Good morning and welcome to the Culp Inc. first quarter fiscal 2026 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing star then zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Dru Anderson. Please go ahead. Thank you. Good morning and welcome to the Culp conference call to review the company's results for the first quarter of fiscal 2026. 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. 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. 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 to revise forward-looking statements. 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 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. An investor relations presentation is also available on the company's website as part of the webcast of today's call. I will now turn the call over to Iv Culp, President and Chief Executive Officer of Culp, please go ahead. Thank you, Dru, and good morning, and thank you to everyone for joining us today and for your interest in our company. With me on the call is Ken Bowling, our Chief Financial Officer. Tommy Bruno and Mary Beth Hunsberger are not on the call today as they are fully engaged in their respective roles as Chief Commercial Officer and Chief Operations Officer, both of which are going exceedingly well. I will begin the call with some detailed comments, and as mentioned in the introduction, we have posted a slide presentation to our website that provides some information that is supplemental to what we will speak about today. That slide presentation is simply entitled "First Quarter FY26 Supplemental Information." Ken will then review the financial results for the quarter, and after that, I will briefly review our business outlook for the remainder of fiscal 2026, and we will take some questions. Looking at our performance for the first quarter, the key takeaway from our perspective is that we were able to build on the momentum we had to close out last fiscal year and realize improvement in our operating results despite not only the depressed demand across the home furnishings industry that we're all too familiar with at this point, but also the continuing challenges from tariffs and the uncertain global trade environment. Even with these two significant headwinds, we were able to achieve substantial double-digit improvement at both the gross profit and operating lines during the quarter, particularly due to our streamlined bedding segment. An improvement of that nature in this market and macroeconomic environment is a testament to the effective work of the Culp team over the last year. Throughout fiscal 2025 and into fiscal 2026, we made tremendous strides to successfully transform our Culp Home Fashions mattress fabrics business, which, following the integration of our two former divisions, we now call our bedding segment. I'm impressed with how our team was able to execute on the comprehensive restructuring effort, including the closure and pivoting of production at a long-term manufacturing facility in Canada to our owned U.S. facility and some external strategic partners, while also making sure that our customer service levels remained the highest priority. I think it's important to emphasize that we're certainly not yet where we want to be from an operating and profitability standpoint and where we believe we ultimately will be. Our improving trend tells us that we're doing a good job of controlling and influencing the things we can in an unmistakably tough industry environment. The actions and gross profit impacts of our fiscal 2025 North American bedding consolidation and restructuring project are summarized on pages eight and nine of the supplemental presentation that is now available on our website. Before we take a closer look at our results for the quarter, I'd like to take a moment to focus on some interesting data and market commentary out there regarding activity in the bedding industry published by the International Sleep Products Association and others, which we've included on pages 13 and 14 of the supplemental presentation. While the industry is obviously still in a down cycle, this information effectively shows how long the industry has been running below historic unit levels in the current cycle and correspondingly how much pent-up demand may be building to support an industry recovery in the future. Some analysts who closely follow the market appear to be of the mind that demand for mattresses is finally close to bottoming out and that demand may be set to increase due to cyclical factors such as product replacement cadence and growth in household formation. To some degree, this information and commentary align with our own thoughts on the general direction of the mattress market, given the low activity levels we've seen over the last several years. However, as I've already mentioned, we are making the changes and updates to our business that are necessary to return Culp Inc. to profitability in this current demand environment. We will be pleased when the market recovers, but we are not counting on that. We are just working to get ourselves even better positioned to strongly capitalize on any recovery. This industry data also indicates to us that we've been able to win market share and gain a larger piece of the available mattress business by leveraging our competitive advantages in scale, product development, and innovation, and the ability to use our global platform to value engineer products and offer better supply chain solutions to customers. With our Canada restructuring mostly behind us, we have competitive, stylish, and innovative offerings in knits, wovens, cut-and-sewn covers, and some bedding accessory products. Despite the historically low industry volume and ongoing tariff fluidity, our bedding segment was able to grow sales sequentially versus last quarter and comp sales year over year. Moreover, and notably, with our newly streamlined platform in place, we achieved double-digit gross margins in the bedding quarter compared to negative gross profit in the prior year period. We also expect that our bedding segment margins will continue to improve with sequential sales growth and normalize at a much higher range, particularly once the price increases we've initiated to mitigate tariff costs and also right-size margins in certain areas become effective for the majority of the second quarter. Turning to Culp Upholstery Fabrics, which we will now just refer to as our upholstery segment, soft market conditions across the home furnishings industry, driven by muted consumer spending and housing market trends, continue to impact that part of our business, especially on the residential upholstery side. The global trade and tariff situation continues to add more complexity to this business during the quarter due to the primarily Asian supply concentration that the residential upholstery industry has gravitated to in the last few decades. The historically high and temporary tariffs on China-produced imports last spring, which again reached over 150%, basically shut down our residential upholstery orders and shipments for over a month. Rather than absorb these cost increases for which we had no realistic time to plan, we simply did not ship any containers from China to the U.S. and waited for tariff rates to reduce to a more commercially reasonable level. The delayed effects of that pause in activity, along with the general market uneasiness and hesitancy that all these tariff changes and negotiations have created, significantly dampened sales in our first quarter of fiscal 2026. We do have the ability company-wide to navigate tariff fluidity, and a snapshot of our global footprint is shown on a map on page 15 of the supplemental presentation. It has long been a hallmark of Culp to have options in our supply chain, and that advantage was definitely supportive to our bedding performance this quarter. We have tremendous flexibility in our supply chain to service bedding customers strategically and from multiple locations. Likewise, our global platform has the strength in upholstery as well, but the pace and ever-changing tariff rates in April and May were extremely challenging to the industry. With time to react, we can manage upholstery tariffs effectively and with strength, and we will continue to keep our ear to the ground and balance our production to best serve our customers. Sales in our upholstery segment were also challenged during the quarter by an uneven year-over-year comparison caused by a large residential fabric customer's decision to focus most of its purchasing in the front half of last year, including a notable one-time bind uptick in last year's first quarter. We think this issue is now pretty much behind us, as we expect a more even purchasing cadence from that customer this year and for sales comparisons to smooth out in the second quarter and the rest of fiscal 2026. Despite the challenges mentioned in residential upholstery, demand in the higher margin channels of our upholstery segment, hospitality and commercial, remained relatively solid, and those products comprised almost 40% of our total upholstery segment sales for the quarter. These channels are less directly impacted by discretionary consumer spending and housing market trends, given their focus on upholstery fabric for furniture, window treatments, and related applications in hotel, theater, office, retail, and other commercial settings. Moreover, the supply chains in these channels are less Asia-centric, although we are seeing some of our customers' projects and building plans impacted by the current tariff environment. As a final bigger-picture note on tariffs, they've obviously been a disruption to our overall business, whether it's actual tariff rates on our imported items or delays on customer projects. Again, though, when we can manage through changes with appropriate warning and time, we believe the disruption can actually become a competitive advantage for us. We've also made solid progress on an initiative we announced last quarter, the integration of our two former divisions into a unified Culp-branded business. We have internally named this activity Project Blaze, and our work should provide a significant boost to the operating profile of our business overall and also help us better navigate the difficult residential upholstery demand and tariff environments. This project supports the two industry sales channels we target, but also allows us to move to a shared cost and talent model. Under the leadership of Tommy Bruno as Chief Commercial Officer and Mary Beth Hunsberger as Chief Operations Officer, we are becoming more streamlined in sharing best practices across products, resources, processes, technology, and supply chains. A summarized scope of this work by major project is contained on pages 10 and 11 of our supplemental deck. The transition of upholstery operations at our lease facility in Burlington, North Carolina, to a shared management model within our Stokesdale, NC, location is underway, and we expect the anticipated cost and efficiency benefits of that move to begin to manifest in our second quarter results, with the majority of the benefits supporting the second half of this fiscal year. Additionally, we recently announced internally a similar transition in our upholstery segment's read window business, via which we are consolidating and shuttering operations at a lease facility in Tennessee into a more cost-effective shared management platform within our own Stokesdale location, along with outsourcing to some valued domestic partners. This move should begin to positively affect our results in the third quarter as we reduce lease and manufacturing costs accordingly. Once fully implemented, these integration actions, together with the price increases I previously mentioned that are going into effect in our bedding segment, beginning in the second quarter to mitigate tariffs and rationalize margins in some areas, are expected to generate at least $6 million in annualized cost and efficiency enhancements, which are additive to the $10 to $11 million of annualized benefits expected from last year's restructuring initiatives. Once again, the schedule and impacts of all these actions are summarized on the table on slide 11 in our supplemental deck. The Culp team has clearly not been sitting on its hands and waiting for the market to turn around. We are executing our strategies to become a leaner and more unified company that is prepared to thrive in a variety of market conditions, and we are very well poised for an eventual and general market recovery. We have best-in-class innovative products and a strong U.S. manufacturing base with well-established nearshore and offshore platforms that together give us what we believe is a growing competitive advantage in the market, particularly as customers continue to look for supply chain alternatives and geographic diversity in the current trade and tariff landscape. As I mentioned in our press release, our highest priorities at Culp Inc. are to get back to sustained operating profitability and reduced debt, regardless of any improvement in market conditions, and we believe that we are well on our way to doing so. I'm encouraged by our progress, the talent we have leading our two segments, and the opportunities I believe we have to grow revenue and increase our operating performance. I'll now turn it over to Ken to provide more detail on our first quarter financial performance. Thanks, Iv. Here are the financial highlights for the first quarter. Net sales for the first quarter, which included an extra week, were $50.7 million compared to net sales in the prior year period of $56.5 million. The decline was driven primarily by the continued market softness and the tariff-driven pause in residential upholstery shipments that Iv discussed earlier. Gross profit for the quarter was $7.2 million or 14.3% of sales, compared to a prior year period gross profit of $5.1 million or 9% of sales. This year-over-year improvement of 530 basis points was driven primarily by the cost and efficiency benefits flowing from the restructuring initiatives in the bedding segment completed last year. Operating income for the quarter was $1.6 million, compared with a loss in operations of $6.9 million for the prior year period. Adjusting for restructuring credits and expenses, including a net credit of approximately $3.5 million driven by a gain on the sale of our Canadian manufacturing facility, non-GAAP operating loss for the quarter was $1.9 million compared to prior year period's non-GAAP operating loss of $4.1 million. Net loss for the fourth quarter was $231,000 or $0.02 per diluted share, compared with a net loss of $7.3 million or $0.58 per diluted share for the prior year period. EBITDA adjusted for the impacts of restructuring and related credits and expenses was a negative $1.1 million for the first quarter, compared to negative $2.7 million in the prior year period. Our overall operating performance for the first quarter as compared to the prior year period benefited primarily from continued momentum in our bedding segment, driven by the positive impacts of last year's restructuring initiatives in that area. Operating performance also benefited from the continued profitability in our upholstery segment, despite the low revenue industry environment and tariff-related challenges Iv spoke to. The effective income tax rate for the first quarter of this fiscal year was 120.3%, compared with a negative 3.4% for the same period a year ago, and was impacted by the gain on the sale of our Canadian manufacturing facility and by the company's mix of earnings between our U.S. and foreign subsidiaries. Our cash income tax payments totaled $46,000 for the quarter. Importantly, as of April 27, 2025, we had $88.1 million in U.S. federal net operating loss carryforwards, with related future income tax benefits of $18.5 million. Before we take a look at our reporting segments, we now refer to our mattress fabric business as our bedding segment and our upholstery fabrics business as our upholstery segment. Moreover, as part of that integration, we now manage and assess SG&A expenses on a consolidated basis. As a result, we will no longer report operating performance at the segment level, just down to the gross profit level. The segment breakdown is covered in more detail on slides four through six in our investor presentation. For the bedding segment, sales for the first quarter were $28 million, generally flat compared with last year's first quarter sales. As Iv spoke to, sales continued to be pressured by low industry demand and challenges from consumer spending and housing market trends, but we're able to continue our trend of winning share in key targeted areas. The newly restructured cost platform in our bedding segment drove gross profit to $2.9 million or 10.5% of sales, a significant improvement from the prior year period's negative $326,000 or negative 1.2% of sales. We were pleased to see the profitability momentum in this segment continue during the quarter. For the upholstery segment, sales for the first quarter were $22.6 million, down approximately 20% from the sales in the prior year period of $28.5 million. This decline in sales was driven primarily by the continued softness in the home furnishings market and corresponding weakness in the residential upholstery channel. In addition, the lagging effects of the pause in residential order flow in our fourth quarter last year, stemming from historically high tariffs on China imports, impacted first quarter sales, and the uniquely heavier purchasing by a large residential fabric customer in last year's first quarter unevenly impacted our year-over-year sales comparison. As I've mentioned, we expect this timing-driven disparity to smooth out beginning in the second quarter, given our expectations for this customer's purchasing activity in fiscal 2026. Gross profit in the upholstery segment was $4.3 million or 18.9% of sales, down from $5.5 million or 19.4% of sales in the prior year period, and driven largely by comparable sales or lower comparable sales. Now I'll turn to the balance sheet. We reported $11.1 million in total cash and $18.1 million in outstanding debt as of the end of the first quarter, which includes $2.8 million attributable to supplier financing, maintaining an equivalent $7.1 million net debt position as compared to the end of fiscal 2025. The outstanding debt was primarily driven by worldwide working capital needs, but also includes approximately $3 million in debt we incurred voluntarily to take advantage of availability and borrowing opportunities at current preferred rates in China. We believe this decision was prudent given today's challenging economic environment and uncertain trade relations. Further, we were able to invest these proceeds into a high-yield savings account in China at a rate materially higher than the interest rate paid on the debt. This strategy more than covers our interest costs for the debt, while at the same time giving us significant flexibility in managing our worldwide cash position. Our liquidity breakdown and other supporting information are covered on slide seven in our investor presentation. Cash flow from operations was a negative $695,000 and primarily driven by operating losses, partially offset by favorable working capital. Adjusted for capital expenditures, proceeds in the sale of PP&E and other items, free cash was $311,000 positive for the first quarter. Generating free cash flow and reducing our debt continue to be among our highest priorities and key focus points throughout all areas of our company. Capital expenditures were $179,000 for the first quarter, compared with $501,000 for the prior year period. This decrease stems from our strategic efforts to closely manage capital and focus on integration and other initiatives targeting operating efficiency. We expect capital spending for fiscal 2026 to generally track fiscal 2025 levels as we continue to spend only as necessary. Our liquidity at the end of the first quarter was $28.7 million, consisting of $11.1 million in cash and $17.6 million in borrowing availability under our domestic credit facility, which, as we mentioned last quarter, was recently extended for three years. Another important callout with regard to liquidity options concerns our Stokesdale, NC, manufacturing facility, which is owned. Our net book value for the land, building, and building improvements as of August 3, 2025, was $12.1 million, with an estimated market value of $40 to $45 million. Now I'll turn the call over to Iv Culp to discuss our updated outlook for fiscal 2026, and then we'll take some questions. Thank you, Ken. Due to the market macroeconomic uncertainty and the fluid global trade and tariff environment that we've talked about today, we are only providing limited forward guidance at this time. Despite what we anticipate to remain a low demand environment for home furnishings in the near term that pressures sales in both of our businesses, we currently expect sequential overall sales growth in the second quarter and throughout fiscal 2026. We believe we are gaining market share with key customers that support this improvement. Moreover, we expect the cost and efficiency benefits of our multiple restructuring and division integration initiatives, along with the price increases I mentioned, to drive adjusted EBITDA results in a range from near breakeven to slightly positive for the second quarter of fiscal 2026. We also anticipate our operating performance and profitability to improve sequentially throughout the remainder of fiscal 2026. As Ken spoke to, while we intend to continue to utilize borrowings as necessary under our credit facilities during fiscal 2026, we will continue to aggressively manage liquidity and capital expenditures and prioritize free cash flow. Finally, please just note that our forward guidance and expectations are based on information available as of today and reflect certain assumptions regarding our business and overall industry trends, the projected impact of our restructuring and integration initiatives, and ongoing market headwinds. Our expectations also assume no further meaningful impacts from tariffs and trade negotiations. Thank you again, and we'll now take some questions. We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. The first question comes from Doug Lane with Water Tower Research LLC. Please go ahead. Yes, thank you. Good morning, everybody. Thank you for the commentary on tariffs. It's obviously been front and center in the news, particularly in your industry. Are you at the point now where all the known information on tariffs is out there and your initiatives, both from the cost side and the pricing side, have captured that, or is there still more actions to be taken based on the current news? Hey, Doug, good morning. This is Iv. Thank you for joining today. I appreciate the question. Yeah, we did try to touch on tariffs a lot in our script. It has been a major talking point in the industry, as you referenced. I actually think that where we are today, we can, in some ways, take tariffs off of our immediate worry. It's certainly been very disruptive, and it's not so much the level of tariffs that have been applied as it is the variability and the changes to the tariffs. It's just been hard to plan, and everyone's been dealing in some uncertainty. The only real major issue we had was when tariffs were up over 150% in China, and we just had to stop shipping, which we talked about was impactful to our first quarter here. We have options. That's long been our strategy. We've adjusted our pricing. We have multiple manufacturing locations. We can pivot to best support our customers as we need to. Of course, I'm only speaking to what I know today, but to your direct question, as it is now, we've immersed the tariffs, and we're able to perform and grow our margins under this current environment. Oh, that's good news. You mentioned part of your initiatives are pricing. What is the elasticity these days? Are you able to put the pricing through, or is it too early to tell? Doug, we're certainly in competitive businesses, and there are certainly price levels that the markets will bear, but we have to be profitable, and we have to turn our business to profitability in this environment. We have options. Again, our supply chain allows us to be competitive across a myriad of different platforms. Prices are never easy to pass, but our customers understand the competitive landscape, and we're being fair but aggressive to get prices in to cover tariffs and to also right-size margins. We just have to do that with some discipline. No, and the margin story is looking really good. That chart on slide nine showing a steady improvement in gross profit. Maybe could you give us a feel? You have on slide 11 a list of all the initiatives you've taken, and the total is $18 million. How far along are we in realizing that $18 million? When do you think we'll fully realize that $18 million annual run rate? I can let Ken touch on some of this too, but we've tried to schedule out as best we can. I know maybe it's good to talk about it in more detail. The $10 to $11 million was really a fiscal 2025 initiative. That primarily revolved around us closing our Canadian operations and relocating that business to the U.S. and to some strategic outsource partners. That project's done. It should be fully implemented for fiscal 2026. We should have an impact across the full year. That's great. We got some of that in 2025, but it's really a 2026 impact. The other initiatives we talked about are pretty much back half impacts. We'll get those in Q3 and Q4, although some of the price increase that we speak to is a Q2 initiative. I think a lot of it's in for 2026, and all of it should be in for the back half. Okay, that's helpful. I'm looking also at some of the market commentary that you referenced here, and I'm new to the company here, so I just maybe need a little bit of background on how would you compare this dip here post-COVID, if you will, versus, say, the Great Recession back in the 2000s? Yeah, you know, if you spend a long time in the textile industry, you get to talk about lots of ups and downs. It's one of the blessings and curses of my role in life. I would say we had always been used to variability in the market. That's not abnormal. We have seen down cycles and up cycles. This current period, for whatever reason, seems to be protracted. It's not unusual to see down times, but typically we'll come back pretty quick. Ever since 2020, it's just been a protracted down cycle in units, whether that's some pull forward compounded by people buying early when they're staying at home, then compounded by interest rates and now deferred purchases, whatever the reasons are, housing being slow. We just have seen a low cycle. The good news that we see is that we are in segments that, while they're not necessities, people need and want to buy furniture. It's part of the lifestyle. We know the business is going to come back, and we're confident that it will. What we just aren't willing to do is wait for it to come back. We're going to make our adjustments, get ourselves profitable in the current environment, and when it does come back, we're just better prepared and leaner to capitalize even stronger on the recovery. We know it's coming, Doug, but we're going to make moves, and we can't wait for it. No, you can't forecast when things turn. I mean, you have the commentary from the research that you cited showing significant pent-up demand, people calling a turn in 2026, which of course may or may not happen. What does that mean for Culp? Are you able to satisfy a turning demand with your existing cost structure, or will you have to begin to spend and chase the demand when it does come, assuming it does come in the next year or so? Yeah, a really good question. What we have been very careful about, and we've stressed this as we've done these restructuring initiatives, we have made changes to our platform very strategically, but we have not given up capacity. It doesn't mean we don't have necessarily multiple plants duplicated in similar geographies, but across the globe, we have ways to grow capacity almost unlimited. With any type of planning or foresight, we can grow capacity. We have not limited ourselves, and the real benefit to us is we think that there's a lot of upside leverage on the current base. If we can increase the denominator, put some more fuel on the fire with revenue, we have a lot of cost leverage we don't need to add back, and margins can really go up. We're really encouraged as the market grows, but we're also very encouraged just as it is. We're going to grow the margins now, but when the fuel comes on it, Doug, there's no limit for us. We got to plan it well, and we got to strategize it well, but that's where the cost leverage really pays off. That sounds encouraging for sure. Again, new to the story, I'm fascinated by some of these hidden assets that you have here, Ken. You mentioned a market value of real estate of $40 to $45 million, and you've got federal NOLs of $88 million. How much of that real estate is on the books, and how much of that is really not on the books, and then how are the NOLs going to play out going forward? Yeah, Doug, thanks. Good question. Regarding the real estate, we put in there our net book value for that asset is around $12 million, so you've got about $30 some million of excess room there. The $40 to $45 million is our estimate for the value, but we've had some similar sales around the area, so we feel good about that. That property is stellar. It's in magnificent shape, and we feel very good about that estimate. As far as the taxes, we continue to evaluate that each year. It's made up of obviously continued losses in the U.S., and that will probably grow over time, but will grow over time. It's just something that as of today, it's a benefit. As far as future use, when the time comes, when we start being profitable in the U.S., that's when it will come into play. That's an untapped value there that's available once we become profitable. It's a tremendous benefit for us going forward. Very interesting. Okay, thank you very much. Thank you, Dru. Appreciate the time. This concludes our question and answer session. I would like to turn the conference back over to Iv Culp for any closing remarks. Thank you, Dru, and again, thank you for your participation and your interest in Culp, and we certainly look forward to updating everyone on our progress next quarter. Have a great day. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.