TILE - Earnings call transcript Q1 2020

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

Operator

Ladies and gentlemen, thank you for standing by. And welcome to the Q1 2020 Interface, Inc. Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. Instructions] [Operator

Corporate today’s to recorded. to hand today, Needles, advised would Instructions] your is Please Christine like you. now the Director, conference be ma’am. [Operator being I speaker go Please ahead, Thank Communications. conference over

Christine Needles

to Chairman Good Hendrix, regarding first by CEO; and CFO. and Bruce conference quarter morning Interface’s call results, XXXX and hosted President welcome and Dan Hausmann, Vice

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

as and listeners filed on the to all the Report XX, fiscal lawsuits, commercial discussed company’s Form results statements from of and Forward-looking with future such current Commission. including interiors risks number intent, which conditions we which cause of economic operations ended forward the under the uncertainties in similar statements regarding XA are Factors Annual or Exchange that risks based. and investigations related for could well the and involve Risk legal statements actual COVID-XX reduced and ongoing the document. belief of We assumptions Securities and subject materially XXXX, with the to from for to Item guarantees uncertainties statements industry, risks well including time the as are been as demand XX-K pandemic, not Any of our December in differ to products, that interruptions year and to on our include expectations manufacturing has direct and statements, the such a uncertainties looking performance heading are that proceedings risks as to our management any associated time, team,

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

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

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

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

CEO. Chairman over to Now, and I’d call Hendrix, Dan turn like to the

Daniel Hendrix

our today. Thank well. you, Christine. and for thanks Good joining that Hope morning everyone families call and their and safe are

And our first I we navigating COVID-XX we’re current into business to and give the through how jump you want some before related to pandemic. context conditions quarter results,

ensure our to the operational. love fully past lot our We are talk work few safety disruptions our I’m concern that to minor We’ve strength stability business. and over to primary Interface in world. manufacturing our But the months. say pleased about a leading facilities purpose, industry the experienced employees is operations and first as of foremost health our The and we of in

transmission we local risk, align operations. In here provide to our seeing with as continuing support customers to up remotely of factories, working especially, as to while us step and world, Around the our to we teams requirements. continue work action our We’re environments our in adapted communities. many our reduce

distancing, social plants our us best running and that keep our to following procedures cleaning commitments. meet practices carefully and for includes customer That increased allow

we that customers serve to extensive may capabilities well-positioned mitigate as occur. is interruptions, manufacturing tile to carpet the with can Our flex around they world

proud I’m with invaluable connect customers. as organization, ways and found new selling agility ingenuity to our our they of of the

and fact, In working, been travel with designers reduced specifiers and with we’ve connect remote able more frequently. to

in pandemic. of anything the impact terms taken of the business haven’t lightly We

team structure launch with of the edge, We’ve success. to costs to cost declining reduce swiftly our for steps that maintaining to the foundation align products position innovate management demand Our our long-term protect right-size while acted business to taken company. to us continue our and competitive new

specific making and to not to hard and States. what various participating subsidy a government-sponsored more while programs, outside took programs do, importantly, and spending We’ve our and other strategic at time-and-pay do. introduced employee look all reviewed We choices programs, redundancy, reduction discretionary in wage-support the furloughs projects, what schemes about voluntary retention United

right-size implemented voluntary our to production needed the separations in also We’ve scaling been meet as manufacturing demand. organization. facilities also to We’ve

of One up in cost the structure its roughly is production flex tile to needed. strengths down is plants as Interface’s variable. ability of XX% and And carpet our

and contributions. savings company non-qualified In matching pay addition, XXX(k) in merit-based plan, suspended we increases

structure, lower of benefit a variable XX% compensation. base. With taken We activities, SGA of of out also from full-year compensation significant our our performance-based anticipate cost or all million and we’ve these commission $XX

credit the of liquidity, We’re $XX diligently with of managing $XXX our comprises million million and hand cash under our quarter million flow availability cash borrowing facility. ending of revolving $XXX on

strong the declining our predict capital and to is results. from Interface what that we We’ve is past it will I to economic resilient With holds, downturns first working like Bruce? capital year a future challenging. can’t benefited that, purpose know company the quarter turn profitability. to that last. I’d is to core. reduced built Bruce while reductions plans discuss And in spending We’ve over help fund anticipate This uniquely and pandemic a and centered for that the weathered

Bruce Hausmann

the the everyone. the year, good government had a strong and to impacts you, but as to progressed, issued morning, start Thank We the quarter and first orders globe. pandemic Dan, around of were began see COVID-XX

essentially shelter-in-place was at but the considered spectrum required, Our global government social direction. wide other directive, of explicit to local was geographies construction operations still full where experienced a measures government commerce where and distancing stopped essential, were from lockdowns,

severe lockdown, in a severe more more the The we decline precipitous the saw revenue.

Fortunately, and delay customers we’re them. cancel mostly seeing projects not

the $XX fairly from at it April XX%, where XX% Americas, XXXX. end EMEA, there approximately be down at was said, backlog broad and XX% is pressure orders and XX% will as this phenomenon That earnings with based million was were up the quarter in a minimum, down approximately Our second on of orders Asia-Pac. approximately in in

not the week the as optimism of recent and for mostly moving base us order find customer backlog, Sources and stabilization them trends. orders in are X delaying our sequential is cancelling average growing

see Germany. restrictions China even like and order sequential ease we’re Australia, fact, geographies up turn starting trends lockdown in and to In and were

for in resilience in And a is quarter extra period, healthcare, XXXX. fiscal down year markets. Interface, the pipeline XXXX. context reminder, from sciences our education nora business, week QX as XXXX in to QX see in here X% XXXX versus XXXX a particularly first rubber and continue weeks life mind, quarter We in strong is that in quarter versus of be Net XX information had a of XX fiscal supported the and benefiting that With results. including is on the weeks more year were first of major projects our week large sales first the XX prior

X% translation sharp of and business a February a strong negative pattern growth with Organic in million Resilient first excluded concentrated offset quarter. currency by in March. declines carpet our January throughout the with in flooring in X%, strong the clients $X the Sales results, which sales impact declined in were quarter down maintains quarter tile. Americas the

February such dollars were due results the impacted industrial. education U.S. were particularly in markets local by and went rubber up currency, Resilient up healthcare, to drove business, X% in Similar in headwinds. X% sales declines EMEA January key American March. to flooring and in our as strong currency growth, negatively

Australian were in last local dollar. U.S. due were first to to down largely down Asia-Pacific the in XX% XX% Sales compared dollars, currency but in year, quarter weaker

down the Our on of by had and end start other was it in significantly. local was performance the in hand, Australian the earlier flat a business Asian in to our At up double-digits quarter, business, the strong currency quarter March. despite impacted the pandemic year

hospitality, market in global education living strongest and our the are segments In QX. growth

by tile of from at quarter quarter. despite encouraged periods the throughout margins, the declines closures resulting in carpet different plant several production gross at We’re double-digit our facilities our percentage temporary

quarter a XX XX.X%, First quarter up basis versus first improvement XX the was last points point XX.X%, margin profit year, margin adjusted margin gross was last gross basis gross profit year. profit gross margin over adjusted and profit

million sales. $XX in or SG&A first were expenses sales. SG&A expenses of of or $XX XX.X% were Adjusted XX.X% the million quarter,

Asia charge, that literature, conditions the the that for of non-cash goodwill charge determined our we Including in in is discussions last million review with with we with performed analysis operating required after declines and recognized goodwill you the charge. significant macroeconomic impairment indicators Northern loss $XX an external of in compared first non-cash QX, quarter, $XXX the of and of we in resulted intangibles. year. impairment in million accounting This QX equity a million saw auditors valuations, income market Given in impairment the operating along and a of $XX

first up income $XXX net per in income year. share. the loss quarter, versus $XX a share We $XX million Adjusted operating million EBITDA of versus compared operating of recorded Adjusted the share million, was last $X.XX million million a diluted XX% or net $XX in million XXXX per or $XX first to $XX last $X was QX, of last and million in Adjusted diluted loss year. up QX per in $X.XX was XX% diluted income $X.XX quarter year.

manage of where ended even like cash, other strong and quarter period Lastly, fund healthy first sheet bonus and expenses our as liquidity. payments remains we balance prepaid the a period and have of heavy on through We with balance though strong hand declining taxes. insurance typically this we use demand of quarter cash a the is as we cash vigilantly

first expenditures gross was X.X $XX a our million amortization the Net of of hand with million million debt $XX the on in end months minus last QX, in adjusted in by were XX resulting quarter QX $XX to XXXX $XXX loss adjusted million Interest year. and leverage Depreciation line was $X quarter million consistent times EBITDA expectations. of the of year. the $X compared year last QX to in first million debt compared calculated ratio Capital in last expense debt in divided at last and with net of or million, was was net cash EBITDA. as $XXX

like Dan. I’d turn that, to With call back the to over

Daniel Hendrix

Bruce. Thank you,

acted As the protect and business. of we’ve in underlying margins first you’ve effectively the quickly heard, quarter fundamentals maintained have

seeing move activity significant and Bruce order are severity our some bright as varying world the on in of degrees intake spots are of the demand depending we There as elevated. we the is However, pandemic. declines mentioned, in QX backlog around through

in market in our general, we challenging combined third significant because second the uniquely of environment in a a and quarters, that with expect the withdrawing level guidance. are We XXXX uncertainty of

As of in initiatives align demand. approximately in year we’ve and our and testing described cost million to taken Americas. structure adjusted million. steps million capital our to significant also have $XXX to We total with SG&A anticipate in result spending, expenses cost declining spending earlier, business investments including reduction backing to our $XXX $XX and planned of $XX million anticipate We’ve capital moderated technology the our

run should maintenance our CapEx forward, Going around be annually. rate $XX million

right our continue year unfolds. to as size We this spending will

win-win Our fundamentals in us climate to reducing This customers with change. closely that with business, carbon address manufacturing is launch Back the and an investment. this leading that innovation partner will later invest planet culture, are Take would continue costs for our Climate the we to in year. our also we strong, carbon negative allows of a be products our continue mission, to This our this is exciting reduce is industry as to including footprints our

Temporarily, office real needs. the design shift. other seismic and change in will longer-term, estate a COVID-XX we’re

creation working finding, designed social requirements. way adapt the have workplace provide getting We carpet people tiles, visual flow, to to place zone products that working begun across rubber all they’re new and effectively, distancing. already to solutions, important with distance, and develop A making, industry flooring transit as these probably we maintain while space in cues for social the customers LVT our modular often enhanced

in to our Atlanta, own an our with share fact, making prototype. immediate we’re headquarters as In plan early but we changes in customers

[ph] the faces education, overall While segments significant tile] such as see particularly healthcare, continued products, [rubber commercial life in market sciences. we challenges, and do interest flooring our in

risk of seamless infection well their spaces, the nora to healthcare installation, because suited mitigate are products Our ability durability, issues. for

and that Without in point we I’ve business know Miami team knew hospital projects Wuhan, that pandemic Center, been and the treatment able to the hospital one future. like support quickly of pride our China. located pleased to Convention say these in a of is changing It’s first coronavirus to support the types world frontline unknown be to conversion Beach must the a doubt, efforts. adapt

During our use they advantage, and size away to execution develop, and own speed strategy evolving our of these moving that new as our products new can our times innovative we requirements solutions. these to with

employees I world, purpose. closing, to and for business the In want their our around thank our to commitment

and important. safety so your health is I’m and Your your incredibly adaptability and of that proud of families resilience.

to continue from support we Interface. confident questions. than what Thank to our With remain this to Operator? and it ever you that open shareholders emerge it crisis a before. also have nimble as stronger more and for company up who customers that, I’ll takes I

Operator

Thompson Thank first Thompson you. Kathryn Your Instructions] Research. of question [Operator from comes

open. Your line is

Kathryn Thompson

questions for you thank Hi, taking my today.

we’ve up that adjust. being response realization seen you permanent, enhancing that so to of First, This changes there settles, to be company about more been dust changes forced many but be changes a the end that that you. nimble companies the any the with is you there’s how of when Thank COVID-XX. be also operates in in to may Could terms trend But going some forward. may may have semi-permanent? talk are then, many made

Daniel Hendrix

Yeah. Hey, Kathryn.

how Interface. at looking redesign We’re to

be my not, whole how think you part and redesign to costs that is give is goal number. act. new down my about back. these to I high, will drive A comp bounce obviously, to organization Interface. of variable can’t – goal going The at is will SG&A lot the the it how to looking is reductions. company But at XX% always a looking world to I too we’re will, every to XX%. close is try drive And permanent

Bruce Hausmann

that, add And I’d just to Kathryn. Dan. Morning,

we’re for be as which we Some new customers, their products opportunity them new in this in help environment of bring design to these permanent view office to going to in. ways that changes and are our new an

lot So, and for obviously, view a challenges I economy of out of we the hay through, interestingly going – this a enough, that make can COVID-XX lot we business of business. global but there’s is think headwinds and the some the

Daniel Hendrix

I. so That’s do Yeah, right.

displays think that I tend And very company. strength, And change new Kathryn, to it than we’ve a better love – been actually we’ll I a most think we we innovative the always world. as to Interface’s this adapt company.

Kathryn Thompson

out magnitude and of prepared really gave Asia. Okay, there perfect. of I appreciate you the bit Could the a you. value because write-down equity little get, Thank timing your color commentary. you out fleshing But [ph] that more, write-down? gave on in] you to the any flesh is components buckets and nora [fall in we kind the two relation and just of

Bruce Hausmann

is our incredibly Interestingly through Yeah. is remarks, enough, mentioned in this this. we resilient Kathryn, nora as prepared environment like Bruce.

into where about goodwill. the think the a to have all since inception of goodwill of It’s of water, is sort of company combined You like bucket. bucket one

you’re is governs conversant some fairly We allocate sure I’m some accounting among is that Now, – then And, this. this. among we with allocate literature EMEA technical regions. it it there Americas, Asia-Pac. fairly and do There

we [ph] to have since early Asia, China, you in in fairly through steps. a bit your happening on in the and with saw stuff go – be little some QX us that analysis. So proactive business that made around COVID-XX our particularly [triggering] And

a the we hit – aware that did noncash sheet. comes but impairment you’re did of went really analysis. through And with charge that that it, to and closely I auditors governs that the worked accounting literature we our charge, that, and balance just we make result our we a want the literature that off we that, a goodwill really at And look took hard take take followed sure as so, external quantitative it’s

Kathryn Thompson

final your to seems then, actually, focused kind question really given your of on And U.S. bit We’ve a the There’s demand, a said in industry, least a meeting confirming hard of demand. completely good seeing business. [inputs] have for other which what the time counterintuitive you day, categories, some the at little backlogs, really numbers. of and employment more about heard, education [ph] some Okay. healthcare,

And your the are of Georgia given particularly what meet demand, flesh in wanted the in to I similar you’re seeing business, out the faced your marketplace? operations? trend see, you for you’ve ability in maybe to terms a seeing realities just

Daniel Hendrix

We County. one only that’s Troup, flexible we Obviously, a Georgia. have plant have very in in plant

We shutdowns. really haven’t had with any issues

with had Some competitors particularly issues States. have of the shutdowns, our in United

definitely So we can ramp up meet to demand.

some can imagine have of the You the hit been markets hardest.

ship business New and our it can’t have York good. Boston City, East business, Coast are West our but in hard. Coast, our we really really hit orders In West been

opening and and can a cities So we we commerce really our where It’s backlog. a have fulfilling actually of up meeting demand don’t matter problem ship. do

Bruce Hausmann

Yeah. will add just to I this Bruce, that. Kathryn, is And,

One of in in based flexibility in flex We’ve our I’ve and process through U.S. the to that demand. We’ve seen noticed the is We’ve around that down, Australia. on Interface seen China. world. the here whole that up globally, that just in that strengths seen We’ve plants this of the seen

I want probably their needed. And and listening our colleagues, as call at are down thank amazing this up to right to who now, just flexing capabilities

add to So thing severe remarks, the the more and lockdown, it’s product mentioned the would difficult other or too get the to the we this more the I customers. the in severe been prepared more

it. the to able lockdown we’re that But to because out, able get product ease, delivery customer when the is of take

Daniel Hendrix

right, any at haven’t with we All issues had our supply-chain suppliers all.

Bruce Hausmann

Correct. Yeah.

Daniel Hendrix

with very fortunate supply-chain. So our we’re

Bruce Hausmann

Kathryn, that’s rubber. And with LVT as well, and true

been So have those to fortunate, we’ve not disruptions.

Kathryn Thompson

much good and luck. Okay. you, very Thank

Bruce Hausmann

you. Thank

Operator

Nomura. question Wood comes next of Your Mike from

open. Your line is

Mike Wood

the information morning, and on thanks for Good all April.

limits, covenant and not on First, those that trends, currently not discussions reaching any this you or can April had order update you’re on looking getting preliminary whether with in the with waived? whether lenders at any you’ve scenario or us you envision whether not or

Bruce Hausmann

This is Mike. Bruce. Yeah,

in covenants tripping We have no indication of QX. any

see it a implications supportive. and dialogue banking are the eye our close incredibly to what group, QX. on really We’re obviously good open we We’ve had and for remain QX with keeping

relationship get QX, their If want them. back. need and know go we’re continue and feedback Interface. we to And and some us, to a to us We with here things if please have over go know let we let have to us QX XX-year supporting we in to support worse say, discussions, need you back

Daniel Hendrix

lot [ph]. Yeah, that to gives we’re of bank tatting [tatting the a liquidity. and solace versus have that our just is of lot this] thing a not keep But we

of $XXX liquidity. We million have

And so the liquidity. to pass we don’t the go back to bank

Bruce Hausmann

little that, just I’ll to Dan. a more bit add

a job right good quickly in the the So and really costs we’ve acting at done taking of out business areas.

So to that, their solid I us your own being basically gives right been, management proactive us and think has feedback really it that’s that team it’s you’ve that the got destiny. and making comfort controlling – a

Mike Wood

different that. you’ve Dan, handling expect cause And Thanks given hear now about the would you’d talk in occur. terms given volatility to and historically, have you inefficiencies pretty for Troup manufacturing some demand shorter-term? changed decremental initiatives that is worked what’s love manufacturing changeovers just how major I the what I on? volatility for County to Can recall that demand of that

Daniel Hendrix

run created basis To how we good production I the we and gross it’s then nora part carpet in throw actually me different a short profit gross XXX the tile well, Troup pretty in and business rubber that the is profit stream. long-term, a of the a points plant went That’s LVT line. margin we no broadloom mix XX% is business mix. Well, when way, Bentley got the in margins long demand high have think as our But big our County, run today. business. segregation business, is saw the out down I the modernized plant. say, you would We’ve

line in for confident is I’m really to way our going good So that up a hold us. profit pretty gross

Mike Wood

Great.

seeing upfront? but occur work in From with Finally, you you’re canceled? get the just Or still potential cancellations that, backlog. is delays your no there dealing mentioned delayed some you. Thank historical work the cancellations that could typically

Daniel Hendrix

finishing would order, order new finished it. And or to goes And that say a contract, it’s project with Yeah, a I they project – from a the it’s out. finished enter when the that finish. they standpoint, – the historically, they order they the they a I would purchase project say when have refurbishment they that want build

never time our going that. So anticipate I lot We’d I this see business. at of seen either. a related cancellations don’t to to have think we’re don’t

Mike Wood

All Thanks. right. luck. Good

Daniel Hendrix

Thanks, Mike.

Operator

John Your from next of comes question Baugh Stifel.

Your open. line is

John Baugh

you all are Thank you. well. Good morning, and hope

pre-virus your Let’s say, looked and the in timing, I thereafter, benefit, was start trying the impact that extra but a business apples versus it’s there? some in you’ve adjust Where an if sense understand you that a of were kind assume high-single-digit quarter got with tracking trying I Americas as to different week tile much that and carpet of Asia how and So impacted course, to apples? I let’s to pre-virus, get at QX.

Bruce Hausmann

saw we Bruce. start is were was off started QX. you if year. stuff started And think – very China very, Yeah, the mentioned, in going John. it about year, virus When a in Americas, strong great super strong, January, you of early we we some the But as it, This February, and Europe we year. on

QX, And all so really is really the things down have in pressure so heads because place. much in – is setting lockdown in, to we to we’re will that later was QX on there which we when the that’s wanted provided about be commentary in why you March, came up slowing started we’re

supportive pace when I the so indicators does look then biggest so the the me the to that’s this, activity lockdown? much business. severe ease. It the one customers, and is many me when of – the indicator if back in of have is biggest the at there’s out there. business And seems And lockdown And we comes to how

Daniel Hendrix

back we’re Yeah, again. in

in that lockdown. where easing seeing they’re the We’re markets

normal say wouldn’t move. I Yeah. bouncing levels, it’s return to the We’re to seeing the starting but of business.

Bruce Hausmann

exactly. me of encouragement. a Yeah. Moving lot back. That gives Yeah,

John Baugh

backlog. you Okay. $XX mentioned that And maybe help million us

orders I’m around from and you that? might actually really some expect ABI seen – the transpired that be. is, And orders which maybe an change Thank a of early what is of ugly business, a then I I going guess, coming March April, ABI year-over-year, the commentary assume, sort orders case indication you. future that’s indication, off? few And improve and in XX, bought what forward. weeks or then is what that’s what’s So a like square impact in that we’ve around percentage get with and you It month the trying the sense just the out to think last here to from where or quarter are sounded them up

Bruce Hausmann

John, this is Bruce.

Just I’ll me. million points off a and is The color. the it for few hand more as Dan of actually $XX to pardon end of April,

able So is I if that you at how is at imperative] April. – [ph], of that lockdowns there look when number. the ease, to our the out. being they end take up the aren’t our the the the trying much backlog we’re to get product, we’re That’s but product able happen when think And they point make again, risking the to customers [but

So we’re things we’re once seeing a ease, lot of on. pent-up able head activity deliver that on to

Daniel Hendrix

Yeah, that’s great.

Bruce Hausmann

commentary any on ABI and know have stuff. you don’t the if I

Daniel Hendrix

is one going this no not right now. No. down else I’m manage to I now. right working mean,

John Baugh

What is that percentage, Bruce, with $XX million? a

Bruce Hausmann

that is a million What percentage as total backlog? of $XX

John Baugh

Yeah.

Bruce Hausmann

around with Yeah, I it’s I probably that. guess mean, XX-ish

Daniel Hendrix

think with I XXX… Yeah,

Bruce Hausmann

the year. …end of

John Baugh

Okay.

Bruce Hausmann

that hedge, And then can a the markets into to gives – up, obviously John, some that extent. we gives the us when when second quarter, that us shift open a hedge

John Baugh

How to for around is a all obviously won’t those XXXX I’m neutral which sense orders cash for be quarter believe, the question it. is try to the on Got free flow months year, first through generate user used where and historically at cash? maybe last contingent my the earnings obviously And latter quarter. is, get you and being you’ve just But simply then I going whether or things. or revenue think you’ll cash X a and

Bruce Hausmann

is Bruce. this John, Yeah,

I reiterate is to So we cash. are that headlines one of managing the want vigilantly key

week. it a at our looking We’re of looking twice at cash. And we’re uses

managing working liquidity. at is sure to freed inventory. up, example, working well accounts up we’re we looking a you we’re nice working that in freeing nor of which on our free I’m looking quarter as We up cash closely for at normally opportunities $XX saw a use results, did in job QX watching us. of million capital, big capital. very And receivable, And for as capital which We’re

we generative to this be year. cash we’re that going So think

And in we’re going of a to do ways. variety that

our our our looking we to going capital own opportunities. as going our for that – destiny, going we to through control continuing And and look do go by we’re We’re do want And revenue we’re this. expense, reality. to that managing to expenses by working

John Baugh

Great. luck. Thanks good and color for that

Daniel Hendrix

John. Thanks,

Operator

Your question next Hughes from Keith SunTrust. of comes

Your line is open.

Keith Hughes

Thank you. given second at to what I’m decrementals maybe are at see? margin, quarter, of revenues kind EBITDA either looking expecting or you on third

Bruce Hausmann

able hey, out XX%. trying were up. that’s indication on of at the backlog company to that’s comes around could question. product, seeing take We reiterate can end of to – a the good – So numbers around revenue really with already of Keith, – with right start down April the given pick in total certain that gate. It pressure really just as our I’ll the And customer QX ease. the that quickly orders, imagine orders order depends how these the lockdown ease, we got the to we’ve they’ll we’re be geographies, And once lockdown that to

really plays all it on that out. depends So how

an that just if the And just And taken already of – own controlling our keep we’re I’ll fruition. business. eye is get coming not back of We’ve destiny, it. $XX going to we’ll on costs to have to million out

Daniel Hendrix

continue to we’ll And it. right size

Bruce Hausmann

size we based it, will going. continue is to on where And top-line the right

Daniel Hendrix

profile do or it The that tile particularly good down manufacturing flex carpet maintain Keith, our is we thing can to I that business up on one margin I like a like, level.

So of it. I like where we on that part are

Bruce Hausmann

Bruce is again. Yeah, Keith. This

plants a that our carpet in tile on number give about to XX% our just here you costs So variable. of are

and ability have, a up plants So really earlier, where demonstrating as demand. their and depending we down mentioned on to nimble we’re as are able flex structure to the we

a SG&A carpet a sold those lot flexing on the but line, variables the of line, XX% we so. – Dan’s us lot as costs to on, not gives of about point, of there’s are tile talked goods that so cost in And oftentimes plants, of that goes

Keith Hughes

of comment and April XX% decline, LVT the the notable in there in month? nora, decline to difference switching carpet a of the Kind Okay. tile, between is

Bruce Hausmann

to healthcare, growing, and specification been sciences, to encouraging. supported those in actually fantastic. around is which of life is LVT nora long-term continues LVT nora especially both government resiliency be contracts super is that stay has The great. which continue strong, jobs,

I that’s you been can a to as there is has been the imagine. portion you has would been softest, made business tile probably say order. one good as of carpet our the And – know,

that made-to-order encouraged not we’re that’s it’s business So why when lockups ease the starts surprising. back. And coming

Daniel Hendrix

in It’s XX%s. still down the

Bruce Hausmann

Yeah.

Keith Hughes

loss. on was I sorry, I’m

April. up You Is is in were April? nora up LVT saying in

Bruce Hausmann

nora April. down is in slightly

Keith Hughes

mean, that. tile don’t would is that I Is I know, XX%, your like carpet that…? something imply XX%, off, business

Daniel Hendrix

it’s the no, down – XXs. No, it’s in

Bruce Hausmann

Yeah, Keith.

Keith Hughes

Okay.

Bruce Hausmann

the of this… that’s Remember, core

Keith Hughes

I’ll All I guess, about you to Okay. right, final talk offline. question. And, that

us America, that You shipments. Europe. in the assume by America numbers for All It’s first region you’ve have North negative us currency the correct? the to quarter. those positive some I Is North include given extra given the that the week. to of

Daniel Hendrix

do. They

Keith Hughes

Okay. thank All right, you very much.

Daniel Hendrix

Keith. Thanks,

Operator

The Instructions] Research. of [Operator next MacGregor from question comes Longbow David

line open. Your is

David MacGregor

everyone. morning, Good Yes.

for Just me. a few questions

about raw some First could but help about know on material a lot year? if purchasing of you’re also, this give line. just commodities. fiber, wonder materials XXXX us cost raw I of we use we talk all, should think you your you expected can how recycled I

Daniel Hendrix

the I baking prices pretty when yarn we’ll depends think a that To raw cost we’ll does. raw oil year. with But demand particularly delay good anticipate what prices. it, of the on some benefit material do, our material packing, anything to price in oil down get that increases raw And this a coming into actually I the our happens. we’re extent price There’s going tied see year. material increases what and

David MacGregor

saying a So decrease? you’re net

Daniel Hendrix

anticipate I that. Yes,

David MacGregor

press Do much further, to it to thinking substantial something that? Okay. give sense more want but I are be little we can us incremental? too any of you mean, or around magnitude decrease expect don’t this a you a I

Daniel Hendrix

XX. I would pricing tied nylon, in a that’s say – nylon pricing incremental we caprolactam, to today. Depends have of the

And delay so, that about in the X is months.

insulated] where expect second to we’ll to that half plays either. but [net won’t not to see I be benefit us. so, get, And the But be it a actually it be [ph] It’s going the out.

David MacGregor

production through I about XQ, curtailments How XQ curtailments? production and guess? about and XQ What think we potentially Okay. as should well,

Daniel Hendrix

on couple demand. the short plants. I say, time we’re flexing in manufacturing we’re would our to Well, of a like

plant of demand curtailment is, up. as to give the what just percentage are the world. ramping where you based open markets some meet America’s our we on we’re up of demand We’re today around meeting But to the the a

is back the China China Our plant market. up and supplying

Australia is on ramping as short actually shift, well. now but it’s up

hard you the we’ll it quarter. in a and But tell to to flex around where to particularly of back that in kind that’s going demand we’re we’re see third be. it’s the – world going hoping to bounce So

David MacGregor

Are you running Europe? and up in

Daniel Hendrix

Yes, yeah. Oh, are. we

David MacGregor

help are in Okay. your just guess, America? might reopening you Europe, on I of there North you to I able insights months last that the guess, what experience terms over of here couple draw from in

Daniel Hendrix

is now is opening as The starting. considering in just well they’re Yeah, Italy. just now up. UK up, Spain opening

still We’re – much seeing a very little is bit there. of France activity positive not very shutdown.

little we’re benefit to benefit So starting into little really see really yet, UK a we and don’t good in the have Europe Spain. in except insight a

Bruce Hausmann

Germany. In

Daniel Hendrix

Germany Those gives me and a actually Yeah, back market are as come will starting China, up. that that tell the and to that lot of you, markets. we’re as encouragement see I in well. opens

David MacGregor

Thanks right. Dan. a Okay, lot,

Operator

I at turn There will Hendrix no to questions now further time. for Mr. the comments. this closing are call

Daniel Hendrix

please we’ll thank Thank And you safe, next families talk to for listening your you. time. you to our Well, and you call. please, be and

Operator

this Ladies today’s call. Thank concludes and you for participating. gentlemen, conference

now You may disconnect.

Interface (TILE) 8 May 202020 Q1 Earnings call transcript