UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________

Form 10-K

☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 2928, ~~2024~~2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File No.: 001-33994

INTERFACE INC

(Exact name of registrant as specified in its charter)


Georgia						58-1451243
(State of incorporation)						(I.R.S. Employer Identification No.)


1280 West Peachtree Street	Atlanta	Georgia	30309
(Address of principal executive offices)			(zip code)

Registrant’s telephone number, including area code: (770) 437-6800

Securities Registered Pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered:
Common Stock, $0.10 Par Value Per Share	TILE	Nasdaq Global Select Market

Securities Registered Pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes þ No o

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes o No þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Date File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the ~~Securities~~ Exchange Act ~~of 1934~~.

Large accelerated filer þ Accelerated filer o Non-accelerated filer o Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. þ

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to § 240.10D-1(b). o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No þ

Aggregate market value of the voting and non-voting stock held by non-affiliates of the registrant as of June 2827, ~~2024~~2025: $~~834~~1,~~272~~203,~~048~~605,034 (5657,~~830~~097,~~521~~013 shares valued at the closing sale price of $1421.6808 on June 2827, ~~2024~~2025). See Item 12.

Number of shares outstanding of each of the registrant’s classes of Common Stock, as of February 1413, ~~2025~~2026:

Class			Number of Shares
Common Stock, $0.10 par value per share			5857,~~313~~963,~~040~~488

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Proxy Statement for the ~~2025~~2026 Annual Meeting of Shareholders are incorporated by reference into Part III.

TABLE OF CONTENTS

			Page
PART I			3
ITEM 1. BUSINESS			3
ITEM 1A. RISK FACTORS			1213
ITEM 1B. UNRESOLVED STAFF COMMENTS			2023
ITEM 1C. CYBERSECURITY			2124
ITEM 2. PROPERTIES			2226
ITEM 3. LEGAL PROCEEDINGS			2327
ITEM 4. MINE SAFETY DISCLOSURES			2327
PART II			2428
ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES			2428
ITEM 6. [RESERVED]			2630
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			2731
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK			4446
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA			4648
CONSOLIDATED STATEMENTS OF OPERATIONS			4648
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME			4749
CONSOLIDATED BALANCE SHEETS			4850
CONSOLIDATED STATEMENTS OF CASH FLOWS			4951
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS			5052
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM			100
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM - ERNST & YOUNG LLP			101
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM			102
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM - BDO, USA, P.C.			103
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE			103
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM			104
ITEM 9A. CONTROLS AND PROCEDURES			103
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE			105
ITEM 9B. OTHER INFORMATION			103
ITEM 9A. CONTROLS AND PROCEDURES			105
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS			103
ITEM 9B. OTHER INFORMATION			105
PART III			104
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS			105
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE			104
PART III			106
ITEM 11. EXECUTIVE COMPENSATION			105
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE			106
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS			105
ITEM 11. EXECUTIVE COMPENSATION			107
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE			105
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS			107
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES			105
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE			107
PART IV			106
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES			107
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES			106
PART IV			108
ITEM 16. FORM 10-K SUMMARY			110
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES			108
SIGNATURES			111
ITEM 16. FORM 10-K SUMMARY			112
SIGNATURES			113

Table of Contents

PART I

ITEM 1. BUSINESS

General

References in this Annual Report on Form 10-K to “Interface,” “the Company,” “we,” “our,” “ours” and “us” refer to Interface, Inc. and its subsidiaries or any of them, unless the context requires otherwise.

Interface, Inc. was incorporated in Georgia in 1973 and is a global flooring solutions company ~~and sustainability leader,~~ offering an integrated portfolio of ~~carpet tile and resilient~~ flooring products ~~that~~to ~~includes~~customers, ~~Interface®~~including carpet tile, ~~and~~ luxury vinyl tile (“LVT”), nora® rubber flooring, and FLOR® premium area rugs. ~~for~~We ~~commercial~~are ~~and~~a ~~residential~~global ~~spaces.~~sustainability Weleader ~~help~~and ~~our~~offer ~~customers~~an ~~create~~extensive ~~high-performance~~range ~~interior~~of ~~spaces~~low ~~that~~carbon ~~support~~and ~~well~~cradle-~~being,~~to-gate ~~productivity,~~carbon ~~and~~negative ~~creativity,~~products asthat ~~well~~prioritize asour sustainability ~~of the planet~~goals.

AsOver athe ~~global~~past ~~company~~decade, ~~with~~we have evolved from a ~~reputation~~company ~~for~~focused primarily on modular carpet into an integrated flooring solutions provider. In late 2016, we began offering LVT products in select markets, expanding globally in 2017 to capitalize on the high-growth ~~quality~~resilient flooring market. In 2018, ~~reliability~~we acquired nora systems GmbH, adding rubber flooring to our portfolio and ~~premium~~strengthening ~~positioning~~our position in healthcare, weeducation, and transportation market ~~modular~~segments. ~~carpet~~In ~~under~~2020, ~~the~~we ~~established~~launched ~~brand~~our ~~names~~CQuest™ ~~Interface®~~carbon ~~and~~negative ~~FLOR®~~carpet tile backings, and in 2021 we ~~market~~set ~~LVT~~carbon ~~under~~reduction targets validated by the ~~brand~~Science Based Targets Initiative. We have also implemented our One Interface® strategy, ~~and~~a wemulti-year organizational initiative that positions us to operate as one global team across our integrated product portfolio. These developments have helped us to diversify beyond our traditional corporate office market ~~rubber~~segment, ~~flooring~~building ~~under~~a ~~the~~more ~~brands~~resilient ~~noraplan®~~revenue base across education, healthcare, government, hospitality, and ~~norament®~~other commercial end-markets.

As a global company with a reputation for high quality, reliability and premium positioning, we market our integrated portfolio for carpet tile under the established brand names Interface® and FLOR®, we market LVT under the brand Interface®, and we market rubber flooring under the brands noraplan® and norament®.

Reportable Segments

The Company has two operating and reportable segments – namely Americas (“AMS”) and Europe, Africa, Asia and Australia (collectively “EAAA”). The AMS operating segment includes the United States, Canada and Latin America geographic areas. See Note 2019 entitled “Segment Information” included in Item 8 of this Annual Report on Form 10-K for additional information.

Below is a summary of total net sales percentages by reportable segment for the last three fiscal years.

	2024	2023	2022
	2025	2024	2023
AMS	61%	5861%	58%
EAAA	39%	4239%	42%

Market ~~Segmentation~~Factors

Our business, as well as the commercial interiors industry in general, is cyclical in nature and is impacted by economic conditions and trends that affect the markets for commercial and institutional business spaces. We believe the appeal and utilization of our products will continue to grow, and we are using our considerable skills and experience with designing, producing and marketing our products to make us a market leader. We primarily focus our sales efforts on the corporate office, education, healthcare, ~~government~~public buildings, ~~hospitality~~retail, transportation, and residential living market segments.

Disruptions in global economic markets due to ~~inflation,~~the ~~high~~impact ~~interest~~of ~~rates, geo~~government-~~political~~imposed ~~tensions,~~tariffs ~~including~~and ~~the~~retaliatory ~~Russia-Ukraine~~tariffs, ~~war~~supply chain challenges and ~~the~~disruptions, ~~Middle~~significant ~~East~~pressures ~~conflict,~~in athe ~~still~~commercial ~~challenging~~office ~~supply~~market ~~chain~~globally, ~~environment~~inflation, slow ~~economic~~market conditions in ~~several~~certain ~~markets~~parts ~~that~~of wethe ~~serve~~globe, and ~~significant~~geopolitical ~~financial~~factors ~~pressures~~including inwars ~~the~~and ~~commercial~~other ~~office market globally~~conflicts, all pose challenges for us and impact the markets we operate in.

Table of Contents

Products and Services

Our AMS and EAAA reportable segments sell the same products within their respective geographical regions.

Modular Carpet

Our ~~AMS~~modular ~~and~~carpet ~~EAAA~~systems ~~reportable~~are ~~segments~~marketed ~~sell~~under the ~~same~~established ~~products~~brands ~~within~~Interface ~~their~~and ~~respective geographical regions~~FLOR. We ~~produce~~manufacture carpet tile in precise, dimensionally stable squares - usually 50 cm x 50 cm tiles as well as planks in avarying ~~wide~~sizes. Carpet tile is produced in a variety of colors, patterns, textures, pile heights, and densities. These ~~varieties~~options are designed to meet ~~both~~ the practical and aesthetic needs of a broad spectrum of commercial interiors — particularly offices, educational facilities, healthcare facilities, government-related facilities (including but not limited to airports), ~~hospitality~~retail spaces, ~~retail~~hospitality ~~facilities~~spaces, and residential interiors. ~~Our~~We make carpet tile ~~systems~~with ~~permit~~yarn ~~distinctive~~containing ~~styling~~varying ~~and~~degrees ~~patterning~~of ~~that~~recycled ~~can~~post-consumer benylon, ~~used~~depending toon ~~complement~~the ~~interior~~style ~~designs,~~and tocolor. ~~set~~We ~~off~~also ~~areas~~make ~~for~~carpet ~~particular~~tile ~~purposes~~backing containing post-industrial and/or ~~create~~post-consumer ~~visual~~recycled ~~cues~~materials. While we continue to manufacture and sell a substantial portion of our carpet tile in standard styles, most of our modular carpet sales in the Americas and Asia-Pacific regions are made-to-order products designed to meet customer specifications.

~~Our modular carpet systems are marketed under the established brands Interface and FLOR.~~ We ~~manufacture~~design our carpet ~~tiles~~tile ~~cut in precise, dimensionally stable squares (usually 50 cm x 50 cm) or rectangles (such as planks and Skinny Planks™). Our GlasBac® technology employs a fiberglass-reinforced polymeric composite~~ backing ~~that~~options ~~provides~~for dimensional stability ~~and reduces the need for adhesives or fasteners~~. WeOur ~~also~~two ~~make~~primary ~~carpet tiles with a~~ backing ~~containing~~platforms ~~post-industrial and/or post-consumer recycled materials. In addition, we make carpet tile with yarn containing varying degrees of recycled post-consumer nylon, depending on the style and color.~~are:

•GlasBac® - this backing includes a fiberglass-reinforced polymeric composite that reduces the need for adhesives or fasteners.

•CQuest™ backings include bio-based materials and recycled content. When measured on a stand-alone basis, the backings are net carbon negative (see discussion below for additional information).

Key Modular Carpet Products

In 2021, we introduced our Open Air™ collection of more affordable carpet tiles — an expansive platform of hard-working carpet tile styles designed with open spaces in mind. Innovations in both design and manufacturing allow us to create these high-quality, high-performance carpet products at a lower price point.

Launched in 2020, our next generation carpet tile backings are called CQuest™ backings. Guided by materials science and inspired by nature’s carbon-storing abilities, we added new bio-based materials and more recycled content to our backings. The materials in the CQuest backings, when measured on a stand-alone basis, are net carbon negative — meaning that their global warming potential emissions are net negative. The CQuest backings are:

•CQuest™GB – Which features superior performance with a construction of post-consumer recycled content from carpet tiles, bio-based additives, and pre-consumer recycled materials.

•CQuest™Bio – A non-vinyl bio-composite backing made with bio-based and recycled fillers.

•CQuest™BioX – The same material make-up as CQuestBio with a higher concentration of carbon negative materials.

~~Our~~In ~~i2™~~2020, ~~modular~~we ~~product~~achieved ~~line,~~a ~~which~~substantial ~~includes~~milestone in our ~~popular~~journey ~~Entropy®~~toward ~~product,~~becoming ~~features~~a ~~mergeable~~sustainable ~~dye~~enterprise. ~~lots,~~Simultaneously ~~and~~with ~~includes~~the alaunch ~~number~~ of ~~carpet~~our ~~tile~~CQuest ~~products~~backings ~~that~~described ~~are~~above, ~~designed~~we tointroduced bein ~~installed~~the ~~randomly~~Americas ~~without~~and ~~reference~~subsequently toin ~~the~~our ~~orientation~~EAAA ofgeographical ~~neighboring~~regions, ~~tiles.~~our ~~The~~first i2ever ~~line~~“cradle-to-gate” ~~offers~~carbon ~~cost-efficient~~negative ~~installation~~carpet ~~and~~tile ~~maintenance,~~products ~~interactive~~in ~~flexibility~~three unique styles: Shishu Stitch™, ~~and~~Tokyo ~~recycled~~Texture™, and ~~recyclable~~Zen ~~materials~~Stitch™. ~~Our~~These ~~TacTiles®~~pioneering ~~carpet~~products, ~~tile~~which ~~installation~~are ~~system~~part ~~uses~~of ~~small~~our ~~squares~~Embodied ofBeauty™ ~~adhesive~~collection, ~~plastic~~are ~~film~~created towith ~~connect~~a ~~intersecting~~combination of our CQuestBioX carpet ~~tiles,~~backing ~~thus~~(featuring ~~eliminating~~bio-based ~~the~~materials ~~need~~and ~~for~~more ~~traditional~~recycled ~~carpet~~content), ~~adhesive~~specialty yarns and ~~resulting~~tufting inprocesses that create a ~~reduction~~carpet intile ~~installation~~with ~~time~~a ~~and~~net ~~material~~negative ~~waste~~value of “embodied carbon.”

Embodied Wecarbon ~~also~~is ~~sell~~the ~~our~~carbon ~~FLOR~~footprint ~~line~~(meaning the global warming potential of ~~products~~emissions toof ~~specifically~~greenhouse ~~target~~gases ~~modular~~measured ~~carpet~~in ~~sales~~carbon todioxide ~~the~~equivalents) ~~residential~~of ~~market~~a ~~segment~~product from raw material creation, growth and inextraction ~~recent~~(the ~~years~~“cradle”) ~~FLOR~~through ~~products~~processing ~~have~~until ~~had~~it ~~crossover~~is ~~success~~packaged and ready to be shipped from our factory (the “gate”), thus referred to as “cradle-to-gate” in ~~commercial~~the ~~markets~~life cycle assessment of a product. InEmbodied ~~addition,~~carbon weis ~~have~~distinct ~~created~~from ~~modular~~operational ~~carpet~~carbon, ~~products~~which ~~designed~~refers ~~for~~to ~~each~~the carbon footprint of everything that happens after the ~~education~~product leaves our factory, ~~healthcare~~such as shipment, ~~hospitality~~customer use, and ~~retail~~end ~~market~~of ~~segments~~life.

The award-winning design firm David Oakey Designs has had a pivotal role in developing many of our innovative product designs. David Oakey Designs has developed products that are manufactured using state-of-the-art tufting technology, which allows us to pinpoint tufts of different colored yarns in virtually any arrangement within a carpet tile. These unique designs are best exemplified by our Urban Retreat®, Net Effect®, Human Nature® and World Woven® collections, which are sold throughout our international operations.

In 2020, we achieved a substantial milestone in our journey toward becoming a sustainable enterprise. Simultaneously with the launch of our CQuest backings described above, we introduced in the Americas and subsequently in our EAAA geographical regions, our first ever “cradle-to-gate” carbon negative carpet tile products in three unique styles: Shishu Stitch™, Tokyo Texture™, and Zen Stitch™. These pioneering products, which are part of our Embodied Beauty™ collection, are created with a combination of our CQuestBioX carpet backing (featuring bio-based materials and more recycled content), specialty yarns and tufting processes that create a carpet tile with a net negative value of “embodied carbon”.

Table of Contents

~~Embodied~~Our ~~carbon~~i2™ ismodular ~~the~~product ~~carbon~~line, ~~footprint~~which ~~(meaning~~includes ~~the~~our ~~global~~popular ~~warming~~Entropy® ~~potential~~product, offeatures ~~emissions~~mergeable ofdye ~~greenhouse~~lots, ~~gases~~and ~~measured~~includes ina ~~carbon~~number ~~dioxide equivalents)~~ of acarpet ~~product~~tile ~~from~~products ~~raw~~that ~~material~~are ~~creation,~~designed ~~growth~~to ~~and~~be ~~extraction~~installed ~~(the~~randomly ~~“cradle”)~~without ~~through~~reference ~~processing~~to ~~until~~the itorientation isof ~~packaged~~neighboring ~~and~~tiles. ~~ready~~The toi2 beline ~~shipped~~offers ~~from~~cost-efficient ~~our~~installation ~~factory~~and ~~(the “gate”)~~maintenance, ~~thus~~interactive ~~referred~~flexibility, toand asrecycled ~~“cradle-to-gate”~~and inrecyclable ~~the~~materials. ~~life~~Our ~~cycle~~TacTiles® ~~assessment~~carpet oftile ainstallation ~~product.~~system ~~Embodied~~uses ~~carbon~~small issquares ~~distinct~~of ~~from~~adhesive ~~operational~~plastic ~~carbon,~~film ~~which~~to ~~refers~~connect tointersecting ~~the~~carpet ~~carbon~~tiles, ~~footprint~~thus ofeliminating ~~everything~~the ~~that~~need ~~happens~~for ~~after~~traditional ~~the~~carpet ~~product~~adhesive ~~leaves~~and ~~our~~resulting ~~factory,~~in ~~such~~a asreduction ~~shipment,~~in ~~customer~~installation ~~use,~~time and ~~end~~material ~~of life~~waste.

~~Modular Resilient Flooring~~FLOR®

InWe ~~2016,~~launched ~~we began offering a category of products we call modular resilient flooring, and~~ our ~~first~~FLOR ~~product~~business ~~introductions into this category were LVT products~~ in ~~the~~2003 ~~United~~to ~~States. LVT~~target ~~shares many of~~ the ~~same~~residential ~~attributes~~market ~~and benefits as carpet tile, but has a resilient or hard surface instead of a soft surface of yarn~~segment. In ~~2017~~recent years, weFLOR ~~launched our LVT~~ products ~~globally,~~have ~~beginning~~had ~~with~~crossover ~~the~~success ~~Level Set™ collection which is available~~ in ~~styles~~commercial ~~with printed top layers in a variety of aesthetic looks, including natural woodgrains and stones, textured woodgrains, and patterns~~markets. Our ~~LVT~~FLOR ~~products~~brand ~~are~~delivers ~~modular~~premium ~~and~~area ~~come~~rugs inmade ~~sizes that match certain~~ of ~~our~~ modular carpet tile ~~squares~~for residential and ~~planks~~commercial spaces. ~~Some~~We ofalso ~~our~~offer ~~LVT products are engineered to the same or similar height as our modular carpet, which means our~~ customers ~~have~~ the ~~ability~~option to ~~install~~return ~~our~~their ~~LVT~~used ~~and~~FLOR ~~modular~~ carpet ~~products~~tiles ~~side~~to bybe ~~side~~recycled ~~without~~through ~~transition strips or layering. In addition, some of~~ our ~~LVT~~ReEntry ~~products~~program ~~include~~(see amanufacturing ~~backing~~and ~~system~~raw ~~that~~materials ~~provides~~section ~~acoustic~~below ~~insulation without the need~~ for additional ~~underlayment,~~information ~~which~~on ~~can~~our ~~reduce~~ReEntry ~~the impact of sound in the space where the flooring is used~~program).

~~Rubber~~In ~~Flooring~~2024 we launched a successful, award-winning FLOR collection in collaboration with fashion designer Trina Turk and expanded the collaboration with new styles in 2025.

With the acquisition of nora in 2018, we began offering rubber flooring products under the established noraplan and norament brands, which enhances the Company’s resilient flooring portfolio. Rubber flooring is ideal for applications that require hygienic, safe flooring with strong chemical resistance. Rubber flooring is extremely durable compared to other flooring alternatives.LVT

Interface began offering LVT products in late 2016 in select markets and expanded globally in 2017 to capitalize on the high-growth resilient market. Our LVT products share many of the same attributes and benefits as modular carpet tile but have a resilient or hard surface instead of a soft surface of yarn. Our LVT products offer printed top layers in a variety of aesthetic options, including natural woodgrains and stones, textured woodgrains, and textile patterns.

In 2025 we launched various LVT collections including Lasting Impressions, In the Mix, and Raw Materials, which offer new designs that balance the need for design aesthetics and durability. Our LVT products are engineered to the same or similar height as our modular carpet, which means customers can install our LVT, modular carpet, and rubber products side by side without transition strips or layering.

Our Sound Choice™ LVT backing system provides acoustic insulation without the need for additional underlayment, helping to reduce the impact of sound once installed.

nora® Rubber Flooring

We acquired nora systems, GmbH in 2018, to expand our resilient flooring offerings and drive growth in non-corporate office market segments. nora® represents a core part of our resilient flooring portfolio. Our nora rubber solutions are engineered to support operational efficiency, safety, health, and long-term performance in demanding environments. Designed without PVC or phthalate plasticizers, nora products offer durable, quiet, ergonomic, and low-maintenance flooring. With the established noraplan and norament brands we provide high-performing rubber flooring options to key market segments including healthcare, education, and transportation.

In January 2025, the Company unveiled the first of a kind carbon negative nora rubber flooring prototype, which has a carbon negative footprint when measured cradle to gate. Also, in 2025, we updated our norament brand in AMS adding new colorways and surface textures for enhanced slip resistance.

Other Products and Services

We sell our TacTiles carpet tile installation system, along with a variety of traditional adhesives and products for carpet installation and maintenance that are manufactured by a third party. We also continue to provide “turnkey” flooring project management services for a number of global accounts and other large customers ~~through our InterfaceSERVICES™ business~~.

Table of Contents

Manufacturing and Raw Materials

We manufacture carpet tile at two locations in the United States and at facilities in the Netherlands, the United Kingdom, China and Australia. Our LVT products are manufactured by a third party in South Korea. We manufacture rubber flooring in Germany.

Our raw materials are generally available from multiple sources — both regionally and globally — with the exception of synthetic fiber (nylon yarn). For yarn, we principally rely upon two major global suppliers, but we also have a significant ~~relationships~~relationship with atone ~~least two~~ other ~~suppliers~~supplier. Although our number of principal yarn suppliers is limited, we do have the capability to manufacture carpet using yarn produced from two separate polymer feedstocks — nylon 6 and nylon 6,6 — which provides additional flexibility with respect to yarn supply inputs, if needed. Our global sourcing strategy, including with respect to our principal yarn suppliers and dual polymer manufacturing capability, allows us to help guard against any potential shortages of raw materials or raw material suppliers in a specific polymer supply chain. For rubber flooring, the key polymer raw materials are available from multiple sources, and we can source both synthetic and natural rubber depending on product specification and material availability.

WeThe ~~also~~environmental ~~have~~management ~~technology~~systems ~~that~~of ~~separates~~our ~~the~~manufacturing ~~face~~facilities ~~fiber~~in ~~and~~LaGrange, ~~backing~~Georgia, ofWest ~~reclaimed~~Point, ~~and~~Georgia, ~~waste~~Northern ~~carpet~~Ireland, ~~thus~~the ~~making~~Netherlands, itChina ~~easier to recycle some of its components~~ and ~~providing~~Australia aare ~~purer~~certified ~~supply~~under ofInternational ~~inputs~~Standards ~~for~~Organization ~~our~~(ISO) ~~CQuestGB~~Standard ~~carpet backing~~No. 14001. ~~This~~Nora’s ~~technology~~manufacturing facility, which is ~~part~~located ofin ~~our~~Weinheim, ~~ReEntry®2.0~~Germany, ~~carpet~~is ~~reclamation~~ISO14001 ~~program,~~certified ~~allows~~as uswell toand ~~send~~sells ~~some~~the majority of ~~the~~its ~~reclaimed~~products ~~face~~with ~~fiber~~the ~~back~~Blauer toEngel ~~our~~label. ~~fiber~~Blauer ~~supplier~~Engel tois bethe ~~blended~~leading ~~with~~German ~~virgin~~institute orthat ~~other~~recognizes ~~post-industrial~~products ~~materials~~that ~~and~~have ~~extruded~~environmentally ~~into~~friendly ~~new fiber~~aspects.

The environmental management systems of our floorcovering manufacturing facilities in LaGrange, Georgia, West Point, Georgia, Northern Ireland, the Netherlands, China and Australia are certified under International Standards Organization (ISO) Standard No. 14001. Nora’s manufacturing facility, which is located in Weinheim, Germany, is ISO14001 certified as well and sells the majority of its products with the Blauer Engel label. Blauer Engel is the leading German institute that recognizes products that have environmentally friendly aspects.

Sales and Marketing

We distribute our products through two primary channels: (1) direct sales to end users; and (2) indirect sales through independent contractors, installers and distributors. We ~~use an exclusive third-party distributor to sell our products in the Latin American region.~~ We ~~have~~focus ~~traditionally focused~~ our ~~carpet~~ marketing strategy on major accounts, seeking to build lasting relationships with national and multinational end-users, and on architects, interior designers, engineers, contracting firms, and other specifiers who often make or significantly influence purchasing decisions. While the corporate office market segment, including new construction and renovation, is our largest, we also emphasize sales in other market segments, including schools and educational facilities, government institutions, retail space, healthcare facilities, tenant improvement space, hospitality centers, residences and home office space. Our marketing efforts are enhanced by the established and well-known brand names of our carpet products, including Interface and FLOR, as well as the strength of the nora rubber flooring brands of noraplan and norament.

AnWhile ~~important part of our marketing and sales efforts involves~~ the ~~preparation~~corporate ofoffice ~~custom-made~~market ~~samples of requested carpet designs~~segment, inincluding ~~conjunction~~new ~~with~~construction ~~the development of innovative product designs~~ and ~~styles~~renovation, tois ~~meet~~our ~~the customer’s particular needs. In most cases~~largest, we ~~can~~also ~~produce~~focus ~~samples~~our tosales ~~customer~~efforts ~~specifications~~on inother ~~less~~market ~~than~~segments, ~~five~~including ~~days~~healthcare, ~~which~~education, ~~significantly~~retail, ~~enhances~~government, ~~our~~hospitality, ~~marketing~~ and ~~sales~~residential ~~efforts~~living. InOur ~~addition,~~marketing ~~through~~efforts ~~our~~are ~~websites,~~enhanced weby ~~have~~the ~~made~~established ~~it easy to view~~ and ~~request~~well-known ~~samples~~brand names of our carpet products., Weincluding ~~also~~Interface ~~use~~and ~~technology~~FLOR, ~~which~~as ~~allows~~well usas tothe ~~provide~~strength ~~digital, simulated samples~~ of ~~our~~the ~~products,~~nora ~~which~~rubber ~~helps~~flooring ~~reduce~~brands ~~raw~~of ~~material~~noraplan and ~~energy consumption associated with our samples~~norament.

WeAn ~~primarily~~integral ~~use~~part of our ~~internal~~ marketing and sales ~~force~~efforts ~~teams~~is ~~to market~~ our ~~flooring~~Interface ~~products~~Design Studio. InThis ~~order~~team of design experts creates custom-made samples of requested carpet designs to ~~implement~~meet ~~our~~customer ~~global~~needs. ~~marketing~~In ~~efforts~~most cases, we ~~have~~can ~~product~~produce ~~showrooms~~samples orto ~~design~~customer ~~studios~~specifications in ~~the~~less ~~United~~than ~~States,~~five ~~England,~~days. ~~France,~~In ~~Germany~~addition, ~~Spain,~~through ~~the~~our ~~Netherlands~~websites, ~~India,~~we ~~Australia,~~have ~~United~~made ~~Arab~~it ~~Emirates,~~easy ~~Singapore,~~to ~~Hong~~view ~~Kong,~~and ~~China~~request ~~and~~samples ~~elsewhere~~of our products. We ~~may~~also ~~open~~use ~~offices~~technology inwhich ~~other~~allows ~~locations~~us ~~around~~to ~~the~~provide ~~world~~digital, assimulated ~~necessary~~samples toof ~~capitalize~~our onproducts, ~~opportunities~~which helps reduce raw material and energy consumption associated with our samples.

We primarily use our internal marketing and sales force teams to market our flooring products. In order to implement our global marketing strategy, we have product showrooms or design studios in the United States, England, France, Germany, Spain, the Netherlands, India, Australia, United Arab Emirates, Singapore, Hong Kong, China as well as in other key locations. We may open offices in other locations around the world as necessary to capitalize on opportunities.

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Business Strategy ~~and Principal Initiatives~~

Interface delivers flooring solutions to its customers that align with the Company’s and our customers’ sustainability goals. Our business strategy is to ~~continue~~leverage ~~to use~~ our leading position in modular carpet, product design, and global made-to-order capabilities asto astrengthen ~~platform~~the ~~from~~performance ~~which~~of ~~to position~~ our ~~modular~~integrated ~~carpet,~~product ~~LVT~~portfolio ~~products, rubber flooring, and other resilient products~~ across ~~several~~multiple ~~industry~~market segments.

~~Recently,~~An weimportant ~~also~~element ~~launched~~of our overall business is our One Interface strategy. ~~which~~Launched isas apart of our broader evolution into an integrated flooring solutions company, this multi-year effort ~~focused~~positions us for success by focusing on:

•Building strong global functions ~~like Marketing, IT, Human Resources, and Finance~~ to support our ~~world-class local~~ selling teams.

•Accelerating growth through enhanced ~~productivity of our~~ commercial ~~team.~~productivity

•Expanding margins through global supply chain management and simplifying operations.

•~~Leading~~Reinforcing our leadership in design, innovation, and sustainability.

~~Through~~By ~~these~~working ~~strategies~~as one team with one shared vision, we ~~will~~can ~~seek~~scale toinnovation, ~~increase~~accelerate ~~revenues~~decision making, and ~~profitability~~bring byeven ~~pursuing~~more ~~the~~value ~~following~~to ~~key~~customers ~~initiatives:~~in every region we serve.

~~Continue~~Key to Penetrate Diversified Market Segments. We plan to continue our strategic focus on product design and marketing and sales efforts in the corporate office, government, education, healthcare, hospitality, and residential living market segments. This initiative is part of a market diversification strategy to reduce our exposure to the economic cyclicality of the corporate office market segment, and it has become a principal strategy generally for growing our business and enhancing profitability. Initiatives

~~Develop~~We aare ~~Substantial~~expanding ~~Resilient~~and ~~Flooring~~diversifying ~~Business.~~across ~~Building~~key ~~upon~~market ~~the~~segments ~~success~~to ofstrengthen our ~~products~~business. inWhile ~~the~~corporate ~~LVT~~office ~~market~~remains important, we ~~plan~~are working to ~~expand~~increase our ~~LVT~~presence ~~product~~in ~~offerings~~education, ~~while~~healthcare, ~~also~~government, ~~seeking~~hospitality, toand ~~introduce~~residential ~~new products in the resilient flooring category~~living. WeThis ~~believe~~diversification ~~our~~is ~~ability~~intended to ~~offer~~reduce ~~and sell~~ our ~~soft~~exposure ~~and~~to ~~hard~~cyclicality ~~surfaces~~ in anany ~~integrated~~single ~~flooring~~segment ~~design helps meet the needs of our customers by complementing~~ and ~~enhancing~~supports ~~our~~a ~~carpet~~more ~~tile~~stable, ~~portfolio~~resilient ~~with~~revenue ~~true~~base. ~~modular~~Our ~~installation,~~market nosegmentation ~~transition~~approach ~~strips~~reflects ~~between~~this ~~surfaces~~priority, ~~carpet~~with ~~tile~~a ~~and~~focus ~~resilient~~on ~~products~~gaining ~~that~~share ~~are~~ in ~~some~~emerging ~~cases~~segments ~~the same size~~ and ~~shape,~~strengthening ~~and favorable acoustic properties. Our nora products are a key component of~~ our ~~strategy~~position inacross ~~this~~multiple ~~area~~geographies.

~~Sustain Leadership in Product Design, Product Development, and Sustainability.~~ Our ~~CQuest~~integrated ~~backings,~~portfolio ~~Embodied Beauty collection,~~ and ~~our~~strong ~~plank,~~growth ~~Skinny Plank, and i2 products and TacTiles installation system have confirmed our position as an innovation leader~~ in ~~modular~~resilient flooring. Weprovides ~~plan~~our tocustomers ~~continue~~with tomore ~~pursue~~choice, ~~initiatives to sustain~~flexibility, ~~augment~~ and ~~capitalize~~design ~~upon~~impact ~~that~~across ~~strength~~the toentire ~~continue~~flooring ~~to increase our market share in targeted market segments~~landscape. We ~~also plan to~~ continue to ~~focus~~expand ~~on carbon reductions in~~ our ~~products~~LVT offerings and ~~operations~~grow asour wenora ~~work~~rubber ~~toward~~flooring ~~achieving~~portfolio, ~~our~~ensuring ~~science-based~~smooth ~~targets~~transitions bybetween ~~2030~~soft and ashard wesurfaces ~~work~~with ~~toward~~consistent ~~our~~modularity, ~~goal~~acoustic ofbenefits, ~~becoming~~and adesign ~~carbon negative enterprise by 2040~~coherence.

~~Seasonality~~Innovation remains central to reinforcing our leadership in design and sustainability and to making sure our integrated portfolio meets evolving customer needs. We are committed to developing new solutions that push the boundaries of flooring design. We also plan to continue to focus on carbon reductions in our products and operations as we work toward achieving our science-based targets by 2030 and our goal to be carbon negative by 2040. These initiatives help differentiate Interface within the global flooring industry and strengthen our brand.

AsSustainability we have executed on our strategy, sales in the education market segment have increased, in recent years, particularly in the second and third quarters as schools often schedule renovation projects during the summer months when schools are typically closed.Leadership

~~Competition~~Our sustainability strategy began more than 25 years ago with initiatives aimed at reducing waste, environmental footprint and costs.

We ~~compete,~~aim onto asignificantly ~~global~~reduce ~~basis,~~carbon inemissions ~~the~~across ~~sale of~~ our ~~modular~~products, ~~carpet~~operations, ~~products~~and ~~with~~supply ~~other~~chain ~~carpet~~through ~~manufacturers~~advances ~~and~~in ~~manufacturers~~design, ofmanufacturing, ~~vinyl~~materials, and ~~other~~supplier ~~types~~collaboration. ofIn ~~floorcoverings.~~2021, ~~Although~~we ~~the~~set ~~industry~~a ~~has~~goal ~~experienced~~to ~~significant~~reduce ~~consolidation,~~our aCO2 ~~large~~emissions ~~number~~across ofour ~~manufacturers~~Company ~~remain~~and insupply ~~the~~chain ~~industry.~~by A2030 ~~number~~with oftargets ~~domestic~~validated ~~and~~by ~~foreign~~the ~~competitors~~Science ~~manufacture~~Based ~~modular~~Targets ~~carpet~~Initiative. asOur ~~one~~targets ~~segment~~are ofto ~~their~~reduce ~~business,~~our absolute Scope 1 and ~~some~~2 ofgreenhouse ~~these~~gas ~~competitors~~emissions ~~have~~50% ~~financial~~by ~~resources~~2030 ~~greater~~from ~~than~~a ~~ours.~~2019 Inbase ~~addition~~year, ~~some~~and ofto ~~the~~reduce ~~competing~~our ~~carpet~~absolute ~~manufacturers~~Scope ~~have~~3 ~~the~~greenhouse ~~ability~~gas toemissions ~~extrude~~from atpurchased ~~least~~goods ~~some~~and ofservices ~~their~~50% ~~requirements~~and ~~for~~from ~~fiber~~business ~~used~~travel inand ~~carpet~~employee ~~products~~commuting ~~and~~30% ~~own~~by ~~manufacturing~~2030 ~~facilities~~from ~~for~~a ~~their~~2019 ~~resilient~~base ~~product~~year. ~~offerings,~~We ~~which~~also ~~decreases~~set ~~their~~a ~~dependence~~separate ongoal ~~third-party~~to ~~suppliers~~become a carbon negative enterprise by 2040.

WeOur ~~believe~~leadership ~~the~~is ~~principal~~reinforced ~~competitive~~by ~~factors~~ongoing investment in ~~our~~technology ~~primary~~and ~~floorcovering markets are brand recognition, quality, design, service, broad~~ product ~~lines,~~innovation ~~product~~that ~~performance,~~reduces ~~marketing~~our ~~strategy,~~carbon ~~pricing and sustainability~~impact. WeNotable ~~compete~~achievements ~~against~~include ~~various floorcoverings including carpet tile, broadloom carpet, LVT and other hard surface flooring, and polished concrete. We believe~~ the quality, service, design, better product performance, flexibility (such as design options, selective rotation or replacement, and use in combination with our resilient products), environmental footprint and convenience of our flooring products are our principal competitive advantages.following:

•Bio‑based and recycled materials: We incorporate more bio‑based and recycled inputs to reduce our product‑level carbon footprint.

•CQuest™ backings: We use bio‑based and recycled materials to create the carbon negative foundation of our carpet tile.

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We•Carbon ~~believe~~negative we have competitive advantages in several other areas as well. First, having both an internal design staff as well as our relationship with David Oakey Designs allows us to introduce numerous innovative and attractive carpet tile: ~~and~~We ~~resilient~~created ~~products~~the first cradle-to-gate ~~our~~carbon ~~customers.~~negative ~~Additionally, we believe that our global~~ carpet tile ~~manufacturing capabilities are an important competitive advantage~~ in ~~serving~~2020 ~~the~~and ~~needs~~now ofoffer ~~multinational~~200+ ~~corporate~~carbon ~~customers~~negative styles.

~~Our~~•LVT ~~sustainability~~recycled ~~goals~~content: are a brand-enhancing, competitive strength as well as a strategic initiative. Many of our customers are concerned about the environmental and broader ecological implications of their operations and the products they use in them. Our leadership, knowledge and expertise in the area, especially in the “green building” movement and related environmental certification programs, resonate deeply with many of our customers and prospects around the globe. Our modular carpet products historically have had inherent installation and maintenance advantages that have translated into greater efficiency and waste reduction. We ~~are~~increased ~~using~~recycled ~~raw~~content ~~materials~~across ~~and production technologies, such as~~ our ~~ReEntry~~LVT ~~2.0~~portfolio ~~reclaimed~~to ~~carpet~~further ~~separation process and our CQuest backings, that directly~~ reduce ~~adverse~~its ~~impacts~~carbon offootprint ~~those operations on the environment~~ and ~~limit~~support ~~our~~circular ~~dependence on petrochemicals~~design.

~~Product~~•ReEntry®: ~~Design,~~We ~~Research~~expanded our regional take‑back programs to reuse and ~~Development~~recycle more flooring materials into new product cycles.

WeInterface’s ~~maintain~~sustainability anleadership ~~active~~continues ~~research~~to ~~and~~receive ~~development,~~recognition ~~product~~through ~~development~~key ~~and~~industry ~~design staff. We also draw on the research and development efforts of our suppliers~~awards, ~~particularly~~reflecting in the ~~areas~~strength of fibers, yarns and modular carpet backing materials. The research and development team provides us with technical support and advanced materials research and development. Innovation and increased customization in product design and styling are the principal focus of our ~~product~~climate ~~development~~strategy ~~efforts,~~ and ~~this focus has led to several design breakthroughs such as our CQuest backings, plank and Skinny Plank products, as well as our i2~~ product ~~line~~innovation. ~~Our~~Recent ~~design~~accolades ~~and~~include: ~~development team is recognized as an industry leader in design and product engineering for the commercial and institutional markets.~~

~~David~~•GlobeScan ~~Oakey~~Sustainability ~~Designs~~Leaders ~~provides~~Survey: ~~carpet~~Ranked ~~design and consulting services to us pursuant to~~ a ~~consulting~~Top ~~agreement,~~10 ~~and~~global ~~this~~sustainability ~~firm~~leader ~~augments our internal research, development and design staff. David Oakey Designs’ services under the agreement include creating commercial carpet designs~~ for ~~use by our modular carpet businesses throughout~~ the ~~world~~28th ~~and~~consecutive ~~overseeing~~year ~~product development, design and coloration functions for our modular carpet business~~ in ~~North America~~2025. ~~The agreement can be terminated by either party upon six months prior written notice to the other party.~~

In•Metropolis ~~2020,~~Planet wePositive ~~launched~~Awards: ~~our~~Winner ~~first~~in ~~ever cradle-to-gate carbon negative carpet tile. Our goal is to offer products with~~ the ~~lowest~~Corporate ~~carbon~~Sustainability ~~footprint~~Initiative ~~possible~~category ~~and products that help maintain a climate fit for life. Our carbon negative carpet tile features carbon negative materials~~ in ~~the CQuestBioX backing in combination with specialty yarns and tufting processes~~2025. ~~We have developed innovative ways to work with recycled content and bio-based materials, which has led us to make carpet tiles that store carbon, preventing its release into the atmosphere.~~

~~Our~~•Reuters ~~nora~~Net ~~rubber~~Zero ~~flooring~~Leader ~~products~~Award: ~~have~~Recognized ~~also focused on innovative performance and design. A key innovation is the self-adhesive nTx solution~~ for ~~nora~~Carbon ~~tiles~~Reduction ~~and~~Strategy ~~sheet goods. Notable changes~~ in ~~design~~the ~~include~~Reuters ~~noraplan~~Net ~~Iona~~Zero ~~introducing~~Leader aprogram ~~rubber on rubber print, noraplan valua introducing natural woodlike colors and embossing, and noraplan unita that incorporates real granite parts~~ in ~~a rubber floor. The combination of performance and design makes nora the recognized market leader in rubber flooring. In January~~ 2025~~, the Company unveiled the first of a kind carbon negative nora rubber flooring prototype, which has a carbon negative footprint when measured cradle to gate~~.

~~Environmental~~•WEF Circularity Lighthouse: Named a Circularity Lighthouse in the Built Environment by the World Economic Forum and ~~Sustainability~~McKinsey ~~Initiatives~~for pioneering circular solutions in 2024.

Our sustainability strategy began more than 25 years ago with initiatives aimed at reducing waste, environmental footprint and costs. With our CQuestGB, CQuestBio and CQuestBioX backings, we are able to use more bio-based and recycled materials. As more customers in our target markets share our view that sustainability is an important factor, we expect sustainability will become an increasingly important factor in purchasing and design decisions. In 2021, we set a goal to reduce our CO2 emissions across our Company and supply chain by 2030 with targets validated by the Science Based Targets Initiative. Our targets are to reduce our absolute Scope 1 and 2 greenhouse gas emissions 50% by 2030 from a 2019 base year, and to reduce our absolute Scope 3 greenhouse gas emissions from purchased goods and services 50% and from business travel and employee commuting 30% by 2030 from a 2019 base year. We also set a separate goal to become a carbon negative enterprise by 2040.Seasonality

Our business reflects seasonal patterns that correlate to historical customer spending and commercial project timelines. Sales in the education market segment have increased in recent years, particularly in the second and third quarters as schools often schedule renovation projects during the summer months when schools are typically closed.

Competition

We compete, on a global basis, in the sale of our modular carpet, LVT, and rubber flooring against various companies who offer floor coverings including carpet tile, broadloom carpet, LVT, other hard surface flooring, and polished concrete.

While the flooring industry has experienced significant consolidation, a large number of manufacturers remain in the industry. A number of domestic and foreign competitors manufacture modular carpet as one segment of their business, and some of these competitors have financial resources greater than ours. In addition, some of the competing carpet manufacturers have the ability to extrude at least some of their requirements for fiber used in carpet products and own manufacturing facilities for their resilient product offerings, which decreases their dependence on third-party suppliers.

We believe the principal competitive factors in our primary floorcovering markets are brand recognition, quality, design, service, broad product lines, product performance, marketing strategy, pricing and sustainability. We believe the quality, service, design, performance, flexibility (such as design options, selective rotation or replacement, and use in combination with our resilient products), environmental footprint and convenience of our flooring products are our principal competitive advantages.

Our sustainability goals are a brand-enhancing, competitive strength. Many of our customers are concerned about the environmental and broader ecological implications of their operations and the products they use in them. Our modular carpet products have had inherent installation and maintenance advantages that have translated into greater efficiency and waste reduction. We are using raw materials and production technologies such as our CQuest backings, that directly reduce adverse impacts of those operations on the environment and limit our dependence on petrochemicals.

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~~Compliance~~Product ~~with~~Design, ~~Government~~Research ~~Regulations~~and Development

We ~~are~~maintain ~~subject~~an toactive ~~various~~research ~~federal, state~~ and ~~foreign~~development, ~~laws~~product development and ~~regulations~~design ~~that~~staff. ~~address~~We ~~various~~also ~~aspects~~draw ofon ~~our~~the ~~business~~research ~~such as worker safety, privacy, trade sanctions~~ and ~~anticorruption.~~development Inefforts ~~addition,~~of our ~~operations~~suppliers, ~~are~~particularly ~~subject~~in ~~to laws and regulations relating to~~ the ~~generation,~~areas ~~storage,~~of ~~handling~~fibers, ~~emission~~yarns, ~~transportation~~ and ~~discharge~~modular ofcarpet ~~materials~~backing ~~into the environment~~materials. ~~The~~Innovation ~~costs~~and ofincreased ~~complying~~customization ~~with~~in ~~these~~product ~~laws~~design and ~~regulations~~styling ~~have~~are ~~not~~the ~~had~~principal afocus ~~material~~of ~~adverse impact on~~ our ~~financial~~product ~~condition~~development orefforts, ~~results~~and ofthis ~~operations~~focus inhas ~~the~~led ~~past~~to ~~and~~several ~~are~~design ~~not~~breakthroughs ~~expected~~such toas ~~have~~our aCQuest ~~material~~backings ~~adverse~~and ~~impact~~our ini2 ~~the~~product ~~future~~line. ~~The~~Our ~~environmental~~design ~~management~~and ~~systems~~development ofteam ~~our~~is ~~floorcovering~~recognized ~~manufacturing~~as ~~facilities~~an inindustry ~~LaGrange,~~leader ~~Georgia,~~in ~~West~~design ~~Point,~~and ~~Georgia,~~product ~~Northern~~engineering ~~Ireland,~~for the ~~Netherlands,~~commercial ~~China, Germany~~ and ~~Australia~~institutional ~~are certified under ISO Standard No~~markets. ~~14001.~~

~~Backlog~~David Oakey Designs provides design and consulting services to us pursuant to a consulting agreement, which can be terminated by either party upon six months prior written notice to the other party. David Oakey Designs has had a pivotal role in developing many of our innovative product designs, including products manufactured using state-of-the-art tufting technology, which allows us to pinpoint tufts of different colored yarns in virtually any arrangement within a carpet tile. These unique designs are best exemplified by our Urban Retreat®, Net Effect®, Human Nature® and World Woven® collections, which are sold throughout our international operations.

Our ~~backlog~~goal ofis ~~unshipped~~to ~~orders~~offer ~~was~~products ~~approximately~~with ~~$223.4~~the ~~million~~lowest atcarbon ~~February~~footprint 2,possible ~~2025,~~and ~~compared~~products ~~with~~that ~~approximately~~help ~~$195.5~~maintain ~~million~~a atclimate ~~February~~fit 4,for ~~2024~~life. ~~Historically,~~Our ~~backlog~~cradle-to-gate iscarbon ~~subject~~negative tocarpet ~~significant~~tile ~~fluctuations~~features ~~due~~carbon tonegative ~~the~~materials ~~timing~~in ofthe ~~orders~~CQuestBioX ~~for~~backing ~~individual~~in ~~large~~combination ~~projects.~~with ~~Disruptions~~specialty inyarns ~~supply~~ and ~~distribution~~tufting ~~chains~~processes. We have ~~resulted~~developed ininnovative ~~delays~~ways ofto ~~construction~~work ~~projects~~with ~~and~~recycled ~~flooring~~content ~~installations~~and inbio-based ~~many regions worldwide~~materials, which ~~also~~has ~~have~~led ~~caused,~~us ~~and~~to ~~may~~make ~~continue~~carpet totiles ~~cause~~that store carbon, ~~fluctuations~~preventing inits ~~our~~release ~~backlog~~into the atmosphere.

Our nora rubber flooring products have also focused on innovative performance and design. Key innovations include our carbon negative nora rubber flooring prototype, which has a carbon negative footprint when measured cradle to gate and our self-adhesive nTx solution for nora tiles and sheet products. Notable changes in design include noraplan Iona introducing a rubber on rubber print, noraplan valua introducing natural woodlike colors and embossing, and noraplan unita that incorporates real granite parts in a rubber floor. The combination of performance and design makes nora the recognized market leader in rubber flooring.

Patents and Trademarks

We own numerous patents in the United States and abroad on floorcovering products and on manufacturing processes. The duration of United States patents is between 14 and 20 years from the date of filing of a patent application or issuance of the patent; the duration of patents issued in other countries varies from country to country. We maintain an active patent and trade secret program in order to protect our proprietary technology, know-how and trade secrets. Although we consider our patents to be very valuable assets, we consider our know-how and technology even more important to our current business than patents, and, accordingly, believe that expiration of existing patents or non-issuance of patents under pending applications would not have a material adverse effect on our operations.

We also own many trademarks in the United States and abroad. In addition to the United States, the primary jurisdictions in which we have registered our trademarks are the European Union, United Kingdom, Canada, Australia, New Zealand, Japan, and various countries in Central America, South America and Asia. Some of our more prominent registered trademarks include: Interface, FLOR, GlasBac, CQuest, nora, norament, noraplan, nTX solution, noraplan unita, noraplan valua, and TacTiles. Trademark registrations in the United States are valid for a period of 10 years and are renewable for additional 10-year periods as long as the mark remains in actual use. The duration of trademarks registered in other jurisdictions varies.

Compliance with Government Regulations

We are subject to various federal, state and foreign laws and regulations that address various aspects of our business such as worker safety, privacy, trade sanctions and anticorruption. In addition, our operations are subject to laws and regulations relating to the generation, storage, handling, emission, transportation and discharge of materials into the environment. The costs of complying with these laws and regulations have not had a material adverse impact on our financial condition or results of operations in the past and are not expected to have a material adverse impact in the future. The environmental management systems of our manufacturing facilities in LaGrange, Georgia, West Point, Georgia, Northern Ireland, the Netherlands, China, Germany and Australia are certified under ISO Standard No. 14001.

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Our proactive approach to environmental compliance and our investments in sustainable manufacturing technologies have enhanced our competitive position. Many of our customers prioritize environmental performance in their purchasing decisions, and our carbon negative products, ISO 14001-certified facilities, and circular economy initiatives differentiate Interface in the commercial flooring market.

Backlog

Our backlog of unshipped orders was approximately $222.8 million at February 2, 2026, compared with approximately $223.4 million at February 2, 2025. Historically, backlog is subject to significant fluctuations due to the timing of orders for individual large projects. Disruptions in supply and distribution chains or delays in construction projects and flooring installations worldwide, have caused, and may continue to cause, fluctuations in our backlog.

Human Capital

Interface is a purpose-driven company with a passionate team that shares a unique set of values. We strive to do the right thing and to be generous to people and the planet. ~~Our core values represent who we are, how we see the world, how we treat each other and our external customers and stakeholders, and how we approach our work every day. These core values are:~~

~~•Design~~Workforce ~~a better way;~~Composition

~~•Be~~At ~~genuine~~December 28, 2025, we employed a total of 3,570 employees worldwide. Of such total, 1,367 were clerical, staff, sales, supervisory and ~~generous;~~management personnel and 2,203 were manufacturing personnel. Our workforce is distributed across manufacturing facilities and offices in the Americas, Europe and Asia Pacific.

~~•Inspire~~Talent ~~others;~~Attraction and Retention

~~•Connect~~Competition for qualified employees, including experienced manufacturing personnel and skilled commercial, technical and management professionals, is significant in the ~~whole;~~markets in which we operate. We seek to attract and retain talented individuals by offering competitive compensation and benefits, providing opportunities for career advancement and professional growth, and fostering a values-based workplace culture grounded in merit and achievement. We monitor employee retention and voluntary turnover rates across our global operations and use this data to evaluate the effectiveness of our talent management strategies and to identify areas for improvement.

~~•Embrace~~Employee ~~tomorrow, today.~~Development

AtWe ~~December 29,~~believe ~~2024,~~that weinvesting ~~employed~~in athe ~~total~~growth and development of ~~3,636~~our employees ~~worldwide~~strengthens our organization and supports our long-term business objectives. OfInterface ~~such~~invests ~~total,~~in ~~1,371~~employee ~~were~~development ~~clerical,~~through ~~staff~~leadership development programs and training programs. We also provide role-specific technical training for our manufacturing workforce, ~~sales~~including training on production processes, ~~supervisory~~quality standards and ~~management~~equipment ~~personnel~~operation, ~~and~~to 2support operational efficiency,~~265~~ ~~were~~product ~~manufacturing~~quality ~~personnel~~and employee skill development. These programs include:

•Talent Accelerator Program: Annual cohort of 10 employees selected through an application process typically open to all business functions.

•Interface Coaching Experience: Global Supply Chain and Americas Sales.

•RISE Leadership Development Program: Frontline leader development.

•Quarterly Compliance Training: Mandatory courses launched once per quarter for all business functions.

Compensation and Benefits

Our compensation philosophy is designed to attract, motivate and retain high-performing employees. Total compensation for our employees generally includes a combination of base salary and benefits. We benchmark our compensation programs against relevant market data to help ensure our total rewards offerings remain competitive within the industries and geographies in which we compete for talent. Our benefits programs include, among other components, health benefits, retirement plan contributions and paid time off, with specific programs varying by location in accordance with local market practices and applicable legal requirements.

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Workplace Health and Safety

As a global manufacturer, the health and safety of our employees is a priority and we are committed to maintaining safe working conditions across each of our manufacturing facilities. We maintain workplace health and safety programs designed to comply with applicable occupational health and safety laws and regulations, including those administered by the U.S. Occupational Safety and Health Administration and analogous regulatory bodies in the other jurisdictions in which we operate. These programs include regular safety training, hazard identification and risk assessment procedures, and incident reporting and investigation protocols.

Employee and Labor Relations

Some of our employees in Australia, the United Kingdom and China are represented by unions. In the Netherlands, a Works Council, the members of which are Interface employees, is required to be consulted by management with respect to certain matters relating to our operations in that country, such as a change in control of Interface Europe B.V. (our modular carpet subsidiary based in the Netherlands), and the approval of the Works Council is required for some of our actions, including changes in compensation scales or employee benefits. The majority of our employees in Germany are represented by a Works Council as well. Our management believes that its relations with the Works Councils, the unions and our employees are good.

Information About Our Executive Officers

Our executive officers, their ages as of December 2928, ~~2024~~2025, and their principal positions with us are set forth below. Executive officers serve at the pleasure of the Board of Directors.

Name	Age	Principal Position(s)
Laurel M. Hurd	5556	President and Chief Executive Officer
David B. Foshee	54	Vice President, General Counsel and Secretary
Bruce A. Hausmann	56	Vice President and Chief Financial Officer
Bruce A. Hausmann	55	Vice President and Chief Financial Officer
David B. Foshee	55	Vice President, General Counsel and Secretary
James Poppens	6061	Vice President and Chief Commercial Officer
Nigel Stansfield	57	Vice President and Chief Innovation and Sustainability Officer

Ms. Hurd joined us in April 2022 after having worked previously for global consumer goods company Newell Brands, Inc. Ms. Hurd served as Segment President, Learning and Development at Newell Brands Inc. starting in February 2019, leading its Baby and Writing businesses. Previously, Ms. Hurd was the Division Chief Executive Officer for Newell Brands’ Writing division starting in February 2018. From 2016 to February 2018, she served as Chief Executive Officer of Newell Brands’ Baby division. From May 2014 until 2016, Ms. Hurd was President of the Baby and Parenting division at Newell Brands, where she oversaw the Calphalon, Goody, and Rubbermaid consumer brands. From 2012 to 2014, Ms. Hurd was Vice President, Global Development for Newell Brands, leading both Marketing and Research & Development for the Graco, Aprica, and Teutonia brands globally.

Mr. Foshee, who previously practiced with an Atlanta-based international law firm, joined us in October 1999 as Associate Counsel. He was promoted to Assistant Secretary in April 2002, Senior Counsel in April 2006, Assistant Vice President in April 2007, Vice President in July 2012, Associate General Counsel in May 2014, and Secretary and General Counsel in January 2017.

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Mr. Hausmann joined us in April 2017 as Vice President and Chief Financial Officer. He came to us from the food, facilities and uniform services supplier Aramark Corporation, where he served as Senior Vice President and Chief Financial Officer for Aramark’s Uniform business unit since 2009, and for Aramark’s Direct Store Delivery segment since 2014. Prior to joining Aramark, he served as Vice President and Segment Controller for the Interactive Media Group of The Walt Disney Company, which he joined in 2002. He has also previously held finance and controller positions with several software and internet companies and is a certified public accountant (inactive status) in the State of California.

Mr. Poppens joined us in 2017 to lead the restructuring of our FLOR business and then served as Vice President of Corporate Marketing and was responsible for the global Interface brand, digital strategy, global product commercialization planning as well as leading the FLOR business. He was named President for our Americas business in February 2020. Prior to joining us, Mr. Poppens held leadership roles at Newell Rubbermaid, Kellogg Company, REI, and Coca-Cola. Effective February 1, 2023, Mr. Poppens was named Chief Commercial Officer, and his former role as President of Americas was eliminated.

Mr. Stansfield was the Operations Manager for Firth Carpets (our former European broadloom operations) at the time it was acquired by us in 1997. For two years following that acquisition, Mr. Stansfield served as Manufacturing Systems Manager, part of a global project team that designed and implemented manufacturing software systems at seven of our manufacturing plants. In 1999, he returned to Firth Carpets as Operations Director. In 2002, he became a member of our European research and development team focusing on our sustainability initiatives, and in 2004, he became Product and Innovations Director for all of our European Operations. In 2010, he joined our European management team as Senior Vice President of Product, Design and Innovation, before being named Vice President and Chief Innovations Officer for the Company in March 2012. In December 2016, he became President of our business serving Europe, the Middle East and Africa, and in January 2019 he assumed responsibility for the Asia-Pacific region as well. Effective February 1, 2023, Mr. Stansfield was named Chief Innovation and Sustainability Officer, and his former role as President of Europe, Africa, Australia and Asia was eliminated.11

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Available Information

We make available free of charge on or through our Internet website our Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission (“SEC”, or “Commission”). Our Internet address is http://www.interface.com. The content of our website is not incorporated by reference into this Annual Report on Form 10-K or in any other report or document we file with the SEC, and any references to our website is intended to be inactive textual references only. The SEC maintains a website that contains annual, quarterly and current reports, proxy statements and other information that issuers (including the Company) file electronically with the SEC. The SEC’s website is http://www.sec.gov.

Interface, Inc. was incorporated in Georgia in 1973.

Forward-Looking Statements

This report on Form 10-K contains “forward-looking statements” within the meaning of the Securities Act of 1933, the Securities Exchange Act of 1934, and the Private Securities Litigation Reform Act of 1995. Words such as “believes,” “anticipates,” “plans,” “expects,” “projects,” “estimates” and similar expressions are intended to identify forward-looking statements. 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 those contemplated by such forward-looking statements. Forward-looking statements in this report include, without limitation, any statements regarding the effects of new or increased tariffs and changes in trade policies of the United States or other countries, inflation, ~~high~~changing interest rates, current wars and conflicts, the supply chain environment, slow market conditions in certain geographic areas, ~~tariffs, freight costs,~~ pressures in the commercial office market and other macroeconomic factors, and our future production volumes per unit fixed costs, on our future performance. We undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time. Important factors currently known to management that could cause actual results to differ materially from those in forward-looking statements include risks and uncertainties associated with economic conditions in the commercial interiors industry as well as the risks and uncertainties discussed below in Item 1A, “Risk Factors.”

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ITEM 1A. RISK FACTORS

You should carefully consider the following factors, in addition to the other information included in this Annual Report on Form 10-K and the other documents incorporated herein by reference, before deciding whether to purchase or sell our securities. Any or all of the following risk factors could have a material adverse effect on our business, financial condition, results of operations and prospects.

Risk Factors Related to our Business and Operations

We compete with a large number of manufacturers in the highly competitive floorcovering products market, and some of these competitors have greater financial resources than we do. We may face challenges competing on price, making investments in our business, or competing on product design or sustainability.

The floorcovering industry is highly competitive. Globally, we compete for sales of floorcovering products with other carpet manufacturers and manufacturers of other types of floorcovering. Although the industry has experienced significant consolidation, a large number of manufacturers remain in the industry. From time to time, our competitors add or modify manufacturing capacity throughout the globe, which increases the amount or cost structure of supply in the market. Increased capacity or manufacturing efficiencies at our competitors could result in pricing pressure on our products and less demand for our products, thus adversely affecting both revenues and profitability.

Some of our competitors, including a number of large diversified domestic and foreign companies who manufacture modular carpet and resilient flooring as one segment of their business, have greater financial resources than we do. Competing effectively may require us to make additional investments in our product development efforts, manufacturing facilities, distribution network, and sales and marketing activities.

In addition, we often compete on design preferences. Our customers’ design preferences may evolve or change before we adapt quickly enough to those changes or before we recognize those changes have happened in the marketplace. If this occurs, it could negatively affect our sales as our customers choose other product offerings that more closely align with their design preferences. Moreover, as our competitors improve the sustainability attributes of their products and operations, or if our competitors market the sustainability attributes of their products or operations more effectively than we do, it could negatively affect the degree to which we differentiate from our competitors on those attributes which could negatively affect our ability to compete and gain those sales as customers choose product offerings from our competitors instead of our product offerings. In situations such as these, we may be required by accounting rules to recognize a loss for the write-down of the value of our inventory due to its age or obsolescence.

Our earnings could be adversely affected by non-cash adjustments to goodwill, when a test of goodwill assets indicates a material impairment of those assets.

AsWe ~~prescribed by accounting standards governing goodwill and other intangible assets, we~~ undertake an annual review of the goodwill asset balance reflected in our financial statements. Our review is conducted during the fourth quarter of the year, unless there has been a triggering event prescribed by applicable accounting rules that warrants an earlier interim testing for possible goodwill impairment. A future goodwill impairment test may result in a future non-cash adjustment, which could adversely affect our earnings for any such future period.

InWe ~~recent years, we~~ recorded a goodwill and intangible asset impairment ~~charges~~charge of $36.2 million in the fourth quarter of 2022. The 2022 impairment charge was primarily a result of macroeconomic conditions, such as inflation, rising interest rates and the weakening of the Euro against the U.S. dollar causing a negative impact to our revenue and operating income in our EMEA goodwill reporting unit. Future impairment charges could result if these macroeconomic conditions or other negative market events or conditions ~~continue to~~ impact our operations.

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Our success depends significantly upon the efforts, abilities and continued service of our senior management executives, our principal design consultant and other key personnel (including experienced sales and manufacturing personnel), and our loss of any of them could affect us adversely.

We believe that our success depends to a significant extent upon the efforts and abilities of our senior management executives. In addition, we rely significantly on the leadership that David Oakey of David Oakey Designs provides to our internal design staff. Specifically, David Oakey Designs provides product design/production engineering services to us under an exclusive consulting contract that contains non-competition covenants. Our agreement with David Oakey Designs can be terminated by either party upon six months prior written notice to the other party. Our business also depends on the recruitment and retention of other key personnel, including experienced sales and manufacturing personnel.

The increasing demand for qualified personnel makes it more difficult for us to attract and retain employees with requisite skill sets, particularly employees with specialized technical and trade experience. In certain locations where we operate, the demand for labor has exceeded the supply of labor, resulting in higher costs. Despite our focused efforts to attract and retain employees, including by offering higher levels of compensation in certain instances, we experienced attrition rates within our hourly workforce in recent years, that exceeded historical levels and we incurred higher operating costs at certain of our facilities in the form of higher levels of overtime pay. The market for professional workers was, and remains, similarly challenging. As a result, we may experience higher levels of attrition within our professional workforce in the future.

We may lose the services of key personnel for a variety of reasons, including if our compensation programs become uncompetitive in the relevant markets for our employees and service providers, or if the Company undergoes significant disruptive change, including economic downturns. The loss of key personnel with a great deal of knowledge, training and experience — particularly in the areas of sales, marketing, operations, product design and management — could have an adverse impact on our business. We may not be able to easily replace such personnel, particularly if the underlying reasons for the loss make the Company relatively unattractive as an employer.

We continue to implement changes within our sales organization, including to the standardized processes and systems that our sales force uses to go to market, interact with customers, work with architects and the design community and, in general, operate day-to-day. We also continue to improve and change the technology tools that the sales force is required to use as part of their day-to-day jobs and monitor managerial positions that are designed to actively manage and coach the sales force. All of these changes are disruptive, which may create challenges for our sales force to adapt, particularly for long tenured employees. There are no guarantees that these efforts will increase sales or improve profitability of the business, or that they will not instead adversely disrupt the business, decrease sales, and decrease overall profitability.

~~Large~~Changes ~~increases~~ in ~~the~~foreign ~~cost~~trade ofpolicies ~~our~~and ~~raw materials, shipping costs, duties or~~ tariffs ~~could~~may adversely ~~affect~~impact usour ifbusiness, wefinancial ~~are~~condition, ~~unable~~and toresults ~~pass~~of ~~these cost increases through to our customers~~operations.

~~Petroleum-based~~Recent ~~products~~changes ~~(including~~in ~~yarn)~~U.S. ~~comprise~~and ~~the~~international ~~predominant~~trade ~~portion~~policies, ofincluding the ~~cost~~implementation of ~~raw~~tariffs, ~~materials~~retaliatory ~~that~~tariffs, weand ~~use~~other intrade ~~manufacturing~~barriers, ~~carpet.~~have ~~Synthetic~~created ~~rubber~~significant ~~uses~~uncertainty ~~petroleum-based~~and ~~products~~volatility asin ~~feedstock~~the asglobal ~~well~~markets. WeThe ~~also~~U.S. ~~incur~~government ~~significant~~has ~~shipping~~implemented ~~and~~substantial ~~transport~~changes ~~costs~~ to ~~move~~trade ~~our products around the globe~~policies, ~~and~~including ~~those~~increased ~~costs~~tariffs ~~have~~on ~~increased~~imports ~~dramatically~~from ~~due~~various tocountries. ~~global~~These ~~supply~~actions ~~chain,~~have ~~macroeconomic~~affected and ~~geopolitical~~may ~~challenges.~~continue ~~The~~to ~~possibility~~affect ofthe ~~government-imposed~~cost ~~tariffs~~of incertain ~~locations~~products ~~where~~ we ~~operate~~import ~~could~~into ~~have~~the ~~an adverse impact on our business~~U.S. ~~While~~They wemay ~~attempt~~also toincrease ~~match cost increases with corresponding price increases, inflation and volatility in~~ the ~~cost~~risk of ~~raw~~overall ~~materials~~inflation, ~~foreign~~slower ~~currency~~macro-economic ~~fluctuations~~activity, ~~tariffs~~ and ~~potential~~they ~~retaliatory~~may ~~tariffs,~~temporarily ~~transportation,~~delay ~~shipping~~or ~~costs,~~permanently ~~and~~stall ~~other~~when ~~costs could adversely affect~~ our ~~financial~~customers ~~results~~decide ~~if we are unable~~ to ~~pass~~purchase ~~through such cost increases to~~ our ~~customers~~products.

13We are particularly vulnerable to these trade policy changes as we source our luxury vinyl tile (LVT) products from a third-party manufacturer in South Korea and manufacture all our rubber flooring in Germany. The import of these goods into the U.S. represents our primary exposure to recently implemented and potential future tariffs. Increased tariffs on these imports could significantly increase our cost of goods sold, potentially requiring us to raise prices, which could decrease customer demand for our products, or reduce our profit margins if we are unable to fully pass these increased costs to our customers.

Various countries have announced or implemented retaliatory measures in response to U.S. trade actions, which could further complicate our international operations and supply chain. For example, the carpet tile we sell in Canada typically is manufactured at our plant in the U.S., and therefore may be subject to tariffs implemented by Canada on imports from the U.S. The current situation remains dynamic, and it is unknown if the U.S. and its trade partners will reach agreements to pause or eliminate currently enacted, pending, and threatened tariffs.

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These trade policy changes and resulting uncertainty may lead to:

•Increased costs for our imported LVT and rubber flooring products

•Supply chain disruptions or delays in product availability

•Reduced demand for our products

•Increased competitive and consumer demand pressures, particularly if we increase prices to offset higher costs

•Competitive disadvantages if our competitors face different tariff structures

•Currency exchange rate fluctuations that further impact our costs and margins

While we are assessing options and taking actions to mitigate potential impacts, our ability to do so may be limited by operational and supply chain constraints, especially in the short term. The ultimate effect of these tariffs will depend on their magnitude, duration, how they affect consumer sentiment and behavior, how they affect the overall global macro environment, as well as which countries are implicated. These factors could have a material adverse effect on our business, financial condition, and results of operations.

Large increases in the cost of our raw materials, shipping costs, duties or tariffs could adversely affect us if we are unable to offset them or pass these cost increases through to our customers.

Petroleum-based products (including yarn) comprise the predominant portion of the cost of raw materials that we use in manufacturing carpet. Synthetic rubber uses petroleum-based products as feedstock as well. We also incur significant shipping and transport costs to move our products around the globe, and those costs vary based on market conditions due to global supply chain, macroeconomic and geopolitical challenges. New or increased tariffs in locations where we operate could have an adverse impact on our business. While we attempt to offset cost increases with corresponding price increases, inflation and volatility in the cost of raw materials, foreign currency fluctuations, tariffs and potential retaliatory tariffs, transportation, shipping costs, we may not be successful in offsetting or passing these cost increases through to our customers. Any such new or increased costs could adversely affect our financial results if we are unable to offset or pass through such cost increases to our customers.

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Unanticipated termination or interruption of any of our arrangements with our primary third-party suppliers of synthetic fiber or our primary third-party supplier for luxury vinyl tile (“LVT”) or other key raw materials could have a material adverse effect on us.

We depend on a small number of third-party suppliers of synthetic fiber and are largely dependent upon a primary supplier for our LVT products. The unanticipated termination or interruption of any of our supply arrangements with our current suppliers of synthetic fiber (nylon), our primary supplier of LVT, or other key raw material suppliers, including failure by any third-party supplier to meet our product specifications, could have a material adverse effect on us because we do not have the capability to manufacture our own fiber for use in our carpet products or our own LVT. Our suppliers may not be able to meet our demand for a variety of reasons, including our inability to forecast our future needs accurately or a shortfall in production by the supplier for reasons unrelated to us, such as work stoppages, acts of war, terrorism, civil or political unrest, pandemics, epidemics, or other public health crises, fire, earthquake, energy shortages, flooding or other natural disasters. The primary manufacturing facility of our primary supplier of LVT is located in South Korea. If any of our supply arrangements with our primary suppliers of synthetic fiber, our primary supplier of LVT, or suppliers of other key raw materials are terminated or interrupted, we likely would incur increased manufacturing costs and experience delays in our manufacturing process (thus resulting in decreased sales and profitability) associated with shifting more of our synthetic fiber purchasing to another synthetic fiber supplier or developing new supply chain sources for LVT. A prolonged inability on our part to source synthetic fiber included in our products, LVT, or other key raw materials on a cost-effective basis could adversely impact our ability to deliver products on a timely basis, which could harm our sales and customer relationships.

Changes to our facilities, manufacturing processes, product construction, and product composition could disrupt our operations, increase our manufacturing costs, increase customer complaints, increase warranty claims, negatively affect our reputation, and have a material adverse effect on our financial condition and results of operations.

From time to time, we make improvements and changes to our physical facilities, move operations to other sites, and change our manufacturing processes. ~~Large~~These ~~scale~~ changes or moves could disrupt our normal operations, leading to possible loss of productivity, which may adversely affect our results. We are also making significant investments and modifications to our manufacturing facilities, processes, product compositions, and product construction including but not limited to the production of our CQuest™ carpet tile backings and our nora products. These changes can be disruptive. There is also no guarantee that our CQuest™ backings will perform as expected and will not increase warranty claims or customer complaints. These efforts may also not yield the financial returns and improvements in the business that we hope to achieve from them. While these changes are intended to yield stronger financial results, they could potentially impact our financial results in negative ways due to project delays, business disruption as new facilities and equipment come online, increased customer complaints, or increased warranty claims; all of which could negatively affect our operations, reputation, financial condition and results of operations.

Our business operations could suffer significant losses from natural disasters, acts of war, terrorism, catastrophes, fire, adverse weather conditions, pandemics, endemics, unstable geopolitical situations or other unexpected events.

While we manufacture our products in several facilities and maintain insurance covering our facilities, including business interruption insurance, our manufacturing facilities could be materially damaged by natural disasters, such as floods, storms, tornadoes, hurricanes and earthquakes, whether or not as a result of climate change, or by fire or other unexpected events such as adverse weather conditions, acts of war, terrorism, protests, or other political or civil unrest, energy shortages and disruptions, pandemics or other public health crises or other disruptions to our facilities, supply chain or our customers’ facilities. We have experienced such losses in the past. We could incur uninsured losses and liabilities arising from such events, including damage to our reputation, and suffer material losses in operational capacity, which could have a material adverse impact on our business, financial condition and results of operations. These types of events could also affect our suppliers, installers, and customers, which could have a material adverse impact on our business.

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The market price of our common stock has been volatile and the value of your investment may decline.

The market price of our common stock has been volatile in the past and may continue to be volatile going forward. Such volatility may cause precipitous drops in the price of our common stock on the Nasdaq Global Select Market and may cause your investment in our common stock to lose significant value. As a general matter, market price volatility has had a significant effect on the market values of securities issued by many companies for reasons unrelated to their operating performance. We cannot predict the market price for our common stock going forward.

14Sales of our principal products have been and may continue to be affected by adverse economic conditions and cycles, and effects in the new construction market and renovation market.

~~Table~~Unfavorable economic conditions may arise during times of ~~Contents~~U.S. and international economic downturns, or may be attributed to government shutdowns, implementation of new or increased tariffs and ongoing changes in U.S. and foreign government trade policies (including potential modifications to existing trade agreements and retaliatory measures by foreign governments), inflationary or deflationary pressures, natural disasters, severe weather events, calamities, public health crises, political or civil unrest, terrorist acts, and global conflicts. These macroeconomic conditions have at times, and could in the future, adversely affect the demand for our product offerings.

Sales of our principal products have been and may continue to be affected by adverse economic cycles, and effects in the new construction market and renovation market.

Sales of our principal products are related to the renovation and construction of commercial and institutional buildings. This activity is cyclical and has been affected by the strength of a country’s or region’s general economy, prevailing interest rates and other factors, including increased office vacancies caused by lingering effects from the COVID-19 pandemic and hybrid work schedules, that lead to cost control measures or reduction in the use of space by businesses and other users of commercial or institutional space. In addition, the effects of cyclicality and other factors affecting the corporate office segment have traditionally tended to be more pronounced than the effects on other market segments. Historically, we have generated more sales in the corporate office market segment than in any other market segment. The effects of cyclicality and other factors on the new construction segment of the market have also tended in the past to be more pronounced than the effects on the renovation segment. These effects may recur and could be more pronounced if global economic conditions do not improve or are weakened by negative cycles or other factors.

Disruptions to or failures of information technology systems we use could adversely affect our business.

We rely heavily on information technology systems—both software and computer hardware—to operate our business. Some of these systems are owned and operated by us, and some are owned or operated by third parties pursuant to leases, licenses or other contracts with those third parties. We rely on these systems to, among other things:

•facilitate and plan the purchase, management and distribution of, and payment for, inventory and raw materials;

•control our production processes;

•manage and monitor our distribution network and logistics;

•receive, process and ship orders;

•manage billing, collections, cash applications, customer service, and payables;

•manage financial reporting; and

•manage payroll and human resources information.

The IT systems we use may be disrupted or fail for a number of reasons, including:

•natural disasters, such as fires;

•power loss;

•software “bugs”, hardware defects or human error or malfeasance; and

•hacking, computer viruses or malicious codes, denial of service attacks, malware, ransomware, unauthorized access attempts, social engineering schemes, credential theft, phishing scams, compromised or irretrievable backups, exploitation of vulnerabilities in third-party software and systems or other cyber-attacks.

Any of these events which deny us use of vital IT systems may seriously disrupt our normal business operations. These disruptions may lead to production or shipping stoppages, which may in turn lead to material revenue loss and reputational harm.17

~~Despite~~Table security designs and internal controls, the IT systems we use have in the past experienced, and may in the future become subject to, attempts by unauthorized third parties to access and exfiltrate confidential information, manipulate data or disrupt our operations. In November 2022, we discovered a cybersecurity attack, perpetrated by unauthorized third parties, affecting our IT systems (the “Cyber Event”). In response, we promptly shut down certain systems, including shipping, inventory management and production systems, and engaged forensic experts to evaluate the extent of ~~the Cyber Event and its disruption to our operations. The investigation of the Cyber Event by our forensic experts was completed during fiscal year 2023.~~Contents

Any events which deny us use of vital IT systems may seriously disrupt our normal business operations. These disruptions may lead to production or shipping stoppages, which may in turn lead to material revenue loss and reputational harm. These cyber threats are diverse and constantly evolving, especially given the advances in, and the rise of the use of, artificial intelligence, thereby increasing the difficulty of preventing, detecting, and successfully defending against them and may be more difficult to detect and mitigate, including as threat actors use artificial intelligence and other advanced tools to enhance attacks and impersonation tactics. Cybersecurity breaches could, among other things, disrupt our operations or result in the unauthorized disclosure, theft and misuse of company, customer, employee and supplier sensitive and confidential information, all of which could adversely affect our financial condition and results of operations. Cybersecurity breaches could also result in legal claims or proceedings, financial liability to other parties, governmental investigations, regulatory enforcement actions and penalties, and damage to our brand and reputation. Although we maintain insurance coverage relating to cybersecurity incidents, we may incur costs or financial losses that are either not insured against or not fully covered through our insurance and such insurance may be subject to exclusions, sub-limits and retentions and may become more expensive or less available on acceptable terms.

Despite security designs and internal controls, the IT systems we use have in the past experienced, and we or systems owned and or operated by third parties on which we rely may in the future become subject to, attempts by unauthorized third parties to access and exfiltrate confidential information, manipulate data or disrupt our operations. In November 2022, we discovered a cybersecurity attack, perpetrated by unauthorized third parties, affecting our IT systems (the “Cyber Event”). In response, we promptly shut down certain systems, including shipping, inventory management and production systems, and engaged forensic experts to evaluate the extent of the Cyber Event and its disruption to our operations. The investigation of the Cyber Event by our forensic experts was completed during fiscal year 2023.

In fiscal year 2022, in connection with the Cyber Event, our revenues were adversely affected by approximately $8 million due to lost sales. Additionally, we incurred Cyber Event costs of approximately $5 million in fiscal year 2022 primarily due to idle plant costs, direct labor costs during the period our manufacturing facilities were idle and third-party remediation costs. We have cyber insurance and during 2024, we recovered $5.6 million of our financial losses related to the Cyber Event.

Following the Cyber Event, we implemented measures to enhance our cybersecurity protections against, and reduce the potential of, any future cybersecurity attack. We expect to incur ongoing costs to enhance cybersecurity with the goal of preventing unauthorized access to, or manipulation of, our systems and data.

However, there is no guarantee that these enhancements and steps will be adequate to mitigate future losses due to IT system disruptions or that we will be able to prevent, detect or respond to future incidents in a timely and effective manner, and we may incur significant expense in correcting and recovering from future disruptions.

15As cybercriminals continue to become more sophisticated and numerous, the costs to defend and insure against cyberattacks can be expected to rise.

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To the extent our IT systems store sensitive data, including data related to customers, employees or other parties, security breaches may expose us to fines and other liabilities, and reputational harm if such data is misappropriated. In addition, as cybercriminals continue to become more sophisticated and numerous, the costs to defend and insure against cyberattacks can be expected to rise.

The impact of potential changes to environmental laws and regulations and industry standards regarding climate change and other sustainability matters could lead to unforeseen disruptions to our business operations.

Addressing the effects of climate change has taken on increased importance throughout the world. The continued efforts to combat climate change could include more restrictive federal, state, and foreign environmental laws and regulations, heightened industry standards, or other mitigation measures that may have a material adverse effect on our global operations. These initiatives could, for example, increase the cost of obtaining raw materials for production of our products, increase the cost of energy for our manufacturing processes, negatively impact our supply chain and capital expenditures, or increase our administrative costs.

In 2021, we established and publicly disclosed targets and other commitments related to certain sustainability matters, including a goal to reduce our CO2 emissions across our Company and supply chain by 2030. We also set a goal to become a carbon negative enterprise by 2040. If we are unable to meet these targets or commitments on our projected timelines or at all, or if they are perceived negatively, including the perception that they are not sufficiently robust or, conversely, are too costly, our reputation as well as our relationships with investors, customers and other stakeholders could be harmed, which could in turn adversely impact our business, results of operations and the trading price of our common stock.

Health crisis events, such as epidemics or pandemics, have adversely impacted, and may continue to impact, the economy and disrupt our operations and supply chains, which may have an adverse effect on our results of operations.18

Health crisis events, including epidemics or pandemics, such as COVID-19, have impacted areas where we operate and sell our products and could have additional impacts on economic growth, supply chains, and foreign currency exchange rates. A public health emergency in the future could have a material adverse effect on our ability to operate, our results of operations, financial condition, and demand for our products.

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Public health crisis events, such as epidemics or pandemics, have in the past adversely impacted, and may in the future impact, the economy and disrupt our operations and supply chains, which may have an adverse effect on our results of operations.

Public health crisis events, including epidemics or pandemics, such as the COVID-19 pandemic, have impacted areas where we operate and sell our products and any future public health crises could have additional impacts on economic growth, supply chains, and foreign currency exchange rates. A public health emergency in the future could have a material adverse effect on our ability to operate, our results of operations, financial condition, and demand for our products.

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International Risk Factors

Our substantial international operations are subject to various political, economic and other uncertainties that could adversely affect our business results, including ~~foreign currency fluctuations,~~ restrictive taxation, custom duties, tariffs, border closings or other adverse government regulations.

We have substantial international operations and intend to continue to pursue and commit resources to growth opportunities beyond the United States. Outside of the United States, we maintain manufacturing facilities in the Netherlands, the United Kingdom, China, Australia and Germany, in addition to product showrooms or design studios in England, France, Germany, Spain, the Netherlands, India, Australia, United Arab Emirates, Singapore, Hong Kong, China and elsewhere. In 2025, 2024, and 2023 approximately 43%, 43%, and 46% of our net sales, respectively, and a significant portion of our production were outside the United States, primarily in Europe and Asia-Pacific.

International operations carry certain risks and associated costs, such as: the complexities and expense of administering a business abroad; complications in compliance with, and unexpected changes in, legal and regulatory restrictions or requirements; foreign laws, international import and export legislation; trading and investment policies; economic and political instability in the global markets; foreign currency fluctuations; exchange controls; increased nationalism and protectionism; crime and social instability; tariffs and other trade barriers; difficulties in collecting accounts receivable; potential adverse tax consequences and increasing tax complexity or changes in tax law associated with operating in multiple tax jurisdictions; uncertainties of laws and enforcement relating to intellectual property and privacy rights; difficulty in managing a geographically dispersed workforce in compliance with diverse local laws and customs, including health and safety regulations and wage and hour laws; potential governmental expropriation (especially in countries with undemocratic or authoritarian ruling parties); and other factors depending upon the jurisdiction involved. There can be no assurance that we will not experience these risks in the future.

In addition, due to our global operations, we are subject to many laws governing international relations and international operations, including laws that prohibit improper payments to government officials and commercial customers and that restrict where we can do business, what information or products we can import and export to and from certain countries and what information we can provide to a non-U.S. government. These laws include but are not limited to the U.S. Foreign Corrupt Practices Act (“FCPA”), the U.K. Bribery Act 2010, the Mexican National Anticorruption System (Sistema Nacional Anticorrupción, or “SNA”), the U.S. Export Administration Act and U.S. and international economic sanctions and money laundering regulations. We have internal policies and procedures relating to compliance with such regulations; however, there is a risk that such policies and procedures will not always protect us from the improper acts of employees, agents, business partners or representatives, particularly in the case of recently acquired operations that may not have significant training in applicable compliance policies and procedures. Violations of these laws, which are complex, may result in criminal penalties, sanctions and/or fines that could have an adverse effect on our business, financial condition and results of operations and reputation. In addition, we are subject to antitrust laws in various countries throughout the world. Changes in these laws or their interpretation, administration or enforcement may occur over time. Any such changes may limit our future acquisitions, divestitures or operations.

Finally, we may not be aware of all the factors that may affect our business in foreign jurisdictions. The risks outlined above, and others specific to certain jurisdictions that we may not be aware of, could adversely and materially affect our business and results.

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The conflicts between Russia and Ukraine and in the Middle East could adversely affect our business, results of operations and financial position.

Given the nature of our business and our global operations, political, economic, and other conditions in foreign countries and regions, including geopolitical risks arising from the conflicts between Russia and Ukraine and the Middle East, may adversely affect our business, results of operations and financial position.

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Historically, Russia was a key supplier of natural gas, oil, and other raw materials to European countries. We have substantial manufacturing operations in Europe (including Germany, the Netherlands, and the United Kingdom), and we have key suppliers in Europe, which rely upon natural gas, oil, and other raw materials to operate. Our sole rubber flooring plant is in Germany, and our primary European carpet tile plant is in the Netherlands. Any disruption in the supply of natural gas, oil, or other raw materials from Russia to Europe could adversely affect our ability to operate our business, our results of operations and our financial position, or adversely affect the ability of our key suppliers to meet our raw material requirements. In particular, reduced Russian exports of natural gas and oil to Europe may materially impede our European manufacturing operations and may result in higher energy costs to operate our facilities. Our customers’ businesses, results of operations and financial positions also could be adversely impacted by the conflict in Ukraine, which could reduce their spending on our products. While we permanently closed our operations in Russia in the third quarter of 2022, the effects of the conflict between Russia and Ukraine on us as well as the global economy cannot be predicted.

The conflicts between Russia and Ukraine and in the Middle East are ongoing and the duration of the conflict and war are uncertain. We cannot predict the outcome of the conflict and war or the impact on the broader region, as the conflict and war and related government actions are evolving and are beyond our control. To the extent the conflicts between Russia and Ukraine and in the Middle East adversely affects our business, the conflict and war may also have the effect of heightening other risks disclosed in our Annual Report, any of which could materially and adversely affect our business, results of operations and financial condition. Such risks include, but are not limited to, adverse effects on macroeconomic conditions, including inflation and reduced corporate and consumer spending; disruptions to our global technology infrastructure, including through cyberattack, ransom attack, or cyber-intrusion; adverse changes in international trade policies and relations; our ability to maintain or increase our prices, including fuel surcharges in response to rising fuel costs; further disruptions in global supply chains; terrorist activities targeting business infrastructure; our exposure to foreign currency fluctuations; and constraints, volatility, or disruption in the capital markets. Other potential consequences of the ongoing conflict and war include or may include government sanctions, embargoes, unstable energy markets, tariff wars, regional instability, geopolitical shifts, potential retaliatory action by the governments involved in the conflict and war against companies or other countries, and increased tensions between the involved governments and the United States or other countries in which we operate.

Fluctuations in foreign currency exchange rates have had, and could continue to have, an adverse impact on our financial condition and results of operations.

Changes in the value of foreign currencies relative to the U.S. dollar have adversely affected our results of operations and financial position and could continue to do so. In recent periods, as the value of the U.S. dollar has ~~strengthened~~weakened in comparison to certain foreign currencies — particularly in our EAAA segment and the impact of the Euro on our European operations — our reported revenues have been negatively impacted. As approximately 43% of our revenue is denominated in foreign currencies, these exchange rate fluctuations have had, and could continue to have, a significant adverse impact on our financial results.

The uncertainty surrounding the ongoing implementation and effect of the U.K.’s exit from the European Union, and related negative developments in the European Union, could adversely affect our business, results of operations or financial condition.21

In 2016, voters in the U.K. approved an exit from the European Union via a referendum (commonly referred to as “Brexit”). The U.K. ceased to be a member of the European Union on January 31, 2020. In December 2020, the U.K. and the European Union agreed on a trade and cooperation agreement. Because the agreement merely sets forth a framework in many respects and will require complex additional bilateral negotiations between the U.K. and the European Union as both parties continue to work on the rules for implementation, significant political and economic uncertainty remains about how the precise terms of the relationship between the parties will differ from the terms before withdrawal. The uncertainty leading up to and following Brexit has had, and the ongoing implementation of Brexit may continue to have, a negative impact on our business and demand for our products in Europe, and particularly in the U.K. Brexit could adversely affect European or worldwide political, regulatory, economic or market conditions and could contribute to instability in political institutions and regulatory agencies. Brexit could also have the effect of disrupting the free movement of goods, services, and people between the U.K., the European Union and elsewhere. In addition, Brexit has had a detrimental effect, and could have further detrimental effects, on the value of either or both of the Euro and the British Pound sterling, which could negatively impact our business (principally from the translation of sales and earnings in those foreign currencies into our reporting currency of U.S. dollars). Such a development could have other unpredictable adverse effects, including a material adverse effect on demand for office space and our flooring products in the U.K. and in Europe if the U.K. exit leads to economic difficulties in Europe.

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Risk Factors Related to our Indebtedness

We have a substantial amount of debt, which could adversely affect our business, financial condition and results of operations and our ability to meet our payment obligations under our debt.

We have a substantial amount of debt and debt service requirements. As of December 2928, ~~2024~~2025, we had approximately $~~305~~181.68 million of outstanding debt, and we had $~~299~~243.32 million of undrawn borrowing capacity under our Syndicated Credit Facility.

This level of debt could have significant consequences on our future operations, including:

•making it more difficult for us to meet our payment and other obligations under our outstanding debt;

•resulting in an event of default if we fail to comply with the financial and other restrictive covenants contained in our debt agreements, which event of default could result in all of our debt becoming immediately due and payable;

•reducing the availability of our cash flows to fund working capital, capital expenditures, acquisitions or strategic investments and other general corporate purposes, and limiting our ability to obtain additional financing for these purposes;

•subjecting us to the risk of increasing interest expense on variable rate indebtedness, including borrowings under our Syndicated Credit Facility;

•limiting our flexibility in planning for, or reacting to, and increasing our vulnerability to, changes in our business, the industry in which we operate and the general economy;

•placing us at a competitive disadvantage compared to our competitors that have less debt or are less leveraged;

•limiting our ability to attract certain investors to purchase our common stock due to the amount of debt we have outstanding; ~~and~~

•limiting our ability to refinance our existing indebtedness as it matures.; and

•limiting our ability to pay dividends or repurchase our shares.

In addition, borrowings under our Syndicated Credit Facility have variable interest rates, and therefore our interest expense will increase if the underlying market rates (upon which the variable interest rates are based) increase. The interest rate on certain borrowings under the Syndicated Credit Facility will also increase if our consolidated net leverage ratio increases in a given period. For information regarding the current variable interest rates of these borrowings and the potential impact on our interest expense from hypothetical increases in short term interest rates, please see the discussion in Item 7A of this Report.

Any of the above-listed factors could have an adverse effect on our business, financial condition and results of operations and our ability to meet our payment obligations under our debt.

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Servicing our debt requires a significant amount of cash, and we may not have sufficient cash flow from our operations to pay our indebtedness.

Our ability to generate cash in order to make scheduled payments of the principal of, to pay interest on or to refinance our indebtedness depends on our future performance, which is subject to economic, financial, competitive, legislative, regulatory and other factors beyond our control. In addition, our ability to borrow funds in the future to make payments on our debt will depend on the satisfaction of the covenants in our Syndicated Credit Facility and our other financing agreements, ~~including the indenture governing the Senior Notes, and other agreements~~ we may enter into in the future. Specifically, we will need to maintain certain financial ratios under our Syndicated Credit Facility. Our business may not continue to generate sufficient cash flow from operations in the future and future borrowings may not be available to us under our existing revolving credit facility or from other sources in an amount sufficient to service our indebtedness, ~~including the Senior Notes,~~ to make necessary capital expenditures or to fund our other liquidity needs. If we are unable to generate cash from our operations or through borrowings, we may be required to adopt one or more alternatives, such as selling assets, restructuring debt or obtaining additional equity capital on terms that may be onerous or highly dilutive. Our ability to make payments on our indebtedness or refinance our indebtedness will depend on the capital markets and our financial condition at such time, as well as the terms of our financing agreements, including the Syndicated Credit Facility~~, and the indenture governing the Senior Notes~~. We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on our debt obligations. In addition, borrowings under our Syndicated Credit Facility have variable interest rates, and therefore our interest expense will increase if the underlying market rates (upon which the variable interest rates are based) increase.

We may incur substantial additional indebtedness, which could further exacerbate the risks associated with our substantial indebtedness.

Subject to the restrictions in our Syndicated Credit Facility ~~and in the indenture governing our Senior Notes~~, we and our subsidiaries may be able to incur additional indebtedness in the future. Although our Syndicated Credit Facility ~~and~~contains ~~the indenture governing the Senior Notes contain~~ restrictions on the incurrence of additional debt, these restrictions are subject to a number of significant qualifications and exceptions, including the ability, on a non-committed basis, for us to increase revolving commitments and/or term loans under our Syndicated Credit Facility, and debt incurred in compliance with these restrictions could be substantial. If new debt is added to our ~~and our subsidiaries’~~ existing debt levels, the related risks we now face would increase.

Legal Risk Factors

We face risks associated with litigation and claims.

We have been, and may in the future become, party to lawsuits including, without limitation, actions and proceedings in the ordinary course of business, such as claims brought by our customers in connection with commercial disputes, employment claims made by our current or former employees, or claims relating to intellectual property matters or regulatory investigations and enforcement. Litigation might result in substantial costs and may divert management’s attention and resources, which may adversely affect our business, results of operations and financial condition. An unfavorable judgment against us in any legal proceeding or claim could require us to pay monetary damages and, depending on the nature of the claim and proceeding, may harm our reputation. Insurance might not cover such claims, might not provide sufficient payments to cover all the costs to resolve one or more such claims, and might not continue to be available on terms acceptable to us. In addition, an unfavorable judgment in which the counterparty is awarded equitable relief, such as an injunction, could harm our business, results of operations and financial condition.

Please refer to Item 3, “Legal Proceedings,” within this Report for additional information related to litigation and claims.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

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ITEM 1C. CYBERSECURITY

Risk Management Strategy

Assess, Identify and Manage Material Risks from Cybersecurity Threats

Interface has ~~integrated~~implemented ~~cybersecurity~~processes ~~risk~~designed ~~management~~to ~~into~~identify, ~~our~~assess, ~~broader~~and ~~enterprise~~manage ~~risk~~material ~~management~~risks ~~framework.~~from ~~This~~cybersecurity ~~integration~~threats. ~~ensures~~These ~~that~~processes ~~cybersecurity considerations~~ are anintegrated ~~integral~~into ~~part of~~ our ~~entity-level~~broader ~~risk~~enterprise ~~assessment and decision-making process. Cybersecurity~~ risk management isframework ~~also~~and aare ~~vital~~intended ~~part~~to ~~our~~enable ITongoing ~~incident~~evaluation ~~management~~of ~~and~~cybersecurity ~~disaster~~risks ~~recovery policy~~ that ~~outlines~~could aimpact ~~systematic~~our ~~approach~~business, ofoperations, ~~implementing~~or ~~and~~financial ~~executing~~condition. ~~strategies~~They ~~and~~include ~~procedures~~activities toaimed ~~enable~~at ~~the~~protecting ~~recovery~~sensitive and ~~restoration~~personal ofdata ~~vital~~from ~~business~~unauthorized ~~functions~~access, ~~and~~disclosure, ITor ~~infrastructure following a significant disruptive event~~misuse.

Cybersecurity risks are assessed through a combination of internal evaluations, risk assessments, and monitoring of the evolving threat environment. Identified risks are prioritized based on their potential impact and likelihood, and management develops and implements risk mitigation strategies accordingly.

Use of Cybersecurity Frameworks and Standards

Our cybersecurity program is informed by recognized industry frameworks and standards. Interface currently uses the National Institute of Standards and Technology Cybersecurity Framework (NIST CSF) to guide its cybersecurity activities, capabilities, and reporting to management and the Board of Directors. We also periodically evaluate additional frameworks and standards, including International Organization for Standardization (ISO) 27001, as part of our ongoing efforts to strengthen our cybersecurity governance and risk management practices.

Engagement of Third Parties

Interface's ~~engages a range of external experts in evaluating and testing our~~ cybersecurity risk management ~~systems.~~processes ~~These~~include ~~partnerships~~consideration ~~enable~~of usrisks toassociated ~~leverage~~with ~~specialized~~third-party ~~knowledge~~service ~~and~~providers, ~~insights~~suppliers, ~~ensuring our cybersecurity strategies~~ and ~~processes~~other ~~remain~~business ~~at the forefront of industry best practices~~partners. In ~~the~~We ~~event~~evaluate ~~of a~~ cybersecurity ~~incident,~~risks ~~the~~associated ~~Company~~with ~~uses~~third ~~external~~parties ~~experts~~in toconnection ~~assist~~ with anonboarding ~~investigation~~and, ofwhere ~~the incident~~appropriate, anthrough ~~evaluation~~periodic ofreassessments. ~~the~~These ~~extent~~processes tomay ~~which~~include ~~the~~contractual ~~cybersecurity event has impacted the Company’s operations~~requirements, ~~financial~~risk ~~condition~~assessments, and ITother ~~infrastructure,~~measures ~~and~~designed ~~the~~to ~~recovery~~address ~~and~~cybersecurity ~~restoration~~risks ~~following~~arising ~~the~~from ~~incident~~third-party relationships.

WeCybersecurity ~~evaluate~~Incident the inherent risk associated with using external experts by conducting thorough security assessments before engagement and perform ongoing monitoring to ensure compliance with our cybersecurity standards. Management

~~Governance~~Interface maintains an incident response program designed to identify, respond to, and ~~Oversight~~recover from cybersecurity incidents in a timely manner. This program includes defined procedures and thresholds for incident escalation, internal coordination, and communication with relevant stakeholders. In the event of a material cybersecurity incident, the Company would assess the incident's impact and make disclosures as required by applicable laws and regulations.

The Audit Committee has oversight responsibility for cybersecurity risk management. The Audit Committee is comprised of board members with diverse experience and expertise to effectively oversee risk, although none of them are cybersecurity experts. Our Chief Information Officer, in his capacity, regularly informs the Audit Committee (typically twice per year) and the full board (typically once per year) on all aspects related to cybersecurity risks, as well as any remediation efforts in response to a cybersecurity incident.

Risks from Cybersecurity Threats

Our IT systems face a myriad of cybersecurity threats, including, without limitation, hacking, computer viruses, denial of service attacks, malware, ransomware, phishing scams, compromised or irretrievable backups, and other cyber attacks. Any of these events which deny us use of vital IT systems may seriously disrupt our normal business operations and lead to production or shipping stoppages, revenue loss, and reputational harm.

To the extent our IT systems store sensitive data, including data related to customers, employees or other parties, risks from cybersecurity threats may expose us to fines and other liabilities, and reputational harm if such data is misappropriated. In addition, as cybercriminals continue to become more sophisticated and numerous, the costs to defend and insure against cyberattacks can be expected to rise.

On November 20, 2022, we discovered a cybersecurity attack, perpetrated by unauthorized third parties, affecting our IT systems. In response to this Cyber Event, we notified law enforcement and took steps to supplement existing security monitoring, including scanning and protective measures. The investigation of the Cyber Event was completed during fiscal year 2023. A more detailed discussion of the Cyber Event can be found in Item 7 entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Annual Report on Form 10-K.

21Based upon the information that we have as of the end of the year covered by this Annual Report, we do not believe that any risks from cybersecurity threats, including the Cyber Event described above, have materially affected Interface, including our business strategy, results of operations, or financial condition. However, cybersecurity threats are evolving and increasing in sophistication, and the preventative actions we have taken, and continue to take, to reduce the risk of cybersecurity threats and incidents may not successfully protect against all such threats and incidents, and, as a result, there can be no assurance that we or the third parties we interact with will not experience a cybersecurity event in the future that will materially affect the Company, including its business strategy, results of operations, or financial condition. For additional information regarding cybersecurity risks, see "Risk Factors" in Item 1A of this Annual Report on Form 10-K.

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System Resilience, Availability, and Recovery

Interface maintains business continuity and disaster recovery plans designed to support the availability and resilience of its information systems and operations in the event of a cybersecurity incident or other disruptive event. The disaster recovery plans are reviewed and tested annually, and we take steps to incorporate lessons learned from testing activities and industry events into our resilience planning.

Ongoing Monitoring and Continuous Improvement

Our cybersecurity program includes ongoing monitoring and evaluation activities designed to support the effectiveness of our controls and processes. These activities include security monitoring, vulnerability assessments, and penetration testing conducted internally and by engaged third-party cybersecurity consultants and assessors. Interface also engages external specialists, as needed, to assist with incident response, forensic investigations, and independent assessments of our cybersecurity program. Interface also provides annual and monthly security awareness training to digitally enabled employees designed to promote responsible use of information systems and to reduce the risk of cybersecurity incidents. Management uses the results of these activities to inform enhancements to the Company's cybersecurity program and to address emerging risks.

Governance and Oversight

The Board of Directors has delegated oversight of Interface's cybersecurity risk management to the Audit Committee of the Board of Directors. The Audit Committee is comprised of board members with diverse experience and expertise to effectively oversee risk, although none of them are cybersecurity experts. The Audit Committee receives quarterly updates from management regarding cybersecurity risks, threat environment developments, and the Company's cybersecurity posture through our enterprise risk management process.

Our Chief Information Officer reports directly to the Chief Executive Officer and is responsible for the ongoing management of our cybersecurity program, including the identification and evaluation of risks and the implementation of risk mitigation strategies to maintain a strong cybersecurity posture. Our Chief Information Officer, in his capacity, regularly informs the Audit Committee (typically twice per year) and the full board (typically once per year) on all aspects related to cybersecurity risks, as well as any remediation efforts in response to a cybersecurity incident. The Chief Information Officer works in coordination with leaders across information technology, legal, risk management, compliance, and operations to ensure a comprehensive approach to cybersecurity risk management. Our Chief Information Officer has over twenty-five years of diverse experience aligning information technology strategies to business objectives at global companies.

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ITEM 2. PROPERTIES

We maintain our corporate headquarters in Atlanta, Georgia in approximately 42,000 square feet of leased space. The following table lists our principal manufacturing and distribution facilities and other material physical locations (some locations are comprised of multiple buildings) by reportable segment, all of which we own except as otherwise noted:

Location						FloorSpace(Sq. Ft.)
AMS
LaGrange, Georgia						669,145
LaGrange, Georgia(1)						250,000
LaGrange, Georgia						250,000
Union City, Georgia(1)						370,000
West Point, Georgia						250,000
Salem, New Hampshire(1)						126,766
EAAA
Craigavon, N. Ireland(1)						72,200
Minto, Australia						240,000
Scherpenzeel, Netherlands						1,250,960
Weinheim, Germany(1)						~~873~~921,~~243~~433
Taicang, China(1)						142,500

(1) Leased.

We maintain sales or marketing offices in ~~over~~approximately 40 locations in 19 countries. Most of our sales and marketing locations are leased.

We believe that our manufacturing and distribution facilities and our marketing offices are sufficient for our present operations. We will continue, however, to consider the desirability of establishing additional facilities and offices in other locations around the world as part of our business strategy to meet global market demands. ~~Substantially all of our owned properties in the United States are subject to mortgages, which secure borrowings under our Syndicated Credit Facility.~~

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ITEM 3. LEGAL PROCEEDINGS

From time to time, we are a party to legal proceedings, whether arising in the ordinary course of business or otherwise. See Note 1817 to the consolidated financial statements included in Item 8 of this Annual Report on Form 10-K.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

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PART II

ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Our common stock is traded on the Nasdaq Global Select Market under the symbol TILE. As of February 1413, ~~2025~~2026, we had ~~537~~501 holders of record of our common stock. We estimate that there are in excess of 1145,000 beneficial holders of our common stock.

Although we have a history of paying quarterly cash dividends on our common stock, future declaration and payment of dividends is at the discretion of our Board, and depends upon, among other things, our investment policy and opportunities, results of operations, financial condition, cash requirements, future prospects, and other factors that may be considered relevant by our Board at the time of its determination. Such other factors include limitations contained in the agreement for our Syndicated Credit Facility ~~and the indenture for our Senior Notes~~, ~~each of~~ which specify conditions as to when any dividend payments may be made. As such, we may discontinue our dividend payments in the future if our Board determines that a cessation of dividend payments is proper in light of the factors indicated above.

Stock Performance

The following graph and table compare, for the period comprised of the Company’s five preceding fiscal years ended December 2928, ~~2024~~2025, the Company’s total returns to shareholders (assuming all dividends were reinvested) with that of (i) all companies listed on the Nasdaq Composite Index, and (ii) our ~~previous~~ self-determined peer group, ~~and (iii) our new self-determined peer group,~~ assuming an initial investment of $100 in each on ~~December~~January 293, ~~2019~~2021 (the last day of the fiscal year ~~2019~~2020). In 2024, the Company updated its self-determined peer group to exclude PGT Innovations, Inc., SP Plus Corporation, and Glatfelter Corporation, which were acquired in 2024 and no longer trade publicly and also to incorporate other peer group changes to align with the peer group used to measure executive compensation. Unifi, Inc. was removed because its smaller size no longer aligned with the peer group profile. American Woodmark Corporation, Gibraltar Industries, Inc., Quanex Building Products Corporation, and Tredegar Corporation were appropriate additions in terms of size and industry, while also enhancing the group’s sample size and placing the Company near the median of the peer group. In determining its peer group companies, the Company considered various factors, including the potential peer’s industry, business model, size and complexity. The Company chose a peer group that is arepresentative ~~better representation~~ of the Company’s size and market capitalization with minimal revenue dispersion, and with companies in similar industries or lines of business or subject to similar economic and business cycles, including companies with a significant international presence that are also focused on sustainability. In December 2025, Steelcase Inc., previously included within our self-determined peer group, was acquired by HNI Corporation (a company already in our self-determined peer group). Because Steelcase Inc. no longer trades publicly, it was excluded from our self-determined peer group.

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	December 29, 2019	January 3, 2021	January 2, 2022	January 1, 2023	December 31, 2023	December 29, 2024
	January 3, 2021	January 2, 2022	January 1, 2023	December 31, 2023	December 29, 2024	December 28, 2025
Interface, Inc.	$100	$64152	$9895	$61121	$78241	$~~154~~275
NASDAQ Composite Index	$100	$144	$176	$119	$172	$228
Previous Self-Determined Peer Group (12 Stocks)	$100	$82	$104	$65	$93	$114
Self-Determined Peer Group (11 Stocks)	$100	$117	$78	$111	$126	$136
New Self-Determined Peer Group (12 Stocks)	$100	$90	$103	$69	$100	$112

Notes to Performance Graph

(1)If the annual interval, based on the fiscal year-end, is not a trading day, the preceding trading day is used.

(2)The index level was set to $100 as of ~~December~~January 293, ~~2019~~2021 (the last day of fiscal year ~~2019~~2020).

(3)The Company’s fiscal year ends on the Sunday nearest December 31.

(4)The following companies are included in the ~~Previous~~ Self-Determined Peer Group depicted above: ACCO Brands Corporation; American Woodmark Corporation; Apogee Enterprises, Inc.; Armstrong World Industries, Inc.; Enviri Corporation; ~~HNI~~Gibraltar ~~Corporation; MillerKnoll~~Industries, Inc.; ~~Steelcase~~HNI ~~Inc.~~Corporation; ~~Unifi~~MillerKnoll, Inc.; ~~and~~Quanex ~~VSE~~Building ~~Corporation.~~Products ~~Glatfelter~~ Corporation,; ~~PGT~~Tredegar ~~Innovations, Inc., and SP Plus~~ Corporation; ~~were acquired in 2024~~ and noVSE ~~longer trade publicly, and therefore are excluded from the Previous Self-Determined Peer Group~~Corporation.

(5)The following companies are included in the New Self-Determined Peer Group depicted above: ACCO Brands Corporation; American Woodmark Corporation; Apogee Enterprises, Inc.; Armstrong World Industries, Inc.; Enviri Corporation; Gibraltar Industries, Inc.; HNI Corporation; MillerKnoll, Inc.; Quanex Building Products Corporation; Steelcase Inc.; Tredegar Corporation; and VSE Corporation.

Securities Authorized for Issuance Under Equity Compensation Plans

See Item 12 of Part III of this Annual Report on Form 10-K.

Issuer Purchases of Equity Securities

The following table contains information with respect to purchases made by or on behalf of the Company, or any “affiliated purchaser” (as defined in Rule 10b-18(a)(3) under the Securities Exchange Act of 1934), of our common stock during our fourth quarter ended December 2928, ~~2024~~2025:

Period(1)	TotalNumber ofSharesPurchased	AveragePricePaidPer Share		Total Numberof Shares Purchasedas Part of Publicly Announced Plans or Programs(2)	Approximate Dollar Value of Shares thatMay Yet BePurchased Under thePlans or Programs(2)
September 30, 2024 – October 27, 2024	—	$	—	—	$	82,828,595
September 29, 2025 – October 26, 2025	—	$	—	—	$	77,850,082
October 28, 2024 – December 1, 2024	—	—		—	82,828,595
October 27, 2025 – November 30, 2025	500,166	26.06		500,166	64,654,096
December 2, 2024 – December 29, 2024	—	—		—	82,828,595
December 1, 2025 – December 28, 2025	—	—		—	64,654,096
Total	—500,166	$	—	—500,166

(1) The monthly periods identified above correspond to the Company’s fiscal fourth quarter of ~~2024~~2025, which commenced September 3029, ~~2024~~2025 and ended December 2928, ~~2024~~2025.

(2) On May 17, 2022, the Company announced a share repurchase program authorizing the repurchase of up to $100 million of common stock. The program has no specific expiration date. ~~There were no shares repurchased pursuant to this program during the Company’s fiscal fourth quarter of 2024.~~

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ITEM 6. [RESERVED]

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

Our revenues are derived from sales of floorcovering products, primarily modular carpet, resilient flooring, including luxury vinyl tile (“LVT”), rubber flooring products, and installation services and accessories. Our business, as well as the commercial interiors industry in general, is cyclical in nature and is impacted by economic conditions and trends that affect the markets for commercial and institutional business space. The commercial interiors industry, including the market for floorcovering products, is largely driven by reinvestment by corporations and institutions into their existing ~~businesses~~operations in the form of new fixtures and furnishings for their workplaces. In significant part, the timing and amount of such reinvestments are impacted by the profitability of those ~~corporations~~entities. As a result, macroeconomic factors such as employment rates, office vacancy rates, work from home policies, capital spending, productivity and efficiency gains that impact ~~corporate~~ profitability in general, also affect our business.

We focus our marketing and sales efforts on both corporate office and non-corporate office market segments, to reduce somewhat our exposure to economic cycles that affect the corporate office market segment more adversely, as well as to capture additional market share. More than half of our consolidated net sales were in non-corporate office markets in fiscal years ~~2024~~2025, ~~2023~~2024, and ~~2022~~2023, primarily in education, healthcare, public buildings, retail, residential/living, hospitality, transportation, and consumer residential market segments.

Executive Summary

Our One Interface strategy continues to fuel growth as we strengthen global capabilities, improve commercial productivity, and simplify and optimize our operations. During 2025, we had consolidated net sales of $1,386.9 million, up 5.4% compared to $1,315.7 million in 2024, primarily due to higher customer demand — particularly in the healthcare and education market segments. Consolidated operating income for 2025 was $164.0 million compared to consolidated operating income of $134.4 million in 2024, primarily due to higher sales and higher gross profit margin driven by higher average sales prices, favorable product mix, and manufacturing efficiencies, partially offset by higher input costs and tariff costs. Consolidated net income for 2025 was $116.1 million, or $1.96 per diluted share, compared to consolidated net income of $86.9 million, or $1.48 per diluted share, in 2024.

During 2024, we had consolidated net sales of $1,315.7 million, up 4.3% compared to $1,261.5 million in 2023, primarily due to increased customer demand – particularly in the retail and education market segments. Consolidated operating income for 2024 was $134.4 million compared to consolidated operating income of $104.5 million in 2023, primarily due to higher sales volumes and lower raw material costs. Consolidated net income for 2024 was $86.9 million, or $1.48 per diluted share, compared to consolidated net income of $44.5 million, or $0.76 per diluted share, in 2023.

~~During~~A ~~2023,~~detailed wediscussion ~~had consolidated net sales~~ of ~~$1,261.5 million,~~our ~~down~~2025 ~~2.8%~~and ~~compared~~2024 toconsolidated ~~$1,297.9 million~~and ~~in 2022, primarily due to decreased customer demand – particularly in the retail market~~ segment. ~~Consolidated~~performance ~~operating~~appears ~~income~~below ~~for~~under ~~2023~~“Analysis ~~was $104.5 million compared to consolidated operating income~~ of ~~$75.4~~Results ~~million in 2022, primarily due to a non-recurring goodwill and intangible asset impairment charge~~ of ~~$36~~Operations”.~~2 million recognized in 2022. Consolidated net income for 2023 was $44.5 million, or $0.76 per diluted share, compared to consolidated net income of $19.6 million, or $0.33 per diluted share, in 2022.~~

A detailed discussion of our 2024 and 2023 consolidated and segment performance appears below under “Analysis of Results of Operations”.

Cybersecurity Event

As previously disclosed in our current report on Form 8-K filed with the Commission on November 23, 2022, we discovered a cybersecurity attack on November 20, 2022, perpetrated by unauthorized third parties, affecting our IT systems. ~~The~~During ~~investigation of the Cyber Event was completed in~~ fiscal year ~~2023.~~2024, Wewe ~~have cyber risk insurance and~~ recovered $5.6 million in insurance proceeds ~~during fiscal year 2024,~~ representing business interruption proceeds and reimbursement of certain costs in connection with the Cyber Event. Of the total insurance proceeds received in fiscal year 2024, $4.8 million of business interruption proceeds were recognized as a benefit in other ~~income~~expense / ~~expense~~income, net in the consolidated statements of operations and $0.8 million was recognized as a reduction of selling, general and administrative expenses. The insurance claim for the Cyber Event ~~has~~was ~~been~~ closed asat the end of ~~December~~fiscal ~~29,~~year 2024, and we are not expecting to receive any additional proceeds in connection with the Cyber Event.

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During 2023, ~~the~~we ~~Company~~ incurred approximately $1.1 million in connection with the investigation of the Cyber Event, which ~~were~~was ~~recorded~~recognized in selling, general, and administrative expenses in the consolidated statements of operations. In 2022, we estimated that the Cyber Event adversely affected our fiscal year 2022 revenues by approximately $8 million in lost sales. We incurred approximately $5 million of costs related to the Cyber Event in 2022 for idle plant costs, direct labor costs during the period our manufacturing facilities were idle and third-party remediation costs. Approximately $4.8 million of the Cyber Event costs in 2022 were included in cost of sales in the consolidated statements of operations and approximately $0.3 million were included in selling, general and administrative expenses.

Impact of Macroeconomic Conditions

Disruptions in economic markets due to inflation, ~~high interest rates,~~ the ~~Russia-Ukraine~~impact ~~war~~of ~~and~~tariffs on the ~~conflict~~demand infor ~~the~~our ~~Middle East~~products, a ~~still~~ challenging supply chain environment, slow market conditions in certain parts of the globe, ~~the~~significant ~~impact~~financial ofpressures ~~potential~~in ~~tariffs on~~ the ~~demand~~commercial ~~for~~office ~~our~~market ~~products~~globally, ~~fluctuating~~and ~~freight~~geopolitical ~~costs,~~factors ~~and~~including ~~significant~~wars, ~~financial~~civil ~~pressures~~and inpolitical ~~the~~unrest, ~~commercial~~and ~~office~~other ~~market globally~~conflicts, all pose challenges which may adversely affect our future performance. Management believes it is reasonably likely that these challenges will continue to affect our future operations and demand for our products to some degree during fiscal year ~~2025~~2026. We plan to continue evaluating our cost structure and global manufacturing footprint to identify and activate opportunities to decrease costs and optimize our global cost structure.

The Company expects higher production volumes and lower per unit fixed costs in ~~2025~~2026, and anticipates these impacts will benefit our gross profit margin in ~~2025~~2026. We also expect that continuing challenges in supply chain markets, ~~will~~tariff ~~result~~costs, inand higher ~~freight~~raw material costs towill ~~some~~adversely ~~degree~~impact inour ~~2025~~performance ~~- particularly~~ in ~~the first half of 2025~~2026. We anticipate that continuing slow market conditions in parts of the globe and significant financial pressures in the commercial office market globally will adversely impact our future performance and demand for our products.

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Analysis of Results of Operations

Consolidated Results

The ~~following~~ discussion and analyses ~~reflect~~below reflects the factors and trends discussed in the preceding sections. Fiscal years 2025, 2024, and 2023 each included 52 weeks.

Consolidated net sales denominated in currencies other than the U.S. dollar were approximately 43% in 2024, 46% in 2023, and 47% in 2022. Because we have substantial international operations, we are impacted, from time to time, by international developments that affect foreign currency transactions. In 2024, the weakening of the Euro, Canadian dollar, and Chinese Renminbi against the U.S. dollar had a negative impact on our net sales, partially offset by the strengthening of the British Pound sterling against the U.S. dollar. Currency fluctuations had no material impact to operating income in 2024. In 2023, the strengthening of the Euro against the U.S. dollar had a positive impact on our net sales, partially offset by the weakening of the Australian dollar, Chinese Renminbi, and Canadian dollar. Currency fluctuations had no material impact to operating income in 2023. In 2022, the weakening of the Euro, Australian dollar, British Pound sterling and Chinese Renminbi against the U.S. dollar had a negative impact on our net sales and operating income.

The following table presents the amounts (in U.S. dollars) by which the exchange rates for translating Euros, British Pounds sterling, Australian dollars, Chinese Renminbi, Canadian dollars, and other currencies into U.S. dollars have affected our consolidated net sales and operating income during the past three years:

	2024		2023		2022
	2025		2024		2023
	(in millions)
Impact of changes in foreign currency on consolidated net sales	$	(114.8)9	$	(1.48)	$	~~(58~~1.8)4
Impact of changes in foreign currency on consolidated operating income	(02.1)4		(0.61)		(80.36)

~~The~~Consolidated ~~following~~net ~~table~~sales ~~presents,~~denominated asin acurrencies ~~percentage~~other ofthan ~~net~~the ~~sales~~U.S. dollar were approximately 43% in 2025, ~~certain~~43% ~~items~~in ~~included~~2024, and 46% in ~~our~~2023. ~~consolidated~~Because ~~statements~~we ofhave substantial international operations, ~~during~~we include the ~~past~~impact ~~three~~of ~~years:~~fluctuations in foreign currency exchange rates in our discussion below.

	Fiscal Year
	2024		2023		2022
Net sales	100.0	%	100.0	%	100.0	%
Cost of sales	63.3		65.0		66.3
Gross profit	36.7		35.0		33.7
Selling, general and administrative expenses	26.5		26.9		25.0
Restructuring, asset impairment, other (gains) and charges	—		(0.2)		0.2
Goodwill and intangible asset impairment charge	—		—		2.8
Operating income	10.2		8.3		5.7
Interest/Other expense, net	1.6		3.2		2.6
Income before income tax expense	8.6		5.1		3.1
Income tax expense	2.0		1.5		1.7
Net income	6.6	%	3.6	%	1.4	%

The following table presents, as a percentage of net sales, certain items included in our consolidated statements of operations during the past three years.


	Fiscal Year
	2025		2024		2023
Net sales	100.0	%	100.0	%	100.0	%
Cost of sales	61.3		63.3		65.0
Gross profit	38.7		36.7		35.0
Selling, general and administrative expenses	26.9		26.5		26.9
Restructuring, asset impairment, other (gains) and charges	—		—		(0.2)

Operating income	11.8		10.2		8.3
Interest/Other expense, net	1.9		1.6		3.2
Income before income tax expense	9.9		8.6		5.1
Income tax expense	1.5		2.0		1.5
Net income	8.4	%	6.6	%	3.6	%

Consolidated Net Sales

Below weis ~~provide~~ information regarding our consolidated net sales, and ~~analyze~~analysis of those results, for each of the last three fiscal years. ~~Fiscal years 2024, 2023, and 2022 each included 52 weeks.~~

	Fiscal Year						Percentage Change
	2024		2023		2022		2024 compared with 2023		2023 compared with 2022
	2025		2024		2023		2025 compared with 2024		2024 compared with 2023
	(in thousands)
Consolidated net sales	$	1,~~315~~386,~~658~~854	$	1,~~261~~315,~~498~~658	$	1,~~297~~261,~~919~~498	45.34	%	(24.8)3	%

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Consolidated net sales for 2025 compared with 2024

For 2025, consolidated net sales increased $71.2 million (5.4%) compared to 2024, comprised of higher sales volume (approximately 3.0%) and higher average sales prices (approximately 2.4%). Fluctuations in currency exchange rates had a positive impact of approximately $14.9 million on consolidated net sales for 2025, primarily due to the strengthening of the Euro against the U.S. dollar. On a market segment basis, the sales increase was most significant in the healthcare, education, public buildings, and transportation market segments. See the segment results discussion below for additional information on market segments.

Consolidated net sales for 2024 compared with 2023

For 2024, ~~our~~ consolidated net sales increased $54.2 million (4.3%) compared to 2023, comprised of higher sales ~~volumes~~volume (approximately 2.7%) and higher average sales prices (approximately 1.6%). Fluctuations in currency exchange rates had a negative impact onof ~~our~~$1.8 ~~year-over-year~~million on consolidated net sales ~~comparison~~for ~~of approximately $1.8 million~~2024, indicating that if currency levels had remained constant year-over-year, our 2024 net sales would have been higher by this amount. On a market segment basis, the sales increase was most significant in the retail, education, residential living, and public buildings market segments partially offset by decreases in the hospitality, corporate office, and consumer residential market segments. See the segment results discussion below for additional information on market segments.

Consolidated net sales for 2023 compared with 2022

For 2023, our consolidated net sales decreased $36.4 million (2.8%) compared to 2022, comprised of lower sales volumes (approximately 7.9%) partially offset by higher prices (approximately 5.1%). Fluctuations in currency exchange rates had a positive impact on our year-over-year consolidated net sales comparison of approximately $1.4 million, meaning that if currency levels had remained constant year-over-year, our 2023 net sales would have been lower by this amount. On a market segment basis, the sales decrease was most significant in the retail and healthcare market segments partially offset by increases in education and residential living market segments. See the segment results discussion below for additional information on market segments.

Consolidated Cost and Expenses

The following table presents our consolidated cost of sales and selling, general and administrative (“SG&A”) expenses during the past three years:

	Fiscal Year						Percentage Change
	2024		2023		2022		2024 compared with 2023		2023 compared with 2022
	2025		2024		2023		2025 compared with 2024		2024 compared with 2023
	(in thousands)
Consolidated cost of sales	$	~~832~~849,~~710~~474	$	~~820~~832,~~429~~710	$	~~860~~820,~~186~~429	12.50	%	(41.6)5	%
Consolidated selling, general and administrative expenses	~~348~~373,~~542~~385		~~339~~348,~~049~~542		~~324~~339,~~190~~049		27.81	%	42.68	%

Consolidated Cost of Sales

For ~~2024~~2025, ~~our~~ consolidated cost of sales increased $1216.38 million (12.50%) compared to ~~2023~~2024, primarily due to higher sales volume, increased tariff costs on rubber and luxury vinyl tile products imported into the U.S. (approximately $7.3 million), and higher raw material costs, partially offset by lower ~~raw~~manufacturing ~~material~~ costs driven by favorable fixed cost absorption on higher volume and production efficiencies. Currency translation had a ~~positive~~negative impact on consolidated cost of sales ~~and~~for ~~partially~~2025 ~~reduced~~and increased our costs by approximately $19.41 million (01.21%) compared to ~~2023~~2024. As a percentage of net sales, our consolidated cost of sales decreased to 6361.3% in ~~2024~~2025 versus 6563.03% in ~~2023~~2024. Management believes it is reasonably likely that lower per unit fixed costs due to higher production volumes and plant productivity initiatives will reduce our costs to some degree in ~~2025, particularly in the first half of 2025~~2026. These favorable impacts are expected to be partially offset by continuing tariff costs and higher ~~freight~~raw material costs in ~~2025~~2026.

For ~~2023~~2024, our consolidated cost of sales ~~decreased~~increased $3912.83 million (41.65%) compared to ~~2022~~2023, primarily due to ~~lower~~higher sales ~~and~~partially ~~lower~~offset ~~freight~~by ~~costs~~lower ~~(approximately~~raw ~~$19~~material ~~million) due to stabilizing supply chain conditions~~costs. Currency translation had noa ~~material~~positive impact on consolidated cost of sales and partially reduced our costs by approximately $1.4 million (0.2%) compared to ~~2022~~2023. As a percentage of net sales, our consolidated cost of sales decreased to 6563.03% in ~~2023~~2024 versus 6665.30% in ~~2022~~2023.

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Consolidated Gross Profit

For ~~2024~~2025, consolidated gross profit, as a percentage of net sales, was 3638.7% compared to 3536.07% for ~~2023~~2024. The increase in gross profit percentage was primarily due to ~~(i)~~higher ~~lower~~average ~~costs~~sales prices and favorable product mix (approximately 1%) ~~driven by lower raw material costs~~ and lower ~~fixed~~manufacturing costs ~~per unit as a result of higher volume and~~ (~~ii) higher pricing (~~approximately 1%) as discussed above. Management believes it is reasonably likely that gross profit in ~~2025~~2026 will be positively impacted by lower manufacturing costs as ~~discussed~~result ~~above~~of production efficiencies partially offset by continuing tariff and higher raw material costs.

For ~~2023~~2024, consolidated gross profit, as a percentage of net sales, was 3536.07% compared to 3335.70% for ~~2022~~2023. The increase in gross profit percentage was primarily due to (i) ~~higher~~lower ~~pricing~~costs (approximately 41%), ~~partially~~driven ~~offset~~ by ~~(ii)~~lower ~~the~~raw ~~unfavorable~~material ~~impact~~costs ofand ~~inflation~~lower onfixed ~~raw material~~ costs ~~(approximately~~per ~~1%),~~unit ~~and~~as ~~(iii)~~a ~~unfavorable~~result ~~manufacturing~~of ~~fixed~~higher ~~cost~~volume ~~absorption~~ and ~~product~~(ii) ~~mix~~higher pricing (approximately 21%).

Consolidated SG&A Expenses

For ~~2024~~2025, ~~our~~ consolidated SG&A expenses were $~~348~~373.54 million versus $~~339~~348.05 million in ~~2023. Currency translation had no material impact on consolidated SG&A expenses for~~ 2024. ~~Consolidated~~ SG&A expenses increased $924.58 million (27.81%) in ~~2024~~2025 compared to ~~2023~~2024, primarily due to (i) higher ~~people~~variable ~~costs~~compensation of $158.76 million ~~driven~~as bya ~~increased~~result ~~variable~~of ~~compensation~~higher ascommissions aon ~~result~~increased ofsales and higher ~~operating~~bonus ~~income~~costs ~~compared~~driven toby ~~2023~~improved operating results, ~~partially~~(ii) ~~offset~~higher byemployee ~~lower~~benefits and labor costs of $8.3 million, (iii) higher severance costs of $4.5 million due to employee separations, and (iv) higher professional fees of $2.6 million. ~~driven~~Currency byfluctuations ~~employee~~had ~~headcount~~a ~~reduction~~negative impact on consolidated SG&A expenses and ~~cost~~increased ~~saving~~our ~~initiatives~~costs inby ~~the~~approximately ~~prior~~$3.5 ~~year~~million ~~period~~(1.0%) compared to 2024. As a percentage of net sales, SG&A expenses ~~decreased~~increased to 26.59% in ~~2024~~2025 versus 26.95% in ~~2023~~2024.

For ~~2023~~2024, ~~our~~ consolidated SG&A expenses were $~~339~~348.05 million versus $~~324~~339.20 million in ~~2022~~2023. Currency translation had ano ~~$1.5~~material ~~million (0.5%) negative~~ impact on ~~the~~consolidated ~~year-over-year~~SG&A ~~comparison~~expenses for 2024. Consolidated SG&A expenses increased $~~14.~~9.5 million (42.68%) in ~~2023~~2024 compared to ~~2022~~2023, primarily due to ~~(i)~~higher ~~$6.5~~people ~~million~~costs of ~~higher selling expenses due to sales and marketing initiatives, (ii)~~ $615.37 million ~~of higher severance costs~~ driven by ~~employee~~increased ~~headcount~~variable ~~reductions~~compensation ~~and~~as ~~initiatives~~a toresult ~~reduce future costs, (iii) $4.4 million~~ of higher ~~professional~~operating ~~fees,~~income ~~and~~compared ~~(iv)~~to ~~$1.9~~2023, ~~million of higher variable compensation costs. These increases were~~ partially offset by lower ~~plant~~severance ~~closure~~ costs of ~~approximately~~ $45.16 million ~~related~~driven toby ~~the~~employee ~~closure~~headcount ofreduction ~~our Thailand~~ and ~~Russia~~cost ~~operations~~saving initiatives in ~~2022~~the prior year period. As a percentage of net sales, SG&A expenses ~~increased~~decreased to 26.95% in ~~2023~~2024 versus 2526.09% in ~~2022~~2023.

Restructuring Plan

OnPursuant ~~September 8, 2021, the Company committed~~ to a previous restructuring plan ~~that continued to focus on efforts to improve efficiencies and decrease costs across its worldwide operations~~, ~~involving~~ the ~~closure of the~~ Company’s ~~manufacturing facility in Thailand. During the second quarter of 2023, the Company~~ completed the sale of ~~the~~its Thailand ~~real~~manufacturing ~~estate~~facility during 2023 and recognized a gain of $2.7 million. ~~This restructuring plan was completed following the sale of the Thailand facility.~~

~~During~~See ~~2022,~~Note in15 ~~conjunction~~entitled ~~with~~“Restructuring ~~the~~and ~~closure~~Other” of ~~its~~Part ~~Thailand facility~~II, ~~the~~Item ~~Company~~8 ~~recorded a write-down~~ of ~~inventory~~this ofAnnual ~~$2.5 million~~Report ~~within~~on ~~cost~~Form of10-K ~~sales~~for inadditional ~~the consolidated statements of operations~~information.

See Note 16 entitled “Restructuring and Other” and Note 7 entitled “Property, Plant and Equipment” of Part II, Item 8 of this Annual Report for additional information.

Goodwill, Intangible Asset and Fixed Asset Impairment

During 2024 and 2023 there was no impairment of our goodwill or indefinite-lived intangible assets. During 2022, we recognized a charge of $36.2 million for the impairment of goodwill and certain intangible assets. See Note 12 entitled “Goodwill and Other Intangible Assets” of Part II, Item 8 of this Annual Report for additional information.

Interest Expense

For 2025, interest expense was $19.5 million, versus $23.2 million in 2024, primarily due to lower interest rates and lower outstanding borrowings under the Syndicated Credit Facility for most of 2025. On December 3, 2025, the outstanding borrowings under the $300 million Senior Notes were redeemed and the debt was extinguished. In addition, the Syndicated Credit Facility was amended and restated. In connection with these transactions, we recorded $3.1 million of debt extinguishment costs, which are recognized in interest expense in the consolidated statements of operations. See Note 9 entitled “Long-Term Debt” of Part II, Item 8 of this Annual Report on Form 10-K for additional information. Our average borrowing rate under the Syndicated Credit Facility as of December 28, 2025, was 5.12% compared to 5.62% at December 29, 2024.

For 2024, our interest expense was $23.2 million, versus $31.8 million in 2023, primarily due to lower outstanding term loan borrowings under the Syndicated Credit Facility. Our average borrowing rate under the Syndicated Credit Facility as of December 29, 2024, was 5.62% compared to 6.61% at December 31, 2023.

For 2023, our interest expense was $31.8 million, versus $29.9 million in 2022, primarily due to higher interest rates on outstanding term loan borrowings under the Syndicated Credit Facility, partially offset by lower outstanding term loan borrowings under the Facility. Our average borrowing rate under the Syndicated Credit Facility as of December 31, 2023, was 6.61% compared to 5.78% at January 1, 2023.35

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Other ~~Income~~ Expense / Income, net

During ~~2024~~2025, other expense (income) ~~expense~~, net, was $(27.4)6 million versus $9(2.14) million in ~~2023~~2024. The ~~decrease~~increase ~~was primarily due to the receipt in 2024~~ of $49.89 million ofwas ~~business~~primarily ~~interruption~~due ~~insurance proceeds related~~ to ~~the Cyber Event and~~ $2.4.7 million ofin ~~insurance~~foreign ~~proceeds~~currency ~~related~~transaction tolosses afrom ~~property~~the ~~casualty~~strengthening ~~loss~~of ~~that~~the ~~occurred~~Euro inagainst ~~fiscal~~the ~~year 2023~~U.S. ~~These~~dollar ~~benefits~~and ~~were~~higher ~~partially~~pension ~~offset by the recognition~~ cost of approximately $21.21 million. ofThe ~~cumulative~~increase ~~translation~~was ~~losses~~also ~~reclassified~~impacted ~~from~~by ~~accumulated~~non-recurring ~~other~~insurance ~~comprehensive~~proceeds ~~loss~~recognized ~~due~~in to2024, ~~the~~as ~~substantial~~discussed ~~liquidation~~immediately ~~of our foreign subsidiary in Thailand during 2024~~below.

During ~~2023~~2024, other expense (income), net, was $6(2.4) million versus $9.1 million in 2023. The decrease was primarily due to the receipt in 2024 of $4.8 million of business interruption insurance proceeds related to the Cyber Event and $2.4 million of ~~cumulative~~insurance ~~translation~~proceeds ~~losses~~related ~~were~~to ~~recognized~~a property casualty loss that occurred in ~~other~~fiscal ~~(income)~~year ~~expense,~~2023. ~~net~~These asbenefits awere ~~result~~partially offset by the recognition of $2.2 million of cumulative translation losses reclassified from accumulated other comprehensive loss due to the substantial liquidation of our foreign ~~subsidiaries~~subsidiary in ~~Brazil~~Thailand ~~and~~during ~~Russia~~2024.

Tax

For fiscal year 2025, the Company recorded income tax expense of $20.8 million on pre-tax income of $136.9 million, resulting in an effective tax rate of 15.2% compared with income tax expense of $26.6 million on pre-tax income of $113.6 million, resulting in an effective tax rate of 23.4%, for fiscal year 2024. The decrease in the effective tax rate for fiscal year 2025, compared to fiscal year 2024, was primarily due to the remeasurement and adjustment of deferred taxes, favorable changes related to the utilization of foreign tax credit carryforwards and an increase in the Foreign-Derived Intangible Income deduction. See Note 16 entitled “Income Taxes” of Part II Item 8 of this Annual Report on Form 10-K for additional information.

For fiscal year 2024, the Company recorded income tax expense of $26.6 million on pre-tax income of $113.6 million, resulting in an effective tax rate of 23.4% compared with income tax expense of $19.1 million on pre-tax income of $63.7 million, resulting in an effective tax rate of 30.1%, for fiscal year 2023. The decrease in the effective tax rate for fiscal year 2024, compared to fiscal year 2023, was primarily due to the release of the valuation allowance on interest expense carryforwards, favorable tax benefits related to share-based compensation, and a favorable tax benefit related to a change in tax rate related to the UK pension plan. These favorable changes were partially offset by a decrease in favorable tax benefits related to the repatriation of previously taxed foreign earnings and utilization of foreign tax benefits.

For fiscal year 2023, the Company recorded income tax expense of $19.1 million on pre-tax income of $63.7 million, resulting in an effective tax rate of 30.1%. This compares with income tax expense of $22.4 million on pre-tax income of $41.9 million, resulting in an effective tax rate of 53.3%, for fiscal year 2022. The effective tax rate for fiscal year 2022 was significantly impacted by a non-deductible goodwill impairment charge. Excluding the impact of the non-deductible goodwill impairment charge, the effective tax rate was 31.4% for fiscal year 2022. The decrease in the effective tax rate for fiscal year 2023, as compared to fiscal year 2022, excluding the goodwill impairment, was primarily due to favorable changes related to the cash surrender value of Company-owned life insurance, utilization of foreign tax credits, favorable U.S. tax effects from the repatriation of previously taxed foreign earnings, and non-deductible charges related to the closure of the Company’s manufacturing facility in Thailand in fiscal year 2022. This decrease was partially offset by a favorable change to unrecognized tax benefits in fiscal year 2022.

Segment Results

As discussed above, the Company has two operating and reportable segments – AMS and EAAA. See Note 2019 entitled “Segment Information” included in Item 8 of this Annual Report on Form 10-K for additional information.

During fiscal year 2024, the Company implemented a cost center realignment initiative as part of the Company’s efforts to centralize certain global/shared functions. During 2024, SG&A expenses for these global support functions were allocated to ~~adjusted operating income (“AOI”) for~~ each reportable segment consistent with the allocation methodology used to allocate corporate overhead in prior periods. ~~Prior~~Fiscal year ~~AOI~~2023 amounts below were not recast as there was no material impact to ~~the~~either ~~measure of segment profit for each~~ reportable segment. There were no changes to the composition of the Company’s operating or reportable segments.

AMS Segment – Net Sales and Adjusted Operating Income (“AOI”)

The following table presents AMS segment net sales and AOI for the last three fiscal years:

	Fiscal Year						Percentage Change
	2024		2023		2022		2024 compared with 2023		2023 compared with 2022
	2025		2024		2023		2025 compared with 2024		2024 compared with 2023
	(in thousands)
AMS segment net sales	$	~~800~~843,~~811~~886	$	~~736~~800,~~955~~811	$	~~753~~736,~~740~~955	85.74	%	(28.2)7	%
AMS segment AOI(1)	~~106~~137,~~594~~299		87106,~~789~~594		~~102~~87,~~370~~789		2128.48	%	~~(14~~21.2)4	%

(1) Includes allocation of corporate ~~SG&A expenses~~ and ~~allocation of~~ global support SG&A expenses as discussed above. Excludes Cyber Event impact, ~~intangible asset impairment charge,~~ and restructuring, asset impairment, severance, and other, net. See Note 2019 entitled “Segment Information” included in Item 8 of this Annual Report on Form 10-K for additional information.

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AMS Segment Net Sales for 2025 compared with 2024

During 2025, net sales in AMS increased 5.4% versus 2024, comprised of higher sales volume - particularly increased rubber flooring volume and higher average sales prices. On a market segment basis, the AMS sales increase was most significant in the healthcare (up 21.4%), education (up 8.2%), public buildings (up 10.7%), and corporate office (up 1.5%) market segments, partially offset by decreases in the residential living (down 4.1%) and retail (down 2.5%) market segments.

AMS Segment Net Sales for 2024 compared with 2023

During 2024, net sales in AMS increased 8.7% versus 2023, comprised of higher sales volume and higher average sales prices. On a market segment basis, the AMS sales increase was most significant in the retail (up 81.5%), education (up 13.5%), public buildings (up 27.9%), and residential living (up 23.3%) market segments partially offset by decreases in the corporate office (down 1.7%), hospitality (down 18.0%), and consumer residential (down 10.4%) market segments.

AMS ~~Segment~~AOI ~~Net Sales~~ for ~~2023~~2025 compared with ~~2022~~2024

~~During~~AOI ~~2023, net sales~~ in AMS ~~decreased~~increased 228.28% ~~versus~~during ~~2022,~~2025 ~~comprised~~compared ofto ~~lower~~2024. ~~sales~~Higher ~~volume~~gross ~~partially~~profit ~~offset~~in 2025, driven by higher ~~average~~ sales, ~~prices.~~favorable Onproduct amix, ~~market~~and ~~segment~~manufacturing ~~basis~~efficiencies, ~~the~~partially ~~AMS~~offset ~~sales~~by ~~decrease~~tariff ~~was~~costs, ~~most~~contributed ~~significant~~to in the ~~retail~~increase ~~(down~~in ~~50.6%)~~AMS ~~market~~AOI ~~segment~~for ~~partially~~2025. ~~offset~~As bya ~~increases~~percentage inof ~~the~~net ~~education (up 7.9%)~~sales, ~~corporate~~AOI ~~office~~increased ~~(up~~to 416.13%) ~~and~~in ~~residential~~2025 ~~living~~versus ~~(up 15~~13.43%) ~~market~~in ~~segments~~2024.

AMS AOI for 2024 compared with 2023

AOI in AMS increased 21.4% during 2024 compared to 2023. Higher ~~adjusted~~ gross profit in 2024, driven by higher sales, lower raw material costs, and favorable fixed cost absorption contributed to the increase in AMS AOI for ~~the current year~~2024. AMS SG&A expenses as a percentage of net sales decreased approximately 0.8% compared to 2023, also contributed to the increase in AOI. As a percentage of net sales, AOI increased to 13.3% in 2024 versus 11.9% in 2023.

AMS AOI for 2023 compared with 2022

AOI in AMS decreased 14.2% during 2023 compared to 2022. Lower adjusted gross profit in 2023 driven by unfavorable manufacturing fixed cost absorption and lower sales, partially offset by lower freight costs contributed to the decrease in AMS AOI. AMS SG&A expenses as a percentage of net sales increased approximately 1.1% compared to 2022, primarily due to higher selling expenses also contributed to the decrease in AOI for 2023. As a percentage of net sales, AOI decreased to 11.9% in 2023 versus 13.6% in 2022.

EAAA Segment – Net Sales and AOI

The following table presents EAAA segment net sales and AOI for the last three fiscal years:

	Fiscal Year						Percentage Change
	2024		2023		2022		2024 compared with 2023		2023 compared with 2022
	2025		2024		2023		2025 compared with 2024		2024 compared with 2023
	(in thousands)
EAAA segment net sales	$	~~514~~542,~~847~~968	$	~~524~~514,~~543~~847	$	~~544~~524,~~179~~543	(15.8)5	%	(31.68)	%
EAAA segment AOI(1)	3436,~~803~~456		2834,~~608~~803		3028,~~058~~608		214.78	%	(421.8)7	%

(1) Includes allocation of corporate ~~SG&A expenses~~ and ~~allocation of~~ global support SG&A expenses as discussed above. Excludes ~~goodwill and intangible asset impairment charges,~~ purchase accounting amortization, Cyber Event impact, ~~Thailand plant closure inventory write-down,~~ and restructuring, asset impairment, severance, and other, net. See Note 2019 entitled “Segment Information” included in Item 8 of this Annual Report on Form 10-K for additional information.

EAAA Segment Net Sales for 2025 compared with 2024

During 2025, net sales in EAAA increased 5.5% versus 2024, primarily due to favorable currency fluctuations of approximately $15.9 million (3.1%) from the strengthening of the Euro against the U.S. dollar, higher sales volume, and higher average sales prices. On a market segment basis, the EAAA sales increase was most significant in the transportation (up 35.7%), public buildings (up 24.5%), healthcare (up 18.1%), and education (up 5.8%) market segments.

EAAA Segment Net Sales for 2024 compared with 2023

During 2024, net sales in EAAA decreased 1.8% versus 2023, primarily due to lower sales volume. Currency fluctuations had a negative impact of approximately $0.8 million (0.2%) on EAAA net sales for 2024 compared to 2023 due to the weakening of the Euro, Chinese Renminbi, and Australian dollar against the U.S dollar, partially offset by the strengthening of the British Pound sterling against the U.S. dollar. On a market segment basis, the EAAA sales decrease was most significant in the public buildings (down 21%), hospitality (down 24.1%), and healthcare (down 6.8%) market segments, partially offset by an increase in the residential living (up 9.1%) market segment.

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EAAA ~~Segment~~AOI ~~Net Sales~~ for ~~2023~~2025 compared with ~~2022~~2024

~~During~~AOI ~~2023, net sales~~ in EAAA ~~decreased~~increased 34.68% during 2025 versus ~~2022~~2024, ~~comprised~~primarily ofdue ~~lower~~to ~~sales~~higher ~~volume~~gross ~~partially~~profit ~~offset~~margin driven by ~~higher~~favorable ~~selling~~manufacturing ~~prices.~~costs ~~Slower economic recovery~~ and ~~decreased~~higher ~~customer demand in Asia resulted in approximately 25% lower net~~ sales ~~in Asia during 2023 compared to 2022~~volume. Currency fluctuations had a positive impact of approximately $32.58 million (03.68%) on EAAA ~~net~~AOI ~~sales~~in ~~for~~2025 ~~2023~~ compared to ~~2022~~2024, primarily due to the strengthening of the Euro, ~~partially offset by the weakening of the Australian dollar and Chinese Renminbi~~ against the U.S. dollar. OnAs a ~~market~~percentage ~~segment~~of ~~basis,~~net ~~the EAAA~~ sales, ~~decrease~~AOI was ~~most significant in the corporate office (down 3~~6.57%), ~~healthcare~~in ~~(down~~2025 ~~23.5%),~~versus ~~retail (down 22~~6.8%), ~~and education (down 3.9%) market segments, partially offset by an increase~~ in ~~the hospitality (up 11~~2024.~~5%) market segment.~~

EAAA AOI for 2024 compared with 2023

AOI in EAAA increased 21.7% during 2024 versus 2023. Higher ~~adjusted~~ gross profit in 2024, driven by lower raw material costs partially offset by lower sales volume contributed to the increase in EAAA AOI for ~~the current year~~2024. Currency fluctuations had no material impact on EAAA AOI in 2024 compared to 2023. As a percentage of net sales, AOI was 6.8% in 2024 versus 5.5% in 2023.

~~EAAA AOI for 2023 compared with 2022~~38

AOI in EAAA decreased 4.8% during 2023 versus 2022. Lower adjusted gross profit in 2023, driven by lower sales, inflationary pressures on raw material costs, and unfavorable manufacturing fixed cost absorption on lower production volumes contributed to the decrease in EAAA AOI. Currency fluctuations had no material impact on EAAA AOI in 2023 compared to 2022. As a percentage of net sales, AOI was 5.5% in both 2023 and 2022.

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Financial Condition, Liquidity and Capital Resources

General

In our business, we require cash and other liquid assets primarily to purchase raw materials and to pay other manufacturing costs, in addition to funding normal course SG&A expenses, anticipated capital expenditures, interest expense and potential special projects. We generate our cash and other liquidity requirements primarily from our operations and from borrowings under our Syndicated Credit Facility (the “Facility”) ~~discussed below~~.

We anticipate that our liquidity, cash flows from operations, cash and cash equivalents, and other sources of liquidity are sufficient to meet our obligations for the next 12 months, and we expect to generate sufficient cash to meet our long-term obligations. However, the Company’s cash flows from operations can be affected by numerous factors including raw material availability and cost, demand for our products, and other factors described in “Risk Factors” included in Part I, Item 1A of this Annual Report on Form 10-K.

Below are estimates of our material cash requirements for future periods. The short-term period represents payments due within the 12 months following December 2928, ~~2024~~2025, and the long-term period represents payments due beyond the short-term period.

Payments Due by Period

Short-Term

Long-Term

Total

(in thousands)

Long-term debt obligations

~~482~~8,781

~~305~~172,~~082~~998

~~305~~181,~~564~~779

Operating and finance lease obligations

1923,~~820~~980

9291,~~314~~018

~~112~~114,~~134~~998

Expected interest payments

168,~~796~~851

4928,~~952~~467

6637,~~748~~318

Purchase obligations

2724,~~435~~745

4133,~~147~~771

6858,~~582~~516

Pension cash obligations

43,~~294~~685

2830,~~556~~543

3234,~~850~~228

Total

6870,~~827~~042

~~517~~356,~~051~~797

~~585~~426,~~878~~839

Historically, we use more cash in the first half of the fiscal year, as we pay insurance premiums, taxes and incentive compensation and build up inventory in preparation for the holiday/vacation season of our international operations. As outlined in the table above, we have approximately $6870.80 million in material contractual cash obligations due within the next year, which includes, among other things, scheduled debt repayments under the Facility, pension contributions, interest payments on our debt, and payments on our lease ~~commitments~~obligations. Our long-term debt obligations include the contractually scheduled principal repayment of our term loan and revolving loan borrowings under the Facility, which matures in ~~2027, and $300 million on our Senior Notes due in 2028~~2030. Operating and finance lease obligations consist of undiscounted lease payments due over the ~~term of the~~ lease term. Expected interest payments are those associated with borrowings under the Facility ~~and Senior Notes~~ consistent with our contractually scheduled principal repayments. Our purchase obligations are for non-cancellable agreements primarily for raw material purchases and capital expenditures. Our pension obligations include contributions and expected benefit payments to be paid by the Company related to certain defined benefit pension plans and exclude the expected benefit payments for two of our funded foreign defined benefit plans as these obligations will be paid by the plans.

Based on current interest rates and debt levels, we expect our aggregate interest expense for ~~2025~~2026 to be approximately $2010 million. We estimate aggregate capital expenditures in ~~2025~~2026 to be approximately $4555 million, although we are not committed to this amount.

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Liquidity

AtAs of December 2928, ~~2024~~2025, we had $9971.~~2 million in cash. Approximately $~~3.1 million ~~of this cash was located~~ in ~~the U.S.~~cash, ~~and~~which ~~the remaining $96.1 million~~ was mostly located outside of the U.S. ~~The~~ We consider cash located outside of the U.S. isas indefinitely reinvested in the respective jurisdictions (except as identified below). We believe that our strategic plans and business needs, particularly for working capital needs and capital expenditure requirements in Europe, Asia, and Australia, support our assertion that a portion of our cash in foreign locations will be reinvested and remittance will be postponed indefinitely. Of the ~~$96.1 million of~~ cash held in foreign jurisdictions, approximately $813.83 million ~~represents~~relates to earnings which we have determined are not permanently reinvested, and as such we have provided for foreign withholding and U.S. state income taxes on these amounts in accordance with applicable accounting standards.

As of December 2928, ~~2024~~2025, we had $5181.68 million of borrowings outstanding under our Facility, ~~all~~ of which $175.6 million were term loan borrowings and $6.2 ~~There~~million were no revolving loan borrowings ~~outstanding as of December 29, 2024~~. Additionally, $0.76 million in letters of credit were outstanding under the Facility at the end of fiscal year ~~2024~~2025. As of December 2928, ~~2024~~2025, we had additional borrowing capacity of $~~299~~243.32 million under the Facility. As of December 2928, ~~2024~~2025, the weighted average interest rate on borrowings outstanding under the Facility was 5.6212%. ~~As of December 29, 2024, there were no other lines of credit available to the Company.~~

InIt ~~addition,~~is asimportant for you to consider that we have a significant amount of indebtedness. Our Facility matures on December ~~29,~~ ~~2024~~3, 2030. We cannot assure you that we ~~had~~will ~~$300.0~~be ~~million~~able to renegotiate or refinance any of 5our debt on commercially reasonable terms, or at all.~~50%~~ ~~Senior~~If ~~Notes~~we ~~due~~are ~~2028~~unable ~~(the~~to ~~“Senior~~refinance ~~Notes”)~~our ~~outstanding~~debt or obtain new financing, ~~which~~we ~~are~~would ~~discussed~~have ~~further~~to ~~below~~consider other options, such as selling assets to meet our debt service obligations and other liquidity needs, or using cash, if available, that would have been used for other business purposes.

ItWe ~~is important for you to consider that we~~ have aborrowings ~~significant~~based ~~amount~~on ofvariable ~~indebtedness.~~interest ~~Our~~rates ~~Facility matures in October of 2027, and the Senior Notes,~~ (as ~~discussed~~described below,) ~~mature in December 2028. We cannot assure you~~ that weexpose ~~will~~the beCompany ~~able~~ to ~~renegotiate~~the orrisk ~~refinance~~that ~~any~~interest ofrates ~~our~~may ~~debt on commercially reasonable terms, or at all~~increase. IfFor weinformation ~~are~~regarding ~~unable~~the tocurrent ~~refinance~~variable ~~our~~interest ~~debt~~rates orof ~~obtain~~these ~~new financing~~borrowings, weand ~~would~~the ~~have~~potential toimpact ~~consider~~on ~~other options, such as selling assets to meet~~ our ~~debt~~interest ~~service~~expense ~~obligations~~from ~~and~~hypothetical ~~other~~increases ~~liquidity~~in ~~needs,~~interest ~~or using cash~~rates, ifplease ~~available,~~see ~~that~~the ~~would~~discussion ~~have~~in ~~been~~Item ~~used~~7A ~~for~~of ~~other~~this ~~business purposes~~Report.

We have borrowings based on variable interest rates (as described below) that expose the Company to the risk that interest rates may increase. For information regarding the current variable interest rates of these borrowings, the potential impact on our interest expense from hypothetical increases in short term interest rates, and the former interest rate swap transaction, please see the discussion in Item 7A of this Report.

We are not a party to any material off-balance sheet arrangements.

Balance Sheet

Accounts receivable, net, were $~~171~~174.15 million at December 2928, ~~2024~~2025, compared to $~~163~~171.41 million at December 3129, ~~2023~~2024. The increase of $73.73 million was primarily due to the impact of higher net sales as a result of increased customer demand in ~~2024~~2025.

Inventories, net, were $~~260~~275.60 million at December 2928, ~~2024~~2025, compared to $~~279~~260.16 million at December 3129, ~~2023~~2024. The ~~decrease~~increase of $1814.54 million was primarily due to finished goods inventory build as higher ~~sales,~~customer ~~stronger~~demand ~~working~~is ~~capital~~expected ~~management,~~to ~~and~~continue ~~lower~~into ~~raw~~2026. ~~material~~Currency ~~costs~~fluctuations ~~during~~also impacted the ~~current~~increase ~~year~~in inventories due to the strengthening of the Euro against the U.S. dollar.

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Analysis of Cash Flows

The following table presents a summary of cash flows for fiscal years ~~2024~~2025, ~~2023~~2024 and ~~2022~~2023:

Fiscal Year

2024

2023

2022

2025

2024

2023

(in thousands)

Net cash provided by (used in):

Operating activities

~~148~~167,~~430~~906

~~142~~148,~~034~~430

43142,~~061~~034

Investing activities

(3046,~~374~~192)

(1930,~~514~~374)

(1819,~~437~~514)

Financing activities

(~~125~~159,~~234~~292)

(~~111~~125,~~564~~234)

(19111,~~490~~564)

Effect of exchange rate changes on cash

(49,~~094)~~675

1(4,~~978~~094)

(41,~~822)~~978

Net change in cash and cash equivalents

(1127,~~272~~903)

12(11,~~934~~272)

~~312~~12,934

Cash and cash equivalents at beginning of period

~~110~~99,~~498~~226

97110,~~564~~498

97,~~252~~564

Cash and cash equivalents at end of period

9971,~~226~~323

~~110~~99,~~498~~226

97110,~~564~~498

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We ended 2025 with $71.3 million in cash, a decrease of $27.9 million during the year. The decrease was primarily due to the following:

•Cash provided by operating activities was $167.9 million for 2025, which represents an increase of $19.5 million compared to 2024. The increase in operating cash flows was primarily due to higher sales during 2025 and the impact of foreign currency from the strengthening of the Euro against the U.S. dollar resulting in a source of cash from higher receivables.

•Cash used in investing activities was $46.2 million for 2025, which represents an increase of $15.8 million compared to 2024. The increase was primarily due to an increase in capital expenditures attributable to a greater capital investment in manufacturing automation and robotics solutions in 2025.

•Cash used in financing activities was $159.3 million for 2025, which represents an increase of $34.1 million compared to 2024. The increase was primarily attributable to the repayment of the $300 million Senior Notes in 2025, partially offset by $170 million of proceeds from new term loan borrowings under the amended and restated Syndicated Credit Facility on December 3, 2025. In 2025, we repurchased $18.1 million of our outstanding common stock. See section below entitled “Share Repurchases” for additional information.

We ended 2024 with $99.2 million in cash, a decrease of $11.3 million during the year. The decrease was primarily due to the following:

•Cash provided by operating activities was $148.4 million for 2024, which represents an increase of $6.4 million compared to 2023. The increase in operating cash flows was primarily due to higher sales during 2024 resulting in a source of cash from lower inventory balances partially offset by a use of cash as a result of higher accounts receivable. The 2023 comparable period includes a source of cash for accounts receivable as delayed customer billings related to the 2022 Cyber Event were collected in 2023.

•Cash used in investing activities was $30.4 million for 2024, which represents an increase of $10.9 million compared to 2023. The increase was primarily attributable to an increase in capital expenditures due to increased capital investment partially offset by $2.4 million of insurance proceeds related to a 2023 property casualty loss. The 2023 comparable period includes proceeds of approximately $6.6 million from the sale of the Company’s Thailand real estate.

•Cash used in financing activities was $125.2 million for 2024, which represents an increase of $13.7 million compared to 2023. The increase was primarily attributable to higher prepayments of term loan borrowings during 2024 compared to ~~the~~ 2023 ~~comparable period~~.

We ended 2023 with $110.5 million in cash, an increase of $12.9 million during the year. The increase was primarily due to the following:

•Cash provided by operating activities was $142.0 million for 2023, which represents an increase of $99.0 million compared to 2022. The increase in operating cash flows was primarily due to a greater source of cash from working capital in 2023. Specifically, customer collections in 2023 contributed to a decrease in accounts receivable, primarily attributable to delays in customer billings from the Cyber Event, in which due dates for those delayed billings were pushed from the fourth quarter of 2022 to the first quarter of 2023. The 2022 comparable period also included a greater use of cash for working capital attributable to an increase in inventories compared with 2023.

•Cash used in investing activities was $19.5 million for 2023, which represents an increase of $1.1 million compared to 2022. The increase was primarily attributable to an increase in capital expenditures due to increased capital investment, partially offset by the proceeds of approximately $6.6 million from the sale of the Company’s Thailand real estate in 2023.

•Cash used in financing activities was $111.6 million for 2023, which represents an increase of $92.1 million compared to 2022. The year-over-year difference was primarily due to lower revolving loan borrowings combined with higher repayments of term loan borrowings in 2023 as a result of cash generated from operating activities as described above. Fiscal year 2022 also included repurchases of the Company’s common stock that did not occur in 2023, which partially offset the increased use of cash for financing activities in 2023 compared with 2022.

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We•Fiscal ~~ended~~year 2022 ~~with~~also ~~$97.6~~included ~~million~~repurchases of the Company’s common stock that did not occur in ~~cash~~2023, anwhich ~~increase~~partially ofoffset ~~$0.3~~the ~~million~~increased ~~during~~use ~~the~~of ~~year.~~cash ~~The~~for ~~increase~~financing ~~was~~activities ~~primarily~~in ~~due~~2023 tocompared ~~the~~with ~~following:~~2022.

•Cash provided by operating activities was $43.1 million for 2022, which represents a decrease of $43.6 million compared to 2021. The decrease was primarily due to a greater use of cash for working capital during 2022. Specifically, higher inventories as a result of higher raw material costs and input costs contributed to the greater use of cash for working capital in 2022. Higher variable compensation payouts in the first quarter of 2022 (related to 2021 performance) also contributed to the increased use of cash for 2022. Cash provided by operating activities in 2022 also was negatively impacted by delays in billings due to the Cyber Event, which pushed the due dates for those delayed billings from the fourth quarter of 2022 to the first quarter of 2023.

•Cash used in investing activities was $18.4 million for 2022, which represents a decrease of $9.6 million compared to 2021. The decrease was primarily due to reduced capital expenditures.

•Cash used in financing activities was $19.5 million for 2022, which represents a decrease of $41.4 million compared to 2021. The year-over-year difference was primarily due to higher revolving loan borrowings in 2022 as a source of cash to fund operating activities as described above, offset by a use of cash for repurchases of the Company’s common stock pursuant to a new share repurchase program adopted in the second quarter of 2022. Fiscal year 2021 also included higher repayments of approximately $60 million of term loan borrowings which contributed to a greater use of cash in that period.

Share Repurchases

In ~~the~~May ~~second quarter of~~ 2022, the Company adopted a new share repurchase program in which the Company is authorized to repurchase up to $100 million of its outstanding shares of common stock. The program has no specific expiration date. During fiscal year 2025, the Company repurchased 750,166 shares of common stock at a weighted average price of $24.23 per share pursuant to this program. No shares of common stock were repurchased during 2024 and 2023 pursuant to this program. As of December 2928, ~~2024~~2025, approximately $8264.87 million ~~remains~~remained authorized pursuant to this program for future share repurchases. The program does not require the Company to repurchase a specific number or amount of shares, or to do so within any specific time periods. With the remaining availability under this program, the Company may repurchase shares of common stock at any time or from time to time, without prior notice, subject to prevailing market conditions and other considerations. The Company’s repurchases may be made through a trading plan that may be adopted in accordance with the Securities and Exchange Commission Rule 10b5-1.

Syndicated Credit Facility

In the normal course of business, in addition to using our available cash, we fund our operations by borrowing under our Facility. On At December 29 3, ~~2024~~2025, the ~~Facility provided the~~ Company ~~and~~entered ~~certain~~into ofthe ~~its~~third ~~subsidiaries~~amended ~~with~~and arestated ~~multicurrency~~Facility ~~revolving~~agreement. ~~loan~~In ~~facility~~connection upwith tothis ~~$300~~amendment ~~million,~~the asCompany ~~well~~revised ascertain ~~other~~material ~~U.S.~~terms ~~denominated~~which ~~and~~include, ~~multicurrency~~but ~~term~~are ~~loans. On~~not ~~October~~limited 14to, ~~2022,~~the inaddition ~~connection~~of ~~with~~a ~~the~~$170 ~~fifth~~million ~~amendment~~term ~~to the Facility~~loan, extending the maturity date ~~was extended~~ to ~~October~~December ~~2027.~~2030, ~~Material~~and ~~terms~~reducing ~~under~~our ~~the~~revolving ~~Facility~~loan ~~are~~facility ~~discussed~~to ~~below~~$250 million. For additional information, please see Note 9 entitled “Long-Term Debt” in Item 8 of this Annual Report on Form 10-K.

~~Interest~~The ~~Rates~~Company was in compliance with all covenants under the Facility as of December 28, 2025, and ~~Fees~~anticipates that it will remain in compliance with the covenants for the foreseeable future.

Under the Facility, interest on base rate loans is charged at varying rates computed by applying a margin ranging from 0.25% to 2.00%, depending on the Company’s consolidated net leverage ratio (as defined in the Facility agreement) as of the most recently completed fiscal quarter. Interest on SOFR-based and alternative currency loans are charged at varying rates computed by applying a margin ranging from 1.25% to 3.00% over the applicable SOFR rate or alternative currency rate, depending on the Company’s consolidated net leverage ratio as of the most recently completed fiscal quarter. In addition, the Company pays a commitment fee ranging from 0.20% to 0.40% per annum (depending on the Company’s consolidated net leverage ratio as of the most recently completed fiscal quarter) on the unused portion of the Facility.

Fees for commercial letters of credit are computed as 1.00% per annum of the amount available to be drawn under such letters of credit. Fees for standby letters of credit are charged at varying rates computed by applying a margin ranging from 1.25% to 3.00% per annum of the amount available to be drawn under such standby letters of credit, depending on the Company’s consolidated net leverage ratio as of the most recently completed fiscal quarter.

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Covenants

The Facility contains standard and customary covenants for agreements of this type, including various reporting, affirmative and negative covenants. Among other things, these covenants limit our ability to:

•create or incur liens on assets;

•make acquisitions of or investments in businesses (in excess of certain specified amounts);

•engage in any material line of business substantially different from the Company’s current lines of business;

•incur indebtedness or contingent obligations;

•sell or dispose of assets (in excess of certain specified amounts);

•pay dividends or repurchase our stock (in excess of certain specified amounts);

•repay other indebtedness prior to maturity unless we meet certain conditions; and

•enter into sale and leaseback transactions.

The Facility also requires us to remain in compliance with the following financial covenants as of the end of each fiscal quarter, based on our consolidated results for the year then ended:

•Consolidated Secured Net Leverage Ratio: Must be no greater than 3.00:1.00.

•Consolidated Interest Coverage Ratio: Must be no less than 2.25:1.00.

Events of Default

If we breach or fail to perform any of the affirmative or negative covenants under the Facility, or if other specified events occur (such as a bankruptcy or similar event or a change of control of Interface, Inc. or certain subsidiaries, or if we breach or fail to perform any covenant or agreement contained in any instrument relating to any of our other indebtedness exceeding $20 million), after giving effect to any applicable notice and right to cure provisions, an event of default will exist. If an event of default exists and is continuing, the lenders’ Administrative Agent may, and upon the written request of a specified percentage of the lender group shall:

•declare all commitments of the lenders under the facility terminated;

•declare all amounts outstanding or accrued thereunder immediately due and payable; and

•exercise other rights and remedies available to them under the agreement and applicable law.

Collateral

Pursuant to a Second Amended and Restated Security and Pledge Agreement, the Facility is secured by substantially all of the assets of Interface, Inc. and our domestic subsidiaries (subject to exceptions for certain immaterial subsidiaries), including all of the stock of our domestic subsidiaries and up to 65% of the stock of certain material foreign subsidiaries. If an event of default occurs under the Facility, the lenders’ Administrative Agent may, upon the request of a specified percentage of lenders, exercise remedies with respect to the collateral, including, in some instances, foreclosing mortgages on real estate assets, taking possession of or selling personal property assets, collecting accounts receivable, or exercising proxies to take control of the pledged stock of domestic and certain material foreign subsidiaries.

Under the Facility, we are required to make quarterly amortization payments of the term loan borrowings. The amortization payments are due on the last day of the calendar quarter. We are in compliance with all covenants under the Facility and anticipate that we will remain in compliance with the covenants for the foreseeable future.

Senior Notes

AsOn of December 29 3, ~~2024~~2025, the Company ~~had~~redeemed all of its $300 million outstanding principal amount of 5.50% Senior Notes ~~outstanding~~. The Senior Notes ~~bear~~were anredeemed ~~interest rate~~ at ~~5.50%~~a ~~per~~redemption ~~annum~~price ~~and~~of ~~mature~~100% onof ~~December~~their 1principal amount, ~~2028.~~plus ~~Interest~~accrued isand ~~paid~~unpaid ~~semi-annually~~interest. onThe ~~June~~redemption 1was ~~and~~funded ~~December~~using 1proceeds offrom ~~each~~the ~~year.~~amended ~~Debt~~term ~~issuance~~loan ~~costs~~facility ~~associated~~and ~~with~~available ~~the~~cash ~~Senior~~on ~~Notes~~hand. ~~are~~As ~~recorded as~~ a ~~reduction~~result of ~~long-term~~the debt inextinguishment, the ~~consolidated~~Company ~~balance~~recognized ~~sheets~~a ~~and~~loss ~~are~~of ~~amortized~~$2.1 million ~~over~~resulting from the ~~life~~write-off of unamortized debt issuance costs on the ~~outstanding~~Senior ~~debt~~Notes.

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The Senior Notes are unsecured and are guaranteed, jointly and severally, by each of the Company’s material domestic subsidiaries, all of which also guarantee the obligations of the Company under its Facility. The Company’s foreign subsidiaries and certain non-material domestic subsidiaries are considered non-guarantors. Net sales for the non-guarantor subsidiaries were approximately $573 million for fiscal year 2024, $584 million for fiscal year 2023, and $597 million for fiscal year 2022. Total indebtedness of the non-guarantor subsidiaries was approximately $102 million and $133 million as of December 29, 2024, and December 31, 2023, respectively. The Senior Notes can be redeemed on or after December 1, 2023, at specified redemption prices. See Note 9 entitled “Long-Term Debt” in Item 8 of this Report for additional information.

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Critical Accounting Policies and Estimates

The ~~policies~~preparation ~~and estimates discussed below are considered by management to be critical to an understanding~~ of our consolidated financial statements ~~because~~in ~~their~~accordance ~~application~~with ~~places~~generally ~~the~~accepted ~~most~~accounting ~~significant~~principles ~~demands~~requires onthat ~~management’s~~we ~~judgment,~~make ~~with~~estimates ~~financial~~and ~~reporting~~assumptions ~~results~~about ~~relying~~future onevents ~~estimations~~that ~~about~~affect the ~~effects~~reported amounts of ~~matters~~assets ~~that~~and ~~are~~liabilities ~~inherently~~in ~~uncertain.~~the ~~Specific~~consolidated ~~risks~~financial ~~for~~statements. ~~these~~Our ~~critical~~significant accounting policies are described in ~~the~~Note ~~following~~1 ~~paragraphs.~~entitled ~~For~~”Summary ~~all~~ of ~~these~~Significant ~~policies,~~Accounting ~~management~~Policies” ~~cautions~~of ~~that future events may not develop as forecasted, and~~ the ~~best~~consolidated ~~estimates~~financial ~~routinely require adjustment~~statements.

~~Impairment~~For ~~of Long-Lived Assets. Long-lived assets are reviewed for impairment at~~ the ~~asset~~year ~~group~~ended ~~level~~December whenever events or changes in circumstances indicate that the carrying value may not be recoverable. If the sum of the expected future undiscounted cash flows is less than the carrying amount of the asset28, ~~an impairment is indicated. A loss is then recognized for the difference~~2025, ~~if any, between~~ the ~~fair~~assumptions ~~value~~related ofto ~~the~~goodwill ~~asset (as estimated by management using its best judgment)~~ and ~~the~~impairment ~~carrying value~~ of ~~the~~long ~~asset. Management’s~~lived ~~judgment~~assets inwere ~~estimating~~no ~~the~~longer ~~undiscounted~~considered ~~cash~~critical ~~flows~~accounting ~~based on market conditions and trends, and other industry specific metrics used in determining the fair value is subject to uncertainty~~estimates. ~~If actual market value is less favorable than that estimated by management, additional write-downs may be required.~~

~~Deferred Income Tax Assets and Liabilities.~~ The ~~carrying~~following ~~values~~discussion ofaddresses ~~deferred income tax assets and liabilities reflect the application of~~ our ~~income~~critical ~~tax~~ accounting ~~policies in accordance with applicable accounting standards and are based on management’s assumptions and~~ estimates ~~regarding~~as ~~future operating results and levels~~ of ~~taxable~~December ~~income~~28, as2025, ~~well~~that asrequire significant management’s judgment, ~~regarding~~or the interpretation of the provisions of applicable accounting standards. The carrying values of liabilities for income taxes currently payable are based on management’s interpretations of applicable tax laws and incorporate management’s assumptions and judgments regarding the use of ~~tax~~significant ~~planning strategies in various taxing jurisdictions. The use of different estimates~~assumptions, ~~assumptions~~or ~~and~~complex ~~judgments in connection with accounting for income taxes may result in materially different carrying values of income tax assets and liabilities and results of operations~~estimates.

WeDeferred ~~evaluate~~Income ~~the~~Tax ~~recoverability~~Assets ofand ~~these~~Liabilities. ~~deferred~~The ~~tax~~carrying ~~assets~~values ~~by assessing the adequacy~~ of ~~future~~deferred ~~expected~~income ~~taxable~~tax ~~income~~assets ~~from~~and ~~all~~liabilities ~~sources,~~reflect ~~including~~the ~~reversal~~application of ~~taxable~~our ~~temporary~~income ~~differences,~~tax ~~forecasted~~accounting ~~operating~~policies ~~earnings~~ and ~~available~~are ~~tax~~based ~~planning~~on ~~strategies.~~management’s ~~These~~assumptions ~~sources~~and ~~of income inherently rely heavily on~~ estimates. Weregarding ~~use~~future ~~our~~operating ~~historical~~results ~~experience~~ and ~~our~~levels ~~short-term~~of ~~and~~taxable ~~long-term business forecasts to provide insight. Further~~income, ~~our~~as ~~global~~well ~~business~~as ~~portfolio~~management’s ~~gives~~judgment usregarding the ~~opportunity~~interpretation ~~to employ various prudent and feasible tax planning strategies to facilitate the recoverability~~ of ~~future deductions. To~~ the ~~extent~~provisions ~~we do not consider it more likely than not that a deferred tax asset will be recovered, a valuation allowance is established. As~~ of ~~December 29,~~applicable ~~2024,~~accounting ~~and December 31, 2023, we had state net operating loss carryforwards of $190~~standards.1 ~~million~~The ~~and~~carrying ~~$192.1~~values ~~million, respectively. Certain~~ of ~~these~~liabilities ~~state~~for ~~net~~income ~~operating~~taxes ~~loss~~currently ~~carryforwards~~payable are ~~reserved with a valuation allowance because,~~ based on ~~the~~management’s ~~available~~interpretations ~~evidence,~~of weapplicable ~~believe~~tax itlaws isand ~~more~~incorporate ~~likely~~management’s ~~than~~assumptions ~~not~~and ~~that~~judgments weregarding ~~would~~the ~~not~~use beof ~~able to utilize those deferred~~ tax ~~assets~~planning strategies in ~~the~~various ~~future~~taxing jurisdictions. The ~~remaining~~use ~~year-end~~of ~~2024~~different ~~amounts~~estimates, ~~are~~assumptions ~~expected~~and tojudgments bein ~~fully~~connection ~~recoverable~~with ~~within~~accounting ~~the~~for ~~applicable~~income ~~statutory~~taxes ~~expiration~~may ~~periods.~~result Ifin ~~the~~materially ~~actual~~different ~~amounts~~carrying values of ~~taxable~~ income ~~differ~~tax ~~from~~assets ~~our~~and ~~estimates,~~liabilities ~~the~~and ~~amount~~results of ~~our valuation allowance could be materially impacted~~operations.

~~Goodwill.~~ We ~~review~~evaluate the ~~carrying~~recoverability ~~values~~ of ~~our~~these ~~goodwill~~deferred ~~annually~~tax atassets by assessing the ~~beginning~~adequacy of ~~the~~future ~~fourth~~expected ~~quarter~~taxable ofincome ~~each~~from ~~fiscal~~all ~~year~~sources, orincluding ~~more~~reversal ~~often~~of iftaxable ~~events~~temporary ordifferences, ~~changes~~forecasted inoperating ~~circumstances~~earnings ~~indicate~~and ~~that~~available ~~the~~tax ~~carrying~~planning ~~value~~strategies. These sources of aincome ~~reporting~~inherently ~~unit~~rely ~~may~~heavily ~~exceed~~on ~~its~~estimates. ~~fair~~We ~~value~~use asour ~~set~~historical ~~forth~~experience inand ~~Accounting~~our ~~Standards~~short-term ~~Codification~~and ~~350~~long-term ~~“Intangibles—Goodwill~~business ~~and~~forecasts ~~Other”~~to provide insight. Further, asour ~~amended~~global bybusiness ~~Accounting~~portfolio ~~Standards~~gives ~~Update~~us ~~(“ASU”)~~the ~~2017-04.~~opportunity Weto ~~test~~employ ~~goodwill~~various atprudent and feasible tax planning strategies to facilitate the ~~reporting~~recoverability ~~unit~~of ~~level~~future deductions. To the extent we do not consider it more likely than not that a deferred tax asset will be recovered, ~~which~~a valuation allowance is anestablished. ~~operating~~As ~~segment~~of orDecember 28, ~~one~~2025, ~~level~~and ~~below~~December 29, an2024, we had state net operating ~~segment~~loss carryforwards of $153. We7 ~~utilize~~million ~~the~~and ~~present~~$190.1 ~~value~~million, respectively. Certain of ~~expected~~these ~~future~~state ~~cash~~net ~~flows~~operating ~~and~~loss ~~the~~carryforwards ~~guideline~~are ~~public~~reserved ~~company~~with ~~method~~a tovaluation ~~determine~~allowance because, based on the ~~estimated~~available ~~fair~~evidence, ~~value~~we ofbelieve ~~our~~it ~~reporting~~is ~~units~~more likely than not that we would not be able to utilize those deferred tax assets in the future. The ~~present~~remaining ~~value~~year-end ~~model~~2025 ~~requires~~amounts ~~management~~are expected to ~~estimate~~be ~~future~~fully ~~cash~~recoverable ~~flows,~~within the ~~timing~~applicable ofstatutory ~~these~~expiration ~~cash~~periods. ~~flows,~~If ~~and~~the aactual ~~discount~~amounts ~~rate~~of ~~based~~taxable onincome adiffer ~~weighted~~from ~~average~~our ~~cost~~estimates, the amount of ~~capital~~our valuation allowance could be materially impacted.

~~The~~Trademark ~~assumptions~~and weTrade ~~use~~Name toIntangible ~~estimate~~Assets. ~~future~~Trademark ~~cash~~and ~~flows~~trade ~~and~~name intangible assets acquired in connection with the ~~development~~nora ofacquisition ~~any~~are ~~forecasts~~not subject to beamortization, ~~used~~but are tested for impairment annually in the ~~fair~~fourth ~~value~~quarter, ~~determination~~and ~~are~~between ~~subject~~annual totests ~~inherent~~if ~~risk~~an ~~and~~event ~~judgment.~~occurs Ifor wecircumstances ~~determine~~change that ~~the~~would ~~estimated~~more likely than not reduce the fair value of the ~~reporting~~intangible ~~unit~~assets ~~exceeds~~below ~~its~~their carrying ~~value,~~amount. ~~goodwill~~For of the ~~reporting~~annual ~~unit~~test isperformed, ~~not~~the ~~impaired.~~Company Ifprepared wevaluations ~~determine~~of ~~that~~ the ~~carrying~~intangible ~~value~~assets ofusing the ~~reporting~~present ~~unit~~value ~~exceeds~~of ~~its~~cash ~~estimated~~flows ~~fair~~under ~~value,~~the werelief ~~measure~~from ~~the~~royalty ~~goodwill~~method, ~~impairment~~which ~~charge~~requires ~~based~~significant onmanagement ~~the~~estimates ~~excess~~ of ~~the~~forecasted ~~reporting~~revenue ~~unit’s~~and ~~carrying~~the ~~value~~use ~~over~~of ~~its~~an ~~fair~~estimated ~~value~~intangible ~~consistent~~asset ~~with~~required ~~ASU~~rate ~~2017-04~~of return, ~~“Simplifying~~which ~~the~~was ~~Test~~11% for ~~Goodwill~~the ~~Impairment”~~2025 test.

~~During~~As ~~the~~a ~~fourth~~result ~~quarter~~ of ~~2024~~the ~~and~~2025 ~~2023,~~intangible weassets ~~performed our annual quantitative goodwill~~ impairment testing., Wewe ~~focused~~determined ~~our~~that ~~testing on~~ the ~~Americas~~estimated ~~reporting~~fair ~~unit~~value ~~because~~exceeded ~~it is~~ the ~~only~~carrying ~~reporting~~value ~~unit with an allocated goodwill balance. The allocated goodwill balances for our EMEA~~ and ~~Asia-Pacific~~there ~~reporting~~was ~~units~~no ~~were~~indication ~~written off in prior years as a result~~ of ~~goodwill~~ impairment ~~charges.~~of ~~The Company performed limited procedures for our EMEA and Asia-Pacific reporting units during~~ the ~~2024~~trademark and ~~2023~~trade ~~goodwill~~name ~~testing~~intangible ~~to facilitate a reconciliation of market capitalization~~assets.

41There is inherent risk and uncertainty associated with key assumptions and estimates used in our impairment testing, including the impact of macroeconomic conditions. If we determine that the carrying value of the trademark and trade name intangible assets exceeds the estimated fair value, then we will recognize an impairment charge for the excess of the carrying value over the estimated fair value. To the extent actual revenues decrease by 10% from our estimates, there would be a corresponding 10% decrease in the fair value of the trademark and trade name intangible assets. A hypothetical 1% increase in the intangible asset rate of return would result in an 11% decrease in fair value of the trademark and trade name intangible assets. Neither of these hypothetical changes to key assumptions would cause fair value to be less than carrying value.

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The annual quantitative goodwill testing performed in 2024 and 2023 for our Americas reporting unit was consistent with our prior year methodology. The Company prepared valuations for the Americas reporting unit on both a market comparable methodology and an income methodology, utilizing a combination of the present value of expected future cash flows and the guideline public company method to determine the estimated fair value of the reporting unit. In preparing the valuation, past, present and future expectations of performance were considered, including our expectations for the short-term and long-term impacts of macroeconomic conditions, and our expected financial performance, including planned revenue and operating income for the Americas reporting unit. The present value model requires management to estimate future cash flows, the timing of these cash flows, and a discount rate based on a weighted average cost of capital. The discount rate used for the Americas reporting unit was 10.5% in 2024 compared to 11.5% in 2023, which fluctuated based on a lower risk premium assigned to estimates of expected future performance. There is inherent uncertainty associated with key assumptions and estimates used in our impairment testing, including the impact of macroeconomic conditions.

As a result of our 2024 annual goodwill testing, we determined that the fair value of our Americas reporting unit exceeded its carrying value by 132% at the 2024 measurement date, and therefore no impairment was indicated. The goodwill balance of $99.9 million at December 29, 2024, is allocated entirely to our Americas reporting unit.

As a result of our 2023 annual goodwill testing, we determined that the fair value of our Americas reporting unit exceeded its carrying value by 71% at the 2023 measurement date, and therefore no impairment was indicated. The goodwill balance of $105.4 million at December 31, 2023, was allocated entirely to our Americas reporting unit.

During the fourth quarter of 2022, we performed our annual goodwill quantitative testing for each reporting unit. We considered factors such as, but not limited to, our expectations for the short-term and long-term impacts of macroeconomic factors, including ongoing inflation, foreign currency exchange rates, and our expected financial performance, including planned revenue and operating income of each reporting unit. The discount rate used for each reporting unit ranged from 13.5% to 14.0%, which primarily fluctuated based on a country risk premium assigned to the geographical region of the reporting unit.

For fiscal year 2022, we determined that the carrying value of our EMEA reporting unit exceeded its fair value and that the associated goodwill was impaired. We recorded a goodwill impairment charge of $29.4 million to write off all the goodwill allocated to our EMEA reporting unit.

As of the 2022 measurement date, the fair value of our Americas reporting unit exceeded its carrying value by 71%, and the Americas reporting unit was not impaired. The Americas reporting unit had a goodwill balance of $102.4 million at the end of fiscal 2022. The goodwill balance allocated to our Asia-Pacific reporting unit was previously written off in connection with the 2020 goodwill impairment.

We have not made any material changes to our goodwill impairment loss assessment methodology during the past three fiscal years. Currently, we do not believe there is a reasonable likelihood that there will be a material change in future assumptions or estimates we use to calculate impairment losses. However, we cannot predict or control market factors, including the impact of macroeconomic conditions and the impact of certain risks inherent to our operations, as described in Item 1A “Risk Factors” of this Annual Report. If actual results are not consistent with our assumptions and estimates, we may be exposed to additional goodwill impairment losses that could be material.

See Note 12 entitled “Goodwill and Other Intangible Assets” of Part II, Item 8 of this Annual Report for additional information.

Inventories. We determine the value of inventories using the lower of cost or net realizable value. We write down inventories for the difference between the carrying value of the inventories and their net realizable value. If actual market conditions are less favorable than those projected by management, additional write-downs may be required.

Management’s judgment in estimating our reserves for inventory obsolescence is based on continuous examination of our inventories to determine if there are indicators that carrying values exceed net realizable values. Experience has shown that significant indicators that could require the need for additional inventory write-downs are the age of the inventory, the length of its product life cycles, anticipated demand for our products and current economic conditions.

While we believe that adequate write-downs for inventory obsolescence have been made in the consolidated financial statements, consumer tastes and preferences may continue to change, and we could experience additional inventory write-downs in the future. Our inventory reserve on December 2928, ~~2024~~2025 and December 3129, ~~2023~~2024, was $3835.35 million and $3438.03 million, respectively. To the extent that actual obsolescence of our inventory differs from our estimate by 10%, our ~~2024~~2025 net income would be higher or lower by approximately $23.90 million, on an after-tax basis.

42Allowances for Expected Credit Losses. We maintain allowances for expected credit losses resulting from the inability of customers to make required payments. Estimating the amount of future expected losses requires us to consider historical losses from our customers, as well as current market conditions and future forecasts of our customers’ ability to make payments for goods and services. By its nature, such an estimate is highly subjective, and it is possible that the amount of accounts receivable that we are unable to collect may be different than the amount initially estimated. Our allowance for expected credit losses on December 28, 2025 and December 29, 2024, was $5.2 million and $3.8 million, respectively. To the extent the actual collectability of our accounts receivable differs from our estimates by 10%, our 2025 net income would be higher or lower by approximately $0.4 million, on an after-tax basis, depending on whether the actual collectability was better or worse, respectively, than the estimated allowance.

Product Warranties. We typically provide limited warranties with respect to certain attributes of our carpet products (for example, warranties regarding excessive surface wear, edge ravel and static electricity) for periods ranging from ten to twenty years, depending on the particular carpet product and the environment in which the product is to be installed. Similar limited warranties are provided on certain attributes of our rubber and LVT products, typically for a period of 5 to 15 years. We typically warrant that any services performed will be free from defects in workmanship for a period of one year following completion. In the event of a breach of warranty, the remedy typically is limited to repair of the problem or replacement of the affected product. We record a provision related to warranty costs based on historical experience and future expectations, and periodically adjust these provisions to reflect changes in actual experience. Our warranty and sales allowance reserve on December 28, 2025 and December 29, 2024, was $3.9 million and $5.3 million, respectively. Actual warranty expense incurred could vary significantly from amounts that we estimate. To the extent the actual warranty expense differs from our estimates by 10%, our 2025 net income would be higher or lower by approximately $0.3 million, on an after-tax basis, depending on whether the actual expense is lower or higher, respectively, than the estimated provision.

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Pension Benefits. Net pension expense recorded is based on, among other things, assumptions about the discount rate, estimated return on plan assets and salary increases. While management believes these assumptions are reasonable, changes in these and other factors and differences between actual and assumed changes in the present value of liabilities or assets of our plans above certain thresholds could cause net annual expense to increase or decrease materially from year to year. The actuarial assumptions used in our ~~salary continuation plan and our~~ foreign defined benefit plans reporting are reviewed periodically and compared with external benchmarks to ensure that they appropriately account for our future pension benefit obligation. The expected long-term rate of return on plan assets assumption is based on weighted average expected returns for each asset class. Expected returns reflect a combination of historical performance analysis and the forward-looking views of the financial markets, and include input from actuaries, investment service firms and investment managers. The table below represents the changes to the projected benefit obligation as a result of changes in discount rate assumptions:

Foreign Defined Benefit Plans	Increase (Decrease) inProjected Benefit Obligation
	(in millions)
1% increase in actuarial assumption for discount rate	$	(1921.71)
1% decrease in actuarial assumption for discount rate	25.36

Domestic Salary Continuation Plan	Increase (Decrease) inProjected Benefit Obligation
	(in millions)
1% increase in actuarial assumption for discount rate	$	(1.6)
1% decrease in actuarial assumption for discount rate	1.9

For the year ended December 28, 2025, the discount rate used in the salary continuation plan is no longer considered a critical accounting estimate as a 1% increase or decrease in the discount rate would not have a material impact to the projected benefit obligation of the plan.

Allowances for Expected Credit Losses. We maintain allowances for expected credit losses resulting from the inability of customers to make required payments. Estimating the amount of future expected losses requires us to consider historical losses from our customers, as well as current market conditions and future forecasts of our customers’ ability to make payments for goods and services. By its nature, such an estimate is highly subjective, and it is possible that the amount of accounts receivable that we are unable to collect may be different than the amount initially estimated. Our allowance for expected credit losses on December 29, 2024 and December 31, 2023, was $3.8 million and $3.0 million, respectively. To the extent the actual collectability of our accounts receivable differs from our estimates by 10%, our 2024 net income would be higher or lower by approximately $0.3 million, on an after-tax basis, depending on whether the actual collectability was better or worse, respectively, than the estimated allowance.

Product Warranties. We typically provide limited warranties with respect to certain attributes of our carpet products (for example, warranties regarding excessive surface wear, edge ravel and static electricity) for periods ranging from ten to twenty years, depending on the particular carpet product and the environment in which the product is to be installed. Similar limited warranties are provided on certain attributes of our rubber and LVT products, typically for a period of 5 to 15 years. We typically warrant that any services performed will be free from defects in workmanship for a period of one year following completion. In the event of a breach of warranty, the remedy typically is limited to repair of the problem or replacement of the affected product. We record a provision related to warranty costs based on historical experience and future expectations and periodically adjust these provisions to reflect changes in actual experience. Our warranty and sales allowance reserve on December 29, 2024 and December 31, 2023, was $5.3 million and $4.3 million, respectively. Actual warranty expense incurred could vary significantly from amounts that we estimate. To the extent the actual warranty expense differs from our estimates by 10%, our 2024 net income would be higher or lower by approximately $0.4 million, on an after-tax basis, depending on whether the actual expense is lower or higher, respectively, than the estimated provision.

Recent Accounting Pronouncements

Please see Note 2 entitled “Recent Accounting Pronouncements” in Item 8 of this Report for discussion of these items.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market Risk

As a result of the scope of our global operations, we are exposed to an element of market risk from changes in interest rates and foreign currency exchange rates. Our results of operations and financial condition could be impacted by this risk. We manage our exposure to market risk through our regular operating and financial activities and, to the extent we deem appropriate, through the use of derivative financial instruments.

From time to time, we employ derivative financial instruments as risk management tools and not for speculative or trading purposes. We monitor the use of derivative financial instruments through objective measurable systems, well-defined market and credit risk limits, and timely reports to senior management according to prescribed guidelines. We have established strict counter-party credit guidelines and enter into transactions only with financial institutions with a rating of investment grade or better. As a result, we consider the risk of counter-party default to be minimal. There were no active derivative instruments as of December 29, 2024.

Interest Rate Market Risk Exposure

Changes in interest rates affect the interest paid on our variable rate debt. To mitigate the impact of fluctuations in interest rates, our management monitors interest rates and ~~has developed and implemented a policy to maintain the percentage of fixed and variable rate debt within certain parameters,~~ subject to approval by our Board of Directors~~. In addition~~, may from time to time, ~~we may~~ enter into derivative transactions, such as interest rate swaps, in order to manage exposure to interest rate fluctuations. There were no active interest rate derivative instruments as of December 2928, ~~2024~~2025.

Foreign Currency Exchange Market Risk Exposure

A significant portion of our operations consists of manufacturing and sales activities in foreign jurisdictions. We manufacture our products in the United States, Northern Ireland, the Netherlands, Germany, China, and Australia, and we sell our products in more than 100 countries. As a result, our financial results have been, and could be, significantly affected by factors such as changes in foreign currency exchange rates or weak economic conditions in the foreign markets in which we distribute our products. Our operating results are exposed to changes in exchange rates between the U.S. dollar and many other currencies, including the Euro, British Pound sterling, Canadian dollar, Australian dollar and Chinese Renminbi. When the U.S. dollar strengthens against a foreign currency, the value of anticipated sales in those currencies decreases, and vice versa. Additionally, to the extent our foreign operations with functional currencies other than the U.S. dollar transact business in countries other than the United States, exchange rate changes between two foreign currencies could ultimately impact us. Finally, because we report in U.S. dollars on a consolidated basis, foreign currency exchange fluctuations could have a translation impact on our financial position. To mitigate the impact of fluctuations in foreign currency exchange rates, we may enter into derivative transactions from time to time, such as forward contracts and foreign currency options. There were no active foreign currency derivative instruments as of December 2928, ~~2024~~2025.

During ~~2024~~2025, we recognized a $2350.76 million ~~increase~~ in ~~our accumulated~~ other comprehensive ~~loss~~income –related to foreign currency translation ~~adjustment~~adjustments ~~account compared with fiscal year 2023,~~ primarily due to the ~~weakening~~strengthening of the Euro, ~~Chinese Renminbi, and Australian dollar~~ against the U.S dollar~~, partially offset by the strengthening of the British Pound sterling against the U~~.~~S. dollar.~~

Sensitivity Analysis

For purposes of specific risk analysis, we use sensitivity analysis to measure the impact that market risk may have on the fair values of our market-sensitive instruments.

To perform sensitivity analysis, we assess the risk of loss in fair values associated with the impact of hypothetical changes in interest rates and foreign currency exchange rates on market-sensitive instruments. The market value of instruments affected by interest rate and foreign currency exchange rate risk is computed based on the present value of future cash flows as impacted by the changes in the rates attributable to the market risk being measured. The discount rates used for the present value computations were selected based on market interest and foreign currency exchange rates in effect at December 2928, ~~2024~~2025. The values that result from these computations are then compared with the market values of the financial instruments. The differences are the hypothetical gains or losses associated with each type of risk.

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Interest Rate Risk

As discussed above, our Facility is comprised of a combination of term loan and revolving loan borrowings. The following table summarizes our market risks associated with our variable rate debt obligations under the Facility ~~and fixed rate Senior Notes debt~~ as of December 2928, ~~2024~~2025. For debt obligations, the table presents principal cash flows by year of maturity.

Rate-Sensitive Liabilities	~~2025~~2026		~~2026~~2027		~~2027~~2028		~~2028~~2029		Thereafter		~~Total~~		Total		~~Fair Value~~		Fair Value
	(in thousands)
Long-term Debt:
Variable Rate	$	~~482~~8,781	$	~~482~~8,781	$	48,~~600~~781	$	—8,781	$	146,655	$	~~5,564~~	$	181,779	$	~~5,564~~	$	181,779
Fixed Rate	—		—		—		300,000				300,000				294,738

Our weighted average interest rate for our outstanding borrowings under the Facility as of December 2928, ~~2024~~2025 and December 3129, ~~2023~~2024 was 5.6212% and 65.6162%, respectively.

An increase in our effective interest rate of 1% on our variable rate debt would increase annual interest expense by approximately $02.12 million. We will continue to review our exposure to interest rate fluctuations and evaluate whether we should manage such exposures through any future interest rate swap transactions. The carrying value of the Company’s borrowings under our Facility approximates fair value as the Facility bears variable interest rates that are similar to existing market rates. Based on a hypothetical immediate 100 basis point increase in interest rates, with all other variables held constant, the fair value of our fixed rate long-term debt would be impacted by a net decrease of $10.0 million. Conversely, a 100-basis point decrease in interest rates would result in a net increase in the fair value of our fixed rate long-term debt of $6.6 million.

Foreign Currency Exchange Rate Risk

As of December 2928, ~~2024~~2025, a 10% decrease or increase in the levels of foreign currency exchange rates against the U.S. dollar, with all other variables held constant, would result in a respective decrease or increase in the fair value of our financial instruments of $1211.64 million. As the impact of offsetting changes in the fair market value of our net foreign investments is not included in the sensitivity model, these results are not indicative of our actual exposure to foreign currency exchange risk.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INTERFACE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

	FISCAL YEAR
	2024		2023		2022
	2025		2024		2023
Net sales	$	1,~~315~~386,~~658~~854	$	1,~~261~~315,~~498~~658	$	1,~~297~~261,~~919~~498
Cost of sales	~~832~~849,~~710~~474		~~820~~832,~~429~~710		~~860~~820,~~186~~429
Gross profit	~~482~~537,~~948~~380		~~441~~482,~~069~~948		~~437~~441,~~733~~069
Selling, general and administrative expenses	~~348~~373,~~542~~385		~~339~~348,~~049~~542		~~324~~339,~~190~~049
Restructuring, asset impairment, other (gains) and charges	—		~~(2,502)~~—		1(2,~~965~~502)
Goodwill and intangible asset impairment charge	—		—		36,180
Operating income	163,995		134,406		104,522
Operating income	134,406		104,522		75,398
Interest expense	19,546		23,205		31,787
Interest expense	23,205		31,787		29,929
Other expense (income), net	7,598		(2,353)		9,081
Other (income) expense, net	(2,353)		9,081		3,552
Income before income tax expense	136,851		113,554		63,654
Income before income tax expense	113,554		63,654		41,917
Income tax expense	20,753		26,608		19,137
Income tax expense	26,608		19,137		22,357
Net income	$	116,098	$	86,946	$	44,517
Net income	$	86,946	$	44,517	$	19,560
Earnings per share – basic	$	1.99	$	1.49	$	0.77
Earnings per share – basic	$	1.49	$	0.77	$	0.33
Earnings per share – diluted	$	1.96	$	1.48	$	0.76
Earnings per share – diluted	$	1.48	$	0.76	$	0.33
Common shares outstanding – basic	58,375		58,282		58,092
Common shares outstanding – basic	58,282		58,092		58,865
Common shares outstanding – diluted	59,162		58,871		58,335
Common shares outstanding – diluted	58,871		58,335		58,865

See accompanying notes to consolidated financial statements.

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INTERFACE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

	FISCAL YEAR
	2024		2023		2022
	2025		2024		2023
Net income	$	86116,~~946~~098	$	4486,~~517~~946	$	1944,~~560~~517
Other comprehensive (loss) income, after tax:
Other comprehensive income (loss), after tax:
Foreign currency translation adjustment	~~(23~~50,~~727)~~626		19(23,~~185~~727)		~~(38~~19,~~334)~~185
Reclassification from accumulated other comprehensive loss – discontinued cash flow hedge	—		~~749~~—		~~1,973~~749
Pension liability adjustment	~~(5,818)~~520		(65,~~468~~818)		26(6,~~340~~468)
Other comprehensive (loss) income	(29,545)		13,466		(10,021)
Other comprehensive income (loss)	51,146		(29,545)		13,466
Comprehensive income	$	57167,~~401~~244	$	57,~~983~~401	$	957,~~539~~983

See accompanying notes to consolidated financial statements.

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INTERFACE, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except par values)

	END OF FISCAL YEAR
	2024		2023
	2025		2024
ASSETS
Current assets
Cash and cash equivalents	$	9971,~~226~~323	$	~~110~~99,~~498~~226
Accounts receivable, net	~~171~~174,~~135~~457		~~163~~171,~~386~~135
Inventories, net	~~260~~275,~~581~~014		~~279~~260,~~079~~581
Prepaid expenses and other current assets	3334,~~355~~048		3033,~~895~~355
Total current assets	~~564~~554,~~297~~842		~~583~~564,~~858~~297
Property, plant and equipment, net	~~282~~309,~~374~~449		~~291~~282,~~140~~374
Operating lease right-of-use assets	7678,~~815~~191		8776,~~519~~815
Deferred tax asset	24,624		21,721
Deferred tax assets	25,272		24,624
Goodwill	99112,~~887~~127		~~105~~99,~~448~~887
Intangible assets, net	4850,~~273~~885		5648,~~255~~273
Other assets	7475,~~546~~756		8474,~~154~~546
Total assets	$	1,~~170~~206,~~816~~522	$	1,~~230~~170,~~095~~816
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	6864,~~943~~768	$	6268,~~912~~943
Accrued expenses	~~134~~147,~~996~~770		~~130~~134,~~890~~996
Current portion of operating lease liabilities	1215,~~296~~748		12,~~347~~296
Current portion of long-term debt	~~482~~8,778		~~8,572~~482
Total current liabilities	~~216~~237,~~717~~064		~~214~~216,~~721~~717
Long-term debt	~~302~~172,~~275~~801		~~408~~302,~~641~~275
Operating lease liabilities	6867,~~092~~205		7868,~~269~~092
Deferred income taxes	3123,~~822~~365		3331,~~832~~822
Other long-term liabilities	6265,~~762~~413		6862,~~685~~762
Total liabilities	~~681~~565,~~668~~848		~~804~~681,~~148~~668
Commitments and contingencies (Note 18)
Commitments and contingencies (Note 17)
Shareholders’ equity
Preferred stock, par value $1.00 per share; 5,000 shares authorized; none issued or outstanding at December 29, 2024 and December 31, 2023	—		—
Preferred stock, par value $1.00 per share; 5,000 shares authorized; none issued or outstanding at December 28, 2025 and December 29, 2024	—		—
Common stock, par value $0.10 per share; 120,000 shares authorized; 58,304 and 58,112 shares issued and outstanding at December 29, 2024 and December 31, 2023, respectively	5,830		5,811
Common stock, par value $0.10 per share; 120,000 shares authorized; 57,891 and 58,304 shares issued and outstanding at December 28, 2025 and December 29, 2024, respectively	5,789		5,830
Additional paid-in capital	~~261~~248,~~028~~910		~~252~~261,~~909~~028
Retained earnings	~~405~~517,~~441~~980		~~320~~405,~~833~~441
Accumulated other comprehensive loss – foreign currency translation	(~~143~~92,~~317~~691)		(~~119~~143,~~590~~317)
Accumulated other comprehensive loss – pension liability	(39,~~834~~314)		(3439,~~016~~834)
Total shareholders’ equity	~~489~~640,~~148~~674		~~425~~489,~~947~~148
Total liabilities and shareholders’ equity	$	1,~~170~~206,~~816~~522	$	1,~~230~~170,~~095~~816

See accompanying notes to consolidated financial statements.

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INTERFACE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	FISCAL YEAR
	2024		2023		2022
	2025		2024		2023
OPERATING ACTIVITIES:
Net income	$	86116,~~946~~098	$	4486,~~517~~946	$	1944,~~560~~517
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization	3938,~~333~~916		4039,~~774~~333		40,~~337~~774
Share-based compensation expense	1214,~~907~~385		1012,~~265~~907		810,~~527~~265
Loss (gain) on disposal of property, plant and equipment, net	~~264~~—		~~(2,252)~~264		4(2,~~319~~252)
Loss on foreign subsidiary liquidation	~~2,152~~—		62,~~221~~152		—6,221
Bad debt expense	1,476		53		26
Loss on debt extinguishment	2,440		—		—
Deferred income taxes	(3,034)		(10,082)		10,310
Bad debt expense	1,441		1,476		53
Other	(8,480)		1,273		3,104
Deferred income taxes	(12,958)		(3,034)		(10,082)
Amortization of acquired intangible assets	5,172		5,172		5,038
Other	(4,715)		(8,480)		1,273
Goodwill and intangible asset impairment	—		—		36,180
Amortization of acquired intangible assets	3,073		5,172		5,172
Working capital changes:
Accounts receivable	~~(13~~4,~~872)~~620		21(13,~~798~~872)		~~(17~~21,~~489)~~798
Inventories	102,~~467~~102		3110,~~040~~467		~~(49~~31,~~651)~~040
Prepaid expenses and other current assets	~~(3,079)~~590		(~~302~~3,079)		~~7,020~~(302)
Accounts payable and accrued expenses	181,~~178~~914		(618,~~443)~~178		(246,~~220~~443)
Cash provided by operating activities	~~148~~167,~~430~~906		~~142~~148,~~034~~430		43142,~~061~~034
INVESTING ACTIVITIES:
Capital expenditures	(3346,~~788~~192)		(2633,~~107~~788)		(1826,~~437~~107)
Proceeds from sale of property, plant and equipment	~~1,040~~—		61,~~593~~040		—6,593
Insurance proceeds from property casualty loss	~~2,374~~—		—2,374		—
Cash used in investing activities	(3046,~~374~~192)		(1930,~~514~~374)		(1819,~~437~~514)
FINANCING ACTIVITIES:
Revolving loan borrowing	34,243		90,000		206,031
Term loan borrowings	170,000		—		—
Revolving loan repayments	(34,243)		(114,381)		(189,281)
Term loan repayments	(390)		(115,213)		(80,927)
Term loan repayments	(115,213)		(80,927)		(13,191)
Revolving loan borrowings	41,701		34,243		90,000
Repurchase of common stock	—		—		(17,171)
Revolving loan repayments	(35,515)		(34,243)		(114,381)
Dividends paid	(2,338)		(2,323)		(2,355)
Senior notes repayment	(300,000)		—		—
Tax withholding payments for share-based compensation	(4,770)		(1,514)		(402)
Repurchase of common stock	(18,175)		—		—
Debt issuance costs	—		—		(1,032)
Dividends paid	(3,559)		(2,338)		(2,323)
Finance lease payments	(2,913)		(2,419)		(2,089)
Tax withholding payments for share-based compensation	(8,372)		(4,770)		(1,514)
Cash used in financing activities	(125,234)		(111,564)		(19,490)
Payments for debt extinguishment costs	(620)		—		—
Net cash (used in) provided by operating, investing and financing activities	(7,178)		10,956		5,134
Debt issuance costs	(1,303)		—		—
Effect of exchange rate changes on cash	(4,094)		1,978		(4,822)
Finance lease payments	(3,059)		(2,913)		(2,419)
Cash used in financing activities	(159,292)		(125,234)		(111,564)
Net cash (used in) provided by operating, investing and financing activities	(37,578)		(7,178)		10,956
Effect of exchange rate changes on cash	9,675		(4,094)		1,978
CASH AND CASH EQUIVALENTS:
Net (decrease) increase	(1127,~~272~~903)		12(11,~~934~~272)		~~312~~12,934
Balance, beginning of year	~~110~~99,~~498~~226		97110,~~564~~498		97,~~252~~564
Balance, end of year	$	9971,~~226~~323	$	~~110~~99,~~498~~226	$	97110,~~564~~498

See accompanying notes to consolidated financial statements.

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INTERFACE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

Interface is a global flooring company specializing in carpet tile and resilient flooring, including luxury vinyl tile (“LVT”), and nora® rubber flooring. The Company manufactures modular carpet focusing on the high quality, design-oriented sector of the market, sources resilient flooring including LVT from third parties and focuses on the same sector of the market, and provides specialized carpet replacement, installation and maintenance services. The Company also manufactures and sells resilient rubber flooring.

The Company’s ~~has~~fiscal ~~determined~~year ~~that~~is itthe ~~has~~52 ~~two~~or ~~operating~~53 ~~and~~week ~~reportable~~period ~~segments~~ending –on ~~namely~~the ~~Americas~~Sunday ~~(“AMS”)~~nearest ~~which~~December ~~includes~~31. ~~the~~All ~~United~~references ~~States~~herein to “2025,” ~~Canada~~“2024,” and ~~Latin~~“2023,” ~~America~~mean ~~geographic~~the ~~areas,~~fiscal ~~and~~years ~~Europe~~ended December 28, ~~Africa~~2025, ~~Asia~~December 29, 2024, and ~~Australia~~December 31, ~~(collectively~~2023, ~~“EAAA”)~~respectively. ~~See~~Fiscal ~~Note~~years 202025, ~~entitled~~2024 ~~“Segment~~and ~~Information”~~2023 ~~for~~were ~~additional~~each ~~information~~comprised of 52 weeks.

The Company has determined that it has two operating and reportable segments – namely Americas (“AMS”) which includes the United States, Canada and Latin America geographic areas, and Europe, Africa, Asia and Australia (collectively “EAAA”). See Note 19 entitled “Segment Information” for additional information.

Cybersecurity Event

On November 20, 2022, we discovered a cybersecurity attack, perpetrated by unauthorized third parties, affecting our IT systems (the “Cyber Event”). ~~In response to this Cyber Event, we notified law enforcement and took steps to supplement existing security monitoring, including scanning and protective measures.~~ The investigation of the Cyber Event was completed during 2023. During 2024, we recovered $4.8 million in business interruption insurance proceeds, which are recognized as a benefit within other ~~income~~expense / ~~expense~~income, net in the consolidated statements of operations. During 2024, we also recovered $0.8 million ~~of costs~~ from our cyber risk insurance, which are recorded as a reduction of selling, general, and administrative expenses. The insurance claim for the Cyber Event is now closed.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its subsidiaries. All of our subsidiaries are wholly-owned, and we are not a party to any joint venture, partnership or other variable interest entity that would potentially qualify for consolidation. All material intercompany accounts and transactions are eliminated.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Examples include provisions for returns, ~~bad~~expected ~~debts~~credit losses, product claims reserves, inventory obsolescence and the length of product life cycles, accruals associated with restructuring activities, income tax exposures and valuation allowances, and the remaining carrying value of goodwill, intangible assets and property, plant and equipment. Actual results could vary from these estimates.

Risks and Uncertainties

Global economic challenges, including ~~the~~government-imposed ~~impacts~~tariffs ofand ~~the~~retaliatory ~~Russia-Ukraine~~tariffs, ~~war~~inflation, ~~the~~supply ~~conflict~~chain indisruptions, ~~the~~geopolitical ~~Middle~~factors ~~East,~~including wars and other conflicts ~~around the globe~~, ~~supply chain disruptions, potential government-imposed tariffs,~~ and slow ~~macro~~market ~~environments~~conditions in certain ~~geographical~~parts ~~regions~~of the globe could cause economic uncertainty and volatility. In connection with the Cyber Event discussed above, security breaches may expose us to fines and other liabilities to the extent sensitive data stored in our IT systems, including data related to customers, suppliers or employees, are misappropriated. The Company considered these impacts and subsequent general uncertainties and volatility in the global economy on the assumptions and estimates used herein, including the goodwill and intangible asset assessments ~~and impairments~~ discussed in Note 1211 entitled “Goodwill and Other Intangible Assets.” These uncertainties could result in a future material adverse effect to the Company’s financial statements if actual results differ from these estimates.

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Revenue Recognition

Revenue from contracts with customers is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this core principle, the guidance provides that an entity should apply the following steps: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, the entity satisfies a performance obligation.

Revenue Recognized from Contracts with Customers

Contracts with customers typically take the form of invoices for purchase of materials from the Company. Customer payment terms vary by region and are typically less than 60 days. The performance obligation is the delivery of these materials to the customer’s control. Revenue from the sale of modular carpet, resilient flooring, rubber flooring, and related products ~~was~~is ~~approximately 97% of~~ the ~~Company’s~~primary ~~total~~source ~~revenue in 2024, approximately 98%~~ of the Company’s total revenue ~~in 2023, and approximately 97% of the Company’s total revenue in 2022~~. The revenue from sales of these products is recognized upon shipment, or in certain cases, upon delivery to the customer. The transaction price for these sales is readily identifiable. The remaining revenue ofis ~~approximately 3% for 2024, approximately 2% for 2023, and approximately 3% for 2022 was~~ generated from the installation of carpet and other flooring-related material. See Note 3 entitled “Revenue Recognition” for additional information related to revenue disaggregation.

For installation projects underway, the Company recognized installation revenue over time based on a project cost input method as the customer simultaneously received and consumed the benefit of the services. The installation of the carpet and related products is a separate performance obligation from the sale of carpet. The majority of these projects are completed within five days of the start of installation. The transaction price for these sale and installation contracts is readily determinable between flooring material and installation services and typically is specifically identified in the contract with the customer.

The Company has utilized the portfolio approach to its contracts with customers, as its contracts with customers have similar characteristics, and it is reasonable to expect that the effects from applying this approach are not materially different from applying the accounting standard to individual contracts.

The Company does not have any other significant revenue streams outside of these sales of flooring material, and the sale and installation of flooring material, as described above.

The Company does not record taxes collected from customers and remitted to governmental authorities within revenues. The Company records such taxes collected as a liability on our consolidated balance sheets.

Performance Obligations

As noted above, the Company primarily generates revenue through the sale of flooring material to end users either upon shipment or upon arrival of the product at its destination. In these instances, there typically is no other obligation to the customers other than the delivery of flooring material, with the exception of warranty. The Company ~~does~~offers ~~offer~~ a warranty to its customers which guarantees certain on-floor performance characteristics and warrants against manufacturing defects. The warranty is not a service warranty, and there is no ability to separate the warranty obligation from the sale of the flooring or purchase it separately. ~~The~~ ~~Company’s~~This ~~incidence~~assurance-type of warranty ~~claims~~does isnot ~~extremely~~represent low, with less than 0.5% of revenue in claims on an annual basis for the last three fiscal years. Given the nature of the warranty as well as the financial impact, the Company has determined that there is no need to identify this warranty as a separate performance obligation, and the Company accounts for warranty claims on an accrual basis.

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For the Company’s installation business, the sales of carpet and other flooring materials and installation services are separate deliverables which under the revenue recognition requirements should be characterized as separate performance obligations. The nature of the installation projects is such that the vast majority – an amount in excess of 85% of these installation projects – are completed in less than five days. ~~The~~On a project-by-project basis, the Company’s largest installation customers are retail, education and corporate customers~~, and these are on a project-by-project basis and are short-term installations~~. The Company has evaluated these projects at the end of each reporting period and recorded revenue in accordance with the accounting standards for projects which were underway as of the end of ~~2024~~2025, ~~2023~~2024 and ~~2022~~2023.

Costs to Obtain Contracts

The Company pays sales commissions to many of its sales personnel based upon their selling activity. These are direct costs associated with obtaining the contracts and are expensed as the revenue is recognized. These commissions become payable upon shipment (or in certain cases delivery) of product. There are no other material costs the Company incurs as part of obtaining the sales contract.

Shipping and Handling

Shipping and handling fees billed to customers are classified in net sales in the consolidated statements of operations. Shipping and handling costs incurred are classified in cost of sales in the consolidated statements of operations.

Advertising and Promotion

The Company’s advertising and promotional activities primarily consist of product samples, printed materials, digital marketing, trade shows, and customer events. Advertising and promotional costs are expensed when the advertising / promotional activity first takes place. Advertising and promotional expenses were $3937.28 million, $3439.62 million and $3134.36 million for the years ~~2024~~2025, ~~2023~~2024 and ~~2022~~2023, respectively, and were recorded in selling, general and administrative (“SG&A”) expenses in the consolidated statements of operations.

Research and Development

Research and development costs are expensed as incurred and are included in SG&A expenses and cost of sales in the consolidated statements of operations. Research and development expense includes costs associated with the development of new products as well as the improvement and enhancement of existing products. Research and development expense was $1516.1 million, $1715.01 million, and $1917.10 million for the years ~~2024~~2025, ~~2023~~2024 and ~~2022~~2023, respectively.

Cash, Cash Equivalents and Short-Term Investments

Highly liquid investments with original maturities of three months or less are classified as cash and cash equivalents. Investments with maturities greater than three months and less than one year are classified as short-term investments. Significant concentrations of credit risk may arise from the Company’s cash maintained at various banks, as from time to time cash balances may exceed the FDIC limits. The Company did not hold any significant amounts of cash equivalents and short-term investments at December 2928, ~~2024~~2025 and December 3129, ~~2023~~2024.

Supplemental Cash Flow Information

Cash payments for interest amounted to approximately $2218.80 million, $2822.8 million, and $2528.18 million for the years ~~2024~~2025, ~~2023~~2024 and ~~2022~~2023, respectively. ~~Income~~See ~~tax~~Note ~~payments~~16 ~~amounted~~entitled to“Income ~~approximately~~Taxes” ~~$37.8~~for ~~million,~~income ~~$25.8~~taxes ~~million~~paid ~~and~~information ~~$31.4 million~~ for ~~the~~fiscal years ~~2024~~2025, ~~2023 and 2022, respectively. During the years~~ 2024, ~~2023~~ and ~~2022, the Company received income tax refunds of $3~~2023.3 ~~million, $2.5 million and $12.4 million, respectively.~~

Allowances for Expected Credit Losses

The Company maintains allowances for expected credit losses for estimated losses resulting from the inability of customers to make required payments. Estimating the amount of future expected losses requires the Company to consider historical losses from our customers, as well as current market conditions and future forecasts of our customers’ ability to make payments for goods and services. By its nature, such an estimate is ~~highly~~ subjective, and it is possible that the amount of accounts receivable that the Company is unable to collect may be different than the amount initially estimated.

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Inventories

Inventories are carried at the lower of cost (standards approximating the first-in, first-out method) or net realizable value. Costs included in inventories are based on invoiced costs and/or production costs, as applicable. Included in production costs are material, direct labor and allocated overhead. The Company writes down inventories for the difference between the carrying value of the inventories and their estimated net realizable value. If actual market conditions are less favorable than those projected by management, additional write-downs may be required.

Management estimates its reserves for inventory obsolescence by continuously examining its inventories to determine if there are indicators that carrying values exceed net realizable values. Experience has shown that significant indicators that could require the need for additional inventory write-downs are the age of the inventory, the length of its product life cycles, anticipated demand for the Company’s products, and current economic conditions. While management believes that adequate write-downs for inventory obsolescence have been made in the consolidated financial statements, consumer tastes and preferences may continue to change, and the Company could experience additional inventory write-downs in the future.

Leases

The Company records a right-of-use asset and lease liability for operating and finance leases once a contract that contains a lease is executed and the Company has the right to control the use of the leased asset. The right-of-use asset is measured as the present value of the lease obligation. The discount rate used to calculate the present value of the lease liability is the Company’s incremental borrowing rate, which is based on the estimated rate for a fully collateralized borrowing that fully amortizes over a similar lease term at the commencement date and for the applicable geographical region.

The Company made an accounting policy election to exclude leases with an initial term of 12 months or less from the calculation of the right-of-use asset and lease liability recorded on the consolidated balance sheets. These leases primarily represent month-to-month operating leases for equipment where we were reasonably certain that we would not elect an option to extend the lease. The Company also made an accounting policy election not to separate lease and non-lease components for all asset classes and accounts for the lease payments as a single component.

Property, Plant and Equipment and Long-Lived Assets

Property, plant and equipment are carried at cost. Depreciation is computed using the straight-line method over the following estimated useful lives: buildings and improvements – ten to forty years; equipment, furniture and fixtures – three to twelve years; and computer software – three to six years. Certain manufacturing equipment in our Weinheim manufacturing facility have estimated useful lives up to twenty-five years. Leasehold improvements are depreciated over the shorter of the asset life or lease term, generally between three to twelve years. Interest costs for the construction/development of certain long-term assets are capitalized and amortized over the related assets’ estimated useful lives. Total depreciation expense amounted to approximately $34.34 million, $3534.93 million, and $3635.39 million for the years ~~2024~~2025, ~~2023~~2024 and ~~2022~~2023, respectively.

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the sum of the expected future undiscounted cash flow is less than the carrying amount of the asset, a loss is recognized for the difference between the fair value and carrying value of the asset. Repair and maintenance costs are charged to operating expense as incurred.

Goodwill and Other Intangible Assets

In accordance with applicable accounting standards, the Company tests goodwill for impairment annually and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. During the fourth quarters of ~~2024~~2025, ~~2023~~2024 and ~~2022~~2023, the Company performed the annual goodwill impairment test. The Company tests goodwill at the reporting unit level, which is an operating segment or one level below an operating segment. In performing the impairment testing, the Company prepared valuations of reporting units on both a market comparable methodology and an income methodology, and those valuations were compared with the respective carrying values of the reporting units to determine whether any goodwill impairment existed. ~~In preparing the valuations, past, present and future expectations of performance were considered. See Note 12 entitled “Goodwill and Other Intangible Assets” for additional information.~~

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~~Trademark~~ ~~and~~In ~~trade~~preparing ~~name intangible assets acquired in connection with~~ the ~~nora acquisition are not subject to amortization~~valuations, but are tested for impairment annually and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of the intangible asset below its carrying amount. For the annual tests performed in 2024past, ~~2023,~~present and ~~2022,~~future ~~the~~expectations ~~Company prepared valuations~~ of ~~the~~performance ~~intangible assets using the present value of cash flows under the relief from royalty method, which~~ were ~~compared to the carrying value of intangible assets to determine whether any impairment existed~~considered. See Note 1211 entitled “Goodwill and Other Intangible Assets” for additional information.

~~The~~Trademark ~~Company’s~~and ~~other~~trade name intangible assets ~~primarily~~acquired ~~consist~~in ofconnection ~~developed~~with ~~technology~~the nora acquisition are not subject to amortization, but are tested for impairment annually and between annual tests if an event occurs or circumstances change that iswould ~~amortized~~more onlikely athan ~~straight-line~~not ~~basis~~reduce ~~over~~the fair value of the intangible assets below its carrying amount. For the annual tests performed in 2025, 2024 and 2023, the Company prepared valuations of the intangible assets using the present value of cash flows under the relief from royalty method, which requires management to estimate forecasted revenues and a discount rate. The estimated ~~useful~~fair ~~life~~value of 7the ~~years~~trademark and trade name intangible assets was compared to the carrying value to determine whether any impairment existed. See Note 11 entitled “Goodwill and Other Intangible Assets” for additional information.

Product Warranties

The Company typically provides limited warranties with respect to certain attributes of its carpet products (for example, warranties regarding excessive surface wear, edge ravel and static electricity) for periods ranging from ten to twenty years, depending on the particular carpet product and the environment in which it is to be installed. Similar limited warranties are provided on certain attributes of its rubber and LVT products, typically for a period of 5 to 15 years. The Company typically warrants that services performed will be free from defects in workmanship for a period of one year following completion. In the event of a breach of warranty, the remedy typically is limited to repair of the problem or replacement of the affected product.

The Company records a provision related to warranty costs based on historical experience and future expectations and periodically adjusts these provisions to reflect changes in actual experience. Warranty and sales allowance reserves amounted to $5.3.9 million and $45.3 million as of December 2928, ~~2024~~2025 and December 3129, ~~2023~~2024, respectively, and are included in accrued expenses in the accompanying consolidated balance sheets.

Income Taxes

The Company accounts for income taxes under an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company’s financial statements or tax returns. In estimating future tax consequences, the Company generally considers all expected future events other than enactments of changes in tax laws or rates. The effect on deferred tax assets and liabilities of a change in tax rates will be recognized as income or expense in the period that includes the enactment date.

The Company has elected to account for tax effects of the global intangible low-taxed income (“GILTI”) in the period when incurred, and therefore has not provided any deferred tax impacts for these provisions in its consolidated financial statements.

The Company records a valuation allowance to reduce its deferred tax assets when it is more likely than not that some portion or all of the deferred tax assets will expire before realization of the benefit or that future deductibility is not probable. The ultimate realization of the deferred tax assets depends on the ability to generate sufficient taxable income of the appropriate character in the future. This requires us to use estimates and make assumptions regarding significant future events such as the taxability of entities operating in the various taxing jurisdictions.

For uncertain tax positions, the Company applies the provisions of relevant authoritative guidance, which requires application of a “more likely than not” threshold to the recognition and derecognition of tax positions. The Company’s ongoing assessments of the more likely than not outcomes of tax authority examinations and related tax positions require significant judgment and can increase or decrease the Company’s effective tax rate as well as impact operating results. For further information, see Note 1716 entitled “Income Taxes.”

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Fair Values of Financial Instruments

Fair values of cash and cash equivalents and short-term debt approximate cost due to the short period of time to maturity. Fair values of debt are based on quoted market prices or pricing models using current market rates and classified as level 2 within the fair value hierarchy. See Note 5 entitled “Fair Value of Financial Instruments” for further information.

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Translation of Foreign Currencies

The financial position and results of operations of ~~most of~~ the Company’s foreign subsidiaries are measured using local currencies as the functional currency. Assets and liabilities of these subsidiaries are translated into U.S. dollars at the exchange rate in effect at each year-end. Income and expense items are translated each month at average monthly exchange rates throughout the year. The resulting translation adjustments are recorded in the foreign currency translation adjustment account. In the event of a divestiture or substantial liquidation of a foreign subsidiary, the related foreign currency translation results are reclassified from equity to income. Foreign exchange translation gains (losses) were $~~(23~~50.7)6 million, $19(23.27) million, and $~~(38~~19.3)2 million for the years ~~2024~~2025, ~~2023~~2024 and ~~2022~~2023, respectively.

Earnings per Share

Basic earnings per share is computed based on the average number of common shares outstanding, including participating securities. Diluted earnings per share reflects the potential increase in average common shares outstanding that would result from share-based awards or the assumed exercise of outstanding stock options, calculated using the treasury stock method. See Note 1514 entitled “Earnings Per Share” for additional information.

Share-Based Compensation

The Company has share-based employee compensation plans, which are described more fully in Note 1413 entitled “Shareholders' Equity.”

The Company recognizes expense related to its restricted stock, restricted share unit and performance share grants based on the grant date fair value of the shares awarded, as determined by its market price at date of grant.

Pension Benefits

Net pension expense recorded is based on, among other things, assumptions about the discount rate, estimated return on plan assets and salary increases. While the Company believes these assumptions are reasonable, changes in these and other factors and differences between actual and assumed changes in the present value of liabilities or assets of the Company’s plans above certain thresholds could cause net annual expense to increase or decrease materially from year to year. The actuarial assumptions used in the Company’s salary continuation plan and foreign defined benefit plans reporting are reviewed periodically and compared with external benchmarks to ensure that they appropriately account for our future pension benefit obligation. The expected long-term rate of return on plan assets assumption is based on weighted average expected returns for each asset class. Expected returns reflect a combination of historical performance analysis and the forward-looking views of the financial markets, and include input from actuaries, investment service firms and investment managers.

~~Reclassifications~~57

Certain reclassifications to prior year information have been made in the consolidated statements of cash flows to conform to the current period presentation. The previously reported line item “deferred income taxes and other” was separated into two line items in the current period presentation of the consolidated statements of cash flows to provide additional information. These reclassifications had no effect on cash provided by operating activities as previously reported.

Reclassifications were also made to prior year deferred tax assets and deferred tax liabilities and the reconciliation of the beginning and ending amounts of gross unrecognized tax benefits presented in Note 17 entitled “Income Taxes” to conform to the current period presentation. See Note 17 entitled “Income Taxes” for additional information.

Fiscal Year

The Company’s fiscal year is the 52 or 53 week period ending on the Sunday nearest December 31. All references herein to “2024,” “2023,” and “2022,” mean the fiscal years ended December 29, 2024, December 31, 2023, and January 1, 2023, respectively. Fiscal years 2024, 2023 and 2022 were each comprised of 52 weeks.

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NOTE 2 – RECENT ACCOUNTING PRONOUNCEMENTS

Recently Issued Accounting Pronouncements – Adopted

In ~~November~~December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-0709, “~~Segment~~Income ~~Reporting~~Taxes (Topic ~~280~~740): Improvements to ~~Reportable~~Income ~~Segment~~Tax Disclosures.”. This ASU requires ~~additional~~public ~~disclosures~~entities inon an annual ~~and~~basis ~~interim~~to ~~periods~~disclose ~~for~~a ~~significant~~rate ~~segment~~reconciliation ~~expenses~~with ~~included~~explicit incategories, ~~the~~as ~~measure~~outlined ofin ~~segment~~the ~~profit~~ASU, ~~provided~~and torequires ~~the~~additional ~~chief~~disclosures ~~operating~~for ~~decision~~reconciling ~~maker~~items ~~(“CODM”).~~that ~~Disclosure~~meet ofcertain ~~other~~quantitative ~~segment~~thresholds. ~~items~~Other bydisclosures ~~reportable~~include ~~segment~~disaggregation asof ~~well~~income astaxes apaid, ~~description~~pre-tax ofincome, ~~its~~and ~~composition~~income istax ~~also required~~expense. The new guidance is effective for ~~annual~~fiscal ~~periods~~years beginning after December 15, ~~2023, and for interim periods beginning after December 15,~~ 2024. The Company adopted ~~the~~this ~~provisions of~~ ASU ~~2023-07~~prospectively for the ~~year~~period ended December 2928, ~~2024~~2025. ~~(see~~See Note 2016 entitled “~~Segment~~Income ~~Information~~Taxes”) for additional information. The adoption of this ASU impacted our income tax disclosures but did not have a material impact to our consolidated financial statements.

Recently Issued Accounting Pronouncements – Not Yet Adopted

In ~~November~~September ~~2024~~2025, the FASB issued ASU ~~2024~~2025-~~03,~~06 - “~~Income~~Intangibles ~~Statement Reporting~~ - ~~Comprehensive~~Goodwill ~~Income~~and -Other ~~Expense~~Internal ~~Disaggregation~~Use Software (Topic ~~220~~350-40)”. This ASU ~~requires~~amends ~~public~~the ~~entities~~accounting tofor ~~provide~~internal-use ~~additional~~software ~~footnote~~costs ~~disclosures~~by toremoving ~~disaggregate~~reference ~~the~~to ~~cost~~prescriptive and ~~expense~~sequential ~~line~~software ~~items~~development ~~presented~~stages inused ~~the~~to ~~income~~evaluate ~~statement~~capitalizable ~~into~~costs. ~~specific~~The ~~categories~~ASU ~~including~~requires ~~(a)~~entities ~~purchases~~to ofconsider ~~inventory;~~whether ~~(b)~~significant ~~employee~~uncertainties ~~compensation;~~associated ~~(c)~~with ~~depreciation:~~development ~~and~~activities ~~(d)~~have ~~intangible~~been ~~asset~~resolved ~~amortization.~~prior ~~The~~to ~~ASU~~capitalization ~~also~~of ~~requires~~software ~~qualitative~~costs ~~disclosure~~and ofaligns ~~other~~disclosure ~~relevant~~requirements ~~expense~~with ~~categories~~ASC ~~not~~360, ~~separately disclosed~~“Property, ~~the total amount of selling expenses~~Plant, and ~~the definition of selling expenses in annual reporting periods~~Equipment”. The new guidance in ASU ~~2024~~2025-0306 is effective for annual periods beginning after December 15, ~~2026. In January 2025~~2027, ~~the~~and ~~FASB~~interim ~~issued~~periods ~~ASU~~within ~~2025-01~~those toannual ~~clarify the interim~~ reporting ~~period~~periods, ~~effective~~and ~~date~~may ~~for~~be ~~ASU~~applied ~~2024-03.~~prospectively, ~~The~~retrospectively, ~~provisions~~or ofusing ~~ASU~~a ~~2024-03~~modified ~~are~~retrospective ~~effective for interim periods within annual reporting periods beginning after December 15, 2027~~approach. Early adoption is permitted. The Company is currently evaluating the impact of this ASU to its consolidated financial statements.

In ~~December~~November ~~2023~~2024, the FASB issued ASU ~~2023~~2024-0903, “Income ~~Taxes~~Statement ~~(Topic~~Reporting ~~740):~~- ~~Improvements~~Comprehensive to Income ~~Tax~~- ~~Disclosures.~~Expense Disaggregation (Topic 220-40)”. This ASU requires public entities onto anprovide ~~annual~~additional ~~basis~~footnote disclosures to ~~disclose~~disaggregate athe ~~rate~~cost ~~reconciliation~~and ~~with~~expense ~~explicit~~line ~~categories,~~items aspresented ~~outlined~~ in the ~~ASU,~~income ~~and~~statement ~~requires~~into ~~additional~~specific ~~disclosures~~categories ~~for~~including ~~reconciling~~(a) ~~items~~purchases ~~that~~of ~~meet~~inventory; ~~certain~~(b) ~~quantitative~~employee ~~thresholds~~compensation; (c) depreciation; and (d) intangible asset amortization. ~~Other~~The ~~disclosures~~ASU ~~include~~also ~~disaggregation~~requires qualitative disclosure of ~~income~~other ~~taxes~~relevant ~~paid~~expense categories not separately disclosed, ~~pre-tax~~the ~~income~~total amount of selling expenses, and ~~income~~the ~~tax~~definition ~~expense~~of selling expenses in annual reporting periods. The new guidance in ASU 2024-03 is effective for ~~fiscal~~annual ~~years~~periods beginning after December 15, ~~2024.~~2026, ~~Early~~and ~~adoption~~interim isperiods ~~permitted.~~within Weannual ~~are~~reporting ~~currently~~periods ~~assessing~~beginning ~~the~~after ~~updated~~December ~~guidance; however~~15, it2027. Early adoption is ~~not~~permitted. ~~expected~~The toCompany ~~have~~is acurrently ~~material~~evaluating the impact of this ASU to ~~our~~its consolidated financial statements.

56All other ASU’s issued but not adopted yet were assessed and determined to be not applicable or are not expected to have a material impact to our consolidated financial statement or disclosures.

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NOTE 3 – REVENUE RECOGNITION

The Company generates revenue from sales of modular carpet, resilient flooring, rubber flooring, and other flooring-related material, and from the installation of carpet and other flooring-related material. A summary of these revenue streams, as a percentage of net sales, for fiscal years ~~2024~~2025, ~~2023~~2024 and ~~2022~~2023 is aas follows:

	Fiscal Year
	2024		2023		2022
	2025		2024		2023
Revenue from the sale of flooring material	9798%	%	9897%	%	9798%	%
Revenue from installation of flooring material	32%	%	23%	%	32%	%

Disaggregation of Revenue

For fiscal years ~~2024~~2025, ~~2023~~2024 and ~~2022~~2023, revenue from the Company’s customers is broken down by geography as follows:

	Fiscal Year
Geography	~~2024~~2025		~~2023~~2024		~~2022~~2023
Americas	60.9%	%	5860.49%	%	58.04%	%
Europe	2829.60%	%	3028.16%	%	2930.21%	%
Asia-Pacific	10.51%	%	1110.5%	%	1211.85%	%

Revenue from the Company’s customers in the Americas corresponds to the AMS reportable segment, and the EAAA reportable segment includes revenue from the Europe and Asia-Pacific geographies. See Note 2019 entitled “Segment Information” for additional information.

57For fiscal years 2025, 2024, and 2023, revenue by material market segment as a percentage of consolidated totals is as follows:


	Fiscal Year
Market Segment	2025	2024	2023
Corporate Office	44%	47%	49%
Education	20%	19%	18%
Healthcare	11%	9%	10%
Other	25%	25%	23%

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NOTE 4 – RECEIVABLES

The Company has adopted credit policies and standards intended to reduce the inherent risk associated with potential increases in its concentration of credit risk due to increasing trade receivables. Management believes that credit risks are further moderated by the diversity of its end customers and geographic sales areas. The Company performs ongoing credit evaluations of its customers’ financial condition and requires collateral as deemed necessary. The Company maintains allowances for expected credit losses resulting from the inability of customers to make required payments. If the financial condition of its customers were to deteriorate, resulting in a change in their ability to make payments, additional allowances may be required. As of December 2928, ~~2024~~2025, and December 3129, ~~2023~~2024, the allowance for expected credit losses amounted to $35.82 million and $3.08 million, respectively, for all accounts receivable of the Company.

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NOTE 5 – FAIR VALUE OF FINANCIAL INSTRUMENTS

Accounting standards establish a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure estimated fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy under applicable accounting standards are described below:

Level 1 Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

Level 2 Inputs to the valuation methodology include:

•quoted prices for similar assets in active markets;

•quoted prices for identical or similar assets in inactive markets;

•inputs other than quoted prices that are observable for the asset; and

•inputs that are derived principally or corroborated by observable data by correlation or other.

Level 3 Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.

A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

The following table presents the carrying values and estimated fair values, including the level within the fair value hierarchy, of certain financial instruments:

	December 29, 2024						December 31, 2023
	December 28, 2025						December 29, 2024
	Carrying Value		Fair Value (Level 1)		Fair Value (Level 2)		Carrying Value		Fair Value (Level 1)		Fair Value (Level 2)
	(in thousands)
Assets:
Company-owned life insurance	$	2223,~~911~~048	$	—	$	2223,~~911~~048	$	22,~~788~~911	$	—	$	22,~~788~~911
Deferred compensation investments	3033,~~521~~728		8,~~697~~941		2124,~~824~~787		2830,~~417~~521		98,~~200~~697		1921,~~217~~824
Liabilities(1):
Borrowings under Syndicated Credit Facility(2)	$	5181,~~564~~779	$	—	$	5181,~~564~~779	$	~~121~~5,~~658~~564	$	—	$	~~121~~5,~~658~~564
5.50% Senior Notes due 2028(3)	300,000		—		294,738		300,000		—		281,991
5.50% Senior Notes (3)	—		—		—		300,000		—		294,738

(1) Carrying values are presented gross, excluding the impact of unamortized debt issuance costs and including amounts presented as current liabilities on the consolidated balance sheets.

(2) Unamortized debt issuance costs associated with term loan borrowings under the Syndicated Credit Facility were $0.2 million as of December 28, 2025, and recorded as a reduction of long-term debt in the consolidated balance sheets,. ~~were~~Unamortized ~~not~~debt ~~material~~issuance ascosts ofassociated ~~December 29,~~with ~~2024,~~the ~~and~~Syndicated ~~were~~Credit ~~$1.0~~Facility ~~million~~ as of December 3129, ~~2023~~2024, were not material.

(3) ~~Unamortized~~The ~~debt~~Senior ~~issuance~~Notes ~~costs~~were ~~associated~~repaid ~~with~~on ~~the~~December ~~Senior~~3, ~~Notes~~2025, ~~recorded~~and asthe aoutstanding ~~reduction~~debt was extinguished. As of ~~long-term~~December 29, 2024, unamortized debt inissuance ~~the~~costs ~~consolidated~~associated ~~balance~~with ~~sheets,~~the Senior Notes were $2.8 million and ~~$3.4~~were ~~million~~recorded as a reduction of ~~December 29,~~long-term ~~2024~~debt ~~and~~in ~~December 31,~~the ~~2023,~~consolidated ~~respectively~~balance sheets.

Company-Owned Life Insurance

The fair value of Company-owned life insurance is measured on a readily determinable cash surrender value on a recurring basis. Company-owned life insurance is recorded at fair value within other assets in the consolidated balance sheets. Changes in the fair value of Company-owned life insurance are recognized in SG&A expenses in the consolidated statements of operations.

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Deferred Compensation Investments

Assets associated with the Company’s nonqualified savings plans are held in a rabbi trust and consist of investments in mutual funds and insurance contracts. The fair value of the mutual funds is derived from quoted prices in active markets. The fair value of the insurance contracts is based on observable inputs related to the performance measurement funds that shadow the deferral investment allocations made by participants in the nonqualified savings plans. These investments are recorded at fair value within other assets in the consolidated balance sheets. Changes in the fair value of the investments associated with the nonqualified savings plans are recognized in SG&A expenses in the consolidated statements of operations. See Note 1918 entitled “Employee Benefit Plans” for additional information on the Company’s nonqualified savings plans.

Syndicated Credit Facility and Senior Notes

The Company’s liabilities for borrowings under the ~~Syndicated Credit~~ Facility ~~(the “Facility”) and 5.50% Senior Notes due 2028 (the “Senior Notes”)~~ are not recorded at fair value in the consolidated balance sheets. The carrying value of borrowings under the Facility approximates fair value as the Facility bears variable interest rates that are similar to existing market rates. In the prior year, the Senior Notes obligation was not recorded at fair value in the consolidated balance sheets. The fair value of the Senior Notes iswas derived in prior year using quoted prices for similar instruments. See Note 9, entitled “Long-Term Debt” for additional information.

Other Assets and Liabilities

Due to the short maturity of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses, their carrying values approximate fair value. See Note 1918 entitled “Employee Benefit Plans” for additional information on defined benefit plan assets.

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NOTE 6 – INVENTORIES

Inventories are summarized as follows:

	End of Fiscal Year
	2024		2023
	2025		2024
	(in thousands)
Finished goods	$	~~192~~205,~~705~~115	$	~~201~~192,~~821~~705
Work-in-process	1817,~~552~~418		2018,~~892~~552
Raw materials	4952,~~324~~481		5649,~~366~~324
Inventories, net	$	~~260~~275,~~581~~014	$	~~279~~260,~~079~~581

Reserves for inventory obsolescence amounted to $3835.35 million and $3438.03 million as of December 2928, ~~2024~~2025 and December 3129, ~~2023~~2024, respectively, and have been netted against amounts presented above.

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NOTE 7 – PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consisted of the following:

	End of Fiscal Year
	2024		2023
	2025		2024
	(in thousands)
Land	$	1416,~~844~~362	$	1514,~~810~~844
Buildings and improvements	~~159~~167,~~741~~800		~~162~~159,~~359~~741
Equipment, furniture and fixtures(1)	~~533~~592,~~314~~086		533,~~418~~314
Computer software	6670,~~226~~042		66,~~792~~226
Construction-in-progress(2)	2140,~~394~~134		21,~~577~~394
	795,519		799,956
	886,424		795,519
Accumulated depreciation and amortization(3)	(513,145)		(508,816)
Accumulated depreciation and amortization(1)	(576,975)		(513,145)
Property, plant and equipment, net	$	~~282~~309,~~374~~449	$	~~291~~282,~~140~~374

(1) Includes ~~$13.1~~impact ~~million~~of ~~and~~finance ~~$11~~lease assets.~~9 million~~ ofSee ~~leased~~Note ~~equipment~~10 ~~for~~entitled ~~2024~~“Leases” ~~and~~for ~~2023,~~additional ~~respectively~~information.

(2) Primarily represents manufacturing equipment not yet placed in service ~~as of December 29, 2024 and December 31, 2023~~.

~~(3) Includes $5.0 million and $4.7 million of accumulated amortization on leased equipment for 2024 and 2023, respectively.~~64

Assets Disposed

On September 8, 2021, the Company announced a restructuring plan that involved the closure of its manufacturing facility in Thailand and committed to a plan to sell the Thailand facility in connection with this restructuring plan. See Note 16 entitled “Restructuring and Other” for additional information.

During the second quarter of 2023, the Company completed the sale of the Thailand facility for a selling price of $6.6 million and recognized a gain of $2.7 million, which is recorded in restructuring, asset impairment, other (gains) and charges in the consolidated statements of operations and is attributable to the EAAA reportable segment.

The Company determined that the Thailand facility sale did not meet the criteria for classification as discontinued operations.

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NOTE 8 – ACCRUED EXPENSES

Accrued expenses are summarized as follows:

	End of Fiscal Year
	2024		2023
	2025		2024
	(in thousands)
Compensation	$	97109,~~190~~627	$	8797,~~265~~190
Interest	~~1,276~~948		1,~~338~~276
Taxes	1315,~~762~~179		1813,~~300~~762
Accrued purchases	3,~~888~~341		53,~~141~~888
Warranty and sales allowances	53,~~254~~885		45,~~302~~254
Other	1314,~~626~~790		1413,~~544~~626
Accrued expenses	$	~~134~~147,~~996~~770	$	~~130~~134,~~890~~996

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NOTE 9 – LONG-TERM DEBT

Long-term debt consisted of the following:

	December 29, 2024				December 31, 2023
	December 28, 2025				December 29, 2024
	Outstanding Principal		Interest Rate(1)		Outstanding Principal		Interest Rate(1)
	(in thousands)				(in thousands)
Syndicated Credit Facility(2)
Syndicated Credit Facility
Term loan borrowings	$	5,564	5.62	%	$	121,658	6.61	%
Revolving loan borrowings	$	6,158	6.07	%	$	—	—	%
Total borrowings under Syndicated Credit Facility	5,564		5.62	%	121,658		6.61	%
Term loan borrowings	175,621		5.09	%	5,564		5.62	%
5.50% Senior Notes due 2028	300,000		5.50	%	300,000		5.50	%
Total borrowings under Syndicated Credit Facility	181,779		5.12	%	5,564		5.62	%
Total debt	305,564				421,658
5.50% Senior Notes (2)	—		—	%	300,000		5.50	%
Less: Unamortized debt issuance costs	(2,807)				(4,445)
Total debt	181,779				305,564
Total debt, net	302,757				417,213
Less: Unamortized debt issuance costs	(200)				(2,807)
Less: Current portion of long-term debt	(482)				(8,572)
Total debt, net	181,579				302,757
Total long-term debt, net	$	302,275			$	408,641
Less: Current portion of long-term debt	(8,778)				(482)
Total long-term debt, net	$	172,801			$	302,275

(1) Represents the weighted average rate of interest for borrowings under the Syndicated Credit Facility and the stated rate of interest for the 5.50% Senior Notes ~~due 2028,~~ without the effect of debt issuance costs.

(2) The ~~Syndicated~~Senior ~~Credit~~Notes ~~Facility also includes a multicurrency revolving loan facility as discussed below. There~~ were noredeemed ~~revolving loan borrowings outstanding as of~~ December 293, ~~2024~~2025. orSee ~~December 31,~~below ~~2023~~for additional information.

Syndicated Credit Facility

The Company’s Syndicated Facility Agreement (“Facility”) provides to the Company U.S. denominated and multicurrency term loans and provides to the Company and certain of its subsidiaries a multicurrency revolving credit facility. AtEach ~~December 29,~~of ~~2024,~~ the ~~Facility provided to the~~ Company’s ~~and~~material ~~certain~~domestic ~~of its~~ subsidiaries aguarantee ~~multicurrency~~the ~~revolving~~obligations ~~loan~~of ~~facility~~the upCompany tounder ~~$300.0~~its ~~million, as well as other U~~Facility.S. ~~denominated and multicurrency term loans.~~ At December 2928, ~~2024~~2025, the Company had available borrowing capacity of $~~299~~243.32 million under the revolving loan facility.

Significant Credit Facility ~~Amendments~~ Amendment

On ~~October~~December 143, ~~2022~~2025, the Company entered into athe ~~fifth~~third ~~amendment~~amended toand ~~its~~restated Facility agreement. The ~~fifth~~ amendment provided for, among other changes, the following ~~amendments to the Facility~~:

•~~the~~adding ~~amendment~~a ofnew ~~the~~term ~~maturity~~loan ~~date~~facility in an aggregate principal amount of ~~the~~$170 million ~~Facility~~(“Term toLoan”), ~~October~~which ~~2027;~~was ~~and~~fully drawn on December 3, 2025;

•~~amendments~~extending ~~to replace~~ the ~~LIBOR~~maturity ~~benchmark~~date ~~interest~~of ~~rates~~the ~~applicable~~Facility to ~~all~~December ~~loans~~3, ~~denominated in U.S. dollars with the SOFR benchmark interest rates.~~ 2030;

64•reducing the revolving credit facility from $300 million to $250 million;

•reducing the maximum unused facility commitment fee to 0.30%; and

•amending the interest rates applicable to Base Rate loans and Secured Overnight Financing Rate ("SOFR") loans as discussed in more detail below in “Interest Rates and Fees”.

See the section below entitled “Debt Issuance and Extinguishment costs” for the accounting treatment of fees and charges incurred in connection with this amendment.

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Interest Rates and Fees

Base rate loans, as defined in the amended Facility, represent short-term borrowings with applicable interest rates determined as the greater of the federal funds rate plus a margin, the prime rate, or SOFR plus a margin. Interest on base rate loans is charged at varying rates computed by applying a margin ranging from 0.25125% to 21.00%, depending on the Company’s consolidated net leverage ratio as of the most recently completed fiscal quarter. Interest on SOFR-based and alternative currency loans are charged at varying rates computed by applying a margin ranging from 1.25125% to 32.00% over the applicable SOFR rate or alternative currency rate, depending on the Company’s consolidated net leverage ratio as of the most recently completed fiscal quarter. In addition, the Company pays a commitment fee ranging from 0.20% to 0.4030% per annum (depending on the Company’s consolidated net leverage ratio as of the most recently completed fiscal quarter) on the unused portion of the Facility.

Fees for commercial letters of credit are computed as 1.00% per annum of the daily amount available to be drawn under such letters of credit. Fees for standby letters of credit are charged at varying rates computed by applying a margin ranging from 1.25125% to 32.00% per annum of the amount available to be drawn under such standby letters of credit, depending on the Company’s consolidated net leverage ratio as of the most recently completed fiscal quarter.

Covenants

•create or incur liens on assets;

•make acquisitions of or investments in businesses (in excess of certain specified amounts);

•engage in any material line of business substantially different from the Company’s current lines of business;

•incur indebtedness or contingent obligations;

•sell or dispose of assets (in excess of certain specified amounts);

•pay dividends or repurchase the Company’s stock (in excess of certain specified amounts);

•repay other indebtedness prior to maturity unless the Company meets certain conditions; and

•enter into sale and leaseback transactions.

The Facility also requires the Company to remain in compliance with the following financial covenants as of the end of each fiscal quarter, based on the Company’s consolidated results for the ~~year~~four ~~then~~fiscal quarters most recently ended:

•Consolidated Secured Net Leverage Ratio: Must be no greater than 3.00:1.00.

•Consolidated Interest Coverage Ratio: Must be no less than 2.25:1.00.

Under the amended Facility, the Company is required to make quarterly amortization payments of the term loan borrowings, which will commence the first quarter of 2026. The amortization payments are due on the last day of the calendar quarter.

Events of Default

If the Company breaches or fails to perform any of the affirmative or negative covenants under the Facility, or if other specified events occur (such as a bankruptcy or similar event or a change of control of Interface, Inc. or certain subsidiaries, or if the Company breaches or fails to perform any covenant or agreement contained in any instrument relating to any of the Company’s other indebtedness exceeding $20 million), after giving effect to any applicable notice and right to cure provisions, an event of default will exist. If an event of default exists and is continuing, the lenders’ Administrative Agent may, and upon the written request of a specified percentage of the lender group shall:

•declare all commitments of the lenders under the facility terminated;

•declare all amounts outstanding or accrued thereunder immediately due and payable; and

•exercise other rights and remedies available to them under the agreement and applicable law.

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Collateral

Pursuant to a ~~Second~~Third Amended and Restated Security and Pledge Agreement, the Facility is secured by substantially all of the assets of the Company and its domestic subsidiaries (subject to exceptions for certain immaterial subsidiaries), including all of the stock of the Company’s domestic subsidiaries and up to 65% of the stock of certain material foreign subsidiaries. If an event of default occurs under the Facility, the lenders’ Administrative Agent may, upon the request of a specified percentage of lenders, exercise remedies with respect to the collateral, including, in some instances, ~~foreclosing mortgages on real estate assets,~~ taking possession of or selling personal property assets, collecting accounts receivable, or exercising proxies to take control of the pledged stock of domestic and certain material foreign subsidiaries.

As of December 2928, ~~2024~~2025 and December 3129, ~~2023~~2024, the Company had $0.76 million and $10.67 million, respectively, in letters of credit outstanding under the Facility.

~~Under~~The ~~the~~Company ~~Facility,~~is ~~the~~in ~~Company~~compliance iswith ~~required~~all tocovenants ~~make~~under ~~quarterly~~the ~~amortization~~Facility ~~payments~~as of ~~the~~December 28, ~~term~~2025, ~~loan~~and ~~borrowings.~~anticipates ~~The~~that ~~amortization~~it ~~payments~~will ~~are~~remain ~~due~~in oncompliance with the ~~last~~covenants ~~day~~for of the ~~calendar~~foreseeable ~~quarter~~future.

~~The~~Redemption ~~Company is in compliance with all covenants under the Facility as~~ of ~~December~~Senior ~~29, 2024, and anticipates that it will remain in compliance with the covenants for the foreseeable future.~~Notes

On December 3, 2025, the Company redeemed all of its $300 million outstanding 5.50% Senior Notes. ~~due~~The ~~2028~~Senior Notes were redeemed using the proceeds from term loan borrowings under the amended Facility and cash on hand. The redemption price was 100% of the principal amount, plus accrued and unpaid interest. See below for amounts recognized upon extinguishment.

AsDebt ofIssuance ~~December 29, 2024, the Company had $300.0 million of Senior Notes outstanding. The Senior Notes bear an interest rate at 5.50% per annum~~ and ~~mature~~Extinguishment ~~on December 1, 2028. Interest is paid semi-annually on June 1 and December 1 of each year.~~ Costs

~~The~~In ~~Senior~~connection ~~Notes~~with ~~are~~the ~~unsecured~~December ~~and~~3, ~~are~~2025 ~~guaranteed,~~Facility ~~jointly~~amendment and ~~severally,~~Senior byNotes ~~each of the Company’s material domestic subsidiaries~~redemption, ~~all~~below ofis ~~which~~a ~~also~~summary ~~guarantee the obligations~~ of the ~~Company~~fees ~~under~~and ~~its~~expenses ~~Facility.~~incurred:

Redemption


	Financial Statement Location	Revolving Loans		Term Loans		Senior Notes (1)		Total
	(in thousands)
Capitalization of debt issuance costs - revolving loans	Other assets	$	1,099	$	—	$	—	$	1,099
Capitalization of debt issuance costs - term loans	Long-term debt	—		203		—		203
Loss on debt extinguishment(2)	Interest expense	293		—		2,147		2,440
Other debt extinguishment costs	Interest expense	—		620		—		620

~~On or after December 1, 2023, the Company may redeem the Senior Notes, in whole or in part, at any time at the redemption prices listed below, plus accrued and unpaid interest, if any, to~~ (~~but excluding~~1) Represents ~~the redemption date, if redeemed during the 12~~write-~~month~~off ~~period commencing on December 1~~ of ~~the~~unamortized ~~years~~debt ~~set~~issuance ~~forth below:~~costs.

Period	Redemption Price
2023	102.750	%
2024	101.375	%
2025 and thereafter	100.000	%

(2) Revolving loan amounts pertain to the partial write-off of unamortized debt issuance costs due to lender changes in the Facility.

InDebt ~~addition,~~issuance ~~the~~costs ~~Company~~related ~~had~~to the ~~option~~revolving todebt ~~redeem~~include upunderwriting tofees, ~~35%~~legal, ofand ~~the~~other ~~aggregate~~direct ~~principal~~costs ~~amount~~associated ofwith the ~~Senior~~issuance ~~Notes~~of ~~before~~debt. ~~December~~These 1,unamortized ~~2023~~amounts ~~with~~are ~~the~~included ~~proceeds~~in ofother ~~certain~~assets ~~equity~~in ~~offerings~~the atCompany’s aconsolidated ~~redemption~~balance ~~price of 105~~sheets.~~50%,~~ ~~plus~~The ~~accrued~~Company ~~and~~amortizes ~~unpaid~~these ~~interest,~~costs ifover ~~any,~~the tolife ~~(but~~of ~~excluding)~~ the ~~redemption~~related ~~date~~debt.

IfDebt issuance costs associated with term loans under the ~~Company~~Facility ~~experiences~~and the prior Senior Notes are reflected as a ~~change~~reduction of ~~control,~~long-term debt in the Company’s ~~will~~consolidated bebalance ~~required~~sheets. toThese ~~offer~~fees toare ~~purchase~~amortized straight-line, which approximates the ~~Senior~~effective ~~Notes~~interest atmethod, ~~101%~~and over the life of ~~their~~the ~~principal~~outstanding ~~amount~~borrowing, ~~plus~~the ~~accrued~~debt ~~and~~balance ~~unpaid~~will ~~interest~~increase toby ~~(but~~the ~~excluding)~~same amount as the ~~date~~fees ofthat ~~repurchase~~are amortized.

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Covenants

The indenture governing the Senior Notes contains standard and customary covenants for agreements of this type, including various reporting, affirmative and negative covenants. Among other things, these covenants limit the Company’s and its subsidiaries’ ability to:

•incur additional indebtedness;

•declare or pay dividends, redeem stock or make other distributions to shareholders;

•make investments;

•create liens on their assets or use their assets as security in other transactions;

•enter into mergers, consolidations or sales, transfers, leases or other dispositions of all or substantially all of the Company’s assets;

•enter into certain transactions with affiliates; and

•sell or transfer certain assets.

The Company is in compliance with all covenants under the indenture governing the Senior Notes and anticipates that it will remain in compliance with the covenants for the foreseeable future.

Events of Default

If the Company breaches or fails to perform any of the affirmative or negative covenants under the indenture governing the Senior Notes, or if other specified events occur (such as a bankruptcy or similar event), after giving effect to any applicable notice and right to cure provisions, an event of default will exist. If an event of default exists and is continuing, the terms of the indenture permit the trustee or the holders of at least 25% in principal amount of outstanding Senior Notes to declare the principal, premium, if any, and accrued but unpaid interest on all the Senior Notes to be due and payable.

Debt Issuance Costs

Debt issuance costs associated with the Company’s Senior Notes and term loans under the Facility are reflected as a reduction of long-term debt in accordance with applicable accounting standards. These fees are amortized straight-line, which approximates the effective interest method, and over the life of the outstanding borrowing, the debt balance will increase by the same amount as the fees that are amortized. As of December 29, 2024 and December 31, 2023, the unamortized debt issuance costs recorded as a reduction of long-term debt were $2.8 million and $4.4 million, respectively. Expenses related to such costs for the years 2024, 2023 and 2022 amounted to $1.7 million, $1.7 million, and $1.2 million, respectively.

Debt issuance costs related to the issuance of revolving debt, which include underwriting, legal and other direct costs, net of accumulated amortization, were $1.1 million and $1.4 million, as of December 29, 2024 and December 31, 2023, respectively. These amounts are included in other assets in the Company’s consolidated balance sheets. The Company amortizes these costs over the life of the related debt. Expenses related to such costs amounted to $0.4 million for each of the years 2024, 2023 and 2022.

Future Maturities

The aggregate maturities of borrowings ~~are~~outstanding at December 28, 2025 were as follows:

Fiscal Year	Amount
	(in thousands)
2025	$	482
2026	$	8,781
2026	482
2027	8,781
2027	4,600
2028	8,781
2028	300,000
2029	8,781
Total debt	$	305,564
2030	146,655
Total debt	$	181,779

Total long-term debt in the consolidated balance sheets includes a reduction for unamortized debt issuance costs, ~~of $2.8 million~~ which are excluded from the maturities table above.

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NOTE 10 – ~~DERIVATIVE INSTRUMENTS~~LEASES

Interest Rate Risk Management

From time to time, the Company enters into interest rate swap transactions to fix the variable interest rate on a portion of its term loan borrowing in order to manage a portion of its exposure to interest rate fluctuations. The Company’s objective and strategy with respect to these interest rate swaps is to protect the Company against adverse fluctuations in interest rates by reducing its exposure to variability to cash flows relating to interest payments on a portion of its outstanding debt.

Cash Flow Interest Rate Swaps

In the fourth quarter of 2020, the Company terminated its designated interest rate swap transactions with a total notional value of $250 million. Hedge accounting was also discontinued at that time. Losses recorded in accumulated other comprehensive loss for these terminated interest rate swaps are reclassified and recorded in the consolidated statements of operations to the extent it is probable that a portion of the original forecasted transactions related to the portion of the hedged debt repaid will not occur by the end of the originally specified time period. See Note 21 entitled “Items Reclassified From Accumulated Other Comprehensive Loss” for additional information.

All amounts related to the terminated interest rate swaps have been recognized in the consolidated statements of operations and there was no remaining balance in accumulated other comprehensive loss associated with the terminated interest rate swaps at December 29, 2024.

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NOTE 11 – LEASES

General

The Company has operating and finance leases for manufacturing equipment, corporate offices, showrooms, vehicles, distribution facilities, design centers, as well as computer and office equipment. The Company’s leases have terms ranging from 1 to 20 years, some of which may include options to extend the lease term for up to 5 years, and certain leases may include an option to terminate the lease. Our lease accounting may include these options to extend or terminate a lease when it is reasonably certain that we will exercise that option.

As of December 2928, ~~2024~~2025, there were no significant leases that had not commenced.

The table below represents a summary of the balances recorded in the consolidated balance sheets related to the Company’s leases as of December 2928, ~~2024~~2025 and December 3129, ~~2023~~2024:

December 29, 2024

December 31, 2023

December 28, 2025

December 29, 2024

Balance Sheet Location

Operating Leases

Finance Leases

Operating Leases

Finance Leases

(in thousands)

Operating lease right-of-use assets

7678,~~815~~191

8776,~~519~~815

Current portion of operating lease liabilities

1215,~~296~~748

12,~~347~~296

Operating lease liabilities

6867,~~092~~205

7868,~~269~~092

Total operating lease liabilities

8082,~~388~~953

9080,~~616~~388

Property, plant and equipment, net

89,~~079~~574

78,~~236~~079

Accrued expenses

23,~~657~~155

2,~~587~~657

Other long-term liabilities

56,~~797~~817

5,~~035~~797

Total finance lease liabilities

89,~~454~~972

78,~~622~~454

Lease Costs

Fiscal Year

2024

2023

2022

2025

2024

2023

(in thousands)

Finance lease cost:

Amortization of right-of-use assets

3,~~079~~477

23,~~808~~079

2,~~238~~808

Interest on lease liabilities

~~457~~561

~~319~~457

~~164~~319

Operating lease cost

1920,~~495~~305

1819,~~850~~495

18,~~916~~850

Short-term lease cost

~~827~~557

~~1,143~~827

~~849~~1,143

Variable lease cost

23,~~824~~467

2,~~509~~824

2,~~692~~509

Total lease cost

2628,~~682~~367

2526,~~629~~682

2425,~~859~~629

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Other Supplemental Information

Fiscal Year

2024

2023

2022

2025

2024

2023

(in thousands)

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows from finance leases

~~431~~534

~~237~~431

~~128~~237

Operating cash flows from operating leases

1718,~~246~~603

1517,~~552~~246

1815,~~080~~552

Financing cash flows from finance leases

23,~~913~~059

2,~~419~~913

2,~~089~~419

Right-of-use assets obtained in exchange for new finance lease liabilities

3,~~993~~978

3,~~612~~993

3,~~436~~612

Right-of-use assets obtained in exchange for new operating lease liabilities

410,~~598~~159

154,~~561~~598

915,~~307~~561

Lease Term and Discount Rate

The table below presents the weighted average remaining lease terms and discount rates for finance and operating leases as of December 2928, ~~2024~~2025 and December 3129, ~~2023~~2024:

	End of Fiscal Year
	2024		2023
	2025		2024
Weighted-average remaining lease term – finance leases (in years)	34.6107		3.7061
Weighted-average remaining lease term – operating leases (in years)	7.6805		87.2968
Weighted-average discount rate – finance leases	6.4452	%	56.5144	%
Weighted-average discount rate – operating leases	6.3933	%	6.2539	%

Maturity Analysis

A maturity analysis of lease payments under non-cancellable leases is presented as follows:

Fiscal Year	Operating Leases		Finance Leases
	(in thousands)
2025	$	16,724	$	3,096
2026	$	20,284	$	3,696
2026	16,746		2,597
2027	17,250		3,010
2027	13,863		2,018
2028	13,492		2,046
2028	11,077		1,151
2029	11,435		1,101
2029	9,506		504
2030	8,723		539
Thereafter	3432,~~706~~450		~~146~~972
Total future minimum lease payments (undiscounted)	~~102~~103,~~622~~634		911,~~512~~364
Less: Present value discount	(2220,~~234~~681)		(1,~~058~~392)
Total lease liabilities	$	8082,~~388~~953	$	89,~~454~~972

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NOTE 12 – GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill

The Company has two operating and reportable segments – namely AMS and EAAA. See Note 20 entitled “Segment Information” for additional information. The Company tests goodwill for impairment at least annually at the reporting unit level. The Company’s reporting units consist of (1) the Americas, (2) Europe, Middle East and Africa (“EMEA”), and (3) Asia-Pacific. The Americas reporting unit is the same as the AMS reportable segment, and the EMEA and Asia-Pacific reporting units are one level below the EAAA reportable segment.

During the fourth quarter of 2024 and 2023 we performed our annual quantitative goodwill impairment testing. We focused our testing on the Americas reporting unit because it is the only reporting unit with an allocated goodwill balance. The allocated goodwill balances for our EMEA and Asia-Pacific reporting units were written off in prior years as a result of goodwill impairment charges. The Company performed limited procedures for our EMEA and Asia-Pacific reporting units during the 2024 and 2023 goodwill testing to facilitate a reconciliation of market capitalization.

The annual quantitative goodwill impairment testing performed in 2024 and 2023 for our Americas reporting unit was consistent with our prior year methodology. The Company prepared valuations for the Americas reporting unit on both a market comparable methodology and an income methodology, utilizing a combination of the present value of expected future cash flows and the guideline public company method to determine the estimated fair value of the reporting unit. In preparing the valuation, past, present and future expectations of performance were considered, including our expectations for the short-term and long-term impacts of macroeconomic conditions and our expected financial performance, including planned revenue and operating income for the Americas reporting unit. The present value model requires management to estimate future cash flows, the timing of these cash flows, and a discount rate based on a weighted average cost of capital. The discount rate used for the Americas reporting unit was 10.5% in 2024 compared to 11.5% in 2023, which fluctuated based on a lower risk premium assigned to estimates of expected future performance. There is inherent uncertainty associated with key assumptions and estimates used in our impairment testing, including the impact of macroeconomic conditions.

As a result of our 2024 annual goodwill impairment testing, we determined that the fair value of our Americas reporting unit exceeded its carrying value by 132% at the 2024 measurement date, and therefore no impairment was indicated. Improved expectations of financial performance for the Americas reporting unit and a lower discount rate contributed to a higher estimated fair value of our Americas reporting unit for 2024. The consolidated goodwill balance of $99.9 million at December 29, 2024 is allocated entirely to our Americas reporting unit.

During the fourth quarter of 2022, the Company performed the annual goodwill impairment test, consistent with prior years. The Company performed this test at the reporting unit level, which is an operating segment or one level below the operating segment level. In performing the impairment testing for each reporting unit, the Company prepared valuations of reporting units on both a market comparable methodology and an income methodology, and those valuations were compared with the respective carrying values of the reporting units to determine whether any goodwill impairment existed. In preparing the valuations, past, present and future expectations of performance were considered, including the ongoing impact of the COVID-19 pandemic in 2022. As a result of our 2022 testing, we determined that the carrying value of our EMEA reporting unit exceeded its fair value and that the associated goodwill was impaired at the measurement date. We recorded a goodwill impairment charge of $29.4 million in 2022 to write off all the goodwill allocated to our EMEA reporting unit. Macroeconomic factors, including inflation, foreign currency exchange rates, and the expected impact to planned revenue and operating income contributed to the lower estimated fair value of our EMEA reporting unit. Higher discount rates also contributed to the lower fair value of our reporting units. We determined that the fair value of our Americas reporting unit exceeded its carrying value by 71% at the 2022 measurement date, and therefore no impairment was indicated. The remaining goodwill balance of $102.4 million at January 1, 2023, was allocated to our Americas reporting unit. The goodwill balance allocated to our Asia-Pacific reporting unit was previously written off in connection with the 2020 goodwill impairment.

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~~The~~NOTE ~~ending~~11 ~~balances~~– ~~and~~GOODWILL ~~the~~AND ~~changes~~OTHER inINTANGIBLE ~~the carrying amounts of goodwill allocated to each reportable segment for the years ended December 29, 2024 and December 31, 2023 are as follows(1):~~ASSETS

	AMS		EAAA		Total
	(in thousands)
Goodwill balance, at January 1, 2023	$	102,417	$	—	$	102,417
Foreign currency translation(2)	3,031		—		3,031
Goodwill balance, at December 31, 2023	105,448		—		105,448
Foreign currency translation(2)	(5,561)		—		(5,561)
Goodwill balance, at December 29, 2024	$	99,887	$	—	$	99,887

Goodwill

~~(1)~~The ~~Goodwill~~Company ~~balances~~has ~~are~~two ~~presented~~operating ~~net~~and ofreportable ~~cumulative~~segments ~~impairment~~– ~~losses~~namely ofAMS ~~$358~~and EAAA.~~5 million~~ asSee ofNote ~~December 29,~~19 ~~2024~~entitled “Segment Information” for additional information. The ~~cumulative~~Company ~~impairment~~tests ~~losses~~goodwill ~~include~~for impairment ~~charges~~at ~~recognized~~least ~~prior~~annually toat ~~2020~~the ~~related~~reporting tounit ~~discontinued~~level. ~~operations~~The ~~that~~Company’s ~~were~~reporting ~~allocated~~units toconsist of (1) the ~~current~~Americas, (2) Europe, Middle East and Africa (“EMEA”), and (3) Asia-Pacific. The Americas reporting unit is the same as the AMS reportable ~~segments~~segment, onand athe ~~proportionate~~EMEA ~~basis~~and Asia-Pacific reporting units are one level below the EAAA reportable segment.

During the fourth quarter of 2025, 2024, and 2023 we performed our annual quantitative goodwill impairment testing. We focused our testing on the Americas reporting unit because it is the only reporting unit with an allocated goodwill balance. The allocated goodwill balances for our EMEA and Asia-Pacific reporting units were written off in prior years as a result of goodwill impairment charges. The Company performed limited procedures for our EMEA and Asia-Pacific reporting units during the 2025, 2024, and 2023 goodwill testing to facilitate a reconciliation of market capitalization.

The annual quantitative goodwill impairment testing performed in 2025, 2024, and 2023 for our Americas reporting unit used a consistent methodology. The Company prepared valuations for the Americas reporting unit on both a market comparable methodology and an income methodology, utilizing a combination of the present value of expected future cash flows and the guideline public company method to determine the estimated fair value of the reporting unit. In preparing the valuation, past, present and future expectations of performance were considered, including our expectations for the short-term and long-term impacts of macroeconomic conditions and our expected financial performance, including planned revenue and operating income for the Americas reporting unit. The present value model requires management to estimate future cash flows, the timing of these cash flows, and a discount rate based on a weighted average cost of capital.

For 2025, 2024, and 2023 the fair value of the Americas reporting unit was substantially in excess of the carrying value and is not at risk of failing the quantitative impairment test.

The ending balances and the changes in the carrying amounts of goodwill allocated to each reportable segment for the years ended December 28, 2025 and December 29, 2024, are as follows(1):


	AMS		EAAA		Total
	(in thousands)
Goodwill balance, at December 31, 2023	$	105,448	$	—	$	105,448
Foreign currency translation(2)	(5,561)		—		(5,561)
Goodwill balance, at December 29, 2024	99,887		—		99,887
Foreign currency translation(2)	12,240		—		12,240
Goodwill balance, at December 28, 2025	$	112,127	$	—	$	112,127

(1) Goodwill balances are presented net of cumulative impairment losses of $358.5 million as of December 28, 2025. The cumulative impairment losses include impairment charges recognized prior to 2020 related to discontinued operations that were allocated to the current reportable segments on a proportionate basis.

(2) A portion of the goodwill balance allocated to the AMS reportable segment is comprised of goodwill denominated in foreign currency attributable to the nora acquisition.

Other Intangible Assets

During the fourth quarter of 2025, 2024, and 2023, the Company performed its annual impairment testing of the trademark and trade name intangible assets. The Company prepared valuations of the intangible assets using the present value of cash flows under the relief from royalty method, which requires management to estimate forecasted revenues and a discount rate. The intangible asset required rate of return used in the 2025, 2024, and 2023 annual impairment testing were 11.0%, 11.5%, 12.5%, respectively. We determined that the estimated fair value of the trademark and trade name intangible assets exceeded the carrying value and that no impairment existed at the 2025, 2024, or 2023 measurement dates.

In the fourth quarter of 2022, we determined that the trademark and trade name intangible assets related to the acquired nora business were impaired and recognized an impairment loss of $6.3 million. The impairment loss consisted of charges of $3.6 million and $2.7 million attributable to the AMS and EAAA reportable segments, respectively.

The Company’s intangible assets other than goodwill consisted of the following as of December 29, 2024 and December 31, 2023:

	December 29, 2024								December 31, 2023
	Gross Carrying Amount		Accumulated Impairment		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Impairment		Accumulated Amortization		Net Carrying Amount
	(in thousands)
Intangible assets subject to amortization(1):
Technology	$	34,429	$	—	$	(31,522)	$	2,907	$	37,198	$	—	$	(28,845)	$	8,353
Other	723		(478)		(34)		211		734		(478)		(20)		236
Total intangible assets subject to amortization	35,152		(478)		(31,556)		3,118		37,932		(478)		(28,865)		8,589
Indefinite-lived intangible assets(1):
Trademarks and trade names	56,236		(11,081)		—		45,155		58,747		(11,081)		—		47,666
Total intangible assets	$	91,388	$	(11,559)	$	(31,556)	$	48,273	$	96,679	$	(11,559)	$	(28,865)	$	56,255

(1) Certain intangible asset balances are subject to changes attributable to foreign currency translation.

Amortization expense related to intangible assets during the years 2024, 2023 and 2022 was $5.2 million, $5.2 million and $5.0 million, respectively, and is recorded in cost of sales in the consolidated statements of operations. Amortization expense related to intangible assets is expected to be approximately $3.0 million for fiscal year 2025. The developed technology intangible asset is amortized over its estimated useful life, which ends in fiscal year 2025.

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~~NOTE~~The 13Company’s –intangible ~~PREFERRED~~assets ~~STOCK~~other than goodwill consisted of the following as of December 28, 2025 and December 29, 2024:

The Company is authorized to designate and issue up to 5,000,000 shares of $1.00 par value preferred stock in one or more series and to determine the rights and preferences of each series, to the extent permitted by the Articles of Incorporation, and to fix the terms of such preferred stock without any vote or action by the shareholders. The issuance of any series of preferred stock may have an adverse effect on the rights of holders of common stock and could decrease the amount of earnings and assets available for distribution to holders of common stock. In addition, any issuance of preferred stock could have the effect of delaying, deferring or preventing a change in control of the Company. As of December 29, 2024, and December 31, 2023, there were no shares of preferred stock issued.


	December 28, 2025								December 29, 2024
	Gross Carrying Amount		Accumulated Impairment		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Impairment		Accumulated Amortization		Net Carrying Amount
	(in thousands)
Intangible assets subject to amortization(1):
Technology	$	35,046	$	—	$	(35,046)	$	—	$	34,429	$	—	$	(31,522)	$	2,907
Other	749		(478)		(67)		204		723		(478)		(34)		211
Total intangible assets subject to amortization	35,795		(478)		(35,113)		204		35,152		(478)		(31,556)		3,118

Indefinite-lived intangible assets(1):
Trademark and trade name	61,762		(11,081)		—		50,681		56,236		(11,081)		—		45,155

Total intangible assets	$	97,557	$	(11,559)	$	(35,113)	$	50,885	$	91,388	$	(11,559)	$	(31,556)	$	48,273

(1) Certain intangible asset balances are subject to changes attributable to foreign currency translation.

Amortization expense related to intangible assets during the years 2025, 2024 and 2023 was $3.1 million, $5.2 million and $5.2 million, respectively, and is recorded in cost of sales in the consolidated statements of operations. The developed technology intangible asset was amortized over its estimated useful life of 7 years and was fully amortized during fiscal year 2025.

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NOTE 1412 – ~~SHAREHOLDERS’~~PREFERRED ~~EQUITY~~STOCK

The Company is authorized to designate and issue ~~120~~up ~~million~~to 5,000,000 shares of $01.1000 par value ~~Common~~preferred ~~Stock~~stock in one or more series and to determine the rights and preferences of each series, to the extent permitted by the Articles of Incorporation, and to fix the terms of such preferred stock without any vote or action by the shareholders. The ~~Company’s~~issuance ~~Common~~of ~~Stock~~any isseries ~~traded~~of preferred stock may have an adverse effect on the ~~Nasdaq~~rights ~~Global~~of ~~Select~~holders ~~Market~~of ~~under~~common stock and could decrease the ~~symbol~~amount ~~TILE~~of earnings and assets available for distribution to holders of common stock. In addition, any issuance of preferred stock could have the effect of delaying, deferring or preventing a change in control of the Company. As of December 28, 2025, and December 29, 2024, there were no shares of preferred stock issued.

The Company paid cash dividends totaling $0.04 per share, including participating securities, in each of years 2024, 2023 and 2022. The future declaration and payment of dividends is at the discretion of the Company’s Board, and depends upon, among other things, the Company’s investment policy and opportunities, results of operations, financial condition, cash requirements, future prospects, and other factors that may be considered relevant at the time of the Board’s determination. Such other factors include limitations contained in the agreement for its Syndicated Credit Facility and the indenture governing its 5.50% Senior Notes due 2028, which specify conditions as to when any dividend payments may be made. As such, the Company may discontinue its dividend payments in the future if its Board determines that a cessation of dividend payments is appropriate in light of the factors indicated above.

In the second quarter of 2022, the Company adopted a new share repurchase program in which the Company is authorized to repurchase up to $100 million of its outstanding shares of common stock. The program has no specific expiration date. No shares of common stock were repurchased pursuant to this program during 2024 or 2023. During 2022, the Company repurchased and retired an aggregate of 1,383,682 shares, at a weighted average price of $12.41 per share, pursuant to this program. All treasury stock is accounted for using the cost method.

The following tables depict the activity in the accounts which make up shareholders’ equity for fiscal years 2024, 2023 and 2022:

	SHARES	COMMON STOCK		ADDITIONALPAID-INCAPITAL		RETAINEDEARNINGS		PENSIONLIABILITY		FOREIGNCURRENCYTRANSLATIONADJUSTMENT		TOTAL
	(in thousands)
Balance, at December 31, 2023	58,112	$	5,811	$	252,909	$	320,833	$	(34,016)	$	(119,590)	$	425,947
Net income	—	—		—		86,946		—		—		86,946
Issuances of stock related to restricted share units and performance shares	479	48		(48)		—		—		—		—
Restricted stock issuances	58	6		941		—		—		—		947
Unrecognized compensation expense related to restricted stock awards	—	—		(946)		—		—		—		(946)
Cash dividends declared	—	—		—		(2,338)		—		—		(2,338)
Compensation expense related to share-based plans, net of forfeitures and shares received for tax withholdings	(345)	(35)		8,172		—		—		—		8,137
Pension liability adjustment	—	—		—		—		(5,818)		—		(5,818)
Foreign currency translation adjustment	—	—		—		—		—		(23,727)		(23,727)
Balance, at December 29, 2024	58,304	$	5,830	$	261,028	$	405,441	$	(39,834)	$	(143,317)	$	489,148

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	SHARES	COMMON STOCK		ADDITIONALPAID-INCAPITAL		RETAINEDEARNINGS		PENSIONLIABILITY		FOREIGNCURRENCYTRANSLATIONADJUSTMENT		CASH FLOWHEDGE		TOTAL
	(in thousands)
Balance, at January 1, 2023	58,106	$	5,811	$	244,159	$	278,639	$	(27,548)	$	(138,775)	$	(749)	$	361,537
Net income	—	—		—		44,517		—		—		—		44,517
Issuances of stock related to restricted share units and performance shares	85	8		(8)		—		—		—		—		—
Restricted stock issuances	107	11		749		—		—		—		—		760
Unrecognized compensation expense related to restricted stock awards	—	—		(760)		—		—		—		—		(760)
Cash dividends declared	—	—		—		(2,323)		—		—		—		(2,323)
Compensation expense related to share-based plans, net of forfeitures and shares received for tax withholdings	(186)	(19)		8,769		—		—		—		—		8,750
Pension liability adjustment	—	—		—		—		(6,468)		—		—		(6,468)
Foreign currency translation adjustment	—	—		—		—		—		19,185		—		19,185
Reclassification out of accumulated other comprehensive loss – discontinued cash flow hedge	—	—		—		—		—		—		749		749
Balance, at December 31, 2023	58,112	$	5,811	$	252,909	$	320,833	$	(34,016)	$	(119,590)	$	—	$	425,947

NOTE 13 – SHAREHOLDERS’ EQUITY

	SHARES	COMMON STOCK		ADDITIONALPAID-INCAPITAL		RETAINEDEARNINGS		PENSIONLIABILITY		FOREIGNCURRENCYTRANSLATIONADJUSTMENT		CASH FLOWHEDGE		TOTAL
	(in thousands)
Balance, at January 2, 2022	59,055	$	5,905	$	253,110	$	261,434	$	(53,888)	$	(100,441)	$	(2,722)	$	363,398
Net income	—	—		—		19,560		—		—		—		19,560
Restricted stock issuances	501	50		6,499		—		—		—		—		6,549
Unrecognized compensation expense related to restricted stock awards	—	—		(6,549)		—		—		—		—		(6,549)
Cash dividends declared	—	—		—		(2,355)		—		—		—		(2,355)
Compensation expense related to share-based plans, net of forfeitures	(66)	(6)		8,132		—		—		—		—		8,126
Share repurchases	(1,384)	(138)		(17,033)		—		—		—		—		(17,171)
Pension liability adjustment	—	—		—		—		26,340		—		—		26,340
Foreign currency translation adjustment	—	—		—		—		—		(38,334)		—		(38,334)
Reclassification out of accumulated other comprehensive loss – discontinued cash flow hedge	—	—		—		—		—		—		1,973		1,973
Balance, at January 1, 2023	58,106	$	5,811	$	244,159	$	278,639	$	(27,548)	$	(138,775)	$	(749)	$	361,537

The Company is authorized to issue 120 million shares of $0.10 par value Common Stock. The Company’s Common Stock is traded on the Nasdaq Global Select Market under the symbol TILE.

The Company paid cash dividends during 2025 totaling $0.06 per share and $0.04 per share for 2024 and 2023, including participating securities. The future declaration and payment of dividends is at the discretion of the Company’s Board, and depends upon, among other things, the Company’s investment policy and opportunities, results of operations, financial condition, cash requirements, future prospects, and other factors that may be considered relevant at the time of the Board’s determination. Such other factors include limitations contained in the agreement for its Syndicated Credit Facility, which specify conditions as to when any dividend payments may be made. As such, the Company may discontinue its dividend payments in the future if its Board determines that a cessation of dividend payments is appropriate in light of the factors indicated above.

In May 2022, the Company adopted a new share repurchase program in which the Company is authorized to repurchase up to $100 million of its outstanding shares of common stock. The program has no specific expiration date. During fiscal year 2025, the Company repurchased 750,166 shares of common stock at a weighted average price of $24.23 per share pursuant to this program. No shares of common stock were repurchased pursuant to this program during 2024 or 2023. All treasury stock is accounted for using the cost method.

The following tables depict the activity in the accounts which make up shareholders’ equity for fiscal years 2025, 2024 and 2023:


	SHARES	COMMON STOCK		ADDITIONAL PAID-IN CAPITAL		RETAINED EARNINGS		PENSION LIABILITY		FOREIGN CURRENCY TRANSLATION ADJUSTMENT		TOTAL
	(in thousands)
Balance, at December 29, 2024	58,304	$	5,830	$	261,028	$	405,441	$	(39,834)	$	(143,317)	$	489,148
Net income	—	—		—		116,098		—		—		116,098
Issuances of stock related to restricted share units and performance shares	713	71		(71)		—		—		—		—


Cash dividends declared	—	—		—		(3,559)		—		—		(3,559)
Compensation expense related to share-based plans, net of forfeitures and shares received for tax withholdings	(376)	(38)		6,054		—		—		—		6,016
Share repurchases	(750)	(74)		(18,101)		—		—		—		(18,175)
Pension liability adjustment	—	—		—		—		520		—		520
Foreign currency translation adjustment	—	—		—		—		—		50,626		50,626
Balance, at December 28, 2025	57,891	$	5,789	$	248,910	$	517,980	$	(39,314)	$	(92,691)	$	640,674

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	SHARES	COMMON STOCK		ADDITIONAL PAID-IN CAPITAL		RETAINED EARNINGS		PENSION LIABILITY		FOREIGN CURRENCY TRANSLATION ADJUSTMENT		TOTAL
	(in thousands)
Balance, at December 31, 2023	58,112	$	5,811	$	252,909	$	320,833	$	(34,016)	$	(119,590)	$	425,947
Net income	—	—		—		86,946		—		—		86,946
Issuances of stock related to restricted share units and performance shares	479	48		(48)		—		—		—		—
Restricted stock issuances	58	6		941		—		—		—		947
Unrecognized compensation expense related to restricted stock awards	—	—		(946)		—		—		—		(946)
Cash dividends declared	—	—		—		(2,338)		—		—		(2,338)
Compensation expense related to share-based plans, net of forfeitures and shares received for tax withholdings	(345)	(35)		8,172		—		—		—		8,137
Pension liability adjustment	—	—		—		—		(5,818)		—		(5,818)
Foreign currency translation adjustment	—	—		—		—		—		(23,727)		(23,727)
Balance, at December 29, 2024	58,304	$	5,830	$	261,028	$	405,441	$	(39,834)	$	(143,317)	$	489,148


	SHARES	COMMON STOCK		ADDITIONAL PAID-IN CAPITAL		RETAINED EARNINGS		PENSION LIABILITY		FOREIGN CURRENCY TRANSLATION ADJUSTMENT		CASH FLOW HEDGE		TOTAL
	(in thousands)
Balance, at January 1, 2023	58,106	$	5,811	$	244,159	$	278,639	$	(27,548)	$	(138,775)	$	(749)	$	361,537
Net income	—	—		—		44,517		—		—		—		44,517
Issuances of stock related to restricted share units and performance shares	85	8		(8)		—		—		—		—		—
Restricted stock issuances	107	11		749		—		—		—		—		760
Unrecognized compensation expense related to restricted stock awards	—	—		(760)		—		—		—		—		(760)
Cash dividends declared	—	—		—		(2,323)		—		—		—		(2,323)
Compensation expense related to share-based plans, net of forfeitures	(186)	(19)		8,769		—		—		—		—		8,750

Pension liability adjustment	—	—		—		—		(6,468)		—		—		(6,468)
Foreign currency translation adjustment	—	—		—		—		—		19,185		—		19,185
Reclassification out of accumulated other comprehensive loss – discontinued cash flow hedge	—	—		—		—		—		—		749		749
Balance, at December 31, 2023	58,112	$	5,811	$	252,909	$	320,833	$	(34,016)	$	(119,590)	$	—	$	425,947

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Stock Incentive Plan

The Company has a stock incentive plan under which a committee of independent directors is authorized to grant directors and key employees, including officers, restricted stock, incentive stock options, nonqualified stock options, stock appreciation rights, restricted share units and performance shares.

In May 2024, the shareholders of the Company approved the adoption of an amendment and restatement of the Interface, Inc. 2020 Omnibus Stock Incentive Plan (the “Amended and Restated Plan”). The aggregate number of shares of common stock that may be issued or transferred under the Amended and Restated Plan on or after the effective date of the plan is the sum of 3,200,000 shares not previously authorized for issuance under any plan, plus the number of shares remaining available for issuance under the original Interface, Inc. 2020 Omnibus Stock Incentive Plan (the “Original Plan”) but not subject to outstanding awards under the Original Plan immediately prior to the effective date of the Amended and Restated Plan, plus the number of shares remaining available for issuance pursuant to the outstanding awards under the Original Plan immediately prior to the effective date of the Amended and Restated Plan, including any shares that become available due to the forfeiture, termination or cancellation of such awards. No award may be granted after the tenth anniversary of the effective date of the Amended and Restated Plan.

~~Accounting~~The ~~standards require that the~~ Company ~~measure~~measures the cost of employee services received in exchange for an award of equity instruments based on the grant date fair market value of the award. That expense will be recognized over the period that the employee is required to provide the services – the requisite service period (usually the vesting period) – in exchange for the award. For certain restricted stock and restricted share unit awards with a graded vesting schedule, the Company has elected to recognize compensation expense on a straight-line basis over the requisite service period for the entire award.

Restricted Stock Awards

During fiscal ~~years~~year 2025, there were no new grants of restricted stock awards. Outstanding restricted stock at December 29, 2024, ~~2023~~of 242,300 shares with a weighted average grant date fair value of $13.92 were fully vested as of December 28, 2025. During fiscal years 2024 and ~~2022~~2023, the Company granted restricted stock awards totaling 58,400, and 107,100, ~~and 500,800~~ shares, respectively, of Common Stock. The weighted average grant date fair value of restricted stock awards granted during 2024, ~~2023~~ and ~~2022~~2023 was $16.22, and $7.10, ~~and $13.08,~~ respectively. These awards (or a portion thereof) ~~vest~~vested with respect to each recipient over a one to three-year period from the date of grant, provided the individual ~~remains~~remained in the employment or service of the Company as of the vesting date. Additionally, certain awards (or a portion thereof) could vest earlier in the event of a change in control of the Company or upon involuntary termination without cause.

Compensation expense related to awards of restricted stock was $20.34 million, $42.53 million and $54.35 million for ~~2024~~2025, ~~2023~~2024 and ~~2022~~2023, respectively. These grants are made primarily to the board of directors and executive-level personnel at the Company, and as a result, no compensation costs have been capitalized. The Company has reduced its expense for any restricted stock forfeited during the period. The expense related to awards of restricted stock is captured in SG&A expenses in the consolidated statements of operations. As of December 28, 2025, there was no remaining unrecognized compensation expense for restricted stock awards.

The following table summarizes restricted stock outstanding as of December 29, 2024, as well as activity during the year:

	Restricted Shares	Weighted Average Grant Date Fair Value
Outstanding at December 31, 2023	691,600	$	12.55
Granted	58,400	16.22
Vested	(504,700)	12.31
Forfeited or canceled	(3,000)	13.19
Outstanding at December 29, 2024	242,300	$	13.92

As of December 29, 2024, the unrecognized total compensation cost related to unvested restricted stock was $0.4 million. That cost is expected to be recognized over a weighted-average remaining vesting period of 0.3 years.

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Restricted Share Unit Awards

During fiscal year 2025, 2024, and 2023, the Company granted awards for 337,300, 407,300, and 596,200 restricted share units to certain employees and directors pursuant to the Company’s stock incentive plan. ~~There were no restricted share unit awards granted during 2022.~~ The weighted average grant date fair value of the restricted share units granted during 2025, 2024, and 2023, was $22.00, $13.38, and $10.36, respectively. Each restricted share unit represents one share of the Company’s common stock to be issued to the award recipient once the vesting criteria have been satisfied. Awards of restricted share units have a graded vesting schedule over a ~~two~~one to three-year period from the date of grant, provided the individual remains in the employment or service of the Company as of each vesting date. Additionally, certain awards (or a portion thereof) could vest earlier in the event of a change in control of the Company, upon involuntary termination without cause, or upon retirement, provided certain eligibility criteria are met.

Compensation expense related to the restricted share units was $6.0 million, $3.5 million, and $1.9 million for 2025, 2024, and 2023, respectively. ~~There was no compensation expense related to restricted share unit awards during 2022.~~ These grants are made primarily to executive-level personnel at the Company and, as a result, no compensation costs have been capitalized. The Company has reduced its expense for any restricted share units forfeited during the period. The expense related to awards of restricted share units is captured primarily in SG&A expenses in the consolidated statements of operations.

The following table summarizes restricted share units outstanding as of December 29, 2024, as well as activity during the year:

	Restricted Share Units	Weighted Average Grant Date Fair Value
Outstanding at December 31, 2023	583,400	$	10.35
Granted	407,300	13.38
Vested	(157,200)	10.77
Forfeited or canceled	(10,200)	11.41
Outstanding at December 29, 2024	823,300	$	11.76

As of December 29, 2024, the unrecognized total compensation cost related to unvested restricted share units was $6.0 million. That cost is expected to be recognized over a weighted-average remaining vesting period of 1.8 years.

Performance Share Awards

In each of the years 2024, 2023 and 2022, the Company issued awards of performance shares to certain employees. These awards vest based on the achievement of certain performance-based goals over a performance period of three years, subject to (among other things) the employee’s continued employment through the last date of the performance period and will be settled in shares of our common stock or in cash at the Company’s election. The number of shares that may be issued in settlement of the performance shares to the award recipients may be greater (up to 200%) or lesser than the nominal award amount depending on actual performance achieved as compared to the performance targets set forth in the awards. The expense related to these performance shares is captured in SG&A expenses in the consolidated statements of operations. The Company evaluates the probability of achieving the performance-based goals as of the end of each reporting period and adjusts compensation expense based on this assessment.

The following table summarizes the performance shares outstanding as of December 29, 2024, as well as the activity during the year:

	Performance Shares	Weighted Average Grant Date Fair Value
Outstanding at December 31, 2023	1,115,000	$	12.36
Granted	402,800	13.24
Vested	(322,200)	13.90
Forfeited or canceled	(23,900)	12.53
Outstanding at December 29, 2024	1,171,700	$	12.23

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~~Compensation expense related to the performance shares for 2024, 2023 and 2022 was $7.1 million, $3.9 million and $3.2 million, respectively.~~ The Company has reduced its expense for any ~~performance~~restricted ~~shares~~share units forfeited during the period. ~~Unrecognized~~The ~~compensation~~ expense related to ~~these~~awards ~~performance shares was approximately $7.9 million as~~ of ~~December 29,~~restricted ~~2024.~~share ~~The~~units ~~amount~~is ~~and~~captured ~~timing~~primarily ofin ~~future~~SG&A ~~compensation~~expenses ~~expense~~in ~~will depend on~~ the ~~performance~~consolidated ofstatements ~~the Company. The compensation expense related to these outstanding performance shares is expected to be recognized over a weighted-average remaining vesting period~~ of 1operations.8 ~~years.~~

The ~~tax~~following ~~benefit~~table ~~recognized~~summarizes ~~with respect to~~ restricted ~~stock, restricted~~ share units ~~and~~outstanding ~~performance~~as ~~shares~~of ~~was $1.7 million~~December 28, ~~$0.9 million~~2025, ~~and~~as ~~$0.8~~well ~~million~~as inactivity ~~2024,~~during ~~2023~~the ~~and 2022, respectively.~~year:


	Restricted Share Units	Weighted Average Grant Date Fair Value
Outstanding at December 29, 2024	823,300	$	11.76
Granted	337,300	22.00
Vested	(338,000)	11.87
Forfeited or canceled	(25,200)	16.97
Outstanding at December 28, 2025	797,400	$	15.88

As of December 28, 2025, the unrecognized total compensation cost related to unvested restricted share units was $6.9 million. That cost is expected to be recognized over a weighted-average remaining vesting period of 1.7 years.

Performance Share Awards

In each of the years 2025, 2024 and 2023, the Company issued awards of performance shares to certain employees. These awards vest based on the achievement of certain performance-based goals over a performance period of three years, subject to (among other things) the employee’s continued employment through the last date of the performance period and will be settled in shares of our common stock or in cash at the Company’s election. The number of shares that may be issued in settlement of the performance shares to the award recipients may be greater (up to 200%) or lesser than the nominal award amount depending on actual performance achieved as compared to the performance targets set forth in the awards. The expense related to these performance shares is captured in SG&A expenses in the consolidated statements of operations. The Company evaluates the probability of achieving the performance-based goals as of the end of each reporting period and adjusts compensation expense based on this assessment.

The following table summarizes the performance shares outstanding as of December 28, 2025, as well as the activity during the year:


	Performance Shares	Weighted Average Grant Date Fair Value
Outstanding at December 29, 2024	1,171,700	$	12.23
Granted	303,200	19.94
Vested	(375,500)	12.99
Forfeited or canceled	(29,100)	16.30
Outstanding at December 28, 2025	1,070,300	$	14.04

Compensation expense related to the performance shares for 2025, 2024 and 2023 was $7.9 million, $7.1 million and $3.9 million, respectively. The Company has reduced its expense for any performance shares forfeited during the period. Unrecognized compensation expense related to these performance shares was approximately $7.9 million as of December 28, 2025. The amount and timing of future compensation expense will depend on the performance of the Company. The compensation expense related to these outstanding performance shares is expected to be recognized over a weighted-average remaining vesting period of 1.7 years.

The tax benefit recognized with respect to restricted stock, restricted share units and performance shares was $2.3 million, $1.7 million, and $0.9 million in 2025, 2024 and 2023, respectively.

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NOTE 1514 – EARNINGS PER SHARE

The Company computes basic earnings per share (“EPS”) by dividing net income by the weighted average common shares outstanding, including participating securities outstanding, during the period as discussed below. Diluted EPS reflects the potential dilution beyond shares for basic EPS that could occur if securities or other contracts to issue common stock were exercised, converted into common stock or resulted in the issuance of common stock that would have shared in the Company’s earnings.

The Company includes all unvested stock awards that contain non-forfeitable rights to dividends or dividend equivalents, whether paid or unpaid, in the number of shares outstanding for basic EPS as these awards are considered participating securities. Unvested share-based awards of restricted stock are paid dividends equally with all other shares of common stock and are considered participating securities. As a result, the Company includes all outstanding restricted stock awards in the calculation of basic and diluted EPS. Any unvested share-based awards considered non-participating securities (restricted share units and performance shares) are included in diluted EPS calculations when the inclusion of these shares would be dilutive. The following table shows the computation of basic and diluted EPS:

	Fiscal Year
	2024		2023		2022
	2025		2024		2023
	(in thousands, except per share data)
Numerator:(1)
Net income	$	86116,~~946~~098	$	4486,~~517~~946	$	1944,~~560~~517
Denominator:
Weighted average shares outstanding	5758,~~937~~341		57,~~349~~937		57,~~893~~349
Participating securities	~~345~~34		~~743~~345		~~972~~743
Shares for basic EPS	58,~~282~~375		58,~~092~~282		58,~~865~~092
Dilutive effect of share-based awards (non-participating securities)	589		243		—
Dilutive effect of non-participating securities	787		589		243
Shares for diluted EPS	5859,~~871~~162		58,~~335~~871		58,~~865~~335
Basic EPS	$	1.4999	$	01.7749	$	0.3377
Diluted EPS	$	1.4896	$	01.7648	$	0.3376

(1) ~~Including~~Net income attributable to participating securities, ~~which was $0.5 million, $0.6 million, and $0.3 million,~~ for fiscal years ~~2024~~2025, ~~2023~~2024 and ~~2022~~2023, ~~respectively~~was not material.

~~For 2024, there were no securities excluded from the computation of diluted EPS that would have been antidilutive~~. For 2023, 657,391 non-participating securities that could potentially dilute basic EPS in the future, consisting of restricted share units and performance shares, were excluded from the computation of diluted EPS as these securities would have been antidilutive for the respective period.

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NOTE 1615 – RESTRUCTURING AND OTHER

~~Restructuring~~During the second quarter of 2023, the Company completed the sale of its Thailand facility, in connection with a previous plan of restructuring, for a selling price of $6.6 million and recognized a gain of $2.7 million, which is recorded in restructuring, asset impairment, other (gains) and charges byin ~~reportable~~the ~~segment~~consolidated ~~are~~statements ~~presented~~of asoperations ~~follows:~~and is attributable to the EAAA reportable segment.

	Fiscal Year
	2024		2023		2022
	(in thousands)
AMS	$	—	$	—	$	—
EAAA	—		(2,502)		1,965
Total restructuring, asset impairment, other (gains) and charges	$	—	$	(2,502)	$	1,965

The Company determined that the Thailand facility sale did not meet the criteria for classification as discontinued operations.

2021 Restructuring Plan

On September 8, 2021, the Company committed to a restructuring plan that focused on efforts to improve efficiencies and decrease costs across its worldwide operations. The plan involved a reduction of approximately 188 employees and the closure of the Company’s manufacturing facility in Thailand at the end of the first quarter of 2022.

During 2022, in conjunction with the closure of its Thailand facility, the Company recorded a write-down of inventory of $2.5 million within cost of sales in the consolidated statements of operations.

The Company recognized a gain of $2.7 million on the sale of the Thailand facility during 2023. See Note 7 entitled “Property, Plant and Equipment” for additional information. This restructuring plan was completed following the sale of the Thailand Facility.

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NOTE 1716 – INCOME TAXES

Income before income taxes consisted of the following:

	Fiscal Year
	2024		2023		2022
	2025		2024		2023
	(in thousands)
U.S. operations	$	3764,~~060~~601	$	337,~~611~~060	$	113,~~758~~611
Foreign operations	7672,~~494~~250		6076,~~043~~494		3060,~~159~~043
Income before income taxes	$	~~113~~136,~~554~~851	$	63113,~~654~~554	$	4163,~~917~~654

Provisions for federal, foreign and state income taxes in the consolidated statements of operations consisted of the following components:

Fiscal Year

2024

2023

2022

2025

2024

2023

(in thousands)

Current expense:

Federal

7,~~599~~209

57,~~523~~599

15,~~624~~523

Foreign

2023,~~982~~235

1820,~~330~~982

2018,~~903~~330

State

2,~~481~~843

2,~~167~~481

12,~~307~~167

Current expense

3133,~~062~~287

2631,~~020~~062

2326,~~834~~020

Deferred (benefit) expense:

Federal

~~(3,279)~~182

(43,~~810~~279)

~~346~~(4,810)

Foreign

(~~841~~12,846)

(~~1,212~~841)

(21,~~053~~212)

State

~~(334)~~130

(~~861~~334)

~~230~~(861)

Deferred benefit

(412,~~454~~534)

(64,~~883~~454)

(16,~~477~~883)

Total income tax expense

2620,~~608~~753

1926,~~137~~608

2219,~~357~~137

Income taxes paid (net of refunds) consisted of the following:


	Fiscal Year
	2025
	(in thousands)
Federal	$	9,118
Foreign:
Germany	11,538
Netherlands	5,546
China	2,069
Other Foreign	5,684
State and local	3,384
Total Income taxes paid, net of refunds	$	37,339

Income tax payments amounted to approximately $37.8 million and $25.8 million for the years 2024 and 2023, respectively. During the years 2024 and 2023, the Company received income tax refunds of $3.3 million and $2.5 million, respectively.

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~~The~~We ~~Company’s~~adopted ~~effective~~ASU ~~tax~~2023-09 ~~rate~~on ~~was~~a ~~23.4%,~~prospective ~~30.1%~~basis ~~and~~beginning ~~53.3%~~with ~~for~~ fiscal ~~years~~year ~~2024, 2023 and 2022, respectively~~2025. The following ~~summary~~table reconciles ~~income taxes at~~ the U.S. federal statutory rate of 21% ~~applicable~~to ~~for~~our ~~all~~effective ~~periods~~income ~~presented~~tax torate ~~the~~for ~~Company’s~~fiscal ~~actual~~year ~~income~~2025 ~~tax~~in ~~expense~~accordance with ASU 2023-09:

	~~Fiscal Year~~		Fiscal Year
	2024				2023				2022
			2025
	~~(in thousands)~~		(in thousands)
Income taxes at U.S. federal statutory rate	$	23,846			$	13,367			$	8,803
			Amount				Percent
Increase (decrease) in taxes resulting from:
Income taxes at U.S. federal statutory rate			$	28,739			21.0	%
State income taxes, net of federal tax effect	2,319				(432)				817
State and local income taxes, net of federal income tax effect (1)			2,369				1.7	%
Non-deductible business expenses	940				747				237
Foreign Tax Effects
Non-deductible employee compensation	1,587				1,681				1,678
Germany
Tax effects of Company-owned life insurance	(576)				(587)				612
Statutory tax rate difference between Germany and U.S.			(1,651)				(1.2)	%
Tax effects of undistributed earnings from foreign subsidiaries not deemed to be indefinitely reinvested	443				779				1,123
Trade tax			5,974				4.4	%
Foreign and U.S. tax effects attributable to foreign operations	4,532				1,537				3,528
Enacted changes in tax laws or rates			(6,331)				(4.6)	%
Expiring tax attributes	4,125				3,780				—
Remeasurement of deferred tax liability			(4,048)				(3.0)	%
Valuation allowance effect	(7,330)				(879)				2,898
Other			(1,207)				(0.9)	%
Research and development tax credits	(703)				(820)				(917)
Other foreign jurisdictions			2,521				1.9	%
Goodwill impairment	—				—				6,171
Effect of Cross-Border Tax Laws
Foreign tax rate change related to UK pension	(2,493)				—				—
Other			(1,506)				(1.1)	%
Unrecognized tax benefits	(135)				(79)				(2,463)
Tax credits
Other	53		(887)		43		(0.6)	%	~~(130)~~
Income tax expense	$	26,608			$	19,137			$	22,357
Nontaxable or non-deductible items
Non-deductible employee compensation			1,823				1.3	%
Other

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