- Sales for the Quarter Increase 4.3% Year-Over-Year to $242.2 Million -
- Debt Refinancing Significantly Improves Liquidity -
ATLANTA, Feb. 18 /PRNewswire-FirstCall/ -- Interface, Inc.
(Nasdaq: IFSIA), a worldwide interiors products and services company, today
announced results for the fourth quarter and fiscal year ended December 28,
2003.
Sales were $242.2 million in the fourth quarter 2003, compared with
$232.3 million in the fourth quarter 2002. Excluding the restructuring charge
in each respective period, loss from continuing operations was $2.2 million,
or $0.04 per share, in the fourth quarter 2003, compared with a loss from
continuing operations of $1.7 million, or $0.04 per share, in the fourth
quarter 2002. Loss from discontinued operations was $821,000 in the fourth
quarter 2003, versus a loss from discontinued operations of $12.9 million in
the same period a year ago. After restructuring charges, net loss for the
fourth quarter 2003 was $4.1 million, or $0.08 per share, compared with a
fourth quarter 2002 net loss of $30.2 million, or $0.60 per share.
"We were encouraged to see a sequential improvement in sales for the third
straight quarter, as well as a year-over-year improvement in sales for the
second straight quarter, which together give us optimism that our industry may
be emerging from its unprecedented downturn," said Daniel T. Hendrix,
President and Chief Executive Officer. "During the fourth quarter 2003, we
saw a modest improvement in our corporate office sales, which, in combination
with the continued success of our market segmentation strategy, led to
$242.2 million in sales for the quarter. Our worldwide modular business
generated gratifying results during the fourth quarter, with revenue
increasing 11% year-over-year. The modular business continues to grow in
nearly all areas, from the corporate office market to the education,
institutional, hospitality and healthcare markets."
Mr. Hendrix continued, "We have seen marked improvement in our fabrics and
broadloom businesses as well. During the fourth quarter, our broadloom
business achieved its third sequential quarter of operating profitability,
despite ongoing softness in the marketplace. We made substantial progress in
this business during 2003, and we continue to identify ways to reduce costs
and increase manufacturing efficiencies to bring about further improvements in
profitability. Similarly, our fabrics business remains on track to realize
the benefits from the restructuring initiatives we implemented in prior
quarters, and we expect this business to return to profitability in the first
half of fiscal 2004."
Sales for the 2003 fiscal year were $923.5 million, compared with
$924.1 million in 2002. Loss from continuing operations for the 2003 fiscal
year was $18.4 million, or $0.36 per share, compared with a loss from
continuing operations of $17.8 million, or $0.36 per share, in 2002. Net loss
for the 2003 fiscal year was $33.3 million, or $0.66 per share, compared with
a net loss of $87.7 million, or $1.75 per share in 2002. In fiscal 2003, the
Company recorded restructuring charges totaling $6.2 million, or $0.08 per
share after-tax. In fiscal 2002, the Company recorded a restructuring charge
of $23.4 million, or $0.31 per share after-tax, in addition to a $55.4 million
after-tax write-down, or $1.10 per share, related to goodwill impairment as a
result of the Company's implementation of SFAS No. 142.
Patrick C. Lynch, Vice President and Chief Financial Officer of Interface,
commented, "We have entered fiscal 2004 with better liquidity and a solid
financial foundation. A key accomplishment was the successful debt
refinancing that we completed earlier this month. As a result of this
refinancing, our debt maturity profile has been significantly improved, which
will give us increased flexibility to pursue our long-term strategies for
growth and profitability."
Mr. Hendrix concluded, "Over the past few years, we have taken many steps
to put Interface in a position to capitalize on a rebound in the commercial
market. We have lowered the break-even points in each of our business units,
penetrated diverse market segments to lessen our dependence on the corporate
office segment, and significantly improved our capital structure -- all while
maintaining and, we believe, increasing our share of the corporate office
market. With these critical measures materializing, we are focusing our
attention on growing the top lines of our businesses. In that regard, we have
been encouraged by the level of order activity in January of this year."
The Company will host a conference call tomorrow, February 19, 2004, at
9:00 a.m. Eastern Time, to discuss its fourth quarter and fiscal year 2003
results. The conference call will be simultaneously broadcast live over the
Internet. Listeners may access the conference call live over the Internet at
http://phx.corporate-ir.net/phoenix.zhtml?c=112931&p=IROL-
EventDetails&EventId=846181or through the Company's website at
http://www.interfaceinc.com/results/investor/. The archived version of the
conference call will be available at these sites beginning approximately one
hour after the call ends through February 19, 2005 at 11:59 p.m. Eastern Time.
Interface, Inc. is a recognized leader in the worldwide interiors market,
offering floorcoverings and fabrics. The Company is committed to the goal of
sustainability and doing business in ways that minimize the impact on the
environment while enhancing shareholder value. The Company is the world's
largest manufacturer of modular carpet under the Interface, Heuga, Bentley and
Prince Street brands, and, through its Bentley Mills and Prince Street brands,
enjoys a leading position in the high quality, designer-oriented segment of
the broadloom carpet market. The Company is a leading producer of interior
fabrics and upholstery products, which it markets under the Guilford of Maine,
Toltec, Intek, Chatham and Camborne brands. The Company provides specialized
carpet replacement, installation, maintenance and reclamation services through
its Re:Source Americas service network. In addition, the Company provides
specialized fabric services through its TekSolutions business and produces
InterCell brand raised/access flooring systems.
Safe Harbor Statement under the Private Securities Litigation Reform Act
of 1995: Except for historical information contained herein, the other matters
set forth in this news release are forward-looking statements. The
forward-looking statements set forth above involve a number of risks and
uncertainties that could cause actual results to differ materially from any
such statement, including risks and uncertainties associated with economic
conditions in the commercial interiors industry as well as the risks and
uncertainties discussed under the heading "Safe Harbor Compliance Statement
for Forward-Looking Statements" in Item 1 of the Company's Annual Report on
Form 10-K for the fiscal year ended December 29, 2002, which discussion is
incorporated herein by this reference, including, but not limited to, the
discussion of specific risks and uncertainties under the headings "We compete
with a large number of manufacturers in the highly competitive commercial
floorcovering products market, and some of these competitors have greater
financial resources than we do," "Sales of our principal products may be
affected by cycles in the construction and renovation of commercial and
institutional buildings," "Our continued success depends significantly upon
the efforts, abilities and continued service of our senior management
executives and our design consultants," "Our substantial international
operations are subject to various political, economic and other
uncertainties," "Our Chairman, together with other insiders, currently has
sufficient voting power to elect a majority of our Board of Directors," "Large
increases in the cost of petroleum-based raw materials, which we are unable to
pass through to our customers, could adversely affect us," "Unanticipated
termination or interruption of any of our arrangements with our primary
third-party suppliers of synthetic fiber could have a material adverse effect
on us," and "Our Rights Agreement could discourage tender offers or other
transactions that could result in shareholders receiving a premium over the
market price for our stock." Any forward-looking statements are made pursuant
to the Private Securities Litigation Reform Act of 1995 and, as such, speak
only as of the date made. The Company assumes no responsibility to update or
revise forward-looking statements made in this press release and cautions
readers not to place undue reliance on any such forward-looking statements.
Consolidated Statements of Income Three Months Ended Twelve Months Ended
(in thousands, 28-Dec-03 29-Dec-02 28-Dec-03 29-Dec-02
except per share data)
Net Sales $242,241 $232,325 $923,509 $924,084
Cost of Sales 175,066 167,714 670,532 659,910
Gross Profit 67,175 64,611 252,977 264,174
Selling, General & Administrative
Expenses 58,395 57,169 231,306 225,569
Restructuring Charge 1,641 23,449 6,196 23,449
Operating Income (Loss) 7,139 (16,007) 15,475 15,156
Interest Expense 11,394 10,283 42,820 42,022
Other Expense, Net 688 418 1,280 798
Income (Loss) Before Taxes (4,943) (26,708) (28,625) (27,664)
Income Tax Expense (Benefit) (1,661) (9,371) (10,215) (9,905)
Income (Loss) from Continuing
Operations (3,282) (17,337) (18,410) (17,759)
Discontinued Operations, Net of Tax (821) (12,869) (6,022) (14,525)
Loss on Disposal, Net of Tax -- -- (8,825) --
Income (Loss) before Change in
Accounting Principle (4,103) (30,206) (33,257) (32,284)
Cumulative Effect of Change,
Net of Tax -- -- -- (55,380)
Net Income (Loss) $(4,103) $(30,206) $(33,257) $(87,664)
Earnings Per Share - Basic and
Diluted
Continuing Operations $(0.06) $(0.35) $(0.36) $(0.36)
Discontinued Operations (0.02) (0.25) (0.12) (0.29)
Loss on Disposal -- -- (0.18) --
Cumulative Effect of Change in
Accounting Principle -- -- -- (1.10)
Earnings Per Share - Basic and
Diluted $(0.08) $(0.60) $(0.66) $(1.75)
Common Shares Outstanding, Basic and
Diluted 50,296 50,274 50,282 50,194
Consolidated Condensed Balance Sheets
(In thousands) 28-Dec-03 29-Dec-02
Assets
Cash $16,633 $34,134
Accounts Receivable 174,366 137,486
Inventory 143,885 134,656
Other Current Assets 24,062 42,953
Assets of Business Held for Sale -- 17,492
Total Current Assets 358,946 366,721
Property, Plant & Equipment 211,457 213,059
Other Assets 323,871 283,730
Total Assets $894,274 $863,510
Liabilities
Current Liabilities $190,456 $168,912
Long-Term Debt -- --
Senior and Senior Subordinated Notes 445,000 445,000
Other Liabilities 40,085 25,427
Total Liabilities 675,541 639,339
Shareholders' Equity 218,733 224,171
Total Liabilities and
Shareholders' Equity $894,274 $863,510
Reconciliation of Loss from
Continuing Operations Three Months Ended Three Months Ended
Excluding Restructuring 28-Dec-03 29-Dec-02
Charge to GAAP Measure
(in thousands, except per share data)
Loss from Continuing Operations
Excluding Restructuring Charge $(2,215) $(1,666)
Restructuring Charge, Net of Tax (1,067) (15,671)
Loss from Continuing Operations $(3,282) $(17,337)
Per Share (Diluted) Loss from
Continuing Operations
Excluding Restructuring Charge $(0.04) $(0.04)
Per Share (Diluted) Restructuring
Charge, Net of Tax (0.02) (0.31)
Per Share (Diluted) Loss from $(0.06) $(0.35)
Continuing Operations
SOURCE Interface, Inc.
-0- 02/18/2004
/CONTACT: Daniel T. Hendrix, President and Chief Executive Officer, or
Patrick C. Lynch, Chief Financial Officer, +1-770-437-6800, both of Interface,
Inc.; or Christine Mohrmann or Lindsay Hatton, both of Financial Dynamics,
+1-212-850-5600, for Interface, Inc. /
/Web site: http://www.interfaceinc.com /
(IFSIA)
CO: Interface, Inc.
ST: Georgia