Interface Inc (TILE) 2024 Q3 法說會逐字稿

Thank you for standing by. My name is Bailey and I will be your conference operator today. At this time, I would like to welcome everyone to the Q3 2024 interface inc earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session.

謝謝你的支持。我叫貝利，今天我將擔任你們的會議操作員。現在，我歡迎大家參加 Interface Inc 2024 年第三季財報電話會議。所有線路均已靜音，以防止任何背景噪音。演講者發言後，將進行問答環節。

If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question again, press star and one I would now like to turn the call over to Christine Needles, corporate communications. You may begin.

如果您想在此期間提出問題，只需按電話鍵盤上的星號，然後再按數字 1 即可。如果您想再次撤回您的問題，請按星號和一位，我現在想將電話轉給企業傳播部的 Christine Needles。你可以開始了。

Good morning and welcome to interface's conference call regarding third quarter, 2024 results hosted by Laurel Hurd CEO and Bruce Hausmann CFO.

早安，歡迎參加由 Laurel Hurd 執行長和 Bruce Hausmann 財務長主持的 2024 年第三季業績的電話會議。

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.

在今天的電話會議上，任何有關介面業務的管理層評論（不屬於歷史資訊）均屬於聯邦證券法含義內的前瞻性陳述。

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.

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。

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.

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，可能導致實際結果與任何此類陳述存在重大差異，包括我們向公司提交的最新年度報告10-K 表格中描述的風險與不確定性。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GAAP 衡量標準，非GAAP 衡量標準與最具可比性的GAAP 衡量標準的調節表以及其使用說明均包含在公司今天向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 rerecorded or rebroadcasted without interface's express permission.

最後，該呼叫正在錄製並廣播給介面。它包含受版權保護的資料，未經 Interface 明確許可，不得重新錄製或轉播。

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

您參與通話即表示您同意本公司對其進行錄音和廣播。

After our prepared remarks, we will open up the call for questions. Now, I will turn the call over to Laurel Hurd CEO.

在我們準備好發言後，我們將開始提問。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 to begin our call. I want to thank the interface team for an impressive quarter. Our strong results reinforce the fact that our one interface strategy is working and yielding tangible results.

謝謝克里斯汀，大家早安，開始我們的通話。我要感謝介面團隊帶來了令人印象深刻的季度。我們的強勁業績強化了這樣一個事實：我們的單一介面策略正在發揮作用並產生實際的成果。

The strategy is focused on building strong global functions to support our world class local selling team accelerating growth through enhanced productivity of our commercial teams, expanding margins through global supply chain management and complexity reduction and leading in design innovation and sustainability.

該策略的重點是建立強大的全球職能部門，以支持我們世界一流的本地銷售團隊，透過提高商業團隊的生產力來加速成長，透過全球供應鏈管理和降低複雜性來擴大利潤，並在設計創新和可持續發展方面處於領先地位。

We're in the early stages of our multiyear plan and we're encouraged by the results we're seeing across the business. We've talked about the new integrated selling approach that we implemented in Q1 of this year which combines Nora and interface selling teams in the US. These coordinated teams are continuing to yield tremendous results in the Americas business resulting in currency neutral net sales up an impressive 18% in the quarter.

我們正處於多年計劃的早期階段，我們對整個業務所取得的成果感到鼓舞。我們已經討論過我們在今年第一季實施的新的整合銷售方法，該方法結合了 Nora 和美國的介面銷售團隊。這些協調一致的團隊繼續在美洲業務中取得巨大成果，導致本季貨幣中性淨銷售額成長了 18%，令人印象深刻。

We're seeing momentum in Nora rubber sales, expanding beyond health care into other growth segments including education, BioPharma and manufacturing. Our combined selling teams are effectively unlocking new opportunities across the product portfolio while enhancing the customer experience.

我們看到諾拉橡膠的銷售勢頭強勁，從醫療保健領域擴展到其他成長領域，包括教育、生物製藥和製造。我們的聯合銷售團隊正在有效地釋放整個產品組合的新機會，同時增強客戶體驗。

This is what we'd hope to see and we're encouraged by the team's progress. Additionally, we recently added the Nora brand to our refreshed brand attitude made for more. This platform brings our brands closer together to drive consistency in how we show up for our customers. It creates efficiency in our marketing and brand efforts and ultimately provides additional sales opportunities.

這是我們希望看到的，我們對團隊的進步感到鼓舞。此外，我們最近將 Nora 品牌添加到我們全新的品牌態度中，以創造更多。該平台使我們的品牌更加緊密地聯繫在一起，以提高我們向客戶展示的方式的一致性。它提高了我們的行銷和品牌工作效率，並最終提供了額外的銷售機會。

Turning to our financial results, we delivered a very strong third quarter with currency neutral net sales growth of 10% and significant profitability expansion. They continued to drive strong momentum in the Americas and as mentioned, currency neutral net sales were up 18% year over year. Continued market share gains in (inaudible) currency neutral net sales were flat as growth in [Emeaa] was largely offset by lower net sales in Australia.

談到我們的財務業績，我們第三季的業績非常強勁，貨幣中立的淨銷售額成長了 10%，獲利能力顯著擴張。他們繼續在美洲推動強勁勢頭，如上所述，貨幣中立的淨銷售額年增 18%。（聽不清楚）貨幣中性淨銷售額的持續市佔率成長持平，因為[Emeaa]的成長在很大程度上被澳洲較低的淨銷售額所抵消。

Additionally, billings and all products were up here to date in both price and volume, which is a great testament to our selling organization and their ability to execute and gain share. Moving to our market segments, global education billings remain strong up 18% year over year, led by strength in the Americas.

此外，帳單和所有產品的價格和數量均達到最新水平，這很好地證明了我們的銷售組織及其執行和獲得份額的能力。轉向我們的細分市場，在美洲的強勁帶動下，全球教育支出仍然強勁，較去年同期成長 18%。

Our expanded open-air collection, Nora rubber and three-millimeter LBT collections continue to resonate with our K through 12 and higher education customers. This is a great example of our combined selling teams effectively supporting our customers across the full product portfolio.

我們擴展的露天系列、Nora 橡膠系列和 3 毫米 LBT 系列繼續引起我們的 K 至 12 歲及高等教育客戶的共鳴。這是我們的聯合銷售團隊在整個產品組合中有效支援客戶的一個很好的例子。

Global corporate office billings were up 2% year over year where we continue to gain market share. When you compare us with overall industry trends, as companies return to the office and update their spaces, our sales team leverages their deep relationships with architects and design firms to meet their needs with our differentiated product portfolio.

全球企業辦公室營業額年增 2%，我們持續擴大市場佔有率。當您將我們與整體行業趨勢進行比較時，隨著公司返回辦公室並更新其空間，我們的銷售團隊利用他們與建築師和設計公司的深厚關係，透過我們差異化的產品組合來滿足他們的需求。

Overall activity continues to increase particularly in class a space where we are differentiated by our premium products, design and sustainability. Leadership. Health care billings were soft in the third quarter. However, we saw strong double digit year over year order growth. As a reminder, we typically have a longer sales and installation cycle related to our Nora products and health care. And our strong health care orders will convert to billings in the coming quarters.

整體活動持續增加，尤其是在 A 類空間中，我們憑藉優質產品、設計和永續性脫穎而出。領導。第三季醫療保健支出疲軟。然而，我們看到訂單年增強勁兩位數。提醒一下，我們的諾拉產品和醫療保健相關的銷售和安裝週期通常較長。我們強勁的醫療保健訂單將在未來幾季轉化為帳單。

And as expected retail billings were up in the quarter compared to a soft prior year period. Retail is a small part of our overall net sales but can have periodic unplanned deferrals of store remodel projects which we experienced in the prior year period.

正如預期的那樣，與去年同期相比，本季零售額有所增長。零售業務僅占我們整體淨銷售額的一小部分，但我們在上一年期間經歷的商店改造項目可能會定期出現計劃外延期。

Turning to orders strong commercial execution drove a 10% increase in consolidated currency neutral orders in the third quarter, currency neutral orders in the Americas were up 17% with growth across all product categories in [E AAA]. Currency, neutral orders were flat year over year growth in Asia was largely offset by Australia with a Maya essentially flat as we head into the fourth quarter. Our backlog is strong up 29% year-to-date.

就訂單而言，強勁的商業執行力推動第三季綜合貨幣中性訂單成長 10%，美洲的貨幣中性訂單成長 17%，所有產品類別均實現成長。[E AAA]。貨幣、中性訂單同比持平，亞洲的成長在很大程度上被澳洲和瑪雅的持平所抵消，進入第四季。今年迄今，我們的積壓訂單強勁成長了 29%。

We remain focused on commercial productivity, improving the customer experience and aligning our sales teams with the fastest growing geographic markets and segments. Beginning in the US. Turning to supply chain and manufacturing we continue to focus on reducing complexity through automation in our manufacturing facilities. As previously mentioned, we will continue to implement new automation and robotic solutions over the next three quarters, we are encouraged by the results of these investments in our US manufacturing plants and continue to evaluate other automation opportunities which will be funded through manufacturing efficiency savings. Before Bruce gets into the financials, I want to share some notable accomplishments related to sustainability.

我們仍然專注於商業生產力，改善客戶體驗，並使我們的銷售團隊與成長最快的地理市場和細分市場保持一致。從美國開始。談到供應鏈和製造，我們繼續致力於透過製造設施的自動化來降低複雜性。如前所述，我們將在未來三個季度繼續實施新的自動化和機器人解決方案，我們對美國製造工廠的這些投資結果感到鼓舞，並繼續評估其他自動化機會，這些機會將透過製造效率節省來資助。在布魯斯進入財務領域之前，我想分享一些與永續發展相關的顯著成就。

First, we recently announced that we are making it easier for customers to understand the carbon impact of their product selection. We are delivering embodied carbon metrics on all floor plans created by the interface design studio by using a unique combination of technology and data to calculate the carbon footprint of a project's flooring. This helps to put carbon footprint data at the forefront where we know we lead with differentiated low carbon product, and it contributes to helping our customers achieve their own sustainability and carbon goals.

首先，我們最近宣布，我們將讓客戶更輕鬆地了解其產品選擇的碳影響。我們透過使用技術和數據的獨特組合來計算專案地板的碳足跡，在介面設計工作室創建的所有平面圖上提供特定的碳指標。這有助於將碳足跡數據放在最前沿，我們知道我們在差異化低碳產品方面處於領先地位，並有助於幫助我們的客戶實現自己的永續發展和碳目標。

Second, we've recently announced that we've expanded our carpet recycling capabilities and our facility in the Netherlands building on 30 years of progress in support of the circular economy, we can now process [CQUEST bio and ses bio Xact carpet in EMEA] to turn used products into new ones helping us reduce our carbon footprint.

其次，我們最近宣布，我們已經擴大了我們的地毯回收能力，我們在荷蘭的工廠以30 年支持循環經濟的進展為基礎，我們現在可以處理[歐洲、中東和非洲地區的CQUEST bio 和ses bio Xact地毯]將舊產品變成新產品，幫助我們減少碳足跡。

Third, I'm pleased to share that interface received the highest distinction in Reuters recent sustainability awards in the net zero leadership category for a decision to go all in on becoming carbon negative without offsets.

第三，我很高興與大家分享，該介面在路透社最近的可持續發展獎中獲得了淨零領導力類別的最高榮譽，因為它決定全力以赴地在沒有補償的情況下實現碳負排放。

And finally, I'm proud to report that interface was added to Newsweek's Greenest companies list, which is the ranking of top companies in the US that are committed to environmental sustainability. Interface continues to be at the forefront of sustainability as we work to become carbon negative by 2040 we appreciate the recognition of our progress with that. I'll turn it over to Bruce to go over the financials Bruce.

最後，我很自豪地向大家報告，Interface 已被列入《新聞周刊》的「最環保公司」名單，該名單是美國致力於環境永續發展的頂級公司的排名。隨著我們努力在 2040 年實現負碳排放，英特飛將繼續走在永續發展的最前沿，我們感謝對我們在這方面取得的進展的認可。我會把它交給布魯斯來檢查布魯斯的財務狀況。

Well, thank you, Laurel and good morning, everyone.

嗯，謝謝你，勞雷爾，大家早安。

Third quarter, net sales totaled $344.3 million an increase of 11% versus the third quarter of 2023.

第三季淨銷售額總計 3.443 億美元，較 2023 年第三季成長 11%。

Third quarter. FX neutral net sales in the Americas were up 18% year over year driven primarily by strength in the education market segment as well as strong retail billings FX neutral net sales in (inaudible) were flat year over year and on an FX neutral basis, (inaudible) was up 2% Asia was down 1% and Australia was down 9% year over year. On a strong prior year comparison, third quarter adjusted gross profit margin was 37.5%. An increase of 158 basis points on raw material cost deflation and higher fixed cost absorption due to increased volume compared to the same period last year. Adjusted G&A expenses were $85.5 million or 24.8% of net sales in the third quarter compared to $79.2 million or 25.5% of net sales in the third quarter. Last year.

第三季。美洲的外匯中性淨銷售額年增18%，主要是由於教育市場領域的實力以及強勁的零售賬單推動的（聽不清）在外匯中性的基礎上，外匯中性淨銷售額同比持平， （聽不清楚）年增 2% 亞洲年減 1%，澳洲年減 9%。與去年同期相比，第三季調整後毛利率為 37.5%。與去年同期相比，原料成本通貨緊縮和固定成本吸收增加導致產量增加 158 個基點。調整後的一般及行政費用為 8,550 萬美元，佔第三季淨銷售額的 24.8%，而第三季為 7,920 萬美元，佔淨銷售額的 25.5%。去年。

Third quarter adjusted operating income was $43.5 million. Up 34% versus adjusted operating income of $32.4 million in the third quarter. Last year. the increase was driven by higher net sales and higher gross profit margins in the quarter.

第三季調整後營業收入為 4,350 萬美元。較第三季調整後營業收入 3,240 萬美元成長 34%。去年。這一增長是由本季更高的淨銷售額和更高的毛利率推動的。

Our third quarter effective tax rate benefited from the release of a $2.7 million valuation allowance. This is driven by strong business performance in the US and lower interest expense from accelerated debt repayment.

我們第三季的有效稅率受益於 270 萬美元估值津貼的釋放。這是由於美國強勁的業務表現以及加速債務償還帶來的利息支出下降所推動的。

The release of this valuation allowance was unique to Q3 2024 and is not expected to incur third quarter adjusted EPS was 48¢ versus 28¢ in the third quarter. Last year, third quarter's adjusted ETA was $53.7 million versus $43.7 million in the third quarter. Last year, we generated $76.2 million of cash from operating activities in the third quarter.

這項估值準備金的發布是 2024 年第三季特有的，預計不會產生第三季調整後每股收益 48 美分，而第三季調整後每股收益為 28 美分。去年第三季調整後的預計到達時間為 5,370 萬美元，而第三季的調整後預計到達時間為 4,370 萬美元。去年，我們第三季的經營活動產生了 7,620 萬美元的現金。

In line with our capital allocation strategy, we repaid $51.3 million of debt in the third quarter and $80.9 million year-to-date our balance sheet remains strong with $415 million of liquidity at quarter end. And our net leverage ratio was 1.1 times calculated as net debt divided by the last 12 months of adjusted EBITDA. Capital expenditures were $6.5 million in the third quarter of 2024 compared to $5.9 million in 2023.

根據我們的資本配置策略，我們在第三季償還了 5,130 萬美元的債務，年初至今我們的資產負債表保持強勁，達到 8,090 萬美元，季度末的流動性為 4.15 億美元。我們的淨槓桿率為 1.1 倍，計算方法為淨債務除以過去 12 個月調整後 EBITDA。2024 年第三季的資本支出為 650 萬美元，而 2023 年為 590 萬美元。

According to our outlook, we delivered impressive results in the third quarter of 2024 and entered fourth quarter with strong orders and a healthy backlog. As a reminder in the fourth quarter, last year, gross profit margin benefited 160 basis points from non-recurring items that reduced cost of sales in that quarter.

根據我們的展望，我們在 2024 年第三季取得了令人印象深刻的業績，並以強勁的訂單和健康的積壓進入第四季度。去年第四季度，由於非經常性項目降低了該季度的銷售成本，毛利率提高了 160 個基點。

Separately, we continue to anticipate strong retail billings in the fourth quarter of 2024 which has slightly lower gross profit margins that are more typical premium products.

另外，我們繼續預期 2024 年第四季的零售收入將強勁，但毛利率略低，屬於更典型的高端產品。

With that backdrop in mind, we are raising our full year outlook and are now anticipating the following for the full fiscal year, 2024 net sales of 1.315 billion to 1.325 billion adjusted gross profit margin of approximately 36.6% adjusted SG and A expenses of approximately $345 million adjusted interest and other expenses of approximately $27 million an adjusted effective tax rate for the full year of approximately 25% fully diluted weighted average share count of approximately 58.8 million shares and capital expenditures of approximately $37 million. And with that, I'll turn the call back to Laurel for concluding remarks.

考慮到這一背景，我們正在上調全年展望，目前對整個財年的預期如下：2024 年淨銷售額為13.15 億至13.25 億，調整後毛利率約為36.6%，調整後SG 和A 費用約為345 美元調整後的利息和其他費用約為 2,700 萬美元，調整後的全年有效稅率約為 25%，完全稀釋加權平均股數約為 5,880 萬股，資本支出約為 3,700 萬美元。接下來，我會將電話轉回勞雷爾進行總結演講。

Thank you Bruce. I want to thank everyone for joining the call today and I would especially like to extend my thanks to the entire interface team. Our results this quarter demonstrate the strength and effectiveness of our one interface strategy. And I'm incredibly proud of the progress we have made across all areas of our business.

謝謝布魯斯。我要感謝大家今天加入電話會議，特別要向整個介面團隊表達感謝。我們本季的業績證明了我們單一介面策略的優勢和有效性。我對我們在各個業務領域的進步感到無比自豪。

As we look ahead, our focus remains on investing in the business operational excellence and delivering value to both our customers and shareholders. We are confident in our ability to navigate the dynamics of our current market while seizing opportunities that align with our long term vision. With that. I will open it up to questions, operator.

展望未來，我們的重點仍然是投資於卓越的業務運營並為客戶和股東創造價值。我們對駕馭當前市場動態的能力充滿信心，同時抓住符合我們長期願景的機會。就這樣。我將開放給大家提問，接線生。

Thank you. At this time. I would like to remind everyone in order to ask a question, press star and the number one on your telephone keypad.

謝謝。此時。我想提醒大家，要提問，請按星號和電話鍵盤上的數字一。

Our first question comes from the line of Kathryn Thompson of TRG. Your line is open.

我們的第一個問題來自 TRG 的 Kathryn Thompson。您的線路已開通。

Hi. Thank you for taking my questions today. First, I want to focus on non res repair and remodel and we've heard very, a few companies this earning season talk about an improvement in activity in non res repair and model. And you seem to be seeing that as well. Given the pace of orders in the past few quarters and bigger growth this quarter and education and health care. Could you how would you characterize the state of nonres repair model leading into 2025? And how does it compare to going into the current year last year? So really, you know, what's the pace now going into next year? And how does it compare to last year at the same time as you think about momentum?

你好。感謝您今天回答我的問題。首先，我想專注於非資源維修和改造，我們在本財報季聽到很多公司談論非資源維修和模型活動的改善。你似乎也看到了這一點。考慮到過去幾季的訂單成長速度以及本季的更大成長以及教育和醫療保健。您如何描述 2025 年之前的非修復模型的狀態？與去年相比，今年情況如何？所以說真的，你知道明年的進度是怎麼樣的嗎？當您考慮勢頭時，與去年相比如何？

Thanks Katherine.

謝謝凱瑟琳。

First, I'd say I'm really proud of the progress that the teams made, you know, 18% net sales growth in the Americas is a really, really strong quarter.

首先，我想說，我對團隊的進步感到非常自豪，你知道，美洲 18% 的淨銷售額成長是一個非常非常強勁的季度。

And as you said, our order book also looks good. So we're saying, I think we're definitely outpacing the market with respect to the total market. We're feeling really good about, you know, the corporate environment is we're continuing to see more and more activity as people are bringing more associates back to work. So those projects are coming, I think stronger certainly than a year ago, our, our optimism is building with respect to that. As you said, our education business remains very strong as we're selling the full product portfolio, seeing a lot of growth across our NORA products as well in education, both in K through 12 and higher education. So I think we're optimistic that the momentum is building and within that we are proud of the team's ability to take share.

正如您所說，我們的訂單看起來也不錯。所以我們說，我認為就整個市場而言，我們肯定超過了市場。我們對公司環境感覺非常好，隨著人們讓更多員工重返工作崗位，我們繼續看到越來越多的活動。因此，我認為這些項目的到來肯定比一年前更加強勁，我們對此的樂觀情緒正在增強。正如您所說，我們的教育業務仍然非常強勁，因為我們正在銷售完整的產品組合，我們的 NORA 產品以及教育領域（從 K 到 12 年級和高等教育）都實現了大幅增長。因此，我認為我們對這種勢頭正在形成感到樂觀，並且我們對團隊分享份額的能力感到自豪。

Katherine. I, I agree. The other thing that was really interesting to me on our earnings this quarter is that year-to-date, all three product lines were up both in price and volume. And you know, we couldn't say that last year. So it's just another testament to the momentum that we're seeing in the business, the momentum that we're seeing now versus a year ago. So, so great momentum inside the business and great to see the volume up as well as us being able to hold price in the market.

凱瑟琳。我，我同意。關於本季收益，我真正感興趣的另一件事是，今年迄今為止，所有三個產品線的價格和銷售量均有所上漲。你知道，去年我們不能這麼說。因此，這只是我們在業務中看到的勢頭的另一個證明，我們現在看到的勢頭與一年前相比。因此，業務內部勢頭如此強勁，很高興看到銷量上升以及我們能夠保持市場價格。

Okay, helpful and just follow on to that on order growth in Americas, can you give any detail on the breakout across verticals or products?

好的，很有幫助，請繼續關注美洲的訂單成長，您能提供有關垂直行業或產品突破的任何詳細資訊嗎？

We, we don't.

我們，我們不。

Really leading the.

真正領先了。

Growth.

生長。

Yeah. Yeah, we don't.

是的。是的，我們不這樣做。

Give a ton of a ton of detail in that break out. The one thing that we did mention in the prepared remarks is that our health care orders were up double digits in the quarter. So we're feeling optimistic about that health care business and the and those orders will read through over the coming quarter. Some of those take longer to read through. So that's good momentum for us in the future.

在那次爆發中提供大量細節。我們在準備好的發言中確實提到的一件事是，我們的醫療保健訂單在本季度增長了兩位數。因此，我們對醫療保健業務以及這些訂單將在下個季度完成感到樂觀。其中一些需要更長的時間才能讀完。所以這對我們未來來說是一個好的動力。

Okay, great. Thanks so much.

好的，太好了。非常感謝。

Yeah, your next question comes from the line of Alex Paris with Barrington Research. Your line is open.

是的，你的下一個問題來自 Barrington Research 的 Alex Paris。您的線路已開通。

Hi, guys. Thanks for taking my question. Congratulations on another big raise. Thanks.

嗨，大家好。感謝您提出我的問題。恭喜你再次大幅加薪。謝謝。

I, I just had a question kind of following up on Katherine's regarding billing. So again, education was up very strong. Up, 18% corporate office was up 2% kind of bucking the industry trend and you made some favorable comments about return to office. I just thought what whatever additional color I can get in those two categories, but also wanted to talk a little bit about retail and health care. So, retail is finally up as a from down last year due to product project delays. So, what's going on in retail? I'll, start there.

我，我只是有一個關於凱瑟琳關於賬單的後續問題。教育再次發展得非常強勁。上漲，18% 的公司辦公大樓上漲了 2%，與行業趨勢相反，您對重返辦公室發表了一些積極的評論。我只是想在這兩個類別中我能得到什麼額外的顏色，但也想談談零售和醫療保健。因此，由於產品項目的延遲，零售業最終比去年下降了。那麼，零售業到底發生了什麼事？我會，從那裡開始。

Yeah, great. So.

是的，太棒了。所以。

Our retail business did come back as we had expected. And again, this was really project delays last year. So in the back half of last year, we had several store remodels that were delayed and pushed into the back half of this year and those read through in the quarter. If you look at the Americas business as an example for that 18% about eight points of that growth was the retail come back, which we had expected and then 10 points of growth across the rest of the market. So a strong a strong quarter for retail, which is exactly what we had expected. We expect that also to carry some somewhat forward into the fourth quarter. And then our corporate office business, you know, it does continue to perform really well, was actually up mid single digits in the Americas. So even stronger than our globally, our 2% growth and our teams are really winning projects is brew set across all categories. So they're doing an incredible job with these one interface selling teams of selling the full suite of products across LVT carpet tile and also nora rubber, so strong growth in corporate as well.

我們的零售業務確實如我們預期的那樣恢復了。再說一遍，這確實是去年的工程延誤。因此，去年下半年，我們進行了幾次商店改造，這些改造被推遲並推遲到今年下半年，並在本季度完成。以美洲業務為例，18% 的成長大約有 8 個百分點是零售業的回歸，這是我們所預期的，然後是市場其他地區的 10 個百分點的成長。因此，零售業的季度表現強勁，這正是我們的預期。我們預計這也會在一定程度上延續到第四季。然後我們的公司辦公業務，你知道，它確實繼續表現得非常好，實際上在美洲成長了中個位數。因此，我們 2% 的成長甚至比我們的全球成長還要強勁，而且我們的團隊確實贏得了所有類別的項目。因此，他們與這些介面銷售團隊一起做了一項令人難以置信的工作，銷售 LVT 地毯塊和諾拉橡膠的全套產品，因此公司的成長也很強勁。

That's great. And then, and then health care. You, you know, you said that that orders were up nicely, which is great, but revenue net sales were down in health care slightly. What do you attribute that to?

那太棒了。然後是醫療保健。你知道，你說訂單成長得很好，這很好，但醫療保健領域的淨收入銷售額略有下降。您認為這歸因於什麼？

Yeah, you know, health.

是的，你知道，健康。

Care for us, those projects get installed over time. So, the time horizon is a bit different. The double digit order growth in health care is really encouraging. And a testament to the team again that the combined selling teams really focusing on the end market and we expect those orders to read through those projects get installed sometimes over 1 to 2 years, they're bigger projects and the orders come in in bigger chunks, but they also get the billings read through in bigger chunks over a longer period. So, we're encouraged that we saw that level of net sales growth in the quarter while health care was not as strong and then health care orders up, which shows that momentum will continue to read through in the future.

關心我們，這些項目會隨著時間的推移而安裝。所以，時間範圍有點不同。醫療保健領域兩位數的訂單成長確實令人鼓舞。再次向團隊證明，聯合銷售團隊真正專注於終端市場，我們預計這些訂單有時會在 1 到 2 年內完成安裝，這些項目是更大的項目，訂單量也更大。時間內以更大的區塊讀取帳單。因此，令我們感到鼓舞的是，我們看到本季的淨銷售成長水平，而醫療保健則較不強勁，然後醫療保健訂單增加，這表明未來將繼續保持這種勢頭。

Does that that strength in orders in health care translate into higher net sales in health care in the fourth quarter?

醫療保健領域訂單的強勁是否會轉化為第四季度醫療保健領域淨銷售額的成長？

I would expect it to, I think it also will flow through into next year. So again, some of those projects are like small medical buildings and those will turn in the quarter. Some of those projects are large health care systems that may have multiple buildings and multiple floors that get installed over 12 to 18 months.

我預計它會持續到明年。同樣，其中一些項目就像小型醫療建築，這些項目將在本季完成。其中一些項目是大型醫療保健系統，可能有多個建築物和多個樓層，安裝時間需要 12 至 18 個月。

Great. That's I appreciate that color and then I might have missed it. But did you comment on billings across product categories? I think you said they were up year-to-date in all three carpet tile, LVT and rubber.

偉大的。那是我欣賞這種顏色，然後我可能會錯過它。但您對跨產品類別的帳單發表評論了嗎？我想你說過他們今年迄今為止在所有三種方塊地毯、LVT 和橡膠方面都有所上漲。

That's right. Yes.

這是正確的。是的。

Great.

偉大的。

In Alex, our billings were up with price and volume, which is also, which is, which is a great sign. So in all three product categories here to date.

在亞歷克斯，我們的帳單隨著價格和數量的增加而增加，這也是，這是，這是一個很好的跡象。到目前為止，在所有三個產品類別中。

Great. We were they up in the third quarter or just up year-to-date or both.

偉大的。我們認為他們在第三季上漲，或者今年迄今上漲，或者兩者兼而有之。

2 out of 3 were up with and they were up with volume. So yeah, that's you know, again, an encouraging sign that its really encouraging to see how much volume has come back while we're able to hold price. So all, all encouraging stuff on top line.

三分之二的人都上升了，而且他們的音量也上升了。所以，是的，這又是一個令人鼓舞的跡象，在我們能夠保持價格的情況下，看到成交量回升確實令人鼓舞。總而言之，所有令人鼓舞的事物都在一線。

Ab Absolutely. Thank you. Then the final question for me, great out performance on the adjusted gross margin versus your guidance. I think you had guided to approximately 36%. It came in at 37.5%. What is your long term target there? I think you want to get back to pre COVID levels. What it, what is that? And then how long will it take you to get there? Is it like a 50 bits per year sort of thing or is it faster sooner?

絕對是。謝謝。然後是我的最後一個問題，調整後的毛利率與您的指導相比表現出色。我想你已經指導到了大約 36%。其比例為 37.5%。您在那裡的長期目標是什麼？我認為你想回到新冠疫情之前的水平。那是什麼，那是什麼？那麼你需要多長時間才能到達那裡？它是每年 50 位元之類的東西還是更快更快？

Alex, you're right. Exactly. We're, we're, our ambition is to get back up to 38% to 38.5%. And we're really encouraged by the progress that we're making. We haven't given a specific timeline. We're Honestly just trying to get there as fast as we can and again, encouraged by the progress.

亞歷克斯，你是對的。確切地。我們、我們、我們的目標是恢復到 38% 到 38.5%。我們所取得的進展讓我們深受鼓舞。我們還沒有給出具體的時間表。老實說，我們只是想盡可能快地實現這一目標，並再次受到進展的鼓舞。

And I would just say Alex, the good news is that you kind of mentioned it, you know, we brought up our gross profit margins in Q4 and for the full year. So if you sort of think about our prior guide for Q4, it was around 34.1%. We brought that up 80 basis points in Q4 to 34.9 is our midpoint guide. And for the full year as you pointed out, you know, our, our prior guide was 36% and now we brought it up to 36.6. So really good, strong momentum on that gross profit line or, row.

我只想說亞歷克斯，好消息是你提到了這一點，你知道，我們提高了第四季和全年的毛利率。因此，如果您考慮我們之前對第四季度的指導，您會發現該比例約為 34.1%。我們將第四季的中點指引上調了 80 個基點至 34.9。正如您所指出的，我們之前的指導值為 36%，現在我們將其提高到 36.6。毛利線或行的勢頭非常好，強勁。

Great news. Thank you so much. I appreciate the additional color. I'll get back into the queue.

好消息。太感謝了。我很欣賞額外的顏色。我會回到隊列中。

Thank.

感謝。

You.

你。

Your next question comes from the line of David mcgregor with Longbow Research. Your line is open.

您的下一個問題來自 Longbow Research 的 David mcgregor。您的線路已開通。

Yeah, thanks for taking my questions and good morning to everyone. Congratulations on all the progress. Tremendous to see. I guess what percentage of wins at this point have more than just carpet tile. So, include the LBT and, and the Nora versus how that KPI might have stood a year ago, 18 months ago.

是的，感謝您提出我的問題，祝大家早安。祝賀所有的進展。太棒了。我猜想此時獲勝的百分比有多少不僅僅是地毯塊。因此，請考慮 LBT 和 Nora 與一年前、18 個月前 KPI 的情況。

Yes, it's a great, it's a great.

是的，這是一個偉大的，這是一個偉大的。

Question, David and not and not something that we disclose regularly. I would say it's increasing. For sure. An example I would say is in our education space where we had primarily initially, we were just selling carpet tile and education. We broaden that nicely to include carpet tile and LBT as pretty standard and selling to the education space. And what we're finding now is NORA is also included in those both in K through 12, but also in higher education. So, for example, we're getting lab spaces and other spaces in the higher ed, which we maybe hadn't had as part of that portfolio in the past. So it's definitely increasing and encouraged by what we're seeing there. I think there's more to go.

問題，大衛，而不是我們經常披露的事情。我會說它正在增加。一定。我想說的一個例子是在我們的教育領域，我們最初主要只是銷售地毯塊和教育。我們很好地擴展了這一範圍，將方塊地毯和 LBT 作為相當標準並銷售給教育領域。我們現在發現 NORA 也包含在 K 到 12 年級以及高等教育中。例如，我們在高等教育中獲得了實驗室空間和其他空間，而這些空間我們過去可能沒有作為該投資組合的一部分。因此，我們在那裡看到的情況肯定會增加並受到鼓舞。我認為還有更多的事情要做。

That's encouraging. And I guess this is all just one interface. It's not necessarily evolving preferences with the customer. It's more you're taking share in those categories with increasing presence.

這令人鼓舞。我想這只是一個介面。它不一定是隨著客戶的喜好而改變的。隨著影響力的增加，您在這些類別中的份額也越來越大。

Yeah. You know, it's interesting.

是的。你知道，這很有趣。

When, when we think about what we did with the one interface selling teams which hit as you know, starting in January. Part of that model was that we increased our feet on the street for a Nora brand by about 20% to really round out the the combined selling teams and make sure we had enough coverage on Nora to execute that model.

當我們思考我們對從一月份開始受到打擊的單一介面銷售團隊所做的事情時。該模型的一部分是，我們將 Nora 品牌的市場佔有率增加了約 20%，以真正完善合併的銷售團隊，並確保我們對 Nora 有足夠的覆蓋範圍來執行該模型。

What we're also seeing is that we actually put the Nora brand in the hands of all of our interface sellers by changing our compensation structure so that now we're selling as one team and compensating as one team. And so the energy around that, you know, rubbers solution for a lot of flooring opportunities. And we've really got an amplified effort across our entire interface selling team in addition to that increase in feet on the street specific to Nora. So we're really seeing a multiplier effect there that's stronger than we anticipated.

我們也看到，透過改變我們的薪酬結構，我們實際上將 Nora 品牌交到了所有介面銷售人員的手中，這樣我們現在就可以作為一個團隊進行銷售並作為一個團隊進行補償。因此，圍繞這一點的能源，你知道，橡膠解決方案提供了許多地板機會。除了諾拉（Nora）在街上的人數增加之外，我們整個介面銷售團隊確實加強了力度。所以我們確實看到了比我們預期更強的乘數效應。

And so with the growth in Nora and just in terms of penetrating your existing base and then, in addition to that, you're talking about growth beyond health care. How do you stand in terms of available capacity? NORA do you have the capacity to support how much growth and when do you have to start deploying capital to, to expand that?

因此，隨著諾拉（Nora）的成長，就滲透現有基礎而言，除此之外，您正在談論醫療保健之外的成長。您對可用容量的看法如何？NORA 您是否有能力支援多少成長？

Yeah, it's a great question and, and we're talking a lot about that. I think the good news right now is we've got, we invested in some automation equipment in Nora that is live now. That's really helping us to increase our throughput. So we have what we need. I think we'll continue to invest in that space and you may see some additional investments in Nora as we continue to grow. But we're continuing to kind of bring on more and more people to support the growth and also continue to invest in automation. So I think we're in good shape. We're we're talking about it every day.

是的，這是一個很好的問題，我們對此進行了很多討論。我認為現在的好消息是我們在諾拉投資了一些自動化設備，這些設備現在已經投入運作。這確實有助於我們提高吞吐量。所以我們有我們需要的東西。我認為我們將繼續在該領域進行投資，隨著我們的不斷發展，您可能會看到對 Nora 的一些額外投資。但我們將繼續吸引越來越多的人來支持成長，並繼續投資自動化。所以我認為我們的狀態很好。我們每天都在談論它。

Got it on the raw materials. How much of the benefit that you achieved? Well, first of all, maybe can you can you just talk about what price/cost might have contributed to the gross margins?

從原料上就知道了。您獲得了多少利益？好吧，首先，也許您能談談價格/成本對毛利率的貢獻嗎？

And David, it was a, it, it was a blend between, if you look at the 158 basis points of gross margin expansion in Q3, it was a blend of raw material cost deflation and also higher fixed cost absorption or lower cost per unit on higher volume. And, and part of the contribution of that was that we actually beat our revenue number in Q3. So compared to where we thought we would be in Q3, we had more throughput plants which, which helped us a lot on our fixed cost absorption. And on the raw side, you know, things are leveling out from a, from a inflation deflation standpoint. But we did, but we did get a little bit of year over year lift in Q3 that will start to moderate as we move into Q4 and all that's built into our guide.

大衛，這是一個，它，這是一個混合體，如果你看看第三季度毛利率擴張的158 個基點，它是原材料成本通貨緊縮和更高的固定成本吸收或更低的單位成本的混合體在較高的音量上。而且，其中的部分貢獻是我們實際上在第三季超過了我們的收入數字。因此，與我們認為第三季的情況相比，我們擁有更多吞吐量工廠，這對我們吸收固定成本有很大幫助。從原始數據來看，從通膨通貨緊縮的角度來看，情況正在趨於穩定。但我們做到了，但我們確實在第三季度取得了一些同比提升，隨著我們進入第四季度，這些提升將開始放緩，所有這些都納入了我們的指南。

And, and David, I just add to that also when our Americas business is up 18% that regional mix impact also helps us so that that flows through as a benefit as well.

而且，大衛，我只是補充一點，當我們的美洲業務成長 18% 時，區域組合的影響也對我們有幫助，這也能帶來好處。

It's true, I guess I'm trying to get a sense of how much benefit there is from just movement in the raw material markets themselves in terms of the, the price you're paying for these factors versus some of the benefits associated with bringing on a new supply chain leader and really getting much more process oriented around procurement.

確實如此，我想我正試圖了解原材料市場本身的變動有多少好處，即您為這些因素支付的價格與與帶來的一些好處相關的好處。採購為導向的流程。

I think it's a combination of all those things and all you, you put all of those, all of those positive pieces in and it's really, it blends into the 158 bits. As Laura mentioned, it did Laurel had a really good point that you know, the geographic mix helped us a lot as well now to offset a little bit by the retail mix. So there lots, lots of, a lot of pieces in there. So.

我認為這是所有這些東西和所有你的組合，你把所有這些，所有這些積極的部分放進去，它真的融入了 158 位。正如勞拉（Laura）所提到的，勞雷爾（Laurel）確實有一個非常好的觀點，你知道，地理組合對我們現在也有很大幫助，可以透過零售組合來抵消一點。所以裡面有很多很多很多的碎片。所以。

And I think a lot of the things that we're seeing with respect to our investments in automation are yet to come. As we, as we said, we're, I'm pleased with the progress we now have. I think it's three machines up and running. Maybe the fourth is live by now in our Georgia facility that will really help with the automation there, but that's going to continue to play out over the next year.

我認為我們在自動化投資方面看到的很多事情尚未發生。正如我們所說，我對我們現在的進展感到滿意。我認為這是三台機器正在運行。也許第四個現在已經在我們喬治亞州的工廠上線，這將真正有助於那裡的自動化，但這將在明年繼續發揮作用。

And that's versus, I think you had one line up and running last quarter.

這與我認為上個季度你已經排好隊並運行的情況相反。

That's right, David. Okay.

沒錯，大衛。好的。

So good progress there. I guess just thinking through the 2025 and I'm not sure, you know, obviously there's a lot of uncertainty still remaining with regard to what 25 may bring. But I'd be interested in your thoughts in terms of your ability to maintain kind of a gross margin progression, not so much based on what the market may bring because as we've said, that's uncertain but just based on the idiosyncratic drivers that you've got in place, the automation, the procurement, the one interface initiatives.

那裡進展順利。我想，只要想想 2025 年，我就不確定，你知道，顯然 25 年可能會帶來什麼，仍然存在著許多不確定性。但我對你保持毛利率進步的能力感興趣，而不是基於市場可能帶來的變化，因為正如我們所說，這是不確定的，但只是基於特殊的驅動因素您已經就位，自動化、採購、單一介面計劃。

What do you think that could contribute to gross margin progression as you move into the next year?

您認為這對明年的毛利率成長有何貢獻？

You know, as we've said, our ambition, as you know, is to get back to 38 - 38.5. I think we're, from a timing standpoint this year. I think we'll be ahead of where we thought. So, I'm encouraged by that and yet we still have a lot yet to deploy that I don't think is reading through the P&L yet. So I'm encouraged that we'll continue to make progress and as you said, the market will, you know, we'll ride that and see where that takes us. But we're through all of this. We've just said we're going to not pay so much attention to what the market's doing and we're going to do everything we can to continue to drive market share gains and growth which and then, and then also the the supply chain initiatives, all, all that is within our it's within our control to drive that. So I think we're, we're feeling good.

正如我們所說，我們的目標是回到 38 - 38.5。我認為，從今年的時間安排來看，我們是這樣的。我認為我們會領先於我們的想法。因此，我對此感到鼓舞，但我們仍然有很多需要部署的地方，我認為還沒有通讀損益表。因此，我很高興我們將繼續取得進展，正如您所說，市場將會，您知道，我們將順應這一趨勢，看看它會將我們帶到何處。但我們已經經歷了這一切。我們剛剛說過，我們不會太關注市場的動態，我們將盡一切努力繼續推動市場份額的成長和成長，然後是供應鏈倡議，所有，所有在我們範圍內的事情都在我們的控制範圍內來推動。所以我認為我們感覺很好。

Okay. And then just wrapping up for me, I guess the question on SG&A you know, you're guiding to $345 million this year of SG&A. I guess a couple of questions here, you know, how much revenue growth can you support based on kind of that level of spend? I I'm guessing you're going to get some inflation there in 2025 3% inflation would be an extra $10 million, but maybe I set that some productivity and maybe offset, you know, increasing growth spending with cutbacks and non-growth SG&A I'm not sure how you approach that, but, but I guess the question is just how much upside is left in terms of your ability to grow revenue off SG&A A before you have to really take SG& A to the next level.

好的。然後我就結束了，我猜關於 SG&A 的問題，你知道，今年的 SG&A 目標是 3.45 億美元。我想這裡有幾個問題，你知道，根據這種支出水平，你能支持多少收入成長？我猜你會在 2025 年出現一些通貨膨脹，3% 的通貨膨脹將額外增加 1000 萬美元，但也許我設定了一些生產力，也許可以抵消，你知道，通過削減和非增長 SG&A 來增加增長支出我不確定你如何處理這個問題，但是，但我想問題是，在你必須真正將SG&A 提升到一個新的水平之前，你透過SG&A A 增加收入的能力還剩下多少上升空間。

So as, as we've, as we've said, we've been really focused on being efficient in our SG&A and we'll make investments, very thoughtful and intentional investments that we believe will read through the growth. The great example of that is adding the feet on the street to the Nora business which is paying back in dividends. And, and we're at, we're, you know, analyzing all of that to see how much more do we need in 2025 to deliver the growth expectations that we have for ourselves. And yet we'll be very diligent on anything that doesn't touch the customer, the innovation or, or the product design and development. So, it's a dance as you know, right, we, we need to make sure that we fund the growth will be really intentional. We do a lot of test and learn to see whether or not things pay back. So we're putting really good money to work for us and then being really efficient on anything that doesn't, doesn't touch the customer.

因此，正如我們所說，我們一直非常注重提高 SG&A 效率，我們將進行投資，非常深思熟慮和有意的投資，我們相信這些投資將貫穿整個成長。一個很好的例子就是諾拉（Nora）的業務增加了街頭業務，並獲得了股息回報。而且，我們正在分析所有這些，看看我們在 2025 年還需要多少才能實現我們對自己的成長預期。然而，我們將非常努力地處理任何不涉及客戶、創新或產品設計和開發的事情。所以，正如你所知，這是一場舞蹈，對吧，我們需要確保我們為成長提供的資金是真正有意義的。我們做了很多測試並學習，看看事情是否有回報。因此，我們投入了大量資金為我們工作，然後在任何不影響客戶的事情上都非常有效率。

Great. Well, thanks very much for answering my questions and congratulations on all the progress.

偉大的。嗯，非常感謝您回答我的問題並祝賀所有的進展。

Thanks David, appreciate it.

謝謝大衛，很感激。

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

目前沒有其他問題。我會將電話轉回給執行長勞雷爾赫德 (Laurel Hurd) 致閉幕詞。

Well, I want to thank the.

嗯，我要感謝了。

Entire interface team for an excellent quarter. Congratulations to the team and thanks everyone for listening to the call and have a great day.

整個介面團隊度過了一個出色的季度。恭喜團隊，感謝大家收聽電話，祝您有美好的一天。

Thank you. This does conclude today's conference call. You may now disconnect.

謝謝。今天的電話會議到此結束。您現在可以斷開連線。