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]