Financial Data and Key Metrics Changes - Consolidated net sales for the quarter were $135.7 million, down 8% year-over-year, primarily driven by trade-related uncertainty and short-term demand volatility across each business segment [20][24] - Gross profit was lower at $3.4 million, with a gross margin of 2.5% [20] - The Americas segment saw net sales decline by 1.3% compared to the prior year, with gross profit decreasing by $300,000 [21] - The Asia segment experienced a 19% decline in net sales and a 16% decline in gross profit, although gross margin improved by 40 basis points [22] Business Line Data and Key Metrics Changes - In the Americas, reduced sales volumes were attributed to trade uncertainty and productivity shortfalls from ongoing consolidation efforts [13] - The Brazil segment faced import pricing pressures and lower sales volumes, but demand fundamentals remain strong [14] - The Asia segment's sales continued to be weak due to prolonged trade negotiations [14] Market Data and Key Metrics Changes - Apparel sales growth remains solid at a 5% increase year-over-year, with inventory levels declining significantly [3] - In Brazil, demand stability is noted, but there are concerns about dumping pressures from Asia-based companies [10] - The tariff and trade situation has negatively impacted all business segments in the short term, but may provide greater support for the Americas segment in the long term [11] Company Strategy and Development Direction - The company has resized its cost model to align with lower revenue levels, implementing cost reductions and headcount reductions to improve cash flow and EBITDA [5][12] - There is a focus on expanding beyond apparel products, including military segments, carpet, resin sales, and packaging, which are expected to contribute to revenue growth [6][18] - The company is actively working with retailers to leverage U.S. yarn in Central America to reclaim tariffs, enhancing competitiveness [9][33] Management's Comments on Operating Environment and Future Outlook - Management acknowledges a challenging quarter due to external factors like tariffs and internal transitions, but expresses optimism for revenue momentum beginning in early 2026 [8][24] - The company expects to see improved profitability and cash flow as cost-saving measures take effect and demand recovers [24][26] - Management anticipates that the global trade situation will gain clarity by the end of calendar 2025, which should help improve top-line performance [25] Other Important Information - Reprieve fiber represented 29% of sales, down 1 percentage point from the previous year, but there is optimism for growth in Reprieve polyester resin sales [15] - Recent product launches under the AMI platform and collaborations with brands like Marmot and Lafuma are expected to enhance market presence [16][17] - The company continues to see positive momentum in beyond apparel initiatives, particularly in military and packaging applications [18] Q&A Session Summary Question: Can you provide more details about the volatility in demand and production, particularly in the Americas? - Management noted significant volatility in demand, with a rapid adjustment in production levels in response to lower-than-expected revenues [30] Question: What are customers saying about the operating environment and the upcoming holiday season? - Customers are cautious with inventory management, preparing for year-end inventories, but expect better performance in Q3 due to seasonal factors [32] Question: Can you expand on the green shoots seen with Reprieve? - There is renewed interest in Reprieve products, with expectations for growth in Asia and the Americas as ordering patterns improve [37] Question: What is the extent of the price increases mentioned? - Specific price increases were not disclosed, but they are responsive to costs and tariffs, aimed at maintaining value for customers [38] Question: What revenue is currently derived from beyond apparel initiatives? - The company expects to see significant growth in beyond apparel initiatives, estimating around $20 million in revenue by the end of calendar 2026 [40] Question: Are there any other key beyond apparel initiatives? - The automotive sector is also seen as a potential growth area, although there is caution due to industry changes [42]