Interface reports third quarter results
Interface Inc announced results for the third quarter ended September 28, 2008. Sales for the third quarter of 2008 were $278.4 million compared with sales of $279.5 million in the third quarter of 2007. Operating income for the third quarter of 2008 was $31.0 million, or 11.1% of sales, compared with operating income of $34.8 million, or 12.4% of sales, in the third quarter of 2007. Income from continuing operations for the 2008 third quarter was $13.6 million, or $0.22 per diluted share, a decrease of 10.7% compared with income from continuing operations of $15.2 million, or $0.25 per diluted share, in the third quarter of 2007.
Net income for the 2008 third quarter was $8.4 million, or $0.14 per diluted share, compared with net income of $8.6 million, or $0.14 per diluted share, in the third quarter last year. Included in the Company's results for the third quarter of 2008 was an after-tax loss from discontinued operations of $5.2 million, or $0.08 per diluted share, of which $4.2 million, or $0.07 per diluted share, was related to a reserve placed on the deferred purchase price amount of $6.5 million for the 2007 sale of the Company's fabrics business.
The remainder of the loss from discontinued operations relates to an impairment charge for certain assets remaining from the fabrics business that are currently being held for sale. Results for the third quarter of 2007 included expenses of $0.7 million after-tax, or $0.01 per diluted share, for premiums paid in connection with the redemption of the Company's 7.3% Senior Notes.
"Our sales in the 2008 third quarter showed remarkable resilience in the current economic environment and illustrate the benefits of the strategic actions we've taken to strengthen our position in the market," said Daniel T. Hendrix, President and Chief Executive Officer. "Driven by our diversification across both end markets and geographies, third quarter sales held substantially even with the strong results reported a year ago. While we have seen a slowdown in demand within the corporate office segment, particularly in Western Europe and the United States, it has been balanced by continued solid demand for modular carpet in segments such as government, education, healthcare and retail, and growth in emerging geographic markets.”
“In Europe, we continued to invest in the implementation of our market diversification strategy, which has been a strong driver of our success in the United States. While these investments have had a near-term impact on profitability, we believe there is a significant opportunity for growth in Europe in these segments, which have remained largely untapped to date."
For the first nine months of 2008, sales were $835.2 million, compared with $787.9 million for the same period a year ago, an increase of 6.0%. Operating income for the 2008 nine-month period was $95.4 million, an increase of 6.1% versus operating income of $90.0 million in the comparable2007 nine-month period.