Interface (NASDAQ: TILE) reported Q3 EPS of $0.47, $0.05 better than the analyst estimate of $0.42. Revenue for the quarter came in at $348 million versus the consensus estimate of $346.4 million.

Third Quarter Highlights:

• Q3 net sales up 9%; Q3 organic sales up 2%
• Q3 GAAP EPS of $0.45, up 221%; Q3 adjusted EPS of $0.47, up 15%
• SG&A expenses managed through tight cost disciplines
• Delivered value creation commitments at one-year anniversary of nora® acquisition
• Reduced debt in the quarter by $46 million
• Full year 2019 outlook unchanged and on track

"Our transformation from a carpet tile company to a commercial flooring company continues to create value for our shareholders. Through this transformation, we've diversified our product offerings, with resilient flooring now comprising 25% of our revenue volume. In the third quarter, we grew adjusted earnings per share 15% year over year while delivering strong margin improvement and efficiently managing SG&A expenses," said Jay Gould, CEO of Interface. "This quarter marked the one-year anniversary of the nora systems acquisition, which has contributed solid earnings per share, aligned with our commitment to shareholders. Despite a challenging demand environment, we remain on track to meet our previous full year 2019 outlook. LVT continues to perform strongly and drove organic growth in the quarter as we lapped a difficult comparable in carpet tile from the shipment of a large customer order in Q3 last year."

Gould continued, "Going forward, our robust product innovation is both increasing our opportunities with current customers and expanding our end market demand. We\'re excited about our new product launch of 3mm LVT, which is going to market in the Americas and is developed specifically to meet customer needs in the healthcare, multifamily and tenant improvement segments. These lower price-point and higher-margin LVT offerings provide new cross-selling opportunities across our expanding product portfolio; particularly combining LVT and rubber in segments like healthcare. Additionally, we are capitalizing on strategic investment opportunities across our business and building on the momentum of our Carbon Neutral Floors™ program by accelerating approximately $10 million dollars in capital expenditures in order to scale our capabilities to manufacture carbon negative products which we are targeting to launch next year."

Fiscal Year 2019 Outlook

Looking ahead to the full year of 2019, Interface is targeting to achieve:

• Total net sales growth of 14 - 15%
• Organic sales growth of 2 - 3%
• Adjusted gross profit margin of approximately 39.5%, an increase of 80 basis points versus prior year
• Adjusted SG&A expenses of approximately 28.5% as a percentage of net sales

Full year interest and other expenses are projected to be approximately $30 million, and the effective tax rate is anticipated to be approximately 24%. Diluted share count is anticipated to be approximately 59 million shares. Capital expenditures for the full year are forecast to be $75 - $85 million.

For earnings history and earnings-related data on Interface (TILE) click here.