ATLANTA — October 7, 2014 — Interface, Inc. a worldwide carpet tile company and global leader in sustainability, today announced the consummation of an amendment of its existing syndicated facility agreement, effective October 3, 2014.  The amendment expands the aggregate borrowing availability for revolving loans under the credit facility from $200 million to $250 million, and provides new borrowing availability for a $200 million Term Loan A which may be used to repurchase or redeem, before December 31, 2014, the Company’s existing 7.625% Senior Notes due 2018 (the “Notes”).  The amendment also extends the maturity of the facility until October 3, 2019.  All other terms of the facility, including covenants, interest rates and fees, remain substantially unchanged from the existing facility agreement.

Planned Bond Redemption
The Company also announced its intention to redeem the currently outstanding $247.5 million aggregate principal amount of the Notes.  While the Company has not yet commenced the redemption, it expects to do so shortly and complete the redemption before the end of 2014.  The planned redemption is expected to require $266 million to $268 million, depending on the date of redemption, and to be funded through a combination of Term Loan A and revolving borrowings under the expanded credit facility, and cash on hand. It is estimated that the redemption would result in $12 million to $13 million in annualized interest savings, based on current interest rates.

Share Repurchase Plan
In furtherance of its capital allocation strategy, the Company also announced that its Board of Directors has authorized a program to repurchase up to 500,000 shares of common stock per fiscal year, commencing with the 2014 fiscal year.  It is anticipated that the share repurchase program will be funded through the Company’s cash on hand.  Purchases made pursuant to the program will be made in either the open market or in privately negotiated transactions from time to time as permitted by federal securities laws and other legal requirements. The timing, manner, price and amount of any repurchases will be determined by the Company in its discretion and will be subject to economic and market conditions, stock price, applicable legal requirements and other factors. The program does not require the Company to repurchase any specific number or amount of shares and may be amended, suspended or discontinued at any time in the Company’s discretion and without notice.

Preliminary Third Quarter Results
The Company also announced preliminary results for the third quarter ended September 28, 2014.  Based on preliminary data, the Company expects third quarter revenue to be in the range of $250 million to $255 million, compared with $255 million in the third quarter last year.  In addition, the previously announced pre-tax restructuring charge in the third quarter of 2014 has been increased to an aggregate amount of $12.5 million.  The charge is now comprised of approximately $9.5 million of cash expenditures, primarily for severance expenses, and approximately $3.0 million of non-cash charges for the write-down of the carrying value of impaired assets.  This restructuring plan is anticipated to be substantially completed by the end of 2014, and is expected to yield annual cost savings of approximately $14 million beginning in fiscal year 2015.  Excluding the restructuring and asset impairment charge, third quarter net income is expected to be between $8 million and $9 million, or $0.12 to $0.14 per diluted share.  In the third quarter last year, net income was $15.0 million, or $0.23 per diluted share.  Including the restructuring and asset impairment charge, the third quarter of 2014 bottom line result is expected to be between a net loss of $0.7 million and net income of $0.3 million, or $(0.01) to $0.01 per diluted share.  Orders received during the third quarter of 2014 were $262 million, compared with $255 million in the third quarter last year, and backlog at the end of the third quarter was up $33 million (or 33%) compared with the beginning of the year.

“We’re pleased with the amendment to our syndicated credit agreement, which gives us the opportunity to refinance our existing debt at a substantially lower interest rate,” said Daniel T. Hendrix, Chairman and Chief Executive Officer of the Company.  “These arrangements also will allow us to improve our capital structure by repurchasing shares of our common stock and thereby enhancing our earnings per share.”

Mr. Hendrix continued, “Unfortunately, our preliminary results in the third quarter have not shaped up to our expectations, starting with lighter than expected revenues primarily due to customer deferrals of order delivery dates, disruptions in yarn supply and lower order intake levels at the beginning of the quarter.  These factors brought about lower manufacturing throughput and increased margin pressure, prompting us to look for deeper cost cutting as part of our restructuring efforts and resulting in a charge that is larger than our previously announced estimate.  Most of the restructuring activities are within the SG&A line item, and have a payback period of less than a year, so we are currently targeting 2015 SG&A expenses to be in the neighborhood of $250 million.  Our restructuring and refinancing plans, along with our healthy backlog, should put us in a much improved operating and capital structure going forward.”

Third Quarter Conference Call
Interface intends to release its definitive third quarter 2014 results on Wednesday, October 22, 2014, after the close of the market.  Interface will host a conference call the next day, Thursday, October 23, 2014, that will be simultaneously broadcast live over the Internet.  Detailed information regarding the third quarter conference call will be announced by the Company at a later date.

Posted October 7, 2014

Source: Interface
 

MEMPHIS — October 1, 2014 — The National Cotton Council appreciates the U.S. government’s successful efforts to conclude the U.S.-Brazil trade dispute in the World Trade Organization through negotiation, thereby avoiding retaliation.

NCC Chairman Wally Darneille reiterated that the U.S. cotton industry has undertaken extensive efforts to resolve this case. He said the NCC offered comprehensive reform of cotton policy as part of the new farm law.

“The new U.S. farm bill includes several necessary changes to cotton policy and the GSM export credit program,” Darneille said. “When compared to previous programs, cotton policy is more market-oriented with the primary safety net conveyed through insurance products that must be purchased by the producer.”

“Officials from the Office of the U.S. Trade Representative and the Department of Agriculture are to be commended for reaching a comprehensive agreement that brings the dispute to a close,” Darneille stated. “With the conclusion of the case, the U.S. cotton industry can bring a renewed focus to the challenges that lay in front of us.”

Posted October 1, 2014

Source: National Cotton Council
 

CHATTANOOGA, Tenn. — October 1, 2014 — The Dixie Group, Inc. today announced that it has retained the services of former President and Chief Operating Officer of Burtco Enterprises Robert E. Kokoszka to assist Dixie in the integration process of the recently acquired assets of Burtco Enterprises, Inc., a maker of custom-crafted flooring designed for the hospitality industry.

Kokoszka earned a bachelor of science degree in engineering from Widener University in Chester, Pennsylvania, in 1965, and continued with graduate studies in engineering at Penn State University. His career began in 1958 at Aldon Industries in product development and manufacturing capacities. He has been an officer and board member of Regent Mills and Dorsett Carpet Mills. In 1990, he joined Burton Brown as a partner at Burtco Enterprises where he pioneered the utilization of computerized yarn placement (CYP) technologies for manufacturing patterned soft-surface floorcovering. Bob retired from Burtco in 2012.

Posted October 1, 2014

Source: The Dixie Group

WASHINGTON — October 1, 2014 — Today, U.S. Trade Representative Michael Froman and Secretary of Agriculture Tom Vilsack announced that the United States and Brazil have reached agreement to settle the longstanding Cotton dispute in the World Trade Organization (WTO). Under the terms of the agreement, Brazil will terminate the Cotton case, giving up its rights to countermeasures against U.S. trade or any further proceedings in this dispute. Brazil has also agreed not to bring new WTO actions against U.S. cotton support programs while the current U.S. Farm Bill is in force or against agricultural export credit guarantees under the GSM-102 program as long as the program is operated consistent with the agreed terms. 
 
“I am pleased that the United States and Brazil have found a permanent resolution to the Cotton dispute,” said Ambassador Froman. “Today’s agreement brings to a close a matter which put hundreds of millions of dollars in U.S. exports at risk. The United States and Brazil look forward to building on this significant progress in our bilateral economic relationship.”
 
“Through this negotiated solution, the United States and Brazil can finally put this dispute behind us,” said Secretary Vilsack. “Without this agreement, American businesses, including agricultural businesses and producers, could have faced countermeasures in the way of increased tariffs totaling hundreds of millions of dollars every year. This removes that threat and ensures American cotton farmers will have effective risk management tools.”
 
Background
The Cotton dispute is a decade-long dispute brought by Brazil against the United States at the WTO.  In 2005 and again in 2008, the WTO found that certain U.S. agriculture programs (domestic support to cotton under the marketing loan and countercyclical payment programs, and export credit guarantees under the GSM-102 program) were inconsistent with the United States’ WTO commitments.  In August 2009, WTO arbitrators provided the level of countermeasures that Brazil could impose against U.S. trade.
 
In June 2010, the United States and Brazil signed a Framework Agreement to avert the imposition of countermeasures by Brazil against the United States that at the time would have affected approximately $800 million of U.S. trade, including U.S. intellectual property rights.  The Framework provided specific interim steps and a process for quarterly discussions on the programs at issue.  The United States also made monthly payments to the Brazil Cotton Institute for technical assistance and capacity building activities for the sector under a related Memorandum of Understanding (MOU).  During discussions under the Framework over the past four years, Brazil and the United States worked on the elements of a settlement to the dispute, including changes to the operation of the GSM-102 program and changes to cotton domestic support programs.  The Framework expired on February 7, 2014, when the 2014 Farm Bill was enacted.  The Farm Bill included significant changes to U.S. cotton domestic support programs, along with changes to the GSM-102 program.
 
Over the last several months, the United States and Brazil have held intensified discussions to resolve the dispute.  Today, the two governments have reached an agreement that provides for formal termination of the Cotton case at the WTO Dispute Settlement Body within 21 days.  Brazil will also relinquish all rights to countermeasures against U.S. trade.  Other terms and conditions are contained in a MOU that includes new rules governing the fees and tenor for guarantees under the GSM-102 Program, a final transfer of funds to the Brazil Cotton Institute, and limitations on new disputes against U.S. cotton domestic support programs and the GSM-102 program. 
 
The 2014 MOU provides for additional support for the technical assistance and capacity building activities begun under the 2010 Memorandum of Understanding.  The United States will make a one-time final contribution of $300 million to the Brazil Cotton Institute, or IBA.  The 2014 MOU also provides for additional uses for the funds, such as research in conjunction with U.S. institutions.

Posted October 1, 2014

Source: USTR