Interface(US:TILE)2025-10-31 10:39Financial Performance - Net sales for Q3 2025 totaled $364.5 million, representing a 5.9% increase year-over-year and a 4.2% increase on a currency-neutral basis[6] - GAAP earnings per diluted share increased by 62.5% to $0.78, while adjusted earnings per diluted share rose by 27.1% to $0.61[6] - Gross profit margin expanded by 233 basis points to 39.4%, driven by favorable product mix and manufacturing efficiencies[7] - Net sales for the three months ended September 28, 2025, were $364.5 million, a 5.3% increase from $344.3 million for the same period in 2024[22] - Gross profit for the three months ended September 28, 2025, was $143.6 million, representing a gross margin of 39.4%, compared to $127.6 million and a gross margin of 37.1% in the prior year[22] - Operating income increased to $53.4 million for the three months ended September 28, 2025, up 26.4% from $42.2 million in the same period last year[22] - Net income for the three months ended September 28, 2025, was $46.1 million, a significant increase of 62.1% compared to $28.4 million in the prior year[22] - Earnings per share (EPS) for the three months ended September 28, 2025, were $0.79 (basic) and $0.78 (diluted), compared to $0.49 (basic) and $0.48 (diluted) in the same period last year[22] - For the first nine months of 2025, GAAP net income was $91.7 million with diluted EPS of $1.55, compared to $65.2 million and $1.11 in the same period of 2024, marking a 40.7% increase in net income and a 39.6% increase in EPS[29] - The company experienced a total revenue of $1,037.5 million for the first nine months of 2025, up from $980.6 million in the same period of 2024, which is a 5.8% increase[31] Balance Sheet and Cash Flow - Cash increased by 88.8% to $187.4 million, while total debt rose slightly by 1.7% to $307.8 million[9] - The net leverage ratio improved to 0.6x, indicating a stronger balance sheet position[9] - Total assets as of September 28, 2025, were $1.33 billion, an increase of 13.6% from $1.17 billion as of December 29, 2024[24] - Cash and cash equivalents increased to $187.4 million as of September 28, 2025, compared to $99.2 million at the end of the previous fiscal year[24] - Cash provided by operating activities for the three months ended September 28, 2025, was $76.7 million, slightly up from $76.2 million in the same period last year[25] - The company reported a total current liabilities of $240.2 million as of September 28, 2025, compared to $216.7 million as of December 29, 2024[24] - Long-term debt stood at $307.3 million as of September 28, 2025, a slight increase from $302.3 million at the end of the previous fiscal year[24] Operational Efficiency - Adjusted SG&A expenses increased by $4.5 million year-over-year due to higher sales commissions and inflation[8] - Adjusted EBITDA for the last 12 months reached $214.1 million, reflecting robust operational performance[9] - Non-GAAP adjusted operating income for Q3 2025 was $54.1 million, up from $43.5 million in Q3 2024, reflecting a 24.8% year-over-year growth[26] - The company reported a GAAP operating income of $53.4 million in Q3 2025, compared to $42.2 million in Q3 2024, representing a 26.4% increase[33] - Adjusted (non-GAAP) operating income for the first nine months of 2025 was $135.5 million, compared to $108.6 million in the same period of 2024, reflecting a 24.8% increase[29] - Non-GAAP Adjusted Operating Income (AOI) for the first nine months of 2025 was $135.5 million, up from $108.6 million in 2024, reflecting a 24.8% growth[34] Strategic Initiatives - The One Interface strategy contributed to a 29% increase in Healthcare segment sales and a 5% increase in Corporate Office segment sales[4] - The company plans to continue focusing on market expansion and new product development as part of its strategic initiatives moving forward[38] - The company believes that non-GAAP performance measures provide a meaningful basis for comparing current results with prior periods, aiding in business evaluation[38] Tax and Currency Impact - The company recognized a non-cash credit to income tax expense in Q3 2025 due to a reduction in the German corporate income tax rate, which will decrease by 1% annually from 2028 to 2032[27] - The impact of changes in currency for the first nine months of 2025 was a decrease of $6.0 million in consolidated net sales[31] Adjustments and Expenses - The total adjustments for non-GAAP measures in Q3 2025 amounted to $10.2 million, primarily due to purchase accounting amortization and restructuring costs[26] - The company incurred a total of $6.9 million in non-GAAP adjustments for the first nine months of 2025, compared to $3.8 million in 2024, showing an increase of 81.6%[34] - Interest Expense for the first nine months of 2025 was $13.1 million, down from $18.3 million in the same period of 2024, a decrease of 28.0%[36] - Depreciation and Amortization expenses for the first nine months of 2025 were $28.3 million, slightly up from $27.7 million in 2024, reflecting a 2.2% increase[36] Cyber Event Impact - The company reported a Cyber Event Impact of $(5.1) million for the fiscal year 2024, which was a significant factor in the financial results[37]