Click here to close now.


News Feed Item

Interface Reports First Quarter 2014 Results

ATLANTA, April 23, 2014 /PRNewswire/ -- Interface, Inc. (Nasdaq: TILE), a worldwide carpet tile company and global leader in sustainability, today announced results for the first quarter ended March 30, 2014.

Interface, Inc. logo.

"The first quarter is our seasonally slowest period, and as previously mentioned we also were impacted this year by severe winter weather and the recommencement of local manufacturing at our new plant in Australia," said Daniel T. Hendrix, Chairman and Chief Executive Officer of the Company.  "Despite poor weather conditions that cost us several manufacturing and field sales days, our flagship Americas modular business posted healthy contributions from non-office segments.  Our Europe business came roaring back during the quarter, with strong growth coming in both office and non-office segments, primarily within our key countries of the U.K., Holland and Germany.  Asia-Pacific was the top line weakness, due to a combination of soft market conditions, the transition in Australia from an import model to the start-up of our new plant, and a more pronounced seasonal impact from the Chinese New Year.  On a very positive front, consolidated orders during the quarter increased 8% to $241 million, with a strengthening progression throughout the period – up 2%, 6% and 14% in January, February and March, respectively."


Sales:  Sales for the first quarter of 2014 were $219.0 million, up 4.1% from sales of $210.4 million in the first quarter of 2013. 

  • In our Americas business, first quarter sales increased 5% year-over-year. The growth occurred across all non-office segments, with hospitality (up 26%), retail (up 18%) and education (up 12%) having the largest percentage gains, partially offset by a modest decline in the corporate office segment (down 2%). FLOR sales were up 6% year-over-year, reflecting the impact of harsh winter weather in January and February that decreased store traffic and lowered overall consumer sentiment. FLOR rebounded strongly in March, resulting in its orders for the first quarter increasing 18% over the prior year period.
  • Our Europe business gained further momentum, with sales up 15% (or 11% in local currency) compared with the first quarter last year. The corporate office segment accounted for most of the growth (up 13%, or 8% in local currency), while non-office segments collectively posted their first improvement in several years (up 21%, or 16% in local currency).
  • Sales in the Asia-Pacific region were down 17%, primarily due to a drop in business in Australia as a result of longer lead times and service issues following the 2012 plant fire as well as currency translation effects. The January start-up of our new manufacturing facility in Australia and the Chinese New Year holiday also had negative top line impacts in the region.

Operating Income:  Operating income in the first quarter of 2014 was $12.0 million, or 5.5% of sales, compared with operating income of $14.0 million, or 6.7% of sales, in the first quarter last year.  The year-over-year decline in operating income is primarily attributable to lower sales volume in the Asia-Pacific region, higher SG&A spending, and under-absorption of fixed overhead costs associated with the recommencement of manufacturing in Australia in the first quarter of 2014.

Net Income:  Net income during the first quarter of 2014 was $4.0 million, or $0.06 per diluted share.  This compares with net income of $5.1 million, or $0.08 per diluted share, in the first quarter last year, excluding a one-time tax dispute resolution benefit of $1.9 million.  Including the tax resolution benefit, net income in the first quarter last year was $7.0 million, or $0.11 per diluted share.

Patrick C. Lynch, Senior Vice President and Chief Financial Officer, commented, "Gross margin improved 20 basis points compared with the first quarter last year, which is a good result considering the negative variances associated with the start-up of our new plant in Australia.  We are optimistic that gross margin will further expand throughout the year as we continue to ramp up our Australia plant, implement additional lean manufacturing initiatives, and realize enhanced fixed cost absorption as Europe's sales volume grows."

Mr. Hendrix concluded, "While the first quarter was a slower start than we expected, we still feel confident about our opportunities this year.  Our resurgence in Europe holds a lot of promise, and we expect our recovery there to continue – and perhaps accelerate – throughout 2014.  Our Americas business is healthy, with strong results in non-office segments, and we believe we're soundly outperforming our competitors in the region.  The pipeline of project activity in both the Americas and Southeast Asia is improving nicely, and we're recapturing market share in Australia with improved service levels from our new manufacturing facility.  Based on our positive order trend alongside our organic growth platforms, we expect greater top line improvement for the rest of the year.  Our focus will remain on expanding gross margin, containing SG&A expenses as sales volume grows, and increasing our bottom line."

Webcast and Conference Call Information

The Company will host a conference call tomorrow morning, April 24, 2014, at 9:00 a.m. Eastern Time, to discuss its first quarter 2014 results.  The conference call will be simultaneously broadcast live over the Internet.  Listeners may access the conference call live over the Internet at the following address: or through the Company's website at: The archived version of the webcast will be available at these sites for one year beginning approximately one hour after the call ends.

Interface, Inc. is the world's largest manufacturer of modular carpet, which it markets under the Interface and FLOR brands. 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. 

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 "Risk Factors" included in Item 1A of the Company's Annual Report on Form 10-K for the fiscal year ended December 29, 2013, which discussion is incorporated herein by this reference, including, but not limited to, the discussion of specific risks and uncertainties under the headings "Sales of our principal products have been and may continue to be affected by adverse economic cycles in the renovation and construction of commercial and institutional buildings," "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," "Our success depends significantly upon the efforts, abilities and continued service of our senior management executives and our principal design consultant, and our loss of any of them could affect us adversely," "Our substantial international operations are subject to various political, economic and other uncertainties that could adversely affect our business results, including by restrictive taxation or other government regulation and by foreign currency fluctuations," "The worldwide financial and credit crisis could have a material adverse effect on our business, financial condition and results of operations," "Concerns regarding the European sovereign debt crisis and market perceptions about the instability of the euro, the potential re-introduction of individual currencies within the Eurozone, or the potential dissolution of the euro entirely, could adversely affect our business, results of operations or financial condition," "Large increases in the cost of petroleum-based raw materials could adversely affect us if we are unable to pass these cost increases through to our customers," "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," "We have a significant amount of indebtedness, which could have important negative consequences to us," "The market price of our common stock has been volatile and the value of your investment may decline," "Our earnings in a future period could be adversely affected by non-cash adjustments to goodwill, if a future test of goodwill assets indicates a material impairment of those assets," and "Our Rights Agreement could discourage tender offers or other transactions for our stock 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 Condensed Statements of Operations

Three Months Ended

(In thousands, except per share data)



Net Sales

$ 218,992

$ 210,369

Cost of Sales



    Gross Profit



Selling, General & Administrative Expenses



    Operating Income



Interest Expense



Other Expense (Income), Net



    Income (Loss) Before Taxes



Income Tax Expense



Net Income

$    4,025

$    6,997

Earnings Per Share – Basic

$ 0.06

$ 0.11

Earnings Per Share – Diluted

$ 0.06

$ 0.11

Common Shares Outstanding – Basic



Common Shares Outstanding – Diluted



Orders from Continuing Operations



Consolidated Condensed Balance Sheets

(In thousands)





$ 62,492

$ 72,883

Accounts Receivable






Other Current Assets



Total Current Assets



Property, Plant & Equipment



Other Assets



Total Assets

$ 807,691

$ 796,335


Accounts Payable

$  54,497

$  52,515

Accrued Liabilities



Total Current Liabilities



Senior Notes



Long-Term Debt



Other Long-Term Liabilities



Total Liabilities



Shareholders' Equity



Total Liabilities and Shareholders' Equity

$ 807,691

$ 796,335



Consolidated Condensed Statements of Cash Flows

Three Months Ended

(In millions)



Net Income



Depreciation and Amortization



Deferred Income Taxes and Other Items



Change in Working Capital

Accounts Receivable






Prepaids and Other Current Assets



Accounts Payable and Accrued Expenses



Cash Used in Operating Activities



Cash Used in Investing Activities



Cash Provided by (Used in) Financing Activities



Effect of Exchange Rate Changes on Cash



Net Decrease in Cash




Reconciliation of Non-GAAP Performance Measures to GAAP Performance Measures 
(In millions, except per share amounts)


Three Months Ended


Net Income Excluding Tax Dispute Resolution

$  5.1

Tax Dispute Resolution


Net Income, As Reported

$ 7.0

Three Months Ended


Earnings per Share Excluding Tax Dispute Resolution

$  0.08

Tax Dispute Resolution


Earnings per Share, As Reported

$ 0.11


The Company believes that the above non-GAAP performance measures, which management uses in managing and evaluating the Company's business, may provide users of the Company's financial information with additional meaningful bases for comparing the Company's current results and results in a prior period, as these measures reflect factors that are unique to one period relative to the comparable period.  However, these non-GAAP performance measures should be viewed in addition to, and not as an alternative for, the Company's reported results under accounting principles generally accepted in the United States.  Tax effects identified above (when applicable) are calculated using the statutory tax rate for the jurisdictions in which the charge or income occurred.

Logo -

SOURCE Interface, Inc.

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
SYS-CON Events announced today that Key Information Systems, Inc. (KeyInfo), a leading cloud and infrastructure provider offering integrated solutions to enterprises, will exhibit at the 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Key Information Systems is a leading regional systems integrator with world-class compute, storage and networking solutions and professional services for the most advanced softwa...
"Matrix is an ambitious open standard and implementation that's set up to break down the fragmentation problems that exist in IP messaging and VoIP communication," explained John Woolf, Technical Evangelist at Matrix, in this interview at @ThingsExpo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
The modern software development landscape consists of best practices and tools that allow teams to deliver software in a near-continuous manner. By adopting a culture of automation, measurement and sharing, the time to ship code has been greatly reduced, allowing for shorter release cycles and quicker feedback from customers and users. Still, with all of these tools and methods, how can teams stay on top of what is taking place across their infrastructure and codebase? Hopping between services a...
Containers are changing the security landscape for software development and deployment. As with any security solutions, security approaches that work for developers, operations personnel and security professionals is a requirement. In his session at @DevOpsSummit, Kevin Gilpin, CTO and Co-Founder of Conjur, will discuss various security considerations for container-based infrastructure and related DevOps workflows.
WebRTC has had a real tough three or four years, and so have those working with it. Only a few short years ago, the development world were excited about WebRTC and proclaiming how awesome it was. You might have played with the technology a couple of years ago, only to find the extra infrastructure requirements were painful to implement and poorly documented. This probably left a bitter taste in your mouth, especially when things went wrong.
DevOps and Continuous Delivery software provider XebiaLabs has announced it has been selected to join the Amazon Web Services (AWS) DevOps Competency partner program. The program is designed to highlight software vendors like XebiaLabs who have demonstrated technical expertise and proven customer success in DevOps and specialized solution areas like Continuous Delivery. DevOps Competency Partners provide solutions to, or have deep experience working with AWS users and other businesses to help t...
Enterprises can achieve rigorous IT security as well as improved DevOps practices and Cloud economics by taking a new, cloud-native approach to application delivery. Because the attack surface for cloud applications is dramatically different than for highly controlled data centers, a disciplined and multi-layered approach that spans all of your processes, staff, vendors and technologies is required. This may sound expensive and time consuming to achieve as you plan how to move selected applicati...
Nowadays, a large number of sensors and devices are connected to the network. Leading-edge IoT technologies integrate various types of sensor data to create a new value for several business decision scenarios. The transparent cloud is a model of a new IoT emergence service platform. Many service providers store and access various types of sensor data in order to create and find out new business values by integrating such data.
The broad selection of hardware, the rapid evolution of operating systems and the time-to-market for mobile apps has been so rapid that new challenges for developers and engineers arise every day. Security, testing, hosting, and other metrics have to be considered through the process. In his session at Big Data Expo, Walter Maguire, Chief Field Technologist, HP Big Data Group, at Hewlett-Packard, will discuss the challenges faced by developers and a composite Big Data applications builder, foc...
Data loss happens, even in the cloud. In fact, if your company has adopted a cloud application in the past three years, data loss has probably happened, whether you know it or not. In his session at 17th Cloud Expo, Bryan Forrester, Senior Vice President of Sales at eFolder, will present how common and costly cloud application data loss is and what measures you can take to protect your organization from data loss.
The cloud has reached mainstream IT. Those 18.7 million data centers out there (server closets to corporate data centers to colocation deployments) are moving to the cloud. In his session at 17th Cloud Expo, Achim Weiss, CEO & co-founder of ProfitBricks, will share how two companies – one in the U.S. and one in Germany – are achieving their goals with cloud infrastructure. More than a case study, he will share the details of how they prioritized their cloud computing infrastructure deployments ...
There are so many tools and techniques for data analytics that even for a data scientist the choices, possible systems, and even the types of data can be daunting. In his session at @ThingsExpo, Chris Harrold, Global CTO for Big Data Solutions for EMC Corporation, will show how to perform a simple, but meaningful analysis of social sentiment data using freely available tools that take only minutes to download and install. Participants will get the download information, scripts, and complete en...
WebRTC: together these advances have created a perfect storm of technologies that are disrupting and transforming classic communications models and ecosystems. In his session at WebRTC Summit, Cary Bran, VP of Innovation and New Ventures at Plantronics and PLT Labs, will provide an overview of this technological shift, including associated business and consumer communications impacts, and opportunities it may enable, complement or entirely transform.
SYS-CON Events announced today that Dyn, the worldwide leader in Internet Performance, will exhibit at SYS-CON's 17th International Cloud Expo®, which will take place on November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Dyn is a cloud-based Internet Performance company. Dyn helps companies monitor, control, and optimize online infrastructure for an exceptional end-user experience. Through a world-class network and unrivaled, objective intelligence into Internet condit...
Between the compelling mockups and specs produced by analysts, and resulting applications built by developers, there exists a gulf where projects fail, costs spiral, and applications disappoint. Methodologies like Agile attempt to address this with intensified communication, with partial success but many limitations. In his session at DevOps Summit, Charles Kendrick, CTO and Chief Architect at Isomorphic Software, will present a revolutionary model enabled by new technologies. Learn how busine...