Interface posts marginal rise in Q1 sales

Excluding the tax dispute resolution benefit, income from continuing operations for the first quarter of 2013 was $5.1 million, or $0.08 per share, compared with income from continuing operations of $6.1 million, $0.09 per share, in the prior year period, excluding the restructuring and asset impairment charge.  Including the charge, loss from continuing operations in the first quarter of 2012 was $6.1 million, or $0.10 per share.

Net Income:  The Company reported first quarter 2013 net income of $7.0 million, or $0.11 per share, compared with a net loss in the first quarter last year of $5.9 million, or $0.09 per share, after the restructuring and asset impairment charge.

Patrick C. Lynch, Senior Vice President and Chief Financial Officer, commented, "Gross margin finished ahead of the first quarter last year, but was below our target due to under-absorption of fixed costs associated with lower than expected production volumes. 

"We also made significant investments in operational efficiency in the Americas that should drive up gross margin as production volumes increase.  We held SG&A expenses in line with our expectations while still investing in the specific areas where we're seeing strong growth, but we didn't get the aggregate top line number needed to support the overall expense level."

"Our optimism for the coming months comes primarily from growth in the Americas, which represents about 50% of our global business, as well as in Asia," concluded Mr. Hendrix.  "The poor business climate in Europe will not be resolved quickly or easily, requiring us to balance the impact of the depressed Western European markets with the opportunity to grow in markets such as Eastern Europe, Scandinavia, Germany, the Middle East, Russia and India. 

"China sales are expected to expand in the second quarter, and our new plant in Australia should be up and running in the fourth quarter.  Notwithstanding the seasonally slow first quarter, U.S. macroeconomic data such as the architectural billings index and nonresidential construction numbers, along with our positive book-to-bill ratio, remain encouraging for the rest of the year. 

"Going forward, we look for improvements in sales and gross margin with momentum in the Americas and Asia, further stabilization of our business in Australia before resuming local manufacturing at our rebuilt plant, and reductions in SG&A expenses as a percentage of sales."

Interface