Atlanta, GA, Feb. 19--Interface announced results for the fourth quarter and fiscal year ended December 29, and also announced its intent to sell or otherwise create a joint venture or strategic alliance for its raised flooring business, Interface Architectural Resources. This business represented approximately 2.4% and 4.0% of revenue for the full years 2002 and 2001, respectively. The discussion of results in this release, except for net loss, excludes the company’s raised flooring business.
In the fourth quarter, the company's sales were $232.3 million, compared with $240.4 million in the same period a year ago. Operating income, excluding the restructuring charge in each respective period, was $7.4 million in the fourth quarter, versus $10.1 million in the fourth quarter of the previous year.
Loss from continuing operations was $1.8 million, or $0.04 per share, in the fourth quarter, compared with income from continuing operations of $1.6 million, or $0.03 per share, in the same period a year ago, excluding the respective restructuring charges. With the respective restructuring charges included, the company's continuing operations recognized a loss of $17.4 million for the fourth quarter, compared with a loss from continuing operations of $0.3 million for the same period a year ago.
Sales for the year were $924.1 million, compared with $1.06 billion a year ago. Operating income, excluding the respective restructuring charges in each year, was $38.6 million last year, versus $53.5 million the year before. The company recorded a restructuring charge of $23.4 million, or $0.31 per share after tax, in 2002, while restructuring charges the previous year were $54.6 million, or $0.72 per share after tax.
For the year, loss from continuing operations before the cumulative effect of the SFAS No. 142 accounting change, excluding the restructuring charge, was $2.1 million, or $0.04 per share. This compares with income from continuing operations for the previous year, excluding restructuring charges, of $8.7 million, or $0.17 per share. Net loss for the full year 2002 was $87.7 million, or $1.75 per share. This compares with a net loss of $36.3 million, or $0.72 per share, including restructuring charges, the year before.
"Our results from continuing operations, excluding the previously announced restructuring charge, are in line with expectations, and reflect the prolonged downturn in industry conditions," commented Daniel T. Hendrix, president and CEO. "Our company's fundamentals remain strong, however, as evidenced by our ability to generate free cash flow in excess of $17 million in the fourth quarter of 2002 and $39 million for the year. In addition, despite a difficult business environment, our efforts to penetrate new market segments yielded positive results during the fourth quarter. We also are encouraged by the strong improvement in our international operations, led by our Asia-Pacific business, where sales in the fourth quarter of 2002 grew approximately 30% versus fourth quarter 2001, and 10% versus third quarter 2002."
Regarding the company's raised flooring business, Hendrix stated, "In order to intensify our focus on strategic assets that offer more immediate opportunities for growth and profitability, we have decided to divest or otherwise find a strategic alliance for our raised flooring business. This business has been profitable for us in the past, but out of all of our businesses it has been hit perhaps the hardest by the economic downturn. While we truly believe our raised flooring business produces great products and will return to profitability when the economy picks up, we can no longer wait for the rebound in the market for its products. The intended transaction also will help us achieve our goal of generating free cash flow. We already have begun marketing efforts, and our preliminary discussions with potential suitors have been encouraging.”
