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This presentation contains forward-looking statements, including, in particular, statements about Interface’s
plans, strategies and prospects. These are based on the Company’s current assumptions, expectations and
projections about future events.
plans, strategies and prospects. These are based on the Company’s current assumptions, expectations and
projections about future events.
Although Interface believes that the expectations reflected in these forward-looking statements are
reasonable, the Company can give no assurance that these expectations will prove to be correct or that
savings or other benefits anticipated in the forward-looking statements will be achieved. Important factors,
some of which may be beyond the Company’s control, that could cause actual results to differ materially from
management’s expectations are discussed under the heading “Risk Factors” included in Item 1A of the
Company’s most recent Annual Report on Form 10-K, filed with the Securities and Exchange Commission,
which discussion is hereby incorporated by reference. Forward-looking statements speak only as of the date
made. The Company assumes no responsibility to update or revise forward-looking statements and cautions
listeners and conference attendees not to place undue reliance on any such statements.
reasonable, the Company can give no assurance that these expectations will prove to be correct or that
savings or other benefits anticipated in the forward-looking statements will be achieved. Important factors,
some of which may be beyond the Company’s control, that could cause actual results to differ materially from
management’s expectations are discussed under the heading “Risk Factors” included in Item 1A of the
Company’s most recent Annual Report on Form 10-K, filed with the Securities and Exchange Commission,
which discussion is hereby incorporated by reference. Forward-looking statements speak only as of the date
made. The Company assumes no responsibility to update or revise forward-looking statements and cautions
listeners and conference attendees not to place undue reliance on any such statements.
Forward Looking Statements
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Daniel Hendrix
§ President and Chief Executive Officer
Patrick Lynch
§ Senior Vice President and Chief Financial Officer
Presenters
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§ Interface is leading the secular shift to modular carpet as it moves from a niche to a
category with the leading global market share.
category with the leading global market share.
§ Interface is the largest global manufacturer of modular carpet with a presence on four
continents (United States, England, Holland, Ireland, Thailand, China, Australia).
continents (United States, England, Holland, Ireland, Thailand, China, Australia).
§ Interface has established diversified end markets including emerging markets, non-
office commercial markets, and consumer representing nearly 55% of the overall
business.
office commercial markets, and consumer representing nearly 55% of the overall
business.
§ Interface is creating a consumer brand (FLOR) as modular carpet is moving from a
concept to awareness for the home.
concept to awareness for the home.
§ Interface’s global sales and marketing capabilities have created significant growth in
emerging markets which will experience growth faster than developed countries.
emerging markets which will experience growth faster than developed countries.
§ Interface is the recognized thought leader in sustainability - the marketplace is
rewarding our leading position.
rewarding our leading position.
Investment Highlights
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Interface Brands - Most Recognized in the Industry
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Leadership Position in Sustainability
Global Make-to-Order Manufacturing and Local Distribution
Rapid Innovation and Designs
Invest in the Growth
of Emerging Markets
of Emerging Markets
Grow a
Consumer Brand
Diversify
End Use
Markets
Maintain Dominant
Share in the
Share in the
Office Market
§ Establish our position as
the leader in modular
carpet for the home
the leader in modular
carpet for the home
§ Drive sales through direct
channels
channels
§ Potential roll out of FLOR-
branded store network in
the U.S.
branded store network in
the U.S.
§ Drive growth of carpet tile
market in China with local
manufacturing presence
market in China with local
manufacturing presence
§ Invest in growth in Latin
America, Eastern Europe,
Middle East, Africa and
Indo-China
America, Eastern Europe,
Middle East, Africa and
Indo-China
§ Gain share in commercial
non-office segments
non-office segments
§ Establish “main street”
commercial presence in
the U.S. and Australia
commercial presence in
the U.S. and Australia
§ Pursue the airline
transportation segment in
the U.S.
transportation segment in
the U.S.
§ Capture opportunity as
the Office market
rebounds
the Office market
rebounds
§ Gain share in European
carpet tile market
carpet tile market
Lead the Secular Shift of Modular Carpet
Reduce the Cyclical Nature of our Business
Customer Intimacy
Interface Strategy: Be the Global Category Leader for Modular Carpet
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Secular Shift
1. Creative DESIGN freedom
2. NO glue, NO pad
3. LOWER COST to change
4. Produces LESS WASTE
5. FASTER and more PROFITABLE
INSTALLATION for contractors
INSTALLATION for contractors
6. Easier to RECONFIGURE and
MAINTAIN
MAINTAIN
7. Easily RECYCLED and
REPURPOSED
REPURPOSED
2009 Floor Focus U.S. Top 250 Design Survey: Hot Products
Benefits of Modular
Source: Floor Focus
Modular Carpet is Moving from a Niche to a Category for
Commercial Flooring
Commercial Flooring
![](https://capedge.com/proxy/8-K/0000715787-10-000010/exh99_154.jpg)
Easy
Repairs
![](https://capedge.com/proxy/8-K/0000715787-10-000010/exh99_155.jpg)
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Long-Term Strategy Has Been to Focus on Organic Growth of
Modular Carpet
Modular Carpet
Sales by Business Type
Divested
Raised Access
Flooring
Raised Access
Flooring
Divested
European
Fabrics
European
Fabrics
Divested
N. American
Fabrics
Divested
European
Broadloom
Divested
Installation &
Maintenance
Installation &
Maintenance
Divested
Vinyl
Matting
Divested $500M in Revenue Base and
Replaced with Organic Modular Sales Growth
Secular Shift
40%
92%
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Functionality and Design Create a Secular Shift in Modular
Carpet From a Niche to a Category
Carpet From a Niche to a Category
§ Preferred interior design element
§ “Becoming the Flooring of Choice”
§ Random products merge design with function
§ Sustainability drives recycled and repurposed
products
products
§ Stressed the functionality of
modular carpet
modular carpet
§ Exploited the benefits of
modular vs. broadloom
modular vs. broadloom
§ Limited application and design
§ Open office plans emerge
Pioneering Stage
Functionality Stage
Secular Shift
2009 Total U.S. Specified
Commercial Carpet Market = $2.3B
§ Celebrating the square
§ Sustainability introduced
§ Pattern by tile
Liberation of Design
2020P Total U.S. Specified
Commercial Carpet Market = $3.3B
3%
CAGR
CAGR
2009
38% Penetration
2020P
65% Penetration
Carpet Tile Share of U.S. Commercial Carpet Market
($ in millions)
What if modular
carpet reached
65% market share
of the commercial
market by 2020?
carpet reached
65% market share
of the commercial
market by 2020?
2004
26% Penetration
($ in millions)
Source: Invista, Floor Focus, Carpet and Rug Institute, Catalina Research Inc., U.S. Flooring Forecast and management estimates
Secular Shift
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Carpet Tile Penetration of European Contract Soft Flooring Market
European Market Opportunity
(millions of square meters)
(Billions of square meters)
Significant
Opportunity
65%
Penetration
8%
44%
24%
42%
24%
30%
23%
Carpet Tile
Broadloom and Other Soft Flooring
Source: BMW Associates and management estimates
Secular Shift
23%
Total
Europe
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Carpet Tile Penetration of the Asia-Pacific Contract Soft Flooring Market
Asia-Pacific Market Opportunity
(millions of square meters)
28%
($ in millions)
25%
Carpet Tile
Broadloom and Other Soft Flooring
Source: BMW Associates and management estimates
Secular Shift
65%
Penetration
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Interface has a Significant Share of the Global Carpet Tile Market
Secular Shift
Americas
Europe & MEAI
Australia/NZ
Source: BMW Associates and management estimates
§ Interface has significant market presence
in key major markets
in key major markets
§ Interface has manufacturing, sales &
marketing support on four continents
marketing support on four continents
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Segmented Market Approach
Diversified End Use Markets
Growth
Platforms
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Diversify End Use Markets
Current Portfolio
Growth
Platforms
Target Portfolio
Mature Office Market
Non-Office Commercial Segments
Emerging Markets
Consumer
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Capture the Rebound in the Corporate Office Segment
Growth
Platforms
Modular Mature Corporate Office Sales
Excludes Latin America, Eastern Europe, Russia, Middle East, Africa, India and NE Asia
23%
28%
18%
5%
U.S. Office Construction Starts
§ U.S. office construction is expected to
remain flat in 2010 and then rebound in
late 2011, returning to 2007 levels by the
end of 2012
remain flat in 2010 and then rebound in
late 2011, returning to 2007 levels by the
end of 2012
($ in Billions)
Source: McGraw-Hill
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Strong Growth from Non-Corporate Segments
Modular Non-Office Commercial Sales
15%
14%
4%
10%
Non-Office Commercial Sales by Segment
Growth
Platforms
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New Segment Opportunities - Main Street Commercial
§ Access to secondary Contract and Main
Street commercial markets in smaller rural
and suburban areas
Street commercial markets in smaller rural
and suburban areas
§ Broadened reach in primary markets
beyond specified market
beyond specified market
§ Exploring several strategies to expand
reach and distribution
reach and distribution
Opportunity
Main Street Commercial Market
U.S. Commercial Carpet Market
($ in billions)
Main Street Commercial
Contract Commercial
$3.0B
Growth
Platforms
![](https://capedge.com/proxy/8-K/0000715787-10-000010/exh99_165.jpg)
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New Segment Opportunities - Transportation
§ Single tile replace-ability
§ Longer Life construction
§ Highest standards of Smoke Toxicity with Nylon
§ Lighter weight than current carpet options
§ Quick replacement - no “out of service” time
required
required
§ Recycled after use by manufacturer
Benefits of Modular for Transportation
$200M
Airline Opportunity
Southwest Airlines Green Plane
§ Pilot project serving as a test for new
environmentally responsible materials
environmentally responsible materials
§ InterfaceFLOR, in collaboration with Boeing,
designed a carpet tile to meet Federal Aviation
requirements and Southwest’s environmental
expectations
designed a carpet tile to meet Federal Aviation
requirements and Southwest’s environmental
expectations
§ First ever modular carpet product used for the
airline industry
airline industry
Growth
Platforms
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Invest in Emerging Markets
Growth
Platforms
Interface Target Emerging Markets
§ Central America
§ South America
§ Eastern Europe
§ Russia
§ Middle East
§ Africa
§ India
§ China
§ Vietnam
§ Cambodia
§ Singapore
§ Indonesia
§ Philippines
Emerging Market Sales
38%
10%
31%
31%
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Invest in Emerging Markets: Establishing Local Manufacturing
in High Growth China Market
in High Growth China Market
Growth
Platforms
InterfaceFLOR Taicang Facility
§ Targeting LEED Silver certification for Office and
Customer spaces
Customer spaces
§ Expect to begin production by third quarter 2010
§ Greater access to Local customers -
reduced exposure to Multi-National
Corporations
reduced exposure to Multi-National
Corporations
§ Improved service speed
§ “Made in China”
§ Leading with our strengths
- Design Flexibility & Responsiveness
- Local Sustainability Position
§ Non-office segment opportunities in
Institutional and Hospitality
Institutional and Hospitality
§ Future opportunity to capitalize on
urbanization of population
urbanization of population
Benefits of China Manufacturing Plant
![](https://capedge.com/proxy/8-K/0000715787-10-000010/exh99_168.jpg)
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FLOR is…
§ A new way to think about floor covering
§ A new kind of customer experience
§ A new way to design for your life
§ A new standard in sustainable residential
design
design
Grow a Consumer Brand: Modular Goes in the Home
Growth
Platforms
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2010 catalog, online and in-store experiences bring the proposition to life for consumers
Grow a Consumer Brand: FLOR Connects Directly with
Consumers
Consumers
Growth
Platforms
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FLOR Sales by Channel
Grow a Consumer Brand: FLOR is Creating a Category:
“Modular Carpet for the Home”
“Modular Carpet for the Home”
% Direct Sales
Percent of Total
Percent of Total
75%
77%
88%
90% of FLOR
sales are
generated Online
and via Catalog
and via Catalog
90%
Growth
Platforms
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Grow a Consumer Brand: FLOR Store Opened
§ First store opened in Chicago in June 2009
§ Opportunity to interact with the customer about
the modular concept, design and sustainability
the modular concept, design and sustainability
§ 8x10 grid allowing visitors to bring design ideas
to life
to life
§ Exceeded budget in 2009
§ Exploring opportunities for future stores
FLOR Store Highlights
Growth
Platforms
![](https://capedge.com/proxy/8-K/0000715787-10-000010/exh99_172.jpg)
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Global Manufacturing Capabilities and Local Distribution
City of
Industry,
California
Bangkok,
Thailand
Thailand
Picton,
Australia
Australia
Current Manufacturing Facility
LaGrange,
Georgia
Georgia
58% of Sales
51% of Production
30% of Sales
34% of Production
12% of Sales
15% of Production
Note: Figures represent FYE 2009
Value Drivers
Shanghai, China
Americas
Europe & MEAI
Asia-Pacific
Future Manufacturing Facility
Uruguay
(commissioned)
India
![](https://capedge.com/proxy/8-K/0000715787-10-000010/exh99_173.jpg)
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1. Increases speed to market
2. Promotes innovation
3. Offers unique custom product capabilities
4. Supports a constant flow of new products
5. Offers sales force the opportunity to visit the
customer with new products
customer with new products
6. Decreases lead time to customers
7. Increases inventory turns
The Made-to-Order Advantage
Interface Modular Percentage Make-to-Order
Interface is the ONLY company with a “make-to-order” approach to the market
75% TARGET Level
Note: Figures represent FYE 2009
Value Drivers
Strong Competitive Advantage Through Make-to-Order Philosophy
![](https://capedge.com/proxy/8-K/0000715787-10-000010/exh99_174.jpg)
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Contract Magazine 2009 Brand Report
Value Drivers
Top Modular Carpet Brands
1. InterfaceFLOR
2. Shaw Contract Group
3. Lees Carpets
4. Milliken
5. Bentley Prince Street
5. Tandus
7. Patcraft Designweave
8. C&A
8. Mannington
10. J&J/Invision
Top-ranked Modular Carpet brands for 2009
Source: Contract Magazine 10th Annual Brand Report
Market Leader in Product Design and Fashion
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Corporate Office
Value Drivers
![](https://capedge.com/proxy/8-K/0000715787-10-000010/exh99_176.jpg)
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Retail
Value Drivers
![](https://capedge.com/proxy/8-K/0000715787-10-000010/exh99_177.jpg)
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Colleges & Universities
Value Drivers
![](https://capedge.com/proxy/8-K/0000715787-10-000010/exh99_178.jpg)
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K-12 Education
Value Drivers
![](https://capedge.com/proxy/8-K/0000715787-10-000010/exh99_179.jpg)
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Healthcare
Value Drivers
![](https://capedge.com/proxy/8-K/0000715787-10-000010/exh99_180.jpg)
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Government & Public Spaces
Value Drivers
![](https://capedge.com/proxy/8-K/0000715787-10-000010/exh99_181.jpg)
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Hospitality
Value Drivers
![](https://capedge.com/proxy/8-K/0000715787-10-000010/exh99_182.jpg)
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Interface is the Recognized Leader in Sustainability
GlobeScan Corporate Sustainability Leaders 2009
Floor Focus Green Leaders 2009
Unprompted, Combined Mentions 2009
Value Drivers
Source: 2009 Floor Focus Top 250 Design Survey (U.S. Market)
Interface received
“Green Kudos”
for Sustainable
Products with good
Design options and
Closed Loop
Processes
Products with good
Design options and
Closed Loop
Processes
Source: The Sustainability Survey from GlobeScan
![](https://capedge.com/proxy/8-K/0000715787-10-000010/exh99_183.jpg)
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Sustainability Inspires Innovation
Value Drivers
§ i2 Design Platform - biomimicry inspired
random carpet tile patent
random carpet tile patent
§ TacTiles - - no glue installation
§ Cool Blue - 100% recycled backing process
§ Cool Carpet - climate neutral product
§ ReEntry 2.0 - carpet reclamation and
recycling program
recycling program
§ Convert - - post-consumer recycled content
product platform
product platform
§ Southwest Green Plane - pilot project
testing new environmentally responsible
materials for airplanes
testing new environmentally responsible
materials for airplanes
Sustainability-Focused Innovation
Cool Blue™
Greenbuild 2009
i2 Products
![](https://capedge.com/proxy/8-K/0000715787-10-000010/exh99_184.jpg)
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ReEntry 2.0 Brings Convert Product Platform
Value Drivers
§ Reclaiming both Interface and competitor carpet tile
and broadloom, sorting & separating
and broadloom, sorting & separating
§ Access to recycled N6 and N6,6 face fiber, boosting
post consumer recycled content in our products
post consumer recycled content in our products
§ Diverted 200 million pounds of materials from
landfills from 1995-2009
landfills from 1995-2009
ReEntry - - Cumulative Carpet Diverted from Landfill
200m pounds of
carpet diverted
(millions of lbs)
Benefits of TacTiles
§ Patented No Glue / No VOCs installation system
§ 25% of current orders include TacTiles
§ High margin product
§ Leading to other new innovations - Moisture Guard
2.0 moisture vapor barrier
2.0 moisture vapor barrier
§ Integrating TacTiles into Design - designing
installation patterns that drive TacTile demand
installation patterns that drive TacTile demand
![](https://capedge.com/proxy/8-K/0000715787-10-000010/exh99_185.jpg)
Interface, Inc. Financials
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Consolidated Financial Results
Net Sales and Adjusted Operating Income
(Continuing Operations)*
* See the Appendix for a reconciliation of Adjusted Operating Income from Continuing Operations
($ in millions)
![](https://capedge.com/proxy/8-K/0000715787-10-000010/exh99_187.jpg)
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Quarterly Results
Q4 Comparison*
* See the Appendix for a reconciliation of adjusted figures
($ in millions)
![](https://capedge.com/proxy/8-K/0000715787-10-000010/exh99_188.jpg)
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Interface Financial Results from Continuing Operations
Net Sales
Gross Profit
($ in millions)
($ in millions)
![](https://capedge.com/proxy/8-K/0000715787-10-000010/exh99_189.jpg)
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Interface Financial Results from Continuing Operations
SG&A Expense
Adjusted Operating Income*
($ in millions)
($ in millions)
(1) Reported Operating Income of $57.1M in 2009 excludes Income from Litigation Settlements of $5.9M
* See the Appendix for a reconciliation of Adjusted Operating Income
Reported Operating Income
Restructuring Charges
Loss on Disposal ($1.9m)
Operating Income % of Net Sales
Goodwill Impairment
$113.8
$64.7
(1)
![](https://capedge.com/proxy/8-K/0000715787-10-000010/exh99_190.jpg)
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Interface Financial Results from Continuing Operations
Adjusted Diluted Earnings Per Share (Continuing Operations)*
* See the Appendix for a reconciliation of Adjusted Diluted Earnings Per Share from Continuing Operations
![](https://capedge.com/proxy/8-K/0000715787-10-000010/exh99_191.jpg)
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Key Leverage Statistics
Ending Cash Balance
Net Debt*
* See the Appendix for a reconciliation of Net Debt and Adjusted EBITDA
![](https://capedge.com/proxy/8-K/0000715787-10-000010/exh99_192.jpg)
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Appendix: Reconciliation of Non-GAAP Financial Measures