ATLANTA, Oct. 26, 2011 /PRNewswire/ -- Interface, Inc. (Nasdaq: IFSIA), a worldwide floorcoverings company and global leader in sustainability, today announced results for the third quarter ended October 2, 2011.

Sales for the third quarter of 2011 were $273.1 million, compared with sales of $252.7 million in the third quarter of 2010, an increase of 8.1%. Operating income was $25.3 million, or 9.3% of sales, compared with last year's third quarter operating income of $28.0 million, or 11.1% of sales. Net income attributable to Interface, Inc. was $12.2 million, or $0.19 per share, in the third quarter of 2011, compared with net income attributable to Interface, Inc. of $12.1 million, or $0.19 per share, in the third quarter of 2010.

"During the quarter, we increased our sales and grew our overall global presence in the face of changing market conditions and strong year-ago comparisons," said Daniel T. Hendrix, President and Chief Executive Officer. "Sales growth remained solid in emerging markets, and our U.S. modular carpet business produced record revenues for the quarter, with the corporate office and institutional segments showing particular strength. Demand slowed in some of our mature corporate office markets outside the U.S., such as Australia, Japan and the larger parts of Western Europe. The quarter also saw a significant increase in raw materials pricing that was felt across our geographies which, combined with moderating sales volumes in the select markets I mentioned, affected our gross profit in the period. Bentley Prince Street continued to generate near breakeven results despite a decline in sales, while our FLOR retail business achieved a double-digit percentage increase in quarterly sales. We opened a new FLOR store in Dallas during the third quarter, for a total of five stores across the U.S., and we have two more FLOR stores opening in Houston and Brooklyn in the next month."

Patrick C. Lynch, Senior Vice President and Chief Financial Officer, commented, "The moderation of demand in certain of our mature office markets outside the U.S., combined with the increase in raw material costs that could not be offset fast enough by our price increases, constrained profitability in the third quarter. Compared sequentially with the second quarter, our SG&A expenses declined as a percentage of sales and were nearly flat in absolute dollars. We currently are reviewing our SG&A outlays even more closely, and taking steps to reduce these expenses further in terms of absolute dollars in the fourth quarter to better match regional demand levels. Nevertheless, we will continue to utilize our solid free cash flow to invest selectively in growth initiatives where we see near-term opportunities."

For the first nine months of 2011, sales were $786.1 million, compared with $696.5 million for the same period a year ago, an increase of 12.9%. Operating income for the 2011 nine-month period was $73.0 million, or 9.3% of sales. These figures compare with operating income for the 2010 nine-month period (excluding a previously announced $3.1 million restructuring charge in the first quarter of 2010) of $66.4 million, or 9.5% of sales. Including the restructuring charge, operating income for the 2010 nine-month period was $63.3 million, or 9.1% of sales. Net income attributable to Interface, Inc. in the first nine months of 2011 was $34.8 million, or $0.53 per diluted share, compared with net income attributable to Interface, Inc. in the year-ago period of $21.6 million, or $0.34 per diluted share.

Mr. Hendrix concluded, "While the third quarter was marked by moderation in select corporate office markets outside the U.S., we're optimistic that it could be short-lived and we continue to believe that Interface is well positioned for outperformance over the longer-term. The fundamental drivers of the secular shift to carpet tile have not changed, and we remain a leader in driving this change in the marketplace. We continue to see opportunities, such as expanding our retail and other non-office offerings, to invest in growth, and remain committed to doing so going forward. In the face of changing dynamics in select markets, however, we will take the same fiscally conservative approach we have in the past by balancing our investment goals with judicious expense management to maximize operational efficiency and adapt to current macroeconomic conditions."

Interface, Inc. is the world's largest manufacturer of modular carpet, which it markets under the InterfaceFLOR, FLOR, Heuga and Bentley Prince Street brands, and, through its Bentley Prince Street brand, enjoys a leading position in the designer quality segment of the broadloom carpet market. The Company is committed to the goal of sustainability and doing business in ways that minimize the impact on the environment while enhancing shareholder value.