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Interface to cease manufacturing operations at Belleville facility

08
Jan '09
Interface Inc announced restructuring actions as part of the Company's plan to reduce costs across its global operations in response to softening demand.

Pursuant to the Company's restructuring plan, Interface will cease manufacturing operations at its facility in Belleville, Canada, and reduce its worldwide employee base by a total of approximately 530 employees in the areas of manufacturing, sales and administration.

The headcount reductions amount to about 14% of the Company's worldwide workforce. The Company will retain its sales and distribution presence in Canada and will source products from other Interface facilities to service customers in the region. As a result of the restructuring, Interface expects annualized cost savings of approximately $30 million.

Interface plans to complete the restructuring activities in the first quarter of 2009 and expects to report a pre-tax restructuring charge in the fourth quarter of 2008 of approximately $11 million related to employee severance, asset impairment related to the manufacturing cessation in Canada and other exit costs. Approximately $8.5 million of the restructuring charge will be cash expenditures, primarily severance expense.

"Interface continues to be focused on reducing expenses, increasing operational efficiencies and generating cash for debt reduction," said Daniel T. Hendrix, President and Chief Executive Officer.

"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 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. As a result of our restructuring, we are moving forward as a leaner company while maintaining our ability to provide superior service to our customers globally."

Interface Inc is the world's largest manufacturer of modular carpet, which it markets under the InterfaceFLOR, FLOR, Heuga and Bentley Prince Street brands, and, through its Bentley Prince Street brand, enjoys a leading position in the designer quality segment of the broadloom carpet market. 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.

Interface Inc


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