Financial Data and Key Metrics Changes - For Q3 2025, the company reported net sales of $62.4 million, a decrease from $64.9 million in Q3 2024, indicating a decline of approximately 3.9% year-over-year [2] - The operating loss for Q3 2025 was $2.0 million, slightly improved from an operating loss of $2.1 million in Q3 2024 [2] - The net loss from continuing operations was $4.0 million, or $0.28 per diluted share, compared to a net loss of $3.7 million, or $0.26 per diluted share in the same quarter of the previous year [2] - Gross margins were reported at 24.8%, slightly up from 24.6% in Q3 2024, while year-to-date margins improved to 27% from 25.7% [4] Business Line Data and Key Metrics Changes - Soft surface net sales were down less than 1% year-over-year, outperforming the industry which declined approximately 4% in Q3 [11] - The hard surface segment saw net sales increase over 17% year-over-year for the first nine months [12] - The company introduced new products in the third quarter, including two new Duracil polyester carpet styles and six new decorative carpet styles, contributing to positive growth in high-end segments [11] Market Data and Key Metrics Changes - The flooring industry has faced a downturn, with a reported 30% decline in units over the past three years due to low home sales and high housing prices [9] - The company noted that residential remodeling is a primary driver of sales, as flooring is often replaced before homes are listed or after purchase [9] Company Strategy and Development Direction - The company has implemented a profit improvement plan aiming for $10 million in cost reductions, with 90% of the plan expected to be in place by year-end [10] - The focus remains on high-end customer service, design-focused product introductions, and operational excellence to navigate industry challenges [12] - The company has reduced costs by nearly $60 million over the past three years through restructuring and operational efficiencies [9] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the impact of declining interest rates and higher home prices on flooring purchases [13] - The company is closely monitoring market conditions and is prepared to take additional financing actions if necessary [22] - Management highlighted the importance of managing working capital and minimizing capital expenditures to maintain liquidity [10][22] Other Important Information - The company has entered into a memorandum of understanding to settle two PFAS-related lawsuits, with an estimated liability recorded in Q3 results [12][13] - Legal expenses related to these lawsuits are included in administrative expenses, and some of these costs are not expected to recur in the next quarter [19][20] Q&A Session Summary Question: Impact of price increases on future quarters - Management indicated that the price increases implemented in late September and October would have a muted impact in Q4 but are expected to contribute approximately $6 million in the following year [16] Question: Performance trends in September and October - Management noted that their business typically strengthens in October, with a run rate 12% above Q3, aligning closely with the previous year [17] Question: Clarification on cost reductions - The $10 million in cost reductions mentioned is incremental to previous reductions and includes the impact of price increases [18] Question: Liquidity and financing strategies - Management expressed comfort with current liquidity levels but is considering additional financing options to cushion against potential market fluctuations [21][22]