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SUPPLEMENTAL CONDENSED CONSOLIDATING GUARANTOR FINANCIAL STATEMENTS (Tables) | 9 Months Ended
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Sep. 30, 2012
Condensed Consolidating Statement of Operations | unconditional. The Supplemental Guarantor Financial Statements are presented herein pursuant to requirements of the Commission. INTERFACE, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2012
|  | GUARANTOR SUBSIDIARIES |  |  | NON- GUARANTOR SUBSIDIARIES |  |  | INTERFACE, INC. (PARENT CORPORATION) |  |  | CONSOLIDATION AND ELIMINATION ENTRIES |  |  | CONSOLIDATED TOTALS |
|  | (In thousands) |
Net sales |  | $ | 165,391 |  |  | $ | 120,383 |  |  | $ | 0 |  |  | $ | (42,911 | ) |  | $ | 242,863 |
Cost of sales |  |  | 122,447 |  |  |  | 80,466 |  |  |  | 0 |  |  |  | (42,911 | ) |  |  | 160,002 |
Gross profit on sales |  |  | 42,944 |  |  |  | 39,917 |  |  |  | 0 |  |  |  | 0 |  |  |  | 82,861 |
Selling, general and administrative expenses |  |  | 23,966 |  |  |  | 28,260 |  |  |  | 5,788 |  |  |  | 0 |  |  |  | 58,014 |
Losses related to Australia fire |  |  | 0 |  |  |  | 980 |  |  |  | 0 |  |  |  | 0 |  |  |  | 980 |
Restructuring and asset impairment charge |  |  | 0 |  |  |  | 770 |  |  |  | 0 |  |  |  | 0 |  |  |  | 770 |
Operating income (loss) |  |  | 18,978 |  |  |  | 9,907 |  |  |  | (5,788 | ) |  |  | 0 |  |  |  | 23,097 |
Interest/other expense |  |  | 3,598 |  |  |  | 3,410 |  |  |  | (542 | ) |  |  | 0 |  |  |  | 6,466 |
Income before taxes on income and equity in income of subsidiaries |  |  | 15,380 |  |  |  | 6,497 |  |  |  | (5,246 | ) |  |  | 0 |  |  |  | 16,631 |
Income tax expense |  |  | 5,145 |  |  |  | 2,174 |  |  |  | (1,755 | ) |  |  | 0 |  |  |  | 5,564 |
Equity in income (loss) of subsidiaries |  |  | 0 |  |  |  | 0 |  |  |  | (2,282 | ) |  |  | 2,282 |  |  |  | 0 |
Income (loss) from continuing operations |  |  | 10,235 |  |  |  | 4,323 |  |  |  | (5,773 | ) |  |  | 2,282 |  |  |  | 11,067 |
Income (loss) from discontinued operations (net of tax) |  |  | (16,840 | ) |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | (16,840 | )
Net income (loss) |  | $ | (6,605 | ) |  | $ | 4,323 |  |  | $ | (5,773 | ) |  | $ | 2,282 |  |  | $ | (5,773 | )
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2012
|  | GUARANTOR SUBSIDIARIES |  |  | NON- GUARANTOR SUBSIDIARIES |  |  | INTERFACE, INC. (PARENT CORPORATION) |  |  | CONSOLIDATION AND ELIMINATION ENTRIES |  |  | CONSOLIDATED TOTALS |
|  | (In thousands) |
Net sales |  | $ | 428,084 |  |  | $ | 358,564 |  |  | $ | 0 |  |  | $ | (104,223 | ) |  | $ | 682,425 |
Cost of sales |  |  | 314,158 |  |  |  | 240,409 |  |  |  | 0 |  |  |  | (104,223 | ) |  |  | 450,344 |
Gross profit on sales |  |  | 113,926 |  |  |  | 118,155 |  |  |  | 0 |  |  |  | 0 |  |  |  | 232,081 |
Selling, general and administrative expenses |  |  | 68,452 |  |  |  | 82,928 |  |  |  | 16,754 |  |  |  | 0 |  |  |  | 168,134 |
Losses related to Australia fire |  |  | 0 |  |  |  | 980 |  |  |  | 0 |  |  |  | 0 |  |  |  | 980 |
Restructuring and asset impairment charge |  |  | 1,143 |  |  |  | 15,943 |  |  |  | 0 |  |  |  | 0 |  |  |  | 17,086 |
Operating income (loss) |  |  | 44,331 |  |  |  | 18,304 |  |  |  | (16,754 | ) |  |  | 0 |  |  |  | 45,881 |
Interest/other expense |  |  | 21,827 |  |  |  | 10,013 |  |  |  | (11,884 | ) |  |  | 0 |  |  |  | 19,956 |
Income (loss) before taxes on income and equity in income of subsidiaries |  |  | 22,504 |  |  |  | 8,291 |  |  |  | (4,870 | ) |  |  | 0 |  |  |  | 25,925 |
Income tax expense |  |  | 7,329 |  |  |  | 4,452 |  |  |  | (1,363 | ) |  |  | 0 |  |  |  | 10,418 |
Equity in income (loss) of subsidiaries |  |  | 0 |  |  |  | 0 |  |  |  | 2,058 |  |  |  | (2,058 | ) |  |  | 0 |
Income (loss) from continuing operations |  |  | 15,175 |  |  |  | 3,839 |  |  |  | (1,449 | ) |  |  | (2,058 | ) |  |  | 15,507 |
Income (loss) from discontinued operations (net of tax) |  |  | (16,956 | ) |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | (16,956 | )
Net income (loss) |  | $ | (1,781 | ) |  | $ | 3,839 |  |  | $ | (1,449 | ) |  | $ | (2,058 | ) |  | $ | (1,449 | )
Condensed Consolidating Balance Sheet | CONDENSED CONSOLIDATING BALANCE SHEET SEPTEMBER 30, 2012
|  | GUARANTOR SUBSIDIARIES |  |  | NON- GUARANTOR SUBSIDIARIES |  |  | INTERFACE, INC. (PARENT CORPORATION) |  |  | CONSOLIDATION AND ELIMINATION ENTRIES |  |  | CONSOLIDATED TOTALS |
|  | (In thousands) |
ASSETS |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 2,529 |  |  | $ | 38,250 |  |  | $ | 50,872 |  |  | $ | 0 |  |  | $ | 91,651 |
Accounts receivable |  |  | 53,733 |  |  |  | 74,122 |  |  |  | 586 |  |  |  | 0 |  |  |  | 128,441 |
Inventories |  |  | 69,258 |  |  |  | 78,504 |  |  |  | 0 |  |  |  | 0 |  |  |  | 147,762 |
Prepaids and deferred income taxes |  |  | 5,272 |  |  |  | 27,002 |  |  |  | 9,340 |  |  |  | 0 |  |  |  | 41,614 |
Total current assets |  |  | 130,792 |  |  |  | 217,878 |  |  |  | 60,798 |  |  |  | 0 |  |  |  | 409,468 |
Property and equipment less accumulated depreciation |  |  | 72,076 |  |  |  | 97,388 |  |  |  | 3,403 |  |  |  | 0 |  |  |  | 172,867 |
Investment in subsidiaries |  |  | 361,233 |  |  |  | 195,361 |  |  |  | (18,453 | ) |  |  | (538,141 | ) |  |  | 0 |
Goodwill |  |  | 6,542 |  |  |  | 67,252 |  |  |  | 0 |  |  |  | 0 |  |  |  | 73,794 |
Other assets |  |  | 1,585 |  |  |  | 10,846 |  |  |  | 92,849 |  |  |  | 0 |  |  |  | 105,280 |
|  | $ | 572,228 |  |  | $ | 588,725 |  |  | $ | 138,597 |  |  | $ | (538,141 | ) |  | $ | 761,409 |
LIABILITIES AND SHAREHOLDERS’ EQUITY |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current liabilities |  | $ | 53,943 |  |  | $ | 79,966 |  |  | $ | 17,509 |  |  | $ | 0 |  |  | $ | 151,418 |
Senior notes |  |  | 0 |  |  |  | 0 |  |  |  | 283,090 |  |  |  | 0 |  |  |  | 283,090 |
Deferred income taxes |  |  | 0 |  |  |  | 11,655 |  |  |  | (2,783 | ) |  |  | 0 |  |  |  | 8,872 |
Other |  |  | 0 |  |  |  | 8,199 |  |  |  | 27,680 |  |  |  | 0 |  |  |  | 35,879 |
Total liabilities |  |  | 53,943 |  |  |  | 99,820 |  |  |  | 325,496 |  |  |  | 0 |  |  |  | 479,259 |
Common stock |  |  | 81,844 |  |  |  | 102,199 |  |  |  | 6,594 |  |  |  | (184,043 | ) |  |  | 6,594 |
Additional paid-in capital |  |  | 191,411 |  |  |  | 12,525 |  |  |  | 365,038 |  |  |  | (203,936 | ) |  |  | 365,038 |
Retained earnings (deficit) |  |  | 246,979 |  |  |  | 429,549 |  |  |  | (548,978 | ) |  |  | (150,162 | ) |  |  | (22,612 | )
Foreign currency translation adjustment |  |  | (1,949 | ) |  |  | (20,331 | ) |  |  | (7,054 | ) |  |  | 0 |  |  |  | (29,334 | )
Pension liability |  |  | 0 |  |  |  | (35,037 | ) |  |  | (2,499 | ) |  |  | 0 |  |  |  | (37,536 | )
|  | $ | 572,228 |  |  | $ | 588,725 |  |  | $ | 138,597 |  |  | $ | (538,141 | ) |  | $ | 761,409 |
Condensed Consolidating Statement of Cash Flows | CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2012
|  | GUARANTOR SUBSIDIARIES |  |  | NON- GUARANTOR SUBSIDIARIES |  |  | INTERFACE, INC. (PARENT CORPORATION) |  |  | CONSOLIDATION AND ELIMINATION ENTRIES |  |  | CONSOLIDATED TOTALS |
|  | (In thousands) |
Net cash provided by operating activities |  | $ | 36,070 |  |  | $ | 4,652 |  |  | $ | (12,466 | ) |  | $ | 15,648 |  |  | $ | 43,904 |
Cash flows from investing activities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Purchase of plant and equipment |  |  | (11,284 | ) |  |  | (17,492 | ) |  |  | (41 | ) |  |  | 0 |  |  |  | (28,817 | )
Other |  |  | 465 |  |  |  | (39 | ) |  |  | (1,953 | ) |  |  | 0 |  |  |  | (1,527 | )
Net proceeds from sale of Bentley Prince Street |  |  | 0 |  |  |  | 0 |  |  |  | 32,174 |  |  |  | 0 |  |  |  | 32,174 |
Cash received from insurance company |  |  | 0 |  |  |  | 10,000 |  |  |  | 0 |  |  |  | 0 |  |  |  | 10,000 |
Net cash used for investing activities |  |  | (10,819 | ) |  |  | (7,531 | ) |  |  | 30,180 |  |  |  | 0 |  |  |  | 11,830 |
Cash flows from financing activities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Repurchase of senior subordinated notes |  |  | 0 |  |  |  | 0 |  |  |  | (11,477 | ) |  |  | 0 |  |  |  | (11,477 | )
Other |  |  | (24,015 | ) |  |  | 4,705 |  |  |  | 34,958 |  |  |  | (15,648 | ) |  |  | 0 |
Proceeds from issuance of common stock |  |  | 0 |  |  |  | 0 |  |  |  | 293 |  |  |  | 0 |  |  |  | 293 |
Dividends paid |  |  | 0 |  |  |  | 0 |  |  |  | (4,276 | ) |  |  | 0 |  |  |  | (4,276 | )
Net cash provided by (used for) financing activities |  |  | (24,015 | ) |  |  | 4,705 |  |  |  | 19,498 |  |  |  | (15,648 | ) |  |  | (15,460 | )
Effect of exchange rate change on cash |  |  | 192 |  |  |  | 561 |  |  |  | 0 |  |  |  | 0 |  |  |  | 753 |
Net increase (decrease) in cash |  |  | 1,428 |  |  |  | 2,387 |  |  |  | 37,212 |  |  |  | 0 |  |  |  | 41,027 |
Cash at beginning of period |  |  | 1,101 |  |  |  | 35,863 |  |  |  | 13,660 |  |  |  | 0 |  |  |  | 50,624 |
Cash at end of period |  | $ | 2,529 |  |  | $ | 38,250 |  |  | $ | 50,872 |  |  | $ | 0 |  |  | $ | 91,651 |

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