Please standby. Good day, ladies and gentlemen and welcome to the Culp's Third Quarter 2021 Earnings Conference Call. Today's call is being recorded. And at this time, for opening remarks and introduction, I'd like to turn the call over to Ms. Dru Anderson. Please go ahead.

Thank you. Good morning, and welcome to the Culp conference call to review the company's results for the third quarter of fiscal 2021. 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. 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 either 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 or in the slide presentation with supporting summary financial information, that is also available on the company's website as part of the webcast of today's call. I'll now turn the call over to Iv Culp, President and Chief Executive Officer. Please go ahead, sir.

Thank you and good morning. Thank you very much for joining us today. I would like to welcome you to the Culp quarterly conference call with analysts and investors. With me on the call today are Ken Bowling, our Chief Financial Officer; and Boyd Chumbley, our President of Upholstery Fabrics. I’ll begin the call with some opening comments. And Ken will then review the financial results for the quarter. I'll then update you on the strategic actions in each of our operating segments. And after that Ken will review our fourth quarter fiscal 2021 business outlook. And of course, we'll then be happy to take your questions. Okay. So we're energized by our financial performance for the third quarter of fiscal 2021. These results reflect strong growth in sales and operating performance compared to the prior-year period, as well as exceptional execution of our product-driven strategy and the continued resilience of our robust global platform. These results would not have been possible without the hard work and perseverance of our dedicated team of associates around the world, their determination and diligence, including strict adherence to safety protocols, to help minimize the spread of COVID-19 have enabled us to continue operating our business with minimal disruption, while also meeting the rapidly changing needs of our customers. We're tremendously grateful for their tireless efforts and unwavering commitment to operational excellence during this unprecedented time. We're encouraged by the performance of both our Mattress Fabrics and Upholstery Fabrics segments during the quarter. Our growth in both segments was driven by a combination of strong demand for our products, and the benefits of market share gains from product innovation. As consumers have remained focused on the home environment, our diversified manufacturing and sourcing capabilities, along with our service supply chain, have allowed us to…

Thanks, Iv. As mentioned earlier on the call, we have posted slide presentations to our Investor Relations website that cover key performance measures. We've also posted our capital allocation strategy. I also want to note that as a result of the sales of eLuxury during the fourth quarter of last year, the financial results for the Home Accessories segment are excluded from the reported financial performance of our continuing operations and presented as a discontinued operation in our consolidated financial statements. Here are the financial highlights for the third quarter. Net sales was $79.3 million, up 15.8% compared to the prior-year period. Both divisions had a strong sales performance for the quarter. Iv will go into more detail on divisional operation performance in a moment. On a pre-tax basis, the company reported income from continuing operations of $3.1 million, which included $1 million in other expense related mostly to foreign exchange rate fluctuations associated with our operations located in China, compared with pre-tax income from continuing operations of $2.7 million for the prior-year period, which included $282,000 in other expenses. Notably, the foreign exchange charges included in the other expense line item for both the third quarter and the first nine-months of this fiscal year are mostly non-cash and are mostly offset by income tax deductible foreign exchange losses associated with our China operations. The current quarter was affected by the unfavorable foreign exchange rate fluctuations I just mentioned, as well as higher SG&A expenses due primarily to increased incentive compensation costs, offset somewhat by lower T&E and marketing expenses mostly associated with the Upholstery Fabric segments. On a percent of sales basis, total SG&A came in at 12.4% compared to 12.9% for the same period a year-ago. Net income from continuing operations was $2.1 million or $0.17 per diluted…

Thank you, Ken. Let me start with the Mattress Fabrics business. We're very pleased by the strong growth and sales and operating performance for the Mattress Fabrics segment during the third quarter, which is historically our most challenging quarter due to seasonality within the Mattress industry and holiday shutdowns in certain of our locations. Our significant increase in sales 15% year-over-year compared to the prior-year period was driven by an ongoing consumer focus on the at-home experience. And we also benefited from market share gains across a diversified group of new and existing customers. The strength and flexibility of our global manufacturing and sourcing operations in the United States, Canada, Haiti, Asia and Turkey enabled us to support current demand and serve the needs of our Mattress Fabrics and cover customers. In addition, we believe the domestic mattress industry and in turn our business began to realize some benefits during the quarter from the preliminary anti-dumping duties imposed in October 2020 by the U.S. Department of Commerce on mattress imports from seven countries. We're cautiously optimistic that this tailwind will continue from the fourth quarter of fiscal 2021 and beyond. We remain especially pleased with the growth in our sewn mattress cover business and the ongoing consumer acceptance of the boxed bedding trend in both e-commerce and traditional retail outlets. We continue to work collaboratively with new and existing customers to develop fresh, innovative products, utilizing our fabric to cover expertise. We're also excited about our recent strategic investment to acquire the remaining 50% ownership interest in our sewn mattress cover joint venture in Haiti which was completed at the beginning of the fiscal 2021 fourth quarter. By gaining full ownership of the Haiti platform, we have increased our flexibility and enhanced our capacity to meet growing customer demand, while…

Although subject to uncertainties related to COVID-19 pandemic and potential disruption in our customer supply chains, we're encouraged by the execution of a product-driven strategy and continued strength and demand in our home furnishing products as well as opportunities for market share growth. We expect sales and operating income for the fourth quarter of this fiscal year to be dramatically improved compared to the prior-year period. The fourth quarter of last year was materially affected by global shutdowns related to the COVID-19 pandemic. We expect our net sales for the fourth quarter to be approximately 40% higher compared to the prior-year period with increase in Mattress Fabrics sales expected to be moderately higher than this percentage and the increase in Upholstery Fabrics business is expected to be moderately lower than this percentage. Notably, as Iv mentioned earlier, operating performance for the Upholstery Fabrics segment is being affected by the timing of holiday shutdowns for the Chinese New Year holiday, which fall entirely in the company's fourth quarter. Recognizing this impact, consolidated operating income is expected to be in the range of $1.2 million to $1.7 million for the fourth quarter. This compares to an $18 million operating loss from continuing operations for the fourth quarter of last fiscal year, which included $13.7 million in asset impairment charges. Excluding these charges, adjusted operating loss from continuing operations for the fourth quarter last fiscal year was $4.3 million. Based on current expectations, including the $4 million investment and additional knit machines for our Mattress Fabrics business that we mentioned on previous calls, capital expenditures for this fiscal year, together with the recently completed work for investment in our Haiti operations are now expected to be in the $9 million to $10 million range. Depreciation and amortization is expected to be approximately $10.5 million in this fiscal year. With that, we'll now take your questions.

Thank you. [Operator Instructions]. And we'll go first to Budd Bugatch of Water Tower Research.

Good morning, Ken. Good morning, Iv. Congratulations on good quarter and your navigation. Can you hear me, okay?

Yes, sir. Good morning, Budd.

Good morning, Budd.

Good morning. Congratulations to you and your team for navigating during this unusual pandemic time. You've done a terrific job. And of course, obviously, my first thought and I'm sure you're totally families and your team members should stay well and ultimately get vaccinated. And you've addressed a lot of this during your script and I just want you to go maybe for me, I'm getting questions on the seasonality difference this year versus last year and maybe the year before, which is maybe the more telling comparison between the third quarter and the fourth quarter is can you kind of put it in framing as to what's most important is the Chinese New Year, the most important thing in Upholstery, the most impacted, you've also got the issue was weather affecting the foamers in the middle part of the country, you've got anti-dumping that seems to actually have lowered the amount of imports so far. So there are a whole lot of dots that are going on and maybe you can connect them and put them in well within rank order for us?

Yes, thank you, Budd. That's good, very good questions. And I would first start and thank you for recognizing our people, our associates for just extraordinary efforts. And I mean, everyone's started so many times, just unprecedented times, we can't be more grateful for their efforts, resilience, tenacity. However, you want to say it, that our people have demonstrated during this period. We're very proud, very proud to be where we are and would not have been possible without everyone's efforts. So thanks for recognizing that that means a lot. Looking at the comparison to Q3 and Q4. First of all, both quarters are significantly better than last year. So whatever that's worth, we're very happy with that. And then you're picking up on a lot of really good points. It's not a fair or even an appropriate comparison to look at Q4 sequentially to Q3. And to your question of ranking those, and as we have mentioned in the script, the full effect of the Chinese New Year shutdown impacted Culp Upholstery Fabrics fully in the fourth quarter, nearly mainly in February, will impact the fourth quarter, mainly in February. In a case like this, we can lose three to four weeks of production and sales in one quarter. So we've seen this in previous years, it's not really abnormal, better for us when the Chinese New Year timing spreads over Q3 and Q4 with Upholstery hitting all in one quarter. Also, generally speaking, this is really an all Culp Upholstery Fabrics impact; with Culp Home Fashions are expected to be consistent sequentially. There are also some factors I would say today that that's the number one factor the Chinese New Year timing. But there also are some other things, freshness [ph] in Q4. Of course, we're watching the currency close and we'll deal with that, with our price adjustments. And now, raw material allocation primarily, [indiscernible] mentioned, it can mute our sales somewhat in Q4. We think we built some of that in but we have to be there if that's more significant than we might think. All that being said, our belief and expectation is for really solid Q4, and a strong start to fiscal year 2022. So we're excited about the business and excited about the market share growth.

Thank you for that. And this is just lastly it's pretty much a February event for Chinese New Year that's pretty much older. And we don't see any effectiveness for next year right now except when we get to the third and fourth quarter again, we have to figure out where Chinese New Year is, is that the way to look at it?

Yes, that's right. Yes, that's right, Budd. I mean, that's we are starting to see the mills, we don't take nearly as long as the Chinese New Year shutdown at some of our supplier and partner mills do. So they're all starting to come back on stream this week. So yes, that's pretty much a February event.

Okay. Your balance sheet is impressive. But at the end of the quarter with over $50 million of liquidity and no debt. Can you talk about the fact that you've taken it looks like about $6 million, $5 million to $6 million worth of CapEx that you're going to spend in the fourth quarter that's right to expect it, right?

Yes, Budd, CapEx and the investment in Haiti, yes.

Okay. And then you've got the [indiscernible] that will show up in a separate line, right that will show up in the acquisition line?

Pardon.

The Haiti acquisition will show up on a separate line and the cash flow separate?

Yes, we're working all that out. But yes, that will be handled. But I just wanted to make sure that everybody knew in addition to our CapEx, we have that that investment as well.

So and just can you peg where you think cash winds up at the end of the fourth quarter wearables, what do you think that will be at the end of the fiscal year?

Yes, but that's a great question. We don't guide that, but I will say obviously, based on our investments in the fourth quarter, we're going to use some of that cash that we ended the third quarter with. And that's what we've always strived for, to build our cash position, strong enough to be able to react to investments, either investments like this or opportunities, or anything down the road of acquisitions, whatever. So I think we will use some cash in the fourth quarter, but we'll still be in a strong position as we go into FY 2022. It's just, we've got these investments to get behind us. But we will be -- we feel very good about our prospects and where our cash position will be at year-end.

And for next year, do we need a similar amount of cash, capital expenditures? What -- what's your best guess today? I know you can change that and opportunities will happen. But is there any number that we can model in for CapEx for next year?

Yes, we -- what we do if there -- if it's considered kind of a normal, what we call maintenance CapEx here, which we feel is in the $5 million to $7 million range, that's what we would say, in a year where there is no either additional opportunities for more equipment or investment whatever. So I would say that in a normal maintenance mode, we would say $5 million to $7 million for CapEx.

So we're getting 15 knit machines, that's the big pump this year, right. And we don't -- we have more room for more knit machines next year if we need them?

Sure, Budd this is Iv. We do have space allocated, it’s easy for us to expand the capacity in several locations now whether we decide to do it, we'll be determined but I do think for all the things I've watched Ken worry about. Cash balance has not been one, he's been worried about. I know we're -- we feel up on a good position there and from what I hear, we feel great. You have the ability to do more strategic things, if we decide to do them, right. So we like our position. We think we've done a lot, we think we’re in great position but if opportunities present themselves, we'll be able to take advantage of them.

Am I right, Ken that we've seen a little bit of stretch out in terms of engaged sales of receivables?

Yes, we have. It's been some. Our DSOs or day sales outstanding, they are lower than they were obviously at the end of last year but they have -- have moved up a little bit from Q2 and that's mainly just due to our customers paying on net terms. I'll say that we’ve been very pleased with our customers paying. We've done very well with our customers paying as they agreed to pay. And of course that's going to reflect in our cash position. And we -- our credit team did the great job working with our customers and we've done very well there.

And that's been a real strength to our cash position is timely receipts.

That's correct. That's correct.

You've innovated really well over the last couple of years; LiveSmart was a really good innovation. I think you've extended that with a number of other programs are now on the cut and sew has really become a more important part of mattress. So is there anything else on tap that we can -- you can tell us, now I realize some of that may be competitive. But what's on tap now and what are you most excited about?

Yes, good question. Budd, that's, you hit on a couple really good ones and you're right throughout innovation and design are critical pieces and I believe we're flourishing in both businesses. You said in Upholstery, we're thrilled with the success of LiveSmart. We now have cleanable, sustainable, we have antimicrobial protection for the fabric and we have waterproof options. So that LiveSmart portfolio is really on trend with consumers demand for performance fabrics. On the Mattress side, we do also have some specialty finishes in development. And we're really excited about the sewn cover platform. That just gives us that helps us to innovate from fabric to cover. So we're not just stuck to the patterns anymore, and we get a greater content share of finished mattress. I guess new things we're excited about, there's definitely going to be a more technical story push for antimicrobial fabrics, and we believe a much stronger push and sustainability. We just know that's going to be a major focus of pandemic. I also think both businesses another way of thinking of innovation, we're really pleased with our digital and virtual presentation capability. And I think it's going to pay big dividends, helping to streamline and then learn from new business. I think it's worth saying I'm probably getting a little outside of your question here, but really excited about this diversity of our customer base. We have more solid, more diverse customer base than we've had in a while, in both services from high end to low end, from traditional to e-commerce, from import to domestic and of course from fabric to sewn cover or sewn upholstery. And then, just one more thing, we're optimistic about read window and hospitality businesses. As the world gets better, we know that that business has some room to recover. So all that comes I'm excited about a lot of things, but certainly very excited about our future.

Well, okay. I don't remember that much on your plate. You got a lot on your plate right now. Last for me, the easy questions. Tax and currency, you've given us a tax effect. You're not paying any cash taxes, in general, are you -- what's the cash impact of what you're paying? And how long does this currency thing, what do you think it's going to be in the fourth quarter, if rates stay where they are, what do you see for the fourth quarter?

Well, let me talk about cash taxes first. I mean, right now, obviously we're paying the cash taxes in Canada and China. We paid very little cash tax in the U.S. There's just a very small amount. And that's really for the foreseeable future, the way we're structured. As far as foreign exchange, we have seen a little bit of weakening in the RMB this past month. Not a lot, but it certainly is slowed down. So if that stays calm, or stable throughout the quarter, then the effects really around the world will be far less than they were in the first nine months. So we're hoping that's the case. So far, so good. We're one month into the quarter almost. And it's been pretty calm. But it all depends on where that rate moves for the next three months.

And it's all the currency RMB or is there the Canadian dollar and any Vietnamese currency impact or elsewhere?

No, Vietnamese right now, but yes, Canadian. We do have Canadian exposure, but not nearly as to the extent that we have the RMB exposure.

Okay. All right. Well, that does it for me. Thank you and good luck for the quarter and for the beginning of next year.

Thank you, Budd.

Thanks, Budd.

Our next question will come from Marco Rodriguez of Stonegate Capital Markets.

I was wondering if maybe you guys could explain this a little bit more time and for some more color around some of the -- I guess supply chain constraints that your customers are kind of seeing. I don't think you've mentioned that the foam delays, raw material inflations. Can you just maybe sort of rank out where you're seeing the biggest constraint and anything else you might be seeing and if at all possible, what you're kind of hearing in terms of when those constraints might be worked through, if you will?

Yes, thank you, Marco. This is Iv. I'll give you my feedback on this. We certainly are not experts on supply chain just out of our fabric. And we understand our fabric supply chains well, but there are some external things that impact our customers that are going on. And we're trying to learn every day and getting different opinions about that. Really throughout -- really if we go back a little bit throughout COVID-19, there has been a lift in the business for several quarters. And we haven't been perfect for sure. But generally, our supply platforms have been really stable and we have met most of the demand put in front of us. So we haven't seen nearly any shortage of material for our production. Yes, there are now some price, raw material price increases, we're hearing about coming on yarns, we're hedged on that so far, we're hearing on that coming on freight. And so that's why we're going to have to implement some price increases in both businesses in Q4. But what we're thinking about and what maybe you're hearing about more, is there has been over the quarter shortages for our customers, the different components they use to build furniture and mattresses. And I guess the most topical one now today is after, there is already a pressure on the supply chain because of the expanded need and demand. And then with the freeze to the power grid in Texas that has shutdown, a vast majority of chemical production that would feed into sewn, that gets causing some concern for supply over. What I think so relatively short-term. But whether it's two to three weeks, or four to six weeks, or six to eight weeks, I think it's still to be determined. So we're hearing customers with different level of allocation amounts. And, obviously, we were ready to ship some fabric. But if they can't get the other components to make the furniture of the mattress, then it slows us down. We think we have built into our Q4. I mean we've already estimated that to some degree. But we just have to watch that and see if an impact is more. But we do think it short-term, I don't think things going to extend, certainly not beyond Q4 in our opinion, but again, I'm not an expert on it, just it's a short-term impact, we got to watch.

Got it. And then you mentioned that you have or you're going to put through price increases, I'm assuming that's for obviously both segments, can you just kind of confirm has that price increase already gone through?

Those have been announced now or in the process or have been announced. So in our Upholstery business, the price increases will be on written orders, new written orders, not on orders that have already been received. And on the Mattress Fabrics side it will be on all distributable orders in a future date, business varies different that way but they're both being announced and will take effect in the fourth quarter.

Got it, understood. And then kind of shifting gears, in your prepared remarks, you mentioned market share gains and you listed out a few different reasons that that are kind of helping you guys attain those gains, if maybe you can rank them in regard to kind of where you're seeing the most success right now?

Okay. Yes, thank you, Marco, it’s a good question. And we'll try to put some color around why we see it. So I think first and this probably isn't the most important today, but it has been in over the last six months, you're winning market share, because of having strong stable supply chains, we're outperforming in delivering products and we have a great global model in both businesses. I say the higher rank thing now today, it's our innovation and design are flourishing. We're just seeing just nice patterns, and pretty colors but its performance at the top of our LiveSmart portfolio, and further development with some covers in both businesses. That's probably top of the list today. And then right under that is we just have a very broad range of customers now in both businesses, it's definitely more robust than the years past. That’s more actual customers, and it's more channels that our product has gone into. So we're seeing our process [indiscernible] place, whether it be new national line rollout for 2021 or if it's people rolling our products into areas where supply has been voided. And we just have great belief that our market share trend is going to continue by in Q4 and also in 2022.

Understood. And then you guys in the past have mentioned and you did as well on this call, but the end consumers really kind of focused on comforting their home. And that's sort of helping drive some of the level of demand that you guys have seen here recently. The backend is starting to kind of get rolled out here and then you'll possibly return to normalcy, sometime by maybe fall or winter later this year. How are you guys kind of thinking about how consumer demand might evolve?

Yes, it's also a good question, Marco. Certainly, you're totally right. And everyone in our space has talked about the lift we've had from just a strong impetus on home being a safe place, and wanting to update your home, if you're going to entertain more in your home, then we have definitely seen a trend of consumers wanting to update that. I think we look at it, our business is always kind of thinking about options for what's coming at us. And it's really good positivity for us as we think ahead, we have a strong backlog in our Upholstery business, which is great. We know we're winning market share, we see ourselves placing on new rollouts. If travel and leisure gets more popular, we're poised to capitalize on that with read window and hospitality. We have expectations; we assume more stimulus will be coming into the market. So that's going to provide, I think more opportunities for us to sell products and then just get on more diverse customer base and having more customers to sell to is a very, very positive trend. I think it's important for you to know market. We've been definitely been buoyed by the strong demand for home. But there's much more under the surface of that that's going to drive our business next year. It's much more fundamental, the fundamentals of the business are strong. So really whatever but who knows what's coming, right, who would have expected what we face and who knows what we'll face in the future, but we're excited about the prospects we have.

[Operator Instructions]. We'll now go to Anthony Lebiedzinski of Sidoti & Company.

Yes, good morning and thank you for taking the question. So first of all, just wanted to follow-up as far as the backlog is concerned, is there way that you can talk about the strength of that backlog, maybe perhaps quantify what you're seeing there with the backlog?

Yes, sure Anthony, I'm going to -- this is Iv and I'm going to pivot this to Boyd, but I’ll first tell you is our businesses are different in that way. On our Upholstery segments, Boyd will touch on; we do get written orders that generate the strong backlog. On our mattress side, we do more in a forecast model. And so we're building to a forecast that seems very strong. I'm going let Boyd talk specifically on the backlog [indiscernible] side of the Upholstery segment.

Yes, Anthony. The backlog position still remains today at significantly higher levels than at this point last year. We've really seen that remain somewhat consistent over these last couple of quarters with backlogs well above the prior-year levels. Incoming orders continue to outpace the same period last year as well. So we still see strength from both the standpoint of very good backlogs and the pace of orders coming in. So that that seems to stay very steady. I think it support us well for the coming quarters, so yes, that seems we're in very good position.

Got it, okay. Thank you for that. And then as far as the price increases that's where you're looking to put in place to offset higher costs. I mean, will those fully offset the higher costs or will there be some lag by the time you're able to capture the higher prices?

Yes, sir, Anthony well I think mostly so, yes, we were doing that with an expectation what we think is going to cover it generally in fall.

Yes, Anthony, this is Ken. We've looked at all the different components and each division is different. It's not a global type same. So each division has looked at their facts and circumstances and adjusted their prices accordingly.

Got it, thank you very much. And then Iv, you talked about being sad about the diversity of your customer base. Just wondering when you look at the decent results here, can you talk about the sales increases that you've captured? Just wanted to see if you can bifurcate this was from new customers versus existing customers. So if you can give us some -- more color about that?

Yes, I think a lot of that's driven, Anthony, from our growth in our Sewn Mattress Cover business. And so, for a long time, we've had a really good success of being a reliable, innovative fabric supplier. And we always sold to furniture manufacturers. And we've done that for a long time. Maybe typically in the bedding business first, as there's been more e-commerce brands that have started-up, these just our platform, the U.S., Haiti, Asia platform, combined with our ability to design fabric cover, and innovate is gaining us traction with a lot of the new upstart brands. So the fastest growing part of our business is mattress covers. But the reason that's hard to kind of bifurcate is because it also pulls through fabrics or really is a terrific model for our mattress business to be pulling through [indiscernible]. So certainly mattress covers are growing and becoming a significant part of the business, but it also is using fabric. So I may not be answering your question and we can even talk about lot more detail there. But on the Upholstery side, we know how to service big customers, because we just have a good supply chain. And we can serve as high demand. But we're now pushing into more broad categories from promotional to high-end, gain and share also with e-commerce furniture brand. So it just -- it feels like we have more channels in both businesses to push our fabric too and our covers too which is positive for both sides.

And the hospitality business is all different?

And of course, the hospitality business is a whole another lane to our Upholstery business, where normally we feel good about where that business can be sometime in the fiscal year 2022, we think travel and leisure will come back and will come back strong.

Got it, okay, thanks for that. And then last question for me. So I know you're stepping up your investments, as far as your CapEx and the Haiti joint venture, but longer-term looking into fiscal 2022 beyond, how do you prioritize your cash flow priorities?

Yes, Anthony this is Ken. I think we've done in the past. We actually post our capital allocation strategy right on the website to give investors a view of exactly what we're thinking. We're going to, our primary purpose; we're going to invest in our business to grow organically through working capital, through CapEx. And we also view the -- obviously staying debt free as much as long as we can. And then of course, keeping the regular dividend in place and growing at a consistent pace. So those are our highest priorities to capital allocation, that's really any year that we were looking at. So I would say that as we go into a New Year, that will be our focus, just like it was this year, we'd be focused next year.

And with that, we had no other questions,. I'd like to turn the call back to our presenters for any additional or closing comments.

Thank you, Operator. And again, thanks to everyone for your participation and your interest in Culp. We certainly look forward to updating you on our progress next quarter. Have a great day.

And with that, ladies and gentlemen, that does conclude today's call. We'd like to thank you again for your participation. You may now disconnect.