Interface reports 4% net sales growth and 208 basis points margin expansion, buoyed by robust healthcare performance and strategic investments in automation and innovation.

OPERATOR - (00:01:05)

Thank you for standing by and welcome to the Interface third quarter 2025 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be A question and answer session. If you would like to ask a question during this time, simply press STAR followed by the number one on your telephone keypad. If you would like to withdraw your question again, press the star one. Thank you. I'd now like to turn the call over to Christine Needles, Global Communications. You may begin.

Christine Needles - Global Communications - (00:01:35)

Good morning and welcome to Interface's conference call regarding third quarter 2025 results hosted by Laurel Hurd, CEO and Bruce Housman, CFO. During today's conference call, any management comments regarding Interface's business which are not historical information are forward looking statements within the meaning of federal securities laws. Forward looking statements include statements regarding the intent, belief or current expectations of our management team as well as the assumptions on which such statements are based. Any forward looking statements are not guarantees of future performance and involve a number of risks and uncertainties that could cause actual results to differ materially from any such statements, including risks and uncertainties described in our most recent Annual report on Form 10K filed with the SEC as supplemented in our first quarter 10Q. The company assumes no responsibility to update forward looking statements. Management's remarks during this call also refer to certain non GAAP measures. Reconciliations of the non GAAP measures to the most comparable GAAP measures and explanations for their use are contained in the Company's Earnings Release and Form 8K furnished with the SEC today. Lastly, this call is being recorded and broadcasted for Interface. It contains copyrighted material and may not be re recorded or rebroadcasted without Interface's express permission. Your participation on the call confirms your consent to the Company's taping and broadcasting of it. After our prepared remarks, we will open up the call for questions. Now I will turn the call over.

Laurel Hurd - Chief Executive Officer - (00:03:13)

To Laurel Hurd, CEO. Thank you Christine and good morning everyone. Interface delivered another strong quarter exceeding our expectations with currency neutral net sales growth of 4% and significant profitability gains. We saw continued strength in the Americas and increased momentum in EAA with broad based growth across all regions, all product categories and the majority of our market segments. We are pleased with the quality of our earnings. Net sales increased through a balanced mix of price and volume and adjusted gross profit margin expanded by 208 basis points driven by favorable mix and manufacturing efficiencies. This consistent execution underscores the power of our diversified portfolio, the strength of our brand and ongoing share gains in key markets. I'm proud of the Interface team and their unwavering commitment to serving our customers. Our One Interface strategy is driving these results. As we've discussed before, this multi year plan is focused on building strong global functions to support our world class local selling team, accelerating growth through enhanced commercial productivity, expanding margin through global supply chain management and simplifying operations leading in design, performance and sustainability. Since launching our one interface sales team structure in the US in January 2024, we've been delivering a single cohesive customer experience across carpet, Tile, LVT and NORA Rubber. This unified approach has exceeded our expectations and continues to drive consistent quarterly growth driven by our combined selling teams. Nora Rubber grew 20% in the third quarter and is up 19% year to date. To build on this momentum, we will accelerate investments in automation, productivity and innovation. To further strengthen the NORA product portfolio and drive long term growth, we're preparing for the launch of a new Rubber flooring innovation in early 2026 that we believe will accelerate growth in the healthcare segment, among others. We look forward to sharing more about this on our next call. Additionally, our investments in carpet tile, automation and robotics are delivering meaningful productivity gains and margin improvement. These investments are exceeding expectations, improving efficiency, reducing waste and enhancing service levels. We're now extending these robotic systems to our facilities in Europe and Australia and we continue to explore and identify new opportunities for automation across the company. From a product standpoint, we continue to expand our addressable market, delivering high design at compelling price points to create new opportunities for growth. During the quarter, we introduced our Stellar Horizons Carpet Tile Collection, which spans a range of price points and supports segment versatility. The collection offers exceptional durability, acoustics and cleanability while balancing design and functional performance. We also introduced three new resilient products that expand color design and aesthetic options across the category. This includes two new LVT styles in the mix and raw materials and a refresh of our norament XP Rubber. Offering. These new and updated styles give customers more ways to specify interface products across a range of spaces and budgets. We continue to differentiate our portfolio through exceptional design, superior performance and an unwavering commitment to sustainability. Now let's turn to our third quarter results. We delivered a 4% increase in currency neutral net sales reflecting strong execution and continued share gains in the Americas. Currency neutral net sales increased 4% as our combined selling teams drove growth across key market segments in EAA. Currency neutral net sales were also up 4% through broad based growth in all our regions. Turning to market segments, our diversification strategy continues to fuel our growth global healthcare billings were up 29% with double digit gains across both the Americas and EAA. Our broad and differentiated product portfolio continues to capture opportunities as the global healthcare sector evolves, driven by aging populations, technological innovation and a growing focus on preventative care in the US Our combined interface and NORA selling teams are working together seamlessly enabling us to compete more effectively and win new opportunities as we meet the complex and changing needs of modern healthcare environments. Corporate office billings were up 5% in the third quarter and they are also up year to date. As expected, we continue to see share gains in this segment as companies move to class a space where our brand strength, design leadership and broad product portfolio position us to win. Our solutions are well aligned with workplace trends as companies invest in refreshes and adapt environments to meeting the evolving needs of a hybrid workforce. And by expanding our product offerings across a wider range of price points, we are capturing new opportunities and broadening our reach. Education billings declined slightly in the third quarter but remain up high single digits year to date. We view the slight quarterly decline of timing related as we are well positioned in both K12 and higher education underpinned by our design, leadership and low carbon high performing products. Strong macro drivers, modernization initiatives and regional migration continue to create meaningful growth opportunities in this segment. Turning to orders, Consolidated currency neutral orders increased 2.4% year over year. Americas was up 1.7% on top of prior year order growth of 17.1%. EAA was up 3.5% driven by strength in EMEA and Australia. We ended the third quarter with our backlog up 17% year to date reflecting solid underlying demand. Our strong results this quarter reflect how well our teams are delivering for our customers. That's evident in the recognition we received from the design community. Interface earned multiple number one rankings in the Floor Focus Top 250 Design Survey where designers named us an industry leader in service quality, design and performance. On the sustainability front, we were named Manufacturer of the Year in edie's Net Zero Awards and recognized by Metropolis in their Planet Positive Awards for our all in Strategy. These awards acknowledge the bold steps we are taking to be carbon negative by 2040 without offsets and they are a testament to the hard work and dedication of our entire team. Looking ahead, we remain confident in our strategy and disciplined execution. Continued investments in innovation, automation and commercial excellence are strengthening our foundation for sustainable growth. With a talented global team, a powerful brand and a proven strategy, interface is well positioned to deliver differentiated design, strong financial performance and long term value for our shareholders. With that, I'LL turn it over to Bruce.

Bruce Housman - Chief Financial Officer - (00:10:44)

Well, thank you Laurel and Good morning everyone. Third quarter net sales were 364.5 million, up 5.9% as reported and 4.2% on a currency neutral basis versus the third quarter of 2024, both ahead of our expectations. Third quarter currency neutral net sales were up 4.1% in the Americas and 4.3% in EPAA year over year. Adjusted gross Profit margin was 39.5% up 208 basis points versus the third quarter of 2024, driven by favorable pricing and product mix combined with manufacturing efficiencies partially offset by higher raw material and tariff related costs. Adjusted SGA expenses were 90 million in the third quarter compared to 85.5 million in the third quarter of 2024, primarily due to higher sales commissions and variable compensation on increased sales and profits, inflation and foreign currency exchange variances. Adjusted operating income was 54.1 million up 24.5% year over year. Third quarter adjusted EBITDA was 66.2 million versus 53.7 million in the third quarter of 2024. Third quarter adjusted earnings per share was $0.61, a 27% increase versus $0.48 in the third quarter of 2024. We generated 76.7 million of operating cash flow during the third quarter and ended the period with 482 million of liquidity. Net debt, defined as total debt minus cash on hand was 120.4 million and our net leverage ratio was 0.6 times calculated as net debt divided by the last 12 months of adjusted EBITDA. As part of our balanced capital allocation Strategy, we repurchased 0.7 million of interface common stock during the quarter. Overall, our strong balance sheet provides flexibility and optionality in today's dynamic environment and the ability to continue investing in the business for growth and margin expansion. Turning to tariffs, you may recall our exposure is limited and primarily tied to imports of NORA Rubber from Germany and LVT from South Korea into the us. We continue to offset tariff related costs through pricing and productivity initiatives. When tariff costs are successfully offset on a dollar for dollar basis, we are able to protect our gross profit dollars, but there is a dilutive impact to our gross profit percentage. In the third quarter. Tariffs diluted our adjusted gross profit percentage by approximately 30 basis points and we anticipate a similar dilution of 50 basis points to fourth quarter's adjusted gross profit percentage. In sum, we are successfully managing tariff related costs and our plan is to continue doing so with that backdrop in Mind. And on the strength of our year to date results, we are raising our full year guidance for the full fiscal year of 2025. We now anticipate net sales of 1.375 to 1.390 billion. Adjusted gross profit margin of 38.5% of net sales, adjusted SG&A expenses of 362 million. Adjusted interest in other expenses of 25 million. An adjusted effective income tax rate of 26%, capital expenditures of 45 million and fully diluted weighted average share count of 59.1 million shares. To note, all figures are approximate. With that, I'll turn the call back to Laurel.

Laurel Hurd - Chief Executive Officer - (00:14:39)

Thank you, Bruce. We delivered another strong quarter with growth in all product categories, growth in all regions and growth in the majority of our market segments while driving meaningful gross profit margin expansion. We are encouraged by the quality of these earnings and the strong execution in a challenging and uncertain macro environment. I want to thank the entire Interface. Team for their relentless focus on winning. Business and serving our customers. With that, we will open up the call for questions.

OPERATOR - (00:15:08)

Thank you. We will now begin the question and answer session. If you would like to ask a question, please press Star one in your telephone keypad. To withdraw your question, simply press Star one again. Your first question today comes from the line of Brian Burroughs from trg. Your line is open.

Brian Burroughs - Equity Analyst - (00:15:25)

Hey, good morning everyone. Thank you for taking my questions today. Brian. Sales were above the guidance range. Second quarter revenue of sales, slightly above the guidance range. So clearly something's working over there. Last quarter you cited strong momentum and education outperformed a tough computer. It sounds like this quarter, maybe it's. Healthcare that's the outperformer. So just curious here what the surprise was that drove the sales outperformance relative to your expectations three months ago.

Laurel Hurd - Chief Executive Officer - (00:15:55)

Yeah, thanks Brian. And it is Healthcare. We noted healthcare was up 29% for the quarter, which is above our expectations. We've been really focused on the healthcare segment. Our top three priority segments are really corporate office, education and healthcare. But we've been working to expand our product portfolio in healthcare. Obviously, the one interface selling teams continue to exceed our expectations and we grew in healthcare outside the US as well. So really, really strong quarter that exceeded our expectations. And Brian, I would just also add our one interface selling teams are just executing so strongly. You know, we just continue to upscale the organization and we continue to see in our selling organization, our customer service organization, a relentless focus on winning for the customer and making sure we serve the customer and importantly, making sure we win business and take share.

Brian Burroughs - Equity Analyst - (00:16:54)

It's definitely working for you guys on the, on the NORA and the rubber, I guess further investments you mentioned in the prepared remarks. I know you're going to provide some more color I guess next, next call. But any more commentary you can add on the investments you might make there, if that's across expanding capacity or just more automation in the NORA facility would be interesting to hear.

Laurel Hurd - Chief Executive Officer - (00:17:20)

Yeah, we've been making investments all along in NORA and we will continue to amplify that as our sales growth continues to exceed expectations. So we're doing a few things. One, we're investing in making sure we can support the capacity. Secondly, we are investing in additional productivity initiatives to increase our throughput and also to really help drive efficiencies. And then we're also investing in innovation. So that's what we'll share more about. On our next call. But we're excited about continued opportunities to grow the NORA business.

Bruce Housman - Chief Financial Officer - (00:17:56)

Brian, I would just add if we think about capex in 2026, it may be slightly up, potentially around 10 or so million compared to 2025 levels as we invest in these productivity initiatives, in innovation initiatives again. And it's all about growth, it's all about innovation and all about projects that generate margin expansion.

Brian Burroughs - Equity Analyst - (00:18:21)

Last question for me on margins. Current guide for the year looks like it's 38 and a half. A nice, it's been a nice step up throughout the year to get there. I believe maybe the 38 and a half level is also kind of a near term margin level you might have cited in the past that you want to get to that kind of balances price with volume and cash generation. So if you're, if you're going to be at that level this year, how do we think about margins from here with all the positive things you still have between mix efficiencies, do we see further margins expansions from here or do you kind of keep it at this level to accelerate volumes even more? So just curious how you're thinking about margins at this level and going forward.

Bruce Housman - Chief Financial Officer - (00:19:08)

Brian, thank you for noticing.

Laurel Hurd - Chief Executive Officer - (00:19:10)

As we've mentioned previously, you know, our ambition is to get to 38.5% and we've got a good shot at hitting that number this year. To be fair, we have to deliver a strong Q4, which we intend to do, but it's a challenging dynamic environment and it's a balancing act between taking share, winning for our customers and also making sure that we can hit that nice sweet spot between taking share and growing the business.

Brian Burroughs - Equity Analyst - (00:19:47)

Yeah. Thank you.

OPERATOR - (00:19:50)

Your next question comes from the line of Alex Paris from Barrington Research. Your line is open.

Alex Paris - Equity Analyst - (00:19:57)

Hi guys. Thanks for taking my call. And I just wanted to say congratulations on the beaten race.

Bruce Housman - Chief Financial Officer - (00:20:03)

Thanks, Alex.

Alex Paris - Equity Analyst - (00:20:07)

I have a few questions. I'll start with. A question about the shape of your Q3 outperformance in terms of momentum. You know, how did it. I think on the last call you said July was strong from an order standpoint and broad based. How about August and September and then maybe to get a similar comment about the fourth quarter, how did October go?

Laurel Hurd - Chief Executive Officer - (00:20:37)

Yeah, I would say, Alex, it's pretty steady and consistent. So the quarter played out pretty consistently and October, I would say continues in that same bent. The Americas especially continues to look good and outside the US is a little bit, you know, those macros are more. Challenging certainly in Europe. So we're watching that order momentum as well. But we feel really good about where our guidance is for Q4.

Bruce Housman - Chief Financial Officer - (00:21:06)

Yeah, I agree. And Alex, our demand is solid, our backlog is strong and we just need to continue executing strongly.

Alex Paris - Equity Analyst - (00:21:17)

Great, thanks for that color. And then you know, the market segment discussion. Healthcare up 29 in global billings. Corporate office of 5%. Great performance. You said ed education declined slightly. Can we put some numbers on that? I mean, was it down 3% or was it down 8%?

Bruce Housman - Chief Financial Officer - (00:21:42)

Down less than 3%. So just down just 2 1/2% or so. Alex, that's just timing. You know, every things come in lumpy phases. It's up high single digits for the year. So we've got a great education business, we've got great product, we've got great momentum. So it's just, it's just timing in. The quarter and not a big quarter for education as well. Q2 is really education season for us, so not something we're concerned about.

Alex Paris - Equity Analyst - (00:22:12)

Okay, great. And then on the gross margin expansion, you kind of listed the things that influence that. It was similar to last quarter, favorable price and volume as well as manufacturing efficiencies. I think you said last, last quarter that 80% of the gain was manufacturing efficiencies. Is it sort of a similar thing going on this quarter?

Bruce Housman - Chief Financial Officer - (00:22:40)

About half and half. So our manufacturing efficiencies have been working very, very well. And that drove about half of the margin expansion and the rest was a combination of price and mix. Great.

Alex Paris - Equity Analyst - (00:22:55)

And then you had a very unusual tax rate in the quarter, 4.8%. How about a little color? And then your guidance for the full year, I know it's on an adjusted basis, is unchanged at 26%. So. What special items were in the Q3.

Bruce Housman - Chief Financial Officer - (00:23:12)

Yeah, thanks for noticing. And we put a comment on that in our press release. And what happened was In July of 2025, the German Germany enacted tax legislation to reduce the German corporate income tax rate by 1% annually from 2028 to 2032. And of course, as you can, as you know, Alex, that required us to go back and remeasure our deferred tax assets and liabilities. And it resulted in a non cash pickup on our interest expense line of 10.4 million. And again, this is just an accounting requirement due to the change in legislation in Germany to remeasure those assets and liabilities.

Alex Paris - Equity Analyst - (00:24:02)

Okay, that makes sense. But again, you give guidance of 26% on an adjusted tax basis. So you're adding, you're adding a 10.4 million back to the tax expense on a nine month basis to get to that. Because Otherwise it's like 18% for the full year.

Bruce Housman - Chief Financial Officer - (00:24:21)

Yeah, two different numbers. There's the GAAP number and then there's the adjusted number. So the 26% is our adjusted effective income tax rate. That excludes that pickup related to the German tax legislation.

Alex Paris - Equity Analyst - (00:24:36)

Great.

Bruce Housman - Chief Financial Officer - (00:24:37)

Does that make sense?

Alex Paris - Equity Analyst - (00:24:38)

Yep, makes perfect sense. And then lastly, I noticed these are just cats and dogs, but the amortization of intangibles fell. It must be running off. How should we think about that going forward? I think it was 1.4 million last quarter and this quarter it was about 0.5 million.

Bruce Housman - Chief Financial Officer - (00:24:59)

And I appreciate your attention detail actually. So now we're all done with that amortization. It's now you'll no longer see it on P and L run its course.

Alex Paris - Equity Analyst - (00:25:14)

Gotcha. So that is a typical add back to gross income to get to adjusted gross income. So there won't be any add back in Q4 and going forward?

Bruce Housman - Chief Financial Officer - (00:25:25)

That's right. But of course it was always a wash because there was the expense and net income. And so we won't see the expense in net income and hence we won't see the add back. So.

Alex Paris - Equity Analyst - (00:25:37)

Okay, perfect. Thanks. That answers all my questions and again, congrats guys.

Bruce Housman - Chief Financial Officer - (00:25:41)

Thanks, Alex.

OPERATOR - (00:25:43)

Your next question comes from the line of David McGregor from Longbow Research. Your line is open.

David McGregor - Equity Analyst - (00:25:51)

Yes. Good morning everyone. Congratulations on the results. Just got a great trajectory going here.

Bruce Housman - Chief Financial Officer - (00:25:58)

Thanks, David.

David McGregor - Equity Analyst - (00:25:59)

I wanted to. Yeah, I guess I wanted to add a few questions here on a few different things, but we go back to the gross margins and 38.5%. I guess if you adjust for tariffs, it's even 30bps better than that. When we talk about Kind of the upside from this level is that upside at this point driven by just volume leverage and just, you know, just growing your units as you go forward. Is it, is there more sort of a mix benefit that maybe, you know, emphasizing healthcare and NARA that drives that I'm just trying to get a sense of as opposed to just asking you what the upside is. Just try to get a sense of what the drivers are to further upside from here.

Laurel Hurd - Chief Executive Officer - (00:26:45)

Yeah, thanks, David. And as Bruce mentioned earlier, we had stayed at 38 and a half as our ambition to get there. I'd say we got there earlier than we expected, to be honest. And that's because of really three things. One is mix. So both country mix, the US doing really well as well as, as you mentioned, the NORA rubber sales growth in the US productivity. Our productivity initiatives are paying off better than we anticipated. The investments that we're making. And then there's volume leverage as well. So you know, as we look forward, I think we've got more room to go on productivity. We'll continue to drive mix and volume leverage and at the same time, as Bruce said, really look at how we drive share growth and make sure that, you know, it's a competitive market out there and we don't want to. There is a sweet spot that we'll need to navigate.

David McGregor - Equity Analyst - (00:27:38)

So if I could just sort of pick up on a couple of these things here. I don't know, Operator, are there any. Other questions behind me in the queue?

OPERATOR - (00:27:47)

No, there are not.

David McGregor - Equity Analyst - (00:27:49)

Okay, thank you. I have a few here for you, if you don't mind. I guess when you automate the front end of the manufacturer manufacturing lines, it's obviously created a lot of productivity benefit. And now you're going to take those learnings and you're going to go to Europe and to Australia. If we isolate that, what could that represent in terms of gross margin upside?

Laurel Hurd - Chief Executive Officer - (00:28:13)

Well, David, obviously the US is a, is a, is a bigger number, sure. But it's going to, you know, these. Are all meaningful numbers. And you know, we're, we're investing in this machinery, investing in this robotics and it's actually, it's a. The benefit that we originally scoped out was a benefit because we had very difficult jobs to fill. We're also seeing benefit around less waste. So we're using, we have less waste in our manufacturing facilities which is helping us with our inventory and helping us with our cost of sales. It's helping us. There's a lot of little things like we're just using fewer cones, for example. So There's a whole bunch of things that will help us, that are helping us in the US and that will also help us similarly in Australia and in Europe. Clearly though, to be fair, those are smaller businesses than the U.S.

David McGregor - Equity Analyst - (00:29:08)

They are. But it sounds like, you know, when you talk about the three buckets, mixed productivity and volume leverage, the big part of that productivity bucket is, is this migration of what you've learned at Lagrange and. Yeah, okay, good. And then on the volume, on the volume leverage, talk about sort of incremental margins right now. And I realize they're a little bit different from DORA versus LVT versus, you know, carpet tile. And within carpet tile you have various price points where you could get some variance in your operating leverage. But how should we be thinking about incremental margins and the potential upside from here on? Incremental margins?

Laurel Hurd - Chief Executive Officer - (00:29:52)

I think the situation that we're in, David, is we are going to continue to be laser focused on driving efficiencies in our manufacturing environment. It's just so important that we do that to maintain our competitiveness and in a really challenging market, make sure that we have the right price points to meet our customers where they are so that we can continue driving volume and we can continue driving share. The other thing, David, that we've been doing is we've talked about expanding our addressable market by pushing a bit more to accessible price points, particularly in carpet tile. And we've done that through, you know, design for manufacturing, making sure we maintain our efficiencies while we're doing that. But that's helping us drive growth. So we'll continue to do more of that as well and again, sort of manage that sweet spot.

David McGregor - Equity Analyst - (00:30:46)

Okay. So I mean, if on the one hand you get a little more Nora coming in here, you're making the capacity investments, we would presume that that becomes a, a stronger part of the mix. On the other hand, you've got more medium price point product rolling out. Right, right. So should we just be, should we just be thinking incremental margins, kind of remaining kind of in line with the yard right now? I guess I'm just looking for a little bit of help there.

Bruce Housman - Chief Financial Officer - (00:31:17)

We want to deliver this year. We got a great year, great nine months behind us. We got to deliver another three great months and we'll have a solid year. And then if we do, we'll hit our ambition. And I think, to be fair, David, I appreciate your question, I appreciate your probing. I think maybe when we release our year end results and we see how this all shakes out we would be in a stronger position to talk about, you know, perhaps what is our next ambition around gross profit. But for right now, we just want. To hit the current ambition.

David McGregor - Equity Analyst - (00:31:50)

Got it. Okay. That's, that's, that's fair. Thank you for that. You had talked a while back now about adding kind of global product category management. I think you might have actually staffed somebody in that seat. Yeah.

Laurel Hurd - Chief Executive Officer - (00:32:03)

And I guess this is all part of the one interface program. You talk about sort of the percentage of revenues and how that might be changing from jobs that are kind of across multiple categories and across multiple, you know, America and Europe or just, you know, sort of that expanded scope of an order as opposed to selling carpet tile to a guy in Cincinnati. You know, we're getting more projects where we're selling, you know, all three products to, you know, companies spanning both American and European markets. I'm obviously making this stuff up, but, but just trying to get a sense of how that, how that's changing. And I presume that's a margin driver for you. So I'm just trying to get a sense of proportion at this point. Yeah. So a couple of things in that. First of all, we did add global product category management. So we're really looking. And that will help us drive our innovation funnel for the future. We're going to see some new innovation. Come next year, which I think will be really exciting. But, and those are global, global innovations, global launches. We're looking at those on a real macro level that we think can really help us to further accelerate what you're talking about, which is the opportunity to sell our full portfolio of products to our customers. So rather than just selling NORA to healthcare and just selling carpet tile to corporate office, we're really selling that full suite. And as you're saying, we also, we. Have great global customers and we're now. Offering the full suite of products to those global customers. That's honestly still in early days. I mean, we're still continuing to build that out and we'll continue to do that further as we go forward.

Bruce Housman - Chief Financial Officer - (00:33:45)

Okay, that's helpful. And then Bruce, you mentioned capital allocation. Up about 10 million next year in capex versus where you're going to be this year. Is that full 10 million associated with NORA or are there other programs? Portion of nora. A large portion of it is nora. But there are, there is innovation happening outside of nora and there's, there is some automation investments happening outside of NORA as well. So. Okay, yes, but on capital allocation as well, you're, you're buying back stock which is, you know, a real milestone, I guess, for Interface. How do you think about sort of that program going forward? Is this kind of a residual, we don't have any other immediate use for the cash, so we buy back stock. Or are you sort of employing targets in mind with respect to what you want to accomplish on a repurchase level? Yeah, I mean, it's opportunistic. However, we always keep in mind our number one priority, which is to invest in the business around growth margin expansion and making sure that. And innovation. So while also. While. While also making sure and being good stewards of the. To the corporation and to our capital allocation priorities. And so, you know, when there's opportunity, we are making sure that we return capital back to our shareholders. Got it. Well, congratulations on all the progress. Great to see. Thank you.

David McGregor - Equity Analyst - (00:35:19)

Thanks, David. Appreciate it.

OPERATOR - (00:35:21)

And that concludes our question and answer session. I will now turn the call back over to Laurel Hurt for closing remarks.

Laurel Hurd - Chief Executive Officer - (00:35:28)

Great. Thanks to everyone for joining the call today. And thanks to the entire Interface team. For another great quarter.

OPERATOR - (00:35:35)

This concludes today's conference call. Thank you for your participation. You may now disconnect.