Interface Reports First Quarter 2007 Results 
- First Quarter Adjusted Sales Increase 19.7% - 
- Year-Over-Year Order Growth of 21.5% - 

ATLANTA, April 25 /PRNewswire-FirstCall/ -- Interface, Inc. (NASDAQ:IFSIA) , a worldwide floorcoverings and fabrics company, today announced results for the first quarter ended April 1, 2007.

   Sales for the first quarter of 2007 increased 19.7% to $279.3 million from sales of $233.3 million in the year ago period, after exclusion of revenues from the Company's European fabrics business that were present in the first quarter of 2006. Including the European fabrics business, which was sold in April 2006, sales increased 11.4% from $250.6 million in the first quarter of 2006.

   Excluding certain one-time items (detailed below) from each period, operating income for the first quarter of 2007 increased 24% to $24.2 million, or 8.7% of sales, from $19.5 million, or 8.4% of sales, in the first quarter of last year. The one-time items in the first quarter of 2007 were an impairment charge of $48.3 million related to the Company's U.S. fabrics business and a $1.9 million loss on the disposal of assets in its specialty products business, while the one-time items in the first quarter of 2006 were the results from the Company's European fabrics business and a $3.3 million restructuring charge relating to its U.S. fabrics business. Including those items, the Company reported an operating loss for the 2007 first quarter of $26.0 million, compared with an operating loss of $3.3 million in the same period in 2006. Net loss was $40.6 million, or $0.68 per share, in the 2007 first quarter, versus a net loss of $17.1 million, or $0.32 per share, in the 2006 first quarter. (Please see the attached tables for a reconciliation of GAAP and non-GAAP results.)

   "Setting aside the one-time charges, we had a great start to 2007, even though the first quarter seasonally has been our slowest time of the year," said Daniel T. Hendrix, President and Chief Executive Officer. "Our improving sales performance reflects the success we are experiencing across our primary market segments, as growth in our non-office commercial segments, and particularly in hospitality and education facilities, outpaced the growth of the recovering corporate office market. Perhaps the most exciting news, though, is that orders received during the quarter were up 21.5% to $288 million, which is the highest mark reached in more than six years."

   Patrick C. Lynch, Senior Vice President and Chief Financial Officer, commented, "Our modular carpet business was the principal driver of our growth, with sales increasing 24% and orders increasing 26% compared with the same period last year. Sales of modular carpet increased across all key regions, with the Americas and Europe leading the way, as we built upon our leadership position in this growing market category. The strong sales performance in modular carpet resulted in excellent profitability growth for the business. We also continued to see robust sales improvement in our Bentley Prince Street business, which was up 24% and continued to gain market share. Bentley Prince Street's operating income doubled over the prior year, despite some isolated manufacturing inefficiencies due to a changeover in materials processing, and we expect to see further profitability growth throughout 2007. We were disappointed with the performance of our fabrics business, which reported an operating loss during the quarter due to costs associated with headcount reductions and continued manufacturing inefficiencies resulting from our plant consolidation program. While we are continuing with our plans to improve the performance of this business, we also are exploring possible strategic options, and our analyses have led us to conclude that it is necessary to record an impairment charge for the first quarter."

   Mr. Hendrix concluded, "The outlook for our core businesses remains very positive, and we have positioned ourselves well to benefit from the market opportunities we helped create and are now seeing come to fruition. Specifically, we are benefiting from the secular market shift toward modular carpet and the continuing recovery of the office market. Further, our segmentation strategy has been successful and we are benefiting from our presence in these other commercial and residential markets, on a global basis. Looking forward, we remain optimistic about the strength of the office market, especially in the U.S. and Europe, the prospects for our segmentation strategy to further drive sales growth across our key markets, and the progress of our product introductions in the residential market. Through the first three weeks of our second quarter, sales and order activity continue to be strong."