Interface, Inc.

one on your telephone keypad. If you would like to withdraw your question, please press star one again. For operator assistance throughout the call, please press star zero. And finally, I would like to advise all participants that this call is being recorded. Thank you. I'd now like to welcome Christine Needles, Corporate Communications, to begin the conference. Christine, over to you.

Good morning, and welcome to Interface's conference call regarding first quarter 2024 results, hosted by Laurel Hurd, CEO, and Bruce Hausman, 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 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 rebroadcasted 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 will turn the call over to Laurel Hurd, CEO.

Thank you, Christina. Good morning, everyone. To start our call, I want to thank the entire Interface team for a very strong quarter. Thanks to their efforts and the support of our customers and partners, we achieved robust performance in the first quarter, fueled by comprehensive strength across the Americas. These strong results reinforce the fact that our one interface strategy is working and yielding tangible results. With that backdrop in mind, I'd like to take a few minutes to update you on our progress. As a reminder, our strategy is focused on reducing complexity, driving continuous improvement, and globalizing our core functions to support our world-class selling team. After a successful pilot in 2023, our territories throughout the U.S. have transitioned to combine NORA and interface selling teams. and we continue to see tremendous synergies between the two. During the first quarter, the One Interface selling team drove strong order growth, outpacing our expectations in a challenging macro environment. This collaborative and consolidated approach aligns incentives and maximizes coverage to win business together. Reducing complexity is a core tenet of our strategy. We are continuing to simplify how we work across the enterprise and around the globe. in everything we do in every functional area, and importantly, in how we provide the best products and services in the industry to our customers. We are also on track with operational improvements in manufacturing, including investments in new automation and robotic solutions, which will drive improved margins. We're adding robotics to some of the more manual parts of our carpet tile manufacturing process in the U.S., which is better for our workforce in these hard-to-fill, labor-intensive roles. These robotic solutions will drive labor efficiencies and reduce raw material waste. We're in the preliminary stages of implementation, which will roll out in phases over the next 24 months. We're being prudent with our investments, and as we see the desired results, we will continue to assess and invest in efficiency opportunities. Ruth and I recently visited our facilities in Germany, the Netherlands, and Australia. In Germany, we witnessed firsthand our automation investments at work in our Nora rubber manufacturing facility. By automating the rubber press and cutting processes, we enhance employee safety and increase production throughput. In Australia, we met with several customers across corporate office, education, hospitality, and healthcare, and also hosted an event at our showroom where we showcased new products and interacted with over 80 customers. It was great to spend time in the field. seeing how our strategy and innovation are playing out. There's a lot of great work being done, leading to encouraging progress on the horizon. Earlier this month, Interface rolled out a fresh new brand attitude, Made for More, which showcases the best of Interface and encompasses our belief that our flooring is made with purpose and without compromise, meaning that our customers get beautiful design, quality, performance, innovation, and sustainability with all of our products all the time we don't ask our customers to sacrifice design for performance or quality for sustainability we are the preferred partner for flooring and design projects because we provide high design sustainability focused products across all of our brands and categories to our customers which significantly differentiates us in the marketplace we've introduced made for more around the globe at the same time and it's another example of our one interface strategy in action We look forward to Clerkenwell Design Week in May and Neocon in June, where we will showcase several exciting new product launches. Turning to our first quarter results, net sales came in at the high end of our expectations, driven by the Americas. We continue to see notable strength in education, with billings up double digits. Our K-12 business was particularly strong, driven by increased demand for expanded open-air collections. Expanding our offering of carpet tile designs at more accessible price points allows us to connect with our customers' needs while ultimately driving increased carpet and LVT sales. Corporate office was down low single digits in the first quarter, which we viewed as a positive outcome given the volatility in that segment. Our renovation business remains strong as the trend for people returning to office continues, and we grew share in the U.S. carpet tile market in the quarter. As expected, retail sales were soft in the first quarter due to ongoing headwinds in the sector. However, we are beginning to see increased demand, and we expect stronger retail sales beginning in Q2, which is reflected in our updated guidance. While first quarter sales were down 2% year over year, adjusted gross profit margin increased by 528 basis points year over year. Our selling organization continued to successfully execute, holding price and driving favorable mix. Gross profit margin also benefited from raw material deflation in the quarter. Turning to orders, total company orders were strong in the quarter, up 5% year-over-year. Orders were up 7% in the Americas and up 3% in EAAA. Strength in EMEA and Asia was partially offset by softer orders in Australia, which had tough comps. Our backlog was strong as we finished Q1, up 19% year-to-date. We remained focused on commercial productivity and aligning our sales teams to the fastest growing geographic markets and segments. Before I turn the call over to Bruce, I want to talk about a recent update to our sustainability strategy, which marks a pivotal point in our climate journey. Beginning in 2025, we will redirect investments from carbon offset purchases into initiatives that will both reduce our carbon footprint and accelerate our growth, including low carbon innovation and circular solutions. We have proven over the past three decades that we can significantly reduce our carbon footprint while growing our business, with our most recent figures showing an 82% reduction in our global carpet carbon footprint from when we started the journey back in 1996 to 2023. We remain committed to helping our customers achieve their sustainability goals, and this change will enable us to continue to thoughtfully invest in differentiated innovation. accelerating development of more sustainable solutions that our customers will love. In summary, I'm pleased with our strong first quarter results, and I'm more confident than ever that our strategy is working and yielding tangible results. With that, I will turn it over to Bruce to go through the financials. Bruce?