Atlanta, GA, April 27--Interface, Inc. in the first quarter of 2005 reported a net loss of $2.2 million, or $0.04 per share, compared with a net loss in the first quarter of 2004 of $3.0 million, or $0.06 per share.
Analyst had forecast earnings of $0.06 per share, excluding special items, for the quarter.
First quarter 2005 results included an 11.8% increase in sales to $234.7 million, from $210.0 million in the year ago period.
The first quarter of 2005 contained 13 weeks, compared to 14 weeks last year. As previously announced, the Company is exiting its owned floorcovering dealer business. Consequently, it is reporting the results of operations for its owned Re:Source dealer businesses (as well as a small Australian dealer business and a small residential fabrics business) as "discontinued operations," in accordance with accounting standards. These operations yielded a first quarter 2005 after-tax operating loss of $4.8 million.
"We are pleased with our results for the 2005 first quarter, which represent considerable growth during what is typically a seasonally slower period for our business," said Daniel T. Hendrix, President and Chief Executive Officer. "We saw a continuation of the trends we experienced in 2004, reflecting the positive developments we are seeing in our industry. Strong growth in our modular business drove improving performance for our Company, and we continued to benefit from the ongoing improvements in the corporate office and retail space markets. Overall, sales increased and operating margins continued to expand, and we were encouraged to see the level of order activity remain high during the first quarter. Orders were up 9.1% to $261 million, compared with the first quarter of last year."
Mr. Hendrix continued, "During the first quarter, we once again gained market share in our worldwide modular business as we continue to outpace the industry and lead the growth of this market. The ongoing improvement in the corporate office market, coupled with our penetration into other markets, led to a 15.3% increase in worldwide modular sales for the quarter. This growth was primarily driven by the U.S. and Asia-Pacific regions, where strong order flows produced record results. As we predicted, our fabrics business returned to profitability in the first quarter, due to a modest improvement in sales - despite having one less week in the first quarter compared with last year - and the benefits of our past restructuring initiatives. We expect to see further profitability improvements in this business during the course of the year. Our Bentley Prince Street broadloom business posted its third straight quarter of profitability, and we remain confident that our cost-control initiatives and increased manufacturing efficiencies, coupled with an improving market, have this business on track in 2005."
Mr. Hendrix concluded, "Overall, we are encouraged by our results for the first quarter and are optimistic, based on current market trends, that the momentum we have generated will continue throughout the remainder of the year. Our focus will remain on leading and shaping the growth of the worldwide modular carpet market across all segments. We also will seek to drive sales in our fabrics and broadloom businesses through segmentation efforts and improving market conditions, while at the same time continuing our process improvements and cost controls. Although raw material pricing remains a challenge, we believe that with the proper execution of our business strategy, we can continue to generate top line growth while improving profitability in all areas of our business."
