Interface Has Record Second Quarter

Atlanta, GA, July 23, 2008--Interface, Inc. reported net income for the 2008 second quarter of $15.9 million, or $0.26 per diluted share.

"Our 2008 second quarter represented Interface's best second quarter ever in terms of operating income and earnings per share, despite the challenging market and economic environment," said CEO Daniel T. Hendrix.

Sales increased 11.3 percent to $295 million from sales of $265 million in the year ago period.

Gross profit margin for the 2008 second quarter grew 90 basis points to 35.7 percent, versus 34.8 percent in the second quarter of 2007. Operating income increased 8.2 percent to $33.4 million, or 11.3 percent of sales, compared with operating income of $30.9 million, or 11.7 percent of sales, a year ago.

"We continued to grow our business and gain market share, as overall sales increased more than 11 percent, driven by our market segmentation strategy, the ongoing secular shift toward carpet tile, our presence in emerging geographic markets, and a positive currency impact," Hendrix said.

"These factors more than offset softer sales volumes in the Western Europe and U.S. corporate office markets. We continued to see solid demand for our products, as orders grew 3 percent to $311 million versus the record level comparison in the second quarter last year and backlog increased 21 percent from the beginning of the year. We also added $24 million in cash to the balance sheet during the quarter."

Hendrix said the modular carpet business had year-over-year sales growth of 15 percent. He said Bentley Prince Street continued to work through operational issues associated with the ramp up of its carpet tile backing operations as well as rising raw material and energy costs. However, Bentley Prince Street had a strong order backlog going into the third quarter, and the modular component of its business recorded a 23 percent increase in sales.

"Given the broader macroeconomic conditions, we're largely pleased with our second quarter performance, and notwithstanding the slowing conditions in the Western Europe and U.S. corporate office markets, we're encouraged by our future prospects," Hendrix said.

He said Interface is building a carpet tile plant in China.