TILE - Earnings call transcript Q2 2019

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning. My name is Natalie and I’ll be your conference operator today. At this time, I would like to welcome everyone to the Q2 2019 Interface Inc. Earnings Conference Call. All lines have been placed on mute to prevent any background noise. there a remarks session. speakers the will question-and-answer be After [Operator You. Instructions] Thank

begin Communications, Corporate Needles, your you Christine may conference.

Christine Needles

hosted President Natalie. to Vice regarding results, Interface's you, President conference Jay Thank Good call second morning, and CFO. quarter Bruce CEO; and and and welcome by Hausmann, Gould, XXXX

Private During call, the XXXX, the of Securities comments of XXXX, all Litigation regarding are of business, which Securities meaning today's historical within information of the the Exchange Act conference Securities and Act not are management XXXX. Interface's forward-looking Reform statements Act

Forward-looking current statements on team, as belief include statements based. regarding assumptions the as expectations intent, or which the are management of statements such our well

uncertainties results are of in from heading expectations of any fiscal to involve not statements and regarding future filed of such a statements, year forward-looking as Securities including XX, acquisition company's Form Commission. risk performance the associated conditions that the the for System, XA all Exchange in which to direct has number XX-K uncertainties and listeners economic XXXX, risks with the Annual We and Report industry under and our the Risk our actual discussed differ Any and risks ended document. as of Item with uncertainties the Factors on materially guarantees cause well and that been the interiors December commercial Nora could

this call such listeners no to any forward-looking cautions responsibility made update and assumes company during to revise The reliance place or not statements. forward-looking on undue statements

section non-GAAP filed SEC as release in call the uses is comparable GAAP of useful of Relations investors, www.interface.com. directly and a website, this accessed contained for most which can earnings in Interface information of which these to yesterday, The the be explains Form GAAP well measures comparable to the Management's non-GAAP as also additional certain any purposes the Interface of X-K as which the non-GAAP to material measures refer measures measures these remarks as believes provides with the well measures. non-GAAP Investor company's company's reconciliation measures, presentations why during each

is call material contains this permission. be and without expressed broadcasted Interface. It Lastly, for rerecorded recorded or may Interface's copyrighted being rebroadcasted not and

to call it. broadcasting and the confirms on taping your consent participation the company's Your of

call I'd to Gould, to Jay like Now, turn the over CEO.

Jay Gould

Good second a thank and sales morning, results discuss for on you pleased up share quarter the us the of year. X% solid call. organic our for up with quarter last second and outlook I’m second the of net sales quarter We XX%, joining versus delivered half our year. to second this and

the keeping goals entire growth. their on Thank you to another strategic commitment to global us solid delivering for quarter another deliver year for to interface track team of and our

to macro back we execute of stronger as on the the a company. and continue XXXX our enter creation We environment, slow growth strategy value despite half

in market gains customer key positively Floors world, Germany, Increasing in and U.K., interest States, United Carbon our markets Customers revenue our have share Neutral now India. move of program the including currency. our helped the two in drive the local both rubber. and approximately Those responded resilient to and at for into rates product LVT around lines account digit grew double flooring: XX%

business XX% nora second currency, same grew to our In flooring in year. in standalone the business last local quarter, compared the period nora rubber the

CRM a a sales system and efficiency with drive sales robust quarter platform pipeline. transformation for also to in selling the greater made visibility tool our launch providing the in strides new into We second much our our force

costs gross expected in-line and XX.X%. drove full-year track quarter yielding on remain were a our remain Raw profit of second in XX-basis adjusted as margin point Our as increase gross material productivity expectations. in a year, versus adjusted with the they initiatives prior quarter margin the

around the markets hold pricing and saw We also world. increase number of actually a in

legal the SG&A to quarter. normal to for the these $XX EPS of legal announced planned the related adjusted expenses of $X.XX SEC delivered diluted expenses with to Together, managed of previously sales, XX.X% were higher despite matter. million level results net an

earlier, moderating are business mentioned our share. we growth in industry, but take the with broader to tile carpet continuing are As experiencing we market consistent

last in This our LVT, involves have tile a volume the space third rubber carpet customer and our which strategy and us prior market we while States the tough we we to in of lead That product including to carpet large in significant that acquired year. has second comparison recall expanding dynamic XXXX years launched United drove we which last continue said, quarters the product in currently broadening space, tile year. resilient our offerings line the a where

with With we organic quarter flat finished orders comp, challenging year. last this second the versus very

anticipating be of growth QX quarter range X%. to followed X% the by to X% growth we’re in So, organic of to organic the fourth X% in

I call will Bruce. the With turn that, over to

Bruce Hausman

Thanks Jay, to and good morning everyone.

year, net up impact XX% XXX year-over-year. million was basis or sales including quarter with negative were million, of X%, currency expectations. Organic were prior our up Second sales $X over the points which $XXX in-line

sales were more year quarter at up excluding Americas grew previously the order and Looking compared in to Americas last in legacy in of large mentioned XXXX, detail, the X%. the in second X%, sales revenue customer the

were second were to exchange USD U.S. headwinds last were the in down to the Asia last to EMEA and to in U.S. local local USD quarter dollar due in driven largely to sales in dollars versus sterling Australian Legacy rate compared by X% year, up Pac but currency, but exchange in down of the in euro year. X% due X% versus grew dollars, pound sales rates USD X% prior. currency Legacy to currency,

driven Market was healthcare. buildings, second quarter our corporate and growth Global by office, In segments, public

half million XX.X%, over the quarter sequentially positioned gross well pleased progress the of back XX.X%, Nora enter margin impact profit year our and the gross included of as were purchase which us margin margin improvement XXXX. on margin throughout the with X which period. results, we was in very amortization. profit of prior initiative, gross productivity into quarter the profit a Adjusted our accounting point We Second improved XX-basis was

unusually of quarter $XX were legal expenses matter. QX on line, a in of adjustment. SEC related SG&A in had a net to high expenses incurred tax million related approximately million or tax the million item second We income in the quarter. Separately, the contributed to quarter X.X sales. the This rate liability reduction [indiscernible] to favorably to tax second expense $X the we a XX.X% low

million, $XX $XX per the line, last in operating year. Adjusted compared transaction-related compared more we QX operating quarter QX, was purchase Now, expenses the to income $XX XXXX, accounting looking year $X.XX with operating compared period, Nora at million prior million, In $XX QX XXXX. per or income year. income to income in share, million of recorded in $XX net second income net share million, last was in XXXX million diluted $X.XX to QX or of $XX of excluding diluted

per million income or same million EBITDA $X.XX quarter share XXXX, to XX% net representing the in million of was QX $XX adjusted growth last Adjusted compared year. year XXXX, or was diluted million, Adjusted diluted EBITDA. period the in in $XX compared in $XX second last $XX per share $X.XX to

balance the cash sheet to Moving flows. and

the our liquidity strong with borrowing revolving Our quarter. of remain [$XXX the under balance end and credit availability of facility at sheet million]

our [$XX XXXX to sequentially reduced working XXXX metrics. from inventory we million] We by capital QX QX to also improve as continue

cash debt, gross with also on hand We cash million quarter XX net minus debt, million at is debt was simply of and million the on the $XXX therefore of the end which hand of XXX ended gross quarter.

out as in laid adjusted basis, trailing EBITDA XXX On is the release. XX-month a on table million approximately our press proforma our earnings reconciliation

pro of forma EBITDA X.X. net debt Our the approximately leverage This over forma taking adjusted to ratio, million the adjusted million XXX trailing debt XXX divided the EBITDA XX-months. net [indiscernible] pro calculated by result by as was as

second quarter, in Nora interest acquisition, to occurred measures. to non-GAAP last million QX table These our non-GAAP And of was million a are increase reminder, to quarter Interest please $X to was the all due of financing in reconcile expense $X which refer the expense third And release the compared the the year. in press measures. as in with reconciliation GAAP the XXXX. in

In Depreciation in year compared to we was as second last compared share repurchases year. $X of strategic million manufacturing expenditures with were expanding and including last objectives, to our in-line in million we $XXX and the capabilities previously under to $XX capital expectations quarter, initiatives. second also million XX $X quarter, our on million the productivity And available announced execute the repurchase remaining $XX on program. share continue executed amortization QX, million at million

provide call back the hand Jay outlook. to update XXXX to to like on would our an I now, And

Jay Gould

Thank Bruce. you,

at take we in company commercial is flooring Our foreign also share working. with portfolio of is transition to XX% double-digits now our carpet. represents into market growing margins. And accretive Resilient continue a

to we expect to a results strategic So, environment, we the achieve slowing despite on and year continue targeting execute agenda our macro XXXX. in we the strong as following are

XX%. to of basis a versus growth XX.X%. XX.X% of sales Total net to of profit SG&A XX.X% XXX gross the XX% XXX sales to growth Organic approximately year, a X% points to range X%. sales. prior to equates percentage points margin basis increase to which Adjusted Adjusted expenses of of as net

effective million and million and is to interest anticipated share be XX%. approximately XX to is the anticipated company other to are million shares. tax Full-year Diluted be be projected XX to approximately XX expenses count rate

EPS to approximately adjusted we $X.XX. $X.XX QX QX second at adjusted earnings, to by looking So, half anticipate the exceed EPS the

be margin and to million to manufacturing creation and million capabilities Capital million, growth plus expenditures to greater of value are expansion. expand and the that forecasted of fund $XX $XX $XX gross capital, approximately capital investment will for optimize full-year yield comprised our ultimately maintenance initiatives

to the described gross margins objectives results operating as full-year we XX% to our we X In over set and addition, XX% years. EBITDA margins next XX% achieve have in XXXX mid-term margins, X call,

to Interface growth. keeping team of for on year quarter want for us to again accomplish another yet very I solid and the another thank track global

to very and back helping win inspiring We are marketplace. the our mission that vision. who continue an clear support take and a on owners us you we our our is aligned to climate in Thank share have Interface customers, strategy

do open with us I’ll please? up could questions. that So, Natalie, call that, for the for you

Operator

Instructions] Our the Michael Certainly. first comes Nomura/Instinet. of from line Wood [Operator of question

is line Your open.

Michael Wood

Hi, good morning.

Bruce Hausman

Good Mike. morning,

Michael Wood

second third there numbers timing? else expecting in that contributing fourth ramp, SG&A mentioned productivity quarter timing growth you quarter anything to The half, the you that the is organic like or is are

Jay Gould

would I comps mean easier Well all, say top the have we we of quarter. first I on than the in third comps, lower line, fourth in have quarter the

is it. a So, of that driver

growth have and greater we’re in continued resilient quarter. push business floor expecting got we Secondly, even in the LVT into fourth the

Michael Wood

Great.

us you mentioned next aware in how bumps much or longer-term there a major the remind give some milestones, be so just have, going you’ve be should or far? can savings you any that those us the row work when margin disruptions and achieved that of may You are towards you of be goals the can to of you we

Jay Gould

Well, is there lot. a

unpack me Let bit. that a little

XXX our year, of margins of have for have we piece key our A end project is complete three project. all, anticipated asset working harvested transformation from gross the to be of that $XX the U.S. million XXXX will we’ve on with that that will basis First points. been that years that expanded by will that XXXX and we

years additional do We over margins margin to XX% three us to help on and have plans gross XX% operating productivity margins. that the next

in XXXX, our is talk our productivity but going plan say which end the we the will those pipeline I third level present for forward to beyond, detail to fairly of leads about at go confidence kind robust, quarter margin of that targets. We’re in that as achieving the and

Michael Wood

Great.

in just profit your that? I what can to guidance your contribute basis points outlook. reduction gross the Finally, of XX would in ask In

Jay Gould

we anticipating that initiatives we’re It’s Yes. as – expected productivity started still year. the we the

million XXX improvement net offset $XX of roughly margins. million million is $XX gross of basis productivity points XXX gross to in which basis So, of at $XX to by yield inflation productivity, point

at our XX China very is a versus a the significantly order in volume, from going where facility, manufacturing assumption it some basis but margins. we’re at particularly took to related mix issues coming in largely expecting reduced some So, we in Europe, points government came reduction and volume in large nora miss some

bit of out fixed leverages little a of Europe. bit mix, cost So, little of

Michael Wood

so Great. Thanks much.

Jay Gould

Thank you, Mike.

Operator

question And of Thompson next our from the Thompson Research line comes Kathryn of Group.

is line open. Your

Kathryn Thompson

and LVT clarify also, market? the in geographic where in On sales terms the you. breakout for granularity order and the category? just resilient of Thank and today U.S. other rubber versus U.S. growth resilient segment, could European separately of Europe on you get we today the sales And markets more are the the broad versus and

Jay Gould

the we the When United had the business a strong business, is business year first and very third of based in Nora the on a but growth really a half of globally is States about in United in States rubber. the that

bit great Germany, and the we Switzerland the growth in countries Germany, first across of Little really had half call the in German-speaking region, dark strong what is Europe. of performance weaker also which We Australia, there. rest

We reduced margins strong in very China albeit first also half for saw the year. of growth with the

Bruce Hausman

XX% [Indiscernible] XX% roughly numbers Bruce. is Asia around XX% in of and in about is that our EMEA, revenues Roughly in Kathryn. Americas, It are Pac. Asia,

Kathryn Thompson

Four specifically resilient categories?

Bruce Hausman

giving total. actually you by with don't, we the numbers. don't break really category I am That We isn't product [indiscernible]. total out

Kathryn Thompson

But helps as forward growth story. the pile if it just that build to growth category category be in would bridge helpful it something be important you're for double-digit carpet be grows having versus will going for because that in the flat more terms, to that

where trends on China seeing are obviously give a but China and softening the right a a more little more in bit Europe question do as bit the the operating color little has some European just not company could you’re and to specifically weaker understand surprising little more you’re to little bit Europe clarify you what now. U.S. challenges clearly also see So, second in in seeing a bit market, or to you seeing trying of more in in better the on markets

Jay Gould

interesting. Yes. orders slowdown quarter has board. far strong still pretty I legacy would growth a in business say very Europe and the the The soft soft, year, dark the across is South on UK been region, much we’re so this look the seeing

you very Kathryn. been the business economy, you on legacy across So, is overall, the feel then that going it’s some, sentiment market has anti-American slowdown of the China know I you think on. difficult a know of there And Europe. pretty broad slowdown can that China literally

offset eye business, year and weak that to India where fabulous been an continue The coming say us, for will new keeping our in offices another for of So, China. in out that that orders I would accounts have many and of have India. on global India revenue

pleased with very the performance there. So,

Kathryn Thompson

understand new just any geographic question follow-up much. And penetrated? continuing particular Okay. that new are strength the line, to finally, getting good what – there been really Nora that are are are and you some any you’re strength? out, end-markets seeing it a you as there you, that hadn't on synergies on very top Are markets seeing fully markets Thank markets particular roll are

Bruce Hausman

Nora some great in growth We’re seeing growth and the of in business. healthcare the education on piece

used that So, treads. very stair an as address in saw code encouraged that. the to base office I with better opportunity, in think We rubber in market where and it's

So, cross-sell. there an in to accelerate will our growth a is of back And do the us with job half better there. we think year that the for opportunity I

Kathryn Thompson

very Perfect. much. Thank you

Bruce Hausman

Thank you, Kathryn.

Operator

line And our the of next of from comes Keith question Hughes SunTrust.

is line Your open.

Keith Hughes

Thank you.

to SG&A, the you talk up to wanted up? Just question on numbers you ticked a the XX.X, about contributions that did those get

Bruce Hausman

expense, expense. will when amazed legal added do mean, We some we year a we’re talk be still start I at [indiscernible]. Well, of have the about full-year

million to quarter. the X.X floated think second have I

impact. a So, is full-year going to that have

pull to a bit. of keep a as SG&A percent back little our on softened as sales top We’re trying line it to

We’re making on some our dollars. reductions SG&A total

Keith Hughes

the that last And quarter, is any accounting that? announced there investigate update Okay. on you

Bruce Hausman

No, we mean it’s have government an don't going the update. in I space.

responding to we’re request the get process. So, to trying to and

Keith Hughes

off currency? read And excluding am you question, me, hard I in hearing if is a currency time I again just you, could it growth, final geographic having don’t know just local the

Bruce Hausman

that Keith. got okay? I me Can hear you

Keith Hughes

barely. Yes,

If more it you time. could read just one

Bruce Hausman

hear hope I Okay. now. can you me

X%. order that the sales X%, XXXX, large that Americas So, in grew had to we the we was second excluding year [indiscernible] compared last and mentioned quarter up customer in

by to U.S. currency, Pacific last and quarter exchange Asia sales in U.S. X% but were in really were X% year, versus of were the driven dollars, currency, headwinds legacy more local versus EMEA Australian were sales rate to And that year. up again X% due USD driven down year. but down second euro in headwinds to in dollar currency local to exchange the by X% in dollars, legacy USD pound currency compared GST, last grew Our in last rates

Keith Hughes

you. Okay, thank

Operator

line Matt of Global from comes And the of McCall our Seaport Security. next question

Your line is open.

Matt McCall

you. Good guys. Thank morning

Jay Gould

morning Matt. Good

Matt McCall

ex So, think I growth at X.X to adjusted or when X%, you I growth order large so is the look impact large the impacts of that the one of that QX, the X%, growth what last year? large gave order Americas excluding X also order, QX that or that

Bruce Hausman

in Matt, Bruce. QX. It this impact is similar will we as a had in QX be

Matt McCall

Okay.

two so that, maybe, impact when I does the that four points get think about was to so, to full-year, what about or of that? [X adjusted order X growth question like points that is I on four the would X.X% that large for like And QX, of kind guess the of than that organic same to in points there in imply impact basis more for full-year you X] QX, something so X% maybe X,

Bruce Hausman

a the said have basis points I Yes. year Matt. That’s probably, lot. for XXX

So, I on could points rate beginning basis. a organic XXX to growth mean to yes, normalized basis the XXX add you

Matt McCall

the question, for mid-single-digit, And how so leads then important number, the number, is and carpet tile the that and kind that next right the some talking long-term is GDP growth of of you are in to the maybe view tile the of some Jay, pressures moves, facing the of manufacturing are the helping moves you the new secular carpet product some offset I'm in there? specifically right

Bruce Hausman

the for office of get on kind [indiscernible] surface GDP a secular because in back market. dent, I general, growth flooring superior a a of see the office don't I know and market in commercial point couple pressures, back year if benefits. of the making in resilient is certainly as moving to bigger carpet particular think its it’s we do pressure tile I it it’s is but flooring will particularly that in because

X% share and anticipate growth X% would well back over category continued growth coming carpet market time the that from see gains. I category, as we tile, both to rate as So,

part for now. is do XX% right of We believe, portfolio the new mean I our vitality

our new are if the you know responding that. products market, So, definitely customers the demand to capturing are in

we’ll including our non-PVC Additionally, some a as a backing, into portfolio tile, year, broader really next has have move in in carpet forever. portfolio we which been gap

and portfolio even market Carpet around we’ll into conversation we more the us a with innovation, move design So, have allow aggressive think, coupled be Neutral I that share. should Floors, carbon as

Matt McCall

key on I on, how the following was Okay. was and on when question legal projected legal guidance SG&A you much how specifically SG&A, then last That’s guidance quarter in was helpful that to in gave last one ask, up it think last maybe related quarter? much to that SEC range, issue

Jay Gould

It was levels modest, be levels quarter. those the at And the high. that spending we with will expect mean we in you. we to I don't did continue perfectly honest think didn’t second frankly,

it quarter surprise of a of to the we So, how in bit much there. second was had invest a

Matt McCall

going the, you that be So, I'm the guess you get back? is, back, pulled what how pulled thought back some then to you pulling think where I’m was where you to can is question I you to out it’s and it said be, and then trying bigger SG&A figure at actually you’ve now you exactly you much going quantify what pulled what to is do what trying are

Jay Gould

for was $XX pulled this million million mean, we legal back significantly don't honestly I be. know. was or mean, going I it to whatever SG&A expense was for $X [indiscernible]

and not we'll little to that’s our back right going government, We're now with And Matt. soft. through some because the on the it tabs pulled trimming Europe tabs for the is in not bit everywhere. little then year. got deliver just the a and And process expectations have to it the because trim on pulled incentives back we we're – We go

Matt McCall

Thank you, perfect. guys. Okay

Jay Gould

Thanks Matt.

Operator

Darkatsh Raymond our the Sam of question And from line of James. comes next

Your line is open.

Sam Darkatsh

How morning good are you? Jay, morning Good Bruce.

Bruce Hausman

Good, Sam.

Sam Darkatsh

that terrific The obviously Two Nora XX% like-for-like than you called on and basis. a higher three questions. when you bought out Nora. or the growth That’s originally

from in to sell know you were but large made I of you Nora growth so, we more that targeting steady-state of I I the also two now best China, what you might sort the you a When tell? years holistically. mentioned moves mid-single Nora, a think next rate synergistic or at plus. know can you three look now number order kind expect or of

Bruce Hausman

much You growth. think know, the prospects to thrilled into has an Look, family. like I Nora X% I are [indiscernible]. it done the Interface team of range don't job the I long-term X% think absolutely with The fabulous was coming and in double-digit XX%. sales of more the kind am

Sam Darkatsh

So, over high-single-low next, how two three, four quarters double-digit or this sustainable the last? rate or know, don't might I so

Bruce Hausman

I for think while. a

expanded some will with think the I kind deeper core getting have think will markets of help. Interface also our I of with help we reach in geographical and

Interface take the are things with think deeper market selling where I We systems could there. we and the offers share like

Sam Darkatsh

appears I you're question. at still least have evaluation this debt finished roughly allocation, though the share and is had current Capital it Next is paydown, forward talk your versus debt-to-EBITDA, imperative times think about why? have authorization, at you modest X repo point you priorities your repo so going although where

Bruce Hausman

Really order. it’s Sam Bruce. Hey on priorities are go of there three kind this

the investments in business the P&L. showing productivity are in on is And up the business. First, the that we’re as investing making

So, us the XX% That’s and to just expansion as margin what to that product momentum. we seeing well. are continue the want we gets today that’s driving

then pay. also as we debt I think also well aware we focused on. you're deleveraging we second down and have The And that is which competitive also dividend are paying a

Sam Darkatsh

in include not there. you So, did share repurchase

optimal what’s is the structure two So, turns the now you see from it roughly as capital today? three

Bruce Hausman

Yes.

targeting as I deleverage. we think toward we’re that’s continue to what

Sam Darkatsh

there until it just way or a process it other? I or last but on kind continues a question, the with or do my continuing do of cost for then then and of cost the windows them again, apologize initial you kind And anticipate one SEC long it. is the decision horse as upfront jumping an the is continue legal as away legal Got they

Bruce Hausman

know, answer, say if you definitive to give impossible you you is it were to a never Honestly, almost what’s our but guesstimate. best

we little expense best of quarter, we – that but bit get bit incurred that’s estimate don't a of, we of hump not ongoing had know our is had had a You leverage. a little to this we for out

Sam Darkatsh

might least is rate something that of half there something be we should bake in until resolution? So, at

Bruce Hausman

what wouldn't, kinds saying not at continued That’s with these and rate. I’m think was matters that you it just to be would saying. was, that something money I disappointed high of it quarter, But that have not I’m you just saying I we’re I'm It’s not spend. if I to half unusually if spend anticipating. that or need

Sam Darkatsh

Understood. gentlemen. Thank it. you much very Appreciate

Operator

And question MacGregor from of Longbow Research. the our next comes David line of

Your line is open.

David MacGregor

on quarter. congratulations Jay, good a

Jay Gould

Thank you, appreciate sir, it.

David MacGregor

of your LVT project What Nora wins and now with include percentage and ago? year how does compare that

Jay Gould

Well, is XX% to I percent continues I mean include all that can it’s tell and it orders the of really you both, and roughly grow.

David MacGregor

would that have a What been year ago?

Jay Gould

said an really competitors interchangeable products as I do mean folding helped are design the selling idea our of community. are who same will it really has the has helped that thing. as would that working. they of same is not really I And I'm our XX and the about design sounds, This the any aware have fact or integrated size less. odd

David MacGregor

away? winning you it of jobs remarkable due to the to talk offering, about XX The That’s get XX. versus ones breath aren’t or just is price

Jay Gould

categories Well, in we the low price point you don't compete as know.

it take to trying rightful and I amongst a of we design XXX%. share, the in believe. is unfortunately, needs our The belief that going is players from to what it's we're a – what lose there's Because ones perspective, market democracy is the a some our that be salespeople to win market do I'm So, I those tell which don't table.

we and lose to deals is because market we with enough As time don't our XXX% is our share customers. the have spend rightful

David MacGregor

just the So, around? people spreading are business

Jay Gould

Yes.

David MacGregor

anniversary On the first it’s year of what’s Nora. acquisition, been the acquisition, about guess, accretion? expected I a we’re the very obviously successful

Jay Gould

perspective? From an EPS

David MacGregor

works. Show that

Jay Gould

Nora contribution, break out page from we So, the David. legacy the don't the really on business

David MacGregor

the that $X.XX expectation? I you company measure acquired do time year, how guess we at the $X.XX to initial thought could do you the against Well first you in so

Jay Gould

do are provide accretive So, think we're is It’s line so to integrated revenue the we I necessarily difficult the don't businesses an every becomes and trying well companies. do. – we two two GP accretive Over of to of components the also we frankly accretion it they separate line. from and the what what two We will an integrated become businesses to, quarter, time, break out the together. to oil which provide, different being one

David MacGregor

your that to just Sure. accretion you later can at held thought you you’re behind it would you initial or fair be up? are seems ahead But how circle you I just are are in-line, if expectation the communicating year mean to guess, that it, up a see purchase, back against and and how trying expectations to around time able the of stack quantify be where you you you does just of or with

Jay Gould

from No, I think very has see pleased. it, growth you the, acquisition very rates as getting you a from the And very, out synergies as acquisition been great as are can track. it’s, mentioned the and on we're much the that we

Jay Gould

that’s I Look, think fair.

year. the of end the at back circle will We

So, the will talk quarter about third see that. end more we results, when at of the we

in been belt. working work selling working challenge integration challenges. have whole the some States deludedly continuing they from feel get cross-selling, in that’s full-year margins, the really Top has frankly will arms in Germany. would line environment of We around I our the our gross under mean, quite hindsight. United you category. and manufacturing the What the know, a talked new we’re The like a what participating organization first to in the I margins, We're for to our the about and quarter. that a what is I well are working. and We say, is of

the a works work new slower to and liked, than council Germany little it’s around. wanting that’s coming in We’re bit been with but I would have

has it income operating the positive. been at So, line,

yet, be our which of find We reductions kind haven't we through through stage gone as headcount an synergies the better in going systems opportunity place. of any going to to is get

year live this there we're in of So, quarter our will pick better the organize integration we cash as of couple order rollout consistently. an a be opportunity going global, that fourth and starting quarter us with which to will give

carpet fundamentally at been tile has little line when bit our to think I soft. and it’s frankly has It that’s good a added bottom So, a working. been time

David MacGregor

appreciate That’s Jay. helpful. I Great. candour, the

brought has tile Just last competitively? in carpet There been talk just Europe, capacity from how U.S. influencing question capacity in may new industry additional you industry and that be me. about into so

Jay Gould

We haven't seen it at David. all

So, was was once gross I to XX.X. delivered be U.S. expectation, - actually we We will out quarter that of None even wanted the of bips our XXX target the Americas. again, in XX, in I miss. and my hit about our from second our margin with coming say

on because I the think in it’s Americas capacity added of added the impact don't Europe. has our soft, had structure. in the but capacity is no So, [know-how] margin Europe

numbers little Europe. volume in line less Europe the inventory produced down We a lot a is Europe. soft in took Our we because actually are soft because bit in top

had we environment manufacturing price. in Europe. in that competitive Hopefully cost fixed It’s really helps. from leverage So, challenges not our some

David MacGregor

into third It production continue does expecting those Are curtailments help. in you to the quarter Europe?

Jay Gould

Yes.

David MacGregor

very guys. Okay. Thanks much Alright.

Operator

question from line last our comes of Baugh John the of And Stifel.

line is Your opened.

John Baugh

it commentary the orders the the business? strategy versus of points, where operated with of tile end. course tile terms had low you you. you I what of times general terms growth you, that What custom curious carpet high of quick mix good are end terms to just there stock Thank a is the price seeing morning. more and in you, carpet around mix, question the just U.S. you versus U.S. of a Thank to in high strikes are order? are most low of Are on you is, in and make me the Jay, seeing I'm tile where in in

Jay Gould

carpet, but plus selling also we’re lot of carpet. a selling ironic, we’re of $XX, a lot It’s $XX $XX

again product, area top branded of is $XX have sells plus and booming selling as which at lot commercial We business yard. square a the in a a floor the tile rugs, that carpet

John, did of there is So, we is, things our in you you every the ago few years remember a design approach better, good, one have in and a approach. best might design,

And of we as can engineer the kind purchase into we ourselves so, strength. value get

growth our at end So, and the the we’re high-end seeing portfolio. of low

John Baugh

back just then And Nora to Okay. really quickly.

in integrated sales, in and big of to is China early get of course not Interface, mentioned area. from the were trying order, I’m you you're is a seeing If benefit exclude owning whether sense you strong a you commercial and to that opportunity, of Nora that obviously which this, the U.S., innings

sound whether any winds like would curious you of being but in that So, U.S. just yet, chalk occurred the to part seeing it up I'm doesn't that’s Interface? you’re Nora

Jay Gould

answer the Germany, in markets really the of scale. Both is and think two I Well, U.S. are yes. which

know, of still sharing And of it’s early can is read working. that sharing into countless bringing off numbers account one the worked. days, I individual the is deals there have but I salesperson You of mean another needs, opportunities

John Baugh

And Great. Thank good luck. you.

Jay Gould

same the when the John, it CRM way, get on get by all platform. will better we

May look deal will we that. so in in we will fourth the accelerate The help can salesforce.com the one go Nora integrated at having platform. took people people live quarter. all new live So, our Interface actually system, the in And activity

John Baugh

you. Thank

Jay Gould

John. Thanks

Operator

further will no questions over there now time. at closing And are I for this to Jay remarks. turn it

Jay Gould

thrilled the I’m to Thank market take with you, that Natalie. the for Well world team into the you next Interface you. continue around quarter. another thanks and interest company I’m and of to your call, solid share. progress in we to on investment Interface. once very Talk quarter. appreciate a the and excited Thank to the again everyone continued I company, transformation growing the

Operator

This today's call. conference concludes

great day. disconnect. now Have may a You

Interface (TILE) 27 Jul 192019 Q2 Earnings call transcript