Q3 2024 Interface Inc Earnings Call

Operator: Thank you for standing by.

Thank you for standing by my name is Barry and I will be your conference operator today at this time I would like to welcome everyone to the Q3 2024 interface, Inc earnings Conference call.

Bailey: My name is Bailey, and I will be your conference operator today. At this time, I would like to welcome everyone to the Q3 2024 Interface Inc. Earnings Conference Call. All lines have been placed on mute to prevent any background noise.

Lines have been placed on mute to prevent any background noise.

Bailey: After the speaker's 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 star and 1.

After the Speakers' remarks, there'll 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 Crestar one.

Christine Needles: I would now like to turn the call over to Christine Needles, Corporate Communications. You may begin.

Speaker Change: I would now like to turn the call over to Christine Needles Corporate Communications you may begin.

Christine Needles: Good morning and welcome to Interface's conference call regarding third quarter 2024 results hosted by Laurel Hurd, CEO, and Bruce Hausmann, 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.

Good morning, and welcome to interfaces conference call regarding third quarter 2024 results posted by Laurel Hurd, CEO and Bruce Hausmann CFO.

Christine Needles: During today's conference call any management comments regarding interfaces business, which are not historical information are forward looking statements within the meaning of federal securities laws.

Christine Needles: 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.

Christine Needles: 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 10-K filed with the SEC. The company assumes no responsibility to update forward-looking statements.

Christine Needles: 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 10-K filed with the SEC. The company assumes no responsibility to.

Christine Needles: Update forward looking statements.

Christine Needles: Management's remarks during this call also refer to certain non-GAP 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.

Management's remarks during this call also refer to certain non-GAAP measures.

Christine Needles: Reconciliations of the non-GAAP measures to the most comparable GAAP measures and explanations for their youth are contained in the company's earnings release and form 8-K furnished with the SEC today.

Christine Needles: Lastly, this call is being recorded and broadcasted for Interface. It contains copyrighted material and may not be rerecorded or rebroadcasted without Interface's express permission. Your participation on the call confirms your consent to the company's taping and broadcasting of it.

Christine Needles: Lastly, this call is being recorded and broadcasted for interface. It contains copyrighted material and may not be rerecorded or rebroadcast without interfaces express permission.

Christine Needles: Your participation on the call confirms your consent to the company's taping and broadcasting of it.

Christine Needles: After our prepared remarks, we will open up the call for questions.

Speaker Change: After our prepared remarks, we will open up the call for questions now I will turn the call over to Laurel Hurd CEO.

Laurel Hurd: Now I will turn the call over to Laurel Hurd, CEO. Thank you, Christine, and good morning, everyone. To begin our call, I want to thank the Interface team for an impressive quarter. Our strong results reinforce the fact that our One Interface strategy is working and yielding tangible results. Our strategy is focused on building strong global functions to support our world-class local selling business. Accelerating growth through enhanced productivity of our commercial teams. expanding margins through global supply chain management and complexity reduction. and leading in design, innovation, and sustainability. We're in the early stages of our multi-year plan, and we're encouraged by the results we're seeing across the business.

Laurel Hurd: Thank you Christine and good morning, everyone.

Laurel Hurd: To begin our call I want to thank the interface team for an impressive quarter. Our strong results reinforced the fact that our one interface strategy is working and yielding tangible results.

Laurel Hurd: The strategy is focused on building strong global functions to support our world class local selling team.

Laurel Hurd: Accelerating growth through enhanced productivity of our commercial teams.

Banding margins through global supply chain management and complexity reduction.

Laurel Hurd: And leading in design innovation and sustainability.

We're in the early stages of our multiyear plan and we're encouraged by the results we're seeing across the business.

Laurel Hurd: We've talked about the new integrated selling approach that we implemented in Q1 of this year, which combines Nora and Interface selling teams in the U.S. These coordinated teams are continuing to yield tremendous results in the Americas. resulting in currency neutral net sales up an impressive 18% in the quarter. We're seeing momentum in NORA rubber sales, expanding beyond healthcare into other growth segments including education, biopharma, and manufacturing. Our combined selling teams are effectively unlocking new opportunities across the product portfolio while enhancing the customer experience. This is what we'd hoped to see and were encouraged by the team's progress.

Laurel Hurd: We've talked about the new integrated selling approach that we implemented in Q1 of this year, which combines Nora and interface selling teams in the U S.

Laurel Hurd: These coordinated teams are continuing to yield tremendous results in the Americas business, resulting in currency neutral net sales up an impressive 18% in the quarter.

Laurel Hurd: We're seeing momentum in Nora rubber sales expanding beyond health care.

Laurel Hurd: Other growth segments, including education, Biopharma and manufacturing.

Laurel Hurd: Our combined selling teams are effectively unlocking new opportunities across the product portfolio, while enhancing the customer experience.

Laurel Hurd: This is what we'd hope to see and we're encouraged by the team's progress.

Laurel Hurd: Additionally, we recently added the Nora brand to our refreshed brand attitude made for more. This platform brings our brands closer together to drive consistency in how we show up for our customers. It creates efficiency in our marketing and brand efforts and ultimately provides additional sales opportunities.

Laurel Hurd: Additionally, we recently added the Knorr brand to our refreshed brand attitude made for more.

Laurel Hurd: Platform brings our brands closer together to drive consistency in how we show up for our customers. It creates efficiency in our marketing and brand efforts and ultimately provides additional sales opportunities.

Laurel Hurd: Turning to our financial results, we delivered a very strong third quarter with currency neutral net sales growth of 10% and significant profitability expansion. We continue to drive strong momentum in the Americas, and as mentioned, currency-neutral net sales were up 18% year over year. Continued market share gains.

Laurel Hurd: Turning to our financial results, we delivered a very strong third quarter with currency neutral net sales growth of 10% and significant profitability expansion.

Laurel Hurd: Continue to drive strong momentum in the Americas, and as mentioned currency neutral net sales were up 18% year over year.

Laurel Hurd: <unk> market share gains.

Laurel Hurd: In EAAA, currency-neutral net sales were flat, as growth in EMEA was largely offset by lower net sales in Australia. Additionally, fillings in all product categories. were up here to date in both price and volume, which is a great testament to our selling organization and their ability to execute and gain.

Laurel Hurd: And he'd AAA currency neutral net sales were flat.

Laurel Hurd: Growth in EMEA was largely offset by lower net sales in Australia.

Laurel Hurd: Additionally, billings in all product categories.

Laurel Hurd: We're up year to date in both price and volume, which is a great Testament to our selling organization and their ability to execute and gain share.

Laurel Hurd: Moving to our market segment. Global education billings remain strong, up 18% year-over-year, led by Strength in the Americas. Our Expanded Open-Air Collection, Nora Rubber, and 3mm LBT Collections continue to resonate with our K-12 and higher education customers. This is a great example of our combined selling teams effectively supporting our customers across the full product portfolio. Global corporate office billings were up 2% year over year, where we continue to gain market share when you compare us with overall industry trends. As companies return to the office and update their spaces, our sales team leverages their deep relationships with architects and design firms to meet their needs with our differentiated product portfolio.

Laurel Hurd: Moving to our market segments Global education Billings remained strong up 18% year over year led by strength in the Americas.

Laurel Hurd: Our expanded open air collection, Nora rubber and three millimeter ELV T collection continued to resonate with our K through 12 and higher education.

Acacia customers.

Laurel Hurd: This is a great example of our combined selling teams effectively supporting our customers across the full product portfolio.

Laurel Hurd: Global corporate office billings were up 2% year over year, where we continue to gain market share when you compare us with overall industry trends.

Laurel Hurd: The company's return to the office and update their spaces, our sales team leverages, our deep relationships with architects and design firms to meet their needs with our differentiated product portfolio.

Laurel Hurd: Overall activity continues to increase, particularly in Class A space where we are differentiated by our premium products, design, and sustainability leadership.

Overall activity continues to increase particularly in class a space, where we are differentiated by our premium products design and sustainability leadership.

Laurel Hurd: Healthcare billings were soft in the third quarter. However, we saw strong double-digit year-over-year order growth. As a reminder, we typically have a longer sales and installation cycle related to our NORA products in healthcare, and our strong healthcare orders will convert to billings in the coming quarter. And as expected, retail billings were up in the quarter compared to a soft prior year period. Retail is a small part of our overall net sales, but can have periodic unplanned deferrals of store remodel projects, which we experienced in the prior year period.

Laurel Hurd: Healthcare billings were soft in the third quarter. However, we saw strong double digit year over year order growth. As a reminder, we typically have a longer sales and installation cycle related to our neuro products in health care and our strong health care orders will convert to billings in the coming quarters.

Laurel Hurd: And as expected retail billings were up in the quarter compared to a soft prior year period retailers, a small part of our overall net sales, but can have periodic unplanned deferrals of store remodel projects, which we experienced in the prior year period.

Laurel Hurd: Turning to orders, strong commercial execution drove a 10% increase in consolidated currency-neutral orders in the third quarter. currency neutral orders in the Americas were up 17% with growth across all product categories. In EAAA, currency neutral orders were flat year over year. Growth in Asia was largely offset by Australia, with EMEA essentially flat. As we head into the fourth quarter, our backlog is strong, up 29% year-to-date. We remain focused on commercial productivity, improving the customer experience, and alighting our sales teams with the fastest growing geographic markets and segments beginning in the U.S.

Laurel Hurd: Turning to orders strong commercial execution drove a 10% increase in consolidated currency neutral orders in the third quarter.

Laurel Hurd: Currency neutral orders in the Americas were up 17% with growth across all product categories.

Laurel Hurd: And a AAA currency neutral orders were flat year over year growth in Asia was largely offset by Australia with EMEA essentially flat.

Laurel Hurd: As we head into the fourth quarter, our backlog is strong up 29% year to date.

Laurel Hurd: We remain focused on commercial productivity, improving the customer experience and our lighting our sales teams with the fastest growing geographic markets and segments beginning in the U S.

Laurel Hurd: Turning to supply chain and manufacturing, we continue to focus on reducing complexity through automation in our manufacturing. As previously mentioned, we will continue to implement new automation and robotics solutions over the next three quarters. We are encouraged by the results of these investments in our U.S. manufacturing and continue to evaluate other automation opportunities which will be funded through manufacturing efficiency savings.

Laurel Hurd: Turning to supply chain and manufacturing, we continue to focus on reducing complexity through automation in our manufacturing facilities. As previously mentioned, we will continue to implement new automation and robotic solutions over the next three quarters. We are encouraged by the results of these investments in our U S manufacturing plants.

Laurel Hurd: To evaluate other automation opportunities, which will be funded through manufacturing efficiency savings.

Laurel Hurd: Before Bruce gets into the financials, I want to share some notable accomplishments related to sustainability. First, we recently announced that we are making it easier for customers to understand the carbon impact of their product selection. We are delivering embodied carbon metrics on all floor plans created by the Interface Design Studio by using a unique combination of technology and data to calculate the carbon footprint of a project's flooring. This helps to put carbon footprint data at the forefront, where we know we lead with differentiated low-carbon products. and it contributes to helping our customers achieve their own sustainability and carbon goal.

Before Bruce gets into the financials.

Laurel Hurd: I want to share some notable accomplishments related to sustainability.

Laurel Hurd: First we recently announced that we are making it easier for customers to understand the carbon impact of their product selection.

We are delivering embodied carbon metrics on all floor plans created by the interface design studio by using a unique combination of technology and data to calculate the carbon footprint of our projects flooring.

Laurel Hurd: This helps to put carbon footprint data at the forefront, where we know we lead with differentiated low carbon products and it contributes to helping our customers achieve their own sustainability and carbon goals.

Laurel Hurd: Second, we've recently announced that we've expanded our carpet recycling capabilities at our facility in the Netherlands, building on 30 years of progress in support of the circular economy. We can now process SeaQuest BIO and SeaQuest BIOx-backed carpet in EMEA to turn used products into new ones, helping us reduce our carbon footprint. Third, I'm pleased to share that Interface received the highest distinction in Reuters recent sustainability awards in the net zero leadership category for a decision to go all in on becoming carbon negative without offset. And finally, I'm proud to report that Interface was added to Newsweek's Greenest Companies list, which is a ranking of top companies in the U.S.

Laurel Hurd: Second we've recently announced so we've expanded our carpet recycling capabilities at our facility in the Netherlands building on 30 years of progress in support of the circular economy.

Laurel Hurd: We can now process SEAQUEST bio and SEAQUEST biotechs backed carpet in EMEA to turn use products into new ones, helping us reduce our carbon footprint.

Laurel Hurd: Third I am pleased to share that interface received the highest distinction and Reuters recent sustainability awards in the net zero leadership category for our decision to go all in on becoming carbon negative without offsets.

Laurel Hurd: And finally I'm proud to report that interface was added to Newsweek's greenest companies list, which is a ranking of top companies in the U S that are committed to environmental sustainability.

Laurel Hurd: that are committed to environmental sustainability. Interface continues to be at the forefront of sustainability as we work to become carbon negative by 2040, and we appreciate the recognition of our progress.

Laurel Hurd: Interface continues to be at the forefront of sustainability as we work to become carbon negative by 2040, and we appreciate the recognition of our progress.

Bruce Hausmann: And with that, I'll turn it over to Bruce to go over the financials. Well, thank you, Laurel, and good morning, everyone. Third quarter net sales totaled $344.3 million, an increase of 11% versus the third quarter of 2023. Third quarter FX neutral net sales in the Americas were up 18% year over year, driven primarily by strength in the education market segment, as well as strong retail billing. FX Neutral net sales and EAAA were flat year-over-year and on an FX Neutral basis, EMEA was up 2%, Asia was down 1%, and Australia was down 9% year-over-year on a strong prior-year comparison.

Laurel Hurd: With that I'll turn it over to Bruce to go over the financials Bruce.

Bruce: Well, thank you Laurel and good morning, everyone.

Bruce: Third quarter net sales totaled $344 3 million, an increase of 11% versus the third quarter of 2023.

Bruce: Third quarter FX neutral net sales in the Americas were up 18% year over year, driven primarily by strength in the education market segment as well as strong retail billings.

Bruce: FX neutral net sales nature boule were flat year over year.

Bruce: Tax neutral basis, EMEA was up 2% Asia was down 1% and Australia was down 9% year over year on a strong prior year comparison.

Bruce Hausmann: Third quarter adjusted gross profit margin was 37.5%, an increase of 158 basis points on raw material cost deflation and higher fixed cost absorption due to increased volume compared to the same period last Adjusted SG&A expenses were $85.5 million, or 24.8% of net sales in the third quarter, compared to $79.2 million, or 25.5% of net sales in the third quarter last year. Third quarter adjusted operating income was $43.5 million, up 34%, versus adjusted operating income of $32.4 million in the third quarter last year. The increase was driven by higher net sales and higher gross profit margins in the quarter.

Bruce: Third quarter adjusted gross profit margin was 37, 5% an increase of 158 basis points on raw material cost deflation and higher fixed cost absorption due to the increased volume compared to the same period last year.

Bruce: Adjusted SG&A expenses were $85 5 million or 24, 8% of net sales in the third quarter compared to $79 2 million or 25, 5% of net sales in the third quarter last year.

Bruce: Third quarter adjusted operating income was $43 5 million up 34% versus adjusted operating income of $32 4 million in the third quarter last year the.

The increase was driven by higher net sales and higher gross profit margins in the quarter.

Bruce Hausmann: Our third quarter effective tax rate benefited from the release of a $2.7 million valuation allowance. This is driven by strong business performance in the U.S. and lower interest expense from accelerated debt repayment. The release of this valuation allowance was unique to Q3 2024 and is not expected to recur. Third quarter adjusted EPS was $0.48 versus $0.28 in the third quarter last year. Third quarter's adjusted EBITDA was $53.7 million versus $43.7 million in the third quarter last year. We generated $76.2 million of cash from operating activities in the third quarter. In line with our capital allocation strategy, we repaid $51.3 million of debt in the third quarter and $80.9 million year-to-date.

Bruce: Our third quarter effective tax rate benefited from the release of a $2 7 million valuation allowance. This is driven by strong business performance in the U S and lower interest expense from accelerated debt repayment.

Bruce: The release of the valuation allowance was unique to Q3 2024 and is not expected to recur.

Bruce: Third quarter adjusted EPS was <unk> 48.

Bruce: Versus 28 cents in the third quarter last year.

Bruce: Third quarter, adjusted EBITDA was $53 7 million versus $43 7 million in the third quarter last year.

Bruce: We generated $76 $2 million of cash from operating activities in the third quarter.

Bruce: In line with our capital allocation strategy, we repaid 51 3 million of debt in the third quarter and $80 9 million year to date.

Bruce Hausmann: Our balance sheet remained strong with $415 million of liquidity at quarter end and our net leverage ratio was 1.1 times calculated as net debt divided by the last 12 months of adjusted EBITDA. Capital expenditures were $6.5 million in the third quarter of 2024 compared to $5.9 million in 2023.

Bruce: Our balance sheet remains strong with $415 million of liquidity at quarter end and our net leverage ratio was one one times calculated as net debt divided by in the last 12 months of adjusted EBITDA.

Bruce: Capital expenditures were $6 5 million in the third quarter of 2024 compared to $5 9 million in 2023.

Bruce Hausmann: Turning to our outlook, we delivered impressive results in the third quarter of 2024 and enter fourth quarter with strong orders and a healthy backlog. As a reminder, in the fourth quarter last year, gross profit margin benefited 160 basis points from nonrecurring items that reduced cost of sales in that quarter. Separately, we continue to anticipate strong retail billings in the fourth quarter of 2024, which has slightly lower gross profit margins than our more typical premium product.

Bruce: Turning to our outlook, we delivered impressive results in the third quarter of 2024 and enter fourth quarter with strong quarters and a healthy backlog.

Bruce: As a reminder, in the fourth quarter last year gross profit margin benefited 160 basis points from nonrecurring items that reduced cost of sales in that quarter.

Bruce: Currently we continue to anticipate strong retail billings in the fourth quarter of 2024, which has slightly lower gross profit margins that are more typical premium products.

Bruce Hausmann: With that backdrop in mind, we are raising our full year outlook and are now anticipating the following for the full fiscal year 2024. Net sales of $1.315 billion to $1.325 billion. adjusted gross profit margin of approximately 36.6%. adjusted SG&A expenses of approximately $345 million. adjusted interest and other expenses of approximately $27 million. and adjusted effective tax rate for the full year of approximately 25%. Fully diluted with an average share count of approximately 58.89 shares. and capital expenditures of approximately $37 million.

Bruce: With that backdrop in mind, we are raising our full year outlook and are now anticipating the following for the full fiscal year 2024.

Bruce: Net sales of $1 315 billion to 132 5 billion.

Bruce: Adjusted gross profit margin of approximately 36, 6%.

Bruce: Adjusted SG&A expenses of approximately $345 million.

Bruce: Adjusted interest and other expenses of approximately $27 million.

And adjusted effective tax rate for the full year of approximately 25%.

Fully diluted weighted average share count of approximately $58 8 million shares.

Bruce: And capital expenditures of approximately $37 million.

Laurel Hurd: And with that, I'll turn the call back to Laurel for concluding remarks.

Speaker Change: And with that I'll turn the call back to Laura for concluding remarks.

Laurel Hurd: Thank you, Bruce.

Laura: Thank you Bruce I want to thank everyone for joining the call today.

Laurel Hurd: I want to thank everyone for joining the call today, and I would especially like to extend my thanks to the entire Interface Our results this quarter demonstrate the strength and effectiveness of our One Interface strategy, and I'm incredibly proud of the progress we have made across all areas of our business. As we look ahead, our focus remains on investing in the business, operational excellence, and delivering value to both our customers and shareholders. We are confident in our ability to navigate the dynamics of our current market while seizing opportunities that align with our long-term vision.

Laura: I'd, especially like to extend my thanks to the entire interface team.

Laura: Our results this quarter demonstrate the strength and effectiveness of our one interface strategy and I'm incredibly proud of the progress we've made across all areas of our business. As we look ahead, our focus remains on investing in the business operational excellence and delivering value to both our customers and shareholders. We are confident in our ability to navigate the.

<unk> of our current market, while seizing opportunities that align with our long term vision.

Laurel Hurd: With that, I will open it up to questions.

Laura: With that I will open it up to questions operator.

Operator: Operator? Thank you.

Speaker Change: Thank you at this time I would like to remind everyone in order to ask a question press star and the number one on your telephone keypad.

Operator: At this time, I would like to remind everyone in order to ask a question, press star and the number 1 on your telephone keypad.

Catherine Thompson: Our first question comes from the line of Catherine Thompson of TRG, your line is open. Hi. Thank you for taking my questions today.

Speaker Change: Our first question comes from the line of Kathryn Thompson of Georgi Your line is open.

Kathryn Thompson: Hi, Thank you for taking my questions today first wanted to focus on non res repair and remodel and we've talked for a few companies. This earning season talk about an improvement in activity in non res repair and model.

Catherine Thompson: First, I want to focus on non-res, repair, and remodel. And we've heard a few companies this earnings season talk about an improvement in activity in non-res, repair, and remodel. And you seem to be seeing that as well, given the pace of orders in the past few quarters and bigger growth this quarter in education and healthcare. How would you characterize the state of non-res, repair, and remodel leading into 2025, and how does it compare to going into the current year, last year? So really, you know, what's the pace now going into next year, and how does it compare to last year at the same time, as you think about momentum?

Kathryn Thompson: You seem to be seeing that as well given the pace of orders in the past few quarters.

Kathryn Thompson: And a bigger growth this quarter and education and health care.

Kathryn Thompson: Could you how would you characterize the state of <unk>.

Kathryn Thompson: Non res repairing model leading into 2025, it how does it compare to <unk>.

Kathryn Thompson: Going into the.

Kathryn Thompson: Current year last year, so really.

Kathryn Thompson: What's the pace down going into next year, and how does it compare to last year.

As you think about momentum.

Laurel Hurd: Thanks, Catherine.

Speaker Change: Thanks Catherine.

Laurel Hurd: First, I'd say I'm really proud of the progress that the team's made. You know, 18% net sales growth in the Americas is a really, really strong quarter. And as you said, our order book also looks good. So we're saying, I think we're definitely outpacing the market with respect to the total market. We're feeling really good about, you know, the corporate environment is, we're continuing to see more and more activity as people are bringing more associates back to work. So those projects are coming, I think, stronger certainly than a year ago. Our optimism is building with respect to that.

Speaker Change: First I would say I'm really proud of the progress that the team has made.

Speaker Change: <unk> net sales growth in the Americas is a really really strong quarter.

Speaker Change: And as you said our order book also looks good. So we're saying I think we're definitely outpacing the market with respect to the total market.

Speaker Change: We're feeling really good about the corporate environment.

Speaker Change: Is we're continuing to see more and more activity.

Speaker Change: People are bringing more associates back to work. So those projects are coming I think stronger certainly than a year ago. Our optimism is building with respect to that as you said our education business remains very strong as we are selling the full product portfolio seeing a lot of growth across our newer products as well in education.

Laurel Hurd: As you said, our education business remains very strong as we're selling the full product portfolio, seeing a lot of growth across our Nora products as well in education, both in K through 12 and higher ed. So I think we're optimistic that the momentum is building. And within that, we are proud of the team's ability to take share. Catherine, I agree.

Speaker Change: Both in K through 12 and higher Ed.

So I think we're optimistic that the momentum is building and within that we are.

Speaker Change: Im proud of the team's ability to take share.

Speaker Change: Catherine I agree the other thing Thats really interesting to me on our earnings this quarter or is that year to date, all three product lines were up both in price and volume and.

Laurel Hurd: The other thing that was really interesting to me on our earnings this quarter is that year to date, all three product lines were up, both in price and volume.

Laurel Hurd: And we couldn't say that last year. So it's just another testament to the momentum that we're seeing in the business, the momentum that we're seeing now versus a year ago. So great momentum inside the business and great to see the volume up, as well as us being able to hold price in the market.

Speaker Change: We couldnt say that last year. So it's just another testament to the momentum that we're seeing in the business. The momentum that we're seeing now versus a year ago. So so great momentum inside the business and great to see the volume up as well as us being able to hold price in the market.

Catherine Thompson: Okay. Helpful.

Speaker Change: Okay helpful and just a follow on to that.

Laurel Hurd: And just a follow-on to that, on order growth in America, can you give any detail on the breakout across verticals or products? We don't really... Yeah, we don't give a ton of a ton of detail in that breakout. The one thing that we did mention in the prepared remarks is that our health care orders were up double digits in the quarter. So we're feeling optimistic about that health care business. And those orders will read through over the coming quarter. Some of those take longer to read through. So that's good momentum for us in the future.

On order growth in the Americas can you give any detail on the breakout across verticals or products.

Speaker Change: We don't really does leading the growth.

Speaker Change: Yeah, we don't give a ton of it.

Speaker Change: Kind of detailing that breakout the one thing that we did mentioned in the prepared remarks is that our health care orders were up double digits in the quarter. So we're feeling optimistic about that healthcare business and those orders will read through over the coming quarters. Some of those take longer to read through so that's good momentum for us in the future.

Alex Paris: Okay, great.

Speaker Change: Okay, great. Thanks, so much.

Alex Paris: Thanks so much.

Speaker Change: Yes.

Alex Paris: Your next question comes from the line of Alex Paris with Barrington Research. Your line is open. Hi guys, thanks for taking my question. Congratulations on another beaten race. I just had a question kind of following up on Catherine's regarding billing. So, again, education was up very strong, up 18 percent. Corporate office was up 2 percent, kind of bucking the industry trend, and you made some favorable comments about return to office. I just thought whatever additional color I can get in those two categories, but also wanted to talk a little bit about. Retail and Healthcare. So retail's finally up from down last year due to project delays.

Speaker Change: Your next question comes from the line of Alex Paris with Barrington Research. Your line is open.

Alex Paris: Hi, guys. Thanks for taking my question.

Alex Paris: Congratulations on another beat and raise.

Speaker Change: Thanks Alan.

Alex Paris: I just had a question kind of following up on catherines regarding billing. So again education was up very strong up 18% corporate office was up 2% kind of booking.

Alex Paris: The industry trend and you made some favorable comments about return to office.

Alex Paris: I just thought.

Alex Paris: Whatever additional color I can get in those two categories, but also wanted to talk a little bit about.

Alex Paris: Retail and health care, so retail's finally up.

Alex Paris: Yes.

Alex Paris: From down last year due to product.

Laurel Hurd: So what's going on in retail? I'll start there. Yeah, great. So our retail business did come back as we had expected. And again, this was really project delays last year. So in the back half of last year, we had several store remodels that were delayed and pushed into the back half of this year, and those read through in the quarter. If you look at the Americas business, as an example, for that 18%, about eight points of that growth was the retail comeback, which we had expected, and then 10 points of growth across the rest of the market.

Project delays, so what's going on in retail.

Start there.

Speaker Change: Yeah, great. So.

Speaker Change: Our retail business did come back as we had expected and again. This was really project delays last year. So in the back half of last year, we had several.

Speaker Change: Store Remodels that were delayed and pushed into the back half of this year and those read through in the quarter.

You look at the Americas business I think as an example for that 18% about eight points of that growth was the retail come back, which we had expected and then 10 points of growth across the rest of the market.

Laurel Hurd: So a strong quarter for retail, which is exactly what we had expected. We expect that also to carry somewhat forward into the fourth quarter. And then our corporate office business, you know, it does continue to perform really well. It was actually up mid-single digits in the Americas. so even stronger than globally our 2% growth. And our teams are really winning projects, as Bruce said, across all categories. So they're doing an incredible job with these one interface selling teams of selling the full suite of products across LVT, Carpetile, and also Nora Rubber. So strong growth in corporate as well.

Speaker Change: Our strong.

Speaker Change: A strong quarter for retail, which is exactly what we had expected. We expect that also to carry some somewhat forward into the fourth quarter and then our corporate office business. You know it does continue to perform really well.

Speaker Change: Mid single digits in the Americas.

Speaker Change: So even stronger than our.

Globally, our 2% growth and our teams are really winning projects with Bruce that across all categories. So they're doing an incredible job with these one interface selling teams of selling the full suite of products across L. T carpet tile and also Nora rubber.

Speaker Change: Strong growth in corporate as well.

Alex Paris: That's great.

Speaker Change: That's great and then healthcare.

Laurel Hurd: And then health care, you know, you said that that orders were up nicely, which is great. But revenue, net sales were down in health care slightly. What do you attribute that to? Yeah, you know, healthcare, for us, those projects get installed over time. So the time horizon is a bit different. The double digit order growth in healthcare is really encouraging and a testament to the team. Again, the combined selling team is really focusing on the end market. And we expect those orders to read through. Those projects get installed sometimes over one to two years. They're bigger projects and the orders come in in bigger chunks.

Speaker Change: You said that.

Speaker Change: Orders were up nicely, which is great, but revenue net sales were down in healthcare slightly.

Speaker Change: What do you attribute that to.

Speaker Change: Yes health care for us those projects get installed over time. So the time horizon is a bit different the double digit order growth in healthcare is really encouraging and a testament to the team's again the combined selling team is really focusing on the end market and we expect those orders to read through those.

Speaker Change: <unk> get installed sometimes over one to two years, they are bigger projects and the orders come in in bigger chunks, but they also get the billings reading through in bigger chunks over a longer period. So we're encouraged that we saw that level of net sales growth in the quarter.

Laurel Hurd: But they also get the billings read through in bigger chunks over a longer period of time. So we're encouraged that we saw that level of net sales growth in the quarter, while healthcare was not as strong, and then healthcare orders up, which shows that momentum will continue to read through in the future.

Speaker Change: While healthcare was not as strong and then health care orders up which shows that momentum will continue to read through in the future.

Laurel Hurd: Does that strength in orders in health care translate into higher net sales in health care in the fourth quarter? I would expect it to I think it also will flow through into next year. So again, some of those projects are like small medical buildings, and those will turn in the quarter. Some of those projects are large healthcare systems that may have multiple buildings and multiple floors that get installed over 12 to 18 months.

Speaker Change: Does that that strength in orders in healthcare translate into higher net sales in health care in the fourth quarter.

I would expect it to I think it also will flow through into next year. So again some of those projects are like small medical buildings and those will turn in the quarter. Some of those projects are large health care systems that may have multiple buildings multiple floors that get installed over 12 to 18 months.

Laurel Hurd: Great, I appreciate that color. And then I might have missed it, but did you comment on billings across product categories? I think you said they were up year-to-date in all three, carpet tile, LVT, and rubber. That's right. Yep.

Speaker Change: Great I appreciate that color and then.

Speaker Change: I might've missed it but did you comment on billings across product categories. I think you said they were up year to date in all three carpet tile <unk> and rubber.

Speaker Change: That's right.

Speaker Change: Okay.

Laurel Hurd: Alex, our billings were up with price and volume, which is also which is which is a great sign. So in all three product categories year to date. Great.

Speaker Change: Great.

Speaker Change: Alex our billings were up with price and volume, which is also which is which is a great sign so in all three product categories year to date.

Speaker Change: Great.

Laurel Hurd: Were they up in the third quarter, or just up here today, or both? Two out of the three were up, and they were up with volume. Yeah, that's, you know, again, an encouraging sign that it's really encouraging to see how much volume has come back while we're able to hold price. So All encouraging stuff on the top line. Absolutely. Thank you.

Speaker Change: Yeah.

Were they up in the third quarter or just up year to date or both.

Speaker Change: Two out of the three were up.

And they were up with volume.

Speaker Change: So.

Speaker Change: Yes.

Speaker Change: Yes, again, an encouraging sign.

Speaker Change: It's really encouraging to see how much volume that's come back.

Speaker Change: All were able to hold price so.

Speaker Change: All encouraging stuff on topline.

Speaker Change: Absolutely. Thank you and then the final question from me Great outperformance on the adjusted gross margin versus your guidance I think you had guided to approximately 36% and came in at 37, 5%.

Alex Paris: Then the final question from me. Great outperformance on the adjusted gross margin versus your guidance. I think you had guided to approximately 36%. It came in at 37 and 1 1.5%.

Speaker Change: Yes.

Alex Paris: What is your long-term target there? I think you want to get back to pre-COVID levels. What is that? And then how long will it take you to get there? Is it like a 50 bps per year sort of thing, or is it faster, sooner?

Speaker Change: What is your long term target there I think you wanted to get back to pre COVID-19 levels. What it what is that and then how long will it take you to get there is it like a 50 bps per year sort of thing or is it faster sooner.

Laurel Hurd: Alex, you're right. Exactly. Our ambition is to get back up to 38% to 38.5%, and we're really encouraged by the progress that we're making.

Speaker Change: Alex you're right exactly where we are.

Speaker Change: Our ambition is to get back up to 38 to 38, 5% and we're really encouraged by the progress that we're making.

Bruce Hausmann: We haven't given a specific timeline. We're honestly just trying to get there as fast as we can, and again, encouraged by the progress. I would just say, Alex, the good news is that you kind of mentioned it, you know, we brought up our gross profit margins in Q4 and for the full year. So if you sort of think about our prior guide for Q4, it was around 34.1%. We brought that up 80 basis points in Q4 to 34.9 as our midpoint guide. And for the full year, as you pointed out, you know, our prior guide was 36%, and now we brought it up to 36.6.

Speaker Change: We haven't given a specific timeline, where honestly just trying to get there as fast as we can and again encouraged by the progress.

Speaker Change: And I would just say Alex the good news is that you kind of mentioned it we brought up our gross profit margins in Q4 and for the full year.

Speaker Change: So if you sort of think about our prior guide for Q4. It was around 34, 1%. We brought that up 80 basis points in Q4 to $34 nine as our midpoint guide and for the full year as you pointed out.

Speaker Change: Our prior guide was 36% and now we brought it up to $36 six so really good strong momentum on that gross profit line.

Bruce Hausmann: So really good, strong momentum on that gross profit line or row.

Speaker Change: Okay.

Speaker Change: Yeah.

Alex Paris: Great news.

Speaker Change: Great David. Thank you so much I appreciate the additional color I will get back into the queue.

Alex Paris: Thank you so much. I appreciate the additional color. I'll get back into the queue.

David Macgregor: Thank you. Your next question comes from the line of David MacGregor with Longbow Research. Yeah, thanks for taking my questions and good morning to everyone. Congratulations on all the progress. I guess, what percentage of wins at this point have more than just carbonyl, so include the LBT and the Nora, versus how that KPI might have stood a year ago?

Speaker Change: Thank you thanks Bill.

Speaker Change: Your next question comes from the line of David Macgregor with Longbow Research. Your line is open.

David Macgregor: Yes, thanks for taking my questions and good morning to everyone.

David Macgregor: Congratulations on all the progress tremendous to see.

David Macgregor: I guess what percentage of wins at this point have.

David Macgregor: More than just carpet tile. So include the LPG and the Nomura versus how that TPI might've stood a year ago 18 months ago.

Laurel Hurd: It's a great question, David, and not something that we disclose regularly. I would say it's increasing, for sure. An example, I would say, is in our education space, where we had primarily, initially, we were just selling carpet tile in education. We broadened that nicely to include carpet tile and LVT as pretty standard in selling to the education space. And what we're finding now is NORA is also included in those, both in K-12, but also in higher ed. So, for example, we're getting lab spaces and other spaces in higher ed, which we maybe hadn't had as part of that portfolio in the past.

Speaker Change: Yes, it's a great. It's a great question, David and not and not something that we disclose regularly I would say its increasing for sure. An example, I would say is.

Speaker Change: In our education space, where we had primarily initially we were just selling carpet tile in education, we've broadened that nicely to include carpet tile and <unk>.

Speaker Change: Pretty standard and selling to the education space and what we're finding now is Nora is also included in those both in K through 12, but also in higher Ed. So for example, we're getting lab spaces in other spaces in the higher Ed, which we may be hadn't had as part of that portfolio in the past. So it is definitely increasing.

Laurel Hurd: So, it's definitely increasing and encouraged by what we're seeing there. I think there's more to go. And I guess this is all just one interface. It's not necessarily evolving preferences with the customer. It's more you're taking share in those categories with an increasing presence.

Speaker Change: And encouraged by what we're seeing there I think there's more to go.

Speaker Change: Okay.

Speaker Change: It's encouraging.

Speaker Change: And I guess this is all just one interface, that's not necessarily evolving preferences with the customer it's more youre taking share in those categories with increasing prices.

Laurel Hurd: Yeah, you know, it's interesting when when we think about what we did with the One Interface selling teams, which hit, as you know, starting in January, part of that model was that we increased our feet on the street for a Nora brand by about 20% to really round out that the combined selling teams and make sure we had enough coverage and Nora to execute that model. What we're also seeing is that we actually put the Nora brand in the hands of all of our interface sellers by changing our compensation structure so that now we're selling as one team and compensating as one team.

Speaker Change: Yeah, it's interesting when we think about what we did with the one interface selling teams, which hit as you know starting in January.

Speaker Change: Part of that model was that we increased our feet on the street for our Knorr brand by about 20% to really round out that.

Speaker Change: The combined selling teams and make sure we had enough coverage in order to execute that model.

Speaker Change: What we're also seeing is that we actually put the Nora brand in the hands of all of our interface sellers by changing our compensation structure. So that now we're selling as one team and compensating as one team and so the energy around that rubber as a great solution for.

Laurel Hurd: And so the energy around that, you know, rubber is a great solution for a lot of flooring opportunities. And we've really got an amplified effort across our entire interface selling team in addition to that increase in feet on the street specific to Nora. So we're really seeing a multiplier effect there that's stronger than we anticipated.

Speaker Change: A lot of flooring opportunities and we've really gotten amplified effort across our entire interface selling team. In addition to that increase in feet on the street specific to north So we're really seeing a multiplier effect there.

Speaker Change: Stronger than we anticipated.

Laurel Hurd: And so with the growth in NORA, just in terms of penetrating your existing... base. In addition to that, you're talking about growth beyond health care. How do you stand in terms of available capacity, Nora?

Speaker Change: And so with the growth in Nora just in terms of penetrating your existing.

Speaker Change: In addition to that you are talking about growth beyond health care.

Speaker Change: How do you stand in terms of available capacity at Nora do you have the capacity to support and how much growth.

Laurel Hurd: Do you have the capacity to support how much growth and when do you have to start deploying?

Speaker Change: When do you have to start deploying capital too.

Speaker Change: To expand that.

Laurel Hurd: Yeah, it's a great question. And we're talking a lot about that. I think I think the good news right now is we've got we invested in some automation equipment in Nora that is live now that's really helping us to increase our throughput. So we have what we need, I think we'll continue to invest in that space. And you may see some additional investments in Nora as we continue to grow. But we're continuing to kind of bring on more and more people to support the growth and also continue to invest in automation. So I think we're in good shape.

Speaker Change: Yes, it's a great question and we're talking a lot about that I think I think the good news right. Now is we've got we invested in.

Speaker Change: And some automation equipment and Nora that is live now that's really helping us to increase our throughput. So we have what we need I think we'll continue to invest in that space. Then you may see some additional investments in Nova as we continue to grow.

Speaker Change: But we're continuing to kind of bring on more and more people to support the growth and also continue to invest in automation. So I think we're in good shape, where we're talking about it every day.

Laurel Hurd: We're, we're talking about it every day.

David Macgregor: got it. On the raw materials, how much of the benefit that you achieved, well, first of all, maybe can you just talk about what price cost might have contributed to the gross margin? Yeah, David, it was a...

Speaker Change: Got it on the raw materials, how much of the benefit that you achieved first of all maybe could you just talk about what price costs might have contributed to the gross margins.

David Macgregor: Hey, David.

Bruce Hausmann: It was a blend between, if you look at the 158 basis points of gross margin expansion in Q3, it was a blend of raw material cost deflation and also higher fixed cost absorption, or lower cost per unit, on higher volume. And part of the contribution of that was that we actually beat our revenue number in Q3. So compared to where we thought we would be in Q3, we had more throughput through the plants, which helped us a lot on our fixed cost absorption.

David Macgregor: It was a blend between if you look at the 158 basis points of gross margin expansion in Q3. It was a blend of raw material cost deflation and also higher fixed cost absorption or lower cost per unit on higher volume and part of the contribution of that was that we.

David Macgregor: Beat our revenue number in Q3.

So compared to where we thought we would be in Q3, we had more throughput through the plants.

Which helped us a lot on our fixed cost absorption.

Bruce Hausmann: And on the raw side, things are leveling out from an inflation-deflation standpoint, but we did get a little bit of year-over-year lift in Q3 that will start to moderate as we move into Q4, and all that's built into our guide. And David, I'd just add to that also, when our America's Business is up 18%, that regional mix impact also helps us, so that flows through as a benefit as well.

And on the raw side things are leveling out from a from a inflation deflation standpoint, but we did but we did get a little bit of year over year lift in Q3 that will start to moderate as we move into Q4 and all of that's built into our guidance.

Speaker Change: And David I would just add to that also in our Americas business is up 18% that regional mix impact also helps us to that that flows through as a benefit as well that's true.

Bruce Hausmann: It's true.

Bruce Hausmann: I guess I'm trying to get a sense of how much benefit there is from just movement in the raw material markets themselves in terms of the price you're paying for these factors versus some of the benefit associated with bringing on a new supply chain leader and really getting much more process oriented around procurement. I think it's a combination of all those things. You put all of those positive pieces in, and it blends into the 158 BIPs, as Laurel mentioned. Laurel had a really good point that the geographic mix helped us a lot as well, offset a little bit by the retail mix.

Speaker Change: I guess I'm trying to get a sense of how much benefit there is from just movement in the raw material.

Speaker Change: Markets themselves in terms of the price you're paying for these factors versus some of the benefit associated with bringing on new supply chain leader and really getting them.

Speaker Change: Much more process oriented around procurement.

Speaker Change: I think it's a combination of all those things.

Speaker Change: And if you put all of those all of those positives pieces in and it's really it's really it blends into the 158 bps.

Speaker Change: As Laura mentioned it.

<unk> had a really good point that.

The geographic mix helped us a lot as well offset a little bit by the retail mix. So.

Bruce Hausmann: So there's a lot of pieces in there.

Speaker Change: Lots of a lot of pieces in there so and I think a lot of the things that we're seeing with respect to our investments in automation.

Bruce Hausmann: And I think a lot of the things that we're seeing with respect to our investments in automation are yet to come, as we've said. I'm pleased with the progress. We now have, I think it's three machines up and running, maybe the fourth is live by now in our Georgia facility that'll really help with the automation. there, but that's going to continue to play out over the next year. And that's versus, I think you had one line up and running last quarter. That's right. That's right, David. So good progress there.

Speaker Change: Are yet to come as we've as we've said.

I am pleased with the progress we now have three.

Speaker Change: Three machines up and running maybe the fourth as well as by now.

Our Georgia facility that will really help with the automation.

Speaker Change: There, but thats going to continue to play out over the next year.

Speaker Change: And Thats versus I think you had one line up and running last quarter Thats right.

David Macgregor: David Okay.

David Macgregor: So good progress there.

Bruce Hausmann: I guess just thinking through to 2025, and I'm not sure, you know, obviously there's a lot of uncertainty still remaining with regard to what 2025 may bring, but I'd be interested in your thoughts in terms of your ability to maintain kind of a gross margin progression, not so much based on what the market may bring, because as we've said, that's uncertain, but just based on the idiosyncratic drivers that you've got in place, the automation, the procurement, the one interface initiatives. What do you think that could contribute to gross margin progression as you look into You know, as we've said, our ambition, as you know, is to get back to 38, 38 and a half.

I guess, just thinking through to 2025 and I'm not sure obviously theres a lot of uncertainty still remaining with regard to 2014, we bring but.

Speaker Change: I would be interested in your thoughts in terms of your ability to maintain kind of a gross margin progression not so much based on what the market may bring because as we've said that's uncertain, but just based on the idiosyncratic drivers that you've got in place the automation the procurement one interface initiatives.

Speaker Change: What do you think that could contribute to gross margin progression as you move into the next year.

Speaker Change: As we as we've said our ambition as you know is to get back to 38, 38, and a half I think work.

Bruce Hausmann: I think we're, from a timing standpoint this year, I think we'll be ahead of where we thought. So I'm encouraged by that. And yet we still have a lot yet to deploy that I don't think is reading through the P&L yet. So I'm encouraged that we'll continue to make progress. And as you said, the market will, you know, will ride that and see where that takes us. But we're, through all of this, we've just said we're going to not pay so much attention to what the markets do, and we're going to do everything we can to continue to drive market share gains and growth, which and then also the supply chain initiatives, all that is within our...

From a timing standpoint. This year I think we'll be ahead of where we thought so I'm encouraged by that and yet we still have a lot yet to deploy that I don't think it's reading through the P&L yet.

Speaker Change: So I'm encouraged that we'll continue to make progress.

Speaker Change: As he said the market will we'll ride that and see where that takes us.

Speaker Change: Through all of this we've just said we're going to not pay so much attention to what the markets do and we're going to do everything we can to continue to drive market share gains and growth, which.

Speaker Change: And then and then also that the supply chain initiatives all of that is within our.

Bruce Hausmann: It's within our control to drive that, so I think we're feeling good.

Speaker Change: It's within our control to drive that so I think we're feeling good.

David Macgregor: Okay, and then just wrapping up for me, I guess the question on SG&A, you know, you're guiding to 345 million this year of SG&A. I guess a couple of questions here, you know, how much revenue growth can you support based on kind of that level of spend? I'm guessing you're gonna get some inflation there in 2025, 3% inflation, it would be an extra 10 million, but maybe offset that with some productivity and maybe offset, you know, increasing growth spending with cutbacks and non-growth SG&A.

Speaker Change: Okay, and then just wrap it up for me I guess a question on SG&A.

Speaker Change: You're guiding to $345 million this year of SG&A.

Speaker Change: I guess a couple of questions here.

Speaker Change: How much revenue growth can you support based on kind of that level of spend.

Speaker Change: I'm guessing you're going to get some inflation there in 2025, 3% inflation it would be an extra $10 million, but maybe offset that with some productivity.

Speaker Change: And maybe offset.

Speaker Change: Yes.

Speaker Change: Kris and growth spending cuts.

Speaker Change: Cutbacks in non growth SG&A I'm not sure how you approach that.

Laurel Hurd: I'm not sure how you approach that, but I guess the question is just how much upside is left in terms of your ability to grow revenue off SG&A before you have to really take SG&A. So, as we've said, we've been really focused on being efficient in our SG&A, and we'll make investments, very thoughtful and intentional investments that we believe will read through to growth. The great example of that is adding the feet on the street to the NORA business, which is paying back in dividends. And we're analyzing all of that to see how much more do we need in 2025 to deliver the growth expectations that we have for ourselves.

Speaker Change: I guess the question is just how much.

Speaker Change: Is left in terms of your ability to grow revenue of SG&A before you have to really take SG&A to the next level.

Speaker Change: So as we as we've said what we've been really focused on being efficient in our SG&A and we'll make investments very thoughtful and intentional investments that we believe will read through to growth.

Speaker Change: Great example of that is adding the feet on the street.

Speaker Change: To the nor business, which is paying back in dividends and we are analyzing.

Speaker Change: Analyzing all of that to see how much more do we need in 2025 to deliver the growth expectations that we have for ourselves and yet will be very diligent on anything that doesn't touch the customer the innovation or the product design and development. So.

Laurel Hurd: And yet, we'll be very diligent on anything that doesn't touch the customer, the innovation, or the product design and development. So, it's a dance, as you know, right? We need to make sure that we fund the growth. We'll be really intentional. We do a lot of test and learn to see whether or not things pay back. So, we're putting really good money to work for us and then being really efficient on anything that doesn't touch the customer.

Speaker Change: It's a dance as you know right we need to make sure that we fund the growth will be really intentional we do a lot of test and learn to see whether or not things payback. So we're putting really good money to work for us and then being really efficient on anything that doesn't cut it doesn't touch the customer.

David Macgregor: Great, well thanks very much for answering my questions and congratulations on all the progress. Thanks David, I appreciate it.

Speaker Change: Great. Thanks, very much for answering my questions and congratulations on all the progress.

David Macgregor: Thanks, David appreciate it.

Speaker Change: Okay.

Operator: There are no further questions at this time.

Speaker Change: And there are no further questions at this time I will turn the call back over to Laurel Hurd CEO for closing remarks.

Laurel Hurd: I will turn the call back over to Laurel Hurd, CEO, for closing remarks. Well, I want to thank the entire Interface team for an excellent quarter.

Well I want to thank the entire interface team for an excellent quarter congratulations to the team and thanks, everyone for listening to the call and have a great day.

Laurel Hurd: Congratulations to the team, and thanks everyone for listening to the call, and have a great day. Thank you.

Speaker Change: Alright.

Speaker Change: Thank you. This does conclude today's conference call you may now disconnect.

Operator: This does conclude today's conference call. You may now...

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