Interface, Inc.

Good day and thank you for standing by. Welcome to the second quarter 2021 Interface Incorporated Earnings Conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. I would now like to hand the conference over to your speaker today, Christine Needles, Corporate Communication. You may begin your conference.

Good morning, and welcome to Interface's conference call regarding second quarter 2021 results. Hosted by Dan Hendricks, Chairman and CEO, and Bruce Hausman, Vice President and CFO. During today's conference call, any management comments regarding Interface's business which are not historical information are forward-looking statements within the meaning of federal securities laws. Forward-looking statements include statements regarding the intent, belief, or current expectations of our management team, as well as the assumptions on which such statements are based. Any forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties that could cause actual results to differ materially from any such statements, including risks and uncertainties associated with the ongoing COVID-19 pandemic and those described in our most recent annual report on Form 10-K filed with the SEC. The company assumes no responsibility to update forward-looking statements. Management's remarks during this call also refer to certain non-GAAP measures. Reconciliations of the non-GAAP measures to the most comparable GAAP measures and explanations for their use are contained in the company's earnings release and form 8K furnished with the SEC today. Lastly, this call is being recorded and broadcasted for interface. It contains copyrighted material and may not be re-recorded or re-broadcasted without Interfaces Express permission. Your participation on the call confirms your consent to the company's taping and broadcasting of it. After our prepared remarks, we will open up the call for questions. Now I'd like to turn the call over to Dan Hendricks, Chairman and CEO.

Thank you, Christine. Good morning, and thank you for joining our call today. Once again, I want to thank the Interface team for helping us to deliver another quarter of strong results. In the second quarter, we saw continued improvements in economic activity in the United States, parts of Europe, and parts of Asia Pacific, particularly China and Australia. The big story for us, our orders came roaring back in the second quarter. Yes, you heard it right, roaring back in the second quarter, up 38% compared to the prior year period and up 21% sequentially. We're seeing our order momentum pick up globally, with America's up 35% and EAAA up 43%. As a result, order backlog was up 20% compared to the prior year and up 63 million, or 39%, since the beginning of the year. We saw strong signs recovering in Americas and parts of Europe and parts of Asia Pacific, but the ongoing pandemic continues to present challenges in our business. as we manage against rising COVID cases, rolling lockdowns, labor shortages, inflation, and supply chain challenges. These issues are not unique to Interface, but they impacted our ability to get product out the door and ultimately our gross profit in the quarter. As we look to our market verticals, activity in the office market has picked up in recent weeks. More and more companies have announced their plans to return to the office. Many of our customers are talking about flexible and hybrid policies, And Interface is in a great position to capitalize on this. Companies are moving ahead with remodel and renovation projects that were previously put on hold. While the recent increase in Delta variant cases may slightly delay return to the office plans, we're continuing to see signs that it's a matter of when, not if, people return to the office. In the U.S., K-12 education was another bright spot. The federal stimulus plan is leading to a surge in new projects, with many schools upgrading their flooring choices in the process. We're also seeing broad-based strength across the market verticals, such as healthcare and transportation. The dealer discretionary market continues to gain traction with excitement around open-air products and LVT, and our floor business continues to grow. Momentum for our cradle-to-gate carbon negative backings continues to build in the marketplace. This non-PVC option creates additional opportunity for us, particularly with our global end-user customers. The market is continuing to recognize us for our carbon tech innovations. We were featured in the New York Times Magazine as one of the few commercialized products on the market that use carbon as a resource. Our carbon negative carbon top backings and products are increasingly showing up in product specifications, And we continue to see robust interest from many of our global customers that have made public carbon reduction commitments. Finally, we're gearing up for Neocon, which is back in Chicago in person in October. It shows several new products this year. We have a new Carpital collection that includes organic, linear, and angular designs. It's a fresh perspective on biophilic design, which continues to drive commercial design trends across our vertical markets. As I said before, we have a strong pipeline of new products rolling out this year across Carbital, LVT, and rubber. With that, I'll turn it over to Bruce for the second quarter 2021 financial recap. Bruce?