Interface Inc (TILE) 2023 Q4 法說會逐字稿

Good morning. My name is Jeannie, and I will be your conference operator today. I would like to welcome you to the Q4 and full-year 2023 Interface, Inc. earnings conference call. (Operator Instructions) Thank you.

早安.我叫珍妮，今天我將擔任你們的會議操作員。歡迎您參加 Interface, Inc. 第四季和 2023 年全年財報電話會議。（操作員說明）謝謝。

I would now like to turn the conference over to Christine Needles. You may begin your conference.

我現在想將會議轉交給克里斯汀·尼德爾斯 (Christine Needles)。您可以開始您的會議了。

Good morning, and welcome to Interface's conference call regarding fourth quarter and full-year 2023 results hosted by Laurel Hurd, CEO; and Bruce Hausmann, CFO.

早上好，歡迎參加由執行長 Laurel Hurd 主持的 Interface 電話會議，內容涉及 2023 年第四季和全年業績；和財務長布魯斯·豪斯曼。

During today's conference call, any management comments regarding Interface's business which are not historical information are forward-looking statements within the meaning of federal securities laws. Forward-looking statements include statements regarding the intent, belief, or current expectations of our management team as well as the assumptions on which such statements are based. Any forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties that could cause actual results to differ materially from any such statements including risks and uncertainties described in our most recent annual report on Form 10-K filed with the SEC. The company assumes no responsibility to update forward-looking statements.

在今天的電話會議上，任何有關 Interface 業務的管理層評論（不屬於歷史資訊）均屬於聯邦證券法含義內的前瞻性陳述。前瞻性陳述包括有關我們管理團隊的意圖、信念或當前期望的陳述以及此類陳述所基於的假設。任何前瞻性陳述都不是對未來業績的保證，並且涉及許多風險和不確定性，這些風險和不確定性可能導致實際結果與任何此類陳述有重大差異，包括我們向公司提交的最新10-K表格年度報告中所述的風險和不確定性。美國證券交易委員會。該公司不承擔更新前瞻性陳述的責任。

Management's remarks during this call also refer to certain non-GAAP measures. Reconciliations of the non-GAAP measures to the most comparable GAAP measures and explanations for their use are contained in the company's earnings release and Form 8-K furnished with the SEC today.

管理階層在本次電話會議上的演講也提到了某些非公認會計原則措施。非 GAAP 衡量標準與最具可比性 GAAP 衡量標準的調整以及對其使用的解釋包含在公司今天向 SEC 提供的收益報告和 8-K 表格中。

Lastly, this call is being recorded and broadcasted for Interface. It contains copyrighted material and may not be re-recorded or re-broadcasted without Interface's express permission. Your participation on the call confirms your consent to the company's taping and broadcasting of it. After our prepared remarks, we will open up the call for questions.

最後，正在為 Interface 錄製和廣播此呼叫。它包含受版權保護的資料，未經 Interface 明確許可，不得重新錄製或重新廣播。您參與通話即表示您同意本公司對其進行錄音和廣播。在我們準備好發言後，我們將開始提問。

Now I will turn the call over to Laurel Hurd, CEO.

現在我將把電話轉給執行長勞雷爾·赫德 (Laurel Hurd)。

Thank you, Christine, and good morning, everyone. Interface delivered a strong finish to the year with fourth-quarter sales and margins coming in ahead of our expectations. Our performance in 2023 through a challenging macroenvironment reinforces our confidence that our strategy is working. We entered 2024 with solid momentum in our business in many areas outperforming the market as we continue to activate our diversification strategy and deliver strong commercial execution.

謝謝克里斯汀，大家早安。Interface 為今年帶來了強勁的業績，第四季度的銷售額和利潤率都超出了我們的預期。我們在充滿挑戰的宏觀環境中 2023 年的表現增強了我們對我們的策略正在發揮作用的信心。進入 2024 年，我們繼續啟動多元化策略並提供強大的商業執行力，在許多領域的業務表現強勁，表現優於市場。

Overall, in 2023, our team did a great job holding price and driving increased margins through favorable product mix, while we also benefited from raw material input cost deflation specifically in the fourth quarter.

總體而言，2023 年，我們的團隊在控制價格並透過有利的產品組合推動利潤率成長方面表現出色，同時我們也受益於原材料投入成本通貨緊縮，特別是在第四季度。

Digging into our product category results, we delivered a stronger-than-expected quarter in carpet tile with low single-digit growth in global billings for the quarter. This is well ahead of industry trends, reflecting share gains in this important category. This is a testament to the strength of our commercial execution, new collections that have strong momentum, and the importance of our low-carbon footprint products.

深入研究我們的產品類別業績，我們的方塊地毯季度業績強於預期，該季度全球銷售額實現低個位數成長。這遠遠領先於行業趨勢，反映了這一重要類別的份額成長。這證明了我們商業執行力的實力、勢頭強勁的新系列以及我們低碳足跡產品的重要性。

On the nora rubber side, we delivered another solid year in this category in 2023, although we continue to experience softness in Asia. We had another record year for LVT. Global billings surpassed $165 million in 2023, up 10.5% compared to 2022. We're outperforming market growth in this category as well, with LVT billings in 2023 up double digits in the Americas, our largest market, compared to industry-wide benchmarks that show LVT growth in low-single digits. We're encouraged by these share gains as customers increasingly show preference for the design and performance of our flooring solutions.

在諾拉橡膠方面，儘管我們在亞洲市場繼續表現疲軟，但我們在 2023 年在該類別中又實現了穩健的一年。我們的 LVT 又創歷史新高。2023 年全球營收超過 1.65 億美元，比 2022 年成長 10.5%。我們在這一類別中的表現也優於市場成長，與顯示 LVT 低個位數成長的全產業基準相比，2023 年我們最大市場美洲的 LVT 帳單將成長兩位數。隨著客戶越來越青睞我們地板解決方案的設計和性能，我們對這些份額的成長感到鼓舞。

Turning to our market segments. We're pleased with our continued progress to diversify our business. Today, I want to start with looking at corporate office which exceeded our expectations in 2023 and the fourth quarter. We ended the year flat in corporate office and up 4% globally in Q4 due to strength in the Americas.

轉向我們的細分市場。我們對業務多元化方面不斷取得的進展感到高興。今天，我想先看看 2023 年和第四季超出我們預期的公司辦公室。由於美洲市場的強勁表現，我們的公司辦公室業務去年持平，而第四季度全球成長了 4%。

More and more people are coming back to the office, driving companies to refresh their spaces as well as the move to Class A premium buildings. These are areas where we excel and have the right to win with our premium products and design leadership. And our commercial execution and selling organization is tuned to capitalize on this shift. It's one way our selling system continues to provide us with a competitive advantage.

越來越多的人回到辦公室，推動公司更新他們的空間並搬到甲級優質建築。這些都是我們擅長的領域，我們有權利憑藉我們的優質產品和設計領先優勢贏得勝利。我們的商業執行和銷售組織已做好準備，以利用這項轉變。這是我們的銷售系統繼續為我們提供競爭優勢的一種方式。

Healthcare remains an important segment and a key part of our diversification strategy. In 2023, our healthcare business grew in the Americas and Australia, offset by softness in Asia and timing of projects in Europe.

醫療保健仍然是我們多元化策略的重要組成部分和關鍵部分。2023 年，我們的醫療保健業務在美洲和澳洲成長，但被亞洲的疲軟和歐洲計畫的時機所抵消。

Education remains a standout market for us. Global billings were up 5% for the year, driven by strength in the Americas as higher ed purchasers increasingly prioritize the sustainability attributes of interior products including flooring, Interface remains well positioned to serve customers and continue winning in this market.

教育對我們來說仍然是一個突出的市場。由於高等教育購買者越來越重視包括地板在內的室內產品的可持續性屬性，受美洲市場實力的推動，今年全球銷售額增長了5%，Interface 仍處於服務客戶並繼續贏得該市場的有利位置。

As expected, ongoing retail sector softness remained a headwind, driving the overall decline in sales for both the quarter and the full year. Macroeconomic uncertainty resulted in some customers deferring store remodel projects and, in some cases, closing locations due to constrained budgets. While retail remains a small percentage of our overall revenue, it did have an outsized impact in our sales in the back half, and we expect the headwinds to continue through the first half of 2024.

正如預期的那樣，零售業持續疲軟仍然是一個阻力，導致本季和全年銷售額整體下降。宏觀經濟的不確定性導致一些客戶推遲商店改造項目，在某些情況下，由於預算有限而關閉門市。儘管零售業務在我們的總收入中所佔比例仍然很小，但它確實對我們下半年的銷售產生了巨大影響，我們預計這種逆風將持續到 2024 年上半年。

Excluding retail, we were pleased with the growth we saw for the quarter and the year, particularly given the macro headwinds we navigated through.

不包括零售業，我們對本季和全年的成長感到滿意，特別是考慮到我們所經歷的宏觀阻力。

Turning to orders. Fourth-quarter orders were flat year over year as currency-neutral orders in the Americas were up 3.1%, offset by EAAA that was down 4.1%. Backlog at the end of the fourth quarter was solid at $176.3 million as we moved into 2024.

轉向命令。第四季訂單較去年同期持平，貨幣中性的美洲訂單成長 3.1%，但被 EAAA 下降 4.1% 所抵銷。進入 2024 年，第四季末的積壓訂單穩定在 1.763 億美元。

We are intently focused on commercial productivity and aligning our sales team to the fastest-growing geographic market. The selling organization has done a great job holding price and driving favorable mix, both geographically and from a product standpoint. All of this, coupled with deflation in certain raw materials, helped drive 507 basis points of improvement year over year in fourth quarter's adjusted gross profit margin.

我們專注於商業生產力，並使我們的銷售團隊適應成長最快的地理市場。無論從地理角度還是從產品角度來看，銷售組織在控制價格和推動有利的組合方面都做得很好。所有這些，再加上某些原物料的通貨緊縮，有助於推動第四季調整後毛利率年增 507 個基點。

As part of our One Interface strategy, we launched a pilot in 2023 in select US markets, bringing together the nora and Interface sellers into coordinated teams with an aligned quota that incentivizes cross-selling. We have seen tremendous results. In total, our test markets delivered double-digit order growth over the prior-year period, outpacing many of the non-combined teams in the Americas. Teams that previously operated independently started calling our customers together as a single integrated flooring partner, and we've already seen the benefits, opening new opportunities for us to win more of the floor.

作為 One Interface 策略的一部分，我們於 2023 年在選定的美國市場啟動了一項試點，將 nora 和 Interface 賣家聚集到協調團隊中，並製定一致的配額，以激勵交叉銷售。我們已經看到了巨大的成果。總的來說，我們的測試市場比去年同期實現了兩位數的訂單成長，超過了美洲的許多非合併團隊。以前獨立運營的團隊開始將我們的客戶召集在一起，作為單一的整合地板合作夥伴，我們已經看到了好處，為我們贏得更多地板提供了新的機會。

This is true even with long-time customers, they may have only installed one type of product in the past. For example, we have a hospital system that has had nora rubber installed for years that we now proactively offer carpet tile and LVT for other areas of the floor.

即使對於長期客戶也是如此，他們過去可能只安裝過一種類型的產品。例如，我們的醫院系統多年來一直安裝諾拉橡膠，現在我們主動為地板的其他區域提供方塊地毯和 LVT。

Some of these new opportunities are quick turn, some are longer sales cycles particularly on the nora side. Ultimately, we're serving our customers better and helping them get the right mix of product across more of the floor plate.

這些新機會有些是快速轉變的，有些是較長的銷售週期，特別是在諾拉方面。最終，我們為客戶提供更好的服務，幫助他們在更多的地板上獲得正確的產品組合。

Building off this success, in January 2024, we launched combined selling teams across the entire Americas business. And importantly, we are investing in additional feet on the street, specifically with more rubber flooring sales expertise that will help strengthen our approach as the teams become even more successful. We're funding this investment through realized efficiencies from our global operating model under the One Interface strategy.

在這項成功的基礎上，我們於 2024 年 1 月在整個美洲業務範圍內組建了聯合銷售團隊。重要的是，我們正在投資更多的人員，特別是更多的橡膠地板銷售專業知識，這將有助於加強我們的方法，讓團隊更成功。我們透過單一介面策略下的全球營運模式所實現的效率來為這項投資提供資金。

We're also focused on productivity improvements in our manufacturing. As you'll see reflected in our 2024 CapEx guide, we are planning to make operational investments in our plants, including new automation and robotic solutions. We will be rolling out these investments over the next 18 to 24 months following an initial pilot that has been going well with the goal of driving gross profit margin expansion. We anticipate we'll see these benefits to amplify as we get into fiscal year 2025.

我們也專注於提高製造業的生產力。正如您將在我們的 2024 年資本支出指南中看到的那樣，我們計劃對我們的工廠進行營運投資，包括新的自動化和機器人解決方案。初步試點進展順利，我們將在未來 18 至 24 個月內推出這些投資，以推動毛利率擴張。我們預計，隨著 2025 財年的到來，這些優勢將會進一步增強。

I'm incredibly excited about the work our design teams are doing as well as the product innovation and development in our pipeline as we've aligned as One Interface, leveraging our global expertise.

我對我們的設計團隊所做的工作以及我們管道中的產品創新和開發感到非常興奮，因為我們已經整合為一個接口，利用我們的全球專業知識。

In Q4, we launched our Fastforward carpet tile collections. This was the first time in our history that we launched a global collection at the same time everywhere around the world, strong in decades of renowned design. We have another exciting global carpet tile and LVT collection launch coming up in Q2 that will unveil at Clerkenwell and then NeoCon, our biggest design events of the year.

第四季度，我們推出了 Fastforward 方塊地毯系列。這是我們史上第一次在世界各地同時推出全球系列，憑藉著數十年的知名設計實力。我們將在第二季度推出另一個令人興奮的全球方塊地毯和 LVT 系列，並將在 Clerkenwell 和 NeoCon（我們今年最大的設計活動）上亮相。

In addition, we'll continue to expand our open air collection with more carpet tile designs available at accessible price points while continuing to bring market-leading design to the premium category.

此外，我們將繼續擴大我們的露天系列，提供更多價格實惠的方塊地毯設計，同時繼續將市場領先的設計引入高端類別。

Lastly, we continue to be recognized for our sustainability progress and leadership. Notably, in January, our circular approach to carpet tile production was recognized as one of three Circularity Lighthouses in the Built Environment by the World Economic Forum and McKinsey & Company. This spearheading circular solution exemplifies our ongoing commitment to achieving our sustainability objectives as well as our focus on innovation, impact, and value.

最後，我們在永續發展方面的進步和領導力繼續獲得認可。值得注意的是，一月份，我們的方塊地毯生產循環方法被世界經濟論壇和麥肯錫公司評為建築環境中的三個循環燈塔之一。這個領先的循環解決方案體現了我們對實現永續發展目標的持續承諾，以及我們對創新、影響力和價值的關注。

As we report our financial results for 2023, I'm proud of our global team for truly embracing our One Interface strategy. We have positive momentum going into 2024, and I'm excited for what is to come. We remain focused on leveraging the power of our global company to drive profitable growth and value to our shareholders.

當我們報告 2023 年財務表現時，我為我們的全球團隊真正擁護我們的「單一介面」策略感到自豪。進入 2024 年，我們擁有積極的勢頭，我對即將發生的事情感到興奮。我們仍然專注於利用我們全球公司的力量來推動利潤成長和為股東創造價值。

With that, I will turn it over to Bruce to go over the financials. Bruce?

這樣，我會把它交給布魯斯來檢查財務狀況。布魯斯？

Well, thank you, Laurel, and good morning, everyone. Fourth-quarter net sales totaled $325.1 million, a decrease of 3.1% versus 2022's fourth quarter. FX-neutral net sales declined 4.5% year over year. Fourth-quarter FX-neutral net sales in the Americas were down 4% year over year, and we saw particular strength in education and corporate office, offset by softness in the retail sector, driven mostly by project deferrals. FX-neutral net sales in EAAA were down 5.2%, driven by a softer macroeconomic environment.

嗯，謝謝你，勞雷爾，大家早安。第四季淨銷售額總計 3.251 億美元，較 2022 年第四季下降 3.1%。匯率中性淨銷售額年減 4.5%。第四季美洲地區的匯率中性淨銷售額年減 4%，我們看到教育和企業辦公業務尤其強勁，但主要由專案延期推動的零售業疲軟所抵銷。由於宏觀經濟環境疲軟，EAAA 的匯率中性淨銷售額下降 5.2%。

Fourth-quarter adjusted gross profit margin was 38.3%, an increase of 507 basis points from prior year's fourth quarter, primarily due to strong execution from our selling organization to hold price, favorable product mix and raw material input cost deflation, partially offset by unfavorable fixed cost absorption.

第四季調整後毛利率為38.3%，較去年第四季成長507 個基點，主要是由於我們的銷售組織保持價格的強勁執行力、有利的產品組合和原材料投入成本通縮，部分被不利的因素所抵銷固定成本吸收。

We had a few items that benefited our adjusted gross profit margin in the fourth quarter, which contributed 160 basis points in Q4 and 40 basis points for the full year of 2023. For example, we received an R&D credit and an energy subsidy from the German government in the fourth quarter, which reduced our cost of sales. These are benefits that we do not expect to recur going forward, which is reflected in our guide.

我們有一些專案對第四季度調整後的毛利率有利，為第四季度貢獻了 160 個基點，為 2023 年全年貢獻了 40 個基點。例如，我們在第四季度獲得了德國政府的研發信貸和能源補貼，降低了我們的銷售成本。這些是我們預計未來不會再出現的好處，這在我們的指南中得到了反映。

Adjusted SG&A expenses were $83.5 million in the fourth quarter compared to $79.4 million in the fourth quarter of 2022 as we focused on strong cost controls and efficiencies offset by inflation.

第四季調整後的 SG&A 費用為 8,350 萬美元，而 2022 年第四季為 7,940 萬美元，因為我們專注於強有力的成本控制和效率，以抵消通貨膨脹帶來的影響。

Fourth-quarter adjusted operating income was $41 million compared to adjusted operating income of $32 million in the fourth quarter of 2022. The increase was due to higher gross profit margins in the fourth quarter, which I described earlier.

第四季調整後營業收入為 4,100 萬美元，而 2022 年第四季調整後營業收入為 3,200 萬美元。這一增長是由於第四季度毛利率較高，正如我之前所描述的。

Fourth-quarter adjusted EPS was $0.41 versus $0.31 in fourth quarter of 2022, and adjusted EBITDA was $52.2 million versus $41.3 million in the fourth quarter of 2022.

第四季調整後每股收益為 0.41 美元，而 2022 年第四季為 0.31 美元；調整後 EBITDA 為 5,220 萬美元，而 2022 年第四季為 4,130 萬美元。

Now turning to the full-year results. Full-year 2023 net sales totaled $1.26 billion, a decrease of 2.8% versus fiscal-year 2022, and FX-neutral net sales declined 2.9% year over year. FX-neutral net sales in the Americas were down 2% year over year, and FX-neutral net sales in EAAA were down 4.2%.

現在轉向全年業績。2023 年全年淨銷售額總計 12.6 億美元，較 2022 財年下降 2.8%，剔除匯率因素後淨銷售額較去年同期下降 2.9%。美洲的匯率中性淨銷售額年減 2%，EAAA 的匯率中性淨銷售額下降 4.2%。

2023's adjusted gross profit margin was 35.4%, an increase of 70 basis points from the prior-year period, primarily due to strong execution from the selling organization and raw material cost deflation in the back half of the year. Adjusted SG&A expenses were $329.8 million in 2023 compared to $317.6 million in 2022, and the increase was primarily due to inflation.

2023年調整後毛利率為35.4%，較上年同期成長70個基點，主要得益於銷售機構的強勁執行力以及下半年原料成本下降。2023 年調整後的 SG&A 費用為 3.298 億美元，而 2022 年為 3.176 億美元，成長主要是由於通貨膨脹。

Full-year adjusted operating income was $116.4 million compared to adjusted operating income of $132.4 million in 2022. The decrease was primarily due to lower net sales in 2023 compared to 2022.

全年調整後營業收入為 1.164 億美元，而 2022 年調整後營業收入為 1.324 億美元。下降的主要原因是 2023 年淨銷售額低於 2022 年。

Adjusted EBITDA for 2023 was $162 million versus $176.1 million in 2022. We generated $142 million of cash from operating activities in 2023, and liquidity was strong at the end of the year, totaling $408.9 million, which consisted of $110.5 million of cash and $298.4 million of revolver capacity. In line with our capital allocation strategy, we repaid $105.3 million of debt in 2023, resulting in net debt or total debt minus cash on hand of $306.7 million at the end of the year.

2023 年調整後 EBITDA 為 1.62 億美元，而 2022 年為 1.761 億美元。2023年，我們的經營活動產生了1.42億美元的現金，年底流動性強勁，總計4.089億美元，其中包括1.105億美元的現金和2.984億美元的循環能力。根據我們的資本配置策略，我們在 2023 年償還了 1.053 億美元的債務，導致年底淨債務或總債務減去手頭現金為 3.067 億美元。

We also brought our leverage ratio down to 1.9 times, calculated as net debt divided by LTM adjusted EBITDA. We continue to focus on strengthening the balance sheet, which positions us to capitalize on future growth opportunities as they arise.

我們也將槓桿率降至 1.9 倍，計算公式為淨債務除以 LTM 調整後 EBITDA。我們繼續專注於加強資產負債表，這使我們能夠利用未來出現的成長機會。

Capital expenditures were $26.1 million in 2023 compared to $18.4 million in 2022. As we look at 2024, while the macroeconomic environment remains dynamic, we are encouraged by improving trends. And while uncertainty remains, we are forecasting growth and gross profit margin expansion in 2024 while maintaining tight controls over SG&A.

2023 年的資本支出為 2,610 萬美元，而 2022 年為 1,840 萬美元。展望 2024 年，雖然宏觀經濟環境仍充滿活力，但趨勢的改善令我們感到鼓舞。儘管不確定性仍然存在，但我們預計 2024 年將實現成長和毛利率擴張，同時保持對銷售、管理和行政費用的嚴格控制。

As Laurel mentioned, we expect continued headwinds from a soft retail sector for the first half of the year, plus more customary seasonality, which typically means a lighter Q1 sequentially followed by a stronger Q2 and Q3. And with that backdrop in mind, we are anticipating the following: For the first quarter of fiscal 2024, net sales of $280 million to $290 million, adjusted gross profit margin of approximately 36%, adjusted SG&A expenses of approximately $83 million, adjusted interest and other expenses of approximately $8 million, and fully diluted weighted average share count of approximately 58.8 million shares.

正如勞雷爾所提到的，我們預計今年上半年疲軟的零售業將繼續帶來阻力，再加上更常見的季節性因素，這通常意味著第一季的銷量較輕，隨後第二季和第三季的銷售量則更為強勁。考慮到這一背景，我們預計：2024 財年第一季的淨銷售額為 2.8 億至 2.9 億美元，調整後毛利率約為 36%，調整後 SG&A 費用約為 8300 萬美元，調整後利息和其他費用約800 萬美元，完全稀釋加權平均股數約5,880 萬股。

And for the full fiscal year of 2024, we are anticipating net sales of $1.26 billion to $1.28 billion. Adjusted gross profit margin of approximately 35.5% to 35.8%, adjusted SG&A expenses of approximately 26% of net sales, adjusted interest and other expenses of approximately $32 million, and adjusted effective tax rate for the full year of approximately 29%, and capital expenditures of approximately $42 million.

對於 2024 年整個財年，我們預計淨銷售額為 12.6 億美元至 12.8 億美元。調整後的毛利率約為35.5%至35.8%，調整後的SG&A費用約為淨銷售額的26%，調整後的利息和其他費用約為3,200萬美元，調整後的全年有效稅率約為29 %，資本支出約4200萬美元。

Now I'll turn the call back to Laurel for concluding remarks.

現在我將把電話轉回勞雷爾進行總結發言。

Thank you, Bruce. I want to express my gratitude to our team for their hard work this past year. Overall, we navigated a dynamic market. And while there is still some uncertainty ahead, we are seeing positive momentum as we enter 2024. I am encouraged by the progress we are making with our One Interface strategy, combined with strong commercial execution and operational discipline.

謝謝你，布魯斯。我想對我們團隊在過去一年的辛勤工作表示感謝。總體而言，我們在一個充滿活力的市場中航行。儘管未來仍存在一些不確定性，但進入 2024 年我們看到了積極的勢頭。我對我們的「單一介面」策略以及強大的商業執行力和營運紀律所取得的進展感到鼓舞。

We remain focused on delivering against our growth priorities. We're amplifying our efforts against high-growth segments like education and healthcare, while gaining share in corporate office. We're also leveraging our selling system as a competitive advantage in aligning our biggest opportunity geographies. And we're focused on delivering innovative designs and differentiated low-carbon products to build on our strength in the premium specified market, while we continue to offer the right product mix and expanded selection to meet our customers' needs. We look forward to sharing more updates on our progress in future calls. Thank you.

我們仍然專注於實現我們的成長優先事項。我們正在加強針對教育和醫療保健等高成長領域的力度，同時擴大在企業辦公室領域的份額。我們也利用我們的銷售系統作為競爭優勢，調整我們最大的機會地理。我們專注於提供創新設計和差異化低碳產品，以增強我們在高端特定市場的實力，同時我們繼續提供正確的產品組合和擴大的選擇，以滿足客戶的需求。我們期待在未來的電話會議中分享更多有關我們進展的最新資訊。謝謝。

With that, I'll open it up for questions. Operator?

有了這個，我將打開它來提問。操作員？

(Operator Instructions) Kathryn Thompson, Thompson Research Group.

（操作員說明）Kathryn Thompson，湯普森研究小組。

I just wanted to see if you could review. It was great to see the momentum in carpet tile. But overall, for Q4, could you review volumes and pricing trends? And if you're able to break it out by Americas versus Europe, Africa, Asia, and Australia, that would be great. But really mainly volume and pricing initially, and then I have a follow-up on cash generation.

我只是想看看你是否可以評論。很高興看到方塊地毯的發展動能。但總體而言，您能否回顧一下第四季度的銷售和定價趨勢？如果你能夠將美洲與歐洲、非洲、亞洲和澳洲區分開來，那就太好了。但最初主要是銷售和定價，然後我對現金產生進行了跟進。

So if we just focus on carpet in Q4, pricing was up around 6%, and volumes were down around 2%. So we saw actually a nice momentum going through the quarter. And if we look at total company around all of our product lines, pricing was up around 4% for the quarter.

因此，如果我們只關注第四季的地毯，價格上漲約 6%，銷量下降約 2%。所以我們實際上看到了整個季度的良好勢頭。如果我們看看公司所有產品線的整體情況，就會發現本季的定價上漲了 4% 左右。

Okay. Great. And then just in terms of -- you've done a really nice job of paying down debt and cash generation in the year. When you frame the year, where does this put you in terms of free cash generated for the quarter for the year? And you hit your bogey of being below two times for leverage. What now once you've hit your bogey?

好的。偉大的。然後，就這一年而言，你們在償還債務和創造現金方面做得非常好。當您規劃這一年時，您認為該季度產生的自由現金處於什麼位置？並且你擊中了槓桿低於兩倍的柏忌。一旦你擊中柏忌，現在該怎麼辦？

Yeah. Great question. So our capital allocation strategy remains the same right now. We're going to continue focusing on paying down debt, while also investing in the business. And you probably noticed our CapEx guide was $42 million this year. We have some equipment that we're going to invest in in our plant, which we believe is going to help lower our costs, our operating costs, and also increase our gross profit margins. So it's a bit of a balancing act. But for sure, paying down debt is a top priority still.

是的。很好的問題。所以我們的資本配置策略目前保持不變。我們將繼續專注於償還債務，同時也投資於業務。您可能注意到我們今年的資本支出指南為 4200 萬美元。我們將在工廠投資一些設備，我們相信這將有助於降低我們的成本和營運成本，並提高我們的毛利率。所以這是一個平衡的行為。但可以肯定的是，償還債務仍然是首要任務。

And as you mentioned, thank you for pointing it out. Our free cash flow generation was great this year. We generated a lot of cash, and we were very disciplined in paying down debt. I probably noticed our net debt to adjusted EBITDA was 1.9 times. So we're below 2 which is fantastic.

正如您所提到的，感謝您指出這一點。今年我們的自由現金流量非常好。我們創造了大量現金，並且在償還債務方面非常自律。我可能注意到我們的淨債務與調整後 EBITDA 的比率是 1.9 倍。所以我們低於 2，這太棒了。

Okay. Great. And then just a final clean-up question. Could you just also clarify what your adjusted gross margin you said it was in prepared commentary? And then just the puts and takes for your margin expectations both gross profit and SG&A for 2024.

好的。偉大的。然後是最後一個清理問題。您能否澄清一下您在準備好的評論中所說的調整後毛利率？然後是您對 2024 年毛利和銷售管理費用 (SG&A) 的利潤率預期的看跌期權和賣出期權。

Sure. So if we think about our baseline adjusted gross profit margin for the year, it was 35%. As we mentioned in our prepared remarks, we had 40 basis points of nonrecurring pick-ups in Q4 -- I'm sorry, for the full year -- in Q4, it was 160 basis points of nonrecurring pick-ups. The baseline for Q4 was 36.7. So I'll just note that if you go off the baseline, we had -- and you compare where we landed this year compared to our guide, our midpoint guide, we're planning on 70 basis points of year-over-year improvement on our adjusted gross profit margin line.

當然。因此，如果我們考慮今年基準調整後的毛利率，它是 35%。正如我們在準備好的發言中提到的，我們在第四季度的非經常性回升為 40 個基點 - 對不起，全年 - 在第四季度，非經常性回升為 160 個基點。第四季的基線為 36.7。所以我要指出的是，如果你偏離基線，我們已經 - 你將我們今年的目標與我們的指南、我們的中點指南進行比較，我們計劃同比改進 70 個基點在我們調整後的毛利率線上。

But as you model that out, please note that Q4 will have a really tough comp given the fact that we had 160 basis points of nonrecurring pickups in Q4 of this year that we'll have to lap next year in Q4.

但當你對此進行建模時，請注意，鑑於今年第四季度我們有160 個基點的非經常性回升，我們必須在明年第四季度完成這一事實，因此第四季度將有一個非常艱難的競爭。

And then we're just going to continue. I think you asked about SG&A. We are going to continue optimizing our SG&A spend. And our One Interface program continues to give us opportunities to leverage our SG&A globally, operate as one company. And I think we're demonstrating that, and we're really running the company as one across the globe, which gives us a great opportunity to leverage our scale.

然後我們就繼續。我想你問的是SG&A。我們將繼續優化 SG&A 支出。我們的 One Interface 計劃繼續為我們提供在全球範圍內利用 SG&A、作為一家公司運營的機會。我認為我們正在證明這一點，而且我們確實在全球範圍內經營公司，這為我們提供了充分利用我們規模的絕佳機會。

David MacGregor, Longbow Research.

大衛‧麥格雷戈，長弓研究中心。

This is Joe Nolan on for David. I just wanted to start. You guys talked about some input cost deflation in the fourth quarter. Can you just talk about what is baked into your guidance for raw materials in 2024 and maybe talk about some of the moving buckets within that?

這是大衛的喬諾蘭。我只是想開始。你們談到了第四季的一些投入成本通貨緊縮。您能否談談 2024 年原料指南的內容，以及其中的一些變化？

Sure, Joe. So we are -- we had a -- starting in the back half of 2023, we did start to see some deflation in our purchases, and we saw some benefit of that in Q4 of 2023. We'll continue to see some benefit of that going into 2024. And as I just mentioned, we're planning on coming off of our baseline adjusted gross profit margin. We're planning about 70 basis points of year-over-year improvement and about a third of that is going to be generated by raw material deflation, and the other third will be generated by pricing, and the other third will be generated by productivity.

當然，喬。因此，我們從 2023 年下半年開始，我們的採購確實開始出現一些通貨緊縮，我們在 2023 年第四季看到了一些好處。到 2024 年，我們將繼續看到這帶來的一些好處。正如我剛才提到的，我們計劃擺脫基準調整後的毛利率。我們計劃年增約 70 個基點，其中約三分之一將由原物料通貨緊縮產生，另外三分之一將由定價產生，另外三分之一將由生產力產生。

Got it. Okay. That's helpful. And then could you please just give us an update on the One Interface initiative and what you expect that to contribute to the 2024 results?

知道了。好的。這很有幫助。那麼您能否向我們介紹一下 One Interface 計劃的最新情況以及您期望該計劃對 2024 年結果有何貢獻？

Yeah, I'd be happy to. We're really pleased with the progress. And I think what you can see in 2024 will be -- I think we're starting to show some proof points of that progress, both with some of our new collection launches and our results in Q4. You'll see that continue to strengthen. As we mentioned in the prepared remarks, we'll have more global collections launching at Clerkenwell and NeoCon that we really expect to contribute to our growth.

是的，我很樂意。我們對進展感到非常滿意。我認為您在 2024 年可以看到的是——我認為我們開始展示這一進展的一些證據，包括我們推出的一些新系列和第四季度的業績。你會看到這種情況繼續加強。正如我們在準備好的演講中所提到的，我們將在 Clerkenwell 和 NeoCon 推出更多全球系列，我們真正希望這些系列能為我們的成長做出貢獻。

And then we have this pilot that we launched this year in the Americas with our combined selling team. So as you know, our nora business we acquired in 2018, and we've been doing a really great job infusing design into what's really a technical sale. And we're taking it a step further in the Americas. We've been really reluctant to fully integrate the selling team because it really is a different sale.

然後我們今年與我們的聯合銷售團隊在美洲推出了這個試點項目。如您所知，我們於 2018 年收購了諾拉業務，我們一直做得非常出色，將設計融入真正的技術銷售中。我們在美洲更進一步。我們真的不願意完全整合銷售團隊，因為這確實是不同的銷售。

When I go out to a nora customer, I'm suited up head to toe in a bunny suit, crawling around on the hospital room floor versus what our Interface sellers spend a lot of their time with architects and designers and end users. But what we found in the example that we gave on a hospital campus, they love the nora brand. And nora has been sold in every operating room, in every one of their facilities around the world, and yet we haven't necessarily landed the LVT or the carpet tile in patient rooms and waiting rooms.

當我去拜訪一位諾拉客戶時，我從頭到腳都穿著兔子套裝，在醫院病房的地板上爬來爬去，而我們的介面銷售人員則花費大量時間與建築師、設計師和最終用戶打交道。但我們在醫院園區的例子中發現，他們喜歡諾拉品牌。諾拉已經在世界各地的每一間手術室、每個設施中出售，但我們還沒有在病房和候診室中使用 LVT 或方塊地毯。

So now we're launching combined selling teams which have one quota. And when you have a variable comp structure and you align those selling systems, we've seen some really strong results with order generation up double digits in those pilot markets. So we're rolling that across the Americas. We launched that in January. We had our selling teams together in the past few weeks and are really excited about the results there.

因此，現在我們正在推出具有一個配額的聯合銷售團隊。當您擁有可變的薪酬結構並調整這些銷售系統時，我們已經看到了一些非常強勁的成果，在這些試點市場中訂單產生量達到了兩位數。所以我們正在將其推廣到整個美洲。我們在一月份推出了它。在過去的幾周里，我們的銷售團隊聚集在一起，對那裡的結果感到非常興奮。

That's great detail. I'll pass it on.

這是非常詳細的。我會把它傳遞下去。

Keith Hughes, Truist.

基斯‧休斯，真理主義者。

Within the revenue guide for the year, it's flat, modestly up. Could you just talk about how you think the various end-user markets will be performing under this plan?

在今年的收入指南中，它持平，略有上升。您能否談談您認為在此計劃下各個最終用戶市場的表現如何？

As we mentioned, our retail end market has been challenged starting in the back half of the last year. And as we mentioned, it's largely one customer, and we see that continuing in the first half of this year. And the good news there, we haven't lost that business. They've just delayed their store remodels, which we do expect they're going to have to remodel at some point, but we're being conservative about how we're thinking about that. So that's, I think, the biggest headwind that we've got in the first half of the year, and then we'll be past that comp in the middle of the year.

正如我們所提到的，我們的零售終端市場從去年下半年開始就受到了挑戰。正如我們所提到的，它主要是一個客戶，我們認為這種情況將在今年上半年繼續下去。好消息是，我們並沒有失去這項業務。他們剛剛推遲了商店改造，我們確實預計他們將在某個時候進行改造，但我們對此的想法持保守態度。所以，我認為，這是我們今年上半年遇到的最大阻力，然後我們將在年中克服這個困難。

We are seeing strength in corporate as people are returning to work, and that Class A space is really where we're seeing the most activity. And again, we believe we're gaining share there. So we're not naive to the market dynamics, but we're cautiously optimistic that corporate will continue to hold in really steady. And then healthcare and education, we're continuing to see growth there and expect that to continue.

隨著人們重返工作崗位，我們看到了企業的力量，而 A 級空間確實是我們看到活動最多的地方。再次，我們相信我們正在那裡獲得份額。因此，我們對市場動態並不天真，但我們對企業將繼續保持穩定持謹慎樂觀態度。然後是醫療保健和教育，我們將繼續看到這些領域的成長，並預計這種情況將持續下去。

In the corporate office comment you just made, is that from remodel activity? Is that what's driving it? So it sounds like it's going to be a positive number based on what you just said.

在您剛剛發表的公司辦公室評論中，是來自改造活動嗎？這就是它的驅動力嗎？所以根據你剛才所說的，聽起來這會是一個正數。

Yes.

是的。

Or is it remodel and new construction?

還是改造新建？

We're primarily seeing the strength in remodel for sure. It's people moving their spaces. There's a lot of movement with return to office and people wanting to refresh their space, either encouraged to bring people back or in some cases, they are moving to new space that's smaller, but that activity is really good for us, and we're capitalizing on it. It's definitely the remodel side of it.

我們首先肯定看到了改造的力量。這是人們移動他們的空間。回到辦公室的活動很多，人們想要更新自己的空間，要么鼓勵人們回來，要么在某些情況下，他們搬到更小的新空間，但這種活動對我們來說確實有好處，我們正在利用它。這絕對是它的改造方面。

Okay. And final question on revenue guide. What's the -- are units and pricing flattish in this scenario? Or is there some residual pricing that's still going to be flowing through beginning of the year?

好的。關於收入指南的最後一個問題。在這種情況下，單位和定價是否持平？或者是否有一些剩餘定價仍將持續到今年年初？

We think there's a little bit of residual price. We do a pretty good job when we roll out pricing to hold it. We'll do that oftentimes with new collections and other things that we're able to hold. So there's a little bit of price, and then unit is about flattish, maybe down a little bit.

我們認為還有一點剩餘價格。當我們推出定價來維持價格時，我們做得非常好。我們會經常對新系列和我們能夠持有的其他東西這樣做。所以價格有一點點，然後單位就持平，也許會下降一點。

Okay.

好的。

Yeah.

是的。

There are no further questions at this time. I will now turn the call back over to Laurel Hurd for closing remarks.

目前沒有其他問題。現在我將把電話轉回給勞雷爾·赫德（Laurel Hurd）做總結演講。

Great. Thank you, and thanks to everyone for listening to the call today. Thanks to the entire Interface team for their continued efforts, and we look forward to keeping everyone posted on our progress.

偉大的。謝謝大家，也謝謝大家今天收聽電話會議。感謝整個 Interface 團隊的持續努力，我們期待讓每個人都能了解我們的進展。

This concludes today's call. You may now disconnect.

今天的電話會議到此結束。您現在可以斷開連線。