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美国
证券交易委员会
华盛顿特区20549
_______________
表格 10-Q

þ 根据1934年证券交易法第13或15(d)条款的季度报告。
截止至本季度结束 2024年9月29日

¨ 根据1934年证券交易法第13或15(d)条款的过渡报告
委员会档案编号 001-33994
接口公司
（依凭章程所载的完整登记名称）
佐治亚州58-1451243
(公司成立所在地或其他行政区划)
的注册地或组织地点)		(国税局雇主识别号码)
识别号码)
1280 West Peachtree Street乔治亚州亚特兰大市佐治亚州30309
(总部办公地址)388-0349
注册者的电话号码，包括区域号码:           (770) 437-6800          
根据法案第12(b)条登记的证券：
每个班级的标题交易标的（s）注册的每个交易所的名称
普通股，每股面值 $0.10TILE纳斯达克全球货币选择市场
请勾选以下项目，以判定在过去12个月(或更短期间，该注册人被要求提交报告)内所有根据1934年证券交易法第13条或第15(d)条要求提供报告的报告是否已经提交，并且该注册人在过去90天中是否受到提交报告的要求。 是 þ 否 ¨
请用勾记号表示公司是否在过去12个月内（或申报对象所需提交的较短期间内）已递交所有应递交的交互式资料档案，根据S-t法规405条款(本章规232.405节)的要求。是 þ 否 ¨
请勾选该申报者是否为大型快速申报者、快速申报者、非快速申报者、小型报告公司或新兴成长公司。请参阅交易所法案第1202条中“大型快速申报者”、“快速申报者”、“小型报告公司”和“新兴成长公司”的定义。
大型加速归档人¨加速归档人þ非加速归档人¨小型报告公司☐新兴成长型企业¨
如果一家新兴成长型公司，请用勾选标记表示该申报人已选择不使用根据证交所法案13(a)条款提供的任何新的或修订过的财务会计准则的延长过渡期。 ¨
请用勾选的方式表示，公司是否属于外壳公司（如交易所法案第120亿2条所定义）。 是 ☐ þ
截至2024年10月31日，每类发行人普通股的流通股份数：
Class A普通股股份数量
普通股，每股面值0.10美元58,303,571


目 录
页面
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

目录
第一部分 - 财务信息
项目 1. 基本报表
INTERFACE, INC.及附属公司
合并简明资产负债表
(以千为单位，除普通股面值外)
2024年9月29日2023年12月31日
(未经查核)
资产
流动资产合计
现金及现金等价物$115,601 $110,498 
应收帐款净额173,859 163,386 
存货净值283,096 279,079 
预付费用及其他流动资产35,605 30,895 
全部流动资产608,161 583,858 
不动产、厂房及设备净值284,845 291,140 
营运租赁权使用资产81,716 87,519 
递延所得税资产21,604 21,721 
商誉和无形资产，净值
159,428 161,703 
其他资产87,510 84,154 
 
资产总额$1,243,264 $1,230,095 
 
负债和股东权益
流动负债
应付账款$78,279 $62,912 
应计费用136,626 130,890 
营运租赁负债的流动部分12,888 12,347 
长期债务的当期偿还8,593 8,572 
流动负债合计236,386 214,721 
长期负债329,347 408,641 
营业租赁负债72,861 78,269 
推延所得税32,945 33,832 
其他长期负债70,162 68,685 
 
总负债741,701 804,148 
 
承诺和条件（附注15）
 
股东权益
优先股，面额 $1.00 ； 5,000 授权股份为 无 由2024年9月29日和2023年12月31日发行或持有的股票数目
— — 
普通股，面额 $0.10 ； 120,000 授权股份为 58,304 和 58,112 于2024年9月29日和2023年12月31日分别发行和持有的股份
5,830 5,811 
资本公积额额外增资257,282 252,909 
保留收益384,258 320,833 
累积其他综合损失－外币翻译(111,573)(119,590)
累积其他综合损失－退休金负债(34,234)(34,016)
 
股东权益总额501,563 425,947 
 
负债总额及股东权益$1,243,264 $1,230,095 
请参阅联合简明基本报表附注。
3
目录
INTERFACE, INC.及附属公司
综合总结简明利润表
(未经查核)
（以千美元为单位，除每股数据外）
截至六月三十日，2024年为止六个月九个月结束
2024年9月29日2023年10月1日2024年9月29日2023年10月1日
净销售额$344,270 $311,006 $980,648 $936,380 
销货成本216,645 200,748 620,005 618,463 
毛利润127,625 110,258 360,643 317,917 
 
销售、一般及管理费用85,450 79,273 255,871 251,049 
重组、资产减损及其他收益，净
— — — (2,502)
营收42,175 30,985 104,772 69,370 
 
利息费用5,721 8,163 18,317 24,986 
其他费用，净额
381 6,702 237 7,674 
 
税前收入36,073 16,120 86,218 36,710 
所得税支出7,630 6,241 21,038 11,748 
 
净利润$28,443 $9,879 $65,180 $24,962 
 
每股基本盈利$0.49 $0.17 $1.12 $0.43 
每股稀释盈利$0.48 $0.17 $1.11 $0.43 
 
普通股份的基本流通数量58,305 58,107 58,275 58,087 
普通股份的稀释后流通数量58,871 58,342 58,754 58,233 
请参阅联合简明基本报表附注。
4
目录
INTERFACE, INC.及附属公司
综合收益陈述
(未经查核)
（以千为单位）
截至六月三十日，2024年为止六个月九个月结束
2024年9月29日2023年10月1日2024年9月29日2023年10月1日
净利润$28,443 $9,879 $65,180 $24,962 
其他综合收益（损失），税后：
外币兑换调整21,131 (9,176)8,017 (2,885)
退休金责任调整(1,210)202 (218)(877)
从其他综合收益累积重新分类 - 终止现金流量套期交易— 150 — 749 
其他全面收益（损失）
19,921 (8,824)7,799 (3,013)
 
综合收益
$48,364 $1,055 $72,979 $21,949 
See accompanying notes to consolidated condensed financial statements.
5
Table of Contents
INTERFACE, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)
NINE MONTHS ENDED
SEPTEMBER 29, 2024OCTOBER 1, 2023
OPERATING ACTIVITIES:
Net income$65,180 $24,962 
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization29,246 30,591 
Share-based compensation expense9,160 7,334 
Loss (gain) on disposal of property, plant and equipment, net
139 (2,531)
Loss on foreign subsidiary liquidation
— 6,221 
Deferred income taxes
(1,160)438 
Other
(2,318)(1,109)
Amortization of acquired intangible assets3,895 3,886 
Working capital changes:
Accounts receivable(10,656)37,396 
Inventories(2,395)14,135 
Prepaid expenses and other current assets(4,583)(2,842)
Accounts payable and accrued expenses23,879 (4,264)
 
Cash provided by operating activities110,387 114,217 
 
INVESTING ACTIVITIES:
Capital expenditures(20,108)(17,238)
Proceeds from sale of property, plant and equipment1,040 6,593 
Insurance proceeds from property casualty loss2,374 — 
 
Cash used in investing activities(16,694)(10,645)
 
FINANCING ACTIVITIES:
Repayments of long-term debt(114,241)(149,738)
Borrowing of long-term debt33,381 74,000 
Tax withholding payments for share-based compensation(4,770)(1,514)
Dividends paid(1,755)(1,742)
Finance lease payments(2,160)(1,853)
 
Cash used in financing activities(89,545)(80,847)
 
Net cash provided by operating, investing and financing activities
4,148 22,725 
Effect of exchange rate changes on cash955 (656)
 
CASH AND CASH EQUIVALENTS:
Net increase
5,103 22,069 
Balance, beginning of period110,498 97,564 
 
Balance, end of period$115,601 $119,633 
See accompanying notes to consolidated condensed financial statements.
6
Table of Contents
INTERFACE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
References in this Quarterly Report on Form 10-Q to “Interface,” “the Company,” “we,” “our,” “ours” and “us” refer to Interface, Inc. and its subsidiaries or any of them, unless the context requires otherwise.
As contemplated by the Securities and Exchange Commission (the “Commission”) instructions to Form 10-Q, the following footnotes have been condensed and, therefore, do not contain all disclosures required in connection with annual financial statements. Reference should be made to the Company’s year-end financial statements and notes thereto contained in its Annual Report on Form 10-K for the fiscal year ended December 31, 2023, as filed with the Commission.
The financial information included in this report has been prepared by the Company, without audit. In the opinion of management, the financial information included in this report contains all adjustments necessary for a fair presentation of the results for the interim periods. All such adjustments are of a normal recurring nature unless otherwise disclosed. Nevertheless, the results shown for interim periods are not necessarily indicative of results to be expected for the full year. The December 31, 2023, consolidated condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States (“GAAP”).
The nine-month periods ended September 29, 2024 and October 1, 2023 both include 39 weeks. The three-month periods ended September 29, 2024 and October 1, 2023 both include 13 weeks.
Risks and Uncertainties
Global economic challenges, including the impacts of the Russia-Ukraine and Israel-Hamas wars or other conflicts around the globe, supply chain disruptions, and slow macro environments in certain geographical regions could cause economic uncertainty and volatility. In connection with the Cyber Event discussed below, security breaches may expose us to fines and other liabilities to the extent sensitive data stored in our IT systems, including data related to customers, suppliers or employees, are misappropriated. The Company considered these impacts and subsequent general uncertainties and volatility in the global economy on the assumptions and estimates used herein. These uncertainties could result in a future material adverse effect to the amounts reported within the Company’s consolidated condensed financial statements if actual results differ from these estimates.
Cybersecurity Event
On November 20, 2022, we discovered a cybersecurity attack, perpetrated by unauthorized third parties, affecting our IT systems (the “Cyber Event”). In response to this Cyber Event, we notified law enforcement and took steps to supplement existing security monitoring, including scanning and protective measures. The investigation of the Cyber Event by our forensic experts was completed during fiscal year 2023.
Reclassifications
Certain reclassifications to previously reported information have been made in the consolidated condensed statements of cash flows to conform to the current period presentation. The previously reported line item “deferred income taxes and other” was separated into two line items in the current period presentation of the consolidated condensed statements of cash flows to provide additional information. These reclassifications had no effect on cash provided by operating activities as previously reported.
Recently Issued Accounting Pronouncements – Not Yet Adopted
In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” This ASU requires public entities on an annual basis to disclose a rate reconciliation with explicit categories, as outlined in the ASU, and requires additional disclosures for reconciling items that meet certain quantitative thresholds. Other disclosures include disaggregation of income taxes paid, pre-tax income, and income tax expense. The new guidance is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. We are currently assessing the updated guidance; however, it is not expected to have a material impact to our consolidated financial statements.
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In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.” This ASU requires additional disclosures in annual and interim periods for significant segment expenses included in the measure of segment profit provided to the chief operating decision maker (“CODM”). Disclosure of other segment items by reportable segment as well as a description of its composition is also required. The new guidance is effective for annual periods beginning after December 15, 2023, and for interim periods beginning after December 15, 2024. Early adoption is permitted. The Company has completed its evaluation of ASU 2023-07 and has determined that the new guidance will enhance our segment disclosures, but will not have a material impact to our consolidated financial statements.
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NOTE 2 – REVENUE RECOGNITION
The Company generates revenue from sales of modular carpet, resilient flooring, rubber flooring, and other flooring-related material, and from the installation of carpet and other flooring-related material. A summary of these revenue streams, as a percentage of net sales, for the three and nine months ended September 29, 2024 and October 1, 2023 is as follows:
Three Months Ended
Nine Months Ended
September 29, 2024October 1, 2023September 29, 2024October 1, 2023
Revenue from the sale of flooring material
96 %98 %97 %98 %
Revenue from installation of flooring material
4 2 3 2 
Disaggregation of Revenue
For the three and nine months ended September 29, 2024 and October 1, 2023, revenue from the Company’s customers is broken down by geography as follows:
Three Months Ended
Nine Months Ended
GeographySeptember 29, 2024October 1, 2023September 29, 2024October 1, 2023
Americas61.0 %57.3 %60.7 %58.6 %
Europe28.2 30.3 28.9 30.0 
Asia-Pacific10.8 12.4 10.4 11.4 
Revenue from the Company’s customers in the Americas corresponds to the AMS reportable segment, and the EAAA reportable segment includes revenue from the Europe and Asia-Pacific geographies. See Note 10 entitled “Segment Information” for additional information.
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NOTE 3 – INVENTORIES
Inventories are summarized as follows:
September 29, 2024December 31, 2023
(in thousands)
Finished goods$207,740 $201,821 
Work-in-process22,853 20,892 
Raw materials52,503 56,366 
Inventories, net$283,096 $279,079 

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NOTE 4 – EARNINGS PER SHARE
The Company computes basic earnings per share (“EPS”) by dividing net income by the weighted average common shares outstanding, including participating securities outstanding, during the period as discussed below. Diluted EPS reflects the potential dilution beyond shares for basic EPS that could occur if securities or other contracts to issue common stock were exercised, converted into common stock or resulted in the issuance of common stock that would have shared in the Company’s earnings.
The Company includes all unvested stock awards that contain non-forfeitable rights to dividends or dividend equivalents, whether paid or unpaid, in the number of shares outstanding for basic EPS as these awards are considered participating securities. Any unvested stock awards considered non-participating securities are included in diluted EPS calculations when the inclusion of these shares would be dilutive. Unvested share-based awards of restricted stock are paid dividends equally with all other shares of common stock. As a result, the Company includes all outstanding restricted stock awards in the calculation of basic and diluted EPS. Distributed earnings include common stock dividends and dividends earned on unvested share-based payment awards. Undistributed earnings represent earnings that were available for distribution but were not distributed. The following table shows the computation of basic and diluted EPS:
Three Months EndedNine Months Ended
September 29, 2024October 1, 2023September 29, 2024October 1, 2023
(in thousands, except per share data)
Numerator:
Net income$28,443 $9,879 $65,180 $24,962 
Less: distributed and undistributed earnings available to participating securities(119)(117)(425)(327)
Distributed and undistributed earnings available to common shareholders$28,324 $9,762 $64,755 $24,635 
 
Denominator:
Weighted average shares outstanding58,061 57,420 57,895 57,326 
Participating securities244 687 380 761 
Shares for basic EPS58,305 58,107 58,275 58,087 
Dilutive effect of non-participating securities566 235 479 146 
Shares for diluted EPS58,871 58,342 58,754 58,233 
 
Basic EPS$0.49 $0.17 $1.12 $0.43 
Diluted EPS$0.48 $0.17 $1.11 $0.43 
For both the three and nine months ended September 29, 2024, there were no securities excluded from the computation of diluted EPS that would have been antidilutive. For both the three and nine months ended October 1, 2023, 855,785 of non-participating securities were excluded from the computation of diluted EPS because the effect would have been antidilutive.
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NOTE 5 – LONG-TERM DEBT
Long-term debt consisted of the following:
September 29, 2024December 31, 2023
Outstanding Principal
Interest Rate(1)
Outstanding Principal
Interest Rate(1)
(in thousands)(in thousands)
Syndicated Credit Facility(2):
Term loan borrowings$41,167 5.32 %$121,658 6.61 %
5.50% Senior Notes due 2028300,000 5.50 %300,000 5.50 %
 
Total debt341,167 421,658 
Less: Unamortized debt issuance costs(3,227)(4,445)
 
Total debt, net337,940 417,213 
Less: Current portion of long-term debt(8,593)(8,572)
 
Total long-term debt, net$329,347 $408,641 
(1) Represents the weighted average rate of interest for borrowings under the Syndicated Credit Facility and the stated rate of interest for the 5.50% Senior Notes due 2028, without the effect of debt issuance costs.
(2) The Syndicated Credit Facility also includes a multicurrency revolving loan facility up to $300.0 million. There were no revolving loan borrowings outstanding as of September 29, 2024 or December 31, 2023.
Syndicated Credit Facility
The Company’s Syndicated Credit Facility (the “Facility”) provides to the Company U.S. denominated and multicurrency term loans and provides to the Company and certain of its subsidiaries a multicurrency revolving credit facility. Interest on base rate loans is charged at varying rates computed by applying a margin depending on the Company’s consolidated net leverage ratio as of the most recently completed fiscal quarter. Interest on SOFR-based and alternative currency loans is charged at varying rates computed by applying a margin over the applicable SOFR rate or alternative currency rate, depending on the Company’s consolidated net leverage ratio as of the most recently completed fiscal quarter. In addition, the Company pays a commitment fee per annum (depending on the Company’s consolidated net leverage ratio as of the most recently completed fiscal quarter) on the unused portion of the Facility.
Fees for commercial letters of credit are computed as a percentage of the amount available to be drawn under such letters of credit. Fees for standby letters of credit are charged at varying rates computed by applying a margin of the amount available to be drawn under such standby letters of credit, depending on the Company’s consolidated net leverage ratio as of the most recently completed fiscal quarter. As of September 29, 2024 and December 31, 2023, the Company had $0.7 million and $1.6 million, respectively, in letters of credit outstanding under the Facility.
As of both September 29, 2024 and December 31, 2023, the carrying value of the Company’s borrowings under the Facility approximated its fair value as the Facility bears interest rates that are similar to existing market rates. The fair value of borrowings under the Facility is estimated using observable market rates and is considered Level 2 within the fair value hierarchy.
Under the Facility, the Company is required to make quarterly amortization payments of the term loan borrowings, which are due on the last day of the calendar quarter.
The Company is in compliance with all covenants under the Facility and anticipates that it will remain in compliance with the covenants for the foreseeable future.

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Senior Notes due 2028
The 5.50% Senior Notes due 2028 (the “Senior Notes”) bear an interest rate at 5.50% per annum and mature on December 1, 2028. Interest is paid semi-annually on June 1 and December 1 of each year. The Senior Notes are unsecured and are guaranteed, jointly and severally, by each of the Company’s material domestic subsidiaries, all of which also guarantee the obligations of the Company under its Facility.
As of September 29, 2024, the estimated fair value of the Senior Notes was $294.8 million, compared with a net carrying value recorded in the Company’s consolidated condensed balance sheet of $297.1 million ($300.0 million gross, excluding the impact of $2.9 million of unamortized debt issuance costs). The fair value of the Senior Notes is derived using quoted prices for similar instruments and is considered Level 2 within the fair value hierarchy.
The Company is in compliance with all covenants under the indenture governing the Senior Notes and anticipates that it will remain in compliance with the covenants for the foreseeable future.

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NOTE 6 – SHAREHOLDERS’ EQUITY
The following tables depict the activity in the accounts which make up shareholders’ equity for the nine months ended September 29, 2024 and October 1, 2023:
SHARESCOMMON STOCKADDITIONAL PAID-IN CAPITALRETAINED
EARNINGS		FOREIGN CURRENCY TRANSLATION ADJUSTMENTPENSION LIABILITYTOTAL
(in thousands, except per share data)
Balance, at December 31, 202358,112 $5,811 $252,909 $320,833 $(119,590)$(34,016)$425,947 
Net income— — — 14,179 — — 14,179 
Issuances of stock related to restricted share units and performance shares472 47 (47)— — — — 
Cash dividends declared, $0.01 per common share
— — — (589)— — (589)
Compensation expense related to share-based plans, net of forfeitures and shares received for tax withholdings(311)(31)(324)— — — (355)
Foreign currency translation adjustment— — — — (11,092)— (11,092)
Pension liability adjustment— — — — — 458 458 
Balance, at March 31, 202458,273 $5,827 $252,538 $334,423 $(130,682)$(33,558)$428,548 
Net income— — — 22,558 — — 22,558 
Issuances of stock related to restricted share units and performance shares4 — — — — — — 
Restricted stock issuances58 6 941 — — — 947 
Unrecognized compensation expense related to restricted stock awards— — (946)— — — (946)
Cash dividends declared, $0.01 per common share
— — — (584)— — (584)
Compensation expense related to share-based plans, net of forfeitures and shares received for tax withholdings(32)(3)2,133 — — — 2,130 
Foreign currency translation adjustment— — — — (2,022)— (2,022)
Pension liability adjustment— — — — — 534 534 
Balance, at June 30, 202458,303 $5,830 $254,666 $356,397 $(132,704)$(33,024)$451,165 
Net income— — — 28,443 — — 28,443 
Issuances of stock related to restricted share units
3 — — — — — — 
Cash dividends declared, $0.01 per common share
— — — (582)— — (582)
Compensation expense related to share-based plans, net of forfeitures and shares received for tax withholdings(2)— 2,616 — — — 2,616 
Foreign currency translation adjustment— — — — 21,131 — 21,131 
Pension liability adjustment— — — — — (1,210)(1,210)
Balance, at September 29, 202458,304 $5,830 $257,282 $384,258 $(111,573)$(34,234)$501,563 
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SHARESCOMMON STOCKADDITIONAL PAID-IN CAPITALRETAINED
EARNINGS		FOREIGN CURRENCY TRANSLATION ADJUSTMENTPENSION LIABILITYCASH FLOW
HEDGE		TOTAL
(in thousands, except per share data)
Balance, at January 1, 202358,106 $5,811 $244,159 $278,639 $(138,775)$(27,548)$(749)$361,537 
Net loss— — — (714)— — — (714)
Issuances of stock related to performance shares79 8 (8)— — — — — 
Cash dividends declared, $0.01 per common share
— — — (580)— — — (580)
Compensation expense related to share-based plans, net of forfeitures and shares received for tax withholdings(132)(14)1,850 — — — — 1,836 
Foreign currency translation adjustment— — — — 4,930 — — 4,930 
Pension liability adjustment— — — — — (279)— (279)
Reclassification out of accumulated other comprehensive loss – discontinued cash flow hedge— — — — — — 299 299 
Balance, at April 2, 202358,053 $5,805 $246,001 $277,345 $(133,845)$(27,827)$(450)$367,029 
Net income— — — 15,797 — — — 15,797 
Issuances of stock related to restricted share units and performance shares5 1 (1)— — — — — 
Restricted stock issuances102 10 697 — — — — 707 
Unrecognized compensation expense related to restricted stock awards— — (708)— — — — (708)
Cash dividends declared, $0.01 per common share
— — — (581)— — — (581)
Compensation expense related to share-based plans, net of forfeitures and shares received for tax withholdings(48)(5)1,808 — — — — 1,803 
Foreign currency translation adjustment— — — — 1,361 — — 1,361 
Pension liability adjustment— — — — — (800)— (800)
Reclassification out of accumulated other comprehensive loss – discontinued cash flow hedge— — — — — — 300 300 
Balance, at July 2, 202358,112 $5,811 $247,797 $292,561 $(132,484)$(28,627)$(150)$384,908 
Net income— — — 9,879 — — — 9,879 
Cash dividends declared, $0.01 per common share
— — — (581)— — — (581)
Compensation expense related to share-based plans, net of forfeitures and shares received for tax withholdings(5)— 2,182 — — — — 2,182 
Foreign currency translation adjustment— — — — (9,176)— — (9,176)
Pension liability adjustment— — — — — 202 — 202 
Reclassification out of accumulated other comprehensive loss – discontinued cash flow hedge— — — — — — 150 150 
Balance, at October 1, 202358,107 $5,811 $249,979 $301,859 $(141,660)$(28,425)$— $387,564 
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Stock Incentive Plan
The Company has share-based employee compensation plans, which are described more fully in Note 14 to the consolidated financial statements included in Item 8 of the Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
In May 2024, the shareholders of the Company approved the adoption of an amendment and restatement of the Interface, Inc. 2020 Omnibus Stock Incentive Plan (the “Amended and Restated Plan”). The aggregate number of shares of common stock that may be issued or transferred under the Amended and Restated Plan on or after the effective date of the plan is the sum of 3,200,000 shares not previously authorized for issuance under any plan, plus the number of shares remaining available for issuance under the original Interface, Inc. 2020 Omnibus Stock Incentive Plan (the “Original Plan”) but not subject to outstanding awards under the Original Plan immediately prior to the effective date of the Amended and Restated Plan, plus the number of shares remaining available for issuance pursuant to the outstanding awards under the Original Plan immediately prior to the effective date of the Amended and Restated Plan, including any shares that become available due to the forfeiture, termination or cancellation of such awards. No award may be granted after the tenth anniversary of the effective date of the Amended and Restated Plan.
Restricted Stock Awards
Compensation expense related to restricted stock grants was $1.9 million and $3.4 million for the nine months ended September 29, 2024 and October 1, 2023, respectively. The Company has reduced its expense for any restricted stock forfeited during the period.
The following table summarizes restricted stock outstanding as of September 29, 2024, as well as activity during the nine months then ended:
Restricted SharesWeighted Average
Grant Date
Fair Value
Outstanding at December 31, 2023691,600 $12.55 
Granted58,400 16.22 
Vested(504,800)12.31 
Forfeited or canceled(2,900)13.19 
Outstanding at September 29, 2024242,300 $13.92 
As of September 29, 2024, the unrecognized total compensation cost related to unvested restricted stock was $0.8 million. That cost is expected to be recognized by the second quarter of 2025.
Restricted Share Unit Awards
Compensation expense related to the restricted share units was $2.6 million and $1.5 million for the nine months ended September 29, 2024 and October 1, 2023, respectively. The Company has reduced its expense for any restricted share units forfeited during the period.
The following table summarizes restricted share units outstanding as of September 29, 2024, as well as activity during the nine months then ended:
Restricted Share UnitsWeighted Average
Grant Date
Fair Value
Outstanding at December 31, 2023583,400 $10.35 
Granted402,800 13.24 
Vested(157,200)10.77 
Forfeited or canceled(10,200)11.41 
Outstanding at September 29, 2024818,800 $11.68 
As of September 29, 2024, the unrecognized total compensation cost related to unvested restricted share units was $6.7 million. That cost is expected to be recognized by the first quarter of 2027.
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Performance Share Awards
The following table summarizes the performance shares outstanding as of September 29, 2024, as well as the activity during the nine months then ended:
Performance SharesWeighted Average
Grant Date
Fair Value
Outstanding at December 31, 20231,115,000 $12.36 
Granted402,800 13.24 
Vested(322,300)13.90 
Forfeited or canceled(23,900)12.53 
Outstanding at September 29, 20241,171,600 $12.23 
Compensation expense related to the performance shares was $4.7 million and $2.4 million for the nine months ended September 29, 2024 and October 1, 2023, respectively. The Company has reduced its expense for any performance shares forfeited during the period. Unrecognized compensation expense related to these performance shares was approximately $6.3 million as of September 29, 2024. The amount and timing of future compensation expense will depend on the performance of the Company. The compensation expense related to these outstanding performance shares is expected to be recognized by the first quarter of 2027.
The tax benefit recognized with respect to restricted stock, restricted share units and performance shares was approximately $1.4 million for the nine months ended September 29, 2024.
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NOTE 7 – LEASES
The table below represents a summary of the balances recorded in the consolidated condensed balance sheets related to the Company’s leases as of September 29, 2024 and December 31, 2023:
September 29, 2024December 31, 2023
Balance Sheet LocationOperating LeasesFinance LeasesOperating LeasesFinance Leases
(in thousands)
Operating lease right-of-use assets$81,716 $87,519 
 
Current portion of operating lease liabilities$12,888 $12,347 
Operating lease liabilities72,861 78,269 
Total operating lease liabilities$85,749 $90,616 
 
Property, plant and equipment, net$7,526 $7,236 
 
Accrued expenses$2,577 $2,587 
Other long-term liabilities5,335 5,035 
Total finance lease liabilities$7,912 $7,622 
As of September 29, 2024, there were no significant leases that had not commenced.
Lease Costs
Three Months EndedNine Months Ended
September 29, 2024October 1, 2023September 29, 2024October 1, 2023
(in thousands)
Finance lease cost:
Amortization of right-of-use assets$766 $696 $2,291 $2,056 
Interest on lease liabilities119 79 328 224 
Operating lease cost4,824 4,740 14,635 14,141 
Short-term lease cost241 187 637 934 
Variable lease cost805 583 2,140 1,924 
Total lease cost$6,755 $6,285 $20,031 $19,279 

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Other Supplemental Information
Three Months EndedNine Months Ended
September 29, 2024October 1, 2023September 29, 2024October 1, 2023
(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases$115 $60 $316 $167 
Operating cash flows from operating leases4,377 4,130 12,797 12,771 
Financing cash flows from finance leases723 545 2,160 1,853 
Right-of-use assets obtained in exchange for new finance lease liabilities780 1,414 2,361 2,450 
Right-of-use assets obtained in exchange for new operating lease liabilities2,318 236 3,217 4,199 
Lease Term and Discount Rate
The table below presents the weighted average remaining lease terms and discount rates for finance and operating leases as of September 29, 2024 and December 31, 2023:
 September 29, 2024December 31, 2023
Weighted-average remaining lease term – finance leases (in years)3.663.70
Weighted-average remaining lease term – operating leases (in years)7.948.29
Weighted-average discount rate – finance leases6.31 %5.51 %
Weighted-average discount rate – operating leases6.37 %6.25 %
Maturity Analysis
A maturity analysis of lease payments under non-cancellable leases is presented as follows:
Fiscal YearOperating LeasesFinance Leases
(in thousands)
2024 (excluding the nine months ended September 29, 2024)
$4,423 $821 
202516,995 2,754 
202616,839 2,218 
202713,954 1,654 
202811,459 946 
Thereafter46,668 516 
Total future minimum lease payments (undiscounted)110,338 8,909 
Less: Present value discount(24,589)(997)
Total lease liabilities
$85,749 $7,912 

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NOTE 8 – EMPLOYEE BENEFIT PLANS
During the three and nine months ended September 29, 2024, the Company recorded multi-employer pension expense related to multi-employer contributions of $0.8 million and $2.1 million, respectively. During the three and nine months ended October 1, 2023, the Company recorded multi-employer pension expense related to multi-employer contributions of $0.7 million and $2.0 million, respectively.
The following tables provide the components of net periodic benefit cost for the three and nine months ended September 29, 2024 and October 1, 2023:
Three Months EndedNine Months Ended
Defined Benefit Retirement Plans (Europe)
September 29, 2024October 1, 2023September 29, 2024October 1, 2023
(in thousands)
Interest cost$1,746 $1,791 $5,158 $5,304 
Expected return on plan assets(2,009)(2,030)(5,930)(6,009)
Amortization of prior service cost46 30 135 89 
Amortization of net actuarial losses274 229 810 680 
Net periodic benefit cost$57 $20 $173 $64 
Three Months EndedNine Months Ended
Salary Continuation PlanSeptember 29, 2024October 1, 2023September 29, 2024October 1, 2023
(in thousands)
Interest cost$267 $284 $799 $851 
Amortization of net actuarial losses59 49 179 146 
Net periodic benefit cost$326 $333 $978 $997 
Three Months EndedNine Months Ended
nora Defined Benefit Plan
September 29, 2024October 1, 2023September 29, 2024October 1, 2023
(in thousands)
Service cost$126 $116 $376 $345 
Interest cost268 275 794 822 
Amortization of net actuarial gains
— (110)— (330)
Net periodic benefit cost$394 $281 $1,170 $837 
In accordance with applicable accounting standards, the service cost component of net periodic benefit costs is presented within operating income in the consolidated condensed statements of operations, while all other components of net periodic benefit costs are presented within other expense, net, in the consolidated condensed statements of operations.
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NOTE 9 – GOODWILL AND OTHER INTANGIBLE ASSETS
The ending balance and the change in the carrying amount of goodwill for the nine months ended September 29, 2024 is as follows:
Goodwill(1)
(in thousands)
Balance, at December 31, 2023$105,448 
Foreign currency translation(2)
1,132 
Balance, at September 29, 2024$106,580 
(1) The goodwill balance is allocated entirely to the AMS reportable segment.
(2) A portion of the goodwill balance is comprised of goodwill denominated in foreign currency attributable to the nora acquisition.
The net carrying value of intangible assets other than goodwill was $52.8 million and $56.3 million at September 29, 2024 and December 31, 2023, respectively.
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NOTE 10 – SEGMENT INFORMATION
The Company determines that an operating segment exists if a component (i) engages in business activities from which it earns revenues and incurs expenses, (ii) has operating results that are regularly reviewed by the chief operating decision maker (“CODM”) and (iii) has discrete financial information. Additionally, accounting standards require the utilization of a “management approach” to report the financial results of operating segments, which is based on information used by the CODM to assess performance and make operating and resource allocation decisions. The Company determined that it has two operating segments organized by geographical area – namely (a) Americas (“AMS”) and (b) Europe, Africa, Asia and Australia (collectively “EAAA”). The AMS operating segment includes the United States, Canada and Latin America geographic areas.
Pursuant to the management approach discussed above, the Company’s CODM, our chief executive officer, evaluates performance at the AMS and EAAA operating segment levels and makes operating and resource allocation decisions based on segment adjusted operating income (“AOI”), which includes allocations of corporate selling, general and administrative (“SG&A”) expenses and allocations of global support SG&A as discussed below. AOI excludes: nora purchase accounting amortization; Cyber Event impact; property casualty loss; and restructuring, asset impairment, severance, and other, net. Intersegment revenues for the three and nine months ended September 29, 2024, were $19.1 million and $60.4 million, respectively, and intersegment revenues for the three and nine months ended October 1, 2023, were $25.0 million and $72.3 million, respectively. Intersegment revenues are eliminated from net sales presented below since these amounts are not included in the information provided to the CODM.
The Company has determined that it has two reportable segments – AMS and EAAA, as each operating segment meets the quantitative thresholds defined in the accounting guidance.
During the first quarter of 2024, the Company implemented a cost center realignment initiative to centralize certain global/shared functions. For the three and nine months ended September 29, 2024, SG&A expenses for these global support functions were allocated to AOI for each reportable segment consistent with the allocation methodology used to allocate corporate overhead in prior periods. Prior year AOI amounts below were not recast as there was no material impact to the measure of segment profit for each reportable segment. There were no changes to the composition of the Company’s operating or reportable segments.
Segment information for the three and nine months ended September 29, 2024 and October 1, 2023 is presented in the following table:
Three Months EndedNine Months Ended
September 29, 2024October 1, 2023September 29, 2024October 1, 2023
(in thousands)
Net sales
AMS$210,155 $178,194 $595,082 $548,716 
EAAA134,115 132,812 385,566 387,664 
Total net sales$344,270 $311,006 $980,648 $936,380 
 
Segment AOI
AMS$32,187 $23,318 $77,214 $58,621 
EAAA 11,299 9,049 31,402 16,805 
 
Depreciation and amortization
AMS$4,453 $4,640 $13,252 $13,457 
EAAA5,449 5,805 15,994 17,134 
Total depreciation and amortization$9,902 $10,445 $29,246 $30,591 
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A reconciliation of the Company’s total operating segment assets to the corresponding consolidated amounts follows:
September 29, 2024December 31, 2023
(in thousands)
Assets
AMS$628,090 $627,782 
EAAA640,638 630,939 
Total segment assets1,268,728 1,258,721 
Corporate assets112,674 108,673 
Eliminations(138,138)(137,299)
Total reported assets$1,243,264 $1,230,095 
Reconciliations of operating income to income before income tax expense and segment AOI are presented as follows:
Three Months EndedNine Months Ended
September 29, 2024October 1, 2023September 29, 2024October 1, 2023
(in thousands)
AMS operating income$31,878 $23,530 $76,877 $56,997 
EAAA operating income10,297 7,455 27,895 12,373 
Consolidated operating income42,175 30,985 104,772 69,370 
Interest expense5,721 8,163 18,317 24,986 
Other expense, net
381 6,702 237 7,674 
Income before income tax expense$36,073 $16,120 $86,218 $36,710 
Three Months Ended
September 29, 2024
Three Months Ended
October 1, 2023
AMSEAAAAMSEAAA
(in thousands)
Operating income$31,878 $10,297 $23,530 $7,455 
Purchase accounting amortization— 1,311 — 1,302 
Cyber Event impact— — 62 42 
Restructuring, asset impairment, severance, and other, net
309 (309)(274)250 
AOI$32,187 $11,299 $23,318 $9,049 
Nine Months Ended
September 29, 2024
Nine Months Ended
October 1, 2023
AMSEAAAAMSEAAA
(in thousands)
Operating income$76,877 $27,895 $56,997 $12,373 
Purchase accounting amortization— 3,895 — 3,886 
Cyber Event impact(225)(156)554 415 
Restructuring, asset impairment, severance, and other, net
562 (232)1,070 131 
AOI$77,214 $31,402 $58,621 $16,805 
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NOTE 11 – SUPPLEMENTAL CASH FLOW INFORMATION
Supplemental cash flow information for the nine months ended September 29, 2024 and October 1, 2023 is presented in the following table:
Nine Months Ended
September 29, 2024October 1, 2023
(in thousands)
Cash paid for interest
$13,659 $17,603 
Cash paid for income taxes, net of refunds
25,905 17,588 
See Note 7 entitled “Leases” for additional supplemental disclosures related to finance and operating leases.
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NOTE 12 – INCOME TAXES
The Company determines its provision for income taxes for interim periods using an estimate of its annual effective tax rate (“AETR”) and records any changes affecting the estimated AETR in the interim period in which the change occurs, including discrete tax items.
During the nine months ended September 29, 2024, the Company recorded a total income tax provision of $21.0 million on pre-tax income of $86.2 million resulting in an effective tax rate of 24.4%, as compared to a total income tax provision of $11.7 million on pre-tax income of $36.7 million resulting in an effective tax rate of 32.0% during the nine months ended October 1, 2023. The decrease in the effective tax rate for the period ended September 29, 2024, as compared to the period ended October 1, 2023, was primarily due to the release of the valuation allowance on interest expense carryforwards, favorable changes related to the limitation on the deduction of business interest expense under Internal Revenue Code section 163(j), an increase in tax benefits related to share-based compensation, and prior period non-deductible charges related to the substantial liquidation of subsidiaries in Brazil and Russia that occurred during the nine months ended October 1, 2023. These favorable changes were partially offset by a decrease in U.S. tax benefits related to foreign tax credit utilization, foreign derived intangible income, and the repatriation of previously taxed foreign earnings realized during the nine months ended October 1, 2023.
On December 20, 2021, the Organization for Economic Co-operation and Development (“OECD”) published Pillar Two Model Rules defining the global minimum tax, which calls for the taxation of large corporations at a minimum rate of 15%. The OECD has since issued administrative guidance providing transition and safe harbor rules around the implementation of the Pillar Two global minimum tax. Many non-U.S. tax jurisdictions have either recently enacted legislation to adopt certain components of the Pillar Two Model Rules beginning in 2024 (including the European Union Member States) with the adoption of additional components in later years or announced their plans to enact legislation in future years. For fiscal year 2024, we expect to meet the Transitional Country-by-Country (CbCR) Safe Harbor rules for most if not all jurisdictions and do not expect these provisions to have a material impact on the Company’s financial statements. We will continue to closely monitor ongoing developments and evaluate any potential impact on future periods.
In the first nine months of 2024, the Company increased its liability for unrecognized tax benefits by $0.4 million. As of September 29, 2024, the Company had accrued approximately $5.3 million for unrecognized tax benefits. In accordance with applicable accounting standards, the Company’s deferred tax asset as of September 29, 2024, reflects a reduction of $2.8 million of these unrecognized tax benefits.
Unrecognized tax benefits are reviewed on an ongoing basis and are adjusted for changing facts and circumstances, including the progress of tax audits and the closing of statutes of limitations. While it is reasonably possible that some of the unrecognized tax benefits will be recognized within the next 12 months, the Company does not expect the recognition of such amounts will have a material impact on the Company’s financial results.
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NOTE 13 – ITEMS RECLASSIFIED FROM ACCUMULATED OTHER COMPREHENSIVE LOSS
Amounts reclassified out of accumulated other comprehensive loss (“AOCL”), before tax, to the consolidated condensed statements of operations during the three and nine months ended September 29, 2024 and October 1, 2023 are reflected in the tables below:
Three Months Ended
Statement of Operations LocationSeptember 29, 2024October 1, 2023
(in thousands)
Loss on foreign subsidiary liquidation(1)
Other expense, net
$— $(6,221)
Interest rate swap contracts lossInterest expense— (196)
Amortization of benefit plan net actuarial losses and prior service cost
Other expense, net
(379)(198)
Total loss reclassified from AOCL
$(379)$(6,615)
Nine Months Ended
Statement of Operations LocationSeptember 29, 2024October 1, 2023
(in thousands)
Loss on foreign subsidiary liquidation(1)
Other expense, net
$— $(6,221)
Interest rate swap contracts lossInterest expense— (982)
Amortization of benefit plan net actuarial losses and prior service cost
Other expense, net
(1,124)(585)
Total loss reclassified from AOCL
$(1,124)$(7,788)
(1) The Company’s foreign subsidiaries in Russia and Brazil were substantially liquidated during the three months ended October 1, 2023, and the cumulative foreign currency translation losses associated with these entities were recognized in the consolidated condensed statements of operations. The tax impact of the cumulative foreign currency translation reclassification was approximately $1.1 million.

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NOTE 14 – ASSETS DISPOSED
During the second quarter of 2023, pursuant to a previously announced plan of reorganization, the Company completed the sale of its Thailand manufacturing facility for a selling price of $6.6 million and recognized a gain of $2.7 million. The gain attributable to the EAAA reportable segment was recorded in restructuring, asset impairment, and other gains, net, in the consolidated condensed statements of operations.
The Company determined that the Thailand facility sale did not meet the criteria for classification as discontinued operations.

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NOTE 15 – COMMITMENTS AND CONTINGENCIES
From time to time, we are a party to legal proceedings, whether arising in the ordinary course of business or otherwise. See disclosure under the heading “Lawsuit by Former CEO in Connection with Termination” set forth in Note 18 to the consolidated financial statements included in Item 8 of the Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Our discussions below in this Item 2 are based upon the more detailed discussions about our business, operations and financial condition included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, under Part II, Item 7 of that Form 10-K. Our discussions here focus on our results during the quarter and nine months ended September 29, 2024, or as of, September 29, 2024, and the comparable periods of 2023, and to the extent applicable, any material changes from the information discussed in that Form 10-K or other important intervening developments or information since that time. These discussions should be read in conjunction with that Form 10-K for more detailed and background information. The nine-month periods ended September 29, 2024 and October 1, 2023 both include 39 weeks. The three-month periods ended September 29, 2024 and October 1, 2023 both include 13 weeks.
Forward-Looking Statements
This report contains statements which may constitute “forward-looking statements” within the meaning of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995. Important factors currently known to management that could cause actual results to differ materially from those in forward-looking statements include risks and uncertainties associated with the economic conditions in the commercial interiors industry as well as the risks and uncertainties discussed under the heading “Risk Factors” included in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023. The Company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time.
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Executive Overview
During the quarter ended September 29, 2024, we had consolidated net sales of $344.3 million, up 10.7% compared to $311.0 million in the third quarter last year, primarily due to higher customer demand — particularly in the retail and education market segments. Consolidated operating income was $42.2 million for the third quarter of 2024 compared to $31.0 million in the third quarter last year, primarily due to higher sales and higher gross profit margin as a result of higher sales volume, raw material cost deflation, and favorable fixed cost absorption. Consolidated net income for the quarter ended September 29, 2024, was $28.4 million or $0.48 per diluted share, compared to $9.9 million or $0.17 per diluted share in the third quarter last year.
During the first nine months of 2024, we had consolidated net sales of $980.6 million, up 4.7% compared to $936.4 million in the first nine months of last year, primarily due to higher customer demand — particularly in the education, retail, and residential living market segments partially offset by decreases in the healthcare and hospitality market segments. Consolidated operating income was $104.8 million for the first nine months of 2024, compared to $69.4 million in the same period last year, primarily due to higher sales and higher gross profit margin as a result of higher average sales prices and raw material cost deflation. Consolidated net income for the nine months ended September 29, 2024, was $65.2 million or $1.11 per diluted share, compared to $25.0 million or $0.43 per diluted share in the same period last year.
Cybersecurity Event
As previously disclosed in our current report on Form 8-K filed with the Commission on November 23, 2022, we discovered a cybersecurity attack on November 20, 2022, perpetrated by unauthorized third parties, affecting our IT systems. The investigation of the Cyber Event was completed in fiscal year 2023. We have cyber risk insurance and have recovered $0.5 million of our costs and expenses during the nine months ended September 29, 2024. We anticipate that additional costs, expenses or losses related to the Cyber Event will ultimately be recovered by insurance.
Impact of Macroeconomic Trends
Recent disruptions in economic markets due to inflation, high interest rates, the Russia-Ukraine war and the Israel-Hamas war, a fairly stabilized but still challenging supply chain environment, slow market conditions in certain parts of the globe, and significant financial pressures in the commercial office market globally, all pose challenges which may adversely affect our future performance. To mitigate these impacts, we plan to continue evaluating our cost structure and global manufacturing footprint to identify and activate opportunities to decrease costs and optimize our global cost structure.


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Analysis of Results of Operations
Consolidated Results
The following table presents, as a percentage of net sales, certain items included in our consolidated condensed statements of operations for the three-month and nine-month periods ended September 29, 2024 and October 1, 2023:
Three Months EndedNine Months Ended
September 29, 2024October 1, 2023September 29, 2024October 1, 2023
Net sales100.0 %100.0 %100.0 %100.0 %
Cost of sales62.9 64.5 63.2 66.0 
Gross profit37.1 35.5 36.8 34.0 
Selling, general and administrative expenses24.8 25.5 26.1 26.8 
Restructuring, asset impairment, and other gains, net
— — — (0.3)
Operating income12.3 10.0 10.7 7.5 
Interest/Other expense, net
1.8 4.8 1.9 3.5 
Income before income tax expense10.5 5.2 8.8 4.0 
Income tax expense2.2 2.0 2.1 1.3 
Net income8.3 %3.2 %6.7 %2.7 %
Consolidated Net Sales
Below is information regarding our consolidated net sales, and analysis of those results, for the three-month and nine-month periods ended September 29, 2024, and October 1, 2023:
Three Months EndedPercentage
Change		Nine Months EndedPercentage
Change
September 29, 2024October 1, 2023September 29, 2024October 1, 2023
(in thousands)(in thousands)
Consolidated net sales$344,270 $311,006 10.7 %$980,648 $936,380 4.7 %
For the quarter ended September 29, 2024, consolidated net sales increased $33.3 million (10.7%) versus the comparable period in 2023, primarily due to higher sales volume (approximately 9%) and higher average sales prices (approximately 2%). Currency fluctuations had a positive impact on consolidated net sales of approximately $1.4 million (0.4%) for the third quarter of 2024, due primarily to the strengthening of the Euro, Australian dollar, and British Pound sterling against the U.S. dollar. On a market segment basis, the sales increase was primarily in the retail, education, corporate office, residential living, and public buildings market segments partially offset by decreases in the hospitality and healthcare market segments.
For the nine months ended September 29, 2024, consolidated net sales increased $44.3 million (4.7%) versus the comparable period in 2023, primarily due to higher volume (approximately 3%) and higher average sales prices (approximately 2%). Currency fluctuations had a negative impact on consolidated net sales of approximately $0.7 million (0.1%) for the first nine months of 2024, due to the weakening of the Chinese Renminbi, Canadian dollar, and Australian dollar against the U.S. dollar partially offset by the strengthening of the British Pound sterling against the U.S. dollar. On a market segment basis, the sales increase was primarily in the education, retail, residential living, and public buildings market segments partially offset by decreases in the healthcare and hospitality market segments.

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Consolidated Cost and Expenses
The following table presents our consolidated cost of sales and selling, general and administrative expenses for the three-month and nine-month periods ended September 29, 2024, and October 1, 2023:
Three Months EndedPercentage
Change		Nine Months EndedPercentage
Change
September 29, 2024October 1, 2023September 29, 2024October 1, 2023
(in thousands)(in thousands)
Consolidated cost of sales$216,645 $200,748 7.9 %$620,005 $618,463 0.2 %
Consolidated selling, general and administrative expenses85,450 79,273 7.8 %255,871 251,049 1.9 %
Consolidated Cost of Sales
For the quarter ended September 29, 2024, consolidated cost of sales increased $15.9 million (7.9%) compared to the third quarter of 2023, primarily due to higher sales partially offset by raw material cost deflation and favorable fixed cost absorption. Currency translation had a negative impact on consolidated cost of sales in the third quarter of 2024 and partially increased our costs by approximately $0.9 million (0.4%) compared to the same period last year. As a percentage of net sales, our cost of sales decreased to 62.9% for the third quarter of 2024 versus 64.5% for the third quarter of 2023.
For the nine months ended September 29, 2024, consolidated cost of sales increased $1.5 million (0.2%) versus the comparable period in 2023, primarily due to higher sales partially offset by raw material cost deflation. Currency translation had a positive impact on consolidated cost of sales for the first nine months of 2024 and partially reduced our costs by approximately $0.6 million (0.1%) compared to the same period last year. As a percentage of net sales, our cost of sales decreased to 63.2% for the first nine months of 2024 versus 66.0% for the first nine months of 2023.
Consolidated Gross Profit
For the quarter ended September 29, 2024, gross profit, as a percentage of net sales, was 37.1% compared with 35.5% in the same period last year. The increase in gross profit percentage was primarily due to lower costs (approximately 2%) driven by raw material cost deflation and lower fixed costs per unit due to higher volume.
For the nine months ended September 29, 2024, gross profit, as a percentage of net sales, was 36.8% compared with 34.0% in the same period last year. The increase in gross profit percentage was primarily due to raw material cost deflation (approximately 2%) and higher average sales prices (approximately 1%).
Consolidated Selling, General and Administrative (“SG&A”) Expenses
For the quarter ended September 29, 2024, consolidated SG&A expenses increased $6.2 million (7.8%) versus the comparable period in 2023. Currency fluctuations had no material impact on consolidated SG&A expenses in the third quarter of 2024 compared to the same period last year. SG&A expenses were higher for the third quarter of 2024 primarily due to higher people costs of $5.7 million driven by increased variable compensation as a result of higher operating income compared to the same period last year. As a percentage of net sales, SG&A expenses decreased to 24.8% for the third quarter of 2024 versus 25.5% for the third quarter of 2023. 
For the nine months ended September 29, 2024, consolidated SG&A expenses increased $4.8 million (1.9%) versus the comparable period in 2023. Currency translation had no material impact on consolidated SG&A expenses in the first nine months of 2024 compared to the same period last year. SG&A expenses were higher for the first nine months of 2024 primarily due to (i) higher people costs of $12.2 million driven by the factors discussed above for the current quarter, partially offset by (ii) lower professional fees of $3.6 million primarily due to lower non-recurring consulting expenses, (iii) lower severance costs of $2.8 million driven by employee headcount reduction and cost saving initiatives in the prior year period, and (iv) lower Cyber Event costs of $1.4 million due to completion of the investigation in the prior year. As a percentage of net sales, SG&A expenses decreased to 26.1% for the first nine months of 2024 versus 26.8% for the first nine months of 2023.

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Assets Disposed
During the second quarter of 2023, the Company completed the sale of its Thailand manufacturing facility and recognized a gain of $2.7 million.
See Note 14 entitled “Assets Disposed” of Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.
Other Expense, net
During the nine months ended September 29, 2024, the Company received insurance proceeds of approximately $2.4 million related to a property casualty loss that occurred in fiscal year 2023. The insurance proceeds were recognized in other expense, net, in the consolidated condensed statements of operations. During the quarter ended October 1, 2023, the Company substantially liquidated its foreign subsidiaries in Brazil and Russia and $6.2 million of cumulative translation adjustments were reclassified from accumulated other comprehensive loss and recognized in other expense, net, in the consolidated condensed statements of operations.
Interest Expense
During the quarter ended September 29, 2024, interest expense was $5.7 million, a decrease of $2.4 million from the comparable period in 2023, primarily due to lower outstanding term loan borrowings under the Facility. For the nine months ended September 29, 2024, interest expense was $18.3 million, a decrease of $6.7 million from the comparable period in 2023, primarily due to lower outstanding term loan borrowings as discussed above.
Provision for Income Taxes
The effective tax rate for the three and nine months ended September 29, 2024, was 21.2% and 24.4%, respectively, compared to 38.7% and 32.0% for the same periods in 2023. The effective tax rate for 2024 was positively impacted by the release of a valuation allowance on interest expense carryforwards, utilization of previously unrealized interest expense carryforwards and an increase in tax benefits related to share-based compensation, partially offset by a decrease in U.S. tax benefits related to foreign tax credit utilization, foreign derived intangible income, and the repatriation of previously taxed foreign earnings. The effective tax rate for 2023 was negatively impacted by the limitation on the deductibility of interest expense under Internal Revenue Code section 163(j) and non-deductible charges related to the substantial liquidation of subsidiaries in Brazil and Russia.
Segment Operating Results
During the first quarter of 2024, the Company implemented a cost center realignment initiative to centralize certain global/shared functions. For the three and nine months ended September 29, 2024, SG&A expenses for these global support functions were allocated to adjusted operating income (“AOI”) for each reportable segment consistent with the allocation methodology used to allocate corporate overhead in prior periods. Prior year AOI amounts below were not recast as there was no material impact to the measure of segment profit for each reportable segment. There were no changes to the composition of the Company’s operating or reportable segments.
AMS Segment – Net Sales and AOI
The following table presents AMS segment net sales and AOI for the three-month and nine-month periods ended September 29, 2024, and October 1, 2023:
Three Months EndedPercentage ChangeNine Months EndedPercentage Change
September 29, 2024October 1, 2023September 29, 2024October 1, 2023
(in thousands)(in thousands)
AMS segment net sales$210,155 $178,194 17.9 %$595,082 $548,716 8.4 %
AMS segment AOI(1)
32,187 23,318 38.0 %77,214 58,621 31.7 %
(1) Includes allocation of corporate SG&A expenses and allocation of global support SG&A expenses as discussed above. Excludes Cyber Event impact and restructuring, asset impairment, severance, and other, net. See Note 10 entitled “Segment Information” of Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.
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During the third quarter of 2024, net sales in AMS increased 17.9% versus the comparable period in 2023, primarily due to higher sales volume and average sales prices. On a market segment basis, the AMS sales increase was primarily in the retail, education, corporate office, and public buildings market segments.
During the first nine months of 2024, net sales in AMS increased 8.4% versus the comparable period in 2023, primarily due to higher sales volume and average sales prices. On a market segment basis, the AMS sales increase was primarily in education, retail, public buildings, and residential living market segments partially offset by decreases in the healthcare market segment.
AOI in AMS increased 38.0% during the third quarter of 2024 compared to the prior year period, primarily due to higher sales and higher gross profit driven by raw material cost deflation and favorable fixed cost absorption. As a percentage of net sales, AOI increased to 15.3% during the third quarter of 2024 compared to 13.1% in the same period last year.
AOI in AMS increased 31.7% during the first nine months of 2024 compared to the prior year period, primarily due to higher sales and higher gross profit driven by raw material cost deflation. As a percentage of net sales, AOI increased to 13.0% during the first nine months of 2024 compared to 10.7% in the same period last year.
EAAA Segment – Net Sales and AOI
The following table presents EAAA segment net sales and AOI for the three-month and nine-month periods ended September 29, 2024, and October 1, 2023:
Three Months EndedPercentage ChangeNine Months EndedPercentage Change
September 29, 2024October 1, 2023September 29, 2024October 1, 2023
(in thousands)(in thousands)
EAAA segment net sales$134,115 $132,812 1.0 %$385,566 $387,664 (0.5)%
EAAA segment AOI(1)
11,299 9,049 24.9 %31,402 16,805 86.9 %
(1) Includes allocation of corporate SG&A expenses and allocation of global support SG&A expenses as discussed above. Excludes purchase accounting amortization, Cyber Event impact, and restructuring, asset impairment, severance and other, net. See Note 10 entitled “Segment Information” of Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.
During the third quarter of 2024, net sales in EAAA increased 1.0% versus the comparable period in 2023. Currency fluctuations had a positive impact on EAAA sales of approximately $1.6 million (1.2%) for the third quarter of 2024 compared to the same period last year due to the strengthening of the Euro, Australian dollar, and the British Pound sterling against the U.S. dollar. On a market segment basis, the EAAA sales increase was primarily in the education and residential living market segments partially offset by decreases in the hospitality and corporate office market segments.
During the first nine months of 2024, net sales in EAAA decreased 0.5% versus the comparable period in 2023, primarily due to lower sales volume. Currency fluctuations had no material impact on EAAA sales for the first nine months of 2024 compared to the same period last year. On a market segment basis, the EAAA sales decrease was primarily in the public buildings, hospitality, and healthcare market segments partially offset by increases in the corporate office, education, and residential living market segments.
AOI in EAAA increased 24.9% during the third quarter of 2024 versus the comparable period in 2023, primarily due to higher gross profit driven by raw material cost deflation. Currency fluctuations had no material impact on EAAA AOI for the third quarter of 2024 compared to the same period last year. As a percentage of net sales, AOI increased to 8.4% during the third quarter of 2024 compared to 6.8% in the same period last year.
AOI in EAAA increased 86.9% during the first nine months of 2024 versus the comparable period in 2023, primarily due to higher gross profit driven by raw material cost deflation. Currency fluctuations had no material impact on EAAA AOI for the first nine months of 2024 compared to the same period in 2023. As a percentage of net sales, AOI increased to 8.1% during the first nine months of 2024 compared to 4.3% in the same period last year.
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Financial Condition, Liquidity and Capital Resources
General
At September 29, 2024, the Company had $115.6 million in cash. At that date, the Company had $41.2 million in term loan borrowings, no revolving loan borrowings, and $0.7 million in letters of credit outstanding under our Facility, and we had $300.0 million of Senior Notes outstanding. As of September 29, 2024, we had additional borrowing capacity of $299.3 million under the Facility. We anticipate that our liquidity is sufficient to meet our obligations for the next 12 months, and we expect to generate sufficient cash to meet our long-term obligations.
The Senior Notes are unsecured and are guaranteed, jointly and severally, by each of the Company’s material domestic subsidiaries, all of which also guarantee the obligations of the Company under its Facility. The Company’s foreign subsidiaries and certain non-material domestic subsidiaries are considered non-guarantors. Net sales for the non-guarantor subsidiaries were approximately $149 million and $427 million for the three-month and nine-month periods ended September 29, 2024, respectively, and net sales for the non-guarantor subsidiaries were approximately $148 million and $431 million for the three-month and nine-month periods ended October 1, 2023, respectively. Total indebtedness of the non-guarantor subsidiaries was approximately $130 million and $133 million as of September 29, 2024 and December 31, 2023, respectively.
Balance Sheet
Accounts receivable, net, were $173.9 million at September 29, 2024, compared to $163.4 million at December 31, 2023. The increase of $10.5 million was primarily due to the impact of higher net sales as a result of increased customer demand in 2024.
Inventories, net, were $283.1 million at September 29, 2024, compared to $279.1 million at December 31, 2023. The increase of $4.0 million was primarily due to finished goods inventory build attributable to higher expected customer demand in the remainder of 2024, partially offset by lower raw material costs.
Analysis of Cash Flows
The following table presents a summary of cash flows for the nine-month periods ended September 29, 2024 and October 1, 2023, respectively:
Nine Months Ended
September 29, 2024October 1, 2023
(in thousands)
Net cash provided by (used in):
Operating activities$110,387 $114,217 
Investing activities(16,694)(10,645)
Financing activities(89,545)(80,847)
Effect of exchange rate changes on cash955 (656)
Net change in cash and cash equivalents5,103 22,069 
Cash and cash equivalents at beginning of period110,498 97,564 
Cash and cash equivalents at end of period$115,601 $119,633 
Cash provided by operating activities was $110.4 million for the nine months ended September 29, 2024, which represents a decrease of $3.8 million from the prior year comparable period. Higher sales during the first nine months of 2024 contributed to higher accounts receivable balances resulting in a use of cash for the current period. The prior year comparable period includes a source of cash from accounts receivable collections compared with the first nine months of 2024, primarily attributable to delays in customer billings from the Cyber Event, in which those delayed billings were collected in the first quarter of 2023. Additionally, the increase in inventories during the first nine months of 2024, as described above, resulted in a greater use of cash compared with the same period in the prior year.

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Cash used in investing activities was $16.7 million for the nine months ended September 29, 2024, which represents an increase of $6.0 million from the prior year comparable period. The increase was attributable to higher capital expenditures partially offset by cash proceeds received during the first nine months of 2024 from the sale of manufacturing equipment and insurance proceeds for property casualty losses. The first nine months of 2023 include cash proceeds of approximately $6.6 million from the sale of the Company’s Thailand manufacturing facility.
Cash used in financing activities was $89.5 million for the nine months ended September 29, 2024, which represents an increase of $8.7 million from the prior year comparable period. The increase was primarily attributable to higher prepayments of term loan borrowings during the first nine months of 2024 compared to the prior year period.
Outlook
Cash flows from operations, cash and cash equivalents, and other sources of liquidity are expected to be available and sufficient to meet foreseeable cash requirements. However, the Company’s cash flows from operations can be affected by numerous factors including raw material availability and cost, and demand for our products.
Backlog
As of October 20, 2024, the consolidated backlog of unshipped orders was approximately $242.3 million. As disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, backlog was approximately $195.5 million as of February 4, 2024. Disruptions in supply and distribution chains have resulted in delays of construction projects and flooring installations in many regions worldwide, which have also caused, and may continue to cause, fluctuations in our backlog.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The discussion below in this Item 3 is based upon the more detailed discussions of our market risk and related matters included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, under Part II, Item 7A of that Form 10-K. The discussion here focuses on the nine months ended September 29, 2024, and any material changes from (or other important intervening developments since the time of) the information discussed in that Form 10-K. This discussion should be read in conjunction with that Form 10-K for more detailed and background information.
Sensitivity Analysis
For purposes of specific risk analysis, we use sensitivity analysis to measure the impact that market risk may have on the fair values of our market sensitive instruments. To perform sensitivity analysis, we assess the risk of loss in fair values associated with the impact of hypothetical changes in interest rates and foreign currency exchange rates on market sensitive instruments.
Because the debt outstanding under our Facility has variable interest rates based on an underlying prime lending rate, SOFR, or other benchmark rate, we do not believe changes in interest rates would have any significant impact on the fair value of that debt instrument. Changes in the underlying prime lending rate, SOFR, or other benchmark rate would, however, impact the amount of our interest expense. For a discussion of these hypothetical impacts on our interest expense, please see the discussion in Part II, Item 7A of our Annual Report on Form 10-K for the year ended December 31, 2023.
As of September 29, 2024, based on a hypothetical immediate 100 basis point increase in interest rates, with all other variables held constant, the fair value of our fixed rate long-term debt would be impacted by a net decrease of $10.6 million. Conversely, a 100 basis point decrease in interest rates would result in a net increase in the fair value of our fixed rate long-term debt of $7.0 million.
As of September 29, 2024, a 10% decrease or increase in the levels of foreign currency exchange rates against the U.S. dollar, with all other variables held constant, would result in a respective decrease or increase in the net fair value of our financial instruments of $12.9 million. As the impact of offsetting changes in the fair market value of our net foreign investments is not included in the sensitivity model, these results are not indicative of our actual exposure to foreign currency exchange risk.

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ITEM 4. CONTROLS AND PROCEDURES
As of the end of the period covered by this Quarterly Report on Form 10-Q, an evaluation was performed under the supervision and with the participation of our management, including our President and Chief Executive Officer and our Vice President and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Act”), pursuant to Rule 13a-14(c) under the Act.
No system of controls, no matter how well designed and operated, can provide absolute assurance that the objectives of the system of controls are met, and no evaluation of controls can provide absolute assurance that the system of controls has operated effectively in all cases. Our disclosure controls and procedures however are designed to provide reasonable assurance that the objectives of disclosure controls and procedures are met.
Based on the evaluation, our President and Chief Executive Officer and our Vice President and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this Quarterly Report to provide reasonable assurance that the objectives of disclosure controls and procedures are met.
There were no changes in our internal control over financial reporting that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
From time to time, we are a party to legal proceedings, whether arising in the ordinary course of business or otherwise. See Note 15 of Part I, Item 1 of this Quarterly Report on Form 10-Q and Note 18 to the consolidated financial statements included in Item 8 of the Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

ITEM 1A. RISK FACTORS
In addition to the other information set forth in this report, you should carefully consider the risk factors disclosed in Part I, Item 1A, “Risk Factors,” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
The following table contains information with respect to purchases made by or on behalf of the Company, or any “affiliated purchaser” (as defined in Rule 10b-18(a)(3) under the Securities Exchange Act of 1934), of our common stock during our third quarter ended September 29, 2024:
Period(1)
Total
Number of
Shares
Purchased		Average
Price
Paid
Per Share
Total Number
of Shares Purchased
as Part of Publicly Announced Plans or Programs(2)
Approximate Dollar Value of Shares that
May Yet Be
Purchased Under the
Plans or Programs(2)
July 1 – July 28, 2024(3)
364 $14.68 — $82,828,595 
July 29 – August 25, 2024(3)
477 16.70 — 82,828,595 
August 26 – September 29, 2024
— — — 82,828,595 
Total841 $15.83 — 
(1) The monthly periods identified above correspond to the Company’s fiscal third quarter of 2024, which commenced July 1, 2024 and ended September 29, 2024.
(2) On May 17, 2022, the Company announced a share repurchase program authorizing the repurchase of up to $100 million of common stock. The program has no specific expiration date. There were no shares repurchased pursuant to this program during the Company’s fiscal third quarter of 2024.
(3) Comprised of shares received by the Company from employees to satisfy income tax withholding obligations in connection with the vesting of previous equity awards.
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ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None

ITEM 5. OTHER INFORMATION
During the three months ended September 29, 2024, one of our directors, Daniel T. Hendrix, adopted a Rule 10b5-1 trading arrangement for the potential sale of our common stock in amounts and prices determined in accordance with such plan, as outlined in the table below:
Name and Title
Action
Date Adopted
Expiration Date
Aggregate Number of Securities to be Purchased / Sold
Daniel T. Hendrix, Director
Adoption of Rule 10b5-1 Plan(1)
September 4, 2024
May 30, 202575,000 
(1) Intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Securities Exchange Act of 1934.
Transactions in our securities by directors or officers of Interface or its subsidiaries are required to be made in accordance with our Insider Trading Policy, which incorporates applicable U.S. federal securities laws that prohibit trading Interface common stock and other Company securities while aware of material non-public information about Interface.
Except as set forth above, during the three months ended September 29, 2024, no other director or officer (as defined in Rule 16a-1(f) of the Exchange Act) of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K.

ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.

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ITEM 6. EXHIBITS
The following exhibits are filed or furnished with this report:
Exhibit NumberDescription of Exhibit
10.1
31.1
31.2
32.1
32.2
101.INSXBRL Instance Document – The Instance Document does not appear in the Interactive Data Files because its XBRL tags are embedded within the Inline XBRL document.
101.SCHXBRL Taxonomy Extension Schema Document.
101.CALXBRL Taxonomy Extension Calculation Linkbase Document.
101.LABXBRL Taxonomy Extension Label Linkbase Document.
101.PREXBRL Taxonomy Presentation Linkbase Document.
101.DEFXBRL Taxonomy Definition Linkbase Document.
104
The cover page from this Quarterly Report on Form 10-Q for the quarter ended September 29, 2024, formatted in Inline XBRL
*
Management contract or compensatory plan or agreement.

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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
INTERFACE, INC.
Date: November 5, 2024By:
/s/ Bruce A. Hausmann
Bruce A. Hausmann
Chief Financial Officer
(Principal Financial Officer)
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