Interface — Third Quarter 2026 Earnings Summary

Financial Performance:

• Net sales totaled $366.7 million for the quarter, a 0.6% year-over-year increase and 0.4% currency-neutral increase; nine-month net sales reached $1,093.5 million, up 5.4% year-over-year.
• GAAP earnings per diluted share were $0.67, a 14.1% decrease year-over-year; adjusted earnings per diluted share were $0.68, an 11.5% increase year-over-year.
• GAAP net income was $39.2 million for the quarter compared to $46.1 million in the prior year; nine-month GAAP net income was $114.2 million, up 24.6% year-over-year.
• Adjusted net income was $39.9 million for the quarter, an 11.1% increase year-over-year; nine-month adjusted net income was $115.3 million, up 34.1% year-over-year.
• Gross profit margin was 40.6% for the quarter, an 116 basis point increase year-over-year; nine-month gross profit margin was 41.5%, up 267 basis points year-over-year.
• Adjusted gross profit margin was 40.6% for the quarter, up 103 basis points year-over-year; nine-month adjusted gross profit margin was 41.5%, up 238 basis points year-over-year.
• SG&A expenses were $92.4 million for the quarter (25.2% of net sales), up 2.4% year-over-year; nine-month SG&A expenses were $290.0 million, up 5.9% year-over-year.
• Adjusted SG&A expenses were $91.5 million for the quarter, up 1.7% year-over-year; nine-month adjusted SG&A expenses were $288.7 million, up 6.9% year-over-year.
• Operating income was $56.3 million for the quarter, up 5.5% year-over-year; nine-month operating income was $163.6 million, up 27.1% year-over-year.
• Adjusted operating income was $57.2 million for the quarter, up 5.7% year-over-year; nine-month adjusted operating income was $164.9 million, up 21.7% year-over-year.
• Adjusted EBITDA was $69.3 million for the quarter, up 4.7% year-over-year; nine-month adjusted EBITDA was $203.8 million, up 21.3% year-over-year.
• Cash on hand was $81.1 million as of October 4, 2026, compared to $71.3 million as of December 28, 2025.
• Total debt was $130.2 million as of October 4, 2026, down 28.3% from $181.6 million as of December 28, 2025.
• Net debt (Total Debt minus Cash) was $49.1 million as of October 4, 2026, down 55.4% from $110.3 million as of December 28, 2025.
• Net leverage ratio (Net Debt divided by Last 12-Months Adjusted EBITDA) was 0.2x.
• Currency-neutral orders increased 0.8% year-over-year for the quarter.

Guidance and Future Outlook:

• Interface reaffirmed its full fiscal year 2026 adjusted earnings guidance.
• Net sales outlook for full fiscal year 2026 was revised down to $1.440 to $1.455 billion from a previous range of $1.455 to $1.485 billion, reflecting softer conditions in Europe.
• Adjusted gross profit margin outlook for full fiscal year 2026 is 40.4% of net sales, revised down from 40.6%.
• Adjusted SG&A expenses outlook for full fiscal year 2026 is $387 million, revised down from $395 million.
• Adjusted interest and other expenses outlook for full fiscal year 2026 is $14 million, revised down from $15 million.
• Adjusted effective income tax rate outlook for full fiscal year 2026 is 25.0%, revised down from 26.0%.
• Capital expenditures outlook for full fiscal year 2026 remains at $60 million.
• Fully diluted weighted average share count outlook for full fiscal year 2026 is 58.5 million shares, revised down from 58.6 million shares.
• Guidance includes $15.6 million of IEEPA tariff refunds received in Q2 2026.

Business Segments and Product Lines:

• Global billings grew across all three primary market segments: Healthcare, Education, and Corporate Office.
• Healthcare billings increased 5% year-over-year, following 29% growth in the prior-year quarter.
• Education and Corporate Office billings each grew in the low single digits.
• AMS segment net sales were $219.4 million for the quarter, up 0.3% year-over-year; nine-month net sales were $662.7 million, up 3.9% year-over-year.
• AMS segment currency-neutral orders increased 6.2% year-over-year for the quarter.
• EAAA segment net sales were $147.4 million for the quarter, up 1.0% year-over-year; nine-month net sales were $430.8 million, up 7.8% year-over-year.
• EAAA segment currency-neutral orders decreased 6.8% year-over-year for the quarter.
• Adjusted gross profit margin improvement in the quarter was driven by favorable pricing and product mix combined with manufacturing efficiencies, partially offset by higher raw material and tariff-related costs.
• Adjusted SG&A expense increase in the quarter was due to higher inflation and marketing costs.

Market and Competitive Landscape:

• Interface stated it continues to outperform the broader industry.
• Momentum in the Americas and disciplined execution helped offset softer conditions in EMEA during the quarter.
• The company noted that certain Retail and nora deliveries shifted into future periods.

Risks and Challenges:

• The press release cites risks related to foreign trade policies, tariffs, and fluctuations in foreign currency exchange rates.
• Risks include large increases in the cost of raw materials, shipping costs, duties, or tariffs that may not be offset or passed through to customers.
• Potential disruptions to supply chains, manufacturing processes, or facilities from natural disasters, geopolitical conflicts, or pandemics are noted.
• Substantial international operations are subject to political, economic, and regulatory uncertainties.
• The company faces risks associated with litigation and claims.

Management Commentary and Tone:

• Laurel Hurd, CEO, stated that third-quarter results reflect the strength of the diversified portfolio and the effectiveness of the "One Interface" strategy.
• Hurd expressed confidence in the ability to drive growth, expand margins, and create value through ongoing investments in innovation, productivity, and operational efficiency.
• Bruce Hausmann, CFO, noted that operating discipline enabled adjusted earnings growth ahead of expectations despite modest net sales growth.
• Management described the backlog as solid and the balance sheet as healthy, emphasizing a continued focus on margin expansion and cost discipline.

Other Key Points:

• The company is reaffirming its full-year earnings outlook despite revising the net sales outlook.
• Interface remains focused on its goal of becoming carbon negative by 2040 without the use of offsets.
• The press release includes a conference call scheduled for November 6, 2026, at 8:00 a.m. Eastern Time.
• Non-GAAP measures provided include adjusted earnings per share, adjusted net income, adjusted operating income, adjusted gross profit, adjusted gross profit margin, adjusted SG&A expenses, currency-neutral sales, net debt, and adjusted EBITDA.
• Adjusted measures exclude restructuring, asset impairment, severance, other net, nora purchase accounting amortization, warehouse fire recovery, and deferred taxes - rate changes and other.