SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
☑ | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For Quarterly Period Ended July 5, 20153, 2016
Commission File Number 001-33994
INTERFACE, INC.
(Exact name of registrant as specified in its charter)
GEORGIA | 58-1451243 | |
(State or other jurisdiction of |
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incorporation or organization) | (I.R.S. Employer Identification No.) |
2859 PACES FERRY ROAD, SUITE 2000, ATLANTA, GEORGIA 30339
(Address of principal executive offices and zip code)
(770) 437-6800
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Date File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer ☑ | Accelerated filer ☐ | Non-accelerated filer ☐ | Smaller reporting company ☐ |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No ☑
Shares outstanding of each of the registrant’s classes of common stock at August 4, 2015:2016:
Class | Number of Shares | ||
Common Stock, $.10 par value per share |
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INTERFACE, INC.
PAGE | |||
PART I. | |||
Item 1. | 3 | ||
Consolidated Condensed Balance Sheets – July | 3 | ||
4 | |||
5 | |||
6 | |||
7 | |||
Item 2. | Management’s Discussion and Analysis of Financial Conditionand Results of Operations |
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Item 3. |
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Item 4. |
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PART II. | |||
Item 1. |
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Item 1A. |
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Item 2. |
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Item 3. |
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Item 4. |
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Item 5. |
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Item 6. |
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PARTI - FINANCIAL INFORMATION
ITEMITEM 1. FINANCIAL STATEMENTS
INTERFACE, INC. AND SUBSIDIARIES
CONSOLIDATEDCONSOLIDATED CONDENSEDBALANCE SHEETS
(IN THOUSANDS)
JULY 5, 2015 | DECEMBER 28, 2014 | JULY 3, 2016 | JANUARY 3, 2016 | |||||||||||||
(UNAUDITED) | (UNAUDITED) | |||||||||||||||
ASSETS | ||||||||||||||||
CURRENT ASSETS: | ||||||||||||||||
Cash and Cash Equivalents | $ | 71,821 | $ | 54,896 | $ | 88,364 | $ | 75,696 | ||||||||
Accounts Receivable, net | 137,546 | 157,093 | 128,479 | 130,322 | ||||||||||||
Inventories | 164,205 | 142,167 | 168,738 | 161,174 | ||||||||||||
Prepaid Expenses and Other Current Assets | 21,989 | 20,780 | 22,402 | 22,490 | ||||||||||||
Deferred Income Taxes | 9,617 | 9,732 | 8,509 | 8,726 | ||||||||||||
TOTAL CURRENT ASSETS | 405,178 | 384,668 | 416,492 | 398,408 | ||||||||||||
PROPERTY AND EQUIPMENT, less accumulated depreciation | 216,681 | 227,347 | 210,818 | 211,489 | ||||||||||||
DEFERRED TAX ASSET | 24,988 | 33,138 | 11,073 | 20,110 | ||||||||||||
GOODWILL | 64,530 | 70,509 | 64,872 | 63,890 | ||||||||||||
OTHER ASSETS | 58,788 | 59,252 | 61,864 | 62,652 | ||||||||||||
TOTAL ASSETS | $ | 770,165 | $ | 774,914 | $ | 765,119 | $ | 756,549 | ||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||||
CURRENT LIABILITIES: | ||||||||||||||||
Accounts Payable | $ | 56,273 | $ | 49,464 | $ | 45,174 | $ | 52,834 | ||||||||
Current Portion of Long-Term Debt | 7,500 | 0 | 13,750 | 11,250 | ||||||||||||
Accrued Expenses | 80,421 | 94,323 | 79,501 | 88,933 | ||||||||||||
TOTAL CURRENT LIABILITIES | 144,194 | 143,787 | 138,425 | 153,017 | ||||||||||||
LONG-TERM DEBT | 251,615 | 263,338 | 210,577 | 202,281 | ||||||||||||
DEFERRED INCOME TAXES | 11,240 | 11,002 | 9,030 | 10,505 | ||||||||||||
OTHER | 47,217 | 50,148 | 45,947 | 48,380 | ||||||||||||
TOTAL LIABILITIES | 454,266 | 468,275 | 403,979 | 414,183 | ||||||||||||
Commitments and Contingencies | ||||||||||||||||
SHAREHOLDERS’ EQUITY: | ||||||||||||||||
Preferred Stock | 0 | 0 | 0 | 0 | ||||||||||||
Common Stock | 6,585 | 6,597 | 6,481 | 6,570 | ||||||||||||
Additional Paid-In Capital | 368,725 | 368,603 | 358,320 | 370,327 | ||||||||||||
Retained Earnings | 68,481 | 39,737 | 127,274 | 100,270 | ||||||||||||
Accumulated Other Comprehensive Loss – Foreign Currency Translation Adjustment | (79,175 | ) | (58,936 | ) | (90,443 | ) | (91,511 | ) | ||||||||
Accumulated Other Comprehensive Loss – Pension Liability | (48,717 | ) | (49,362 | ) | (40,492 | ) | (43,290 | ) | ||||||||
TOTAL SHAREHOLDERS’ EQUITY | 315,899 | 306,639 | 361,140 | 342,366 | ||||||||||||
$ | 770,165 | $ | 774,914 | $ | 765,119 | $ | 756,549 |
See accompanying notes to consolidated condensed financial statements.
INTERFACE, INC. AND SUBSIDIARIES
CONSOLIDATEDCONSOLIDATED CONDENSEDSTATEMENTS OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
THREE MONTHS ENDED | SIX MONTHS ENDED | THREE MONTHS ENDED | SIX MONTHS ENDED | |||||||||||||||||||||||||||||
JULY 5, 2015 | JUNE 29, 2014 | JULY 5, 2015 | JUNE 29, 2014 | JULY 3, 2016 | JULY 5, 2015 | JULY 3, 2016 | JULY 5, 2015 | |||||||||||||||||||||||||
NET SALES | $ | 263,637 | $ | 260,624 | $ | 500,541 | $ | 479,616 | $ | 248,207 | $ | 263,637 | $ | 470,761 | $ | 500,541 | ||||||||||||||||
Cost of Sales | 162,385 | 170,239 | 313,857 | 314,545 | 149,081 | 162,385 | 285,003 | 313,857 | ||||||||||||||||||||||||
GROSS PROFIT ON SALES | 101,252 | 90,385 | 186,684 | 165,071 | 99,126 | 101,252 | 185,758 | 186,684 | ||||||||||||||||||||||||
Selling, General and Administrative Expenses | 68,033 | 66,042 | 132,065 | 128,701 | 67,328 | 68,033 | 132,933 | 132,065 | ||||||||||||||||||||||||
OPERATING INCOME | 33,219 | 24,343 | 54,619 | 36,370 | 31,798 | 33,219 | 52,825 | 54,619 | ||||||||||||||||||||||||
Interest Expense | 1,790 | 5,420 | 3,678 | 10,918 | 1,590 | 1,790 | 3,109 | 3,678 | ||||||||||||||||||||||||
Other Expense (Income) | (446 | ) | (128 | ) | 826 | (154 | ) | (116 | ) | (446 | ) | 333 | 826 | |||||||||||||||||||
INCOME BEFORE INCOME TAX EXPENSE | 31,875 | 19,051 | 50,115 | 25,606 | 30,324 | 31,875 | 49,383 | 50,115 | ||||||||||||||||||||||||
Income Tax Expense | 10,153 | 5,980 | 16,071 | 8,510 | 9,667 | 10,153 | 15,832 | 16,071 | ||||||||||||||||||||||||
NET INCOME | $ | 21,722 | $ | 13,071 | $ | 34,044 | $ | 17,096 | $ | 20,657 | $ | 21,722 | $ | 33,551 | $ | 34,044 | ||||||||||||||||
Earnings Per Share – Basic | $ | 0.33 | $ | 0.20 | $ | 0.51 | $ | 0.26 | $ | 0.32 | $ | 0.33 | $ | 0.51 | $ | 0.51 | ||||||||||||||||
Earnings Per Share – Diluted | $ | 0.33 | $ | 0.20 | $ | 0.51 | $ | 0.26 | $ | 0.32 | $ | 0.33 | $ | 0.51 | $ | 0.51 | ||||||||||||||||
Common Shares Outstanding – Basic | 65,995 | 66,473 | 66,208 | 66,472 | 65,367 | 65,995 | 65,526 | 66,208 | ||||||||||||||||||||||||
Common Shares Outstanding – Diluted | 66,044 | 66,550 | 66,253 | 66,558 | 65,405 | 66,044 | 65,564 | 66,253 |
See accompanying notes to consolidated condensed financial statements.
INTERFACE, INC. AND SUBSIDIARIES
CONSOLIDATEDCONSOLIDATED STATEMENTS OFCOMPREHENSIVE INCOME
(UNAUDITED)
(IN THOUSANDS)
THREE MONTHS ENDED | SIX MONTHS ENDED | THREE MONTHS ENDED | SIX MONTHS ENDED | |||||||||||||||||||||||||||||
JULY 5, 2015 | JUNE 29, 2014 | JULY 5, 2015 | JUNE 29, 2014 | JULY 3, 2016 | JULY 5, 2015 | JULY 3, 2016 | JULY 5, 2015 | |||||||||||||||||||||||||
Net Income | $ | 21,722 | $ | 13,071 | $ | 34,044 | $ | 17,096 | $ | 20,657 | $ | 21,722 | $ | 33,551 | $ | 34,044 | ||||||||||||||||
Other Comprehensive Income (Loss), Foreign | ||||||||||||||||||||||||||||||||
Currency Translation Adjustment | 5,060 | 1,078 | (20,239 | ) | 4,182 | |||||||||||||||||||||||||||
Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment | (8,311 | ) | 5,060 | 1,068 | (20,239 | ) | ||||||||||||||||||||||||||
Other Comprehensive Income (Loss), Pension Liability Adjustment | (2,557 | ) | (776 | ) | 645 | (1,213 | ) | 2,190 | (2,557 | ) | 2,798 | 645 | ||||||||||||||||||||
Comprehensive Income | $ | 24,225 | $ | 13,373 | $ | 14,450 | $ | 20,065 | $ | 14,536 | $ | 24,225 | $ | 37,417 | $ | 14,450 |
See accompanying notes to consolidated condensed financial statements.
INTERFACE, INC. AND SUBSIDIARIES
CONSOLIDATEDCONSOLIDATED CONDENSED STATEMENTS OFCASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
SIXMONTHS ENDED | SIX MONTHS ENDED | |||||||||||||||
JULY 5, 2015 | JUNE 29, 2014 | JULY 3, 2016 | JULY 5, 2015 | |||||||||||||
OPERATING ACTIVITIES: | ||||||||||||||||
Net Income | $ | 34,044 | $ | 17,096 | $ | 33,551 | $ | 34,044 | ||||||||
Adjustments to Reconcile Net Income to Cash Provided by Operating Activities: | ||||||||||||||||
Depreciation and Amortization | 15,539 | 13,312 | 14,960 | 15,539 | ||||||||||||
Stock Compensation Amortization Expense | 9,100 | 2,674 | 2,349 | 9,100 | ||||||||||||
Deferred Income Taxes and Other | 9,287 | 234 | 4,490 | 9,287 | ||||||||||||
Working Capital Changes: | ||||||||||||||||
Accounts Receivable | 15,209 | (12,403 | ) | 1,668 | 15,209 | |||||||||||
Inventories | (27,150 | ) | (21,929 | ) | (6,169 | ) | (27,150 | ) | ||||||||
Prepaid Expenses and Other Current Assets | (2,328 | ) | (118 | ) | (574 | ) | (2,328 | ) | ||||||||
Accounts Payable and Accrued Expenses | (2,841 | ) | 1,938 | (20,360 | ) | (2,841 | ) | |||||||||
CASH PROVIDED BY OPERATING ACTIVITIES: | 50,860 | 804 | 29,915 | 50,860 | ||||||||||||
INVESTING ACTIVITIES: | ||||||||||||||||
Capital Expenditures | (12,126 | ) | (22,017 | ) | (12,752 | ) | (12,126 | ) | ||||||||
Other | (462 | ) | (1,658 | ) | 1,585 | (462 | ) | |||||||||
CASH USED IN INVESTING ACTIVITIES: | (12,588 | ) | (23,675 | ) | (11,167 | ) | (12,588 | ) | ||||||||
FINANCING ACTIVITIES: | ||||||||||||||||
Repayments of Long-Term Debt | (3,000 | ) | (2,289 | ) | (10,000 | ) | (3,000 | ) | ||||||||
Borrowing of Long-Term Debt | 0 | 5,952 | 20,167 | 0 | ||||||||||||
Proceeds from Issuance of Common Stock | 359 | 159 | 0 | 359 | ||||||||||||
Repurchase of Common Stock | (10,469 | ) | 0 | (10,443 | ) | (10,469 | ) | |||||||||
Dividends Paid | (5,300 | ) | (3,989 | ) | (6,547 | ) | (5,300 | ) | ||||||||
CASH USED IN FINANCING ACTIVITIES: | (18,410 | ) | (167 | ) | (6,823 | ) | (18,410 | ) | ||||||||
Net Cash Provided by (Used in) Operating, Investing andFinancing Activities | 19,862 | (23,038 | ) | |||||||||||||
Net Cash Provided by (Used in) Operating, Investing and | ||||||||||||||||
Financing Activities | 11,925 | 19,862 | ||||||||||||||
Effect of Exchange Rate Changes on Cash | (2,937 | ) | 167 | 743 | (2,937 | ) | ||||||||||
CASH AND CASH EQUIVALENTS: | ||||||||||||||||
Net Change During the Period | 16,925 | (22,871 | ) | 12,668 | 16,925 | |||||||||||
Balance at Beginning of Period | 54,896 | 72,883 | 75,696 | 54,896 | ||||||||||||
Balance at End of Period | $ | 71,821 | $ | 50,012 | $ | 88,364 | $ | 71,821 |
See accompanying notes to consolidated condensed financial statements.
INTERFACE, INC. AND SUBSIDIARIES
NOTESTO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
NOTE 1 – CONDENSED FOOTNOTES
As contemplated by the Securities and Exchange Commission (the “Commission”) instructions to Form 10-Q, the following footnotes have been condensed and, therefore, do not contain all disclosures required in connection with annual financial statements. Reference should be made to the Company’s year-end audited consolidated financial statements and notes thereto contained in its Annual Report on Form 10-K for the fiscal year ended December 28, 2014,January 3, 2016, as filed with the Commission.
The financial information included in this report has been prepared by the Company, without audit. In the opinion of management, the financial information included in this report contains all adjustments (all of which are normal and recurring) necessary for a fair presentation of the results for the interim periods. Nevertheless, the results shown for interim periods are not necessarily indicative of results to be expected for the full year. The December 28, 2014,January 3, 2016, consolidated condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States. The first quarter of 20152016 was comprised of 1413 weeks, while the first quarter of 20142015 was comprised of 1314 weeks. Each of the second quarters of 20152016 and 20142015 was comprised of 13 weeks.
Certain prior period amounts have been reclassified to conform to the current period presentation.
NOTE 2 – INVENTORIES
Inventories are summarized as follows:
July 5, 2015 | December 28, 2014 | July 3, 2016 | January 3, 2016 | |||||||||||||
(In thousands) | (In thousands) | |||||||||||||||
Finished Goods | $ | 105,756 | $ | 89,688 | $ | 112,304 | $ | 101,697 | ||||||||
Work in Process | 10,915 | 9,898 | 9,710 | 9,865 | ||||||||||||
Raw Materials | 47,534 | 42,581 | 46,724 | 49,612 | ||||||||||||
$ | 164,205 | $ | 142,167 | $ | 168,738 | $ | 161,174 |
NOTE 3 – EARNINGS PER SHARE
The Company computes basic earnings per share (“EPS”) by dividing net income by the weighted average common shares outstanding, including participating securities outstanding, during the period as discussed below. Diluted EPS reflects the potential dilution beyond shares for basic EPS that could occur if securities or other contracts to issue common stock were exercised, converted into common stock or resulted in the issuance of common stock that would have shared in the Company’s earnings.
The Company includes all unvested stock awards which contain non-forfeitable rights to dividends or dividend equivalents, whether paid or unpaid, in the number of shares outstanding in our basic and diluted EPS calculations when the inclusion of these shares would be dilutive. Unvested share-based awards of restricted stock are paid dividends equally with all other shares of common stock. As a result, the Company includes all outstanding restricted stock awards in the calculation of basic and diluted EPS. Distributed earnings include common stock dividends and dividends earned on unvested share-based payment awards. Undistributed earnings represent earnings that were available for distribution but were not distributed. The following tables show distributed and undistributed earnings:
Three Months Ended | Six Months Ended | Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||
July 5, 2015 | June 29, 2014 | July 5, 2015 | June 29, 2014 | July 3, 2016 | July 5, 2015 | July 3, 2016 | July 5, 2015 | |||||||||||||||||||||||||
Earnings Per Share: | ||||||||||||||||||||||||||||||||
Basic Earnings Per Share: | ||||||||||||||||||||||||||||||||
Distributed Earnings | $ | 0.04 | $ | 0.03 | $ | 0.08 | $ | 0.05 | $ | 0.05 | $ | 0.04 | $ | 0.10 | $ | 0.08 | ||||||||||||||||
Undistributed Earnings | 0.29 | 0.17 | 0.43 | 0.21 | 0.27 | 0.29 | 0.41 | 0.43 | ||||||||||||||||||||||||
Total | $ | 0.33 | $ | 0.20 | $ | 0.51 | $ | 0.26 | $ | 0.32 | $ | 0.33 | $ | 0.51 | $ | 0.51 | ||||||||||||||||
Diluted Earnings Per Share: | ||||||||||||||||||||||||||||||||
Distributed Earnings | $ | 0.04 | $ | 0.03 | $ | 0.08 | $ | 0.05 | $ | 0.05 | $ | 0.04 | $ | 0.10 | $ | 0.08 | ||||||||||||||||
Undistributed Earnings | 0.29 | 0.17 | 0.43 | 0.21 | 0.27 | 0.29 | 0.41 | 0.43 | ||||||||||||||||||||||||
Total | $ | 0.33 | $ | 0.20 | $ | 0.51 | $ | 0.26 | $ | 0.32 | $ | 0.33 | $ | 0.51 | $ | 0.51 | ||||||||||||||||
Basic earningsper share | $ | 0.33 | $ | 0.20 | $ | 0.51 | $ | 0.26 | $ | 0.32 | $ | 0.33 | $ | 0.51 | $ | 0.51 | ||||||||||||||||
Diluted earnings per share | $ | 0.33 | $ | 0.20 | $ | 0.51 | $ | 0.26 | $ | 0.32 | $ | 0.33 | $ | 0.51 | $ | 0.51 |
The following tables present net income that was attributable to participating securities:
Three Months Ended | Six Months Ended | |||||||||||||||
July 5, 2015 | June 29, 2014 | July 5, 2015 | June 29, 2014 | |||||||||||||
(In millions) | ||||||||||||||||
Net Income | $ | 0.5 | $ | 0.3 | $ | 0.8 | $ | 0.4 |
Three Months Ended | Six Months Ended | |||||||||||||||
July 3, 2016 | July 5, 2015 | July 3, 2016 | July 5, 2015 | |||||||||||||
(In millions) | ||||||||||||||||
Net Income | $ | 0.2 | $ | 0.5 | $ | 0.3 | $ | 0.8 |
The weighted average shares outstanding for basic and diluted EPS were as follows:
Three Months Ended | Six Months Ended | Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||
July 5, 2015 | June 29, 2014 | July 5, 2015 | June 29, 2014 | July 3, 2016 | July 5, 2015 | July 3, 2016 | July 5, 2015 | |||||||||||||||||||||||||
(In thousands) | (In thousands) | |||||||||||||||||||||||||||||||
Weighted Average Shares Outstanding | 64,497 | 65,012 | 64,710 | 65,011 | 64,779 | 64,497 | 64,938 | 64,710 | ||||||||||||||||||||||||
Participating Securities | 1,498 | 1,461 | 1,498 | 1,461 | 588 | 1,498 | 588 | 1,498 | ||||||||||||||||||||||||
Shares for Basic Earnings Per Share | 65,995 | 66,473 | 66,208 | 66,472 | 65,367 | 65,995 | 65,526 | 66,208 | ||||||||||||||||||||||||
Dilutive Effect of Stock Options | 49 | 77 | 45 | 86 | 38 | 49 | 38 | 45 | ||||||||||||||||||||||||
Shares for Diluted Earnings Per Share | 66,044 | 66,550 | 66,253 | 66,558 | 65,405 | 66,044 | 65,564 | 66,253 |
For all periods presented, there were no options or participating securities excluded from the computation of diluted EPS.
NOTE 4 – LONG-TERM DEBT
7.625% Senior Notes
As of June 29, 2014, the Company had outstanding $247.5 million in 7.625% Senior Notes due 2018 (the “7.625% Senior Notes”). These notes were redeemed in their entirety in the fourth quarter of 2014. The estimated fair value of the 7.625% Senior Notes as of June 29, 2014, based on then current market prices, was $259.9 million.
Syndicated Credit Facility
The Company has a syndicated credit facility (the “Facility”) pursuant to which the lenders provide to the Company and certain of its subsidiaries a multicurrency revolving credit facility and provide to the Company a term loan. The facility matures in October of 2019. Interest on base rate loans is charged at varying rates computed by applying a margin depending on the Company’s consolidated net leverage ratio as of the most recently completed fiscal quarter. Interest on LIBOR-based loans and fees for letters of credit are charged at varying rates computed by applying a margin over the applicable LIBOR rate, depending on the Company’s consolidated net leverage ratio as of the most recently completed fiscal quarter. In addition, the Company pays a commitment fee per annum (depending on the Company’s consolidated net leverage ratio as of the most recently completed fiscal quarter) on the unused portion of the Facility.
As of July 5, 2015,3, 2016, the Company had $200outstanding $192.5 million of term loan borrowing and $59.1$31.8 million of revolving loan borrowings outstanding under the Facility, and had $3.1$4.0 million in letters of credit outstanding under the Facility. As of July 5, 2015,3, 2016, the weighted average interest rate on borrowings outstanding under the Facility was 1.9%2.4%.
TheBeginning in the fourth quarter of 2015, the Company isbecame required to make quarterly amortization payments of the term loan borrowing. The amortization payments are due on the last day of the calendar quarter, commencing with an initial amortizationquarter. The payment amount for each of the first three quarters of 2016 is $2.5 million on December 31, 2015.per quarter. The quarterly amortization payment amount increases to $3.75 million on December 31, 2016.
The Company is currently in compliance with all covenants under the Facility and anticipates that it will remain in compliance with the covenants for the foreseeable future.
Other Lines of Credit
Subsidiaries of the Company have an aggregate of the equivalent of $19.0$14.7 million of other lines of credit available at interest rates ranging from 2%2.5% to 6%6.5%. As of July 5, 2015,3, 2016, there were no borrowings outstanding under these lines of credit.
NOTE 5 – STOCK-BASED COMPENSATION
Stock OptionAwards
In accordance with accounting standards, the Company measures the cost of employee services received in exchange for an award of equity instruments based on the grant date fair value of the award. That cost will be recognized over the period in which the employee is required to provide the services – the requisite service period (usually the vesting period) – in exchange for the award.
All outstanding stock options vested prior to the end of 2013, and therefore there was no stock option compensation expense in 2014the first six months of 2015 or 2015.2016.
As of July 3, 2016, there were 87,500 stock options outstanding and exercisable, at an average exercise price of $8.75 per share. There were no stock options granted in 20142016 or 2015. The following table summarizesThere were no exercises or forfeitures of stock options outstanding as of July 5, 2015, as well as activity during the six months then ended:
Shares | Weighted Average Exercise Price | |||||||
Outstanding at December 28, 2014 | 126,000 | $ | 9.23 | |||||
Granted | 0 | 0 | ||||||
Exercised | 38,500 | 9.27 | ||||||
Forfeited or canceled | 0 | 0 | ||||||
Outstanding at July 5, 2015 | 87,500 | 8.75 | ||||||
Exercisable at July 5, 2015 | 87,500 | $ | 8.75 |
At July 5, 2015, the aggregate intrinsic value of both in-the-money options outstanding and options exercisable was $1.4 million (the intrinsic value of a stock option is the amount by which the market value of the underlying stock exceeds the exercise price of the option).
Cash proceeds and intrinsic value related to total stock options exercised duringin the first six months of 20152016. The aggregate intrinsic value of the outstanding and 2014 are provided in the table below. The Company did not recognize any significant tax benefit with regard toexercisable stock options in either period presented.was $0.6 million as of July 3, 2016.
Six Months Ended | ||||||||
July 5, 2015 | June 29, 2014 | |||||||
(In thousands) | ||||||||
Proceeds from stock options exercised | $ | 359 | $ | 159 | ||||
Intrinsic value of stock options exercised | 421 | 299 |
Restricted Stock Awards
During the six months ended July 3, 2016 and July 5, 2015, and June 29, 2014, the Company granted restricted stock awards for 266,500 and 597,000 and 490,000 shares respectively, of common stock. Restricted stock, awardsrespectively. Awards of restricted stock (or a portion thereof) vest with respect to each recipient over a two to five yearthree-year period from the date of grant, provided the individual remains in the employment or service of the Company as of the vesting date. Additionally, certain awards (or a portion thereof) could vest earlier upon the attainment of certain performance criteria, in the event of a change in control of the Company, or upon involuntary termination without cause.
Compensation expense related to restricted stock grants was $9.1$1.7 million and $2.7$9.1 million for the six months ended July 3, 2016 and July 5, 2015, and June 29, 2014, respectively. Accounting standards require that the Company estimate forfeitures for restricted stock and reduce compensation expense accordingly. The Company has reduced its expense by the assumed forfeiture rate and will evaluate experience against this forfeiture rate going forward.
The following table summarizes restricted stock activityoutstanding as of July 5, 2015, and3, 2016, as well as activity during the six months then ended:
Shares | Weighted Average Grant Date Fair Value | Restricted Shares | Weighted Average Grant Date Fair Value | |||||||||||||
Outstanding at December 28, 2014 | 1,391,000 | $ | 17.12 | |||||||||||||
Outstanding at January 3, 2016 | 1,470,000 | $ | 17.92 | |||||||||||||
Granted | 597,000 | 16.43 | 266,500 | 17.21 | ||||||||||||
Vested | 290,500 | 13.99 | 975,000 | 18.53 | ||||||||||||
Forfeited or canceled | 199,500 | 13.58 | 174,000 | 16.71 | ||||||||||||
Outstanding at July 5, 2015 | 1,498,000 | $ | 17.92 | |||||||||||||
Outstanding at July 3, 2016 | 587,500 | $ | 16.95 |
As of July 5, 2015,3, 2016, the unrecognized total compensation cost related to unvested restricted stock was approximately $14.3$6.4 million. That cost is expected to be recognized by the end of 2019.
ForPerformance Share Awards
In 2016, the Company issued awards of performance shares to certain employees. These awards vest based on the achievement of certain performance-based goals over a performance period of one to three years, subject to the employee’s continued employment through the last date of the performance period, and will be settled in shares of our common stock or in cash at the Company’s election. The number of shares that may be issued in settlement of the performance shares to the award recipients may be greater (up to 200%) or lesser than the nominal award amount depending on actual performance achieved as compared to the performance targets set forth in the awards.
The following table summarizes the performance shares outstanding as of July 3, 2016, as well as the activity during the six months then ended:
Performance Shares | ||||
Outstanding at January 3, 2016 | 0 | |||
Granted | 435,500 | |||
Vested | 0 | |||
Forfeited or canceled | 0 | |||
Outstanding at July 3, 2016 | 435,500 |
The weighted average grant date fair value of the performance shares awarded in the first six month of 2016 was $17.23 per share. Compensation expense related to the performance shares for the six months ended July 5, 2015, and June 29, 2014, the Company recognized tax benefits with regard3, 2016 was $0.6 million. Unrecognized compensation expense related to restricted stockthese performance shares was approximately $6.9 million as of $3.5 million and $0.7 million, respectively.July 3, 2016. No performance shares were granted or outstanding during 2015.
NOTE 6 – EMPLOYEE BENEFIT PLANS
The following tables provide the components of net periodic benefit cost for the three-month and six-month periods ended July 3, 2016 and July 5, 2015, and June 29, 2014, respectively:
Three Months Ended | Six Months Ended | Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||
Defined Benefit Retirement Plan (Europe) | July 5, 2015 | June 29, 2014 | July 5, 2015 | June 29, 2014 | July 3, 2016 | July 5, 2015 | July 3, 2016 | July 5, 2015 | ||||||||||||||||||||||||
(In thousands) | (In thousands) | (In thousands) | (In thousands) | |||||||||||||||||||||||||||||
Service cost | $ | 265 | $ | 188 | $ | 534 | $ | 363 | $ | 263 | $ | 265 | $ | 521 | $ | 534 | ||||||||||||||||
Interest cost | 2,111 | 2,849 | 4,204 | 5,364 | 1,728 | 2,111 | 3,448 | 4,204 | ||||||||||||||||||||||||
Expected return on assets | (2,265 | ) | (3,195 | ) | (4,512 | ) | (6,020 | ) | (2,007 | ) | (2,265 | ) | (4,004 | ) | (4,512 | ) | ||||||||||||||||
Amortization of prior service costs | 9 | 13 | 17 | 25 | (9 | ) | 9 | 18 | 17 | |||||||||||||||||||||||
Recognized net actuarial losses | 242 | 175 | 481 | 328 | 184 | 242 | 368 | 481 | ||||||||||||||||||||||||
Net periodic benefit cost | $ | 362 | $ | 30 | $ | 724 | $ | 60 | $ | 159 | $ | 362 | $ | 351 | $ | 724 |
Three Months Ended | Six Months Ended | Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||
Salary Continuation Plan (SCP) | July 5, 2015 | June 29, 2014 | July 5, 2015 | June 29, 2014 | July 3, 2016 | July 5, 2015 | July 3, 2016 | July 5, 2015 | ||||||||||||||||||||||||
(In thousands) | (In thousands) | (In thousands) | (In thousands) | |||||||||||||||||||||||||||||
Service cost | $ | 148 | $ | 125 | $ | 297 | $ | 250 | $ | 110 | $ | 148 | $ | 220 | $ | 297 | ||||||||||||||||
Interest cost | 278 | 268 | 556 | 535 | 317 | 278 | 634 | 556 | ||||||||||||||||||||||||
Amortization of prior service cost | 0 | 6 | 0 | 12 | ||||||||||||||||||||||||||||
Amortization of loss | 131 | 67 | 261 | 133 | 203 | 131 | 405 | 261 | ||||||||||||||||||||||||
Net periodic benefit cost | $ | 557 | $ | 466 | $ | 1,114 | $ | 930 | $ | 630 | $ | 557 | $ | 1,259 | $ | 1,114 |
NOTE 7 – SEGMENT INFORMATION
Based on applicable accounting standards, the Company has determined that it has three operating segments – namely, the Americas, Europe and Asia-Pacific geographic regions. Pursuant to accounting standards, the Company has aggregated the three operating segments into one reporting segment because they have similar economic characteristics, and the operating segments are similar in all of the following areas: (a) the nature of the products and services; (b) the nature of the production processes; (c) the type or class of customer for their products and services; (d) the methods used to distribute their products or provide their services; and (e) the nature of the regulatory environment.
While the Company operates as one reporting segment for the reasons discussed, included below is selected information on our operating segments.
AMERICAS | EUROPE | ASIA- PACIFIC | TOTAL | |||||||||||||
(in thousands) | ||||||||||||||||
Three Months Ended July 3, 2016: | ||||||||||||||||
Net Sales | $ | 148,761 | $ | 61,264 | $ | 38,182 | $ | 248,207 | ||||||||
Depreciation and amortization | 3,611 | 1,297 | 2,169 | 7,077 | ||||||||||||
Total assets | 244,313 | 256,381 | 187,705 | 688,399 | ||||||||||||
Three Months Ended July 5, 2015: | ||||||||||||||||
Net Sales | $ | 158,243 | $ | 66,273 | $ | 39,121 | $ | 263,637 | ||||||||
Depreciation and amortization | 3,879 | 1,231 | 2,297 | 7,407 | ||||||||||||
Six Months Ended July 3, 2016: | ||||||||||||||||
Net Sales | $ | 279,177 | $ | 119,222 | $ | 72,362 | $ | 470,761 | ||||||||
Depreciation and amortization | 7,268 | 2,571 | 4,385 | 14,224 | ||||||||||||
Six Months Ended July 5, 2015: | ||||||||||||||||
Net Sales | $ | 297,590 | $ | 130,780 | $ | 72,171 | $ | 500,541 | ||||||||
Depreciation and amortization | 7,820 | 2,436 | 4,662 | 14,918 |
A reconciliation of the Company’s total operating segment depreciation and amortization, and assets to the corresponding consolidated amounts follows:
Three Months Ended | ||||||||
DEPRECIATION AND AMORTIZATION | July 3, 2016 | July 5, 2015 | ||||||
(In thousands) | ||||||||
Total segment depreciation and amortization | $ | 7,077 | $ | 7,407 | ||||
Corporate depreciation and amortization | 366 | 343 | ||||||
Reported depreciation and amortization | $ | 7,443 | $ | 7,750 | ||||
Six Months Ended | ||||||||
DEPRECIATION AND AMORTIZATION | July 3, 2016 | July 5, 2015 | ||||||
(In thousands) | ||||||||
Total segment depreciation and amortization | $ | 14,224 | $ | 14,918 | ||||
Corporate depreciation and amortization | 736 | 621 | ||||||
Reported depreciation and amortization | $ | 14,960 | $ | 15,539 |
ASSETS | July 3, 2016 | |||
(In thousands) | ||||
Total segment assets | $ | 688,399 | ||
Corporate assets and eliminations | 76,720 | |||
Reported total assets | $ | 765,119 |
NOTE 8 – SUPPLEMENTAL CASH FLOW INFORMATION
Cash payments for interest amounted to $3.3$2.5 million and $9.9$3.3 million for the six months ended July 3, 2016 and July 5, 2015, and June 29, 2014, respectively. Income tax payments amounted to $3.5$7.3 million and $4.0$3.5 million for the six months ended July 3, 2016 and July 5, 2015, and June 29, 2014, respectively.
NOTE 9 – RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In January 2015,May 2014, the Financial Accounting Standards Board (“FASB”) issued an accounting standard regarding recognition of revenue from contracts with customers. In summary, the core principle of this standard is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance for this standard was initially effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. However, in August of 2015, the FASB delayed the effective date of the standard for one full year. While the Company is currently reviewing this new standard, it does not believe that the adoption of this standard will have a material impact on its financial condition or results of operations.
In January 2015, the FASB issued an accounting standard which eliminates the concept of extraordinary items from generally accepted accounting principles. The standard does not affect disclosure guidance for events or transactions that are unusual in nature or infrequent in their occurrence. The standard is effective for interim and annual periods in fiscal years beginning after December 15, 2015. The standard allows prospective or retrospective application. Early adoption is permitted if applied from the beginning of the fiscal year of adoption. We do not believe the adoption of this standard willdid not have any significant effectimpact on our ongoing financial reporting.condition or results of operations.
In February 2015, the FASB issued an accounting standard which changes the way reporting enterprises evaluate whether (a) they should consolidate limited partnerships and similar entities, (b) fees paid to a decision maker or service provider are variable interests in a variable interest entity (“VIE”), and (c) variable interests in a VIE held by related parties of the reporting enterprise require the reporting enterprise to consolidate the VIE. The new accounting standard is effective for annual and interim periods in fiscal years beginning after December 15, 2015. We are currently evaluating the impact, if any,The adoption of this standard willdid not have any impact on our ongoing financial condition or results of operations.
In April 2015, the FASB issued an accounting standard to simplify the presentation of debt issuance costs. This accounting standard requires debt issuance costs to be presented on the balance sheet as a direct reduction from the carrying amount of the related debt liability. In August 2015, the FASB issued an accounting standard update that allows the presentation of debt issuance costs related to line-of-credit arrangements as an asset on the balance sheet under the simplified guidance, regardless of whether there are any outstanding borrowings on the related arrangements. The guidance in these accounting standards is to be applied retrospectively and is effective for interim and annual reporting but we do not believeperiods beginning after December 15, 2015. The Company’s debt issuance costs relate to its Syndicated Credit Facility and, as a result, these costs have been, and will continue to be, included as an asset on the balance sheet. Thus, the adoption of this standard did not have any impact on our financial statements.
In July 2015, the FASB issued an accounting standard to simplify the accounting for inventory. This standard requires all inventories to be measured at the lower of cost and net realizable value, except for inventory that is accounted for using the LIFO or the retail inventory method, which will be measured under existing accounting standards. The new guidance must be applied on a prospective basis and is effective for fiscal years beginning after December 15, 2016, with early adoption permitted. The Company is currently evaluating the impact of the adoption of this new standard and does not expect it to have a significant impact on its consolidated financial statements.
In November 2015, the FASB issued an accounting standard which requires deferred tax assets and liabilities, as well as any related valuation allowance, to be classified as noncurrent on the balance sheet. As a result, each jurisdiction will only have one net noncurrent deferred tax asset or liability. This standard does not change the existing requirement that only permits offsetting within a jurisdiction. The amendments in the standard may be applied either prospectively or retrospectively to all prior periods presented. The new guidance is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods, with early adoption permitted. As this standard impacts only presentation, the Company does not expect it to have any significant effect on ourits ongoing financial reporting.
In February 2016, the FASB issued a new accounting standard regarding leases. The new standard establishes a right-of-use (ROU) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company is currently evaluating the impact of adoption of the new standard on our consolidated financial statements
NOTE 10 – INCOMETAXES
Accounting standards require that all tax positions be analyzed using a two-step approach. The first step requires an entity to determine if a tax position is more-likely-than-not to be sustained upon examination. In the second step, the tax benefit is measured as the largest amount of benefit, determined on a cumulative probability basis, that is more-likely-than-not to be realized upon ultimate settlement. In the first six months of 2015,2016, the Company decreased its liability for unrecognized tax benefits by $0.1$0.2 million. As of July 5, 2015,3, 2016, the Company had accrued approximately $27.2$28.1 million for unrecognized tax benefits. In accordance with applicable accounting standards, the Company’s deferred tax asset as of July 5, 20153, 2016 reflects a reduction for $21.9$14.2 million of these unrecognized tax benefits.
NOTE 11 – ITEMS RECLASSIFIED FROM OTHER COMPREHENSIVE INCOME
During the first six months of 2015,2016, the Company did not reclassify any significant amounts out of accumulated other comprehensive income. The reclassifications that occurred in that period were primarily comprised of $0.8 million related to the Company’s defined retirement benefit plan and salary continuation plan. These reclassifications were included in the selling, general and administrative expenses line item of the Company’s consolidated condensed statement of operations.
NOTE 12 – 2014 RESTRUCTURING PLAN
In the third quarter of 2014, the Company committed to a new restructuring plan in its continuing efforts to reduce costs across its worldwide operations. In connection with this restructuring plan, the Company incurred a pre-tax restructuring and asset impairment charge in the third quarter of 2014 in an amount of $12.4 million. The charge was comprised of severance expenses of $9.7 million for a reduction of 100 employees, other related exit costs of $0.1 million, and a charge for impairment of assets of $2.6 million. Approximately $10 million of the charge will result in cash expenditures, primarily severance expense.
A summary of these restructuring activities is presented below:
Total RestructuringCharge | Costs Incurred in 2014 | Cost Incurredin2015 | Balance at July 5, 2015 | |||||||||||||
(In thousands) | ||||||||||||||||
Workforce Reduction | $ | 9,669 | $ | 2,732 | $ | 5,801 | $ | 1,136 | ||||||||
Fixed Asset Impairment | 2,584 | 2,584 | 0 | 0 | ||||||||||||
Other Related Exit Costs | 133 | 133 | 0 | 0 |
NOTE 1312 – REPURCHASE OF COMMON STOCK
In the fourth quarter of 2014, the Company announced a program to repurchase up to 500,000 shares of common stock per fiscal year, commencing with the 2014 fiscal year. In the second quarter of 2016, the Company amended the share purchase program to authorize the repurchase of up to $50 million of common stock. This amended program has no specific expiration date. During the first quartersix months of 2015,2016, the Company repurchased and retired 250,000662,500 shares of common stock at a weighted average purchase price of $19.39 per share. During the second quarter of 2015, the Company repurchased and retired 250,000 shares of common stock at a weighted average purchase price of $22.41$15.73 per share.
ITEM 2.2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Our discussions below in this Item 2 are based upon the more detailed discussions about our business, operations and financial condition included in our Annual Report on Form 10-K for the fiscal year ended December 28, 2014,January 3, 2016, under Item 7 of that Form 10-K. Our discussions here focus on our results during the quarter and six months ended, or as of, July 5, 2015,3, 2016, and the comparable periods of 20142015 for comparison purposes, and, to the extent applicable, any material changes from the information discussed in that Form 10-K or other important intervening developments or information since that time. These discussions should be read in conjunction with that Form 10-K for more detailed and background information.
Forward-Looking Statements
This report contains statements which may constitute “forward-looking statements” within the meaning of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995. Important factors currently known to management that could cause actual results to differ materially from those in forward-looking statements include risks and uncertainties associated with economic conditions in the commercial interiors industry as well as the risks and uncertainties discussed under the heading “Risk Factors” included in Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended December 28, 2014,January 3, 2016, which discussion is hereby incorporated by reference. The Company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time.
General
During the quarter ended July 5, 2015,3, 2016, we had net sales of $263.6$248.2 million, compared with net sales of $260.6$263.6 million in the second quarter last year. During the first six months of fiscal year 2015,2016, we had net sales of $500.5$470.8 million, compared with net sales of $479.6$500.5 million in the first six months of last year. Fluctuations in currency exchange rates had small negative impacts on our sales and operating income in the 20152016 reported periods, compared with the prior year periods. The following table presents the amounts (in U.S. dollars) by which the exchange rates for converting foreign currencies into U.S. dollars have negatively affected our net sales and operating income for the three months and six months ended July 5, 2015.3, 2016.
Three Months Ended July 5, 2015 | Six Months Ended July 5, 2015 | |||||||||||||||
Impact ofChanges inForeignCurrency on: | Three Months Ended July 3, 2016 | Six Months Ended July 3, 2016 | ||||||||||||||
(In millions) | (In millions) | |||||||||||||||
Net sales | $ | (24.1 | ) | $ | (43.3 | ) | $ | (0.5 | ) | $ | (4.3 | ) | ||||
Operating income | (3.4 | ) | (5.5 | ) | 0.0 | (0.3 | ) |
During the second quarter of 2015,2016, we had net income of $20.7 million, or $0.32 per diluted share, compared with net income of $21.7 million, or $0.33 per diluted share, compared with net income of $13.1 million, or $0.20 per diluted share, in the second quarter of 2014.2015. During the six months ended July 5, 2015,3, 2016, we had net income of $34.0$33.6 million, or $0.51 per diluted share, compared with net income of $17.1$34.0 million, or $0.26$0.51 per diluted share, in the first six months of 2014.2015.
The first six months of 2016 were comprised of 26 weeks, while the first six months of 2015 were comprised of 27 weeks, while the first six months of 2014 were comprised of 26 weeks. (The additional week was in the first quarter of 2015.) This is a factor in certain of the comparisons discussed in this Item 2.
Results of Operations
The following table presents, as a percentage of net sales, certain items included in our Consolidated Condensed Statements of Operations for the three-month and six-month periods ended July 3, 2016, and July 5, 2015, and June 29, 2014, respectively:
Three Months Ended | Six Months Ended | Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||
July 5, 2015 | June 29, 2014 | July 5, 2015 | June 29, 2014 | July 3, 2016 | July 5, 2015 | July 3, 2016 | July 5, 2015 | |||||||||||||||||||||||||
Net sales | 100.0% | 100.0% | 100.0% | 100.0% | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||||||||||||||
Cost of sales | 61.6 | 65.3 | 62.7 | 65.6 | 60.1 | 61.6 | 60.5 | 62.7 | ||||||||||||||||||||||||
Gross profit on sales | 38.4 | 34.7 | 37.3 | 34.4 | 39.9 | 38.4 | 39.5 | 37.3 | ||||||||||||||||||||||||
Selling, general and administrative expenses | 25.8 | 25.3 | 26.4 | 26.8 | 27.1 | 25.8 | 28.2 | 26.4 | ||||||||||||||||||||||||
Operating income | 12.6 | 9.3 | 10.9 | 7.6 | 12.8 | 12.6 | 11.2 | 10.9 | ||||||||||||||||||||||||
Interest/Other expenses | 0.5 | 2.0 | 0.9 | 2.2 | 0.6 | 0.5 | 0.8 | 0.9 | ||||||||||||||||||||||||
Income before tax expense | 12.1 | 7.3 | 10.0 | 5.3 | 12.2 | 12.1 | 10.5 | 10.0 | ||||||||||||||||||||||||
Income tax expense | 3.9 | 2.3 | 3.2 | 1.8 | 3.9 | 3.9 | 3.4 | 3.2 | ||||||||||||||||||||||||
Net income | 8.2 | 5.0 | 6.8 | 3.6 | 8.3 | 8.2 | 7.1 | 6.8 |
Net Sales
Below we provide information regarding net sales and analyze those results for the three-month and six-month periods ended July 3, 2016, and July 5, 2015, and June 29, 2014, respectively.
Three Months Ended | Percentage | |||||||||||
July 5, 2015 | June 29, 2014 | Change | ||||||||||
(In thousands) | ||||||||||||
Net Sales | $ | 263,637 | $ | 260,624 | 1.2 | % |
Three Months Ended | Percentage | |||||||||||
July 3, 2016 | July 5, 2015 | Change | ||||||||||
(In thousands) | ||||||||||||
Net Sales | $ | 248,207 | $ | 263,637 | (5.9 | %) |
Six Months Ended | Percentage | |||||||||||
July 5, 2015 | June 29, 2014 | Change | ||||||||||
(In thousands) | ||||||||||||
Net Sales | $ | 500,541 | $ | 479,616 | 4.4 | % |
Six Months Ended | Percentage | |||||||||||
July 3, 2016 | July 5, 2015 | Change | ||||||||||
(In thousands) | ||||||||||||
Net Sales | $ | 470,761 | $ | 500,541 | (5.9 | %) |
For the quarter ended July 5, 2015,3, 2016, net sales increased $3.0decreased $15.4 million (1.2%(5.9%) versus the comparable period in 2014. As discussed above,2015. Currency fluctuations did not have a significant impact on the comparison, as a strengthening of the Euro versus the U.S. dollar versus certain foreign currencies (primarily,was offset by the Euro,weakening of the Australian dollar versus the U.S. dollar. On a geographic basis, we experienced sales declines in the Americas (down 6%), Europe (down 8% as reported in U.S. dollars and Canadian dollar) had a negative impact9% in local currency) and Asia-Pacific (down 2%). In the Americas, the decline was largely attributable to our InterfaceServices business, where its largest retail customer delayed many projects until the second half of approximately $24 million on 2015 second quarter2016, alongside deferred purchases by customers in the weakened oil and gas sector. With the exception of the hospitality (up 27%) and healthcare (up 15%) segments, all other market segments in the Americas region experienced declining sales as compared toin the second quarter of 2014.2016 compared with the prior year period. In Europe, the Americas, we increased sales 7%, whichdecline was largely due to customer uncertainty and hesitation leading up to the June 23, 2016 Brexit referendum vote. The decline in Europe occurred in the corporate office (down 9%) and education (down 46%) market segments, partially offset by declinesincreases in all other market segments with the retail segment (up 34%) being the most significant. In Asia-Pacific, the decline was largely a function of 7%softer sales performance in Europe (asAustralia (down 9% as reported in U.S. dollars)dollars and 6%5% in local currency) due primarily to large project shipments in June 2015 that did not reoccur this year. The remainder of the Asia-Pacific (as reportedregion experienced an increase of 5%, with India and China having the most significant growth. Within the Asia-Pacific division, sales in U.S. dollars) due to the negative currency impacts discussed above. In the Americas, the corporate office market segment led the way with a 12% increase, as the rebound in this market continued and we gained market share in the U.S. Non-office segments were up 3%6%, but this was more than offset by a 25% decline in the aggregate,non-office segments, with increases in the hospitality (up 55%education (down 39%) and education (up 10%hospitality (down 63%) segments being partially offset by declines in the retail (down 12%), healthcare (down 9%) and residential (down 4%) segments. The decline in the residential segment was primarily in the multi-family sector, as our FLOR residential consumer business posted a 4% sales increase for the 2015 second quarter, primarily due to stronger web-based sales. In Europe, the sales increase in local currency was approximately 16%, due to the strength of the corporate office market segment (up 21%) which comprises the bulk of the sales in the region. Non-office segments in Europe were down 3% in the aggregate in local currency, with the government segment showingrepresenting the largest decline (down 48%) due to the continued austerity programs in place through the region. In Asia-Pacific, the sales increase in local currency was 4%, which was almost entirely due to the strengthareas of the corporate office market, primarily in Australia.decline.
For the six months ended July 5, 2015,3, 2016, net sales increased $20.9decreased $29.8 million (4.4%(5.9%) versus the comparable period in 2014. The strengthening of the U.S. dollar versus certain foreign currencies2015. Currency fluctuations had a negative impact on the comparison of approximately $43$4.3 million, on 2015 first half sales as compared to the first half of 2014.or just under 1%. On a geographic basis, we experienced sales increasesa decline of 6% in the Americas (up 11%) and 9% in Europe (in both U.S. dollars and local currency), while our sales in Asia-Pacific (up 2%) versuswere up less than 1% in the first six months of 2014. Due2016 compared with the same period last year. The decline in the Americas region was, again, largely a result of delayed projects at our InterfaceServices business until the second half of 2016, along with softer sales to oil and gas customers. With the impactexception of currency fluctuations,the hospitality (up 13%) and healthcare (up 7%) market segments, all other market segments in the Americas had lower sales compared with the first six months of 2015. In Europe, experiencedthe uncertainty and hesitation surrounding the Brexit vote as well as other political and economic issues led to lower sales, particularly in the corporate office (down 10%) and education (down 38%) market segments. Small increases in the retail (up 32%) and hospitality (up 23%) market segments slightly mitigated the decline. In Asia-Pacific, an increase of 8% in Asia was nullified by a sales decline in Australia of 7%6% as reported in U.S. dollars, butdollars. In local currency, however, sales in Australia were even in the first six months of 2016 compared with the same period in 2015. On a market segment basis within the Asia-Pacific region, an increase in local currency of 14%. In the Americas, the sales increase was almost evenly balanced between the corporate office and non-office segments, with corporate office sales increasing 12% and non-office segments increasing 10%. All non-office market segments showed an increasesegment of 8% for the first six months of 2015, with the exception of2016 was offset almost entirely by declines in the retail (down 5%54%), education (down 27%) and healthcare (essentially flat)hospitality (down 49%) segments. Hospitality (up 74%) and education (up 11%) market segments represented the most significant increases over the first six months of 2014. In local currency, the increase in Europe was mostly in the corporate office market, which grew 21%. Non-office segments in Europe in the aggregate were down 9% in local currency, with the most significant decline coming in the government segment due to the continued austerity measures in place throughout the region. In Asia-Pacific, the sales growth of 2% came as a result of the corporate office market. (up 9%) primarily due to increased new construction and refurbishment projects in Australia. With the exception of the hospitality segment (up 17%), all non-office segments in Asia-Pacific showed declines for the period, with the most significant being in retail (down 35%) and healthcare (down 24%).
Cost and Expenses
The following table presents, on a consolidated basis for our operations, our overall cost of sales and selling, general and administrative expenses for the three-month and six-month periods ended July 3, 2016, and July 5, 2015, and June 29, 2014, respectively:
Three Months Ended | Percentage | Three Months Ended | Percentage | |||||||||||||||||||||
Cost and Expenses | July 5, 2015 | June 29, 2014 | Change | July 3, 2016 | July 5, 2015 | Change | ||||||||||||||||||
(In thousands) | (In thousands) | |||||||||||||||||||||||
Cost of sales | $ | 162,385 | $ | 170,239 | (4.6 | %) | $ | 149,081 | $ | 162,385 | (8.2% | ) | ||||||||||||
Selling, general and administrative expenses | 68,033 | 66,042 | 3.0 | % | 67,328 | 68,033 | (1.0% | ) | ||||||||||||||||
Total | $ | 230,418 | $ | 236,281 | (2.5 | %) | $ | 216,409 | $ | 230,418 | (6.1% | ) |
Six Months Ended | Percentage | Six Months Ended | Percentage | |||||||||||||||||||||
Cost and Expenses | July 5, 2015 | June 29, 2014 | Change | July 3, 2016 | July 5, 2015 | Change | ||||||||||||||||||
(In thousands) | (In thousands) | |||||||||||||||||||||||
Cost of sales | $ | 313,857 | $ | 314,545 | (0.2 | %) | $ | 285,003 | $ | 313,857 | (9.2% | ) | ||||||||||||
Selling, general and administrative expenses | 132,065 | 128,701 | 2.6 | % | 132,933 | 132,065 | 0.7 | % | ||||||||||||||||
Total | $ | 445,922 | $ | 443,246 | 0.6 | % | $ | 417,936 | $ | 445,922 | (6.3% | ) |
For the three months ended July 5, 2015,3, 2016, our cost of sales decreased $7.9$13.3 million (4.6%(8.2%) versus the comparable period in 2014.2015. As a percentage of sales, our costs of sales decreased to 60.1% for the second quarter of 2016 versus 61.6% for the second quarter of 2015. This improvement in gross profit margin occurred across all three of our geographic regions, with Asia-Pacific showing the largest percentage increase, followed by Europe and the Americas. The key factors in the gross margin improvement were (1) lower raw materials input costs (for the second quarter of 2016, our per-unit input costs are 3-5% lower on average than the comparable period in 2015 due to lower prices on petroleum-based raw materials), (2) a shift in product mix towards margin accretive products such as our skinny plank designs, and (3) better material usage and improved production efficiencies as we continue to implement and refine our lean manufacturing practices. These factors drove the decrease in cost of sales as percentage of sales, despite a 7% decline in production volume in the second quarter of 2016 compared with the second quarter last year.
For the six months ended July 3, 2016, our cost of sales decreased $28.9 million (9.2%) versus the comparable period in 2015. Currency fluctuationfluctuations had a favorable impact of less than 1% on cost of sales;the comparison; if currency rates had remained the same for the second quarter of 2015 versus that of the second quarter of 2014,year over year, our cost of sales would have been approximately $13$3.0 million higher.higher versus the first six months of 2015. As a percentage of sales, our cost of sales declined significantly to 61.6% for the second quarter of 2015 versus 65.3% for the second quarter of 2014. Gross profit margin improved across all three of our primary geographic regions, with the Americas showing the largest improvement versus 2014. The key factors in the improvement were (1) reduced raw material costs of 5-7% on a global level due to lower input prices and usage, (2) better absorption of fixed costs associated with higher production volumes, particularly in the Americas and Europe, (3) the normalization of operations in Australia and rebalancing of production in the Asia-Pacific region compared with the inefficiencies associated with the startup of the new facility in Australia in 2014, (4) continued implementation of lean manufacturing practices in our Americas business, and (5) the cost savings associated with our restructuring activities in the third quarter of 2014.
For the six months ended July 5, 2015, our cost of sales decreased $0.7 million (0.2%) versus the comparable period of 2014. Currency fluctuation had a favorable impact on cost of sales; if currency rates had remained the same for the first half of 2015 versus that of the first half of 2014, our cost of sales would have been approximately $23 million higher. As a percentage of sales, our costs of sales60.5% for the first six months of 2015 experienced a significant decline to2016, versus 62.7%, as compared to 65.6% for the comparablesame period last year. The improvement as a percentage of 2014. The reasons forsales took place across all of our geographic regions, with Asia-Pacific having the decline forlargest increase followed by Europe and the six month period are similarAmericas. Our decrease in cost of sales in absolute dollars was due to the reasons addressed above for the three month period:following factors: (1) reducedlower raw materials costs, as our per-unit input costs were down 4-6% during the first six months of 5-7%,2016 compared with the prior year period, primarily as a result of lower petroleum-based and related feedstock costs; (2) better material usage and improved production efficiencies as we continue to implement and refine lean manufacturing practices; (3) higher production volumes whichaverage selling prices in the Americas region; and (4) introduction of margin accretive products such as additional skinny plank designs. These factors led to greater absorptiondecreased cost of fixed costs, (3)sales as a percentage of sales, notwithstanding a 9% decline in production volume for the continued stabilizationfirst six months of 2016 compared with the supply chain and manufacturing footprint in the Asia-Pacific region, (4) improvements in manufacturing efficiencies, and (5) the impacts of our restructuring activities in 2014. The gross margin improvements accelerated during 2015, and as such, the improvement is more significant inprior year period.
For the three months ended July 5, 2015 versus the six month period ended July 5, 2015.
For the three month period ended July 5, 2015,3, 2016, our selling, general and administrative (“SG&A”) expenses increased $2.0decreased $0.7 million (3.0%(1.0%) versus the comparable period in 2015. Currency fluctuation hadThe decline in SG&A expenses was primarily due to savings of approximately $3.0 million in administrative costs, primarily as a favorable impact on selling, general and administrative expense; if currency rates had remained the same for the second quarterresult of 2015 versus that of the second quarter of 2014, our selling, general and administrative expenses would have been approximately $5 million higher. The largest driver of the increase in selling, general and administrative expenses versus the 2014 period is approximately $5.2lower performance-based incentive compensation this year. This decrease was somewhat mitigated by (1) $0.9 million of higher administrativeselling expenses, largely comprisedprimarily associated with new sales staff additions in the Americas division to continue targeting growth markets, and (2) $1.5 million of share-based payment expenses and incentive compensation amounts, as our projected performance is better in 2015 versus 2014. This increase was offset by lower selling andhigher marketing expenses down $1.4for planned initiatives to promote growth, including global branding, market development and new product introductions. The marketing expenses were higher globally, with the Americas region having the largest increase ($0.8 million) and Europe and Asia-Pacific each responsible for approximately $0.3 million and $1.7 million, respectively. These declines, however, were largely dueof the increase. Despite the lower SG&A expenses in absolute dollars, the decline in net sales led to the currency translation effects discussed above,an increase in SG&A expenses as in local currencies these expenditures remained relatively consistent year over year. Duea percentage of sales to the increased administrative expenses discussed above, our selling, general and administrative expenses increased to 25.8% of sales27.1% for the three months ended July 5, 2015, versus 25.3% of sales3, 2016, compared with 25.8% in the correspondingcomparable period in 2014. On a sequential basis, however, selling general and administrativeof 2015. Our SG&A expenses as a percentage of sales is lower,are down sequentially, however, as compared with 27.0%to 29.5% in the first quarter of 2015.2016.
For the six month periodmonths ended July 5, 2015,3, 2016, our selling, general and administrativeSG&A expenses increased $3.4$0.9 million (2.6%(0.7%) versus the comparable period in 2014. Currency fluctuation2015. Fluctuations in currency exchange rates had a positiveslight (less than 1%) negative impact on selling, general and administrative expenses; if currency rates had remained the samecomparison. As noted above, our SG&A expenses during the second quarter of 2016 declined as compared to the second quarter of 2015, so the overall increase for the first six months of 2015 versuscurrent year six-month period related entirely to the first six monthsquarter of 2014, our selling, general and administrative expenses would have been approximately $9 million higher.2016. The increase was largely due to higher administrative$4.3 million of increased marketing expenses as we continue to roll out global marketing, branding and product introduction platforms. Marketing expenses were up across all regions, with the Americas (up $2.1 million) followed by Europe (up $1.2 million) and Asia-Pacific (up $1.0 million). We also had an increase of $8.9$1.4 million largely comprised of share-based paymentin selling expenses, and incentive compensation amounts, as our projected performance is betteralmost entirely within the Americas region, for personnel additions in 2015 versus 2014.Thesekey markets. These increases were partially offset by lower marketing (down $3.3 million) and selling (down $1.7 million) costs. While currency impacts wereadministrative costs of $4.8 million, primarily as a result of lower performance-based incentive compensation this year. Due to the primary factoroverall increase in these declines, across all regions selling and marketingSG&A expenses, were downas well as a decline in sales, our SG&A expenses as a percentage of sales versusincreased to 28.2% for the first six months of 2014, dueended July 3, 2016, as compared to both higher sales as well as cost savings as a result of our restructuring actions which took place in the third quarter of 2014. Due to these initiatives, as a percentage of sales, selling, general and administrative expenses26.4% for the first six months of 2015 declined to 26.4%, versus 26.8% in the first six months of 2014.ended July 5, 2015.
Interest Expense
For the three month period ended July 5, 2015,3, 2016, our interest expense decreased $3.6$0.2 million to $1.8$1.6 million, from $5.4$1.8 million in the second quarter of 2014.2015. For the six month period ended July 5, 2015,3, 2016, our interest expense decreased $7.2$0.6 million to $3.7$3.1 million, from $10.9$3.7 million in the comparable period last year. The reason for the decreases was the debt refinancing activities we completed in the fourth quarter of 2014, in which we redeemed all of our $247.5 million ofwere due to lower daily average outstanding 7.625% Senior Notes and replaced them with borrowings under our Syndicated Credit Facility. This facility is comprisedFacility during the second quarter and first six months of a term loan2016 as well as a multi-currency revolving debt facility and incurs interest at a significantly lower rate thancompared to the 7.625% Senior Notes.corresponding periods of 2015.
Liquidity and Capital Resources
General
At July 5, 2015,3, 2016, we had $71.8$88.4 million in cash.cash and cash equivalents. At that date, we had $200.0$192.5 million in term loan borrowings, $59.1$31.8 million of revolving loan borrowings and $3.1$4.0 million in letters of credit outstanding under the Syndicated Credit Facility. As of July 5, 2015,3, 2016, we could have incurred $187.8$214.2 million of additional borrowings under our Syndicated Credit Facility.In addition, we could have incurred an additional $19.0$14.7 million of borrowings under our other lines of credit in place at other non-U.S. subsidiaries.
It is also important for you to consider that borrowings under our Syndicated Credit Facility comprise essentially all of our indebtedness, and that these borrowings are based on variable interest rates (as described above) that expose the Company to the risk that short-term interest rates may increase. For information regarding the current variable interest rates of these borrowings and the potential impact on our interest expense from hypothetical increases in short term interest rates, please see Note 4 in Part I, Item 1 of this report and the discussion under the heading “Interest Rate Risk” in Item 7A of our Annual Report on Form 10-K for the year ended January 3, 2016.
Analysis of Cash Flows
OurApart from cash provided by operating activities, our primary source of cash during the six months ended July 5, 20153, 2016 was $15.2$20.2 million dueof revolving loan borrowings under our Syndicated Credit Facility. Most of the revolving loan borrowings were made by our Australian subsidiary in Australian dollars and then converted into U.S. dollars, to take advantage of a reduction of accounts receivable.strong Australian dollar and lock in a favorable exchange rate into U.S. dollars, which are used by that business for certain raw material purchases. Our primary uses of cash during the six month then endedperiod were (1) $27.2$20.4 million for increased inventory levels,a reduction of accounts payable and accrued expenses, (2) $12.1$12.8 million for capital expenditures, (3) $10.5$10.4 million for stock repurchases, and (4) $5.3$10.0 million for dividend payments.repayments of borrowings under our Syndicated Credit Facility.
ITEM 3.3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Our discussion below in this Item 3 is based upon the more detailed discussions of our market risk and related matters included in our Annual Report on Form 10-K for the fiscal year ended December 28, 2014,January 3, 2016 under Item 7A of that Form 10-K. Our discussion here focuses on the period ended July 5, 2015,3, 2016, and any material changes from (or other important intervening developments since the time of) the information discussed in that Form 10-K. This discussion should be read in conjunction with that Form 10-K for more detailed and background information.
At July 5, 2015,3, 2016, we recognized a $20.2$1.1 million decreaseincrease in our foreign currency translation adjustment account compared to December 28, 2014,January 3, 2016, primarily because of the strengtheningweakening of the U.S. dollar against certain foreign currencies, particularly the Euro and Australian dollar.
Sensitivity Analysis. For purposes of specific risk analysis, we use sensitivity analysis to measure the impact that market risk may have on the fair values of our market sensitive instruments. To perform sensitivity analysis, we assess the risk of loss in fair values associated with the impact of hypothetical changes in interest rates and foreign currency exchange rates on market sensitive instruments.
Because the debt outstanding under our Syndicated Credit Facility has variable interest rates based on an underlying prime lending rate or LIBOR rate, we do not believe changes in interest rates would have any significant impact on the fair value of that debt instrument. Changes in the underlying prime lending rate or LIBOR rate would, however, impact the amount of our interest expense. For a discussion of these hypothetical impacts on our interest expense, please see the discussion in Item 7A of our Annual Report on Form 10-K for the year ended December 28, 2014.January 3, 2016.
As of July 5, 2015,3, 2016, a 10% decrease or increase in the levels of foreign currency exchange rates against the U.S. dollar, with all other variables held constant, would result in a decrease in the fair value of our financial instruments of $10.1$11.7 million or an increase in the fair value of our financial instruments of $8.3$14.3 million, respectively. As the impact of offsetting changes in the fair market value of our net foreign investments is not included in the sensitivity model, these results are not indicative of our actual exposure to foreign currency exchange risk.
ITEMITEM 4.CONTROLS AND PROCEDURES
As of the end of the period covered by this Quarterly Report on Form 10-Q, an evaluation was performed under the supervision and with the participation of our management, including our PresidentChairman and Chief Executive Officer and our Senior Vice President and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Act”), pursuant to Rule 13a-14(c) under the Act. Based on that evaluation, our PresidentChairman and Chief Executive Officer and our Senior Vice President and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this Quarterly Report.
There were no changes in our internal control over financial reporting that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PARTIIPARTII - OTHER INFORMATION
ITEMITEM 1.LEGAL PROCEEDINGS
We are subject to various legal proceedings in the ordinary course of business, none of which is required to be disclosed under this Item 1.
ITEMITEM 1A.RISK FACTORS
There are no material changes in risk factors in the second quarter of 2015.2016. For a discussion of risk factors, see Part I, Item 1A, “Risk Factors,” in our Annual Report on Form 10-K for the fiscal year ended December 28, 2014.January 3, 2016.
ITEMITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
The following table contains information with respect to purchases made by or on behalf of the Company, or any “affiliated purchaser” (as defined in Rule 10b-18(a)(3) under the Securities Exchange Act of 1934), of our common stock during the quarter ended July 5, 2015:3, 2016:
Period(1) | Total Numberof Shares Purchased | Average PricePaid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(2) | Maximum Number of Shares that May Yet Be Purchased Under the Plans orPrograms(2) | ||||||||||||
April 6-30, 2015 | 0 | N/A | 0 | 250,000 | ||||||||||||
May 1-31, 2015(3) | 251,232 | $ | 22.40 | 250,000 | 0 | |||||||||||
June 1-30, 2015 | 0 | N/A | 0 | 0 | ||||||||||||
July 1-5, 2015 | 0 | N/A | 0 | 0 | ||||||||||||
Total | 251,232 | $ | 22.40 | 250,000 | 0 |
Period(1) | Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(2) | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans orPrograms(2) | ||||||||||||
April 4-30, 2016 | 0 | N/A | 0 | $ | 50,000,000 | |||||||||||
May 1-31, 2016(3) | 329,110 | $ | 16.30 | 328,833 | 44,639,862 | |||||||||||
June 1-30, 2016 | 329,353 | $ | 15.15 | 329,353 | 39,651,157 | |||||||||||
July 1-3, 2016 | 0 | N/A | 0 | 39,651,157 | ||||||||||||
Total | 658,463 | $ | 15.72 | 658,186 | $ | 39,651,157 |
(1)The monthly periods identified above correspond to the Company’s fiscal second quarter of 2015,2016, which commenced April 6, 20154, 2016 and ended July 5, 2015.3, 2016.
(2) In the fourth quarter of 2014, the Company announced a program to repurchase up to 500,000 shares of common stock per fiscal year, commencing with the 2014 fiscal year. In April 2016, the Company amended the share purchase program to authorize the repurchase of up to $50 million of common stock. This amended program has no specific expiration date.
(3) Includes certain277 shares acquired by the Company from employees to satisfy income tax withholding obligations in connection with the vesting of previous grants of restricted stock.
ITEMITEM 3.DEFAULTS UPONSENIOR SECURITIES
None
ITEMITEM 4.MINE SAFETYDISCLOSURES
Not applicable
ITEMITEM 5.OTHER INFORMATION
None
The following exhibits are filed with this report:
EXHIBIT NUMBER | DESCRIPTION OF EXHIBIT |
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31.1 | Section 302 Certification of Chief Executive Officer. |
31.2 | Section 302 Certification of Chief Financial Officer. |
32.1 | Certification of Chief Executive Officer pursuant to 18 U.S.C. § 1350. |
32.2 | Certification of Chief Financial Officer pursuant to 18 U.S.C. § 1350. |
101.INS | XBRL Instance Document |
101.SCH | XBRL Taxonomy Extension Schema Document |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document |
101.PRE | XBRL Taxonomy Presentation Linkbase Document |
101.DEF | XBRL Taxonomy Definition Linkbase Document |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
INTERFACE, INC. | |||
Date: August | By: | /s/ Patrick C. Lynch | |
Patrick C. Lynch | |||
Senior Vice President | |||
(Principal Financial Officer) |
EXHIBITS INCLUDED HEREWITH
EXHIBIT NUMBER | DESCRIPTION OF EXHIBIT | |
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31.1 | Section 302 Certification of Chief Executive Officer | |
31.2 | Section 302 Certification of Chief Financial Officer | |
32.1 | Certification of Chief Executive Officer pursuant to 18 U.S.C. § 1350 | |
32.2 | Certification of Chief Financial Officer pursuant to 18 U.S.C. § 1350 | |
101.INS | XBRL Instance Document | |
101.SCH | XBRL Taxonomy Extension Schema Document | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE | XBRL Taxonomy Presentation Linkbase Document | |
101.DEF | XBRL Taxonomy Definition Linkbase Document |
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