Interface Posts 4Q Profit
Atlanta, GA, February 22, 2006—Interface in the fourth quarter of 2005, after charges, reported net income of 5.7 million, or $0.11 per diluted share, compared with a net loss in the fourth quarter of 2004 of $4.4 million, or $0.08 per diluted share.
Sales in the 2005 fourth quarter rose 12.0% to $260.6 million from $232.6 million in the year ago period.
For the full year 2005, after charges and losses from discontinued operations of $14.8 million and a loss on disposal of $1.9 million, net income for 2005 was $1.2 million, or $0.02 per diluted share. This compares with a net loss in 2004 of $55.4 million, or $1.06 per diluted share (which included a loss from discontinued operations of $58.8 million and a loss on disposal of $3.0 million).
For the full year 2005, sales increased 11.8% to $985.8 million, compared with $881.7 million in 2004.
"The year 2005 was very gratifying, as we built upon the momentum generated during our turnaround in 2004," said Daniel T. Hendrix, President and Chief Executive Officer. "We continued to expand our leadership position in the worldwide modular market, outpacing the growth in the overall industry. While we garnered the benefit of some resurgence in our core corporate office market, we also took further steps to significantly diversify our revenue base through our segmentation strategy. This was true not only in modular but also in our fabrics and broadloom businesses, each of which delivered solid improvements in both sales and profitability during the year. Importantly, we also were able to largely offset rising raw material costs through enhanced manufacturing efficiencies, diligent cost management and successfully passing through price increases, which led to higher operating margins."
Mr. Hendrix added, "Modular carpet is increasingly becoming the floorcovering of choice across most commercial market segments, and that is reflected by the 13% increase year-over-year in worldwide sales we achieved in the fourth quarter. This growth was particularly strong in the U.S. and Asia-Pacific regions, where strong order flows produced record fourth quarter results -- for the second year in a row. Furthermore, our Europe modular business had its best quarter in the last five years. The growing strength of the corporate office market also led to an 11% increase year-over-year in fabrics sales in the fourth quarter. We are pleased with the progress made in this business during the year, as we were successful in our efforts to reduce costs, penetrate the automotive market, and significantly improve profitability over prior year levels. In addition, our Bentley Prince Street broadloom business posted its best quarter in five years, with sales in the fourth quarter increasing 15% year-over-year, while our cost control efforts within this division led to substantial profitability growth."
Patrick C. Lynch, Vice President and Chief Financial Officer, commented, "Financially, this was an important year for Interface, as our results affirm the strategic actions we have taken within the business. Based on the leverage in our operating model, we were able to capitalize on the growth opportunities presented in our markets, while containing costs and decreasing selling, general and administrative expenses as a percentage of overall sales. At the same time, we maintained our focus on cash flow, generating a $29.1 million net increase in cash for the year."
Mr. Hendrix concluded, "We are very pleased with our results for the fourth quarter and full year 2005. We believe we are well positioned to continue the strong momentum in all of our businesses in 2006 by driving our segmentation strategy and maintaining careful control over our cost structure."