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• Net Sales: $297.4 million, an increase of 2.6% year over year.

• FX Neutral Net Sales Growth: 4.1% compared to the prior year's first quarter.

• Americas Net Sales Growth: 6.3% year over year.

• EAAA Net Sales Growth: 1% year over year.

• Adjusted Gross Profit Margin: 37.7%, a decrease of 82 basis points from the prior year.

• Adjusted SG&A Expenses: $86.8 million, compared to $86.2 million in the prior year.

• Adjusted Operating Income: $25.5 million, flat compared to the prior year.

• Adjusted EPS: $0.25, up from $0.24 in the prior year.

• Adjusted EBITDA: $37 million, compared to $38.8 million in the prior year.

• Cash from Operating Activities: $11.7 million generated in the first quarter.

• Liquidity: $397.2 million at the end of the quarter.

• Net Debt: $205.1 million at the end of the quarter.

• Net Leverage Ratio: 1.1 times.

• Capital Expenditures: $7.5 million in the first quarter.

• Second Quarter Net Sales Forecast: $355 million to $365 million.

• Second Quarter Adjusted Gross Profit Margin Forecast: Approximately 37.2% of net sales.

• Full Year Net Sales Forecast: $1.340 billion to $1.365 billion.

• Full Year Adjusted Gross Profit Margin Forecast: Approximately 37.2% to 37.4% of net sales.

• Warning! GuruFocus has detected 3 Warning Sign with TILE.

Release Date: May 02, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Interface Inc (NASDAQ:TILE) reported a 4% year-over-year currency-neutral growth in net sales, indicating strong performance despite a challenging macro environment.

• The company's 'One Interface' strategy is showing positive results, particularly in the Americas, where net sales grew by 6% and currency-neutral orders increased by 10%.

• Interface Inc (NASDAQ:TILE) launched two new carpet tile collections, Material Impressions and Open Road, expanding their product portfolio and catering to the needs of education and corporate office spaces.

• The company is making significant strides in sustainability, with strategic investments to incorporate captured carbon into manufacturing processes, aiming for carbon negativity by 2040.

• Interface Inc (NASDAQ:TILE) has a strong balance sheet with liquidity totaling $397.2 million and a net leverage ratio of 1.1 times, providing financial flexibility in a dynamic macro environment.

Negative Points

• The EAAA region experienced a softer macro environment, with currency-neutral orders down 6% year-over-year, impacting overall growth.

• Corporate office buildings saw a 7% year-over-year decline in the quarter, attributed to timing issues, although growth is expected for the full year.

• The adjusted gross profit margin decreased by 82 basis points from the prior year's first quarter due to higher manufacturing and freight costs.

• Exposure to tariffs on US imports of rubber from Germany and LVT from South Korea could impact approximately 15% of global product costs, though plans are in place to mitigate this.

• Despite strong performance in some areas, the overall adjusted EBITDA decreased to $37 million from $38.8 million in the first quarter of 2024.