Interface Announces Restructuring Initiative
Atlanta, GA, January 7, 2019-Interface has announced a restructuring plan for the first half of 2019.
The effort hopes to improve efficiencies and streamline operations to more closely align its operating structure with its business and value creation strategy. In total, the company expects to reduce approximately 200 positions globally as well as the write-down of certain obsolete, underutilized and impaired information technology and manufacturing assets.
As a result of this plan, the company expects to incur a pre-tax restructuring and asset impairment charge in the fourth quarter of 2018 of approximately $22.0 million. The charge is comprised of severance expenses ($12.7 million), impairment of assets ($8.2 million) and other items ($1.1 million). The charge is expected to result in future cash expenditures of $13.5 million, primarily for severance payments ($12.5 million).
The plan is expected to yield gross annual savings of approximately $12.5 million, however; the company expects to redeploy essentially all of the anticipated savings toward the funding of sales and strategic growth initiatives and those investments will start in 2019 yielding negligible net savings on the company’s income statement.