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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
/x/ Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For Quarterly Period Ended July 2, 1995
Commission File Number 0-12016
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INTERFACE, INC.
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(Exact name of registrant as specified in its charter)
GEORGIA 58-1451243
- ------------------------------- --------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2859 PACES FERRY ROAD, SUITE 2000, ATLANTA, GEORGIA 30339
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(Address of principal executive offices and zip code)
(404) 437-6800
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(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
--- ---
Shares outstanding of each of the registrant's classes of common stock at
August 8, 1995:
<TABLE>
<CAPTION>
Class Number of Shares
--------------------------------------------- ----------------
<S> <C>
Class A Common Stock, $.10 par value per share 15,238,355
Class B Common Stock, $.10 par value per share 3,011,998
</TABLE>
1
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INTERFACE, INC.
Index
Page
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Part I. FINANCIAL INFORMATION
Item 1. Consolidated Condensed Financial Statements
Balance Sheets - July 2, 1995 and January 1, 1995 3
Statements of Income - Three Months and Six Months
Ended July 2, 1995 and July 3, 1994 4
Statements of Cash Flows -
Six Months Ended July 2, 1995 and July 3, 1994 5
Notes to Financial Statements 6
2
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<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
INTERFACE, INC. AND SUBSIDIARIES
Consolidated Condensed Balance Sheet
(Unaudited)
(In thousands) July 2, January 1,
- ---------------------------- 1995 1995
------ ---------
ASSETS
- ----------------------------
<S> <C> <C>
CURRENT ASSETS:
Cash and Cash Equivalents $4,856 $4,389
Escrowed and Restricted Funds 2,455 2,663
Accounts Receivable 143,522 133,536
Inventories 145,880 132,650
Deferred Tax Asset 3,767 3,767
Prepaid Expenses 18,928 15,110
-------- --------
TOTAL CURRENT ASSETS 319,408 292,115
PROPERTY AND EQUIPMENT, less
accumulated depreciation 162,440 152,874
EXCESS OF COST OVER NET ASSETS ACQUIRED 215,178 202,852
OTHER ASSETS 42,562 40,093
-------- --------
$739,588 $687,934
======== ========
LIABILITIES AND COMMON SHAREHOLDERS' EQUITY
- -------------------------------------------
CURRENT LIABILITIES:
Accounts Payable $71,208 $59,702
Accrued Expenses 51,834 56,940
Current Maturities of Long-Term Debt 1,550 853
-------- --------
TOTAL CURRENT LIABILITIES 124,592 117,495
LONG-TERM DEBT, less current maturities 234,464 209,663
CONVERTIBLE SUBORDINATED DEBENTURES 103,925 103,925
DEFERRED INCOME TAXES 17,012 17,761
-------- --------
TOTAL LIABILITIES 479,993 448,844
-------- --------
Redeemable Preferred Stock 25,000 25,000
Common Stock:
Class A 1,881 1,871
Class B 304 308
Additional Paid-In Capital 93,971 93,450
Retained Earnings 142,370 136,343
Foreign Currency Translation Adjustment 13,815 (136)
Treasury Stock, 3,600
Class A Shares, at Cost (17,746) (17,746)
-------- --------
$739,588 $687,934
======== ========
See accompanying notes to consolidated condensed financial statements.
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3
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<TABLE>
<CAPTION>
INTERFACE, INC. AND SUBSIDIARIES
Consolidated Condensed Statements of Income
(Unaudited)
(In thousands except per share amounts)
- ---------------------------------------
Three Months Ended Six Months Ended
------------------------- ---------------------------
July 2 July 3, July 2, July 3
1995 1994 1995 1994
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net Sales $202,818 $181,665 $394,145 $342,384
Cost of Sales 140,090 126,117 273,062 238,492
-------- -------- -------- --------
Gross Profit on Sales 62,728 55,548 121,083 103,892
Selling, General and Administrative Expenses 47,278 43,408 92,240 81,313
-------- -------- -------- --------
Operating Income 15,450 12,140 28,843 22,579
Other (Expense) Income - Net (7,262) (6,342) (14,179) (12,386)
-------- -------- -------- --------
Income before Taxes on Income 8,188 5,798 14,664 10,193
Taxes on Income 3,113 2,087 5,573 3,670
-------- ------- -------- --------
Net Income 5,075 3,711 9,091 6,523
Less: Preferred Dividends 437 437 874 875
-------- ------- -------- --------
Net Income Applicable to Common Shareholders $4,638 $3,274 $8,217 5,648
======== ======= ======== ========
Earnings Per Share
Primary $0.25 $0.18 $0.45 $0.32
======== ======= ======== =======
Fully Diluted <F1> $0.25 $0.18<F1> $0.45 $0.32<F1>
======== ======= ======== =======
Weighted Average Common Shares Outstanding
Primary 18,250 18,175 18,230 17,834
======== ======= ======= =======
Fully Diluted 26,086 26,010 26,065 25,670
======== ======= ======= =======
- ------------------------
<FN>
<F1> For the three months and six months periods ended July 3, 1994, earnings per share on a fully dilutive basis
were antidilutive.
</FN>
See accompanying notes to consolidated condensed financial statements.
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4
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<TABLE>
<CAPTION>
INTERFACE, INC. AND SUBSIDIARIES
Consolidated Condensed Statements of Cash Flows
(Unaudited)
Six Months Ended
--------------------------
July 2, July 3,
(In thousands) 1995 1994
- ------------- ---------- ----------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $9,091 $6,523
Adjustment to reconcile net income
to cash provided by operating activities:
Depreciation and amortization 14,308 14,357
Deferred income taxes (861) 970
Cash provided by (used for):
Accounts receivable (4,490) (4,385)
Inventories (4,295) (13,156)
Prepaid and other (2,582) 217
Accounts payable and accrued expenses 2,898 (10,455)
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14,069 (5,929)
------- ---------
INVESTING ACTIVITIES:
Capital expenditures (12,881) (9,182)
Acquisitions of businesses (17,154) (643)
Other (2,710) 2,511
-------- ----------
(32,745) (7,314)
-------- ----------
FINANCING ACTIVITIES:
Net borrowing of long-term debt 21,434 12,734
Issuance of common stock 526 453
Dividends paid (3,064) (3,015)
-------- ---------
18,896 10,172
-------- ---------
Net cash provided by operating,
investing and financing activities 220 (3,071)
Effect of exchange rate changes on cash 247 318
-------- ---------
CASH AND CASH EQUIVALENTS:
Net increase (decrease) during the period 467 (2,753)
Balance at beginning of period 4,389 4,674
-------- --------
Balance at end of period $4,856 $1,921
======== ========
See accompanying notes to consolidated condensed financial statements.
</TABLE>
5
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INTERFACE, INC. AND SUBSIDIARIES
Notes to Consolidated Condensed Financial Statements
NOTE 1 - CONDENSED FOOTNOTES
As contemplated by the Securities and Exchange Commission instructions
to Form 10-Q, the following footnotes have been condensed and, therefore,
do not contain all disclosures required in connection with annual financial
statements. Reference should be made to the notes to the Company's year-end
financial statements contained in its Annual Report to Shareholders for the
fiscal year ended January 1, 1995, as filed with the Securities and Exchange
Commission.
NOTE 2 - INVENTORIES
Inventories are summarized as follows:
July 2, January 1,
1995 1995
------- ---------
Finished Goods $ 78,895 $ 74,542
Work-in-Process 28,482 20,250
Raw Materials 38,503 37,858
------ ------
$ 145,880 $ 132,650
========== =========
NOTE 3 - BUSINESS ACQUISITIONS
In June 1995, the Company acquired substantially all of the assets of
Toltec Fabrics, Inc., a North Carolina based company, for approximately
$13,280,000 (comprised of $7,530,000 in cash and $5,750,000 in notes).
The acquisition was accounted for as a purchase and, accordingly, the results
of operations are included in the Company's consolidated financial statements
from the date of acquisition.
NOTE 4 - EARNINGS PER SHARE AND DIVIDENDS
Earnings per share are computed by dividing net income applicable to
common
shareholders by the combined weighted average number of shares of Class A and
Class B common stock outstanding during the particular reporting period.
The computation does not include a negligible dilutive effect of outstanding
stock options. Neither the Convertible Subordinated Debentures issued in
September 1988 nor the Series A Cumulative Convertible Preferred Stock issued
during June 1993 were determined to be common stock equivalents.
6
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INTERFACE, INC. AND SUBSIDIARIES
Notes to Consolidated Condensed Financial Statements
NOTE 4 - EARNINGS PER SHARE AND DIVIDENDS (Continued)
In computing primary earnings per share, the preferred stock dividend
reduces income applicable to common shareholders. For the purposes of
computing earnings per share and dividends paid per share, the Company is
treating as treasury stock (and therefore not outstanding) the shares that
are owned by a wholly-owned subsidiary (3,600,000 Class A shares, recorded
at cost).
__________________________________________
The financial information included in this report has been prepared by the
Company, without audit, and should not be relied upon to the same extent as
audited financial statements. In the opinion of management, the financial
information included in this report contains all adjustments (all of which are
normal and recurring) necessary for a fair presentation of the results for the
interim periods. Nevertheless, the results shown for interim periods are not
necessarily indicative of results to be expected for the year.
7<PAGE>
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
INTERFACE, INC.
Date: August 21, 1995 By: /s/ Daniel T. Hendrix
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Daniel T. Hendrix
Vice President
(Principal Financial Officer)
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