1 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 September 29, 1996 Commission File Number 0-12016 ------------------------------ INTERFACE, INC. ------------------------------------------------------ (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 --------------------------------------------------------- (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 --- --- Shares outstanding of each of the registrant's classes of common stock at November 4, 1996: Class Number of Shares - ------------------------------------------------------------------------- Class A Common Stock, $.10 par value per share 18,369,893 Class B Common Stock, $.10 par value per share 2,975,190
2 INTERFACE, INC. INDEX <TABLE> <CAPTION> Page ---- <S> <C> <C> <C> Part I. FINANCIAL INFORMATION Item 1. Consolidated Condensed Financial Statements Balance Sheets - September 29, 1996 and December 31, 1995 3 Statements of Income - Three Months and Nine Months Ended September 29, 1996 and October 1, 1995 4 Statements of Cash Flows - Nine Months Ended September 29, 1996 and October 1, 1995 5 Notes to Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 11 Part II. OTHER INFORMATION Item 1. Legal Proceedings 13 Item 2. Changes in the Rights of the Company's Security Holders 13 Item 3. Defaults by the Company on Its Senior Securities 13 Item 4. Submission of Matters to a Vote of Security Holders 13 Item 5. Other Information 13 Item 6. Exhibits and Reports on Form 8-K 13 </TABLE> 2
3 PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS INTERFACE, INC. AND SUBSIDIARIES Consolidated Condensed Balance Sheets (Unaudited) <TABLE> <CAPTION> (In thousands) - ---------------------------------------------- September 29, December 31, ASSETS 1996 1995 - ---------------------------------------------- ------------- ----------- <S> <C> <C> CURRENT ASSETS: Cash and Cash Equivalents $ 154 $ 8,750 Accounts Receivable 164,866 111,386 Inventories 154,579 134,504 Deferred Tax Asset 4,662 3,998 Prepaid Expenses 22,021 15,748 -------- -------- TOTAL CURRENT ASSETS 346,282 274,386 PROPERTY AND EQUIPMENT, less accumulated depreciation 202,253 183,299 EXCESS OF COST OVER NET ASSETS ACQUIRED 240,755 218,825 OTHER ASSETS 54,970 37,841 -------- -------- $844,260 $714,351 ======== ======== LIABILITIES AND COMMON SHAREHOLDERS' EQUITY - ---------------------------------------------- CURRENT LIABILITIES: Notes Payable $ 5,650 $ 8,546 Accounts Payable 74,077 55,101 Accrued Expenses 69,947 50,148 Current Maturities of Long-Term Debt 2,127 1,560 -------- -------- TOTAL CURRENT LIABILITIES 151,801 115,355 LONG-TERM DEBT, less current maturities 266,307 199,022 SENIOR SUBORDINATED NOTES 125,000 125,000 DEFERRED INCOME TAXES 21,918 18,060 -------- -------- TOTAL LIABILITIES 565,026 457,437 -------- -------- Redeemable Preferred Stock 24,751 25,000 Common Stock: Class A 2,127 1,903 Class B 298 300 Additional Paid-In Capital 114,271 96,863 Retained Earnings 159,507 147,039 Foreign Currency Translation Adjustment (3,974) 3,555 Treasury Stock, 3,600 Class A Shares, at Cost (17,746) (17,746) -------- -------- $844,260 $714,351 ======== ======== </TABLE> See accompanying notes to consolidated condensed financial statements. 3
4 INTERFACE, INC. AND SUBSIDIARIES Consolidated Condensed Statements of Income (Unaudited) (In thousands except per share amounts) - -------------------------------------- <TABLE> <CAPTION> Three Months Ended Nine Months Ended ------------------------- ------------------------ September 29, October 1, September 29, October 1, 1996 1995 1996 1995 ------------- ---------- ------------ ---------- <S> <C> <C> <C> <C> Net Sales $275,041 $203,269 $717,546 $597,414 Cost of Sales 187,581 139,574 492,509 412,636 -------- -------- -------- -------- Gross Profit on Sales 87,460 63,695 225,037 184,778 Selling, General and Administrative Expenses 65,910 47,373 170,887 139,613 -------- -------- -------- -------- Operating Income 21,550 16,322 54,150 45,165 Other (Expense) Income - Net (9,105) (7,730) (25,683) (21,909) -------- -------- -------- -------- Income before Taxes on Income 12,445 8,592 28,467 23,256 Taxes on Income 4,864 3,265 11,153 8,838 -------- -------- -------- -------- Net Income 7,581 5,327 17,314 14,418 Less: Preferred Dividends 433 438 1,299 1,312 -------- -------- -------- -------- Net Income Applicable to Common Shareholders $ 7,148 $ 4,889 $ 16,015 $ 13,106 ======== ======== ======== ======== Primary Earnings Per Common Share $0.34 $0.27 $0.82 $0.72 ======== ======== ======== ======== Weighted Average Common Shares Outstanding 20,935 18,252 19,604 18,237 ======== ======== ======== ======== </TABLE> See accompanying notes to consolidated condensed financial statements. 4
5 INTERFACE, INC. AND SUBSIDIARIES Consolidated Condensed Statements of Cash Flows (Unaudited) <TABLE> <CAPTION> Nine Months Ended ------------------------------- September 29, October 1, (In thousands) 1996 1995 - -------------- ------------- ---------- <S> <C> <C> OPERATING ACTIVITIES: Net income $17,314 $14,418 Adjustments to reconcile net income to cash provided by operating activities: Depreciation and amortization 25,041 21,285 Deferred income taxes 1,815 Cash provided by (used for): Accounts receivable (20,461) 23,528 Inventories (9,671) 647 Prepaid and other (6,112) (2,057) Accounts payable and accrued expenses 17,769 (3,818) ------- ------- 23,880 55,818 ------- ------- INVESTING ACTIVITIES: Capital expenditures (27,795) (26,186) Acquisitions of businesses (46,912) (15,203) Other (3,354) (2,798) ------- ------- (78,061) (44,187) ------- ------- FINANCING ACTIVITIES: Net borrowing (reduction) of long-term debt 49,638 (9,114) Issuance of common stock 881 744 Dividends paid (4,839) (4,597) ------- ------- 45,680 (12,967) ------- ------- Net cash provided by (used for) operating, investing and financing activities (8,501) (1,336) Effect of exchange rate changes on cash (95) (19) ------- ------- CASH AND CASH EQUIVALENTS: Net increase (decrease) during the period (8,596) (1,355) Balance at beginning of period 8,750 4,389 ------- ------- Balance at end of period $ 154 $ 3,034 ======= ======= </TABLE> See accompanying notes to consolidated condensed financial statements. 5
6 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 December 31, 1995, as filed with the Securities and Exchange Commission. 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 full year. NOTE 2 - INVENTORIES Inventories are summarized as follows: <TABLE> <CAPTION> September 29, December 31, 1996 1995 -------- --------- <S> <C> <C> Finished Goods $ 85,218 $ 76,407 Work-in-Process 31,071 26,168 Raw Materials 38,290 31,929 -------- -------- $154,579 $134,504 ======== ======== </TABLE> NOTE 3 - BUSINESS ACQUISITIONS During fiscal 1996, the Company has acquired, through merger and stock purchases, thirteen commercial floorcovering contractors -- Landry's Commercial Flooring Co., Inc., based in Oregon, Reiser Associates, Inc., based in Texas, Earl W. Bentley Operating Co., Inc., based in Oklahoma, Quaker City International, Inc., based in Pennsylvania, Superior Holding Inc., based in Texas, Flooring Consultants, Inc., based in Arizona, ParCom, Inc., based in Virginia, Congress Flooring Corp., based in Massachusetts, Southern Contract Systems, Inc., based in Georgia, B. Shehadi & Sons, Inc., based in New Jersey, A & F Installation, Inc., based in New Jersey, Lasher/White Carpet Co., Inc., based in New York and Oldtown Carpet Center, Inc., 6
7 INTERFACE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS based in North Carolina -- for approximately $50,895,000, in the aggregate (comprised of $32,888,000 in cash and $18,007,000 in Interface common stock). All the acquisitions were accounted for as purchases with the exception of the acquisition of B. Shehadi & Sons, Inc. which was accounted for under the pooling of interests method of accounting; accordingly, the results of operations for the acquired companies are included in the Company's consolidated financial statements from the date of the acquisitions with the exception of the acquisition of B. Shehadi & Sons results of operations which are included in the Company's consolidated financial statements from the beginning of the year. The excess of the purchase price over the fair value of the net liabilities was approximately $29,149,000 and is being amortized over 25 years. In February 1996, the Company acquired the outstanding common stock of Renovisions, Inc., a nationwide installation services firm (based in Georgia) that has pioneered a new method of carpet replacement, for approximately $5,000,000 in cash. The acquisition was accounted for as a purchase and, accordingly, the results of operations for Renovisions are included in the Company's consolidated financial statements from the date of acquisition. The excess of the purchase price over the fair value of net assets was approximately $4,240,000, and is being amortized over 25 years. In February 1996, the Company acquired the outstanding common stock of C-Tec, Inc., a Michigan based producer of raised/access flooring systems, for approximately $8,750,000 (comprised of $4,500,000 in cash and $4,250,000 in 6% subordinated convertible notes). The acquisition was accounted for as a purchase and, accordingly, the results of operations for C-Tec are included in the Company's consolidated financial statements from the date of acquisition. The excess of the purchase price over the fair value of net liabilities was approximately $3,144,000, and is being amortized over 25 years. 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 earnings computation does not give effect to the negligible dilutive impact of outstanding stock options. The Series A Cumulative Convertible Preferred Stock issued in June 1993 is not considered to be a common stock equivalent because at the date of issuance the stated rate of interest was greater than 66 2/3% of the AAA bond rate. In computing primary earnings per share, the preferred stock dividend of 7% per annum 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). 7
8 NOTE 5 - SUPPLEMENTAL GUARANTOR FINANCIAL STATEMENTS The Guarantor Subsidiaries, which consist of the Company's principal domestic subsidiaries, are guarantors of the Company's 9.5% senior subordinated notes due 2005. The Supplemental Guarantor Financial Statements are presented herein pursuant to requirements of the Securities and Exchange Commission. INTERFACE, INC. AND SUBSIDIARIES Note 5 - SUPPLEMENTAL GUARANTOR FINANCIAL STATEMENTS <TABLE> <CAPTION> For the Nine Months Ended September 29, 1996 Consolidation Non- Interface, Inc. and Guarantor Guarantor (Parent Elimination Consolidated Subsidiaries Subsidiaries Corporation) Entries Totals -------------------------------------------------------------------------- (in thousands) <S> <C> <C> <C> <C> <C> Net sales $472,106 $300,249 - $(54,809) $717,546 Cost of sales 332,946 214,372 - (54,809) 492,509 ------- -------- ------- -------- -------- Gross profit on sales 139,160 85,877 - - 225,037 Selling, general and administrative expenses 98,580 60,545 11,762 - 170,887 ------- -------- ------- -------- -------- Operating income 40,580 25,332 (11,762) - 54,150 ------- -------- ------- -------- -------- Other expense (income) Interest Expense 5,644 5,367 14,591 - 25,602 Other 1,861 1,246 (3,026) - 81 ------- -------- ------- -------- -------- Total other expense 7,505 6,613 11,565 _ 25,683 ------- -------- ------- -------- -------- Income before taxes on income and equity in income of subsidiaries 33,075 18,719 (23,327) - 28,467 Taxes on income 13,798 6,763 (9,408) - 11,153 Equity in income of subsidiaries - - 31,233 (31,233) - ------- -------- ------- -------- -------- Net income 19,277 11,956 17,314 (31,233) 17,314 Preferred stock dividends - - 1,299 - 1,299 ------- -------- ------- -------- -------- Net income applicable to common share holders $19,277 $ 11,956 $16,015 $(31,233) $ 16,015 ======= ======== ======= ======== ======== </TABLE> 8
9 INTERFACE, INC. AND SUBSIDIARIES Note 5 - SUPPLEMENTAL GUARANTOR FINANCIAL STATEMENTS <TABLE> <CAPTION> September 29, 1996 Consolidation Non- Interface, Inc. and Guarantor Guarantor (Parent Elimination Consolidated Subsidiaries Subsidiaries Corporation) Entries Totals --------------------------------------------------------------------- (in thousands) <S> <C> <C> <C> <C> <C> ASSETS Current Assets: Cash and cash equivalents $ 947 $ 4,896 $(5,689) - $ 154 Accounts receivable 102,825 81,301 (19,260) - 164,866 Inventories 96,197 57,383 999 - 154,579 Miscellaneous 6,175 14,559 5,949 - 26,683 -------- -------- -------- --------- -------- Total current assets 206,144 158,139 (18,001) - 346,282 Property and equipment, less accumulated depreciation 140,951 57,204 4,098 - 202,253 Investment in subsidiaries 108,977 17,746 331,921 (458,644) 0 Miscellaneous 134,876 35,419 416,027 (531,352) 54,970 Excess of cost over net assets acquired 148,804 88,462 3,489 - 240,755 -------- -------- -------- --------- -------- $739,752 $356,970 $737,534 $(989,996) $844,260 LIABILITIES AND COMMON SHAREHOLDERS' EQUITY Current Liabilities: Notes payable $ 5,168 $ 482 - - $ 5,650 Accounts payable 47,961 25,743 373 - 74,077 Accrued expenses 40,982 29,558 (593) - 69,947 Current maturities of long-term debt 2,029 98 - - 2,127 -------- -------- -------- --------- -------- Total current liabilities 96,140 55,881 (220) - 151,801 Long-term debt, less current maturities 199,944 102,606 296,496 (332,739) 266,307 Senior subordinated notes - - 125,000 - 125,000 Deferred income taxes 16,063 582 5,273 - 21,918 -------- -------- -------- --------- -------- Total liabilities 312,147 159,069 426,549 (332,739) 565,026 Redeemable preferred stock 57,891 - 24,751 (57,891) 24,751 Common stock 84,834 98,526 2,425 (183,360) 2,425 Additional paid-in capital 167,307 21,480 114,272 (188,788) 114,271 Retained earnings 120,810 73,797 173,905 (209,005) 159,507 Foreign currency translation adjustment (3,237) 4,098 (4,368) (467) (3,974) Treasury stock - - - (17,746) (17,746) -------- -------- -------- --------- -------- $739,752 $356,970 $737,534 $(989,996) $844,260 ======== ======== ======== ========= ======== </TABLE> 9
10 INTERFACE, INC. AND SUBSIDIARIES Note 5 - SUPPLEMENTAL GUARANTOR FINANCIAL STATEMENTS <TABLE> <CAPTION> For the Nine Months Ended September 29, 1996 Consolidation Non- Interface, Inc. and Guarantor Guarantor (Parent Elimination Consolidated Subsidiaries Subsidiaries Corporation) Entries Totals ---------------------------------------------------------------------- (in thousands) <S> <C> <C> <C> <C> <C> Cash flows from operating activities $20,357 $26,721 $(23,198) - $23,880 ------- ------- -------- ------ ------- Cash flows from investing activities: Purchase of plant and equipment (16,488) (8,242) (3,065) - (27,795) Acquisitions, net of cash acquired (46,912) - (46,912) Other (3,354) - (3,354) ------- ------- -------- ------ ------- Net cash provided by (used in) investing activities (16,488) (8,242) (53,331) - (78,061) ------- ------- -------- ------ ------- Cash flows from financing activities: Net borrowings (repayments) (5,906) (18,626) 74,170 - 49,638 Proceeds from issuance of common stock 881 - 881 Cash dividends paid (4,839) - (4,839) Other - - ------- ------- -------- ------ ------- Net cash provided by (used in) financing activities (5,906) (18,626) 70,212 - 45,680 ------- ------- -------- ------ ------- Effect of exchange rate change on cash - (95) - - (95) ------- ------- -------- ------ ------- Net increase (decrease) in cash (2,037) (242) (6,317) - (8,596) Cash at beginning of year 2,984 5,138 628 - 8,750 ------- ------- -------- ------ ------- Cash at end of year $ 947 $ 4,896 $ (5,689) - $ 154 ======= ======= ======== ====== ======= </TABLE> 10
11 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS. For the three month and nine month periods ended September 29, 1996, the Company's net sales increased $71.8 million (35.3%) and $120.1 (20.1%), respectively, compared with the same periods in 1995. The increase was primarily attributable to (i) increased sales volume associated with the acquisitions of the companies in the Company's newly formed U.S. distribution network, Re:Source Americas, (ii) increased sales volume in the Company's floorcoverings operations in the United States, Continental Europe and Australia; (iii) increased sales volume in the Company's interior fabrics operations associated with the acquisitions of Toltec Fabrics, Inc. in June 1995, and the Intek Division of Springs Industries in December 1995, and (iv) increased sales volume in the Company's specialty resources division associated with the acquisition of C-Tec, Inc. in February 1996. These increases were offset somewhat by a weakening of the currencies of certain key markets (particularly the British pound sterling, Dutch guilder and Japanese yen) against the U.S. dollar, the Company's reporting currency. Cost of sales, as a percentage of sales, decreased slightly to 68.2% and 68.6%, respectively, for the three month and nine month periods ended September 29, 1996, when compared to 68.7% and 69.1% for the same periods in 1995. The Company recognized a decrease in manufacturing costs in its operations due to continued implementation of its make-to-order production strategy and "war-on-waste" initiative, which created manufacturing efficiencies as well as a shift to higher margin products. In addition to the improved manufacturing efficiencies, the Company achieved improved pricing in its floorcovering operations. These benefits were somewhat offset by the acquisitions of Toltec, Intek, C-Tec, and the companies comprising the Company's new distribution network, which historically had higher cost of sales than the Company. Selling, general and administrative expenses as a percentage of sales increased slightly to 24.0% and 23.8%, respectively, for the three month and nine month periods ended September 29, 1996, compared to 23.3% and 23.4% for the same periods in 1995. The increase for the three month period was attributable to (i) administrative expenses associated with building an infrastructure to manage Re:Source Americas, (ii) increased marketing and sampling expenses in the floorcovering operations associated with the introduction of new products as the Company moves to implement a mass customization strategy in its European and U.S. operations and (iii) the acquisitions of Toltec Fabrics and Intek which, historically, had higher SG&A ratios than the Company. For the three month and nine month periods ended September 29, 1996, the Company's other expense increased $1.4 million and $3.8 million, respectively, compared to the same periods in 1995, primarily due to an increase in bank debt incurred as a result of the Company's acquisitions, as well as increased interest rates associated with the issuance of the Company's senior subordinated notes in November 11
12 1995 and subsequent redemption of the Company's convertible subordinated debentures. As a result of the aforementioned factors, the Company's net income (after adjustment for preferred dividends) increased 46.2% to $7.1 million and 22.2% to $16.0 million, respectively, for the three month and nine month periods ended September 29, 1996, compared to the same periods in 1995. LIQUIDITY AND CAPITAL RESOURCES. The primary uses of cash during the nine month period ended September 29, 1996 have been (i) $ 46.9 million associated with acquisitions, (ii) $27.8 million for additions to property and equipment in the Company's manufacturing facilities, and (iii) $3.4 million related to various deposits and long-term note receivables. These uses were funded primarily by $49.6 million from long-term financing and $23.8 million from operating activities. Cash provided by operating activities decreased to $23.8 million during the nine month period ended September 29, 1996 from $55.8 million during the corresponding period in the prior year. This decrease was caused primarily by an increase in accounts receivable, subsequent to the Company's sale of $33.9 million of domestic receivables under a securitization program at the end of fiscal year 1995. The Company, as of September 29, 1996, recognized a $ 7.5 million decrease in foreign currency translation adjustment compared to that of December 31, 1995. The decrease was associated primarily with the Company's investments in subsidiaries located in the United Kingdom and Continental Europe. The translation adjustment to shareholders' equity was converted by the guidelines of the Financial Accounting Standards Board's Statement of Financial Accounting Standards No. 52. The Company employs a variety of off-balance sheet financial instruments, including foreign currency swap agreements and foreign currency exchange contracts, to reduce its exposure to adverse fluctuations in interest and foreign currency exchange rates. At September 29, 1996, the Company had approximately $64.3 million (notional amount) of foreign currency hedge contracts outstanding, consisting principally of currency swap contracts to hedge firmly committed Dutch guilder and Japanese yen currency revenues. At September 29, 1996, the Company utilized interest rate swap agreements to effectively convert approximately $73 million of variable rate debt to fixed rate debt. The interest rate swap agreements have maturity dates ranging from nine to twenty-four months. The Company continually monitors its position with, and the credit quality of, the financial institutions which are counterparties to its off-balance sheet financial instruments and does not currently anticipate nonperformance by the counterparties. Management believes that the cash provided by operations and available under long-term loan commitments will provide adequate funds for current commitments and other requirements in the foreseeable future. 12
13 PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS The Company is not aware of any material pending legal proceedings involving it or any of its property. ITEM 2. CHANGES IN THE RIGHTS OF THE COMPANY'S SECURITY HOLDERS None ITEM 3. DEFAULTS BY THE COMPANY ON ITS SENIOR SECURITIES None ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None ITEM 5. OTHER INFORMATION None ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) The following exhibits are filed with this report: Exhibit Number Description of Exhibit ------- ---------------------- [S] [C] 3.1 Articles of Incorporation (composite as of September 8, 1988) (included as Exhibit 3.1 to the Company's annual report on Form 10-K for the year ended January 3, 1993 previously filed with the Commission and incorporated herein by reference) and Articles of Amendment (Series A Preferred Stock Designation), dated June 17, 1993 (included as Exhibit 4.1 to the Company's current report on Form 8-K, filed with the Commission on July 7, 1993 and incorporated herein by reference). 3.2 Bylaws, as amended (included as Exhibit 3.2 to the Company's quarterly report on Form 10-Q for the quarter ended April 1, 1990, previously filed with the Commission and incorporated herein by reference). 4.1 See Exhibits 3.1 and 3.2 for provisions in the Company's Articles of Incorporation, as amended, and Bylaws 13
14 defining the rights of holders of Common Stock of the Company. 4.2 Indenture governing the Company's 9.5% Senior Subordinated Notes due 2005, dated as of November 15, 1995, among the Company, certain U.S. subsidiaries of the Company, as Guarantors, and First Union National Bank of Georgia, as Trustee (included as Exhibit 4.1 to the Company's registration statement on Form S-4, File No. 33-65201, previously filed with the Commission and incorporated herein by reference). 4.3 Registration Rights Agreement dated as of November 21, 1995, among the Company, certain subsidiaries of the Company as Guarantors and the Initial Purchasers of the Company's Notes (included as Exhibit 4.3 to the Company's registration statement on Form S-4, File No. 33-65201, previously filed with the Commission and incorporated herein by reference). 4.4 Form of Exchange Note (included as part of Exhibit 4.2). 10.1 Fourth Amendment to Amended and Restated Credit Agreement, dated as of July 30, 1996, among the Company (and certain direct and indirect subsidiaries), SunTrust Bank and The First National Bank of Chicago. 10.2 Sixth Amendment to Revolving Credit Loan Agreement, dated as of August 5, 1996, between Interface Flooring Systems, Inc. and SunTrust Bank. 10.3 Employment Agreement of Raymond S. Willoch, dated as of August 1, 1996. 10.4 Agreement (Change in Control) of Raymond S. Willoch, dated as of August 1, 1996. 27.1 Financial Data Schedule (for SEC use only). (b) No reports on Form 8-K were filed during the quarter ended September 29, 1996. 14
15 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: November 11, 1996 By:/s/ Daniel T. Hendrix ------------------------------- Daniel T. Hendrix Senior Vice President (Principal Financial Officer) 15
16 EXHIBIT INDEX <TABLE> <CAPTION> EXHIBIT DESCRIPTION OF EXHIBIT SEQUENTIAL NUMBER PAGE NO. <S> <C> 3.1 Articles of Incorporation (composite as of September 8, 1988) (included as Exhibit 3.1 to the Company's annual report on Form 10-K for the year ended January 3, 1993 previously filed with the Commission and incorporated herein by reference) and Articles of Amendment (Series A Preferred Stock Designation), dated June 17, 1993 (included as Exhibit 4.1 to the Company's current report on Form 8-K, filed with the Commission on July 7, 1993 and incorporated herein by reference). 3.2 Bylaws, as amended (included as Exhibit 3.2 to the Company's quarterly report on Form 10-Q for the quarter ended April 1, 1990, previously filed with the Commission and incorporated herein by reference). 4.1 See Exhibits 3.1 and 3.2 for provisions in the Company's Articles of Incorporation, as amended, and Bylaws defining the rights of holders of Common Stock of the Company. 4.2 Indenture governing the Company's 9.5% Senior Subordinated Notes due 2005, dated as of November 15, 1995, among the Company, certain U.S. subsidiaries of the Company, as Guarantors, and First Union National Bank of Georgia, as Trustee (included as Exhibit 4.1 to the Company's registration statement on Form S-4, File No. 33-65201, previously filed with the Commission and incorporated herein by reference). 4.3 Registration Rights Agreement dated as of November 21, 1995, among the Company, certain subsidiaries of the Company as Guarantors and the Initial Purchasers of the Company's Notes (included as Exhibit 4.3 to the Company's registration statement on Form S-4, File No. 33-65201, previously filed with the Commission and incorporated herein by reference). 4.4 Form of Exchange Note (included as part of Exhibit 4.2). 10.1 Fourth Amendment to Amended and Restated Credit Agreement, dated as of July 30, 1996, among the Company (and certain direct and indirect subsidiaries), SunTrust Bank and The First National Bank of Chicago. 10.2 Sixth Amendment to Revolving Credit Loan Agreement, dated as of August 5, 1996, between Interface Flooring Systems, Inc. and SunTrust Bank. 10.3 Employment Agreement of Raymond S. Willoch, dated as of August 1, 1996. </TABLE> 16
17 <TABLE> <S> <C> 10.4 Agreement (Change in Control) of Raymond S. Willoch, dated as of August 1, 1996. 27.1 Financial Data Schedule (for SEC use only) </TABLE> 17