Culp, Inc. (CULP) Earnings Call Transcript & Summary

[Audio Gap] Everyone, and thank you for joining us. I'm Budd Bugatch, Head of the Consumer Research team at Water Tower Research. With us today, I have my associate, Darin Ostrowski, also a Senior Research Associate with Water Tower Research. And we're very glad today and very happy to be honoring and hosting Culp, Inc.'s webcast this afternoon, fireside chat with Culp. Several weeks ago, we did a fireside chat with Culp on -- with -- on their mattress fabrics innovation and talking with the mattress fabrics team. Today, we are taking the other side of Culp's business, the upholstery fabrics business. And with us today from Culp, we have Iv Culp, the President and CEO of Culp, who will introduce his other members of the team with him. And we'll start talking about the innovations in Culp upholstery fabric. So Iv, we'll give that to you. Just one quick housekeeping note beforehand. [Operator Instructions] You do realize that Culp made a prerelease of their upcoming fourth quarter because of the Chinese shutdown in Shanghai of COVID. So they gave as much information as they're able to talk about the financial results that we will see released in a few weeks on that release and probably can't talk about -- much more about the numbers on that -- in this website -- in this chat. But irrespective of that, it's going to be full of information on the innovation in upholstery fabrics. And again, Iv, without any further ado, let me turn it over to you.

Thank you, Budd. Really appreciate the opportunity to be with you today and to introduce to our investors some just amazing talent within Culp. And as you mentioned, back in March, we did a fireside chat focused on innovation in the mattress fabrics business. And today, we're going to focus on innovation and performance products in our upholstery division. And for me, it's really great to have a talented team join me. We have Boyd Chumbley, who is our Division President for Upholstery Fabrics; Tammy Buckner, who's our Senior Vice President of Design and Marketing for Upholstery Fabrics; and then Donna Morrison, who's our Vice President and Creative Director for CUF. So I'm going to turn this over to them quick. And of course, I will stay here and be engaged with questions as we go along. And as we conclude, of course, I'll be able to just take some questions as well. But I just think you're all going to be so impressed by the creativity and innovation we have underway in our Culp upholstery fabrics business. I think you'll be so impressed with what you see. So with that, let me turn it to Boyd Chumbley, and he'll take it and go through the presentation. Thanks for joining us.

Yes. And thank you, Iv. Our Culp upholstery fabrics team is very happy to share with you today the latest trends we see that influence consumer buying decisions and that really are the catalysts for our innovation and product development strategy and direction. We've been going through a period of time where our industry has experienced multiple back-to-back challenges on a macro level. But we can sense that the industry and our customers are eager and now positioning to move beyond the supply challenges and refocus on new, fresh and innovative product to attract and excite the consumer. And we feel that's certainly a positive for us. We do expect that there will be a more robust new product launch at the next major furniture markets coming up, more so than we've seen for the last several market seasons. We are really fortunate, as Iv mentioned, to have a very talented and experienced team in our upholstery fabrics division that leads our creative efforts. So now I'll turn it over to Tammy and Donna to present our updates on consumer and industry trends and the innovation and product directions resulting from those trends.

Thanks, Boyd. I'm going to walk you through a little bit of where we follow really closely where the consumers are getting their trend direction right now. With travel being still limited to some degree, social media has really come out as the star driver there in the trends and where consumers are really looking to find their new trends and new styles. One of the biggest there has been Pinterest, and that's something I know we use in our design group every day, I mean, everything from color direction, design direction, personal innovations, everything. So for 2021, Pinterest -- 8 out of 10 of their predictions came true. And each season, they release predictions. So it's pretty interesting. 8 of the 10 they released last year actually came true. 80% of the trends Pinterest predicted for 2021 continue to climb throughout the year, and Pinterest has about 400 million people using it each day. So it has a lot of people that are really paying attention to what's being posted on Pinterest. And Pinterest predicted 8 of 10 trends for 2 years in a row. So it really has a big influence out there. I wanted to walk you through a few of the trends that they're predicting for 2022. The first one is curve appeal, and this is really about the shapes of your furniture. Everything is really moving away from sharp edges, sharp corners to really organic, flowing circular shapes. From tables, sofas, chairs, everything has a curve to it. I really think of 360-degree views that it's not just the front of your piece of furniture in what you have to think about. It's the back and sides. So we're doing a lot of inside-out designs for fabric that -- one fabric is on outside, and another is to be plain for the inside. And that's really going along with what we're seeing consumers buy right now. The next is Barkitecture, and this is about pampering your pets. It really isn't going much further, though, than pet beds. You see the cat in the bed there. This is really with people working at home during COVID, their pets were in their laps. They were in their home office space. If they were working on a sofa, their pets were beside them. So they're really -- it's -- they're redesigning their homes and buying new furniture. They're really keeping that in mind that the furniture is pet friendly, that -- we mentioned catified in our description there. But pets, dogs, cats, anything that you have in your home, that your furniture, it's very friendly to them. Biophilic design is another one that Pinterest predicted for the year. And this is where you're seeing the house plants come into their home but also nature. It's really about making your space inside your home feel as a retreat and an escape. And it's everything from floral ceilings to artificial plants, live plants. It's all being integrated in this biophilic design trend. The last one in this group is lake it till you make it. And this is really -- again, people are traveling, but they're traveling different areas they used to travel. Second homes has been a big, big upsurge the last couple of years. And really, in the past, if people buy homes in the coast, well, those are at a premium now. And people are really looking to manage their time better. And so buy something near in the lake, and you can drive 30 minutes to your second home instead of 2 hours. And that's something we've really kept in mind as we're designing our novelty fabrics and different specialty fabrics, that it's not all coastal, that it's really more vacation and escape-oriented for their second homes.

The next social media platform that we're really seeing a huge interest in is called Houzz. This platform has 11 million pictures, and it really inspires homeowners for projects big and small. I mean, it could be as small as how to create a table scape or a new layout for your mantle or it's as big as totally revamping your home. And so there are 40 million people who use this every month, and 90% of those people are homeowners. And Houzz is predicting, they have 3 big trends that they're predicting. The first one is multiple window banks. And this is really allowing homeowners -- they're seeing people -- as Tammy mentioned with the biophilic design from Pinterest, people want the outdoors. They want to be able to see the outdoors. They want to let in natural light. So they see a lot of -- Houzz sees a lot of homeowners adding additional window to their home. And then the next trend that they're seeing is cozy outdoor areas. Again, with the pandemic, people were looking to make the most of their backyard spaces, the most of their decks and their patios and their balconies. So you're seeing all of this creation into kind of comfortable cozy spaces where people can spend time outdoors all year round. And then the last one is practical storage solutions. So again, people are tired of seeing all their clutter when they're working at home. They want kind of interesting ways to hide all that clutter. So there's huge interest in furniture and other appliances that have hidden storage areas where you can just kind of hide your junk.

The next one is one that's kind of surprising to some people where we mentioned TikTok as being one of the major predictors out there, and it's growing ridiculously fast right now. A lot of people say, "Oh, I don't use TikTok. My teenage daughter does or my college student." What they don't realize is if they're looking at a how-to video on how to finish a piece of furniture, if they're forwarding some kind of funny video, a cooking video, anything they're looking at on Instagram, maybe it's a showroom or a design walk-through of a home, they're using TikTok. So many of these videos are being made on TikTok and released on social media. They really are influencing how consumers are buying today. TikTok is predicting that they'll reach 755 million people monthly in 2022, and they saw almost a 60% growth in 2020 and then about 40.8% in 2021. Some of the predictions that TikTok has released you'll see here are -- sustainable is the first one. And this is something that we at Culp have seen growing over the last few years. And this is something that users are really getting on. And they're talking to each other about what's worth reducing, reusing, recycling, whether it's furniture that's been found at the thrift store or just any way to reduce your carbon footprint in nature. This is all moving towards sustainable. Botanical is the next one, and this really goes along with biophilic. Think about pairing your house plants with lots of soft textures, natural woods. Really, again, it's about bringing the outside in. So you're really seeing a lot of correlation of what they're predicting in some of these other trend influencers. The next one is grand millennial, and this is a combination of grandma and millennial. This is really -- think about collecting pieces. People are going to buy new homes. Maybe just straight out of college, they've inherited some hand-me-downs. And they're mixing their taste and spin with some modern pieces in there to just give it their own unique look. Anthropologie is a company that really does a lot of this kind of spin on this. The next one is cottagecore. And this, we really haven't seen cottage strong since the late '90s. It's come back huge now. Floral wallpapers, vintage furniture, again, paired with natural wood, it's really gaining a lot of traction right now. The last one here is electric nostalgia. And this -- designers are really throwing it back to the '70s, '80s, '90s. And they're filling their homes with iconic pieces from those areas in those decades, really a fun kind of bright, upbeat trend that we're seeing there.

And then these predictors that we research online and in person, they really help to kind of inform where we take what we see as market influencers and what we present to our customers as influence that's happening in the market. And the first one we see is curve appeal. And you saw this as one of the Pinterest trends, but we're also seeing a growing interest in this with all of our customers and with consumers. So it's really an emphasis on relaxed frames, organic shapes. It's very fun. It's very useful, and it really goes again back to a little bit of the nostalgia because you see these frames in the -- historically in the '80s and the early '90s. So it's really bringing that back again as well.

The next trend that we've really focused on is cozy. And I think now more than ever, when Donna and I are choosing our fabric for our line, it has to be soft in the body, and the hand has to be incredible more than ever. These are really -- think about this whole trend, naturals and white on whites being layered, it's all used together. Think about it mixed with bleached woods, natural woods. It's really a pared down home but still, I believe, a modern and comfortable look. And this is another trend that we just keep seeing grow. And we really have built a lot of our line knowing that this is something that people are looking for right now.

The next trend we have is technology, and this is one of the biggest trends in motion furniture. You're seeing frames with integrated workstations. There's Wi-Fi. There's surround sound speakers, remote controls. There's lights. And all of this is kind of combined with a movement towards a sleeker, a more modern look to motion furniture. So it's not just the kind of overstuffed bubba chairs that you've been seeing in the past. And you're also seeing a lot of work on hidden motion. So these frames don't look like motion frames. You're seeing hidden footrests, hidden headrests, lumbar support, massage features. And then all of this kind of combines to make the perfect position so that you can watch Netflix as long as you want to.

The next trend we really focused on is leather alternatives. And that's something -- at Culp, we make a lot of faux and vegan leathers. These really -- a lot of consumers really want that leather look, but they want something that's going to hold up again for their family and their pets. Our leather alternatives are stain-resistant, scratch-resistant, UV-resistant. So they really actually perform better than natural leathers, and they're also a sustainable and ethical option to something -- no animals were harmed in making of these. And just really from a price standpoint, too, we've seen a huge growth in this going forward that people -- the average family can afford a faux leather sofa versus a true leather sofa.

And the next trend that we see growing is the pet-friendly fabrics. 68% of households have pets, and this is really driving the demand for upholstery fabrics. These families have spent 100 -- almost $110 billion on their pets. So this is a major trend in the marketplace. They're looking for pet-friendly furniture. They're looking for pet-friendly pieces that kind of go together with their existing furniture. And they want things that are cleanable and really will withstand pets and children.

The next trend we're really seeing move is performance demand. And that's something -- pre-COVID, there was a demand out there, and it was really moving toward that. But COVID has just really exaggerated this whole movement. Performance fabric market is projected to reach $80 billion by 2023, and that's something we've really seen a lot of growth in personally within our company. But consumers now, as they're buying furniture with this whole remodeling phase that's taking place and this whole boom in homes, a lot of them are buying furniture for the first time that performance fabrics have been available at an affordable price. Before, it was only something you went through your designer to get it. There is a $600 to $700 upcharge to get a performance fabric sofa. And that's not the case anymore. So consumers really expect their fabrics to work for their family and anything that they're going to throw at it right now. And that's something kind of we wanted to talk about really what's driving a lot of our innovations at Culp. And this whole performance trend has really given a huge boost to our LiveSmart brand. And that's been our premium brand for about 5 years now since we introduced it. And within that time, we've really expanded under that umbrella for a lot of different areas that we're seeing demand for in the home.

The original LiveSmart brand really was a very simple, understandable performance brand. It's cleanable. It's stain resistant. It's water repellent, and now it's also fluorine-free. So LiveSmart technology combines a performance fiber with a performance finish. So it gives the fabrics inherent durability and longevity and really is the perfect choice for families with pets, for children, people who use their furniture every day. This is really made for families.

And one of the innovations under our LiveSmart umbrella is our washables collection. And this is something -- LiveSmart has always water-repellent, stain-resistant and cleanable. This takes it to a whole new level. You can take your slipcover off, throw it in the washing machine at home. Keeping your home clean has been top of mind again with people staying at home, and this whole slipcover trend was starting to come in, and then COVID really ushered it in much faster. And it's whether some traditional slipcovers or maybe it's Velcro that you don't see that are hidden slipcovers. So our washables innovation has really addressed that market, and so many of our retailers now are embracing this and adding slipcovers to their lineup.

The next category that we added to our LiveSmart brand was Outdoor fabrics. As people were creating more outdoor spaces, we really felt like there was the need to expand LiveSmart to include fabrics that can be used anywhere. So these fabrics, in addition to having all of the properties of LiveSmart, they're also weather resistant, fade resistant, mildew resistant. And they're also bleach cleanable. So the Outdoor fabrics are designed for anywhere you want your furniture to hold up to everyday life. It's made for the elements of the outdoors, but it can also be used indoors in dining rooms or children's rooms or any place that there's really kind of a heavy use furniture.

For me, the most exciting brand that we have under LiveSmart is our Evolve. And that's something we came out with about 3 years ago. And this is really our LiveSmart but with the addition of sustainability. It's using recycled water bottles. All the performance of LiveSmart but just with the sustainability aspect added to it. And this is really about reducing our negative impact on the environment, Culp as a whole. I know we've been interviewing people in the last few couple of years. One of the first things that we get question-wise is, what is your company doing for sustainability? And that's something we've really felt was very important going forward and that we're continuing to grow this.

The LiveSmart Evolve line was really designed around the premise that we believe that nothing that you use for a few minutes should pollute the environment for centuries. When you're looking at statistics, there are 1 million bottles, plastic bottles that are bought around the world every minute. And this is increasing every year. It's expected to increase 20% by the end of this year alone. And there are 8 million tons of plastic that ends up in the oceans every year, and less than 1/5 of all plastic is recycled. So we're really looking to collect bottles before they reach landfills, before they reach waterways, before they reach the oceans and turn them into something that does good for people. And people are really looking for these type of products.

One of the things we found, too, when we first introduced recycled, and we've actually had recycled for a long time at Culp, but when we first came out with it, there is a little bit of resistance across the board. And a lot of retailers said, "It's not for us. Our consumers are not paying more for sustainable." And that's something we've really seen a huge shift in lately. And retailers are now seeing that. But consumers still think that there's a disconnect. Consumers say -- 76% of them said that retailers should be more sustainable. 68% say now that they would pay more for sustainable products, and that's a huge shift there. In the past, people wanted to be sustainable as long as it didn't cost them more. And that's a whole difference in attitude now. And then 75% say they value product sustainability over brand name. And again, that's something really big. A lot of these small companies, especially e-commerce companies, that are really focusing on sustainability are making a huge impact on customers. And consumers are really willing to spend their money with these customers -- with these retailers to support that. So anyway, it's just one of the things that's really we've seen a huge shift in is the whole retailer change in this, and consumers are really pushing the retailers to be more sustainable right now.

This slide shows the process of taking water bottles and then turning them into yarn, which is then turned into fabric. So they collect the water bottles. They're washed. They're chopped up into flake, which you can see on the second step there. And then they're melted down. That flake is melted down. It's turned into chip, and then that chip is melted and extruded and turned into fiber. So this whole process really saves -- this is where the energy savings takes place. So it uses less energy than you would use to make what's considered a virgin polyester by starting with the plastic water bottles.

One of the questions we always get, too, is what does the final yarn feel like? Is it extremely soft? Once you get to the chip form, there's no difference in the way it feels and performs than virgin polyester. And also, when we were considering what we wanted to do in the sustainable area, one of the really important things to us was traceability. You have lots of different people greenwashing, saying they're sustainable. But when you really look into it, they're really not sustainable. And so that was very important to us to be able to trace it all the way through the chain. And that's something Unifi REPREVE offers that they stamp each fiber with their U TRUST branding. And that's something that can trace all the way to the retail floor to the consumer level. They can look at the actual fabric and say, "Yes, that's REPREVE recycled postconsumer water bottles." So you truly can verify that it is postconsumer. And it's certifiable. We can certify every fabric we introduce, and something new that's just kind of about now is it can be certified by the consumer. A retailer can set up their frames and anything they produce with these fabrics with a certification number that the consumer can punch into the Unifi portal, and they can actually see the number of bottles that were recycled going into their actual piece of furniture. So that's really, I think, a big step and the consumer can really see what they've done by purchasing that piece of furniture.

And just to show you a little bit of how many water bottles we're really talking about when we're talking about using this in recycled fabrics, the LiveSmart fabrics contain at least 30% recycled polyester content. And so on average, that's about 9 bottles per yard. So when you look at how much fabric is used in a chair, you're looking at about 50 water models. For a sofa, it's about 110 water bottles. And then when you get up to a sectional, that's 450 water bottles. So as you're seeing this, you're really seeing these bottle numbers add up, and that really is important to consumers. And as they're looking at the U TRUST, the Unifi certification website, they can see exactly what this means to them and what kind of an impact they have had.

At Culp, like I said, this is probably one of our most exciting innovations that we've had. For us, we have, to date, recycled over 86 million battles. And that's something, I mean, we're really proud of, the impact that we've been able to make by doing this. When you think of 86 million bottles, that's enough -- that saves 1.9 million gallons of water a year. It generates enough energy to power 814 homes, and the greenhouse gases that it saves improves air quality by avoiding 2.2 million kilograms of CO2 emissions. So the 86 million, we feel like that's something we've really made a difference and going to continue to grow with our line. But -- and that's all the innovations we wanted to share with you today. So feel free to ask us any questions or anything, if there's something that we've kind of gone through quickly.

Thank you.

Thank you. We're going to turn this back over.

Well, thank you very much for the -- that presentation. And it's exciting to see the environment and the impact that you're having to saving and through LiveSmart Evolve. Do you have some examples of some of the fabrics that you have in the presentation that you can show to the audience?

Yes. See, I can -- so just a general idea, if you kind of look at some of these different fabrics used in our presentation here, and we really -- all of these go around different color stories. But we've really focused on style with this as well. Our Evolve fabrics are stylish and trendy for color. So you can see in some of the right-hand pictures here, a lot of the textures, really focusing on the juniper green that's trending right now with the biophilic that we mentioned. And we do accents as well as bodies. So you can have your whole sofa, your whole room setting as recycled Evolve if you wanted. We had some customers, too, that they do everything. They're doing recycled filling in their sofa, doing biodegradable bags, recycled steel. So there's really a lot of manufacturers that really are focusing on the -- from the getting to and from the process to their product they're making by uses.

And we're really trying to focus on making this usable for all segments of the market. We're doing nicer fabrics. We're doing more value-oriented fabrics. So we're really trying to open up the marketplace and make it easily available.

Here's just showing a few more. This is more in our naturals collection. Again, just across the board, for the accents and different price points, as Donna mentioned, we really would like to have something in every area, no matter what the retailer is looking for to cover and whatever look they're doing.

And this is part of what we do each season, too. We create color groupings that make it very easy for our furniture manufacturers to put together their own room settings. So we can suggest where the color directions are going, what we see consumers gravitating towards. And then this just gives them an idea in our line how to put those things together, and it really is one-stop shopping because we've got the plain fabrics that are used all over on sofas. We've got accent pieces. We've got chair fabrics. We've got things that can be used on ottomans. So really, they can put together an entire room based on what they're seeing in our line.

And that's something that's been working really well for us. If you see the right, with the correlations of the fabrics, a lot of our retailers are taking the Evolve program and doing slip handles. So you can pick your body clock, which might be a beige, and then you have all of these different options for accents. So if the consumer wants contemporary, if they wanted traditional, they can do the full room setting based on these color stories that we're putting together and keep the whole group sustainable, which has really, really been a great aspect of this whole program.

And two, with the way homes are right now, everything is going much more casual. People want relaxed fabrics. They want -- instead of a lot of pattern, they want more textures. They want kind of mix and match. You saw it in the cozy trend. They want soft, comfortable fabrics that they can continue to use and really accents the natural elements that they're bringing into their home.

Yes. Just a few more photos of this. Our goal with these is always to just make using our fabrics easy. We always refer to it as Garanimals as kind of an inside joke, but it truly is. You can -- you just want to make it easy. People are unsure of their choices. So if you can put that together, mix and match options they can't go wrong with, that are easy to access and just have available there on the showroom floors or the retail floors, it just makes the shopping of our line really, really, really easy.

And we've heard from so many customers how much they enjoy getting these groupings and how much they enjoy seeing these groupings. It really is something that can inform them. We're putting these trends or what we see as trends and color groupings together. A lot of our customers don't have time to do this for themselves. So they really use us as a design resource when they're working on their lines and planning for furniture market and their furniture introductions.

Budd, something that strikes me looking through and listening to the ladies talk about the innovations, and Boyd touched on this in his opening remarks, too, it has been a period of time in our business where there have not been a lot of new products introduced at retail. And so I think you can see in Donna and Tammy and the way they're presenting, there's so much opportunity for us with new products, and sustainability and performance will drive the day. But what they can do with texture and color and merchandise packages, I think there's a lot of upside for us as we look into some new rollouts coming to retail. People have been so busy. And so backlog -- and they haven't been focused on launching new items. But there is a nice trend of that heading forward that we're certainly motivated by it.

But I'm hearing more and more that people are hungry for something new right now, sorry.

I'm sorry. I just -- I've been around Culp a long time, and I've never seen this kind of variety and difference in just so many different patterns and colors. And the hand looks great. It just -- it's pretty exciting to see this. So I can understand people have been at home for a while, and they need to see new and fresh, as the dealers do.

Yes. It's starting for us right now as well.

Darin, I think you were going to talk about one of the particular issues that we've seen from some of our clients, talking about our note that we issued a couple of days ago.

Yes. I guess just a quick question. Just wanted you to maybe talk, this maybe is for Iv, a little bit more about the lockdown in China and just how that's going and also just your long-term strategy in China. And also, I guess just across the globe, as globalization increases and as we see supply chain issues and just generally talk about that, that would be great.

Yes. Thank you, Darin, and good to see you. Thanks for the question. This is something that Boyd and I and Tammy and Donna speak about a lot. And virtually, every investor we speak with has that same question. And we've been thinking about it quite a bit. And I'm going to let Boyd cover it primarily. But I'll tell you the way I think about and the way the company is thinking about China and our strategy in Asia is that we would not have been where we are today without that strong Asian platform. So as we think going forward, we definitely -- we want to pivot and diversify our risk into other regions, and we're doing that already today through Vietnam and through Haiti and some of the developments we have underway. But we don't want to exit Asia. We don't want to exit China. There's too much potential going forward there. So for us, putting a balanced platform together is where we're focused on as a company. But Boyd, maybe I'll let you just elaborate there. And if you want to touch on what you're seeing right now in the face of the lockdown scenario, maybe you could touch a bit of that.

Sure. I'll be happy to, Iv. And yes, in regards to the current situation, the situation in China is improving. Our China facility is in the Shanghai area. So we have been impacted by the Shanghai COVID lockdowns. We did have to close our facility in early April, but we have reopened in May and resumed operations and shipping. It appears it will take a little time still for the restrictions there to be fully removed and restored to our normal operating levels. But absolutely, progress is being made towards that each week. And I'll say, too, that some other positives that had helped us to mitigate the Shanghai area impact is that much of our China supply base is located outside of the Shanghai area and -- which has been less affected and has continued to produce product for us with minimal disruption. Secondly, we had intentionally built our U.S. fabric inventory prior to the normal Chinese New Year shutdown but also to buffer against the already existing supply chain challenges. So we've been in a good inventory position in the U.S. to supply our U.S.-based customers with little delay or disruption, even during the period of the Shanghai shutdowns. So I think just a summary of the current conditions. While there have been impacts to our China operations in shipments for a month or 2, we do not anticipate a longer-term impact. And now steady progress is being made back to normal each week.

Boyd, thank you very much. Iv, thank you very much. Donna and Tammy, thank you for a very insightful presentation of what's going on in terms of the consumer trends and the impact on Culp's innovations in upholstery fabrics, which are many and varied and exciting. We appreciate that for our clients and for the investors. There is -- and we're coming to the end of our time allotted for us. So we appreciate everybody's participation. The area I hope we can cover in our next chat may be what's going on in Haiti and some of the more interesting aspects that Culp has got with their new Haiti facility. Iv, is there anything you wanted to quickly just recover -- or cover on the progress in Haiti before we close?

Yes. I would just say, Budd, it's part of our strategy as a company overall, again, to diversify our global supply platform. We -- as I have told to a lot of investors, we want to meet customers where they want to be served. So if they want to be serviced in Asia, we'll do it there. If they want some near source location, we'll do it via Haiti and some other near source platform. Today, we're now operating in Haiti with 3 facilities, 2 for mattress fabrics, 1 for upholstery fabrics, really for cut and sew in both parts of the businesses. We have almost 700 associates there. It really is a spectacular platform for us as we look forward. So it'd be fun to cover that as we look forward. And I just think what I would want any of our investors or any of our associates that are watching to know is that while we have never -- certainly not trying to sugarcoat the current situation. It's been a challenge through the COVID. It's been a challenge as of late with market conditions. But I think you see from where Donna and Tammy presented to you that we are not sitting still, and we are moving forward in a very robust way to develop products that will win for this business. So we can't always control the timing of what may be in the market, but I know we can control what we're doing. And our success will be borne by our innovation. So that's where our focus lies.

Great. Well, thank you all very much. We're going to end the webcast. We appreciate everybody's time and attention. Thank you all very much.

Thank you, Budd. Appreciate it.

Thank you.

Thank you.