Interface, Inc. (Nasdaq: TILE), a worldwide commercial flooring
company and global leader in sustainability, today announced
results for the fourth quarter and full fiscal year ended December
31, 2023.
Fourth quarter highlights:
- Net sales totaled $325.1 million, down 3.1%
year-over-year.
- Gross profit margin increased to 37.9%, up 646 basis points
year-over-year.
- GAAP earnings per share of $0.33; Adjusted earnings per share
of $0.41.
- Generated $27.8 million of cash from operations, repaid $29.6
million of debt in the quarter.
Fiscal Year:
- Net sales totaled $1,261.5 million, down 2.8%
year-over-year.
- Gross profit margin increased to 35.0%, up 124 basis points
year-over-year.
- GAAP earnings per share of $0.76; Adjusted earnings per share
of $1.00.
- Generated $142.0 million of cash from operations, repaid $105.3
million of debt in the year.
“Strong fourth quarter performance rounded out a solid year,
reinforcing our confidence that our strategy is working. Education
remains a standout market segment with total sales up 5% for the
full year, and notable strength in the Americas. We continue to
take share in Corporate Office, as global sales increased 4% in the
fourth quarter and were flat for the year in an incredibly dynamic
market,” commented Laurel Hurd, CEO of Interface.
“Continued softness in the retail sector drove the majority of
our year-over-year net sales decline both in the fourth quarter and
the full year. While retail remains a small percentage of our
overall revenue, it did have an outsized impact on net sales in the
second half of 2023 and we expect this headwind to persist through
the first half of 2024,” continued Hurd. “The team did a great job
driving mix and holding price, and our margins further benefited
from raw material cost deflation.”
“We are intently focused on commercial excellence and leveraging
our strengths as one global organization. Our sales teams are
aligned to our fastest growing markets and are working
collaboratively across our brands to accelerate growth and drive
value for our shareholders,” concluded Hurd.
“Interface ended 2023 with strong momentum on the gross profit
margin line as we continued to hold price and drive favorable mix
geographically and across product lines. During 2023, we delivered
on our capital allocation commitments by aggressively paying down
debt while investing in the business. Looking ahead, we remain
focused on debt repayment and reinvesting in the business to drive
automation and innovation for the future. We believe our strong
financial position enables us to effectively capitalize on
opportunities to accelerate growth,” added Bruce Hausmann, CFO of
Interface.
Fourth Quarter 2023 Financial Summary
Sales: Fourth quarter net sales were $325.1 million, down
3.1% versus $335.6 million in the prior year period.
Gross profit margin was 37.9% in the fourth quarter, an increase
of 646 basis points from the prior year period. Adjusted gross
profit margin was 38.3%, an increase of 507 basis points from
adjusted gross profit margin for the prior year period due
primarily to input cost deflation, higher selling prices and
product mix, partially offset by unfavorable fixed cost
absorption.
Fourth quarter SG&A expenses were $88.0 million, or 27.1% of
net sales, compared to $83.5 million, or 24.9% of net sales in the
fourth quarter of 2022. Adjusted SG&A expenses were $83.5
million, or 25.7% of net sales, in the fourth quarter of 2023,
compared to $79.4 million, or 23.7% of net sales, in the fourth
quarter of 2022.
Operating Income: Fourth quarter operating income was
$35.2 million, compared to operating loss of $14.6 million in the
prior year period. Fourth quarter 2023 adjusted operating income
("AOI") was $41.0 million versus AOI of $32.0 million in the fourth
quarter of 2022.
Net Income and EPS: On a GAAP basis, the Company recorded
net income of $19.6 million in the fourth quarter of 2023, or $0.33
per diluted share, compared to fourth quarter 2022 GAAP net loss of
$24.6 million, or $0.42 per diluted share. Fourth quarter 2023
adjusted net income was $23.8 million, or $0.41 per diluted share,
versus fourth quarter 2022 adjusted net income of $18.1 million, or
$0.31 per diluted share.
Adjusted EBITDA: In the fourth quarter of 2023, adjusted
EBITDA was $52.2 million. This compares with adjusted EBITDA of
$41.3 million in the fourth quarter of 2022.
Fiscal Year 2023 Financial Summary
Sales: Net sales for fiscal year 2023 were $1,261.5
million, down 2.8% versus $1,297.9 million in the prior year.
Gross profit margin was 35.0% for fiscal year 2023, an increase
of 124 basis points from the prior year. Adjusted gross profit
margin was 35.4%, an increase of 70 basis points from adjusted
gross profit margin for the prior year period primarily due to
input cost deflation, higher selling prices and product mix,
partially offset by unfavorable fixed cost absorption.
SG&A expenses for fiscal year 2023 were $339.0 million, or
26.9% of net sales, compared to $324.2 million, or 25.0% of net
sales in the prior year. Adjusted SG&A expenses were $329.8
million, or 26.1% of sales, for fiscal year 2023 compared to $317.6
million, or 24.5% of net sales, in the prior year.
Operating Income: Operating income for fiscal year 2023
was $104.5 million, compared to operating income of $75.4 million
in the prior year. AOI was $116.4 million for fiscal year 2023
versus $132.4 million in the prior year.
Net Income and EPS: On a GAAP basis, the Company recorded
net income of $44.5 million in fiscal year 2023, or $0.76 per
diluted share, compared to fiscal year 2022 GAAP net income of
$19.6 million, or $0.33 per diluted share. Adjusted net income for
fiscal year 2023 was $58.6 million, or $1.00 per diluted share,
versus fiscal year 2022 adjusted net income of $73.4 million, or
$1.25 per diluted share.
Adjusted EBITDA: In fiscal year 2023, adjusted EBITDA was
$162.0 million. This compares with adjusted EBITDA of $176.1
million in fiscal year 2022.
Cash and Debt: The Company had cash on hand of $110.5
million and total debt of $417.2 million at the end of fiscal year
2023, compared to $97.6 million of cash and $520.2 million of total
debt at the end of fiscal year 2022.
Fourth Quarter 2023 Segment Results
AMS Results:
- Q4 2023 net sales were $188.2 million, down 3.9% versus $196.0
million in the prior year period.
- Q4 2023 orders were up 3.1% compared to the prior year period
on a currency neutral basis.
- Q4 2023 operating income was $28.0 million compared to $17.6
million in the prior year period.
- Q4 2023 AOI was $29.2 million versus $27.9 million in the prior
year period.
EAAA Results:
- Q4 2023 net sales were $136.9 million, down 1.9% versus $139.6
million in the prior year period.
- Currency fluctuations had an approximately $4.6 million
positive impact on Q4 2023 sales as compared to Q4 2022 sales due
to strengthening of the Euro, partially offset by the weakening of
the Australian dollar and Chinese Renminbi against the U.S. dollar.
Excluding positive foreign currency impacts, EAAA's Q4 2023 net
sales were down 5.2% year-over-year.
- Q4 2023 orders were down 4.1% compared to the prior year period
on a currency neutral basis. EMEA was down 4.8%, Australia was down
6.7%, partially offset by Asia, which was up 3.1%.
- Q4 2023 operating income was $7.1 million compared to operating
loss of $32.2 million in the prior year period.
- Q4 2023 AOI was $11.8 million versus $4.1 million in the prior
year period.
Fiscal Year 2023 Segment Results
AMS Results:
- Net sales for fiscal year 2023 were $737.0 million, down 2.2%
versus $753.7 million in the prior year.
- Operating income for fiscal year 2023 was $85.0 million
compared to $92.2 million in the prior year.
- AOI for fiscal year 2023 was $87.8 million versus $102.4
million in the prior year.
EAAA Results:
- Net sales for fiscal year 2023 were $524.5 million, down 3.6%
versus $544.2 million in the prior year.
- Currency fluctuations had an approximately $3.5 million
positive impact on net sales in fiscal year 2023 as compared to the
prior year, primarily due to the strengthening of the Euro,
partially offset by the weakening of the Australian dollar and
Chinese Renminbi against the U.S. dollar. Excluding positive
foreign currency impacts, EAAA's net sales were down 4.2%
year-over-year.
- Operating income for fiscal year 2023 was $19.5 million
compared to operating loss of $16.8 million in the prior year.
- AOI for fiscal year 2023 was $28.6 million versus $30.1 million
in the prior year.
Outlook
Interface anticipates the following for the first quarter of
fiscal year 2024:
- Net sales of $280 million to $290 million.
- Adjusted gross profit margin of approximately 36.0%.
- Adjusted SG&A expenses of approximately $83 million.
- Adjusted Interest & Other expenses of approximately $8
million.
- Fully diluted weighted average share count of approximately
58.8 million shares.
For the full fiscal year 2024:
- Net sales of $1.26 billion to $1.28 billion.
- Adjusted gross profit margin of approximately 35.5% to
35.8%.
- Adjusted SG&A expenses of approximately 26.0% of net
sales.
- Adjusted Interest & Other expenses of approximately $32
million.
- An adjusted effective tax rate for the full year of
approximately 29.0%.
- Capital expenditures of approximately $42 million.
Webcast and Conference Call Information
Interface will host a conference call on February 27, 2024, at
8:00 a.m. Eastern Time, to discuss its fourth quarter and full
fiscal year 2023 results. The conference call will be
simultaneously broadcast live over the Internet.
Listeners may access the conference call live over the Internet
at: https://events.q4inc.com/attendee/392372040, or through
the Company's website at:
https://investors.interface.com.
The archived version of the webcast will be available at these
sites for one year beginning approximately one hour after the call
ends.
Non-GAAP Financial Measures
Interface provides adjusted earnings per share, adjusted net
income, adjusted operating income ("AOI"), adjusted gross profit,
adjusted gross profit margin, adjusted SG&A expenses, currency
neutral sales and currency neutral sales growth, net debt, and
adjusted EBITDA as additional information regarding its operating
results in this press release. These non-GAAP measures are not in
accordance with – or alternatives to – GAAP measures, and may be
different from non-GAAP measures used by other companies. Adjusted
EPS, adjusted net income, and AOI exclude nora purchase accounting
amortization, the Thailand plant closure inventory write-down,
cyber event costs, goodwill and intangible asset impairment
charges, and restructuring, asset impairment, severance, and other,
net. Adjusted EPS and adjusted net income also exclude the loss on
discontinuance of interest rate swaps, the loss on extinguishment
of debt, property casualty loss, and the loss on foreign subsidiary
liquidation. Adjusted gross profit and adjusted gross profit margin
exclude nora purchase accounting amortization, and the Thailand
plant closure inventory write-down. Adjusted SG&A expenses
exclude the cyber event impact and restructuring, asset impairment,
severance, and other, net. Currency neutral sales and currency
neutral sales growth exclude the impact of foreign currency
fluctuations. Net debt is total debt less cash on hand. Adjusted
EBITDA is GAAP net income excluding interest expense, income tax
expense, depreciation and amortization, share-based compensation
expense, goodwill and intangible asset impairment charges, cyber
event costs, property casualty loss, restructuring, asset
impairment, severance, and other, net, nora purchase accounting
amortization, loss on foreign subsidiary liquidation, and the
Thailand plant closure inventory write-down. This news release
should be read in conjunction with the Company's Current Report on
Form 8-K furnished today to the U.S. Securities & Exchange
Commission, which explains why Interface believes presentation of
these non-GAAP measures provides useful information to investors,
as well as any additional material purposes for which Interface
uses these non-GAAP measures.
About Interface
Interface, Inc., (NASDAQ: TILE) is a global flooring solutions
enterprise with an integrated portfolio of carpet tile and
resilient flooring products. A leader in sustainability, Interface
is working toward achieving its verified Science Based Targets by
2030 and its goal to become a carbon negative enterprise by 2040.
With our design approach to flooring systems, we help our customers
create high-performance interior spaces that have a positive impact
on people’s lives and the planet. Our range includes Interface®
carpet tile and LVT, nora® by Interface rubber flooring, and FLOR®
premium area rugs for commercial and residential spaces.
Learn more about Interface at interface.com and
blog.interface.com, nora by Interface at nora.com, FLOR at
FLOR.com, and our sustainability journey at
interface.com/sustainability.
Follow us on Facebook, Instagram, LinkedIn, X, and
Pinterest.
Safe Harbor Statement under the Private Securities Litigation
Reform Act of 1995:
Except for historical information contained herein, the other
matters set forth in this news release are forward-looking
statements. Forward-looking statements may be identified by words
such as “may,” “expect,” “forecast,” “anticipate,” “intend,”
“plan,” “believe,” “could,” "should," "goal," "aim," "objective,"
“seek,” “project,” “estimate,” “target,” “will” and similar
expressions. Forward-looking statements in this press release
include, without limitation, any projections we make regarding the
Company’s 2024 first quarter and full year 2024 under “Outlook”
above. The forward-looking statements set forth above involve a
number of risks and uncertainties that could cause actual results
to differ materially from any such statement, including but not
limited to the risks under the following subheadings in “Risk
Factors” in the Company's Annual Report on Form 10-K for the fiscal
year ended January 1, 2023: "We compete with a large number of
manufacturers in the highly competitive floorcovering products
market, and some of these competitors have greater financial
resources than we do. We may face challenges competing on price,
making investments in our business, or competing on product design
or sustainability", "Our earnings could be adversely affected by
non-cash adjustments to goodwill, when a test of goodwill assets
indicates a material impairment of those assets", "Our success
depends significantly upon the efforts, abilities and continued
service of our senior management executives, our principal design
consultant and other key personnel (including experienced sales and
manufacturing personnel), and our loss of any of them could affect
us adversely", "Large increases in the cost of our raw materials,
shipping costs, duties or tariffs could adversely affect us if we
are unable to pass these cost increases through to our customers",
"Unanticipated termination or interruption of any of our
arrangements with our primary third-party suppliers of synthetic
fiber or our primary third-party supplier for luxury vinyl tile
(“LVT”) or other key raw materials could have a material adverse
effect on us", "The market price of our common stock has been
volatile and the value of your investment may decline", "Changes to
our facilities, manufacturing processes, product construction, and
product composition could disrupt our operations, increase our
manufacturing costs, increase customer complaints, increase
warranty claims, negatively affect our reputation, and have a
material adverse effect on our financial condition and results of
operations", "Our business operations could suffer significant
losses from natural disasters, acts of war, terrorism,
catastrophes, fire, adverse weather conditions, pandemics,
endemics, unstable geopolitical situations or other unexpected
events", "Disruptions to or failures of our information technology
systems could adversely affect our business", "The impact of
potential changes to environmental laws and regulations and
industry standards regarding climate change could lead to
unforeseen disruptions to our business operations", "The COVID-19
pandemic has had and could continue to have (and other public
health emergencies could have in the future) a material adverse
effect on our ability to operate, our ability to keep employees
safe from the pandemic, our results of operations, financial
condition, liquidity, capital investments, our near term and long
term ability to stay in compliance with debt covenants under our
Syndicated Credit Facility and Senior Notes, our ability to
refinance our existing indebtedness, and our ability to obtain
financing in capital markets", "Sales of our principal products
have been and may continue to be affected by the COVID-19 pandemic,
adverse economic cycles, and effects in the new construction market
and renovation market", "Our substantial international operations
are subject to various political, economic and other uncertainties
that could adversely affect our business results, including foreign
currency fluctuations, restrictive taxation, custom duties, border
closings or other adverse government regulations", "The conflict
between Russia and Ukraine could adversely affect our business,
results of operations and financial position", "Fluctuations in
foreign currency exchange rates have had, and could continue to
have, an adverse impact on our financial condition and results of
operations", "The uncertainty surrounding the ongoing
implementation and effect of the U.K.’s exit from the European
Union, and related negative developments in the European Union
could adversely affect our business, results of operations or
financial condition", "We have a substantial amount of debt, which
could adversely affect our business, financial condition and
results of operations and our ability to meet our payment
obligations under our debt", "Servicing our debt requires a
significant amount of cash, and we may not have sufficient cash
flow from our operations to pay our indebtedness", "We may incur
substantial additional indebtedness, which could further exacerbate
the risks associated with our substantial indebtedness", and "We
face risks associated with litigation and claims". You should
consider any additional or updated information we include under the
heading “Risk Factors” in our subsequent quarterly and annual
reports.
Any forward-looking statements are made pursuant to the Private
Securities Litigation Reform Act of 1995 and, as such, speak only
as of the date made. The Company assumes no responsibility to
update or revise forward-looking statements made in this press
release and cautions readers not to place undue reliance on any
such forward-looking statements.
- TABLES FOLLOW -
Consolidated Statements of Operations
(Unaudited)
Three Months Ended
Twelve Months Ended
(In thousands, except per share data)
12/31/2023
1/1/2023
12/31/2023
1/1/2023
Net Sales
$
325,118
$
335,555
$
1,261,498
$
1,297,919
Cost of Sales
201,966
230,112
820,429
860,186
Gross Profit
123,152
105,443
441,069
437,733
Selling, General & Administrative
Expenses
88,000
83,479
339,049
324,190
Restructuring, asset impairment, other
(gains) and charges
—
373
(2,502
)
1,965
Goodwill and Intangible Asset Impairment
Charge
—
36,180
—
36,180
Operating Income (Loss)
35,152
(14,589
)
104,522
75,398
Interest Expense
6,801
8,142
31,787
29,929
Other Expense, net
1,407
1,864
9,081
3,552
Income (Loss) Before Taxes
26,944
(24,595
)
63,654
41,917
Income Tax Expense
7,389
21
19,137
22,357
Net Income (Loss)
$
19,555
$
(24,616
)
$
44,517
$
19,560
Earnings (Loss) Per Share – Basic
$
0.34
$
(0.42
)
$
0.77
$
0.33
Earnings (Loss) Per Share – Diluted
$
0.33
$
(0.42
)
$
0.76
$
0.33
Common Shares Outstanding – Basic
58,108
58,166
58,092
58,865
Common Shares Outstanding – Diluted
58,636
58,166
58,335
58,865
Consolidated Balance Sheets (Unaudited)
(In thousands)
12/31/2023
1/1/2023
Assets
Cash
$
110,498
$
97,564
Accounts Receivable
163,386
182,807
Inventory
279,079
306,327
Other Current Assets
30,895
30,339
Total Current Assets
583,858
617,037
Property, Plant & Equipment
291,140
297,976
Operating Lease Right-of-Use Asset
87,519
81,644
Goodwill
105,448
102,417
Other Intangibles, net
56,255
59,778
Other Assets
105,875
107,651
Total Assets
$
1,230,095
$
1,266,503
Liabilities
Accounts Payable
$
62,912
$
78,264
Accrued Liabilities
130,890
120,138
Current Portion of Operating Lease
Liabilities
12,347
11,857
Current Portion of Long-Term Debt
8,572
10,211
Total Current Liabilities
214,721
220,470
Long-Term Debt
408,641
510,003
Operating Lease Liabilities
78,269
72,305
Other Long-Term Liabilities
102,517
102,188
Total Liabilities
804,148
904,966
Shareholders’ Equity
425,947
361,537
Total Liabilities and Shareholders’
Equity
$
1,230,095
$
1,266,503
Consolidated Statements of Cash Flows
(Unaudited)
Twelve Months Ended
(In thousands)
12/31/2023
1/1/2023
OPERATING ACTIVITIES
Net Income
$
44,517
$
19,560
Adjustments to Reconcile Net Income to
Cash Provided by Operating Activities:
Depreciation and Amortization
40,774
40,337
Share-Based Compensation Expense
10,265
8,527
(Gain) Loss on Disposal of Property, Plant
and Equipment, net
(2,252
)
4,319
Loss on Foreign Subsidiary Liquidation
6,221
—
Bad Debt Expense
53
26
Goodwill and Intangible Asset Impairment
Charge
—
36,180
Amortization of Acquired Intangible
Assets
5,172
5,038
Deferred Income Taxes and Other Non-Cash
Items
(8,809
)
13,414
Change in Working Capital
Accounts Receivable
21,798
(17,489
)
Inventories
31,040
(49,651
)
Prepaid Expenses and Other Current
Assets
(302
)
7,020
Accounts Payable and Accrued Expenses
(6,443
)
(24,220
)
Cash Provided by Operating Activities
142,034
43,061
INVESTING ACTIVITIES
Capital Expenditures
(26,107
)
(18,437
)
Proceeds from Sale of Property, Plant and
Equipment
6,593
—
Cash Used in Investing Activities
(19,514
)
(18,437
)
FINANCING ACTIVITIES
Revolving Loan Borrowing
90,000
206,031
Revolving Loan Repayments
(114,381
)
(189,281
)
Term Loan Repayments
(80,927
)
(13,191
)
Repurchase of Common Stock
—
(17,171
)
Tax Withholding Payments for Share-Based
Compensation
(1,514
)
(402
)
Debt Issuance Costs
—
(1,032
)
Dividends Paid
(2,323
)
(2,355
)
Finance Lease Payments
(2,419
)
(2,089
)
Cash Used in Financing Activities
(111,564
)
(19,490
)
Net Cash Provided by Operating, Investing
and Financing Activities
10,956
5,134
Effect of Exchange Rate Changes on
Cash
1,978
(4,822
)
CASH AND CASH EQUIVALENTS
Net Change During the Period
12,934
312
Balance at Beginning of Period
97,564
97,252
Balance at End of Period
$
110,498
$
97,564
Segment Results (Unaudited)
Three Months Ended
Twelve Months Ended
(in thousands)
12/31/2023
1/1/2023
12/31/2023
1/1/2023
Net Sales
AMS
$
188,239
$
195,972
$
736,955
$
753,740
EAAA
136,879
139,583
524,543
544,179
Consolidated Net Sales
$
325,118
$
335,555
$
1,261,498
$
1,297,919
Segment AOI*
AMS
$
29,168
$
27,868
$
87,789
$
102,370
EAAA
11,803
4,150
28,608
30,058
Consolidated AOI
$
40,971
$
32,018
$
116,397
$
132,428
* Note: Segment AOI includes allocation of
corporate SG&A expenses
Net Sales by Region (Unaudited)
Twelve Months Ended
% of Total
12/31/2023
Net Sales
AMS
58 %
EMEA
30 %
APAC
12 %
Consolidated Net Sales
100 %
Gross Billings by Customer Vertical (Unaudited)
Twelve Months Ended
% of Total
12/31/2023
Gross Billings
Corporate/Office
49 %
Education
18 %
Healthcare
10 %
Government
6 %
Retail
3 %
Residential/Living
4 %
Hospitality
3 %
Consumer Residential
2 %
Transportation
2 %
Other
3 %
Consolidated Gross Billings
100 %
Reconciliation of GAAP Financial Measures to Non-GAAP
Financial Measures (Unaudited)
(In millions, except per share amounts)
Fourth Quarter 2023
Fourth Quarter 2022
Adjustments
Adjustments
Gross
Profit
SG&A
Operating Income (Loss)
Pre-tax
Tax
Effect
Net
Income (Loss)
Diluted
EPS
Gross
Profit
SG&A
Operating Income (Loss)
Pre-tax
Tax
Effect
Net
Income (Loss)
Diluted
EPS
GAAP As Reported
$
123.2
$
88.0
$
35.2
$
19.6
$
0.33
$
105.4
$
83.5
$
(14.6
)
$
(24.6
)
$
(0.42
)
Non-GAAP Adjustments
Purchase Accounting Amortization
1.3
—
1.3
1.3
(0.4
)
0.9
0.02
1.2
—
1.2
1.2
(0.4
)
0.9
0.01
Restructuring, Asset Impairment,
Severance, and Other, net
—
(4.4
)
4.4
4.4
(1.2
)
3.2
0.06
—
(3.7
)
4.1
4.1
(0.6
)
3.5
0.06
Goodwill and Intangible Asset
Impairment
—
—
—
—
—
—
—
—
—
36.2
36.2
(2.1
)
34.1
0.59
Cyber Event Impact
—
(0.1
)
0.1
0.1
—
0.1
—
4.8
(0.3
)
5.1
5.1
(1.3
)
3.8
0.07
Loss on Extinguishment of Debt
—
—
—
—
—
—
—
—
—
—
0.1
—
0.1
—
Loss on Discontinuance of Interest Rate
Swaps
—
—
—
—
—
—
—
—
—
—
0.4
(0.1
)
0.3
0.01
Adjustments Subtotal *
1.3
(4.5
)
5.8
5.8
(1.6
)
4.2
0.08
6.0
(4.1
)
46.6
47.1
(4.4
)
42.7
0.73
Adjusted (non-GAAP) *
$
124.4
$
83.5
$
41.0
$
23.8
$
0.41
$
111.4
$
79.4
$
32.0
$
18.1
$
0.31
* Note: Sum of reconciling items may
differ from total due to rounding of individual components
Fiscal Year 2023
Fiscal Year 2022
Adjustments
Adjustments
Gross
Profit
SG&A
Operating Income
Pre-tax
Tax
Effect
Net
Income
Diluted
EPS
Gross
Profit
SG&A
Operating Income
Pre-tax
Tax
Effect
Net
Income
Diluted
EPS
GAAP As Reported
$
441.1
$
339.0
$
104.5
$
44.5
$
0.76
$
437.7
$
324.2
$
75.4
$
19.6
$
0.33
Non-GAAP Adjustments
Purchase Accounting Amortization
5.2
—
5.2
5.2
(1.5
)
3.7
0.06
5.0
—
5.0
5.0
(1.5
)
3.6
0.06
Thailand Plant Closure Inventory
Write-down
—
—
—
—
—
—
—
2.5
—
2.5
2.5
—
2.5
0.04
Goodwill and Intangible Asset
Impairment
—
—
—
—
—
—
—
—
—
36.2
36.2
(2.1
)
34.1
0.58
Restructuring, Asset Impairment,
Severance, and Other, net
—
(8.1
)
5.6
5.6
(1.6
)
4.1
0.07
—
(6.2
)
8.2
8.2
(0.6
)
7.6
0.13
Cyber Event Impact
—
(1.1
)
1.1
1.1
(0.3
)
0.8
0.01
4.8
(0.3
)
5.1
5.1
(1.3
)
3.8
0.07
Property Casualty Loss(1)
—
—
—
(0.5
)
0.1
(0.4
)
(0.01
)
—
—
—
—
—
—
—
Loss on Foreign Subsidiary Liquidation
(2)
—
—
—
6.2
(1.1
)
5.1
0.09
—
—
—
—
—
—
—
Loss on Extinguishment of Debt
—
—
—
—
—
—
—
—
—
—
0.1
—
0.1
—
Loss on Discontinuance of Interest Rate
Swaps
—
—
—
1.0
(0.2
)
0.8
0.01
—
—
—
2.8
(0.7
)
2.1
0.04
Adjustments Subtotal *
5.1
(9.2
)
11.9
18.6
(4.5
)
14.0
0.24
12.3
(6.6
)
57.0
60.0
(6.1
)
53.9
0.92
Adjusted (non-GAAP) *
$
446.2
$
329.8
$
116.4
$
58.6
$
1.00
$
450.1
$
317.6
$
132.4
$
73.4
$
1.25
(1) Represents insurance recovery net of
loss recognized in the first quarter of 2023.
(2) Russia and Brazil foreign subsidiaries
were substantially liquidated. The related cumulative translation
adjustment was recognized in other expense.
* Note: Sum of reconciling items may
differ from total due to rounding of individual components
Reconciliation of Segment GAAP Financial Measures to Non-GAAP
Financial Measures ("Currency Neutral Net Sales", "AOI")
(In millions)
Fourth Quarter 2023
Fourth Quarter 2022
AMS Segment
EAAA Segment
Consolidated *
AMS Segment
EAAA Segment
Consolidated *
Net Sales as Reported (GAAP)
$
188.2
$
136.9
$
325.1
$
196.0
$
139.6
$
335.6
Impact of Changes in Currency
—
(4.6
)
(4.6
)
—
—
—
Currency Neutral Net Sales *
$
188.3
$
132.4
$
320.6
$
196.0
$
139.6
$
335.6
* Note: Sum of reconciling items may
differ from total due to rounding of individual components
Fiscal Year 2023
Fiscal Year 2022
AMS Segment
EAAA Segment
Consolidated *
AMS Segment
EAAA Segment
Consolidated *
Net Sales as Reported (GAAP)
$
737.0
$
524.5
$
1,261.5
$
753.7
$
544.2
$
1,297.9
Impact of Changes in Currency
2.1
(3.5
)
(1.4
)
—
—
—
Currency Neutral Net Sales *
$
739.1
$
521.0
$
1260.1
$
753.7
$
544.2
$
1297.9
* Note: Sum of reconciling items may
differ from total due to rounding of individual components
Fourth Quarter 2023
Fourth Quarter 2022
AMS Segment
EAAA Segment
Consolidated *
AMS Segment
EAAA Segment
Consolidated *
GAAP Operating Income (Loss)
$
28.0
$
7.1
$
35.2
$
17.6
$
(32.2
)
$
(14.6
)
Non-GAAP Adjustments
Purchase Accounting Amortization
—
1.3
1.3
—
1.2
1.2
Cyber Event Impact
0.1
—
0.1
3.9
1.2
5.1
Goodwill and Intangible Asset
Impairment
—
—
—
3.8
32.3
36.2
Restructuring, Asset Impairment,
Severance, and Other, net
1.1
3.4
4.4
2.5
1.6
4.1
Adjustments Subtotal *
1.1
4.7
5.8
10.3
36.4
46.6
AOI *
$
29.2
$
11.8
$
41.0
$
27.9
$
4.1
$
32.0
* Note: Sum of reconciling items may
differ from total due to rounding of individual components
Fiscal Year 2023
Fiscal Year 2022
AMS Segment
EAAA Segment
Consolidated *
AMS Segment
EAAA Segment
Consolidated *
GAAP Operating Income (Loss)
$
85.0
$
19.5
$
104.5
$
92.2
$
(16.8
)
$
75.4
Non-GAAP Adjustments
Purchase Accounting Amortization
—
5.2
5.2
—
5.0
5.0
Thailand Plant Closure Inventory
Write-down
—
—
—
—
2.5
2.5
Cyber Event Impact
0.6
0.5
1.1
3.9
1.2
5.1
Goodwill and Asset Impairment
—
—
—
3.8
32.3
36.2
Restructuring, Asset Impairment,
Severance, and Other, net
2.1
3.5
5.6
2.4
5.8
8.2
Adjustments Subtotal *
2.8
9.1
11.9
10.1
46.9
57.0
AOI *
$
87.8
$
28.6
$
116.4
$
102.4
$
30.1
$
132.4
* Note: Sum of reconciling items may
differ from total due to rounding of individual components
Fourth Quarter 2023
Fourth Quarter 2022
Fiscal Year 2023
Fiscal Year 2022
Net Income (Loss) as Reported
(GAAP)
$
19.6
$
(24.6
)
$
44.5
$
19.6
Income Tax Expense
7.4
—
19.1
22.4
Interest Expense (including debt issuance
cost amortization)
6.8
8.1
31.8
29.9
Depreciation and Amortization (excluding
debt issuance cost amortization)
9.7
9.3
38.7
38.7
Share-based Compensation Expense
2.9
1.9
10.3
8.5
Purchase Accounting Amortization
1.3
1.2
5.2
5.0
Goodwill and Intangible Asset
Impairment
—
36.2
—
36.2
Restructuring, Asset Impairment,
Severance, and Other, net
4.4
4.1
5.6
8.2
Thailand Plant Closure Inventory
Write-down
—
—
—
2.5
Cyber Event Impact
0.1
5.1
1.1
5.1
Property Casualty Loss(1)
—
—
(0.5
)
—
Loss on Foreign Subsidiary Liquidation
(2)
—
—
6.2
—
Adjusted Earnings before Interest,
Taxes, Depreciation and Amortization (AEBITDA)*
$
52.2
$
41.3
$
162.0
$
176.1
(1) Represents insurance recovery net of
loss recognized in the first quarter of 2023.
(2) Russia and Brazil foreign subsidiaries
were substantially liquidated. The related cumulative translation
adjustment was recognized in other expense.
As of 12/31/23
Total Debt
$
417.2
Total Cash on Hand
(110.5
)
Total Debt, Net of Cash on Hand (Net
Debt)
$
306.7
12/31/2023
Total Debt / Fiscal Year 2023 Net
Income
9.4x
Net Debt / Fiscal Year 2023 AEBITDA
1.9x
Note: Sum of reconciling items may differ
from total due to rounding of individual components
The impacts of changes in foreign currency presented in the
tables are calculated based on applying the prior year period's
average foreign currency exchange rates to the current year
period.
The Company believes that the above non-GAAP performance
measures, which management uses in managing and evaluating the
Company’s business, may provide users of the Company’s financial
information with additional meaningful basis for comparing the
Company’s current results and results in a prior period, as these
measures reflect factors that are unique to one period relative to
the comparable period. However, these non‑GAAP performance measures
should be viewed in addition to, and not as an alternative for, the
Company’s reported results under accounting principles generally
accepted in the United States. Tax effects identified above (when
applicable) are calculated using the statutory tax rate for the
jurisdictions in which the charge or income occurred.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240227456378/en/
Media Contact: Christine Needles Global Corporate Communications
Christine.Needles@interface.com +1 404-491-4660
Investor Contact: Bruce Hausmann Chief Financial Officer
Bruce.Hausmann@interface.com +1 770-437-6802
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