Culp, Inc.

Good day and welcome to the CULP, Inc. Second 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 the question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Drew Anderson. Please go ahead.

Good morning, and welcome to the CULP conference call to review the company's results for the second 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 measurements is included in the tables to the press release, included as an exhibit to the company's Form 8K filed yesterday and posted on the company's website at colp.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 Yves Colp, President and Chief Executive Officer of Call. Please go ahead.

Thank you, Drew. Good morning and thank you to everyone for joining us today. With me on the call is Ken Bowling, our Chief Financial Officer. Before I begin my remarks, I do want to briefly pause and wish one of our longest and most loyal investors, John Baum, a happy birthday. John, we appreciate you and wish you all the best. I will now begin the call with some detailed comments. And as mentioned in the introduction, we have posted a slide presentation to our website that provides some information that is supplemental to what we will speak about today and to our results and strategies. That slide presentation is simply entitled Culp Incorporated Second Quarter Fiscal Year 26 Supplemental Information. Ken will then review the financial results for the quarter, and after that I'll briefly review our business outlook for the remainder of fiscal 26, and we will take some questions. At a headline level, our results for the second quarter were similar to our first quarter in the sense that we continued our push to improve our operating performance and make significant progress throughout our business in the face of challenging macro conditions. It's well documented and likely familiar to all of you that the home furnishings industry has been abysmal from an actual unit sold perspective. The tide generally remains out for housing and related furniture purchases, and we are improving our business gradually and in spite of these conditions. While we are seeing some encouraging signs of demand stabilization and sales growth in our bedding business, We have still yet to see the broad market recovery across some furnishings that many in the industry think could soon be pending. The macroeconomic data remains stubbornly low, with consumer confidence down based on a variety of factors and the housing market working through challenges, including some of the highest levels of unsold homes in years, as well as higher interest rates. There is acute pressure on housing affordability which continues to put downward pressure on unit sales across the entire industry. We illustrate some of these dynamics and impacts on pages 12 through 18 of our supplemental deck, which again is posted on our website. In the face of a difficult top-line environment, we continue to focus on two overarching strategies at Culp. Winning market share and adjusting our cost structure to both achieve profitability in the current market cycle and position CULP to accelerate growth when conditions ultimately improve without the need for additional investment. That last point is one I'd like to re-emphasize because with the adjustments we've made to optimize our platform that we'll talk about in detail today, we have the capacity to absorb additional production driven by any uptick in demand without the need to spend significant capital dollars. Our team has been aggressive, and we have made great progress on both of these key strategies. With respect to market share, we believe that our ability to sequentially increase our overall sales in the second quarter, despite having one less week than the first quarter, and to increase sales in our betting segment both sequentially and year-over-year in this demand environment are a testament to our growing share with key customers. Our stylish and innovative products, along with our global platform for bedding and upholstery fabrics, continue to provide a unique and increasingly valuable proposition for customers. Moreover, we believe that the consolidation activity we are seeing downstream, especially in the bedding market, bolsters our competitive position with key customers. Our experience has been that larger customers generally gravitate to the reliability of suppliers with compliant multi-location manufacturing flexibility, scale-driven cost advantages, and above all, the proven track record of product innovation and on-time performance that we offer. The supply chain complexities presented by the new global trade and tariff landscape actually provide us with additional competitive advantages, particularly as the pace of new tariff implementation settles and we have more time to react with product strategies and pricing adjustments. Recent evidence of this are the surcharges and cost adjustments we will be implementing in response to the most recent round of increased, and in some cases, unexpected tariffs on Turkey, Haiti, and other imports during the second quarter. As we've said before, the winners in a fluid trade environment are very likely to be companies that can give customers multiple geographic manufacturing options to better navigate tariff impacts. Unlike some of our competitors, we've been very intentional over the years in building out a multi-location strategy with robust domestic manufacturing, as well as near shore and multiple offshore operations. A map of our manufacturing and sourcing locations is included on page 19 of the supplemental slide deck. Today, for mattress fabric products, we have our expanded U.S. platform for production, finishing, and distribution. as well as longtime supply partners in Turkey and Asia. For cut-and-sewn mattress cover products, we have our nearshore production in Haiti, which is situated directly on the border of the Dominican Republic, as well as Asia supply chains in both Vietnam and China. In upholstery, we have a well-established Asia presence with solid and growing Vietnam supply options for both fabrics and sewn kits. And we also continue assessing various options in other parts of the world. Notably, only approximately 30% of our China-produced fabric ship in the U.S., so we have some protection currently from fluctuating tariffs in that scenario. For window treatments, we have our U.S. platform for drapery and roller shades, as well as several strategic supply partners. Bottom line, there is no slam-dunk strategy for handling the current tariff environment. but we believe our global production footprint, improving ability to pivot our platform as necessary, provide customers with country of origin and speed to market optionality that is unique, and we can provide them preferred delivery and customer service wherever they want to be supplied. We feel strongly that tariffs can ultimately be turned into an advantage for Colt, but the pace of legislative change creates a lag before we can compensate with pricing and or product strategy. Turning to our operating performance for the quarter, I'd like to take a moment to review everything our team has done to drive the improvement we've seen in recent periods. There has been a truly formidable amount of work done on our platform, beginning with the restructuring project completed last fiscal year. That project was quite comprehensive and involved the consolidation of our North American Betty operations, including the closure and sale of our Canada facility, expansion of knitting and finish capacity to our U.S. facility, transition of our dam-less glides to a sourcing model, consolidation of our Haiti cut-and-throw operations, and the production of our bedding workforce by almost 35%. We also rationalized our upholstery finishing operation in China and significantly reduced our overall administrative SG&A expenses as part of the project. A summary of those actions is detailed on page 8 of the supplemental deck. We continue to expect approximately $11 million in annualized cost savings and efficiency gains from this project, and we've already seen those gains begin to reflect in our financial performance over the prior several quarters. The actions in our betting platform have been particularly impactful, with gross profitability in that business almost tripling year over year in the first half of fiscal 2026 and driving over 20% improvement in our consolidated operating results for the quarter. We followed up that restructuring project with an initiative to integrate our two former standalone divisions, Mattress and Upholstery, or what we used to call CHF and CUF, into a unified CULP-branded business. The substantive actions of this reorganization are detailed on page 10 of the supplemental tag. As part of this integration, which we are calling Project Blaze, We transitioned our division presidents into company-wide chief commercial officer and chief operating officer roles, and blended other operations, resources, and personnel. We are also in the final stages of transitioning our US upholstery distribution and window treatment operations from leased facilities into our owned campus in Stokestown, North Carolina. Both of these consolidations are on track to begin positively impacting our results in late Q3, and the remainder of the second half of fiscal 26. And together with other integration initiatives are expected to generate annualized cost savings and efficiency gains of approximately $3.5 million. We also recently implemented price adjustments intended to address baseline tariff uncertainty and rationalize gross margins. We expect these adjustments to generate approximately $2.5 million in annualized margin improvement in our betting segment and that began in late second quarter. And as I previously mentioned, we are initiating additional surcharges and other product strategies in response to new tariffs during the quarter that will be effective in late Q3 and all of Q4. Importantly, we are not done with our work to enhance our operating profile and generate profitability across market cycles, including the current one. We are moving forward with additional measures involving the reduction of our lease facility footprint in China that should be completed this fiscal year, and we are identifying further SG&A and other cost reductions. Commensurate with our warehouse consolidation, we have also worked to right-size and effectively manage inventory, recognizing some non-cash impairments and related charges in Q2, while focusing on turning aged inventory into cash and filling our warehouse with strategic inventory that our customers prefer. As we eventually move into Q4 and then to fiscal year 27, we will have a much cleaner and strategic inventory and distribution platform in North Carolina to better service our markets and customers. From an all-in perspective, starting with our restructuring project in fiscal 25 and continuing through the completion of these other initiatives I mentioned, we expect to enter fiscal 27 with a benefit of over $20 million in annualized cost savings and enhancements going forward. The overall summary of this is on page 11 of the supplemental deck. I am extremely proud of how our team has embraced the challenge and entry conditions and seized the opportunity to transform our business into a leaner and more agile organization. Turning to our betting business specifically, summarized on page 5 of the supplemental deck, the sales momentum we have recently seen in that business Again, including both sequential and year-over-year growth during the quarter is highly encouraging. A lot of this activity was generated by some nice trends in our knit fabric and sewn cover product lines, which are areas we believe we have a lot of white space to drive profitable growth with our restructured bedding platform. We feel good about our current product offerings in this business and believe that our go-to-market strategies are on point. Also, as I mentioned, we are seeing some indications that the betting market is stabilizing and there continues to be more industry commentary indicating that the betting market is due for an increase in unit activity driven by historical product replacement cycles. The industry consensus view supports that we're now over four years into a period of demand down cycle. We included in our presentations on pages 16 through 18 some excerpts from recent research published by UBS indicating that the current market downturn has now extended beyond the typical duration of prior downturns, and there is a significant amount of pent-up demand relative to historic trends as a result. We generally agree with that view and believe that the industry is due for an increase in unit activity, although the timing of that is, of course, the critical question that no one knows for certain. Turning to our upholstery business, summarized on page 6 of the supplemental deck, Market conditions there are comparably more unsettled and pressuring sales, which had a notable impact on our expected consolidated gross profit dollars during the quarter. The current weakness in consumer sentiment and housing is still heavily dampening buying activity, particularly among the lower and middle income segments that the prevailing portion of our residential fabric customers typically target. Despite the difficult environment, we were pleased to be able to maintain relatively stable sales within our U.S. residential fabric customer base during the quarter, while our residential sales to customers in China and other foreign countries declined due to what appear to be more challenged revenue conditions in those markets. The macroeconomic uncertainties also impacted our hospitality and commercial upholstery business with many hotel, office, and other public space projects temporarily delayed in recent periods. However, that business remains an important part of our upholstery strategy, and we continue to believe it should drive solid long-term growth over time. Despite the challenging top-line environment for home furnishings, we continue to maintain a strong competitive position and believe that the foundation is there to grow upholstery over the long term. We have market-leading innovation and design capabilities, along with a flexible platform And we continue to gain new opportunities by segmenting our product and sales strategies to focus on mid to upper price point furniture, as well as the value segment. Our product lines have continued to generate positive reactions at industry events and shows, including the recent furniture market and the interweb and fabric show, both in High Point, which will ultimately lead to winning placements with customers. Furthermore, with the uncertainty around tariffs, we are able to offer customers multiple options via our extensive Asia operations, including Vietnam, while also having the flexibility to consider options in other regions to enable a preferred response. We are encouraged that we were able to maintain solid gross margins on our poultry business during the second quarter, despite lower than expected sales. Nonetheless, we are heavily focused on integrating that business with our bedding business and generating operating improvements. Our upholstery business is already relatively asset-light and less capital-intensive compared to our bedding business and its vertical manufacturing platform, and it's been consistently profitable. The consolidations of our U.S. upholstery distribution and window treatment manufacturing into a shared management model, along with the reduction of our facility footprint in Chata, should enhance further our upholstery profitability in the near term. and position it to accelerate when top line conditions cycle favorably. In closing, I want to emphasize that we are now in the final inning, so to speak, of a comprehensive multi-phase transformation of our business. We will finish the fiscal year with a rationalized and fully optimized global platform for both bedding and upholstery products that we believe will create a significant long-term value for shareholders. Our key investment highlights are included on page 21 of our supplemental slide deck. To be clear, we are committed to alter strategies and make changes within our business to adjust to market demand. Our highest priorities in the near term remain returning Culp to overall profitability in the current cycle and effectively managing our debt levels, and I can assure you that we will not take our eye off of those goals. 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 our outlook for the remainder of fiscal 26. Thanks, Yves.

Here are the financial highlights for the second quarter. Consolidated net sales for the second quarter were $53.2 million, a sequential improvement from the first quarter sales of $50.7 million, which included an extra week, and a decline from prior year period sales of $55.7 million. The year-over-year decline was driven primarily by the continued industry-wide softness and the tariff-related uncertainty that he had discussed. Consolidated gross profit for the quarter was 5.8 million or 10.9 percent of sales compared to the prior year period gross profit of 6 million or 10.8 percent of sales. Excluding restructuring-related expenses, adjusted consolidated gross profit for the quarter was 6.7 million or 12.6 percent of sales compared to the prior year period adjusted gross profit of $6.8 million or 12.1% of sales. This gross profit improvement was driven primarily by cost and efficiency gains from the restructuring of our betting segment completed last year. SG&A expense for the quarter was $8.7 million, an approximate 7% improvement compared with SG&A expense for the prior year period, reflecting cost savings from our restructuring initiatives. Loss from operations was $3.5 million for the quarter compared to the prior year period loss of operations of $5.4 million. Excluding restructuring and related expenses, adjusted operating loss for the quarter was $2 million compared to the prior year period adjusted operating loss of $2.6 million. EBITDA adjusted for the impacts of restructuring related expenses, stock-based compensation, and other non-cast charges was a negative $1 million for the second quarter and improvement on lower sales compared to the negative 1.1 million in the prior year period. Our year-over-year operating performance improvement for the second quarter benefited primarily from continued momentum in our betting segment, driven by the positive impacts of last year's restructuring. Operating performance also benefited from the continued profitability in the upholstery fabric segment, despite the low-revenue industry environment and tariff-related challenges it spoke to. The effective income tax rate for the second quarter was a negative 5.1%, compared to 0.9% for the same period a year ago, and continues to be impacted by the company's mix of earnings between our U.S. and foreign subsidiaries. Our income tax payments totaled $1.7 million for the first six months of this fiscal year. Importantly, as of the end of last fiscal year, we had $88.1 million in U.S. federal net operating loss carry forwards with related future income tax benefits of $18.5 million. Before we take a look at our operating segments, once again, please note that following the integration of our two former divisions, we now refer to our CHF mattress fabrics business as our bedding segment and our CUF upholstery fabrics business as our upholstery segment. Moreover, As part of that integration, we now manage and assess S&A expenses on a consolidated basis. As a result, we no longer report operating performance at the segment level, just down to the gross profit level. For the betting segment, sales for the second quarter were $30.8 million, up approximately 10% sequentially from the first quarter and up over 2% compared to the prior year period. As Em spoke to, sales continued to be pressured by low industry demand and challenges from consumer spending and housing market trends, but we were able to continue our trend of winning share in key targeted areas. The restructured cost platform in our betting segment drove a gross profit of $3.1 million, or 10.1% of sales, a 200 basis point improvement from the prior year period. We were pleased to see the profitability momentum in this segment continue during the quarter. For the upholstery fabric segment, sales for the second quarter were $22.4 million, sequentially flat with the first quarter and down approximately 12% compared to the prior year period. This year-over-year decline stemmed from continuous softness in the home furnishings market and corresponding weakness in the residential upholstery channel, as well as additional pressure on demand from tariffs. Gross profit in the upholstery segment was 3.6 million or 16.1% of sales, down from 4.3 million or 16.9% of sales in the prior year period, and driven largely by lower comparable sales. Now I'll turn to the balance sheet. We reported 10.7 million total cash and 18.3 million in outstanding debt as of the end of the second quarter, with a net debt position of 7.6 million as compared to a net debt position of 7.1 million at the end of the first quarter. The outstanding debt was primarily incurred to fund worldwide working capital and restructuring activities, but also includes approximately 3 million incurred voluntarily to take advantage of borrowing opportunities at current preferred rates in China. We continue to believe this decision was prudent given today's challenging economic environment and uncertain trade relations. Further, we were able to invest these proceeds into a high yield savings account in China at a rate materially higher than the interest rate paid on the debt. This strategy more than covers our interest costs for the debt, while at the same time giving us significant flexibility in managing our worldwide cash position. Cash flow from operations was a negative 1.2 million for the first six months of this fiscal year, and primarily driven by operating losses, which compares favorably to negative $2.6 million in the prior year period. Adjusted for capital expenditures, proceeds from sale of PP&E and other items, pre-cash flow was just about break-even at $10,000 and down favorably from a negative $3.4 million in the prior year period. Generating free cash flow and reducing our debt continue to be among our highest priorities. Capital expenditures were only $218,000 for the year-to-date period, down from $1.6 million in the prior year period with lower spending driven by strategic efforts to closely manage capital and focus on maintenance projects and initiatives with a quick payback. We expect capital spending for fiscal 2026 to be lower than fiscal 2025 levels as we continue to spend only as necessary. Our liquidity as of the end of the second quarter was approximately $28.1 million and consisted of $10.7 million in cash and 17.4 million in borrowing availability under our domestic credit facility. As a reminder of liquidity purposes, the net book value for our owned manufacturing campus in North Carolina as of the end of the quarter was around $12 million and has an estimated market value of 40 to 45 million. Our liquidity highlights are briefly summarized on page seven of the supplemental deck. With that, I'll turn the call back over to Yves to discuss the general outlook for the third quarter, and then we will take your questions.

Thank you, Ken. Due to the market and macroeconomic uncertainty and the fluid tariff landscape we've talked about today, we are only providing limited forward guidance at this time. Despite what we anticipate to remain a challenging demand environment for home furnishings in the near term, the pressure sales in both of our businesses, we currently expect steady consolidated sales performance in the third quarter and throughout the remainder of fiscal 26, with higher expectations for the betting segment. Moreover, we expect the cost and efficiency benefits flowing from the transformation of our betting and upholstery platforms, along with recent pricing action, to drive improving gross profit and lower SG&A, resulting in continued significant improvement in operating loss and near breakeven to positive adjusted EBITDA for the third quarter. As Ken spoke to, while we intend to continue utilizing borrowings that's necessary under our credit facilities during fiscal 26 to fund working capital needs as well as integration and efficiency initiatives, we will continue to aggressively manage liquidity and capital expenditures to prioritize free cash flow. On that point, we are owed approximately $4.7 million in cash in the fourth quarter on the sale of our Canada facility, And we anticipate that those funds may be received earlier, perhaps in the third quarter.

Thank you again for your time listening today. And we'll now take some questions.

We will now begin the question and answer session. To ask a question, you may press star then 1 on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw the question, please press star then 2. At this time, we will pause momentarily to assemble our roster.

Our first question comes from Doug Lane with Water Tower Research. Please go ahead. Again, that's Doug Lane with Water Tower Research.

Operator, I'm wondering if he's dialing in on the other line.

I'm sorry.

Can you hear me now? Yes, sir. We got you, Doug. There you go. Good morning. Sorry about that. Yeah, I was encouraged to see the free cash flow break even and the cash use from operations being cut in half. So all the work you're doing is starting to come through, and I'm just trying to get a feel for where we are in the realization of all these cost savings. I know in the implementation, Viv, you said you're in the late innings, but of that $20 million on slide 11, about how much of that do you think is already being realized in the P&L and how much is still to come?

Yeah, Doug, thank you for that question. It's a lot. I've tried to regurgitate all the stuff we've done over the last couple fiscal years, and it's really, when you think about it and write it down and script it the way we have, it's a considerable amount of effort. So it's coming in at different phases. We had, obviously the big work we did with our Canada facility is really helping us this year. That's in. The additional savings that we did and the price adjustments to deal with baseline tariffs, that all started to impact us maybe in late Q2. And then the new things we've announced or the plans with consolidating warehouses and moving our reed window production and further adjustments are really a late Q3 impact. So by the time we get to Q4, we would expect to have the majority of everything done And we would have as clean of pictures we could have from a call standpoint. Now, unfortunately, what that's doing is just we're continuing to re-optimize the platform to deal with very challenged conditions. So we're not banking on any kind of improvement. We hope and have feelings that it could start to come, but we're just doing all we can do to restructure the platform so that Q4 quarter is a clean quarter and we're all gears turn towards being profitable in this cycle. And then when the business turns, we don't have to have capacity to really start showing more fruitful results on top of that. So I hope that helps.

No, that does help. It sounds like heading into fiscal 27, you'll have a pretty clean run rate here, and then it's just a question of the benefit of the next up cycle whenever that happens. It's going to happen, we just don't know when.

Yeah, and I guess I would say 100% yes. Fiscal 27 will be a very clean position heading into the market. What we don't know is if it continues to lag or for some reason it were to get worse. We don't believe that's the case, but if it did, we'd take more action. I just think I want investors to be clear that we are positioning ourselves to do whatever it takes to adjust to the demand cycle. And I'm Unfortunately, we've had things that have been lagging more than we expected, so we make more changes. But optimistically, we're clean in 27 and maybe even in fourth quarter and hope to see some demand that's moving the right way, at least a little bit.

Is there any way, have you done any math on what the incremental margin would be on the next point of sales growth? So as sales start to move up, what would be the contribution margin from that incremental point of sales?

Yeah, Doug, this is Ken. And we've said this before. I mean, we've got so much buildup leverage in our ability to capitalize on any increase in sales. And as Ev said, I mean, we've got all the cost reductions to be implemented in the fourth quarter. And so, you know, we're going to be able to gain a lot of those sales dollars as far as the contribution margin is concerned. I mean, we're We're set on SG&A. We've got fixed costs in place. So we're going to be able to keep a significant amount of those incremental dollars as we grow the business based on the platform we have today.

Got it. That makes sense. And I know you mentioned new tariffs in Turkey and Haiti. Can you give us a feel for when were those implemented and when do you think you'll be able to benefit from whatever mitigation efforts you put in place for them?

Certainly. I think I've tried so hard to have Doug, you and other investors understand tariffs have been a real pit to the business. It's been so disruptive the way they've come in. Optimistically, we feel like we can handle it. We've gotten better at this. And we believe, because of our platform, it's actually an advantage. So it's like any kind of, you know, when you think about strengths and weaknesses, they can sometimes be both. And I think tariffs have been a challenge on the industry and are impacting sales. But I do think, for us, they can become a strength because we have ways to navigate it. So to answer your question directly, What happened in Turkey and Haiti, we had a baseline of tariffs, and then Turkey, for example, went from a 10% to a 15%. It just got changed on the reciprocal part of the ending of Liberation Day. So we had to deal with that extra 5% that wasn't planned. And that comes in immediately. We are built on that day one, and it can take us 60 days with a customer or with a strategy to adjust that. So that's a lag for us. Haiti... We had eight years of tariff-free treatment from regulation in Haiti. And all of a sudden, because of government, I'll call it dysfunction or delay, there's been a lag on renewing that agreement. We think it will get renewed. But in the short term, we've gone from zero tariff to 15% overnight. So we have to adjust that. And we will adjust it and believe it's we can easily adjust it, but not as quick as the pain. So that's why it's at least a 60-day lag for us with the change in tariff to then change the strategy or pass that price. And that's what we've been working on really for the last, ever since the announcement of tariffs, we've been working on that. And we do feel close to the end, but it's knock on wood what tomorrow might bring.

And the tariff situation on a week-to-week basis, is it still somewhat volatile, or do you think it's settled a little bit?

I believe, and I want to believe, it's starting to settle. I think that we have seen a slight reduction in some Asian tariffs. So there are things that are starting to neutralize. And again, we've become very proficient. I don't wish we were proficient, but we've become very proficient on managing tariff change. And we have ways to mitigate it. So... Nothing, I'm not scared or worried about that. It's just the timing sometimes that it takes to get it fixed.

Well, clearly you've been working hard in a very difficult environment. So we'll stay tuned. Thanks, Ev.

Thank you, Doug. Appreciate the time.

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

Thank you, operator. And again, thank you to everyone for your participation and your interest in CULT. And we certainly look forward to updating our progress next quarter. Have a great day.

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