Interface Inc (NASDAQ: TILE)

Sector: Consumer Cyclical Industry: Furnishings, Fixtures & Appliances CIK: 0000715787
Market Cap 2.17 Bn
P/B 6.02
P/E 30.23
P/S 2.24
ROIC (Qtr) 15.25
Div Yield % 0.69
Rev 1y % (Qtr) 5.88
Total Debt (Qtr) 390.04 Mn
Debt/Equity (Qtr) 0.63
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About

Investment thesis

Bull case

  • Strong operating cash flow of 156.64M provides robust 0.40x coverage of total debt 390.04M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 187.35M provide 13.32x coverage of short-term debt 14.07M, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 156.64M provides strong 10.96x coverage of stock compensation 14.29M, indicating sustainable incentive practices.
  • Strong tangible asset base of 1.17B provides 3x coverage of total debt 390.04M, indicating robust asset backing and low credit risk.
  • Robust free cash flow of 117.48M exceeds capital expenditure of 39.16M by 3x, indicating strong organic growth funding capability.

Bear case

  • Operating cash flow of 156.64M barely covers its investment activities of (39.16M), with a coverage ratio of -4, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 156.64M provides thin coverage of dividend payments of (2.98M) with a -52.56 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Free cash flow of 117.48M represents just -3.54x of debt issuance (33.19M), suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • Retained earnings of 494.75M provide limited buffer against comprehensive income items of (137.69M), which is -3.59x, indicating elevated exposure to market risks.
  • Operating cash flow of 156.64M is outpaced by equity issuance of (5.14M) (-30.46 ratio), indicating concerning reliance on equity markets for funding operations.

Segments Breakdown of Revenue (2024)

Geographical Breakdown of Revenue (2024)

Peer comparison

Companies in the Furnishings, Fixtures & Appliances
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 SGI Somnigroup International Inc. 18.99 Bn 125.40 7.03 6.62 Bn
2 SN SharkNinja, Inc. 18.48 Bn 32.14 3.04 0.89 Bn
3 MHK Mohawk Industries Inc 8.23 Bn 19.54 0.77 2.34 Bn
4 PATK Patrick Industries Inc 5.10 Bn 175.24 10.70 1.53 Bn
5 WHR Whirlpool Corp /De/ 4.88 Bn 15.36 0.31 7.19 Bn
6 HNI Hni Corp 2.23 Bn 44.66 1.16 0.46 Bn
7 TILE Interface Inc 2.17 Bn 30.23 2.24 0.39 Bn
8 LEG Leggett & Platt Inc 1.59 Bn 5.64 0.39 1.66 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.75 0.98
EV to Cash from Ops. EV/CFO 21.10 -9.92
EV to Debt EV to Debt 5.96 25.70
EV to EBIT EV/EBIT 20.96 17.69
EV to EBITDA EV/EBITDA 16.36 15.96
EV to Free Cash Flow [EV/FCF] EV/FCF 28.22 17.28
EV to Market Cap EV to Market Cap 1.07 1.76
EV to Revenue EV/Rev 2.39 1.40
Price to Book Value [P/B] P/B 6.02 9.34
Price to Earnings [P/E] P/E 30.23 16.89
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 38.08 1.74
Dividend Payout Ratio % Div Payout % (Qtr) 2.60 9.37
Dividend per Basic Share Div per Share (Qtr) 0.05 0.51
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 2.48 28.74
Interest Coverage Int. cover (Qtr) 8.64 -23.23
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -40.16 -9.80
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 62.07 70.23
Dividend Growth (1y) % Div 1y % (Qtr) 25.00 0.00
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 23.94 -367.80
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 9.40 -34.93
EBIT Growth (1y) % EBIT 1y % (Qtr) 12.15 -198.55
EBT Growth (1y) % EBT 1y % (Qtr) 21.18 -72.49
EPS Growth (1y) % EPS 1y % (Qtr) 32.88 -131.79
FCF Growth (1y) % FCF 1y % (Qtr) 6.54 0.53
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 8.49 -2.36
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.03 1.16
Cash Payout Ratio Cash Payout (Qtr) 0.02 0.13
Cash Ratio Cash Ratio (Qtr) 0.78 0.30
Current Ratio Curr Ratio (Qtr) 2.89 1.96
Debt to Equity Ratio Debt/Equity (Qtr) 0.63 0.57
Interest Cover Ratio Int Coverage (Qtr) 8.64 -23.23
Times Interest Earned Times Interest Earned (Qtr) 8.64 -23.23
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 14.50 -2.26
EBIT Margin % EBIT Margin % (Qtr) 11.30 -4.46
EBT Margin % EBT Margin % (Qtr) 9.99 -7.49
Gross Margin % Gross Margin % (Qtr) 38.20 33.73
Net Profit Margin % Net Margin % (Qtr) 8.30 -8.04