Interface, Inc. Q3 FY2025 earnings call

• Interface had strong Q3 with currency-neutral net sales growth of 4% and profitability gains. - One Interface strategy is driving results, with unified selling teams in U.S. since Jan 2024 driving growth. - Nora Rubber grew 20% in Q3 and 19% YTD, with investments in automation, productivity, and innovation planned. - Introduced stellar Horizon's carpet tile collection and new resilient products. - Healthcare billings up 29%, corporate office up 5% Q3 and YTD, education billings slight Q3 decline but YTD up high single digits. - Recognized with awards for sustainability.

Interface delivered currency-neutral net sales growth of 4%. Americas saw currency-neutral net sales increase 4%, and EAAA also had 4% growth. Nora Rubber grew 20% in the third quarter and 19% year-to-date. Global healthcare billings were up 29% with double-digit gains in Americas and EAAA. Corporate office billings were up 5% in Q3 and YTD. Education billings declined slightly in Q3 but remained up high single digits YTD. Net sales increased through a balanced mix of price and volume, adjusted gross profit margin expanded by 208 basis points.

• Raised full-year 2025 guidance: net sales $1.375B - $1.390B, adjusted gross profit margin 38.5% of net sales, adjusted SG&A expenses $362M, adjusted interest and other expenses $25M, adjusted effective income tax rate 26%, capital expenditures $45M, fully diluted weighted average share count 59.1 million shares. - Anticipate similar tariff-related gross profit percentage dilution in Q4 as in Q3.

• Tariff-related costs diluting gross profit percentage, with approximately 30 basis points diluted in Q3 and anticipated 50 basis points in Q4. - Dynamic market environment posing challenges to maintaining margins and driving growth.

Q: Expansion of addressable market and selling full portfolio?

A: Added global product category management to drive innovation funnel. Selling full suite of products to global customers, still in early days but continuing to build out.

Q: Capital allocation for CapEx next year?

A: Large portion related to Nora, but also innovation and automation investments outside of Nora.

Q: Stock buyback program?

A: Opportunistic, keeping in mind #1 priority of investing in business for growth, margin expansion, and innovation, while returning capital to shareholders when opportunity arises.