-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QGkdFvFPaDpfmMaV3mIqDONnKEyADo+9f7ydksMep5W2UYRAf/Zemhf1RMPmKsyX BixejjK912WxFWaGiBHhzQ== 0001188112-06-002238.txt : 20060725 0001188112-06-002238.hdr.sgml : 20060725 20060725172450 ACCESSION NUMBER: 0001188112-06-002238 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20060725 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060725 DATE AS OF CHANGE: 20060725 FILER: COMPANY DATA: COMPANY CONFORMED NAME: INTERFACE INC CENTRAL INDEX KEY: 0000715787 STANDARD INDUSTRIAL CLASSIFICATION: CARPETS AND RUGS [2273] IRS NUMBER: 581451243 STATE OF INCORPORATION: GA FISCAL YEAR END: 0103 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-12016 FILM NUMBER: 06979887 BUSINESS ADDRESS: STREET 1: 2859 PACES FERRY RD STREET 2: STE 2000 CITY: ATLANTA STATE: GA ZIP: 30339 BUSINESS PHONE: 7704376800 MAIL ADDRESS: STREET 1: 2859 PACES FERRY RD STREET 2: STE 2000 CITY: ATLANTA STATE: 2Q ZIP: 30339 FORMER COMPANY: FORMER CONFORMED NAME: INTERFACE FLOORING SYSTEMS INC DATE OF NAME CHANGE: 19870817 8-K 1 t11056_8k.htm CURRENT REPORT ON FORM 8-K Current Report on Form 8-K


SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 


FORM 8-K
 


CURRENT REPORT

Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): July 25, 2006
 


INTERFACE, INC.
(Exact name of Registrant as Specified in its Charter)


Georgia
 
000-12016
 
58-1451243
(State or other Jurisdiction of Incorporation or Organization)
 
(Commission File
Number)
 
(IRS Employer
Identification No.)

2859 Paces Ferry Road, Suite 2000
Atlanta, Georgia
 
 
30339
(Address of principal executive offices)
 
(Zip code)

Registrant’s telephone number, including area code: (770) 437-6800

Not Applicable   
(Former name or former address, if changed since last report)



Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))



ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
 
On July 25, 2006, Interface, Inc. (the “Company”) issued a press release reporting its financial results for the second quarter of 2006.  A copy of such press release is included as Exhibit 99.1 hereto and hereby incorporated by reference.  The information set forth herein, including the exhibit hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.
 
ITEM 7.01 REGULATION FD DISCLOSURE.

As previously announced, on April 21, 2006, the Company completed a sale of its European fabrics business, Camborne Holdings Limited. Camborne Holdings Limited was a component of the Company’s Fabrics Group business segment for reporting purposes.

Exhibit 99.2, attached hereto and incorporated herein by reference, contains data regarding the net sales, deprecation and amortization, and operating income of our Fabrics Group business segment excluding the operations of Camborne Holdings Limited for fiscal year 2005 and the first fiscal quarter of 2006. The information reflected in Exhibit 99.2 is not required under applicable SEC rules, and the Company is not otherwise required to disclose the information unless it is considered to be material. Whether or not that information is properly considered to be material, the Company believes it is appropriate to make the information available generally to all persons who might consider it to be useful for their respective purposes. The presentation of the results of the Fabrics Group business segment excluding the results of Camborne Holdings Limited is a non-GAAP financial measure, one which management uses in managing and evaluating the Company’s business and intends to use in select discussions with interested persons about the Company’s operations and performance over periods of time. As a result, management believes this information may provide other users of the Company’s financial information with additional meaningful bases for comparing the Company’s results in a prior period. However, these non-GAAP performance measures should be viewed in addition to, and not as an alternative for, the Company’s reported results under accounting principles generally accepted in the United States.

The information set forth in this Item 7.01, including the exhibit attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.

ITEM 9.01. FINANCIAL STATEMENTS, PRO FORMA INFORMATION AND EXHIBITS.

(a)    Financial Statements of Businesses Acquired.

 None.

2



(b)    Pro Forma Financial Information.

 None.


(c)    Shell Company Transactions.

Not applicable.

(d)    Exhibits.

Exhibit No.
Description
   
99.1
Press Release of Interface, Inc., dated July 25, 2006, reporting its financial results for the second quarter of 2006 (furnished pursuant to Item 2.02 of this Report).
   
99.2
Table containing certain financial information relating to the Fabrics Group business segment exclusive of Camborne Holdings Limited (furnished pursuant to Item 7.01 of this Report).


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


 
INTERFACE, INC.
 
 
By:       
 
 
/s/ Patrick C. Lynch
Patrick C. Lynch
Vice President and Chief Financial Officer
 
 
Date: July 25, 2006
 

3




EXHIBIT INDEX



Exhibit No.
Description
   
99.1
Press Release of Interface, Inc., dated July 25, 2006, reporting its financial results for the second quarter of 2006 (furnished pursuant to Item 2.02 of this Report).
   
99.2
Table containing certain financial information relating to the Fabrics Group business segment exclusive of Camborne Holdings Limited (furnished pursuant to Item 7.01 of this Report).

 
 
 
 
 
 
 
4
EX-99.1 2 ex99-1.htm EXHIBIT 99.1 Exhibit 99.1

 
Exhibit 99.1
 
 
 

 
 
 
 
CONTACT:
Daniel T. Hendrix
 
 
President and Chief Executive Officer
 
 
Patrick C. Lynch
 
 
Chief Financial Officer
 
 
(770) 437-6800
 
 
 
 
 
Financial Dynamics:
 
 
Christine Mohrmann, Jim Olecki
FOR IMMEDIATE RELEASE
 
(212) 850-5600
 
 

INTERFACE REPORTS SECOND QUARTER 2006 RESULTS
-- Second Quarter Sales (Excluding Sold European Fabrics Business) Up 12.2% Year-Over-Year --
-- Second Quarter Orders Up 13.4% Year-Over-Year to $276 million --

ATLANTA, Georgia, July 25, 2006 - Interface, Inc. (Nasdaq: IFSIA), a worldwide floorcoverings and fabrics company, today announced results for the second quarter ended July 2, 2006.

Sales in the 2006 second quarter rose 5.0% to $258.7 million from $246.5 million in the year ago period. As previously announced, the Company sold its European fabrics business during the 2006 second quarter. Excluding sales from this business in both periods, the Company’s sales for the 2006 second quarter were $258.7 million, a 12.2% increase compared with $230.6 million in the second quarter of 2005. Operating income for the 2006 second quarter was $21.1 million, versus $21.2 million in the year ago period. Excluding results from the European fabrics business in both periods, as well as a loss of $1.7 million on the disposal of the business in the 2006 second quarter, operating income for the second quarter of 2006 was $22.8 million, versus operating income of $20.9 million a year ago, an increase of 9.1%. Please see the attached tables for a reconciliation of results including and excluding the European fabrics business.

The Company reported net income for the 2006 second quarter of $5.9 million, or $0.11 per diluted share, versus a net loss of $7.4 million, or $0.14 per diluted share in the second quarter a year ago. The Company’s 2006 second quarter results include the previously mentioned loss on the European fabrics business disposal of $1.7 million, or $0.03 per diluted share, as well as other expenses of $0.5 million, or $0.01 per diluted share, for premiums paid in connection with the Company’s repurchase of $23 million of its 7.3% Senior Notes during the 2006 second quarter. The Company’s 2005 second quarter results include a loss from discontinued operations of $9.8 million, or $0.19 per diluted share (net of tax), a loss on disposal of discontinued operations of $1.6 million, or $0.03 per diluted share (net of tax), and a tax charge of approximately $1.6 million, or $0.03 per share, related to the repatriation of foreign earnings.


-MORE-

                                                                  
 
 
INTERFACE REPORTS SECOND QUARTER 2006 RESULTS
-2-

“We are pleased with our results for the second quarter, as we successfully executed against our goals, and the improving trends we are seeing in the industry continue to validate our strategy,” said Daniel T. Hendrix, President and Chief Executive Officer. “Overall sales increased despite challenging year-over-year comparables, and order activity further strengthened, with orders up 13% to $276 million over last year’s second quarter. This growth was realized across all of our geographic regions due to the continued outstanding performance of our modular carpet business, driven by the ongoing recovery within the corporate office market and the success of our market segmentation strategy. We also are particularly pleased with the performance of our Bentley Prince Street business, which posted strong growth for the quarter.”

Mr. Hendrix continued, “Modular carpet continues to gain acceptance around the world and Interface is leading the industry and shaping the growth of this market. Worldwide modular sales increased 14% during the second quarter, leading to record operating income for this business segment. We also continued to execute on our strategy in our Bentley Prince Street business, as sales increased 15% and profitability increased substantially. The sole disappointment this quarter was our fabrics business, which continues to lag behind our expectations. During the quarter, disruptions in yarn supply, manufacturing inefficiencies resulting from the shut-down of our East Douglas plant, and higher raw material costs combined to have a significant negative impact on our results in this business. We are addressing these issues within our fabrics business, and expect profitability to improve in the second half of the year.”

Patrick C. Lynch, Vice President and Chief Financial Officer of Interface, commented, “Driven by our increased sales volume, we saw improved results for the business. Selling, general and administrative expenses increased in the second quarter, reflecting the planned investments we are making in our residential flooring business, and in expanding our sales force and enhancing our marketing programs. We believe we’re already benefiting from these investments in the form of increased orders. As a percentage of sales, SG&A expenses in the 2006 second quarter were level with the year ago period at 22.6%. During the second quarter, we also took steps to enhance our financial strength, as we repurchased $23 million in bonds during the period.”

For the first six months of 2006, sales were $509.3 million, compared with $481.3 million for the same period a year ago, an increase of 5.8%. Excluding results from the Company’s European fabrics business in both periods, sales for the 2006 six-month period were $492.0 million compared with $448.6 million last year, an increase of 9.7%. Operating income for the 2006 six-month period was $17.8 million, versus operating income of $38.4 million for the comparable 2005 six-month period. Excluding results from the Company’s European fabrics business in both periods, as well as a charge for impairment of goodwill of $20.7 million, restructuring charges of $3.3 million, and the loss of $1.7 million on the previously mentioned European fabrics business disposal, operating income in the first half of 2006 was $42.4 million, compared with $37.0 million in the year ago period, an increase of 14.6%. The net loss for the first six months of 2006 was $11.2 million, or $0.21 per share, compared with a net loss of $9.6 million, or $0.18 per diluted share, for the 2005 first half. The loss for the 2005 period includes a loss from discontinued operations of $14.5 million, or $0.28 per diluted share, and a loss on disposal of $1.9 million, or $0.03 per diluted share.



 
 
INTERFACE REPORTS SECOND QUARTER 2006 RESULTS
-3-

       Mr. Hendrix concluded, “We are excited about our future, and particularly the third quarter, based on the current order activity, our backlog, and the trends we are seeing in the marketplace. Most of our businesses are growing in line with our goals, and our primary focus in the short term is to improve the profitability of our fabrics business. Over the longer term, we will continue to leverage the benefit of improving market conditions, the rebound in the corporate office market, and our segmentation strategy to exploit the growth of the worldwide modular carpet market, and focus on paying down debt. At the same time, we also will continue to improve our financial position to support our organic growth initiatives.”

The Company will host a conference call tomorrow, July 26, 2006, at 9:00 a.m. Eastern Time, to discuss its second quarter 2006 results. The conference call will be simultaneously broadcast live over the Internet. Listeners may access the conference call live over the Internet at http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=112931&eventID=1350637 or through the Company’s website at http://www.interfaceinc.com/results/investor/. The archived version of the webcast will be available at these sites for one year beginning approximately 1 hour after the call ends.

Interface, Inc. is a recognized leader in the worldwide interiors market, offering floorcoverings and fabrics. The Company is committed to the goal of sustainability and doing business in ways that minimize the impact on the environment while enhancing shareholder value. The Company is the world’s largest manufacturer of modular carpet under the InterfaceFLOR Commercial, FLOR, Heuga and Bentley Prince Street brands, and, through its Bentley Prince Street brand, enjoys a leading position in the high quality, designer-oriented segment of the broadloom carpet market. The Company’s InterfaceFabric business is a leading producer of interior fabrics and upholstery products, which it markets under the Guilford of Maine, Chatham and Terratex brands, and provides specialized automotive textile solutions.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: Except for historical information contained herein, the other matters set forth in this news release are forward-looking statements. The forward-looking statements set forth above involve a number of risks and uncertainties that could cause actual results to differ materially from any such statement, including risks and uncertainties associated with economic conditions in the commercial interiors industry as well as the risks and uncertainties discussed under the heading “Risk Factors” included in Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended January 1, 2006, which discussion is incorporated herein by this reference, including, but not limited to, the discussion of specific risks and uncertainties under the headings “We compete with a large number of manufacturers in the highly competitive commercial floorcovering products market, and some of these competitors have greater financial resources than we do,” “Sales of our principal products have been and may continue to be affected by adverse economic cycles in the construction and renovation of commercial and institutional buildings,” “Our success depends significantly upon the efforts, abilities and continued service of our senior management executives and our principal design consultant, and our loss of any of them could affect us adversely,” “Our substantial international operations are subject to various political, economic and other uncertainties that could adversely affect our business results, including by restrictive taxation or other government regulation and by foreign currency fluctuations,” “Our Chairman, together with other insiders, currently has sufficient voting power to elect a majority of our Board of Directors,” “Large increases in the cost of petroleum-based raw materials, which we are unable to pass through to our customers, could adversely affect us,” “Unanticipated termination or interruption of any of our arrangements with our primary third-party suppliers of synthetic fiber could have a material adverse effect on us,” “We have a significant amount of indebtedness which could have important negative consequences to us,” and “Our Rights Agreement could discourage tender offers or other transactions for our stock that could result in shareholders receiving a premium over the market price for our stock.” Any forward-looking statements are made pursuant to the Private Securities Litigation Reform Act of 1995 and, as such, speak only as of the date made. The Company assumes no responsibility to update or revise forward-looking statements made in this press release and cautions readers not to place undue reliance on any such forward-looking statements.

 
- TABLES FOLLOW -



 
 
INTERFACE REPORTS SECOND QUARTER 2006 RESULTS
-4-


Consolidated Condensed Statements of Operations
 
Three Months Ended
 
Six Months Ended
 
(In thousands, except per share data)
 
07/02/06
 
07/03/05
 
07/02/06
 
07/03/05
 
                   
Net Sales
 
$
258,678
 
$
246,545
 
$
509,312
 
$
481,260
 
Cost of Sales
   
177,511
   
169,317
   
349,163
   
332,893
 
Gross Profit
   
81,167
   
77,228
   
160,149
   
148,367
 
Selling, General & Administrative Expenses
   
58,381
   
56,005
   
116,683
   
109,974
 
Impairment of Goodwill - European Fabrics
   
--
   
--
   
20,712
   
--
 
Restructuring Charges
   
--
   
--
   
3,260
   
--
 
Loss on Disposal - European Fabrics
   
1,723
   
--
   
1,723
   
--
 
Operating Income
   
21,063
   
21,223
   
17,771
   
38,393
 
Interest Expense
   
10,936
   
11,506
   
22,168
   
23,084
 
Other Expense, Net
   
453
   
268
   
981
   
868
 
Income (Loss) Before Taxes
   
9,674
   
9,449
   
(5,378
)
 
14,441
 
Income Tax Expense
   
3,768
   
5,509
   
5,798
   
7,578
 
Income (Loss) from Continuing Operations
   
5,906
   
3,940
   
(11,176
)
 
6,863
 
Discontinued Operations, Net of Tax
   
(21
)
 
(9,763
)
 
(27
)
 
(14,525
)
Loss on Disposal - Discontinued Operations, Net of Tax
   
--
   
(1,598
)
 
--
   
(1,935
)
Net Income (Loss)
 
$
5,885
 
$
(7,421
)
$
(11,203
)
$
(9,597
)
                           
Earnings (Loss) Per Share - Basic
                         
Continuing Operations
 
$
0.11
 
$
0.08
 
$
(0.21
)
$
0.13
 
Discontinued Operations
   
--
   
(0.19
)
 
--
   
(0.28
)
Loss on Disposal
   
--
   
(0.03
)
 
--
   
(0.04
)
Earnings (Loss) Per Share - Basic
 
$
0.11
 
$
(0.14
)
$
(0.21
)
$
(0.19
)
                           
Earnings (Loss) Per Share - Diluted
                         
Continuing Operations
 
$
0.11
 
$
0.08
 
$
(0.21
)
$
0.13
 
Discontinued Operations
   
--
   
(0.19
)
 
--
   
(0.28
)
Loss on Disposal
   
--
   
(0.03
)
 
--
   
(0.03
)
Earnings (Loss) Per Share - Diluted
 
$
0.11
 
$
(0.14
)
$
(0.21
)
$
(0.18
)
                           
Common Shares Outstanding - Basic
   
53,375
   
51,398
   
52,995
   
51,362
 
Common Shares Outstanding - Diluted
   
54,996
   
52,481
   
52,995
   
52,622
 
                           
Orders from Continuing Operations*
   
275,900
   
243,200
   
532,000
   
501,100
 
Continuing Operations Backlog (as of 07/02/06 and 07/03/05, respectively)*
               
118,500
   
99,500
 
                           



_______________________
*  Orders from Continuing Operations in the 2005 three-month and six-month periods, and Continuing Operations Backlog as of July 3, 2005, exclude the European fabrics business, which was sold in April 2006.


 

 

INTERFACE REPORTS SECOND QUARTER 2006 RESULTS
-5-
 
Consolidated Condensed Balance Sheets
         
(In thousands)
 
07/02/06    
 
01/01/06   
 
Assets
         
    Cash
 
$
27,347
 
$
51,312
 
    Accounts Receivable
   
143,769
   
141,408
 
    Inventory
   
142,766
   
130,209
 
    Other Current Assets
   
25,615
   
21,164
 
    Assets of Businesses Held for Sale
   
3,107
   
5,526
 
        Total Current Assets
   
342,604
   
349,619
 
    Property, Plant & Equipment
   
180,338
   
185,643
 
    Other Assets
   
291,296
   
303,728
 
        Total Assets
 
$
814,238
 
$
838,990
 
               
Liabilities
             
    Accounts Payable
 
$
52,525
 
$
50,312
 
    Accrued Liabilities
   
83,425
   
85,581
 
    Liabilities of Businesses Held for Sale
   
1,855
   
4,214
 
    Long-Term Debt
   
1,573
   
--
 
    Senior and Senior Subordinated Notes
   
427,250
   
458,000
 
    Other Long-Term Liabilities
   
67,669
   
68,807
 
        Total Liabilities
   
634,297
   
666,914
 
    Shareholders’ Equity
   
179,941
   
172,076
 
        Total Liabilities and Shareholders’ Equity
 
$
814,238
 
$
838,990
 



Consolidated Condensed Statements of Cash Flows
 
Three Months Ended
 
Six Months Ended
 
(In millions)
 
07/02/06
 
07/03/05
 
07/02/06
 
07/03/05
 
                   
Net Income (Loss)
       
$
5.9
       
$
(7.4
)
     
$
(11.2
)
     
$
(9.6
)
Adjustments for Discontinued Operations
         
0.0
         
11.4
         
0.0
         
16.5
 
Net Income (Loss) from Continuing Operations
       
$
5.9
       
$
4.0
       
$
(11.2
)
     
$
6.9
 
Depreciation and Amortization
         
7.7
         
8.1
         
15.9
         
16.2
 
Deferred Income Taxes and Other Non-Cash Items
         
(5.4
)
       
(5.1
)
       
(5.6
)
       
(10.7
)
Impairment of Goodwill and Restructuring Charges
         
--
         
--
         
23.4
         
--
 
Change in Working Capital
                                                 
Accounts Receivable
   
(4.6
)
       
(11.1
)
       
(9.6
)
       
(12.1
)
     
Inventories
   
(2.1
)
       
0.7
         
(21.9
)
       
(15.5
)
     
Prepaids
   
(0.2
)
       
(0.6
)
       
(4.4
)
       
(6.2
)
     
Accounts Payable and Accrued Expenses
   
20.7
         
16.2
         
3.5
         
16.1
       
Cash Provided from (Used in) Continuing Operations
         
22.0
         
12.2
         
(9.9
)
       
(5.3
)
Cash Provided from Operating Activities of
                                                 
Discontinued Operations
         
--
         
1.8
         
--
         
7.9
 
Cash Provided from (Used in) Operating Activities
         
22.0
         
14.0
         
(9.9
)
       
2.6
 
Cash Provided from (Used in) Investing Activities
         
20.0
         
(7.0
)
       
8.8
         
(11.0
)
Cash Provided from (Used in) Financing Activities
         
(36.0
)
       
(6.4
)
       
(24.2
)
       
10.5
 
Effect of Exchange Rate Changes on Cash
         
0.9
         
(1.3
)
       
1.3
         
(1.8
)
Net (Decrease) Increase in Cash
       
$
6.9
       
$
(0.7
)
     
$
(24.0
)
     
$
0.3
 



 
 
INTERFACE REPORTS SECOND QUARTER 2006 RESULTS
-6-

Consolidated Condensed Segment Reporting
(In millions)
   
Three Months Ended
     
Six Months Ended
     
   
07/02/06
 
07/03/05
 
% Change
 
07/02/06
 
07/03/05
 
% Change
 
Net Sales
                         
Modular Carpet
 
$
186.5
 
$
163.7
   
13.9
%
$
352.4
 
$
317.2
   
11.1
%
Bentley Prince Street
   
33.9
   
29.5
   
14.9
%
 
63.0
   
57.6
   
9.4
%
Fabrics Group
   
35.5
   
49.5
   
(28.3
%)
 
88.0
   
98.0
   
(10.2
%)
Specialty Products
   
2.8
   
3.8
   
(26.3
%)
 
5.9
   
8.5
   
(30.6
%)
Total
 
$
258.7
 
$
246.5
   
5.0
%
$
509.3
 
$
481.3
   
5.8
%
                                       
Operating Income (Loss)
                                     
Modular Carpet
 
$
23.6
 
$
21.4
       
$
44.3
 
$
37.9
       
Bentley Prince Street
   
1.7
   
0.5
         
2.2
   
1.0
       
Fabrics Group
   
(3.0
)
 
0.1
         
(26.4
)
 
1.1
       
Specialty Products
   
0.0
   
0.2
         
0.0
   
0.4
       
Corporate Expenses and
                                     
Eliminations
   
(1.2
)
 
(1.0
)
       
(2.3
)
 
(2.0
)
     
Total
 
$
21.1
 
$
21.2
       
$
17.8
 
$
38.4
       

Reconciliation of Non-GAAP Performance Measures to GAAP Performance Measures
(In millions)

   
Three Months Ended
                 
   
07/02/06
 
07/03/05
 
% Change
             
Operating Income Excluding European Fabrics
and Loss on Disposal
 
$
22.8
 
$
20.9
   
9.1
%
                 
Operating Income - European Fabrics
   
--
   
0.3
                         
Loss on Disposal of European Fabrics
   
(1.7
)
 
--
                         
Operating Income - as Reported
 
$
21.1
 
$
21.2
                         
                                       
 
 
Three Months Ended 
     
Six Months Ended
     
   
07/02/06 
   
07/03/05
   
% Change
   
07/02/06
   
07/03/05
   
% Change
 
Net Sales Excluding European Fabrics
 
$
258.7
 
$
230.6
   
12.2
%
$
492.0
 
$
448.6
   
9.7
%
Net Sales - European Fabrics
   
--
   
15.9
         
17.3
   
32.7
       
Net Sales - as Reported
 
$
258.7
 
$
246.5
       
$
509.3
 
$
481.3
       
                                       
 
 
Six Months Ended 
                       
 
   
07/02/06 
   
07/03/05
   
% Change
                   
Operating Income Excluding European Fabrics,
                                     
Impairment of Goodwill, Loss on Disposition
and Restructuring Charge
 
$
42.4
 
$
37.0
   
14.6
%
                 
Operating Income - European Fabrics
   
1.1
   
1.4
                         
Impairment of Goodwill
   
(20.7
)
 
--
                         
Loss on Disposition
   
(1.7
)
 
--
                         
Restructuring Charge
   
(3.3
)
 
--
                         
Operating Income - as Reported
 
$
17.8
 
$
38.4
                         
                                       
The Company believes that the above non-GAAP performance measures, which management uses in managing and evaluating the Company’s business, may provide users of the Company’s financial information with additional meaningful bases for comparing the Company’s current results and results in a prior period, as these measures reflect factors that are unique to the current period relative to the comparable prior period. However, these non-GAAP performance measures should be viewed in addition to, and not as an alternative for, the Company’s reported results under accounting principles generally accepted in the United States.

 
EX-99.2 3 ex99-2.htm EXHIBIT 99.2 Exhibit 99.2

 

Exhibit 99.2
                     
                       
Consolidated
                     
Condensed Segment
                     
Reporting with Adjustments as Indicated
                     
                       
(in thousands)
 
Three Months
Ended
 
Three Months
Ended
 
Three Months
Ended
 
Three Months
Ended
 
Three Months
Ended
 
 
 
4/3/2005
 
7/3/2005
 
10/2/2005
 
1/1/2006
 
4/2/2006
 
Net Sales
                               
Modular Carpet (as reported)
 
$
153,527
 
$
163,681
 
$
157,962
 
$
171,043
 
$
165,883
 
Bentley Prince Street (as reported)
   
28,062
   
29,468
   
32,104
   
35,533
   
29,100
 
Fabrics Group (as adjusted)
   
31,633
   
33,650
   
34,513
   
36,052
   
35,209
 
Specialty Products (as reported)
   
4,644
   
3,851
   
3,963
   
3,066
   
3,151
 
Total (as adjusted)
 
$
217,866
 
$
230,650
 
$
228,542
 
$
245,694
 
$
233,343
 
                                 
Depreciation and Amortization
                               
Modular Carpet (as reported)
 
$
3,305
 
$
3,742
 
$
3,104
 
$
3,493
 
$
3,273
 
Bentley Prince Street (as reported)
   
396
   
411
   
403
   
498
   
308
 
Fabrics Group (as adjusted)
   
2,618
   
2,467
   
2,058
   
2,653
   
2,402
 
Specialty Products (as reported)
   
39
   
39
   
17
   
16
   
18
 
Corporate Expenses and Eliminations (as reported)
   
1,371
   
1,205
   
1,210
   
1,198
   
1,908
 
Total (as adjusted)
 
$
7,729
 
$
7,864
 
$
6,792
 
$
7,858
 
$
7,909
 
                                 
Operating Income (loss)
                               
Modular Carpet (as reported)
 
$
16,495
 
$
21,379
 
$
18,059
 
$
21,418
 
$
20,675
 
Bentley Prince Street (as reported)
   
475
   
493
   
849
   
1,677
   
513
 
Fabrics Group (as adjusted)
   
(127
)
 
(180
)
 
985
   
496
   
(3,802
)
Specialty Products (as reported)
   
214
   
215
   
188
   
34
   
43
 
Corporate Expenses and Eliminations (as reported)
   
(979
)
 
(1,012
)
 
(500
)
 
(1,289
)
 
(1,145
)
Total (as adjusted)
 
$
16,078
 
$
20,895
 
$
19,581
 
$
22,336
 
$
16,284
 
                                 
                                 
Reconciliation of Non-GAAP financial statement measures
                               
Net Sales
                               
Fabrics Group (as reported)
 
$
48,462
 
$
49,545
 
$
49,869
 
$
50,967
 
$
52,500
 
European Fabrics Business
   
16,829
   
15,895
   
15,356
   
14,915
   
17,291
 
Fabrics Group (as adjusted)
 
$
31,633
 
$
33,650
 
$
34,513
 
$
36,052
 
$
35,209
 
                                 
Depreciation and Amortization
                               
Fabrics Group (as reported)
 
$
2,996
 
$
2,690
 
$
2,363
 
$
2,958
 
$
2,730
 
European Fabrics Business
   
378
   
223
   
305
   
305
   
328
 
Fabrics Group (as adjusted)
 
$
2,618
 
$
2,467
 
$
2,058
 
$
2,653
 
$
2,402
 
                                 
Operating Income (loss)
                               
Fabrics Group (as reported)
 
$
965
 
$
148
 
$
1,916
 
$
1,256
 
$
(23,378
)
European Fabrics Business
   
1,092
   
328
   
931
   
760
   
(19,576
)
Fabrics Group (as adjusted)
 
$
(127
)
$
(180
)
$
985
 
$
496
 
$
(3,802
)
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