INTERFACE INC 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA INTERFACE, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) FISCAL YEAR 2025 2024 2023 Net sales $ 1,386,854 $ 1,315,658 $ 1,261,498 Cost of sales 849,474 832,710 820,429 Gross profit 537,380 482,948 441,069 Selling, general and administrative expenses 373,385 348,542 339,049 Restructuring, asset impairment, other (gains) and charges — — ( 2,502 ) Operating income 163,995 134,406 104,522 Interest expense 19,546 23,205 31,787 Other expense (income), net 7,598 ( 2,353 ) 9,081 Income before income tax expense 136,851 113,554 63,654 Income tax expense 20,753 26,608 19,137 Net income $ 116,098 $ 86,946 $ 44,517 Earnings per share – basic $ 1.99 $ 1.49 $ 0.77 Earnings per share – diluted $ 1.96 $ 1.48 $ 0.76 Common shares outstanding – basic 58,375 58,282 58,092 Common shares outstanding – diluted 59,162 58,871 58,335 See accompanying notes to consolidated financial statements. 48 Table of Contents INTERFACE, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in thousands) FISCAL YEAR 2025 2024 2023 Net income $ 116,098 $ 86,946 $ 44,517 Other comprehensive income (loss), after tax: Foreign currency translation adjustment 50,626 ( 23,727 ) 19,185 Reclassification from accumulated other comprehensive loss – discontinued cash flow hedge — — 749 Pension liability adjustment 520 ( 5,818 ) ( 6,468 ) Other comprehensive income (loss) 51,146 ( 29,545 ) 13,466 Comprehensive income $ 167,244 $ 57,401 $ 57,983 See accompanying notes to consolidated financial statements. 49 Table of Contents INTERFACE, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except par values) END OF FISCAL YEAR 2025 2024 ASSETS Current assets Cash and cash equivalents $ 71,323 $ 99,226 Accounts receivable, net 174,457 171,135 Inventories, net 275,014 260,581 Prepaid expenses and other current assets 34,048 33,355 Total current assets 554,842 564,297 Property, plant and equipment, net 309,449 282,374 Operating lease right-of-use assets 78,191 76,815 Deferred tax assets 25,272 24,624 Goodwill 112,127 99,887 Intangible assets, net 50,885 48,273 Other assets 75,756 74,546 Total assets $ 1,206,522 $ 1,170,816 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities Accounts payable $ 64,768 $ 68,943 Accrued expenses 147,770 134,996 Current portion of operating lease liabilities 15,748 12,296 Current portion of long-term debt 8,778 482 Total current liabilities 237,064 216,717 Long-term debt 172,801 302,275 Operating lease liabilities 67,205 68,092 Deferred income taxes 23,365 31,822 Other long-term liabilities 65,413 62,762 Total liabilities 565,848 681,668 Commitments and contingencies (Note 17) Shareholders’ equity Preferred stock, par value $ 1.00 per share; 5,000 shares authorized; none issued or outstanding at December 28, 2025 and December 29, 2024 — — Common stock, par value $ 0.10 per share; 120,000 shares authorized; 57,891 and 58,304 shares issued and outstanding at December 28, 2025 and December 29, 2024, respectively 5,789 5,830 Additional paid-in capital 248,910 261,028 Retained earnings 517,980 405,441 Accumulated other comprehensive loss – foreign currency translation ( 92,691 ) ( 143,317 ) Accumulated other comprehensive loss – pension liability ( 39,314 ) ( 39,834 ) Total shareholders’ equity 640,674 489,148 Total liabilities and shareholders’ equity $ 1,206,522 $ 1,170,816 See accompanying notes to consolidated financial statements. 50 Table of Contents INTERFACE, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) FISCAL YEAR 2025 2024 2023 OPERATING ACTIVITIES: Net income $ 116,098 $ 86,946 $ 44,517 Adjustments to reconcile net income to cash provided by operating activities: Depreciation and amortization 38,916 39,333 40,774 Share-based compensation expense 14,385 12,907 10,265 Loss (gain) on disposal of property, plant and equipment, net — 264 ( 2,252 ) Loss on foreign subsidiary liquidation — 2,152 6,221 Loss on debt extinguishment 2,440 — — Bad debt expense 1,441 1,476 53 Deferred income taxes ( 12,958 ) ( 3,034 ) ( 10,082 ) Other ( 4,715 ) ( 8,480 ) 1,273 Amortization of acquired intangible assets 3,073 5,172 5,172 Working capital changes: Accounts receivable 4,620 ( 13,872 ) 21,798 Inventories 2,102 10,467 31,040 Prepaid expenses and other current assets 590 ( 3,079 ) ( 302 ) Accounts payable and accrued expenses 1,914 18,178 ( 6,443 ) Cash provided by operating activities 167,906 148,430 142,034 INVESTING ACTIVITIES: Capital expenditures ( 46,192 ) ( 33,788 ) ( 26,107 ) Proceeds from sale of property, plant and equipment — 1,040 6,593 Insurance proceeds from property casualty loss — 2,374 — Cash used in investing activities ( 46,192 ) ( 30,374 ) ( 19,514 ) FINANCING ACTIVITIES: Term loan borrowings 170,000 — — 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 ) — — Dividends paid ( 3,559 ) ( 2,338 ) ( 2,323 ) Tax withholding payments for share-based compensation ( 8,372 ) ( 4,770 ) ( 1,514 ) Payments for debt extinguishment costs ( 620 ) — — Debt issuance costs ( 1,303 ) — — Finance lease payments ( 3,059 ) ( 2,913 ) ( 2,419 ) Cash used in financing activities ( 159,292 ) ( 125,234 ) ( 111,564 ) Net cash (used in) provided by operating, investing and financing activities ( 37,578 ) ( 7,178 ) 10,956 Effect of exchange rate changes on cash 9,675 ( 4,094 ) 1,978 CASH AND CASH EQUIVALENTS: Net (decrease) increase ( 27,903 ) ( 11,272 ) 12,934 Balance, beginning of year 99,226 110,498 97,564 Balance, end of year $ 71,323 $ 99,226 $ 110,498 See accompanying notes to consolidated financial statements. 51 Table of Contents INTERFACE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations Interface is a global flooring company specializing in carpet tile and resilient flooring, including luxury vinyl tile (“LVT”), and nora® rubber flooring. The Company manufactures modular carpet focusing on the high quality, design-oriented sector of the market, sources resilient flooring including LVT from third parties and focuses on the same sector of the market, and provides specialized carpet replacement, installation and maintenance services. The Company also manufactures and sells resilient rubber flooring. The Company’s 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”). See Note 19 entitled “Segment Information” for additional information. Cybersecurity Event On November 20, 2022, we discovered a cybersecurity attack, perpetrated by unauthorized third parties, affecting our IT systems (the “Cyber Event”). 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 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. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its subsidiaries. All of our subsidiaries are wholly-owned, and we are not a party to any joint venture, partnership or other variable interest entity that would potentially qualify for consolidation. All material intercompany accounts and transactions are eliminated. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Examples include provisions for returns, 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 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. 52 Table of Contents Revenue Recognition Revenue from contracts with customers is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this core principle, the guidance provides that an entity should apply the following steps: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, the entity satisfies a performance obligation. Revenue Recognized from Contracts with Customers Contracts with customers typically take the form of invoices for purchase of materials from the Company. Customer payment terms vary by region and are typically less than 60 days. The performance obligation is the delivery of these materials to the customer’s control. Revenue from the sale of modular carpet, resilient flooring, rubber flooring, and related products 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 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. The installation of the carpet and related products is a separate performance obligation from the sale of carpet. The majority of these projects are completed within five days of the start of installation. The transaction price for these sale and installation contracts is readily determinable between flooring material and installation services and typically is specifically identified in the contract with the customer. The Company does not have any other significant revenue streams outside of these sales of flooring material, and the sale and installation of flooring material, as described above. The Company does not record taxes collected from customers and remitted to governmental authorities within revenues. The Company records such taxes collected as a liability on our consolidated balance sheets. Performance Obligations As noted above, the Company primarily generates revenue through the sale of flooring material to end users either upon shipment or upon arrival of the product at its destination. In these instances, there typically is no other obligation to the customers other than the delivery of flooring material, with the exception of warranty. The Company 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. This assurance-type warranty does not represent a separate performance obligation and the Company accounts for warranty claims on an accrual basis. 53 Table of Contents 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. 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. Costs to Obtain Contracts The Company pays sales commissions to many of its sales personnel based upon their selling activity. These are direct costs associated with obtaining the contracts and are expensed as the revenue is recognized. These commissions become payable upon shipment (or in certain cases delivery) of product. There are no other material costs the Company incurs as part of obtaining the sales contract. Shipping and Handling Shipping and handling fees billed to customers are classified in net sales in the consolidated statements of operations. Shipping and handling costs incurred are classified in cost of sales in the consolidated statements of operations. Advertising and Promotion The Company’s advertising and promotional activities primarily consist of product samples, printed materials, digital marketing, trade shows, and customer events. Advertising and promotional costs are expensed when the advertising / promotional activity first takes place. Advertising and promotional expenses were $ 37.8 million, $ 39.2 million and $ 34.6 million for the years 2025, 2024 and 2023, respectively, and were recorded in selling, general and administrative (“SG&A”) expenses in the consolidated statements of operations. Research and Development Research and development costs are expensed as incurred and are included in SG&A expenses and cost of sales in the consolidated statements of operations. Research and development expense includes costs associated with the development of new products as well as the improvement and enhancement of existing products. Research and development expense was $ 16.1 million, $ 15.1 million, and $ 17.0 million for the years 2025, 2024 and 2023, respectively. Cash, Cash Equivalents and Short-Term Investments Highly liquid investments with original maturities of three months or less are classified as cash and cash equivalents. Investments with maturities greater than three months and less than one year are classified as short-term investments. Significant concentrations of credit risk may arise from the Company’s cash maintained at various banks, as from time to time cash balances may exceed the FDIC limits. The Company did no t hold any significant amounts of cash equivalents and short-term investments at December 28, 2025 and December 29, 2024. Supplemental Cash Flow Information 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. See Note 16 entitled “Income Taxes” for income taxes paid information for fiscal years 2025, 2024 and 2023. Allowances for Expected Credit Losses The Company maintains allowances for expected credit losses for estimated losses resulting from the inability of customers to make required payments. Estimating the amount of future expected losses requires the Company to consider historical losses from our customers, as well as current market conditions and future forecasts of our customers’ ability to make payments for goods and services. By its nature, such an estimate is 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. 54 Table of Contents Inventories Inventories are carried at the lower of cost (standards approximating the first-in, first-out method) or net realizable value. Costs included in inventories are based on invoiced costs and/or production costs, as applicable. Included in production costs are material, direct labor and allocated overhead. The Company writes down inventories for the difference between the carrying value of the inventories and their estimated net realizable value. If actual market conditions are less favorable than those projected by management, additional write-downs may be required. Management estimates its reserves for inventory obsolescence by continuously examining its inventories to determine if there are indicators that carrying values exceed net realizable values. Experience has shown that significant indicators that could require the need for additional inventory write-downs are the age of the inventory, the length of its product life cycles, anticipated demand for the Company’s products, and current economic conditions. While management believes that adequate write-downs for inventory obsolescence have been made in the consolidated financial statements, consumer tastes and preferences may continue to change, and the Company could experience additional inventory write-downs in the future. Leases The Company records a right-of-use asset and lease liability for operating and finance leases once a contract that contains a lease is executed and the Company has the right to control the use of the leased asset. The right-of-use asset is measured as the present value of the lease obligation. The discount rate used to calculate the present value of the lease liability is the Company’s incremental borrowing rate, which is based on the estimated rate for a fully collateralized borrowing that fully amortizes over a similar lease term at the commencement date and for the applicable geographical region. The Company made an accounting policy election to exclude leases with an initial term of 12 months or less from the calculation of the right-of-use asset and lease liability recorded on the consolidated balance sheets. These leases primarily represent month-to-month operating leases for equipment where we were reasonably certain that we would not elect an option to extend the lease. The Company also made an accounting policy election not to separate lease and non-lease components for all asset classes and accounts for the lease payments as a single component. Property, Plant and Equipment and Long-Lived Assets Property, plant and equipment are carried at cost. Depreciation is computed using the straight-line method over the following estimated useful lives: buildings and improvements – ten to forty years ; equipment, furniture and fixtures – three to twelve years ; and computer software – three to six years . Certain manufacturing equipment in our Weinheim manufacturing facility have estimated useful lives up to twenty-five years . Leasehold improvements are depreciated over the shorter of the asset life or lease term, generally between three to twelve years . Interest costs for the construction/development of certain long-term assets are capitalized and amortized over the related assets’ estimated useful lives. Total depreciation expense amounted to approximately $ 34.4 million, $ 34.3 million, and $ 35.9 million for the years 2025, 2024 and 2023, respectively. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the sum of the expected future undiscounted cash flow is less than the carrying amount of the asset, a loss is recognized for the difference between the fair value and carrying value of the asset. Repair and maintenance costs are charged to operating expense as incurred. Goodwill and Other Intangible Assets In accordance with applicable accounting standards, the Company tests goodwill for impairment annually and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. During the fourth quarters of 2025, 2024 and 2023, the Company performed the annual goodwill impairment test. The Company tests goodwill at the reporting unit level, which is an operating segment or one level below an operating segment. In performing the impairment testing, the Company prepared valuations of reporting units on both a market comparable methodology and an income methodology, and those valuations were compared with the respective carrying values of the reporting units to determine whether any goodwill impairment existed. 55 Table of Contents In preparing the valuations, past, present and future expectations of performance were considered. 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 assets below its carrying amount. For the annual tests performed in 2025, 2024 and 2023, the Company prepared valuations of the intangible assets using the present value of cash flows under the relief from royalty method, which requires management to estimate forecasted revenues and a discount rate. The estimated 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. Product Warranties The Company typically provides limited warranties with respect to certain attributes of its carpet products (for example, warranties regarding excessive surface wear, edge ravel and static electricity) for periods ranging from ten to twenty years , depending on the particular carpet product and the environment in which it is to be installed. Similar limited warranties are provided on certain attributes of its rubber and LVT products, typically for a period of 5 to 15 years. The Company typically warrants that services performed will be free from defects in workmanship for a period of one year following completion. In the event of a breach of warranty, the remedy typically is limited to repair of the problem or replacement of the affected product. The Company records a provision related to warranty costs based on historical experience and future expectations and periodically adjusts these provisions to reflect changes in actual experience. Warranty and sales allowance reserves amounted to $ 3.9 million and $ 5.3 million as of December 28, 2025 and December 29, 2024, respectively, and are included in accrued expenses in the accompanying consolidated balance sheets. Income Taxes The Company accounts for income taxes under an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company’s financial statements or tax returns. In estimating future tax consequences, the Company generally considers all expected future events other than enactments of changes in tax laws or rates. The effect on deferred tax assets and liabilities of a change in tax rates will be recognized as income or expense in the period that includes the enactment date. The Company has elected to account for tax effects of the global intangible low-taxed income (“GILTI”) in the period when incurred, and therefore has not provided any deferred tax impacts for these provisions in its consolidated financial statements. The Company records a valuation allowance to reduce its deferred tax assets when it is more likely than not that some portion or all of the deferred tax assets will expire before realization of the benefit or that future deductibility is not probable. The ultimate realization of the deferred tax assets depends on the ability to generate sufficient taxable income of the appropriate character in the future. This requires us to use estimates and make assumptions regarding significant future events such as the taxability of entities operating in the various taxing jurisdictions. For uncertain tax positions, the Company applies the provisions of relevant authoritative guidance, which requires application of a “more likely than not” threshold to the recognition and derecognition of tax positions. The Company’s ongoing assessments of the more likely than not outcomes of tax authority examinations and related tax positions require significant judgment and can increase or decrease the Company’s effective tax rate as well as impact operating results. For further information, see Note 16 entitled “Income Taxes.” 56 Table of Contents Fair Values of Financial Instruments Fair values of cash and cash equivalents and short-term debt approximate cost due to the short period of time to maturity. Fair values of debt are based on quoted market prices or pricing models using current market rates and classified as level 2 within the fair value hierarchy. See Note 5 entitled “Fair Value of Financial Instruments” for further information. Translation of Foreign Currencies 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. dollars at the exchange rate in effect at each year-end. Income and expense items are translated each month at average monthly exchange rates throughout the year. The resulting translation adjustments are recorded in the foreign currency translation adjustment account. In the event of a divestiture or substantial liquidation of a foreign subsidiary, the related foreign currency translation results are reclassified from equity to income. Foreign exchange translation gains (losses) were $ 50.6 million, $( 23.7 ) million, and $ 19.2 million for the years 2025, 2024 and 2023, respectively. Earnings per Share Basic earnings per share is computed based on the average number of common shares outstanding, including participating securities. Diluted earnings per share reflects the potential increase in average common shares outstanding that would result from share-based awards or the assumed exercise of outstanding stock options, calculated using the treasury stock method. See Note 14 entitled “Earnings Per Share” for additional information. Share-Based Compensation The Company has share-based employee compensation plans, which are described more fully in Note 13 entitled “Shareholders' Equity.” The Company recognizes expense related to its restricted stock, restricted share unit and performance share grants based on the grant date fair value of the shares awarded, as determined by its market price at date of grant. Pension Benefits Net pension expense recorded is based on, among other things, assumptions about the discount rate, estimated return on plan assets and salary increases. While the Company believes these assumptions are reasonable, changes in these and other factors and differences between actual and assumed changes in the present value of liabilities or assets of the Company’s plans above certain thresholds could cause net annual expense to increase or decrease materially from year to year. The actuarial assumptions used in the Company’s salary continuation plan and foreign defined benefit plans reporting are reviewed periodically and compared with external benchmarks to ensure that they appropriately account for our future pension benefit obligation. The expected long-term rate of return on plan assets assumption is based on weighted average expected returns for each asset class. Expected returns reflect a combination of historical performance analysis and the forward-looking views of the financial markets, and include input from actuaries, investment service firms and investment managers. 57 Table of Contents NOTE 2 – RECENT ACCOUNTING PRONOUNCEMENTS Recently Issued Accounting Pronouncements – Adopted 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)”. This ASU requires public entities to provide additional footnote disclosures to disaggregate the cost and expense line items presented in the income statement into specific categories including (a) purchases of inventory; (b) employee compensation; (c) depreciation; and (d) intangible asset amortization. The ASU also requires qualitative disclosure of other relevant expense categories not separately disclosed, the total amount of selling expenses, and the definition of selling expenses in annual reporting periods. The new guidance in ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of this ASU to its consolidated financial statements. 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. 58 Table of Contents 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 2025, 2024 and 2023 is as follows: Fiscal Year 2025 2024 2023 Revenue from the sale of flooring material 98 % 97 % 98 % Revenue from installation of flooring material 2 % 3 % 2 % Disaggregation of Revenue For fiscal years 2025, 2024 and 2023, revenue from the Company’s customers is broken down by geography as follows: Fiscal Year Geography 2025 2024 2023 Americas 60.9 % 60.9 % 58.4 % Europe 29.0 % 28.6 % 30.1 % Asia-Pacific 10.1 % 10.5 % 11.5 % Revenue from the Company’s customers in the Americas corresponds to the AMS reportable segment, and the EAAA reportable segment includes revenue from the Europe and Asia-Pacific geographies. See Note 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: Fiscal Year Market Segment 2025 2024 2023 Corporate Office 44 % 47 % 49 % Education 20 % 19 % 18 % Healthcare 11 % 9 % 10 % Other 25 % 25 % 23 % 59 Table of Contents NOTE 4 – RECEIVABLES The Company has adopted credit policies and standards intended to reduce the inherent risk associated with potential increases in its concentration of credit risk due to increasing trade receivables. Management believes that credit risks are further moderated by the diversity of its end customers and geographic sales areas. The Company performs ongoing credit evaluations of its customers’ financial condition and requires collateral as deemed necessary. The Company maintains allowances for expected credit losses resulting from the inability of customers to make required payments. If the financial condition of its customers were to deteriorate, resulting in a change in their ability to make payments, additional allowances may be required. As of December 28, 2025, and December 29, 2024, the allowance for expected credit losses amounted to $ 5.2 million and $ 3.8 million, respectively, for all accounts receivable of the Company. 60 Table of Contents NOTE 5 – FAIR VALUE OF FINANCIAL INSTRUMENTS Accounting standards establish a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure estimated fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy under applicable accounting standards are described below: Level 1 Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Level 2 Inputs to the valuation methodology include: • quoted prices for similar assets in active markets; • quoted prices for identical or similar assets in inactive markets; • inputs other than quoted prices that are observable for the asset; and • inputs that are derived principally or corroborated by observable data by correlation or other. Level 3 Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The following table presents the carrying values and estimated fair values, including the level within the fair value hierarchy, of certain financial instruments: December 28, 2025 December 29, 2024 Carrying Value Fair Value (Level 1) Fair Value (Level 2) Carrying Value Fair Value (Level 1) Fair Value (Level 2) (in thousands) Assets: Company-owned life insurance $ 23,048 $ — $ 23,048 $ 22,911 $ — $ 22,911 Deferred compensation investments 33,728 8,941 24,787 30,521 8,697 21,824 Liabilities (1) : Borrowings under Syndicated Credit Facility (2) $ 181,779 $ — $ 181,779 $ 5,564 $ — $ 5,564 5.50% Senior Notes (3) — — — 300,000 — 294,738 (1) Carrying values are presented gross, excluding the impact of unamortized debt issuance costs and including amounts presented as current liabilities on the consolidated balance sheets. (2) Unamortized debt issuance costs associated with term loan borrowings under the Syndicated Credit Facility were $ 0.2 million as of December 28, 2025, and recorded as a reduction of long-term debt in the consolidated balance sheets. 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 The fair value of Company-owned life insurance is measured on a readily determinable cash surrender value on a recurring basis. Company-owned life insurance is recorded at fair value within other assets in the consolidated balance sheets. Changes in the fair value of Company-owned life insurance are recognized in SG&A expenses in the consolidated statements of operations. 61 Table of Contents Deferred Compensation Investments Assets associated with the Company’s nonqualified savings plans are held in a rabbi trust and consist of investments in mutual funds and insurance contracts. The fair value of the mutual funds is derived from quoted prices in active markets. The fair value of the insurance contracts is based on observable inputs related to the performance measurement funds that shadow the deferral investment allocations made by participants in the nonqualified savings plans. These investments are recorded at fair value within other assets in the consolidated balance sheets. Changes in the fair value of the investments associated with the nonqualified savings plans are recognized in SG&A expenses in the consolidated statements of operations. See Note 18 entitled “Employee Benefit Plans” for additional information on the Company’s nonqualified savings plans. Syndicated Credit Facility and Senior Notes The Company’s liabilities for borrowings under the 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. 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 Due to the short maturity of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses, their carrying values approximate fair value. See Note 18 entitled “Employee Benefit Plans” for additional information on defined benefit plan assets. 62 Table of Contents NOTE 6 – INVENTORIES Inventories are summarized as follows: End of Fiscal Year 2025 2024 (in thousands) Finished goods $ 205,115 $ 192,705 Work-in-process 17,418 18,552 Raw materials 52,481 49,324 Inventories, net $ 275,014 $ 260,581 Reserves for inventory obsolescence amounted to $ 35.5 million and $ 38.3 million as of December 28, 2025 and December 29, 2024, respectively, and have been netted against amounts presented above. 63 Table of Contents NOTE 7 – PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment consisted of the following: End of Fiscal Year 2025 2024 (in thousands) Land $ 16,362 $ 14,844 Buildings and improvements 167,800 159,741 Equipment, furniture and fixtures (1) 592,086 533,314 Computer software 70,042 66,226 Construction-in-progress (2) 40,134 21,394 886,424 795,519 Accumulated depreciation and amortization (1) ( 576,975 ) ( 513,145 ) Property, plant and equipment, net $ 309,449 $ 282,374 (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. 64 Table of Contents NOTE 8 – ACCRUED EXPENSES Accrued expenses are summarized as follows: End of Fiscal Year 2025 2024 (in thousands) Compensation $ 109,627 $ 97,190 Interest 948 1,276 Taxes 15,179 13,762 Accrued purchases 3,341 3,888 Warranty and sales allowances 3,885 5,254 Other 14,790 13,626 Accrued expenses $ 147,770 $ 134,996 65 Table of Contents NOTE 9 – LONG-TERM DEBT Long-term debt consisted of the following: December 28, 2025 December 29, 2024 Outstanding Principal Interest Rate (1) Outstanding Principal Interest Rate (1) (in thousands) (in thousands) 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 (2) — — % 300,000 5.50 % Total debt 181,779 305,564 Less: Unamortized debt issuance costs ( 200 ) ( 2,807 ) Total debt, net 181,579 302,757 Less: Current portion of long-term debt ( 8,778 ) ( 482 ) Total long-term debt, net $ 172,801 $ 302,275 (1) Represents the weighted average rate of interest for borrowings under the Syndicated Credit Facility and the stated rate of interest for the 5.50 % Senior Notes 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 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. 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 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 %; and • amending the interest rates applicable to Base Rate loans and Secured Overnight Financing Rate ("SOFR") loans as discussed in more detail below in “Interest Rates and Fees”. See the section below entitled “Debt Issuance and Extinguishment costs” for the accounting treatment of fees and charges incurred in connection with this amendment. 66 Table of Contents Interest Rates and Fees Base rate loans, as defined in the amended Facility, represent short-term borrowings with applicable interest rates determined as the greater of the federal funds rate plus a margin, the prime rate, or SOFR plus a margin. Interest on base rate loans is charged at varying rates computed by applying a margin ranging from 0.125 % to 1.00 %, depending on the Company’s consolidated net leverage ratio as of the most recently completed fiscal quarter. Interest on SOFR-based and alternative currency loans are charged at varying rates computed by applying a margin ranging from 1.125 % to 2.00 % over the applicable SOFR rate or alternative currency rate, depending on the Company’s consolidated net leverage ratio as of the most recently completed fiscal quarter. In addition, the Company pays a commitment fee ranging from 0.20 % to 0.30 % 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 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. Covenants The Facility contains standard and customary covenants for agreements of this type, including various reporting, affirmative and negative covenants. Among other things, these covenants limit the Company’s and its subsidiaries’ ability to: • create or incur liens on assets; • make acquisitions of or investments in businesses (in excess of certain specified amounts); • engage in any material line of business substantially different from the Company’s current lines of business; • incur indebtedness or contingent obligations; • sell or dispose of assets (in excess of certain specified amounts); • pay dividends or repurchase the Company’s stock (in excess of certain specified amounts); • repay other indebtedness prior to maturity unless the Company meets certain conditions; and • enter into sale and leaseback transactions. The Facility also requires the Company to remain in compliance with the following financial covenants as of the end of each fiscal quarter, based on the Company’s consolidated results for the four fiscal quarters most recently ended: • Consolidated Secured Net Leverage Ratio: Must be no greater than 3.00 :1.00. • Consolidated Interest Coverage Ratio: Must be no less than 2.25 :1.00. Under the amended Facility, the Company is required to make quarterly amortization payments of the term loan borrowings, which will commence the first quarter of 2026. The amortization payments are due on the last day of the calendar quarter. Events of Default If the Company breaches or fails to perform any of the affirmative or negative covenants under the Facility, or if other specified events occur (such as a bankruptcy or similar event or a change of control of Interface, Inc. or certain subsidiaries, or if the Company breaches or fails to perform any covenant or agreement contained in any instrument relating to any of the Company’s other indebtedness exceeding $ 20 million), after giving effect to any applicable notice and right to cure provisions, an event of default will exist. If an event of default exists and is continuing, the lenders’ Administrative Agent may, and upon the written request of a specified percentage of the lender group shall: • declare all commitments of the lenders under the facility terminated; • declare all amounts outstanding or accrued thereunder immediately due and payable; and • exercise other rights and remedies available to them under the agreement and applicable law. 67 Table of Contents Collateral 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. 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. 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 Term Loans Senior Notes (1) Total (in thousands) Capitalization of debt issuance costs - revolving loans Other assets $ 1,099 $ — $ — $ 1,099 Capitalization of debt issuance costs - term loans Long-term debt — 203 — 203 Loss on debt extinguishment (2) Interest expense 293 — 2,147 2,440 Other debt extinguishment costs Interest expense — 620 — 620 (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. 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. 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. 68 Table of Contents Future Maturities The aggregate maturities of borrowings outstanding at December 28, 2025 were as follows: Fiscal Year Amount (in thousands) 2026 $ 8,781 2027 8,781 2028 8,781 2029 8,781 2030 146,655 Total debt $ 181,779 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. 69 Table of Contents NOTE 10 – LEASES General The Company has operating and finance leases for manufacturing equipment, corporate offices, showrooms, vehicles, distribution facilities, design centers, as well as computer and office equipment. The Company’s leases have terms ranging from 1 to 20 years, some of which may include options to extend the lease term for up to 5 years, and certain leases may include an option to terminate the lease. Our lease accounting may include these options to extend or terminate a lease when it is reasonably certain that we will exercise that option. As of December 28, 2025, there were no significant leases that had not commenced. The table below represents a summary of the balances recorded in the consolidated balance sheets related to the Company’s leases as of December 28, 2025 and December 29, 2024: December 28, 2025 December 29, 2024 Balance Sheet Location Operating Leases Finance Leases Operating Leases Finance Leases (in thousands) Operating lease right-of-use assets $ 78,191 $ 76,815 Current portion of operating lease liabilities $ 15,748 $ 12,296 Operating lease liabilities 67,205 68,092 Total operating lease liabilities $ 82,953 $ 80,388 Property, plant and equipment, net $ 9,574 $ 8,079 Accrued expenses $ 3,155 $ 2,657 Other long-term liabilities 6,817 5,797 Total finance lease liabilities $ 9,972 $ 8,454 Lease Costs Fiscal Year 2025 2024 2023 (in thousands) Finance lease cost: Amortization of right-of-use assets $ 3,477 $ 3,079 $ 2,808 Interest on lease liabilities 561 457 319 Operating lease cost 20,305 19,495 18,850 Short-term lease cost 557 827 1,143 Variable lease cost 3,467 2,824 2,509 Total lease cost $ 28,367 $ 26,682 $ 25,629 70 Table of Contents Other Supplemental Information Fiscal Year 2025 2024 2023 (in thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from finance leases $ 534 $ 431 $ 237 Operating cash flows from operating leases 18,603 17,246 15,552 Financing cash flows from finance leases 3,059 2,913 2,419 Right-of-use assets obtained in exchange for new finance lease liabilities 3,978 3,993 3,612 Right-of-use assets obtained in exchange for new operating lease liabilities 10,159 4,598 15,561 Lease Term and Discount Rate The table below presents the weighted average remaining lease terms and discount rates for finance and operating leases as of December 28, 2025 and December 29, 2024: End of Fiscal Year 2025 2024 Weighted-average remaining lease term – finance leases (in years) 4.07 3.61 Weighted-average remaining lease term – operating leases (in years) 7.05 7.68 Weighted-average discount rate – finance leases 6.52 % 6.44 % Weighted-average discount rate – operating leases 6.33 % 6.39 % Maturity Analysis A maturity analysis of lease payments under non-cancellable leases is presented as follows: Fiscal Year Operating Leases Finance Leases (in thousands) 2026 $ 20,284 $ 3,696 2027 17,250 3,010 2028 13,492 2,046 2029 11,435 1,101 2030 8,723 539 Thereafter 32,450 972 Total future minimum lease payments (undiscounted) 103,634 11,364 Less: Present value discount ( 20,681 ) ( 1,392 ) Total lease liabilities $ 82,953 $ 9,972 71 Table of Contents NOTE 11 – GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill The Company has two operating and reportable segments – namely AMS and EAAA. See Note 19 entitled “Segment Information” for additional information. The Company tests goodwill for impairment at least annually at the reporting unit level. The Company’s reporting units consist of (1) the Americas, (2) Europe, Middle East and Africa (“EMEA”), and (3) Asia-Pacific. The Americas reporting unit is the same as the AMS reportable segment, and the EMEA and Asia-Pacific reporting units are one level below the EAAA reportable segment. During the fourth quarter of 2025, 2024, and 2023 we performed our annual quantitative goodwill impairment testing. We focused our testing on the Americas reporting unit because it is the only reporting unit with an allocated goodwill balance. The allocated goodwill balances for our EMEA and Asia-Pacific reporting units were written off in prior years as a result of goodwill impairment charges. The Company performed limited procedures for our EMEA and Asia-Pacific reporting units during the 2025, 2024, and 2023 goodwill testing to facilitate a reconciliation of market capitalization. The annual quantitative goodwill impairment testing performed in 2025, 2024, and 2023 for our Americas reporting unit used a consistent methodology. T he Company prepared valuations for the Americas reporting unit on both a market comparable methodology and an income methodology, utilizing a combination of the present value of expected future cash flows and the guideline public company method to determine the estimated fair value of the reporting unit. In preparing the valuation, past, present and future expectations of performance were considered, including our expectations for the short-term and long-term impacts of macroeconomic conditions and our expected financial performance, including planned revenue and operating income for the Americas reporting unit. The present value model requires management to estimate future cash flows, the timing of these cash flows, and a discount rate based on a weighted average cost of capital. For 2025, 2024, and 2023 the fair value of the Americas reporting unit was substantially in excess of the carrying value and is not at risk of failing the quantitative impairment test. The ending balances and the changes in the carrying amounts of goodwill allocated to each reportable segment for the years ended December 28, 2025 and December 29, 2024, are as follows (1) : AMS EAAA Total (in thousands) Goodwill balance, at December 31, 2023 $ 105,448 $ — $ 105,448 Foreign currency translation (2) ( 5,561 ) — ( 5,561 ) Goodwill balance, at December 29, 2024 99,887 — 99,887 Foreign currency translation (2) 12,240 — 12,240 Goodwill balance, at December 28, 2025 $ 112,127 $ — $ 112,127 (1) Goodwill balances are presented net of cumulative impairment losses of $ 358.5 million as of December 28, 2025. The cumulative impairment losses include impairment charges recognized prior to 2020 related to discontinued operations that were allocated to the current reportable segments on a proportionate basis. (2) A portion of the goodwill balance allocated to the AMS reportable segment is comprised of goodwill denominated in foreign currency attributable to the nora acquisition. Other Intangible Assets During the fourth quarter of 2025, 2024 , and 2023, the Company performed its annual impairment testing of the trademark and trade name intangible assets. 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. 72 Table of Contents 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 (in thousands) Intangible assets subject to amortization (1) : Technology $ 35,046 $ — $ ( 35,046 ) $ — $ 34,429 $ — $ ( 31,522 ) $ 2,907 Other 749 ( 478 ) ( 67 ) 204 723 ( 478 ) ( 34 ) 211 Total intangible assets subject to amortization 35,795 ( 478 ) ( 35,113 ) 204 35,152 ( 478 ) ( 31,556 ) 3,118 Indefinite-lived intangible assets (1) : Trademark and trade name 61,762 ( 11,081 ) — 50,681 56,236 ( 11,081 ) — 45,155 Total intangible assets $ 97,557 $ ( 11,559 ) $ ( 35,113 ) $ 50,885 $ 91,388 $ ( 11,559 ) $ ( 31,556 ) $ 48,273 (1) Certain intangible asset balances are subject to changes attributable to foreign currency translation . Amortization expense related to intangible assets during the years 2025, 2024 and 2023 was $ 3.1 million, $ 5.2 million and $ 5.2 million, respectively, and is recorded in cost of sales in the consolidated statements of operations. The developed technology intangible asset was amortized over its estimated useful life of 7 years and was fully amortized during fiscal year 2025. 73 Table of Contents NOTE 12 – PREFERRED STOCK The Company is authorized to designate and issue up to 5,000,000 shares of $ 1.00 par value preferred stock in one or more series and to determine the rights and preferences of each series, to the extent permitted by the Articles of Incorporation, and to fix the terms of such preferred stock without any vote or action by the shareholders. The issuance of any series of preferred stock may have an adverse effect on the rights of holders of common stock and could decrease the amount of earnings and assets available for distribution to holders of common stock. In addition, any issuance of preferred stock could have the effect of delaying, deferring or preventing a change in control of the Company. As of December 28, 2025, and December 29, 2024, there were no shares of preferred stock issued. 74 Table of Contents NOTE 13 – SHAREHOLDERS’ EQUITY The Company is authorized to issue 120 million shares of $ 0.10 par value Common Stock. The Company’s Common Stock is traded on the Nasdaq Global Select Market under the symbol TILE. The Company paid cash dividends during 2025 totaling $ 0.06 per share and $ 0.04 per share for 2024 and 2023, including participating securities. The future declaration and payment of dividends is at the discretion of the Company’s Board, and depends upon, among other things, the Company’s investment policy and opportunities, results of operations, financial condition, cash requirements, future prospects, and other factors that may be considered relevant at the time of the Board’s determination. Such other factors include limitations contained in the agreement for its Syndicated Credit Facility, which specify conditions as to when any dividend payments may be made. As such, the Company may discontinue its dividend payments in the future if its Board determines that a cessation of dividend payments is appropriate in light of the factors indicated above. In May 2022, the Company adopted a new share repurchase program in which the Company is authorized to repurchase up to $ 100 million of its outstanding shares of common stock. The program has no specific expiration date. During fiscal year 2025, the Company repurchased 750,166 shares of common stock at a weighted average price of $ 24.23 per share pursuant to this program. No shares of common stock were repurchased pursuant to this program during 2024 or 2023. All treasury stock is accounted for using the cost method. The following tables depict the activity in the accounts which make up shareholders’ equity for fiscal years 2025, 2024 and 2023: SHARES COMMON STOCK ADDITIONAL PAID-IN CAPITAL RETAINED EARNINGS PENSION LIABILITY FOREIGN CURRENCY TRANSLATION ADJUSTMENT TOTAL (in thousands) Balance, at December 29, 2024 58,304 $ 5,830 $ 261,028 $ 405,441 $ ( 39,834 ) $ ( 143,317 ) $ 489,148 Net income — — — 116,098 — — 116,098 Issuances of stock related to restricted share units and performance shares 713 71 ( 71 ) — — — — Cash dividends declared — — — ( 3,559 ) — — ( 3,559 ) Compensation expense related to share-based plans, net of forfeitures and shares received for tax withholdings ( 376 ) ( 38 ) 6,054 — — — 6,016 Share repurchases ( 750 ) ( 74 ) ( 18,101 ) — — — ( 18,175 ) Pension liability adjustment — — — — 520 — 520 Foreign currency translation adjustment — — — — — 50,626 50,626 Balance, at December 28, 2025 57,891 $ 5,789 $ 248,910 $ 517,980 $ ( 39,314 ) $ ( 92,691 ) $ 640,674 75 Table of Contents SHARES COMMON STOCK ADDITIONAL PAID-IN CAPITAL RETAINED EARNINGS PENSION LIABILITY FOREIGN CURRENCY TRANSLATION ADJUSTMENT TOTAL (in thousands) Balance, at December 31, 2023 58,112 $ 5,811 $ 252,909 $ 320,833 $ ( 34,016 ) $ ( 119,590 ) $ 425,947 Net income — — — 86,946 — — 86,946 Issuances of stock related to restricted share units and performance shares 479 48 ( 48 ) — — — — Restricted stock issuances 58 6 941 — — — 947 Unrecognized compensation expense related to restricted stock awards — — ( 946 ) — — — ( 946 ) Cash dividends declared — — — ( 2,338 ) — — ( 2,338 ) Compensation expense related to share-based plans, net of forfeitures and shares received for tax withholdings ( 345 ) ( 35 ) 8,172 — — — 8,137 Pension liability adjustment — — — — ( 5,818 ) — ( 5,818 ) Foreign currency translation adjustment — — — — — ( 23,727 ) ( 23,727 ) Balance, at December 29, 2024 58,304 $ 5,830 $ 261,028 $ 405,441 $ ( 39,834 ) $ ( 143,317 ) $ 489,148 SHARES COMMON STOCK ADDITIONAL PAID-IN CAPITAL RETAINED EARNINGS PENSION LIABILITY FOREIGN CURRENCY TRANSLATION ADJUSTMENT CASH FLOW HEDGE TOTAL (in thousands) Balance, at January 1, 2023 58,106 $ 5,811 $ 244,159 $ 278,639 $ ( 27,548 ) $ ( 138,775 ) $ ( 749 ) $ 361,537 Net income — — — 44,517 — — — 44,517 Issuances of stock related to restricted share units and performance shares 85 8 ( 8 ) — — — — — Restricted stock issuances 107 11 749 — — — — 760 Unrecognized compensation expense related to restricted stock awards — — ( 760 ) — — — — ( 760 ) Cash dividends declared — — — ( 2,323 ) — — — ( 2,323 ) Compensation expense related to share-based plans, net of forfeitures ( 186 ) ( 19 ) 8,769 — — — — 8,750 Pension liability adjustment — — — — ( 6,468 ) — — ( 6,468 ) Foreign currency translation adjustment — — — — — 19,185 — 19,185 Reclassification out of accumulated other comprehensive loss – discontinued cash flow hedge — — — — — — 749 749 Balance, at December 31, 2023 58,112 $ 5,811 $ 252,909 $ 320,833 $ ( 34,016 ) $ ( 119,590 ) $ — $ 425,947 76 Table of Contents Stock Incentive Plan The Company has a stock incentive plan under which a committee of independent directors is authorized to grant directors and key employees, including officers, restricted stock, incentive stock options, nonqualified stock options, stock appreciation rights, restricted share units and performance shares. In May 2024, the shareholders of the Company approved the adoption of an amendment and restatement of the Interface, Inc. 2020 Omnibus Stock Incentive Plan (the “Amended and Restated Plan”). The aggregate number of shares of common stock that may be issued or transferred under the Amended and Restated Plan on or after the effective date of the plan is the sum of 3,200,000 shares not previously authorized for issuance under any plan, plus the number of shares remaining available for issuance under the original Interface, Inc. 2020 Omnibus Stock Incentive Plan (the “Original Plan”) but not subject to outstanding awards under the Original Plan immediately prior to the effective date of the Amended and Restated Plan, plus the number of shares remaining available for issuance pursuant to the outstanding awards under the Original Plan immediately prior to the effective date of the Amended and Restated Plan, including any shares that become available due to the forfeiture, termination or cancellation of such awards. No award may be granted after the tenth anniversary of the effective date of the Amended and Restated Plan. 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. For certain restricted stock and restricted share unit awards with a graded vesting schedule, the Company has elected to recognize compensation expense on a straight-line basis over the requisite service period for the entire award. Restricted Stock Awards During fiscal 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) 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. Compensation expense related to awards of restricted stock was $ 0.4 million, $ 2.3 million and $ 4.5 million for 2025, 2024 and 2023, respectively. These grants are made primarily to the board of directors and executive-level personnel at the Company, and as a result, no compensation costs have been capitalized. The Company has reduced its expense for any restricted stock forfeited during the period. The expense related to awards of restricted stock is captured in SG&A expenses in the consolidated statements of operations. As of December 28, 2025, there was no remaining unrecognized compensation expense for restricted stock awards. Restricted Share Unit Awards During fiscal year 2025, 2024, and 2023, the Company granted awards for 337,300 , 407,300 , and 596,200 restricted share units to certain employees and directors pursuant to the Company’s stock incentive plan. 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 one to three -year period from the date of grant, provided the individual remains in the employment or service of the Company as of each vesting date. Additionally, certain awards (or a portion thereof) could vest earlier in the event of a change in control of the Company, upon involuntary termination without cause, or upon retirement, provided certain eligibility criteria are met. Compensation expense related to the restricted share units was $ 6.0 million, $ 3.5 million, and $ 1.9 million for 2025, 2024, and 2023 , respectively. These grants are made primarily to executive-level personnel at the Company and, as a result, no compensation costs have been capitalized. 77 Table of Contents The Company has reduced its expense for any restricted share units forfeited during the period. The expense related to awards of restricted share units is captured primarily in SG&A expenses in the consolidated statements of operations. The following table summarizes restricted share units outstanding as of December 28, 2025, as well as activity during the year: Restricted Share Units Weighted Average Grant Date Fair Value Outstanding at December 29, 2024 823,300 $ 11.76 Granted 337,300 22.00 Vested ( 338,000 ) 11.87 Forfeited or canceled ( 25,200 ) 16.97 Outstanding at December 28, 2025 797,400 $ 15.88 As of December 28, 2025, the unrecognized total compensation cost related to unvested restricted share units was $ 6.9 million. That cost is expected to be recognized over a weighted-average remaining vesting period of 1.7 years. Performance Share Awards In each of the years 2025, 2024 and 2023, the Company issued awards of performance shares to certain employees. These awards vest based on the achievement of certain performance-based goals over a performance period of three years , subject to (among other things) the employee’s continued employment through the last date of the performance period and will be settled in shares of our common stock or in cash at the Company’s election. The number of shares that may be issued in settlement of the performance shares to the award recipients may be greater (up to 200 %) or lesser than the nominal award amount depending on actual performance achieved as compared to the performance targets set forth in the awards. The expense related to these performance shares is captured in SG&A expenses in the consolidated statements of operations. The Company evaluates the probability of achieving the performance-based goals as of the end of each reporting period and adjusts compensation expense based on this assessment. The following table summarizes the performance shares outstanding as of December 28, 2025, as well as the activity during the year: Performance Shares Weighted Average Grant Date Fair Value Outstanding at December 29, 2024 1,171,700 $ 12.23 Granted 303,200 19.94 Vested ( 375,500 ) 12.99 Forfeited or canceled ( 29,100 ) 16.30 Outstanding at December 28, 2025 1,070,300 $ 14.04 Compensation expense related to the performance shares for 2025, 2024 and 2023 was $ 7.9 million, $ 7.1 million and $ 3.9 million, respectively. The Company has reduced its expense for any performance shares forfeited during the period. Unrecognized compensation expense related to these performance shares was approximately $ 7.9 million as of December 28, 2025. The amount and timing of future compensation expense will depend on the performance of the Company. The compensation expense related to these outstanding performance shares is expected to be recognized over a weighted-average remaining vesting period of 1.7 years. The tax benefit recognized with respect to restricted stock, restricted share units and performance shares was $ 2.3 million, $ 1.7 million, and $ 0.9 million in 2025, 2024 and 2023, respectively. 78 Table of Contents NOTE 14 – EARNINGS PER SHARE The Company computes basic earnings per share (“EPS”) by dividing net income by the weighted average common shares outstanding, including participating securities outstanding, during the period as discussed below. Diluted EPS reflects the potential dilution beyond shares for basic EPS that could occur if securities or other contracts to issue common stock were exercised, converted into common stock or resulted in the issuance of common stock that would have shared in the Company’s earnings. The Company includes all unvested stock awards that contain non-forfeitable rights to dividends or dividend equivalents, whether paid or unpaid, in the number of shares outstanding for basic EPS as these awards are considered participating securities. Unvested share-based awards of restricted stock are paid dividends equally with all other shares of common stock and are considered participating securities. As a result, the Company includes all outstanding restricted stock awards in the calculation of basic and diluted EPS. Any unvested share-based awards considered non-participating securities (restricted share units and performance shares) are included in diluted EPS calculations when the inclusion of these shares would be dilutive. The following table shows the computation of basic and diluted EPS: Fiscal Year 2025 2024 2023 (in thousands, except per share data) Numerator: (1) Net income $ 116,098 $ 86,946 $ 44,517 Denominator: Weighted average shares outstanding 58,341 57,937 57,349 Participating securities 34 345 743 Shares for basic EPS 58,375 58,282 58,092 Dilutive effect of non-participating securities 787 589 243 Shares for diluted EPS 59,162 58,871 58,335 Basic EPS $ 1.99 $ 1.49 $ 0.77 Diluted EPS $ 1.96 $ 1.48 $ 0.76 (1) Net income attributable to participating securities for fiscal years 2025, 2024 and 2023, was not material. . 79 Table of Contents NOTE 15 – RESTRUCTURING AND OTHER 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. 80 Table of Contents NOTE 16 – INCOME TAXES Income before income taxes consisted of the following: Fiscal Year 2025 2024 2023 (in thousands) U.S. operations $ 64,601 $ 37,060 $ 3,611 Foreign operations 72,250 76,494 60,043 Income before income taxes $ 136,851 $ 113,554 $ 63,654 Provisions for federal, foreign and state income taxes in the consolidated statements of operations consisted of the following components: Fiscal Year 2025 2024 2023 (in thousands) Current expense: Federal $ 7,209 $ 7,599 $ 5,523 Foreign 23,235 20,982 18,330 State 2,843 2,481 2,167 Current expense 33,287 31,062 26,020 Deferred (benefit) expense: Federal 182 ( 3,279 ) ( 4,810 ) Foreign ( 12,846 ) ( 841 ) ( 1,212 ) State 130 ( 334 ) ( 861 ) Deferred benefit ( 12,534 ) ( 4,454 ) ( 6,883 ) Total income tax expense $ 20,753 $ 26,608 $ 19,137 Income taxes paid (net of refunds) consisted of the following: Fiscal Year 2025 (in thousands) Federal $ 9,118 Foreign: Germany 11,538 Netherlands 5,546 China 2,069 Other Foreign 5,684 State and local 3,384 Total Income taxes paid, net of refunds $ 37,339 Income tax payments amounted to approximately $ 37.8 million and $ 25.8 million for the years 2024 and 2023, respectively. During the years 2024 and 2023, the Company received income tax refunds of $ 3.3 million and $ 2.5 million, respectively. 81 Table of Contents 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: Fiscal Year 2025 (in thousands) Amount Percent Income taxes at U.S. federal statutory rate $ 28,739 21.0 % State and local income taxes, net of federal income tax effect (1) 2,369 1.7 % Foreign Tax Effects Germany 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 Other ( 1,506 ) ( 1.1 ) % Tax credits Other ( 887 ) ( 0.6 ) % Nontaxable or non-deductible items Non-deductible employee compensation 1,823 1.3 % Other ( 1,383 ) ( 1.0 ) % Changes in valuation allowances ( 3,693 ) ( 2.7 ) % Changes in unrecognized tax benefits 33 — % 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. 82 Table of Contents 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: Fiscal Year 2024 2023 (in thousands) Income taxes at U.S. federal statutory rate $ 23,846 $ 13,367 Increase (decrease) in taxes resulting from: State income taxes, net of federal tax effect 2,319 ( 432 ) Non-deductible business expenses 940 747 Non-deductible employee compensation 1,587 1,681 Tax effects of Company-owned life insurance ( 576 ) ( 587 ) Tax effects of undistributed earnings from foreign subsidiaries not deemed to be indefinitely reinvested 443 779 Foreign and U.S. tax effects attributable to foreign operations 4,532 1,537 Expiring tax attributes 4,125 3,780 Valuation allowance effect ( 7,330 ) ( 879 ) Research and development tax credits ( 703 ) ( 820 ) Foreign tax rate change related to UK pension ( 2,493 ) — Unrecognized tax benefits ( 135 ) ( 79 ) Other 53 43 Income tax expense $ 26,608 $ 19,137 On July 4, 2025, the U.S. enacted H.R. 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. 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. Deferred income taxes for the years ended December 28, 2025 and December 29, 2024, reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. 83 Table of Contents The temporary differences that give rise to significant portions of the deferred tax assets and liabilities are as follows: End of Fiscal Year 2025 2024 (in thousands) Deferred tax assets Lease liability $ 22,504 $ 22,329 Net operating loss and interest carryforwards 5,091 7,964 Federal tax credit carryforwards 2,131 4,036 Deferred compensation 17,314 16,521 Pensions 4,155 4,982 Property and equipment 658 438 Inventory 2,516 3,121 Prepaids, accruals and reserves 10,493 9,235 Capitalized costs 11,727 10,327 Deferred tax assets, gross 76,589 78,953 Valuation allowance ( 5,235 ) ( 10,028 ) 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 Lease asset 20,983 20,887 Pensions 3,694 3,866 Foreign currency 667 556 Foreign withholding and U.S. state taxes on unremitted earnings 681 773 Other 164 158 Deferred tax liabilities 69,447 76,123 Net deferred tax assets (liabilities) $ 1,907 $ ( 7,198 ) 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 material U.S. 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. 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. 84 Table of Contents 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. 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 Canada, China, and Thailand where a portion of our undistributed earnings are not deemed to be permanently reinvested. The Company provided for U.S. income taxes and foreign withholding taxes on the undistributed earnings that were not permanently reinvested at December 28, 2025 and December 29, 2024. Although the Tax Cuts and Jobs Act of 2017 (the “Tax Act”) created a dividends received deduction that generally eliminates additional U.S. federal income taxes on dividends from our foreign subsidiaries, the Company continues to assert that all of its undistributed earnings in its non-U.S. subsidiaries, excluding undistributed earnings for which U.S. income taxes and foreign withholding taxes have been provided, are indefinitely reinvested outside of the U.S. The Company expects that domestic cash resources will be sufficient to fund its domestic operations and cash commitments in the future. In the event the Company determines not to continue to assert that all or part of its undistributed earnings in its non-U.S. subsidiaries are permanently reinvested, an actual repatriation of earnings from its non-U.S. subsidiaries could still be subject to additional foreign withholding and U.S. state taxes, the determination of which is not practicable. The Company’s federal income tax returns are subject to examination for the years 2022 to the present. The Company files returns in numerous state and local jurisdictions and in general it is subject to examination by the state tax authorities for the years 2020 to the present. 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. 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. The Company recognizes accrued interest and income tax penalties related to unrecognized tax benefits as a component of income tax expense. 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. 85 Table of Contents A reconciliation of the beginning and ending amounts of gross unrecognized tax benefits is as follows: Fiscal Year 2025 2024 2023 (in thousands) Balance at beginning of year $ 4,351 $ 4,532 $ 5,352 Increases related to tax positions taken during the current year 323 316 320 Increases related to tax positions taken during the prior years 55 — 19 Decreases related to tax positions taken during the prior years ( 142 ) ( 208 ) ( 30 ) Decreases related to lapse of applicable statute of limitations ( 249 ) ( 289 ) ( 1,142 ) Changes due to foreign currency translation 6 — 13 Balance at end of year $ 4,344 $ 4,351 $ 4,532 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. 86 Table of Contents NOTE 17 – COMMITMENTS AND CONTINGENCIES From time to time, the Company is a party to legal proceedings, whether arising in the ordinary course of business or otherwise. One of the proceedings the Company is involved in is summarized below. PFAS Lawsuit 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. 2873. 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. 87 Table of Contents NOTE 18 – EMPLOYEE BENEFIT PLANS Defined Contribution and Deferred Compensation Plans The Company has a 401(k) retirement investment plan (“401(k) Plan”), which is open to all eligible U.S. employees with at least six months of service. The 401(k) Plan provides Company matching contributions on a sliding scale based on the level of the employee’s contribution. 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. The NSPs provide Company matching contributions on a sliding scale based on the level of the employee’s contribution. The obligations of the Company under such agreements to pay the deferred compensation in the future in accordance with the terms of the NSPs are unsecured general obligations of the Company. Participants have no right, interest or claim in the assets of the Company, except as unsecured general creditors. The Company has established a rabbi trust to hold, invest and reinvest deferrals and contributions under the NSPs. If a change in control of the Company occurs, as defined in the NSPs, the Company will contribute an amount to the rabbi trust sufficient to pay the obligation owed to each participant. The deferred compensation liability in connection with the NSPs totaled $ 33.3 million and $ 30.3 million at December 28, 2025 and December 29, 2024, respectively. The Company invests the deferrals in insurance instruments with readily determinable cash surrender values and in exchange traded mutual funds. The value of the insurance instruments was $ 24.8 million and $ 21.8 million as of December 28, 2025 and December 29, 2024, respectively. 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. 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 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. 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. 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. Plan assets are primarily invested in insurance contracts and fixed income securities. 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. 88 Table of Contents The tables presented below set forth the funded status of the Company’s significant foreign defined benefit plans: Fiscal Year 2025 2024 (in thousands) Change in benefit obligation: Benefit obligation, beginning of year $ 200,888 $ 214,428 Service cost 443 500 Interest cost 8,701 7,933 Benefits and expenses paid ( 12,224 ) ( 10,709 ) Actuarial gain ( 11,184 ) ( 4,321 ) Currency translation adjustment 19,390 ( 6,943 ) Benefit obligation, end of year $ 206,014 $ 200,888 Change in plan assets: Plan assets, beginning of year $ 181,153 $ 199,348 Actual return on assets ( 1,298 ) ( 5,144 ) Company contributions 1,563 2,626 Benefits paid ( 12,224 ) ( 10,709 ) Currency translation adjustment 16,108 ( 4,968 ) Plan assets, end of year $ 185,302 $ 181,153 Funded status $ ( 20,712 ) $ ( 19,735 ) Amounts recognized in consolidated balance sheets: Other assets $ 14,778 $ 15,465 Current liabilities ( 1,361 ) ( 1,170 ) Other long-term liabilities, net of current portion ( 34,129 ) ( 34,030 ) Under-funded status at end of fiscal year $ ( 20,712 ) $ ( 19,735 ) Amounts recognized in accumulated other comprehensive loss, after tax: Unrecognized actuarial loss $ 35,314 $ 36,323 Total amount recognized, end of year $ 35,314 $ 36,323 Accumulated benefit obligation $ 206,014 $ 200,888 89 Table of Contents The above disclosure represents the aggregation of information related to the Company’s three defined benefit plans which cover many of its European employees. The increase in the projected benefit obligation of $ 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. As of December 28, 2025, one of these plans, which primarily covers certain employees in the United Kingdom (the “UK Plan”), had assets in excess of the accumulated benefit obligation. The accumulated benefit obligation of the Dutch Plan exceeded plan assets as of December 28, 2025. The nora Plan is an unfunded defined benefit plan and the accumulated benefit obligation exceeded plan assets as of December 28, 2025. The following table summarizes this information as of December 28, 2025 and December 29, 2024. End of Fiscal Year 2025 2024 (in thousands) UK Plan Projected benefit obligation $ 111,878 $ 106,865 Accumulated benefit obligation 111,878 106,865 Plan assets 126,656 122,330 Dutch Plan Projected benefit obligation $ 63,309 $ 63,938 Accumulated benefit obligation 63,309 63,938 Plan assets 58,646 58,823 nora Plan Projected benefit obligation $ 30,827 $ 30,085 Accumulated benefit obligation 30,827 30,085 Plan assets — — Fiscal Year 2025 2024 2023 (in thousands) Components of net periodic benefit cost: Service cost $ 443 $ 500 $ 458 Interest cost 8,701 7,933 8,169 Expected return on plan assets ( 7,847 ) ( 7,858 ) ( 7,933 ) Amortization of prior service cost 186 180 137 Amortization of net actuarial losses 1,223 1,080 468 Net periodic benefit cost $ 2,706 $ 1,835 $ 1,299 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). 90 Table of Contents Fiscal Year 2025 2024 2023 Weighted average assumptions used to determine net periodic benefit cost: Discount rate 4.3 % 3.9 % 4.1 % Expected return on plan assets 5.1 % 4.6 % 4.6 % Weighted average assumptions used to determine benefit obligations: Discount rate 4.8 % 4.7 % 4.1 % The expected long-term rate of return on plan assets assumption is based on weighted average expected returns for each asset class. Expected returns reflect a combination of historical performance analysis and the forward-looking views of the financial markets, and include input from actuaries, investment service firms and investment managers. The investment objectives of the foreign defined benefit plans are to maximize the return on the investments to ensure that the assets are sufficient to exceed minimum funding requirements, and to achieve a favorable return against performance expectations based on historical and projected rates of return over the short term. The goal is to optimize the long-term return on plan assets at a moderate level of risk, by balancing higher-returning assets, such as equity securities, with less volatile assets, such as fixed income securities. The assets are managed by professional investment firms and performance is evaluated periodically against specific benchmarks. The plans’ net assets did not include the Company’s own stock at December 28, 2025 or December 29, 2024. Dutch Plan Assets and Indexation Benefit As is common in Dutch pension plans, the Dutch Plan includes a provision for discretionary benefit increases termed “indexation.” The indexation benefit is meant to adjust pension benefits for cost-of-living increases, similar to U.S. consumer price index-based cost-of-living adjustments for U.S. retirement plans. The indexation benefit is not guaranteed, and is only provided for and paid out if sufficient assets are available due to favorable asset returns. 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. This type of insurance arrangement is common in The Netherlands, although not necessarily common in other jurisdictions. 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. 91 Table of Contents 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: Fiscal Year 2026 2025 2024 Asset Category Target Allocation Percentage of Plan Assets at Year End Debt and debt securities 65 % — 70 % 60 % 58 % Short-term investments — % — 2 % 8 % 9 % Other investments 30 % — 35 % 32 % 33 % 100 % 100 % 100 % The following table sets forth by level within the fair value hierarchy the foreign defined benefit plans’ assets at fair value, as of December 28, 2025 and December 29, 2024. The nora plan is currently unfunded. 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. Pension Plan Assets by Category as of December 28, 2025 Dutch Plan UK Plan Total (in thousands) Level 1 $ — $ 14,131 $ 14,131 Level 2 — 108,107 108,107 Level 3 58,646 4,418 63,064 Total $ 58,646 $ 126,656 $ 185,302 Pension Plan Assets by Category as of December 29, 2024 Dutch Plan UK Plan Total (in thousands) Level 1 $ — $ 16,182 $ 16,182 Level 2 — 90,330 90,330 Level 3 58,823 15,818 74,641 Total $ 58,823 $ 122,330 $ 181,153 92 Table of Contents The tables below detail the foreign defined benefit plans’ assets by asset allocation and fair value hierarchy: End of Fiscal Year 2025 Asset Category Level 1 Level 2 Level 3 (in thousands) Debt and debt securities $ — $ 108,107 $ 3,496 Short-term investments (1) 14,131 — — Other investments (2) — — 59,568 $ 14,131 $ 108,107 $ 63,064 End of Fiscal Year 2024 Asset Category Level 1 Level 2 Level 3 (in thousands) Debt and debt securities $ — $ 90,330 $ 14,950 Short-term investments (1) 16,182 — — Other investments (2) — — 59,691 $ 16,182 $ 90,330 $ 74,641 (1) Short-term investments are generally invested in interest-bearing accounts. (2) Other investments are comprised of insurance contracts. Assets identified as level 2 above pertain to corporate bonds and other debt securities. The fair values of these assets are calculated based on quoted market prices for similar assets. With the exception of the Dutch Plan assets as discussed above, the assets identified as level 3 above in 2025 and 2024 relate to insured annuities and direct lending assets held by the UK Plan. The fair value of these assets was calculated using the present value of the future cash flows due under the insurance annuities, and for the direct lending assets the value is based on the asset value from the latest available valuation with adjustments for any drawdowns and distribution payments made between the valuation date and the reporting date. The range of discount rates used in the fair value calculation of level 3 assets held by the Dutch Plan and the UK Plan were 4.00 % to 5.40 % for 2025, and 3.50 % to 5.35 % for 2024. The weighted average discount rates were 4.02 % and 3.53 % for 2025 and 2024, respectively. These amounts are weighted based on the fair value of level 3 plan assets subject to fluctuations in the discount rate. Any changes in these variables will impact the fair value of level 3 assets. The table below indicates the change in value related to these level 3 assets during 2025 and 2024: Fiscal Year 2025 2024 (in thousands) Balance of level 3 assets, beginning of year $ 74,641 $ 90,916 Actual return on plan assets (1) ( 7,363 ) ( 2,463 ) Purchases, sales and settlements, net ( 12,356 ) ( 10,138 ) Currency translation adjustment 8,142 ( 3,674 ) Balance of level 3 assets, end of year $ 63,064 $ 74,641 (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. 93 Table of Contents During 2026, the Company expects to contribute $ 1.8 million to the foreign defined benefit plans. It is anticipated that future benefit payments for the foreign defined benefit plans will be as follows: Fiscal Year Expected Payments (in thousands) 2026 $ 13,191 2027 13,228 2028 13,285 2029 13,539 2030 13,777 2031-2035 69,224 94 Table of Contents Domestic Defined Benefit Plan The Company maintains a domestic nonqualified salary continuation plan (“SCP”), which is designed to induce selected officers of the Company to remain in the employ of the Company by providing them with retirement, disability and death benefits in addition to those which they may receive under the Company’s other retirement plans and benefit programs. The SCP entitles participants to: (i) retirement benefits upon normal retirement at age 65 (or early retirement as early as age 55 ) after completing at least 15 years of service with the Company (unless otherwise provided in the SCP), payable for the remainder of their lives (or, if elected by a participant, a reduced benefit is payable for the remainder of the participant’s life and any surviving spouse’s life) and in no event less than 10 years under the death benefit feature; (ii) disability benefits payable for the period of any total disability; and (iii) death benefits payable to the designated beneficiary of the participant for a period of up to 10 years. Benefits are determined according to one of three formulas contained in the SCP, and the SCP is administered by the Compensation Committee of the Company’s Board of Directors, which has full discretion in choosing participants and the benefit formula applicable to each. The Company’s obligations under the SCP are currently unfunded (although the Company uses insurance instruments to hedge its exposure thereunder). The Company is required to contribute the present value of its obligations thereunder to an irrevocable grantor trust in the event of a change in control as defined in the SCP. The Company uses a year-end measurement date for the domestic SCP. The tables presented below set forth the required disclosures in accordance with applicable accounting standards, and amounts recognized in the consolidated financial statements related to the domestic SCP. There is no service cost component in the change in benefit obligation in 2025 and 2024 as there are no longer any participants accruing benefits in the plan. Fiscal Year 2025 2024 (in thousands) Change in benefit obligation: Benefit obligation, beginning of year $ 21,065 $ 22,659 Interest cost 1,098 1,065 Benefits paid ( 1,874 ) ( 1,872 ) Actuarial loss (gain) 919 ( 787 ) Benefit obligation, end of year $ 21,208 $ 21,065 The amounts recognized in the consolidated balance sheets are as follows: End of Fiscal Year 2025 2024 (in thousands) Current liabilities $ 1,873 $ 1,873 Non-current liabilities 19,335 19,192 Total benefit obligation $ 21,208 $ 21,065 The components of the amounts in accumulated other comprehensive loss, after tax, are as follows: Fiscal Year 2025 2024 (in thousands) Unrecognized actuarial loss $ 3,986 $ 3,428 The accumulated benefit obligation related to the SCP was $ 21.2 million at December 28, 2025, and $ 21.1 million at December 29, 2024. The SCP is currently unfunded; as such, the benefit obligations disclosed are also the benefit obligations in excess of the plan assets. The Company uses insurance instruments to help limit its exposure under the SCP. 95 Table of Contents Fiscal Year 2025 2024 2023 (in thousands, except for assumptions) Assumptions used to determine net periodic benefit cost: Discount rate 5.45 % 4.90 % 5.20 % Assumptions used to determine benefit obligations: Discount rate 5.05 % 5.45 % 4.90 % Components of net periodic benefit cost: Interest cost $ 1,098 $ 1,065 $ 1,134 Amortization of actuarial losses 189 239 195 Net periodic benefit cost $ 1,287 $ 1,304 $ 1,329 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. It is anticipated that future benefit payments for the SCP will be as follows: Fiscal Year Expected Payments (in thousands) 2026 $ 1,873 2027 1,873 2028 1,873 2029 1,867 2030 1,835 2031-2035 8,531 96 Table of Contents NOTE 19 – SEGMENT INFORMATION The Company determines that an operating segment exists if a component (i) engages in business activities from which it earns revenues and incurs expenses, (ii) has operating results that are regularly reviewed by the chief operating decision maker (“CODM”) and (iii) has discrete financial information. Additionally, accounting standards require the utilization of a “management approach” to report the financial results of operating segments, which is based on information used by the CODM to assess performance and make operating and resource allocation decisions. The Company determined that it has two operating segments organized by geographical area – namely (a) Americas (“AMS”) and (b) Europe, Africa, Asia and Australia (collectively “EAAA”). The AMS operating segment includes the United States, Canada and Latin America geographic areas. Pursuant to the management approach discussed above, the Company’s CODM, our chief executive officer, evaluates performance at the AMS and EAAA operating segment levels and makes operating and resource allocation decisions based on segment adjusted operating income (“AOI”). The CODM uses AOI to evaluate segment operating results compared to expectations. AOI is also used by the CODM to develop variable compensation targets and make capital spend decisions. AOI excludes: nora purchase accounting amortization; 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. Intersegment revenues are eliminated from net sales presented below since these amounts are not included in the information provided to the CODM. The Company has determined that it has two reportable segments – AMS and EAAA, as each operating segment meets the quantitative thresholds defined in the accounting guidance. During fiscal year 2024, the Company implemented a cost center realignment initiative to centralize certain global/shared functions. During 2024, SG&A expenses for these global support functions were allocated to AOI for each reportable segment consistent with the allocation methodology used to allocate corporate overhead in prior periods. 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. 97 Table of Contents The following table outlines information by reportable segment including net sales, significant segment expenses, and AOI. The table also includes a reconciliation to income before taxes for fiscal years 2025, 2024, and 2023. Fiscal Year 2025 2024 2023 AMS EAAA TOTAL AMS EAAA TOTAL AMS EAAA TOTAL (in thousands) Net sales $ 843,886 $ 542,968 $ 1,386,854 $ 800,811 $ 514,847 $ 1,315,658 $ 736,955 $ 524,543 $ 1,261,498 Less: significant segment expenses (1) Adjusted cost of sales (2) 494,700 351,701 494,185 333,353 458,708 356,591 Adjusted selling, general, & administrative expenses (3) 211,887 154,811 200,032 146,691 190,458 139,344 Segment AOI 137,299 36,456 173,755 106,594 34,803 141,397 87,789 28,608 116,397 Reconciliation of AOI to income before taxes Restructuring, severance, asset impairment and other, net 6,687 2,530 5,631 Purchase accounting amortization 3,073 5,172 5,172 Cyber Event impact — ( 711 ) 1,072 Interest expense 19,546 23,205 31,787 Other expense (income), net 7,598 ( 2,353 ) 9,081 Income before taxes $ 136,851 $ 113,554 $ 63,654 (1) Significant segment expense categories and amounts align with segment level information that is regularly provided to the CODM, included in the measure of segment profit, and considered to be significant. Amounts include allocation of corporate overhead and global support costs. Intersegment expenses are excluded. (2) Adjusted cost of sales excludes 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. Segment depreciation and amortization for 2025, 2024 and 2023 is presented in the table below: Fiscal Year 2025 2024 2023 (in thousands) Depreciation and amortization AMS $ 18,792 $ 17,804 $ 17,989 EAAA 20,124 21,529 22,785 Total depreciation and amortization $ 38,916 $ 39,333 $ 40,774 98 Table of Contents A reconciliation of the Company’s total operating segment assets to the corresponding consolidated amounts follows: End of Fiscal Year 2025 2024 (in thousands) Assets AMS $ 660,189 $ 644,085 EAAA 619,663 587,639 Total segment assets 1,279,852 1,231,724 Corporate assets 98,853 111,761 Eliminations ( 172,183 ) ( 172,669 ) Total reported assets $ 1,206,522 $ 1,170,816 The Company has a large and diverse customer base, which includes numerous customers located in foreign countries. No single unaffiliated customer accounted for more than 10 % of total sales in any year during the past three years. Sales to customers in foreign markets in 2025, 2024 and 2023 were approximately 43 %, 43 % and 46 %, respectively, of total net sales. These sales were primarily to customers in Europe, Canada, Asia, Australia and Latin America. Net sales and long-lived assets for the United States and other significant countries (that individually represent 10 % or greater of consolidated totals for each year presented) are as follows: Fiscal Year Net Sales to Unaffiliated Customers (1) 2025 2024 2023 (in thousands) United States $ 785,933 $ 744,407 $ 677,342 Other foreign countries 600,921 571,251 584,156 Total net sales $ 1,386,854 $ 1,315,658 $ 1,261,498 End of Fiscal Year Long-Lived Assets (2) 2025 2024 (in thousands) United States $ 146,980 $ 151,130 Germany 75,406 60,391 Netherlands 42,458 36,350 Australia 31,326 24,380 Other foreign countries 13,279 10,123 Total long-lived assets $ 309,449 $ 282,374 (1) Revenue attributed to geographic areas is based on the location of the customer. (2) Long-lived assets attributed to geographic areas are based on the physical location of the asset. 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. 99 Table of Contents NOTE 20 – ITEMS RECLASSIFIED FROM ACCUMULATED OTHER COMPREHENSIVE LOSS Amounts reclassified out of accumulated other comprehensive loss (“AOCL”), before tax, to the consolidated statements of operations for the fiscal years 2025, 2024 and 2023, are reflected in the table below: Fiscal Year Statement of Operations Location 2025 2024 2023 (in thousands) Loss on foreign subsidiary liquidation (1) Other expense (income), net $ — $ ( 2,152 ) $ ( 6,221 ) Interest rate swap contracts loss (2) Interest expense — — ( 982 ) Amortization of benefit plan net actuarial losses and prior service cost (3) Other expense (income), net ( 1,598 ) ( 1,499 ) ( 800 ) Total loss reclassified from AOCI $ ( 1,598 ) $ ( 3,651 ) $ ( 8,003 ) (1) In 2024, the Company’s foreign subsidiary in Thailand was substantially liquidated and in 2023, the Company’s foreign subsidiaries in Russia and Brazil were substantially liquidated. The cumulative foreign currency translation losses associated with these entities were recognized in the consolidated statements of operations for the respective period. There is no tax impact for the Thailand cumulative foreign currency translation reclassification for 2024 as it is non-deductible. The tax impact for the 2023 cumulative foreign currency translation reclassification was $ 1.1 million. (2) 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. 100 Table of Contents 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. 101 Table of Contents 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 102 Table of Contents Report of Independent Registered Public Accounting Firm Shareholders and Board of Directors Interface, Inc. Atlanta, Georgia Opinion on the Consolidated Financial Statements 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 These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. 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 consolidated 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 consolidated 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 consolidated 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 consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. /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 served as the Company's auditor since at least 1981 to 2025. Atlanta, Georgia February 26, 2025 103 Table of Contents Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors of Interface, Inc. Opinion on Internal Control Over Financial Reporting 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 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 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 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, 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. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. 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/ Ernst & Young LLP Atlanta, Georgia February 25, 2026 104 Table of Contents ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE Not applicable.