"In order to remain competitive in the demanding commercial marketplace, we must become even more efficient and responsive for our customers and market," said Mac Bridger, Tandus CEO. "To achieve this, we have made the strategic decision to combine our broadloom production facilities. Our existing plant in Truro is the ideal Tandus facility to absorb the equipment and production requirements of our Monterey brand without plant expansion."

Monterey, C&A and Crossley, the three product brands that comprise Tandus, will all continue to be marketed as separate and distinct brands, and the company will maintain a product design center in California.

"It is crucial that we maintain the valuable reputations associated with our three brands," Bridger explained. "Monterey is a recognized design leader identified with high-style, high-quality products, and this will not change as we will have dedicated personnel in Product Development and Marketing to concentrate exclusively on the Monterey brand."

All Tandus brands will continue to be sold in the U.S. through its three segmented selling organizations - specifically, Tandus Design, Tandus Corporate and Tandus Specialized Markets, which consists of the Education, Healthcare and Government sectors.

To service the North American market, the company maintains facilities in Dalton dedicated to producing structured-back 6-foot roll and modular tiles. Its Truro facility will produce tufted and woven broadloom carpets. In the European market, the company has a facility in the United Kingdom to manufacture structure-backed product. Tandus is currently building a facility in China to produce carpet tile for the Asian market.

A comprehensive plan has been developed to service customers on the West Coast with timely deliveries.

"These steps are right for the future but difficult for the present. Our associates in Santa Ana have been a dedicated and valued part of this company and we regret having to take this action," said Bridger. "We plan to relocate a small number of staff to the consolidated manufacturing facility in Truro or to our Dalton headquarters."

Gordon Laing will remain CEO and president of Crossley, and will oversee the transition of equipment and operations to the Truro facility. Ralph Grogan will continue to lead the Monterey brand as its president and will remain in Santa Ana through the transition after which he will relocate to Dalton.

The Santa Ana closure will impact 150 employees. The company said it will work with appropriate state agencies to identify employment opportunities for those affected. All will receive a severance package provided that they work through the transition until they are released by the company.

A majority of the production equipment from Santa Ana will be moved to Truro and, as a result, approximately 150 jobs will be added there. This move will consolidate all broadloom carpet production into single facility. The existing 400,000-square-foot operation includes a fully integrated mill with in-house yarn processing, dyeing and finishing, and extensive tufting capabilities.

The Santa Ana plant's final day of operation has not been determined, but it is currently expected this will occur by the end of the company's first fiscal quarter of 2005. There are no plans to close any other Tandus operations.