Interface Inc (NASDAQ:TILE) Q1 2018 Earnings Conference Call - Final Transcript
Apr 26, 2018 • 09:00 am ET
also for the exit of our FLOR store, specialty retail stores was up a solid 6.6% year-over-year.
Turning to orders, our first quarter organic orders were up 12% year-over-year. Our first quarter revenue and order trends were consistent with the pace that we anticipated. As expected, orders were influenced by a large strategic customer and a deal that we negotiated late last year.
We're now starting to see our order book translate to the P&L. This will help revenue growth in quarters two and three. For the second quarter, we are targeting net sales growth in the range of 9% to 11%.
As anticipated, our first quarter gross margin of 38.9% was down slightly year-over-year, due to higher input prices as well as the exiting of the FLOR specialty retail. As planned, we held our SG&A expenses flat as a percentage of sales over the prior year.
With dollars up versus last year, as we made the planned investments in our growth related strategies, the pace of SG&A spend is in line with our anticipated annual run rate.
The outcome of all this was solid EPS growth. We delivered EPS of $0.25 compared to last year's Q1 GAAP EPS of $0.13. That's a 19% increase versus a, that's a 19% increase. Regarding our capital allocation, we continue to execute against our previously announced $100 million share repurchase program. In the first quarter, we completed an additional $14.5 million of stock repurchases.
Now, I'd like to turn the call over to Bruce for a full review of the financial details of the first quarter. Bruce, the call is yours.
Thanks, Jay, and good morning, everyone. As a reminder, organic sales, organic sales growth and organic order growth adjusts to exclude the impact of foreign currency fluctuations and exiting FLOR specialty retail.
Let's dive into first quarter 2018 results. First quarter GAAP net sales were $241 million, up 8.8% over the prior-year period on broad based growth and positive currency impacts, offset partially by exit of FLOR specialty retail. Organic sales were up 6.6% year-over-year. And taking a closer look at our regional net sales in Q1, net sales in the Americas region grew 5% compared to Q1 last year with solid performance across the business and continued momentum in LVT.
Growth in the US business was also enhanced by continued momentum in our Interface Services business and strong growth in Latin America. In local currency, net sales in EMEA was up 4% year-over-year, while in US dollars EMEA's net sales were up 19% year-over-year as we benefited from currency tailwinds. Asia Pacific net sales were up 16% compared to Q1 last year, with both China and India having double-digit growth.
In terms of our global market segmentation, core office saw double-digit growth over the same period last year and we continue to see increases in non-office segments particularly retail, government, and healthcare. Q1 organic orders were up 12% year-over-year, gross margin was 38.9% for the first quarter, which reflects an anticipated