Interface(US:TILE)2023-08-04 18:58Financial Data and Key Metrics Changes - Second quarter net sales totaled $329.6 million, a decrease of 4.9% year-over-year compared to a strong prior year that was up 23% [43] - Adjusted EPS was $0.25 versus $0.36 in the second quarter last year [19] - Adjusted EBITDA was $39.8 million this year compared to $49 million in the second quarter last year [19] - Adjusted gross profit margin was 33.9%, a decrease of 39 basis points from the prior year period [18] - The company repaid $25.9 million of debt, resulting in net debt of $382.6 million at the end of Q2 [11] Business Line Data and Key Metrics Changes - Currency-neutral net sales were down 5% year-over-year, with a strong prior year comp that was up 23% [14] - Consolidated currency-neutral orders in Q2 were down 2% year-over-year, with orders down 3% in the Americas and flat in EAAA [16] - Education segment grew to 18% of global billings, with sales in this segment up 7% year-over-year [39][40] Market Data and Key Metrics Changes - In EMEA, net sales were down 5%, Asia down 31%, and Australia up 4% year-over-year [18] - The Americas saw a 3% decline in net sales year-over-year, while EAAA experienced an 8% decline [43] Company Strategy and Development Direction - The "One Interface" strategy is progressing as planned, focusing on resetting the operating model to leverage the entire company for growth and improved profits [8] - The company is enhancing digital capabilities to improve customer experience and showcase new design software [7] - A new Chief Supply Chain Officer has been appointed to lead supply chain optimization efforts [42] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about steady customer demand and an improving supply chain environment [12] - The company anticipates a strong second half with continued market share gains and strong cash generation [22] - Management noted that raw material prices have stabilized, with a 2% year-over-year deflation in Q2 [10] Other Important Information - The company was recognized as one of Time's 100 Most Influential Companies for its sustainability efforts [67] - Capital expenditures were $5.6 million in Q2 2023 compared to $4.3 million in 2022 [45] Q&A Session Summary Question: Can you touch on the gross profit outlook for the full year? - Management noted that a more stable supply chain environment and deflation in raw materials have improved the gross profit outlook [25][26] Question: Are you seeing any pricing pressure or increased competition? - Management indicated that pricing is holding up well, with market share gains in the US and strong sales of premium products [27] Question: Can you update on the One Interface strategy? - Management reported good progress, with a new Chief Supply Chain Officer in place to enhance gross margins [30] Question: What are the near-term order patterns in the US? - Management noted steady demand in the Americas, with a focus on low carbon products [33] Question: How have units performed in the second quarter? - Units were down roughly 10% year-over-year, with pricing up approximately 5% [71]