Interface Announces Amendment to Credit Agreement Including Seven Quarters of Covenant Relief

Rhea-AI Summary

Interface, Inc. (Nasdaq: TILE), a leader in sustainable flooring, announced an amendment to its syndicated credit facility, enhancing financial covenant flexibility through April 2022. This amendment raises the consolidated net leverage ratio covenant limit for seven quarters while imposing a higher interest rate during this period, without changing borrowing limits. CFO Bruce Hausmann emphasized the importance of this flexibility to manage the balance sheet strategically amidst the ongoing global pandemic and highlighted strong liquidity as a key asset.

Positive

• Enhanced financial covenant flexibility through April 2022.
• Increased consolidated net leverage ratio covenant limit for seven quarters.
• Strong liquidity maintained amid global pandemic.

Negative

• Higher interest rates imposed during the flexibility period.

ATLANTA, July 15, 2020 /PRNewswire/ -- Interface, Inc. (Nasdaq: TILE), a worldwide commercial flooring company and global leader in sustainability, today announced an amendment to its syndicated credit facility providing for, among other things, enhanced financial covenant flexibility through the fiscal quarter ending April 3, 2022. The amended credit agreement raises the consolidated net leverage ratio covenant limit for seven quarters and includes a higher interest rate during those quarters with no change to the borrowing limits.

"The amendment to our financial covenant provides us with the flexibility to strategically manage our balance sheet in alignment with our business priorities," said Bruce Hausmann, CFO of Interface.  "We appreciate the support of our banking group as we navigate through the global pandemic and position our business for the long term. Interface continues to maintain strong liquidity, and we believe the cooperation of our lenders underscores their confidence in our business."

About Interface

Interface, Inc. is a global flooring company specializing in carbon neutral carpet tile and resilient flooring, including luxury vinyl tile (LVT) and nora® rubber flooring. We help our customers create high-performance interior spaces that support well-being, productivity, and creativity, as well as the sustainability of the planet. Our mission, Climate Take Back™, invites you to join us as we commit to operating in a way that is restorative to the planet and creates a climate fit for life.

Learn more about Interface at interface.com and blog.interface.com, our nora brand at nora.com, our FLOR® brand at FLOR.com, and our Carbon Neutral Floors™ program at interface.com/carbonneutral.

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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 may be identified by words such as "may," "expect," "forecast," "anticipate," "intend," "plan," "believe," "could," "should," "goal," "aim," "objective," "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 but are not limited to the risks under the following subheadings in "Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended December 29, 2019 and our subsequent Quarterly Report on Form 10-Q for the period ended April 5, 2020: "Sales of our principal products have been and may continue to be affected by adverse economic cycles in the renovation and construction of commercial and institutional buildings"; "We compete with a large number of manufacturers in the highly competitive floorcovering products market, and some of these competitors have greater financial resources than we do. We may face challenges competing on price, making investments in our business, or competing on product design"; "Our success depends significantly upon the efforts, abilities and continued service of our senior management executives, our principal design consultant and other key personnel (including sales personnel), and our loss of any of them could affect us adversely"; "Our substantial international operations are subject to various political, economic and other uncertainties that could adversely affect our business results, including by restrictive taxation or other government regulation and by foreign currency fluctuations"; "The uncertainty surrounding the implementation and effect of the U.K.'s exit from the European Union, and related negative developments in the European Union could adversely affect our business, results of operations or financial condition"; "Our manufacturing and supply chain abilities may be adversely impacted by an extended shutdown of our operations in China due to the recent coronavirus outbreak"; "The SEC's investigation into our earnings per share ("EPS") calculations and rounding practices could result in potential sanctions or penalties, distraction to our management and result in litigation from third parties, each of which could adversely affect or cause variability in our results of operations and financial condition"; "Large increases in the cost of petroleum-based raw materials could adversely affect us if we are unable to pass these cost increases through to our customers"; "Unanticipated termination or interruption of any of our arrangements with our primary third party suppliers of synthetic fiber or our sole third party supplier for luxury vinyl tile ("LVT") could have a material adverse effect on us"; "If we fail to realize the expected synergies and other benefits of the nora acquisition, our results of operations and stock price may be negatively affected"; "We have a significant amount of indebtedness, which could have important negative consequences to us"; "The market price of our common stock has been volatile and the value of your investment may decline"; "Our earnings in a future period could be adversely affected by non-cash adjustments to goodwill, if a future test of goodwill assets indicates a material impairment of those assets"; "Changes to our facilities could disrupt our operations"; "Our business operations could suffer significant losses from natural disasters, catastrophes, fire, pandemics or other unexpected events"; "Disruptions to or failures of our information technology systems could adversely affect our business"; "The COVID-19 pandemic could have a material adverse effect on our ability to operate, our ability to keep employees safe from the pandemic, our results of operations, financial condition, liquidity, capital investments, our near term and long term ability to stay in compliance with debt covenants under our Syndicated Credit Facility, our ability to refinance our existing indebtedness, and our ability to obtain financing in capital markets"; "Future earnings could be negatively impacted by additional goodwill, intangible assets and property, plant and equipment impairments"; and "We face risks associated with litigation and claims.".

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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SOURCE Interface, Inc.

FAQ

What is the significance of Interface's credit facility amendment announced on July 15, 2020?

The amendment provides enhanced financial covenant flexibility through April 2022, allowing Interface to strategically manage its balance sheet.

How does the credit amendment affect Interface's financial obligations?

It raises the consolidated net leverage ratio covenant limit for seven quarters but includes a higher interest rate during this timeframe.

What is the current status of Interface's liquidity as per the July 2020 announcement?

Interface maintains strong liquidity, which is crucial as they navigate the challenges presented by the global pandemic.