Core Insights - Interface reported quarterly earnings of $0.6 per share, exceeding the Zacks Consensus Estimate of $0.47 per share, and showing an increase from $0.4 per share a year ago, resulting in an earnings surprise of +27.66% [1] - The company achieved revenues of $375.52 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 4.31%, compared to $346.64 million in the same quarter last year [2] - Interface has consistently surpassed consensus EPS estimates over the last four quarters, achieving this four times [2] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.48 on revenues of $352 million, and for the current fiscal year, it is $1.58 on revenues of $1.35 billion [7] - The estimate revisions trend for Interface was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Textile - Home Furnishing industry, to which Interface belongs, is currently in the top 40% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Company Overview - Interface reported net sales of $1.3 billion in FY2024[9] - The company has a global presence with 6 manufacturing locations on 4 continents[9] - Interface is recognized as a leader in sustainability with over 50 years of innovation[11] Financial Performance (Q2 2025) - Net sales increased by 8.3% year-over-year to $375.5 million[63, 64, 66] - Currency neutral net sales increased by 7.1% year-over-year to $371.1 million[63, 80] - Gross profit increased by 20.7% to $148.0 million, representing 39.4% of net sales[64] - Operating income increased by 36.4% to $52.0 million, representing 13.9% of net sales[64] - Adjusted operating income increased by 41.2% to $55.9 million, representing 14.9% of net sales[63, 66] - Adjusted EBITDA was $64.8 million, representing 17.3% of net sales[66] - Adjusted earnings per share was $0.60[63, 66] Sustainability Metrics (2024) - Scope 1 emissions reduced by 30%[49] - Scope 2 emissions reduced by 28%[49] - Scope 3 emissions (Purchased Goods & Services) reduced by 42%[49] - 80% of total energy sourced at manufacturing sites is renewable[52]

```markdown [Executive Summary & Q2 2025 Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Q2%202025%20Highlights) Interface exceeded Q2 2025 expectations with **7%** currency-neutral net sales growth and **403 bps** gross margin expansion, raising full-year guidance Q2 2025 Performance Highlights | Metric | Value | Change (YoY) | | :--- | :--- | :--- | | Net Sales | $376 million | +8% | | Currency-Neutral Net Sales | - | +7% | | GAAP Earnings per Diluted Share | $0.55 | +45% | | Adjusted Earnings per Diluted Share | $0.60 | +50% | - The 'One Interface' strategy is yielding measurable results, fueling growth across all product categories and key market segments[5](index=5&type=chunk) - Global billings saw significant increases in key market segments: Healthcare grew by **28%**, Education by **11%**, and Corporate Office by **3%**[5](index=5&type=chunk) - Gross profit margin expanded by **403 basis points**, attributed to higher pricing, favorable product mix, and manufacturing cost benefits from increased sales volumes[6](index=6&type=chunk) [Financial Performance](index=2&type=section&id=Financial%20Performance) Interface achieved robust Q2 2025 financial health, driven by Americas segment growth and a solid balance sheet with reduced net debt [Consolidated Results](index=2&type=section&id=Consolidated%20Results) Q2 2025 consolidated net sales grew **8.3%** to **$375.5 million**, with operating income up **36.4%** and adjusted EPS increasing **50%** to **$0.60** Consolidated Financial Metrics | Metric | 6/29/2025 | 6/30/2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $375.5M | $346.6M | +8.3% | | Gross Profit Margin % | 39.4% | 35.4% | +403 bps | | Operating Income | $52.0M | $38.2M | +36.4% | | Net Income | $32.6M | $22.6M | +44.3% | | Adjusted Operating Income | $55.9M | $39.6M | +41.2% | | Adjusted Net Income | $35.4M | $23.6M | +49.9% | | Adjusted EPS | $0.60 | $0.40 | +50.0% | - Adjusted SG&A expenses increased by **$9.1 million** year-over-year, driven by higher sales commissions, variable compensation, healthcare costs, inflation, and foreign currency exchange variances[9](index=9&type=chunk) [Segment Results](index=3&type=section&id=Segment%20Results) Americas segment drove Q2 2025 growth with **11.5%** currency-neutral net sales and **81.3%** adjusted operating income surge, while EAAA declined Segment Performance Overview | Segment | Currency-Neutral Net Sales Change | Adjusted Operating Income Change | | :--- | :--- | :--- | | **AMS** | +11.5% | +81.3% | | **EAAA** | -0.1% | -44.2% | - Currency-neutral orders increased by **2.1%** year-over-year in the AMS segment, while they decreased by **4.3%** in the EAAA segment[11](index=11&type=chunk) [Balance Sheet & Key Metrics](index=2&type=section&id=Balance%20Sheet%20%26%20Key%20Metrics) Balance sheet shows improved liquidity with cash up **22.6%** to **$121.7 million**, net debt down **10.2%** to **$182.7 million**, and a **0.9x** Net Leverage Ratio Balance Sheet Summary | Metric | 6/29/2025 | 12/29/2024 | Change | | :--- | :--- | :--- | :--- | | Cash | $121.7M | $99.2M | +22.6% | | Total Debt | $304.4M | $302.8M | +0.6% | | Net Debt | $182.7M | $203.5M | -10.2% | | Net Leverage Ratio | 0.9x | N/A | N/A | - Total assets increased to **$1,278.2 million** from **$1,170.8 million** at the end of fiscal year 2024[30](index=30&type=chunk) [Statement of Operations](index=8&type=section&id=Statement%20of%20Operations) Q2 2025 consolidated operations report net income of **$32.6 million** on **$375.5 million** net sales, with diluted EPS rising to **$0.55** Consolidated Statement of Operations | Metric (Thousands USD) | Three Months Ended 6/29/2025 | Three Months Ended 6/30/2024 | | :--- | :--- | :--- | | Net Sales | $375,522 | $346,635 | | Gross Profit | $147,977 | $122,613 | | Operating Income | $52,047 | $38,151 | | Net Income | $32,561 | $22,558 | | Earnings Per Share – Diluted | $0.55 | $0.38 | [Statement of Cash Flows](index=10&type=section&id=Statement%20of%20Cash%20Flows) Six months ended June 29, 2025, cash from operations increased to **$41.9 million**, with a net positive change in cash of **$22.5 million** Consolidated Statement of Cash Flows | Metric (Thousands USD) | Six Months Ended 6/29/2025 | Six Months Ended 6/30/2024 | | :--- | :--- | :--- | | Cash Provided by Operating Activities | $41,867 | $34,158 | | Cash Used in Investing Activities | ($14,821) | ($11,567) | | Cash Used in Financing Activities | ($13,740) | ($36,960) | | **Net Change in Cash** | **$22,475** | **($16,311)** | - The company repurchased **$4.3 million** of common stock in the first six months of 2025, with no repurchases in the same period of 2024[31](index=31&type=chunk) [Business Outlook](index=4&type=section&id=Business%20Outlook) Interface raised full fiscal year 2025 guidance, projecting net sales between **$1.370 billion** and **$1.390 billion**, and Q3 net sales between **$350 million** and **$360 million** Q3 2025 Business Outlook | Metric | Q3 2025 Outlook | | :--- | :--- | | Net sales | $350 million to $360 million | | Adjusted gross profit margin | 38.0% of net sales | | Adjusted SG&A expenses | $92 million | | Adjusted effective income tax rate | 27.0% | Full Year 2025 Business Outlook | Metric | Updated Full Year 2025 Outlook | Previous Full Year 2025 Outlook | | :--- | :--- | :--- | | Net sales | $1.370B to $1.390B | $1.340B to $1.365B | | Adjusted gross profit margin | 37.7% of net sales | 37.2% to 37.4% of net sales | | Adjusted SG&A expenses | $362 million | 26% of net sales | | Adjusted effective income tax rate | 26.0% | 27.0% | [Appendix: Non-GAAP Reconciliations](index=5&type=section&id=Appendix%3A%20Non-GAAP%20Reconciliations) Appendix provides detailed reconciliations of GAAP to non-GAAP financial measures, including adjusted EPS, AOI, and adjusted EBITDA, to clarify core operating performance - Non-GAAP measures like adjusted EPS, adjusted net income, and AOI exclude items such as nora purchase accounting amortization, restructuring, asset impairment, and severance costs[18](index=18&type=chunk) - For Q2 2025, GAAP Net Income of **$32.6 million** was adjusted by **$2.8 million** for items like purchase accounting amortization and restructuring, resulting in an Adjusted (non-GAAP) Net Income of **$35.4 million**[32](index=32&type=chunk) - Adjusted EBITDA for the last twelve months (LTM) ended June 29, 2025, was calculated to be **$201.6 million**, up from **$189.0 million** for the fiscal year 2024[39](index=39&type=chunk) [Company Information & Disclosures](index=5&type=section&id=Company%20Information%20%26%20Disclosures) Section outlines Interface, Inc.'s profile as a global flooring and sustainability leader, details investor call, defines non-GAAP measures, and includes Safe Harbor Statement - Interface is a global flooring company offering carpet tile and resilient flooring products, with a strong focus on sustainability and a goal to become a carbon negative enterprise by **2040**[20](index=20&type=chunk)[21](index=21&type=chunk) - A conference call to discuss Q2 2025 results will be hosted on August 1, 2025, at 8:00 a.m. Eastern Time[16](index=16&type=chunk) - The press release contains forward-looking statements, including the financial outlook for Q3 and the full year 2025, which are subject to numerous risks and uncertainties detailed in the company's Form 10-K[24](index=24&type=chunk) ```

Group 1 - Interface operates as a global flooring solutions firm, indicating its role in the flooring industry [1] - The company has been recognized for years, suggesting a level of stability and potential for investment [1] Group 2 - Crude Value Insights focuses on cash flow and companies in the oil and natural gas sector, highlighting the importance of financial health in investment decisions [1] - The service offers a stock model account and in-depth cash flow analyses, which can provide valuable insights for investors [2]

Economic Overview - Inflation is cooling at a faster rate than expected, with the consumer price index (CPI) rising only 0.1% sequentially in May, lower than the consensus estimate of 0.2% [3][9] - Year-over-year, CPI increased 2.4%, aligning with analysts' expectations, while core CPI rose 0.1% sequentially and 2.8% year-over-year, both lower than expected [3][4] Consumer Discretionary Stocks - Positive sentiment in the market suggests investing in consumer discretionary stocks such as Carnival Corporation & plc (CCL), Fox Corporation (FOX), Netflix, Inc. (NFLX), and Interface, Inc. (TILE) [2][8] - These stocks have seen positive earnings estimate revisions in the last 60 days, with each carrying a Zacks Rank 2 (Buy) [2] Company-Specific Insights Carnival Corporation & plc - Carnival Corporation operates as the largest cruise operator globally, carrying nearly half of the global cruise guests [10] - The expected earnings growth rate for the current year is 31.7%, with the Zacks Consensus Estimate for current-year earnings improving by 1.1% over the last 60 days [10] Fox Corporation - Fox Corporation produces and distributes news, sports, and entertainment content, with brands including FOX News and FOX Sports [11] - The expected earnings growth rate for the current year is 32.4%, with the Zacks Consensus Estimate for current-year earnings improving by 1.1% over the past 60 days [11] Netflix, Inc. - Netflix is a pioneer in the streaming space, aggressively building its portfolio of original shows to maintain its leading position [12] - The expected earnings growth rate for the current year is 27.7%, with the Zacks Consensus Estimate for current-year earnings improving by 3.3% over the past 60 days [12] Interface, Inc. - Interface is the world's largest manufacturer of modular carpets, committed to sustainability while enhancing shareholder value [13] - The expected earnings growth rate for the current year is 8.2%, with the Zacks Consensus Estimate for current-year earnings improving by 2.6% over the past 60 days [13]

Core Viewpoint - Investors are increasingly seeking growth stocks that demonstrate above-average growth potential, but identifying such stocks can be challenging due to inherent risks and volatility [1] Group 1: Growth Stock Identification - The Zacks Growth Style Score system aids in identifying promising growth stocks by analyzing real growth prospects beyond traditional metrics [2] - Interface (TILE) is highlighted as a recommended stock with a favorable Growth Score and a top Zacks Rank [2] Group 2: Earnings Growth - Earnings growth is a critical factor for growth investors, with double-digit growth being particularly attractive [4] - Interface's projected EPS growth for the current year is 8.2%, surpassing the industry average of 6.5% [5] Group 3: Asset Utilization - The asset utilization ratio, or sales-to-total-assets (S/TA) ratio, is an important metric for assessing a company's efficiency in generating sales [6] - Interface has an S/TA ratio of 1.1, indicating it generates $1.1 in sales for every dollar in assets, outperforming the industry average of 1.02 [6] Group 4: Sales Growth - Sales growth is another key indicator, with Interface expected to achieve a sales growth of 2.8% this year, compared to the industry average of 1.4% [7] Group 5: Earnings Estimate Revisions - Positive trends in earnings estimate revisions are correlated with stock price movements [8] - The current-year earnings estimates for Interface have increased by 2.6% over the past month, indicating a favorable outlook [8] Group 6: Overall Positioning - Interface has achieved a Zacks Rank of 2 and a Growth Score of B, positioning it well for potential outperformance in the growth stock category [10]

Core Insights - Soundhound AI has gained attention in the market due to the growing interest in AI technologies, particularly since the last coverage on December 10, 2024 [1] Company Analysis - The company is positioned within the tech sector, which is currently experiencing significant investor interest [1] - The investment philosophy emphasizes simplicity, focusing on fundamental financial ratios and metrics for clearer insights [1] Market Trends - There is a notable trend of investors eager to capitalize on the proliferation of AI technologies, indicating a potential growth area for companies like Soundhound AI [1]

Core Viewpoint - Growth stocks are appealing due to their potential for above-average financial growth, but identifying strong growth stocks can be challenging due to associated risks and volatility [1] Group 1: Growth Stock Identification - The Zacks Growth Style Score system aids in identifying promising growth stocks by analyzing real growth prospects beyond traditional metrics [2] - Interface (TILE) is highlighted as a recommended stock with a favorable Growth Score and a top Zacks Rank [2] Group 2: Earnings Growth - Earnings growth is a critical factor for growth investors, with double-digit growth being particularly desirable [4] - Interface's projected EPS growth is 8.2% for the current year, significantly higher than the industry average of 4.8% [5] Group 3: Asset Utilization - The asset utilization ratio, or sales-to-total-assets (S/TA) ratio, is an important indicator of efficiency in generating sales [6] - Interface has an S/TA ratio of 1.1, outperforming the industry average of 1.02, indicating better asset efficiency [6] Group 4: Sales Growth - Sales growth is another key metric, with Interface expected to achieve a 2.8% sales growth this year, compared to the industry average of 0% [7] Group 5: Earnings Estimate Revisions - Positive trends in earnings estimate revisions correlate strongly with stock price movements [8] - The current-year earnings estimates for Interface have increased by 2.6% over the past month, indicating positive momentum [8] Group 6: Overall Positioning - Interface has achieved a Zacks Rank of 2 (Buy) and a Growth Score of B, positioning it well for potential outperformance in the growth stock category [10]

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _______________ Form 10-Q þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended March 30, 2025 Commission File Number 001-33994 INTERFACE INC (Exact name of registrant as specified in its charter) | Georgia | | 58-1451243 | | --- | --- | --- | | (State or other jurisdiction of | | ...

Financial Data and Key Metrics Changes - Interface reported a 4% year-over-year currency neutral growth in net sales for Q1 2025, with net sales totaling $297.4 million, an increase of 2.6% compared to Q1 2024 [6][17] - Adjusted gross profit margin for Q1 was 37.7%, a decrease of 82 basis points from the prior year due to higher manufacturing and freight costs [17] - Adjusted EPS increased to $0.25 from $0.24 in Q1 2024, while adjusted EBITDA decreased to $37 million from $38.8 million [18] Business Line Data and Key Metrics Changes - Global education billings increased by 13%, supported by modernization initiatives and regional migration [12] - Health care billings rose by 16% year-over-year, driven by strong orders converting to billings [12] - Corporate office billings decreased by 7% year-over-year, attributed to timing, but growth is expected for the full year [13] Market Data and Key Metrics Changes - In The Americas, net sales grew by 6% and currency neutral orders were up 10% [11] - EAAA experienced a softer macro environment, with currency neutral orders down 6% year-over-year [15] - Consolidated currency neutral orders increased by 3% year-over-year, with a strong backlog up 12% [15] Company Strategy and Development Direction - The "One Interface" strategy is focused on building strong global functions, enhancing productivity, expanding margins, and leading in design performance and sustainability [6][10] - A new VP of Global Product Category Management was appointed to optimize the product innovation pipeline [7] - The company is committed to sustainability, aiming to be carbon negative by 2040 and incorporating captured carbon into manufacturing processes [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong order momentum and backlog, anticipating a strong second quarter despite global macro uncertainties [20][21] - The company is monitoring the tariff environment, with plans to offset impacts through pricing and productivity [16][19] - Management highlighted the importance of local manufacturing to mitigate tariff exposure [16][54] Other Important Information - Capital expenditures for Q1 2025 were $7.5 million, up from $4 million in 2024, with a focus on strategic investments [19] - The company expects net sales for Q2 2025 to be between $355 million and $365 million [20] Q&A Session Summary Question: Q1 results were better than expected, particularly on gross margin and SG&A - Management confirmed that the "One Interface" strategy is delivering results, with strong growth in all product categories globally [23][24] Question: Guidance was raised on the lower end; what drove this? - The increase in guidance was based on strong Q1 results and positive outlook for Q2, supported by strong order growth [31][32] Question: How did EAAA perform compared to The Americas? - EAAA had softer results, but Asia Pacific showed strong double-digit growth [37][39] Question: What is the status of the government business? - The government segment, while small, showed strength in Q1, with activity holding steady [42] Question: Any changes to capital allocation given the strong balance sheet? - The focus remains on investing in the business and executing on those investments to drive growth [47] Question: Concerns about timing mismatch with tariffs and pricing? - Management believes the timing of cost increases and pricing adjustments will align well [61] Question: How is the new global product category management role expected to impact growth? - This role is aimed at optimizing the innovation funnel and is expected to yield long-term benefits [65][66] Question: What is the outlook on the return to office dynamic? - Management sees ongoing churn and opportunities for modernization in office spaces, indicating a positive outlook for growth [71][72]