What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-02-25 compared with 2025-02-26 · 338 added, 430 removed, 1068 unchanged (42% of the section changed)

10 unchanged sentences

Restructuring, asset impairment, other (gains) and charges — — ( 2,502 )

— ( 2,502 ) 1,965

Goodwill and intangible asset impairment charge — — 36,180

Operating income 163,995 134,406 104,522

134,406 104,522 75,398

Interest expense 19,546 23,205 31,787

Other (income) expense, net

( 2,353 ) 9,081 3,552

Other expense (income), net 7,598 ( 2,353 ) 9,081

Income before income tax expense 136,851 113,554 63,654

113,554 63,654 41,917

Income tax expense 20,753 26,608 19,137

26,608 19,137 22,357

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

Net income $ 116,098 $ 86,946 $ 44,517

Earnings per share – basic $ 1.99 $ 1.49 $ 0.77

$ 1.49 $ 0.77 $ 0.33

Earnings per share – diluted $ 1.96 $ 1.48 $ 0.76

$ 1.48 $ 0.76 $ 0.33

Common shares outstanding – basic 58,375 58,282 58,092

6 unchanged sentences

2025 2024 2023

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

Other comprehensive (loss) income, after tax:

Net income $ 116,098 $ 86,946 $ 44,517

Other comprehensive income (loss), after tax:

Foreign currency translation adjustment 50,626 ( 23,727 ) 19,185

1 unchanged sentence

Pension liability adjustment 520 ( 5,818 ) ( 6,468 )

Other comprehensive (loss) income

Other comprehensive income (loss)

51,146 ( 29,545 ) 13,466

Comprehensive income $ 167,244 $ 57,401 $ 57,983

$ 57,401 $ 57,983 $ 9,539

See accompanying notes to consolidated financial statements.

12 unchanged sentences

Operating lease right-of-use assets 78,191 76,815

Deferred tax asset 24,624 21,721

Deferred tax assets

25,272 24,624

Goodwill 112,127 99,887

Intangible assets, net 50,885 48,273

48,273 56,255

Other assets 75,756 74,546

33 unchanged sentences

OPERATING ACTIVITIES:

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

Net income $ 116,098 $ 86,946 $ 44,517

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

1 unchanged sentence

Share-based compensation expense 14,385 12,907 10,265

12,907 10,265 8,527

Loss (gain) on disposal of property, plant and equipment, net — 264 ( 2,252 )

264 ( 2,252 ) 4,319

Loss on foreign subsidiary liquidation — 2,152 6,221

Loss on debt extinguishment

Bad debt expense 1,441 1,476 53

Deferred income taxes ( 12,958 ) ( 3,034 ) ( 10,082 )

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

( 8,480 ) 1,273 3,104

Other ( 4,715 ) ( 8,480 ) 1,273

Amortization of acquired intangible assets 3,073 5,172 5,172

Goodwill and intangible asset impairment — — 36,180

Working capital changes:

10 unchanged sentences

FINANCING ACTIVITIES:

Revolving loan borrowing 34,243 90,000 206,031

Revolving loan repayments ( 34,243 ) ( 114,381 ) ( 189,281 )

Term loan borrowings

Term loan repayments ( 390 ) ( 115,213 ) ( 80,927 )

Revolving loan borrowings

41,701 34,243 90,000

Revolving loan repayments ( 35,515 ) ( 34,243 ) ( 114,381 )

Senior notes repayment

( 300,000 ) — —

Repurchase of common stock ( 18,175 ) — —

1 unchanged sentence

Tax withholding payments for share-based compensation ( 8,372 ) ( 4,770 ) ( 1,514 )

Payments for debt extinguishment costs

Debt issuance costs ( 1,303 ) — —

2 unchanged sentences

Net cash (used in) provided by operating, investing and financing activities ( 37,578 ) ( 7,178 ) 10,956

( 7,178 ) 10,956 5,134

Effect of exchange rate changes on cash 9,675 ( 4,094 ) 1,978

1 unchanged sentence

Net (decrease) increase ( 27,903 ) ( 11,272 ) 12,934

( 11,272 ) 12,934 312

Balance, beginning of year 99,226 110,498 97,564

9 unchanged sentences

The Company also manufactures and sells resilient rubber flooring.

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

All references herein to “2025,” “2024,” and “2023,” mean the fiscal years ended December 28, 2025, December 29, 2024, and December 31, 2023, respectively.

Fiscal years 2025, 2024 and 2023 were each comprised of 52 weeks.

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

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

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

The investigation of the Cyber Event was completed during 2023.

During 2024, we recovered $ 4.8 million in business interruption insurance proceeds, which are recognized as a benefit within other income / expense, 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.

During 2024, we recovered $ 4.8 million in business interruption insurance proceeds, which are recognized as a benefit within other expense / income, net in the consolidated statements of operations.

During 2024, we also recovered $ 0.8 million 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.

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requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods.

Examples include provisions for returns, bad debts, product claims reserves, inventory obsolescence and the length of product life cycles, accruals associated with restructuring activities, income tax exposures and valuation allowances, and the carrying value of goodwill, intangible assets and property, plant and equipment.

Examples include provisions for returns, expected credit losses, product claims reserves, inventory obsolescence and the length of product life cycles, accruals associated with restructuring activities, income tax exposures and valuation allowances, and the remaining carrying value of goodwill, intangible assets and property, plant and equipment.

Actual results could vary from these estimates.

Risks and Uncertainties

Global economic challenges, including the 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.

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.

Global economic challenges, including government-imposed tariffs and retaliatory tariffs, inflation, supply chain disruptions, geopolitical factors including wars and other conflicts, 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, including the goodwill and intangible asset assessments discussed in Note 11 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.

Revenue Recognition

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The performance obligation is the delivery of these materials to the customer’s control.

Revenue from the sale of modular carpet, resilient flooring, rubber flooring, and related products was 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.

Revenue from the sale of modular carpet, resilient flooring, rubber flooring, and related products is the primary source of the Company’s total revenue.

The revenue from sales of these products is recognized upon shipment, or in certain cases, upon delivery to the customer.

The transaction price for these sales is readily identifiable.

The remaining revenue of approximately 3 % for 2024, approximately 2 % for 2023, and approximately 3 % for 2022 was generated from the installation of carpet and other flooring-related material.

The remaining revenue is generated from the installation of carpet and other flooring-related material.

See Note 3 entitled “Revenue Recognition” for additional information related to revenue disaggregation.

For installation projects underway, the Company recognized installation revenue over time based on a project cost input method as the customer simultaneously received and consumed the benefit of the services.

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The transaction price for these sale and installation contracts is readily determinable between flooring material and installation services and typically is specifically identified in the contract with the customer.

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

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

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In these instances, there typically is no other obligation to the customers other than the delivery of flooring material, with the exception of warranty.

The Company does offer a warranty to its customers which guarantees certain on-floor performance characteristics and warrants against manufacturing defects.

The Company offers a warranty to its customers which guarantees certain on-floor performance characteristics and warrants against manufacturing defects.

The warranty is not a service warranty, and there is no ability to separate the warranty obligation from the sale of the flooring or purchase it separately.

The Company’s incidence of warranty claims is extremely low, with less than 0.5 % of revenue in claims on an annual basis for the last three fiscal years.

Given the nature of the warranty as well as the financial impact, the Company has determined that there is no need to identify this warranty as a separate performance obligation, and the Company accounts for warranty on an accrual basis.

This assurance-type warranty does not represent a separate performance obligation and the Company accounts for warranty claims on an accrual basis.

For the Company’s installation business, the sales of carpet and other flooring materials and installation services are separate deliverables which under the revenue recognition requirements should be characterized as separate performance obligations.

The nature of the installation projects is such that the vast majority – an amount in excess of 85 % of these installation projects – are completed in less than five days.

The Company’s largest installation customers are retail, education and corporate customers, and these are on a project-by-project basis and are short-term installations.

On a project-by-project basis, the Company’s largest installation customers are retail, education and corporate customers.

The Company has evaluated these projects at the end of each reporting period and recorded revenue in accordance with the accounting standards for projects which were underway as of the end of 2025, 2024 and 2023.

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Cash payments for interest amounted to approximately $ 18.0 million, $ 22.8 million, and $ 28.8 million for the years 2025, 2024 and 2023, respectively.

Income tax payments amounted to approximately $ 37.8 million, $ 25.8 million and $ 31.4 million for the years 2024, 2023 and 2022, respectively.

During the years 2024, 2023 and 2022, the Company received income tax refunds of $ 3.3 million, $ 2.5 million and $ 12.4 million, respectively.

See Note 16 entitled “Income Taxes” for income taxes paid information for fiscal years 2025, 2024 and 2023.

Allowances for Expected Credit Losses

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Estimating the amount of future expected losses requires the Company to consider historical losses from our customers, as well as current market conditions and future forecasts of our customers’ ability to make payments for goods and services.

By its nature, such an estimate is highly subjective, and it is possible that the amount of accounts receivable that the Company is unable to collect may be different than the amount initially estimated.

By its nature, such an estimate is subjective, and it is possible that the amount of accounts receivable that the Company is unable to collect may be different than the amount initially estimated.

Inventories are carried at the lower of cost (standards approximating the first-in, first-out method) or net realizable value.

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See Note 11 entitled “Goodwill and Other Intangible Assets” for additional information.

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 asset below its carrying amount.

For the annual tests performed in 2024, 2023, and 2022, 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.

For the annual tests performed in 2025, 2024 and 2023, the Company prepared valuations of the intangible assets using the present value of cash flows under the relief from royalty method, which requires management to estimate forecasted revenues and a discount rate.

The estimated fair value of the trademark and trade name intangible assets was compared to the carrying value to determine whether any impairment existed.

See Note 11 entitled “Goodwill and Other Intangible Assets” for additional information.

The Company’s other intangible assets primarily consist of developed technology that is amortized on a straight-line basis over the estimated useful life of 7 years.

Product Warranties

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Translation of Foreign Currencies

The financial position and results of operations of most of the Company’s foreign subsidiaries are measured using local currencies as the functional currency.

The financial position and results of operations of the Company’s foreign subsidiaries are measured using local currencies as the functional currency.

Assets and liabilities of these subsidiaries are translated into U.S.

17 unchanged sentences

Expected returns reflect a combination of historical performance analysis and the forward-looking views of the financial markets, and include input from actuaries, investment service firms and investment managers.

Reclassifications

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 “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.

NOTE 2 – RECENT ACCOUNTING PRONOUNCEMENTS

Recently Issued Accounting Pronouncements – Adopted

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.

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

Improvements to Income Tax Disclosures”.

This ASU requires public entities on an annual basis to disclose a rate reconciliation with explicit categories, as outlined in the ASU, and requires additional disclosures for reconciling items that meet certain quantitative thresholds.

Other disclosures include disaggregation of income taxes paid, pre-tax income, and income tax expense.

The new guidance is effective for fiscal years beginning after December 15, 2024.

The Company adopted this ASU prospectively for the period ended December 28, 2025.

S ee Note 16 entitled “Income Taxes” for additional information.

The adoption of this ASU impacted our income tax disclosures but did not have a material impact to our consolidated financial statements.

Recently Issued Accounting Pronouncements – Not Yet Adopted

In September 2025, the FASB issued ASU 2025-06 - “ Intangibles - Goodwill and Other Internal Use Software (Topic 350-40)”.

This ASU amends the accounting for internal-use software costs by removing reference to prescriptive and sequential software development stages used to evaluate capitalizable costs.

The ASU requires entities to consider whether significant uncertainties associated with development activities have been resolved prior to capitalization of software costs and aligns disclosure requirements with ASC 360, “ Property, Plant, and Equipment”.

The new guidance in ASU 2025-06 is effective for annual periods beginning after December 15, 2027, and interim periods within those annual reporting periods, and may be applied prospectively, retrospectively, or using a modified retrospective approach.

Early adoption is permitted.

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

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

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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.

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.

” This ASU requires public entities on an annual basis to disclose a rate reconciliation with explicit categories, as outlined in the ASU, and requires additional disclosures for reconciling items that meet certain quantitative thresholds.

Other disclosures include disaggregation of income taxes paid, pre-tax income, and income tax expense.

The new guidance is effective for fiscal years beginning after December 15, 2024.

Early adoption is permitted.

We are currently assessing the updated guidance;

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

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

NOTE 3 – REVENUE RECOGNITION

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

A summary of these revenue streams, as a percentage of net sales, for fiscal years 2024, 2023 and 2022 is a follows:

A summary of these revenue streams, as a percentage of net sales, for fiscal years 2025, 2024 and 2023 is as follows:

2025 2024 2023

Revenue from the sale of flooring material 98 % 97 % 98 %

97 % 98 % 97 %

Revenue from installation of flooring material 2 % 3 % 2 %

7 unchanged sentences

See Note 19 entitled “Segment Information” for additional information.

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

Market Segment 2025 2024 2023

Corporate Office

44 % 47 % 49 %

20 % 19 % 18 %

11 % 9 % 10 %

25 % 25 % 23 %

NOTE 4 – RECEIVABLES

26 unchanged sentences

$ 181,779 $ — $ 181,779 $ 5,564 $ — $ 5,564

5.50% Senior Notes due 2028 (3)

5.50% Senior Notes (3)

— — — 300,000 — 294,738

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

(2) Unamortized debt issuance costs associated with term loan borrowings under the Syndicated Credit Facility, 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.

(2) Unamortized debt issuance costs associated with term loan borrowings under the Syndicated Credit Facility were $ 0.2 million as of December 28, 2025, and recorded as a reduction of long-term debt in the consolidated balance sheets.

Unamortized debt issuance costs associated with the Syndicated Credit Facility as of December 29, 2024, were not material.

(3) The Senior Notes were repaid on December 3, 2025, and the outstanding debt was extinguished.

As of December 29, 2024, unamortized debt issuance costs associated with the Senior Notes were $ 2.8 million and were recorded as a reduction of long-term debt in the consolidated balance sheets.

Company-Owned Life Insurance

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Syndicated Credit Facility and Senior Notes

The Company’s liabilities for borrowings under the Syndicated Credit Facility (the “Facility”) and 5.50 % Senior Notes due 2028 (the “Senior Notes”) are not recorded at fair value in the consolidated balance sheets.

The Company’s liabilities for borrowings under the Facility are not recorded at fair value in the consolidated balance sheets.

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

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

In the prior year, the Senior Notes obligation was not recorded at fair value in the consolidated balance sheets.

The fair value of the Senior Notes was derived in prior year using quoted prices for similar instruments.

See Note 9, entitled “Long-Term Debt” for additional information.

Other Assets and Liabilities

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Computer software 70,042 66,226

66,226 66,792

Construction-in-progress (2)

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Property, plant and equipment, net $ 309,449 $ 282,374

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

(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.

Assets Disposed

On September 8, 2021, the Company announced a restructuring plan that involved the closure of its manufacturing facility in Thailand and committed to a plan to sell the Thailand facility in connection with this restructuring plan.

See Note 16 entitled “Restructuring and Other” for additional information.

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

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

(1) Includes impact of finance lease assets.

See Note 10 entitled “Leases” for additional information.

(2) Primarily represents manufacturing equipment not yet placed in service.

NOTE 8 – ACCRUED EXPENSES

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Syndicated Credit Facility

Revolving loan borrowings

$ 6,158 6.07 % $ — — %

Term loan borrowings 175,621 5.09 % 5,564 5.62 %

Total borrowings under Syndicated Credit Facility 181,779 5.12 % 5,564 5.62 %

5.50% Senior Notes due 2028 300,000 5.50 % 300,000 5.50 %

5.50% Senior Notes (2)

— — % 300,000 5.50 %

Total debt 181,779 305,564

3 unchanged sentences

Total long-term debt, net $ 172,801 $ 302,275

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

(2) The Syndicated 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.

(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 without the effect of debt issuance costs.

(2) The Senior Notes were redeemed December 3, 2025.

See below for additional information.

Syndicated Credit Facility

The Company’s Facility provides to the Company U.S.

The Company’s Syndicated Facility Agreement (“Facility”) provides to the Company U.S.

denominated and multicurrency term loans and provides to the Company and certain of its subsidiaries a multicurrency revolving credit facility.

At December 29, 2024, the Facility provided to the Company and certain of its subsidiaries a multicurrency revolving loan facility up to $ 300.0 million, as well as other U.S.

denominated and multicurrency term loans.

Each of the Company’s material domestic subsidiaries guarantee the obligations of the Company under its Facility.

At December 28, 2025, the Company had available borrowing capacity of $ 243.2 million under the revolving loan facility.

Significant Facility Amendments

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

The fifth amendment provided for, among other changes, the following amendments to the Facility:

• the amendment of the maturity date of the Facility to October 2027;

• amendments to replace the LIBOR benchmark interest rates applicable to all loans denominated in U.S.

dollars with the SOFR benchmark interest rates.

Significant Credit Facility Amendment

On December 3, 2025, the Company entered into the third amended and restated Facility agreement.

The amendment provided for, among other changes, the following:

• adding a new term loan facility in an aggregate principal amount of $ 170 million (“Term Loan”), which was fully drawn on December 3, 2025;

• extending the maturity date of the Facility to December 3, 2030;

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

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

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

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

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.

Base rate loans, as defined in the amended Facility, represent short-term borrowings with applicable interest rates determined as the greater of the federal funds rate plus a margin, the prime rate, or SOFR plus a margin.

Interest on base rate loans is charged at varying rates computed by applying a margin ranging from 0.125 % to 1.00 %, depending on the Company’s consolidated net leverage ratio as of the most recently completed fiscal quarter.

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In addition, the Company pays a commitment fee ranging from 0.20 % to 0.30 % per annum (depending on the Company’s consolidated net leverage ratio as of the most recently completed fiscal quarter) on the unused portion of the Facility.

Fees for commercial letters of credit are computed as 1.00 % per annum of the amount available to be drawn under such letters of credit.

Fees for commercial letters of credit are computed as 1.00 % per annum of the daily amount available to be drawn under such letters of credit.

Fees for standby letters of credit are charged at varying rates computed by applying a margin ranging from 1.125 % to 2.00 % per annum of the amount available to be drawn under such standby letters of credit, depending on the Company’s consolidated net leverage ratio as of the most recently completed fiscal quarter.

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• enter into sale and leaseback transactions.

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

• Consolidated Secured Net Leverage Ratio:

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Must be no less than 2.25 :1.00.

Under the amended Facility, the Company is required to make quarterly amortization payments of the term loan borrowings, which will commence the first quarter of 2026.

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

Events of Default

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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 certain material foreign subsidiaries.

If an event of default occurs under the Facility, the lenders’ Administrative Agent may, upon the request of a specified percentage of lenders, exercise remedies with respect to the collateral, including, in some instances, foreclosing mortgages on real estate assets, taking possession of or selling personal property assets, collecting accounts receivable, or exercising proxies to take control of the pledged stock of domestic and certain material foreign subsidiaries.

Pursuant to a Third Amended and Restated Security and Pledge Agreement, the Facility is secured by substantially all of the assets of the Company and its domestic subsidiaries (subject to exceptions for certain immaterial subsidiaries), including all of the stock of the Company’s domestic subsidiaries and up to 65 % of the stock of certain material foreign subsidiaries.

If an event of default occurs under the Facility, the lenders’ Administrative Agent may, upon the request of a specified percentage of lenders, exercise remedies with respect to the collateral, including, in some instances, taking possession of or selling personal property assets, collecting accounts receivable, or exercising proxies to take control of the pledged stock of domestic and certain material foreign subsidiaries.

As of December 28, 2025 and December 29, 2024, the Company had $ 0.6 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.

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

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

Senior Notes due 2028

As of December 29, 2024, the Company had $ 300.0 million of Senior Notes outstanding.

The Senior Notes bear an interest rate at 5.50 % per annum and mature on December 1, 2028.

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.

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

Period Redemption Price

2023 102.750 %

2024 101.375 %

2025 and thereafter 100.000 %

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.

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.

The indenture governing the Senior Notes contains standard and customary covenants for agreements of this type, including various reporting, affirmative and negative covenants.

Among other things, these covenants limit the Company’s and its subsidiaries’ ability to:

• incur additional indebtedness;

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

• make investments;

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

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

• enter into certain transactions with affiliates;

• sell or transfer certain assets.

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

Events of Default

If the Company breaches or fails to perform any of the affirmative or negative covenants under the indenture governing the Senior Notes, or if other specified events occur (such as a bankruptcy or similar event), after giving effect to any applicable notice and right to cure provisions, an event of default will exist.

If an event of default exists and is continuing, the terms of the indenture permit the trustee or the holders of at least 25 % in principal amount of outstanding Senior Notes to declare the principal, premium, if any, and accrued but unpaid interest on all the Senior Notes to be due and payable.

Debt Issuance Costs

Debt issuance costs associated with the Company’s Senior Notes and term loans under the Facility are reflected as a reduction of long-term debt in accordance with applicable accounting standards.

These fees are amortized straight-line, which approximates the effective interest method, and over the life of the outstanding borrowing, the debt balance will increase by the same amount as the fees that are amortized.

As of December 29, 2024 and December 31, 2023, the unamortized debt issuance costs recorded as a reduction of long-term debt were $ 2.8 million and $ 4.4 million, respectively.

Expenses related to such costs for the years 2024, 2023 and 2022 amounted to $ 1.7 million, $ 1.7 million, and $ 1.2 million, respectively.

Debt issuance costs related to the issuance of revolving debt, which include underwriting, legal and other direct costs, net of accumulated amortization, were $ 1.1 million and $ 1.4 million, as of December 29, 2024 and December 31, 2023, respectively.

These amounts are included in other assets in the Company’s consolidated balance sheets.

Redemption of Senior Notes

On December 3, 2025, the Company redeemed all of its $ 300 million outstanding 5.50 % Senior Notes.

The Senior Notes were redeemed using the proceeds from term loan borrowings under the amended Facility and cash on hand.

The redemption price was 100% of the principal amount, plus accrued and unpaid interest.

See below for amounts recognized upon extinguishment.

Debt Issuance and Extinguishment Costs

In connection with the December 3, 2025 Facility amendment and Senior Notes redemption, below is a summary of the fees and expenses incurred:

Financial Statement Location Revolving Loans

Senior Notes (1)

(in thousands)

Capitalization of debt issuance costs - revolving loans

Other assets $ 1,099 $ — $ — $ 1,099

Capitalization of debt issuance costs - term loans

Long-term debt — 203 — 203

Loss on debt extinguishment (2)

Interest expense 293 — 2,147 2,440

Other debt extinguishment costs

Interest expense — 620 — 620

(1) Represents write-off of unamortized debt issuance costs.

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

Debt issuance costs related to the revolving debt include underwriting fees, legal, and other direct costs associated with the issuance of debt.

These unamortized amounts are included in other assets in the Company’s consolidated balance sheets.

The Company amortizes these costs over the life of the related debt.

Expenses related to such costs amounted to $ 0.4 million for each of the years 2024, 2023 and 2022.

Debt issuance costs associated with term loans under the Facility and the prior Senior Notes are reflected as a reduction of long-term debt in the Company’s consolidated balance sheets.

Future Maturities

The aggregate maturities of borrowings are as follows:

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

Fiscal Year Amount

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Total debt $ 181,779

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

NOTE 10 – DERIVATIVE INSTRUMENTS

Interest Rate Risk Management

From time to time, the Company enters into interest rate swap transactions to fix the variable interest rate on a portion of its term loan borrowing in order to manage a portion of its exposure to interest rate fluctuations.

The Company’s objective and strategy with respect to these interest rate swaps is to protect the Company against adverse fluctuations in interest rates by reducing its exposure to variability to cash flows relating to interest payments on a portion of its outstanding debt.

Cash Flow Interest Rate Swaps

In the fourth quarter of 2020, the Company terminated its designated interest rate swap transactions with a total notional value of $ 250 million.

Hedge accounting was also discontinued at that time.

Losses recorded in accumulated other comprehensive loss for these terminated interest rate swaps are reclassified and recorded in the consolidated statements of operations to the extent it is probable that a portion of the original forecasted transactions related to the portion of the hedged debt repaid will not occur by the end of the originally specified time period.

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

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

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

NOTE 10 – LEASES

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Total lease liabilities $ 82,953 $ 9,972

$ 80,388 $ 8,454

NOTE 11 – GOODWILL AND OTHER INTANGIBLE ASSETS

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The Company performed limited procedures for our EMEA and Asia-Pacific reporting units during the 2025, 2024, and 2023 goodwill testing to facilitate a reconciliation of market capitalization.

The annual quantitative goodwill impairment testing performed in 2024 and 2023 for our Americas reporting unit was consistent with our prior year methodology.

The annual quantitative goodwill impairment testing performed in 2025, 2024, and 2023 for our Americas reporting unit used a consistent 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.

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The present value model requires management to estimate future cash flows, the timing of these cash flows, and a discount rate based on a weighted average cost of capital.

The discount rate used for the Americas reporting unit was 10.5 % in 2024 compared to 11.5 % in 2023, which fluctuated based on a lower risk premium assigned to estimates of expected future performance.

There is inherent uncertainty associated with key assumptions and estimates used in our impairment testing, including the impact of macroeconomic conditions.

As a result of our 2024 annual goodwill impairment testing, we determined that the fair value of our Americas reporting unit exceeded its carrying value by 132 % at the 2024 m easurement date, and therefore no impairment was indicated.

Improved expectations of financial performance for the Americas reporting unit and a lower discount rate contributed to a higher estimated fair value of our Americas reporting unit for 2024.

The consolidated goodwill balance of $ 99.9 million at December 29, 2024 is allocated entirely to our Americas reporting unit.

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.

The Company performed this test at the reporting unit level, which is an operating segment or one level below the operating segment level.

In performing the impairment testing for each reporting unit, the Company prepared valuations of reporting units on both a market comparable methodology and an income methodology, and those valuations were compared with the respective carrying values of the reporting units to determine whether any goodwill impairment existed.

In preparing the valuations, past, present and future expectations of performance were considered, including the ongoing impact of the COVID-19 pandemic in 2022.

As a result of our 2022 testing, we determined that the carrying value of our EMEA reporting unit exceeded its fair value and that the associated goodwill was impaired at the measurement date.

We recorded a goodwill impairment charge of $ 29.4 million in 2022 to write off all the goodwill allocated to our EMEA reporting unit.

Macroeconomic factors, including inflation, foreign currency exchange rates, and the expected impact to planned revenue and operating income contributed to the lower estimated fair value of our EMEA reporting unit.

Higher discount rates also contributed to the lower fair value of our reporting units.

We determined that the fair value of our Americas reporting unit exceeded its carrying value by 71 % at the 2022 m easurement date, and therefore no impairment was indicated.

The remaining goodwill balance of $ 102.4 million at January 1, 2023, was allocated to our Americas reporting unit.

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

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

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

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(in thousands)

Goodwill balance, at January 1, 2023

Goodwill balance, at December 31, 2023

$ 105,448 $ — $ 105,448

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Other Intangible Assets

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.

During the fourth quarter of 2025, 2024 , and 2023, the Company performed its annual impairment testing of the trademark and trade name intangible assets.

T he Company prepared valuations of the intangible assets using the present value of cash flows under the relief from royalty method, which requires management to estimate forecasted revenues and a discount rate.

The intangible asset required rate of return used in the 2025, 2024, and 2023 annual impairment testing were 11.0 %, 11.5 %, 12.5 %, respectively.

We determined that the estimated fair value of the trademark and trade name intangible assets exceeded the carrying value and that no impairment existed at the 2025, 2024, or 2023 measurement dates.

The Company’s intangible assets other than goodwill consisted of the following as of December 28, 2025 and December 29, 2024:

December 28, 2025 December 29, 2024

Gross Carrying Amount Accumulated Impairment Accumulated Amortization Net Carrying Amount Gross Carrying Amount

Accumulated Impairment Accumulated Amortization

Net Carrying Amount

Gross Carrying Amount Accumulated Impairment Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Impairment Accumulated Amortization Net Carrying Amount

(in thousands)

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Indefinite-lived intangible assets (1) :

Trademarks and trade names 56,236 ( 11,081 ) — 45,155 58,747 ( 11,081 ) — 47,666

Trademark and trade name

61,762 ( 11,081 ) — 50,681 56,236 ( 11,081 ) — 45,155

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

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Amortization expense related to intangible assets during the years 2025, 2024 and 2023 was $ 3.1 million, $ 5.2 million and $ 5.2 million, respectively, and is recorded in cost of sales in the consolidated statements of operations.

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.

The developed technology intangible asset was amortized over its estimated useful life of 7 years and was fully amortized during fiscal year 2025.

NOTE 12 – PREFERRED STOCK

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The Company’s Common Stock is traded on the Nasdaq Global Select Market under the symbol TILE.

The Company paid cash dividends totaling $ 0.04 per share, including participating securities, in each of years 2024, 2023 and 2022.

The Company paid cash dividends during 2025 totaling $ 0.06 per share and $ 0.04 per share for 2024 and 2023, including participating securities.

The future declaration and payment of dividends is at the discretion of the Company’s Board, and depends upon, among other things, the Company’s investment policy and opportunities, results of operations, financial condition, cash requirements, future prospects, and other factors that may be considered relevant at the time of the Board’s determination.

Such other factors include limitations contained in the agreement for its Syndicated Credit Facility and the indenture governing its 5.50% Senior Notes due 2028, which specify conditions as to when any dividend payments may be made.

Such other factors include limitations contained in the agreement for its Syndicated Credit Facility, which specify conditions as to when any dividend payments may be made.

As such, the Company may discontinue its dividend payments in the future if its Board determines that a cessation of dividend payments is appropriate in light of the factors indicated above.

In the second quarter of 2022, the Company adopted a new share repurchase program in which the Company is authorized to repurchase up to $ 100 million of its outstanding shares of common stock.

In May 2022, the Company adopted a new share repurchase program in which the Company is authorized to repurchase up to $ 100 million of its outstanding shares of common stock.

The program has no specific expiration date.

During fiscal year 2025, the Company repurchased 750,166 shares of common stock at a weighted average price of $ 24.23 per share pursuant to this program.

No shares of common stock were repurchased pursuant to this program during 2024 or 2023.

During 2022, the Company repurchased and retired an aggregate of 1,383,682 shares, at a weighted average price of $ 12.41 per share, pursuant to this program.

All treasury stock is accounted for using the cost method.

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Issuances of stock related to restricted share units and performance shares 713 71 ( 71 ) — — — —

479 48 ( 48 ) — — — —

Restricted stock issuances 58 6 941 — — — 947

Unrecognized compensation expense related to restricted stock awards

— — ( 946 ) — — — ( 946 )

Cash dividends declared — — — ( 3,559 ) — — ( 3,559 )

Compensation expense related to share-based plans, net of forfeitures and shares received for tax withholdings ( 376 ) ( 38 ) 6,054 — — — 6,016

Share repurchases

( 750 ) ( 74 ) ( 18,101 ) — — — ( 18,175 )

6 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

Issuances of stock related to restricted share units and performance shares 479 48 ( 48 ) — — — —

85 8 ( 8 ) — — — — —

Restricted stock issuances 58 6 941 — — — 947

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

— — ( 760 ) — — — — ( 760 )

Cash dividends declared — — — ( 2,338 ) — — ( 2,338 )

2 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

6 unchanged sentences

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

— — — 19,560 — — — 19,560

Net income — — — 44,517 — — — 44,517

Issuances of stock related to restricted share units and performance shares 85 8 ( 8 ) — — — — —

Restricted stock issuances 107 11 749 — — — — 760

Unrecognized compensation expense related to restricted stock awards — — ( 760 ) — — — — ( 760 )

— — ( 6,549 ) — — — — ( 6,549 )

Cash dividends declared — — — ( 2,323 ) — — — ( 2,323 )

Compensation expense related to share-based plans, net of forfeitures ( 186 ) ( 19 ) 8,769 — — — — 8,750

( 66 ) ( 6 ) 8,132 — — — — 8,126

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

Stock Incentive Plan

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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.

The Company measures the cost of employee services received in exchange for an award of equity instruments based on the grant date fair market value of the award.

That expense will be recognized over the period that the employee is required to provide the services – the requisite service period (usually the vesting period) – in exchange for the award.

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Restricted Stock Awards

During fiscal year 2025, there were no new grants of restricted stock awards.

Outstanding restricted stock at December 29, 2024, of 242,300 shares with a weighted average grant date fair value of $ 13.92 were fully vested as of December 28, 2025.

During fiscal years 2024 and 2023, the Company granted restricted stock awards totaling 58,400 and 107,100 shares, respectively, of Common Stock.

The weighted average grant date fair value of restricted stock awards granted during 2024 and 2023 was $ 16.22 and $ 7.10 , respectively.

These awards (or a portion thereof) vest with respect to each recipient over a one to three-year period from the date of grant, provided the individual remains in the employment or service of the Company as of the vesting date.

These awards (or a portion thereof) vested with respect to each recipient over a one to three-year period from the date of grant, provided the individual remained in the employment or service of the Company as of the vesting date.

Additionally, certain awards (or a portion thereof) could vest earlier in the event of a change in control of the Company or upon involuntary termination without cause.

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The expense related to awards of restricted stock is captured in SG&A expenses in the consolidated statements of operations.

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

Restricted Shares Weighted Average Grant Date Fair Value

Outstanding at December 31, 2023 691,600 $ 12.55

Granted 58,400 16.22

Vested ( 504,700 ) 12.31

Forfeited or canceled ( 3,000 ) 13.19

Outstanding at December 29, 2024 242,300 $ 13.92

As of December 29, 2024, the unrecognized total compensation cost related to unvested restricted stock was $ 0.4 million.

That cost is expected to be recognized over a weighted-average remaining vesting period of 0.3 years.

As of December 28, 2025, there was no remaining unrecognized compensation expense for restricted stock awards.

Restricted Share Unit Awards

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.

During fiscal year 2025, 2024, and 2023, the Company granted awards for 337,300 , 407,300 , and 596,200 restricted share units to certain employees and directors pursuant to the Company’s stock incentive plan.

The weighted average grant date fair value of the restricted share units granted during 2025, 2024, and 2023, was $ 22.00 , $ 13.38 , and $ 10.36 , respectively.

Each restricted share unit represents one share of the Company’s common stock to be issued to the award recipient once the vesting criteria have been satisfied.

Awards of restricted share units have a graded vesting schedule over a two to three -year period from the date of grant, provided the individual remains in the employment or service of the Company as of each vesting date.

Awards of restricted share units have a graded vesting schedule over a one to three -year period from the date of grant, provided the individual remains in the employment or service of the Company as of each vesting date.

Additionally, certain awards (or a portion thereof) could vest earlier in the event of a change in control of the Company, upon involuntary termination without cause, or upon retirement, provided certain eligibility criteria are met.

Compensation expense related to the restricted share units was $ 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.

Compensation expense related to the restricted share units was $ 6.0 million, $ 3.5 million, and $ 1.9 million for 2025, 2024, and 2023 , respectively.

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

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The following table summarizes restricted share units outstanding as of December 28, 2025, as well as activity during the year:

Restricted Share Units

Weighted Average Grant Date Fair Value

Restricted Share Units Weighted Average Grant Date Fair Value

Outstanding at December 29, 2024 823,300 $ 11.76

407,300 13.38

( 157,200 ) 10.77

Granted 337,300 22.00

Vested ( 338,000 ) 11.87

Forfeited or canceled ( 25,200 ) 16.97

( 10,200 ) 11.41

Outstanding at December 28, 2025 797,400 $ 15.88

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(in thousands, except per share data)

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

Net income $ 116,098 $ 86,946 $ 44,517

Weighted average shares outstanding 58,341 57,937 57,349

57,937 57,349 57,893

Participating securities 34 345 743

Shares for basic EPS 58,375 58,282 58,092

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

Dilutive effect of non-participating securities

Shares for diluted EPS 59,162 58,871 58,335

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Diluted EPS $ 1.96 $ 1.48 $ 0.76

(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.

(1) Net income attributable to participating securities for fiscal years 2025, 2024 and 2023, was not material.

NOTE 15 – RESTRUCTURING AND OTHER

Restructuring, asset impairment, other (gains) and charges by reportable segment are presented as follows:

2024 2023 2022

(in thousands)

AMS $ — $ — $ —

EAAA — ( 2,502 ) 1,965

Total restructuring, asset impairment, other (gains) and charges

$ — $ ( 2,502 ) $ 1,965

2021 Restructuring Plan

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

The plan involved a reduction of approximately 188 employees and the closure of the Company’s manufacturing facility in Thailand at the end of the first quarter of 2022.

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

The Company recognized a gain of $ 2.7 million on the sale of the Thailand facility during 2023.

See Note 7 entitled “Property, Plant and Equipment” for additional information.

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

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

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

NOTE 16 – INCOME TAXES

5 unchanged sentences

Income before income taxes $ 136,851 $ 113,554 $ 63,654

$ 113,554 $ 63,654 $ 41,917

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

6 unchanged sentences

Current expense 33,287 31,062 26,020

31,062 26,020 23,834

Deferred (benefit) expense:

3 unchanged sentences

Deferred benefit ( 12,534 ) ( 4,454 ) ( 6,883 )

( 4,454 ) ( 6,883 ) ( 1,477 )

Total income tax expense $ 20,753 $ 26,608 $ 19,137

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

(in thousands)

Federal $ 9,118

Germany 11,538

Netherlands 5,546

Other Foreign

State and local

Total Income taxes paid, net of refunds

Income tax payments amounted to approximately $ 37.8 million and $ 25.8 million for the years 2024 and 2023, respectively.

During the years 2024 and 2023, the Company received income tax refunds of $ 3.3 million and $ 2.5 million, respectively.

We adopted ASU 2023-09 on a prospective basis beginning with fiscal year 2025.

The following table reconciles the U.S.

federal statutory rate of 21 % to our effective income tax rate for fiscal year 2025 in accordance with ASU 2023-09:

(in thousands)

Income taxes at U.S.

federal statutory rate

$ 28,739 21.0 %

The Company’s effective tax rate was 23.4 %, 30.1 % and 53.3 % for fiscal years 2024, 2023 and 2022, respectively.

The following summary reconciles income taxes at the U.S.

federal statutory rate of 21 % applicable for all periods presented to the Company’s actual income tax expense:

State and local income taxes, net of federal income tax effect (1)

Foreign Tax Effects

Statutory tax rate difference between Germany and U.S.

( 1,651 ) ( 1.2 ) %

Trade tax 5,974 4.4 %

Enacted changes in tax laws or rates ( 6,331 ) ( 4.6 ) %

Remeasurement of deferred tax liability

( 4,048 ) ( 3.0 ) %

Other ( 1,207 ) ( 0.9 ) %

Other foreign jurisdictions 2,521 1.9 %

Effect of Cross-Border Tax Laws

( 1,506 ) ( 1.1 ) %

( 887 ) ( 0.6 ) %

Nontaxable or non-deductible items

Non-deductible employee compensation 1,823 1.3 %

( 1,383 ) ( 1.0 ) %

Changes in valuation allowances

( 3,693 ) ( 2.7 ) %

Changes in unrecognized tax benefits

Income tax expense and effective tax rate

$ 20,753 15.2 %

(1) State taxes in California, Georgia, Massachusetts, Minnesota, New Jersey, and New York comprise the majority (greater than 50 percent) of the tax effect in this category.

The following table reconciles the U.S.

federal statutory income tax rate of 21 % to our effective income tax rate for fiscal years 2024 and 2023 based on the required disclosure prior to our adoption of ASU 2023-09:

(in thousands)

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Expiring tax attributes 4,125 3,780

4,125 3,780 —

Valuation allowance effect ( 7,330 ) ( 879 )

Research and development tax credits ( 703 ) ( 820 )

Goodwill impairment — — 6,171

Foreign tax rate change related to UK pension ( 2,493 ) —

( 2,493 ) — —

Unrecognized tax benefits ( 135 ) ( 79 )

Other 53 43 ( 130 )

Income tax expense $ 26,608 $ 19,137

$ 26,608 $ 19,137 $ 22,357

On August 16, 2022, the Inflation Reduction Act of 2022 (“Inflation Reduction Act”) was signed into law, with tax provisions primarily focused on implementing a 15 % minimum tax on global adjusted financial statement income (“AFSI”) for corporations with average AFSI exceeding $ 1 billion over a three-year period, a 1 % excise tax on share repurchases and various climate and clean energy tax incentives.

The Inflation Reduction Act did not have a material impact on the Company’s financial statements for the year ended December 29, 2024.

On July 4, 2025, the U.S.

1, commonly referred to as the One Big Beautiful Bill Act (“OBBBA”).

The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions.

The OBBBA did not have a material impact on our estimated annual effective tax rate in 2025.

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 %.

The OECD has since issued administrative guidance providing transition and safe harbor rules around the implementation of the Pillar Two global minimum tax.

Many non-U.S.

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.

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.

While the U.S.

has not adopted Pillar Two, many non-U.S.

tax jurisdictions have enacted legislation to adopt Pillar Two Model Rules beginning in 2024 (including the European Union Member States) or announced their plans to enact legislation in future years.

For fiscal year 2025, these provisions did not 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.

8 unchanged sentences

Deferred compensation 17,314 16,521

Pensions 4,155 4,982

Property and equipment 658 438

2 unchanged sentences

Capitalized costs 11,727 10,327

Deferred tax asset, gross 78,953 90,248

Deferred tax assets, gross

76,589 78,953

Valuation allowance ( 5,235 ) ( 10,028 )

Deferred tax asset, net $ 68,925 $ 72,891

Deferred tax assets, net

$ 71,354 $ 68,925

Deferred tax liabilities

Property and equipment $ 27,283 $ 24,899

Inventory 3,152 4,014

Intangible assets 12,823 20,970

4 unchanged sentences

state taxes on unremitted earnings 681 773

Other 164 158

Deferred tax liabilities 69,447 76,123

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.

Net deferred tax assets (liabilities)

$ 1,907 $ ( 7,198 )

federal and foreign deferred tax assets at December 28, 2025.

The Company recorded a valuation allowance on certain state net operating loss carryforwards that it does not believe are more likely than not to be utilized in the future.

In July 2025, Germany enacted tax legislation to gradually reduce the corporate income tax rate.

The current income tax rate of 15 % is set to decrease by 1% annually beginning in 2028 reaching 10 % by 2032.

As a result of this change to tax rates, deferred assets and liabilities were remeasured using the new rates applicable to the periods in which the underlying temporary differences are expected to reverse.

The remeasurement of the Company’s German deferred tax positions and other deferred tax adjustments resulted in a favorable deferred income tax benefit of $ 10.4 million in fiscal year 2025.

As of December 28, 2025, the Company has approximately $ 2.1 million of foreign tax credit carryforwards with expiration dates through 2034.

A full valuation allowance has been provided as the Company does not expect to utilize these foreign tax credits before the expiration dates.

As of December 29, 2024, the Company had a full valuation allowance on all of its foreign tax credit carryforwards.

During fiscal year 2025, the Company released $ 3.7 million of the valuation allowance on its foreign tax credit carryforwards that the Company expects to utilize and retained $ 0.3 million on the portion that the Company does not expect to utilize before the expiration date.

As of December 28, 2025, the Company has approximately $ 153.7 million in state net operating loss carryforwards relating to continuing operations with expiration dates through 2044 and has provided a valuation allowance against $ 107.0 million of such losses, which the Company does not expect to utilize.

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 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 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.

income taxes and foreign withholding taxes on the undistributed accumulated earnings of its foreign subsidiaries, with the exception of Canada, China, and Thailand where a portion of our undistributed earnings are not deemed to be permanently reinvested.

The Company provided for U.S.

12 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 2020 to the present.

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.

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 28, 2025 and December 29, 2024, non-current deferred tax assets were reduced by approximately $ 1.9 million and $ 2.6 million of unrecognized tax benefits, respectively.

As of December 28, 2025, and December 29, 2024, the Company had $ 4.9 million and $ 4.8 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 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.

As of December 28, 2025 and December 29, 2024, the Company accrued interest and penalties of $ 0.5 million and $ 0.4 million, respectively, 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:

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$ 4,344 $ 4,351 $ 4,532

(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.

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 $ 4.9 million in future periods.

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

NOTE 17 – COMMITMENTS AND CONTINGENCIES

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

Lawsuit by Former CEO in Connection with Termination

On January 19, 2020, the Company’s Board of Directors voted to terminate for cause the employment of Jay D.

Gould, then President and Chief Executive Officer, effective immediately, for violations of the Company’s working environment policies.

On February 14, 2020, Mr.

Gould filed a lawsuit against the Company in the United States District Court of the Northern District of Georgia, Gould v.

Interface, Inc.

1:20-cv-00695.

In his lawsuit, Mr.

Gould asserted several claims against the Company in connection with his termination, including that the termination was a wrongful retaliation against Mr.

Gould and breached his employment contract with the Company, that public statements made by the Company in connection with his termination defamed Mr.

Gould (two counts) and that the Company’s investigation into Mr.

Gould’s conduct that preceded the termination was negligently performed.

Among other unspecified relief, Mr.

Gould sought in excess of $ 10 million in damages for the breach of contract claim and $ 100 million for each of the other claims, as well as attorneys’ fees.

The Court granted judgment on the pleadings in favor of the Company on Mr.

Gould’s putative claim of negligent investigation, and Mr.

Gould’s defamation claims were dismissed with prejudice by stipulation of the parties.

On March 31, 2022, the Court entered an order granting the Company’s motion for summary judgment on all of Mr.

Gould’s remaining claims, leaving only the Company’s counterclaim against Mr.

Gould for breach of fiduciary duty pending in the District Court.

An attempted interlocutory appeal by Mr.

Gould of the summary judgment order was remanded by the 11th Circuit Court of Appeals back to the District Court as premature.

Gould filed a motion for reconsideration of the Court’s grant of summary judgment in favor of the Company on Mr.

Gould’s breach of contract claim.

On July 31, 2023, the Court denied that motion for reconsideration.

Also on July 31, 2023, the Company filed a motion to dismiss without prejudice its counterclaim against Mr.

Gould for breach of fiduciary duty.

On August 2, 2023, the Court granted that motion to dismiss, resulting in a final judgment in the trial court.

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

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

Gould to the U.S.

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.

In April 2025, The Water Works Board of the City of Opelika, Alabama filed a lawsuit in the Circuit Court of Lee County, Alabama, The Water Works of the City of Opelika, Alabama, v.

3M Company, et al., Case No.

43-CV-2025-900229.00 , against Interface, Inc., our subsidiary InterfaceFLOR, LLC, and numerous other defendants.

The lawsuit alleges that the defendants, including Interface, manufactured, sold, used, and discharged per- and poly-fluoroalkyl substances (PFAS), which have allegedly contaminated the plaintiff's water supply.

The case was removed by defendant 3M Company to the United States District Court for the Middle District of Alabama, Case No.

3:25-cv-411-ECM-CWB.

Subsequently, a motion was filed to transfer the case to the Multi-District Litigation (MDL) concerning Aqueous Film-Forming Foams (AFFF) Products Liability Litigation, and the plaintiff filed a motion to remand the case to the Circuit Court of Lee County, Alabama.

On October 9, 2025, the United States Judicial Panel on Multidistrict Litigation issued a Transfer Order directing that the case be transferred to the District of South Carolina for inclusion in MDL No.

The nature of this litigation involves complex scientific, legal and factual issues, and the case is in an early stage.

We cannot at this time estimate the reasonably possible loss or range of loss, if any, for this matter.

Interface believes it has meritorious defenses to the claims brought against it, and intends to defend vigorously against them.

NOTE 18 – EMPLOYEE BENEFIT PLANS

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The 401(k) Plan provides Company matching contributions on a sliding scale based on the level of the employee’s contribution.

The Company may, at its discretion, make additional contributions to the 401(k) Plan based on the attainment of certain performance targets by its subsidiaries.

The Company’s matching contributions are funded bi-monthly and totaled approximately $ 3.6 million, $ 3.4 million, and $ 3.3 million for the years 2024, 2023 and 2022, respectively.

No discretionary contributions were made in 2024, 2023 or 2022.

The Company’s matching contributions totaled approximately $ 3.6 million, $ 3.6 million, and $ 3.4 million for the years 2025, 2024 and 2023, respectively.

Under the Company’s nonqualified savings plans (“NSPs”), the Company provides eligible employees the opportunity to enter into agreements for the deferral of a specified percentage of their compensation, as defined in the NSPs.

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The fair value of the mutual fund investments at December 28, 2025 and December 29, 2024 was $ 8.9 million and $ 8.7 million, respectively.

Multiemployer Plan

On December 31, 2019, a plan amendment was executed to eliminate future service accruals in our defined benefit pension plan in the Netherlands (the “Dutch Plan”), which resulted in a curtailment of the plan.

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

Active participants no longer accrue benefits after December 31, 2019, and instead participate in the Industry-Wide Pension Fund (the “IWPF”) multi-employer plan beginning in fiscal year 2020.

During 2024, 2023 and 2022, the Company recorded multi-employer pension expense related to multiemployer contributions of $ 2.9 million, $ 2.7 million and $ 2.4 million, respectively.

The Company’s contributions into the IWPF are less than 5 % of total plan contributions.

The IWPF is more than 85 % funded at the end of 2023, which is the latest date plan information is available.

The IWPF multi-employer plan is not considered to be significant based on the funded status of the plan and our contributions.

Multi-employer Plan

During 2025, 2024 and 2023, the Company recorded multi-employer pension expense related to contributions to insignificant multi-employer plans of $ 2.8 million, $ 2.9 million and $ 2.7 million, respectively.

Foreign Defined Benefit Plans

The Company has trusteed defined benefit retirement plans which cover many of its European employees.

The Company has defined benefit retirement plans, which cover many of its European employees.

The benefits under these defined benefit retirement plans are generally based on years of service and the employee’s average monthly compensation.

In connection with the nora acquisition in 2018, the Company acquired an additional defined benefit plan, which covers certain employees in Germany (the “nora Plan”).

The nora plan has no plan assets.

The Company acquired an additional defined benefit plan in connection with the nora acquisition, which covers certain employees in Germany (the “nora Plan”).

The nora Plan has no plan assets and is unfunded.

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, 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.

The Dutch Plan is financed by assets held in an insurance contract.

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 is obligated to fund the cost to guarantee vested benefits.

The Dutch Plan is financed by assets held in an insurance contract and the Company is obligated to fund the cost to guarantee vested benefits.

As of December 28, 2025, the under-funded status of the Dutch Plan of $ 4.7 million is recorded on the consolidated balance sheet in other long-term liabilities.

Pension expense for our three European defined benefit plans was $ 1.8 million, $ 1.3 million, and $ 2.0 million for the years 2024, 2023 and 2022, respectively.

Plan assets are primarily invested in insurance contracts and fixed income securities.

As of December 29, 2024, for the European plans, the Company had a net liability recorded of $ 19.7 million, an amount equal to their under-funded status, and had recorded in accumulated other comprehensive loss an amount equal to $ 36.3 million (net of taxes of approximately $ 8.1 million) related to the future amounts to be recorded in net periodic benefit costs.

As of December 28, 2025, the Company had a net liability recorded of $ 20.7 million for the foreign defined benefit plans, an amount equal to their under-funded status, and had recorded in accumulated other comprehensive loss an amount equal to $ 35.3 million (net of taxes of approximately $ 9.1 million) related to the future amounts to be recorded in net periodic benefit costs.

In the next fiscal year, approximately $ 1.1 million will be reclassified from accumulated other comprehensive loss into net periodic benefit cost.

The tables presented below set forth the funded status of the Company’s significant foreign defined benefit plans and required disclosures in accordance with applicable accounting standards:

The tables presented below set forth the funded status of the Company’s significant foreign defined benefit plans:

(in thousands)

4 unchanged sentences

Benefits and expenses paid ( 12,224 ) ( 10,709 )

Actuarial loss (gain)

Actuarial gain

( 11,184 ) ( 4,321 )

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Amounts recognized in consolidated balance sheets:

$ 15,465 $ 25,235

Other assets $ 14,778 $ 15,465

Current liabilities ( 1,361 ) ( 1,170 )

( 1,170 ) ( 1,182 )

Other long-term liabilities, net of current portion ( 34,129 ) ( 34,030 )

( 34,030 ) ( 39,133 )

Under-funded status at end of fiscal year $ ( 20,712 ) $ ( 19,735 )

2 unchanged sentences

Total amount recognized, end of year $ 35,314 $ 36,323

$ 36,323 $ 29,918

Accumulated benefit obligation $ 206,014 $ 200,888

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 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.

The increase in the projected benefit obligation of $ 5.1 million for 2025 compared to prior year was primarily due to the impact of foreign currency translation due to the strengthening of the Euro against the U.S.

dollar in 2025.

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Net periodic benefit cost $ 2,706 $ 1,835 $ 1,299

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

During 2024, other comprehensive loss was impacted by a total net loss of approximately $ 5.7 million (net of $ 1.7 million of tax), comprised of actuarial loss of approximately $ 6.5 million (net of $ 2.0 million of tax) and amortization of loss of $ 0.8 million (net of $ 0.3 million of tax).

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

During 2025, other comprehensive income was impacted by a total net gain of approximately $ 2.5 million (net of $ 0.9 million of tax), comprised of actuarial gain of approximately $ 1.6 million (net of $ 0.6 million of tax) and amortization of loss of $ 0.9 million (net of $ 0.3 million of tax).

2025 2024 2023

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The indexation benefit is not guaranteed, and is only provided for and paid out if sufficient assets are available due to favorable asset returns.

Both the vested benefit amounts as well as amounts related to the discretionary indexation benefits under the Dutch Plan are paid pursuant to an insurance contract with a private insurer (the “Contract”).

Vested benefits as well as amounts related to the discretionary indexation benefits under the Dutch Plan are paid pursuant to an insurance contract with a private insurer (the “Contract”).

The Dutch Plan itself is financed by investment assets held within the Contract.

Prior to December 31, 2019, the Contract guaranteed payment of vested benefits, regardless of whether Dutch Plan assets held through the Contract were ultimately sufficient to pay vested amounts, and also provided for payment of the indexation amount on a contingent basis if the actual return on Dutch Plan assets were sufficient to pay it.

This type of insurance arrangement is common in The Netherlands, although not necessarily common in other jurisdictions.

After the Dutch Plan curtailment on December 31, 2019, any shortfall in plan assets to pay vested benefits will be funded by the Company.

The assets under the Dutch Plan, including any indexation benefit, are identified as level 3 assets under the fair value hierarchy.

Under the express terms of the Contract, contract value is the greater of (i) the value of the discounted vested benefits of the Dutch Plan and (ii) the fair value of the underlying investment assets held by the insurance company under the Contract.

As between those two values, the former was the greater for 2025 and 2024.

Because the Company will fund the cost to guarantee vested benefits, the Company has recorded a provision, which reduces the Dutch Plan assets, that consists of the net present value of the expected future guarantee payments due to the insurance company pursuant to the Company’s guarantee.

As explained above, the Contract also will pay the indexation benefit if sufficient assets are available, which the Company believes not to be probable as of the end of 2024 based on recent returns.

The indexation benefit for 2024 and 2023 is not significant.

The Company’s actual weighted average asset allocations for 2025 and 2024, and the targeted asset allocation for 2026, of the foreign defined benefit plans by asset category, are as follows:

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The nora plan is currently unfunded.

As required by accounting standards, assets are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

Assets are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

As noted above, the Dutch Plan assets as represented by the insurance contract are classified as a level 3 asset and included in the “Other” asset category.

45 unchanged sentences

Currency translation adjustment 8,142 ( 3,674 )

( 3,674 ) 3,357

Balance of level 3 assets, end of year $ 63,064 $ 74,641

(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.

(1) Includes $ 5.8 million and $ 2.1 million for 2025 and 2024, respectively, of unrealized losses recognized during the period in other comprehensive income for assets held at year end.

During 2026, the Company expects to contribute $ 1.8 million to the foreign defined benefit plans.

45 unchanged sentences

Net periodic benefit cost $ 1,287 $ 1,304 $ 1,329

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 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).

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 income during 2025 related to the SCP as a result of plan activity was a net loss of approximately $ 0.5 million (net of $ 0.2 million of tax), primarily comprised of a net loss during the period of $ 0.6 million (net of $ 0.3 million of tax) and amortization of loss of $ 0.1 million (net of $ 0.1 million of tax).

During 2025, 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 operating income (“AOI”).

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:

AOI excludes:

nora purchase accounting amortization;

Thailand plant closure inventory write-down;

Cyber Event impact;

goodwill and intangible asset impairment charges;

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

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

and the impact of the Cyber Event.

Intersegment revenues for 2025, 2024 and 2023 were $ 122.0 million, $ 91.1 million and $ 82.8 million, respectively.

3 unchanged sentences

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.

AOI amounts below for fiscal year 2023, 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.

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(in thousands)

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

Net sales $ 843,886 $ 542,968 $ 1,386,854 $ 800,811 $ 514,847 $ 1,315,658 $ 736,955 $ 524,543 $ 1,261,498

significant segment expenses (1)

6 unchanged sentences

Restructuring, severance, asset impairment and other, net 6,687 2,530 5,631

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

Cyber Event impact

Purchase accounting amortization

3,073 5,172 5,172

Goodwill & intangible asset impairment — — 36,180

Thailand plant inventory write down — — 2,530

Cyber Event impact — ( 711 ) 1,072

Interest expense 19,546 23,205 31,787

Other (income) expense, net

Other expense (income), net

7,598 ( 2,353 ) 9,081

3 unchanged sentences

Intersegment expenses are excluded.

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

(2) Adjusted cost of sales excludes nora purchase accounting amortization and the Cyber Event impact.

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

32 unchanged sentences

Netherlands 42,458 36,350

Other foreign countries

31,326 24,380

Other foreign countries 13,279 10,123

Total long-lived assets $ 309,449 $ 282,374

1 unchanged sentence

(2) Long-lived assets attributed to geographic areas are based on the physical location of the asset.

2024 includes $ 3.1 million and $ 5.0 million of leased equipment, net of accumulated amortization, in the United States and foreign countries, respectively.

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

2025 includes $ 2.5 million and $ 6.6 million of leased equipment in the U.S.

and in non-U.S.

countries, respectively.

2024 includes $ 3.1 million and $ 5.0 million of leased equipment in the U.S.

and in non-U.S.

countries, respectively.

NOTE 20 – ITEMS RECLASSIFIED FROM ACCUMULATED OTHER COMPREHENSIVE LOSS

3 unchanged sentences

Loss on foreign subsidiary liquidation (1)

Other (income) expense, net

Other expense (income), net

$ — $ ( 2,152 ) $ ( 6,221 )

2 unchanged sentences

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

Other (income) expense, net

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

Other expense (income), net ( 1,598 ) ( 1,499 ) ( 800 )

Total loss reclassified from AOCI $ ( 1,598 ) $ ( 3,651 ) $ ( 8,003 )

3 unchanged sentences

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.

(2) In fiscal year 2020, the Company terminated its designated interest rate swaps.

Losses recorded in accumulated other comprehensive loss for these terminated interest rate swaps were reclassified and recorded in the consolidated statements of operations for the respective periods.

The tax impact of the interest rate swap reclassifications was $ 0.2 million for fiscal year 2023, related to the discontinued cash flow hedges.

(3) See Note 18 entitled “Employee Benefit Plans” for the tax impact of reclassifications related to the Company’s defined benefit plans.

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of Interface, Inc.

Opinion on the Financial Statements

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

and subsidiaries (the Company) as of December 28, 2025, the related consolidated statements of operations, comprehensive income , and cash flows for the year then ended, and the related notes and the financial statement schedule listed in the Index at Item 15(a) (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 28, 2025, and the results of its operations and its cash flows for the year then ended, in conformity with U.S.

generally accepted accounting principles.

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 28, 2025, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 25, 2026 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audit s .

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosures to which it relates.

Valuation of Indefinite-Lived Trademark and Trade Name

Description of the Matter As of December 28, 2025, the Company’s indefinite-lived trademark and trade name intangible assets had an aggregate carrying value of $50.7 million.

As explained in Note 1 to the consolidated financial statements, indefinite-lived trademark and trade name intangible assets 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 its carrying amount.

Auditing the Company’s impairment test for indefinite-lived trademark and trade name intangible assets was complex due to the judgmental nature of the significant assumptions used in the determination of the estimated fair value of these intangible assets.

The Company estimates the fair value of the trademark and trade name intangible assets using the present value of cash flows under the relief from royalty method.

A significant assumption used to estimate the fair value of the trademark and tradename intangible assets included estimated forecasted revenue.

The significant assumption is forward-looking and could be affected by future economic and market conditions.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of the Company’s controls over the annual impairment process for indefinite-lived trademark and trade name intangible assets.

This included testing controls over management’s review of the significant assumption described above.

To test the fair value of the trademark and trade name intangible assets, our audit procedures included, among others, assessing the methodology used to estimate fair value, testing the significant assumption used to develop the fair value estimate, and testing the underlying data used by the Company in its analysis for completeness and accuracy.

We compared the significant assumption to current industry, market and economic trends, the Company’s historical results and other relevant factors.

In addition, we considered the accuracy of the Company’s historical projections of revenue compared to actual revenue.

We also performed a sensitivity analysis to evaluate the potential change in the fair value of the trademark and trade name intangible assets resulting from changes in the significant assumption.

We have served as the Company’s auditor since 2025.

/s/ Ernst & Young LLP

Atlanta, Georgia

February 25, 2026

Report of Independent Registered Public Accounting Firm

Shareholders and Board of Directors

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Opinion on the Consolidated Financial Statements

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

(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.

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

(the “Company”) as of December 29, 2024, the related consolidated statements of operations, comprehensive income, and cash flows for each of the two fiscal years in the period ended December 29, 2024, and the related notes (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 the results of its operations and its cash flows for each of the two fiscal years in the period ended December 29, 2024 , in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

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We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

Goodwill and Other Intangible Assets Impairment Assessment

As described in Notes 1 and 12 of the consolidated financial statements, the Company’s consolidated goodwill balance was $99.9 million as of December 29, 2024, all allocated to the Americas reporting unit.

Goodwill is tested for impairment annually and between annual tests if events or changes in circumstances indicate the asset might be impaired.

If the carrying value of the Americas reporting unit exceeds its estimated fair value, the Company will recognize an impairment loss equal to the amount of the excess, limited to the amount of goodwill allocated to that reporting unit.

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 trade name intangible assets was $45.2 million as of December 29, 2024.

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 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.

The primary procedures we performed to address this critical audit matter included:

• Evaluating management’s ability to accurately forecast future revenues by performing a retrospective review comparing management’s prior period forecasts to actual results for the same period.

• 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 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;

and (iii) developing a range of independent estimates and comparing those to the discount rate selected by management.

/s/ BDO USA, P.C.

We are uncertain as to the year we began serving consecutively as the auditor of the Company's financial statements;

however, we are aware that we have been the Company's auditor consecutively since at least 1981.

however, we are aware that we served as the Company's auditor since at least 1981 to 2025.

Atlanta, Georgia

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Report of Independent Registered Public Accounting Firm

Shareholders and Board of Directors

Interface, Inc.

Atlanta, Georgia

To the Shareholders and the Board of Directors of Interface, Inc.

Opinion on Internal Control Over Financial Reporting

We have audited Interface, Inc.’s (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 (the “COSO criteria”).

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 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.

We have audited Interface, Inc.

and subsidiaries’ internal control over financial reporting as of December 28, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

In our opinion, Interface, Inc.

and subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 28, 2025, 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 sheet of the Company as of December 28, 2025, the related consolidated statements of operations, comprehensive income and cash flows for the year then ended, the related notes and the financial statement schedule listed in the Index at Item 15(a) and our report dated February 25, 2026 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Item 9A, Management’s Annual Report on Internal Control over Financial Reporting.

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting.

Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit of internal control over financial reporting in accordance with the standards of the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

Our audit also included performing such other procedures as we considered necessary in the circumstances.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion.

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Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ BDO USA, P.C.

/s/ Ernst & Young LLP

Atlanta, Georgia

3 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