About Interface

Interface, Inc., a flooring company, specializing in carbon neutral carpet tile and resilient flooring, including luxury vinyl tile (LVT), vinyl sheet, and nora rubber flooring. The company helps its customers create high-performance interior spaces that support well-being, productivity, and creativity, as well as the sustainability of the planet. The company markets modular carpet under the established brand names Interface and FLOR, and it markets LVT and vinyl sheet under the brand Interface. In 2018, the company acquired nora Holding GmbH (nora), a worldwide leader in the rubber flooring category under the established nora brands norament and noraplan. Segments In 2021, the company largely completed its integration of the nora acquisition, and integration of its European and Asia-Pacific commercial areas, and determined that it has two segments – namely Americas (AMS) and Europe, Africa, Asia and Australia (collectively EAAA). The AMS operating segment continues to include the United States, Canada and Latin America geographic areas. Market Segmentation The company’s business, as well as the commercial interiors industry in general, is cyclical in nature and is impacted by economic conditions and trends that affect the markets for commercial and institutional business space. Products and Services Modular Carpet The company’s AMS and EAAA reportable segments sell the same products within their respective geographical regions. The company produces carpet tiles in a wide variety of colors, patterns, textures, pile heights and densities. These varieties are designed to meet both the practical and aesthetic needs of a broad spectrum of commercial interiors particularly offices, healthcare facilities, airports, educational and other institutions, hospitality spaces, retail facilities and residential interiors. The company’s carpet tile systems permit distinctive styling and patterning that can be used to complement interior designs, to set off areas for particular purposes, create visual cues, and to convey graphic information. While the company continues to manufacture and sell a substantial portion of its carpet tile in standard styles, most of its modular carpet sales in the Americas and the Asia-Pacific regions are made-to-order products designed to meet customer specifications. The company’s modular carpet systems are marketed under the established brands Interface and FLOR. The company manufactures carpet tiles cut in precise, dimensionally stable squares (usually 50 cm x 50 cm) or rectangles (such as planks and Skinny Planks). The company’s GlasBac technology employs a fiberglass-reinforced polymeric composite backing that provides dimensional stability and reduces the need for adhesives or fasteners. The company also makes carpet tiles with a backing containing post-industrial and/or post-consumer recycled materials, which it market under the CQuestGB name. In addition, the company makes carpet tile with yarn containing varying degrees of recycled post-consumer nylon, depending on the style and color. In 2021, the company introduced its Open Air collection of more affordable carpet tiles — an expansive platform of hard-working carpet tile styles designed with open spaces in mind. Innovations in both design and manufacturing allow the company to create high-quality, high-performance carpet products at a lower price point. In 2020, the company introduced the next generation of its carpet tile backings called CQuest backings. Guided by materials science and inspired by nature’s carbon-storing abilities, the company added new bio-based materials and more recycled content to its backings. The materials in the CQuest backings, when measured on a stand-alone basis, are net carbon negative — meaning that their global warming potential emissions are net negative. The CQuest backings are: CQuestGB - The next evolution of the company’s GlasBacRE backing. It features the same superior performance with a construction of post-consumer recycled content from carpet tiles, bio-based additives, and pre-consumer recycled materials. CQuestBio - A non-vinyl bio-composite backing made with bio-based and recycled fillers. CQuestBioX - The same material make-up as CQuestBio with a higher concentration of carbon negative materials. The company’s i2 modular product line, which includes its popular Entropy product, features mergeable dye lots, and includes a number of carpet tile products that are designed to be installed randomly without reference to the orientation of neighboring tiles. The i2 line offers cost-efficient installation and maintenance, interactive flexibility, and recycled and recyclable materials. The company’s TacTiles carpet tile installation system uses small squares of adhesive plastic film to connect intersecting carpet tiles, thus eliminating the need for traditional carpet adhesive and resulting in a reduction in installation time and material waste. The company also produces and sells a specially adapted version of its carpet tile for the healthcare facilities market. The company’s carpet tile possesses characteristics — such as the use of the Intersept antimicrobial, static-controlling nylon yarns, and thermally pigmented, colorfast yarns — which make it suitable for use in these facilities in place of hard surface flooring. Moreover, the company sells its FLOR line of products to specifically target modular carpet sales to the residential market segment, and in recent years FLOR products have had crossover success in commercial markets. In addition, the company has created modular carpet products specifically designed for each of the education, hospitality and retail market segments. In 2020, the company achieved a substantial milestone in its journey toward becoming a sustainable enterprise. Simultaneously with the launch of its new CQuest backings, the company introduced in the Americas its first ever cradle-to-gate carbon negative carpet tile products in three unique styles: Shishu Stitch, Tokyo Texture, and Zen Stitch. These pioneering products, which are part of the company’s Embodied Beauty collection, are created with a combination of its new CQuestBioX carpet backing (featuring new bio-based materials and more recycled content), specialty yarns and tufting processes that create a carpet tile with a net negative value of embodied carbon. Embodied carbon is the carbon footprint (meaning the global warming potential of emissions of greenhouse gases measured in carbon dioxide equivalents) of a product from raw material creation, growth and extraction (the cradle) through processing until it is packaged and ready to be shipped from its factory (the gate), thus referred to as cradle-to-gate in the life cycle assessment of a product. Embodied carbon is distinct from operational carbon, which refers to the carbon footprint of everything that happens after the product leaves the company’s factory, such as shipment, customer use, and end of life. The Embodied Beauty collection was expanded into the company EAAA geographical regions in 2021. In addition, through the company’s third party verified Carbon Neutral Floors program, all of its carpet tile, LVT and norament and noraplan rubber flooring products are made carbon neutral across their entire life cycle, including both embodied carbon and operational carbon, by its purchase and retirement of third party verified carbon offsets. Modular Resilient Flooring In 2016, the company began offering a category of products it calls modular resilient flooring, and its first product introductions into this category were LVT products in the United States. LVT shares many of the same attributes and benefits as carpet tile, but has a resilient or hard surface instead of a soft surface of yarn. In 2017, the company launched its LVT products globally, beginning with the Level Set collection which is available in styles with printed top layers in a variety of aesthetic looks, including natural woodgrains and stones, textured woodgrains, and patterns. The company’s LVT products are modular and come in sizes that match certain of its modular carpet tile squares and planks. Some of them are engineered to the same or similar height as the company’s modular carpet, which means its customers have the ability to install its LVT and modular carpet products side by side without transition strips or layering. In addition, some of its LVT products include a backing system that provides acoustic insulation without the need for additional underlayment, which can reduce the impact of sound in the space where the flooring is used. In 2022, the company introduced its rigid core Even Path collection of LVT with high-quality wood and stone designs. The company’s rigid core resilient flooring products are designed for hard-working spaces and commercial markets. Rubber Flooring With the acquisition of nora in 2018, the company began offering rubber flooring products under the established noraplan and norament brands, which enhances the company’s fast-growing resilient flooring portfolio. Rubber flooring is ideal for applications that require hygienic, safe flooring with strong chemical resistance. Rubber flooring is extremely durable compared to other flooring alternatives. Other Products and Services The company sells a proprietary antimicrobial chemical compound under the registered trademark Intersept that it incorporates in some of its modular carpet products. The company also sells its TacTiles carpet tile installation system, along with a variety of traditional adhesives and products for carpet installation and maintenance that are manufactured by a third party. The company also continues to provide turnkey project management services for a number of global accounts and other large customers through its InterfaceSERVICES business. Sales and Marketing The company distributes its products through two primary channels: direct sales to end users; and indirect sales through independent contractors, installers and distributors. The company uses an exclusive third-party distributor to sell its products in the Latin American region. The company has traditionally focused its carpet marketing strategy on major accounts, seeking to build lasting relationships with national and multinational end-users, and on architects, interior designers, engineers, contracting firms, and other specifiers who often make or significantly influence purchasing decisions. While the corporate office market segment, including new construction and renovation, is the company’s largest, it also emphasizes sales in other market segments, including schools and educational facilities, government institutions, retail space, healthcare facilities, tenant improvement space, hospitality centers, residences and home office space. The company’s marketing efforts are enhanced by the established and well-known brand names of its carpet products, including Interface and FLOR, as well as the strength of the nora rubber flooring brands of noraplan and norament. An important part of the company’s marketing and sales efforts involves the preparation of custom-made samples of requested carpet designs, in conjunction with the development of innovative product designs and styles to meet the customer’s particular needs. In most cases, it can produce samples to customer specifications in less than five days, which significantly enhances its marketing and sales efforts. In addition, through its websites, the company has made it easy to view and request samples of its products. The company also uses technology which allows it to provide digital, simulated samples of its products, which helps reduce raw material and energy consumption associated with its samples. The company primarily uses its internal marketing and sales force teams to market its flooring products. In order to implement its global marketing efforts, the company has product showrooms or design studios in the United States, England, France, Germany, Spain, the Netherlands, India, Australia, the United Arab Emirates, Singapore, Hong Kong, China and elsewhere. Business Strategy and Principal Initiatives The company’s business strategy is to continue to use its leading position in modular carpet, product design and global made-to-order capabilities as a platform from which to position its modular carpet, LVT products, other resilient products and rubber flooring products across several industry segments. The key elements of the company’s strategy are to continue to penetrate non-corporate office market segments; develop a substantial resilient flooring business; and sustain leadership in product design and development. Seasonality Historically, sales in the company’s first quarter had typically been its lowest quarter while its fourth quarter sales had typically been its best quarter, as sales generally increased throughout the course of the fiscal year. However, in more recent years, as the company’s sales efforts and results in the education and other non-corporate office market segments increased, its second and third quarter sales sometimes were the highest. In 2022, the company’s second quarter sales were the highest quarter. In 2021, the company’s fourth quarter sales were the highest quarter as certain countries rebounded from the economic impacts of the COVID-19 pandemic over the course of the year. In 2020, the company’s first quarter sales were the highest quarter, as the COVID-19 pandemic escalated and more severely impacted the remainder of the year (year ended January 1, 2023). Research and Development The company’s research and development expense included $19.1 million for the fiscal year ended January 1, 2023. Patents and Trademarks The company owns numerous patents in the United States and abroad on floorcovering products and on manufacturing processes. The company also owns many trademarks in the United States and abroad. In addition to the United States, the primary jurisdictions in which it has registered the company’s trademarks are the European Union, United Kingdom, Canada, Australia, New Zealand, Japan, and various countries in Central America, South America and Asia. Some of the company’s more prominent registered trademarks include Interface, FLOR, GlasBac, CQuest, Climate Take Back, nora, norament, noraplan, nTX solution, noraplan unita, noraplan valua, and TacTiles. History Interface, Inc. was founded in 1973. The company was incorporated in 1973 as a Georgia corporation.