Interface(TILE) - 2026 Q4 - Annual Results

Financial Performance - Fourth quarter 2025 net sales reached $349 million, a 4.3% increase year-over-year, while full year net sales totaled $1.387 billion, up 5.4%[7] - Adjusted earnings per diluted share for the fourth quarter increased by 44.1% to $0.49, and for the full year, it rose by 32.9% to $1.94[7] - Adjusted operating income for the fourth quarter increased by 16.7% to $38.2 million, and for the full year, it rose by 22.9% to $173.8 million[8] - Net income for the twelve months ended December 28, 2025, was $116,098 thousand, a significant increase of 33.5% compared to $86,946 thousand in 2024[27] - Earnings per share (diluted) for the twelve months ended December 28, 2025, rose to $1.96, up from $1.48 in 2024, reflecting a 32.4% increase[27] - In Q4 2025, the company reported a GAAP net income of $24.4 million, translating to a diluted EPS of $0.41, compared to $21.8 million and $0.37 in Q4 2024, representing a 12% increase in net income year-over-year[34] - For the fiscal year 2025, the company achieved a GAAP net income of $116.1 million with a diluted EPS of $1.96, up from $86.9 million and $1.48 in fiscal year 2024, indicating a 33% increase in net income[36] Profitability Metrics - Adjusted gross profit margin for the fourth quarter improved by 169 basis points year-over-year to 38.6%, driven by favorable pricing and product mix[8] - The company's gross profit for Q4 2025 was $134.8 million, a 10% increase from $122.3 million in Q4 2024, while SG&A expenses rose to $99.4 million from $92.7 million[34] - Non-GAAP Adjusted Operating Income (AOI) for FY 2025 was $173.8 million, up from $141.4 million in FY 2024, representing an increase of 22.8%[41] - Adjusted Earnings before Interest, Taxes, Depreciation, and Amortization (AEBITDA) for FY 2025 was $217.9 million, compared to $189.0 million in FY 2024, indicating a rise of 15.2%[43] Cash Flow and Debt Management - The company generated $49 million in cash from operations and repaid $128 million of debt during the fourth quarter[7] - Total debt decreased by 40% to $181.6 million, while net debt fell by 45.8% to $110.3 million[10] - Cash provided by operating activities for the twelve months ended December 28, 2025, was $167,906 thousand, compared to $148,430 thousand in 2024, marking a 13.2% increase[31] - The company reported a total cash on hand of $71.3 million as of December 28, 2025[45] Sales Growth and Forecast - For fiscal year 2026, the company anticipates net sales between $1.420 billion and $1.460 billion, with an adjusted gross profit margin of 38.5% to 39.0%[15] - Currency-neutral net sales for the fourth quarter increased by 1.6% year-over-year, while full year currency-neutral sales growth was 4.3%[8] - Currency-neutral net sales for the fiscal year 2025 reached $1,371.9 million, up from $1,315.7 million in fiscal year 2024, reflecting a growth of 4.3%[39] - The One Interface strategy contributed to a 21% increase in global billings in the Healthcare segment and an 8% increase in the Education segment for the fiscal year[4] Regional and Segment Performance - Net sales by region for the twelve months ended December 28, 2025, showed that the Americas accounted for 61%, EMEA for 29%, and APAC for 10% of total sales[32] - Corporate/Office vertical contributed 44% to gross billings for the twelve months ended December 28, 2025, followed by Education at 20% and Healthcare at 11%[33] - In Q4 2025, the EAAA segment generated net sales of $143.5 million, while the AMS segment reported $205.9 million, leading to consolidated net sales of $349.4 million[39] Adjustments and Other Financial Impacts - The company incurred $2.9 million in restructuring and other net adjustments in Q4 2025, which positively impacted the adjusted operating income[34] - The impact of currency changes on net sales for fiscal year 2025 was a reduction of $14.9 million, highlighting the importance of currency fluctuations on revenue[39] - The company experienced a loss of $2.3 million related to property casualty in fiscal year 2025, which was accounted for in the financial results[36] - The impact of cyber events on GAAP Operating Income was a loss of $0.3 million in Q4 2024, while there was no impact reported for Q4 2025[41] - Income Tax Expense for Q4 2025 was $2.7 million, down from $5.6 million in Q4 2024, a decrease of 51.8%[43] - Interest Expense for FY 2025 was $19.5 million, a decrease from $23.2 million in FY 2024, reflecting a reduction of 16.0%[43]