Interface Reports 1.4% Revenue Growth in Second Quarter

Atlanta, GA, July 27, 2017-Interface, Inc. reported results for the second quarter ended July 2, 2017.

Second quarter highlights include:

On a GAAP basis, net sales grew 1.4% year over year. Organic sales, which adjusts for the impact of foreign currency fluctuations and exiting the FLOR specialty retail stores, grew 4% year over year. Organic order growth was 6% year over year.
Gross margin remained in line with expectations at 38.9%.
SG&A continued to be well managed at $64.9 million, or 25.8% of net sales, and was in-line with the Company's targeted 2017 annual run rate.
Operating income margin was 13.1%, an increase of 30 basis points over last year's second quarter.
The Company completed $25 million in stock repurchases in the second quarter, executing on the previously announced $100 million share repurchase program.

With the fundamentals in place, Interface remains committed to its full year plan, which targets 3-4% organic sales growth, 38.0-38.5% gross margin, and $260-265 million in SG&A expenses for 2017.

Second Quarter 2017 Financial Summary & Highlights

Sales: On a GAAP basis, second quarter net sales were $251.7 million, up 1.4% over the prior year period on broad-based growth, particularly in the Americas and Asia-Pacific.

Operating Income: Second quarter operating income was $33.0 million, or 13.1% of sales, compared with operating income of $31.8 million, or 12.8% of sales, in the prior year period.

Net Income: Net income during the second quarter of 2017 was $20.9 million, or $0.33 per diluted share, an increase over the prior year period net income of $20.7 million, or $0.32 per diluted share.

Year to Date 2017 Financial Results

Sales: On a GAAP basis, for the first six months of 2017, net sales were $472.8 million, up 0.4% compared with $470.8 million in the first half of last year. Organic sales, which adjusts for the impact of foreign currency fluctuations and exiting the FLOR specialty retail stores, grew 3% over the same period.

Operating Income: On a GAAP basis, for the first half of 2017, the Company reported operating income of $48.4 million, or 10.2% of sales, which included previously announced restructuring and asset impairment costs.

Net Income: On a GAAP basis, the Company reported net income of $29.5 million, or $0.46 per share, for the first half of 2017, which included previously announced restructuring and asset impairment costs.