Interface EPS, before restructuring expenses, up for Q4 and year
Also during the fourth quarter, Interface recognized an additional $1 million of restructuring expense associated with the initiatives disclosed in the first quarter of 2000, and finalized at approximately $21.0 million for the year the previously estimated restructuring charge. Including the additional $1 million of non-recurring, pretax restructuring expense (amounting to 1 cent diluted share after tax), net income for the fourth quarter of 2000 was $9.3 million, or 18 cents per diluted share. Sales for the fourth quarter improved by 6% to $330.3 million from $310.7 million in the fourth quarter of 1999.
Operating income for the fourth quarter, excluding the non-recurring charge, increased by 36% to $25.2 million, from $18.6 million in the same period a year ago.
For the 2000 fiscal year, net income, excluding the non-recurring restructuring charge, was $31.8 million, or 62 cents per diluted share -- an increase of 38% compared with net income of $23.5 million, or 45 cents per diluted share, in 1999. (Including the non-recurring, pre-tax restructuring charge of approximately $21.0 million, or 28 cents per diluted share after tax, net income for 2000 was $17.3 million, or 34 cents per diluted share.)
Sales for 2000 were $1.28 billion, compared with $1.23 billion in 1999. Operating income in 2000, excluding the non-recurring charge, improved by 16% to $90.1 million, compared with $77.5 million in 1999.
Fourth quarter 2000 results primarily reflected the continuation of strong growth in Interface's U.S. modular floorcoverings, interior fabrics and raised/access flooring operations, as well as improving profitability in the Re:Source Americas service business. Both the modular floorcoverings and raised/access flooring divisions sustained their previous sales momentum in the quarter, producing higher margins and profit contribution compared with a year ago. The Re:Source Americas service business continued to improve operating efficiencies, despite lower sales volumes.
These results were tempered by Interface's domestic broadloom and European operations. Domestic broadloom performance was affected by manufacturing inefficiencies, which occurred during consolidation of the company's Prince Street operation with its Bentley operation. The company's European operations continued to be impacted by the decline of the Euro against the U.S. dollar.
“We are generally pleased with our fourth quarter and year end 2000 results, which were in line with our expectations,” said Ray C. Anderson, chairman, president and CEO. “Our internal initiatives are on track. However, due to the current economic slowdown, we have seen a softening in orders throughout the U.S. commercial interiors market. “Given the current business climate, we now expect earnings per diluted share for the first quarter of 2001 to be in line with earnings per diluted share for the same period a year ago,” he added. “Anticipating business to rebound in the second half of the year, in line with industry expectations, we expect profit levels to resume the favorable trends of the last year.”