A：Forward-looking statements are projections, expectations, or beliefs about future events or results that are not statements of historical fact. The actual performance of the company could differ materially from these statements due to various risks and uncertainties described in the company's regular SEC filings, including on Forms 10K and 10Q. Additional risks may also affect the company's business operations and financial results.

A：During the call, the company is discussing non-GAAP financial measurements, and a reconciliation of these measurements to the most directly comparable GAAP financial measurements is included in a table within the press release, which is an exhibit to the company's Form 8-K and posted on the company's website.

A：The main headline for the fourth quarter performance is the momentum being built in key areas of the business as it closed out the fiscal year and entered fiscal 2027. The company experienced overall sales growth for the fourth quarter both sequentially and year over year. They achieved sequential improvement across several important measures, including profit, operating results, and the bottom line. The company is encouraged by their progress and is optimistic that fiscal 2027 will represent a turning point, supported by initiatives taken to restructure the operating platform and integrate segments. The actions are expected to translate into more than $20 million of annualized savings efficiencies, improving operating leverage.

A：The betting business, the larger of the company's two script segments, finished the year strongly and was an important contributor to overall progress. It delivered double-digit sales growth and nearly a 40% improvement in gross profit compared to the third quarter. Notable successes include the expansion of the sewn mattress cover offerings, refining the ability to manufacture covers efficiently, and broadening the range of products beyond just knitted fabrics. This has led to higher value-added revenue per mattress unit and stronger relationships with targeted customers. The company's capacity to innovate within product design and development, as well as the ability to follow up with commercial strategies to drive profitable products, was evident in the sewn mattress cover category during the quarter.

A：The company has integrated domestic operations within its bedding segment and fully relocated US upholstery operations into owned manufacturing in North Carolina. China's upholstery operations have become more efficient through an enhanced outsourcing model, and new capabilities have been added in Vietnam, including a new showroom.

A：Strategic initiatives include product innovation and reemphasizing the fashionable line, with performance products becoming essential in the upholstery fabrics market. The company has also streamlined its platform to reduce complexity and create a more efficient structure.

A：The company has created a diverse supply chain that includes multiple all share options with dynamic proximity to market. This regional diversity helps customers navigate trade environment challenges, such as tariffs, and positions the company to improve operating performance with any demand increase.

A：The company continues to focus on operational discipline and cost management. Sales and financial results improvements in the quarter are seen as key success markers. They made progress on inventory with a $5 million favorable outcome.

A：The company has received $700 million in IIPA tariffs refunds following recent court rulings, which will significantly reduce debt levels and improve liquidity. New pricing actions have been implemented in response to trade pressure and supply constraints.

A：The financial highlights include net sales of $51.6 million, up from the third quarter and prior year period. Gross profit was $6.8 million or 13.2% of sales. The company reported a loss of operations of $2.4 million, with a non-GAAP operating loss of $1.5 million. Net loss per diluted share was $2.2 million or 18 cents, improving from the third quarter. Adjusted EBITDA was a negative $560,000, a 74% sequential improvement.

A：The GAAP operating loss for the full fiscal year was 7.2 million, while the non-GAAP operating loss was 8.6 million.

A：The net loss for the full fiscal year was 10.2 million, or 81 cents per diluted share.

A：Foreign exchange charges had a net impact of 1.4 million, with 1.3 million being non-cash foreign exchange charges mostly offset by tax-deductible foreign exchange losses related to China included in income tax expense, which reduced income tax payments.

A：The adjusted EBITDA for the full fiscal year was negative 4.7 million, compared to negative 3.7 million in the prior fiscal year.

A：The effective income tax rate for the fourth quarter was negative 2.7%, compared with 10.5% for the same period in the prior year.

A：The sequential improvement in the betting segment's gross profit was driven primarily by the same factors that drove improvement in consolidated gross profit during the quarter.

A：Upholstery fabric segment's sales in the fourth quarter were 21.1 million, down 2.5% compared to the prior year period. For the full year, sales were 86.9 million, down from 99.3 million in the prior fiscal year. The segment's post proper profit margin declined from 4.7 million or 21.7% of sales in the prior year period to 15.4 million or 17.7% of sales in the current fiscal year, primarily driven by lower comparable sales, offset somewhat by operational improvements and lower fixed costs.

A：Total inventory dollars were reduced to 47.5 million from 52.2 million in the third quarter and 40.3 million in the prior year's fourth quarter. The company looks to further reduce net debt and improve liquidity. As of the end of the fiscal year, there was a total of 24.2 million consisting of 8.3 million cash and 15.9 million in borrow availability under their credit facilities. Capital expenditures are expected to be in the 2 to 2.5 million range, with depreciation expected to be around 3.5 million for fiscal 2027.

A：The company expects to significantly reduce its outstanding debt through the recovery of approximately $7 million in Iepa care-free funds, received in the first quarter of fiscal 2027. This will enhance liquidity and improve balance sheet flexibility. The company expects to reduce net debt to as low as zero at the first quarter end. The company expects consolidated sales for the first quarter to moderately improve, cost and efficiency benefits from restructuring initiatives to drive improving gross profit and lower S&A expenses, resulting in break-even to positive adjusted EBITDA. The receipt of the $7 million in tariff-free funds is expected to enhance profitability in the first quarter.

A：The company is showing a positive outlook with a guide for moderate consolidated revenue growth for the first quarter and a sequential year-over-year increase. They expect to maintain consistent momentum, with short-term upside potential due to a stronger competitive position in the market.

A：The significant difference in gross profit margins is attributed to restructuring efforts over two years, which included integrating domestic upholstery with domestic mattress operations and a major fabric reorganization of the mattress business. There has been inventory noise and the margins have varied, with upholstery margins being fantastic and mattress margins improving but not yet reaching the desired levels.

A：The company is on track to achieve a run rate of approximately $22.5 million in cost savings by 2027. These savings are a result of pricing actions and some additional expense savings. The savings are expected to increase the company's profitability as any revenue growth will directly impact the bottom line without requiring additional costs for that growth.

A：The company plans to use the tariff refunds to pay down debt, with a strategic focus on reducing higher-interest debt in the U.S. This approach is expected to significantly reduce interest expense going forward. However, the company will still maintain some debt, particularly lower-rate debt in China, for strategic flexibility, especially considering market tumult with tariffs and other operational challenges.