28.2.2005: Meldung: Interface, Inc.: Fourth Quarter and Full Year 2004 Results
Wednesday February 23, 5:53 pm ET
- Fourth Quarter Sales Up 14.6% Year-Over-Year - - Fourth Quarter Orders Up 20.7% Year-Over-Year - - Income from Continuing Operations of $1.9 million, or $0.04 per share -
ATLANTA, Feb. 23 / Interface, Inc. (Nasdaq: IFSIA - News), a worldwide floorcoverings and fabrics company, today announced results for the fourth quarter and full year ended January 2, 2005.
Fourth quarter 2004 results included a 14.6% increase in sales to $232.6 million, from $202.9 million in the year ago period. Operating income was $15.3 million in the fourth quarter 2004, a 29.3% increase over operating income of $11.8 million in the fourth quarter 2003. Income from continuing operations was $1.9 million, or $0.04 per share, in the fourth quarter 2004, compared with income from continuing operations of $0.5 million, or $0.01 per share, in the fourth quarter 2003.
As previously announced, the Company is exiting the owned dealer business. Consequently, it is reporting the results of operations for its owned Re:Source dealer businesses (as well as a small Australian dealer business and a small residential fabrics business) as "discontinued operations," in accordance with accounting standards. Those operations yielded a fourth quarter 2004 after-tax operating loss of $2.7 million. The Company"s 2004 fourth quarter results also included a loss of $3.5 million, after-tax, related to the disposal of certain dealer businesses.
In comparison, in the fourth quarter of 2003, the Company recorded a charge of $1.6 million in connection with its previously-announced restructuring initiative designed to rationalize manufacturing operations in its fabrics division and further reduce worldwide workforce. Additionally, the fourth quarter 2003 results included a loss from discontinued operations of $4.6 million, composed of a $0.8 million operating loss related to the Company"s U.S. raised/access flooring business and a $3.8 million operating loss primarily related to the dealer businesses.
Net loss for the fourth quarter 2004 was $4.4 million, or $0.08 per share, compared with a net loss in the fourth quarter 2003 of $4.1 million, or $0.08 per share.
"In 2004, we benefited from record sales in our U.S. modular business, improving trends in the corporate office market, an up-tick in our broadloom business, as well as our market segmentation strategy and cost reduction initiatives," said Daniel T. Hendrix, President and Chief Executive Officer. "Consequently, we were able to attain year-over-year growth in both sales and operating income in every quarter in 2004. Order activity remained robust throughout the year, with fourth quarter orders up almost 21% to $247.7 million, compared with the fourth quarter of last year. We expect this momentum to continue in 2005."
Mr. Hendrix continued, "Our worldwide modular business continued to gain market share, as Interface leads and shapes the expansion of this growth market. Sales in our worldwide modular business grew 21% for the fourth quarter 2004 because of the improving corporate office market and the success of our penetration into the non-corporate office markets. The increasing diversity in our end-markets also enabled us to deliver broadloom sales growth of 2% in the fourth quarter 2004, while cost-cutting initiatives and improvements in manufacturing efficiencies further contributed to broadloom operating profitability. While sales in our fabrics business for the fourth quarter 2004 were up only slightly, the business experienced a $10 million turnaround in operating profitability over the course of the year. We expect this business to become profitable again in the first quarter of 2005, underscoring the streamlining we have worked so hard to achieve over the past several quarters."
For the full year 2004, sales were $881.7 million, compared with $766.5 million for the same period a year ago, an increase of 15.0%. Operating income for the full year 2004 increased to $60.7 million, from $31.4 million in the comparable period last year (after pre-tax restructuring charges of $6.2 million, or $0.08 per share after-tax, in the 2003 period). Income from continuing operations during the full year 2004 was $6.4 million, versus a loss from continuing operations of $8.0 million, after the restructuring charge, in the full year 2003.
The full year 2004 after-tax loss from discontinued operations was $58.8 million, which included write-downs for the impairment of assets and goodwill of $17.5 million and $29.0 million, respectively, primarily related to the Re:Source dealer businesses. The Company"s 2004 results also included a loss of $3.0 million, after-tax, related to the disposal of certain dealer businesses. In comparison, the Company"s 2003 after-tax loss from discontinued operations was $16.4 million, which included a $12.0 million write-down for the impairment of assets related to the U.S. raised/access flooring business. The Company also recorded an $8.8 million after-tax loss in 2003 on the disposal of that business. Including the results of all discontinued operations, the Company reported a net loss of $55.4 million, or $1.06 per fully diluted share, for the full year 2004. This compares with net loss of $33.3 million, or $0.66 per fully diluted share, for the full year 2003.
Patrick C. Lynch, Vice President and Chief Financial Officer of Interface, commented, "Fiscal 2004 was an important year for Interface, as our results reflect the growth we have been experiencing and the operational strategies we have been executing. This was perhaps best evidenced by our growth in operating income, which nearly doubled as compared with 2003. During the fourth quarter of 2004, we felt the impact of higher raw material prices, and also incurred higher professional fees related to Sarbanes-Oxley compliance. Despite these factors, we still were able to improve our fourth quarter operating margin year-over-year. As previously announced, we are exiting our unprofitable dealer business, which will reduce our cost structure and working capital requirements and improve our cash flow. To date, we have sold or initiated closure of 10 of our 15 dealer locations, and we expect to complete our exit activities by the end of the second quarter of 2005."
Mr. Hendrix concluded, "We enter 2005 with a positive outlook. Interface continues to lead the growing modular market, while our market segmentation efforts and ongoing cost management program have led to higher sales levels and significant improvements in profitability. Based on the present trends, we expect continued sales growth and margin expansion in 2005. While increasing raw material costs will remain a challenge, we believe that the cost reduction actions we have taken position us well for further progress. Our focus moving into 2005 will include process improvements and continued cost management, to enhance margins in our broadloom business and enable our fabrics business to sustain profitability. Overall, we remain confident in Interface"s growth prospects, given the fundamentals and momentum in all of our markets and the leverage that now exists in our operating model."
The Company will host a conference call tomorrow, February 24, 2005, at 9:00 a.m. Eastern Time, to discuss its fourth quarter and full year 2004 results. The conference call will be simultaneously broadcast live over the Internet. Listeners may access the conference call live over the Internet, please copy and paste the following link into your browser: http://phx.corporate-ir.net/phoenix.zhtml?p=irol- eventDetails&c=112931&eventID=1012950 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 February 23, 2006 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. In addition, the Company provides specialized fabric services through its TekSolutions business and produces InterCell brand raised/access flooring systems.
Source: Interface, Inc.