Interface sees FY18 carpet tile and LVT sales growth 4%-7%
Interface is targeting carpet tile and LVT business to achieve 4-7% organic sales growth, gross profit margin of approximately 39%, and SG&A expenses that are relatively flat to 2017 as a percentage of net sales. The nora acquisition is anticipated to have the following impacts on Interface's targeted 2018 results: increasing gross profit margin by 30 - 50 basis points; increasing SG&A expenses, as a percentage of net sales, by 70 - 100 basis points; increasing the company's effective tax rate to 27 - 28%; and improving adjusted EPS by 3c-6c in 2018. Full year post-closing company interest and other expenses are projected to be $17M-$19M. Capital expenditures for the full year post-closing are forecasted to be $50M-$60M. The company continues to expect its strongest operating income growth in Q2 and Q3, with softer growth in Q1 and Q4. The company's existing credit facility will be amended and extended as part of the transaction closing to effectively refinance all of the company's current debt and incorporate new debt from the nora transaction.