Good morning and welcome to the Culp, Inc. Fourth Quarter Earnings Conference Call. Please note this event is being recorded. I’d 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 fourth quarter and fiscal 2022 year. 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 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. A slide presentation with supporting summary financial information 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, sir.

Good morning and thank you for joining us today. I'd like to welcome you to the Culp quarterly conference call with analysts and investors, and with me on the call today are Ken Bowling, our Chief Financial Officer, and Boyd Chumbley, our President of our Upholstery Fabrics business. I will begin the call with some opening comments, and Ken will then review the financial results for the quarter and the full year. I will then briefly update you on the strategic actions specific to each of our operating segments, and after that, Ken will review our first quarter fiscal 2023 business outlook, and we'll then be pleased to take any questions. As previously announced, our results for the fourth quarter were significantly challenged by the unexpected shutdown of our China facilities due to COVID related restrictions affecting both of our businesses and by further weakening in domestic mattress industry sales. However, our operating loss for the quarter was somewhat better than expected as our mattress fabric segment experienced slightly higher sales than previously anticipated during the last two weeks of the quarter. We were also able to return a small number of employees to our Culp China locations at the end of April and facilitate product shipments in a limited capacity. Importantly, we have maintained our strong customer relationships despite this disruption as we have balanced and diversified supply chains in both businesses. Much effort has gone into our delivery platforms, and we fully understand the importance of customer service in our competitive industry. We also ended the quarter with a higher cash position than expected, with $14.6 million in cash and investments and no outstanding borrowings. In addition, we are pleased to announce the closing of our new secured credit facility, which enhances the company's financial flexibility and is expected to provide us with sufficient liquidity to navigate the ongoing headwinds. Our fiscal year last year started off strong for both of our businesses with moderate pressure on profitability and supply chain disruption. However, as the year progressed, the rapid rise in inflation, changing consumer spending patterns, COVID related disruption and other geopolitical events materially affected the performance of our businesses. We took several pricing and cost reduction actions throughout the year to help mitigate these pressures, but with the ongoing volatility, we are now taking additional measures to align our business to meet current demand trends and diligently manage our liquidity. These measures include reducing inventory, limiting capital expenditures and other discretionary spending, eliminating underutilized equipment, reducing production schedules, and making other workforce adjustments as needed to match demands. We are also planning to announce additional pricing action during the first quarter. We are strategically taking these steps to adapt to the near-term challenges while ensuring that we remain well positioned to continue to meet the needs of our customers both now and when conditions normalize. In addition to these actions and considering the current and expected business environment, our Board of Directors has made the difficult decision to suspend the company's quarterly cash dividend. Although we are confident in our business strategy, the duration of the current challenges is unknown, and we believe that preserving capital is in the best interest of the company to support future growth opportunities and the long-term interest of our shareholders. We understand the importance of this decision for our shareholders, and we will continue to reassess our dividend policy each quarter. A key objective and a top priority is our emphasis on managing and stabilizing our solid cash position, and we will continue our emphasis on reducing inventories, limiting capital expenditures, and controlling overhead costs. Our intent is to always maintain our strong balance sheet. Our associates around the world continue to persevere, delivering innovative products, creative designs, and exceptional service for our customers. We are especially proud of the tremendous resilience of our China associates who have energetically returned to work following eight weeks of shutdowns and are diligently working to ship product and resume operations at normalized capacity. Although these shutdowns dramatically affected sales for our residential upholstery fabrics business and our mattress cover business during the fourth quarter of fiscal 2022 and to a lesser extent, the first month of fiscal 2023, this has notably been the first instance of any material COVID related disruption for our China operations since the pandemic began. Throughout the past few years, our Asia platform has been a reliable strength for our business, with our dedicated associates and stable supply chain partners demonstrating their capacity to meet demand. While we value the benefit provided through our Asia platform, we are focused on continuing to diversify our supply chain, and we are particularly pleased with developments in Haiti. This near-shore operation gives us excellent potential to improve our reactivity to demand shifts and service our customers better. Our Haiti platform is an excellent complement to our North American and Asian platforms, as we believe that an onshore, near-shore, and offshore balance in production will serve us well in the future. Looking ahead, we expect the prevailing macroeconomic pressures and retail softness will continue to affect our business through at least the first half of fiscal 2023. We believe our market position remains solid with new plan placements and product development opportunities that we expect to materialize as market conditions improve. As previously mentioned in our third quarter investor call, I touched on many points that we expect to be accretive to our revenue, specifically in mattress fabrics. We continue to see opportunity being generated from our innovation, design expertise, reorganized sales focus, brand management experiences, digital presentation tools, and our new innovation campus. In upholstery fabrics, we remain pleased with the growth of our LiveSmart portfolio of brands, as well as the steady return of fabric sales in our hospitality segment. Growth from these projected improvements is being stunted by weaker business conditions and delayed retail product rollouts. But we believe a core focus on product innovation will eventually be rewarded. We remain focused on generating cash, keeping our expenses in line with demand trends, and ensuring that we have adequate liquidity. Importantly, we remain optimistic about Culp's future. With all that, let me turn the call over to Ken, who will review the financial results for the quarter and the full year.

Thanks, Iv. As mentioned earlier on the call, we have posted slide presentations through our Investor Relations website that cover key performance measures. We've also posted our capital allocation strategy. Here are the financial highlights for the fourth quarter: Net sales were $56.9 million, down 28% compared with the prior year period. The company reported a loss from operations of $5.4 million compared with income from operations of $1.6 million for the prior year period. I'll comment in more detail on divisional sales and operating performance in a moment. Net loss for the fourth quarter was $6 million or $0.49 per diluted share compared with net income of $1.5 million or $0.12 per diluted share for the prior period. Our overall operating performance for the fourth quarter was significantly pressured by lower sales, operating inefficiencies at our US and Canadian locations due to the rapid and material decline in revenues, unfavorable foreign exchange rate fluctuations in China, and additional employee training costs and operating inefficiencies at our new Haiti upholstery cut and sewn facility, as it continues to scale capacity to its full planned output level. These pressures were partially offset by lower total SG&A expense for the quarter, due primarily to a lower incentive compensation expense. For the full fiscal year, net sales were $294.8 million, down 1.6% as compared to the previous year. Income from operations for the full fiscal year was $678,000 compared with income from operations of $12.1 million for the prior year. Net loss for the full fiscal year was $3.2 million or $0.26 per diluted share compared with net income of $3.2 million or $0.26 per diluted share for the prior year. Operating performance for the current year was affected by the factors I noted earlier in the fourth quarter, as well as higher freight, raw material, and labor costs. Other pressures affecting the year were start-up costs for the new Haiti upholstery cut and sewn facility, operating inefficiencies in our mattress fabric segment related to the product mix within the segment's global platform, and labor shortages in the US and Canada, among other factors. These pressures were partially offset by lower total SG&A expense for the year, due primarily to a lower incentive compensation expense. Adjusted EBITDA for this fiscal year was $8 million or 2.7% of sales compared with $18.5 million or 6.2% of net sales for the last fiscal year. Consolidated return on capital for this fiscal year was 0.7%. The effective income tax rate for the fourth quarter of this fiscal year was a negative 4.4% compared with 36.6% for the same period a year ago. The effective income tax rate for the full fiscal 2022 year was negative 888% compared with 70.7% for the prior year. Our effective income tax rates for the fourth quarter and for the full fiscal year were affected by the company's mix of income between the US and its foreign jurisdictions. We incurred significant pre-tax losses in the US operations during these periods, and as a result, the income tax expense we incurred stems from taxable income from our foreign jurisdictions that exceeded our consolidated taxable loss in the US. Additionally, the effective income tax rate for the fourth quarter this fiscal year was adversely affected by change in estimate adjustments that stem from our higher than expected actual pre-tax loss incurred by the US operations compared to estimates as of the end of the third quarter this fiscal year. Our income tax payments totalled $3.1 million for this fiscal year and we currently expect cash income tax payments of approximately $3.2 million for the fiscal 2023 year. Importantly, our estimated cash income tax payments for fiscal 2023 are management's current projections only and can be affected over the year by actual earnings from our foreign subsidiaries located in China, Canada versus annual projections, changes in the foreign exchange rates associated with our China operations, and other factors. Now let's take a look at our business segments. For the mattress fabric segment, sales for the fourth quarter were $29.9 million, down 30.6% compared to last year's fourth quarter. Sales for the quarter, which included pricing and surcharge actions that were in effect during the period, reflected industry weakness and domestic mattress sales with customers curtailing inventory purchases and delaying the timing of new product rollouts in response to slow retail demand. We believe this industry softness is primarily due to inflationary pressures affecting consumer spending, particularly for mattress products in the lower to mid-range price points. Sales were also affected by the COVID related shutdowns of our Culp China platform, which halted production and distribution of our sewn mattress covers produced in China. Operating loss for the quarter was $2.9 million compared with operating income of $2.3 million a year ago. Our operating performance for the fourth quarter this fiscal year was significantly pressured by the rapid and material decline in revenues for the quarter, causing operating inefficiencies at our US Canadian facilities. Results for the quarter were also affected by lower mattress cover sales due to the COVID related lockdowns in China. For the upholstery fabric segment, sales for the fourth quarter were $27.2 million, down 24.8% over the prior year. Sales for the upholstery fabric products were significantly impacted during the fourth quarter, primarily due to COVID related shutdowns of our facilities in China and, to a lesser extent, a slowdown in new business for the residential home furnishings industry. However, top line performance in our hospitality business continues to recover from pandemic related impacts during the quarter with higher sales in both our hospitality contract business and our windows products business compared to the fourth quarter of last fiscal year. Sales results for the fourth quarter were supplemented by the pricing and surcharge actions that were in effect during the period as compared to the prior year. Operating loss for the quarter was $116,000 compared with $2.6 million in income a year ago. Our operating performance for the fourth quarter of this fiscal year was primarily pressured by lower sales, as well as unfavorable foreign currency fluctuations in China and additional employee training costs and operating inefficiencies at our new Haiti cut and sewn facility as they continue to scale capacity to its full planned output level. The pricing and surcharge actions implemented throughout the year, including the full realization of the additional price increase that was in effect for new orders during the fourth quarter, helped offset the increased freight and raw material costs during this period. Now, turning to the balance sheet; we reported $14.6 million in total cash and investments and no outstanding debt as of the end of this fiscal year. This compares with $46.9 million in total cash and investments and no outstanding debt as of the end of the last fiscal year. Cash flow from operations and free cash flow were negative $17.4 million and negative $24.3 million respectively for this fiscal year. Our cash flow from operations and free cash flow during this fiscal year were affected by the following uses of cash: Higher inventory levels to help navigate supply chain disruption and support our valued customers. Importantly, approximately 30% of the increase in inventory was a result of higher raw material costs through the revaluation of our inventory, $5.7 million investment in capital expenditures, including expenditures for machinery, equipment and IT security and infrastructure investments, as well as expenditures related to our new innovation campus, $2.5 million in payments for the new building lease, start-up expenses and other costs associated with ramping up our new Haiti upholstery cut and sewn operation, and increased accounts payable payments related to our returns to normal credit terms, as opposed to the extended terms previously granted in response to the COVID-19 pandemic. Additionally, during this fiscal year, we paid $5.5 million in regular quarterly dividends and $1.8 million for share repurchases of our common stock. The company did not repurchase any shares during the fourth quarter of this fiscal year, leaving approximately $3.2 million available under our current share repurchase agreement. Despite the current share repurchase authorization, we do not expect to repurchase any shares during the first quarter of fiscal 2023. With that, I'll turn the call back over to Iv.

Thanks, Ken. I'll just give a few more comments about each division, beginning with the mattress fabric segment. Despite the headwinds in this business, Culp Home Fashions has maintained a continued focus on its product driven strategy with an emphasis on innovation, design creativity, quality, and personalized customer service. In response to the ongoing headwinds, management is taking decisive action to further reduce expenses and improve operating efficiencies, with targeted annual cost savings of approximately $2 million. We're also planning to announce additional pricing action during the first quarter that will be effective for the second quarter of fiscal 2023. Looking ahead, we are optimistic about planned new programs and product development opportunities for fiscal 2023, but industry weakness is expected to continue for some period of time, which may reduce demand for mattress fabrics and cover products and delay the timing of new product rollouts. We have an excellent supply chain platform within CHF with manufacturing and sourcing operations across six countries. Customer service and reactivity remain at our core, and we will be prepared to respond to changing demand scenarios and meet our customers where they want to be serviced. Now, I'll turn over to the upholstery fabrics segment. Despite the significant disruption in the residential business during the fourth quarter due to COVID-related shutdowns in China, we sustained our focus on innovation and creative design. We continued the ramp up in production at our new Haiti upholstery cut and sew facility during the quarter, and we also expanded our options for fabric development and sourcing, offering greater diversification and supply chain resiliency within our global platform. We are also pleased that the shutdowns have significantly curtailed our China operations throughout April and May have now been lifted, and we are currently operating at normal capacity. However, we note that lingering constraints from the shutdowns may continue during the first quarter of fiscal 2023. Looking ahead, we believe our upholstery fabrics business is well positioned for the long-term with its scalable global platform and its sustained focus on innovative product offerings, including our popular portfolio of LiveSmart performance products and a growing hospitality fabric business. However, we expect a slowdown in new retail business for the residential home furnishings industry may affect demand for the residential business for some period. Ken is now going to discuss the general outlook for the first quarter of fiscal 2023, and then we'll take any questions.

We continue to navigate a convergence of headwinds, including significant inflationary pressures that are affecting consumer spending, a challenging labor market, COVID-related disruption in China, and other geopolitical events. Although the company remains well positioned over the long-term with this product-driven strategy and flexible global platform, the current conditions are likely to continue pressuring results through at least the first half of fiscal 2023. Due to the continued volatility in the macro environment, we are providing only limited sequential financial guidance for the first quarter of fiscal 2023 at this time. We expect net sales for the first quarter of fiscal 2023 to be comparable to the fourth quarter of last fiscal year. While we still expect a material consolidated operating loss for the first quarter of fiscal 2023, we do expect a moderate improvement compared to the loss incurred during the fourth quarter of last fiscal year. We also expect our cash position as of the end of the first quarter of fiscal 2023 to be comparable to our cash position as of the end of last fiscal year. In conclusion, as we continue to weather the current challenges, we will be laser-focused on prudent financial management with the goal of always maintaining a strong balance sheet, especially with regard to ensuring a strategic balance in our working capital. With that, we'll take your questions.

Our first question today comes from Budd Bugatch of Water Tower. Please go ahead.

I guess, the question I have is really to assess the health of your customers and their inventory, current inventory and their financial capacity. I'm talking about the manufacturing customers, both in upholstery and in mattresses. Maybe you could give us some color to the extent that you can without talking about individual customers?

Budd, nice hearing from you. For sure, we don't want to talk any details about specific customers. But generally, I would say one of our strengths in our cash position or management for the last period of time has been really solid receivables. So we've been pleased with that. What we're facing probably on a customer level is that I think a lot of our customers are still working off high backlogs, have inventory in place that we have shipped them and are using that to fill orders they have, while they're also seeing some slowness in their market, which is maybe limiting what they're bringing in from us. So we have done a really nice job, as we've touched on in many previous calls, of delivering on demand. So even through the surge, we kind of kept up. We never built a really large backlog and we just kept shipping to our customers. And so now I think we are faced with some of our customers on both sides of the business that have inventories of our products and other things and they're finishing out their backlogs and not pulling new things from us at least currently. So as excited as we get about new product wins and all the things we talk about that's growing, we're getting new product to offset stuff that's not moving. We're not able to gain on the total quite yet. Boyd, do you want to add anything to the customer?

I would just echo what you said there, Iv, which is, a lot of our residential furniture manufacturing customers still have backlogs that they are working down. And while those backlogs have been coming down, I think a number of them are still in a position where they're in pretty good shape of having backlogs to still work through. That does vary within our customer base and there are some that backlogs have been brought down further than others. But I think it's just a general assessment of the industry that remains the picture of where it is today.

So two questions come to mind on that. Is there any difference between upholstery and mattress? And at the current rate of sales and their work down, how long will it take before their inventories are better balanced or reach normalcy?

Budd, I think there's maybe a little bit of a difference between upholstery and mattress customers for us. Generally, the mattress business, as you know, has always been more of a just-in-time delivery cycle. So maybe you carve out on the mattress side, bed-in-a-box or mattress-in-a-box type of customers. There probably is a lot of inventory in the system on products like that, but traditional mattress business probably does not have large backlogs, maybe just weaker conditions we're feeling. And then on the upholstery side, I think it's for sure, it's higher backlogs than most everyone has experienced. And Boyd, I don't know if you have an idea of a timeline? I'm sure it varies by customer.

I think we're still looking at several months out at minimum before we start to see more normalization there to pre-COVID type backlogs and lead times. So I think there's still some number of months of run out to go.

So Ken, to get to a comparable cash position at the end of Q1, if you're going to have a sizable operating loss, I guess that means that, a, you're not going to spend a whole lot of capital in advance of depreciation. But b, you're going to be working down some working capital as well. Where is the source of cash coming from? Is it primarily receivables, or will there be a significant inventory reduction at the end of Q1? And if so, could you quantify what your thoughts are?

Our main focus will be on inventory. We made good progress in Q4, with inventory down nearly 9% from Q3. We intend to continue this effort in Q1, while also balancing the opportunities that arise. We're expecting a significant contribution from inventory, and we will closely monitor capital expenditures, limiting spending unless absolutely necessary. Additionally, we will maintain careful management of accounts payable and focus on the performance of our accounts receivable. Overall, inventory will be a major focus for us moving forward.

And again, do you think it's a 9% reduction, or what's the kind of number that you get to at the end of Q1?

Budd, I can't provide a specific number. It will be significant, and we need to concentrate on that. To address the losses, we will definitely have to make a substantial contribution.

Budd, I'll just make a quick comment on the inventory, maybe specifically to the CHF side, and we have touched on this in previous calls. We still have a significant part of our inventory on that part is raw material. So that is a product that we're not worried about moving. It's the timeline of moving, and then we've got to generate volume to move it. So we see opportunities to reduce the inventory. And it is hard to pin down on a number we'll get to, but there will be significant focus on both moving fabrics that are in stock to the customers that have taken it and to opportunities for new customers as well as just getting the run schedules a little better so we can work down yarns that have already been purchased. So there's some tailwinds in there.

And did I hear you right? You have a $2 million cost savings program? And is that an annual number? And where do you see that, in which divisions and what kind of actions are you taking?

Most of those actions or generally all those actions have been taken on the mattress fabrics side of the business, and it's coming from several areas. I mean, it's labor cost reductions, both salaried and hourly. It's some right-sized product shifting for certain aspects of the business. Some of our segments may not be performing as others, so we're going to scale back production of those items. We're going to flex our global platform to make the products in the most advantageous cost spot. There are a lot of material improvements such as order quantities, just managing the efficiency of the business better, dropping some yarn SKUs, just being more efficient in the business in these current terms. It's mostly on the mattress side. And if we complement that with some announced pricing actions we're going to need to do and then maybe get a little volume relief on new products, that's where we see improvement being potentially there.

And the pricing actions, have they been announced? And can you quantify them?

No, we haven't announced those yet. We'll be announcing those in our quarter in Q1 to be effective for Q2.

Good luck on the balance of what's going to be a difficult period for all of us, I'm afraid.

Our next question comes from Anthony Lebiedzinski from Sidoti & Company. Please go ahead.

So first, I guess, just looking at the cost savings, just to follow-up on the previous question from Budd, as far as that $2 million savings program. As far as the timing of that, I mean, should we expect that kind of evenly throughout the year or like, Ken, maybe you can help me out as far as thinking about the timing of those expense savings?

Good question, Anthony. I think the way we would look at that is maybe the back end of Q1, but primarily, Q2, Q3, and Q4 is where that would spread.

And then as far as, I know some of the new product rollouts could be delayed because of just all the uncertainty that is out there. But that being said, I know that's a high focus for you guys as far as keeping an eye on innovating products. So can you share with us some of the examples that you hope to be able to rollout in fiscal '23? What are some of the exciting new things that you hope to bring to market in your segments?

Well, I think about it, if we look about two different parts of the business, let's start with maybe the upholstery side. And Boyd, I'll let you comment if I'm missing something here, and I'll let you fill in details. I'm thinking there's excitement there for our LiveSmart products. I think we continue to see strong potential in new placements with our sustainability products, LiveSmart Evolve. And I think we're pretty optimistic about the recovery of the hospitality business, specifically on the fabric side where those fabric applications can fit. I think there's opportunity in both those parts. Boyd, why don't you touch on it and I'll do mattress fabrics after you?

Yes, the strength in the LiveSmart umbrella of products that we offer, that certainly remains a core strength for us. And I'd say especially the Evolve, the sustainability product that we have introduced to the marketplace. And the reality of it is, while that has been available for a couple of markets, these are a couple of market seasons where there was not a lot of new introduction being done. So as we came out of the most recent April furniture market and certainly our most recent fabric showing season here in May, we have really seen renewed interest and additional receptance to these products. And again, especially the Evolve, LiveSmart Evolve is really gaining a lot of traction. We are hearing from a lot of people that there is going to be a need and is a need in the retail environment and in the market for new products. We're expecting much more significant introductions in that late in October. So we remain very optimistic for that entire category of our product offering.

And Anthony, I can provide some insights on the mattress segment. What excites me is that we've made substantial changes to our sales presentations, incorporating numerous digital technologies, enhancing brand experience management, and refining our customer service processes. As a result, we're observing projects being placed, including both fabrics and covers for national brands, with rollouts planned for this fiscal year. Boyd mentioned that retailers haven't introduced much new product following the surge of COVID. As business conditions start to become more challenging, we see a renewed enthusiasm for new products, with retailers eager to showcase them to attract customers. This is where our optimism lies, as we have secured better placement positions for upcoming launches, although we currently cannot control the timing of their physical introduction. This context hopefully clarifies our observations and explains the difficulty in estimating timelines, while also highlighting our positive outlook for the future.

So it sounds like that because of these initiatives as far as new product innovation, that should help you to come out faster in that recovery once we're past this tough period here. And just a follow-up also on the sustainable product focus for LiveSmart Evolve. Generally, is that a higher margin type of product for you guys versus others?

Anthony, typically, the performance category does have somewhat higher margins. So yes, as that category continues to grow for us, that should have some impact there.

Remember, Boyd is able to do that two ways. When he talks about performance, we think about that, Anthony, it's a sustainability product along with having a lot of performance features and cleanability. So it really is an excellent product that is demanded. Now we can offer it multiple ways. It doesn't have to have both, but a performance and sustainability product is a pretty special offering we have.

Can you provide an update on the hospitality business and its overall impact? I know you've mentioned a recovery in revenue for that sector. It would be helpful to understand how it compares now to a year ago and two years ago, even if you can't provide specific numbers.

Anthony, this is Boyd, and I'm happy to address that. As we've mentioned before, in 2021, the hospitality sector usually follows the trends of the residential market. During the stay-at-home period of COVID, we definitely noticed a rise in order demand from residential, more so than from hospitality initially. Now, we've seen a shift where hospitality growth is returning as travel resumes. While we typically don't disclose specific percentages of our business, I can provide some perspective. In fiscal year 2021, our hospitality business represented a significantly smaller portion of our overall business. By fiscal year 2022, it rebounded, though it hasn't quite reached the levels we enjoyed before COVID; however, it's getting close. As we progress through this fiscal year, we're experiencing ongoing strength in that segment. Therefore, I expect we will see a return to the percentage of overall business that we had prior to COVID.

That's very helpful color. And then I know you guys are very focused on managing your CapEx. I may have missed this, but Ken, did you give a number for CapEx for the year that you expect? Or I just wanted to follow up with that?

No, Anthony, we did not. Right now, we're closely examining every single expenditure and managing that carefully. It will definitely be limited as we navigate this period, but we have not provided a total at this point.

Our next question comes from Budd Bugatch of Water Tower. Please go ahead.

Sorry for the follow-up. There was a notable bankruptcy in the mattress side of the business. I just wanted to make sure if the receivables have been appropriately reserved for that, or if that will be an issue we need to address going forward?

Budd, good question, and that's something we just learned about on Saturday morning. So we're still kind of gathering our data around it. That customer has been a good customer for us, and we certainly are going to support the restructure. I'm pleased to tell you there's really no impact to us for Q4, and we're just now managing the impact to our business and the opportunity we see. But for now, with more to learn, we feel pretty good and feel like that's not going to be a major impact to Culp.

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

Thank you so much, operator. And again, thank you all for your participation and your interest in Culp. Have a happy 4th of July holiday, and we look forward to updating you on our progress next quarter.

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