This acquisition will expand Interface's rapidly growing resilient flooring portfolio and increase its penetration into high growth segments including healthcare, life sciences, education and transportation. Nora is the leader in the nearly
"We believe our value creation strategy is working in the marketplace as we better serve our customers with an expanded product portfolio and an enhanced selling system. Customers want a single flooring solution provider that can deliver a range of options that meet their requirements in different commercial applications. The nora acquisition is expected to accelerate our growth strategy by expanding our product portfolio and extending our reach in the performance flooring category of resilient flooring," said
The nora acquisition, when completed, is expected to be accretive to Interface's margins and adjusted earnings per share. Nora is anticipated to increase the company's adjusted EPS, a non-GAAP measure,
Interface will host a conference call at
Fiscal Year 2018 Outlook
Looking at the full year of 2018, Interface's existing carpet tile and LVT business is targeting to achieve 3 - 5% organic sales growth, gross profit margin of 39 - 39.5%, and SG&A expenses that are relatively flat to 2017 as a percentage of net sales.
Depending on the date the transaction formally closes, which will determine when nora's business results start being included into Interface's business results, the nora acquisition is anticipated to have the following impacts on Interface's targeted 2018 results:
- Increasing gross profit margin by 30 – 50 basis points;
- Increasing SG&A expenses, as a percentage of net sales, by 70 – 100 basis points;
- Increasing the Company's effective tax rate to 27 - 28%; and
- Improving adjusted EPS by
$0.03 to $0.06in 2018.
Full year post-closing company interest and other expenses are projected to be
Non-GAAP Financial Measures
Interface provides adjusted earnings per share and organic sales growth as additional information regarding its projected operating results in this press release. These measures are not in accordance with – or alternatives to – GAAP, and may be different from non-GAAP EPS and other non-GAAP measures used by other companies. Adjusted EPS excludes the effects of the 2017 U.S. Tax Cuts and Jobs Act and restructuring and asset impairment charges. In addition, the effects on adjusted EPS of completing the nora acquisition exclude the impact of transaction costs and purchase accounting related amortization. Organic sales growth excludes the impact of foreign currency fluctuations and Interface's exit from its FLOR specialty retail stores. This news release should be read in conjunction with the Company's Current Report on Form 8-K furnished today to the
Interface at this time cannot reasonably quantify the GAAP basis impact of the nora transaction to earnings per share without unreasonable efforts, as such calculations are highly dependent upon the timing of the closing of the transaction and the nature of the purchase price accounting adjustments and their impacts going forward. While the ultimate effect of the transaction on Interface's future GAAP EPS cannot be predicted at this time for the reasons just stated, we expect that for 2018 and 2019 the effect of the transaction will be negative to our GAAP EPS. Given the uncertainty of foreign exchange rates in the future, Interface also cannot reasonably reconcile forecasted organic sales growth to GAAP net sales growth.
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About nora systems
Nora systems is a leading global manufacturer of commercial rubber floor covering systems. The company has been designing and manufacturing high-performance rubber flooring for more than 80 years for a number of different markets. Nora's team of skilled professionals collaborates with architects and designers to develop performance-driven flooring solutions that help bring their projects to life.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:
Except for historical information contained herein, the other matters set forth in this news release are forward‑looking statements. Forward-looking statements include, without limitation, information under the heading "Fiscal Year 2018 Outlook" in this news release, the Company's expectations regarding the closing, and timing of closing, of the nora acquisition and the Company's expectations regarding the effect of the nora acquisition on the Company's results. Forward-looking statements may be identified by words such as "may," "expect," "forecast," "anticipate," "intend," "plan," "believe," "could," "seek," "project," "estimate," "target," "will" and similar expressions. The forward-looking statements set forth above involve a number of risks and uncertainties that could cause actual results to differ materially from any such statement, including: the risk that the closing conditions in the nora acquisition will not be satisfied or waived on a timely basis, or at all; the risk that the Company may have overestimated the future contribution of the nora business to the Company's combined results; risks related to integration of the combined businesses; risks related to the increased indebtedness the Company will incur to complete the acquisition; risks related to the increased reliance on international business the Company will experience if the acquisition closes; and risks and uncertainties associated with economic conditions in the commercial interiors industry.
Risk and uncertainties that may cause actual results to differ materially from those predicted in forward-looking statements also include, but are not limited to, the discussion of specific risks and uncertainties under the following subheadings in "Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended
Any forward-looking statements are made pursuant to the Private Securities Litigation Reform Act of 1995 and, as such, speak only as of the date made. The Company assumes no responsibility to update or revise forward-looking statements made in this press release and cautions readers not to place undue reliance on any such forward-looking statements.
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Media Contact: Christine Needles, Global Corporate Communications, Christine.Needles@interface.com, +1 404-491-4660; Investor Contact: Bruce Hausmann, Chief Financial Officer, Bruce.Hausmann@interface.com , +1 770-437-6802