Financial Data and Key Metrics Changes - In Q4 2024, net sales were approximately $64.4 million, down from $66.7 million in Q4 2023 [2] - The net loss for Q4 2024 was $7.2 million compared to a net loss of $3.2 million in Q4 2023, which included an $8.2 million gain on the sale of assets [3] - For the fiscal year 2024, net sales were $265 million, down 4.1% from $276 million in 2023 [4] - The net loss from continuing operations for 2024 was $12.2 million or $0.83 per diluted share, compared to a net loss of $1.95 million or $0.13 per diluted share in 2023 [3] - Gross profit margin in 2024 was 24.7% of net sales, down from 26.7% in the prior year [5] Business Line Data and Key Metrics Changes - Selling and administrative expenses in 2024 were reduced by $4.3 million or 5.8% of net sales due to planned cost-cutting initiatives [5] - Facility consolidation expenses were $2.5 million lower than the prior year, including additional write-downs of idled assets [6] - The company reduced costs by over $35 million in 2023 and further reduced costs by over $10 million in 2024 [11] Market Data and Key Metrics Changes - Existing home sales have declined dramatically from over 6 million homes per year to under 4 million, impacting the industry significantly [9] - The actual square yards of carpet chips have decreased by 25% over the last three years [10] Company Strategy and Development Direction - The company has focused on cost reduction and restructuring to align capacity with current volume, reducing the number of associates by approximately 28% over the last three years [11] - Investment in extrusion equipment aims to provide lower-cost raw materials and ensure a consistent supply [12] - The company is expanding its product offerings, including hard surface products under the TrueCore brand and enhancing its high-end wood program [13][14] Management Comments on Operating Environment and Future Outlook - The management noted that the industry has been in a recession for several years, with existing home sales at the lowest point since 1995 [9] - The company anticipates further cost reductions exceeding $10 million in 2025 and continues to manage working capital effectively [11][17] - The impact of tariffs on imported products is uncertain, but the company is prepared to take appropriate actions as needed [16] Other Important Information - The company closed a new $75 million senior credit facility, enhancing its financial position [8] - The company has maintained low capital expenditures except for investments in extrusion equipment [11] Q&A Session Summary Question: What percent of hard surfaces is imported from China? - Very little is imported from China, with imports coming from Thailand, Cambodia, Vietnam, and some from Europe [19] Question: How quickly can the company pass along price increases due to tariffs? - It is unclear, but it is likely that price increases will be passed on quickly as tariffs become impactful [22] Question: What was the amount of the Q4 inventory write-down? - The overall reduction in inventory was $9.8 million, with additional reserves made for excess inventory [25][26] Question: How soon will the company achieve the $10 million cost reduction? - The company is very close to that level today, with most of the reductions planned months ago [27] Question: Is there potential benefit from tariffs for the soft side of the business? - It depends on where the tariffs end up, but imports are not a major factor for the domestic tufted carpet business [34] Question: Is the full amount of $12.2 million available to borrow under the new credit facility? - Yes, the $12.2 million includes the $6 million excess availability [35]