Good day, and welcome to the Culp, Inc. Third 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 the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch-tone phone. 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. Good morning and welcome to the Culp conference call to review the company's results for the third 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. With me on the call is Ken Bowling, our Chief Financial Officer. I will begin the call with some detailed comments, and as mentioned in the introduction, we did post a slide presentation to our website that provides some information that is supplemental to what we will speak about today relating to our results and strategies. That slide presentation is simply entitled Third Quarter FY 2026 Supplemental Information. Ken will then review the financial results for the quarter. After that, I'll briefly review our business outlook for the remainder of fiscal 2026, and we will take some questions. Our third quarter results are candidly frustrating given all that we've done over the last year and a half to transform our company and position it to generate value for shareholders. The prolonged low demand environment across the home furnishings industry just continues to pressure our top line and inhibit our ability to leverage all of the cost and efficiency enhancements we've made in recent periods. Compounding our frustration was untimely severe weather in the Southeast that caused us to lose the last week of our quarter of shipping from Stokesdale. This was a significant one-time impact, especially to our Bedding revenue results, which I will touch on a bit more shortly. Regardless, I'm extremely proud of our team for staying focused and executing on integration and restructuring initiatives that touch pretty much every area of our company, and doing so both on time and according to plan. I'm confident that the benefits of this work will become more and more evident in our results. I'd like to thank all of our associates across the United States, China, Haiti and Dominican Republic, and Vietnam, as well as our former associates in Canada and our global network of strategic supply partners for all of their heavy lifting to get us to where we are today with a fully optimized manufacturing engine ready to pounce on any improvements in demand. Importantly, our revamped platform is poised to scale and absorb capacity without adding any significant expense. We just need the unit volume. As I mentioned in our release, we are confident that industry conditions will eventually stabilize and skew favorable in our core Bedding and furniture markets. Both our own operating history and the market data are indicating a current historical deficit in overall industry units, but also conditions that are ripe, perhaps even overripe, according to some, for a product replacement cycle that should energize the top line. The pockets of positive demand activity that we've seen in recent periods on the Bedding side also support that proposition. However, we agree with the industry consensus that housing activity, particularly affordability and availability trends in housing and consumer confidence and discretionary spending, all need to level up to drive any meaningful market recovery. We've included some data in our supplemental presentations on pages 14 through 18, providing additional context for the impacts of housing activity, consumer confidence levels, and other related factors, as well as some historical industry unit trends. Our commercial team, led by Chief Commercial Officer Tommy Bruno, has done an outstanding job of being proactive in increasing our share of the available business despite the top-line current environment where overall sales growth is so hard to come by, if not unheard of, on the supplier side. One thing we've always done really well at Culp is to take the time to listen to our customers, fully understand what their needs are, and meet those needs on their timetable with competitive and fashionable fabrics and sewn covers. We have continued to do this well and prioritize our customers above all else, which has resulted in a fairly steady stream of program wins with major customers on both the Bedding and Upholstery sides of our business and what we believe is a larger market share within the key segments we target. In our Bedding business, we were on pace this quarter to comp sales in the prior year period, which is no small feat in this market. Multiple snowstorms in the Southeastern U.S. caused us to basically lose the entire last week of shipping for the quarter at our most important facility in that business. Up to that point in the quarter, we believe that our Bedding sales velocity was outpacing the industry. Despite this difficult backdrop, we have solid opportunities in mattress covers, which is a key growth area for us that carries higher sales dollars and margin. We look for the momentum we saw in our overall Bedding business for most of that third quarter to resume in our fourth quarter. Sales velocity in our Upholstery business was more elusive this quarter, with residential furniture purchases continuing to be affected by muted housing and consumer spending activity, along with heightened tariff sensitivity due to the primarily offshore supply chain for furniture and especially for furniture components. In addition, we've continued to see project delays in the commercial and hospitality Upholstery markets we serve that have in turn delayed sales of fabric and window treatments into those channels. We see the project delays in our commercial channel as temporary, and we continue to build relationships with major hotel brands and prioritize our preferred supplier certifications under their design and construction standards. We have built a strong competitive position in both the residential as well as the commercial and hospitality markets, and this advantage creates some natural hedge for our revenue and supply chains. In recent prior periods, hospitality and commercial performed well relative to residential, but Q3 was an anomaly, with weaker sales in both areas that is expected to be non-recurring as we look forward. One bright spot for us in Upholstery during the quarter was in the Upholstery kit product category. This is a high-growth area for us, where we typically generate higher per-unit revenue, and we were able to achieve double-digit growth there that we look to continue in the fourth quarter. Also in Upholstery, Tommy and his team continue to focus on expanding our customer base to include more brands and retailers playing in the higher price point areas. Our current customer base primarily targets consumers buying at the mid and lower-tier furniture price points, and one of our strategic priorities is to maintain our market-leading position in these segments while also diversifying more into the higher-end customer segment that caters to consumers less affected by economic cycles. One of the other things we've always done well at Culp across both businesses is invest in the resources necessary to maintain market-leading position in product design and development, whether that's creating or adopting new fabric technology and performance capabilities or staying ahead of design trends and other innovation efforts. Our noted growth in furniture Upholstery kits and in sewn mattress covers, despite the tough market conditions, provide good examples of our consistency in development and we'll continue to leverage our advantages and expertise going forward. This current season we're in also offers several great opportunities to meet with customers and show new products. This week, our key sales leaders for Bedding are attending the International Sleep Products Association's bi-annual trade show and displaying in tandem with our long-term partner in Turkey. This ISPA show puts us in front of many of the industry leaders and major customers we target. We'll follow that up with a Bedding design showcase here at our innovation center at Congdon Yards in High Point, where we'll host our Bedding customers by appointment during the week of March 23rd to review all of our new products, our cut-and-sew prototypes, and our open line. Both of these customer windows allow us great opportunity to continue placing new products and to grow our market position in Bedding. Likewise, in Upholstery, we have recently opened a new dedicated showroom in Vietnam to host customers anytime they need to review new fabrics. Our showroom is placed conveniently in the Ho Chi Minh City area, and the opening corresponds with a traditional Vietnam furniture show called the VIFA Expo for furniture and accessories. We are pleased with customer engagement so far, and the showroom allows us to meet with visiting US customers as well as Asia-based visitors and customers from all over the world. We are excited to have this global reach to display our latest introductions. The VIFA Expo also serves as a nice lead-in to our main fabric show, Interwoven, that will be in High Point at Congdon Yards in May. At a summarized and big-picture level, we feel very good about our position as a key supplier to the major players in both our core Bedding and Upholstery markets and believe that our market share gains will ultimately be reflected in our top-line growth, certainly once demand normalizes. On the Bedding side particularly, we believe that our strategic focus aligns nicely with the ongoing consolidation trends among the major Bedding brands and retailers that we believe are likely to continue. What we've learned over our many years as a supplier is that customers value optionality and compliance in their supply chains and the redundancy and reliability we offer for production planning purposes. Our restructured global platform, with flexible options across the full range of supply strategies, is designed with that need foremost in mind, and it has continued to garner even more perceived value to larger customers that have complexity and diversity in their product lines. A basic map of our global platform and production options is displayed on page 12 of that supplemental deck. Turning now to the global trade and tariff landscape, particularly all of the change and unpredictability we are seeing there. We believe the recent volatility of trade policy can actually be a net positive for us, given that it serves to highlight the strategic value of our global platform to our customers. This was certainly the case before the recent IEEPA tariff developments, but even more so now, given the fluidity and status with those tariffs and other new tariffs either announced or under consideration. We are watching tariff developments very closely, from the Supreme Court decision to strike down IEEPA tariffs to the administration's immediate enactment of new Section 122 tariffs and recent activity under Section 301. A summary of the tariff impacts and our mitigation strategies are displayed on page 11 of our supplemental deck. Our decision to consolidate our North American operations within our own Stokesdale facility in the U.S. provides our Bedding customers with a robust domestic production and distribution option that has proven to be prescient in this current environment. Similarly, our platform in Haiti, on the border with the Dominican Republic, gives customers a nearshore and low-tariff option, while our Vietnam and Turkey supply chain provide nice supplemental offshore options to complement our China production. Encouragingly, we're seeing customers lean more and more into the various sourcing alternatives we offer as they are continually forced to factor the cost of new and changing tariffs into their models and build more flexibility into their strategies. Our global platform presents customers with what we believe is the best opportunity out there to source in multiple geographies and tariff regimes, but with the operational and administrative ease of dealing with a single turnkey supplier partner. Looking at that tariff issue from a pure cost perspective and how they directly affect our financials, we believe that the current go-forward tariff rates applicable to our business are manageable and, in some cases, improved versus what we've had to absorb in prior periods. Additionally, our pricing adjustments and surcharges implemented in recent periods are appropriately calibrated and are expected to offset tariff costs on a cost-neutral basis over the near to medium term, absent, of course, any unanticipated governmental changes or sudden increases. I have stated for multiple quarters that we believe our strategic platform is an advantage for Culp in an uncertain tariff environment. The problem we had for most of this year was keeping pace with the sweeping changes in tariff rates. The quick cadence of the changes often created a natural lag between tariff effective dates and price adjustments that resulted in pressured profitability. I again wanna reiterate that we are now covered with known tariffs present today, and overall, we feel positive about where we are on the tariff issue going forward, both from the perspective of our competitive positioning in the market and from a product cost perspective. Before I move on from tariffs, I wanna mention that we are, of course, taking the steps necessary to be in position to obtain any available refunds on the IEEPA tariffs we've paid that were subject to the recent court decisions on that issue. We have filed all the necessary protests related to reliquidated entries and have also filed a lawsuit with the Court of International Trade. Over the last 14 months, we've paid over $15 million in total baseline duties and tariffs, with an estimated $6 million-$7 million in IEEPA tariffs over that same period. It is those IEEPA tariffs where we are entitled to refunds. Depending, of course, on how the refund issue ultimately plays out, our receipt of the amount of IEEPA tariffs we've paid would be significant and would offset some previous period losses. That pace of tariff implementation has been punitive to our profitability, so any refunds would help to remedy the lag impacts we experience adjusted to those policy changes. Lastly on tariffs, in addition to those IEEPA tariffs, we're also anticipating some refunds on the baseline duties on Haiti-produced sewn covers we paid in recent periods before the reinstatement of the Haiti HOPE/HELP trade program, which gives Haiti imports duty-free treatment. I'd now like to take some time to update all the work we've completed on our lower cost structure and add efficiencies across both our Bedding and Upholstery businesses. Our third quarter was the capstone to the efforts we began at the beginning of last fiscal year to comprehensively restructure our operating platform, as well as integrate our business and the way we go to market. We've now completed the last of several major initiatives associated with the integration of our two former standalone divisions, Mattress and Upholstery, or what we called CHF and CUF, into a unified Culp-branded business, which we called Project Blaze internally. The fiscal year 2026 substantive actions of this comprehensive reorganization are detailed on pages nine and 10 of the supplemental presentation, and Q4 will be the first quarter with all projects completed and savings and efficiencies fully enacted. As a reminder, our Project Blaze initially involved the transition of our Division Presidents into company-wide Chief Commercial Officer and Chief Operating Officer roles, and we followed that with the blending of other division operations and resources. During the third quarter, we completed two key related initiatives, and thanks to the hard work of our team, we now have all of our U.S. distribution operations consolidated under one roof with our own facility in Stokesdale, North Carolina, with a single management team overseeing both our Bedding and Upholstery businesses distribution activities in our largest market. We also completed a similar transition in our Read Window business, operated within our Upholstery segment during the quarter. Our fixed costs in that business are now significantly reduced through the relocation of our former operations in a leased facility in Tennessee to a shared management model within our Stokesdale facility and the increased usage of strategic outsourcing partners. Finally, we completed our plans to streamline our China operations, which are our second largest after the U.S. during the quarter, which included both facility and headcount reductions. All told, beginning with the restructuring of our Bedding business last year and continuing through the completion of these most recent initiatives, we've generated over $20 million in annualized cost savings and enhancement, many of which have already began to positively impact our results and the remainder of which should begin to benefit our results in our fourth quarter and in fiscal 2027 in the form of lower costs and better operating margins. Of course, assuming no further significant drop off in sales. We believe we now have the pricing and cost structure optimized throughout our U.S. nearshore and offshore operations, and we are ready to quickly and profitably increase capacity without additional cost when demand picks up. We look at our rebuilt platform as a high-performance engine that is ready to run. We just need more unit volume for it to fully reflect on our operating results and generate the value for our shareholders that we believe it will. We estimate that with our revamped lower cost platform, any increase in our revenue numbers flows to the bottom line at an approximately 25% rate. However, I wanna be very clear that our ultimate near-term goal remains getting Culp profitable in these pressured market conditions, and we are fully committed to maintaining a disciplined approach to cash management and cost containment until we get there. One byproduct of our recent restructuring and integration activities that I wanna briefly discuss is the excess inventory that we have accumulated in connection with the facility consolidations that were part of those efforts. When we made the decision to close our operations in Canada last year, we chose to build some safety stock in certain fabrics to ensure availability to customers as we transitioned to a single North American facility and stood up our outsourced supply model for damask products in Turkey. We also accumulated some excess inventory as a result of the reduction of our distribution footprint to a single facility with defined capacity as well as other drivers. We took some markdowns on this inventory during the quarter that affected our profitability, and we have measurable plans to work through it and turn this inventory into a tailwind and generate cash over the next two quarters. In addition, our team is intensely focused on tightening up our overall inventory management efficiency and minimizing any markdown impacts to profitability going forward. Before I turn the call over to Ken, I want to acknowledge his planned retirement that was announced in January and update you on our success and plans for his Chief Financial Officer role. First of all, I wanna thank Ken for his almost 30 years with Culp and for all he's done to help grow our company and lead us both through a variety of challenges and to many successes over the years. Ken will leave very big shoes to fill, to say the least. We're thankful he has agreed to stay with Culp throughout 2026 and help us make a smooth transition to his successor. As we are digesting Ken's decision to retire, we are looking at the Chief Financial Officer role in light of our Project Blaze initiative to integrate our operations and drive efficiencies where it makes sense. I'm pleased to report that we've established a plan for Mary Beth Hunsberger, our current Chief Operating Officer, to begin working closely with Ken over the course of calendar 2026, with the goal of immediately taking on some of the operational functions of the CFO role, specifically the financial planning and analysis, or FP&A, process for our FY 2027 operating plan. Mary Beth joined us at Culp several years ago as president of what was then our CUF Upholstery division and subsequently moved into the COO role in May 2025 as part of Project Blaze. Before Culp, Mary Beth spent a significant portion of her career in a financial leadership roles, including several with Tempur Sealy, a key customer of ours now known as Somnigroup, and a variety of accounting and executive roles, including CFO, COO, and president of multinational furniture companies. We are very excited to leverage Mary Beth's skill set in an interim dual role responsible for integrating financial leadership and operational execution across our global platform. We believe it is a natural fit for Mary Beth to combine her operational leadership with financial oversight to accelerate our consolidated improvement and create more efficiencies. Mary Beth should also be instrumental in bolstering our FP&A capabilities through system enhancements and upgrades, which is an area she has valuable proven leadership experience. We are extremely grateful to Ken for agreeing to continue serving in the CFO role and as our Principal Financial and Accounting officer until we believe the time is right to make any official leadership transition. Ken has always been willing to share his wealth of knowledge regarding Culp and his financial and accounting functions, and we are all glad to have this time for our teams across the company to work together. I'm also excited to report that we've hired an individual to replace our recently departed Corporate Controller, which we also announced in January. This individual will also have the opportunity to work with Ken this year. As part of his planned transition, we believe he will be a key player for us going forward. Needless to say, we are thrilled to have a comprehensive transition plan in place for our financial leadership team at Culp. Congratulations, Ken and Mary Beth, and welcome to Culp, Odera. With that, I'll now turn the call over to Ken, who will review the financial results for the quarter, and then I'll review the outlook we are providing as we look ahead into the fourth quarter of fiscal 2026. Thanks, Iv. Thank you also for those kind words. It's been an honor and a privilege to work for Culp, and I'm totally committed to doing everything I can to ensure a very smooth transition. Here are the financial highlights for the third quarter. As Iv mentioned earlier, we continue to face a challenging overall demand environment during the quarter and also lost some sales momentum to close the quarter due to severe weather, which impacted shipping at our most important facility. These conditions drove net sales of $48 million compared with net sales in the prior year period of $52.3 million. Consolidated gross profit for the quarter was $5.3 million or 11.1% of sales compared to the prior year period gross profit of $6.3 million or 12.1% of sales, with the decline driven by lower comparable sales, adjustments related to excess inventory stemming from our restructuring integration initiatives and unfavorable foreign exchange rates associated with our China operations. The company reported a loss from operations of $3.7 million compared to a loss from operations of $3.9 million for the prior year period. Excluding restructuring and related expenses, adjusted loss from operations was $3.1 million compared to a loss of $1.6 million for the prior year period. Net loss of the third quarter was $3.4 million or $0.27 per diluted share, a sequential improvement of approximately 20% from our second quarter and approximately 17% increase compared with a net loss of $4.1 million or $0.33 per diluted share for the prior year period. Excluding restructuring and related expenses and other non-cash charges, as well as the impact of net proceeds from a legal settlement of approximately $1 million, Adjusted EBITDA for the quarter was a - $2.2 million as compared to - $457,000 for the prior year period. The effective income tax rate for the quarter was a - 9.3% compared with a - 12.1% for the same period a year ago. Our effective income tax rate for the quarter continues to be impacted by the mix of earnings between our U.S. and foreign subsidiaries, with an operating loss in the U.S. and taxable income mostly from China, which has a higher income tax rate compared to the U.S. Our cash income tax payments totaled $2.4 million for the first nine months of this fiscal year. Notably, we do not expect to incur any income taxes in the U.S. on a cash basis for the foreseeable future due to our existing U.S. Federal net operating loss carryforwards totaling almost $90 million as of last fiscal year-end, which carry related future income tax benefits of $18.5 million. Now let's take a look at our business segments. For the Bedding segment, sales for the third quarter were $27.3 million, down approximately 5% compared to last year's third quarter, with the decrease driven primarily by lower housing and discretionary spending trends I touched on earlier, along with the tariff-driven pressure on demand and the impacts from severe weather in late January. Gross profit on our Bedding segment was $2 million or 7.2% of sales, a decline from gross profit of $2.7 million or 9.6% of sales in the prior year period, driven primarily by adjustments related to excess inventory stemming from our restructuring and integration initiatives, which were partially offset by improved selling margins during the quarter. For the Upholstery segment, sales for the third quarter were $20.7 million, down approximately 12% compared to the prior year period, with the decline driven by most of the same factors driving the sales decline in Bedding. Gross profit on our Upholstery segment was $3.4 million or 16.3% of sales, a decline from gross profit of $4.2 million or 17.9% of sales in the prior year period, driven primarily by lower comparable sales and unfavorable foreign exchange impacts related to our China operations. Now let me turn to the balance sheet. We reported $9.7 million in total cash and $18.5 million in outstanding debt under our credit facilities as of the end of the third quarter, giving us a net debt position of $8.8 million. Cash flow from operations was a - $2.3 million for the first nine months of this fiscal year and primarily driven by operating losses, which compares favorably to a - $9.4 million in the prior year period. Adjusted for capital expenditures, proceeds from the sale of property, plant, and equipment, and notes receivable and other items, free cash flow was a - $1 million, down favorably from a - $10.1 million in the prior year period. Generating free cash flow and reducing our debt continue to be among our highest priorities. Capital expenditures for the first nine months was $442,000, down from $2.4 million in the prior year period, as we continue to focus on maintenance projects and strategic initiatives with quick payback. We expect capital spending for fiscal 2026 to be in the range of $600,000-$700,000 as we continue to spend only as necessary. With respect to liquidity, as of the end of the third quarter, we were at $27.7 million, consisting of $9.7 million in cash and $18 million in borrowing availability under our domestic and foreign credit facilities. As a reminder for our liquidity purposes, the net book value of our own manufacturing campus in North Carolina as of the end of the quarter was around $12 million, and that property has an estimated market value of $40 million-$45 million. Our liquidity highlights are briefly summarized on page seve of our supplemental deck. With that, I'll turn the call over to Iv to discuss the general outlook for the fourth quarter and full year, and we will then take your questions. Thank you, Ken. Due to the ongoing macroeconomic and increasing tariff and trade uncertainty, we expect continued industry sales pressure and are only providing limited financial guidance at this time. We expect sequential consolidated sales growth for the fourth quarter of fiscal 2026, with solid expectations for our Bedding segment despite the challenged demand environment for home furnishings. We also expect our current pricing to balance tariff pressure in the fourth quarter and for the cost and efficiency benefits of our restructuring and integration initiatives to drive improving gross profit and lower SG&A for the fourth quarter and beyond. We're not providing more specific operating guidance at this time due to the uncertainty around the potential IEEPA tariff refunds, and if received, the impacts on our operating results in prior quarter losses. We intend to continue utilizing borrowings as necessary under our credit facilities to fund working capital needs and growth, but we'll continue to aggressively manage liquidity and capital expenditures and prioritize free cash flow. Additionally, the $4.8 million balance sheet item due from the sale of our former facility in Canada is scheduled to be paid during the fourth quarter. With that, we'll be happy to take some questions. We will now begin the question-and-answer session. To ask a question, you may press star then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the key. 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. Our first question today comes from Anthony Lebiedzinski with Sidoti & Company. Please go ahead. Good morning, gentlemen, and congrats to Ken on his pending retirement. You know, you guys talked about green shoots that you're seeing on the Bedding side, which is certainly good to see, and you also talked about the programs with major customers. Just wondering if you guys could expand on that and, as far as that's concerned, if you could provide more details, that'd be great. Yeah. Thank you, Anthony. Good to hear from you. Thanks for checking in with us. Appreciate the comments about Ken. We're honored by his service and, you know, I'm excited for him to retire and think about a positive future for his life, but we'll miss him a lot, and we're really grateful for the formal transition we're working through. I'm glad you got to say hello to him about that. Yeah. Thank you, Anthony. I appreciate that. Thank you. Yeah. Sure. The green shoots you mentioned, you know, Anthony, it's interesting commentary, and we're careful how we wanna talk about it. The market's challenged, and I think you know that, and everyone knows it, and it's just been a hard market for unit volume. You know, we were really on a pretty good pace in our third quarter in Bedding on the forecast that we thought we'd be, and we're, I think, outpacing the industry fairly well. We got really crushed by untimely weather at the end of our quarter, which is. That's just hard to do when you're making a turn like we're trying to make. That hurt. The fact, the pace we saw Bedding operating on, and I think we see pretty cool opportunities in sewn covers, and, you know, we would certainly never name any customers, but we just feel very bullish in our supply chain, our global strategy, and our very strong domestic production. Customers are leaning into us, and we're finding more opportunities and more chances to drive major national lines. It would just be helpful to us if those products would sell at a higher rate, but we're definitely building blocks into the, you know, to get our market share up, which we're thrilled about. Mm-hmm. Okay. That's good to hear. I know you talked about the potential refunds tied to IEEPA. I think you said $6 million-$7 million, but I heard also some commentary about the Haiti. Are those? This is something I probably missed as far as, like, or did you say anything about, like, potential Haiti refunds? We did. Yes, we did. The tariff, yeah, no question you'd be confused on this whole thing. The tariff regulations and trade policies have been unbelievable for the last year, and we touched on it in two different ways. The Haiti tariffs for sure, we are due refunds in process on the duties. Haiti for a long time, which is one of the primary reasons we went there, is a duty-free treatment. That doesn't always override IEEPA or reciprocal tariffs or other things, but from a pure baseline duty, Haiti is a duty-free country. During previous government shutdown, not even the one we're in today, the last one, the Haiti HOPE Act expired, and before it got renewed, there was a period of some time where duties were being charged. That act has now been renewed, and we're reclaiming those duties back. That will be some fourth quarter cash for us. That's approved and in process, and those duties will be coming back. The IEEPA tariff is a much bigger thing that impacts us at all of our international locations. With the Supreme Court ruling on that, we are now in line to claim refunds that we are entitled to based on the ruling. We understand that the timeline and the mechanism of that is uncertain. We have filed all of our protests. We have a lawsuit filed. We are speaking daily with our customs brokers. We're tracking this really close because we are confident that we should be due somewhere between $6 million-$7 million as we check our IEEPA tariffs we've paid since they were enacted. We don't know the timeline, and we understand there'll be more to the story, but we're just pushing that and want our investors to understand that's a significant situation that we're following very closely. We feel like we are relative experts in the tariff world. Not proud of that, but it's just been so impactful. Anything that we get back, Anthony, I mean, obviously everyone sees how we've performed. It's not intended to boost our margins. It's to recoup losses that we took dealing with these tariffs and the lag that we had to deal with putting them in. We really need to focus on that refund to offset previous period trouble. Understood. Certainly. Okay. You know, given all the streamlining and restructuring that you guys have done, and certainly it's been quite significant, and I know the environment is still fluid with everything that's going on in the world, but can you give us a kind of a rough estimate as to what's your breakeven revenue run rate nowadays? Hey, Anthony, it's Ken. I think if you know. Okay. In his comments, you know, we talked about the inventory markdown or pressure that we're under. You know, we've got to get that fixed, and we are laser focused on that. Beyond that, I think where we look at where we are today, as we look out to Q4 and beyond, we're in that, you know, that breakeven level at about the pace where we are for the third and fourth quarter, around that $50 million per quarter level. You know, we feel that that level is we've got a cost structure to support that. As we said in Iv's remarks, beyond that, you know, we've got the leverage to really kick in. We're just, you know, we said it throughout the remarks, we just need that higher sales to kick in. We're ex the fixing of the markdowns, we're at that breakeven point, now we just need more revenue to lever- Got it. Hello? Yes, sir. Yeah, I'm here. Yeah, we're here. Yeah. Sorry. You cut out for a couple of seconds. Okay. All right. Well, I think I got everything that I needed. Well, thank you very much, and I'll pass it on to others. Thank you, Anthony. Thank you. The next question comes from Doug Lane with Water Tower Research. Please go ahead. Yes. Hi, good morning, everybody. Have to say I'm pretty impressed that you've taken the actions on the tariffs, as far as you have by, you know, getting the paperwork filed and what have you, so soon and knowing what those numbers are. What's the next step there? What should we be looking for as the next step on the tariff recovery? That's a good question, Doug, and good morning. Thanks for checking that. We do feel, as I was sitting with Anthony, we do feel sadly, sort of experts on wrestling this. We have our protests in process. We have our lawsuit filed. We have our ACE system set up, which is how the refunds have been said would be reissued. We have our spreadsheets lined up. We are ready to enter the refund by entry or by product, by country, however they want us to do it, we're ready to do it. I think next steps we understand is there's maybe even a closed-door meeting today with the United States Court of International Trade and the administration's lawyers on that process. We're also waiting. What we understand as of today, and certainly all this could be changed, we recognize that, we understand the uncertainty of this, we don't really think there's a question of if refunds are due to us, but we know there's a lot of uncertainty of when. I think what the process going on today is, what's the timeline, what procedures will it be handled by, and what the administration or anyone may do to try to delay that timeline. We're waiting, you know, every day looking at when the next hearings are and what the outcomes are to try to be first in line to strike the opportunity. We understand there could be some further delays, so we're waiting. Okay, it's just unknown at this point. Timewise. I think it's unknown on timing. Yes, sir. On timing. Right. Exactly. Yeah. Ken, you mentioned the inventory is up a little bit year-over-year, and you explained why. Can you give us a feel for how you plan on working off that inventory? Do you expect these non-cash inventory charge markdowns to be, you know, recurring in the next quarter or two? Yeah, Doug, we have spent a lot of time talking about, you know, the reason why, and it was just, again, building inventory to address the restructuring actions. We purposely did that to take care of our customers, and we did a great job, you know, throughout that whole process. I mean, a lot of different things were going on. Now we've recognized that we have inventory that is aging, and we need to get that inventory sold. We are totally focused today on getting that sold at a good margin. We've set some very aggressive goals internally to get that inventory down over the next this quarter and next. Then beyond that, you know, we've looked at aggressive ways to ensure that we turn inventory faster and so that this markdown issue will not be a problem in the future. I mean, you're always gonna have aged inventory, and we understand that. At the same time, we're at a level now where we can make the product that's to meet customer needs and then get this excess sold, and then as we go into the new year, be on a much better cost platform. That's our focus today and we're gonna get it done. Doug, if I just add a touch of color. Ken answered that super. A touch of color just on the inventory in general. It's a big impact to us, obviously, liquidity purposes and profitability purposes. At the end of Q3, we're at a peak position from a number of reasons. It's we build up in advance of Chinese New Year, which is normal, so that's part of the Q3 total inventory number. Ken's right, we built up inventory to service customers through our restructuring transition. That coincides with the trough in the market. Some of those shipments have been delayed. What we've asked our team to do is be very intensely focused on moving inventory, both aged and current, to turn that into cash. Over Q4 and Q1, we're expecting that working capital effort to drive cash to us. That's an intense focus for the company. Okay, that's helpful. You mentioned the storms that came through the South and at the end of January, and I guess unfortunately for you, that's your quarter end. Just to be clear, those sales weren't lost. They were just pushed maybe from the third quarter into the fourth quarter. Is that right? That's right. I think, you know, I really don't like to even use the word hate, but I dislike talking about weather 'cause I know it's, it is what it is. This was so untimely and so severe for where we live and part of our consolidation to put all of our work into this location and then to have it closed for a week was just tough. We don't anticipate losing those sales. They don't all ship out the next day. You know, we're not giving a ton of guidance, I realize, but to say that we're expecting sequential growth, particularly in the Bedding segment, to me shows, Doug, that we're expecting that business to pull through. Yeah. I mean, it looks like Bedding, you know, even with that, is still flat through nine months, and I assume the market's down. Are you gaining share in Bedding? Just maybe give us a couple minutes on where you see your market position here today and where you wanna be when the markets do recover. Well, I mean, from a Culp mentality, it's never enough. We never can have enough. Yes, we do believe we're gaining market share with the right customers. Obviously, we've been through a lot of transition in our business over the last two years. Closing down our Canadian facility, resetting up our U.S. facility in a very strong way, and having really excellent supply partners in different parts of the world. We say it a lot, but to have a strong onshore platform backed up by a very good nearshore platform with Haiti and Dominican, and then having our Asia operations and Turkey as well, we just have a lot of ways to service a major customer. We think that large customers today wanna blend their sourcing. They don't want their eggs in one basket. They want ability to flex around tariff changes, and we offer that. With product design and innovation that we do with cut and sew starting to really be a pickup, we're now doing quilted mattress covers as well. We just have a lot of ways to serve large customers, and we think our platform and our product is driving that. You know, being flat in a down market is probably pretty good, but we're pretty bullish on what we could see with any kind of market push that market share might really show its stuff. We're encouraged about that, but also recognize that we're still in a tough situation, macro business-wise, and we have to be balanced in our platform. Okay, that's helpful. Thanks. Thank you, Doug. Next question comes from Michael Wasserman, Private Investor. Please go ahead. Good morning, Iv. Good morning, Mike. Good morning. I'm curious as to, given the challenging times we're in, whether the company has given any consideration of a sale-leaseback of its headquarters facility just to build cash. Mike, thank you for the question. We have definitely thought about that. As Ken talked about in his remarks, we're very aware of the value of that operation. Today, we thought about it, so the answer is yes, we thought about it. We haven't decided to do that because we believe that location is so integral to how we create value going forward, and we think we need to operate that without any encumbrance. Yes, we thought about it. Yes, it's an option. Mm-hmm. It's not something we're focusing on right now. Right. Okay, thank you. Thank you, Mike. The next question comes from Don Deischer with Pinnacle. Please go ahead. Hi. Good morning, Iv and Ken. Appreciate the color you've given so far. I just have one- Good morning, Don. Good morning. A minor question. The slide deck shows the headcount of about 900, and reading the 10-K at the end of last year was 830. It was up, I won't say significantly, but noticeably. Why is the headcount up given all the integration and restructuring and sales decline you've experienced over the last year or so? Yeah, good question, Don, and I could need to look at those numbers more refined. I think some of those numbers may not match timeline perfectly. The 10-K would have been Ken as of- It gets filed in mid-July. Yeah. Maybe the slide deck we have now. What's happening with that number, Don, is we're having significant increase of business in our Haiti/Dominican Republic location, where we're really striding with some large volumes of quilted mattress covers. There's some personnel adds in that location, but those are very low personnel costs in that region. That would be where increases are. I don't think you're picking up on a good point. We should not be expecting to see headcount growing. It should be going the other way, but I think that's fueled temporarily with some pickup of some business in Haiti. Yep. Do you think that's gonna decline then? The headcount? Yes, sir. Our headcounts will be trending the other way. Yes, sir. Okay. That's good to hear. Thank you very much. Thank you. 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, operator. Thank you again to everyone for your participation and your interest in Culp. We look forward to updating you 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.