Culp Inc (CULP) 2025 Q4 法說會逐字稿

Good day, and welcome to the Culp, Inc., fourth-quarter fiscal 2025 earnings conference call. (Operator Instructions). Please note this event is being recorded.

大家好，歡迎參加 Culp, Inc. 2025 財年第四季財報電話會議。（操作員指令）。請注意，此事件正在被記錄。

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

現在我想將會議交給 Dru Anderson。請繼續。

Thank you. Good morning, and welcome to the Culp conference call to review the company's results for the fourth quarter and fiscal 2025.

謝謝。早安，歡迎參加卡爾普電話會議，回顧公司第四季和 2025 財年的表現。

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

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。前瞻性陳述是包含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. 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.

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。這些風險和不確定性在我們定期提交給美國證券交易委員會的文件中有所描述，包括公司最近提交的 10-K 表和 10-Q 表。

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

我們目前不知道或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。請注意不要過度依賴今天的前瞻性陳述。所有這些聲明都只代表今天的情況。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. A reconciliation of these non-GAAP financial measurements to the most directly comparable GAAP financial measurements is included in the tables to the press release included as an exhibit to the company's 8-K filed yesterday and also posted on the company's website at culp.com. A slide presentation on the company's restructuring plan and related topics is also available on the company's website as part of the webcast of today's call.

此外，在本次電話會議中，本公司將討論非公認會計準則財務指標。這些非公認會計準則 (non-GAAP) 財務指標與最直接可比較的公認會計準則 (GAAP) 財務指標的對帳表已包含在新聞稿的表格中，該新聞稿作為公司昨日提交的 8-K 表格的附件，並已發佈在公司網站 culp.com 上。公司重組計劃及相關主題的幻燈片演示文稿也可在公司網站上獲取，作為今天電話會議網絡直播的一部分。

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

現在我將電話轉給 Culp 總裁兼執行長 Iv Culp。請繼續。

Thank you, Dru, and good morning. And thank you to everyone for joining us today and for your interest in our company. I would like to welcome you to the quarterly conference call with analysts and investors. With me on the call today are Ken Bowling, Chief Financial Officer; Mary Beth Hunsberger, who is now our Chief Operating Officer; and Tommy Bruno, now our Chief Commercial Officer.

謝謝你，德魯，早安。感謝大家今天的到來以及對我們公司的關注。歡迎您參加與分析師和投資者的季度電話會議。今天與我一起參加電話會議的還有財務長肯·鮑林 (Ken Bowling)、現任營運長瑪麗·貝絲·亨斯伯格 (Mary Beth Hunsberger) 和現任首席商務官湯米·布魯諾 (Tommy Bruno)。

I'll begin the call with some detailed comments. And as mentioned in the introduction, we have posted a slide presentation to our Investor Relations website, that covers information related to our restructuring plans and actions, along with some associated topics, which I'll speak about in detail today. That slide presentation is entitled, Positioning for the Future.

我將在通話開始時發表一些詳細的評論。正如介紹中提到的，我們已經在投資者關係網站上發布了幻燈片演示，其中涵蓋了與我們的重組計劃和行動相關的信息，以及一些相關主題，我今天將詳細討論這些主題。這張投影片簡報的標題是「定位未來」。

Ken will then review the financial results for the quarter and the full year. After that, I'll briefly review our business outlook as we turn the page to fiscal 2026. And we will take some questions.

然後，肯將回顧本季和全年的財務業績。之後，我將簡要回顧我們2026財年的業務前景。我們將回答一些問題。

Fiscal 2025 was a truly transformative year for Culp, marked by substantial efforts across the entire company to streamline our cost structure, maximize efficiency, and facilitate long-term growth. Despite a challenging revenue environment across the industry and additional complexities from the ongoing tariff and global trade negotiations, we successfully implemented numerous measures that we expect to enhance our operating profile and position us to improve operating performance across a wide spectrum of demand scenarios.

2025 財年對 Culp 來說是真正變革的一年，整個公司付出了巨大努力來簡化成本結構、最大限度地提高效率並促進長期成長。儘管整個行業的收入環境充滿挑戰，並且正在進行的關稅和全球貿易談判帶來了額外的複雜性，但我們成功實施了多項措施，預計這些措施將改善我們的經營狀況，並使我們能夠在廣泛的需求情景中提高經營業績。

In addition, we believe that we are now even better positioned from a competitive standpoint to take advantage of any improvement in market conditions. I'm proud of our team for executing on what were a variety of unique initiatives during the year and doing so both according to our expected timelines and while remaining committed to doing what we do best, delivering the high level of service and on-trend products for which the Culp brand is known throughout the market; and also ensuring that our global footprint continues to offer customers the most flexible supply chain in the industry.

此外，我們相信，從競爭角度來看，我們現在處於更有利的位置，可以利用市場條件的任何改善。我為我們的團隊感到自豪，他們在這一年中實施了各種獨特的舉措，既按照預期的時間表完成了這些舉措，又繼續致力於做我們最擅長的事情，提供 Culp 品牌在整個市場上聞名的高水平服務和流行產品；同時確保我們的全球業務繼續為客戶提供業內最靈活的供應鏈。

The recent completion of the restructuring plan we announced in May of 2024 is an excellent example of our team's execution on consequential and accretive activities during fiscal '25. That plan involved a lot of heavy lifting to significantly reduce the fixed cost base in our Mattress Fabrics business, including facility closures and consolidations to establish a strengthened USA manufacturing platform, along with the transition of a major product line, our damask woven fabrics, to an asset-light strategic sourcing model, mostly with a long-term partner in Turkey.

我們在 2024 年 5 月宣布的重整計畫最近才剛完成，這是我們團隊在 2025 財年執行後續增值活動的絕佳例證。該計劃涉及大量繁重工作，以大幅降低我們的床墊面料業務的固定成本基礎，包括關閉和合併工廠以建立強化的美國製造平台，以及將主要產品線（錦緞機織面料）轉變為輕資產戰略採購模式，主要與土耳其的長期合作夥伴合作。

Corresponding details and outcomes from this initiative are covered on pages 3 through 5 of our posted slide presentation. We essentially transform the entire cost structure and manufacturing base of our Mattress Fabrics business and now have what we believe is a solid operating foundation for that business to better navigate even the depressed demand environment we continue to see across the mattress industry.

我們發布的投影片簡報的第 3 至 5 頁介紹了該計劃的相應細節和成果。我們基本上改變了床墊布料業務的整個成本結構和製造基礎，現在我們相信，該業務已經擁有了堅實的營運基礎，可以更好地應對整個床墊行業持續低迷的需求環境。

The recent sale of our former facility in Canada in April provided a nice exclamation point to our completion of the plan, essentially one year from the date we announced it. Through this restructuring plan, we also reduced fixed costs in our Upholstery Fabrics business by transitioning our finishing operations in China to an outsourced model. With the uncertainty around global supply chains, tariff, and cost impacts, we believe it is wise to deleverage fixed costs and lean more on the expertise of our long-term partners to continue our wide array of product offerings in Upholstery Fabrics.

我們最近在四月出售了位於加拿大的舊工廠，這為我們完成該計劃提供了一個美好的驚嘆號，從我們宣布該計劃之日起，已經過去了一年。透過這項重組計劃，我們也將在中國的整理業務轉變為外包模式，從而降低了裝飾布料業務的固定成本。由於全球供應鏈、關稅和成本影響的不確定性，我們認為降低固定成本並更多地依靠長期合作夥伴的專業知識來繼續提供廣泛的裝飾布料產品是明智之舉。

We continue to realize $10 million to $11 million in consolidated annualized savings through this restructuring plan. And we are pleased to see those benefits and related efficiency gains begin to take shape and impact operating performance in our Mattress Fabrics business, including steady progress throughout the year despite continued pressure on industry sales. The lower fixed costs and the resulting operating enhancements in our Mattress Fabrics business, along with lower inventory markdowns, helped drive significant year-over-year improvement in our overall results for the quarter.

透過這項重組計劃，我們繼續實現 1,000 萬至 1,100 萬美元的綜合年度節省。我們很高興看到這些好處和相關的效率提升開始顯現，並影響到我們的床墊布料業務的經營業績，儘管行業銷售持續面臨壓力，但全年仍取得穩步進展。較低的固定成本和由此帶來的床墊布料業務的營運改進，以及較低的庫存降價，幫助推動了本季度我們整體業績的同比大幅改善。

Looking at our overall sales for the fourth quarter, while they were generally in line with our sales in the prior-year fourth quarter, we are actually encouraged by that outcome given the well-publicized low-demand environment and related unit volume challenges pressuring sales across the industry.

縱觀我們第四季度的整體銷售額，雖然與去年同期第四季度的銷售額基本持平，但考慮到眾所周知的低需求環境和相關的單位數量挑戰給整個行業的銷售帶來壓力，我們對這一結果實際上感到鼓舞。

Notably, we achieved a year-over-year sales increase in our Mattress Fabrics business during the quarter despite the industry consensus projecting a decline in overall mattress sales, with the report issued by the International Sleep Products Association, projecting a decline in units of around 11% or more for the March calendar quarter.

值得注意的是，儘管業界普遍預測整體床墊銷量將下降，但本季我們的床墊布料業務銷售額仍實現了同比增長，國際睡眠產品協會發布的報告預測 3 月份季度床墊銷量將下降約 11% 或更多。

We believe this provides some important context for our growth in Mattress Fabrics sales during the fourth quarter and supports our belief that we are winning market share, particularly in key segments we are targeting in Mattress Fabrics and especially cut and sewn covers through our strong relationships with major customers.

我們相信，這為我們第四季度床墊布料銷售的成長提供了一些重要的背景，並支持了我們的信念，即我們正在贏得市場份額，特別是在我們瞄準的床墊布料的關鍵領域，特別是透過與主要客戶建立牢固的關係在裁剪和縫製罩方面。

Our Mattress Fabric sales growth is also a testament to our product development and design team's ability to stay closely aligned with current market trends and consistently deliver products that are well received by customers. In our revamped manufacturing base for Mattress Fabrics and covers, again featuring a strong USA platform, complemented by production and sourcing capabilities in Haiti, located on the Dominican Republic border, as well as Turkey, Vietnam, and China, provide our customers with valuable optionality and mitigation opportunities for global tariffs and trade risks going forward.

我們的床墊布料銷售成長也證明了我們的產品開發和設計團隊能夠緊密跟上當前市場趨勢並持續提供深受客戶歡迎的產品。我們改造後的床墊布料和床墊罩生產基地再次以強大的美國平台為特色，並輔以位於多明尼加共和國邊境的海地以及土耳其、越南和中國的生產和採購能力，為我們的客戶提供寶貴的選擇和緩解未來全球關稅和貿易風險的機會。

In our Upholstery Fabrics business, demand trends in the furniture market segment continue to be historically low. And our sales in that business reflected those trends to a large degree during the quarter, particularly on the residential side.

在我們的裝飾織品業務中，家具市場領域的需求趨勢持續處於歷史低點。本季度，我們在該業務的銷售額在很大程度上反映了這些趨勢，尤其是在住宅方面。

Our Upholstery Fabric sales were also challenged by several relatively unique factors, including the recent tariff changes affecting China-produced goods. The fabric manufacturing and supply chain for the residential furniture business, to a large degree, is dependent on China. And the frequent shifting of tariff amounts and enforcement policies occurring in our fiscal fourth quarter were debilitating to demand.

我們的裝飾織品銷售也受到幾個相對獨特因素的挑戰，包括最近影響中國生產商品的關稅變化。住宅家具業的布料製造和供應鏈在很大程度上依賴中國。而我們財政第四季關稅金額和執法政策的頻繁變化也削弱了需求。

Most of our customers stopped shipping containers as tariff rates were prohibitive, even above 150%, in some cases, for roughly a month, which, of course, meant we stopped shipping as well. Current tariff rates under review currently have allowed business to resume, but there is still uncertainty in the industry as to where it will all land. This uncertainty and lack of container shipments from the fourth quarter, continues to pressure our business, at least as we look into the first quarter of fiscal '26.

由於關稅稅率過高，有些甚至超過 150%，大多數客戶都停止了貨櫃運輸，這種情況持續了大約一個月，當然，這也意味著我們也停止了運輸。目前正在審查的現行關稅稅率已允許業務恢復，但業界對於最終結果仍存在不確定性。從第四季開始，這種不確定性和貨櫃運輸量的不足繼續給我們的業務帶來壓力，至少在我們展望26財年第一季時是如此。

Additionally, the timing of the Chinese New Year holiday, which impacted pretty much only the fourth quarter rather than multiple quarters, was the pressure to our sales as well as the ordering cadence of a large residential fabric customer that uniquely front-loaded more of its total purchasing in the first half of fiscal '25. We do expect sales for this large customer to be more consistent quarter to quarter in fiscal '26. But the first quarter is likely to be particularly difficult comp given the anomalous sales spike in the first quarter last year.

此外，農曆新年假期的時間幾乎只影響了第四季度而不是多個季度，這給我們的銷售帶來了壓力，也影響了大型住宅面料客戶的訂購節奏，該客戶在 2025 財年上半年提前進行了更多的總採購。我們確實預計，26財年該大客戶的銷售額將逐季維持穩定。但考慮到去年第一季銷售異常飆升，第一季的銷售情況可能尤其艱難。

Encouragingly, demand in our Upholstery Fabrics business in hospitality and commercial markets has remained relatively solid, with our sales in that higher-margin area of our business growing to constitute approximately 42% of our total upholstery sales during the quarter.

令人鼓舞的是，我們的裝飾布料業務在飯店和商業市場的需求保持相對穩定，我們在該業務利潤率較高的領域的銷售額增長至本季度裝飾布料總銷售額的約 42%。

The team has done a good job of investing time and resources in those markets and developing relationships with key customers, that we expect to continue to grow over time. The main drivers of our success in this area include the fabric business that we are selling into commercial markets and our roller shade production that we are selling into hotel installations, offices, and other public spaces.

該團隊在這些市場投入了時間和資源，並與關鍵客戶建立了良好的關係，我們預計這種關係將隨著時間的推移而持續成長。我們在這一領域取得成功的主要驅動力包括我們向商業市場銷售的布料業務以及我們向飯店設施、辦公室和其他公共場所銷售的捲簾產品。

Of note, I will comment that we also see first-quarter demand pressure in the commercial area, as many property owners delayed projects due to tariffs and the resulting product cost uncertainty. Our pipeline is healthy in the hospitality and contract segment. So a return to normalcy should be a solid tailwind for us.

值得注意的是，我要評論的是，我們也看到商業領域第一季的需求壓力，因為許多業主因關稅和由此產生的產品成本不確定性而推遲了專案。我們在酒店和合約領域的通路狀況良好。因此，恢復正常對我們來說應該是一個堅實的順風。

The overall market uncertainty created by the recent global trade and tariff-related actions is hard to overstate. I think our team has done a good job of reacting and making adjustments to our business in real time. But as I mentioned, given the high concentration of Upholstery Fabric manufactured in China and the current lack of viable options elsewhere, the tariff landscape put significant pressure on an already depressed demand environment in the home furnishings industry, particularly again on residential furniture.

近期全球貿易和關稅相關行動所造成的整體市場不確定性難以言喻。我認為我們的團隊在即時回應和調整業務方面做得很好。但正如我所提到的，鑑於中國製造的室內裝飾織物高度集中，以及目前其他地區缺乏可行的選擇，關稅形勢給家居裝飾行業本已低迷的需求環境帶來了巨大壓力，尤其是住宅家具。

Our diversified manufacturing and sourcing platform for Mattress Fabrics and sewn covers should continue to provide competitive advantages for us in this fluid environment. And we continue to emphasize our Vietnam operations to our upholstery customers and believe it will continue to grow in importance and increase volumes over time, as the industry continues to look for alternatives to its current China-centric model.

我們多元化的床墊布料和縫製罩製造和採購平台應能繼續為我們在這種流動的環境中提供競爭優勢。我們將繼續向我們的室內裝飾客戶強調我們在越南的業務，並相信，隨著該行業繼續尋找當前以中國為中心的模式的替代方案，越南業務的重要性將不斷增長，並且隨著時間的推移，其銷量也會不斷增加。

Looking at our upholstery business from a big picture perspective. Our product line remains in style and on trend, and we are diversifying our supply base. We were pleased with customer reaction from the May interwoven fabric show and expect to generate solid placements on retail floors. We are also pleased that our Upholstery Fabrics business has been able to operate profitably in the face of the extremely difficult home furnishings industry environment and the unique challenges from the tariffs.

從宏觀角度來看我們的室內裝潢業務。我們的產品線始終保持時尚和潮流，並且我們正在實現供應基礎的多樣化。我們對五月交織布料展的顧客反應感到滿意，並期望在零售攤位上獲得穩固的展示。我們也很高興，我們的裝飾布料業務能夠在極其困難的家居行業環境和關稅帶來的獨特挑戰面前實現盈利。

Now importantly, we are not done taking action to adjust our model for better adaptability and alignment with the volume pressure across the industry. We recently initiated a comprehensive effort to integrate our Mattress Fabric and Upholstery Fabric divisions into a single unified business. As part of this integration, which we are internally calling Project Blaze, we are consolidating facilities, relocating equipment, and making other operational adjustments, all without reducing production capacity levels.

現在重要的是，我們還沒有採取行動調整我們的模型，以便更好地適應和應對整個行業的數量壓力。我們最近發起了一項全面努力，將我們的床墊布料和裝飾布料部門整合為一個統一的業務部門。作為此次整合的一部分（我們內部稱之為「Project Blaze」），我們正在整合設施、重新安置設備並進行其他營運調整，而所有這些都不會降低生產能力水準。

While there is a significant cost reduction aspect to this initiative, it is heavily focused on creating synergies and scale efficiencies through cross-functional and shared management strategies. Above all, we believe it will result in a more agile and flexible organization, better equipped to respond to customer needs and market trends. A summary slide of the actions comprising this initiative are listed on page 6 of the attached slide presentation.

雖然這項措施可以顯著降低成本，但它主要專注於透過跨職能和共享管理策略來創造協同效應和規模效率。最重要的是，我們相信它將使組織變得更加敏捷和靈活，能夠更好地回應客戶需求和市場趨勢。所附投影片簡報的第 6 頁列出了本計畫所採取的行動摘要投影片。

As part of this initiative, we made some recent changes to our executive leadership team that we believe will drive positive change throughout Culp and accelerate our transition away from the somewhat siloed approach that characterized our two standalone divisions. Mary Beth Hunsberger and Tommy Bruno, who previously served as the Presidents of our two former divisions, have both moved into key leadership roles with a company-wide scope.

作為該計劃的一部分，我們最近對執行領導團隊進行了一些調整，我們相信這將推動整個卡爾普的積極變化，並加速我們擺脫兩個獨立部門各自為政的做法。曾擔任我們兩個部門總裁的 Mary Beth Hunsberger 和 Tommy Bruno 均已出任公司範圍內的關鍵領導職務。

Mary Beth Hunsberger now serves as our Chief Operating Officer, tasked with driving efficiency and operational excellence across all of Culp. And Tommy Bruno now serves as our Chief Commercial Officer and is charged with ensuring that all of our product development and innovation, merchandising, marketing, sales, and other customer-facing activities are designed to drive revenue growth. We're excited to see Tommy and Mary Beth impact Culp's success in their new roles without any divisional constraints.

瑪麗貝絲亨斯伯格 (Mary Beth Hunsberger) 現任我們的營運長，負責推動整個卡爾普公司的效率和卓越營運。湯米布魯諾 (Tommy Bruno) 現任我們的首席商務官，負責確保我們所有的產品開發和創新、商品推銷、行銷、銷售和其他面向客戶的活動都旨在推動收入成長。我們很高興看到 Tommy 和 Mary Beth 在不受任何部門限制的情況下在新角色中為 Culp 的成功做出貢獻。

Another initial steps in the integration strategy includes the closure of our lease facility in Burlington, North Carolina, with operations there transitioning to a shared management and resource model within our Stokesdale, North Carolina facility, which we own. This facility consolidation is expected to generate approximately $2 million in annualized savings, beginning in the third quarter of fiscal '26.

整合策略的另一個初步步驟包括關閉我們位於北卡羅來納州伯靈頓的租賃設施，並將那裡的營運轉變為我們在北卡羅來納州斯托克斯代爾擁有的設施內的共享管理和資源模式。從 26 財年第三季開始，此次設施合併預計將產生約 200 萬美元的年度節省。

And we believe that this and related actions will significantly enhance the operating profile of our Upholstery business and position it to better navigate the challenges currently impacting the home furnishings market.

我們相信，此措施及相關措施將顯著提升我們室內裝潢業務的經營狀況，並使其能夠更好地應對目前影響家居裝飾市場的挑戰。

Overall, we anticipate total annualized savings of approximately $3 million per year from this integration effort, which are in addition to the $10 million to $11 million in annualized savings achieved through our recently completed restructuring plan.

總體而言，我們預計此次整合工作每年可節省約 300 萬美元，此外，我們最近完成的重組計劃還實現了 1,000 萬至 1,100 萬美元的年度節省。

In addition to the integration, we have also taken action to initiate price increases responding to the tariff landscape, which we expect to be helpful in softening the new tariff impacts when the prices are fully implemented after the first quarter of fiscal '26. The approximate annualized benefit of these price increases is expected to be $2.5 million and effective in our fiscal second quarter. We are pushing these prices through as expeditiously as possible, but the immediacy of the recent tariff measures does create a margin lag impacting our first quarter.

除了整合之外，我們還採取行動，根據關稅形勢啟動價格上漲，我們預計這將有助於在 2026 財年第一季後全面實施價格時減輕新關稅的影響。預計此次價格上漲的年化收益約為 250 萬美元，並將於我們第二財季生效。我們正在盡快推動這些價格，但最近關稅措施的即時性確實造成了利潤率滯後，影響了我們的第一季。

We have done our best to navigate the situation in support of our customers, and we are grateful for our strong partnerships. This price action, which impacts both our Mattress and Upholstery businesses, coupled with the expected cost savings and synergy benefits of the integration initiative, total $5 million to $6 million of annualized benefit, which again is on top of the $10 million to $11 million of annualized savings from the restructuring project we completed in fiscal '25.

我們已盡最大努力應對這種情況以支持我們的客戶，並且我們感謝我們強大的合作夥伴關係。此價格行動對我們的床墊和室內裝潢業務均產生了影響，再加上整合計劃預期的成本節約和協同效應，總計可帶來 500 萬至 600 萬美元的年度化收益，這還不包括我們在 25 財年完成的重組項目所帶來的 1000 萬至 1100 萬美元的年度化節省。

We are doing everything we can to improve performance in a tough demand environment. And our actions should bolster sales and operating performance as we move further into fiscal '26.

我們正在盡一切努力在嚴峻的需求環境下提高業績。隨著我們進一步邁入 26 財年，我們的行動應該會增強銷售和營運績效。

Finally, as Ken will talk about in more detail, we recently took action to extend our credit facility at Wells Fargo for an additional three years. We are pleased to have this new agreement in place and the liquidity and financing flexibility it provides us to support our ongoing initiatives and fund our growth strategies.

最後，正如肯將更詳細地談到的那樣，我們最近採取行動，將我們在富國銀行的信貸額度延長三年。我們很高興能夠達成這項新協議，它為我們提供了流動性和融資靈活性，以支持我們正在進行的計劃並為我們的成長策略提供資金。

Our team's hard work in fiscal '25 has fundamentally transformed our business, positioning Culp to leverage synergies through centralized operations and a unified management team, laser-focused on the home furnishings industry. This streamlined approach, which we'll continue to enhance and improve on in fiscal '26, strengthens our ability to adapt to varying demand scenarios and respond effectively to market changes.

我們團隊在 25 財年的辛勤工作從根本上改變了我們的業務，使 Culp 能夠透過集中營運和統一的管理團隊發揮協同效應，專注於家居裝飾行業。我們將在 26 財年繼續加強和改進這種簡化方法，以增強我們適應不同需求情境和有效應對市場變化的能力。

With that, I'll turn the call over to Ken.

說完這些，我會把電話轉給肯。

Thanks, Iv. Here are the financial highlights for the fourth quarter.

謝謝，Iv。以下是第四季的財務亮點。

Net sales were $48.8 million and generally flat with our net sales in the prior-year period of $49.5 million. The company reported a loss from operations of $2.2 million, which included $1.5 million in restructuring-related expenses, as compared with a loss from operations of $4.2 million from the prior-year period, which included $204,000 in restructuring expense. Non-GAAP operating loss for the fourth quarter was $704,000 as compared to a non-GAAP operating loss of $4 million for the prior-year period. I'll comment in more detail on our segment sales and operating performance in a moment.

淨銷售額為 4,880 萬美元，與去年同期的 4,950 萬美元淨銷售額基本持平。該公司報告稱，營業虧損為 220 萬美元，其中包括 150 萬美元的重組相關費用，而去年同期的營業虧損為 420 萬美元，其中包括 20.4 萬美元的重組費用。第四季非公認會計準則營業虧損為 704,000 美元，而去年同期非公認會計準則營業虧損為 400 萬美元。我稍後將更詳細地評論我們的分部銷售和營運表現。

Net loss for the fourth quarter was $2.1 million or $0.17 per diluted share compared with a net loss of $4.9 million or $0.39 per diluted share for the prior-year period. Adjusted EBITDA for the fourth quarter was $559,000 compared to a negative $2.2 million in the prior-year period.

第四季淨虧損為 210 萬美元，即每股攤薄虧損 0.17 美元，去年同期淨虧損為 490 萬美元，即每股攤薄虧損 0.39 美元。第四季調整後 EBITDA 為 559,000 美元，而去年同期為負 220 萬美元。

Our overall operating performance for the fourth quarter as compared to the prior-year period benefited from continued momentum in the Mattress Fabrics operating performance, including significant improvement in operating loss from the prior-year period driven by the cost and efficiency benefits derived from the restructuring plan.

與去年同期相比，我們第四季的整體經營業績得益於床墊布料經營業績的持續成長，包括由於重組計畫帶來的成本和效率效益，經營虧損較去年同期顯著改善。

Operating performance also benefited from the continued profitability in the Upholstery Fabrics segment, despite the lower revenue industry environment and tariff-related challenges I spoke to earlier, and was also favorably impacted by lower inventory markdowns resulting from a change in our accounting estimates for finished goods inventory.

儘管我之前提到了收入較低的行業環境和與關稅相關的挑戰，但經營業績也受益於裝飾布料部門的持續盈利能力，並且由於我們對成品庫存的會計估計變化導致庫存降價減少，也受到了有利的影響。

For the full fiscal year, net sales were $213.2 million, down 5.4% compared to the previous year. Loss from operations for the full fiscal year was $18.4 million, which included $9.4 million in restructuring-related expenses compared with a loss from operations of $11.3 million for the prior fiscal year, which included approximately $676,000 in restructuring and related expenses during the period.

全年淨銷售額為2.132億美元，較上年下降5.4%。整個財年的營業虧損為 1,840 萬美元，其中包括 940 萬美元的重組相關費用，而上一財年的營業虧損為 1,130 萬美元，其中包括該期間約 676,000 美元的重組和相關費用。

Non-GAAP operating loss for the full fiscal year was $9 million compared to a non-GAAP operating loss of $10.6 million for the prior fiscal year. The improvement in non-GAAP operating performance for the year as compared to the prior-year period was impacted generally by the same dynamics driving operating improvement in the fourth quarter.

整個財年的非公認會計準則營業虧損為 900 萬美元，而上一財年的非公認會計準則營業虧損為 1,060 萬美元。與去年同期相比，本年度非公認會計準則經營業績的改善總體上受到推動第四季度經營業績改善的相同動力的影響。

Net loss for the full fiscal year was $19.1 million or $1.53 per diluted share compared with a net loss of $13.8 million or $1.11 per diluted share for the prior year. Adjusted EBITDA for the 12 months ending the fourth quarter of fiscal 2025 was a negative $3.5 million compared to negative $3.4 million in the prior-year period.

全年淨虧損為 1,910 萬美元，即每股攤薄虧損 1.53 美元，而前一年的淨虧損為 1,380 萬美元，即每股攤薄虧損 1.11 美元。截至 2025 財年第四季的 12 個月調整後 EBITDA 為負 350 萬美元，而去年同期為負 340 萬美元。

Importantly, the effective income tax rate for the fourth quarter of this fiscal year was 10.5% compared with the negative 19.8% for the same period a year ago. The effective income tax rate for fiscal 2025 was a negative 2.1% compared with a negative 28.3% for the prior fiscal year. Our effective income tax rate for the fourth quarter and for the full fiscal year continues to be impacted by the company's mix of earnings between our US and foreign subsidiaries, with an operating loss in the US and our China operations generated income that was taxed at a higher rate as compared to the US.

重要的是，本財年第四季的有效所得稅率為10.5%，去年同期為-19.8%。2025 財年的有效所得稅率為負 2.1%，而上一財年的有效所得稅率為負 28.3%。我們第四季和整個財年的有效所得稅率持續受到公司美國和外國子公司獲利組合的影響，美國出現經營虧損，而我們中國業務產生的收入的稅率高於美國。

Our cash income tax payments totaled $2.3 million for this fiscal year. Expected cash income tax payments for fiscal 2026 will not be given at this time due to the ongoing integration effort, tariff uncertainty, and other drivers.

本財政年度我們的現金所得稅總額為 230 萬美元。由於正在進行的整合工作、關稅不確定性和其他因素，目前不會公佈 2026 財年的預期現金所得稅支付。

Now let's take a look at our reporting segments. For the Mattress Fabrics segment, sales for the fourth quarter were $27.1 million, up 5.3% compared with last year's fourth quarter. For the full year, sales were $113.9 million, down 2.1% compared with the prior fiscal year.

現在讓我們來看看我們的報告部分。床墊布料部門第四季的銷售額為 2,710 萬美元，比去年第四季成長 5.3%。全年銷售額為 1.139 億美元，較上一財年下降 2.1%。

Sales continued to be pressured during the quarter by muted demand across the industry and related challenges from consumer spending and housing market trends. However, as Iv said, we are generally pleased with the sales growth in this segment given the overall industry consensus projecting declines, as well as our ability to continue to win new business with larger customers.

由於整個行業需求低迷以及消費者支出和房地產市場趨勢帶來的相關挑戰，本季銷售繼續面臨壓力。然而，正如 Iv 所說，考慮到整個行業普遍預測的下滑，以及我們繼續贏得更大客戶的新業務的能力，我們總體上對該部門的銷售成長感到滿意。

Operating loss in the Mattress Fabrics segment for the quarter was $217,000 compared with an operating loss of $2.9 million in the prior-year period. For the full year, operating loss in the Mattress Fabrics segment was $5.2 million compared with an operating loss of $6.8 million in fiscal 2024.

本季床墊布料部門的營業虧損為 21.7 萬美元，而去年同期的營業虧損為 290 萬美元。全年床墊布料部門的營業虧損為 520 萬美元，而 2024 財年的營業虧損為 680 萬美元。

This improved operating performance for the quarter was driven primarily by higher gross margins attributable to lower fixed cost, and operating efficiency improvements derived from the restructuring plan and the lower inventory markdowns I mentioned earlier. We were pleased to see operating performance in this segment improve consistently during the year, with the improvement driven primarily by the same dynamics impacting the segment's operating performance for the fourth quarter.

本季經營績效的改善主要得益於固定成本降低所帶來的毛利率上升，以及重組計畫和我先前提到的庫存降價降低所帶來的經營效率提高。我們很高興看到該部門的經營業績在年內持續改善，這一改善主要受到影響該部門第四季度經營業績的相同動力的推動。

For the Upholstery Fabrics segment, sales for the fourth quarter were $21.7 million, down 8.9% over the prior-year period. For the full year, sales were $99.3 million, down 8.8% compared to fiscal 2024. This sales decline was driven primarily by continued demand deterioration in the home furnishings industry pressuring our residential sales, as well as lower comparable sales to the large residential fabric customer Iv mentioned earlier, that uniquely concentrated more of its annual purchasing in the first half of fiscal 2025 and strategically managed inventory levels in the back half of the year.

就裝飾織物部門而言，第四季的銷售額為 2,170 萬美元，較去年同期下降 8.9%。全年銷售額為 9,930 萬美元，較 2024 財年下降 8.8%。銷售額下降的主要原因是家居裝飾行業需求持續惡化，給我們的住宅銷售帶來壓力，以及與前面提到的大型住宅織物客戶 Iv 的可比銷售額較低，該客戶獨特地將其更多年度採購集中在 2025 財年上半年，並在下半年戰略性地管理庫存水平。

The market uncertainty from the recent tariff-related actions and the timing of the Chinese New Year holiday also hindered sales. Operating income in the Upholstery Fabrics segment for the quarter was $1.1 million compared with operating income of $975,000 in the prior-year period. Our operating performance for the quarter continued to be pressured by lower sales. However, that sales pressure was partially offset by lower inventory markdowns, I mentioned earlier, as well as a more favorable mix of higher-margin hospitality contract sales and lower SG&A expenses.

近期關稅相關措施以及中國農曆新年假期時間帶來的市場不確定性也阻礙了銷售。本季裝飾織品部門的營業收入為 110 萬美元，而去年同期的營業收入為 97.5 萬美元。本季我們的經營業績持續受到銷售額下降的壓力。然而，我之前提到過，這種銷售壓力被較低的庫存降價以及利潤率更高的酒店合約銷售和較低的銷售、一般及行政費用（SG&A）的更有利的組合部分抵消。

For the full year, operating income in our Upholstery Fabrics segment was $4.1 million compared to operating income of $5.8 million for fiscal 2024, with the decline driven primarily by lower sales, partially offset by lower inventory markdowns and lower SG&A expenses.

全年而言，我們裝飾布料部門的營業收入為 410 萬美元，而 2024 財年的營業收入為 580 萬美元，下降的主要原因是銷售額下降，但庫存降價幅度降低和銷售、一般及行政費用 (SG&A) 降低部分抵消了這一影響。

Now I'll turn to the balance sheet. We reported $5.6 million of total cash and $12.7 million in outstanding debt as of the end of this fiscal year. The outstanding debt was primarily incurred for restructuring activities and to fund worldwide working capital. Notably, $2.8 million of the outstanding debt was attributable to the supplier financing arrangements in our China operations.

現在我來看一下資產負債表。截至本財政年度末，我們報告的現金總額為 560 萬美元，未償債務為 1,270 萬美元。未償還債務主要用於重整活動和為全球營運資金提供資金。值得注意的是，280 萬美元的未償債務歸因於我們中國業務的供應商融資安排。

Cash flow from operations and free cash flow were a negative [$17.7 million and it was $17.1 million], respectively, for the full fiscal year. As expected, our cash flow from operations and free cash flow during the fiscal year were pressured by operating losses and included $5.6 million in non-recurring cash restructuring expenses. In addition, free cash flow was impacted by planned strategic investments and capital expenditures, mostly related to the Mattress Fabrics segment as we focused on restructuring that business.

整個財年，經營現金流和自由現金流分別為負 [1,770 萬美元和 1,710 萬美元]。正如預期的那樣，本財年我們的營運現金流量和自由現金流受到經營虧損的壓力，並包括 560 萬美元的非經常性現金重組費用。此外，自由現金流受到計劃中的策略性投資和資本支出的影響，主要與床墊布料部門有關，因為我們專注於重組該業務。

Generating free cash flow in fiscal 2026 will continue to be among our highest priorities and a key focus point throughout all areas of our company.

在 2026 財年創造自由現金流將繼續成為我們的首要任務之一，也是我們公司所有領域的重點。

Capital expenditures were $2.9 million for the year compared with $3.7 million for last fiscal year. This decrease stems from our strategic focus on projects targeting operating efficiency and future growth. Based on current expectations, capital spending for fiscal 2026 is projected to be in line with fiscal 2025 as we continue to tightly manage our cash and spend only as absolutely necessary. Based on current expectations, depreciation for fiscal 2026 is expected to be approximately $4.5 million.

本年度資本支出為 290 萬美元，而上一財政年度為 370 萬美元。這一下降源於我們對以營運效率和未來成長為目標的專案的策略關注。根據目前的預期，2026 財年的資本支出預計將與 2025 財年持平，因為我們將繼續嚴格管理現金並僅在絕對必要時進行支出。根據目前的預期，2026 財年的折舊預計約為 450 萬美元。

With respect to liquidity, as of the end of fiscal 2025, we had approximately $27 million consisting of $5.6 million in cash and $21.4 million in borrowing availability under our domestic credit facility.

關於流動性，截至 2025 財年末，我們擁有約 2,700 萬美元，其中包括 560 萬美元現金和 2,140 萬美元國內信貸安排下的可用借款。

Finally, as Iv mentioned earlier, we were pleased to be able to extend the term of our domestic credit facility with Wells Fargo on June 12 for an additional three years. And that interest rates, we believe, are in line with the market. Subject to borrowing base limitations, this facility allows us to borrow up to $30 million and contains an accordion feature that could increase that amount, an additional $10 million, based on a mutual agreement.

最後，正如 Iv 之前提到的，我們很高興能夠在 6 月 12 日將我們與富國銀行的國內信貸安排期限延長三年。我們相信，利率與市場一致。在藉款基數限制的前提下，該工具允許我們借款高達 3000 萬美元，並且包含一個可折疊功能，可以根據雙方協議將該金額額外增加 1000 萬美元。

We intend to continue utilizing borrowings only as necessary under both our domestic and foreign credit facilities during fiscal 2026 in connection with funding working capital needs and growth, integration, and efficiency initiatives, and we will continue to aggressively manage liquidity and capital expenditures and prioritize free cash flow.

我們打算在 2026 財年期間繼續在國內外信貸安排下僅在必要時利用借款來滿足營運資金需求以及增長、整合和效率計劃，並且我們將繼續積極管理流動性和資本支出並優先考慮自由現金流。

With that, I'll turn the call back over to Iv to discuss the general outlook for the fiscal year 2026. And then we will take your questions.

說完這些，我將把電話轉回給 Iv，討論 2026 財年的整體前景。然後我們會回答你們的問題。

Thank you, Ken. Due to the macroeconomic uncertainty in the fluid global trade environment that I previously mentioned, which pressured demand and results in a suspended China shipments and minimal commercial flow for several weeks during the fourth quarter, as well as the immediacy of tariff cost increases, we are not providing specific financial guidance and only limited annual guidance at this time.

謝謝你，肯。由於我之前提到的全球貿易環境動盪帶來的宏觀經濟不確定性，給需求帶來壓力，導致第四季度中國發貨暫停，商業流量連續數週處於最低水平，加之關稅成本即將上漲，因此我們目前不提供具體的財務指導，只提供有限的年度指導。

For fiscal '26, we anticipate year-over-year sales growth in our Mattress Fabrics business and for the sales pressure on the residential side of our Upholstery business to continue. The cost and efficiency benefits of the recently completed restructuring plan are expected to continue to drive meaningful operating improvement as the year progresses, particularly as we move beyond the tariff-related sales and margin pressure impacting the first quarter.

對於 26 財年，我們預計床墊布料業務的銷售額將同比增長，而室內裝潢業務的住宅方面的銷售壓力將持續存在。預計近期完成的重組計劃的成本和效率效益將在今年繼續推動有意義的營運改善，特別是當我們擺脫影響第一季的關稅相關銷售和利潤壓力時。

In addition, the fiscal '26 division integration initiative and related facility consolidation activity, along with the price increases I had discussed, should further bolster operating performance, particularly as we get beyond first quarter. As Ken said, while we intend to continue to utilize borrowings, if necessary, under our credit facilities during fiscal '26, we will continue to aggressively manage liquidity and capital expenditures and prioritize free cash flow.

此外，26財年的部門整合計畫和相關設施整合活動，以及我所討論的價格上漲，應該會進一步增強經營業績，特別是在我們度過第一季之後。正如肯恩所說，雖然我們打算在 26 財年期間繼續利用信貸安排進行借款（如有必要），但我們將繼續積極管理流動性和資本支出，並優先考慮自由現金流。

Our expectations today are based on information available and reflect certain assumptions regarding our business and overall industry trends, the projected impact of restructuring and integration initiatives, and ongoing tariff and market headwinds. Our expectations also assume no further meaningful changes from tariffs and trade negotiations.

我們今天的預期是基於現有訊息，並反映了對我們的業務和整體行業趨勢、重組和整合舉措的預期影響以及持續的關稅和市場逆風的某些假設。我們的預期也假設關稅和貿易談判不會發生進一步的有意義的變化。

Thank you again for your time today. We appreciate your continued support and look forward to taking some questions. With that, I want to turn it back to the operator.

再次感謝您今天的寶貴時間。我們感謝您一直以來的支持，並期待回答一些問題。有了這些，我想把它交還給操作員。

(Operator Instructions) Brian Gordon, Water Tower Research.

（操作員指示） Brian Gordon，水塔研究。

Good morning, everyone. I guess, first question, could you talk a little bit about the cadence of business across mattress, residential upholstery, and the commercial upholstery and fabric side of the businesses?

大家早安。我想，第一個問題，您能否談談床墊、住宅室內裝潢以及商業室內裝潢和織物業務的業務節奏？

Good morning, Brian. You just mean the current cadence that we're seeing now?

早安，布萊恩。您指的是我們現在看到的當前節奏嗎？

Yeah.

是的。

Yeah. Well, kind of as we laid out in in the script, I think we are pretty encouraged about Mattress Fabrics business. I think we've done some really nice job winning some share in both fabric and some covers. And we see -- while not always linear like we want it to be, we see optimism and strength in the backlog for Mattress Fabrics and covers.

是的。嗯，就像我們在腳本中提到的那樣，我認為我們對床墊布料業務感到非常鼓舞。我認為我們在面料和封面方面贏得了一些份額，做得非常好。我們看到——雖然並不總是像我們希望的那樣線性增長，但我們在床墊面料和床墊罩的積壓訂單中看到了樂觀和強勁的勢頭。

I think we have a very solid pipeline in place on the hospitality side of our Upholstery business, window treatments and fabrics. And again, some of those projects got delayed when the tariffs were at peak pressure. But the pipeline is there, and we're encouraged about that business.

我認為我們在室內裝潢業務、窗簾和織物的酒店方面已經建立了非常穩固的渠道。而且，當關稅達到頂峰時，其中一些項目又被推遲了。但管道就在那裡，我們對這項業務感到鼓舞。

Residential upholstery has just been a slog. It's been tough through this demand cycle. We believe we're placing product very well. We just don't believe that things are turning at the retail floors at the level we want them to. So, we're maybe a bit more muted on that portion of our business in the short term.

住宅室內裝潢一直是一項艱鉅的任務。這個需求週期非常艱難。我們相信我們的產品定位非常好。我們只是不相信零售業務的進展能達到我們所希望的水平。因此，短期內我們可能對這部分業務保持謹慎。

That makes sense. Do you have any sense on sort of like how tariffs specifically have been impacting the end customer demand across your segments?

這很有道理。您是否了解關稅具體是如何影響各個細分市場的最終客戶需求的？

Yeah, it's a good question, Brian. It's funny, a lot of -- prices are being pushed through. We're going to be doing ours now. I think all prices that have been impacted from the suppliers, the manufacturers, are just going straight to retail and being passed to the consumer.

是的，這是個好問題，布萊恩。有趣的是，很多價格都被推高了。我們現在要做我們的事情。我認為所有受到供應商和製造商影響的價格都直接進入零售領域並轉嫁給消費者。

I'm not sure that tariff prices are driving consumer demand. I think there's so much uncertainty in the market where the inflation is, where interest rates are. Tariffs are one piece of a two, and it's just that top of mind for consumers today.

我不確定關稅價格是否能推動消費者需求。我認為市場上存在著許多不確定性，例如通貨膨脹、利率等。關稅是兩者中的一個，也是當今消費者最關心的問題。

I do also think on the furniture side, this season is typically a slower season anyway annually. So we just need to -- we're focused on getting through the summertime season and hoping that as we get to the fall, we see prices are pushed through. Things are maybe normalized, at least, at the price level, and the consumers will come back to the stores.

我確實也認為，就家具方面而言，每年這個季節通常都是淡季。所以我們只需要——我們專注於度過夏季，並希望隨著秋季的到來，價格能夠回升。至少在價格水平上，情況可能會恢復正常，消費者會回到商店。

Yeah. So I have a follow-up question, though, on the pricing action. So you guys talked about $2.5 million in respect to that over the course of the year. What are the revenue assumptions that are baked into those gains at this point?

是的。所以我有一個關於定價行動的後續問題。所以你們談論了今年在這方面的 250 萬美元。目前這些收益所包含的收入假設是什麼？

Yeah, it's a good question. We are not forecasting those revenue assumptions to get the $2.5 million or what we see today, steady state. Obviously, that can be bolstered as things were to pick up, but we aren't banking on that. Those price increases are at steady state revenue. And a lot of them -- a vast majority of those are on the mattress side, that we see as we adjust our pricing in that business for fabrics and sewn covers.

是的，這是個好問題。我們預測這些收入假設不會達到 250 萬美元或我們今天看到的穩定狀態。顯然，隨著情況好轉，這種勢頭會得到加強，但我們並不指望這一點。這些價格上漲是基於穩定狀態的收入。其中很多——絕大多數都是床墊方面的，我們在調整床墊布料和縫製罩的定價時就看到了這一點。

Okay, that makes sense. In terms of all of the cost savings that you've outlined -- and there's obviously several buckets. There's the restructuring that you first announced a year ago. There's the reorganization of Project Blaze, and then there are the price adjustments.

好的，這很有道理。就您列出的所有成本節約而言 — — 顯然有幾種情況。這是您一年前首次宣布的重組。首先是 Project Blaze 的重組，然後是價格調整。

If I try and think about how that's going to impact the bottom line quarter by quarter, if my arithmetic is right, we're going to see something like a gain of like maybe [$2.5 million] or so Q1 up to $4 million -- maybe even $4 million-plus, by Q4. Is that logic right? Is that how we should be thinking about this?

如果我試著思考這將如何影響每個季度的底線，如果我的計算正確的話，我們將看到第一季的收益大概是 [250 萬美元] 到第四季度達到 400 萬美元——甚至可能超過 400 萬美元。這個邏輯對嗎？我們應該這樣思考這個問題嗎？

You're speaking about the new actions or just the all actions combined --?

你指的是新的行動，還是所有行動的總和--？

All actions combined. Just trying to flip that to a quarterly benefit as we progress across '26.

所有動作合併。隨著我們進入 26 年，我們只是想將其轉變為季度福利。

Yeah. I think you see -- in our fourth quarter, you see the start of the significant fixed cost reductions coming through from the Mattress Fabrics restructure. That should continue on pace. I mean, that's done. We're really happy to have that behind us.

是的。我想你會看到——在我們的第四季度，你會看到床墊布料重組帶來的固定成本大幅削減開始出現。這一趨勢應該會持續下去。我的意思是，那已經完成了。我們非常高興這件事已經過去。

The new actions we're talking about, the integration of the businesses and the warehouse consolidations and the price actions, are all phasing in during Q2. So they start to impact Q2, and then they're probably very effective in Q3 and Q4.

我們正在談論的新舉措、業務整合、倉庫合併和價格行動都將在第二季逐步實施。因此它們開始影響第二季度，然後可能在第三和第四季度非常有效。

Okay. And (multiple speakers) --

好的。和（多位發言者）——

That's just timing. We have leases that we have to exit. I mean -- so you start to generate some of the savings from those projects and from headcount reductions or consolidations that we may do to streamline. But when they're fully enact and done, it's the back half of the year.

那隻是時機而已。我們有必須退出的租約。我的意思是——因此，您開始從這些項目以及我們為精簡而進行的員工減少或合併中獲得一些節省。但當這些措施全部實施完畢時，已經是下半年了。

All right, thank you. Next question may be more for Ken. One of the things that you guys mentioned in the release was the change in your approach to inventory markdowns. Could you maybe explain a little bit what's going on there? And how that impacted the quarter, and how that might impact '26 as we move through the year?

好的，謝謝。下一個問題可能更適合 Ken。你們在新聞稿中提到的一件事是庫存降價方法的改變。您能否稍微解釋一下那裡發生了什麼事？這對本季有何影響？以及對全年的 26 月有何影響？

Yeah. Thanks, Brian, for the question. Yeah, we -- it boiled down to -- we found that we were marking down our fabric for obsolescence too quickly in relation to the final price we were getting. I mean, the -- given the longer product life cycles, we're capable now of holding our full price a lot longer, which is great news for us because we're getting full value further down the road.

是的。謝謝 Brian 提出的問題。是的，我們——歸根結底——我們發現，相對於我們最終得到的價格而言，我們對過時面料的降價速度太快了。我的意思是，鑑於產品生命週期更長，我們現在能夠更長時間地保持全價，這對我們來說是個好消息，因為我們將在未來獲得全部價值。

And so that's a great testament to our fabric value. But in light of all this, we wanted to study our activity and make sure that we move our cadence of markdowns to better fit the actual prices we were getting. And so we looked at that, studied it, and made some changes. And that generated a $1.7 million benefit in the quarter.

這充分證明了我們的布料價值。但考慮到這一切，我們希望研究我們的活動，並確保我們調整降價節奏，以更好地適應我們所得到的實際價格。因此，我們對此進行了觀察、研究，並做出了一些改變。這在本季度產生了 170 萬美元的收益。

Now looking ahead -- we feel good about this. We feel it's the right decision, obviously, to get everything balanced. But looking ahead, that way going forward, we balance our markdowns with our pricing. We don't get ahead of ourselves, and we don't get behind ourselves. So, we can truly track things throughout the year and get a more consistent look at our performance and help us better manage our inventory.

現在展望未來——我們對此感到滿意。顯然，我們認為這是使一切達到平衡的正確決定。但展望未來，我們將以這樣的方式平衡降價和定價。我們不會超越自己，也不會落後自己。因此，我們可以真正追蹤全年的情況，更一致地了解我們的業績，並幫助我們更好地管理庫存。

Okay. That's very helpful. This is maybe another question for you, Ken. Given the macro environment and given liquidity and cash flow projections at this point, how aggressive are you guys going to be on the debt paydown side?

好的。這非常有幫助。肯，這也許又是你要問的另一個問題。考慮到目前的宏觀環境和流動性及現金流預測，你們在償還債務方面會採取多大的積極措施？

Brian, you know us. We will pay down the debt as quickly as we can. We've got -- obviously, we have the initiatives that we're funding. Priority, obviously, is getting -- making sure we have the working capital needs met around the world. That's always the highest priority. But any time we have a chance to pay down that debt, we will.

布萊恩，你了解我們。我們將盡快償還債務。顯然，我們已經有正在資助的計劃。顯然，當務之急是確保我們能夠滿足全球的營運資金需求。這始終是最高優先權。但只要我們有機會償還債務，我們就會償還。

And obviously, we've got -- with the new three-year deal, we've got the flexibility to pull it as needed. But also we've got the flexibility to pay it off both in the US and China. So the answer to that is, we will be as aggressive as we possibly can.

顯然，透過新的三年期協議，我們可以根據需要靈活地執行該協議。但我們也可以彈性地在美國和中國償還債務。所以答案是，我們將盡可能積極主動。

Great. Thank you.

偉大的。謝謝。

I might just stick in for -- on Ken's -- tailgate him there. Some of the borrowings we have outstanding in China are just a good strategic play for us as we balance global working capital.

我可能會堅持在肯的後面跟著他。我們在中國尚未償還的部分借款對於我們平衡全球營運資金來說是一項很好的策略性舉措。

They are, in some cases, some borrowings we just pulled because we could get it. It's very low, very attractive rates, and we could pay them back when we want. But we, sometimes, think in the uncertainty of the world, it's smart to just have some of that money available, especially as we operate our China business.

在某些情況下，它們只是我們借用的一些材料，因為我們能夠得到它們。利率非常低，非常有吸引力，我們可以隨時償還。但有時，我們會想，在充滿不確定性的世界中，保留一部分資金是明智之舉，尤其是在我們經營中國業務的時候。

That's right.

這是正確的。

Yeah, certainly, I would agree with that. One final question maybe for you, Iv, and then maybe for Tommy as well. What are the growth investments in terms of like new products and markets that you're going to be focused on prioritizing in '26?

是的，我當然同意這一點。最後一個問題也許問你，Iv，也許也問 Tommy。就新產品和新市場而言，您將在 2026 年重點關注哪些成長投資？

And where do you think, especially, do you have the best opportunity to gain share? I mean, it sounds like both hospitality and mattress on that side of the business would be maybe the bright spots for share gains.

您認為在哪裡您有最佳的機會獲得市場佔有率？我的意思是，聽起來酒店業和床墊業都可能是市場份額增長的亮點。

Yeah, we made a lot of comments in the script, Brian. The Mattress Fabric business, we have gone through a significant -- I mean, transformation is almost not a strong enough word to change that model. We now have -- we have all the team we had with design and focus on product and the sales team. And we have a really preferred manufacturing model with a US platform that's certainly desired today, complemented really well by global operations that can mitigate tariffs.

是的，布萊恩，我們在劇本中提出了很多評論。床墊布料業務，我們經歷了重大的——我的意思是，「轉型」這個詞幾乎不足以改變這種模式。我們現在擁有——我們擁有專注於設計、產品和銷售的所有團隊。我們擁有一個真正受歡迎的製造模式，其採用的是美國平台，這在當今無疑是受歡迎的，而全球營運則可以很好地補充這一模式，從而降低關稅。

We have ways to move that business to where customers want to be served. So -- and we've got a great platform for fabrics and for cut and sewn covers. And we have deep relationships with strong customers, and we just believe there's opportunity for us to win share in a tough market. And then someday when that market performs better, we're really in a good spot. And just very happy about that, the mattress potential. Certainly not banking on a market recovery, but just thinking we have potential. And we're building and planting a lot of seeds for the future.

我們有辦法將業務轉移到客戶想要得到服務的地方。所以——我們有一個很棒的布料和裁剪及縫製封面的平台。我們與強大的客戶建立了深厚的關係，我們相信我們有機會在激烈的市場中贏得份額。然後，有一天，當市場表現更好時，我們就處於一個很好的位置。我對此感到非常高興，床墊具有潛力。當然不是指望市場復甦，只是認為我們有潛力。我們正在為未來培育和播下許多種子。

I think we're also excited a lot about the hospitality business. We have a great model, our fabric. Sometimes, I think investors don't realize how strong our fabric portfolio is to the hospitality market. We talk a lot about Read Window. And we're excited about draperies and roller shades and things like that. But the fabric piece of that business -- we've got a new line. It's priced with better margins. It's just an exciting time to be in that space.

我認為我們對酒店業也非常感興趣。我們有一個很棒的模型，我們的面料。有時，我認為投資者沒有意識到我們的布料組合對飯店市場有多強大。我們討論了很多關於閱讀視窗的內容。我們對窗簾、捲簾和類似的東西很感興趣。但該業務的布料部分——我們已經有了一條新生產線。它的定價具有更好的利潤率。身處那個空間真是令人興奮的時刻。

Certainly got muted when everyone delayed some projects, but that's likely to be something we can be excited about looking forward. And then I don't mean to be too tough on our residential upholstery business because that's our foundation. Our company was founded on that, and we love that business.

當每個人都推遲一些專案時，肯定會變得沉默，但這可能是我們期待的事情。我不想對我們的住宅室內裝潢業務太苛刻，因為這是我們的基礎。我們的公司就是以此為基礎成立的，我們熱愛這項事業。

Our product line is as strong as it's been in a long time. I think we're placing it very well. We just don't see a lot of short-term demand in residential furniture, and we hope that changes. But -- and we're not going to stop doing it. We're just going to manage it cost appropriately and put resources through our new integration to where we think it's growing right now.

我們的產品線一如既往地強大。我認為我們的定位非常好。我們只是沒有看到住宅家具的短期需求很大，我們希望這種情況能夠改變。但是——我們不會停止這樣做。我們只是要適當管理成本，並透過新的整合將資源投入到我們認為目前正在成長的領域。

So, I'm speaking for Tommy's commercial strategy, but that is where I think we're thinking. But we're not in any way trying to say we're not also working on residential upholstery because we are in a big way. We just are maybe thinking there's a lag for that recovery.

所以，我代表湯米的商業策略發言，但我認為這就是我們正在思考的地方。但我們絕不是說我們沒有涉足住宅室內裝潢領域，因為我們在這方面做得很大。我們可能只是認為復甦會有一個滯後。

Yeah. Thank you. That all certainly makes sense, and best of luck with the quarter.

是的。謝謝。這一切當然都是有道理的，祝本季好運。

Yeah. Thank you, Brian. I appreciate your support, and we look forward to talking to you more.

是的。謝謝你，布萊恩。感謝您的支持，我們期待與您有更多交流。

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

我們的問答環節到此結束。我想將會議交還給卡爾普先生，請他作最後發言。

Thank you, operator. And again, thank you for your participation and your interest in Culp. We appreciate everyone's time and look forward to updating you on our progress next quarter. Have a great day.

謝謝您，接線生。再次感謝您的參與和對卡爾普的關注。我們感謝大家的時間，並期待下個季度向您通報我們的進展。祝你有美好的一天。

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

會議現已結束。感謝您參加今天的演講。您現在可以斷開連線。