XFRA:IF6N Interface Inc Quarterly Report 10-Q Filing - 7/1/2012

Effective Date 7/1/2012

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Form 10-Q
Table of Contents

 

 

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 10-Q

 

 

 

x Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For Quarterly Period Ended July 1, 2012

Commission File Number 001-33994

 

 

INTERFACE, INC.

(Exact name of registrant as specified in its charter)

 

 

 

GEORGIA   58-1451243

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

2859 PACES FERRY ROAD, SUITE 2000, ATLANTA, GEORGIA 30339

(Address of principal executive offices and zip code)

(770) 437-6800

(Registrant’s telephone number, including area code)

 

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Date File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer   x    Accelerated filer   ¨
Non-accelerated filer   ¨    Smaller reporting company   ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

Shares outstanding of each of the registrant’s classes of common stock at August 1, 2012:

 

Class

 

Number of Shares

Common Stock, $.10 par value per share

  65,967,061

 

 

 


Table of Contents

INTERFACE, INC.

INDEX

 

          PAGE  

PART I.

   FINANCIAL INFORMATION   
   Item 1.   

Financial Statements

     3   
     

Consolidated Condensed Balance Sheets – July 1, 2012 and January 1, 2012

     3   
     

Consolidated Condensed Statements of Operations – Three Months and Six  Months Ended July 1, 2012 and July 3, 2011

     4   
     

Consolidated Statements of Comprehensive Income (Loss) – Three Months and Six Months Ended July 1, 2012 and July 3, 2011

     5   
     

Consolidated Condensed Statements of Cash Flows – Six Months Ended July  1, 2012 and July 3, 2011

     6   
     

Notes to Consolidated Condensed Financial Statements

     7   
   Item 2.   

Management’s Discussion and Analysis of Financial Condition and Results of Operations

     20   
   Item 3.   

Quantitative and Qualitative Disclosures about Market Risk

     25   
   Item 4.   

Controls and Procedures

     25   

PART II.

   OTHER INFORMATION   
   Item 1.   

Legal Proceedings

     26   
   Item 1A.   

Risk Factors

     26   
   Item 2.   

Unregistered Sales of Equity Securities and Use of Proceeds

     26   
   Item 3.   

Defaults Upon Senior Securities

     26   
   Item 4.   

Mine Safety Disclosures

     26   
   Item 5.   

Other Information

     26   
   Item 6.   

Exhibits

     26   


Table of Contents

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

INTERFACE, INC. AND SUBSIDIARIES

CONSOLIDATED CONDENSED BALANCE SHEETS

(IN THOUSANDS)

 

     JULY 1, 2012     JANUARY 1, 2012  
     (UNAUDITED)        

ASSETS

    

CURRENT ASSETS:

    

Cash and Cash Equivalents

   $ 36,878      $ 50,635   

Accounts Receivable, net

     141,132        156,170   

Inventories

     173,684        166,073   

Prepaid Expenses and Other Current Assets

     25,578        23,407   

Deferred Income Taxes

     10,442        9,699   
  

 

 

   

 

 

 

TOTAL CURRENT ASSETS

     387,714        405,984   

PROPERTY AND EQUIPMENT, less accumulated depreciation

     190,652        190,119   

DEFERRED TAX ASSET

     46,419        47,290   

GOODWILL

     72,132        74,557   

OTHER ASSETS

     54,653        54,322   
  

 

 

   

 

 

 

TOTAL ASSETS

   $ 751,570      $ 772,272   
  

 

 

   

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

    

CURRENT LIABILITIES:

    

Accounts Payable

   $ 56,891      $ 55,289   

Accrued Expenses

     85,072        93,884   
  

 

 

   

 

 

 

TOTAL CURRENT LIABILITIES

     141,963        149,173   

SENIOR NOTES

     283,070        283,030   

SENIOR SUBORDINATED NOTES

     —          11,477   

DEFERRED INCOME TAXES

     8,485        8,391   

OTHER

     37,188        39,162   
  

 

 

   

 

 

 

TOTAL LIABILITIES

     470,706        491,233   

Commitments and Contingencies

    

SHAREHOLDERS’ EQUITY:

    

Preferred Stock

     —          —     

Common Stock

     6,596        6,548   

Additional Paid-In Capital

     364,376        361,400   

Retained Earnings (Deficit)

     (15,067     (16,764

Accumulated Other Comprehensive Loss – Foreign Currency Translation Adjustment

     (38,745     (33,883

Accumulated Other Comprehensive Loss – Pension Liability

     (36,296     (36,262
  

 

 

   

 

 

 

TOTAL SHAREHOLDERS’ EQUITY

     280,864        281,039   
  

 

 

   

 

 

 
   $ 751,570      $ 772,272   
  

 

 

   

 

 

 

See accompanying notes to consolidated condensed financial statements.

 

-3-


Table of Contents

INTERFACE, INC. AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

(UNAUDITED)

(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

 

     THREE MONTHS ENDED      SIX MONTHS ENDED  
     JULY 1, 2012      JULY 3, 2011      JULY 1, 2012      JULY 3, 2011  

NET SALES

   $ 254,607       $ 267,640       $ 487,367       $ 513,042   

Cost of Sales

     170,012         172,865         326,569         331,339   
  

 

 

    

 

 

    

 

 

    

 

 

 

GROSS PROFIT ON SALES

     84,595         94,775         160,798         181,703   

Selling, General and Administrative Expenses

     62,562         68,638         121,930         134,038   

Restructuring and Asset Impairment Charge

     —           —           16,316         —     
  

 

 

    

 

 

    

 

 

    

 

 

 

OPERATING INCOME

     22,033         26,137         22,552         47,665   

Interest Expense

     6,139         6,783         12,792         13,439   

Other Expense

     274      

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