24.10.2003: Meldung: Interface Reports Third Quarter 2003 Results
Sales in the third quarter 2003 were $237.1 million, compared with $231.3 million in the third quarter 2002. Operating income was $8.0 million in the third quarter 2003, versus $7.5 million in the third quarter 2002. Loss from continuing operations was $2.1 million, or $0.04 per share, in the third quarter 2003, compared with a loss from continuing operations of $1.8 million, or $0.03 per share, in the third quarter 2002. Loss from discontinued operations, including an $8.8 million after-tax loss on the disposal of those operations, was $11.2 million in the third quarter 2003, versus a loss from discontinued operations of $1.0 million in the same period a year ago. Net loss for the third quarter 2003 was $13.4 million, or $0.27 per share, compared with a third quarter 2002 net loss of $2.7 million, or $0.05 per share.
"In the third quarter of 2003, we continued to make significant improvements which strengthened our business," said Daniel T. Hendrix, President and Chief Executive Officer. "We have focused on generating top line momentum by remaining committed to our market segmentation strategy, the results of which were evident this quarter in revenue growth throughout most areas of our business. In addition, we made efforts to streamline our operations and improve our cost structure, resulting in a 7.1% year-over-year increase in operating income during the third quarter. Although many of our end markets have yet to recover from the continued weakness in the economy, we have been taking proactive measures to position our business for recovery."
Mr. Hendrix continued, "Our worldwide modular business performed strongly this quarter, with an 8.7% year-over-year increase in revenues primarily resulting from our ability to take share and capitalize on opportunities in the corporate office, education and healthcare markets. After returning to operating profitability in the second quarter of this year, our broadloom business posted a significant year-over-year increase in operating income in the third quarter, largely as a result of our cost-cutting initiatives and improvements in manufacturing efficiencies. Although our fabrics business remained flat this quarter, we have completed the restructuring initiatives that will fortify this business and position it for sustained long-term growth."
For the first nine months of 2003, sales were $681.3 million, compared with $691.8 million for the same period a year ago. Operating income for the 2003 nine-month period was $8.3 million (which includes $4.6 million of restructuring charges), versus operating income of $31.2 million for the comparable 2002 nine-month period. During the 2003 nine-month period, loss from continuing operations was $15.1 million, or $0.30 per share, compared with a loss from continuing operations of $0.4 million, or $0.01 per share, in the same period a year ago. Net loss for the 2003 nine-month period was $29.2 million, or $0.58 per share, compared with a net loss of $57.5 million, or $1.15 per share, for the first nine months of 2002. During the first nine months of 2002, the Company"s implementation of SFAS No. 142 resulted in an after-tax write-down of $55.4 million, or $1.11 per diluted share, primarily related to the impairment of goodwill.
Patrick C. Lynch, Vice President and Chief Financial Officer of Interface, commented, "As a result of the strategic initiatives we implemented in the third quarter, our business is stronger and more efficient. During the third quarter, we completed the sale of Interface Architectural Resources, our raised/access flooring business, which should improve our overall profitability and enhance our free cash flow generation going forward. In addition, we continued to strengthen our balance sheet by reducing debt by $16.2 million during the third quarter."
Mr. Hendrix continued, "We are pleased to announce the addition of a new member to our Board of Directors. Edward C. Callaway is currently the Chairman of Crested Butte Mountain Resort, Inc. in Colorado, and previously served as its President and Chief Executive Officer from 1987 to 2002. In addition, Edward is actively involved with The Considine Companies, a commercial real estate development business based in Denver. Edward graduated from Dartmouth College before earning a Masters Degree in Accounting from New York University and a Masters of Business Administration Degree from Stanford University. His wide array of business and management expertise will provide an invaluable contribution to our Board of Directors. Edward will join the Board effective today, and is replacing Len Saulter, who is retiring after more than 16 years of service as a director."
Mr. Hendrix concluded, "We are encouraged by our third quarter results and we look forward to maintaining this positive momentum into the final months of fiscal 2003. We remain committed to the strategic priorities that will allow our business to prosper, such as our market segmentation strategy, our ongoing cost management initiatives, and our focus on generating free cash flow to reduce debt."
The Company will host a conference call tomorrow, October 23, 2003, at 9:00 a.m. Eastern Time, to discuss its third quarter 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://www.firstcallevents.com/service/ajwz390484001gf12.html or 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 October 23, 2004 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 provides specialized carpet replacement, installation, maintenance and reclamation services through its Re:Source Americas service network. The Company is a leading producer of interior fabrics and upholstery products, which it markets under the Guilford of Maine, Stevens Linen, Toltec, Intek, Chatham, Camborne and Glenside brands. In addition, the Company provides specialized fabric services through its TekSolutions business and produces InterCell brand raised/access flooring systems.
Consolidated Statements of Income
(in thousands, except per share data)
Three Months Ended Nine Months Ended
28-Sep-03 29-Sep-02 28-Sep-03 29-Sep-02
Net Sales $237,094 $231,315 $681,268 $691,759
Cost of Sales 171,862 166,666 495,466 492,196
Gross Profit 65,232 64,649 185,802 199,563
Selling, General &
Expenses 57,201 57,151 172,911 168,400
Restructuring Charge - - 4,555 -
Operating Income 8,031 7,498 8,336 31,163
Interest Expense 11,033 10,573 31,426 31,739
Other Expense, Net 155 - 592 380
Before Taxes (3,157) (3,075) (23,682) (956)
Income Tax Expense
(Benefit) (1,011) (1,293) (8,554) (534)
Income (Loss) from
Operations (2,146) (1,782) (15,128) (422)
Net of Tax (2,417) (967) (5,201) (1,656)
Loss on Disposal,
Net of Tax (8,825) - (8,825) -
Income (Loss) before
Principle (13,388) (2,749) (29,154) (2,078)
of Change, Net of Tax - - - (55,380)
Net Income (Loss) $(13,388) $ (2,749) $(29,154) $(57,458)
Earnings Per Share - Basic and Diluted
Continuing Operations $(0.04) $(0.03) $(0.30) $(0.01)
Discontinued Operations (0.05) (0.02) (0.10) (0.03)
Loss on Disposal (0.18) - (0.18) -
Cumulative Effect of
Change in Accounting
Principle - - - (1.11)
Earnings Per Share -
Basic and Diluted $(0.27) $(0.05) $(0.58) $(1.15)
Common Shares Outstanding,
Basic and Diluted 50,273 50,251 50,247 50,148
Consolidated Condensed Balance Sheets
(In thousands) 28-Sep-03 29-Dec-02
Cash $ 22,567 $ 34,134
Accounts Receivable 176,453 137,486
Inventory 143,977 134,656
Other Current Assets 40,249 42,953
Assets of Business Held for Sale - 17,492
Total Current Assets 383,246 366,721
Property, Plant & Equipment 207,225 213,059
Other Assets 286,178 283,730
Total Assets $ 876,649 $ 863,510
Current Liabilities $ 173,721 $ 168,912
Long-Term Debt 5,502 -
Senior and Senior Subordinated Notes 445,000 445,000
Other Liabilities 43,146 25,427
Total Liabilities 667,369 639,339
Shareholders" Equity 209,280 224,171
Total Liabilities and
Shareholders" Equity $ 876,649 $ 863,510
Source: Interface, Inc.