎也穩定的需求。

So as far as being able to -- first of all, get our cost right.

因此，就能夠而言——首先，我們的成本是正確的。

I think we feel good about that.

我想我們對此感覺良好。

We've got to deal with the variances which we are.

我們必須應對我們所存在的差異。

As far as pricing, I mean, we're working with our customers every day to make sure we have the right price for the right product.

就定價而言，我的意思是，我們每天都在與客戶合作，以確保我們為合適的產品提供合適的價格。

That's great to hear.

聽到這個消息我很高興。

Okay.

好的。

So you're not getting significant pushback, I guess in terms of being able to pass that along, it sounds like you're able to do that?

所以你沒有受到重大阻力，我想就能夠傳遞這一點而言，聽起來你能夠做到這一點？

It's not really -- I wouldn't call it -- we're not passing on prices on current items, generally about the new things that we're developing our new products being developed with the right prices.

這並不是真的——我不會這麼說——我們不會傳遞當前產品的價格，通常是關於我們正在開發的新產品以合適的價格開發的新產品。

We're not overcharging.

我們並沒有過度收費。

We're just pricing things properly.

我們只是正確定價。

Some of the things that we're having to remerchandise.

有些東西我們必須重新推銷。

Yeah, we either have to offer alternatives or adjust pricing, but that's not a pushback thing, Anthony, we're not trying to drive an uncompetitive price.

是的，我們要么必須提供替代品，要么調整價格，但這不是阻力，安東尼，我們並不是試圖推動一個沒有競爭力的價格。

We just aren't running a better business on their product.

我們只是沒有在他們的產品上開展更好的業務。

Okay, but sounds great.

好吧，但聽起來很棒。

Okay.

好的。

And then you also mentioned that your CapEx you are focusing on projects to increase efficiencies, improve quality, especially at CHF.

然後您也提到您的資本支出專注於提高效率、提高品質的項目，尤其是在瑞士法郎。

Can you share any details in regards to that?

您能否分享這方面的任何細節？

And as far as when do you expect those projects to pay off for Culp?

您預計這些項目何時能為卡爾普帶來回報？

Hi, Anthony, it's Tommy.

嗨，安東尼，我是湯米。

Most of those projects are being implemented now and will come online in the middle to the end of Q4.

這些項目大部分正在實施中，並將於第四季中末上線。

And then we would expect to start seeing efficiencies from those as early as Q1 of 2025 and really start to see the majority of that benefit probably starting in Q2 of 2025.

然後，我們預計最早將在 2025 年第一季開始看到效率提升，並真正開始看到大部分效益可能從 2025 年第二季開始。

Got it.

知道了。

And is it possible for you to like share give us some examples as to what you're doing now, how to think about the potential of, say, a cost savings as you get more efficient?

您是否可以分享給我們一些例子，說明您現在正在做什麼，如何考慮隨著效率提高而節省成本的潛力？

Yeah, I would say most of the projects that we're doing are helping to eliminate waste of our chemical raw materials as well as to measure and monitor our fabric formation.

是的，我想說，我們正在進行的大多數項目都有助於消除化學原材料的浪費，以及測量和監控我們的織物形成。

So we can price our goods accordingly.

因此我們可以相應地為我們的商品定價。

I would expect about a 2% improvement in starting in the middle of 2025 in terms of our gross profit against those initiatives.

我預計從 2025 年中期開始，我們的毛利將比這些措施提高約 2%。

Perfect.

完美的。

That's very helpful.

這非常有幫助。

Well, thank you very much and best of luck and I'll pass it on to others.

嗯，非常感謝你，祝你好運，我會把它傳遞給其他人。

Anthony, thank you.

安東尼，謝謝你。

This concludes our question-and-answer session.

我們的問答環節到此結束。

I would like to turn the conference back over to Iv Culp for any closing remarks.

我想將會議轉回伊夫·卡爾普 (Iv Culp) 發表閉幕詞。

Thank you very much, operator.

非常感謝您，接線生。

And again, thank you to everyone for your participation and your interest in Culp.

再次感謝大家的參與以及對 Culp 的興趣。

We look forward to updating you on our progress next quarter or before.

我們期待在下個季度或之前向您通報我們的最新進展。

Have a great day.

祝你有美好的一天。

The conference has now concluded.

會議現已結束。

Thank you for attending today's presentation.

感謝您參加今天的演講。

You may now disconnect.

您現在可以斷開連線。