ITEM 2.05 COSTS ASSOCIATED WITH EXIT OR DISPOSAL ACTIVITIES.
On September 8, 2021, Interface, Inc. ("the Company") committed to a new
restructuring plan that continues to focus on efforts to improve efficiencies
and decrease costs across its worldwide operations. The plan involves a
reduction of approximately 188 employees and the closure of the Company's
manufacturing facility in Thailand at the end of the first quarter of 2022. As a
result of this plan, the Company expects to incur pre-tax restructuring charges
between the third quarter of 2021 and the fourth quarter of 2022 of
approximately $5.4 million. The charges are comprised of severance expenses
($3.5 million), retention bonuses ($0.5 million), and asset impairments ($1.4
million). The approximately $4.9 million of severance and asset impairment
charges will be recognized in the third quarter of 2021. The approximately $0.5
million of retention costs will be recognized through the end of fiscal year
2022 as earned over the requisite service periods.
The restructuring plan is expected to result in future cash expenditures of
approximately $4.0 million for payment of the employee severance and employee
retention bonuses, as described above. The Company expects to complete the
restructuring plan in fiscal year 2022 and expects the plan to yield annualized
savings of approximately $1.7 million. A portion of the annualized savings is
expected to be realized on the income statement in fiscal year 2022, with the
remaining portion of the annualized savings expected to be realized in fiscal
year 2023.
ITEM 2.06 MATERIAL IMPAIRMENTS.
In connection with the above-described restructuring plan, which the Company
committed to on September 8, 2021, the Company expects to record a noncash
charge of $1.4 million in the third quarter of 2021 for the impairment of assets
that include the write-down of certain manufacturing assets which are obsolete,
underutilized and impaired.
__________________________________________
This Current Report on Form 8-K contains statements which constitute
"forward-looking statements" within the meaning of the Securities Act of 1933,
as amended, and the Securities Exchange Act of 1934, as amended by the Private
Securities Litigation Reform Act of 1995. Those forward-looking statements
include statements regarding the anticipated future charges, expenditures and
savings relating to the restructuring plan described above. In particular, all
of the anticipated charges, expenditures, savings and time frame relating to the
restructuring plan described above are estimates and are therefore subject to
change.
The forward-looking statements set forth above involve a number of risks and
uncertainties that could cause actual results to differ materially from any such
statement, including risks and uncertainties associated with economic conditions
in the commercial interiors industry as well as the risks and uncertainties
discussed under the heading "Risk Factors" included in Item 1A of the Company's
Annual Report on Form 10-K for the fiscal year ended January 3, 2021, which
discussion is incorporated herein by this reference. Any forward-looking
statements are made pursuant to the Private Securities Litigation Reform Act of
1995 and, as such, speak only as of the date made. The Company assumes no
responsibility to update or revise forward-looking statements made in this
report except as required by law and cautions readers not to place undue
reliance on any such forward-looking statements.
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Item 9.01 Financial Statements and Exhibits
(d) Exhibits.
Exhibit No. Description
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
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