TILE

Interface is in the strongest shape of the cycle. FY2025 net sales rose 5.4% to $1.39B, but the real story is operating leverage: gross profit jumped 11.3% and operating income 22% as management cites 'higher average sales prices, favorable product mix, and manufacturing efficiencies.' That flows through to a 38.7% gross margin, 11.8% operating margin, $116M net income (+33.5%) and $1.96 diluted EPS (+32.4%). The multi-year recovery is real and linear — from a -$71.9M loss in FY2021 to $116M today — and ROE is a healthy 18.1%.

The balance sheet has been transformed alongside earnings. Long-term debt fell 42.8% to $173M, total liabilities dropped 17%, and equity grew 31% to $641M, taking liabilities/equity to a conservative 0.88x. Operating cash flow of $168M against $46.2M of capex leaves roughly $120M of free cash flow, comfortably funding the $18.2M buyback and growing dividend. This is no longer a balance-sheet-stressed turnaround; it's a deleveraged, cash-generative compounder.