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and its subsidiaries or any of them, unless the context requires otherwise.
−Removed: Interface is a global flooring company specializing in carbon neutral carpet tile and resilient flooring, including luxury vinyl tile (“LVT”), vinyl sheet, and nora® rubber flooring.
−Removed: We help our customers create high-performance interior spaces that support well-being, productivity, and creativity, as well as the sustainability of the planet.
−Removed: As a global company with a reputation for high quality, reliability and premium positioning, we market modular carpet under the established brand names Interface® and FLOR® , and we market LVT and vinyl sheet under the brand Interface®.
−Removed: In 2018, the Company acquired nora Holding GmbH (“nora”), a worldwide leader in the rubber flooring category under the established nora brands norament ® and noraplan ®.
+Added: Interface is a global flooring company specializing in carbon neutral carpet tile and resilient flooring, including luxury vinyl tile (“LVT”), and nora® rubber flooring.
+Added: We help our customers create high-performance interior spaces that support well-being, productivity, and creativity, as well as sustainability of the planet.
+Added: As a global company with a reputation for high quality, reliability and premium positioning, we market modular carpet under the established brand names Interface® and FLOR® , and we market LVT under the brand Interface®.
+Added: In 2018, the Company acquired nora Holding GmbH (“nora”), a worldwide leader in the rubber flooring category under the established nora brands noraplan ® and norament ®.
Reportable Segments
−Removed: In 2021, the Company largely completed its integration of the nora acquisition, and integration of its European and Asia-Pacific commercial areas, and determined that it has two operating and reportable segments – namely Americas (“AMS”) and Europe, Africa, Asia and Australia (collectively “EAAA”).
−Removed: The AMS operating segment continues to include the United States, Canada and Latin America geographic areas.
+Added: The Company has two operating and reportable segments – namely Americas (“AMS”) and Europe, Africa, Asia and Australia (collectively “EAAA”).
+Added: The AMS operating segment includes the United States, Canada and Latin America geographic areas.
See Note 20 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.
−Removed: Percentages for fiscal year 2020 have been recast to reflect the current reportable segment structure:
2023 2022 2021
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We believe the appeal and utilization of modular carpet and resilient flooring will continue to grow in corporate office and non-corporate office market segments, and we are using our considerable skills and experience with designing, producing and marketing modular products that make us a market leader in the corporate office market segment to support and facilitate our penetration into more non-corporate office market segments around the world.
−Removed: During fiscal years 2022, 2021 and 2020, t he COVID-19 pandemic impacted areas where we operate and sell our products and services.
−Removed: Government restrictions and shutdowns around the world impacted sales in the corporate office market segment and resulted in lower corporate reinvestment compared to the few years immediately preceding the pandemic.
−Removed: To mitigate the effects of COVID-19 on our business, we capitalized on our ongoing market diversification strategy to increase our presence and market penetration for modular carpet and resilient flooring sales in non-corporate office market segments.
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+Added: During fiscal year 2023, the continued disruption in our economic markets due to ongoing inflation, increases in interest rates, the Russia-Ukraine war, and the onset of the Israel-Hamas war, a fairly stabilized but challenging supply chain environment, a slow post COVID recovery in China and slow market conditions in the rest of Asia, and significant financial pressures in the commercial office market globally, all posed challenges for us.
Below is a summary of our sales mix between corporate office and non-corporate office market segments for the last three fiscal years by reportable segment:
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These varieties are designed to meet both the practical and aesthetic needs of a broad spectrum of commercial interiors — particularly offices, healthcare facilities, airports, educational and other institutions, hospitality spaces, retail facilities — and residential interiors.
−Removed: Our carpet tile systems permit distinctive styling and patterning that can be used to complement interior designs, to set off areas for particular purposes, create visual cues, and to convey graphic information.
+Added: Our carpet tile systems permit distinctive styling and patterning that can be used to complement interior designs, to set off areas for particular purposes and create visual cues.
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.
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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.
−Removed: Innovations in both design and manufacturing allow us to create high-quality, high-performance carpet products at a lower price point.
−Removed: In 2020, we introduced the next generation of our carpet tile backings called CQuest™ backings.
+Added: Innovations in both design and manufacturing allow us to create these high-quality, high-performance carpet products at a lower price point.
+Added: Launched in 2020, our next generation of 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.
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In addition, we have created modular carpet products specifically designed for each of the education, hospitality and retail market segments.
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The award-winning design firm David Oakey Designs has had a pivotal role in developing many of our innovative product designs.
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In 2020, we achieved a substantial milestone in our journey toward becoming a sustainable enterprise.
−Removed: Simultaneously with the launch of our new CQuest backings described above, we introduced in the Americas our first ever “cradle-to-gate” carbon negative carpet tile products in three unique styles:
+Added: Simultaneously with the launch of our new 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 ™.
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Embodied carbon is distinct from operational carbon, which refers to the carbon footprint of everything that happens after the product leaves our factory, such as shipment, customer use, and end of life.
−Removed: The Embodied Beauty collection was expanded into our EAAA geographical regions in 2021.
−Removed: In addition, through our third party verified Carbon Neutral Floors ™ program, all of our carpet tile, LVT and norament and noraplan rubber flooring products are made carbon neutral across their entire life cycle, including both embodied carbon and operational carbon, by our purchase and retirement of third party verified carbon offsets.
−Removed: We believe our cradle-to-gate carbon negative carpet tile products and our Carbon Neutral Floors program provide us with a competitive advantage, particularly with our global account customers who are increasingly setting their own goals to reduce their carbon footprints.
Modular Resilient Flooring
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Our LVT products are modular and come in sizes that match certain of our modular carpet tile squares and planks.
−Removed: Some of them are engineered to the same or similar height as our modular carpet, which means our customers have the ability to install our LVT and modular carpet products side by side without transition strips or layering.
+Added: Some of our LVT products are engineered to the same or similar height as our modular carpet, which means our customers have the ability to install our LVT and modular carpet products side by side without transition strips or layering.
In addition, some of our LVT products include a backing system that provides acoustic insulation without the need for additional underlayment, which can reduce the impact of sound in the space where the flooring is used.
−Removed: In 2022, we introduced our rigid core Even Path ™ collection of LVT with high-quality wood and stone designs.
−Removed: Our rigid core resilient flooring products are designed for hard-working spaces and commercial markets.
Rubber Flooring
−Removed: 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 fast-growing resilient flooring portfolio.
+Added: 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.
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We also continue to provide “turnkey” project management services for a number of global accounts and other large customers through our InterfaceSERVICES™ business.
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Manufacturing and Raw Materials
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We also manufactured carpet tile at a location in Thailand for many years, but in 2021 we announced the closure of the Thailand plant, in which manufacturing was permanently halted at the end of the first quarter of 2022.
+Added: The Thailand real estate was sold in 2023.
We manufacture rubber flooring in Germany.
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For yarn, we principally rely upon two major global suppliers, but we also have significant relationships with at least two other suppliers.
−Removed: Although our number of principal yarn suppliers is limited, we do have the capability to manufacture carpet using face fiber produced from two separate polymer feedstocks — nylon 6 and nylon 6,6 — which provides additional flexibility with respect to yarn supply inputs, if needed.
+Added: 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.
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We may open offices in other locations around the world as necessary to capitalize on emerging marketing opportunities.
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Business Strategy and Principal Initiatives
−Removed: Our business strategy is to continue to use our leading position in modular carpet, product design and global made-to-order capabilities as a platform from which to position our modular carpet, LVT products, other resilient products and rubber flooring products across several industry segments.
+Added: Our business strategy is to continue to use our leading position in modular carpet, product design and global made-to-order capabilities as a platform from which to position our modular carpet, LVT products, rubber flooring, and other resilient products across several industry segments.
We will seek to increase revenues and profitability by pursuing the following key initiatives:
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Develop a Substantial Resilient Flooring Business .
−Removed: Building upon the success of our products in the high growth LVT market, we plan to expand our LVT product offerings while also seeking to introduce new products in the resilient flooring category, such as our rigid core resilient flooring that was launched in early 2022.
+Added: Building upon the success of our products in the high growth LVT market, we plan to expand our LVT product offerings while also seeking to introduce new products in the resilient flooring category.
We believe our ability to offer and sell our soft and hard surfaces in an integrated flooring design helps meet the needs of our customers by complementing and enhancing our carpet tile portfolio with true modular installation, no transition strips between surfaces, carpet tile and resilient products that are in some cases the same size and shape, and favorable acoustic properties.
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Our Climate Take Back initiative, which was advanced in 2020 with the launch of our first ever cradle-to-gate carbon negative carpet tile, promotes our commitment to the pursuit of sustainability.
−Removed: Historically, sales in our first quarter had typically been our lowest quarter while our fourth quarter sales had typically been our best quarter, as sales generally increased throughout the course of the fiscal year.
−Removed: However, in more recent years, as our sales efforts and results in the education and other non-corporate office market segments increased, our second and third quarter sales sometimes were the highest.
−Removed: In 2022, our second quarter sales were the highest quarter.
−Removed: In 2021, our fourth quarter sales were the highest quarter as certain countries rebounded from the economic impacts of the COVID-19 pandemic over the course of the year.
−Removed: In 2020, our first quarter sales were the highest quarter, as the COVID-19 pandemic escalated and more severely impacted the remainder of the year.
+Added: As we execute on our strategy to penetrate non-corporate office market segments, sales in the education market segment have increased, in recent years, particularly in the second and third quarters as schools undertake renovation projects during the summer months when schools are typically closed.
We compete, on a global basis, in the sale of our modular carpet products with other carpet manufacturers and manufacturers of vinyl and other types of floorcoverings, including broadloom carpet.
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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.
−Removed: 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, which decreases their dependence on third party suppliers of fiber.
+Added: 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.
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We believe the quality, service, design, better and longer average 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 modular carpet are our principal competitive advantages.
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We believe we have competitive advantages in several other areas as well.
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Product Design, Research and Development
−Removed: We maintain an active research and development, product development and design staff of approximately 150 people and also draw on the research and development efforts of our suppliers, particularly in the areas of fibers, yarns and modular carpet backing materials.
+Added: We maintain an active research and development, product development and design staff.
+Added: We also draw on the research and development efforts of our suppliers, particularly in the areas of fibers, yarns and modular carpet backing materials.
The research and development team provides us with technical support and advanced materials research and development.
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For our nora rubber flooring products, the innovation focus is on performance and design.
−Removed: A key innovation is the fast growing self-adhesive nTx solution for nora tiles and sheet goods.
−Removed: Recent changes in design are 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.
+Added: A key innovation is the self-adhesive nTx solution for nora tiles and sheet goods.
+Added: 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.
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As more customers in our target markets share our view that sustainability is an important factor, we expect sustainability will become a determining factor in purchasing and design decisions.
−Removed: In 2021, we set a goal to reduce our CO2 emissions across our Company and supply chain by 2030 with a target validated by the Science Based Targets Initiative.
+Added: 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.
−Removed: We also set a goal to become a carbon negative enterprise by 2040.
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−Removed: A highlight in our pursuit of sustainability was our creation with the Zoological Society of London of a program called Net-Works® in which we worked with communities in the Philippines to collect discarded fishing nets that are damaging a large coral reef, and divert them to our yarn supplier where they are recycled into new carpet fiber.
−Removed: Net-Works provides a source of income for members of these communities in the Philippines, while also cleaning up the beaches and waters where they live and work.
−Removed: Our Net Effect Collection of carpet tile products, among others, contains yarn that is partly made from the recycled fishing nets collected through the Net-Works program.
−Removed: Net-Works is a big step in redesigning our supply chain from a linear take-make-waste process toward a closed loop system, and it advances our ultimate goal of becoming a restorative enterprise.
+Added: We also set a separate goal to become a carbon negative enterprise by 2040.
In 2022, we became the first and only flooring manufacturer to achieve third-party Carbon Neutral Enterprise certification.
Our claim of Carbon Neutral Enterprise status has been third-party certified to meet the PAS 2060 standard, the leading international carbon neutrality standard created by the British Standards Institution (BSI).
−Removed: We neutralized our carbon impact across our entire business, including all operations and its full value chain.
The Carbon Neutral Enterprise certification builds on our history as a purpose-driven flooring company.
−Removed: Achieving Carbon Neutral Enterprise status is a continuation of our innovation and efforts that started with the Carbon Neutral Floors program — it brings us one step closer to becoming a carbon negative enterprise by 2040.
+Added: Achieving Carbon Neutral Enterprise status is a continuation of our innovation efforts and it brings us one step closer to becoming a carbon negative enterprise by 2040.
Compliance with Government Regulations
−Removed: We are subject to various federal, state and foreign laws and regulations that address various aspects of our business such as worker safety (including but not limited to safety measures in response to the COVID-19 pandemic), privacy, trade sanctions and anticorruption.
+Added: 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.
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Our backlog of unshipped orders was approximately $195.5 million at February 4, 2024, compared with approximately $197.4 million at February 5, 2023.
−Removed: Historically, backlog is subject to significant fluctuations due to the timing of orders for individual large projects and currency fluctuations.
−Removed: Disruptions in supply and distribution chains, global travel restrictions and government orders due to the impact of COVID-19 have resulted in delays of construction projects and flooring installations in many regions worldwide, which also have caused fluctuations in our backlog.
+Added: Historically, backlog is subject to significant fluctuations due to the timing of orders for individual large projects.
+Added: D isruptions in supply and distribution chains have resulted in delays of construction projects and flooring installations in many regions worldwide, which also have caused, and may continue to cause, fluctuations in our backlog.
Patents and Trademarks
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The duration of trademarks registered in other jurisdictions varies.
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Human Capital
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• Embrace tomorrow, today.
−Removed: At January 1, 2023, we employed a total of 3,671 employees worldwide.
+Added: At December 31, 2023, we employed a total of 3,619 employees worldwide.
Of such total, 1,367 were clerical, staff, sales, supervisory and management personnel and 2,252 were manufacturing personnel.
−Removed: We also utilized the services of 176 temporary personnel as of January 1, 2023.
Some of our employees in Australia, the United Kingdom and China are represented by unions.
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Information About Our Executive Officers
−Removed: Our executive officers, their ages as of January 1, 2023, and their principal positions with us are set forth below.
+Added: Our executive officers, their ages as of December 31, 2023, and their principal positions with us are set forth below.
Executive officers serve at the pleasure of the Board of Directors.
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Hausmann 54 Vice President and Chief Financial Officer
−Removed: James Poppens 58 Vice President (President - Americas) (1)
−Removed: Nigel Stansfield 55 Vice President (President - Europe, Africa, Australia and Asia) (1)
−Removed: (1) See below for changes effective February 2023
+Added: James Poppens 59 Vice President and Chief Commercial Officer
+Added: Nigel Stansfield 56 Vice President and Chief Innovation and Sustainability Officer
Hurd joined us in April 2022 after having worked previously for global consumer goods company Newell Brands, Inc.
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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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Hausmann joined us in April 2017 as Vice President and Chief Financial Officer.
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Available Information
−Removed: 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 SEC.
+Added: 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”).
Our Internet address is http://www.interface.com .
+Added: 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.
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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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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.