CULP - Earnings call transcript Q2 2020

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Operator

Good day. And welcome to Culp's Second Quarter 2020 Earnings Conference Call. Today's call is being recorded.

At this time for opening remarks and introductions, I’d like to turn the call over to Ms. Dru Anderson. ahead. go Please

Dru Anderson

morning. to Good quarter to Culp the fiscal Thank the And company's call review second results conference XXXX. you. welcome for of the

contain that As and condition the morning's me start, of about state we call business, let prospects will forward-looking company. financial statements the this

that beliefs differ performance are by statements of not and indicated Forward-looking or historical statements materially of or because events fact. risks include that future are actual the statements could company results, from expectations The statements various forward-looking projections, about or the otherwise of uncertainties.

described These risks Form and our filings, uncertainties recent FormXX-K are including most the and filings on in company's SEC XX-Q. regular

of or You statements. reliance are statement forward-looking undue today. cautioned to no statements as on We to obligation revise to and undertake made forward-looking update not place today only ache speaks

measurements addition, discussing part be comparable non-GAAP today's posted site available measurements slide company to during the of summary the at schedule X-K supporting which non-GAAP filed financial financial included the this additional culp.com. directly information and site these In on A reconciliation of to Web the financial and presentation, Web is as will charts, the most webcast company's in the call, measurements. financial are the on call. performance also A yesterday of GAAP company's

the X-K on information to site. in and With similar available without respect and company's to and flow filed certain of comparable significance information, flow is yesterday posted free not cash the is reconciling available is information, forward-looking GAAP free Web cash the efforts, which its the company's the historical unreasonable significance

Officer Chief sir. go ahead, Culp. to I Frank will over Please the now Saxon, of Chairman and turn Executive call

Frank Saxon

Chief you the Operating quarterly President of everyone call I Chumbley, Boyd with our investors. and Dru. Financial and is Ken President us Culp welcome on to analysts Fabrics Iv call Officer; for you, our and today. Thank With conference Chief you Officer; to today the and Upholstery Culp, morning, joining Good Bowling, like Business. me would thank

will Culp, and taking of the its provide and assuming of evolution as Iv execute we changes of the be a over planning January designed of X, announced, succession These Chairman. to longstanding process CEO company part role continuity As are Executive the previously our continues I growth natural will role strategy. leadership be effective to

involved years, CEO. Having will XX great I'm well to assume company's to confident necessary vision, will transition of day-to-day positions. is I a and divisions, experience operations actively the worked Iv has prepared with responsibility corporate with new for the with for I to and while Iv in leadership responsibilities oversight Iv remain he skills, the capabilities look we specific of as over services. each be for forward working shared

review brief happy comments, the financial the actions the with some of to the results begin review now quarter Ken Ken in will questions. you then I'll on I'll and quarter. for your call our the strategic then After outlook and that, segments. then we'll take third be each update

quarter second of fiscal pleased this our the with are for year. We performance

is from reports. stabilize While continuing the drop is fabrics upholstery mattress domestic we fabrics prior sales in We industry in and the compared overall had improved to variability the we had mattress industry businesses. the sales working imports evidenced cost China, believe to performance mattress and both market a in with modest from related our low in year operating recent disruption period, the

able platform, these the mattress legacy respond product demand customers, We're rolled monitoring mix to or bedding the our trends demand manufacturing we've and among and boxed growing pack trends. broad to and segment. With rapidly changing development been our flexible

chain pleased with adjustments been and to the international make while these supply and customers. tariffs, address has trade ongoing ability by Additionally, business were affected challenges our our fabrics we needs disputes to meet upholstery of our

we refine Fashions, to finished We our to for continued And in remain new products products sales business. leveraging are Home our customers. our sequential business also this online focused with making Culp we positioning on expand market some channel believe improvement. this reach We for and strategies good progress new

In maintaining our and an we're to design. businesses, unwavering creative product emphasis driven our each commitment of product with innovation

can changing we of are the our demand to diverse and the trends With our base. strong support of global sustain respond platform, confident advantage competitive our we customer

marking financial growth the continue the year in seventh of plans quarter, the proud have to announce third our we our increase to and strength annual We're Importantly, pursue shareholders. commencing returning funds consecutive increasing dividend to to another dividends.

over I'll now quarter. the who review results Ken turn the to will call financial the for

Ken Bowling

Frank. Thanks,

have slide As that posted Web we to on site mentioned the relations investor measures. our cover presentations key call, performance earlier

We have posted capital also allocation our strategy.

financial the the are highlights Here quarter. for second

results pre-tax million, compared a million Net On included quarter of income million second the and income $X.X charges for to credits and year the other the period. year. financial company's pre-tax Anderson, facility. reported sales the The were of prior the second South of the $XX.X with last year and of $X.X net in items down of non-recurring X.X% of benefit fiscal last with restructuring related closure for company compared basis, $XXX,XXX Carolina, quarter mostly production a due

income year for credit, was Excluding quarter the last pre-tax second $X.X million. of this net

for was income noted. share period. diluted shareholders year or Net last the I related for per for the second $X.X fiscal million the of year the $X.XX credit $X.XX with $X.X Inc. of diluted just share per The result Culp, compared prior income quarter to included quarter second or attributable net restructuring million

rate for Taxed a same effective rate increase income Income effective tax the tax year Global a tax in represents on the company's was significant earnings. for a Intangible company's in The Tax, income period XX.X% year increase company's with ago. or Low the XX.X% fiscal compared U.S. The this which reflects the the of second GILTI quarter income foreign

a higher in earned foreign the mostly U.S. income has rates located the increase that taxable U.S. to also the basis contributed U.S. be company's the on utilization tax tax the incurred effective net fiscal importantly, company's projected of income to in expected this to the is cash in operating And rate. company's due relation at A in minimal Federal are by forwards. operations shift to loss this in continued Canada and for mix taxes year of China carry income

earnings facts for versus effective annual income XX% subsidiaries foreign over this by and that year U.S. fiscal year, our to rate the the of in Looking affected China projections. rest based income ahead be Canada today. we and the in effective the tax on timing and consolidated fiscal note of we tax will The XX% our actual from operations can be rate mix located range the estimate

if proposed trailing $XX.X of The is year higher effective. the EBITDA this exception finalized on election for Internal until Notably, the tax X.X% under enactment. the fiscal subject the and or exception proposed Department newly available U.S. XX-month tax and timing as tax second are end Consolidated and proposed us election was return when Treasury fiscal XXXX not Service of million enacted sales. Trailing of enacted could proposed if or quarter and regulations high the with some was GILTI the provide regulations GILTI have adjusted XX.X%. that, beginning proposed, later at period of capital issued relief GILTI Revenue the from the in to XX-month

compared the to X.X% down at an Now mattress fabric let's for compared look income our compared margin income with X.X% $XX.X with a year year's Operating was second operating segments, sales business take of the year were $X.X million, $X.X with million last quarter ago. a million a quarter. ago X.X%

the despite an sales. improved second decline delivered We operating for quarter modest the performance in

in efficiency. to fabric investments the improved and rationalize recent Our cover focused operating our in infrastructure efforts production and our locations cost-effective most both sewn

favorable fiscal benefited XX.X%. the year. period fabrics compared prices second on was material mattress raw from Return for last more the with for trailing also We capital XX-month quarter

sales $X.X ago ago. segment, margin to For million, with income the compared a were prior an million year for was over quarter with compared quarter $XX.X operating X.X% second $X.X XX.X% with down upholstery million X.X% year Operating a of the for year. the the income fabric

quarter an be customer for impressive, to to mix more to products hospitality more the currency new operating favorable ago. We've rate the business. Our month Return exchange improved capital compared at XX marketing as the reflects base segment our performance branded improve and our a second of in success of the fabric due unfavorable product year for to benefited continues trailing upholstery coming on from period also XX%. for diversification the

operating on for with [$XXX,XXX] sales quarter later. in which $X.X The of of a compared first $X.X Operating loss which year quarter eLuxury, comment with We'll for improved the the expectations experienced Home ago. and the million Accessories line quarter. the in sequentially was was second segment, includes $XXX,XXX, more loss operations from we reported million performance

and are cash outstanding net $XX.X the of million highlights. for balance cash sheet total $XX.Xmillion. of investments and borrowings $XXX,XXX reported of total a total Here position We cash position and

first the $X.X for months free and million six of flow incurred quarterly $X.X and year, the on of this first six million and flow This we spent $X.X from reflects million compared cash respectively. improvement $X.X million from operations operations year fiscal expenditures Cash flow cash million million year and $X.X dividends. cash the capital flow year-over-year For regular with months was in period. free $X.X $X and cash and $X.X flow and this respectively operation of cash from for of flow prior million million free respectively

second of available the as respect million for stock in previously an quarter. in shares program any a repurchase authorization last $X from the repurchase million. company's not to increase With the reported total did company share quarter, required board common approved to The $X.X back our the

turn I'll that, call to Frank. With back over

Frank Saxon

Ken. Mattress with Thanks the segment. I start Fabrics will

the Chinese Our the the the turmoil and market from measures. results the as to quarter surrounding changing anti-dumping influx reflect industry mattress of recover second attempts subsequent for imports dynamics

is for and boxed from popular bedding favorable the While business, legacy expanding demand in softer our customers trends we mattress experienced in space. demand covers

a sewn optimistic cover strong performance and quarter are for business, new mattress CLASS, exceptionally second about the As delivered opportunities customers. an result, additional existing with we and our

for the production versatility for scalability necessary expanding with platform and serve robust locations customers global supports competitive U.S., creates and Haiti diversification in the in our Asia, environment. Our our and to strong supply the an advantage Culp including covers,

and to capabilities leverage our new releasing the marketing during further reach. efforts. forward customers. we to offer of addition creative a in ability marketplace. capabilities dedicated and a our team and developing about looking the Our distinguishes innovation offer strategy, with design support our to quarter a we're expanded platform enhanced ensures latest product third to Culp mix technologies recent library these that innovation complement excited We've relentless the The commitment our are our a to and expand products also staff opportunities broad innovation offering digital our product to We're

environment. demand well ahead, industry as Culp positioned believe conditions especially Looking improve we stable marketplace, the a with is in more

the creative of with meeting to and an with sewn product platform, efficient demands are our critical changing innovative We global fabrics vertical offerings customers from the covers. products abilities design, provide to

to our customers in box giving intend Asia to second look this and and of expand serving space. fabrics in operations fiscal business. needs cover further flexibility also Haiti of CLASS sewn in the half We footprint the mattress our for year, during of opportunities We capacity forward the the the bedding us ahead

I'll now to turn the Upholstery segment. Fabrics

manufacturing were line this the slight the trade quarter and Carolina due Our in facility the partnerships, to fiscal continued the environment second second year Anderson, year. associated loss expectations agreements well residential closure last segment of in drop sales our and product prior of category issues quarter. of surrounding the the The the soft ongoing during tariffs, sales the a for South as retail as reflects with for over international in

favorable of our residential trends We're and the satisfied the from our plants demand as strong popular benefited we with of resistant performance our innovation. during product fabrics. highly furniture stain durable from for LiveSmart customers experienced We quarter execution line

the Our a of the recycled been conscious same as of well LiveSmart desires very Evolve, received line combined with recent a new product fibers, consumers. has environmentally featuring introduction fabrics fulfills of that performance,

We are successful placements market. focused October on a with these promoting these for customer furniture products, pleased following the strong brands and are

the outdoor with a LiveSmart to elements. product well ability strength also line, launched This LiveSmart received recent pairs at on has of product been builds We the recently withstand which and new line Outdoor, performance the brand showings. outdoor our

RWP. customers window RWP, Products, hospitality supports we and reach Additionally, this to are our expand our our our business, strategy the Read this segment. future market we overall within Window continued optimistic from sales reflect growth installation treatment about or trends services and into contribution as

to have the team further We our innovative to commitment designs also recently creative that creating products changing our of strengthened and our creative demands customers. meet support

kits, and meet this impact the our and of in through to U.S. sourcing Vietnam and mitigate between we've will needs with disputes Additionally, and we the imposed product ongoing sourcing opportunity, to and other supply tariffs the partner develop made engineering chain additional to the continued our to along of of further support changes customers recently We've adjustments options relationships strategic cut our trade pursue sewn China. for customers.

the Going a have the forward, optimistic we're are while upholstery fabrics opportunity place strategy term. for positioned strong geopolitical for in for Culp. about believe uncertainties we remain, well We very and long

newest performance refined Fashion. for sales Next we Culp our were operating Home with our review segment, business Accessories as in line model. I'll business our The expectations Home and further segment

new to new aggressive diversification customer with greater more the a approach execute diligently retail business-to-business with working market, strategies are We and to along online marketplaces.

driving and already creating have term key opportunity. long greater that We initiatives improvement implemented are

business. Amazon, sales e-commerce on a dedicated for also legacy We performance our remain our principal channel to improving

the many outside sellers normal in of trusted third recent sellers have reports, service. affected and other Marketplace operating terms party Amazon's noted by been press new As of Amazon

rationalizing sales enhance collaboratively discussing offerings several are We options channel. our and to the

In products that about core develop to businesses. customers reach we for the excited company's addition, are and new opportunity sales continue to with the channel we're Culp. leverage new synergistic And the

this for quarter the the quarter given half the will businesses during expectations quarters review the for Tim the also I glad then our performing now year. In third this will outlook, of fiscal and we and fourth outlook see take the on touch second second half questions. and year, the specifically fourth but to will how comment we'll I your the third on fiscal of be

We sales third of be to the to expect last quarter overall comparable year.

be margins to to slightly compared expect and mattress to moderately be third quarter fabric income down sales year. We operating and down the last

and sales and are of to Year. slower more The by shutdowns third The of Chinese significant of a this because distribution weeks quarter cover operations. CLASS business greater covered holiday seasonal of as mandated fiscal our in last shutdowns the production result of these year New of traditionally affected impact compared loss this government is timing a third year, quarter during sewn a the CLASS as of period part Haiti, period for the the current is our business is and multiple

quarter year. to return sales for lines. quarter from in of and fourth year, significantly the For expect business, anticipate operating fiscal as overall and the industry benefits improved across slightly fourth increase cover of this income conditions last improvement can to to to margins be and CLASS fiscal We up operating through we continued a efficiencies compared product strong all

this year. we higher are As of of comparable a prior expect as be fiscal half to the to and and result, compared second be sales with margins year as moderately the last half expected income fiscal year operating the the sales for period of second second for half compared to to

we In last to and income operating comparable fiscal half income same our to the year, to to Upholstery operating and this the expect we also expect second Fabrics the quarter half margins second sales be year. comparable be segment, third period of fiscal year. and Similarly, for and last of margins sales

Accessories our year. last we down sales segment, be to Home quarter compared slightly with quarter third In of third fiscal expect

expect meaningful operating for to the as with but We the improvement quarter. an quarter loss second compared

For the expect performance products. fourth on our focus near strategies higher we we be continue quarter, to as breakeven and margin refine to operating

to mostly if due compensation for unallocated income factors, to million excluding costs, restructuring and impairment expenses last related quarter the of the any. as as year's any third pre-tax or million, corporate these expects for range of and well report charges, accrued reversal $X.X the in incentive to credits increased company Considering comparison charges $X.X the

of non-recurring net charges and in a for last year's million, related approximately $X.X credits, Pre-tax and was charge quarter third other restructuring items. $XXX,XXX in which income included

the was Excluding charges, year third $X pre-tax these million. of income for quarter last fiscal

result, year quarter company the as currently year year. this to of is currently half for the our the a of achieved our achieved better be the fiscal last expects The period. to And performance expected quarter fourth results fiscal than prior performance during than better fiscal results the for year in fourth be this significantly second of

fiscal to budget, $X million current be and the for million our million capital expenditures amortization be and range depreciation $X $X.X approximate on year. are expected to expected in the to Based for XXXX is

current even free XXXX be Additionally, fiscal the results, for expected last with comparable an flow cash outlook, geopolitical to given year environment. is to uncertain

As a year flow $XX.X cash flow year free reminder, from million was million. operations last cash the and $XX.X was for

questions. your With we'll now that, take

Operator

of our We Bobby James. question from [Operator Griffin Please Instructions] ahead, first go will take your now is line Raymond open.

Alessandra Jimenez

Alessandra on thank questions. Bobby our Jimenez Griffin, taking is This you for for

upholstery Read is on progressing? segment business can the and integration performing the update hospitality is First, you within the us Products how Window how

Boyd Chumbley

Yes, remain the with very Boyd, and is overall. on happy Read pleased update the Window we'll to you business and this be that. hospitality business Products We

our growth we that that of Products, include expanded see supplying business. to segment. Window to Products were product Upholstery the previously And continue course segment We in to furniture Fabrics overall in within our acquisition addition that into Read that Window capability fabrics in has particular,

So we a to continues market. it to are that very full become and service our provider pleased strategy more the with hospitality

So optimistic areas going expect think for Read yes, growth very about very and and that, in in that we forward. We to general remain see in hospitality we both further of positive particular.

Alessandra Jimenez

like about from prospects the And an then the business of you talk can what M&A growth hospitality look standpoint?

Boyd Chumbley

area, other we certainly focused continuing that are to if are something in available of acquisition certainly We this candidates on. assess abreast there that's are staying

something there sense to if continuing would see that make are there's We further evaluate and us. for

focused see to area that some and would stay, stay And in so if candidates. there's we like

Frank Saxon

work interested very in is calls, And this would putting said that. more as I'll to add we earlier to be space. capital Frank, in we This on

there we as opportunities and acquisition management we're pleased M&A definitely interested very in Read team that we the look and the opportunities As see Boyd ahead. and said, with

Alessandra Jimenez

for you And mattress shifted other then what for your lastly to countries? are calendar imports mattress of that imports 'XX? concerned And with me, expectations have in are level the year

Iv Culp

Alessandra, this is Iv, I really appreciate that question.

checking forward that is nice imports relocated countries, we something pretty and speak Asia are the And certainly that while But much places. is numbers. to volatility in was press about release, are on other every and our continuing. The and we China sales been nice lot you has boost, there a or right. other day, looking being primarily in it business And a to reduced have boost a

So it's market, about definitely watch and very domestic we it's an the something eye we'll something it are on, for concerned to keep closely.

bit A on have going with it we got robust to opportunity imported and those we're seeing a platform, business we great covered doing covered little sales are different forward both fabric in really is what China Culp looking platform, such fabrics and that capture mattress in Vietnam, on a forward. even and an really already

be So perspective we it's it's different as certainly we but domestic, much those perspective we have for didn't look we rather of if would business capturing our products out, which not, the have on ways before. us, imports,

Operator

now Instructions] our from take next Stifel. Baugh go John will question [Operator Please of ahead. We

John Baugh

units in, if the elsewhere on topic countries. world it any virtually call to the the nothing, and read is or around early a fractional or One, early is your it Is bedding that on you were too or couple coming lot from things just here. pick-up that? U.S. that really all producers were relocated be with the will I continue replaced China is being wanted, other I on guess a to mentioned view

Iv Culp

the to surprised previously expert China that, much have But little to been relocated countries. the and bit of we not know certainly it probably was would call. other say, -- is business to imported currently I'm how that has I at from early a

can quality as service the to wise So both those cost whether and did. out China think other it, countries wise I wise as jury's support and still

think do countries. we for in perspective, is up import gained But lot see to really other there I pick do domestic be these a opportunities So producers. to business internal from of business

but how it see close something is we to sticking I about nearly it ends U.S. was previously, back So in I'm march up have not as to much the worried as really

John Baugh

question between and for is yang favorable you neutral, mentioned Culp, I on trade margin bids. at look legacy as it, is yin and And box a the then guess And unfavorable? basis you the that

Iv Culp

John, that there's been months. would talk think I way slightly look full at the and that is, last there's just not. are well legacy, And yin doing very for in are reports we industry think negative a I what yang industry, really the and some were three overall some packed. just about companies as And rolled that I sales the and

full think some finished to We've ultimate favorable wins supplier, for, a customer-to-customer. because do as more so generally of And business, for are roll covered having value lows some high seen very more product. full in industry of I and speaking, we're seen that. moves feeling pack, type some kind the us to we at service

us So fabric to a instead more in more and operations, of customer of a a we're is participate cost this fabric the just giving value to allowing product. selling overall being the and the

John Baugh

then and you question margins just I top it more gross you're all here, on much volumes, of can is there. of some reasons terrific think of sustainable? this even the I it And much -- tepid how from this guess months this is, repeats? How noise here? and of And the are tariff Or lead, the stronger simply the is few But how obviously question with and latest get a profit doing upholstery much of elucidated maybe six it. quarter

to might as the range curious I'm for So be? longer upholstery outlook what gross margin

Boyd Chumbley

that a for in growing segment, seeing we've are to are design, those mix, already focused our profitability of increased that's a focus standpoint of with growing our category on is us you standpoint. products. this creativity, things are associated business a contributing both in as so it's standpoint, the very and percentage the from strategically the seeing of sustainable from is we're in product started hospitality business And performance that mix And we our Boyd. as know John, To I from and think this which standpoint. that we product big innovation

but questions other was has quarter of of that. some benefited currency, here from benefit We what some from quarters course that goes some also this where this to in from quarter and

there really some strategic us. good of about combination direction, continue to will both the product feel I is So good on profitability focus innovation, but that think drive that we for

John Baugh

And you the sort what drove touch six and of Look what of Ken, substantially number then Boyd. inventories. maybe looks could that like? Thanks next they're kind like months on purely the and

Ken Bowling

John, business they are up in eLuxury. increase eLuxury Home in really side with our holiday Fashion one a two and related season the new products. also areas, to was The strategic

we're we So on hoping that's one to fabrics, dedicated that it go mattress third the the will in is to second be burned through that as the through team here and quarter. With regard half. focused down get

schedules need as that we're as we go the quarter. on we to working rationalize that's how the But during of into the so And focus projects production our third certainly kind of list quarter. on third that we

John Baugh

stock last the And you in with price then on sort have were you. at? or for you you regard trading And thoughts question in where Frank. buying -- it's you Thank equity what what refresh of Can where that today? our memory

Frank Saxon

John, I our on our which strategy, allocation the published site. we key Web capital and think

investing expanding highest you in the area. And own priority said our as do and see the we we As just looking previously, us opportunities. at businesses know, for M&A are in hospitality opportunities

repurchasing stock. capital So allocation before that's other items high list like our on

Now we year, a repurchase this earlier did [Ken]. little some

that is do XX, opportunistic a and to work But in we and when I it We and have in exactly. it's could we -- an out our [XXbX]. we and the definitely And we're some expanding, some the in right take do [multiple along. And hospitality, there don't XX have the in see to was the was range putting purchased -- comes of range capital will the that that fortunate But are we've full repurchase business. take capital stock terms buyer. priority we opportunity of expect and remember opportunities said always some speakers] the

Operator

will Instructions] take next from with Markets. We ahead. question Rodriguez Please [Operator Stonegate Marco go Capital now our

Marco Rodriguez

as here obviously couple just M&A it the the doing you the to acquisitions, Windows, you've to it's as been been something capital with up about on additional fairly looking mean, have on area questions an maybe prior we've as to landscape this this. been for far guys well wanted I follow hospitality talked since I a Read year that discussing business. relates about allocate is of

had issue, of of kind it stumbling of blocks you valuation potential kept out type trigger pulling kind there? or when from the Is have been wondering, what it you have Just that other a sort to integration sort guys holdups comes these opportunities the of there?

Frank Saxon

we And I we are as said optimistic that in space. think earlier,

trend. However, of the see We behind And see And couple to get Iv industry low to business year mentioned, to wanted start that next Windows, the and to we beginning we speak, so wanted we'll a next on we as to impact tackling we're that stabilize. that. things fiscal think be of before Read in us. better by mattresses place of the the wanted the see Mattress Fabrics cost

been fiscal see we next we acquisition and improvement. to that over we and the on we better you has not valuation lot Read, do and eLuxury to, knowledge. will that further and And ready been knew to like improve. about was we we to a only management a year XX that. it focusing the secondly, see well I lot to of that more and learn by learn lot wanted the business, Read hospitality And think sure business. ago, we be be It And gained months we as quarter improving a issue are is priorities. last and said, acquisition we the And not And just we'd know wanted it's continued

to even before tackling back something to like close get break to else. So we'd that

Marco Rodriguez

when do to obviously there. guys maybe Accessories business I Then show out profitability you in to Home terms bit in to if growth, strategies confident and just that to you're start pretty can top was little rolling show the wondered about segment, of get of then the kind eLuxury and to seem line remain there a from the you compared you talk you the And where first overall? you about about driver the to for acquisition, maybe kind acquisition? way significant conservatively, you you're think you just drive it to where a high a level, business can about talk could possibly were Culp becomes thinking that if success do then the how it that of made thinking

Iv Culp

Marco technicality. this point is eLuxury an a total partners us we're working a just acquisition. for excellent questions, and We strong and versus really is Iv, investment still have that's really of thrilled the when expected we're different you with are made we and operating within we investment. the they're about way the that thinking business first right, business. that and excited But than

going a say things And lot are I first would well. of there

set really great really business. lot of some we're We're having private solid performance that expect impact would primarily channels. part performance lot a business major channels, the of us be with and success We have that with a doing stable really of We great for really didn't be BXB What's the labeling and of pretty new Amazon. e-commerce business. customers. to e-commerce different the exciting saw We're having we was from the back our most

which really fake a service landscape outside of terms reviews and different marketplace, in But would become their resellers us major just directly, own, to more And bolt-on way kind add market, but better. has perform the on there's hijacked because of invested that or it their our or to have we had not many is that what competitive then that, listings listings pack impacted been of that our that so operations have even Amazon through the we've we were synergistic in. of found just in reshuffle targeted normal much make

many the going I to surprised us business, of need potentially and this changes major the right market done. are synergistic there that we're this we prove get we profit. We can we just start proud we on we're standpoint BXB fiscal some believe, we're going think way we've that supplying But need track, that so thing working and But that So firmly breakeven were to to Maybe take a from we contracts. collaboratively year. things the to even, around. that right showing turn can the in back on the we believe with

Marco Rodriguez

quarter. performance you had in gross another in terms the the margin very of And that here quarter, solid

operational and efficiencies the material have some you Fibric guys pointed help. raw Mattress the On out obviously side,

is in I On FX, performances of as the you where first quantify those well gross leverage side, where help upholstery in here you're the you seeing Can those as half? QX. us you buckets the maybe most think out these just help which some product had another -- margin called mix,

Ken Bowling

Marco, to quantify. this Ken. It's is hard

As one impact we has the is mean, contributed, but something that also upholstery currency way. out, is that is on issue significant go definitely pointed that overtime. is The can I either been the there this developed side quarter. mix

of hard kind it's quantify. Sometimes to

and that there's changes recently the we lot On the and helped previously, made -- the also things has made but so were have mattress side, going a certainly changes that of on.

it really and to we and of it's -- quantify like risk out, ahead, shut just exchange. and But as to we we foreign vacations don't do want will on, very that look because talk well. Boyd exactly have we about the difficult get go downs touched we and really And that's to things don't impact impact it. sustainability it's of way course, they're of the there, them difficult an call the But as because just

Operator

time. over this No at the further phone questions

Frank Saxon

a Okay. everyone day. quarter. for call on Thank joining look after Have And you us you great third we'll today. updating our to the forward

Operator

This today's your participation. Thank for concludes you call.

You may disconnect. now

Culp (CULP) 6 Dec 192020 Q2 Earnings call transcript