What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2025-02-26 compared with 2024-02-28 · 236 added, 282 removed, 1262 unchanged (29% of the section changed)

15 unchanged sentences

Interest expense 23,205 31,787 29,929

Other expense, net 9,081 3,552 2,483

Other (income) expense, net

( 2,353 ) 9,081 3,552

Income before income tax expense

16 unchanged sentences

$ 86,946 $ 44,517 $ 19,560

Other comprehensive income (loss), after tax:

Other comprehensive (loss) income, after tax:

Foreign currency translation adjustment ( 23,727 ) 19,185 ( 38,334 )

Reclassification from accumulated other comprehensive loss – discontinued cash flow hedge

749 1,973 3,468

Pension liability adjustment ( 5,818 ) ( 6,468 ) 26,340

Other comprehensive income (loss) 13,466 ( 10,021 ) ( 21,242 )

Other comprehensive (loss) income

( 29,545 ) 13,466 ( 10,021 )

Comprehensive income

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5,000 shares authorized;

none issued or outstanding at December 31, 2023 and January 1, 2023

none issued or outstanding at December 29, 2024 and December 31, 2023

Common stock, par value $ 0.10 per share;

120,000 shares authorized;

58,112 and 58,106 shares issued and outstanding at December 31, 2023 and January 1, 2023, respectively

58,304 and 58,112 shares issued and outstanding at December 29, 2024 and December 31, 2023, respectively

Additional paid-in capital 261,028 252,909

1 unchanged sentence

Accumulated other comprehensive loss – foreign currency translation ( 143,317 ) ( 119,590 )

Accumulated other comprehensive loss – cash flow hedge — ( 749 )

Accumulated other comprehensive loss – pension liability ( 39,834 ) ( 34,016 )

13 unchanged sentences

12,907 10,265 8,527

(Gain) loss on disposal of property, plant and equipment, net

Loss (gain) on disposal of property, plant and equipment, net

264 ( 2,252 ) 4,319

1 unchanged sentence

Bad debt expense 1,476 53 26

Deferred income taxes and other ( 8,809 ) 13,414 ( 16,379 )

Deferred income taxes

( 3,034 ) ( 10,082 ) 10,310

( 8,480 ) 1,273 3,104

Amortization of acquired intangible assets 5,172 5,172 5,038

9 unchanged sentences

Proceeds from sale of property, plant and equipment 1,040 6,593 —

Insurance proceeds from property casualty loss

Cash used in investing activities ( 30,374 ) ( 19,514 ) ( 18,437 )

9 unchanged sentences

Cash used in financing activities ( 125,234 ) ( 111,564 ) ( 19,490 )

Net cash provided by (used in) operating, investing and financing activities 10,956 5,134 ( 2,240 )

Net cash (used in) provided by operating, investing and financing activities

( 7,178 ) 10,956 5,134

Effect of exchange rate changes on cash ( 4,094 ) 1,978 ( 4,822 )

CASH AND CASH EQUIVALENTS:

Net increase (decrease) 12,934 312 ( 5,801 )

Net (decrease) increase

( 11,272 ) 12,934 312

Balance, beginning of year 110,498 97,564 97,252

6 unchanged sentences

Nature of Operations

Interface is a global flooring company specializing in carbon neutral carpet tile and resilient flooring, including luxury vinyl tile (“LVT”), and nora® rubber flooring.

The Company manufactures modular carpet focusing on the high quality, designer-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.

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.

5 unchanged sentences

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, 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

8 unchanged sentences

Risks and Uncertainties

Global economic challenges, including the impacts of the Russia-Ukraine and Israel-Hamas wars, inflation, supply chain disruptions, and the slow post COVID-19 recovery in China could cause economic uncertainty and volatility.

Global economic challenges, including the impacts of the Russia-Ukraine war, the conflict in the Middle East, and other conflicts around the globe, supply chain disruptions, potential government-imposed tariffs, and slow macro environments in certain geographical regions 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.

Any potential fine or other liability is not probable nor estimable at this time.

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 12 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.

11 unchanged sentences

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 (TacTiles installation materials, etc.) was approximately 98 % of the Company’s total revenue in 2023, approximately 97 % of the Company’s total revenue in 2022, and approximately 98 % of the Company’s total revenue in 2021.

Revenue from the sale of modular carpet, resilient flooring, rubber flooring, and related products was approximately 97 % of the Company’s total 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.

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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 earned.

As these commissions become payable upon shipment (or in certain cases delivery) of product, the commission is earned as the revenue is recognized.

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.

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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 no t hold any significant amounts of cash equivalents and short-term investments at December 31, 2023 and January 1, 2023.

The Company did no t hold any significant amounts of cash equivalents and short-term investments at December 29, 2024 and December 31, 2023.

Supplemental Cash Flow Information

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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 $ 4.3 million and $ 2.1 million as of December 31, 2023 and January 1, 2023, respectively, and are included in accrued expenses in the accompanying consolidated balance sheets.

Warranty and sales allowance reserves amounted to $ 5.3 million and $ 4.3 million as of December 29, 2024 and December 31, 2023, respectively, and are included in accrued expenses in the accompanying consolidated balance sheets.

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.

34 unchanged sentences

Reclassifications

Prior period amounts for goodwill and intangible assets, net, in the consolidated balance sheets have been reclassified to conform with the current period presentation.

Additionally, prior period amounts for the major classes of assets representing property, plant and equipment, as disclosed in Note 7 entitled “Property, Plant and Equipment,” have been reclassified to conform with the current presentation.

These reclassifications had no effect on total assets as previously reported.

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.

The Company’s fiscal year is the 52 or 53 week period ending on the Sunday nearest December 31.

All references herein to “2023,” “2022,” and “2021,” mean the fiscal years ended December 31, 2023, January 1, 2023, and January 2, 2022, respectively.

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.

1 unchanged sentence

Recently Issued Accounting Pronouncements – Adopted

In July 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-03, “ Presentation of Financial Statements (Topic 205), Income Statement — Reporting Comprehensive Income (Topic 220), Distinguishing Liabilities from Equity (Topic 480), Equity (Topic 505), Compensation — Stock Compensation (Topic 718) .” This ASU amends various paragraphs in the accounting codification pursuant to the issuance of Commission Staff Accounting Bulletin (“SAB”) number 120.

The ASU provides clarifying guidance related to employee and non-employee share-based payment accounting, including guidance related to spring-loaded awards.

ASU 2023-03 was effective upon issuance.

The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements.

In June 2022, the FASB issued ASU 2022-03, “ Fair Value Measurement (Topic 820):

Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions .” This ASU clarifies that a contractual restriction on the sale of an equity security is not considered in measuring fair value.

The ASU also requires certain disclosures for equity securities subject to contractual sale restrictions.

The new guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2023.

Early adoption was permitted.

The Company adopted this standard on April 2, 2023.

The adoption of this standard did not have a material impact on the Company’s consolidated financial statements.

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, “ Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.

” This ASU requires additional disclosures in annual and interim periods for significant segment expenses included in the measure of segment profit provided to the chief operating decision maker (“CODM”).

Disclosure of other segment items by reportable segment as well as a description of its composition is also required.

The new guidance is effective for annual periods beginning after December 15, 2023, and for interim periods beginning after December 15, 2024.

The Company adopted the provisions of ASU 2023-07 for the year ended December 29, 2024 (see Note 20 entitled “Segment Information”).

The adoption did not have a material impact to our consolidated financial statements.

Recently Issued Accounting Pronouncements – Not Yet Adopted

In November 2024, the FASB issued ASU 2024-03, “Income Statement Reporting - Comprehensive Income - Expense Disaggregation (Topic 220-40)”.

This ASU requires public entities to provide additional footnote disclosures to disaggregate the cost and expense line items presented in the income statement into specific categories including (a) purchases of inventory;

(b) employee compensation;

and (d) intangible asset amortization.

The ASU also requires qualitative disclosure of other relevant expense categories not separately disclosed, the total amount of selling expenses, and the definition of selling expenses in annual reporting periods.

The new guidance in ASU 2024-03 is effective for annual periods beginning after December 15, 2026.

In January 2025, the FASB issued ASU 2025-01 to clarify the interim reporting period effective date for ASU 2024-03.

The provisions of ASU 2024-03 are effective for interim periods within annual reporting periods beginning after December 15, 2027.

Early adoption is permitted.

The Company is currently evaluating the impact of this ASU to its consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, “ Income Taxes (Topic 740 ):

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Early adoption is permitted.

The Company is currently evaluating the impact of this ASU to its income tax disclosures.

In November 2023, the FASB issued ASU 2023-07, “ Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.

Disclosure of other segment items by reportable segment as well as a description of its composition is also required.

The new guidance is effective for annual periods beginning after December 15, 2023, and for interim periods beginning after December 15, 2024.

Early adoption is permitted.

The Company is currently evaluating the impact of this ASU to its segment disclosures.

We are currently assessing the updated guidance;

however, it is not expected to have a material impact to our consolidated financial statements.

NOTE 3 – REVENUE RECOGNITION

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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 31, 2023, and January 1, 2023, the allowance for expected credit losses amounted to $ 3.0 million and $ 4.0 million, respectively, for all accounts receivable of the Company.

As of December 29, 2024, and December 31, 2023, the allowance for expected credit losses amounted to $ 3.8 million and $ 3.0 million, respectively, for all accounts receivable of the Company.

NOTE 5 – FAIR VALUE OF FINANCIAL INSTRUMENTS

11 unchanged sentences

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

December 31, 2023 January 1, 2023

December 29, 2024 December 31, 2023

Carrying Value Fair Value (Level 1) Fair Value (Level 2) Carrying Value Fair Value (Level 1) Fair Value (Level 2)

8 unchanged sentences

(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, recorded as a reduction of long-term debt in the consolidated balance sheets, were $ 1.0 million and $ 1.9 million as of December 31, 2023 and January 1, 2023, respectively.

(3) Unamortized debt issuance costs associated with the Senior Notes, recorded as a reduction of long-term debt in the consolidated balance sheets, were $ 3.4 million and $ 4.2 million as of December 31, 2023 and January 1, 2023, respectively.

(2) Unamortized debt issuance costs associated with term loan borrowings under the Syndicated Credit Facility, recorded as a reduction of long-term debt in the consolidated balance sheets, were not material as of December 29, 2024, and were $ 1.0 million as of December 31, 2023.

(3) Unamortized debt issuance costs associated with the Senior Notes, recorded as a reduction of long-term debt in the consolidated balance sheets, were $ 2.8 million and $ 3.4 million as of December 29, 2024 and December 31, 2023, respectively.

Company-Owned Life Insurance

24 unchanged sentences

Inventories, net $ 260,581 $ 279,079

Reserves for inventory obsolescence amounted to $ 34.0 million and $ 28.5 million as of December 31, 2023 and January 1, 2023, respectively, and have been netted against amounts presented above.

Reserves for inventory obsolescence amounted to $ 38.3 million and $ 34.0 million as of December 29, 2024 and December 31, 2023, respectively, and have been netted against amounts presented above.

NOTE 7 – PROPERTY, PLANT AND EQUIPMENT

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(1) Includes $ 13.1 million and $ 11.9 million of leased equipment for 2024 and 2023, respectively.

(2) Construction-in-progress costs are presented as a separate asset category.

Amounts for 2022, that were previously allocated to each asset class, have been reclassified to conform to the current presentation.

(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.

10 unchanged sentences

Interest 1,276 1,338

Restructuring — 456

Taxes 13,762 18,300

5 unchanged sentences

Long-term debt consisted of the following:

December 31, 2023 January 1, 2023

December 29, 2024 December 31, 2023

Outstanding Principal Interest Rate (1)

2 unchanged sentences

Syndicated Credit Facility (2)

Revolving loan borrowings $ — — % $ 24,250 5.29 %

Term loan borrowings $ 5,564 5.62 % $ 121,658 6.61 %

7 unchanged sentences

(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 Credit Facility also includes a multicurrency revolving loan facility as discussed below.

There were no revolving loan borrowings outstanding as of December 29, 2024 or December 31, 2023.

Syndicated Credit Facility

5 unchanged sentences

Significant Facility Amendments

On December 9, 2021, the Company entered into a fourth amendment to its Facility.

The fourth amendment provided for, among other changes, the following amendments to the Facility, which became effective on December 16, 2021:

• amendments to replace the LIBOR interest rate benchmark applicable to loans and other extensions of credit under the Facility denominated in British Pounds sterling and Euros with specified successor benchmark rates;

• the amendment of certain provisions related to the implementation, use and administration of successor benchmark rates and to set forth certain borrowing requirements;

• amendments to provide for the case where any interest rate benchmark in the future ceases to be available.

On October 14, 2022, the Company entered into a fifth amendment to its Facility.

3 unchanged sentences

dollars with the SOFR benchmark interest rates.

In connection with the fifth amendment, the Company recognized a loss on extinguishment of debt of $ 0.1 million within interest expense in the consolidated statement of operations and recorded approximately $ 1.0 million of debt issuance costs.

Of this amount, approximately $ 0.4 million of debt issuance costs associated with term loan borrowings was recorded as a reduction of long-term debt, and approximately $ 0.7 million of debt issuance costs associated with revolving loan borrowings was recorded in other assets in the consolidated balance sheets.

Interest Rates and Fees

Base rate loans, as defined in the 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 0.25 % to 2.00 %, depending on the Company’s consolidated net leverage ratio as of the most recently completed fiscal quarter.

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

Pursuant to a Second 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 its first-tier 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 first-tier material foreign subsidiaries.

As of both December 31, 2023 and January 1, 2023, the Company had $ 1.6 million in letters of credit outstanding under the Facility.

As of December 29, 2024 and December 31, 2023, the Company had $ 0.7 million and $ 1.6 million, respectively, in letters of credit outstanding under the Facility.

Under the Facility, the Company is required to make quarterly amortization payments of the term loan borrowings.

The amortization payments are due on the last day of the calendar quarter.

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

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

Senior Notes due 2028

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In addition, the Company had the option to redeem up to 35 % of the aggregate principal amount of the Senior Notes before December 1, 2023 with the proceeds of certain equity offerings at a redemption price of 105.50 %, plus accrued and unpaid interest, if any, to (but excluding) the redemption date.

The Company also had the option to redeem all or a part of the Senior Notes before December 1, 2023, at a price equal to 100 % of the principal amount plus accrued and unpaid interest, if any, to (but excluding) the redemption date, plus a make-whole premium.

The Company did not elect to redeem the Senior Notes, in whole or in part, before December 1, 2023.

If the Company experiences a change of control, the Company will be required to offer to purchase the Senior Notes at 101 % of their principal amount, plus accrued and unpaid interest to (but excluding) the date of repurchase.

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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 31, 2023 and January 1, 2023, the unamortized debt issuance costs recorded as a reduction of long-term debt were $ 4.4 million and $ 6.1 million, respectively.

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 $ 1.4 million and $ 1.8 million, as of December 31, 2023 and January 1, 2023, 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.

2 unchanged sentences

Future Maturities

The aggregate maturities of borrowings for each of the five fiscal years subsequent to 2023 are as follows:

The aggregate maturities of borrowings are as follows:

Fiscal Year Amount

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See Note 21 entitled “Items Reclassified From Accumulated Other Comprehensive Loss” for additional information.

As of December 31, 2023, 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.

As of January 1, 2023, the remaining accumulated other comprehensive loss associated with the terminated interest rate swaps to be amortized to earnings over the remaining term of the interest rate swaps prior to termination, before tax, was $ 1.0 million.

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.

NOTE 11 – LEASES

The Company has operating and finance leases for manufacturing equipment, corporate offices, showrooms, distribution facilities, design centers, as well as computer and office equipment.

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.

1 unchanged sentence

As of December 29, 2024, 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 31, 2023 and January 1, 2023:

December 31, 2023 January 1, 2023

The table below represents a summary of the balances recorded in the consolidated balance sheets related to the Company’s leases as of December 29, 2024 and December 31, 2023:

December 29, 2024 December 31, 2023

Balance Sheet Location Operating Leases Finance Leases Operating Leases Finance Leases

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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 31, 2023 and January 1, 2023:

The table below presents the weighted average remaining lease terms and discount rates for finance and operating leases as of December 29, 2024 and December 31, 2023:

End of Fiscal Year

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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 2023, we performed our annual quantitative goodwill impairment testing.

We focused our testing on the Americas reporting unit since it is the only reporting unit with an allocated goodwill balance.

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 2023 goodwill testing to facilitate a reconciliation of market capitalization.

The annual quantitative goodwill impairment testing performed in 2023 for our Americas reporting unit was consistent with our prior year methodology.

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.

T he 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, including inflation, and our expected financial performance, including planned revenue and operating income for the Americas 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 11.5 % in 2023 compared to 13.5 % in 2022, which fluctuated based on a risk premium assigned to estimates of expected future performance.

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 m easurement date, and therefore no impairment was indicated.

The goodwill balance of $ 105.4 million at December 31, 2023 is allocated to our Americas reporting unit.

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.

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 m easurement 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, the Company performed the annual goodwill impairment test, consistent with prior years.

3 unchanged sentences

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, as the excess of carrying value over fair value exceeded the recorded amount of goodwill for the EMEA reporting unit.

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.

3 unchanged sentences

The goodwill balance allocated to our Asia-Pacific reporting unit was previously written off in connection with the 2020 goodwill impairment.

During the fourth quarter of 2021, we performed the annual goodwill impairment test consistent with prior years and the methodology described above, and all reporting units that had a goodwill balance were noted to have a fair value that exceeded their carrying value.

The ending balances and the changes in the carrying amounts of goodwill allocated to each reportable segment for the years ended December 31, 2023 and January 1, 2023 are as follows (1) :

The ending balances and the changes in 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) :

AMS EAAA Total

2 unchanged sentences

$ 102,417 $ — $ 102,417

Impairment — ( 29,384 ) ( 29,384 )

Foreign currency translation (2)

3,031 — 3,031

Goodwill balance, at January 1, 2023

Goodwill balance, at December 31, 2023

105,448 — 105,448

3 unchanged sentences

$ 99,887 $ — $ 99,887

(1) Goodwill balances are presented net of cumulative impairment losses of $ 358.5 million as of both December 31, 2023 and January 1, 2023, and $ 329.1 million as of January 2, 2022.

(1) Goodwill balances are presented net of cumulative impairment losses of $ 358.5 million as of December 29, 2024.

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.

1 unchanged sentence

Other Intangible Assets

During the fourth quarter of 2023, the Company performed its annual impairment testing of the trademark and trade name intangible assets and determined that no impairment existed at the 2023 measurement date.

During the fourth quarter of 2024 and 2023, the Company performed its annual impairment testing of the trademark and trade name intangible assets and determined that no impairment existed at the 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 31, 2023 and January 1, 2023:

December 31, 2023 January 1, 2023

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

11 unchanged sentences

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 $ 5 million for fiscal year 2024 and approximately $ 3 million for fiscal year 2025.

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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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 31, 2023, and January 1, 2023, there were no shares of preferred stock issued.

As of December 29, 2024, and December 31, 2023, there were no shares of preferred stock issued.

NOTE 14 – SHAREHOLDERS’ EQUITY

7 unchanged sentences

The program has no specific expiration date.

No shares of common stock were repurchased pursuant to this program during 2023.

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.

5 unchanged sentences

LIABILITY FOREIGN

ADJUSTMENT CASH FLOW

ADJUSTMENT TOTAL

(in thousands)

Balance, at January 1, 2023 58,106 $ 5,811 $ 244,159 $ 278,639 $ ( 27,548 ) $ ( 138,775 ) $ ( 749 ) $ 361,537

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

9 unchanged sentences

Foreign currency translation adjustment — — — — — ( 23,727 ) ( 23,727 )

Reclassification out of accumulated other comprehensive loss – discontinued cash flow hedge — — — — — — 749 749

Balance, at December 29, 2024 58,304 $ 5,830 $ 261,028 $ 405,441 $ ( 39,834 ) $ ( 143,317 ) $ 489,148

7 unchanged sentences

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

3 unchanged sentences

Compensation expense related to share-based plans, net of forfeitures and shares received for tax withholdings ( 186 ) ( 19 ) 8,769 — — — — 8,750

Share repurchases ( 1,384 ) ( 138 ) ( 17,033 ) — — — — ( 17,171 )

Pension liability adjustment — — — — ( 6,468 ) — — ( 6,468 )

1 unchanged sentence

Reclassification out of accumulated other comprehensive loss – discontinued cash flow hedge — — — — — — 749 749

Balance, at January 1, 2023 58,106 $ 5,811 $ 244,159 $ 278,639 $ ( 27,548 ) $ ( 138,775 ) $ ( 749 ) $ 361,537

Balance, at December 31, 2023 58,112 $ 5,811 $ 252,909 $ 320,833 $ ( 34,016 ) $ ( 119,590 ) $ — $ 425,947

SHARES COMMON STOCK ADDITIONAL

12 unchanged sentences

( 66 ) ( 6 ) 8,132 — — — — 8,126

Share repurchases

( 1,384 ) ( 138 ) ( 17,033 ) — — — — ( 17,171 )

Pension liability adjustment — — — — 26,340 — — 26,340

4 unchanged sentences

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 2020, the shareholders approved the adoption of the 2020 Omnibus Stock Incentive Plan (“2020 Omnibus Plan”).

The aggregate number of shares of common stock that may be issued or transferred under the 2020 Omnibus Plan on or after the effective date of the plan is 3,700,000 .

No award may be granted after the tenth anniversary of the effective date of the 2020 Omnibus Plan.

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 standards require that the Company measure 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.

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Compensation expense related to awards of restricted stock was $ 2.3 million, $ 4.5 million and $ 5.3 million for 2024, 2023 and 2022, respectively.

These grants are made primarily to executive-level personnel at the Company, and as a result, no compensation costs have been capitalized.

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.

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Restricted Shares Weighted Average Grant Date Fair Value

Outstanding at January 1, 2023 1,006,400 $ 13.91

Outstanding at December 31, 2023 691,600 $ 12.55

Granted 58,400 16.22

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Restricted Share Unit Awards

During fiscal year 2023, the Company granted awards for 596,200 restricted share units to certain employees pursuant to the Company’s 2020 Omnibus Plan.

There were no restricted share unit awards granted during 2022 or 2021.

The weighted average grant date fair value of the restricted share units granted during 2023 was $ 10.36 .

During fiscal year 2024 and 2023, the Company granted awards for 407,300 and 596,200 restricted share units to certain employees 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 2024 and 2023 was $ 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.

1 unchanged sentence

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 $ 1.9 million for 2023.

There was no compensation expense related to restricted share unit awards during 2022 or 2021.

Compensation expense related to the restricted share units was $ 3.5 million and $ 1.9 million for 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 in SG&A expenses in the consolidated statements of operations.

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:

1 unchanged sentence

Weighted Average Grant Date Fair Value

Outstanding at January 1, 2023 — $ —

Outstanding at December 31, 2023 583,400 $ 10.35

407,300 13.38

7 unchanged sentences

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 one to 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.

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.

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Performance Shares Weighted Average Grant Date Fair Value

Outstanding at January 1, 2023 923,600 $ 13.91

Outstanding at December 31, 2023 1,115,000 $ 12.36

Granted 402,800 13.24

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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.

Any unvested stock awards considered non-participating securities are included in diluted EPS calculations when the inclusion of these shares would be dilutive.

Unvested share-based awards of restricted stock are paid dividends equally with all other shares of common stock.

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.

Distributed earnings include common stock dividends and dividends earned on unvested share-based payment awards.

Undistributed earnings represent earnings that were available for distribution but were not distributed.

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:

2 unchanged sentences

$ 86,946 $ 44,517 $ 19,560

distributed and undistributed earnings available to participating securities ( 569 ) ( 323 ) ( 602 )

Distributed and undistributed earnings available to common shareholders

$ 43,948 $ 19,237 $ 54,632

Weighted average shares outstanding

57,937 57,349 57,893

Participating securities

Shares for basic EPS 58,282 58,092 58,865

Dilutive effect of non-participating securities

Dilutive effect of share-based awards (non-participating securities)

Shares for diluted EPS 58,871 58,335 58,865

1 unchanged sentence

Diluted EPS $ 1.48 $ 0.76 $ 0.33

(1) Including income attributable to participating securities, which was $ 0.5 million, $ 0.6 million, and $ 0.3 million, for fiscal years 2024, 2023 and 2022, respectively.

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.

7 unchanged sentences

$ — $ ( 2,502 ) $ 1,965

A summary of the restructuring reserve balance, recorded within accrued expenses in the consolidated balance sheets, for the restructuring plans is presented below:

Workforce Reduction Retention Bonuses Asset Impairment and Other Related Charges

2021 Plan 2019 Plan 2021 Plan 2021 Plan Total

(in thousands)

Balance, at January 3, 2021 $ — $ 1,064 $ — $ — $ 1,064

Charged to expenses 2,257 ( 286 ) — 1,650 3,621

Deductions — ( 681 ) — — ( 681 )

Charged to other accounts — — — ( 1,650 ) ( 1,650 )

Balance, at January 2, 2022 2,257 97 — — 2,354

Charged to expenses 1 — 493 1,471 1,965

Deductions ( 1,981 ) ( 97 ) ( 314 ) — ( 2,392 )

Charged to other accounts — — — ( 1,471 ) ( 1,471 )

Balance, at January 1, 2023 277 — 179 — 456

Charged to expenses 23 — ( 19 ) 174 178

Deductions ( 300 ) — ( 160 ) — ( 460 )

Charged to other accounts — — — ( 174 ) ( 174 )

Balance, at December 31, 2023 $ — $ — $ — $ — $ —

Below is a discussion of the restructuring plan activities under the restructuring plans.

2021 Restructuring Plan

On September 8, 2021, the Company committed to a restructuring plan that continued to focus on efforts to improve efficiencies and decrease costs across its worldwide operations.

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.

Expected charges and cumulative charges incurred to date under the 2021 restructuring plan are as follows:

Workforce Reduction Retention Bonuses

Asset Impairment and Other Related Charges Total

(in thousands)

Estimated expected charges (1)

$ 2,281 $ 474 $ 3,295 $ 6,050

Cumulative charges incurred to date (1)

2,281 474 3,295 6,050

(1) Charges are attributable to the EAAA reportable segment.

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.

The Company completed the 2021 restructuring plan in the second quarter of 2023, following the sale of the Thailand facility, as described in Note 7 entitled “Property, Plant and Equipment,” and expected the plan to yield annualized savings of approximately $ 1.7 million.

A portion of the annualized savings was realized in the consolidated statements of operations in 2022, with the remaining portion of the annualized savings realized in 2023.

2019 Restructuring Plan

On December 23, 2019, the Company committed to a restructuring plan that continued to focus on efforts to improve efficiencies and decrease costs across its worldwide operations, and more closely align its operating structure with its business strategy.

The plan involved a reduction of approximately 105 employees and early termination of two office leases.

As a result of this plan, the Company recorded a pre-tax restructuring charge in the fourth quarter of 2019 of approximately $ 9.0 million (comprised of $ 1.1 million attributable to the AMS reportable segment and $ 7.9 million attributable to the EAAA reportable segment).

The charge was comprised of severance expenses ($ 8.8 million) and lease exit costs ($ 0.2 million).

The plan was expected to result in future cash expenditures of approximately $ 9.0 million for the payment of employee severance and lease exit costs.

In 2021 and 2020, the Company recorded reductions of $ 0.3 million and $ 3.7 million, respectively, of the previously recognized charges due to changes in expected cash payments for employee severance.

The 2019 restructuring plan was completed as of the end of the first quarter of 2022.

Cumulative charges under the 2019 restructuring plan, net of reductions of previously recognized charges, were $ 0.8 million within the AMS reportable segment and $ 4.2 million within the EAAA reportable segment.

The Company expected the plan to yield annualized savings of approximately $ 6.0 million.

A portion of the annualized savings was realized in the consolidated statements of operations in 2020, with the remaining portion of the annualized savings realized in 2021.

This restructuring plan was completed following the sale of the Thailand Facility.

NOTE 17 – INCOME TAXES

39 unchanged sentences

Expiring tax attributes

4,125 3,780 —

Valuation allowance effect ( 7,330 ) ( 879 ) 2,898

1 unchanged sentence

Goodwill impairment — — 6,171

Foreign tax rate change related to UK pension

( 2,493 ) — —

Unrecognized tax benefits ( 135 ) ( 79 ) ( 2,463 )

8 unchanged sentences

tax jurisdictions have either recently enacted legislation to adopt certain components of the Pillar Two Model Rules beginning in 2024 (including the European Union Member States) with the adoption of additional components in later years or announced their plans to enact legislation in future years.

We are still closely monitoring developments and evaluating the potential impact on future periods.

Deferred income taxes for the years ended December 31, 2023 and January 1, 2023, reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

For fiscal year 2024, we expect to meet the Transitional Country-by-Country (CbCR) Safe Harbor rules for most if not all jurisdictions and do not expect these provisions to have a material impact on the Company’s financial statements.

We will continue to closely monitor ongoing developments and evaluate any potential impact on future periods.

Deferred income taxes for the years ended December 29, 2024 and December 31, 2023, reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

The temporary differences that give rise to significant portions of the deferred tax assets and liabilities are as follows:

5 unchanged sentences

Federal tax credit carryforwards 4,036 7,876

Derivative instruments — 295

Deferred compensation 16,521 16,517

Property and equipment

Inventory 3,121 6,657

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Net deferred tax liabilities $ 7,198 $ 12,111

(1) In prior year, certain deferred tax asset and deferred tax liability balances by jurisdiction were presented as a net position.

In the current period presentation, deferred tax assets and deferred tax liabilities are presented gross.

Amounts above for 2023 have been recast to conform to the current period presentation.

These reclassifications change the previously disclosed gross deferred tax asset and gross deferred tax liability positions.

However, the net deferred tax liability position presented in the prior year remains unchanged.

Management believes, based on the Company’s history of taxable income and expectations for the future, that it is more likely than not that future taxable income will be sufficient to fully utilize the federal deferred tax assets at December 29, 2024.

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In addition, as of December 29, 2024, the Company has approximately $ 11.0 million in state net operating loss carryforwards relating to discontinued operations against which a full valuation allowance has been provided.

During fiscal year 2023, the Company had approximately $ 3.8 million in tax attributes with a full valuation allowance related to foreign tax credit carryforwards and foreign net operating loss carryforwards that expired.

As a result, the expiration of these tax attributes did not have an impact on the Company’s effective tax rate for fiscal year 2023.

As of December 31, 2023, and January 1, 2023, non-current deferred tax assets were reduced by approximately $ 2.8 million of unrecognized tax benefits.

During fiscal year 2024, the Company had approximately $ 4.1 million in tax attributes related to foreign tax credit carryovers that expired.

The expiring foreign tax credit carryover attributes had a full valuation allowance, as a result, the expiration of these tax attributed did not have an impact on the Company’s effective tax rate for fiscal year 2024.

As of December 29, 2024, and December 31, 2023, non-current deferred tax assets were reduced by approximately $ 2.6 million and $ 2.8 million of unrecognized tax benefits, respectively.

Historically, the Company has not provided for U.S.

income taxes and foreign withholding taxes on the undistributed accumulated earnings of its foreign subsidiaries, with the exception of its Canada subsidiaries and a specific portion of the undistributed earnings of foreign subsidiaries outside of Canada, because such earnings were deemed to be permanently reinvested.

In September of 2021, as part of an overall restructuring plan, the Company made the decision to close its manufacturing facility in Thailand.

As a result, the Company is no longer asserting that the undistributed earnings in its Thailand subsidiaries are permanently reinvested.

income taxes and foreign withholding taxes on the undistributed accumulated earnings of its foreign subsidiaries, with the exception of its Canada and Thailand subsidiaries and a specific portion of the undistributed earnings of foreign subsidiaries outside of Canada and Thailand, because such earnings were deemed to be permanently reinvested.

The Company provided for U.S.

income taxes and foreign withholding taxes on these earnings at December 31, 2023 and January 1, 2023.

Although the Tax Act created a dividends received deduction that generally eliminates additional U.S.

income taxes and foreign withholding taxes on the undistributed earnings that were not permanently reinvested at December 29, 2024 and December 31, 2023.

Although the Tax Cuts and Jobs Act of 2017 (the “Tax Act”) created a dividends received deduction that generally eliminates additional U.S.

federal income taxes on dividends from our foreign subsidiaries, the Company continues to assert that all of its undistributed earnings in its non-U.S.

9 unchanged sentences

The Company files returns in numerous foreign jurisdictions and in general it is subject to examination by the foreign tax authorities for the years 2013 to the present.

As a result of an audit of the Company’s U.K.

subsidiaries, Her Majesty’s Revenue & Customs (“HMRC”) issued notices of amendment to the Company’s U.K.

tax returns for the years 2012 through 2017.

The adjustments result from the interest rate applied in the intra-group financing arrangement between a Company subsidiary in the U.K.

In 2023, the Company filed requests with both the Competent Authority in the Netherlands and in the U.K.

to initiate a MAP for tax years 2018 through 2020 related to the double taxation arising from Her Majesty’s Revenue & Customs (“HMRC”) adjusting the interest rate applied in the intra-group financing arrangement between the Company’s subsidiary in the U.K.

and another in the Netherlands.

In April of 2021, the Company filed requests with both the Competent Authority in the Netherlands and in the U.K.

to initiate a mutual agreement procedure (“MAP”) related to the double taxation arising from the HMRC adjustments.

In June of 2022, the Competent Authorities reached an agreement on the interest rate to be applied for the years 2012 through 2017.

The Company recognized the adjustments from the 2012-2017 MAP in 2022.

In March of 2023, the Company filed requests with both the Competent Authority in the Netherlands and in the U.K.

to initiate a MAP for tax years 2018 through 2020 related to the double taxation arising from the application of the HMRC interest rate adjustments that were the subject of the 2012-2017 MAP.

In September 2023, the Competent Authorities reached an agreement on the interest rate to be applied for the years 2018 through 2020.

The Company recognized the adjustments from the 2018-2020 MAP in 2023.

The recognition of the adjustments in both 2022 and 2023 did not have a material impact on the Company’s effective tax rate or its financial position.

As of December 31, 2023, and January 1, 2023, the Company had $ 4.9 million and $ 5.7 million, respectively, of unrecognized tax benefits.

For the years ended December 31, 2023 and January 1, 2023, the Company recognized as income tax benefits $ 0.1 million and $ 2.5 million, respectively, of previously unrecognized tax benefits.

During 2023, the MAP was concluded, and the Company recognized the related adjustments in its 2023 financial results.

The recognition of the adjustments did not have a material impact on the Company’s effective tax rate or its financial position.

As of December 29, 2024, and December 31, 2023, the Company had $ 4.8 million and $ 4.9 million, respectively, of unrecognized tax benefits, including accrued interest and penalties.

While it is reasonably possible that some of the unrecognized tax benefits will be recognized within the next 12 months, the Company does not expect the recognition of such amounts will have a material impact on the Company’s financial results.

If any of the $ 4.9 million of unrecognized tax benefits as of December 31, 2023 are recognized, there would be a favorable impact on the Company’s effective tax rate of approximately $ 4.9 million in future periods.

If the unrecognized tax benefits are not favorably settled, $ 2.1 million of the total amount of unrecognized tax benefits would require the use of cash in future periods.

The Company recognizes accrued interest and income tax penalties related to unrecognized tax benefits as a component of income tax expense.

Accrued interest and penalties were $ 0.4 million as of December 31, 2023 and were included in the total unrecognized tax benefit noted above.

If the Company were to prevail on all uncertain tax positions, there would be a favorable impact on the Company’s effective tax rate of approximately $ 4.8 million in future periods.

If the unrecognized tax positions are not favorably settled, $ 2.2 million of the total amount of unrecognized tax benefits would require the use of cash in future periods.

The timing of the ultimate resolution of the Company’s tax matters and the payment and receipt of related cash is dependent on a number of factors, many of which are outside the Company’s control.

The Company recognizes accrued interest and income tax penalties related to unrecognized tax benefits as a component of income tax expense.

As of December 29, 2024 and December 31, 2023, the Company had accrued interest and penalties of $ 0.4 million for both periods, which are included in the total unrecognized tax benefit noted above.

A reconciliation of the beginning and ending amounts of gross unrecognized tax benefits is as follows:

2 unchanged sentences

Balance at beginning of year (1)

$ 4,532 $ 5,352 $ 7,360

Increases related to tax positions taken during the current year 316 320 342

2 unchanged sentences

Decreases related to lapse of applicable statute of limitations ( 289 ) ( 1,142 ) ( 2,225 )

Changes due to settlements — — ( 836 )

Changes due to foreign currency translation — 13 ( 1 )

Balance at end of year (1)

$ 4,351 $ 4,532 $ 5,352

(1) In prior years, interest and penalties were included in the reconciliation of the beginning and ending amounts of gross unrecognized tax benefits.

In the current period, interest and penalties are excluded from the reconciliation of the beginning and ending amounts of gross unrecognized tax benefits.

Amounts for fiscal years 2023 and 2022 above have been recast to conform to the current period presentation.

These reclassifications to the reconciliation of the beginning and ending amounts of gross unrecognized tax benefits do not impact the accrual as recorded in the consolidated balance sheets.

NOTE 18 – COMMITMENTS AND CONTINGENCIES

From time to time, the Company is a party to legal proceedings, whether arising in the ordinary course of business or otherwise.

Some of the proceedings the Company is involved in are summarized below.

One of the proceedings the Company is involved in is summarized below.

Lawsuit by Former CEO in Connection with Termination

27 unchanged sentences

The Court’s award of summary judgment in favor of the Company on Mr.

Gould’s breach of contract claim has been appealed by Mr.

Gould’s breach of contract claim was appealed by Mr.

Gould to the U.S.

Court of Appeals for the 11th Circuit, and that appeal remains pending.

Court of Appeals for the 11th Circuit.

On November 19, 2024, oral arguments for Mr.

Gould’s appeal were held in front of the U.S.

Court of Appeals for the 11th Circuit.

The Court of Appeals has not issued an opinion on Mr.

Gould’s appeal, and it remains pending.

The Company believes Mr.

Gould’s lawsuit and the appeal therefrom is without merit and intends to defend vigorously against it.

Putative Class Action Lawsuit

On November 12, 2020, the Company and certain former and current officers were named as defendants in a lawsuit filed in the United States District Court for the Eastern District of New York, Swanson v.

Interface, Inc.

(case :120-cv-05518).

The lawsuit was a federal securities law putative class action that alleged that the defendants made materially false and misleading statements regarding the Company’s business, operational and compliance policies.

The specific allegations related to the subject matter of a previously disclosed and concluded SEC investigation.

The complaint did not quantify the damages sought.

In 2023, the parties settled the lawsuit for $ 7.5 million, and the Company’s insurers funded the settlement amount.

NOTE 19 – EMPLOYEE BENEFIT PLANS

12 unchanged sentences

If a change in control of the Company occurs, as defined in the NSPs, the Company will contribute an amount to the rabbi trust sufficient to pay the obligation owed to each participant.

The deferred compensation liability in connection with the NSPs totaled $ 28.2 million and $ 27.5 million at December 31, 2023 and January 1, 2023, respectively.

The deferred compensation liability in connection with the NSPs totaled $ 30.3 million and $ 28.2 million at December 29, 2024 and December 31, 2023, respectively.

The Company invests the deferrals in insurance instruments with readily determinable cash surrender values and in exchange traded mutual funds.

The value of the insurance instruments was $ 19.2 million and $ 16.6 million as of December 31, 2023 and January 1, 2023, respectively.

The fair value of the mutual fund investments at December 31, 2023 and January 1, 2023 was $ 9.2 million and $ 11.0 million, respectively.

The value of the insurance instruments was $ 21.8 million and $ 19.2 million as of December 29, 2024 and December 31, 2023, respectively.

The fair value of the mutual fund investments at December 29, 2024 and December 31, 2023 was $ 8.7 million and $ 9.2 million, respectively.

Multiemployer Plan

12 unchanged sentences

The Company uses a year-end measurement date for the plans, which is the closest practical date to the Company’s fiscal year end.

As described above, on December 31, 2019, a plan amendment was executed to eliminate future service accruals in the Dutch defined benefit plan.

The Dutch Plan remains in existence and continues to pay vested benefits.

The reduction in future benefit accruals resulted in a curtailment of the Dutch Plan.

Participants in the Dutch Plan no longer accrue benefits under the plan after December 31, 2019, and participate in the IWPF beginning in fiscal year 2020.

As described above, on December 31, 2019, participants in the Dutch Plan no longer accrue benefits under the plan and they became eligible to contribute to the IWPF beginning fiscal year 2020.

Although the Dutch Plan is frozen to new participants, vested benefits will continue to be accounted for in accordance with applicable accounting standards for defined benefit plans.

1 unchanged sentence

The guarantee provision included in the insurance contract, that existed to fund any shortfall between the fair value of plan investments and the benefit obligation, expired on December 31, 2019.

The Company will fund the cost to guarantee vested benefits and this amount is recorded as an obligation on the Company’s consolidated balance sheets.

As discussed above, the Company still has an obligation to pay vested benefits in the frozen Dutch Plan.

The Company is obligated to fund the cost to guarantee vested benefits.

As of December 29, 2024, the under-funded status of the Dutch Plan of $ 5.1 million is recorded on the consolidated balance sheet in other long-term liabilities.

35 unchanged sentences

The above disclosure represents the aggregation of information related to the Company’s three defined benefit plans which cover many of its European employees.

The increase in the projected benefit obligation of $ 19.0 million for 2023 compared to prior year was primarily due to a decrease in the weighted average discount rate used to measure the obligation and the impact of foreign currency translation due to the strengthening of the Euro and British Pound sterling against the U.S.

The decrease in the projected benefit obligation of $ 13.5 million for 2024 compared to prior year was primarily due to an increase in the weighted average discount rate used to measure the obligation and the impact of foreign currency translation due to the weakening of the Euro against the U.S.

dollar in 2024.

2 unchanged sentences

The nora Plan is an unfunded defined benefit plan and the accumulated benefit obligation exceeded plan assets as of December 29, 2024.

The following table summarizes this information as of December 31, 2023 and January 1, 2023.

The following table summarizes this information as of December 29, 2024 and December 31, 2023.

End of Fiscal Year

31 unchanged sentences

The assets are managed by professional investment firms and performance is evaluated periodically against specific benchmarks.

The plans’ net assets did not include the Company’s own stock at December 31, 2023 or January 1, 2023.

The plans’ net assets did not include the Company’s own stock at December 29, 2024 or December 31, 2023.

Dutch Plan Assets and Indexation Benefit

17 unchanged sentences

Asset Category Target Allocation Percentage of Plan Assets at Year End

Equity securities — % — — % — % — %

Debt and debt securities 65 % — 70 % 58 % 59 %

2 unchanged sentences

100 % 100 % 100 %

The following table sets forth by level within the fair value hierarchy the foreign defined benefit plans’ assets at fair value, as of December 31, 2023 and January 1, 2023.

The following table sets forth by level within the fair value hierarchy the foreign defined benefit plans’ assets at fair value, as of December 29, 2024 and December 31, 2023.

The nora plan is currently unfunded.

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Total $ 58,823 $ 122,330 $ 181,153

Pension Plan Assets by Category as of January 1, 2023

Pension Plan Assets by Category as of December 31, 2023

Dutch Plan UK Plan Total

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Purchases, sales and settlements, net ( 10,138 ) ( 5,734 )

Assets transferred from level 3

Currency translation adjustment

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Balance of level 3 assets, end of year $ 74,641 $ 90,916

(1) Includes $ 2.7 million and $( 22.2 ) million for 2023 and 2022, respectively, of unrealized gains / (losses) recognized during the period in other comprehensive income (loss) for assets held at year end.

(1) Includes $( 2.1 ) million and $ 2.7 million for 2024 and 2023, respectively, of unrealized (losses) / gains recognized during the period in other comprehensive loss for assets held at year end.

During 2025, the Company expects to contribute $ 2.4 million to the foreign defined benefit plans.

3 unchanged sentences

2025 $ 10,551

2029-2033 59,800

Domestic Defined Benefit Plan

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Actuarial loss (gain)

667 ( 6,220 )

Benefit obligation, end of year $ 21,065 $ 22,659

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Unrecognized actuarial loss $ 3,428 $ 4,098

The accumulated benefit obligation related to the SCP was $ 22.7 million as of both December 31, 2023 and January 1, 2023.

The accumulated benefit obligation related to the SCP was $ 21.1 million at December 29, 2024, and $ 22.7 million at December 31, 2023.

The SCP is currently unfunded;

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Interest cost $ 1,065 $ 1,134 $ 771

Amortizations 195 557 743

Amortization of actuarial losses

Net periodic benefit cost $ 1,304 $ 1,329 $ 1,328

In accordance with applicable accounting standards, all components of net periodic benefit cost associated with the SCP are presented within other expense, net, in the consolidated statements of operations.

The change in other comprehensive loss during 2023 related to the SCP as a result of plan activity was a net loss of approximately $ 0.4 million (net of $ 0.1 million of tax), primarily comprised of a net loss during the period of $ 0.5 million (net of $ 0.2 million of tax) and amortization of loss of $ 0.1 million (net of $ 0.1 million of tax).

The change in other comprehensive loss during 2024 related to the SCP as a result of plan activity was a net gain of approximately $ 0.7 million (net of $ 0.3 million of tax), primarily comprised of a net gain during the period of $ 0.6 million (net of $ 0.2 million of tax) and amortization of loss of $ 0.1 million (net of $ 0.1 million of tax).

During 2024, the Company contributed $ 1.9 million in the form of direct benefit payments for its domestic SCP.

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The AMS operating segment includes the United States, Canada and Latin America geographic areas.

Pursuant to the management approach discussed above, the Company’s CODM, our chief executive officer, evaluates performance at the AMS and EAAA operating segment levels and makes operating and resource allocation decisions based on segment adjusted operating income (“AOI”), which includes allocations of corporate selling, general and administrative expenses.

AOI excludes nora purchase accounting amortization;

The CODM uses AOI to evaluate segment operating results compared to expectations.

AOI is also used by the CODM to develop variable compensation targets and make capital spend decisions.

AOI includes allocations of corporate selling, general and administrative expenses and global support as discussed below and excludes:

nora purchase accounting amortization;

Thailand plant closure inventory write-down;

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The Company has determined that it has two reportable segments – AMS and EAAA, as each operating segment meets the quantitative thresholds defined in the accounting guidance.

Segment information for 2023, 2022 and 2021 is presented in the table below:

During fiscal year 2024, the Company implemented a cost center realignment initiative to centralize certain global/shared functions.

During 2024, SG&A expenses for these global support functions were allocated to AOI for each reportable segment consistent with the allocation methodology used to allocate corporate overhead in prior periods.

Prior year AOI amounts below were not recast as there was no material impact to the measure of segment profit for each reportable segment.

There were no changes to the composition of the Company’s operating or reportable segments.

The following table outlines information by reportable segment including net sales, significant segment expenses, and AOI.

The table also includes a reconciliation to income before taxes for fiscal years 2024, 2023, and 2022.

2024 2023 2022

AMS EAAA TOTAL AMS EAAA TOTAL AMS EAAA TOTAL

(in thousands)

AMS $ 736,955 $ 753,740 $ 651,216

EAAA 524,543 544,179 549,182

Total net sales $ 1,261,498 $ 1,297,919 $ 1,200,398

AMS $ 87,789 $ 102,370 $ 85,014

EAAA 28,608 30,058 37,268

$ 800,811 $ 514,847 $ 1,315,658 $ 736,955 $ 524,543 $ 1,261,498 $ 753,740 $ 544,179 $ 1,297,919

significant segment expenses (1)

Adjusted cost of sales (2)

494,185 333,353 458,708 356,591 473,761 374,106

Adjusted selling, general, & administrative expenses (3)

200,032 146,691 190,458 139,344 177,609 140,015

Segment AOI 106,594 34,803 141,397 87,789 28,608 116,397 102,370 30,058 132,428

Reconciliation of AOI to income before taxes

Restructuring, severance, asset impairment and other, net 2,530 5,631 8,189

Purchasing accounting amortization 5,172 5,172 5,038

Cyber Event impact

( 711 ) 1,072 5,093

Goodwill & intangible asset impairment — — 36,180

Thailand plant inventory write down — — 2,530

Interest expense 23,205 31,787 29,929

Other (income) expense, net

( 2,353 ) 9,081 3,552

Income before taxes $ 113,554 $ 63,654 $ 41,917

(1) Significant segment expense categories and amounts align with segment level information that is regularly provided to the CODM, included in the measure of segment profit, and considered to be significant.

Amounts include allocation of corporate overhead and global support costs.

Intersegment expenses are excluded.

(2) Adjusted cost of sales excludes purchase accounting amortization, the Cyber Event impact, and Thailand plant inventory write down.

(3) Adjusted selling, general, and administrative expenses exclude the cyber event impact and restructuring, asset impairment, severance, and other, net.

Segment depreciation and amortization for 2024, 2023 and 2022 is presented in the table below:

2024 2023 2022

(in thousands)

Depreciation and amortization

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Total reported assets $ 1,170,816 $ 1,230,095

Total assets in the table above include operating lease right-of-use assets for fiscal years 2023 and 2022.

Below is a summary of the operating lease right-of-use assets by reportable segment and a reconciliation to the consolidated amounts:

End of Fiscal Year

Operating Lease Right-of-Use Assets 2023 2022

(in thousands)

AMS $ 23,149 $ 14,140

EAAA 54,663 58,255

Total segment operating lease right-of-use assets 77,812 72,395

Corporate operating lease right-of-use assets 9,707 9,249

Total operating lease right-of-use assets $ 87,519 $ 81,644

Reconciliations of operating income (loss) to income before income tax expense and segment AOI are presented as follows:

2023 2022 2021

(in thousands)

AMS operating income $ 85,035 $ 92,234 $ 81,445

EAAA operating income (loss) 19,487 ( 16,836 ) 23,352

Consolidated operating income

104,522 75,398 104,797

Interest expense 31,787 29,929 29,681

Other expense, net 9,081 3,552 2,483

Income before income tax expense

$ 63,654 $ 41,917 $ 72,633

2023 2022 2021

AMS EAAA AMS EAAA AMS EAAA

(in thousands)

Operating income (loss) $ 85,035 $ 19,487 $ 92,234 $ ( 16,836 ) $ 81,445 $ 23,352

Purchase accounting amortization — 5,172 — 5,038 — 5,636

Thailand plant closure inventory write-down — — — 2,530 — —

Cyber Event impact 616 456 3,878 1,215 — —

Goodwill and intangible asset impairment — — 3,838 32,342 — —

Restructuring, asset impairment, severance, and other, net

2,138 3,493 2,420 5,769 3,569 8,280

AOI $ 87,789 $ 28,608 $ 102,370 $ 30,058 $ 85,014 $ 37,268

The Company has a large and diverse customer base, which includes numerous customers located in foreign countries.

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2023 includes $ 2.2 million and $ 5.0 million of leased equipment, net of accumulated amortization, in the United States and foreign countries, respectively.

(3) Long-lived assets in Australia did not exceed 10 % of consolidated long-lived assets for 2023.

Long-lived assets in Australia were $ 29.9 million in 2022, which exceeded 10 % of consolidated long-lived assets as of the end of that fiscal year.

NOTE 21 – ITEMS RECLASSIFIED FROM ACCUMULATED OTHER COMPREHENSIVE LOSS

Amounts reclassified out of accumulated other comprehensive loss (“AOCI”), before tax, to the consolidated statements of operations for the fiscal years 2023, 2022 and 2021, are reflected in the table below:

Amounts reclassified out of accumulated other comprehensive loss (“AOCL”), before tax, to the consolidated statements of operations for the fiscal years 2024, 2023 and 2022, are reflected in the table below:

Statement of Operations Location 2024 2023 2022

1 unchanged sentence

Loss on foreign subsidiary liquidation (1)

Other expense, net

Other (income) expense, net

$ ( 2,152 ) $ ( 6,221 ) $ —

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Amortization of benefit plan net actuarial losses and prior service cost (3)

Other expense, net ( 800 ) ( 1,875 ) ( 2,825 )

Other (income) expense, net

( 1,499 ) ( 800 ) ( 1,875 )

Total loss reclassified from AOCI $ ( 3,651 ) $ ( 8,003 ) $ ( 4,684 )

(1) The Company’s foreign subsidiaries in Russia and Brazil were substantially liquidated in 2023, and the cumulative foreign currency translation losses associated with these entities were recognized in the consolidated statements of operations.

The tax impact of the cumulative foreign currency translation reclassification for 2023 is approximately $ 1.1 million.

(2) The tax impact of the interest rate swap reclassifications were $ 0.2 million, $ 0.8 million and $ 1.4 million for 2023, 2022 and 2021, respectively, related to the discontinued cash flow hedges.

(1) In 2024, the Company’s foreign subsidiary in Thailand was substantially liquidated and in 2023, the Company’s foreign subsidiaries in Russia and Brazil were substantially liquidated.

The cumulative foreign currency translation losses associated with these entities were recognized in the consolidated statements of operations for the respective period.

There is no tax impact for the Thailand cumulative foreign currency translation reclassification for 2024 as it is non-deductible.

The tax impact for the 2023 cumulative foreign currency translation reclassification was $ 1.1 million.

(2) The tax impact of the interest rate swap reclassifications were $ 0.2 million and $ 0.8 million for 2023 and 2022, respectively, related to the discontinued cash flow hedges.

See Note 10 entitled “Derivative Instruments” for additional information.

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We have audited the accompanying consolidated balance sheets of Interface, Inc.

(the “Company”) as of December 31, 2023, and January 1, 2023, the related consolidated statements of operations, comprehensive income, and cash flows for each of the three fiscal years in the period ended December 31, 2023, and the related notes and financial statements schedule listed in the accompanying index (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2023, and January 1, 2023, and the results of its operations and its cash flows for each of the three fiscal years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

(the “Company”) as of December 29, 2024 and December 31, 2023, the related consolidated statements of operations, comprehensive income, and cash flows for each of the three fiscal years in the period ended December 29, 2024, and the related notes and financial statement schedule listed in the accompanying index (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 29, 2024 and December 31, 2023, and the results of its operations and its cash flows for each of the three fiscal years in the period ended December 29, 2024 , in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 29, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and our report dated February 26, 2025 expressed an unqualified opinion thereon.

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The Company estimates the fair value of the Americas reporting unit using a combination of fair values derived from an income methodology and a market comparable methodology.

The Company’s consolidated trademark and tradename intangible assets were $47.7 million as of December 31, 2023.

Trademark and tradename intangible assets acquired in connection with 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 would more likely than not reduce the fair value of the intangible assets below their carrying amount.

The Company’s consolidated Trademark and trade name intangible assets was $45.2 million as of December 29, 2024.

Trademark and trade name intangible assets acquired in connection with 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 would more likely than not reduce the fair value of the intangible assets below their carrying amount.

The Company prepared valuations of the 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.

We identified the income approach valuation methodology used in the impairment evaluation of goodwill for the Americas reporting unit and the nora tradename intangibles as a critical audit matter due to the inherent subjectivity involved in management’s determination of (i) forecasts of revenues and (ii) the discount rate.

We identified the income approach valuation methodology used in the impairment evaluation of goodwill for the Americas reporting unit and the nora trade name and trademark intangibles as a critical audit matter due to the inherent subjectivity involved in management’s determination of (i) forecasts of revenues and (ii) the discount rate.

The audit procedures to evaluate the reasonableness of these assumptions involved a high degree of auditor judgment and an increased extent of effort, including the involvement of individuals with specialized skill or knowledge.

2 unchanged sentences

• Inquiring of management to understand the process for developing the forecasts of future revenues and evaluating the consistency of the revenue forecasts used with evidence obtained in other areas of the audit.

• Testing management’s process used to evaluate goodwill and the nora tradename intangibles for impairment, including evaluating the reasonableness of the forecasts of future revenues by comparing forecasts of future revenues to (1) historical results and the recent trend of revenue growth rates, (2) forecasted information included in industry reports for the Company and its peer companies, (3) publicly available industry analyst projections, and (4) external communications made by the Company.

• Testing management’s process used to evaluate goodwill and the nora trade name and trademark intangibles for impairment, including evaluating the reasonableness of the forecasts of future revenues by comparing forecasts of future revenues to (1) historical results and the recent trend of revenue growth rates, (2) forecasted information included in industry reports for the Company and its peer companies, (3) publicly available industry analyst projections, and (4) external communications made by the Company.

• Utilizing our valuation specialists to assist in evaluating the reasonableness of the Company’s discount rate by (i) testing the source information underlying the determination of the discount rate, (ii) testing the mathematical accuracy of the calculations;

12 unchanged sentences

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 29, 2024, based on the COSO criteria .

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheets of the Company as of December 31, 2023, and January 1, 2023, the related consolidated statements of operations, comprehensive income, and cash flows for each of the three fiscal years in the period ended December 31, 2023, and the related notes and financial statements schedule and our report dated February 28, 2024 expressed an unqualified opinion thereon.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 29, 2024 and December 31, 2023, the related consolidated statements of operations, comprehensive income, and cash flows for each of the three fiscal years in the period ended December 29, 2024, and the related notes and financial statement schedule listed in the accompanying index and our report dated February 26, 2025 expressed an unqualified opinion thereon.

Basis for Opinion

21 unchanged sentences

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.

What changed 10-K

Item 8. Financial Statements and Supplementary Data