Interface, Inc. (Nasdaq: IFSIA), a sustainable business leader in the worldwide floorcoverings industry, reported results for the first quarter ended April 1, 2007. Sales increased 19.7% to $279.3 million from $233.3 million in Q1 06. Operating income increased 24% to $24.2 million, or 8.7% of sales.
“We had a great start to 2007, even though the first quarter seasonally has been our slowest time of the year,” said Daniel Hendrix, President and CEO. “Our improving sales performance reflects the success we are experiencing across our primary market segments, as growth in our non-office commercial segments, and particularly in hospitality and education facilities, outpaced the growth of the recovering corporate office market. Perhaps the most exciting news, though, is that orders received during the quarter were up 21.5% to $288 million, which is the highest mark reached in more than six years.”
Patrick Lynch, Senior Vice President and Chief Financial Officer, commented, “Our modular carpet business was the principal driver of our growth, with sales increasing 24% and orders increasing 26% compared with the same period last year. Sales of modular carpet increased across all key regions, with the Americas and Europe leading the way, as we built upon our leadership position in this growing market category.
We also continued to see robust sales improvement in our Bentley Prince Street business, which was up 24% and continued to gain market share. Bentley Prince Street’s operating income doubled over the prior year, despite some isolated manufacturing inefficiencies due to a changeover in materials processing, and we expect to see further profitability growth throughout 2007.
We were disappointed with the performance of our fabrics business, which reported an operating loss during the quarter due to costs associated with headcount reductions and continued manufacturing inefficiencies resulting from our plant consolidation program. While we are continuing with our plans to improve the performance of this business, we also are exploring possible strategic options, and our analyses have led us to conclude that it is necessary to record an impairment charge for the first quarter.”
Mr. Hendrix concluded, “Looking forward, we remain optimistic about the strength of the office market, especially in the U.S. and Europe, the prospects for our segmentation strategy to further drive sales growth across our key markets, and the progress of our product introductions in the residential market. Through the first three weeks of our second quarter, sales and order activity continue to be strong.”
Interface, Inc. is the world’s largest manufacturer of modular carpet under the InterfaceFLOR, 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.
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