Atlanta, GA, Feb. 18--Interface, Inc. today announced results for the fourth quarter and fiscal year ended December 28, 2003. Sales were $242.2 million in the fourth quarter 2003, compared with $232.3 million in the fourth quarter 2002. Excluding the restructuring charge in each respective period, loss from continuing operations was $2.2 million, or $0.04 per share, in the fourth quarter 2003, compared with a loss from continuing operations of $1.7 million, or $0.04 per share, in the fourth quarter 2002. Loss from discontinued operations was $821,000 in the fourth quarter 2003, versus a loss from discontinued operations of $12.9 million in the same period a year ago. After restructuring charges, net loss for the fourth quarter 2003 was $4.1 million, or $0.08 per share, compared with a fourth quarter 2002 net loss of $30.2 million, or $0.60 per share.
"We were encouraged to see a sequential improvement in sales for the third straight quarter, as well as a year-over-year improvement in sales for the second straight quarter, which together give us optimism that our industry may be emerging from its unprecedented downturn," said Daniel T. Hendrix, President and Chief Executive Officer. "During the fourth quarter 2003, we saw a modest improvement in our corporate office sales, which, in combination with the continued success of our market segmentation strategy, led to $242.2 million in sales for the quarter. Our worldwide modular business generated gratifying results during the fourth quarter, with revenue increasing 11% year-over-year. The modular business continues to grow in nearly all areas, from the corporate office market to the education, institutional, hospitality and healthcare markets.
"We have seen marked improvement in our fabrics and broadloom businesses as well. During the fourth quarter, our broadloom business achieved its third sequential quarter of operating profitability, despite ongoing softness in the marketplace. We made substantial progress in this business during 2003, and we continue to identify ways to reduce costs and increase manufacturing efficiencies to bring about further improvements in profitability. Similarly, our fabrics business remains on track to realize the benefits from the restructuring initiatives we implemented in prior quarters, and we expect this business to return to profitability in the first half of fiscal 2004."
Sales for the 2003 fiscal year were $923.5 million, compared with $924.1 million in 2002. Loss from continuing operations for the 2003 fiscal year was $18.4 million, or $0.36 per share, compared with a loss from continuing operations of $17.8 million, or $0.36 per share, in 2002. Net loss for the 2003 fiscal year was $33.3 million, or $0.66 per share, compared with a net loss of $87.7 million, or $1.75 per share in 2002. In fiscal 2003, the company recorded restructuring charges totaling $6.2 million, or $0.08 per share after-tax. In fiscal 2002, the company recorded a restructuring charge of $23.4 million, or $0.31 per share after-tax, in addition to a $55.4 million after-tax write-down, or $1.10 per share, related to goodwill impairment as a result of the company's implementation of SFAS No. 142.
Patrick C. Lynch, Vice President and Chief Financial Officer of Interface, commented, "We have entered fiscal 2004 with better liquidity and a solid financial foundation. A key accomplishment was the successful debt refinancing that we completed earlier this month. As a result of this refinancing, our debt maturity profile has been significantly improved, which will give us increased flexibility to pursue our long-term strategies for growth and profitability."
Hendrix concluded, "Over the past few years, we have taken many steps to put Interface in a position to capitalize on a rebound in the commercial market. We have lowered the break-even points in each of our business units, penetrated diverse market segments to lessen our dependence on the corporate office segment, and significantly improved our capital structure--all while maintaining and, we believe, increasing our share of the corporate office market. With these critical measures materializing, we are focusing our attention on growing the top lines of our businesses. In that regard, we have been encouraged by the level of order activity in January of this year."
