Interface (TILE) risk factors, FY2024 10-K

Other

1. 01Risk Factors Related to our Business and Operations
2. 02We 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 or sustainability
3. 03Our earnings could be adversely affected by non-cash adjustments to goodwill, when a test of goodwill assets indicates a material impairment of those assets
4. 04Our success depends significantly upon the efforts, abilities and continued service of our senior management executives, our principal design consultant and other key personnel (including experienced sales and manufacturing personnel), and our loss of any of them could affect us adversely
5. 05Large increases in the cost of our raw materials, shipping costs, duties or tariffs could adversely affect us if we are unable to pass these cost increases through to our customers
6. 06Unanticipated termination or interruption of any of our arrangements with our primary third-party suppliers of synthetic fiber or our primary third-party supplier for luxury vinyl tile (“LVT”) or other key raw materials could have a material adverse effect on us
7. 07Our business operations could suffer significant losses from natural disasters, acts of war, terrorism, catastrophes, fire, adverse weather conditions, pandemics, endemics, unstable geopolitical situations or other unexpected events
8. 08The market price of our common stock has been volatile and the value of your investment may decline
9. 09Sales of our principal products have been and may continue to be affected by adverse economic cycles, and effects in the new construction market and renovation market
10. 10Disruptions to or failures of information technology systems we use could adversely affect our business
11. 11Any of these events which deny us use of vital IT systems may seriously disrupt our normal business operations. These disruptions may lead to production or shipping stoppages, which may in turn lead to material revenue loss and reputational harm
12. 12However, there is no guarantee that these enhancements and steps will be adequate to mitigate future losses due to IT system disruptions, and we may incur significant expense in correcting and recovering from future disruptions
13. 13The impact of potential changes to environmental laws and regulations and industry standards regarding climate change and other sustainability matters could lead to unforeseen disruptions to our business operations
14. 14Health crisis events, such as epidemics or pandemics, have adversely impacted, and may continue to impact, the economy and disrupt our operations and supply chains, which may have an adverse effect on our results of operations
15. 15Our substantial international operations are subject to various political, economic and other uncertainties that could adversely affect our business results, including foreign currency fluctuations, restrictive taxation, custom duties, tariffs, border closings or other adverse government regulations
16. 16Given the nature of our business and our global operations, political, economic, and other conditions in foreign countries and regions, including geopolitical risks arising from the conflicts between Russia and Ukraine and the Middle East, may adversely affect our business, results of operations and financial position
17. 17Fluctuations in foreign currency exchange rates have had, and could continue to have, an adverse impact on our financial condition and results of operations
18. 18The uncertainty surrounding the ongoing 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
19. 19We have a substantial amount of debt and debt service requirements. As of December 29, 2024, we had approximately $305.6 million of outstanding debt, and we had $299.3 million of undrawn borrowing capacity under our Syndicated Credit Facility
20. 20Servicing our debt requires a significant amount of cash, and we may not have sufficient cash flow from our operations to pay our indebtedness
21. 21We may incur substantial additional indebtedness, which could further exacerbate the risks associated with our substantial indebtedness
22. 22We face risks associated with litigation and claims