Interface, Inc.

Good morning. My name is Rob, and I will be your conference operator today. At this time, I'd like to welcome everyone to the Interface Inc. 4th Quarter 2021 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star, followed by the number 1 on your telephone keypad. If you would like to withdraw your question, again, press star 1. Thank you. Christine Needles, Corporate Communications, you may begin your conference.

Good morning, and welcome to Interface's conference call regarding fourth quarter and fiscal year 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 security 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. Each of those can be found on our website, www.interface.com. Lastly, this call is being recorded and broadcasted for Interface. It contains copyrighted material and may not be re-recorded or re-broadcasted without Interface's 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 us today. 2021 was a success story for the Interface team. As we advance our growth and diversification strategy, we continue to make history with the world's first and only carbon negative carpet products. We navigated through supply chain and inflationary headwinds, made significant reductions to SG&A, and reduced net leverage to 2.5 times adjusted EBITDA, our lowest level since acquiring NORA. I continue to be impressed with the interface team for their hard work and dedication to our customers and our company. Demand for our carbon neutral and carbon negative products continues to grow. Fourth quarter orders increased 19% year over year, which is our third consecutive quarter of double-digit growth. In America, fourth quarter orders were up 31% year-over-year. In AAA, they were up 12%, both currency neutral. Year-end 2021 backlog increased 28%, up $46 million compared to year-end 2020. And we feel confident with the momentum we are going into 2022. Fourth quarter net sales increased 23% year-over-year to approximately $340 million, on par with fourth quarter 2019. This is a positive sign that the market is continuing to grow. During 2021, we made great strides to advance our diversification and segmentation strategy, executing on growth drivers. Significant wins through the year drove progress on our climate take-back journey, underpinning our position as the industry leader in carbon tech. Major companies across the globe, including multiple Fortune 100 customers, are turning to Interface for our carbon neutral and proprietary carbon negative product offerings. We are aligned with our customers' values and priorities to reduce their own carbon emissions and meet their own sustainability goals. Globally, we continue to launch multiple new products in 2021, where they focus on design and innovation. We expanded our open-air product line after a very successful launch, supporting our ongoing dealer strategy. We enhanced our resilient offerings with Stargazing, a new LVT collection designed for education. We also launched vinyl sheet to meet an expanded breadth of healthcare segment needs. And in recent weeks, we moved into the LBT rigid core category with our even path collection for commercial sector. These high quality wood and stone designs have a rigid flat finish and feature a glue-free installation and low maintenance. And finally, we expanded our Nora product catalog with three new high-style launches last year. Our diversified product portfolio highlights our success in transforming Interface into a global world-class flooring solutions company. Just a few years ago, nearly 100% of our sales were from carpet tile. Today, carpet accounts for approximately 60% of our sales. We have reached more than $120 million in LVT sales, and our acquisition of Norum has proven successful as we continue to take share in the rubber category. From a segmentation perspective, we made significant progress on diversifying outside of the office market. More than half of our global sales in 2021 were generated from non-office segments. In the United States, our largest market, we diversified significantly where over 60% of our sales were in segments outside of the office market. Healthcare, education, multifamily, and transportation have all been significant growth sectors for us. On a consolidated basis, healthcare sales were up 47% in the fourth quarter and 19% for the full year, and education sales were up 16% in the fourth quarter and 11% for the full year, each compared with prior periods. While the commercial office market is a smaller portion of our business now, we continue to see growth there. Fourth quarter 2021 was our third consecutive quarter of double-digit sales growth in the segment, which is a positive sign that the office market is rebounding. We also believe that, to some degree, the work-from-home lifestyle is here to stay in the United States. More businesses are adapting to a hybrid approach, investing in office upgrades that support an open floor plan with less density. 80% of our business is driven by renovation and remodel. As many companies adapt their office layouts to use the same square footage with less people and increase social distancing, They're turning to us as their flooring solutions partner. And we're the ideal partner with design and sustainability are important to them. Outside of the U.S., we expect markets across Europe and Asia to largely return to pre-pandemic work models. I am proud of our team's achievements during a challenging year. We continue to advance our strategy, which was evident in our results. And we have position interface for continued success in the future. The increased demand we're seeing across our product lines and segments shows that we have the right range and mix of products to meet our customers' needs. We continue to stay focused on what makes us unique, our design, innovation, and sustainability leadership, setting us up for continued success. With that, I'll turn it over to Bruce to go through the financials.