Atlanta, GA, July 29--Interface, Inc. in the second quarter of 2004 posted sales that rose 9% to $254.1 million, from $234.0 million in the second quarter 2003.
Operating income was $11.8 million in the second quarter 2004, a significant increase over operating income of $3.7 million in the second quarter 2003.
The company reported a net loss for the second quarter 2004 of $0.2 million, or $0.00 per share, compared with a net loss in the second quarter 2003 of $5.4 million, or $0.11 per share. The company's results for the second quarter 2003, as announced at that time, included a pre-tax restructuring charge of $2.5 million, or $0.03 per share, in connection with the completion of the company's initiative to rationalize manufacturing operations in its fabrics division and reduce its workforce worldwide.
"We are pleased with our results for the second quarter as we once again achieved sequential and year-over-year improvements in sales and operating income," said Daniel T. Hendrix, President and Chief Executive Officer. "Our growth in the second quarter is primarily a result of record sales in our U.S. modular business and the ongoing recovery in the corporate office market. We were also encouraged to see the level of order activity remain high during the second quarter. Orders were up 13% to $258 million, compared with the second quarter of last year."
Mr. Hendrix continued, "Sales in our worldwide modular business continued to be robust across all areas, increasing 13% year-over-year. We experienced particularly strong growth in the education, retail and government markets, where we believe we're gaining market share. Our fabrics business continued to benefit from the restructuring initiatives and the market segmentation strategy we have been implementing over the past several quarters.
"Revenues from this portion of our business increased 6% year-over-year, and operating income improved to $1.4 million for the second quarter of 2004, from an operating loss of $2.5 million a year ago. While sales in our Bentley Prince Street broadloom business were essentially flat year-over-year, we believe we're gaining share in non-corporate office markets; and we remain confident that our strategic initiatives will produce a positive long-term effect on this business."
For the first six months of 2004, sales were $503.4 million, compared with $444.2 million for the same period a year ago, an increase of 13%. Operating income for the 2004 six-month period increased significantly to $21.3 million, versus operating income of $0.3 million for the comparable 2003 six-month period (which included total restructuring charges of $4.6 million).
For the first half of 2004, the company reported a net loss of $3.2 million, or $0.06 per share (which includes the equivalent of $0.02 per share of costs associated with its previously announced bond issuance in the first quarter of 2004). This compares with net loss of $15.8 million, or $0.31 per share, for the first six months of 2003.
Mr. Hendrix concluded, "This was an important quarter for Interface, as our focus on cost control led to significant improvements in operating income and allowed us to essentially reach the breakeven level.
"Overall, we are encouraged by these results and believe the positive momentum will continue through the remainder of the year. Our focus going forward will be to continue our efforts on market segmentation and cost control initiatives. Doing so will help drive revenue growth, enhance our market presence and contribute to continued profitability improvements. We remain confident about Interface's growth prospects and believe the company is well positioned to capitalize on the progressing recovery in the overall industry."
