Atlanta -- Interface announced net sales growth of 24% and organic growth of 9% for the third quarter, which ended September 30.
“On the bottom line, GAAP EPS, which included nora acquisition purchase accounting items and transaction related expenses, was down 56%, but excluding those items, we delivered an impressive adjusted EPS growth of 28% year-over-year,” said Jay Gould, CEO of Interface. “This momentum was fueled by our core carpet tile business, an accelerating LVT business, and the completion of our acquisition of nora systems. And while gross margins were down slightly, we remain confident in achieving our 2018 objectives, and that our value creation strategy is working."
Interface officially completed the acquisition of nora systems on August 7. Third quarter results include $20 million of nora purchase accounting amortization that impacted gross profit, $1 million of nora transaction expenses on the SG&A line, and $1.4 million of transaction expenses recorded in the other expense line.
For the first nine months of 2018, net sales were $843 million, up 15% compared with $730 million in the first three quarters of last year. Organic sales grew 9% vs. the prior year period with solid growth in both carpet tile and LVT.
The company reported year-to-date operating income of $72 million, or 9% of sales, compared to $81 million, or 11% of sales, for the same period in 2017. Adjusted operating income was $97 million, or 11% of sales, in the first nine months of 2018, vs. $88 million, or 12% of sales, in the same period of 2017.
Interface also reported net income of $44 million year-to-date in 2018, compared with $49 million for the same period in 2017. Adjusted net income was $65 million for the first nine months of 2018 versus $54 million in the same period of 2017. Adjusted EPS was $1.08 per share for the first nine months, up 26% versus $0.86 per share for the same period in 2017.
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