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Interface, Inc. Announces Second Quarter Preliminary Results
ATLANTA, Georgia, July 2, 2001 -- Interface, Inc. (Nasdaq: IFSIA), a worldwide commercial interiors products and services company, today announced that it expects to report lower revenue and net income for the second quarter ended July 1, 2001. Based on preliminary data, the Company expects second quarter revenue of between $285 million and $295 million and net income of between $1.5 million and $2.5 million, or $0.03 to $0.05 per diluted share.
Daniel T. Hendrix, President and Chief Executive Officer, stated, "We are disappointed that sales have softened further compared with the first quarter. The continued decline in the domestic economy and its effect on U.S. corporate confidence have prompted our commercial customers to delay projects, resulting in a more significant slowing of orders than previously experienced. In the second quarter, sales from our interior fabrics and broadloom carpet segments continued to decrease because of the well documented difficult conditions in the commercial interiors and office furniture industries. Overall lower sales volumes compared with the first quarter of 2001 and the year ago period resulted in a greater under-absorption of fixed manufacturing costs, reducing second quarter profits. However, second quarter performance of our modular carpet business in North America and Europe is expected to be even with the same period a year ago, despite the current economic landscape, as carpet tile continues to gain market share against other floorcovering alternatives."
Mr. Hendrix concluded, "While we are operating in a challenging business environment, we expect to generate $30 million of free cash flow for fiscal year 2001, which we plan to use to pay down our long-term debt. We are actively addressing slowing order rates by aggressively managing inventory levels and costs. Based on our improving operating efficiencies, and assuming no further deterioration in the economy, we expect full year earnings to be in the range of $0.25 to $0.35 per diluted share. Importantly, our competitive positions in our key markets remain strong, and we are confident that Interface is poised for significant earnings growth when the economy improves."
In conjunction with this release, Interface will hold a conference call on Tuesday, July 3, 2001, at 9:00 a.m. Eastern Time. This call will be simultaneously broadcasted live over the Internet. Listeners may access the call live, or archived through Monday, July 9, 2001 at 6:00 p.m. Eastern Time, over the Internet at www.streetfusion.com. Please allow at least 15 minutes prior to the call to visit the site and download and install any necessary audio software. The Company expects to report earnings for the second quarter of 2001 on July 24, 2001, after the close of the market.
Interface, Inc. is a recognized leader in the worldwide commercial interiors market, offering floorcoverings, fabrics, interior architectural products and specialty chemicals. 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, Prince Street and Firth brands, enjoys a leading position in the high quality, designer-oriented segment of the broadloom and woven carpet market. The Company also provides specialized carpet replacement, installation and maintenance services through its Re:Source Americas service network. The Company is also 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 produces raised/access flooring systems under the C-Tec, Intercell and Atlantic brands; produces adhesives and chemicals used in various rubber and plastic products; offers Intersept, a proprietary antimicrobial used in a variety of interior finishes; and sponsors the Envirosense Consortium in its mission to address workplace environmental issues.
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 in the Company's Safe Harbor Compliance Statement for Forward-Looking Statements, included as Exhibit 99.1 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2000, which discussion is incorporated herein by this reference, including, but not limited to, the discussion of specific risks and uncertainties under the headings "Strong Competition: The Company competes with a large number of other manufacturers in the highly competitive commercial floorcovering products market, and certain of these competitors have financial resources in excess of the Company's," "Cyclical Nature of Industry: Sales of the Company's principal products may be affected by cycles in the construction and renovation of commercial and institutional buildings," "Reliance on Key Personnel: The Company's continued success depends to a significant extent upon the efforts, abilities and continued service of its senior management executives and its design consultants," "Risks of Foreign Operations: The Company's substantial international operations are subject to various political, economic and other uncertainties, such as foreign currency exchange restrictions," "Reliance on Petroleum-Based Raw Materials: Large increases in the cost of petroleum-based raw materials, which the Company is unable to pass through to its customers, could adversely affect the Company," "Reliance on Third Party for Supply of Fiber: Unanticipated termination or interruption of the Company's arrangement with its primary third-party supplier of synthetic fiber could have a material adverse effect on the Company," and "Restrictions Due to Substantial Indebtedness: The Company's indebtedness, which is substantial in relation to its shareholders' equity, requires the Company to dedicate a substantial portion of its cash flow from operations to service debt and governs certain other activities of the Company."
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CONTACT:
Daniel T. Hendrix
President and Chief Executive Officer
Patrick C. Lynch
Controller
(770) 437-6800
Morgen-Walke Associates:
Gordon McCoun, Christine Mohrmann, Lauren Levine
Media contact: Shannon Stevens
(212) 850-5600