Mohawk Industries, Inc. Announces Third Quarter Earnings

    <<


    >>

CALHOUN, Ga., Nov. 3, 2011 /CNW/ -- Mohawk Industries, Inc. (NYSE: MHK) today announced 2011 third quarter net earnings of $47 million and diluted earnings per share (EPS) of $0.68. Adjusted net earnings were $57 million and EPS was $0.83 excluding the unusual items. For the third quarter of 2010, the net earnings were $51 million and EPS was $0.74 both as reported and excluding unusual items. Net sales for the third quarter of 2011 were $1.4 billion increasing 10% as reported and 8% with a constant exchange rate. Our cash position at the end of the quarter remains strong with $276 million and our net debt to adjusted EBITDA ratio was 2.1.

For the nine months ended October 1, 2011, net sales were $4.3 billion, an increase of approximately 5% as reported and 4% with a constant exchange rate. For the nine-month period, net earnings and EPS were $131 million and $1.90, respectively. Excluding unusual items, net earnings were $152 million and EPS was $2.21. For the nine months ended October 2, 2010, net earnings were $140 million and EPS was $1.99. Excluding unusual items in 2010, net earnings were $128 million and EPS was $1.86.

Commenting on the third quarter results, Jeffrey S. Lorberbaum, Chairman and CEO, stated, "The Company's third quarter results reflect an improvement in sales and earnings over last year even with increased raw material costs and consumer reluctance to invest in renovation projects. Sales in both the residential and commercial categories expanded with commercial renovation leading the growth and new residential continuing to lag. Each segment continues to lower costs with new processes, reduced infrastructure and investment in more efficient assets."

Our Mohawk segment net sales improved 6% as we improved our position and grew in both residential and commercial categories. Operating margins were lower due to price increases lagging material inflation as well as continued pressure on our product mix as consumers remain cautious about larger discretionary investments. During the quarter, residential sales grew across most channels and product categories. Commercial sales momentum continued from the previous quarter, with both broadloom and carpet tile achieving gains. During 2011, we implemented two price increases that were fully realized by the end of the third quarter. During the period, raw material costs were greater than anticipated and the higher expense will impact our fourth quarter costs and margins. We have implemented hundreds of manufacturing initiatives yielding significant cost savings in 2011.

Our Dal-Tile segment net sales grew almost 11% during the period with both residential and commercial categories showing gains with product mix continuing to decline. In the comparable 2010 period, business was lower than expected due to the flooding in our Mexican facility from Hurricane Alex. During the quarter, we increased sales in all channels with particular strength in home centers due to additional commitments for our innovative mosaics, wall tile and porcelain tile. Our Mexican ceramic sales grew significantly on a local basis as we enhanced our penetration with new products and broader distribution. We have implemented new manufacturing processes to lower raw material costs, improve efficiency, reduce production runs and improve distribution costs.

Our Unilin net sales increased approximately 19% as reported and 11% with a constant exchange rate. Sales in Europe increased across most channels and regions, and our price increases are beginning to catch up with the raw material inflation. We are implementing additional price increases for roof panels and insulation boards to offset further inflation in those products. Innovation in board manufacturing processes is enhancing our efficiency and material yields. Despite challenging market conditions, our European flooring products grew by capitalizing on the strength of our Quick-Step brand, growing our participation in the DIY channel, and expanding our wood flooring category. In the U.S., sales of our laminate flooring grew through expanded programs in all channels. We completed our Russian laminate flooring plant on schedule and are initiating production. We acquired the largest laminate and wood flooring distributor in Australia, which expands our strategy of getting closer to our customers and becoming more responsive to local markets.

Mohawk's strategy to maximize our long term results is reflected in our international expansion in Mexico, Russia, China and Australia, new technologies to increase value, innovative product categories like Didit click furniture and process enhancements to lower our cost position across the enterprise. We remain confident in the future of our business and will continue to adjust our tactics as economic conditions change. In the fourth quarter, we will be impacted by higher third quarter raw material costs; however we are currently seeing some moderation which will benefit next year. We will consider further price increases as appropriate and implement additional cost reductions to improve the business. With these factors, our fourth quarter guidance for earnings is $0.67 to $0.76 per share, excluding any restructuring costs.

Our strategy in this environment focuses on lowering our cost infrastructure, creating innovative products, maintaining a strong balance sheet and targeting new investments for future growth. Although the macro outlook is somewhat uncertain, we believe our results for next year will reflect continued improvement.

Mohawk is a leading supplier of flooring for both residential and commercial applications. Mohawk offers a complete selection of carpet, ceramic tile, laminate, wood, stone, vinyl, and rugs. These products are marketed under the premier brands in the industry, which include Mohawk, Karastan, Lees, Bigelow, Durkan, Daltile, American Olean, Unilin and Quick-Step. Mohawk's unique merchandising and marketing assist our customers in creating the consumers' dream. Mohawk provides a premium level of service with its own trucking fleet and local distribution in the U.S. Mohawk's operational international presence includes China, Europe, Malaysia, Mexico and Russia.

Certain of the statements in the immediately preceding paragraphs, particularly anticipating future performance, business prospects, growth and operating strategies and similar matters and those that include the words "could," "should," "believes," "anticipates," "expects," and "estimates," or similar expressions constitute "forward-looking statements." For those statements, Mohawk claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. There can be no assurance that the forward-looking statements will be accurate because they are based on many assumptions, which involve risks and uncertainties. The following important factors could cause future results to differ: changes in economic or industry conditions; competition; inflation in raw material prices and other input costs; energy costs and supply; timing and level of capital expenditures; timing and implementation of price increases for the Company's products; impairment charges; integration of acquisitions; international operations; introduction of new products; rationalization of operations; tax, product and other claims; litigation; and other risks identified in Mohawk's SEC reports and public announcements.

There will be a conference call Friday, November 4, 2011 at 11:00 AM Eastern Time.

The telephone number to call is 1-800-603-9255 for US/Canada and 1-706-634-2294 for International/Local.

Conference ID # 17731505. A conference call replay will also be available until November 18, 2011 by dialing 855-859-2056 for US/local calls and 404-537-3406 for International/Local calls and entering Conference ID # 17731505

    <<



    >>

    <<
    MOHAWK INDUSTRIES, INC. AND
     SUBSIDIARIES
    >>

    <<
    Consolidated Statement of
     Operations                                        Three Months Ended     
Nine Months Ended
                                                       ------------------     
-----------------
    (Amounts in thousands,                       October 1,        October 2, 
October 1,         October 2,
     except per share data)                          2011              2010   
2011               2010
                                                -----------       ----------- 
-----------        -----------
    >>

    <<
    Net sales                                     $1,442,512         1,309,552
4,263,961          4,056,874
    Cost of sales                                  1,084,889           964,620
3,182,499          2,995,940
    -------------                                  ---------           -------
---------          ---------
        Gross profit                                 357,623           344,932
1,081,462          1,060,934
    Selling, general and
     administrative expenses                         266,159           259,750
832,214            832,405
    ------------------------                         -------           -------
-------            -------
    Operating income                                  91,464            85,182
249,248            228,529
    Interest expense                                  25,132            30,046
77,487            102,985
    Other (income) expense, net                       13,413           
(4,641)                13,794             (8,628)
    ---------------------------                       ------            ------
------             ------
        Earnings before income
         taxes                                        52,919            59,777
157,967            134,172
    Income tax expense
     (benefit)                                         5,223             7,513
23,639             (8,327)
    ------------------                                 -----             -----
------             ------
    Net earnings                                      47,696            52,264
134,328            142,499
    ------------                                      ------            ------
-------            -------
    Net earnings attributable
     to noncontrolling interest                       (1,050)          
(1,170)                (3,337)            (2,786)
    ---------------------------                       ------            ------
------             ------
        Net earnings attributable
         to Mohawk Industries, Inc.                  $46,646            51,094
130,991            139,713
        ---------------------------                  -------            ------
-------            -------
    Basic earnings per share
     attributable to Mohawk
     Industries, Inc. (1)                              $0.68              0.74
1.91               1.99
    ------------------------                           -----              ----
----               ----
    Weighted-average common
     shares outstanding -
     basic                                            68,759            68,593
68,725             68,567
    -----------------------                           ------            ------
------             ------
    Diluted earnings per share
     attributable to Mohawk
     Industries, Inc. (1)                              $0.68              0.74
1.90               1.99
    --------------------------                         -----              ----
----               ----
    Weighted-average common
     shares outstanding -
     diluted                                          68,954            68,773
68,946             68,764
    -----------------------                           ------            ------
------             ------
    >>

    <<
        (1) Basic earnings per share attributable to Mohawk Industries, Inc.
for the nine months
         ended October 2, 2010, includes a decrease of approximately $0.05,
and diluted earnings
         per share attributable to Mohawk Industries, Inc. for the nine months
ended October 2,
         2010, includes a decrease of approximately $0.04, related to the
change in fair value for
         a redeemable noncontrolling interest in a consolidated subsidiary of
the Company.
    >>

    <<
    Other Financial Information
    (Amounts in thousands)
    Net cash provided by
     operating activities                           $109,598           121,417
138,188            210,394
    ---------------------                           --------           -------
-------            -------
    Depreciation and
     amortization                                    $74,207            72,956
222,804            222,251
    ----------------                                 -------            ------
-------            -------
    Capital expenditures                             $69,741            39,101
182,260             86,240
    --------------------                             -------            ------
-------             ------
    >>

    <<
    Consolidated Balance Sheet
     Data
    (Amounts in thousands)
                                                                              
October 1,         October 2,
                                                                              
2011               2010
                                                                              
-----------        -----------
    ASSETS
    Current assets:
        Cash and cash equivalents                                             
$276,156            365,835
        Receivables, net                                                      
775,421            697,491
        Inventories                                                           
1,132,073            996,271
        Prepaid expenses and other
         current assets                                                       
125,007            114,876
        Deferred income taxes                                                 
131,931            119,729
        ---------------------
            Total current assets                                              
2,440,588          2,294,202
    Property, plant and
     equipment, net                                                           
1,696,182          1,680,541
    Goodwill                                                                  
1,389,430          1,389,057
    Intangible assets, net                                                    
634,164            710,934
    Deferred income taxes and
     other non-current assets                                                 
117,204            117,176
    -------------------------                                                 
-------            -------
                                                                              
$6,277,568          6,191,910
                                                                              
----------          ---------
    LIABILITIES AND
     STOCKHOLDERS' EQUITY
    Current liabilities:
      Current portion of long-
       term debt                                                              
$438,300            351,486
      Accounts payable and
       accrued expenses                                                       
774,939            779,825
      --------------------                                                    
-------            -------
            Total current liabilities                                         
1,213,239          1,131,311
    Long-term debt, less
     current portion                                                          
1,173,038          1,303,151
    Deferred income taxes and
     other long-term
     liabilities                                                              
439,798            441,948
    -------------------------                                                 
-------            -------
            Total liabilities                                                 
2,826,075          2,876,410
            -----------------                                                 
---------          ---------
    Noncontrolling interest                                                   
32,758             34,121
    -----------------------                                                   
------             ------
    Total stockholders' equity                                                
3,418,735          3,281,379
    --------------------------                                                
---------          ---------
                                                                              
$6,277,568          6,191,910
                                                                              
----------          ---------
    >>

    <<
                                                                              
As of or for the Nine Months
    Segment Information                              Three Months Ended       
Ended
                                                     ------------------       
-----------------------------
                                                 October 1,        October 2, 
October 1,         October 2,
    (Amounts in thousands)                           2011              2010   
2011               2010
                                                -----------       ----------- 
-----------        -----------
    >>

    <<
    Net sales:
        Mohawk                                      $754,470           713,481
2,203,699          2,177,646
        Dal-Tile                                     381,891           345,074
1,105,775          1,050,088
        Unilin                                       329,514           276,594
1,018,443            890,859
        Intersegment sales                           (23,363)         
(25,597)               (63,956)           (61,719)
    >>

    <<
            Consolidated net sales                $1,442,512         1,309,552
4,263,961          4,056,874
            ----------------------                ----------         ---------
---------          ---------
    >>

    <<
    Operating income (loss):
        Mohawk                                       $30,946            31,127
79,187             74,100
        Dal-Tile                                      33,073            33,913
82,911             77,432
        Unilin                                        33,048            24,640
105,507             93,434
        Corporate and eliminations                    (5,603)          
(4,498)               (18,357)           (16,437)
    >>

    <<
            Consolidated operating
             income                                  $91,464            85,182
249,248            228,529
            ----------------------                   -------            ------
-------            -------
    >>

    <<
    Assets:
        Mohawk                                                                
$1,810,191          1,652,737
        Dal-Tile                                                              
1,735,718          1,677,957
        Unilin                                                                
2,569,103          2,542,233
        Corporate and eliminations                                            
162,556            318,983
                                                                              
-------
            Consolidated assets                                               
$6,277,568          6,191,910
            -------------------                                               
----------          ---------




    >>

    <<
    Reconciliation of Net Earnings Attributable to Mohawk Industries, Inc. to
Adjusted Net Earnings
     Attributable to Mohawk Industries, Inc. and Adjusted Diluted Earnings Per
Share Attributable to
     Mohawk Industries, Inc.
    (Amounts in thousands,
     except per share data)
                                                                             
Three Months Ended                   Nine Months Ended
                                                                             
------------------                   -----------------
                                                                       
October 1,        October 2,       October 1,       October 2,
                                                                          
2011              2010             2011              2010
                                                                      
-----------       -----------      -----------      -----------
    Net earnings attributable
     to Mohawk Industries,
     Inc.                                                                 
$46,646            51,094          130,991           139,713
    Unusual items:
      Unrealized foreign
       currency losses (1)                                                  
9,085                 -            9,085                 -
      Business restructurings                                               
2,186             3,330           15,513            12,263
      Debt extinguishment costs                                             
1,116                 -            1,116             7,514
      Acquisitions purchase
       accounting                                                             
-             1,713                -             1,713
      U.S. customs refund                                                     
-            (5,765)               -            (5,765)
      Discrete tax items,
       net                                                                    
-                 -                -           (24,407)
      Income taxes                                                         
(1,761)              760           (4,597)           (2,999)
      ------------                                                         
------               ---           ------            ------
        Adjusted net earnings attributable to
         Mohawk Industries, Inc.                                          
$57,272            51,132          152,108           128,032
        -------------------------------------                             
-------            ------          -------           -------
    >>

    <<
    Adjusted diluted earnings per share
     attributable to Mohawk Industries, Inc.
     (2)                                                                     
0.83              0.74             2.21              1.86
    Weighted-average common
     shares outstanding -
     diluted                                                               
68,954            68,773           68,946            68,764
    >>

    <<
        (1)  Unrealized foreign currency losses for certain of the Company's
         consolidated foreign subsidiaries that measure financial conditions
and
         results using the U.S. dollar rather than the local currency.
        (2) Diluted earnings per share attributable to Mohawk Industries, Inc.
         for the nine months ended October 2, 2010, excludes approximately
$0.04
         related to the change in fair value for a redeemable noncontrolling
         interest in a consolidated subsidiary of the Company.
    >>

    <<
    Reconciliation of Total
     Debt to Net Debt
    (Amounts in thousands)
                                                     October 1,
                                                        2011
                                                    -----------
    Current portion of long-
     term debt                                          $438,300
    Long-term debt, less
     current portion                                   1,173,038
    Less: Cash and cash
     equivalents                                         276,156
    -------------------                                  -------
      Net Debt                                        $1,335,182
      --------                                        ----------
    >>

    <<
    Reconciliation of Operating Income to
     Adjusted EBITDA
                                                                              
Trailing
    (Amounts in thousands)                                                    
Twelve
                                                                        Three
Months Ended                           Months Ended
                                                                       
------------------
                                                   December 31,          April
2,           July 2,        October 1,       October 1,
                                                        2010              
2011              2011             2011              2011
                                                  -------------        
---------          --------       -----------      -----------
    Operating income                                     $85,640           
56,084           101,700           91,464           334,888
        Other (expense) income                             1,037              
(15)              396          (13,413)          (11,995)
        Unrealized foreign
         currency losses (1)                                   -              
-                 -            9,085             9,085
        U.S. customs refund                                1,965              
-                 -                -             1,965
        Net earnings attributable
         to noncontrolling
         interest                                         (1,678)          
(1,096)           (1,191)          (1,050)           (5,015)
        Depreciation and
         amortization                                     74,522           
74,253            74,344           74,207           297,326
        ----------------                                  ------           
------            ------           ------           -------
           EBITDA                                        161,486          
129,226           175,249          160,293           626,254
        Business restructurings                                -            
6,813             6,514            2,186            15,513
    -----------------------                                  ---            
-----             -----            -----            ------
    Adjusted EBITDA                                     $161,486          
136,039           181,763          162,479           641,767
    ---------------                                     --------          
-------           -------          -------           -------
    >>

    <<
      Net Debt to Adjusted
       EBITDA                                                                 
2.1
      --------------------                                                    
---
    >>

    <<
        (1)  Unrealized foreign currency losses for certain of the Company's
         consolidated foreign subsidiaries that measure financial conditions
and
         results using the U.S. dollar rather than the local currency.
    >>

    <<
    Reconciliation of Net
     Sales to Adjusted Net
     Sales
    (Amounts in thousands)
                                                        Three Months Ended    
Nine Months Ended
                                                        ------------------    
-----------------
                                                     October 1,        
October 2,        October 1,       October 2,
                                                        2011              
2010              2011             2010
                                                    -----------       
-----------       -----------      -----------
    Net sales                                         $1,442,512        
1,309,552         4,263,961        4,056,874
    Adjustments to net
     sales:
      Exchange rate                                      (22,724)             
-           (57,554)               -
        Adjusted net sales                            $1,419,788        
1,309,552         4,206,407        4,056,874
    ----------------------------                      ----------        
---------         ---------        ---------
    >>

    <<
    Reconciliation of Segment Net Sales to
     Adjusted Segment Net Sales
    (Amounts in thousands)
                                                        Three Months Ended
                                                        ------------------
                                                     October 1,        
October 2,
    Unilin                                                                 
2011               2010
    ------                                          -----------       
-----------
    Net sales                                           $329,514          
276,594
    Adjustment to net
     sales:
      Exchange rate                                      (21,205)             
-
        Adjusted net sales                              $308,309          
276,594
        ------------------                              --------          
-------
    >>

    <<
    Reconciliation of Operating Income to
     Adjusted Operating Income
    (Amounts in thousands)
                                                        Three Months Ended
                                                        ------------------
                                                     October 1,        
October 2,
                                                        2011              
2010
                                                    -----------       
-----------
    Operating income                                     $91,464           
85,182
    Adjustments to operating
     income:
      Business restructurings                              2,186            
3,330
      Adjusted operating income                          $93,650           
88,512
      -------------------------                          -------           
------
      Adjusted operating margin
       as a percent of net
       sales                                                 6.5%             
6.8%
    >>

    <<
    Reconciliation of Segment Operating Income to Adjusted
     Segment Operating Income
    (Amounts in thousands)
                                                        Three Months Ended
                                                        ------------------
                                                     October 1,        
October 2,
    Mohawk                                                                 
2011               2010
    ------                                          -----------       
-----------
    Operating income                                     $30,946           
31,127
    Adjustments to operating
     income:
      Business restructurings                              2,186            
1,292
      Adjusted operating income                          $33,132           
32,419
      -------------------------                          -------           
------
      Adjusted operating margin
       as a percent of net
       sales                                                 4.4%             
4.5%
    >>

    <<
    Dal-Tile
    --------
    Operating income                                     $33,073           
33,913
    Adjustments to operating
     income:
      Business restructurings                                  -            
1,223
      Adjusted operating income                          $33,073           
35,136
      -------------------------                          -------           
------
       Adjusted operating margin
        as a percent of net
        sales                                                8.7%            
10.2%
    >>

    <<
    Unilin
    ------
    Operating income                                     $33,048           
24,640
    Adjustments to operating
     income:
      Business restructurings                                  -              
815
      Adjusted operating income                          $33,048           
25,455
      -------------------------                          -------           
------
      Adjusted operating margin
       as a percent of net
       sales                                                10.0%             
9.2%
    >>

    <<
    Reconciliation of Earnings Before Income Taxes to Adjusted
     Earnings Before Income Taxes
    (Amounts in thousands)
                                                        Three Months Ended
                                                        ------------------
                                                     October 1,        
October 2,
                                                        2011              
2010
                                                    -----------       
-----------
    Earnings before income
     taxes                                               $52,919           
59,777
    Unusual items:
      Unrealized foreign
       currency losses (1)                                 9,085              
-
      Business restructurings                              2,186            
3,330
      Debt extinguishment costs                            1,116              
-
      Acquisitions purchase
       accounting                                              -            
1,713
      U.S. customs refund                                      -           
(5,765)
      -------------------                                    ---           
------
      Adjusted earnings before
       income taxes                                      $65,306           
59,055
      ------------------------                           -------           
------
    >>

    <<
        (1)  Unrealized foreign currency losses for certain of the Company's
         consolidated foreign subsidiaries that measure financial conditions
and
         results using the U.S. dollar rather than the local currency.
    >>

    <<
    Reconciliation of Income Tax Expense to
     Adjusted Income Tax Expense
    (Amounts in thousands)
                                                        Three Months Ended
                                                        ------------------
                                                     October 1,        
October 2,
                                                        2011              
2010
                                                    -----------       
-----------
    Income tax expense                                    $5,223            
7,513
    Unusual items:
      Income taxes                                         1,761             
(760)
      ------------                                         -----             
----
      Adjusted income tax
       expense                                            $6,984            
6,753
      -------------------                                 ------            
-----
    >>

    <<
    Adjusted income tax
     rate                                                     11%             
11%
    -------------------                                      ---              
---
    >>

    <<
    Reconciliation of Selling, General and Administrative Expenses to Adjusted
Selling,
     General and Administrative Expenses
    (Amounts in thousands)
                                                        Three Months Ended
                                                        ------------------
                                                     October 1,        
October 2,
                                                        2011              
2010
                                                    -----------       
-----------
    Selling, general and
     administrative expenses                            $266,159          
259,750
    Adjustments to selling, general and
     administrative expenses:
      Exchange rate                                       (3,920)             
-
      -------------                                       ------              
---
      Adjusted selling, general
       and administrative
       expenses                                         $262,239          
259,750
      -------------------------                         --------          
-------
        Adjusted selling, general
         and administrative
         expenses as a percent of
         net sales                                          18.2%            
19.8%
    >>

    <<
    The Company believes it is useful for itself and investors
     to review, as applicable, both GAAP and the above non-
     GAAP measures in order to assess the performance of the
     Company's business for planning and forecasting in
     subsequent periods.






    >>

SOURCE Mohawk Industries, Inc.

For further information: Frank H. Boykin, Chief Financial Officer, +1-706-624-2695 Web Site: http://www.mohawkind.com


FORFAITS PERSONNALISÉS

Jetez un coup d’œil sur nos forfaits personnalisés ou créez le vôtre selon vos besoins de communication particuliers.

Commencez dès aujourd'hui .

ADHÉSION À CNW

Remplissez un formulaire d'adhésion à CNW ou communiquez avec nous au 1-877-269-7890.

RENSEIGNEZ-VOUS SUR LES SERVICES DE CNW

Demandez plus d'informations sur les produits et services de CNW ou communiquez avec nous au 1‑877-269-7890.