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
The revocation of Safe Harbor has radically affected data sovereignty strategy in the cloud. In his session at 17th Cloud Expo, Jeff Miller, Product Management at Cavirin Systems, discussed how to assess these changes across your own cloud strategy, and how you can mitigate risks previously covered under the agreement.
Countless business models have spawned from the IaaS industry – resell Web hosting, blogs, public cloud, and on and on. With the overwhelming amount of tools available to us, it's sometimes easy to overlook that many of them are just new skins of resources we've had for a long time. In his general session at 17th Cloud Expo, Harold Hannon, Sr. Software Architect at SoftLayer, an IBM Company, broke down what we have to work with, discussed the benefits and pitfalls and how we can best use them ...
Most of the IoT Gateway scenarios involve collecting data from machines/processing and pushing data upstream to cloud for further analytics. The gateway hardware varies from Raspberry Pi to Industrial PCs. The document states the process of allowing deploying polyglot data pipelining software with the clear notion of supporting immutability. In his session at @ThingsExpo, Shashank Jain, a development architect for SAP Labs, discussed the objective, which is to automate the IoT deployment proces...
We all know that data growth is exploding and storage budgets are shrinking. Instead of showing you charts on about how much data there is, in his General Session at 17th Cloud Expo, Scott Cleland, Senior Director of Product Marketing at HGST, showed how to capture all of your data in one place. After you have your data under control, you can then analyze it in one place, saving time and resources.
The Internet of Things (IoT) is growing rapidly by extending current technologies, products and networks. By 2020, Cisco estimates there will be 50 billion connected devices. Gartner has forecast revenues of over $300 billion, just to IoT suppliers. Now is the time to figure out how you’ll make money – not just create innovative products. With hundreds of new products and companies jumping into the IoT fray every month, there’s no shortage of innovation. Despite this, McKinsey/VisionMobile data...
Just over a week ago I received a long and loud sustained applause for a presentation I delivered at this year’s Cloud Expo in Santa Clara. I was extremely pleased with the turnout and had some very good conversations with many of the attendees. Over the next few days I had many more meaningful conversations and was not only happy with the results but also learned a few new things. Here is everything I learned in those three days distilled into three short points.
DevOps is about increasing efficiency, but nothing is more inefficient than building the same application twice. However, this is a routine occurrence with enterprise applications that need both a rich desktop web interface and strong mobile support. With recent technological advances from Isomorphic Software and others, rich desktop and tuned mobile experiences can now be created with a single codebase – without compromising functionality, performance or usability. In his session at DevOps Su...
As organizations realize the scope of the Internet of Things, gaining key insights from Big Data, through the use of advanced analytics, becomes crucial. However, IoT also creates the need for petabyte scale storage of data from millions of devices. A new type of Storage is required which seamlessly integrates robust data analytics with massive scale. These storage systems will act as “smart systems” provide in-place analytics that speed discovery and enable businesses to quickly derive meaningf...
In his keynote at @ThingsExpo, Chris Matthieu, Director of IoT Engineering at Citrix and co-founder and CTO of Octoblu, focused on building an IoT platform and company. He provided a behind-the-scenes look at Octoblu’s platform, business, and pivots along the way (including the Citrix acquisition of Octoblu).
In his General Session at 17th Cloud Expo, Bruce Swann, Senior Product Marketing Manager for Adobe Campaign, explored the key ingredients of cross-channel marketing in a digital world. Learn how the Adobe Marketing Cloud can help marketers embrace opportunities for personalized, relevant and real-time customer engagement across offline (direct mail, point of sale, call center) and digital (email, website, SMS, mobile apps, social networks, connected objects).
The buzz continues for cloud, data analytics and the Internet of Things (IoT) and their collective impact across all industries. But a new conversation is emerging - how do companies use industry disruption and technology enablers to lead in markets undergoing change, uncertainty and ambiguity? Organizations of all sizes need to evolve and transform, often under massive pressure, as industry lines blur and merge and traditional business models are assaulted and turned upside down. In this new da...
In recent years, at least 40% of companies using cloud applications have experienced data loss. One of the best prevention against cloud data loss is backing up your cloud data. In his General Session at 17th Cloud Expo, Sam McIntyre, Partner Enablement Specialist at eFolder, presented how organizations can use eFolder Cloudfinder to automate backups of cloud application data. He also demonstrated how easy it is to search and restore cloud application data using Cloudfinder.
The Internet of Everything is re-shaping technology trends–moving away from “request/response” architecture to an “always-on” Streaming Web where data is in constant motion and secure, reliable communication is an absolute necessity. As more and more THINGS go online, the challenges that developers will need to address will only increase exponentially. In his session at @ThingsExpo, Todd Greene, Founder & CEO of PubNub, exploreed the current state of IoT connectivity and review key trends and t...
Two weeks ago (November 3-5), I attended the Cloud Expo Silicon Valley as a speaker, where I presented on the security and privacy due diligence requirements for cloud solutions. Cloud security is a topical issue for every CIO, CISO, and technology buyer. Decision-makers are always looking for insights on how to mitigate the security risks of implementing and using cloud solutions. Based on the presentation topics covered at the conference, as well as the general discussions heard between sessi...
With all the incredible momentum behind the Internet of Things (IoT) industry, it is easy to forget that not a single CEO wakes up and wonders if “my IoT is broken.” What they wonder is if they are making the right decisions to do all they can to increase revenue, decrease costs, and improve customer experience – effectively the same challenges they have always had in growing their business. The exciting thing about the IoT industry is now these decisions can be better, faster, and smarter. Now ...