Table of Contents

UNITED STATES 
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
☒Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For Quarterly Period Ended July 5, 202004, 2021
Commission File Number 001-33994
INTERFACE INC
(Exact name of registrant as specified in its charter)
Georgia58-1451243
(State or other jurisdiction of

incorporation or organization)
(I.R.S. Employer

Identification No.)
1280 West Peachtree Street,, Atlanta,, Georgia30309
(Address of principal executive offices and zip code)
(770) (770) 437-6800
(Registrant’s telephone number, including area code)
Securities Registered Pursuant to Section 12(b) of the Act:

Title of Each ClassTrading Symbol(s)Name of Each Exchange on Which Registered
Common Stock, $0.10 Par Value Per ShareTILENasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Date File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes þ No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filerþ¨Accelerated filer¨þNon-accelerated filer¨Smaller reporting company☐
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes ☐   No þ
Shares outstanding of each of the registrant’s classes of common stock at August 6, 2020:
5, 2021:
ClassNumber of Shares
Common Stock, $0.10 par value per share58,547,75359,054,937


Table of Contents
INTERFACE, INC.
INDEX
PAGE
PAGE
Item 1.
Financial Statements (Unaudited)
3
3
4
5
6
7
3029
37
38
39
39
40
41
41
41
42
43


Table of Contents
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
INTERFACE, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(IN THOUSANDS)in thousands, except par values)
JULY 5, 2020 DECEMBER 29, 2019JULY 4, 2021JANUARY 3, 2021
(UNAUDITED)  (UNAUDITED)
ASSETS   ASSETS
Current Assets   
Current assetsCurrent assets
Cash and cash equivalents$91,844
 $81,301
Cash and cash equivalents$102,372 $103,053 
Accounts receivable, net139,410
 177,482
Accounts receivable, net146,938 139,869 
Inventories, net263,721
 253,584
Inventories, net258,215 228,725 
Prepaid expenses and other current assets38,411
 35,768
Prepaid expenses and other current assets39,134 23,747 
Total current assets533,386
 548,135
Total current assets546,659 495,394 
Property and equipment, net338,177
 324,585
Property, plant and equipment, netProperty, plant and equipment, net345,322 359,036 
Operating lease right-of-use assets100,091
 107,044
Operating lease right-of-use assets94,316 98,013 
Deferred tax asset23,350
 19,683
Deferred tax asset14,841 18,175 
Goodwill and intangibles, net226,828
 346,474
Goodwill and intangibles, net240,332 253,536 
Other assets79,136
 77,128
Other assets80,744 81,857 
   
Total assets$1,300,968
 $1,423,049
Total assets$1,322,214 $1,306,011 
   
LIABILITIES AND SHAREHOLDERS’ EQUITY   LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities   Current liabilities
Accounts payable$64,894
 $75,687
Accounts payable$82,393 $58,687 
Accrued expenses122,505
 140,652
Accrued expenses118,900 105,739 
Current portion of operating lease liabilities14,124
 15,914
Current portion of operating lease liabilities13,116 13,555 
Current portion of long-term debt31,061
 31,022
Current portion of long-term debt15,189 15,319 
Total current liabilities232,584
 263,275
Total current liabilities229,598 193,300 
Long-term debt589,130
 565,178
Long-term debt541,395 561,251 
Operating lease liabilities86,716
 91,829
Operating lease liabilities83,034 86,468 
Deferred income taxes32,341
 35,550
Deferred income taxes32,254 34,307 
Other long-term liabilities102,001
 99,015
Other long-term liabilities100,347 104,147 
   
Total liabilities1,042,772
 1,054,847
Total liabilities986,628 979,473 
   
Commitments and contingencies

 

Commitments and contingencies00
   
Shareholders’ equity   Shareholders’ equity
Preferred stock—
 —
Common stock5,854
 5,842
Preferred stock, par value $1.00 per share; 5,000 shares authorized; NaN issued or outstanding at July 4, 2021 and January 3, 2021Preferred stock, par value $1.00 per share; 5,000 shares authorized; NaN issued or outstanding at July 4, 2021 and January 3, 20210 0 
Common stock, par value $0.10 per share; 120,000 shares authorized; 59,066 and 58,664 shares issued and outstanding at July 4, 2021 and January 3, 2021, respectivelyCommon stock, par value $0.10 per share; 120,000 shares authorized; 59,066 and 58,664 shares issued and outstanding at July 4, 2021 and January 3, 2021, respectively5,907 5,865 
Additional paid-in capital246,323
 250,306
Additional paid-in capital250,114 247,920 
Retained earnings184,206
 286,056
Retained earnings229,833 208,562 
Accumulated other comprehensive loss – foreign currency translation(112,224) (113,139)Accumulated other comprehensive loss – foreign currency translation(76,473)(60,331)
Accumulated other comprehensive loss – cash flow hedge(10,654) (4,163)Accumulated other comprehensive loss – cash flow hedge(4,696)(6,190)
Accumulated other comprehensive loss – pension liability(55,309) (56,700)Accumulated other comprehensive loss – pension liability(69,099)(69,288)
   
Total shareholders’ equity258,196
 368,202
Total shareholders’ equity335,586 326,538 
   
Total liabilities and shareholders’ equity$1,300,968
 $1,423,049
Total liabilities and shareholders’ equity$1,322,214 $1,306,011 
See accompanying notes to consolidated condensed financial statements.

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INTERFACE, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)in thousands, except per share data)
THREE MONTHS ENDED SIX MONTHS ENDEDTHREE MONTHS ENDEDSIX MONTHS ENDED
JULY 5, 2020 JUNE 30, 2019 JULY 5, 2020 JUNE 30, 2019JULY 4, 2021JULY 5, 2020JULY 4, 2021JULY 5, 2020
NET SALES$259,504
 $357,507
 $547,673
 $655,195
NET SALES$294,785 $259,504 $548,045 $547,673 
Cost of Sales162,210
 216,777
 336,068
 397,943
Cost of Sales185,793 162,210 343,015 336,068 
GROSS PROFIT ON SALES97,294
 140,730
 211,605
 257,252
GROSS PROFIT ON SALES108,992 97,294 205,030 211,605 
       
Selling, General and Administrative Expenses80,058
 97,838
 167,741
 197,973
Selling, General and Administrative Expenses79,830 80,058 159,132 167,741 
Restructuring Charges(157) —
 (1,275) —
Restructuring Charges(62)(157)(192)(1,275)
Goodwill and Intangible Asset Impairment Charge—
 —
 121,258
 —
Goodwill and Intangible Asset Impairment Charge0 0 0 121,258 
OPERATING INCOME (LOSS)17,393
 42,892
 (76,119) 59,279
OPERATING INCOME (LOSS)29,224 17,393 46,090 (76,119)
       
Interest Expense4,965
 6,810
 10,595
 13,603
Interest Expense7,289 4,965 14,545 10,595 
Other Expense5,139
 304
 6,630
 1,318
Other Expense617 5,139 1,332 6,630 
       
INCOME (LOSS) BEFORE INCOME TAX EXPENSE7,289
 35,778
 (93,344) 44,358
INCOME (LOSS) BEFORE INCOME TAX EXPENSE21,318 7,289 30,213 (93,344)
Income Tax Expense2,580
 6,279
 4,114
 7,800
Income Tax Expense5,807 2,580 7,764 4,114 
       
NET INCOME (LOSS)$4,709
 $29,499
 $(97,458) $36,558
NET INCOME (LOSS)$15,511 $4,709 $22,449 $(97,458)
       
Earnings (Loss) Per Share – Basic$0.08
 $0.50
 $(1.67) $0.61
Earnings (Loss) Per Share – Basic$0.26 $0.08 $0.38 $(1.67)
       
Earnings (Loss) Per Share – Diluted$0.08
 $0.50
 $(1.67) $0.61
Earnings (Loss) Per Share – Diluted$0.26 $0.08 $0.38 $(1.67)
       
Common Shares Outstanding – Basic58,484
 59,285
 58,466
 59,459
Common Shares Outstanding – Basic59,041 58,484 58,885 58,466 
Common Shares Outstanding – Diluted58,484
 59,291
 58,466
 59,465
Common Shares Outstanding – Diluted59,041 58,484 58,885 58,466 
See accompanying notes to consolidated condensed financial statements.

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INTERFACE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(UNAUDITED)
(IN THOUSANDS)in thousands)
THREE MONTHS ENDED SIX MONTHS ENDEDTHREE MONTHS ENDEDSIX MONTHS ENDED
JULY 5, 2020 JUNE 30, 2019 JULY 5, 2020 JUNE 30, 2019JULY 4, 2021JULY 5, 2020JULY 4, 2021JULY 5, 2020
Net Income (Loss)$4,709
 $29,499
 $(97,458) $36,558
Net Income (Loss)$15,511 $4,709 $22,449 $(97,458)
Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment16,160
 4,249
 915
 (954)Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment3,455 16,160 (16,142)915 
Other Comprehensive Loss, Cash Flow Hedge(351) (4,667) (6,491) (7,973)
Other Comprehensive Income (Loss), Cash Flow HedgeOther Comprehensive Income (Loss), Cash Flow Hedge745 (351)1,494 (6,491)
Other Comprehensive Income (Loss), Pension Liability Adjustment(342) 829
 1,391
 738
Other Comprehensive Income (Loss), Pension Liability Adjustment100 (342)189 1,391 
Comprehensive Income (Loss)$20,176
 $29,910
 $(101,643) $28,369
Comprehensive Income (Loss)$19,811 $20,176 $7,990 $(101,643)
See accompanying notes to consolidated condensed financial statements.

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INTERFACE, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)in thousands)
SIX MONTHS ENDEDSIX MONTHS ENDED
JULY 5, 2020 JUNE 30, 2019JULY 4, 2021JULY 5, 2020
OPERATING ACTIVITIES:   OPERATING ACTIVITIES:
Net income (loss)$(97,458) $36,558
Net income (loss)$22,449 $(97,458)
Adjustments to reconcile net income (loss) to cash provided by operating activities:   Adjustments to reconcile net income (loss) to cash provided by operating activities:
Depreciation and amortization21,748
 22,698
Depreciation and amortization23,670 21,748 
Stock compensation amortization expense (benefit)(2,216) 4,832
Stock compensation amortization expense (benefit)2,472 (2,216)
Deferred income taxes and other(17,364) (11,577)Deferred income taxes and other1,057 (17,364)
Amortization of acquired intangible assets2,631
 3,252
Amortization of acquired intangible assets2,862 2,631 
Goodwill and intangible asset impairment121,258
 —
Goodwill and intangible asset impairment0 121,258 
Working capital changes:   Working capital changes:
Accounts receivable37,660
 (4,637)Accounts receivable(8,816)37,660 
Inventories(8,792) (13,349)Inventories(33,855)(8,792)
Prepaid expenses and current assets1,005
 (6,206)
Prepaid expenses and other current assetsPrepaid expenses and other current assets(14,830)1,005 
Accounts payable and accrued expenses(26,045) (11,139)Accounts payable and accrued expenses40,109 (26,045)
   
CASH PROVIDED BY OPERATING ACTIVITIES32,427
 20,432
CASH PROVIDED BY OPERATING ACTIVITIES35,118 32,427 
   
INVESTING ACTIVITIES:   INVESTING ACTIVITIES:
Capital expenditures(35,665) (34,926)Capital expenditures(12,112)(35,665)
Other(29) 33
Other0 (29)
   
CASH USED IN INVESTING ACTIVITIES(35,694) (34,893)CASH USED IN INVESTING ACTIVITIES(12,112)(35,694)
   
FINANCING ACTIVITIES:   FINANCING ACTIVITIES:
Repayments of long-term debt(47,779) (16,670)Repayments of long-term debt(56,796)(47,779)
Borrowing of long-term debt70,000
 70,000
Borrowing of long-term debt38,000 70,000 
Tax withholding payments for share-based compensation(1,488) (3,264)Tax withholding payments for share-based compensation(193)(1,488)
Proceeds from issuance of common stock93
 60
Proceeds from issuance of common stock0 93 
Dividends paid(4,392) (7,763)Dividends paid(1,178)(4,392)
Repurchase of common stock—
 (25,154)
Debt issuance costsDebt issuance costs(36)0 
Finance lease payments(810) —
Finance lease payments(1,116)(810)
   
CASH PROVIDED BY FINANCING ACTIVITIES:15,624
 17,209
CASH PROVIDED BY (USED IN) FINANCING ACTIVITIESCASH PROVIDED BY (USED IN) FINANCING ACTIVITIES(21,319)15,624 
   
Net cash provided by operating, investing and financing activities12,357
 2,748
Net cash provided by operating, investing and financing activities1,687 12,357 
Effect of exchange rate changes on cash(1,814) 519
Effect of exchange rate changes on cash(2,368)(1,814)
   
CASH AND CASH EQUIVALENTS:   CASH AND CASH EQUIVALENTS:
Net change during the period10,543
 3,267
Net change during the period(681)10,543 
Balance at beginning of period81,301
 80,989
Balance at beginning of period103,053 81,301 
   
Balance at end of period$91,844
 $84,256
Balance at end of period$102,372 $91,844 
See accompanying notes to consolidated condensed financial statements.

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INTERFACE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
As contemplated by the Securities and Exchange Commission (the “Commission”) instructions to Form 10-Q, the following footnotes have been condensed and, therefore, do not contain all disclosures required in connection with annual financial statements. Reference should be made to the Company’s year-end financial statements and notes thereto contained in its Annual Report on Form 10-K for the fiscal year ended December 29, 2019,January 3, 2021, as filed with the Commission.
The financial information included in this report has been prepared by the Company, without audit. In the opinion of management, the financial information included in this report contains all adjustments necessary for a fair presentation of the results for the interim periods. All such adjustments are of a normal recurring nature unless otherwise disclosed. Nevertheless, the results shown for interim periods are not necessarily indicative of results to be expected for the full year. The December 29, 2019,January 3, 2021, consolidated condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States.States (“GAAP”).
The six monthsix-month period ended July 4, 2021 includes 26 weeks, and the six-month period ended July 5, 2020 includes 27 weeks, and the six month period ended June 30, 2019 includes 26 weeks. The three monththree-month periods ended July 4, 2021 and July 5, 2020 and June 30, 2019 both include 13 weeks.
Risks and Uncertainties
The World Health Organization declared the COVID-19 outbreak a pandemic in March 2020, and many companies have experienced disruptions in their operations. The Company considered the impact of COVID-19 on the assumptions and estimates used and determined that, except for the goodwill and intangible asset impairment recorded in the first quarter of 2020 and discussed in Note 10 “Goodwill and Intangible Assets,” the decline in 2020 revenue for the first six months of 2021 when excluding the impacts of foreign currency fluctuations, and its consequent impacts on production volume, operating income, net income, cash flows, and order rates, there were no other material adverse impacts on the Company’s results of operations and financial position at July 5, 2020.4, 2021. The Company’s primary credit facility has various financial and other covenants including, but not limited to, a covenant to not exceed a maximum secured net debt to EBITDA ratio, as defined by the credit facility agreement. On July 15, 2020,The Company is currently in compliance with all covenants under the Company amended its Syndicated Credit Facility. See Note 16 entitled “Subsequent Events”credit facility agreement and anticipates that it will remain in compliance with the covenants for additional information.the foreseeable future. The full extent of the future impact of COVID-19 on the Company’s operations is uncertain. A prolonged COVID-19 pandemic may continue to have a material adverse impact on our operations, financial condition, and supply chains. It may negatively impact our ability to collect outstanding receivables, manage inventory, produce our products and service customers. The impact of COVID-19 could result in additional impairment losses related to goodwill, intangible assets, and property, plant and equipment.
As the virus spreads through communities, it could impact the physical health, mental health, and productivity of our workforce as many of them are required to shelter in place and work from home for prolonged periods of time, and it could also impact our ability to reach our customers and collaborate with them as they are required to shelter in place and work from home for prolonged periods of time. The COVID-19 pandemic is having broad and negative implications on the global economy, which affects the size and timing of our customers’ capital budgets, and could result in delays or terminations of new and existing renovation projects, remodeling projects, new construction projects, and other projects where our products are used.
COVID-19 Impact
We continue to monitor our operations and have implemented various programs to mitigate the effects of COVID-19 on our business including reductions in employee headcount, labor costs, marketing expenses, consulting spend, travel costs, various other costs, and capital expenditures, as well as suspending and reducing shifts in our production facilities, temporarily furloughing employees, and implementing other cost reduction or avoidance initiatives. Government grants
Reclassifications
In the first quarter of fiscal 2021, the Company determined that it has two operating and payroll protection programs are available globallyreportable segments – namely Americas (“AMS”) and Europe, Africa, Asia and Australia (collectively “EAAA”). The AMS operating segment is unchanged from prior year and continues to provide assistance to companies impacted by the pandemic. The Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) enacted ininclude the United States, (see Note 13 entitled “Income Taxes”Canada and Latin America geographic areas. Segment disclosures for additional information) and a payroll protection program enacted in the Netherlands (the “NOW Program”), provide benefits related to payroll costs either as reimbursements, lower payroll tax rates or deferral of payroll tax payments. The NOW Program provides eligible companies with reimbursement of labor costs as an incentive to retain employees on the payroll. During the second quarter the Company recognized benefits under several payroll protection programs as reductions to payroll costs.

Reclassifications
In fiscal year 2020 the Company made certain classification and presentation changes related to customer service and other costs. Previously, these costs were presented as a component of cost of sales. Beginning in fiscal year 2020, these costs are presented as a component of selling, general and administrative (“SG&A”) expense. The Company determined that this change better reflects how management views and operates the business. Reclassifications of the comparative prior year 2019 amounts have been maderestated to conform to the current presentation as follows:reportable segment structure.See Note 11 entitled “Segment Information” for additional information.
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  Three Months Ended June 30, 2019
Statement of Operations Line Item As Reported Reclassification As Reclassified
  (In thousands)
Cost of Sales $218,917
 $(2,140) $216,777
Selling, General and Administrative Expenses 95,698
 2,140
 97,838
Total $314,615
 $—
 $314,615
       
  Six Months Ended June 30, 2019
Statement of Operations Line Item As Reported Reclassification As Reclassified
  (In thousands)
Cost of Sales $401,207
 $(3,264) $397,943
Selling, General and Administrative Expenses 194,709
 3,264
 197,973
Total $595,916
 $—
 $595,916
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Recently Adopted Accounting Pronouncements
On December 30, 2019, the Company adopted Accounting Standards Codification (“ASC”) Topic 326, Credit Losses. This standard requires a financial asset (including trade receivables) to be presented at the net amount expected to be collected through the use of valuation allowances for credit losses. The income statement will reflect the measurement of credit losses for newly recognized financial assets, as well as the expected increases or decreases of expected credit losses that have taken place during the period. The Company adopted the new standard using a modified retrospective approach with no cumulative-effect adjustment to retained earnings to recognize expected credit losses on trade accounts receivable. The adoption of this standard did not have a material impact to the Company’s consolidated financial statements.
On December 30, 2019,January 4, 2021, the Company adopted Accounting Standards Update (“ASU”) 2017-04, “Intangibles - Goodwill and Other,” that provides for the elimination of Step 2 from the goodwill impairment test. Under the new guidance, impairment charges are recognized to the extent the carrying amount of a reporting unit exceeds its fair value with certain limitations. See Note 10 entitled “Goodwill and Intangible Assets” for additional information.
On December 30, 2019, the Company adopted ASU 2018-13, “Changes to the Disclosure Requirements for Fair Value Measurement.” This standard eliminates the current requirement to disclose the amount or reason for transfers between level 1 and level 2 of the fair value hierarchy and the requirement to disclose the valuation methodology for level 3 fair value measurements. The standard includes additional disclosure requirements for level 3 fair value measurements, including the requirement to disclose the changes in unrealized gains and losses in other comprehensive income during the period and permits the disclosure of other relevant quantitative information for certain unobservable inputs. The adoption of this standard did not have a material impact to the Company’s consolidated financial statements.
On2019-12, “ December 30, 2019, the Company adopted ASU 2018-15, “Internal-Use Software - Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement.” This ASU aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement service contract with the guidance to capitalize implementation costs of internal use software. The ASU also requires that the costs for implementation activities during the application development phase be capitalized in a hosting arrangement service contract, and costs during the preliminary and post implementation phase are expensed. The Company adopted this standard, which will be applied on a prospective basis, with no material impact to the Company’s consolidated financial statements.

Recently Issued Accounting Pronouncements Not Yet Adopted
In December 2019, the Financial Accounting Standards Board (“FASB”) issued ASU 2019-12, “SimplifyingSimplifying the Accounting for Income Taxes.Taxes.” The amendments in this update simplify the accounting for income taxes by removing certain exceptions to the general principles in ASC Topic 740 related to intraperiod tax allocation, the calculation of income taxes in interim periods, and the accounting for outside basis differences of foreign subsidiaries and equity method investments. The amendments also improve consistent application of and simplify GAAP for other areas of ASC Topic 740, including franchise or similar taxes partially based on income, the accounting for a step-up in tax basis goodwill, and interim recognition of an enacted change in tax laws or rates, by clarifying and amending existing guidance. This new guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The Company is currently evaluating the impact of adoption of this standard but doesdid not anticipate that the adoption will have a material effect on itsimpact to the Company’s consolidated financial statements.
Recently Issued Accounting Pronouncements Not Yet Adopted
In March 2020, the FASBFinancial Accounting Standards Board (“FASB”) issued ASU 2020-04, “Reference“Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.Reporting.” This standard addresses the risks from the discontinuation of the London Interbank Offered Rate (LIBOR) and provides optional expedients and exceptions to contracts, hedging relationships and other transactions that reference LIBOR if certain criteria are met. This new guidance is effective and may be applied beginning March 12, 2020 through December 31, 2022. The Company is currently evaluating the impact of adoption of this standard.

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NOTE 2 – REVENUE RECOGNITION
Revenue from sales of carpet, modular resilient flooring, rubber flooring, and other flooring-related material was approximately 98% of total revenue for the six monthsboth six-month periods ended July 4, 2021 and July 5, 2020. The remaining 2% of revenue was generated from the installation of carpet and other flooring-related material.material for both 2021 and 2020 six-month periods.
Disaggregation of Revenue
For the six months ended July 4, 2021 and July 5, 2020, revenue from the Company’s customers is broken down by geography as follows:
Six Months Ended
GeographyJuly 4, 2021July 5, 2020
Americas51.8%56.5%
Europe33.6%30.4%
Asia-Pacific14.6%13.1%
GeographyPercentage of Net Sales
Americas56.5%
Europe30.4%
Asia-Pacific13.1%
Revenue from the Company’s customers in the Americas corresponds to the AMS operating segment, and the EAAA operating segment includes revenue from the Europe and Asia-Pacific geographies. See Note 11 entitled “Segment Information” for additional information.
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NOTE 3 – INVENTORIES
Inventories are summarized as follows:
July 4, 2021January 3, 2021
(in thousands)
Finished goods$172,581 $152,836 
Work in process21,791 17,109 
Raw materials63,843 58,780 
Inventories, net$258,215 $228,725 
 July 5, 2020 December 29, 2019
 (In thousands)
Finished Goods$178,506
 $184,336
Work in Process16,720
 13,152
Raw Materials68,495
 56,096
Inventories, net$263,721
 $253,584


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NOTE 4 – EARNINGS PER SHARE
The Company computes basic earnings or loss per share (“EPS”) by dividing net income or loss by the weighted average common shares outstanding, including participating securities outstanding, during the period as discussed below. Diluted EPS reflects the potential dilution beyond shares for basic EPS that could occur if securities or other contracts to issue common stock were exercised, converted into common stock or resulted in the issuance of common stock that would have shared in the Company’s earnings.
The Company includes all unvested stock awards which contain non-forfeitable rights to dividends or dividend equivalents, whether paid or unpaid, in the number of shares outstanding in the basic and diluted EPS calculations when the inclusion of these shares would be dilutive. Unvested share-based awards of restricted stock are paid dividends equally with all other shares of common stock. As a result, the Company includes all outstanding restricted stock awards in the calculation of basic and diluted EPS. Distributed earnings include common stock dividends and dividends earned on unvested share-based payment awards. Undistributed earnings represent earnings that were available for distribution but were not distributed. The following tables show distributed and undistributed earnings:
 Three Months Ended Six Months Ended
Earnings (Loss) Per ShareJuly 5, 2020 June 30, 2019 July 5, 2020 June 30, 2019
Basic Earnings (Loss) Per Share:       
Distributed Earnings$0.01
 $0.07
 $0.08
 $0.13
Undistributed Earnings (Loss)0.07
 0.43
 (1.75) 0.48
Total$0.08
 $0.50
 $(1.67) $0.61
        
Diluted Earnings (Loss) Per Share:       
Distributed Earnings$0.01
 $0.07
 $0.08
 $0.13
Undistributed Earnings (Loss)0.07
 0.43
 (1.75) 0.48
Total$0.08
 $0.50
 $(1.67) $0.61
        
Basic Earnings (Loss) Per Share$0.08
 $0.50
 $(1.67) $0.61
Diluted Earnings (Loss) Per Share$0.08
 $0.50
 $(1.67) $0.61

The following table presents net income that was attributable to participating securities:
 Three Months Ended Six Months Ended
 July 5, 2020 June 30, 2019 July 5, 2020 June 30, 2019
 (In millions)
Net Income Attributable to Participating Securities$—
 $0.3
 $—
 $0.3
The weighted average shares forshows the computation of basic and diluted EPS were as follows:EPS:
 Three Months Ended Six Months Ended
 July 5, 2020 June 30, 2019 July 5, 2020 June 30, 2019
 (In thousands)
Weighted Average Shares Outstanding58,024
 58,760
 58,006
 58,934
Participating Securities460
 525
 460
 525
Shares for Basic EPS58,484
 59,285
 58,466
 59,459
Dilutive Effect of Stock Options—
 6
 —
 6
Shares for Diluted EPS58,484
 59,291
 58,466
 59,465

Three Months EndedSix Months Ended
July 4, 2021July 5, 2020July 4, 2021July 5, 2020
(in thousands, except per share data)
Numerator:
Net income (loss)$15,511 $4,709 $22,449 $(97,458)
Less: distributed and undistributed earnings available to participating securities(192)(38)(229)(35)
Distributed and undistributed earnings (loss) available to common shareholders$15,319 $4,671 $22,220 $(97,493)
 
Denominator:
Weighted average shares outstanding58,310 58,024 58,283 58,006 
Participating securities731 460 602 460 
Shares for basic earnings per share59,041 58,484 58,885 58,466 
Dilutive effect of stock options0 0 0 0 
Shares for diluted earnings per share59,041 58,484 58,885 58,466 
 
Basic earnings (loss) per share$0.26 $0.08 $0.38 $(1.67)
Diluted earnings (loss) per share$0.26 $0.08 $0.38 $(1.67)
For the three and six months ended July 5, 2020, there were 20,000 stock options in each respective period excluded from the computation of diluted EPS because the impact would be anti-dilutive. For the three and six months ended June 30, 2019, there were 0 stock options or participating securities excluded from the computation
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Table of diluted EPS.Contents

NOTE 5 – LONG-TERM DEBT
Long-term debt consisted of the following:
July 4, 2021January 3, 2021
Outstanding Principal
Interest Rate(1)
Outstanding Principal
Interest Rate(1)
(in thousands)(in thousands)
Syndicated Credit Facility:
Revolving loan borrowings$0 0 %$3,000 4.00 %
Term loan borrowings264,578 1.83 %282,215 1.87 %
Total borrowings under Syndicated Credit Facility264,578 1.83 %285,215 1.89 %
5.50% Senior Notes due 2028300,000 5.50 %300,000 5.50 %
 
Total debt564,578 585,215 
Less: Unamortized debt issuance costs(7,994)(8,645)
 
Total debt, net556,584 576,570 
Less: Current portion of long-term debt(15,189)(15,319)
 
Total long-term debt, net$541,395 $561,251 
(1) Represents the stated rate of interest, without the effect of debt issuance costs or interest rate swaps.
Syndicated Credit Facility
At July 5, 2020, the Company maintained an amended and restatedThe Syndicated Credit Facility (the “Facility”) which provided toprovides the Company and certain of its subsidiaries a multicurrency revolving loan and U.S. denominated and multicurrency term loans. Interest on base rate loans wasis charged at varying rates computed by applying a margin depending on the Company’s consolidated net leverage ratio as of the most recently completed fiscal quarter. Interest on LIBOR-basedEurocurrency-based loans and fees for letters of credit wereare charged at varying rates computed by applying a margin over the applicable LIBOREurocurrency rate, depending on the Company’s consolidated net leverage ratio as of the most recently completed fiscal quarter. In addition, the Company paidpays a commitment fee per annum (depending on the Company’s consolidated net leverage ratio as of the most recently completed fiscal quarter) on the unused portion of the Facility.
Debt issuance costs associated with term loans are reflected as a reduction of long-term debt in accordance with applicable accounting standards. As these fees are expensed over the life of the outstanding borrowing, the debt balance will increase by the same amount as the fees that are expensed. As of both July 5, 20204, 2021 and December 29, 2019, the unamortized debt costs recorded as a reduction of long-term debt were $5.4 million and $6.3 million, respectively.
Other deferred borrowing costs, which include underwriting, legal and other direct costs related to the issuance of revolving debt, net of accumulated amortization, were $1.1 million and $1.3 million as of July 5, 2020 and December 29, 2019, respectively. These amounts are included in other assets in the Company’s consolidated condensed balance sheets. The Company amortizes these costs over the life of the related debt.
As of July 5, 2020,January 3, 2021, the Company had outstanding $566.8 million of term loan borrowing and $58.8 million of revolving loan borrowings under the Facility, and had $1.6 million in letters of credit outstanding under the Facility.
As of December 29, 2019, the Company had outstanding $581.6 million of term loan borrowingboth July 4, 2021 and $20.9 million of revolving loan borrowings under the Facility, and had $2.2 million in letters of credit outstanding under the Facility. As of July 5, 2020 and December 29, 2019, the weighted average interest rate on borrowings outstanding under the Facility was 2.75% and 3.27%, respectively. As of July 5, 2020 and December 29, 2019,January 3, 2021, the carrying value of the Company’s borrowings under the Facility approximatesapproximated its fair value as the Facility bears interest rates that are similar to existing market rates.
Under the Facility, the Company is required to make quarterly amortization payments of the term loan borrowings, which are due on the last day of the calendar quarter.
The Company is currently in compliance with all covenants under the Facility. On July 15, 2020,Facility and anticipates that it will remain in compliance with the covenants for the foreseeable future.
5.50% Senior Notes due 2028
The 5.50% Senior Notes due 2028 (the “Senior Notes”) bear an interest rate at 5.50% per annum and mature on December 1, 2028. Interest is paid semi-annually on June 1 and December 1 of each year, beginning on June 1, 2021. The Senior Notes are unsecured and are guaranteed, jointly and severally, by each of the Company’s material domestic subsidiaries, all of which also guarantee the obligations of the Company amendedunder its Syndicated Creditexisting Facility. See Note 16 entitled “Subsequent Events”

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Table of Contents
As of July 4, 2021, the estimated fair value of the Senior Notes was $315.1 million, compared with a carrying value recorded in the Company’s consolidated condensed balance sheet of $300.0 million, excluding unamortized debt issuance costs. The fair value of the Senior Notes is derived using quoted prices for additional information.similar instruments and is considered Level 2 within the fair value hierarchy.
Other Lines of Credit
Subsidiaries of the Company havehad an aggregate of the equivalent of $9.5$6.0 million of other lines of credit available at interest rates ranging from 2.0%3.5% to 6.0% as of both July 5, 20204, 2021 and December 29, 2019.January 3, 2021. As of July 5, 20204, 2021 and December 29, 2019,January 3, 2021, there were 0 borrowings outstanding under these lines of credit.

Borrowing Costs
Debt issuance costs associated with the Company’s Senior Notes and term loans under the Facility are reflected as a reduction of long-term debt in accordance with applicable accounting standards. As these fees are expensed over the life of the outstanding borrowing, the debt balance will increase by the same amount as the fees that are expensed. As of July 4, 2021 and January 3, 2021, the unamortized debt issuance costs recorded as a reduction of long-term debt were $8.0 million and $8.6 million, respectively.
Other deferred borrowing costs, which include underwriting, legal and other direct costs related to the issuance of revolving debt, net of accumulated amortization, were $1.8 million and $2.0 million as of July 4, 2021 and January 3, 2021, respectively. These amounts are included in other assets in the Company’s consolidated condensed balance sheets. The Company amortizes these costs over the life of the related debt.
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NOTE 6 – DERIVATIVE INSTRUMENTS
Interest Rate Risk Management
In the third quarter of 2017 and the first quarter of 2019,From time to time, the Company enteredenters into interest rate swap transactions in notional amounts of $100 million and $150 million, respectively, to fix the variable interest rate on a portion of its term loan borrowing in order to manage a portion of its exposure to interest rate fluctuations. The Company’s objective and strategy with respect to these interest rate swaps is to protect the Company against adverse fluctuations in interest rates by reducing its exposure to variability to cash flows relating to interest payments on a portion of its outstanding debt. The Company is meeting its objective by hedging the risk of changes in its cash flows (interest payments) attributable to changes in LIBOR, the designated benchmark interest rate being hedged (the “hedged risk”), on an amount of the Company’s debt principal equal to the outstanding swap notional amounts.
Cash Flow Interest Rate Swaps
BothIn the fourth quarter of 2020 the Company terminated its designated interest rate swap transactions with a total notional value of $250 million. Hedge accounting was also discontinued at that time. Losses recorded in accumulated other comprehensive loss for these terminated interest rate swaps are reclassified and recorded in the consolidated condensed statements of operations to the extent it is probable that a portion of the original forecasted transactions related to the portion of the hedged debt repaid will not occur by the end of the originally specified time period. See Note 14 entitled “Items Reclassified From Accumulated Other Comprehensive Loss” for additional information.
As of July 4, 2021 and January 3, 2021, the remaining accumulated other comprehensive loss associated with the terminated interest rate swaps was $6.5 million and $8.7 million, respectively, and will be amortized to earnings over the remaining term of the interest rate swaps described above areprior to termination. We expect that approximately $4.0 million related to the terminated interest rate swaps will be reclassified from accumulated other comprehensive loss as an increase to interest expense in the next 12 months.
The following table summarizes the impact that changes in the fair value of derivatives designated and qualify as cash flow hedges of forecasted interest payments. The Company reports the changes in fair value of the swaps as a component ofhad on accumulated other comprehensive income (or other comprehensive loss). The aggregate notional amountloss, net of tax, during the interest rate swaps as ofthree and six months ended July 5, 2020 was $250 million.2020:
Forward Contracts
Our European operations, from time to time, are party to currency forward contracts designed to hedge the cash flow risk of intercompany sales from the manufacturing facility in Europe to the Americas. The Company’s objective and strategy with respect to these currency forward contracts is to protect the Company against adverse fluctuations in currency rates by reducing its exposure to variability in cash flows related to receipt of payment on intercompany sales. As of July 5, 2020, there were no active forward currency contracts.
Three Months EndedSix Months Ended
July 5, 2020July 5, 2020
(in thousands)
Interest rate swap contracts loss$(351)$(6,491)
Derivative Transactions Not Designated as Hedging Instruments
Our Asia-Pacific operations, from time to time, purchase foreign currency options to economically hedge inventory purchases denominated in foreign currencies other than their functional currency. The Company’s objective with respect to these foreign currency options is to protect the Company against adverse fluctuations in currency rates by reducing its exposure to variability in cash flows related to payment on inventory purchases. These options are classified as non-designated derivative instruments. Gains and losses on the changes in fair value of these foreign currency options are recognized in earnings each period. As of July 5, 2020,4, 2021, the Company had outstanding foreign currency options with an aggregate notional amount of $17.0$4.4 million.
The table below sets forth the fair value of derivative instruments not designated as hedging instruments as of July 5, 2020:4, 2021 and January 3, 2021:
Asset Derivatives
Balance Sheet LocationFair Value as of July 4, 2021Fair Value as of January 3, 2021
(in thousands)
Foreign currency optionsOther current assets$3 $37 
 Asset Derivatives as of
July 5, 2020		 Liability Derivatives as of
July 5, 2020
 
Balance Sheet
Location
 Fair Value 
Balance Sheet
Location
 Fair Value
 (In thousands)
Derivative instruments designated as hedging instruments:       
Interest rate swap contractsOther current assets $—
 Accrued expenses $14,893
Derivative instruments not designated as hedging instruments:       
Foreign currency optionsOther current assets 320
 Accrued expenses —
   $320
   $14,893

The table below sets forth the fair value of derivative instruments as of December 29, 2019:
 Asset Derivatives as of
December 29, 2019		 Liability Derivatives as of
December 29, 2019
 
Balance Sheet
Location
 Fair Value 
Balance Sheet
Location
 Fair Value
 (In thousands)
Derivative instruments designated as hedging instruments:       
Interest rate swap contractsOther current assets $—
 Accrued expenses $5,801
Derivative instruments not designated as hedging instruments:       
Foreign currency optionsOther current assets 251
 Accrued expenses —
   $251
   $5,801

There was no significant impact to net income (loss) from the changes in fair value
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Table of derivatives designated as cash flow hedges during the three and six months ended July 5, 2020. We expect that approximately $5.2 million related to cash flow hedges will be reclassified from accumulated other comprehensive loss as an increase to interest expense in the next 12 months.
The following table summarizes the impact that changes in the fair value of derivatives designated as cash flow hedges had on accumulated other comprehensive loss, net of tax, during the three and six months ended July 5, 2020 and June 30, 2019:
 Three Months Ended Six Months Ended
 July 5, 2020 June 30, 2019 July 5, 2020 June 30, 2019
 (In thousands)
Foreign currency contracts gain (loss)$—
 $204
 $—
 $(159)
Interest rate swap contracts loss(351) (4,871) (6,491) (7,814)
Loss recognized in accumulated other comprehensive loss$(351) $(4,667) $(6,491) $(7,973)

Contents
Gains and losses from derivatives designated as cash flow hedges reclassified from accumulated other comprehensive income (loss) into net income (loss) are discussed in Note 14 entitled “Items Reclassified From Accumulated Other Comprehensive Loss.”
The following tables summarize gains and losses on derivatives not designated as hedging instruments within the consolidated condensed statements of operations for the three and six months ended July 4, 2021 and July 5, 2020 and June 30, 2019:2020:
Three Months Ended
Statement of Operations LocationJuly 4, 2021July 5, 2020
(in thousands)
Foreign currency options gain (loss)Other expense$134 $(1,629)
   Three Months Ended
 Statement of Operations Location July 5, 2020 June 30, 2019
   (In thousands)
Foreign currency options lossOther expense $(1,629) $(144)
      
   Six Months Ended
 Statement of Operations Location July 5, 2020 June 30, 2019
   (In thousands)
Foreign currency options gain (loss)Other expense $79
 $(549)
Six Months Ended
Statement of Operations LocationJuly 4, 2021July 5, 2020
(in thousands)
Foreign currency options gainOther expense$319 $79 


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NOTE 7 – SHAREHOLDERS’ EQUITY
The following tables depict the activity in the accounts which make up shareholders’ equity for the three and six months ended July 4, 2021 and July 5, 2020 and June 30, 2019:2020:
SHARESCOMMON STOCKADDITIONAL PAID-IN CAPITALRETAINED
EARNINGS		PENSION LIABILITYFOREIGN CURRENCY TRANSLATION ADJUSTMENTCASH FLOW
HEDGE
(in thousands)
Balance, at January 3, 202158,664 $5,865 $247,920 $208,562 $(69,288)$(60,331)$(6,190)
Net income— — — 6,938 — — — 
Restricted stock issuances376 38 5,277 — — — — 
Unamortized compensation expense related to restricted stock awards— — (5,315)— — — — 
Cash dividends declared, $0.01 per common share— — — (589)— — — 
Compensation expense related to stock awards, net of forfeitures(26)(2)689 — — — — 
Pension liability adjustment— — — — 89 — — 
Foreign currency translation adjustment— — — — — (19,597)— 
Reclassification out of accumulated other comprehensive loss - discontinued cash flow hedge— — — — — — 749 
Balance, at April 4, 202159,014 $5,901 $248,571 $214,911 $(69,199)$(79,928)$(5,441)
Net income— — — 15,511 — — — 
Restricted stock issuances52 6 789 — — — — 
Unamortized compensation expense related to restricted stock awards— — (794)— — — — 
Cash dividends declared, $0.01 per common share— — — (589)— — — 
Compensation expense related to stock awards0 0 1,548 — — — — 
Pension liability adjustment— — — — 100 — — 
Foreign currency translation adjustment— — — — — 3,455 — 
Reclassification out of accumulated other comprehensive loss - discontinued cash flow hedge— — — — — — 745 
Balance, at July 4, 202159,066 $5,907 $250,114 $229,833 $(69,099)$(76,473)$(4,696)
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 SHARES COMMON STOCK ADDITIONAL PAID-IN CAPITAL 
RETAINED
EARNINGS
 PENSION LIABILITY FOREIGN CURRENCY TRANSLATION ADJUSTMENT 
CASH FLOW
HEDGE
 (In thousands)
Balance, at December 29, 201958,416
 $5,842
 $250,306
 $286,056
 $(56,700) $(113,139) $(4,163)
Net loss—
 —
 —
 (102,167) —
 —
 —
Stock issuances under employee plans220
 22
 197
 —
 —
 —
 —
Other issuances of common stock107
 10
 1,720
 —
 —
 —
 —
Unamortized stock compensation expense related to restricted stock awards—
 —
 (1,731) —
 —
 —
 —
Cash dividends declared, $0.065 per common share—
 —
 —
 (3,807) —
 —
 —
Forfeitures and compensation expense related to stock awards(255) (25) (4,114) —
 —
 —
 —
Pension liability adjustment—
 —
 —
 —
 1,733
 —
 —
Foreign currency translation adjustment—
 —
 —
 —
 —
 (15,245) —
Cash flow hedge unrealized loss—
 —
 —
 —
 —
 —
 (6,140)
Balance, at April 5, 202058,488
 $5,849
 $246,378
 $180,082
 $(54,967) $(128,384) $(10,303)
Net income—
 —
 —
 4,709
 —
 —
 —
Stock issuances under employee plans12
 1
 (1) —
 —
 —
 —
Other issuances of common stock70
 7
 2,294
 —
 —
 —
 —
Unamortized stock compensation expense related to restricted stock awards—
 —
 (2,300) —
 —
 —
 —
Cash dividends declared, $0.01 per common share—
 —
 —
 (585) —
 —
 —
Forfeitures and compensation expense related to stock awards(26) (3) (48) —
 —
 —
 —
Pension liability adjustment—
 —
 —
 —
 (342) —
 —
Foreign currency translation adjustment—
 —
 —
 —
 —
 16,160
 —
Cash flow hedge unrealized loss—
 —
 —
 —
 —
 —
 (351)
Balance, at July 5, 202058,544
 $5,854
 $246,323
 $184,206
 $(55,309) $(112,224) $(10,654)

 SHARES COMMON STOCK ADDITIONAL PAID-IN CAPITAL 
RETAINED
EARNINGS
 PENSION LIABILITY FOREIGN CURRENCY TRANSLATION ADJUSTMENT 
CASH FLOW
HEDGE
 (In thousands)
Balance, at December 30, 201859,508
 $5,951
 $270,269
 $222,214
 $(43,610) $(101,487) $1,326
Net income—
 —
 —
 7,059
 —
 —
 —
Stock issuances under employee plans509
 51
 379
 —
 —
 —
 —
Other issuances of common stock224
 22
 3,900
 —
 —
 —
 —
Unamortized stock compensation expense related to restricted stock awards—
 —
 (3,922) —
 —
 —
 —
Cash dividends declared, $0.065 per common share—
 —
 —
 (3,900) —
 —
 —
Forfeitures and compensation expense related to stock awards(225) (22) 29
 —
 —
 —
 —
Pension liability adjustment—
 —
 —
 —
 (91) —
 —
Foreign currency translation adjustment—
 —
 —
 —
 —
 (5,203) —
Cash flow hedge unrealized loss—
 —
 —
 —
 —
 —
 (3,306)
Balance, at March 31, 201960,016
 $6,002
 $270,655
 $225,373
 $(43,701) $(106,690) $(1,980)
Net income—
 —
 —
 29,499
 —
 —
 —
Stock issuances under employee plans2
 —
 6
 —
 —
 —
 —
Other issuances of common stock(1) —
 —
 —
 —
 —
 —
Unamortized stock compensation expense related to restricted stock awards—
 —
 52
 —
 —
 —
 —
Cash dividends declared, $0.065 per common share—
 —
 —
 (3,863) —
 —
 —
Forfeitures and compensation expense related to stock awards(28) (3) 1,506
 —
 —
 —
 —
Share repurchases(1,556) (156) (24,998) —
 —
 —
 —
Pension liability adjustment—
 —
 —
 —
 829
 —
 —
Foreign currency translation adjustment—
 —
 —
 —
 —
 4,249
 —
Cash flow hedge unrealized loss—
 —
 —
 —
 —
 —
 (4,667)
Balance, at June 30, 201958,433
 $5,843
 $247,221
 $251,009
 $(42,872) $(102,441) $(6,647)

SHARESCOMMON STOCKADDITIONAL PAID-IN CAPITALRETAINED
EARNINGS		PENSION LIABILITYFOREIGN CURRENCY TRANSLATION ADJUSTMENTCASH FLOW
HEDGE
(in thousands)
Balance, at December 29, 201958,416 $5,842 $250,306 $286,056 $(56,700)$(113,139)$(4,163)
Net loss— — — (102,167)— — — 
Issuances of stock (other than restricted stock)220 22 197 — — — — 
Restricted stock issuances107 10 1,720 — — — — 
Unamortized compensation expense related to restricted stock awards— — (1,731)— — — — 
Cash dividends declared, $0.065 per common share— — — (3,807)— — — 
Compensation expense related to stock awards, net of forfeitures(255)(25)(4,114)— — — — 
Pension liability adjustment— — — — 1,733 — — 
Foreign currency translation adjustment— — — — — (15,245)— 
Cash flow hedge unrealized loss— — — — — — (6,140)
Balance, at April 5, 202058,488 $5,849 $246,378 $180,082 $(54,967)$(128,384)$(10,303)
Net income— — — 4,709 — — — 
Issuances of stock (other than restricted stock)12 1 (1)— — — — 
Restricted stock issuances70 7 2,294 — — — — 
Unamortized compensation expense related to restricted stock awards— — (2,300)— — — — 
Cash dividends declared, $0.01 per common share— — — (585)— — — 
Compensation expense related to stock awards, net of forfeitures(26)(3)(48)— — — — 
Pension liability adjustment— — — — (342)— — 
Foreign currency translation adjustment— — — — — 16,160 — 
Cash flow hedge unrealized loss— — — — — — (351)
Balance, at July 5, 202058,544 $5,854 $246,323 $184,206 $(55,309)$(112,224)$(10,654)
Stock Option Awards
In accordance with accounting standards, the Company measures the cost of employee services received in exchange for an award of equity instruments based on the grant date fair value of the award. That cost will be recognized over the period in which the employee is required to provide the services – the requisite service period (usually the vesting period) – in exchange for the award.
All outstanding stock options vested prior to the end of 2013, and therefore there was 0 stock option compensation expense in the first six months of 20202021 or 2019.2020.
As of July 5, 2020,4, 2021, there were 20,0000 stock options outstanding and exercisable, at an average exercise price of $12.43 per share.exercisable. There were 0 stock options granted in the first six months of 20202021 or 2019.2020. There were 7,5000 stock options exercised and 0 stock options forfeited in the first six months of 2020.2021. There were 10,0007,500 stock options exercised in the first six months of 20192020 and 5,0000 stock option forfeitures during those six months. The outstanding and exercisable stock options had no intrinsic value as of July 5, 2020.


Restricted Stock Awards
During the six months ended July 4, 2021 and July 5, 2020, and June 30, 2019, the Company granted restricted stock awards for 308,100428,400 and 224,000308,100 shares of common stock, respectively. Awards of restricted stock (or a portion thereof) vest with respect to each recipient over a one to three-year period from the date of grant, provided the individual remains in the employment or service of the Company as of the vesting date. Additionally, certain awards (or a portion thereof) could vest earlier in the event of a change in control of the Company, or upon involuntary termination without cause.
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Compensation expense (benefit) related to restricted stock grants was $(0.2)$1.8 million and $1.5$(0.2) million for the six months ended July 4, 2021, and July 5, 2020, and June 30, 2019, respectively. The Company has reduced its expense for restricted stock forfeited during the period.
The following table summarizes restricted stock outstanding as of July 5, 2020,4, 2021, as well as activity during the six months then ended:
 Restricted Shares 
Weighted Average
Grant Date
Fair Value
Outstanding at December 29, 2019468,200
 $28.63
Granted308,100
 13.08
Vested(162,100) 19.22
Forfeited or canceled(153,700) 19.67
Outstanding at July 5, 2020460,500
 $24.53

Restricted SharesWeighted Average
Grant Date
Fair Value
Outstanding at January 3, 2021436,900 $24.73 
Granted428,400 14.26 
Vested(167,200)13.68 
Forfeited or canceled(3,100)16.69 
Outstanding at July 4, 2021695,000 $20.97 
As of July 5, 2020,4, 2021, the unrecognized total compensation cost related to unvested restricted stock was $4.7$7.2 million. That cost is expected to be recognized by the end of 2023.2024.
Performance Share Awards
During the six months ended July 4, 2021 and July 5, 2020, and June 30, 2019, the Company issued awards of performance shares to certain employees. These awards vest based on the achievement of certain performance-based goals over a performance period of one to three years, subject to the employee’s continued employment, and will be settled in shares of our common stock or in cash at the Company’s election. The number of shares that may be issued in settlement of the performance shares to the award recipients may be greater (up to 200%) or lesser than the nominal award amount depending on actual performance achieved as compared to the performance targets set forth in the awards.
The following table summarizes the performance shares outstanding as of July 5, 2020,4, 2021, as well as the activity during the six months then ended:
 Performance Shares 
Weighted Average
Grant Date
Fair Value
Outstanding at December 29, 2019512,000
 $19.71
Granted263,700
 15.36
Vested(164,300) 19.74
Forfeited or canceled(192,000) 19.67
Outstanding at July 5, 2020419,400
 $16.99

Performance SharesWeighted Average
Grant Date
Fair Value
Outstanding at January 3, 2021405,300 $16.94 
Granted296,900 14.15 
Vested0 0 
Forfeited or canceled(47,500)23.42 
Outstanding at July 4, 2021654,700 $15.20 
Compensation expense (benefit) related to the performance shares was $(2.0)$0.7 million and $3.3$(2.0) million for the six months ended July 4, 2021 and July 5, 2020, and June 30, 2019, respectively. The Company has reduced its expense for performance shares forfeited during the period. Unrecognized compensation expense related to these performance shares was approximately $7.0$9.0 million as of July 5, 2020.4, 2021. Depending on the performance of the Company, any compensation expense related to these outstanding performance shares will be recognized by the end of 2023.2024.
Tax expenseThe tax benefit recognized with regard to restricted stock and performance shares was approximately $0.5$0.4 million for the six months ended July 5, 2020.4, 2021.

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Table of Contents
NOTE 8 – LEASES
General
We haveThe Company has operating and finance leases for manufacturing equipment, corporate offices, showrooms, distribution facilities, design centers, as well as computer and office equipment. OurThe Company’s leases have terms ranging from 1 to 20 years, some of which may include options to extend the lease term for up to 5 years, and certain leases may include an option to terminate the lease. Our lease accounting may include these options to extend or terminate a lease when it is reasonably certain that we will exercise that option.
We recordThe Company records a right-of-use asset and lease liability for leases extending beyond one year for operating and finance leases once a contract that contains a lease is executed and we have the right to control the use of the leased asset. The right-of-use asset is measured as the present value of the lease obligation. The discount rate used to calculate the present value of the lease liability was the Company’s incremental borrowing rate for the applicable geographical region.
As of July 5, 2020,4, 2021, there were no significant right-of-use assets and lease obligations from leases that had not commenced as of the end of the second quarter.
The table below represents a summary of the balances recorded in the consolidated condensed balance sheets related to ourthe Company’s leases as of July 5, 20204, 2021 and December 29, 2019:January 3, 2021:
 July 5, 2020 December 29, 2019
Balance Sheet LocationOperating Leases Finance Leases Operating Leases Finance Leases
 (In thousands)
Operating lease right-of-use assets$100,091
   $107,044
  
        
Current portion of operating lease liabilities$14,124
   $15,914
  
Operating lease liabilities86,716
   91,829
  
Total operating lease liabilities$100,840
   $107,743
  
        
Property and equipment  $4,954
   $5,007
        
Accrued expenses  $1,455
   $1,489
Other long-term liabilities  1,485
   1,673
Total finance lease liabilities  $2,940
   $3,162


July 4, 2021January 3, 2021
Balance Sheet LocationOperating LeasesFinance LeasesOperating LeasesFinance Leases
(in thousands)
Operating lease right-of-use assets$94,316 $98,013 
 
Current portion of operating lease liabilities$13,116 $13,555 
Operating lease liabilities83,034 86,468 
Total operating lease liabilities$96,150 $100,023 
 
Property, plant and equipment, net$7,738 $6,138 
 
Accrued expenses$1,862 $1,496 
Other long-term liabilities3,916 2,688 
Total finance lease liabilities$5,778 $4,184 
Lease Costs
Three Months EndedSix Months Ended
July 4, 2021July 5, 2020July 4, 2021July 5, 2020
(in thousands)
Finance lease cost:
Amortization of right-of-use assets$305 $335 $584 $635 
Interest on lease liabilities35 16 67 34 
Operating lease cost5,914 6,759 11,800 12,981 
Short-term lease cost179 166 642 341 
Variable lease cost482 924 1,288 1,570 
Total lease cost$6,915 $8,200 $14,381 $15,561 
 Three Months Ended Six Months Ended
 July 5, 2020 June 30, 2019 July 5, 2020 June 30, 2019
Lease cost(In thousands)
Finance lease cost:       
Amortization of right-of-use assets$335
 $278
 $635
 $424
Interest on lease liabilities16
 11
 34
 19
Operating lease cost6,759
 5,930
 12,981
 11,601
Short-term lease cost166
 408
 341
 1,146
Variable lease cost924
 613
 1,570
 758
Total lease cost$8,200
 $7,240
 $15,561
 $13,948
        
Other supplemental information       
        
Cash paid for amounts included in the measurement of lease liabilities:       
Operating cash flows from finance leases$16
 $11
 $34
 $19
Operating cash flows from operating leases5,569
 5,395
 11,450
 10,505
Financing cash flows from finance leases411
 271
 810
 517
Right-of-use assets obtained in exchange for new finance lease liabilities340
 551
 553
 551
Right-of-use assets obtained in exchange for new operating lease liabilities3,088
 4,069
 4,065
 6,536

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Other Supplemental Information
Three Months EndedSix Months Ended
July 4, 2021July 5, 2020July 4, 2021July 5, 2020
(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases$35 $16 $67 $34 
Operating cash flows from operating leases5,476 5,569 10,676 11,450 
Financing cash flows from finance leases589 411 1,116 810 
Right-of-use assets obtained in exchange for new finance lease liabilities1,471 340 2,744 553 
Right-of-use assets obtained in exchange for new operating lease liabilities3,267 3,088 5,645 4,065 
Lease Term and Discount Rate
The table below presents the weighted average remaining lease terms and discount rates for finance and operating leases as of July 5, 20204, 2021 and December 29, 2019:January 3, 2021:
 July 5, 2020 December 29, 2019
Weighted-average remaining lease term – finance leases (in years)2.70
 2.76
Weighted-average remaining lease term – operating leases (in years)10.62
 10.60
Weighted-average discount rate – finance leases2.37% 2.06%
Weighted-average discount rate – operating leases5.93% 5.86%


 July 4, 2021January 3, 2021
Weighted-average remaining lease term – finance leases (in years)3.463.35
Weighted-average remaining lease term – operating leases (in years)10.2610.61
Weighted-average discount rate – finance leases2.82 %2.64 %
Weighted-average discount rate – operating leases5.96 %5.98 %
Maturity Analysis
A maturity analysis of lease payments under non-cancellable leases is presented as follows:
Fiscal YearOperating Leases Finance Leases
 (In thousands)
2020 (excluding the six months ended July 5, 2020)$10,334
 $816
202117,476
 1,063
202214,369
 619
202311,850
 400
202410,120
 141
Thereafter75,880
 —
Total future minimum lease payments (undiscounted)140,029
 3,039
Less: Present value discount(39,189) (99)
Total lease liability$100,840
 $2,940

Fiscal YearOperating LeasesFinance Leases
(in thousands)
2021 (excluding the six months ended July 4, 2021)$9,439 $1,046 
202216,838 1,850 
202313,798 1,579 
202411,563 1,053 
202510,341 419 
Thereafter69,793 140 
Total future minimum lease payments (undiscounted)131,772 6,087 
Less: Present value discount(35,622)(309)
Total lease liability$96,150 $5,778 
Policy Elections
WeThe Company made an accounting policy election not to separate lease and non-lease components for all asset classes, except for data center assets, and will accountaccounts for the lease payments as a single component. WeThe Company also made an accounting policy election to exclude leases with an initial term of 12 months or less from the calculation of the right-of-use asset and lease liability recorded on the consolidated condensed balance sheets. These leases primarily represent month-to-month operating leases for vehicles and office equipment where we were reasonably certain that we would not elect an option to extend the lease.

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NOTE 9 – EMPLOYEE BENEFIT PLANS
On December 31, 2019, a plan amendment was executedDuring the three and six months ended July 4, 2021, the Company recorded multi-employer pension expense related to eliminate future service accruals in the Dutch defined benefit plan, resulting in a curtailmentmulti-employer contributions of the plan. This plan remains in existence$0.7 million and will continue to pay vested benefits. Active participants will no longer accrue benefits after December 31, 2019, and instead will participate in an industry-wide multi-employer plan beginning in fiscal year 2020.$1.4 million, respectively. During the three and six months ended July 5, 2020, the Company recorded multi-employer pension expense related to multi-employer contributions of $0.6 million and $1.3 million, respectively.
The following tables provide the components of net periodic benefit cost for the three and six months ended July 4, 2021 and July 5, 2020 and June 30, 2019:2020:
Three Months EndedSix Months Ended
Defined Benefit Retirement Plans (Europe)
July 4, 2021July 5, 2020July 4, 2021July 5, 2020
(in thousands)
Interest cost$579 $870 $1,151 $1,761 
Expected return on assets(860)(1,038)(1,709)(2,102)
Amortization of prior service cost29 26 58 52 
Amortization of net actuarial losses409 320 813 646 
Net periodic benefit cost$157 $178 $313 $357 
 Three Months Ended Six Months Ended
Defined Benefit Retirement Plans (Europe)
July 5, 2020 June 30, 2019 July 5, 2020 June 30, 2019
 (In thousands)
Service cost$—
 $184
 $—
 $369
Interest cost870
 1,266
 1,761
 2,547
Expected return on assets(1,038) (1,428) (2,102) (2,873)
Amortization of prior service cost26
 16
 52
 32
Amortization of net actuarial losses320
 249
 646
 502
Net periodic benefit cost$178
 $287
 $357
 $577
Three Months EndedSix Months Ended
Salary Continuation PlanJuly 4, 2021July 5, 2020July 4, 2021July 5, 2020
(in thousands)
Interest cost$177 $235 $353 $469 
Amortization of net actuarial losses186 139 372 279 
Net periodic benefit cost$363 $374 $725 $748 

 Three Months Ended Six Months Ended
Salary Continuation PlanJuly 5, 2020 June 30, 2019 July 5, 2020 June 30, 2019
 (In thousands)
Interest cost$235
 $289
 $469
 $577
Amortization of net actuarial losses139
 93
 279
 187
Net periodic benefit cost$374
 $382
 $748
 $764

 Three Months Ended Six Months Ended
nora Defined Benefit Plan
July 5, 2020 June 30, 2019 July 5, 2020 June 30, 2019
 (In thousands)
Service cost$259
 $216
 $517
 $433
Interest cost110
 171
 221
 345
Amortization of net actuarial losses110
 —
 110
 —
Net periodic benefit cost$479
 $387
 $848
 $778

Three Months EndedSix Months Ended
nora Defined Benefit Plan
July 4, 2021July 5, 2020July 4, 2021July 5, 2020
(in thousands)
Service cost$277 $259 $554 $517 
Interest cost104 110 207 221 
Amortization of net actuarial losses92 110 184 110 
Net periodic benefit cost$473 $479 $945 $848 
In accordance with applicable accounting standards, the service cost component of net periodic benefit costs is presented within Operating Incomeoperating income (loss) in the consolidated condensed statements of operations, while all other components of net periodic benefit costs are presented within other expense in the consolidated condensed statements of operations.

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NOTE 10 – GOODWILL AND INTANGIBLE ASSETS
In the first quarter of 2021, the Company determined that it has two operating and reportable segments – namely AMS and EAAA. See Note 11 entitled “Segment Information” for additional information. The Company tests goodwill for impairment at least annually at the reporting unit level. The Company’s reporting units remain unchanged following the realignment of its segments and consist of Americas, Europe, and Asia-Pacific. The Americas reporting unit is the same as the AMS reportable segment, and the Europe and Asia-Pacific reporting units are one level below the EAAA reportable segment.
During the first quarter of 2020, we performedas a qualitative assessmentresult of goodwill impairment indicators, consideringchanges in macroeconomic conditions related to the COVID-19 pandemic, and its potential impact to sales and operating income. We expect that the duration of the COVID-19 pandemic and its adverse impacts on the global economy, global travel restrictions, COVID-19 related government shutdowns, disruptions to our supply chain, distribution disruption, and disruption to our customers’ plans to spend capital on projects that use our products and services will result in lower revenue and operating income. As a result, we determined that there were indicators of impairment, and the Company proceeded withrecognized a quantitative assessmentcharge of $121.3 million for the impairment of goodwill for all reporting units at the end of the first quarter.
In performing the first quarter quantitative goodwill impairment testing, the Company prepared valuations of reporting units on both a market comparable methodology and an income methodology, and those valuations were compared with the respective carrying values of the reporting units to determine whether any goodwill impairment existed. Our reporting units are one level below our reporting segment level. In preparing the valuations, past, present and future expectations of performance were considered, including the impact of the COVID-19 pandemic. This methodology was consistent with the approach used to perform the annual quantitative goodwill assessment in prior years. The weighted average cost of capital used in the goodwill impairment testing ranged between 10.0% and 10.5%, which primarily fluctuated based on a country risk premium assigned to the geographical region of the reporting unit. There is inherent uncertainty associated with key assumptions used in our impairment testing including the duration of the economic downturn associated with the COVID-19 pandemic and the recovery period.certain intangible assets. As a result of the first quarter 2020 assessment, we determined that the fair value for two reporting units was less than the carrying value and recognized a goodwill impairment loss of $116.5 million in the first quarter of 2020. The expected decline in revenue due to the impact of COVID-19 contributed to the lower fair value of our Europe and Asia-Pacific reporting units. As such, the goodwill impairment loss was allocated to our Europe and Asia-Pacific reporting units in the amounts of $99.2 million and $17.3 million, respectively. We determined that the goodwill in our Americas reporting unit was not impaired as the fair value exceeded the carrying value by more than 90% at April 5, 2020. There were no indicators of additional goodwill impairment as of July 5, 2020.4, 2021.
The changes in the carrying amounts of goodwill attributable to each reportable segment for the six months ended July 5, 20204, 2021 are as follows:
BALANCE, AT
DECEMBER 30,
2019
 ACQUISITIONS 
PURCHASE
PRICE
ACCOUNTING
ADJUSTMENTS
 IMPAIRMENT 
FOREIGN
CURRENCY
TRANSLATION
 BALANCE, AT
JULY 5, 2020
(In thousands)
$257,439
 $—
 $—
 $(116,495) $3,121
 $144,065

AMSEAAATotal
(in thousands)
Balance, at January 3, 2021$122,344 $43,433 $165,777 
Foreign currency translation(5,795)(2,057)(7,852)
Balance, at July 4, 2021$116,549 $41,376 $157,925 
Additionally, in fiscal year 2020, we determined that the trademarks and trade names intangible assets related to the acquired nora business were also impaired and recognized an impairment loss of $4.8 million in the first quarter of 2020. The carrying value of intangible assets after the impairment was $82.7$82.4 million at July 5, 2020.4, 2021. There were no indicators of additional intangible asset impairment as of the end of the second quarter of 2020.2021.

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NOTE 11 – SEGMENT INFORMATION
Based on applicableThe Company determines that an operating segment exists if a component (i) engages in business activities from which it earns revenues and incurs expenses, (ii) has operating results that are regularly reviewed by the chief operating decision maker (“CODM”) and (iii) has discrete financial information. Additionally, accounting standards require the utilization of a “management approach” to report the financial results of operating segments, which is based on information used by the CODM to assess performance and make operating and resource allocation decisions. In the first quarter of 2021, the Company largely completed its integration of the nora acquisition, and integration of its European and Asia-Pacific commercial areas and determined that it has 2 operating segments organized by geographical area – namely (a) Americas (“AMS”) and (b) Europe, Africa, Asia and Australia (collectively “EAAA”). The AMS operating segment is unchanged from prior year and continues to include the United States, Canada and Latin America geographic areas.
Pursuant to the management approach discussed above, the Company’s CODM, our chief executive officer, evaluates performance at the AMS and EAAA operating segment levels and makes operating and resource allocation decisions based on segment adjusted operating income or loss (“AOI”), which includes allocations of corporate selling, general and administrative expenses. AOI excludes nora purchase accounting amortization, goodwill and intangible asset impairment charges, changes in equity award forfeiture accounting, restructuring charges, asset impairment, severance and other charges. Intersegment revenues for the three and six months ended July 4, 2021 were $20.6 million and $36.3 million, respectively, and intersegment revenues for the three and six months ended July 5, 2020 were $21.1 million and $40.6 million, respectively. Intersegment revenues are eliminated from net sales presented below since these amounts are not included in the information provided to the CODM.
The Company has determined that it has 3 operating2 reportable segments – namely,AMS and EAAA as each operating segment meets the Americas, Europe and Asia-Pacific geographic regions. Pursuantquantitative thresholds defined in the accounting guidance.
Segment information below for fiscal year 2020 has been restated to accounting standards, the Company has aggregated the three operating segments into onereflect our new reportable segment because they have similar economic characteristics, and the operating segments are similar in allstructure.
Three Months EndedSix Months Ended
July 4, 2021July 5, 2020July 4, 2021July 5, 2020
(in thousands)
Net Sales
AMS$156,665 $151,222 $283,632 $309,313 
EAAA138,120 108,282 264,413 238,360 
Total net sales$294,785 $259,504 $548,045 $547,673 
 
Segment AOI
AMS$21,098 $23,942 $33,011 $47,492 
EAAA9,960 3,530 17,971 9,330 
 
Depreciation and Amortization
AMS$4,504 $3,966 $9,227 $7,873 
EAAA7,232 6,842 14,443 13,875 
Total depreciation and amortization$11,736 $10,808 $23,670 $21,748 
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Table of the following areas: (a) the nature of the products and services; (b) the nature of the production processes; (c) the type or class of customer for their products and services; (d) the methods used to distribute their products or provide their services; and (e) the nature of the regulatory environment.Contents
While the Company operates as 1 reportable segment for the reasons discussed, included below is selected information on our operating segments.
Summary information by operating segment follows:
  AMERICAS EUROPE 
ASIA-
PACIFIC
 TOTAL
  (In thousands)
Three Months Ended July 5, 2020:        
Net Sales $151,222
 $71,874
 $36,408
 $259,504
Depreciation and amortization 3,009
 4,417
 1,919
 9,345
Total assets 685,080
 536,782
 172,737
 1,394,599
         
Three Months Ended June 30, 2019:        
Net Sales $207,250
 $95,665
 $54,592
 $357,507
Depreciation and amortization 3,300
 4,651
 2,108
 10,059
         
Six Months Ended July 5, 2020:        
Net Sales $309,313
 $166,564
 $71,796
 $547,673
Depreciation and amortization 6,069
 8,858
 3,937
 18,864
         
Six Months Ended June 30, 2019:        
Net Sales $367,876
 $188,715
 $98,604
 $655,195
Depreciation and amortization 6,551
 9,331
 4,240
 20,122

A reconciliation of the Company’s total operating segment depreciation and amortization and assets to the corresponding consolidated amounts follows:
July 4, 2021January 3, 2021
(in thousands)
Assets
AMS$834,446 $800,068 
EAAA692,208 682,295 
Total segment assets1,526,654 1,482,363 
Corporate assets128,701 111,073 
Eliminations(333,141)(287,425)
Total reported assets$1,322,214 $1,306,011 
Reconciliations of operating income to income (loss) before income tax expense and segment AOI are presented as follows:
Three Months EndedSix Months Ended
July 4, 2021July 5, 2020July 4, 2021July 5, 2020
(in thousands)
AMS operating income$21,101 $17,189 $32,748 $37,287 
EAAA operating income (loss)8,123 204 13,342 (113,406)
Consolidated operating income (loss)29,224 17,393 46,090 (76,119)
Interest expense7,289 4,965 14,545 10,595 
Other expense617 5,139 1,332 6,630 
Income (loss) before income tax expense$21,318 $7,289 $30,213 $(93,344)
Three Months Ended July 4, 2021Three Months Ended July 5, 2020
AMSEAAAAMSEAAA
(in thousands)
Operating income$21,101 $8,123 $17,189 $204 
Purchase accounting amortization0 1,441 0 1,316 
Restructuring, asset impairment, severance and other charges(3)396 6,753 2,010 
AOI$21,098 $9,960 $23,942 $3,530 
Six Months Ended July 4, 2021Six Months Ended July 5, 2020
AMSEAAAAMSEAAA
(in thousands)
Operating income (loss)$32,748 $13,342 $37,287 $(113,406)
Purchase accounting amortization0 2,862 0 2,631 
Goodwill and intangible asset impairment0 0 2,695 118,563 
Impact of change in equity award forfeiture accounting0 0 757 650 
Restructuring, asset impairment, severance and other charges263 1,767 6,753 892 
AOI$33,011 $17,971 $47,492 $9,330 
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 Three Months Ended Six Months Ended
Depreciation and AmortizationJuly 5, 2020 June 30, 2019 July 5, 2020 June 30, 2019
 (In thousands)
Total segment depreciation and amortization$9,345
 $10,059
 $18,864
 $20,122
Corporate depreciation and amortization1,463
 1,295
 2,884
 2,576
Reported depreciation and amortization$10,808
 $11,354
 $21,748
 $22,698

AssetsJuly 5, 2020
 (In thousands)
Total segment assets$1,394,599
Corporate assets134,082
Eliminations(227,713)
Reported total assets$1,300,968

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NOTE 12 – SUPPLEMENTAL CASH FLOW INFORMATION
Cash payments for interest amounted to $11.1$11.9 million and $12.0$11.1 million for the six months ended July 4, 2021 and July 5, 2020, and June 30, 2019, respectively. Income tax payments, net of refunds, amounted to $6.9$7.5 million and $16.4$6.9 million for the six months ended July 4, 2021 and July 5, 2020, and June 30, 2019, respectively.
See Note 8 entitled “Leases”“Leases” for supplemental disclosures related to finance and operating leases.
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NOTE 13 – INCOME TAXES
The Company determines its provision for income taxes for interim periods using an estimate of its annual effective tax rate and records any changes affecting the estimated annual effective tax rate in the interim period in which the change occurs, including discrete tax items.
During the six months ended July 5, 2020,4, 2021, the Company recorded a total income tax provision of $7.8 million on pre-tax income of $30.2 million resulting in an effective tax rate of 25.7%, as compared to a total income tax provision of $4.1 million on a pre-tax loss of $93.3 million resulting in an effective tax rate of (4.4)%. during the six months ended July 5, 2020. The effective tax rate for thisthe period ended July 5, 2020 was primarily impacted by a non-deductible goodwill impairment. Excluding the impact of the goodwill impairment, the effective tax rate was 17.8% for the period compared to 17.6% during the six months ended June 30, 2019.July 5, 2020. The increase in the effective tax rate as compared to the period ended July 5, 2020, excluding the non-deductible goodwill impairment, was due to unfavorable changes related to company-owned life insurance and unrecognized tax benefits, which were offset by the one-time favorable impacts of amending prior year tax returns.returns during the six months ended July 5, 2020 which was offset by favorable changes related to company-owned life insurance in the current period.
In the first six months of 2020,2021, the Company decreased its liability for unrecognized tax benefits by $0.4$0.7 million. The decrease was primarily due to settlements with taxing authorities and a lapse of applicable statute of limitations. As of July 5, 2020,4, 2021, the Company had accrued approximately $25.1$10.1 million for unrecognized tax benefits. In accordance with applicable accounting standards, the Company’s deferred tax asset as of July 5, 20204, 2021 reflects a reduction for $2.8$3.0 million of these unrecognized tax benefits.
Unrecognized tax benefits are reviewed on an ongoing basis and are adjusted for changing facts and circumstances, including the progress of tax audits and the closing of statutes of limitations. Based on information currently available, it is reasonably possible that approximately $14.7$1.7 million of unrecognized tax benefits may be recognized within the next 12 months due to a lapse of statute of limitations.
On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) was signed into law in response to the COVID-19 pandemic and provides certain tax relief to businesses. Tax provisions
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Table of the CARES Act include, among other things, the deferral of certain payroll taxes, relief for retaining employees, and certain income tax provisions for corporations. During the six months ended July 5, 2020, the Company deferred approximately $1.4 million in payroll taxes under the CARES Act. Other than the deferral of payroll taxes, the CARES Act did not have an impact on the Company’s tax accounts, including its effective tax rate, during the six months ended July 5, 2020. The Company expects it will defer approximately $4.0 million in payroll taxes under the CARES Act during fiscal year 2020 which will result in a corresponding increase in its payroll tax accrual. The CARES Act and other similar foreign government support programs are not expected to have a material impact on the Company’s tax accounts during the year.Contents


NOTE 14 – ITEMS RECLASSIFIED FROM ACCUMULATED OTHER COMPREHENSIVE LOSS
Amounts reclassified out of accumulated other comprehensive income (loss)loss (“AOCI”), before tax, to the consolidated condensed statements of operations during the three and six months ended July 4, 2021 and July 5, 2020 and June 30, 2019 are reflected in the tablestable below:
Three Months Ended
Statement of Operations LocationJuly 4, 2021July 5, 2020
(in thousands)
Interest rate swap contracts lossInterest expense$(1,046)$(1,124)
Amortization of benefit plan prior service cost and net actuarial lossesOther expense(716)(595)
Total loss reclassified from AOCI, net$(1,762)$(1,719)
Six Months Ended
 Three Months EndedStatement of Operations LocationJuly 4, 2021July 5, 2020
Statement of Operations Location July 5, 2020 June 30, 2019(in thousands)
 (In thousands)
Interest rate swap contracts gain (loss)Interest expense $(1,124) $156
Interest rate swap contracts lossInterest rate swap contracts lossInterest expense$(2,107)$(1,616)
Amortization of benefit plan prior service cost and net actuarial lossesOther expense (595) (358)Amortization of benefit plan prior service cost and net actuarial lossesOther expense(1,427)(1,087)
Total loss reclassified from AOCI, net $(1,719) $(202)Total loss reclassified from AOCI, net$(3,534)$(2,703)
    
 Six Months Ended
Statement of Operations Location July 5, 2020 June 30, 2019
 (In thousands)
Interest rate swap contracts gain (loss)Interest expense $(1,616) $295
Amortization of benefit plan prior service cost and net actuarial lossesOther expense (1,087) (721)
Total loss reclassified from AOCI, net $(2,703) $(426)


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NOTE 15 – RESTRUCTURING CHARGES
A summary of restructuring activities for the 2019 restructuring plan is presented below:
Workforce Reduction
(in thousands)
Balance, at January 3, 2021$1,064 
Charged to expenses(192)
Deductions579 
Balance, at July 4, 2021$293 
For the six months ended July 5, 2020,4, 2021, the Company recorded a reduction of $1.3$0.2 million of previously recognized restructuring charges due to changes in expected cash payments. At July 5, 2020,4, 2021, the total restructuring reserve was $6.8 million for both the 2019 and 2018 restructuring plans.$0.3 million. Below is a discussion of the restructuring plan activities by year.under the 2019 restructuring plan.
2019 Restructuring Plan
On December 23, 2019, the Company committed to a new restructuring plan that continues to focus on efforts to improve efficiencies and decrease costs across its worldwide operations, and more closely align its operating structure with its business strategy. The plan involved a reduction of approximately 105 employees and early termination of 2 office leases. As a result of this plan, the Company recorded a pre-tax restructuring charge in the fourth quarter of 2019 of approximately $9.0 million. The charge was comprised of severance expenses ($8.8 million) and lease exit costs ($0.2 million).
The restructuring plan iswas expected to result in cash expenditures of approximately $9.0 million for payment of the employee severance and lease exit costs, as described above. The Company expects to complete the restructuring plan in fiscal year 20202021 and expects the plan to yield annualized savings of approximately $6.0 million. A portion of the annualized savings is expected to bewas realized on the income statement in fiscal year 2020, with the remaining portion of the annualized savings expected to be realized in fiscal year 2021.
A reconciliation of the 2019 plan restructuring reserve is presented below:
 
BALANCE, AT
DECEMBER 30,
2019
 DEDUCTIONS 2020 CHARGED TO EXPENSES 2020 BALANCE, AT
JULY 5, 2020
 (In thousands)
Workforce Reduction$8,634
 $(1,996) $(353) $6,285
Other Exit Costs139
 —
 —
 139
Total$8,773
 $(1,996) $(353) $6,424

2018 Restructuring Plan
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On December 29, 2018, the Company committed to a restructuring plan in its continuing efforts to improve efficiencies and decrease costs across its worldwide operations, and more closely align its operating structure with its business strategy. The plan involved (i) a restructuring
The restructuring plan was substantially completed at the end of the second quarter of 2020. The Company redeployed essentially all of the anticipated savings toward the funding of sales and strategic growth initiatives, yielding negligible net savings on the Company’s income statement.
A reconciliation of the 2018 plan restructuring reserve is presented below:
 
BALANCE, AT
DECEMBER 30,
2019
 DEDUCTIONS 2020 CHARGED TO EXPENSES 2020 BALANCE, AT
JULY 5, 2020
 (In thousands)
Workforce Reduction$1,898
 $(1,385) $(223) $290
Other Exit Costs774
 —
 (699) 75
Total$2,672
 $(1,385) $(922) $365

Contents



NOTE 16 – SUBSEQUENT EVENTS
Cost Reducing Initiatives and Related Charges
As we continue to monitor the impact of COVID-19 and mitigate its effects to our operations, the Company expects to continue to pursue a variety of cost reducing initiatives including but not limited to voluntary incentive separation programs, temporary employee furloughs and other time-and-pay reduction programs, applications to participate in various government sponsored “wage support” programs, involuntary separations where necessary to streamline roles and responsibilities, potential facility closures to streamline operations, and various other cost reducing and cost avoidance activities.
Syndicated Credit Facility
On July 15, 2020, the Company entered into a second amendment to its Syndicated Credit Facility (the “Facility”). This amendment, among other changes, provides for the following: (1) amends the consolidated net leverage ratio covenant making it less restrictive for a period of seven consecutive fiscal quarters beginning with the third quarter of fiscal year 2020 through the first quarter of fiscal year 2022 (the “Relief Period”); (2) amends the pricing grid used to determine interest rate margins on outstanding loans as well as the commitment fee on the unused portion of the Facility to include additional consolidated net leverage ratio levels with increased pricing at higher levels of leverage; (3) amends interest rate provisions to provide for interest rate floors, as applicable, on certain tranches of term loans outstanding; and (4) provides temporary restrictions during the Relief Period on the Company’s ability to make acquisitions, pay dividends, repurchase shares, or enter into new credit facilities without lender consent. The Company incurred approximately $1.5 million in debt issuance costs to execute this amendment.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Our discussions below in this Item 2 are based upon the more detailed discussions about our business, operations and financial condition included in our Annual Report on Form 10-K for the fiscal year ended December 29, 2019,January 3, 2021, under Part II, Item 7 of that Form 10-K. Our discussions here focus on our results during the quarter and six months ended, or as of, July 5, 2020,4, 2021, and the comparable periods of 20192020 for comparison purposes, and, to the extent applicable, any material changes from the information discussed in that Form 10-K or other important intervening developments or information since that time. These discussions should be read in conjunction with that Form 10-K for more detailed and background information. The six monthsix-month period ended July 4, 2021 includes 26 weeks, and the six-month period ended July 5, 2020 includes 27 weeks, and the six month period ended June 30, 2019 includes 26 weeks. The three monththree-month periods ended July 4, 2021 and July 5, 2020 and June 30, 2019 both include 13 weeks.
Forward-Looking Statements
This report contains statements which may constitute “forward-looking statements” within the meaning of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995. Important factors currently known to management that could cause actual results to differ materially from those in forward-looking statements include risks and uncertainties associated with the ongoing COVID-19 pandemic and the economic conditions in the commercial interiors industry as well as the risks and uncertainties discussed under the heading “Risk Factors” included in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended December 29, 2019, as supplemented by the additional risk factors included in Part II, Item 1A of the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended April 5, 2020.January 3, 2021. The Company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time.

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Impact of the COVID-19 Pandemic
TheIn March 2020, the World Health Organization declared the COVID-19 outbreak a pandemic, and the virus continues to spread inimpact areas where we operate and sell our products and services. The COVID-19 pandemic has had material adverse effects on our business, results of operations, and financial condition, and it is anticipated that this will continue for an indefinite period of time.condition. The duration of the pandemic will ultimately determine the extent to which our operations are impacted. We continue to monitor our operations and have implemented various programs to mitigate the effects on our business including reductions in employees, labor costs, marketing expenses, consulting expenses, travel costs, various other costs, and capital expenditures, as well as suspending and reducing shifts in our production facilities, temporarily furloughing employees, and implementing other cost reduction or avoidance initiatives.
During the second quarter of 2020,2021, the COVID-19 pandemic had less of an impact on our overall global operations and financial results as COVID-19 vaccination rates increased, COVID-19 related restrictions loosened, and certain countries began to experience a rebound in economic activity. Our global supply chain and manufacturing experienced increased impacts of COVID-19 in the quarter. These impacts included raw material shortages, raw material cost increases, higher freight costs, shipping delays, and labor shortages - particularly in the United States. These impacts to our supply chain and manufacturing increased our costs and adversely affected our gross margins.
During the second quarter of 2021, consolidated net sales increased 13.6% compared to the same period last year. Higher sales are primarily in the corporate office and retail market segments. During the second quarter of 2021, we began a phased re-opening of our corporate headquarters and global administrative offices and our salesforce and administrative staff are actively working in these locations in accordance with the Company’s ongoing safety measures, as well as any local government orders and directives which remain very fluid.
During the first six months of 2021, the COVID-19 pandemic continued to impact our global operations, resulting in lower revenue across all geographic regions. For the three months ended July 5, 2020,as consolidated net sales declined 27.4%increased 0.1% compared to the same period last year. As discussed above,Net sales for the first six months of 2021 were impacted by lower sales in the corporate office market segment during the first quarter of 2021. During the six months ended July 4, 2021, the Company implemented, and continues to implement, various cost cutting initiativesrecorded $0.9 million of net severance costs in connection with its programs to mitigate the effectsimpact of the COVID-19 on our operations. During the three months ended July 5, 2020, the Company recorded $2.9 million of voluntary and involuntary severance costs,pandemic as discussed above, which are included in selling, general and administrative expenses in the Consolidated Condensed Statements of Operations. We anticipate future annualized savings
General
In the first quarter of approximately $7 million as a result of these separation initiatives.
As a result2021, the Company largely completed its integration of the COVID-19 pandemic, government grantsnora acquisition, and payroll protection programs are available globallyintegration of its European and Asia-Pacific commercial areas and determined that it has two operating and reportable segments - namely Americas (“AMS”) and Europe, Africa, Asia and Australia (collectively “EAAA”). The AMS operating segment is unchanged from prior year and continues to provide assistance to companies impacted by the pandemic. The CARES Act enacted ininclude the United States, (see Note 13 entitled “Income Taxes” ofCanada and Latin America geographic areas. See Part I, Item 1, Note 11 of this Quarterly Report on Form 10-Q entitled “Segment Information” for additional information) and a payroll protection program enacted in the Netherlands (the “NOW Program”), provide benefits related to payroll costs either as reimbursements, lower payroll tax rates or deferralinformation. The results of payroll tax payments. The NOW Program provides eligible companies with reimbursement of labor costs as an incentive to retain employees on the payroll. During the second quarter of 2020, the Company qualified for benefits under several payroll protection programs and recognized a reduction in payroll costs of approximately $3.8 million during the quarter, which are recorded as a reduction of selling, general and administrative expenses in the Consolidated Condensed Statements of Operations, as the Company believes it is likely that the benefits received will not be repaid.
The COVID-19 pandemic had less of an impact on our global operations for the first six months of 2020 (as compared with the impact on the second quarter of 2020), as the effects of the pandemic did not begin to impact our business substantially until the end of the first quarter. For the first six months of 2020, consolidated net sales declined 16.4% compared to the same period last year primarily due to COVID-19. Due to reduced demand and to enhance employee safety measures, we temporarily suspended production in our U.S. manufacturing facilities from March 18, 2020 to March 23, 2020, and then again from April 6, 2020 to April 13, 2020. Wediscussion below also substantially reduced production in our Craigavon, UK facility beginning on April 20, 2020 through the end of the second quarter, and our Thailand, China, and Australia plants are operating in reduced shifts in light of reduced demand. During the first quarter of 2020, our Asia-Pacific region was primarily impacted by COVID-19 due to government shutdowns in China and the temporary closure of our China plant in late January 2020 to February 9, 2020. In addition, almost all of our salesforce and administrative employees globally continue to work remotely in accordance with local government orders and “shelter in place” directives.
Generalincludes segment information.
During the quarter ended July 5, 2020,4, 2021, consolidated net sales were $259.5$294.8 million compared with net sales of $357.5$259.5 million in the second quarter last year. During the first six months ended July 5, 2020,of 2021, consolidated net sales were $547.7$548.0 million compared with net sales of $655.2to $547.7 million in the first six months of last year. TheHigher net sales during the second quarter of 2021, primarily in the corporate office market segment was due to higher corporate spending and first half of 2020 were negatively impacted by the effects ofreinvestment. As discussed above, the COVID-19 pandemic as discussed above.continued to impact the first six months of 2021. Fluctuations in currency exchange rates had a negativepositive impact on net sales of approximately $2.8$13.1 million for the second quarter of 20202021 and a negativepositive impact of approximately $7.5$25.0 million for the first six month periodmonths of 20202021 compared to the threesecond quarter and first six month periodsmonths of 2019,last year, respectively, mostly driven by the weakeningstrengthening of the Euro, British Pound sterling, and the Australian dollar and Chinese Renminbi against the U.S. dollar.
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Goodwill, Intangible Asset and Fixed Asset Impairment
During the first six months of 2021, there were no indicators of goodwill or intangible asset impairment. During the first quarter of 2020, wethe Company recognized a charge of $121.3 million for the impairment of goodwill and certain intangible assets. See Note 10 entitled “Goodwill and Intangible Assets” of Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information. No additional goodwill or intangible asset impairment charges were recorded during the second quarter. During the second quarter of 2020, we recognized fixed asset impairment charges of $3.1 million related to certain FLOR design center closures and other projects that were abandoned or indefinitely delayed. These charges are included in selling, general and administrative expenses in the Consolidated Condensed Statements of Operations.

Results of Operations
Consolidated
The following table presents, as a percentage of net sales, certain items included in our consolidated condensed statements of operations for the three and six monthsix-month periods ended July 4, 2021 and July 5, 2020 and June 30, 2019:2020:
Three Months Ended Six Months EndedThree Months EndedSix Months Ended
July 5, 2020 June 30, 2019 July 5, 2020 June 30, 2019July 4, 2021July 5, 2020July 4, 2021July 5, 2020
Net sales100.0 % 100.0% 100.0 % 100.0%Net sales100.0 %100.0 %100.0 %100.0 %
Cost of sales62.5
 60.6
 61.4
 60.7
Cost of sales63.0 62.5 62.6 61.4 
Gross profit on sales37.5
 39.4
 38.6
 39.3
Gross profit on sales37.0 37.5 37.4 38.6 
Selling, general and administrative expenses30.9
 27.4
 30.6
 30.2
Selling, general and administrative expenses27.1 30.9 29.0 30.6 
Restructuring charges(0.1) —
 (0.2) —
Restructuring charges0.0 (0.1)— (0.2)
Goodwill and intangible asset impairment charge—
 —
 22.1
 —
Goodwill and intangible asset impairment charge— — — 22.1 
Operating income (loss)6.7
 12.0
 (13.9) 9.1
Operating income (loss)9.9 6.7 8.4 (13.9)
Interest/Other expenses3.9
 2.0
 3.1
 2.3
Interest/Other expenses2.7 3.9 2.9 3.1 
Income (loss) before tax expense2.8
 10.0
 (17.0) 6.8
Income (loss) before tax expense7.2 2.8 5.5 (17.0)
Income tax expense1.0
 1.8
 0.8
 1.2
Income tax expense2.0 1.0 1.4 0.8 
Net income (loss)1.8 % 8.2% (17.8)% 5.6%Net income (loss)5.2 %1.8 %4.1 %(17.8)%
Net Sales
Below is information regarding our consolidated net sales, and analysis of those results, for the three and six monthsix-month periods ended July 4, 2021, and July 5, 2020, and June 30, 2019:2020:
 Three Months Ended 
Percentage
Change
 July 5, 2020 June 30, 2019 
 (In thousands)  
Net Sales:     
     Americas$151,222
 $207,250
 (27.0)%
     Europe71,874
 95,665
 (24.9)%
     Asia-Pacific36,408
 54,592
 (33.3)%
Total Net Sales$259,504
 $357,507
 (27.4)%

 Six Months Ended 
Percentage
Change
 July 5, 2020 June 30, 2019 
 (In thousands)  
Net Sales:     
     Americas$309,313
 $367,876
 (15.9)%
     Europe166,564
 188,715
 (11.7)%
     Asia-Pacific71,796
 98,604
 (27.2)%
Total Net Sales$547,673
 $655,195
 (16.4)%


Three Months EndedPercentage
Change		Six Months EndedPercentage
Change
July 4, 2021July 5, 2020July 4, 2021July 5, 2020
(in thousands)(in thousands)
Consolidated net sales$294,785 $259,504 13.6 %$548,045 $547,673 0.1 %
For the quarter ended July 5, 2020,4, 2021, consolidated net sales decreased $98.0increased $35.3 million (27.4%(13.6%) versus the comparable period in 2019.2020, including positive currency fluctuations of approximately $13.1 million (5.1%). The sales declineincrease was primarily due to higher net sales in the impact of the COVID-19 pandemic as discussed above.corporate, retail, healthcare, education and transportation market segments. Currency fluctuations had an approximately $2.8 million (0.8%) negativea positive impact on second quarter 20202021 sales compared to the second quarter of 2019. This currency impact was2020 mostly due to the weakeningstrengthening of the Euro, British Pound sterling, Australian dollar and Chinese Renminbi and Australian dollar against the U.S. dollar. On a geographic basis,
For the six months ended July 4, 2021, consolidated net sales increased $0.4 million (0.1%) versus the comparable period in 2020, including positive currency fluctuations of approximately $25.0 million (4.6%). The sales increase was primarily due to higher sales in the Americas decreased 27.0%, Europe decreased 24.9% and Asia-Pacific decreased 33.3%. The sales decreases across all geographic regions were, as discussed above, due to the impacts of COVID-19, resulting in lower sales globally. The sales decrease in the Americas was most significant in the corporate, retail leisure and transportation market segments partially offset by increasesdecreases in the hospitality and residential/livingcorporate market segments. On a market segment basis, the sales decrease in Europe was most significant in the corporate, retail, hospitality and residential/living market segments, partially offset by increases in the healthcare and leisure market segments. The sales decrease in Europe was also negatively impacted by the weakening of the Euro. On a market segment basis, the sales decrease in Asia-Pacific was most significant in the corporate, retail, healthcare, public buildings and hospitality market segments partially offset by increases in the residential/living market segment. The sales decrease in Asia-Pacific was also impacted by the weakening of the Australian dollar.
For the six months ended July 5, 2020, net sales decreased $107.5 million (16.4%) versus the comparable period in 2019. The sales decline was primarily due to the impact of the COVID-19 pandemic, as discussed above, more pronounced in the second quarter as the effects of the pandemic did not begin to impact our business substantially until the end of the first quarter. Currency fluctuations had an approximately $7.5 million (1.1%) negativea positive impact on net sales for the first six months of 20202021 sales compared to the first six months of 2019. This currency impact wassame period last year mostly due to the weakeningstrengthening of the Euro, British Pound sterling, Australian dollar and Chinese Renminbi and Australian dollar against the U.S. dollar. On a geographic basis, net sales for the first six months



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Table of 2020 in the Americas decreased 15.9%, Europe decreased 11.7% and Asia-Pacific decreased 27.2%. The sales decreases across all geographic regions were, as discussed above, due to the impacts of COVID-19, resulting in lower sales globally. The sales decrease in the Americas was seen in the corporate, retail, and leisure market segments, partially offset by increases in the hospitality and residential/living market segments. On a market segment basis, the sales decrease in Europe was most significant in the corporate, retail, public buildings, residential/living and hospitality market segments, partially offset by increases in the leisure and transportation market segments. The sales decrease in Europe was also impacted by the weakening of the Euro. The sales decrease in the Asia-Pacific region was impacted by COVID-19 shutdowns and the weakening of the Chinese Renminbi and Australian dollar. On a market segment basis, the sales decrease in Asia-Pacific was most significant in the corporate, retail, healthcare, public buildings and transportation market segments partially offset by increases in the residential/living market segment.Contents
Cost and Expenses
The following tables presenttable presents our overallconsolidated cost of sales and selling, general and administrative expenses for the three and six monthsix-month periods ended July 4, 2021, and July 5, 2020, and June 30, 2019:2020:
 Three Months Ended 
Percentage
Change
 July 5, 2020 June 30, 2019 
 (In thousands)  
Cost of sales$162,210
 $216,777
 (25.2)%
Selling, general and administrative expenses80,058
 97,838
 (18.2)%

Six Months Ended 
Percentage
Change
Three Months EndedPercentage
Change		Six Months EndedPercentage
Change
July 5, 2020 June 30, 2019 July 4, 2021July 5, 2020July 4, 2021July 5, 2020
(In thousands)  (in thousands)(in thousands)
Cost of sales$336,068
 $397,943
 (15.5)%Cost of sales$185,793 $162,210 14.5 %$343,015 $336,068 2.1 %
Selling, general and administrative expenses167,741
 197,973
 (15.3)%Selling, general and administrative expenses79,830 80,058 (0.3)%159,132 167,741 (5.1)%
For the quarter ended July 5, 2020,4, 2021, consolidated cost of sales decreased $54.6increased $23.6 million (25.2%(14.5%) compared to the second quarter of 2019,2020, primarily due to lowerhigher net sales. Costsales and the negative impact of sales also includes the amortizationcurrency fluctuations of acquired intangible assets of $1.3approximately $8.8 million for each of the second quarters of 2020 and 2019, respectively. Currency translation had an approximately $2.0 million (0.9%(5.4%) positive impact on the year-over-year comparison. As a percentage of net sales, our cost of sales increased to 63.0% for the second quarter of 2021 versus 62.5% for the second quarter of 2020, versus 60.6%primarily due to price increases for the second quarter of 2019.

certain raw materials.
For the six months ended July 5, 2020,4, 2021, consolidated cost of sales decreased $61.9increased $6.9 million (15.5%(2.1%) compared toversus the first six months of 2019,comparable period in 2020, primarily due to lowerhigher net sales. Costsales and the negative impact of sales also includes the amortizationcurrency fluctuations of acquired intangible assets of $2.6approximately $16.4 million and $3.2 million for the first six months of 2020 and 2019, respectively. Currency translation had an approximately $5.3 million (1.3%(4.9%) positive impact on the year-over-year comparison. As a percentage of net sales, our cost of sales increased to 62.6% for the first six months of 2021 versus 61.4% for the first six months of 2020, versus 60.7%primarily due to price increases for the first six months of 2019.certain raw materials.
For the quarter ended July 5, 2020,4, 2021, consolidated selling, general and administrative (“SG&A”) expenses decreased $17.8$0.2 million (18.2%(0.3%) versus the comparable period in 2019.2020. Currency translation had a $0.5$2.9 million (0.5%(3.6%) positivenegative impact on the year-over-year comparison. SG&A expenses were lower for the second quarter of 20202021 primarily due to (1) lower selling expensesasset impairment and exit activity costs of $16.1$5.0 million compared to the prior year period as fiscal 2020 included one-time costs to exit certain FLOR design center locations and (2) lower severance costs of $3.5 million due to lower net sales, (2) $3.8 million of payroll protection credits, and (3) lower overall payroll costs due to lower performance-based incentive compensation as well as the impact of voluntary and involuntary employee separations and furloughs, whichin the prior year period to mitigate the impacts of COVID-19. These decreases were partially offset by $2.9 millionhigher labor costs in the second quarter of severance expenses recorded during2021 as performance-based compensation costs were lower in the quarter.prior year period due to the impacts of COVID-19. As a percentage of sales, SG&A expenses increaseddecreased to 27.1% for the second quarter of 2021 versus 30.9% for the second quarter of 2020 versus 27.4% for the second quarter of 2019.2020. 
For the six months ended July 5, 2020,4, 2021, consolidated SG&A expenses decreased $30.2$8.6 million (15.3%(5.1%) versus the comparable period in 2019.2020. Currency translation had a $1.4$5.7 million (0.7%(3.4%) positivenegative impact on the year-over-year comparison. SG&A expenses were lower for the first six months of 20202021 primarily due to (1) lower selling expensesasset impairment and exit activity costs of $23.7$4.7 million compared to the prior year period as fiscal 2020 included one-time costs to exit certain FLOR design center locations, (2) lower severance costs of $2.0 million due to lower net sales, (2) lower stock compensation expensethe prior year period impacts of $7.0 million, (3) $3.8 million of payroll protection credits, and (4) lower overall payroll costsCOVID-19 as discussed above.above, and (3) lower professional fees of $4.2 million and lower marketing and other one-time costs of $2.7 million. These decreases were partially offset by higher performance-based compensation as these costs were lower in the prior year period due to the impacts of COVID-19. As a percentage of sales, SG&A expenses increaseddecreased to 29.0% for the first six months of 2021 versus 30.6% for the first six months of 2020 versus 30.2% for2020.
InterestExpense
For the firstquarter ended July 4, 2021, interest expense increased $2.3 million, from $5.0 million in the comparable period last year to $7.3 million. For the six months of 2019. ended July 4, 2021, interest expense increased $3.9 million, from $10.6 million in the comparable period last year to $14.5 million. The increase in both the three and six months ended July 4, 2021 was primarily due to higher fixed-rate interest expense on the senior notes debt, which replaced variable-rate debt under the credit facility, and deferred losses on terminated interest rate swaps that were reclassified from accumulated other comprehensive loss into interest expense during the respective periods.
Other Expense
Other expenses increased $4.8decreased $4.5 million and $5.3 million during the three and six months ended July 5, 2020,4, 2021, respectively, compared to 20192020 primarily due to a $4.2 million write-down of damaged raw material inventory as a result ofin 2020, which resulted from a fire at a leased storage facility.
Interest
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Table of Contents
Segment Operating Results
As discussed above, the Company has two operating and reportable segments – AMS and EAAA. Segment information presented below for fiscal year 2020 has been restated to conform to the new reportable segment structure.
AMS Segment - Net Sales and Adjusted Operating Income (“AOI”)
The following table presents AMS segment net sales and AOI for the three and six month periods ended July 4, 2021, and July 5, 2020:
Three Months EndedPercentage ChangeSix Months EndedPercentage Change
July 4, 2021July 5, 2020July 4, 2021July 5, 2020
(in thousands)(in thousands)
AMS segment net sales$156,665 $151,222 3.6 %$283,632 $309,313 (8.3)%
AMS segment AOI(1)
21,098 23,942 (11.9)%33,011 47,492 (30.5)%
(1) ExpenseIncludes allocation of corporate SG&A expenses. Excludes non-recurring items related to goodwill and intangible asset impairment charges, purchase accounting amortization, restructuring, asset impairment, severance and other costs. See Note 11 entitled “Segment Information” of Part 1, Item 1 of this Quarterly Report on Form 10-Q for additional information.
ForDuring the second quarter ended July 5, 2020, interest expense decreased $1.8 million, from $6.8 millionof 2021, net sales in AMS increased 3.6% versus the comparable period last yearin 2020 primarily due to $5.0 million,higher sales in the retail, healthcare and transportation market segments, partially offset by decreases in the hospitality and public buildings market segments.
During the first six months of 2021, net sales in AMS decreased 8.3% versus the comparable period in 2020 primarily due to the continued impacts of COVID-19. On a market segment basis, the AMS sales decrease was most significant in the corporate, public buildings and hospitality market segments, partially offset by increases in the retail, transportation and consumer residential market segments.
AOI in AMS decreased 11.9% during the second quarter of 2021 primarily due to higher raw material costs, higher freight costs and higher overtime costs compared to prior year. Higher SG&A costs due to higher performance-based compensation also contributed to the decrease in AOI.
AOI in AMS decreased 30.5% during the first six months of 2021 primarily due to lower interest rates. Fornet sales as discussed above. Lower profit margins due to lower fixed cost leverage in the six monthsplant, higher raw material costs, higher freight costs and higher overtime costs as well as higher performance-based compensation also contributed to the decrease in AOI compared to the prior year period.
EAAA Segment - Net Sales and AOI
The following table presents EAAA segment net sales and AOI for the three and six-month periods ended July 4, 2021, and July 5, 2020, interest expense decreased $3.0 million, from $13.6 million2020:
Three Months EndedPercentage ChangeSix Months EndedPercentage Change
July 4, 2021July 5, 2020July 4, 2021July 5, 2020
(in thousands)(in thousands)
EAAA segment net sales$138,120 $108,282 27.6 %$264,413 $238,360 10.9 %
EAAA segment AOI(1)
9,960 3,530 182.2 %17,971 9,330 92.6 %
(1)Includes allocation of corporate SG&A expenses. Excludes non-recurring items related to goodwill and intangible asset impairment charges, purchase accounting amortization, restructuring, asset impairment, severance and other costs. See Note 11 entitled “Segment Information” of Part 1, Item 1 of this Quarterly Report on Form 10-Q for additional information.
During the second quarter of 2021, net sales in EAAA increased 27.6% versus the comparable period last yearin 2020. Currency fluctuations had an approximately $12.2 million (11.3%) positive impact on EAAA’s second quarter 2021 sales compared to $10.6 million, primarily2020 due to the strengthening of the Euro, British Pound sterling, Australian dollar and the Chinese Renminbi against the U.S. dollar. On a market segment basis, the EAAA sales increase was most significant in the corporate, retail, education and public buildings market segments.
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Table of Contents
During the first six months of 2021, net sales in EAAA increased 10.9% versus the comparable period in 2020. Currency fluctuations had an approximately $23.6 million (9.9%) positive impact on EAAA’s first six months of 2021 sales compared to 2020 due to the strengthening of the Euro, British Pound sterling, Australian dollar and the Chinese Renminbi against the U.S. dollar. On a market segment basis, the EAAA sales increase was most significant in the public buildings, retail and education market segments.
AOI in EAAA increased 182.2% during the second quarter of 2021 versus the comparable period in 2020. Currency fluctuations had an approximately $1.4 million (12.2%) positive impact on AOI for the quarter. The impact of higher net sales and higher gross profit margins contributed to the increase in AOI.
AOI in EAAA increased 92.6% during the first six months of 2021 versus the comparable period in 2020. Currency fluctuations had an approximately $3.0 million (12.8%) positive impact on AOI for the six-month period of 2021. The impact of higher net sales and higher gross profit margins partially offset by higher SG&A expenses, comprised of higher performance-based compensation and lower interest rates.government wage support programs, contributed to the increase in AOI.

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Table of Contents
Liquidity and Capital Resources
General
At July 5, 2020,4, 2021, we had $91.8$102.4 million in cash. At that date, we had $566.8$264.6 million in term loan borrowing, $58.8 million ofno revolving loan borrowings, and $1.6 million in letters of credit outstanding under our Syndicated Credit Facility.Facility, and we had $300.0 million of Senior Notes outstanding. As of July 5, 2020,4, 2021, we had additional borrowing capacity of $239.6$298.4 million under the Syndicated Credit Facility and $9.5$6.0 million of borrowing capacity under other credit facilities in place at other non-U.S. subsidiaries. We anticipate that our liquidity is sufficient to meet our obligations for the next 12 months.
AmendmentThe Senior Notes are unsecured and are guaranteed, jointly and severally, by each of Credit Facility Due to COVID-19 Impact
Onthe Company’s material domestic subsidiaries, all of which also guarantee the obligations of the Company under its existing Facility. The Company’s foreign subsidiaries and certain non-material domestic subsidiaries are considered non-guarantors. Net sales for the non-guarantor subsidiaries were approximately $148 million and $284 million for the three and six-month periods ended July 15, 2020, we entered into a second amendment to our Syndicated Credit Facility. See Note 16 entitled “Subsequent Events” within Part I, Item 14, 2021, respectively. Total indebtedness of this Quarterly Report on Form 10-Q for additional information.the non-guarantor subsidiaries was approximately $65 million and $88 million as of July 4, 2021 and January 3, 2021, respectively.
Analysis of Cash Flows
The following table presents a summary of cash flows for the six-month periods ended July 4, 2021 and July 5, 2020, and June 30, 2019, respectively:
Six Months EndedSix Months Ended
July 5, 2020 June 30, 2019July 4, 2021July 5, 2020
(In thousands)(in thousands)
Net cash provided by (used in):   Net cash provided by (used in):
Operating activities$32,427
 $20,432
Operating activities$35,118 $32,427 
Investing activities(35,694) (34,893)Investing activities(12,112)(35,694)
Financing activities15,624
 17,209
Financing activities(21,319)15,624 
Effect of exchange rate changes on cash(1,814) 519
Effect of exchange rate changes on cash(2,368)(1,814)
Net change in cash and cash equivalents10,543
 3,267
Net change in cash and cash equivalents(681)10,543 
Cash and cash equivalents at beginning of period81,301
 80,989
Cash and cash equivalents at beginning of period103,053 81,301 
Cash and cash equivalents at end of period$91,844
 $84,256
Cash and cash equivalents at end of period$102,372 $91,844 
Cash provided by operating activities was $32.4$35.1 million for the six months ended July 5, 2020,4, 2021, which represents an increase of $12.0$2.7 million from the prior year comparable period. The increase was primarily due to working capital changes, specifically an increasevariable compensation payouts in account receivable collections2021 related to 2020 performance that were greatly reduced versus the payouts that occurred in 2020 related to 2019 performance. The lower variable compensation payouts in 2021 were offset by the change toa greater use of cash from working capital. Specifically, increases in accounts payable and accrued expenses.expenses that contributed positively to the change in working capital were offset by higher inventories and higher prepaid expenses attributable primarily to a build-up of inventory due to increased customer demand. Increases in accounts receivable as a result of higher net sales also contributed to the change in working capital during the year.
Cash used in investing activities was $35.7$12.1 million for the six months ended July 5, 2020 which represents an increase of $0.8 million from the prior year comparable period. The increase was primarily due to an increase in capital expenditures from the prior year comparable period.
Cash provided by financing activities was $15.6 million for the six months ended July 5, 20204, 2021, which represents a decrease of $1.6$23.6 million from the prior year comparable period. The decrease from the comparable period was primarily due to a decrease in capital expenditures due to reduced capital investment as a result of the impacts of COVID-19.
Cash used in financing activities was $21.3 million for the six months ended July 4, 2021, which represents a decrease of $36.9 million compared with cash provided by financing activities in the prior year comparable period. Financing activities for 2021 include lower revolving loan borrowings offset by higher repayments of term loan and revolving loan borrowings.debt. Lower dividend payments in 2021 compared with the prior year comparable period also contributed to the change.
Purchase Obligations
We have outstanding purchase obligations
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Table of $9.7 million related to expanding our manufacturing capabilities, which we expect to fund during the remainder of 2020.Contents

Forward-Looking Statement on Impact of COVID-19
While we are aggressively managing our response to the COVID-19 pandemic, its impacts on our full year fiscal 20202021 results and beyond are uncertain. We believe the most significant elements of uncertainty are (1) the intensity and duration of the impact on construction, renovation, and remodeling; (2) corporate, government, and consumer spending levels and sentiment;sentiment including but not limited to when and how employees will be required to work from their office versus working from home; (3) new and renewed government mandated lockdowns, quarantine and other procedures in response to resurgences of COVID-19 cases and variants of the virus; and (4) the ability of our sales channels, supply chain, manufacturing, suppliers, freight providers and distribution partners to continue operating through disruptions. Any or all of these factors could negatively impact our financial position, results of operations, cash flows, and outlook. As the impact of the COVID-19 pandemic continues to affect companies with global operations, we

We anticipate that our business and resultsrevenue growth in the third quarter of 2020 will continuefiscal year 2021 compared with the third quarter of 2020. We are also anticipating continued impacts to be adversely affected,our global supply chain and the timelinemanufacturing operations. These impacts are anticipated to include significant cost increases in our raw materials globally and pace of recovery is uncertain. While we are unable to predict with certainty, we anticipate continued year-over-year declines in revenue and operating incomelabor shortages – particularly in the third and fourth quarters of fiscal year 2020, and perhaps during quarterly periods thereafter.
United States. The Company has implemented several cost reduction and avoidance initiatives to align with anticipated customer demand, including a voluntary employee separation program, temporary employee furloughsimpacts may also potentially include raw material shortages, higher freight costs, shipping delays, and other time-and-pay reduction programs, involuntary employee separations where necessarydisruption. These impacts to streamline rolesour supply chain and responsibilities,manufacturing will increase our costs and various otheradversely affect our gross margins, they may inhibit our ability to manufacture and ship product timely, and at times they may inhibit our ability to meet customer demands and expectations.

We also plan to continue evaluating our cost reducing initiatives. The Company has also suspended merit-based salary increases, as well as its 401(k)structure and Non-Qualified Savings Plan (NSP) matching contributions,global manufacturing footprint to identify and will benefit from lower than originally anticipated performance-based compensationactivate opportunities to decrease costs and variable compensation for 2020. In addition, the Company has reduced its capital spending plans.optimize our global cost structure.
Cash flows from operations, cash and cash equivalents, and other sources of liquidity are expected to be available and sufficient to meet foreseeable cash requirements. However, the Company’s cash flows from operations can be affected by numerous factors including the uncertainty of COVID-19 and its impact on global operations, raw material availability and cost, and demand for our products, and other factors described in “Risk Factors” included in Part II, Item 1A of this Quarterly Report on Form 10-Q.products.
Backlog
As of July 26, 2020,25, 2021, the consolidated backlog of orders was approximately $193.1$231.8 million. As disclosed in our Annual Report on Form 10-K for the fiscal year ended December 29, 2019,January 3, 2021, backlog was approximately $177.8$177.7 million as of February 9, 2020.7, 2021. Disruptions in supply and distribution chains, global travel restrictions and government shelter in place orders due to the impact of COVID-19 have resulted in delays of construction projects and flooring installations in many regions worldwide.

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Table of Contents
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The discussion below in this Item 3 is based upon the more detailed discussions of our market risk and related matters included in our Annual Report on Form 10-K for the fiscal year ended December 29, 2019,January 3, 2021, under Part II, Item 7A of that Form 10-K. The discussion here focuses on the six months ended July 5, 2020,4, 2021, and any material changes from (or other important intervening developments since the time of) the information discussed in that Form 10-K. This discussion should be read in conjunction with that Form 10-K for more detailed and background information.
Sensitivity Analysis
For purposes of specific risk analysis, we use sensitivity analysis to measure the impact that market risk may have on the fair values of our market sensitive instruments. To perform sensitivity analysis, we assess the risk of loss in fair values associated with the impact of hypothetical changes in interest rates and foreign currency exchange rates on market sensitive instruments.
Because the debt outstanding under our Syndicated Credit Facility has variable interest rates based on an underlying prime lending rate or LIBOR rate, we do not believe changes in interest rates would have any significant impact on the fair value of that debt instrument. Changes in the underlying prime lending rate or LIBOR rate would, however, impact the amount of our interest expense. For a discussion of these hypothetical impacts on our interest expense, please see the discussion in Part II, Item 7A of our Annual Report on Form 10-K for the year ended December 29, 2019.January 3, 2021.
As of July 5, 2020,4, 2021, based on a hypothetical immediate 100 basis point increase in interest rates, with all other variables held constant, the fair value of our fixed rate long-term debt would be impacted by a net decrease of $12.0 million. Conversely, a 100 basis point decrease in interest rates would result in a net increase in the fair value of our fixed rate long-term debt of $8.1 million.
As of July 4, 2021, a 10% decrease or increase in the levels of foreign currency exchange rates against the U.S. dollar, with all other variables held constant, would result in a decrease in the fair value of our financial instruments of $11.8$11.1 million or an increase in the fair value of our financial instruments of $14.4$13.6 million, respectively. As the impact of offsetting changes in the fair market value of our net foreign investments is not included in the sensitivity model, these results are not indicative of our actual exposure to foreign currency exchange risk.
As
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Table of July 5, 2020, a 100 basis point decrease in interest rates would result in an increase in the recorded liability of our interest rate swaps of approximately $5.2 million while a 100 basis point increase in interest rates would result in a decrease in the recorded liability of our interest rate swaps of approximately $6.3 million.Contents

ITEM 4. CONTROLS AND PROCEDURES
As of the end of the period covered by this Quarterly Report on Form 10-Q, an evaluation was performed under the supervision and with the participation of our management, including our President and Chief Executive Officer and our Vice President and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Act”), pursuant to Rule 13a-14(c) under the Act.
No system of controls, no matter how well designed and operated, can provide absolute assurance that the objectives of the system of controls are met, and no evaluation of controls can provide absolute assurance that the system of controls has operated effectively in all cases. Our disclosure controls and procedures however are designed to provide reasonable assurance that the objectives of disclosure controls and procedures are met.
Based on the evaluation, our President and Chief Executive Officer and our Vice President and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this Quarterly Report to provide reasonable assurance that the objectives of disclosure controls and procedures are met.
There were no changes in our internal control over financial reporting that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
From time to time, we are a party to legal proceedings, whether arising in the ordinary course of business or otherwise. The disclosure under the headings “Lawsuit by Former CEO in Connection with Termination” and “Putative Class Action Lawsuit” set forth in Note 1718 to the consolidated financial statements included in Item 8 of the December 29, 2019 Annual Report on Form 10-K for the fiscal year ended January 3, 2021is incorporated by reference herein.

In the lawsuit by the former CEO, Mr. Gould’s defamation claims (two counts) were dismissed with prejudice by stipulation of the parties. The Company has filed a motion for summary judgment on Mr. Gould’s remaining claims, and that motion is pending with the Court. The Company believes the lawsuit is without merit and intends to defend vigorously against it.
In the putative class action lawsuit, the Court has appointed a lead plaintiff, which filed an Amended Complaint that, among other things, added the Company’s former chief financial officer as a defendant. As in the original complaint, the allegations in the Amended Complaint relate to the subject matter of the concluded SEC investigation described in Note 18 to the consolidated financial statements included in Item 8 of the Annual Report on Form 10-K for the fiscal year ended January 3, 2021. The Company has filed a motion to dismiss the Amended Complaint in its entirety, and that motion is pending with the Court. The Company believes the putative class action is without merit and that the Company has good defenses to it. The Company intends to defend itself vigorously against the action.
ITEM 1A. RISK FACTORS
In addition to the other information set forth in this report, you should carefully consider the risk factors disclosed in Part I, Item 1A, “Risk Factors,” of our annual reportAnnual Report on Form 10-K for the year ended December 29, 2019, as supplemented by Part II, Item 1AJanuary 3, 2021.
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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
The following table contains information with respect toThere were no purchases made by or on behalf of the Company, or any “affiliated purchaser” (as defined in Rule 10b-18(a)(3)��under the Securities Exchange Act of 1934), of our common stock during our second quarter ended July 5, 2020:
Period(1)
 
Total
Number of
Shares
Purchased
 
Average
Price
Paid
Per Share
 
Total Number
of Shares Purchased
as Part of Publicly Announced Plans or Programs
 
Approximate Dollar Value of Shares that
May Yet Be
Purchased Under the
Plans or Programs
April 6 - May 3, 2020(2) (3)
 19,867
 $10.50
 —
 $—
May 4 - May 31, 2020(2)
 428
 9.02
 —
 —
June 1 - July 5, 2020(2)
 292
 8.50
 —
 —
Total 20,587
 $10.44
 —
 $—
4, 2021.
(1) The monthly periods identified above correspond to the Company’s fiscal second quarter of 2020, which commenced April 6, 2020 and ended July 5, 2020.
(2)
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Includes shares acquired by the Company from employees to satisfy income tax withholding obligations in connection with the vestingTable of previous equity awards.Contents
(3) Includes 6,741 shares withheld that vested during the first quarter of 2020 at the average share price in effect at that time.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None

ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.

ITEM 5. OTHER INFORMATION
None

Disclosure Pursuant to Section 13(r) to the Securities Exchange Act of 1934


On May 12, 2020, the Company disclosed in its quarterly filing a shipment of carpet samples by a non-U.S. affiliate to Iran and a related voluntary disclosure filed with the U.S. Department of the Treasury, Office of Foreign Assets Control (“OFAC”). The disclosure was made pursuant to Section 13(r), which requires an issuer to disclose in its annual or quarterly reports, as applicable, whether it or any of its affiliates knowingly engaged in certain activities, including, among other matters, transactions or dealings relating to the Government of Iran. Disclosure is required even where the activities, transactions or dealings are conducted outside the U.S. by non-U.S. affiliates in compliance with applicable law, and whether or not the activities are sanctionable under U.S. law. On May 19, 2021, the Company received a Cautionary Letter from OFAC, which concludes the voluntarily disclosure process without imposition of any penalty on the Company by OFAC.

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ITEM 6. EXHIBITS
The following exhibits are filed or furnished with this report:
EXHIBIT
NUMBER
DESCRIPTION OF EXHIBIT
10.131.1
10.2
Interface, Inc. 2020 Omnibus Stock Incentive Plan (included as Exhibit 99.1 to the Company’s Current Report on Form 8-K filed on May 28, 2020, previously filed with the Commission and incorporated herein by reference).
10.3
Second Amendment to Second Amended and Restated Syndicated Facility Agreement dated July 15, 2020 (included as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on July 16, 2020, previously filed with the Commission and incorporated herein by reference).
31.1
Section 302 Certification of Chief Executive Officer.
31.2
32.1
32.2
101.INSXBRL Instance Document – The Instance Document does not appear in the Interactive Data Files because its XBRL tags are embedded within the Inline XBRL document.
101.SCHXBRL Taxonomy Extension Schema Document.
101.CALXBRL Taxonomy Extension Calculation Linkbase Document.
101.LABXBRL Taxonomy Extension Label Linkbase Document.
101.PREXBRL Taxonomy Presentation Linkbase Document.
101.DEFXBRL Taxonomy Definition Linkbase Document.
104
The cover page from this Quarterly Report on Form 10-Q for the quarter ended July 5, 2020,4, 2021, formatted in Inline XBRL



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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
INTERFACE, INC.
INTERFACE, INC.
Date: August 11, 202010, 2021By:/s/  Bruce A. Hausmann
Bruce A. Hausmann

Chief Financial Officer

(Principal Financial Officer)

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