Interface(TILE) - 2026 Q1 - Quarterly Results

Financial Highlights Interface reported a solid start to 2025, with net sales rising 2.6% to $297 million and currency-neutral net sales growing 4.1% year-over-year, driven by strong performance in the Americas and double-digit growth in Healthcare and Education sectors Q1 2025 Key Metrics | Metric | Value | | :--- | :--- | | Net Sales | $297 million | | Currency-Neutral Net Sales Growth | 4.1% YoY | | GAAP Earnings per Diluted Share | $0.22 | | Adjusted Earnings per Diluted Share | $0.25 | - The Americas segment demonstrated strong momentum with a 6% increase in net sales and a 10% rise in currency-neutral orders[3] - Global billings in both the Healthcare and Education sectors grew by double digits, highlighting the success of the company's diversification strategy[3] - The ongoing "One Interface" strategy is credited with accelerating growth, expanding margins, and strengthening the company's market position[4][5] Consolidated Financial Performance For Q1 2025, GAAP net sales increased 2.6% to $297.4 million, while GAAP net income decreased to $13.0 million, or $0.22 per diluted share, though adjusted net income rose 3.0% to $14.6 million, resulting in adjusted EPS of $0.25, despite an 82 basis point decline in adjusted gross profit margin due to higher manufacturing and freight costs Q1 2025 vs Q1 2024 GAAP Consolidated Results (in millions, except per share data) | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $297.4 | $289.7 | 2.6% | | Gross Profit Margin | 37.3% | 38.1% | (80) bps | | Operating Income | $23.2 | $24.4 | (5.0)% | | Net Income | $13.0 | $14.2 | (8.3)% | | Earnings per Diluted Share | $0.22 | $0.24 | (8.3)% | Q1 2025 vs Q1 2024 Non-GAAP Consolidated Results (in millions, except per share data) | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Currency-Neutral Net Sales | $301.7 | $289.7 | 4.1% | | Adjusted Gross Profit Margin | 37.7% | 38.6% | (82) bps | | Adjusted Operating Income | $25.5 | $25.5 | (0.3)% | | Adjusted Net Income | $14.6 | $14.2 | 3.0% | | Adjusted Earnings per Diluted Share | $0.25 | $0.24 | 4.2% | - The decline in adjusted gross profit margin was expected and attributed to higher manufacturing costs in the EAAA region and increased freight costs, which were partially offset by higher pricing[7] Segment Performance The Americas (AMS) segment was a key growth driver, with net sales increasing 5.9% to $179.9 million and currency-neutral orders up 9.8%, while the Europe, Africa, Asia, and Australia (EAAA) segment faced challenges, with net sales declining 2.0% to $117.5 million and currency-neutral orders decreasing by 5.7% due to a softer regional macro environment Americas (AMS) Segment Results - Q1 2025 vs Q1 2024 (in millions) | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $179.9 | $169.9 | 5.9% | | Adjusted Operating Income | $19.9 | $18.1 | 9.9% | | Currency-Neutral Orders Increase | 9.8% | - | - | EAAA Segment Results - Q1 2025 vs Q1 2024 (in millions) | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $117.5 | $119.8 | (2.0)% | | Adjusted Operating Income | $5.6 | $7.4 | (24.9)% | | Currency-Neutral Orders (Decrease) | (5.7)% | - | - | Financial Position and Cash Flow As of March 30, 2025, Interface maintained a strong balance sheet with $97.8 million in cash and total debt of $302.9 million, resulting in a low net leverage ratio of 1.1x, with cash provided by operating activities at $11.7 million for the quarter and total assets growing to $1.19 billion Key Financial Position Metrics (as of March 30, 2025) | Metric | Value (in millions) | | :--- | :--- | | Cash | $97.8 | | Total Debt | $302.9 | | Net Debt | $205.1 | | Ratio | Value | | Net Leverage Ratio | 1.1x | Q1 Cash Flow Summary (in millions) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Cash Provided by Operating Activities | $11.7 | $12.6 | | Cash Used in Investing Activities | ($7.5) | ($2.0) | | Cash Used in Financing Activities | ($8.7) | ($29.8) | - Total assets increased to $1.192 billion as of March 30, 2025, from $1.171 billion at the end of fiscal year 2024[26] Business Outlook Interface issued a strong outlook for the second quarter and an updated forecast for the full fiscal year 2025, anticipating Q2 net sales between $355 million and $365 million, and raising full-year net sales guidance to a range of $1.340 billion to $1.365 billion, with an expected adjusted gross profit margin of 37.2% to 37.4% Q2 Fiscal Year 2025 Outlook | Metric | Forecast | | :--- | :--- | | Net Sales | $355 million to $365 million | | Adjusted Gross Profit Margin | ~37.2% of net sales | | Adjusted SG&A Expenses | ~$90 million | | Adjusted Effective Income Tax Rate | ~27.5% | Full Fiscal Year 2025 Outlook | Metric | Current Outlook | Previous Outlook | | :--- | :--- | :--- | | Net Sales | $1.340B to $1.365B | $1.315B to $1.365B | | Adjusted Gross Profit Margin | 37.2% to 37.4% | 37.2% to 37.4% | | Adjusted SG&A Expenses | ~26% of net sales | ~26% of net sales | | Capital Expenditures | ~$45 million | ~$45 million | Non-GAAP Financial Measures Reconciliation The report provides detailed reconciliations of GAAP to non-GAAP financial measures to offer additional insight into operating results, with key Q1 2025 adjustments including $1.3 million for purchase accounting amortization and $1.0 million for restructuring and other costs, reconciling a GAAP Net Income of $13.0 million to an Adjusted Net Income of $14.6 million, with similar reconciliations for gross profit, operating income, segment results, and EBITDA - The company presents non-GAAP measures such as adjusted EPS, adjusted operating income (AOI), currency-neutral sales, net debt, and adjusted EBITDA to provide useful information to investors by excluding certain items that may not be indicative of core operating performance[15][33] Q1 2025 GAAP to Non-GAAP Reconciliation Summary (in millions) | Metric | GAAP | Adjustments | Non-GAAP (Adjusted) | | :--- | :--- | :--- | :--- | | Gross Profit | $111.0 | $1.3 | $112.2 | | Operating Income | $23.2 | $2.2 | $25.5 | | Net Income | $13.0 | $1.6 | $14.6 | - For the last twelve months (LTM) ending March 30, 2025, the company reported Adjusted EBITDA of $187.2 million, reconciled from a GAAP Net Income of $85.8 million[30] Company Information and Safe Harbor Interface, Inc. is a global commercial flooring company and a recognized leader in sustainability, offering an integrated portfolio of carpet tile and resilient flooring products, actively pursuing ambitious climate goals, and qualifying its forward-looking statements with a Safe Harbor statement outlining significant business risks and uncertainties - Interface is a global flooring solutions company offering carpet tile (Interface®), resilient flooring (LVT), rubber flooring (nora®), and premium area rugs (FLOR®)[17] - The company has a strong focus on sustainability, working to achieve verified science-based carbon reduction targets by 2030 and a goal to be a carbon-negative enterprise by 2040[18] - The release contains a Safe Harbor statement warning that forward-looking statements are subject to numerous risks, including market competition, raw material costs, and global economic uncertainty, which could cause actual results to differ materially[21][23]