Interface, Inc.

Good morning, ladies and gentlemen, and thank you for standing by. My name is Kelvin, and I will be your conference operator today. At this time, I would like to welcome everyone to Interface Inc.' 's fourth quarter and full year 2025 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 would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, please press star one again. Thank you. I would now like to turn the call over to Christine Yields, Corporate Communications. Please go ahead.

Christine Yields Good morning, and welcome to Interface's conference call regarding fourth quarter and full year 2025 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, as supplemented in our first quarter 2025-10Q. 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 rerecorded 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, Christine, and good morning, everyone. 2025 was a record year for Interface, as net sales, adjusted operating income, and adjusted EBITDA reached their highest levels in the company's history, driven by a One Interface strategy. We introduced the One Interface strategy in 2023, committing to a set of initiatives that focused on building strong global functions to support our world-class local selling teams, accelerating growth through enhanced commercial productivity, expanding margins through global supply chain management and simplifying operations, and leading in design performance and sustainability. Since launching this strategy, we've carried out these initiatives and delivered growth and margin expansion that has outpaced the industry through strong execution across the business. For the full year, currency neutral net sales increased 4% year over year, driven by broad-based growth across all regions and key market segments. In addition, all three product categories grew in both price and volume. This growth, coupled with operational efficiency gains, expanded our adjusted gross profit margin to 39%. Commercial productivity has been a fundamental growth driver and remains central to our strategy. Our combined US selling team model is a key enabler, allowing us to harness the full strength of our sales organization and present a single, cohesive interface to our customers across Carpetile, LVT, and Nora Rubber. The U.S. team is successfully cross-selling, competing more effectively, winning more of the floor plate, and deepening customer relationships. The growth of our Nora Rubber business in 2025 is a standout example of how our combined teams can help drive momentum. Global rubber billings were up 17% in 2025 compared to the prior year. We will continue to build on this in 2026 and beyond. The success in the U.S. reinforces our confidence in the scalability of this model, and it provides a lot of runway for us to expand our business in healthcare and education across the globe, further leveraging our local selling teams. We're just getting started and excited to build on our early success. Supporting this commercial momentum, we have continued to strengthen and globalize our manufacturing and supply chain team. In 2025, we further aligned our global supply chain around productivity, continuous improvement, and technology-enabled solutions. Our ongoing investments in automation and robotics generated productivity gains and margin expansion. During the year, we automated key processes in our U.S. carpet tile operations, including material handling and other labor-intensive sets. We also invested in automation in our Nora plant to support growth in our core Nora platform. These actions have improved efficiency, reduced waste, and enhanced customer service levels while positioning us for growth. Building on the success of automation in our U.S. carpet tile operations, we are now extending these robotic solutions to our facilities in Europe and Australia. We are also further automating our carpet tile facilities to include more efficient cutting and packaging processes that will drive additional efficiencies. Looking ahead, we will continue to reinvest efficiency-driven savings into additional automation, productivity initiatives, and workflow optimization, scaling proven solutions across our global operations. Paramount to our strategy is a continued focus on product innovation that expands our addressable market as a key driver of growth. With this as the backdrop, this week we are launching Noravant, a groundbreaking rubber flooring innovation that will open new design possibilities in the resilient category. This sheet platform that is PVC-free combines high performance, design flexibility, and enhanced sustainability, complementing our existing Norament and Norplan platforms. We've developed a completely new rubber offering that will compete at the premium end of the vinyl sheet category. This is an incremental growth opportunity that we expect will meaningfully expand our addressable market in resilient over time. Importantly, it will allow us to deliver elevated rubber aesthetics to more spaces where we continue to see opportunity for growth, particularly in healthcare and education. The initial product, Noravant Timber, is the industry's first wood grain design in rubber flooring and expands the range of environments where rubber might be specified, including patient rooms, classrooms, corridors, and waiting areas. Looking specifically at our opportunity in healthcare, Patient rooms represent a sizable portion of the hospital's floor plate. Noravant Timber is ideal for this type of application. We launched with a woodgrain look to support strong demand from healthcare customers for patient rooms to look more like luxury hotel rooms. Noravant is a design-forward, PVC-free, cheap solution that also meets elevated performance, cleaning, and durability requirements, needs that aren't fully served by other products on the market or in our portfolio. We view NoraVant as an important multi-year growth platform. Given Nora's longer selling cycle, which can span several quarters, we expect NoraVant timber to begin contributing to growth in the fourth quarter of 2026 and build over time. We will continue to invest in Nora automation to support growth in our existing Nora platform while also expanding capacity to meet anticipated demand for NoraVant. We also continue to lead in design, We've been focused on expanding our addressable market by offering collections at more approachable price points while pushing our design leadership at premium price points. We've done this with the open air collection in carpet tile and with our three millimeter offering of LBT. These collections are largely incremental to our business and help us to better serve our customers' needs and to drive market share gains while also achieving our gross margin goals. We have high confidence that this is working, and we will continue to expand our offerings in these areas in 2026. Our commitment to sustainability continues to underpin our product development and innovation, and it differentiates us in the marketplace. We make sustainability specifiable with a broad range of low-carbon products, the highest amount of recycled and bio-based materials globally in the flooring industry, and tools that make it easier for our customers to understand the carbon impact their choices like our carbon calculator and carbon footprint data on our floor plans in 2025 we unveiled the first ever cradle to gate carbon negative rubber prototype and began incorporating captured carbon in our u.s and european carpet tile manufacturing processes we also continue to be recognized externally including earning a spot on newsweek's most responsible companies list and being named for the 28th consecutive year in globe scan and erm's 2025 Sustainability Leader Survey. As we move forward, sustainability remains embedded in how we design and innovate and how we stand out and differentiate in the market. Let me now turn to our financial results. For the full year, we delivered 4% year-over-year currency neutral net sales growth, with both price and volume increasing across all three product categories, reflecting strong execution and continued share gains. Growth was fueled by strong performance in the Americas, where currency-neutral net sales increased 5% year-over-year, driven by our one interface, combined selling teams, and strengths across key market segments, particularly healthcare and education. In EAAA, currency-neutral net sales increased 2% for the year, reflecting improving trends despite still challenging macro environment in certain markets. Turning to our market segments, in 2025, global healthcare billings were up 21% year-over-year, with double-digit gains in the Americas and EAAA. Our broad and differentiated product portfolio, with segment-focused offerings across carpet tile, LVT, and rubber, is helping us capture opportunities as the global healthcare sector evolves. We're seeing increased investment in healthcare facilities to adapt to the needs of aging populations and a growing focus on preventative care. Nora remains a standout performer in this segment, and we continue to accelerate investments to support sustained growth in healthcare globally. Education billings increased 8% for the full year, reflecting the success of our expanded, more approachable collection offerings. We remain well positioned across both K-12 and higher education. Our design leadership, durable performance characteristics, and low-carbon footprint products are resonating with specifiers and procurement teams. Macro tailwinds continue to underpin multi-year demand. Modernization continues, and our broader range of price points help us win projects across a wide range of budgets. Corporate office billings were up slightly for the year as expected. We continue to take share in Class A spaces where our brand positioning, design leadership, and sustainability credentials differentiate us. companies continue to reinvest in higher quality spaces and execute targeted refresh programs to support return to office and hybrid work environments. We are capturing refresh and spec opportunities that position us well for continued growth. As we look to 2026, our focus is to continue leveraging what's working and to advance to the next phase of our one interface strategy. We expect to continue gaining share by expanding our addressable market through approachable price points in addition to our premium designs through launching innovative new platforms like Noravant Timber and through scaling commercial productivity globally. This will deepen our presence in healthcare and education to further strengthen our market segment diversification efforts and continue to drive growth. The progress we've made under our one interface strategy also gives us confidence in our ability to continue expanding margins. We will continue to pursue automation and productivity gains in our manufacturing facilities and leverage mix by prioritizing growth in our most profitable categories and markets. We will maintain a disciplined approach on SG&A, prioritizing investments that drive profitable growth and innovation while continuing to deliver efficiencies that expand margins. With that, I'll turn it over to Bruce.