Atlanta, GA, October 26, 2005--Interface, Inc. in the third quarter reported net income of $5.1 million, or $0.10 per diluted share, compared with a net loss in the prior year period of $47.8 million, or $0.92 per diluted share.
Analyst had estimated earnings per share of $0.11 in the quarter.
Third quarter 2005 results included a 9.5% increase in sales to $243.9 million, from $222.8 million in the year ago period.
For the first nine months of 2005 income from continuing operations was $12.2 million, or $0.23 per diluted share, compared $4.6 million, or $0.09 per diluted share, in the year ago period.
For the first nine months of 2005, sales were $725.2 million, compared with $649.1 million for the same period a year ago, an increase of 11.7%.
"Third quarter performance represents another significant step forward for Interface, as we continued to generate solid year-over-year growth in both sales and operating income, even in the face of higher raw material prices, the impact of the tragic events in the Gulf Coast region, and tougher year- over-year comparables," said Daniel T. Hendrix, President and Chief Executive Officer. "These results are indicative of the several positive trends we are seeing in the industry and the momentum we are now generating in all of our businesses. The improving U.S. office market, the ongoing success of our market segmentation strategy, and the increasing popularity of carpet tile as the floorcovering of choice continue to fuel growth for our Company. Our modular business once again generated impressive returns, with double digit sales growth in the U.S., record third quarter growth in Asia-Pacific, and strengthening demand in Europe. We also are upbeat about the performance of our fabrics and broadloom businesses in the third quarter, as sales and operating income increased significantly in each. Given these results, we believe our Company is beginning to hit on all cylinders."
Mr. Hendrix added, "Our segmentation strategy continues to pick up steam around the world, with particular success in the modular carpet segment. With effective execution of this strategy, we are leading and shaping the modular market, while also forming relationships with new customers, such as automobile manufacturers, on the fabrics side of our business. For the third quarter, worldwide modular sales grew 12% year-over-year. The strong order trend we saw in our fabrics business at the end of the second quarter continued into the third quarter, and the ongoing strength of the corporate office market led to a 7% increase in fabrics sales year-over-year. Sales from our Bentley Prince Street broadloom business also increased during the third quarter, which led to its fifth consecutive quarter of profitability."
Mr. Hendrix concluded, "As we move into the fourth quarter, we are encouraged with the level of order activity and we continue to be optimistic about the future. Although increasing raw material costs will remain a challenge in the near term, we believe that the product pricing and supply chain actions we have taken -- coupled with the benefits we are reaping from our decade-long journey toward sustainability -- position us well for further progress. While our leading presence in the worldwide modular carpet market continues to be the main driver of growth for Interface, our market segmentation strategy and ongoing cost management initiatives have led to higher sales levels and significant improvements in profitability in our fabrics and broadloom businesses. We believe that we can continue to generate top-line growth while improving profitability in all areas of our business. During the fourth quarter, we expect continued sales growth and margin expansion."
