Interface announces Third Quarter restructuring charge
ATLANTA -- Interface, Inc. (Nasdaq:IFSIA), a manufacturer of modular carpet and vinyl flooring, will record a pre-tax restructuring charge in the third quarter of 2001 of approximately $60 million, or 80-cents per diluted share after tax, which it attributes to a downswing in the worldwide broadloom and U.S. access flooring businesses.
The restructuring charge is comprised of approximately $21 million of cash expenditures for severance benefits and relocation costs and approximately $39 million of non-cash charges, primarily for the write-down of the carrying value and disposal of certain impaired assets, including goodwill. Excluding the restructuring charge, Interface said it expects to generate third quarter earnings of 1-cent to 3-cents per share on revenues of approximately $255 to $265 million.
The non-recurring charge reflects the Interface's withdrawal from the European broadloom market; facilities consolidation in its raised/access flooring operations; further rationalization of the U.S. broadloom operations; and a worldwide workforce reduction of 850 employee, and consolidation of certain non-strategic Re:Source dealer locations.
Interface (www.interfaceinc.com)said the restructuring will be completed by the second quarter of 2002.
"The economy continued to lag through the third quarter, which affected demand for all of our products, although the market for our modular carpet segment was impacted less than our other segments," said Daniel T. Hendrix, president and CEO. "While we cannot control our business climate, we can address the operations under our management."
Interface, Inc. is the world's largest manufacturer of modular carpet under the Interface, Heuga, Bentley and Prince Street brands, and through its Bentley Mills, Prince Street and Firth brands, enjoys a leading position in the high quality, designer-oriented segment of the broadloom and woven carpet market. It also provides specialized carpet replacement, installation and maintenance services through its Re:Source Americas service network.