Interface Sees Higher Revenues in Third Quarter

Atlanta, GA, October 25, 2007—Third quarter earnings at Interface Inc. fell compared to a year ago despite higher revenues.

The company reported net income of $8.6 million, or $0.14 per diluted share, compared with net income of $9.1 million, or $0.17 per diluted share, in the 2006 third quarter.

Sales for the third quarter of 2007 increased 19.3% to $279.5 million from sales of $234.2 million in the year ago period.

Interface sold its fabrics division in July, and the financial statements for the third quarter reflect the fabrics division as discontinued operations.

"We are very pleased with our performance during the third quarter of 2007, in which we saw strong growth in revenue and record levels in operating margin and income from continuing operations," said Daniel T. Hendrix, president and CEO.

"Driven by the continuing strength of the corporate office market and our segmentation strategy, our modular business continued its strong performance in the period, as revenues grew more than 20% to record levels across each of our key geographic regions of the Americas, Europe and Asia-Pacific."

Sales of modular carpet increased 25.5% year-over-year, with operating income in that segment increasing 44.9%. The Bentley Prince Street segment had modestly lower revenues compared compared to last year, although the modular component within Bentley Prince Street had strong sales growth.

Operating income of $1.3 million in the Bentley Prince Street segment was down from the prior year period primarily due to investment in a new carpet tile backing line at the plant.

For the first nine months of 2007, sales were $787.9 million, compared with $655.5 million for the same period a year ago, an increase of 20.2%. Operating income for the nine-month period was $90.0 million, compared to $69.7 million a year ago.

"As we enter the fourth quarter, which typically is our best quarter of the yearly cycle, I believe the opportunities for our business have never been better,” Hendrix said.

“We continued to see solid order growth in the third quarter, with consolidated orders increasing 10% year-over-year and modular carpet segment orders increasing 14% year-over-year.”