Interface To Cut 14% of Employees, Close Plant

Atlanta, GA, Dec. 31, 2008--Interface Inc. said Tuesday it will restructure its worldwide operations by the end of the first quarter, cut 14 percent of its workforce and close a plant in response to falling demand.

The maker of InterfaceFLOR, FLOR, Heuga and Bentley Prince Street carpet brands, said it would eliminate a total of 530 manufacturing, sales and administration positions and close its plant in Belleville, Canada.

“Interface continues to be focused on reducing expenses, increasing operational efficiencies and generating cash for debt reduction,” Daniel T. Hendrix, Interface president and CEO said in a press release.

“While the decision to take the actions we are announcing today was a difficult one and we sincerely regret the impact it will have on many of our hard working associates, it was also a necessary step in adapting our company to the current demand levels.”

Interface, the world’s largest maker of modular carpet, had net income of $8.4 million in third quarter, about flat from the same quarter in 2007.

Interface’s stock price has dropped from $17.43 a share Feb. 25 to $4.77 Dec. 30.

The company said it expects to save about $30 million annually through the restructuring.

In an SEC filing, Interface said it expects an $11 million pre-tax restructuring charge in fourth quarter. Severance and other employee related costs will be about $8.5 million.

“Interface remains the global leader in modular carpet tile, and it is important that we protect our profitability, cash flows and positioning in the marketplace, while also preserving our ability to invest in strategic initiatives such as market diversification and emerging geographic markets,” Hendrix said.