What changed in this filing

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Item 1. Financial Statements

2025-05-06 compared with 2024-11-05 · 185 added, 245 removed, 356 unchanged (55% of the section changed)

4 unchanged sentences

(in thousands, except par values)

SEPTEMBER 29, 2024 DECEMBER 31, 2023

MARCH 30, 2025 DECEMBER 29, 2024

Current assets

27 unchanged sentences

5,000 shares authorized;

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

none issued or outstanding at March 30, 2025 and December 29, 2024

Common stock, par value $ 0.10 per share;

120,000 shares authorized;

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

58,610 and 58,304 shares issued and outstanding at March 30, 2025 and December 29, 2024, respectively

Additional paid-in capital 257,416 261,028

9 unchanged sentences

(in thousands, except per share data)

THREE MONTHS ENDED NINE MONTHS ENDED

SEPTEMBER 29, 2024 OCTOBER 1, 2023 SEPTEMBER 29, 2024 OCTOBER 1, 2023

THREE MONTHS ENDED

MARCH 30, 2025 MARCH 31, 2024

Net sales $ 297,413 $ 289,743

2 unchanged sentences

Selling, general and administrative expenses 87,736 85,959

Restructuring, asset impairment, and other gains, net

— — — ( 2,502 )

Operating income 23,227 24,446

Interest expense 4,415 6,423

Other expense, net

Other expense (income), net

1,703 ( 976 )

Income before income tax expense

17,109 18,999

Income tax expense 4,107 4,820

Net income $ 28,443 $ 9,879 $ 65,180 $ 24,962

$ 13,002 $ 14,179

Earnings per share – basic

$ 0.22 $ 0.24

Earnings per share – diluted

$ 0.22 $ 0.24

Common shares outstanding – basic 58,434 58,238

5 unchanged sentences

(in thousands)

THREE MONTHS ENDED NINE MONTHS ENDED

SEPTEMBER 29, 2024 OCTOBER 1, 2023 SEPTEMBER 29, 2024 OCTOBER 1, 2023

Net income $ 28,443 $ 9,879 $ 65,180 $ 24,962

THREE MONTHS ENDED

MARCH 30, 2025 MARCH 31, 2024

$ 13,002 $ 14,179

Other comprehensive income (loss), after tax:

1 unchanged sentence

Pension liability adjustment ( 695 ) 458

Reclassification from accumulated other comprehensive loss – discontinued cash flow hedge — 150 — 749

Other comprehensive income (loss)

1 unchanged sentence

Comprehensive income $ 28,141 $ 3,545

$ 48,364 $ 1,055 $ 72,979 $ 21,949

See accompanying notes to consolidated condensed financial statements.

3 unchanged sentences

(in thousands)

NINE MONTHS ENDED

SEPTEMBER 29, 2024 OCTOBER 1, 2023

THREE MONTHS ENDED

MARCH 30, 2025 MARCH 31, 2024

OPERATING ACTIVITIES:

Net income $ 65,180 $ 24,962

$ 13,002 $ 14,179

Adjustments to reconcile net income to cash provided by operating activities:

1 unchanged sentence

Share-based compensation expense

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

139 ( 2,531 )

Loss on foreign subsidiary liquidation

Deferred income taxes

8 unchanged sentences

Cash provided by operating activities

11,739 12,619

INVESTING ACTIVITIES:

10 unchanged sentences

Cash used in financing activities

Net cash provided by operating, investing and financing activities

( 8,668 ) ( 29,776 )

Net cash used in operating, investing and financing activities

( 4,396 ) ( 19,150 )

Effect of exchange rate changes on cash 2,927 ( 1,574 )

CASH AND CASH EQUIVALENTS:

( 1,469 ) ( 20,724 )

Balance, beginning of period 99,226 110,498

10 unchanged sentences

Reference should be made to the Company’s year-end financial statements and notes thereto contained in its Annual Report on Form 10-K for the fiscal year ended December 29, 2024, as filed with the Commission.

The financial information included in this report has been prepared by the Company, without audit.

The financial information included in this report has been prepared by the Company.

In the opinion of management, the financial information included in this report contains all adjustments necessary for a fair presentation of the results for the interim periods.

2 unchanged sentences

The December 29, 2024, consolidated condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States (“GAAP”).

The nine-month periods ended September 29, 2024 and October 1, 2023 both include 39 weeks.

The three-month periods ended September 29, 2024 and October 1, 2023 both include 13 weeks.

The three-month periods ended March 30, 2025 and March 31, 2024 both include 13 weeks.

Risks and Uncertainties

Global economic challenges, including the impacts of the Russia-Ukraine and Israel-Hamas wars or other conflicts around the globe, supply chain disruptions, and slow macro environments in certain geographical regions could cause economic uncertainty and volatility.

In connection with the Cyber Event discussed below, 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.

Global economic challenges including but not limited to the potential impacts of government-imposed tariffs and retaliatory tariffs, inflation, supply chain disruptions, the Russia-Ukraine war and the conflicts in the Middle East, and slow market conditions in certain parts of the globe could cause economic uncertainty and volatility.

The Company considered these impacts and subsequent general uncertainties and volatility in the global economy on the assumptions and estimates used herein.

These uncertainties could result in a future material adverse effect to the amounts reported within the Company’s consolidated condensed financial statements if actual results differ from these estimates.

Cybersecurity Event

On November 20, 2022, we discovered a cybersecurity attack, perpetrated by unauthorized third parties, affecting our IT systems (the “Cyber Event”).

In response to this Cyber Event, we notified law enforcement and took steps to supplement existing security monitoring, including scanning and protective measures.

The investigation of the Cyber Event by our forensic experts was completed during fiscal year 2023.

Reclassifications

Certain reclassifications to previously reported information have been made in the consolidated condensed statements of cash flows to conform to the current period presentation.

Certain reclassifications to prior year information have been made in the consolidated condensed 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 condensed statements of cash flows to provide additional information.

1 unchanged sentence

Recently Issued Accounting Pronouncements – Not Yet Adopted

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, “ Income Taxes (Topic 740 ):

In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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 and 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 ):

Improvements to Income Tax Disclosures.

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

In November 2023, the FASB issued 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.

Early adoption is permitted.

The Company has completed its evaluation of ASU 2023-07 and has determined that the new guidance will enhance our segment disclosures, but will not have a material impact to our consolidated financial statements.

NOTE 2 – REVENUE RECOGNITION

The Company generates revenue from sales of modular carpet, resilient flooring, rubber flooring, and other flooring-related material, and from the installation of carpet and other flooring-related material.

A summary of these revenue streams, as a percentage of net sales, for the three and nine months ended September 29, 2024 and October 1, 2023 is as follows:

A summary of these revenue streams, as a percentage of net sales, for the three months ended March 30, 2025 and March 31, 2024 is as follows:

Three Months Ended

Nine Months Ended

September 29, 2024 October 1, 2023 September 29, 2024 October 1, 2023

March 30, 2025 March 31, 2024

Revenue from the sale of flooring material

96 % 98 % 97 % 98 %

Revenue from installation of flooring material

Disaggregation of Revenue

For the three and nine months ended September 29, 2024 and October 1, 2023, revenue from the Company’s customers is broken down by geography as follows:

For the three months ended March 30, 2025 and March 31, 2024, revenue from the Company’s customers is broken down by geography as follows:

Three Months Ended

Nine Months Ended

Geography September 29, 2024 October 1, 2023 September 29, 2024 October 1, 2023

Geography March 30, 2025 March 31, 2024

Americas 60.5 % 58.6 %

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Inventories are summarized as follows:

September 29, 2024 December 31, 2023

March 30, 2025 December 29, 2024

(in thousands)

7 unchanged sentences

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:

Three Months Ended Nine Months Ended

September 29, 2024 October 1, 2023 September 29, 2024 October 1, 2023

Three Months Ended

March 30, 2025 March 31, 2024

(in thousands, except per share data)

Net income (1)

distributed and undistributed earnings available to participating securities ( 119 ) ( 117 ) ( 425 ) ( 327 )

Distributed and undistributed earnings available to common shareholders $ 28,324 $ 9,762 $ 64,755 $ 24,635

$ 13,002 $ 14,179

Weighted average shares outstanding 58,325 57,623

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Diluted EPS $ 0.22 $ 0.24

For both the three and nine months ended September 29, 2024, there were no securities excluded from the computation of diluted EPS that would have been antidilutive.

For both the three and nine months ended October 1, 2023, 855,785 of non-participating securities were excluded from the computation of diluted EPS because the effect would have been antidilutive.

(1) Including income attributable to participating securities, which was not material for the three months ended March 30, 2025 and was $ 0.2 million for the three months ended March 31, 2024.

For the three months ended March 30, 2025, there were no securities excluded from the computation of diluted EPS that would have been antidilutive.

For the three months ended March 31, 2024, 1,049,405 non-participating securities (restricted share units and performance shares) were excluded from the computation of diluted EPS as these securities would have been antidilutive for the period.

NOTE 5 – LONG-TERM DEBT

Long-term debt consisted of the following:

September 29, 2024 December 31, 2023

March 30, 2025 December 29, 2024

Outstanding Principal Interest Rate (1)

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(2) The Syndicated Credit Facility also includes a multicurrency revolving loan facility up to $ 300.0 million.

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

There were no revolving loan borrowings outstanding as of March 30, 2025 or December 29, 2024.

Syndicated Credit Facility

2 unchanged sentences

Interest on base rate loans is charged at varying rates computed by applying a margin depending on the Company’s consolidated net leverage ratio as of the most recently completed fiscal quarter.

Interest on SOFR-based and alternative currency loans is charged at varying rates computed by applying a margin over the applicable SOFR rate or alternative currency rate, depending on the Company’s consolidated net leverage ratio as of the most recently completed fiscal quarter.

Interest on secured overnight financing rate based (“SOFR”) and alternative currency loans is charged at varying rates computed by applying a margin over the applicable SOFR rate or alternative currency rate, depending on the Company’s consolidated net leverage ratio as of the most recently completed fiscal quarter.

In addition, the Company pays a commitment fee per annum (depending on the Company’s consolidated net leverage ratio as of the most recently completed fiscal quarter) on the unused portion of the Facility.

1 unchanged sentence

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

As of September 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.

As of both September 29, 2024 and December 31, 2023, the carrying value of the Company’s borrowings under the Facility approximated its fair value as the Facility bears interest rates that are similar to existing market rates.

The fair value of borrowings under the Facility is estimated using observable market rates and is considered Level 2 within the fair value hierarchy.

As of March 30, 2025 and December 29, 2024, the Company had $ 0.5 million and $ 0.7 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, which are due on the last day of the calendar quarter.

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Interest is paid semi-annually on June 1 and December 1 of each year.

The Senior Notes are unsecured and are guaranteed, jointly and severally, by each of the Company’s material domestic subsidiaries, all of which also guarantee the obligations of the Company under its Facility.

As of September 29, 2024, the estimated fair value of the Senior Notes was $ 294.8 million, compared with a net carrying value recorded in the Company’s consolidated condensed balance sheet of $ 297.1 million ($ 300.0 million gross, excluding the impact of $ 2.9 million of unamortized debt issuance costs).

The fair value of the Senior Notes is derived using quoted prices for similar instruments and is considered Level 2 within the fair value hierarchy.

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

NOTE 6 – SHAREHOLDERS’ EQUITY

The following tables depict the activity in the accounts which make up shareholders’ equity for the nine months ended September 29, 2024 and October 1, 2023:

The following tables depict the activity in the accounts which make up shareholders’ equity for the three months ended March 30, 2025 and March 31, 2024:

SHARES COMMON STOCK ADDITIONAL PAID-IN CAPITAL RETAINED

EARNINGS FOREIGN CURRENCY TRANSLATION ADJUSTMENT PENSION LIABILITY TOTAL

EARNINGS PENSION LIABILITY FOREIGN CURRENCY TRANSLATION ADJUSTMENT TOTAL

(in thousands, except per share data)

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

Net income — — — 14,179 — — 14,179

Issuances of stock related to restricted share units and performance shares 472 47 ( 47 ) — — — —

Cash dividends declared, $ 0.01 per common share

— — — 13,002 — — 13,002

Compensation expense related to share-based plans, net of forfeitures and shares received for tax withholdings ( 311 ) ( 31 ) ( 324 ) — — — ( 355 )

Foreign currency translation adjustment — — — — ( 11,092 ) — ( 11,092 )

Pension liability adjustment — — — — — 458 458

Balance, at March 31, 2024 58,273 $ 5,827 $ 252,538 $ 334,423 $ ( 130,682 ) $ ( 33,558 ) $ 428,548

Net income — — — 22,558 — — 22,558

Issuances of stock related to restricted share units and performance shares

Restricted stock issuances 58 6 941 — — — 947

Unrecognized compensation expense related to restricted stock awards — — ( 946 ) — — — ( 946 )

Cash dividends declared, $ 0.01 per common share

658 66 ( 66 ) — — — —

Compensation expense related to share-based plans, net of forfeitures and shares received for tax withholdings ( 32 ) ( 3 ) 2,133 — — — 2,130

Foreign currency translation adjustment — — — — ( 2,022 ) — ( 2,022 )

Pension liability adjustment — — — — — 534 534

Balance, at June 30, 2024 58,303 $ 5,830 $ 254,666 $ 356,397 $ ( 132,704 ) $ ( 33,024 ) $ 451,165

Net income — — — 28,443 — — 28,443

Issuances of stock related to restricted share units

3 — — — — — —

Cash dividends declared, $ 0.01 per common share

1 unchanged sentence

Compensation expense related to share-based plans, net of forfeitures and shares received for tax withholdings

Foreign currency translation adjustment — — — — 21,131 — 21,131

( 352 ) ( 35 ) ( 3,546 ) — — — ( 3,581 )

Pension liability adjustment — — — — ( 695 ) — ( 695 )

Balance, at September 29, 2024 58,304 $ 5,830 $ 257,282 $ 384,258 $ ( 111,573 ) $ ( 34,234 ) $ 501,563

Foreign currency translation adjustment — — — — — 15,834 15,834

Balance, at March 30, 2025 58,610 $ 5,861 $ 257,416 $ 417,802 $ ( 40,529 ) $ ( 127,483 ) $ 513,067

SHARES COMMON STOCK ADDITIONAL PAID-IN CAPITAL RETAINED

EARNINGS FOREIGN CURRENCY TRANSLATION ADJUSTMENT PENSION LIABILITY CASH FLOW

EARNINGS PENSION LIABILITY FOREIGN CURRENCY TRANSLATION ADJUSTMENT TOTAL

(in thousands, except per share data)

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

Net loss — — — ( 714 ) — — — ( 714 )

Issuances of stock related to performance shares 79 8 ( 8 ) — — — — —

Cash dividends declared, $ 0.01 per common share

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

— — — 14,179 — — 14,179

Compensation expense related to share-based plans, net of forfeitures and shares received for tax withholdings ( 132 ) ( 14 ) 1,850 — — — — 1,836

Foreign currency translation adjustment — — — — 4,930 — — 4,930

Pension liability adjustment — — — — — ( 279 ) — ( 279 )

Reclassification out of accumulated other comprehensive loss – discontinued cash flow hedge — — — — — — 299 299

Balance, at April 2, 2023 58,053 $ 5,805 $ 246,001 $ 277,345 $ ( 133,845 ) $ ( 27,827 ) $ ( 450 ) $ 367,029

Net income — — — 15,797 — — — 15,797

Issuances of stock related to restricted share units and performance shares

Restricted stock issuances 102 10 697 — — — — 707

Unrecognized compensation expense related to restricted stock awards — — ( 708 ) — — — — ( 708 )

Cash dividends declared, $ 0.01 per common share

472 47 ( 47 ) — — — —

Compensation expense related to share-based plans, net of forfeitures and shares received for tax withholdings ( 48 ) ( 5 ) 1,808 — — — — 1,803

Foreign currency translation adjustment — — — — 1,361 — — 1,361

Pension liability adjustment — — — — — ( 800 ) — ( 800 )

Reclassification out of accumulated other comprehensive loss – discontinued cash flow hedge — — — — — — 300 300

Balance, at July 2, 2023 58,112 $ 5,811 $ 247,797 $ 292,561 $ ( 132,484 ) $ ( 28,627 ) $ ( 150 ) $ 384,908

Net income — — — 9,879 — — — 9,879

Cash dividends declared, $ 0.01 per common share

1 unchanged sentence

Compensation expense related to share-based plans, net of forfeitures and shares received for tax withholdings

Foreign currency translation adjustment — — — — ( 9,176 ) — — ( 9,176 )

( 311 ) ( 31 ) ( 324 ) — — — ( 355 )

Pension liability adjustment — — — — 458 — 458

Reclassification out of accumulated other comprehensive loss – discontinued cash flow hedge — — — — — — 150 150

Balance, at October 1, 2023 58,107 $ 5,811 $ 249,979 $ 301,859 $ ( 141,660 ) $ ( 28,425 ) $ — $ 387,564

Stock Incentive Plan

Foreign currency translation adjustment — — — — — ( 11,092 ) ( 11,092 )

Balance, at March 31, 2024 58,273 $ 5,827 $ 252,538 $ 334,423 $ ( 33,558 ) $ ( 130,682 ) $ 428,548

The Company has share-based employee compensation plans, which are described more fully in Note 14 to the consolidated financial statements included in Item 8 of the Annual Report on Form 10-K for the fiscal year ended December 29, 2024 .

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.

Restricted Stock Awards

Compensation expense related to restricted stock grants was $ 1.9 million and $ 3.4 million for the nine months ended September 29, 2024 and October 1, 2023, respectively.

Compensation expense related to restricted stock grants was $ 0.3 million and $ 0.9 million for the three months ended March 30, 2025 and March 31, 2024, respectively.

The Company has reduced its expense for any restricted stock forfeited during the period.

The following table summarizes restricted stock outstanding as of September 29, 2024, as well as activity during the nine months then ended:

Restricted Shares Weighted Average

The following table summarizes restricted stock outstanding as of March 30, 2025, as well as activity during the three months then ended:

Restricted Stock

Weighted Average

Outstanding at December 29, 2024 242,300 $ 13.92

Granted 58,400 16.22

Vested ( 184,000 ) 13.19

Forfeited or canceled — —

Outstanding at September 29, 2024 242,300 $ 13.92

As of September 29, 2024, the unrecognized total compensation cost related to unvested restricted stock was $ 0.8 million.

That cost is expected to be recognized by the second quarter of 2025.

Outstanding at March 30, 2025 58,300 $ 16.22

As of March 30, 2025, the unrecognized total compensation cost related to unvested restricted stock was $ 0.1 million.

That cost is expected to be recognized during the second quarter of 2025.

Restricted Share Unit Awards

Compensation expense related to the restricted share units was $ 2.6 million and $ 1.5 million for the nine months ended September 29, 2024 and October 1, 2023, respectively.

Compensation expense related to the restricted share units was $ 1.8 million and $ 0.9 million for the three months ended March 30, 2025 and March 31, 2024, respectively.

The Company has reduced its expense for any restricted share units forfeited during the period.

The following table summarizes restricted share units outstanding as of September 29, 2024, as well as activity during the nine months then ended:

The following table summarizes restricted share units outstanding as of March 30, 2025, as well as activity during the three months then ended:

Restricted Share Units Weighted Average

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Forfeited or canceled ( 900 ) 10.80

Outstanding at September 29, 2024 818,800 $ 11.68

As of September 29, 2024, the unrecognized total compensation cost related to unvested restricted share units was $ 6.7 million.

Outstanding at March 30, 2025 786,500 $ 14.75

As of March 30, 2025, the unrecognized total compensation cost related to unvested restricted share units was $ 9.5 million.

That cost is expected to be recognized by the first quarter of 2028.

Performance Share Awards

The following table summarizes the performance shares outstanding as of September 29, 2024, as well as the activity during the nine months then ended:

The following table summarizes the performance shares outstanding as of March 30, 2025, as well as the activity during the three months then ended:

Performance Shares Weighted Average

3 unchanged sentences

Forfeited or canceled ( 2,000 ) 12.20

Outstanding at September 29, 2024 1,171,600 $ 12.23

Compensation expense related to the performance shares was $ 4.7 million and $ 2.4 million for the nine months ended September 29, 2024 and October 1, 2023, respectively.

Outstanding at March 30, 2025 1,094,900 $ 14.09

Compensation expense related to the performance shares was $ 2.0 million and $ 2.1 million for the three months ended March 30, 2025 and March 31, 2024, respectively.

The Company has reduced its expense for any performance shares forfeited during the period.

Unrecognized compensation expense related to these performance shares was approximately $ 6.3 million as of September 29, 2024.

Unrecognized compensation expense related to these performance shares was approximately $ 11.2 million as of March 30, 2025.

The amount and timing of future compensation expense will depend on the performance of the Company.

The compensation expense related to these outstanding performance shares is expected to be recognized by the first quarter of 2028.

The tax benefit recognized with respect to restricted stock, restricted share units and performance shares was approximately $ 1.4 million for the nine months ended September 29, 2024.

The tax benefit recognized with respect to restricted stock, restricted share units and performance shares was approximately $ 0.4 million for the three months ended March 30, 2025.

NOTE 7 – LEASES

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

September 29, 2024 December 31, 2023

The table below represents a summary of the balances recorded in the consolidated condensed balance sheets related to the Company’s leases as of March 30, 2025 and December 29, 2024:

March 30, 2025 December 29, 2024

Balance Sheet Location Operating Leases Finance Leases Operating Leases Finance Leases

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Total finance lease liabilities $ 8,415 $ 8,454

As of September 29, 2024, there were no significant leases that had not commenced.

Three Months Ended Nine Months Ended

September 29, 2024 October 1, 2023 September 29, 2024 October 1, 2023

As of March 30, 2025, there were no significant leases that had not commenced.

Three Months Ended

March 30, 2025 March 31, 2024

(in thousands)

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Other Supplemental Information

Three Months Ended Nine Months Ended

September 29, 2024 October 1, 2023 September 29, 2024 October 1, 2023

Three Months Ended

March 30, 2025 March 31, 2024

(in thousands)

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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 September 29, 2024 and December 31, 2023:

September 29, 2024 December 31, 2023

The table below presents the weighted average remaining lease terms and discount rates for finance and operating leases as of March 30, 2025 and December 29, 2024:

March 30, 2025 December 29, 2024

Weighted-average remaining lease term – finance leases (in years) 3.61 3.61

6 unchanged sentences

(in thousands)

2024 (excluding the nine months ended September 29, 2024)

2025 (excluding the three months ended March 30, 2025)

$ 13,018 $ 2,379

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NOTE 8 – EMPLOYEE BENEFIT PLANS

During the three and nine months ended September 29, 2024, the Company recorded multi-employer pension expense related to multi-employer contributions of $ 0.8 million and $ 2.1 million, respectively.

During the three and nine months ended October 1, 2023, the Company recorded multi-employer pension expense related to multi-employer contributions of $ 0.7 million and $ 2.0 million, respectively.

The following tables provide the components of net periodic benefit cost for the three and nine months ended September 29, 2024 and October 1, 2023:

Three Months Ended Nine Months Ended

The Company has defined benefit and multi-employer pension plans, which are described more fully in Note 19 to the consolidated financial statements included in Item 8 of the Annual Report on Form 10-K for the fiscal year ended December 29, 2024 .

During the three-month periods ended March 30, 2025 and March 31, 2024, the Company recorded multi-employer pension expense related to multi-employer contributions of $ 0.7 million for both periods, respectively.

The following tables provide the components of net periodic benefit cost for the three months ended March 30, 2025 and March 31, 2024:

Three Months Ended

Defined Benefit Retirement Plans (Europe)

September 29, 2024 October 1, 2023 September 29, 2024 October 1, 2023

March 30, 2025 March 31, 2024

(in thousands)

4 unchanged sentences

Net periodic benefit cost $ 294 $ 58

Three Months Ended Nine Months Ended

Salary Continuation Plan September 29, 2024 October 1, 2023 September 29, 2024 October 1, 2023

Three Months Ended

Salary Continuation Plan March 30, 2025 March 31, 2024

(in thousands)

2 unchanged sentences

Net periodic benefit cost $ 322 $ 326

Three Months Ended Nine Months Ended

Three Months Ended

nora Defined Benefit Plan

September 29, 2024 October 1, 2023 September 29, 2024 October 1, 2023

March 30, 2025 March 31, 2024

(in thousands)

2 unchanged sentences

Amortization of net actuarial gains

— ( 110 ) — ( 330 )

Net periodic benefit cost $ 274 $ 390

In accordance with applicable accounting standards, the service cost component of net periodic benefit costs is presented within operating income in the consolidated condensed statements of operations, while all other components of net periodic benefit costs are presented within other expense, net, in the consolidated condensed statements of operations.

The service cost component of net periodic benefit costs is presented within operating income in the consolidated condensed statements of operations, while all other components of net periodic benefit costs are presented within other expense (income), net, in the consolidated condensed statements of operations.

NOTE 9 – GOODWILL AND OTHER INTANGIBLE ASSETS

The ending balance and the change in the carrying amount of goodwill for the nine months ended September 29, 2024 is as follows:

The ending balance and the change in the carrying amount of good will fo r the three months ended March 30, 2025 is as follows:

(in thousands)

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Foreign currency translation (2)

Balance, at September 29, 2024 $ 106,580

Balance, at March 30, 2025 $ 103,543

(1) The goodwill balance is allocated entirely to the AMS reportable segment.

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

The net carrying value of intangible assets other than goodwill was $ 52.8 million and $ 56.3 million at September 29, 2024 and December 31, 2023, respectively.

The net carrying value of intangible assets other than goodwill was $ 48.7 million and $ 48.3 million at March 30, 2025 and December 29, 2024, respectively.

NOTE 10 – SEGMENT INFORMATION

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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 (“SG&A”) expenses and allocations of global support SG&A as discussed below.

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 excludes:

nora purchase accounting amortization;

Cyber Event impact;

property casualty loss;

and restructuring, asset impairment, severance, and other, net.

Intersegment revenues for the three and nine months ended September 29, 2024, were $ 19.1 million and $ 60.4 million, respectively, and intersegment revenues for the three and nine months ended October 1, 2023, were $ 25.0 million and $ 72.3 million, respectively.

restructuring, asset impairment, severance, and other, net, and the impact of a cyber event.

Intersegment revenues for the three months ended March 30, 2025 and March 31, 2024 were $ 28.0 million and $ 16.8 million, respectively.

Intersegment revenues are eliminated from net sales presented below since these amounts are not included in the information provided to the CODM.

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.

During the first quarter of 2024, the Company implemented a cost center realignment initiative to centralize certain global/shared functions.

For the three and nine months ended September 29, 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.

Segment information for the three and nine months ended September 29, 2024 and October 1, 2023 is presented in the following table:

Three Months Ended Nine Months Ended

September 29, 2024 October 1, 2023 September 29, 2024 October 1, 2023

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 the three months ended March 30, 2025 and March 31, 2024.

Three Months Ended

March 30, 2025 March 31, 2024

AMS EAAA TOTAL AMS EAAA TOTAL

(in thousands)

AMS $ 210,155 $ 178,194 $ 595,082 $ 548,716

EAAA 134,115 132,812 385,566 387,664

Total net sales $ 344,270 $ 311,006 $ 980,648 $ 936,380

AMS $ 32,187 $ 23,318 $ 77,214 $ 58,621

EAAA 11,299 9,049 31,402 16,805

Net sales $ 179,937 $ 117,476 $ 297,413 $ 169,915 $ 119,828 $ 289,743

significant segment expenses (1)

Adjusted cost of sales (2)

108,527 76,668 101,605 76,435

Adjusted selling, general, & administrative expenses (3)

51,547 35,217 50,230 35,948

Segment AOI 19,863 5,591 25,454 18,080 7,445 25,525

Reconciliation of AOI to income before taxes

Restructuring, severance, asset impairment and other, net 973 198

Purchasing accounting amortization 1,255 1,297

Cyber event impact

Interest expense 4,415 6,423

Other expense (income), net

1,703 ( 976 )

Income before taxes $ 17,109 $ 18,999

(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.

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

Segment depreciation and amortization for the three months ended March 30, 2025 and March 31, 2024 is presented as follows:

Three Months Ended

March 30, 2025 March 31, 2024

(in thousands)

Depreciation and amortization

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A reconciliation of the Company’s total operating segment assets to the corresponding consolidated amounts follows:

September 29, 2024 December 31, 2023

March 30, 2025 December 29, 2024

(in thousands)

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Total reported assets $ 1,191,798 $ 1,170,816

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

Three Months Ended Nine Months Ended

September 29, 2024 October 1, 2023 September 29, 2024 October 1, 2023

(in thousands)

AMS operating income $ 31,878 $ 23,530 $ 76,877 $ 56,997

EAAA operating income 10,297 7,455 27,895 12,373

Consolidated operating income 42,175 30,985 104,772 69,370

Interest expense 5,721 8,163 18,317 24,986

Other expense, net

381 6,702 237 7,674

Income before income tax expense $ 36,073 $ 16,120 $ 86,218 $ 36,710

Three Months Ended

September 29, 2024

Three Months Ended

October 1, 2023

AMS EAAA AMS EAAA

(in thousands)

Operating income $ 31,878 $ 10,297 $ 23,530 $ 7,455

Purchase accounting amortization — 1,311 — 1,302

Cyber Event impact — — 62 42

Restructuring, asset impairment, severance, and other, net

309 ( 309 ) ( 274 ) 250

AOI $ 32,187 $ 11,299 $ 23,318 $ 9,049

Nine Months Ended

September 29, 2024

Nine Months Ended

October 1, 2023

AMS EAAA AMS EAAA

(in thousands)

Operating income $ 76,877 $ 27,895 $ 56,997 $ 12,373

Purchase accounting amortization — 3,895 — 3,886

Cyber Event impact ( 225 ) ( 156 ) 554 415

Restructuring, asset impairment, severance, and other, net

562 ( 232 ) 1,070 131

AOI $ 77,214 $ 31,402 $ 58,621 $ 16,805

NOTE 11 – SUPPLEMENTAL CASH FLOW INFORMATION

Supplemental cash flow information for the nine months ended September 29, 2024 and October 1, 2023 is presented in the following table:

Nine Months Ended

September 29, 2024 October 1, 2023

Supplemental cash flow information for the three months ended March 30, 2025 and March 31, 2024 is presented in the following table:

Three Months Ended

March 30, 2025 March 31, 2024

(in thousands)

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Cash paid for income taxes, net of refunds

25,905 17,588

See Note 7 entitled “Leases” for additional supplemental disclosures related to finance and operating leases.

Non-Cash Financing Activities

On March 11, 2025, the Company declared cash dividends on its common stock of $ 0.6 million, which were paid during the second quarter of 2025 to shareholders of record as of March 28, 2025.

At March 30, 2025, the dividends were recorded within accrued expenses in the consolidated condensed balance sheet.

NOTE 12 – INCOME TAXES

The Company determines its provision for income taxes for interim periods using an estimate of its annual effective tax rate (“AETR”) and records any changes affecting the estimated AETR in the interim period in which the change occurs, including discrete tax items.

During the nine months ended September 29, 2024, the Company recorded a total income tax provision of $ 21.0 million on pre-tax income of $ 86.2 million resulting in an effective tax rate of 24.4 %, as compared to a total income tax provision of $ 11.7 million on pre-tax income of $ 36.7 million resulting in an effective tax rate of 32.0 % during the nine months ended October 1, 2023.

The decrease in the effective tax rate for the period ended September 29, 2024, as compared to the period ended October 1, 2023, was primarily due to the release of the valuation allowance on interest expense carryforwards, favorable changes related to the limitation on the deduction of business interest expense under Internal Revenue Code section 163(j), an increase in tax benefits related to share-based compensation, and prior period non-deductible charges related to the substantial liquidation of subsidiaries in Brazil and Russia that occurred during the nine months ended October 1, 2023.

These favorable changes were partially offset by a decrease in U.S.

tax benefits related to foreign tax credit utilization, foreign derived intangible income, and the repatriation of previously taxed foreign earnings realized during the nine months ended October 1, 2023.

During the three months ended March 30, 2025, the Company recorded a total income tax provision of $ 4.1 million on pre-tax income of $ 17.1 million resulting in an effective tax rate of 24.0 %, as compared to a total income tax provision of $ 4.8 million on pre-tax income of $ 19.0 million resulting in an effective tax rate of 25.4 % during the three months ended March 31, 2024.

The decrease in the effective tax rate for the three months ended March 30, 2025 as compared to the three months ended March 31, 2024, was primarily due to an increase in tax benefits related to share-based compensation.

This favorable change was partially offset by an unfavorable change related to the cash surrender value of Company-owned life insurance.

On December 20, 2021, the Organization for Economic Co-operation and Development (“OECD”) published Pillar Two Model Rules defining the global minimum tax, which calls for the taxation of large corporations at a minimum rate of 15 %.

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

In the first nine months of 2024, the Company increased its liability for unrecognized tax benefits by $ 0.4 million.

As of September 29, 2024, the Company had accrued approximately $ 5.3 million for unrecognized tax benefits.

In accordance with applicable accounting standards, the Company’s deferred tax asset as of September 29, 2024, reflects a reduction of $ 2.8 million of these unrecognized tax benefits.

In the first three months of 2025, the Company increased its liability for unrecognized tax benefits by $ 0.3 million.

As of March 30, 2025, the Company had accrued approximately $ 5.1 million for unrecognized tax benefits.

The Company’s deferred tax asset as of March 30, 2025 reflects a reduction for $ 2.6 million of these unrecognized tax benefits.

Unrecognized tax benefits are reviewed on an ongoing basis and are adjusted for changing facts and circumstances, including the progress of tax audits and the closing of statutes of limitations.

1 unchanged sentence

NOTE 13 – ITEMS RECLASSIFIED FROM ACCUMULATED OTHER COMPREHENSIVE LOSS

Amounts reclassified out of accumulated other comprehensive loss (“AOCL”), before tax, to the consolidated condensed statements of operations during the three and nine months ended September 29, 2024 and October 1, 2023 are reflected in the tables below:

Amounts reclassified out of accumulated other comprehensive loss (“AOCL”), before tax, to the consolidated condensed statements of operations during the three months ended March 30, 2025 and March 31, 2024 are reflected in the table below:

Three Months Ended

Statement of Operations Location September 29, 2024 October 1, 2023

(in thousands)

Loss on foreign subsidiary liquidation (1)

Other expense, net

$ — $ ( 6,221 )

Interest rate swap contracts loss Interest expense — ( 196 )

Amortization of benefit plan net actuarial losses and prior service cost Other expense, net

( 379 ) ( 198 )

Total loss reclassified from AOCL

$ ( 379 ) $ ( 6,615 )

Nine Months Ended

Statement of Operations Location September 29, 2024 October 1, 2023

Statement of Operations Location March 30, 2025 March 31, 2024

(in thousands)

Loss on foreign subsidiary liquidation (1)

Other expense, net

$ — $ ( 6,221 )

Interest rate swap contracts loss Interest expense — ( 982 )

Amortization of benefit plan net actuarial losses and prior service cost Other expense, net

Amortization of benefit plan net actuarial losses and prior service cost Other expense (income), net

$ ( 384 ) $ ( 374 )

1 unchanged sentence

$ ( 384 ) $ ( 374 )

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

The tax impact of the cumulative foreign currency translation reclassification was approximately $ 1.1 million.

NOTE 14 – ASSETS DISPOSED

During the second quarter of 2023, pursuant to a previously announced plan of reorganization, the Company completed the sale of its Thailand manufacturing facility for a selling price of $ 6.6 million and recognized a gain of $ 2.7 million.

The gain attributable to the EAAA reportable segment was recorded in restructuring, asset impairment, and other gains, net, in the consolidated condensed statements of operations.

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

NOTE 14 – COMMITMENTS AND CONTINGENCIES

1 unchanged sentence

See disclosure under the heading “Lawsuit by Former CEO in Connection with Termination” set forth in Note 18 to the consolidated financial statements included in Item 8 of the Annual Report on Form 10-K for the fiscal year ended December 29, 2024 .

There have been no material changes since December 29, 2024.

NOTE 15 – FAIR VALUE OF FINANCIAL INSTRUMENTS

Accounting standards establish a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure estimated fair value.

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements).

The three levels of the fair value hierarchy under applicable accounting standards are described below:

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

Level 2 Inputs to the valuation methodology include:

• quoted prices for similar assets in active markets;

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

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

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

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

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

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

March 30, 2025 December 29, 2024

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

(in thousands)

Company-owned life insurance $ 22,948 $ — $ 22,948 $ 22,911 $ — $ 22,911

Deferred compensation investments 28,476 7,263 21,213 30,521 8,697 21,824

Liabilities (1) :

Borrowings under Syndicated Credit Facility (2)

5,505 — 5,505 5,564 — 5,564

5.50% Senior Notes due 2028 (3)

300,000 — 292,140 300,000 — 294,738

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

(2) The carrying value of borrowings under the Facility approximates fair value as the Facility bears variable interest rates that are similar to existing market rates.

The fair value of borrowings under the Facility is estimated using observable market rates.

(3) Unamortized debt issuance costs associated with the Senior Notes, recorded as a reduction of long-term debt in the consolidated balance sheets, were $ 2.6 million and $ 2.8 million as of March 30, 2025 and December 29, 2024, respectively.

Fair value of the Senior Notes is derived using quoted prices for similar instruments.

The fair value of Company-owned life insurance is measured on a readily determinable cash surrender value on a recurring basis.

Assets associated with the Company’s nonqualified savings plans are held in a rabbi trust and consist of investments in mutual funds and insurance contracts.

The fair value of the mutual funds is derived from quoted prices in active markets.

The fair value of the insurance contracts is based on observable inputs related to the performance measurement funds that shadow the deferral investment allocations made by participants in the nonqualified savings plans.

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-Q

Item 1. Financial Statements