UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

~~WASHINGTON,~~

Washington, D.C. 20549

~~FORM~~

_______________

Form 10-Q

☑	~~Quarterly Report Pursuant to Section 13 or 15(d) of~~ þQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the ~~Securities Exchange Act of 1934~~

~~For~~ Quarterly Period Ended ~~October 1, 2017~~

March 31, 2024

¨TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 0~~01-33994~~

001-33994

INTERFACE ~~INC.~~

INC

(Exact name of registrant as specified in its charter)

~~GEORGIA~~
Georgia		58-1451243
(State or other jurisdiction of	~~(I.R.S. Employer~~
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


1280 West Peachtree Street	Atlanta	Georgia	30309
(Address of principal executive offices)			(zip code)

Registrant’s telephone number, including area ~~code)~~

code: (770) 437-6800

Securities Registered Pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock, $0.10 Par Value Per Share	TILE	Nasdaq Global Select Market

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 ☑þ 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 ☑þ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer,, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. ~~(Check one):~~

Large accelerated filer☑

Accelerated filer☐

Non-accelerated filer☐

~~Emerging Growth~~

~~Company~~ ☐

Smaller reporting company

☐

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☑

~~Shares~~þ

Number of shares outstanding of each of the ~~registrant~~’sregistrant’s classes of common stock, ~~at November 3, 2017:~~

as of May 2, 2024:


Class	~~Class~~	Number of Shares
	Common Stock, ~~$.10~~$0.10 par value per share	~~60,251,423~~	58,242,833

~~Table of Contents~~

~~INTERFACE, INC.~~

~~INDEX~~

TABLE OF CONTENTS

	~~PAGE~~
				Page
PART I.		FINANCIAL INFORMATION

		Item 1.	Financial Statements (Unaudited)	3

			Consolidated Condensed Balance Sheets – ~~October 1, 2017~~March 31, 2024 and ~~January~~ ~~1, 2017~~December 31, 2023	3

			Consolidated Condensed Statements of Operations – Three Months Ended March 31, 2024 and ~~Nine Months Ended October 1, 2017 and October~~April 2, ~~2016~~2023	4

			Consolidated Statements of Comprehensive Income – Three Months Ended March 31, 2024 and ~~Nine Months Ended October 1, 2017 and October~~April 2, ~~2016~~2023	5

			Consolidated Condensed Statements of Cash Flows – ~~Nine~~Three Months Ended ~~October 1, 2017~~March 31, 2024 and ~~October~~April 2, ~~2016~~2023	6

			Notes to Consolidated Condensed Financial Statements	7

		Item 2.	~~Management~~’sManagement’s Discussion and Analysis of Financial Condition and Results of Operations	15 26

		Item 3.	Quantitative and Qualitative Disclosures about Market Risk	18 33

		Item 4.	Controls and Procedures	19 34

PART II.		OTHER INFORMATION

		Item 1.	Legal Proceedings	19 35

		Item 1A.	Risk Factors	19 35

		Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	19 36

		Item 3.	Defaults Upon Senior Securities	20 37

		Item 4.	Mine Safety Disclosures	20 37

		Item 5.	Other Information	20 37

		Item 6.	Exhibits	20 38

SIGNATURE				39

Table of Contents

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

INTERFACE, INC. AND SUBSIDIARIES

CONSOLIDATED CONDENSED BALANCE SHEETS

(~~IN THOUSANDS)~~

OCTOBER 1, 2017

JANUARY 1, 2017

(UNAUDITED)

ASSETS

CURRENT ASSETS:

Cash and Cash Equivalents
$ 78,108 $ 165,672
Accounts Receivable, net
133,869 126,004
Inventories
186,126 156,083
Prepaid Expenses and Other Current Assets
24,358 23,123
TOTAL CURRENT ASSETS
422,461 470,882

PROPERTY AND EQUIPMENT, less accumulated depreciation
212,332 204,508
DEFERRED TAX ASSETS
30,805 33,117
GOODWILL
68,029 61,218
OTHER ASSETS
68,772 65,714
TOTAL ASSETS
$ 802,399 $ 835,439

LIABILITIES AND SHAREHOLDERS’ EQUITY

CURRENT LIABILITIES:

Accounts Payable
$ 52,313 $ 45,380
Current Portion of Long-Term Debt
15,000 15,000
Accrued Expenses
101,346 98,703
TOTAL CURRENT LIABILITIES
168,659 159,083

LONG-TERM DEBT
219,506 255,347
DEFERRED INCOME TAXES
5,819 4,728
OTHER
76,223 75,552
TOTAL LIABILITIES
470,207 494,710

Commitments and Contingencies

SHAREHOLDERS’ EQUITY:

Preferred Stock
0 0
Common Stock
6,025 6,424
Additional Paid-In Capital
282,424 359,451
Retained Earnings
183,423 140,238
Accumulated Other Comprehensive Income (Loss) – Foreign Currency Translation Adjustment
(79,844 ) (110,522 )
Accumulated Other Comprehensive Income (Loss) – Pension Liability
(59,836 ) (54,862 )
TOTAL SHAREHOLDERS’ EQUITY
332,192 340,729
$ 802,399 $ 835,439

in thousands, except par values)


	MARCH 31, 2024		DECEMBER 31, 2023
	(UNAUDITED)
ASSETS
Current assets
Cash and cash equivalents	$	89,774	$	110,498
Accounts receivable, net	147,185		163,386
Inventories, net	296,249		279,079
Prepaid expenses and other current assets	32,853		30,895
Total current assets	566,061		583,858
Property, plant and equipment, net	280,333		291,140
Operating lease right-of-use assets	83,766		87,519
Deferred tax asset	21,428		21,721
Goodwill and intangible assets, net	156,951		161,703
Other assets	84,953		84,154

Total assets	$	1,193,492	$	1,230,095

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	74,503	$	62,912
Accrued expenses	112,126		130,890
Current portion of operating lease liabilities	12,574		12,347
Current portion of long-term debt	8,523		8,572
Total current liabilities	207,726		214,721
Long-term debt	383,261		408,641
Operating lease liabilities	74,286		78,269
Deferred income taxes	32,098		33,832
Other long-term liabilities	67,573		68,685

Total liabilities	764,944		804,148

Commitments and contingencies (Note 14)

Shareholders’ equity
Preferred stock, par value $1.00 per share; 5,000 shares authorized; none issued or outstanding at March 31, 2024 and December 31, 2023	—		—
Common stock, par value $0.10 per share; 120,000 shares authorized; 58,273 and 58,112 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively	5,827		5,811
Additional paid-in capital	252,538		252,909
Retained earnings	334,423		320,833
Accumulated other comprehensive loss – foreign currency translation	(130,682)		(119,590)
Accumulated other comprehensive loss – pension liability	(33,558)		(34,016)

Total shareholders’ equity	428,548		425,947

Total liabilities and shareholders’ equity	$	1,193,492	$	1,230,095

See accompanying notes to consolidated condensed financial statements.

~~-3-~~

Table of Contents

INTERFACE, INC. AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

(UNAUDITED)

(~~IN THOUSANDS EXCEPT PER SHARE AMOUNTS)~~

THREE MONTHS ENDED

NINE MONTHS ENDED

OCTOBER 1,
2017

OCTOBER 2, 2016

OCTOBER 1, 2017

OCTOBER 2, 2016

NET SALES
$ 257,431 $ 248,349 $ 730,233 $ 719,110
Cost of Sales
158,887 155,431 445,990 440,434

GROSS PROFIT ON SALES
98,544 92,918 284,243 278,676
Selling, General and Administrative Expenses
67,633 67,175 197,660 200,108
Restructuring and Asset Impairment Charges
0 0 7,299 0
OPERATING INCOME
30,911 25,743 79,284 78,568

Interest Expense
1,851 1,654 5,150 4,763
Other Expense
651 739 1,816 1,072

INCOME BEFORE INCOME TAX EXPENSE
28,409 23,350 72,318 72,733
Income Tax Expense
8,970 7,446 23,394 23,278

NET INCOME
$ 19,439 $ 15,904 $ 48,924 $ 49,455

Earnings Per Share – Basic
$ 0.32 $ 0.25 $ 0.78 $ 0.76

Earnings Per Share – Diluted
$ 0.32 $ 0.25 $ 0.78 $ 0.76

Common Shares Outstanding – Basic
61,018 64,805 62,630 65,285
Common Shares Outstanding – Diluted
61,060 64,842 62,672 65,322

in thousands, except per share data)


	THREE MONTHS ENDED
	MARCH 31, 2024		APRIL 2, 2023
Net sales	$	289,743	$	295,792
Cost of sales	179,338		199,919
Gross profit	110,405		95,873

Selling, general and administrative expenses	85,959		86,254
Restructuring, asset impairment and other charges	—		142
Operating income	24,446		9,477

Interest expense	6,423		8,505
Other (income) expense, net	(976)		1,500

Income (loss) before income tax expense	18,999		(528)
Income tax expense	4,820		186

Net income (loss)	$	14,179	$	(714)

Earnings (loss) per share – basic	$	0.24	$	(0.01)
Earnings (loss) per share – diluted	$	0.24	$	(0.01)

Common shares outstanding – basic	58,238		58,079
Common shares outstanding – diluted	58,714		58,079

See accompanying notes to consolidated condensed financial statements.

~~-4-~~

Table of Contents

INTERFACE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

(~~IN THOUSANDS)~~

THREE MONTHS ENDED

NINE MONTHS ENDED

OCTOBER 1,
2017

OCTOBER 2, 2016

OCTOBER 1, 2017

OCTOBER 2, 2016

Net Income
$ 19,439 $ 15,904 $ 48,924 $ 49,455
Other Comprehensive Income (Loss), Foreign

Currency Translation Adjustment
9,848 2,759 30,678 3,827
Other Comprehensive Income (Loss), Pension Liability Adjustment
(1,994 ) 834 (4,974 ) 3,632
Comprehensive Income
$ 27,293 $ 19,497 $ 74,628 $ 56,914

in thousands)


	THREE MONTHS ENDED
	MARCH 31, 2024		APRIL 2, 2023
Net income (loss)	$	14,179	$	(714)
Other comprehensive (loss) income, after tax:
Foreign currency translation adjustment	(11,092)		4,930
Reclassification from accumulated other comprehensive loss – discontinued cash flow hedge	—		299
Pension liability adjustment	458		(279)
Other comprehensive (loss) income	(10,634)		4,950

Comprehensive income	$	3,545	$	4,236

See accompanying notes to consolidated condensed financial statements.

~~-5-~~

Table of Contents

INTERFACE, INC. AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(~~IN THOUSANDS)~~

NINE MONTHS ENDED

OCTOBER 1, 2017

OCTOBER 2, 2016

OPERATING ACTIVITIES:

Net Income
$ 48,924 $ 49,455
Adjustments to Reconcile Net Income to Cash Provided by Operating Activities:

Depreciation and Amortization
22,203 22,474
Stock Compensation Amortization Expense
4,479 3,390
Deferred Income Taxes and Other
5,926 5,049
Working Capital Changes:

Accounts Receivable
(1,397 ) 1,449
Inventories
(22,377 ) (454 )
Prepaid Expenses and Other Current Assets
(653 ) (1,008 )
Accounts Payable and Accrued Expenses
10,804 (1,462 )

CASH PROVIDED BY OPERATING ACTIVITIES:
67,909 78,893

INVESTING ACTIVITIES:

Capital Expenditures
(22,809 ) (20,912 )
Other
(421 ) 1,140

CASH USED IN INVESTING ACTIVITIES:
(23,230 ) (19,772 )

FINANCING ACTIVITIES:

Borrowing of Long-Term Debt
20,000 20,329
Repayment of Long-Term Debt
(62,085 ) (17,500 )
Tax Withholding Payments for Share-Based Compensation
(1,477 ) (4,661 )
Repurchase of Common Stock
(81,061 ) (10,443 )
Debt Issuance Cost
(1,418 ) 0
Dividends Paid
(11,571 ) (10,429 )

CASH USED IN FINANCING ACTIVITIES:
(137,612 ) (22,704 )

Net Cash Provided By (Used In) Operating, Investing and

Financing Activities
(92,933 ) 36,417
Effect of Exchange Rate Changes on Cash
5,369 1,616

CASH AND CASH EQUIVALENTS:

Net Change During the Period
(87,564 ) 38,033
Balance at Beginning of Period
165,672 75,696

Balance at End of Period
$ 78,108 $ 113,729

in thousands)


	THREE MONTHS ENDED
	MARCH 31, 2024		APRIL 2, 2023
OPERATING ACTIVITIES:
Net income (loss)	$	14,179	$	(714)
Adjustments to reconcile net income (loss) to cash provided by operating activities:
Depreciation and amortization	9,616		9,991
Share-based compensation expense	3,915		3,004
Deferred income taxes and other	(4,386)		599
Amortization of acquired intangible assets	1,297		1,283
Working capital changes:
Accounts receivable	13,837		35,791
Inventories	(20,477)		(5,306)
Prepaid expenses and other current assets	(2,193)		(16,148)
Accounts payable and accrued expenses	(3,169)		1,084

Cash provided by operating activities	12,619		29,584

INVESTING ACTIVITIES:
Capital expenditures	(4,033)		(5,712)
Proceeds from sale of property, plant and equipment	1,040		—
Insurance proceeds from property casualty loss	1,000		—

Cash used in investing activities	(1,993)		(5,712)

FINANCING ACTIVITIES:
Repayments of long-term debt	(34,783)		(53,225)
Borrowing of long-term debt	10,000		34,000
Tax withholding payments for share-based compensation	(4,271)		(1,167)
Dividends paid	(6)		—
Finance lease payments	(716)		(643)

Cash used in financing activities	(29,776)		(21,035)

Net cash (used in) provided by operating, investing and financing activities	(19,150)		2,837
Effect of exchange rate changes on cash	(1,574)		872

CASH AND CASH EQUIVALENTS:
Net (decrease) increase	(20,724)		3,709
Balance, beginning of period	110,498		97,564

Balance, end of period	$	89,774	$	101,273

See accompanying notes to consolidated condensed financial statements.

~~-6-~~

Table of Contents

INTERFACE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1 – ~~CONDENSED FOOTNOTES~~

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

References in this Quarterly Report on Form 10-Q to “Interface,” “the Company,” “we,” “our,” “ours” and “us” refer to Interface, Inc. and its subsidiaries or any of them, unless the context requires otherwise.

As contemplated by the Securities and Exchange Commission (the ~~“Commission”~~“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 ~~January 1, 2017,~~December 31, 2023, 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. All such adjustments are of a normal recurring nature unless otherwise disclosed. Nevertheless, the results shown for interim periods are not necessarily indicative of results to be expected forfor the full year. The ~~January 1, 2017,~~December 31, 2023, 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.~~

C~~ertain prior period amounts have been reclassified~~States (“GAAP”).

The three-month periods ended March 31, 2024 and April 2, 2023 both include 13 weeks.

Risks and Uncertainties

Global economic challenges, including the impacts of the Russia-Ukraine and Israel-Hamas wars, inflation, supply chain disruptions, and the slow macro environment in China could cause economic uncertainty and volatility. In connection with the Cyber Event discussed below, security breaches may expose us to ~~conform~~fines and other liabilities to the ~~current period presentation.~~extent sensitive data stored in our IT systems, including data related to customers, suppliers or employees, are misappropriated. The Company considered these impacts and subsequent general uncertainties and volatility in the global economy on the assumptions and estimates used herein. These ~~reclassifications had no~~uncertainties could result in a future material adverse effect to the amounts reported within the Company’s consolidated condensed financial statements if actual results differ from these estimates.

Cybersecurity Event

On November 20, 2022, we discovered a cybersecurity attack, perpetrated by unauthorized third parties, affecting our IT systems (the “Cyber Event”). In response to this Cyber Event, we notified law enforcement and took steps to supplement existing security monitoring, including scanning and protective measures. The investigation of the Cyber Event by our forensic experts was completed during fiscal year 2023.

Recently Issued Accounting Pronouncements – Not Yet Adopted

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.”This ASU requires public entities on ~~reporting~~an annual basis to disclose a rate reconciliation with explicit categories, as outlined in the ASU, and requires additional disclosures for reconciling items that meet certain quantitative thresholds. Other disclosures include disaggregation of income ~~comprehensive~~taxes paid, pre-tax income, ~~cash flows, total assets or shareholders equity~~and income tax expense. The new guidance is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact of this ASU to its income tax disclosures.

In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.” This ASU requires additional disclosures in annual and interim periods for significant segment expenses included in the measure of segment profit provided to the chief operating decision maker (“CODM”). Disclosure of other segment items by reportable segment as ~~previously reported.~~

well as a description of its composition is also required. The new guidance is effective for annual periods beginning after December 15, 2023, and for interim periods beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact of this ASU to its segment disclosures.

Table of Contents

NOTE 2 – REVENUE RECOGNITION

The Company generates revenue from sales of modular carpet, resilient flooring, rubber flooring, and other flooring-related material, and from the installation of carpet and other flooring-related material. A summary of these revenue streams, as a percentage of net sales, for the three months ended March 31, 2024 and April 2, 2023 is as follows:


	Three Months Ended
	March 31, 2024		April 2, 2023
Revenue from the sale of flooring material	99	%	98	%
Revenue from installation of flooring material	1	%	2	%

Disaggregation of Revenue

For the three months ended March 31, 2024 and April 2, 2023, revenue from the Company’s customers is broken down by geography as follows:


	Three Months Ended
Geography	March 31, 2024		April 2, 2023
Americas	58.6	%	57.2	%
Europe	31.6	%	32.0	%
Asia-Pacific	9.8	%	10.8	%

Revenue from the Company’s customers in the Americas corresponds to the AMS reportable segment, and the EAAA reportable segment includes revenue from the Europe and Asia-Pacific geographies. See Note 10 entitled “Segment Information” for additional information.

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NOTE 3 – INVENTORIES

Inventories are summarized as follows:

Oct. 1, 2017

Jan. 1, 2017

(In thousands)

Finished Goods
$ 123,708 $ 104,742
Work in Process
13,046 8,711
Raw Materials
49,372 42,630
$ 186,126 $ 156,083


	March 31, 2024		December 31, 2023
	(in thousands)
Finished goods	$	218,706	$	201,821
Work-in-process	23,107		20,892
Raw materials	54,436		56,366
Inventories, net	$	296,249	$	279,079

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NOTE 34 – EARNINGS PER SHARE

The Company computes basic earnings (loss) per share (“EPS”) by dividing net income (loss) 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.~~

earnings (loss).

The Company includes all unvested stock awards ~~which~~that contain non-forfeitable rights to dividends or dividend equivalents, whether paid or unpaid, in the number of shares outstanding ~~in our~~for basic ~~and~~EPS as these awards are considered participating securities. Any unvested stock awards considered non-participating securities are included in 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:~~

~~-7-~~

~~Table~~table shows the computation of ~~Contents~~

Three Months Ended

Nine Months Ended

Oct. 1, 2017

Oct. 2, 2016

Oct. 1, 2017

Oct. 2, 2016

Earnings Per Share

Basic Earnings Per Share

Distributed Earnings
$ 0.07 $ 0.06 $ 0.19 $ 0.10
Undistributed Earnings
0.25 0.19 0.59 0.66
Total
$ 0.32 $ 0.25 $ 0.78 $ 0.76

Diluted Earnings Per Share

Distributed Earnings
$ 0.07 $ 0.06 $ 0.19 $ 0.10
Undistributed Earnings
0.25 0.19 0.59 0.66
Total
$ 0.32 $ 0.25 $ 0.78 $ 0.76

Basic Earnings Per Share
$ 0.32 $ 0.25 $ 0.78 $ 0.76
Diluted Earnings Per Share
$ 0.32 $ 0.25 $ 0.78 $ 0.76

~~The following tables present net income that was attributable to participating securities:~~

Three Months Ended

Nine Months Ended

Oct. 1, 2017

Oct. 2, 2016

Oct. 1, 2017

Oct. 2, 2016

(In millions)

Net Income Attributable to Participating Securities
$ 0.1 $ 0.1 $ 0.4 $ 0.4

~~The weighted average shares~~ ~~outstanding for~~ basic and diluted EPS:


	Three Months Ended
	March 31, 2024		April 2, 2023
	(in thousands, except per share data)
Numerator:
Net income (loss)	$	14,179	$	(714)
Less: distributed and undistributed earnings available to participating securities	(150)		(9)
Distributed and undistributed earnings (loss) available to common shareholders	$	14,029	$	(723)

Denominator:
Weighted average shares outstanding	57,623		57,177
Participating securities	615		902
Shares for basic EPS	58,238		58,079
Dilutive effect of non-participating securities	476		—
Shares for diluted EPS	58,714		58,079

Basic EPS	$	0.24	$	(0.01)
Diluted EPS	$	0.24	$	(0.01)

For the three months ended March 31, 2024 and April 2, 2023, 1,049,405 and 1,728,579 non-participating securities that could potentially dilute basic EPS in the future, respectively, consisting of restricted share units and performance shares, were ~~as follows:~~

Three Months Ended

Nine Months Ended

Oct. 1, 2017

Oct. 2, 2016

Oct. 1, 2017

Oct. 2, 2016

(In thousands)

Weighted Average Shares Outstanding
60,555 64,241 62,167 64,721
Participating Securities
463 564 463 564
Shares for Basic Earnings Per Share
61,018 64,805 62,630 65,285
Dilutive Effect of Stock Options
42 37 42 37
Shares for Diluted Earnings Per Share
61,060 64,842 62,672 65,322

~~For all periods presented,~~ ~~there were no stock options or participating securities~~ excluded from the computation of diluted ~~EPS.~~

EPS as these securities would have been antidilutive for the respective periods.

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NOTE 45 – LONG-TERM DEBT

Long-term debt consisted of the following:

March 31, 2024 December 31, 2023
Outstanding Principal
Interest Rate(1)
Outstanding Principal
Interest Rate(1)
(in thousands) (in thousands)
Syndicated Credit Facility(2):
Term loan borrowings $ 95,988 6.26 % $ 121,658 6.61 %
5.50% Senior Notes due 2028 300,000 5.50 % 300,000 5.50 %

Total debt 395,988 421,658
Less: Unamortized debt issuance costs (4,204) (4,445)

Total debt, net 391,784 417,213
Less: Current portion of long-term debt (8,523) (8,572)

Total long-term debt, net $ 383,261 $ 408,641

(1) Represents the weighted average rate of interest for borrowings under the Syndicated Credit Facility

and the stated rate of interest for the 5.50% Senior Notes due 2028, without the effect of debt issuance costs.

(2)The ~~Company has~~Syndicated Credit Facility also includes a ~~syndicated credit~~multicurrency revolving loan facility up to $300.0 million. There were no revolving loan borrowings outstanding as of March 31, 2024 or December 31, 2023.

Syndicated Credit Facility

The Company’s Syndicated Credit Facility (the “Facility”) ~~pursuant~~provides to ~~which~~ the ~~lenders provide~~Company U.S. denominated and multicurrency term loans and provides to the Company and certain of its subsidiaries a multicurrency revolving credit ~~facility and provide to the Company a term loan.~~facility. Interest on base rate loans is charged at varying rates computed by applying a margin depending on the ~~Company~~’sCompany’s consolidated net leverage ratio as of the most recently completed fiscal quarter. Interest on ~~LIBOR-based~~SOFR-based and alternative currency loans ~~and fees for letters of credit are~~is charged at varying rates computed by applying a margin over the applicable ~~LIBOR~~SOFR rate or alternative currency 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.

Fees for commercial letters of credit are computed as a percentage of the amount available to be drawn under such letters of credit. Fees for standby letters of credit are charged at varying rates computed by applying a margin of the amount available to be drawn under such standby letters of credit, depending on the Company’s consolidated net leverage ratio as of the most recently completed fiscal quarter. As of ~~October1, 2017,~~both March 31, 2024 and December 31, 2023, the Company had ~~outstanding $173.8 million of term loan borrowing and $60.8 million of revolving loan borrowings under the Facility, and had $6.0~~$1.6 million in letters of credit outstanding under the Facility.

As of ~~October 1, 2017,~~both March 31, 2024 and December 31, 2023, the ~~weighted average interest rate on~~carrying value of the Company’s borrowings ~~outstanding~~ under the Facility ~~was 2.6%.~~

approximated its fair value as the Facility bears interest rates that are similar to existing market rates. The fair value of borrowings under the Facility is estimated using observable market rates and is considered Level 2 within the fair value hierarchy.

Under the Facility, the Company is required to make quarterly amortization payments of the term loan ~~borrowing. The amortization payments~~borrowings, which are due on the last day of the calendar quarter. ~~The quarterly amortization payment amount was $3.75 million for the third quarter of 2017 and will remain this amount for all future quarters until maturity.~~

~~-8-~~

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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.

~~In the third quarter~~

Table of ~~2017, the Company amended and restated the syndicated credit facility.~~ Contents

Senior Notes due 2028

The ~~terms and conditions of the amended and restated credit facility~~5.50% Senior Notes due 2028 (the ~~“Amended Facility”~~“Senior Notes”) ~~are substantially similar to the preceding Facility, with the following key changes:~~

●

~~The Amended Facility matures in August of 2022;~~

●

~~The restricted payments covenant in the Amended Facility has been liberalized (and now allows for, among other things, the repurchase of the full amount of the new share repurchase program described below); and~~

●

~~Permits the potential release of the lenders’ liens on certain real property and equipment in connection with an anticipated property tax abatement transaction in Georgia.~~

~~Interest Rate Risk Management~~

~~Shortly after entering into the Amended Facility,~~ ~~the Company entered into~~bear an interest rate ~~swap transaction to fix the variable interest rate~~at 5.50% per annum and mature on ~~a portion~~December 1, 2028. Interest is paid semi-annually on June 1 and December 1 of ~~its term loan borrowings in order to manage a portion of its exposure to interest rate fluctuations.~~each year. The ~~Company’s objective~~Senior Notes are unsecured and ~~strategy with respect to this interest rate swap is to protect the Company against adverse fluctuations in interest rates~~are guaranteed, jointly and severally, by reducing its exposure to variability to cash flows relating to interest payments on a portion of its outstanding debt. The Company is meeting its objective by hedging the risk of changes in its cash flows (interest payments) attributable to changes in LIBOR, the designated benchmark interest rate being hedged (the “hedged risk”), on an amounteach of the Company’s ~~debt principal equal to~~material domestic subsidiaries, all of which also guarantee the ~~outstanding swap notional amount.~~

~~Cash Flow Interest Rate Swap~~

~~The Company’s interest rate swap is designated and qualifies as a cash flow hedge of forecasted interest payments. The Company reports the effective portion~~obligations of the fair value gain or loss on the swap as a component of other comprehensive income (or other comprehensive loss). Gains or losses (if any) on any ineffective portion of derivative instruments in cash flow hedging relationships are recorded in the period in which they occur as a component of other expense (or other income) in the Consolidated Condensed Statement of Operations. There were no such gains or losses in the third quarter of 2017. The aggregate notional amount of the swap as of October 1, 2017 was $100 million.

Company under its Facility.

As of ~~October 1, 2017,~~March 31, 2024, the estimated fair value of the ~~cash flow interest rate swap liability~~Senior Notes was ~~$0.2~~$287.0 million, ~~and was~~compared with a net carrying value recorded in ~~accrued liabilities.~~

~~Other Lines~~the Company’s consolidated condensed balance sheet of ~~Credit~~

~~Subsidiaries~~$296.7 million ($300.0 million gross, excluding the impact of ~~the Company have an aggregate of the equivalent of $9.8~~$3.3 million of ~~other lines of credit available at interest rates ranging from 2.5% to 6.5%~~unamortized debt issuance costs). ~~As of~~ ~~October 1, 2017, there were no borrowings outstanding under these lines of credit.~~

~~NOTE~~ ~~5 – STOCK-BASED COMPENSATION~~

~~Stock Option Awards~~

~~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~~The fair value of the ~~award. That cost~~Senior Notes is derived using quoted prices for similar instruments and is considered Level 2 within the fair value hierarchy.

The Company is in compliance with all covenants under the indenture governing the Senior Notes and anticipates that it will ~~be recognized~~remain in compliance with the covenants for the foreseeable future.

Debt Issuance Costs

Debt issuance costs associated with the Company’s Senior Notes and term loans under the Facility are reflected as a reduction of long-term debt in accordance with applicable accounting standards. As these fees are expensed 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.~~

~~There were no stock options granted during 2015-2017. All outstanding stock options vested prior to the end of 2013, and therefore there was no stock option compensation expense in the first~~ ~~nine months of 2016 or 2017.~~

~~As of October 1, 2017, there were 82,500 stock options outstanding and exercisable, at an average exercise price~~ ~~of $8.53 per share. There were 5,000 stock options exercised in the first nine months of 2017. There were no forfeitures during the 2017 period. The aggregate intrinsic value~~life of the outstanding borrowing, the debt balance will increase by the same amount as the fees that are expensed. As of March 31, 2024 and ~~exercisable stock options was $1.1~~December 31, 2023, the unamortized debt issuance costs recorded as a reduction of long-term debt were $4.2 million and $4.4 million, respectively.

Debt issuance costs related to the issuance of revolving debt, which include underwriting, legal and other direct costs, net of accumulated amortization, were $1.3 million and $1.4 million as of ~~October 1, 2017.~~

March 31, 2024 and December 31, 2023, respectively. These amounts are included in other assets in the Company’s consolidated condensed balance sheets. The Company amortizes these costs over the life of the related debt.

~~-9-~~

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NOTE 6 – SHAREHOLDERS’ EQUITY

The following tables depict the activity in the accounts which make up shareholders’ equity for the three months ended March 31, 2024 and April 2, 2023:

SHARES COMMON STOCK ADDITIONAL PAID-IN CAPITAL RETAINED
EARNINGS PENSION LIABILITY FOREIGN CURRENCY TRANSLATION ADJUSTMENT TOTAL
(in thousands, except per share data)
Balance, at December 31, 2023 58,112 $ 5,811 $ 252,909 $ 320,833 $ (34,016) $ (119,590) $ 425,947
Net income — — — 14,179 — — 14,179
Issuances of stock related to restricted share units and performance shares 472 47 (47) — — — —
Cash dividends declared, $0.01 per common share — — — (589) — — (589)
Compensation expense related to share-based plans, net of forfeitures and shares received for tax withholdings (311) (31) (324) — — — (355)
Pension liability adjustment — — — — 458 — 458
Foreign currency translation adjustment — — — — — (11,092) (11,092)
Balance, at March 31, 2024 58,273 $ 5,827 $ 252,538 $ 334,423 $ (33,558) $ (130,682) $ 428,548

SHARES COMMON STOCK ADDITIONAL PAID-IN CAPITAL RETAINED
EARNINGS PENSION LIABILITY FOREIGN CURRENCY TRANSLATION ADJUSTMENT CASH FLOW
HEDGE TOTAL
(in thousands, except per share data)
Balance, at January 1, 2023 58,106 $ 5,811 $ 244,159 $ 278,639 $ (27,548) $ (138,775) $ (749) $ 361,537
Net loss — — — (714) — — — (714)
Issuances of stock related to performance shares 79 8 (8) — — — — —
Cash dividends declared, $0.01 per common share — — — (580) — — — (580)
Compensation expense related to share-based plans, net of forfeitures and shares received for tax withholdings (132) (14) 1,850 — — — — 1,836
Pension liability adjustment — — — — (279) — — (279)
Foreign currency translation adjustment — — — — — 4,930 — 4,930
Reclassification out of accumulated other comprehensive loss – discontinued cash flow hedge — — — — — — 299 299
Balance, at April 2, 2023 58,053 $ 5,805 $ 246,001 $ 277,345 $ (27,827) $ (133,845) $ (450) $ 367,029

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The Company has share-based employee compensation plans, which are described more fully in Note 14 to the consolidated financial statements included in Item 8 of the Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

Restricted Stock Awards

~~During the nine months ended~~ October 1, 2017, the Company granted restricted stock awards for 248,000 shares of common stock. Awards of restricted stock (or a portion thereof) vest with respect to each recipient over a one to three-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 (or 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 $~~2.0~~$0.9 million and ~~$2.4~~$1.4 million for the ~~nine~~three months ended ~~October 1, 2017~~March 31, 2024 and ~~October~~April 2, ~~2016,~~2023, respectively. ~~Accounting standards require that the Company estimate forfeitures for restricted stock and reduce compensation expense accordingly.~~ The Company has reduced its expense byfor any restricted stock forfeited during the ~~assumed forfeiture rate and will evaluate experience against this forfeiture rate going forward.~~

period.

The following table summarizes restricted stock outstanding as of ~~October 1, 2017,~~March 31, 2024, as well as activity during the ~~nine~~three months then ended:

Restricted Shares

Weighted Average
Grant Date
Fair Value

Outstanding at January 1, 2017
505,000 $ 17.05
Granted
248,000 17.89
Vested
284,000 16.61
Forfeited or canceled
6,000 16.99
Outstanding at October 1, 2017
463,000 $ 17.77


	Restricted Shares	Weighted Average Grant Date Fair Value
Outstanding at December 31, 2023	691,600	$	12.55
Granted	—	—
Vested	(324,300)	13.94
Forfeited or canceled	(1,200)	13.19
Outstanding at March 31, 2024	366,100	$	11.32

As of ~~October 1, 2017,~~March 31, 2024, the unrecognized total compensation cost related to unvested restricted stock was ~~$5.0~~$0.9 million. That cost is expected to be recognized by the ~~end~~first quarter of ~~2020.~~

~~Performance~~2025.

Restricted Share Unit Awards

~~In 2017~~, 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

Compensation expense related to the ~~employee’s continued employment through~~restricted share units was $0.9 million and $0.5 million for the ~~last date~~three months ended March 31, 2024 and April 2, 2023, respectively. The Company has reduced its expense for any restricted share units forfeited during the period.

The following table summarizes restricted share units outstanding as of March 31, 2024, as well as activity during the ~~performance period, and will~~three months then ended:


	Restricted Share Units	Weighted Average Grant Date Fair Value
Outstanding at December 31, 2023	583,400	$	10.35
Granted	402,800	13.24
Vested	(151,600)	10.80
Forfeited or canceled	(4,000)	10.80
Outstanding at March 31, 2024	830,600	$	11.67

As of March 31, 2024, the unrecognized total compensation cost related to unvested restricted share units was $8.5 million. That cost is expected to be ~~settled in shares~~recognized by the first quarter of ~~our common stock or in cash at the Company’s election. The number~~2027.

Table 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.

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PerformanceShare Awards

The following table summarizes the performance shares outstanding as of ~~October 1, 2017,~~March 31, 2024, as well as the activity during the ~~nine~~three months then ended:

Performance Shares

Weighted Average Grant
Date Fair Value

Outstanding at January 1, 2017
368,500 $ 17.20
Granted
354,000 17.80
Vested
31,000 17.22
Forfeited or canceled
22,000 17.29
Outstanding at October 1, 2017
669,500 $ 17.51


	Performance Shares	Weighted Average Grant Date Fair Value
Outstanding at December 31, 2023	1,115,000	$	12.36
Granted	402,800	13.24
Vested	(320,700)	13.91
Forfeited or canceled	(12,800)	12.82
Outstanding at March 31, 2024	1,184,300	$	12.24

Compensation expense related to the performance shares was $2.1 million and $1.1 million for the ~~nine~~three months ended ~~October 1, 2017 was $2.4 million.~~March 31, 2024 and April 2, 2023, respectively. The Company has reduced its expense for any performance shares forfeited during the period. Unrecognized compensation expense related to these performance shares was approximately ~~$6.2~~$9.0 million as of ~~October 1, 2017.~~

March 31, 2024. The amount and timing of future compensation expense will depend on the performance of the Company. The compensation expense related to these outstanding performance shares is expected to be recognized by the first quarter of 2027.

The tax benefit recognized with respect to restricted stock, restricted share units and performance shares was approximately $0.5 million for the three months ended March 31, 2024.

~~-10-~~

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NOTE 67 – LEASES

The table below represents a summary of the balances recorded in the consolidated condensed balance sheets related to the Company’s leases as of March 31, 2024 and December 31, 2023:


	March 31, 2024				December 31, 2023
Balance Sheet Location	Operating Leases		Finance Leases		Operating Leases		Finance Leases
	(in thousands)
Operating lease right-of-use assets	$	83,766			$	87,519

Current portion of operating lease liabilities	$	12,574			$	12,347
Operating lease liabilities	74,286				78,269
Total operating lease liabilities	$	86,860			$	90,616

Property, plant and equipment, net			$	6,799			$	7,236

Accrued expenses			$	2,482			$	2,587
Other long-term liabilities			4,701				5,035
Total finance lease liabilities			$	7,183			$	7,622

As of March 31, 2024, there were no significant leases that had not commenced.

Lease Costs


	Three Months Ended
	March 31, 2024		April 2, 2023
	(in thousands)
Finance lease cost:
Amortization of right-of-use assets	$	776	$	655
Interest on lease liabilities	99		60
Operating lease cost	4,989		4,703
Short-term lease cost	197		356
Variable lease cost	690		733
Total lease cost	$	6,751	$	6,507

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Other Supplemental Information


	Three Months Ended
	March 31, 2024		April 2, 2023
	(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases	$	96	$	52
Operating cash flows from operating leases	4,097		4,201
Financing cash flows from finance leases	716		643
Right-of-use assets obtained in exchange for new finance lease liabilities	390		557
Right-of-use assets obtained in exchange for new operating lease liabilities	265		1,121

Lease Term and Discount Rate

The table below presents the weighted average remaining lease terms and discount rates for finance and operating leases as of March 31, 2024 and December 31, 2023:


	March 31, 2024		December 31, 2023
Weighted-average remaining lease term – finance leases (in years)	3.60		3.70
Weighted-average remaining lease term – operating leases (in years)	8.10		8.29
Weighted-average discount rate – finance leases	5.70	%	5.51	%
Weighted-average discount rate – operating leases	6.27	%	6.25	%

Maturity Analysis

A maturity analysis of lease payments under non-cancellable leases is presented as follows:


Fiscal Year	Operating Leases		Finance Leases
	(in thousands)
2024 (excluding the three months ended March 31, 2024)	$	12,770	$	2,170
2025	16,197		2,202
2026	16,047		1,651
2027	13,256		1,133
2028	10,804		582
Thereafter	42,883		264
Total future minimum lease payments (undiscounted)	111,957		8,002
Less: Present value discount	(25,097)		(819)
Total lease liabilities	$	86,860	$	7,183

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NOTE 8 – EMPLOYEE BENEFIT PLANS

During the three-month periods ended March 31, 2024 and April 2, 2023, the Company recorded multi-employer pension expense related to multi-employer contributions of $0.7 million and $0.6 million, respectively.

The following tables provide the components of net periodic benefit cost for the ~~three-month~~ three months ended March 31, 2024 and ~~nine-month periods~~April 2, 2023:


	Three Months Ended
Defined Benefit Retirement Plans (Europe)	March 31, 2024		April 2, 2023
	(in thousands)
Interest cost	$	1,710	$	1,735
Expected return on plan assets	(1,966)		(1,964)
Amortization of prior service cost	45		29
Amortization of net actuarial losses	269		223
Net periodic benefit cost	$	58	$	23


	Three Months Ended
Salary Continuation Plan	March 31, 2024		April 2, 2023
	(in thousands)
Interest cost	$	266	$	283
Amortization of net actuarial losses	60		49
Net periodic benefit cost	$	326	$	332


	Three Months Ended
nora Defined Benefit Plan	March 31, 2024		April 2, 2023
	(in thousands)
Service cost	$	126	$	114
Interest cost	264		272
Amortization of net actuarial gains	—		(109)
Net periodic benefit cost	$	390	$	277

In accordance with applicable accounting standards, the service cost component of net periodic benefit costs is presented within operating income in the consolidated condensed statements of operations, while all other components of net periodic benefit costs are presented within other (income) expense, net, in the consolidated condensed statements of operations.

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NOTE 9 – GOODWILL AND OTHER INTANGIBLE ASSETS

The ending balance and the change in the carrying amount of goodwill for the three months ended ~~October 1, 2017,~~March 31, 2024 is as follows:


	Goodwill(1)
	(in thousands)
Balance, at December 31, 2023	$	105,448
Foreign currency translation(2)	(2,251)
Balance, at March 31, 2024	$	103,197

(1) The goodwill balance is allocated entirely to the AMS reportable segment.

(2) A portion of the goodwill balance is comprised of goodwill denominated in foreign currency attributable to the nora acquisition.

The net carrying value of intangible assets other than goodwill was $53.8 million and ~~October 2, 2016, respectively:~~

Three Months Ended

Nine Months Ended

Defined Benefit Retirement Plans (Europe)

Oct. 1, 2017

Oct. 2, 2016

Oct. 1, 2017

Oct. 2, 2016

(In thousands)

(In thousands)

Service cost
$ 423 $ 260 $ 1,204 $ 781
Interest cost
1,426 1,610 4,138 5,058
Expected return on assets
(1,697 ) (1,876 ) (4,920 ) (5,880 )
Amortization of prior service costs
9 9 26 27
Recognized net actuarial losses
318 169 930 537
Net periodic benefit cost
$ 479 $ 172 $ 1,378 $ 523

Three Months Ended

Nine Months Ended

Salary Continuation Plan (SCP)

Oct. 1, 2017

Oct. 2, 2016

Oct. 1, 2017

Oct. 2, 2016

(In thousands)

(In thousands)

Service cost
$ 0 $ 110 $ 0 $ 330
Interest cost
314 317 942 952
Amortization of loss
91 203 273 608
Net periodic benefit cost
$ 405 $ 630 $ 1,215 $ 1,890
$56.3 million at March 31, 2024 and December 31, 2023, respectively.

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NOTE 7 10 – SEGMENT INFORMATION

~~Based on applicable~~

The Company determines that an operating segment exists if a component (i) engages in business activities from which it earns revenues and incurs expenses, (ii) has operating results that are regularly reviewed by the chief operating decision maker (“CODM”) and (iii) has discrete financial information. Additionally, accounting standards require the utilization of a “management approach” to report the financial results of operating segments, which is based on information used by the CODM to assess performance and make operating and resource allocation decisions. The Company determined that it has two operating segments organized by geographical area – namely (a) Americas (“AMS”) and (b) Europe, Africa, Asia and Australia (collectively “EAAA”). The AMS operating segment includes the United States, Canada and Latin America geographic areas.

Pursuant to the management approach discussed above, the Company’s CODM, our chief executive officer, evaluates performance at the AMS and EAAA operating segment levels and makes operating and resource allocation decisions based on segment adjusted operating income (“AOI”), which includes allocations of corporate selling, general and administrative (“SG&A”) expenses and allocations of global support SG&A as discussed below. AOI excludes: nora purchase accounting amortization; Cyber Event impact; property casualty loss; and restructuring, asset impairment, severance, and other, net. Intersegment revenues for the three months ended March 31, 2024 and April 2, 2023 were $16.8 million and $22.6 million, respectively. Intersegment revenues are eliminated from net sales presented below since these amounts are not included in the information provided to the CODM.

The Company has determined that it has ~~three~~two reportable segments – AMS and EAAA, as each operating ~~segments~~ ~~– namely,~~segment meets the ~~Americas, Europe and Asia-Pacific geographic regions. Pursuant to~~quantitative thresholds defined in the accounting ~~standards,~~guidance.

During the first quarter of 2024, the Company ~~has aggregated~~implemented a cost center realignment initiative to centralize certain global/shared functions. For the quarter ended March 31, 2024, SG&A expenses for these global support functions were allocated to AOI for each reportable segment consistent with the allocation methodology used to allocate corporate overhead in prior periods. Prior year AOI amounts below were not recast as there was no material impact to the measure of segment profit for each reportable segment. There were no changes to the composition of the Company’s operating or reportable segments.

Segment information for the three ~~operating segments into one reporting segment because they have similar economic characteristics,~~months ended March 31, 2024 and ~~the operating segments are similar~~April 2, 2023 is presented 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

Three Months Ended October 1, 2017:

Net Sales
$ 148,082 $ 66,677 $ 42,672 $ 257,431
Depreciation and amortization
3,386 1,646 2,211 7,243
Total assets
274,946 255,330 186,966 717,242

Three Months Ended October 2, 2016:

Net Sales
$ 147,500 $ 62,682 $ 38,167 $ 248,349
Depreciation and amortization
3,635 1,253 2,213 7,101

Nine Months Ended October 1, 2017:

Net Sales
$ 433,461 $ 180,506 $ 116,266 $ 730,233
Depreciation and amortization
10,064 4,257 6,458 20,779

Nine Months Ended October 2, 2016:

Net Sales
$ 426,677 $ 181,904 $ 110,529 $ 719,110
Depreciation and amortization
10,903 3,824 6,598 21,325

table:


	Three Months Ended
	March 31, 2024		April 2, 2023
	(in thousands)
Net sales
AMS	$	169,915	$	169,241
EAAA	119,828		126,551
Total net sales	$	289,743	$	295,792

Segment AOI
AMS	$	18,080	$	11,269
EAAA	7,445		3,929

Depreciation and amortization
AMS	$	4,353	$	4,393
EAAA	5,263		5,598
Total depreciation and amortization	$	9,616	$	9,991

~~-11-~~

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A reconciliation of the ~~Company~~’sCompany’s total operating segment ~~depreciation and amortization, and~~ assets to the corresponding consolidated amounts follows:

Three Months Ended

DEPRECIATION AND AMORTIZATION

October 1,
2017

October 2,
2016

(In thousands)

Total segment depreciation and amortization
$ 7,243 $ 7,101
Corporate depreciation and amortization
539 413
Reported depreciation and amortization
$ 7,782 $ 7,514

Nine Months Ended

DEPRECIATION AND AMORTIZATION

October 1,
2017

October 2,
2016

(In thousands)

Total segment depreciation and amortization
$ 20,779 $ 21,325
Corporate depreciation and amortization
1,424 1,149
Reported depreciation and amortization
$ 22,203 $ 22,474

ASSETS

October 1,
2017

(In thousands)

Total segment assets
$ 717,242
Corporate assets and eliminations
85,157

Reported total assets
$ 802,399


	March 31, 2024		December 31, 2023
	(in thousands)
Assets
AMS	$	546,971	$	627,782
EAAA	603,853		630,939
Total segment assets	1,150,824		1,258,721
Corporate assets	110,168		108,673
Eliminations	(67,500)		(137,299)
Total reported assets	$	1,193,492	$	1,230,095

Reconciliations of operating income to income (loss) before income tax expense and segment AOI are presented as follows:


	Three Months Ended
	March 31, 2024		April 2, 2023
	(in thousands)
AMS operating income	$	18,195	$	8,715
EAAA operating income	6,251		762
Consolidated operating income	24,446		9,477
Interest expense	6,423		8,505
Other (income) expense, net	(976)		1,500
Income (loss) before income tax expense	$	18,999	$	(528)


	Three Months Ended March 31, 2024				Three Months Ended April 2, 2023
	AMS		EAAA		AMS		EAAA
	(in thousands)
Operating income	$	18,195	$	6,251	$	8,715	$	762
Purchase accounting amortization	—		1,297		—		1,283
Cyber Event impact	(246)		(170)		228		200
Property casualty loss	—		—		1,300		—
Restructuring, asset impairment, severance, and other, net	131		67		1,026		1,684
AOI	$	18,080	$	7,445	$	11,269	$	3,929

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NOTE 811 – SUPPLEMENTAL CASH FLOW INFORMATION

~~Cash payments for interest amounted to $4.6 million and $4.0 million~~

Supplemental cash flow information for the ~~nine~~three months ended ~~October 1, 2017~~March 31, 2024 and ~~October~~April 2, ~~2016, respectively. Income tax payments amounted~~2023 is presented in the following table:


	Three Months Ended
	March 31, 2024		April 2, 2023
	(in thousands)
Cash paid for interest	$	2,099	$	3,667
Cash paid for income taxes, net of refunds	7,161		5,148

See Note 7 entitled “Leases” for additional supplemental disclosures related to ~~$14.8 million~~finance and ~~$9.9 million for the nine months ended October 1, 2017 and October 2, 2016, respectively.~~

~~NOTE~~ ~~9 – RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS~~

~~In May 2014, the Financial Accounting Standards Board (“~~FASB”) issued an accounting standard regarding recognition of revenue from contracts with customers that will supersede the existing revenue recognition under U.S. GAAP. In summary, the core principle of this standard, along with amendments in 2015 and 2016, 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. Additionally, the new standard requires enhanced disclosures about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts, including revenue recognition policies to identify performance obligations, assets recognized from costs incurred to obtain and fulfill a contract, and significant judgments in measurements and recognition. The standard, as amended, will be effective for annual periods beginning after December 15, 2017, including interim periods within that reporting period. Nearly 95% of the Company’s current revenue is produced from the sale of carpet, hard surface flooring and related products (TacTiles installation system, etc.) and the revenue from sales of these products is recognized upon shipment, or in certain cases upon delivery to the customer. There does not exist any performance or any other obligation after the sale of these products outside of the product warranty, which has not historically been of significance compared to total product sales. There is a small portion of the Company’s revenues (less than 6%) that is for the sale and installation of carpet and related products. Of these projects, the overwhelming majority are completed in less than 5 days and thereforeoperating leases.

Non-Cash Financing Activities

On March 12, 2024, the Company ~~does not expect a significant shift~~declared cash dividends on its common stock of $0.6 million, which were paid during the second quarter of 2024 to shareholders of record as of March 29, 2024. At March 31, 2024, the dividends were recorded within accrued expenses in the timing of revenue recognition for these sales either. While the Company is continuing its review of this new standard and the manner in which it will be implemented, given the nature of the Company’s sales it currently believes that revenue recognition under the new standard will be mostly consistent under both the current and new standards, with performance obligations being satisfied under the majority of contracts with customers upon shipment.

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 adoption of this new standard ~~did not have any significant impact on the Company’s~~ 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, be classified as noncurrent on the~~condensed balance sheet. ~~As a result, each juri~~sdiction 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. The Company adopted this standard in the first quarter of 2017, and recorded a reduction of current assets of $10.0 million and a corresponding increase in long term assets of $5.9 million as well as a reduction of long term liabilities of $4.1 million. The Company applied this standard retrospectively and as a result has adjusted the balance sheet as of the end of 2016 by these amounts as well.

~~-12-~~

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NOTE 12 – INCOME TAXES

The Company determines its provision for income taxes for interim periods using an estimate of its annual effective tax rate (“AETR”) and records any changes affecting the estimated AETR in the interim period in which the change occurs, including discrete tax items.

During the three months ended March ~~2016,~~31, 2024, the ~~FASB issued an accounting standard update to simplify several aspects of accounting for share-based payment transactions, including the~~ Company recorded a total income tax ~~consequences, classification~~provision of ~~awards~~$4.8 million on pre-tax income of $19.0 million resulting in an effective tax rate of 25.4%, as ~~either equity or liabilities,~~compared to a total income tax provision of $0.2 million on pre-tax loss of $0.5 million resulting in a negative effective tax rate of 35.2% during the three months ended April 2, 2023. The year-over-year change in the effective tax rate is primarily due to the tax effects of pre-tax income in the current year quarter compared to pre-tax loss in the prior year quarter and favorable changes related to share-based compensation and the ~~classification~~limitation on the ~~statement of cash flows. In addition, an entity can make an entity-wide accounting policy election to either estimate~~deduction for business interest expenses under Internal Revenue Code section 163(j). The pre-tax loss for the ~~number of awards~~three months ended April 2, 2023, included significant unusual or infrequent items that are ~~expected~~specifically excluded from the AETR. The tax effects related to ~~vest,~~these specifically excluded items are recognized discretely. The income tax benefits recognized discretely were at a lower effective tax rate compared to the estimated AETR resulting in an overall negative effective tax rate for the three months ended April 2, 2023.

On December 20, 2021, the Organization for Economic Co-operation and Development (“OECD”) published Pillar Two Model Rules defining the global minimum tax, which iscalls for the current U.S. GAAP practice, or account for forfeitures when they occur. This update will be effective for fiscal periods beginning after December 15, 2016, including interim periods within that reporting period.taxation of large corporations at a minimum rate of 15%. The ~~element~~OECD has since issued administrative guidance providing transition and safe harbor rules around the implementation of the ~~new standard that will~~Pillar Two global minimum tax. Many non-U.S. tax jurisdictions have either recently enacted legislation to adopt certain components of the Pillar Two Model Rules beginning in 2024 (including the European Union Member States) with the adoption of additional components in later years or announced their plans to enact legislation in future years. For fiscal year 2024, we expect to meet the Transitional Country-by-Country (CbCR) Safe Harbor rules for most if not all jurisdictions and do not expect these provisions to have a material impact on the Company’s financial ~~statements~~statements. We will ~~be income tax consequences. Excess tax benefits~~continue to closely monitor ongoing developments and tax deficiencies on stock-based compensation awards will now be included in the tax provision within the consolidated statement of operations as discrete items in the reporting period in which they occur, rather than the previous accounting of recording them in additional paid-in capital on the consolidated balance sheet. The adoption of this standard resulted in an increase in deferred tax assets of approximately $5.8 million, with a corresponding increase to equity accounts, as of implementation in the first quarter of 2017. There was an impact of this standard on the consolidated statement of cash flows upon adoption, as under the standard when an employer withholds shares for tax withholding purposes those related tax payments will be treated as financing activities, not as operating activities. Upon adoption in the first quarter of 2017, this resulted in a reclassification of $4.6 million of such tax payments in the first quarter of 2016 from operating activities to financing activities. The Company has elected to continue our current policy of estimating forfeitures of stock-based compensation awards at the time of grant and revising in subsequent periods to reflect actual forfeitures, which is allowable under the new standard.

~~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 our pending adoption of the new standard on our consolidated financial statements.

~~In March 2017, the FASB issued~~ a new accounting standard regarding the treatment of net periodic benefit costs. This standard will require segregation of these net benefit costs between operating and non-operating expenses. Currently, the Company reports the net benefit costs associated with its defined benefit plans as a component of operating income. The new standard is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. When the new standard is implemented, only the service cost component of defined benefit plan costs will be reported within operating income, while all other components of net benefit cost will be presented within the “Other Expense (income)” line item on the Consolidated Statements of Operations. The standard requires retrospective application, and as such upon adoption of this standard will result in offsetting changes in operating income and “Other Expense (income)” on the Consolidated Statements of Operations for all periods of 2018 and 2017, with noevaluate any potential impact on ~~net income or earnings per share.~~

~~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.~~ future periods.

In the first ~~nine~~three months of ~~2017,~~2024, the Company increased its liability for unrecognized tax benefits by ~~$0.8~~$0.3 million. As of ~~October 1, 2017,~~March 31, 2024, the Company had accrued approximately ~~$28.7~~$5.2 million for unrecognized tax benefits. In accordance with applicable accounting standards, the Company’s deferred tax asset as of ~~October 1, 2017~~March 31, 2024 reflects a reduction for ~~$3.3~~$2.8 million of these unrecognized tax benefits.

Unrecognized tax benefits are reviewed on an ongoing basis and are adjusted for changing facts and circumstances, including the progress of tax audits and the closing of statutes of limitations. While it is reasonably possible that some of the unrecognized tax benefits will be recognized within the next 12 months, the Company does not expect the recognition of such amounts will have a material impact on the Company’s financial results.

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NOTE 1113 – ITEMS RECLASSIFIED FROM ACCUMULATED OTHER COMPREHENSIVE ~~INCOME~~

~~During the first~~ ~~nine months of 2017, the Company did not reclassify any significant amounts~~LOSS

Amounts reclassified out of accumulated other comprehensive ~~income. The reclassifications that occurred in that period were primarily comprised of $1.2 million related~~loss (“AOCI”), before tax, to the ~~Company’s defined benefit retirement plan~~consolidated condensed statements of operations during the three months ended March 31, 2024 and ~~salary continuation plan. These reclassifications were included~~April 2, 2023 are reflected in the ~~selling, general and administrative expenses line item of the Company’s consolidated condensed statement of operations.~~

table below:


		Three Months Ended
	Statement of Operations Location	March 31, 2024		April 2, 2023
		(in thousands)
Interest rate swap contracts loss	Interest expense	$	—	$	(393)
Amortization of benefit plan net actuarial losses and prior service cost	Other (income) expense, net	(374)		(192)
Total loss reclassified from AOCI		$	(374)	$	(585)

~~-13-~~

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NOTE 1214 – ~~REPURCHASE OF COMMON STOCK~~

InCOMMITMENTS AND CONTINGENCIES

From time to time, we are a party to legal proceedings, whether arising in the ~~fourth quarter~~ordinary course of ~~2014,~~business or otherwise. See disclosure under the ~~Company announced a program~~heading “Lawsuit by Former CEO in Connection with Termination” set forth in Note 18 to ~~repurchase up to 500,000 shares~~the consolidated financial statements included in Item 8 of ~~common stock per~~the Annual Report on Form 10-K for the 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, with no specific expiration date. During the first three months of 2017, the Company repurchased and retired 1,601,896 shares of common stock at a weighted average purchase price of $19.36 per share. These repurchases completed the $50 million repurchase plan.

~~In the second quarter of 2017, the Company~~ adopted a new share repurchase program in which the Company is authorized to repurchase up to $100 million of its outstanding shares of common stock. The program has no specific expiration date. During the second and third quarters of 2017, pursuant to this new program, the Company repurchased and retired an aggregate of 2,575,847 shares of common stock at a weighted average price of $19.38 per share.

~~NOTE 13~~ ~~– RESTRUCTURING AND ASSET IMPAIRMENT CHARGES~~

In the fourth quarter of 2016, the Company committed to a new restructuring plan in its continuing efforts to improve efficiencies and decrease costs across its worldwide operations, and more closely align its operating structure with its business strategy. The plan involves (i) a substantial restructuring of the FLOR business model that includes closure of its headquarters office and most retail FLOR stores, (ii) a reduction of approximately 70 FLOR employees and a number of employees in the commercial carpet tile business, primarily in the Americas and Europe regions, and (iii) the write-down of certain underutilized and impaired assets that include information technology assets, intellectual property assets, and obsolete manufacturing, office and retail store equipment.

~~As a result of this plan, the Company incurred a pre-tax restructuring and asset impairment charge in the fourth quarter of 2016 of $19.8 million.~~ In the first quarter of 2017, the Company recorded an additional charge of $7.3 million, primarily related to exit costs associated with the closure of most FLOR retail stores in the first quarter of 2017. The charge in the first quarter of 2017 was comprised of lease exit costs of $3.4 million, asset impairment charges of $3.3 million and severance charges of $0.6 million.

~~A summary of these restructuring activities is presented below:~~

Total
Restructuring
Charge

Costs Incurred
in 2016

Costs Incurred
in 2017

Balance at
October 1, 2017

(in thousands)

Workforce Reduction
$ 10,652 $ 1,451 $ 6,537 $ 2,664
Asset Impairment
11,319 8,019 3,300 0
Lease Exit Costs
5,116 27 5,027 62

ended December 31, 2023.

~~-14-~~

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ITEM 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 ~~January 1, 2017,~~December 31, 2023, under Part II, Item 7 of that Form 10-K. Our discussions here focus on our results during the quarter ~~and nine months~~ ended March 31, 2024, or as of, ~~October 1, 2017,~~March 31, 2024, and the comparable periods of ~~2016 for comparison purposes,~~2023, 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.

The three-month periods ended March 31, 2024 and April 2, 2023 both include 13 weeks.

Forward-Looking Statements

This report contains statements which may constitute ~~“forward-looking~~“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 the economic conditions in the commercial interiors industry as well as the risks and uncertainties discussed under the heading “Risk Factors” included in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended ~~January 1, 2017, which discussion is hereby incorporated by reference.~~December 31, 2023. 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~~

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Executive Overview

During the quarter ended ~~October 1, 2017,~~March 31, 2024, we had consolidated net sales of ~~$257.4~~$289.7 million, down 2.0% compared ~~with net sales of $248.3 million in the third quarter last year. During the first nine months of fiscal year 2017, we had net sales of $730.2 million, compared with net sales of $719.1~~to $295.8 million in the first ~~nine months of~~quarter last ~~year. Fluctuations~~year, primarily due to decreased customer demand — particularly in ~~currency exchange rates had positive impacts on our~~the corporate office and retail market segments. These decreases were partially offset by higher sales ~~and~~in the education market segment. Consolidated operating income was $24.4 million for the first quarter of 2024, compared to $9.5 million in the ~~third~~first quarter ~~2017 versus the prior~~last year, ~~period; for the nine-month period ended October 1, 2017, fluctuations in currency exchange rates had~~primarily due to higher gross profit margin as a negative impact on our sales but a positive impact on operating income compared with the prior year period. The following table presents the amounts (in U.S. dollars) by which the exchange rates for converting foreign currencies into U.S. dollars have affected ourresult of lower raw material and freight costs. Consolidated net ~~sales and operating~~ income for the ~~three months and nine months~~quarter ended October 1, 2017. The impacts of changes in foreign currency presented in the tables are calculated based on applying the prior year period’s average foreign currency exchange rates to the current year period.

Impact of Changes in
Foreign Currency on:

Three Months Ended
October 1, 2017

Nine Months Ended
October 1, 2017

(In millions)

Net sales
$ 4.0 $ (1.0 )
Operating income
0.6 0.2

~~During the third quarter of 2017, we had net income of $19.4~~March 31, 2024, was $14.2 million or $0.32 per diluted share, compared with net income of $15.9 million, or $0.25 per diluted share, in the third quarter of 2016. During the nine months ended October 1, 2017, we had net income of $48.9 million, or $0.78$0.24 per share, compared ~~with~~to consolidated net ~~income~~loss of ~~$49.5~~$0.7 million or ~~$0.76~~$0.01 per share in the first ~~nine months~~quarter last year.

Cybersecurity Event

As previously disclosed in our current report on Form 8-K filed with the Commission on November 23, 2022, we discovered a cybersecurity attack on November 20, 2022, perpetrated by unauthorized third parties, affecting our IT systems. The investigation of ~~2016. The first nine months~~the Cyber Event was completed in fiscal year 2023. We have cyber risk insurance and anticipate that a portion of ~~2017 include $7.3 million~~our costs and expenses related to the Cyber Event will ultimately be recovered by insurance.

Our IT systems face a myriad of ~~restructuring~~cybersecurity threats, including, without limitation, hacking, computer viruses, denial of service attacks, malware, ransomware, phishing scams, compromised or irretrievable backups, and ~~asset impairment charges (all~~other cyber attacks. Any of these events which ~~were recorded~~deny us use of vital IT systems may seriously disrupt our normal business operations and lead to production or shipping stoppages, revenue loss, and reputational harm. We also expect to incur ongoing costs for enhanced data security against unauthorized access to, or manipulation of, our systems and data.

Impact of Macroeconomic Trends

Recent disruptions in economic markets due to persistent inflation, high interest rates, the Russia-Ukraine war and the Israel-Hamas war, a fairly stabilized but still challenging supply chain environment, slow market conditions in parts of Asia, and significant financial pressures in the ~~first quarter) as a continuation of the plans announced in the fourth quarter of 2016, primarily related~~commercial office market globally, all pose challenges which may adversely affect our future performance. To mitigate these impacts, we plan to ~~closing~~continue evaluating our ~~FLOR specialty retail stores.~~

cost structure and global manufacturing footprint to identify and activate opportunities to decrease costs and optimize our global cost structure.

~~-15-~~

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Analysis of Results of Operations

Consolidated Results

The following table presents, as a percentage of net sales, certain items included in our ~~Consolidated~~ ~~Condensed Statements~~consolidated condensed statements of ~~Operations~~operations for the three-month ~~and nine-month~~ periods ended ~~October 1, 2017~~March 31, 2024 and ~~October~~April 2, ~~2016, respectively:~~

Three Months Ended

Nine Months Ended

Oct. 1, 2017

Oct. 2, 2016

Oct. 1, 2017

Oct. 2, 2016

Net sales
100.0 % 100.0 % 100.0 % 100.0 %
Cost of sales
61.7 62.6 61.1 61.2
Gross profit on sales
38.3 37.4 38.9 38.8
Selling, general and administrative expenses
26.3 27.0 27.1 27.8
Restructuring and Asset Impairment Charges
0.0 0.0 1.0 0.0
Operating income
12.0 10.4 10.9 10.9
Interest/Other expenses
1.0 1.0 0.9 0.8
Income before tax expense
11.0 9.4 9.9 10.1
Income tax expense
3.5 3.0 3.2 3.2
Net income
7.6 6.4 6.7 6.9

2023:

Three Months Ended
March 31, 2024 April 2, 2023
Net sales 100.0 % 100.0 %
Cost of sales 61.9 67.6
Gross profit 38.1 32.4
Selling, general and administrative expenses 29.7 29.2
Restructuring, asset impairment and other charges — 0.0
Operating income 8.4 3.2
Interest/Other (income) expense, net 1.9 3.4
Income (loss) before income tax expense 6.5 (0.2)
Income tax expense 1.7 0.1
Net income (loss) 4.8 % (0.3) %

Consolidated Net Sales

Below ~~we provide~~is information regarding our consolidated net sales, and ~~analyze~~analysis of those results,, for the three-month ~~and nine-month~~ periods ended ~~October 1, 2017,~~March 31, 2024, and ~~October~~April 2, ~~2016, respectively.~~

Three Months Ended

Percentage

Oct. 1, 2017

Oct. 2, 2016

Change

(In thousands)

Net Sales
$ 257,431 $ 248,349 3.7 %

Nine Months Ended

Percentage

Oct. 1, 2017

Oct. 2, 2016

Change

(In thousands)

Net Sales
$ 730,233 $ 719,110 1.5 %

2023:


	Three Months Ended				Percentage Change
	March 31, 2024		April 2, 2023
	(in thousands)
Consolidated net sales	$	289,743	$	295,792	(2.0)	%

For the quarter ended ~~October 1, 2017,~~March 31, 2024, consolidated net sales ~~increased $9.1~~decreased $6.0 million ~~(3.7%~~(2.0%) versus the comparable period in ~~2016.~~2023, primarily due to lower sales volumes (approximately 4%) partially offset by higher prices (approximately 2%). Currency fluctuations had ~~an approximately $4.0 million (2.0%) positive~~no material impact on ~~the 2017 third quarter~~consolidated net sales ~~compared to the third quarter of 2016. This positive impact was the result of a strengthening Euro and Australian dollar as compared to the prior year period. On~~ a geographic basis, sales increased in all regions, with Americas commercial sales (defined as Americas sales less the FLOR residential sales) up 2%, sales in Europe up 6% as translated into U.S. dollars (2% in local currency), and sales in Asia-Pacific up 12%. Third quarter sales were negatively impacted by the exit of the FLOR specialty retail stores at the end offor the first quarter of 2017, although this was partially offset by gains in FLOR’s other sales channels. Global sales increased most significantly in the corporate office, education, government and healthcare segments. These increases were partially offset by declines in the retail segment and in the residential segment, which is largely a result of the exit of the FLOR specialty retail stores. In the Americas, the increase in sales was primarily due to sales of luxury vinyl tile (“LVT”), which is a hard surface modular flooring product line launched in the first quarter of 2017. In Europe, sales increased 2% in local currency, with increases in the United Kingdom, Germany and Southern and Central Europe. As noted above, due to the strengthening of the Euro, our sales in Europe improved by 6% as translated into U.S. dollars. Sales in Asia-Pacific saw increases across the region with the exception of China.

~~For the nine months ended October 1, 2017, net sales increased~~ ~~$11.1 million (1.5%) versus the comparable period in 2016. Currency fluctuations had an approximately $1.0 million (less than 1%) negative impact on sales for the first nine months of 2017 as~~2024 compared to the same period ~~in 2016.~~last year. On a ~~geographic~~market segment basis, the sales ~~were up 2%~~decrease was primarily in the ~~Americas commercial business and up 5% in Asia-Pacific. In Europe, sales were down approximately 1% both in local currency and as translated into U.S. dollars. We experienced sales increases in our~~ corporate office, ~~education and government segments. These increases were offset by declines in the~~retail, healthcare and hospitality ~~segments. Sales were also negatively impacted~~market segments, partially offset by ~~the exit of FLOR specialty retail stores at the end of the first quarter of 2017. As noted above, we launched LVT~~higher sales in the ~~first quarter of 2017. Sales of these products are progressing according to plan~~education and have been primarily in the Americas, although they were launched in Europe and Asia-Pacific in the second quarter of this year and sales activity in those regions is progressing in line with expectations as well.

residential living market segments.

~~-16-~~

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Consolidated Cost and Expenses

The following table~~s present, on a~~ presents our consolidated ~~basis for our operations, our overall~~ cost of sales and selling, general and administrative expenses for the three-month ~~and nine-month~~ periods ended ~~October 1, 2017~~March 31, 2024, and ~~October~~April 2, ~~2016, respectively:~~

Three Months Ended

Percentage

Cost and Expenses

Oct. 1, 2017

Oct. 2, 2016

Change

(In thousands)

Cost of sales
$ 158,887 $ 155,431 2.2 %
Selling, general and administrative expenses
67,633 67,175 0.7 %
Total
$ 226,520 $ 222,606 1.8 %

Nine Months Ended

Percentage

Cost and Expenses

Oct. 1, 2017

Oct. 2, 2016

Change

(In thousands)

Cost of sales
$ 445,990 $ 440,434 1.3 %
Selling, general and administrative expenses
197,660 200,108 (1.2% )
Total
$ 643,650 $ 640,542 0.5 %

2023:


	Three Months Ended				Percentage Change
	March 31, 2024		April 2, 2023
	(in thousands)
Consolidated cost of sales	$	179,338	$	199,919	(10.3)	%
Consolidated selling, general and administrative expenses	85,959		86,254		(0.3)	%

Consolidated Cost of Sales

For the quarter ended ~~October 1, 2017, costs~~March 31, 2024, consolidated cost of sales ~~increased $3.5~~decreased $20.6 million ~~(2.2%~~(10.3%) as compared to the ~~third~~first quarter of ~~2016. Fluctuations in currency exchange rates~~2023, primarily due to lower raw material costs and lower sales. Currency translation had ~~a small (1%)~~no material impact ~~on the comparison. The increase in costs~~to consolidated cost of sales ~~was a function of higher sales for~~compared to the 2017 third quarter, as sales increased 3.7% versus the prior year period. The percentage increase in costs of sales was lower than the increase in sales due to improved manufacturing performance during the quarter, a result of our productivity and process improvement gains as well as savings from our restructuring activities undertaken in the fourth quarter of 2016. In addition, in the third quarter of 2016, there were costs related to our move to a centralized warehouse facility in the U.S. that did not repeat in 2017.same period last year. As a percentage of net sales, ~~costs~~our cost of sales decreased to ~~61.7%~~61.9% for the ~~third~~first quarter of ~~2017 as compared to 62.6%~~2024 versus 67.6% for the ~~third~~first quarter of ~~2016 due to~~2023.

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Consolidated Gross Profit

For the ~~factors noted above. This improvement came despite slightly lower production volumes~~quarter ended March 31, 2024, consolidated gross profit, as a percentage of net sales, was 38.1% compared with 32.4% in ~~the third quarter of 2017 versus~~ the same period last year. The increase in ~~2016 as well as higher~~gross profit percentage was primarily due to (i) lower raw material ~~input prices.~~

and freight costs (approximately 3%), (ii) favorable product mix and other (approximately 2%), and (iii) higher sales pricing (approximately 1%).

Consolidated Selling, General and Administrative (“SG&A”) Expenses

For the ~~nine months~~quarter ended ~~October 1, 2017, cost of sales increased $5.5~~March 31, 2024, consolidated SG&A expenses decreased $0.3 million ~~(1.3%~~(0.3%) versus the comparable period in ~~2016. Fluctuations in currency exchange rates did not have a significant~~2023. Currency translation had no material impact on consolidated SG&A expenses in the ~~comparison. This increase in costs~~first quarter of ~~sales was largely because of increased sales~~2024 compared to the same period last year. SG&A expenses were lower for the ~~period, as sales increased 1.5% versus~~first quarter of 2024 primarily due to (i) $2.0 million of lower severance costs driven by employee headcount reduction and cost saving initiatives in the prior year period, (ii) $1.0 million of lower selling expenses, and (iii) $0.9 million of lower Cyber Event costs due to completion of the investigation in the prior year as well as insurance recoveries in the current period. These decreases were mostly offset by $2.2 million of higher labor and variable compensation costs and $1.4 million of higher software license fees. As a percentage of net sales, ~~our cost of sales decreased slightly~~SG&A expenses increased to ~~61.1%~~29.7% for the ~~nine months~~first quarter of 2024 versus 29.2% for the first quarter of 2023.

InterestExpense

During the quarter ended ~~October 1, 2017,~~March 31, 2024, interest expense was $6.4 million, a decrease of $2.1 million from ~~61.2% for~~ the comparable period in ~~2016. This decrease is~~2023, primarily due to lower outstanding term loan borrowings under the Facility.

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Segment Operating Results

During the first quarter of 2024, the Company implemented a ~~result~~cost center realignment initiative to centralize certain global/shared functions. For the quarter ended March 31, 2024, SG&A expenses for these global support functions were allocated to AOI for each reportable segment consistent with the allocation methodology used to allocate corporate overhead in prior periods. Prior year AOI amounts below were not recast as there was no material impact to the measure of segment profit for each reportable segment. There were no changes to the composition of the Company’s ~~productivity initiatives delivering benefits slightly in advance of higher raw material input prices~~operating or reportable segments.

AMS Segment – Net Sales and despite lesser absorption of fixed costs associated with lower production volumes. We expect continued raw material price inflation, as well as less absorption of fixed costs associated with lower production levels,Adjusted Operating Income (“AOI”)

The following table presents AMS segment net sales and AOI for the ~~balance~~three-month periods ended March 31, 2024, and April 2, 2023:


	Three Months Ended				Percentage Change
	March 31, 2024		April 2, 2023
	(in thousands)
AMS segment net sales	$	169,915	$	169,241	0.4	%
AMS segment AOI(1)	18,080		11,269		60.4	%

(1)Includes allocation of ~~2017~~corporate SG&A expenses and allocation of global support SG&A expenses as ~~a result, cost~~discussed above. Excludes Cyber Event impact, property casualty loss, and restructuring, asset impairment, severance, and other, net. See Note 10 entitled “Segment Information” of Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.

During the first quarter of 2024, net sales ~~as a percentage of sales is expected to increase for the remainder of 2017.~~

~~For the three months ended October~~ ~~1, 2017, selling, general and administrative (“SG&A”) expenses~~in AMS increased ~~$0.5 million (0.7%)~~0.4% versus the comparable period ~~last year. Fluctuations~~ in ~~current exchange rates did not have a significant impact on the comparison. This increase in SG&A expenses is a result of additional incentive based compensation~~2023 primarily due to higher ~~projected attainment of performance goals~~sales prices partially offset by lower volume. On a market segment basis, the AMS sales increase was primarily in the ~~third~~education, residential living, and public buildings market segments, partially offset by decreases in the corporate office, retail and healthcare market segments.

AOI in AMS increased 60.4% during the first quarter of ~~2017 as~~2024 compared to the prior year ~~period. This increase in incentive-based compensation was offset almost entirely by (1) lower selling expenses~~period primarily due to higher sales pricing and lower raw material and freight costs compared to the ~~exit~~same period last year. During the first quarter of 2023, AOI in AMS was adversely impacted by inflation and higher input costs. As a percentage of net sales, AOI increased to 10.6% during the first quarter of 2024 compared to 6.7% in the same period last year.

EAAA Segment – Net Sales and AOI

The following table presents EAAA segment net sales and AOI for the three-month periods ended March 31, 2024, and April 2, 2023:


	Three Months Ended				Percentage Change
	March 31, 2024		April 2, 2023
	(in thousands)
EAAA segment net sales	$	119,828	$	126,551	(5.3)	%
EAAA segment AOI(1)	7,445		3,929		89.5	%

(1)Includes allocation of corporate SG&A expenses and allocation of global support SG&A expenses as discussed above. Excludes purchase accounting amortization, Cyber Event impact, and restructuring, asset impairment, severance and other, net. See Note 10 entitled “Segment Information” of Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.

During the first quarter of 2024, net sales in EAAA decreased 5.3% versus the comparable period in 2023, primarily due to lower sales volume. Currency fluctuations had no material impact on EAAA sales for the first quarter 2024 compared to the same period last year. On a market segment basis, the EAAA sales decrease was most significant in the education, public buildings, and corporate office market segments.

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AOI in EAAA increased 89.5% during the first quarter of 2024 versus the comparable period in 2023, primarily due to lower raw material costs compared to the same period last year. During the first quarter of 2023, AOI in EAAA was adversely impacted by inflation and higher input costs. Currency fluctuations had no material impact on AOI for the first quarter of 2024 compared to the first quarter last year. As a percentage of net sales, AOI increased to 6.2% during the first quarter of 2024 compared to 3.1% in the same period last year.

Financial Condition, Liquidity and Capital Resources

General

At March 31, 2024, the Company had $89.8 million in cash. At that date, the Company had $96.0 million in term loan borrowings, no revolving loan borrowings, and $1.6 million in letters of credit outstanding under our Facility, and we had $300.0 million of Senior Notes outstanding. As of March 31, 2024, we had additional borrowing capacity of $298.4 million under the Facility. We anticipate that our liquidity is sufficient to meet our obligations for the next 12 months, and we expect to generate sufficient cash to meet our long-term obligations.

The Senior Notes are unsecured and are guaranteed, jointly and severally, by each of the ~~FLOR specialty retail stores, (2)~~Company’s material domestic subsidiaries, all of which also guarantee the obligations of the Company under its Facility. The Company’s foreign subsidiaries and certain non-material domestic subsidiaries are considered non-guarantors. Net sales for the non-guarantor subsidiaries were approximately $133 million and $141 million for the three-month periods ended March 31, 2024 and April 2, 2023, respectively. Total indebtedness of the non-guarantor subsidiaries was approximately $128 million and $133 million as of March 31, 2024 and December 31, 2023, respectively.

Balance Sheet

Accounts receivable, net, were $147.2 million at March 31, 2024, compared to $163.4 million at December 31, 2023. The decrease of $16.2 million was primarily due to customer collections and the impact of lower ~~functional expenses as we continue our transition to more centralized services, and (3) savings~~net sales as a result of ~~our restructuring plans implemented~~decreased customer demand in the ~~fourth~~first quarter of ~~2016. These savings~~2024.

Inventories, net, were ~~realized despite~~$296.3 million at March 31, 2024, compared to $279.1 million at December 31, 2023. The increase of $17.2 million was primarily due to finished goods inventory build attributable to expected higher ~~expenses associated with our LVT product launches~~customer demand in ~~2017. As~~the remainder of 2024, partially offset by lower raw material costs.

Analysis of Cash Flows

The following table presents a ~~result~~summary of cash flows for the ~~savings discussed above, as a percentage~~three-month periods ended March 31, 2024 and April 2, 2023, respectively:


	Three Months Ended
	March 31, 2024		April 2, 2023
	(in thousands)
Net cash provided by (used in):
Operating activities	$	12,619	$	29,584
Investing activities	(1,993)		(5,712)
Financing activities	(29,776)		(21,035)
Effect of exchange rate changes on cash	(1,574)		872
Net change in cash and cash equivalents	(20,724)		3,709
Cash and cash equivalents at beginning of period	110,498		97,564
Cash and cash equivalents at end of period	$	89,774	$	101,273

Table of ~~sales, our SG&A expenses declined to 26.3%~~Contents

Cash provided by operating activities was $12.6 million for the three months ended ~~October 1, 2017 versus 27.0% for~~March 31, 2024, which represents a decrease of $17.0 million from the prior year comparable period. The decrease was primarily due to changes in working capital during the first three months of 2024 compared with the first three months of 2023. Specifically, the prior year comparable period includes a greater source of cash from accounts receivable collections compared with the first three months of 2024, primarily attributable to delays in ~~2016.~~

~~For~~customer billings from the ~~nine-month ended October 1, 2017, SG&A expenses decreased $2.5 million (1.2%) versus the comparable period~~Cyber Event, in ~~2016. This decline was a function of decreases~~which those delayed billings were collected in the first ~~six~~quarter of 2023. Additionally, the increase in inventories during the first three months of ~~2017 offset by~~2024, as described above, resulted in a ~~slight increae~~greater use of cash compared with the same period in the prior year.

Cash used in investing activities was $2.0 million for the three months ended ~~October 1, 2017. Fluctuations~~March 31, 2024, which represents a decrease of $3.7 million from the prior year comparable period. The decrease was primarily attributable to cash proceeds received from the sale of manufacturing equipment and insurance proceeds for property casualty losses, both of which partially offset cash used for capital expenditures during the three months ended March 31, 2024.

Cash used in ~~currency exchanges rates did not have a significant impact on the comparison. The decline~~financing activities was $29.8 million for the ~~nine-month period~~three months ended March 31, 2024, which represents an increase of $8.7 million from the prior year comparable period. The year-over-year increase was a result of (1) lower functional expenses, as we move towards more centralized services and realize associated savings, (2) lower selling expenses in the second and third quarters of 2017 associated with exiting the FLOR specialty retail stores, and (3) savings associated with our previously announced restructuring plans. These savings were offset by higher incentive compensationprimarily due to lower revolving loan borrowings combined with higher attainment of performance goals in 2017 versus 2016, as well as costs associated with the rollout of our LVT product offerings. Due to these decreases, as well as higher sales for the first nine months of 2017, our SG&A expenses declined to 27.1% of sales as compared to 27.8% of sales for the first nine months of 2016.

~~-17-~~

~~Table of Contents~~

~~Interest Expense~~

~~For the three~~-month period ended October 1, 2017, our interest expense increased $0.2 million to $1.9 million, from $1.7 million in the third quarter of 2016. For the nine-month period ended October 1, 2017, our interest expense increased $0.4 million to $5.2 million, from $4.8 million in the comparable period last year. The increases were due to higher weighted average borrowing rates for the 2017 periods versus those of the 2016 periods as well as higher average daily outstanding borrowing amounts under our Syndicated Credit Facility during the 2017 periods.

~~Liquidity and Capital Resources~~

~~General~~

At ~~October 1, 2017, we had $78.1 million in cash and cash equivalents. At that date, we had outstanding $173.8 million~~repayments of term loan borrowings ~~$60.8 million of revolving loan borrowings and $6.0 million in letters of credit under our Syndicated Credit Facility.~~

~~As of~~ October 1, 2017, we could have incurred $183.2 million of additional borrowings under our Syndicated Credit Facility. In addition, we could have incurred an additional $9.8 million of borrowings under our other lines of credit in place at other non-U.S. subsidiaries.

~~Analysis of Cash Flows~~

~~We exited the quarter ended October 1, 2017 with $78.1 million in cash, a decrease of $87.6 million~~ during the ~~first nine~~three months ended March 31, 2024.

Outlook

We anticipate revenue growth in the second quarter of ~~the year. The decrease in cash was primarily a result of cash outflows for financing activities,~~fiscal year 2024 compared with the ~~most~~first quarter of 2024. During the first half of fiscal year 2024, the Company also expects continued year-over-year decreases in the cost per unit of various raw material purchases which will benefit gross profit margins in 2024. We also anticipate that the continued slow macro environment in China, high interest rates, and significant financial pressures in the commercial office market globally will continue to adversely impact our performance and demand for our products.

Cash flows from operations, cash and cash equivalents, and other sources of liquidity are expected to be available and sufficient to meet foreseeable cash requirements. However, the Company’s cash flows from operations can be affected by numerous factors ~~being (1) $81.1 million~~including raw material availability and cost, and demand for our products.

Backlog

As of ~~cash used to repurchase and retire 4.2 million shares~~April 21, 2024, the consolidated backlog of unshipped orders was approximately $224.3 million. As disclosed in our ~~outstanding common stock, (2) $62.1 million of cash used to repay borrowings under the Syndicated Credit Facility (including required amortization payments of $11.3 million), and (3) $11.6 million~~Annual Report on Form 10-K for the ~~payments~~fiscal year ended December 31, 2023, backlog was approximately $195.5 million as of ~~dividends. These financing cash outflows were partially offset by $20.0 million~~February 4, 2024. Disruptions in supply and distribution chains have resulted in delays of ~~borrowings under~~construction projects and flooring installations in many regions worldwide, which have also caused, and may continue to cause, fluctuations in our ~~Syndicated Credit Facility. We also used cash~~backlog.

Table of $22.8 million for capital expenditures in the first nine months of 2017. These uses were partially offset by $67.9 million of cash generated from operating activities during the nine-month period. The factors driving the cash from operations were (1) $48.9 million of net income for the period, and (2) $10.8 million of cash generated due to an increase in accounts payable and accruals. These inflows were partially offset by operating cash outflows of $22.4 million due to an increase in inventory.

Contents

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

~~Our~~

The 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 ~~January 1, 2017~~December 31, 2023, under Part II, Item 7A of that Form 10-K. ~~Our~~The discussion here focuses on the ~~period~~three months ended ~~October 1, 2017,~~March 31, 2024, 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 October 1, 2017, we recognized a $30.7 million increase in our foreign currency translation adjustment account compared to January 1, 2017, primarily because of the weakening of the U.S. dollar against certain foreign currencies, particularly the Euro and the Australian dollar.

Sensitivity ~~Analysis.~~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, SOFR, or ~~LIBOR~~other benchmark 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, SOFR, or ~~LIBOR~~other benchmark 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 Part II, Item 7A of our Annual Report on Form 10-K for the year ended ~~January 1, 2017.~~

December 31, 2023.

~~-18-~~

~~Table of Contents~~

As of ~~October 1, 2017,~~March 31, 2024, based on a hypothetical immediate 100 basis point increase in interest rates, with all other variables held constant, the fair value of our fixed rate long-term debt would be impacted by a net decrease of $11.3 million. Conversely, a 100 basis point decrease in interest rates would result in a net increase in the fair value of our fixed rate long-term debt of $11.9 million.

As of March 31, 2024, 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 ~~$9.6~~$9.1 million or an increase in the fair value of our financial instruments of ~~$11.7~~$11.1 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.

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ITEM 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 President and Chief Executive Officer and our 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.

No system of controls, no matter how well designed and operated, can provide absolute assurance that the objectives of the system of controls are met, and no evaluation of controls can provide absolute assurance that the system of controls has operated effectively in all cases. Our disclosure controls and procedures however are designed to provide reasonable assurance that the objectives of disclosure controls and procedures are met.

Based on ~~that~~the evaluation, our President and Chief Executive Officer and our 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.~~

Report to provide reasonable assurance that the objectives of disclosure controls and procedures are met.

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.

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PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, we are ~~subject~~a party to ~~various~~ legal proceedings, whether arising in the ordinary course of business ~~none~~or otherwise. See Note 14 of ~~which is required~~Part I, Item 1 of this Quarterly Report on Form 10-Q and Note 18 to ~~be disclosed under this~~the consolidated financial statements included in Item 1.

8 of the Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

ITEM 1A. RISK FACTORS

~~There~~ ~~are no material changes~~

In addition to the other information set forth in this report, you should carefully consider the risk factors disclosed in ~~the third quarter of 2017. For a discussion of risk factors, see~~ Part I, Item 1A, “Risk Factors,” inof our Annual Report on Form 10-K for the fiscal year ended ~~January 1, 2017.~~

December 31, 2023.

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ITEM 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~~our first quarter ended ~~October 1, 2017:~~

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 or Programs⁽²⁾

July 3-31, 2017⁽³⁾
21,638 $ 19.67 20,010 $ 75,037,949
August 1-31, 2017
1,311,102 $ 19.04 1,311,102 50,077,293
September 1-30, 2017
0 N/A 0 50,077,293
October 1, 2017
0 N/A 0 50,077,293
Total
1,332,740 $ 19.75 1,331,112 50,077,293

^{March 31, 2024:}


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 or Programs(2)
January 1 – January 28, 2024(3)	63,293	$	12.05	—	$	82,828,595
January 29 – February 25, 2024	—	—		—	82,858,595
February 26 – March 31, 2024(3)	246,578	14.21		—	82,828,595
Total	309,871	$	13.77	—

(1)The monthly periods identified above correspond to the Company’s fiscal ~~third~~first quarter of ~~2017,~~2024, which commenced ~~July 3, 2017~~January 1, 2024 and ended ~~October 1, 2017.~~

^{March 31, 2024.}

(2) ~~In April 2017,~~ On May 17, 2022, the Company announced a ~~new~~ share ~~purchase~~repurchase program authorizing the repurchase of up to $100 million of common stock. ~~This amended~~The program has no specific expiration date.

⁽³⁾ ~~Includes 1,628~~ There were no shares ~~acquired~~repurchased pursuant to this program during the Company’s fiscal first quarter of 2024.

(3) Comprised of shares received by the Company from employees ~~at a price of $19.65 per share~~ to satisfy income tax withholding obligations in connection with the vesting of previous ~~grants of~~ equity awards.

~~-19-~~

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ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4. MINE SAFETY DISCLOSURES

Not ~~applicable~~

applicable.

ITEM 5. OTHER INFORMATION

~~None~~

During the three months ended March 31, 2024, one of our directors, Daniel T. Hendrix, adopted a Rule 10b5-1 trading arrangement for the potential sale of our common stock in amounts and prices determined in accordance with such plan, as outlined in the table below:

Name and Title

Action

Date Adopted

Expiration Date

Aggregate Number of Securities to be Purchased / Sold

Daniel T. Hendrix, Director

Adoption of Rule 10b5-1 Plan(1)

March 6, 2024

February 5, 2025

100,000

(1) Intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Securities Exchange Act of 1934.

Transactions in our securities by directors or officers of Interface or its subsidiaries are required to be made in accordance with our Insider Trading Policy, which incorporates applicable U.S. federal securities laws that prohibit trading Interface common stock and other Company securities while aware of material non-public information about Interface.

Except as set forth above, during the three months ended March 31, 2024, no other director or officer (as defined in Rule 16a-1(f) of the Exchange Act) of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K.

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ITEM 6. EXHIBITS

The following exhibits are filed or furnished with this report:

~~EXHIBIT~~ ~~NUMBER~~
Exhibit Number		~~DESCRIPTION OF EXHIBIT~~ Description of Exhibit
~~10.1~~ 19.1		Amended and Restated Syndicated Facility Agreement, dated as of August 8, 2017, among Interface, Inc., certain subsidiaries of the Company as borrowers, certain subsidiaries of the Company as guarantors, Bank of America, N.A. as Administrative Agent, and the other lenders party thereto (included as Exhibit 99.1 to the Company~~’s current report on Form 8-K filed on August 9, 2017, previously filed with the Commission and incorporated herein by reference).~~I nsider Trading Policy
~~10.2~~ 31.1		Amended and Restated Security and Pledge Agreement, dated as of August 8, 2017, among Interface, Inc., certain subsidiaries of the Company as obligors, and Bank of America, N.A. as Administrative Agent (included as Exhibit 99.2 to the Company~~’s current report on Form 8-K filed on August 9, 2017, previously filed with the Commission and incorporated herein by reference).~~
~~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. – The Instance Document does not appear in the Interactive Data Files because its XBRL tags are embedded within the Inline XBRL document.
101.SCH		XBRL Taxonomy Extension Schema ~~Document~~. Document.
101.CAL		XBRL Taxonomy Extension Calculation Linkbase ~~Document~~. Document.
101.LAB		XBRL Taxonomy Extension Label Linkbase ~~Document~~. Document.
101.PRE		XBRL Taxonomy Presentation Linkbase ~~Document~~. Document.
101.DEF		XBRL Taxonomy Definition Linkbase Document.
104		The cover page from this Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, formatted in Inline XBRL

~~-20-~~

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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: ~~November 9, 2017~~ May 7, 2024		By:	/s/ Bruce A. Hausmann
			Bruce A. Hausmann
	~~Vice President~~
	Chief Financial Officer (Principal Financial Officer)

~~-21-~~

~~Table of Contents~~39

~~EXHIBITS INCLUDED HEREWTIH~~

~~EXHIBIT~~ ~~NUMBER~~	~~DESCRIPTION OF EXHIBIT~~

~~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~~.

	OCTOBER 1, 2017			JANUARY 1, 2017
	(UNAUDITED)
ASSETS
CURRENT ASSETS:
Cash and Cash Equivalents	$	78,108		$	165,672
Accounts Receivable, net		133,869			126,004
Inventories		186,126			156,083
Prepaid Expenses and Other Current Assets		24,358			23,123
TOTAL CURRENT ASSETS		422,461			470,882

PROPERTY AND EQUIPMENT, less accumulated depreciation		212,332			204,508
DEFERRED TAX ASSETS		30,805			33,117
GOODWILL		68,029			61,218
OTHER ASSETS		68,772			65,714
TOTAL ASSETS	$	802,399		$	835,439

LIABILITIES AND SHAREHOLDERS’ EQUITY

CURRENT LIABILITIES:
Accounts Payable	$	52,313		$	45,380
Current Portion of Long-Term Debt		15,000			15,000
Accrued Expenses		101,346			98,703
TOTAL CURRENT LIABILITIES		168,659			159,083

LONG-TERM DEBT		219,506			255,347
DEFERRED INCOME TAXES		5,819			4,728
OTHER		76,223			75,552
TOTAL LIABILITIES		470,207			494,710

Commitments and Contingencies

SHAREHOLDERS’ EQUITY:
Preferred Stock		0			0
Common Stock		6,025			6,424
Additional Paid-In Capital		282,424			359,451
Retained Earnings		183,423			140,238
Accumulated Other Comprehensive Income (Loss) – Foreign Currency Translation Adjustment		(79,844	)		(110,522	)
Accumulated Other Comprehensive Income (Loss) – Pension Liability		(59,836	)		(54,862	)
TOTAL SHAREHOLDERS’ EQUITY		332,192			340,729
	$	802,399		$	835,439

	THREE MONTHS ENDED				NINE MONTHS ENDED

	OCTOBER 1, 2017		OCTOBER 2, 2016		OCTOBER 1, 2017		OCTOBER 2, 2016

NET SALES	$	257,431	$	248,349	$	730,233	$	719,110
Cost of Sales		158,887		155,431		445,990		440,434

GROSS PROFIT ON SALES		98,544		92,918		284,243		278,676
Selling, General and Administrative Expenses		67,633		67,175		197,660		200,108
Restructuring and Asset Impairment Charges		0		0		7,299		0
OPERATING INCOME		30,911		25,743		79,284		78,568

Interest Expense		1,851		1,654		5,150		4,763
Other Expense		651		739		1,816		1,072

INCOME BEFORE INCOME TAX EXPENSE		28,409		23,350		72,318		72,733
Income Tax Expense		8,970		7,446		23,394		23,278

NET INCOME	$	19,439	$	15,904	$	48,924	$	49,455

Earnings Per Share – Basic	$	0.32	$	0.25	$	0.78	$	0.76

Earnings Per Share – Diluted	$	0.32	$	0.25	$	0.78	$	0.76

Common Shares Outstanding – Basic		61,018		64,805		62,630		65,285
Common Shares Outstanding – Diluted		61,060		64,842		62,672		65,322

	THREE MONTHS ENDED					NINE MONTHS ENDED

	OCTOBER 1, 2017			OCTOBER 2, 2016		OCTOBER 1, 2017			OCTOBER 2, 2016

Net Income	$	19,439		$	15,904	$	48,924		$	49,455
Other Comprehensive Income (Loss), Foreign
Currency Translation Adjustment		9,848			2,759		30,678			3,827
Other Comprehensive Income (Loss), Pension Liability Adjustment		(1,994	)		834		(4,974	)		3,632
Comprehensive Income	$	27,293		$	19,497	$	74,628		$	56,914

	NINE MONTHS ENDED
	OCTOBER 1, 2017			OCTOBER 2, 2016
OPERATING ACTIVITIES:
Net Income	$	48,924		$	49,455
Adjustments to Reconcile Net Income to Cash Provided by Operating Activities:
Depreciation and Amortization		22,203			22,474
Stock Compensation Amortization Expense		4,479			3,390
Deferred Income Taxes and Other		5,926			5,049
Working Capital Changes:
Accounts Receivable		(1,397	)		1,449
Inventories		(22,377	)		(454	)
Prepaid Expenses and Other Current Assets		(653	)		(1,008	)
Accounts Payable and Accrued Expenses		10,804			(1,462	)

CASH PROVIDED BY OPERATING ACTIVITIES:		67,909			78,893

INVESTING ACTIVITIES:
Capital Expenditures		(22,809	)		(20,912	)
Other		(421	)		1,140

CASH USED IN INVESTING ACTIVITIES:		(23,230	)		(19,772	)

FINANCING ACTIVITIES:
Borrowing of Long-Term Debt		20,000			20,329
Repayment of Long-Term Debt		(62,085	)		(17,500	)
Tax Withholding Payments for Share-Based Compensation		(1,477	)		(4,661	)
Repurchase of Common Stock		(81,061	)		(10,443	)
Debt Issuance Cost		(1,418	)		0
Dividends Paid		(11,571	)		(10,429	)

CASH USED IN FINANCING ACTIVITIES:		(137,612	)		(22,704	)

Net Cash Provided By (Used In) Operating, Investing and
Financing Activities		(92,933	)		36,417
Effect of Exchange Rate Changes on Cash		5,369			1,616

CASH AND CASH EQUIVALENTS:
Net Change During the Period		(87,564	)		38,033
Balance at Beginning of Period		165,672			75,696

Balance at End of Period	$	78,108		$	113,729

	Oct. 1, 2017		Jan. 1, 2017
	(In thousands)
Finished Goods	$	123,708	$	104,742
Work in Process		13,046		8,711
Raw Materials		49,372		42,630
	$	186,126	$	156,083

	Three Months Ended				Nine Months Ended
	Oct. 1, 2017		Oct. 2, 2016		Oct. 1, 2017		Oct. 2, 2016
Earnings Per Share

Basic Earnings Per Share
Distributed Earnings	$	0.07	$	0.06	$	0.19	$	0.10
Undistributed Earnings		0.25		0.19		0.59		0.66
Total	$	0.32	$	0.25	$	0.78	$	0.76

Diluted Earnings Per Share
Distributed Earnings	$	0.07	$	0.06	$	0.19	$	0.10
Undistributed Earnings		0.25		0.19		0.59		0.66
Total	$	0.32	$	0.25	$	0.78	$	0.76

Basic Earnings Per Share	$	0.32	$	0.25	$	0.78	$	0.76
Diluted Earnings Per Share	$	0.32	$	0.25	$	0.78	$	0.76

	Three Months Ended				Nine Months Ended
	Oct. 1, 2017		Oct. 2, 2016		Oct. 1, 2017		Oct. 2, 2016
			(In millions)
Net Income Attributable to Participating Securities	$	0.1	$	0.1	$	0.4	$	0.4

	Three Months Ended				Nine Months Ended
	Oct. 1, 2017		Oct. 2, 2016		Oct. 1, 2017		Oct. 2, 2016
			(In thousands)
Weighted Average Shares Outstanding		60,555		64,241		62,167		64,721
Participating Securities		463		564		463		564
Shares for Basic Earnings Per Share		61,018		64,805		62,630		65,285
Dilutive Effect of Stock Options		42		37		42		37
Shares for Diluted Earnings Per Share		61,060		64,842		62,672		65,322


	March 31, 2024				December 31, 2023
	Outstanding Principal		Interest Rate(1)		Outstanding Principal		Interest Rate(1)
	(in thousands)				(in thousands)
Syndicated Credit Facility(2):

Term loan borrowings	$	95,988	6.26	%	$	121,658	6.61	%


5.50% Senior Notes due 2028	300,000		5.50	%	300,000		5.50	%

Total debt	395,988				421,658
Less: Unamortized debt issuance costs	(4,204)				(4,445)

Total debt, net	391,784				417,213
Less: Current portion of long-term debt	(8,523)				(8,572)

Total long-term debt, net	$	383,261			$	408,641


	SHARES	COMMON STOCK		ADDITIONAL PAID-IN CAPITAL		RETAINED EARNINGS		PENSION LIABILITY		FOREIGN CURRENCY TRANSLATION ADJUSTMENT		TOTAL
	(in thousands, except per share data)
Balance, at December 31, 2023	58,112	$	5,811	$	252,909	$	320,833	$	(34,016)	$	(119,590)	$	425,947
Net income	—	—		—		14,179		—		—		14,179
Issuances of stock related to restricted share units and performance shares	472	47		(47)		—		—		—		—
Cash dividends declared, $0.01 per common share	—	—		—		(589)		—		—		(589)
Compensation expense related to share-based plans, net of forfeitures and shares received for tax withholdings	(311)	(31)		(324)		—		—		—		(355)
Pension liability adjustment	—	—		—		—		458		—		458
Foreign currency translation adjustment	—	—		—		—		—		(11,092)		(11,092)
Balance, at March 31, 2024	58,273	$	5,827	$	252,538	$	334,423	$	(33,558)	$	(130,682)	$	428,548

	Restricted Shares		Weighted Average Grant Date Fair Value
Outstanding at January 1, 2017		505,000	$	17.05
Granted		248,000		17.89
Vested		284,000		16.61
Forfeited or canceled		6,000		16.99
Outstanding at October 1, 2017		463,000	$	17.77

	Performance Shares		Weighted Average Grant Date Fair Value
Outstanding at January 1, 2017		368,500	$	17.20
Granted		354,000		17.80
Vested		31,000		17.22
Forfeited or canceled		22,000		17.29
Outstanding at October 1, 2017		669,500	$	17.51

	Three Months Ended						Nine Months Ended
Defined Benefit Retirement Plans (Europe)	Oct. 1, 2017			Oct. 2, 2016			Oct. 1, 2017			Oct. 2, 2016
	(In thousands)						(In thousands)
Service cost	$	423		$	260		$	1,204		$	781
Interest cost		1,426			1,610			4,138			5,058
Expected return on assets		(1,697	)		(1,876	)		(4,920	)		(5,880	)
Amortization of prior service costs		9			9			26			27
Recognized net actuarial losses		318			169			930			537
Net periodic benefit cost	$	479		$	172		$	1,378		$	523

	Three Months Ended				Nine Months Ended
Salary Continuation Plan (SCP)	Oct. 1, 2017		Oct. 2, 2016		Oct. 1, 2017		Oct. 2, 2016
	(In thousands)				(In thousands)
Service cost	$	0	$	110	$	0	$	330
Interest cost		314		317		942		952
Amortization of loss		91		203		273		608
Net periodic benefit cost	$	405	$	630	$	1,215	$	1,890

	AMERICAS		EUROPE		ASIA-PACIFIC		TOTAL

Three Months Ended October 1, 2017:

Net Sales	$	148,082	$	66,677	$	42,672	$	257,431
Depreciation and amortization		3,386		1,646		2,211		7,243
Total assets		274,946		255,330		186,966		717,242

Three Months Ended October 2, 2016:

Net Sales	$	147,500	$	62,682	$	38,167	$	248,349
Depreciation and amortization		3,635		1,253		2,213		7,101

Nine Months Ended October 1, 2017:

Net Sales	$	433,461	$	180,506	$	116,266	$	730,233
Depreciation and amortization		10,064		4,257		6,458		20,779

Nine Months Ended October 2, 2016:

Net Sales	$	426,677	$	181,904	$	110,529	$	719,110
Depreciation and amortization		10,903		3,824		6,598		21,325

	Nine Months Ended
DEPRECIATION AND AMORTIZATION	October 1, 2017		October 2, 2016
	(In thousands)
Total segment depreciation and amortization	$	20,779	$	21,325
Corporate depreciation and amortization		1,424		1,149
Reported depreciation and amortization	$	22,203	$	22,474

	Total Restructuring Charge		Costs Incurred in 2016		Costs Incurred in 2017		Balance at October 1, 2017
			(in thousands)
Workforce Reduction	$	10,652	$	1,451	$	6,537	$	2,664
Asset Impairment		11,319		8,019		3,300		0
Lease Exit Costs		5,116		27		5,027		62

Impact of Changes in Foreign Currency on:	Three Months Ended October 1, 2017		Nine Months Ended October 1, 2017
	(In millions)
Net sales	$	4.0	$	(1.0	)
Operating income		0.6		0.2

	Three Months Ended				Percentage
	Oct. 1, 2017		Oct. 2, 2016		Change
	(In thousands)
Net Sales	$	257,431	$	248,349		3.7	%

	Three Months Ended				Percentage
Cost and Expenses	Oct. 1, 2017		Oct. 2, 2016		Change
	(In thousands)
Cost of sales	$	158,887	$	155,431		2.2	%
Selling, general and administrative expenses		67,633		67,175		0.7	%
Total	$	226,520	$	222,606		1.8	%

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 or Programs⁽²⁾

July 3-31, 2017⁽³⁾		21,638	$	19.67		20,010	$	75,037,949
August 1-31, 2017		1,311,102	$	19.04		1,311,102		50,077,293
September 1-30, 2017		0		N/A		0		50,077,293
October 1, 2017		0		N/A		0		50,077,293
Total		1,332,740	$	19.75		1,331,112		50,077,293