Atlanta, April 24, 2006--Interface, Inc. today announced that it has sold its European fabrics division (Camborne Holdings Limited) for approximately $28 million in cash. Proceeds from the sale will be used to pay down debt or reinvest in the company's other businesses.
The acquisition was led by the current management of Camborne, with financing provided by Bank of Scotland. For the full year 2005, the European fabrics division generated revenue of $62.8 million and operating income of $3.1 million, and had depreciation and amortization of $1.5 million. As a result of the sale, Interface will record an after-tax, non-cash write-down for the impairment of goodwill of approximately $20 million in the first quarter of 2006.
In addition, the company announced that it is taking actions to reduce operating costs within its North American fabrics business. Interface is closing its East Douglas, Massachusetts manufacturing facility and integrating those operations into its Elkin, North Carolina manufacturing facility. As a result, the company will record an after-tax restructuring charge in the first quarter of 2006 of approximately $3.3 million, or $0.04 per diluted share, related to severance costs (approximately $0.3 million) and non-cash impairment of assets (approximately $3.0 million). The company expects the restructuring to result in operating savings in 2006 of approximately $2.0 million, and $3.6 million annually thereafter.
Daniel T. Hendrix, president and chief executive officer, commented, "We are pleased that we have been able to reach an agreement with the management team of our European fabrics division for the sale of that business. In 2005, we saw solid operating improvements and growth within our North American fabrics business, and continuing to increase sales and enhance the profitability of this business remains an important part of our strategy. Overall, we feel the sale transaction and our restructuring activity in North America allow for greater financial flexibility."
