Interface Reports Lower Sales in Quarter
Atlanta, GA, Oct. 23, 2014 -- Interface Inc. reported a third-quarter net loss of $376,000 or $0.01 per share.
However, earnings adjusted for a restructuring cost were $0.13 per share.
The company posted revenue of $252.2 million, down less than 1% from $254.5 million in the third quarter of 2013.
Interface incurred a pre-tax restructuring and asset impairment charge of $12.4 million.
Excluding the charge, operating income in the third quarter of 2014 was $19.6 million, or 7.8% of sales, compared with $27.8 million, or 10.9% of sales, in the third quarter last year.
"We are reducing manufacturing costs through initiatives that include headcount reductions, reengineering of our products and processes, and raw material pricing," said CEO Daniel Hendrix.
"We are cutting SG&A expenses and enhancing operational excellence through working capital reductions and improved efficiencies. With a healthy backlog and good order trend over the past eight weeks, particularly in the U.S. and Australia, manufacturing volume also should improve in the fourth quarter and contribute to a stronger gross margin profile compared with the third quarter."
Sales in the firm's Americas business were essentially even year-over-year, with strong gains in the multifamily residential (up 89%) and hospitality (up 53%) segments being offset by declines in the retail (down 6%), government (down 3%) and other non-office segments.
The corporate office segment grew less than 1% compared with the third quarter last year.
Sales in the FLOR consumer business fell 8% year-over-year, although same store sales held even compared with the 2013 third quarter.
Interface's European business saw sales down 3.8% compared with the third quarter last year. While corporate office sales in markets such as the UK, Ireland and Germany continued to grow, emerging markets in Eastern Europe, the Middle East and Russia were hurt by political unrest and falling currency rates in those regions.
Sales were up 3.0% in the Asia-Pacific region, with strong momentum in Australia being partially offset by declines in Southeast Asia and China due primarily to political tensions and a softening economy, respectively.