Interface, Inc.

And welcome to Q4, to fourth quarter 2024 Interface Inc. Earnings Conference call. Please note that this call is being recorded. After the speaker's prepared remarks, there will be a question and answer session. If you'd like to ask a question during that time, please press star followed by one on your telephone keypad. Thank you. I'd now like to hand the call over to Christine Needles, Global Communications.

You may now begin. Good morning and welcome to Interface's conference call regarding fourth quarter and full year 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 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 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, Christine, and good morning, everyone. Interface delivered a strong year in 2024, achieving a 4% increase in currency neutral net sales and significantly boosting profitability, despite continued headwinds in our industry. We're confident that our strategy is working. As a reminder, our one interface strategy is a multi-year effort focused on building strong global functions to support our world-class local selling team, accelerating growth through enhanced productivity of our commercial team, expanding margins through global supply chain management and simplifying operations, and leading in design, innovation, and sustainability. I'm incredibly proud of our team and all that we've achieved this year. Let me run through a few highlights of our strategy execution in 2024. Looking at commercial productivity, you may recall that in Q1 2024, we implemented an integrated selling approach combining NORA and Interface selling teams in the US. This collaborative strategy is delivering accelerated results, including double digit order growth in the Americas region year over year. The team is successfully tapping into new opportunities across our product portfolio and we're excited to see NoraSales expanding beyond healthcare into other high-growth segments. In our continued efforts to globalize our functional team, we appointed our first chief supply chain officer about 18 months ago to optimize our supply chain globally and drive productivity improvements that will help expand gross profit margins. We realigned our supply chain organization to focus on productivity and continuous improvement in technology-enabled solutions. As a result of this newly globalized supply chain team, We've made significant progress in driving operational efficiencies. Throughout 2024, we invested in automation and robotics solutions at key manufacturing plants, including our carpet towel manufacturing in the U.S. and our Nora rubber plant in Germany, contributing to improved margins and greater operational efficiency. The initial results of these investments have been very promising, boosting efficiency, consistency, and scalability in our manufacturing processes. As we've shared on prior calls, we will continue to implement these automation investments over the next several quarters, and we will invest in additional opportunities across our global manufacturing footprint. Looking forward, we remain focused on further enhancing productivity, streamlining workflows, and optimizing resources. Importantly, by reinvesting efficiency-driven savings directly into these advancements, we continue to drive growth and position ourselves for long-term success. We also delivered several important initiatives in 2024 to help elevate our brand positioning. For example, we introduced Made for More, a fresh brand attitude designed to unite our brands and create greater consistency in the way we service our customers, bringing our interface and NORA brands together and demonstrating the power of our portfolio. This platform streamlines our marketing and branding efforts and is an example of how we're benefiting from globalizing as one interface. In addition, Last spring, we executed our second global product launch aligned to our biggest interior design and trade event. And importantly, we announced that we're going all in on our goal to be carbon negative by 2040 without the use of carbon offset, which is an important elevation of our sustainability strategy. This allows us to repurpose offset dollars into innovations and R&D that focus on direct impacts, including carbon reduction and carbon storage opportunities. In fact, Interface received a top honor in Reuters 2024 sustainability awards with the highest distinction in the net zero leadership category for our shift from offsets and recommitment to our carbon negative goal. In January this year, we also introduced a proof of concept carbon negative rubber flooring prototype at the bow, a major trade event in Germany. This is a great example of how we are bringing our long track record of carbon reduction and innovation to our NORA product category. It's also a proof point for investing in R&D where we can have the most direct positive impacts to meet our ambitious sustainability targets and deliver product innovations that help our customers achieve their own carbon reduction goals. I'm proud of our continued progress and recognition in sustainability, and I'm encouraged by the tremendous amount of work that has gone into our products. Our deep expertise and commitment truly differentiate innovation in the industry. As I think about the year overall, I'm incredibly pleased with the global organization's execution of our strategy, which is delivering solid initial results and in some areas, even faster results than we anticipated. With our strong strategy execution as the backdrop, let's turn to how we drove our financial results. In 2024, we delivered currency neutral net sales growth of 4% year over year and nearly doubled GAAP earnings per diluted share. Global billings were up across all product categories. including carpet tile, LVT, and rubber. Growth was fueled by strong performance in the Americas, with currency neutral net sales increased 9% year over year. In EAAA, currency neutral net sales were down 2% on a softer macro. Lower net sales in Australia were partially offset by higher net sales in Asia, with EMEA being slightly down for the year. Moving to our market segments, Global education billings were up 10% for the year, driven by strength in the Americas. Interface is strategically positioned in both K-12 and higher education based on the work we've done to align our product portfolio with the needs of our customers in these markets. By offering more approachable price points and differentiating through design and sustainability, we've expanded our addressable market. Strong macro drivers are at play in these markets, including regional migration, where families follow company relocations that increase the need for schools and healthcare facilities. In higher education, there's still pent-up demand following the COVID years, with institutions investing in campus spaces to attract students in a highly competitive environment. In K through 12, schools are undergoing renovations to modernize and expand facilities. These powerful market trends are expected to drive steady growth in the education sector, with a projected increase in the mid-single digits over time. In healthcare, global billings were down 2% year-over-year in 2024, but up 12% in the fourth quarter as orders converted to billing. Interface is positioned for success in healthcare through differentiated products that are ready to meet the needs of an aging population, longer life expectancies, increased technology, and a focus on preventative care. In this growing environment, we are seeing success with our integrated selling teams in finding new opportunities to sell our full suite of products to healthcare systems. Moving to the corporate office segment, global billings were down 1% for the year, which was favorable compared to the overall industry and a found outcome in a challenging market. We continue to see an increase in return to office mandates, and many companies are refreshing their spaces, especially Class A space, where we are positioned to win with our competitive advantage in premium products, innovative design, and sustainability leadership. As we move into 2025, Interface is well positioned to capture this continuing demand. Finally, retail billings were up in 2024 compared to a soft 2023. And while retail is a small percentage of our total revenue, it had an outsized favorable impact on net sales in 2024 as previously deferred projects were activated. Turning to orders, in the fourth quarter of 2024, Consolidated currency neutral orders increased 5% year-over-year. Currency neutral orders in the Americas were up 9% year-over-year, driven by effective execution from our combined selling team. EAAA's fourth quarter currency neutral orders were down 1% year-over-year on a softer macro environment. The MAO was up slightly, partially offset by softness in Australia. Our backlog was strong at the end of 2024, up 15% year-over-year, which puts us in a strong position as we head into fiscal 2025. The results we delivered in 2024 from our one interface strategy give us confidence that there's more growth to come. In 2025, we will continue to execute our one interface strategy and expect growth to outpace the industry. We will continue to simplify our supply chain operations and drive operational efficiencies and productivity in our manufacturing environment. We're excited about our product pipeline that will launch in 2025, which we are confident will demonstrate our design and sustainability leadership. Overall, we feel good about the momentum in the U.S. market and the strong position we hold with our premium products, design, and sustainability leadership. We are closely monitoring the global, geopolitical, and macroeconomic environments around the world, as the European and Australia macro environments are softer right now. With that background in mind and with an incredible year under our belt, I want to thank the entire Interface team around the globe for their relentless commitment to our strategy and dedication to serving our customers with best-in-class flooring solutions. With that, I'll turn it over to Bruce to go over the financials. Bruce?