CALHOUN, Ga., Oct. 30, 2014 /CNW/ -- Mohawk Industries,
Inc. (NYSE: MHK) today announced 2014 third quarter net
earnings of $151 million and diluted
earnings per share (EPS) of $2.06.
Excluding unusual charges, net earnings were $179 million and EPS was $2.44, a 21% increase over last year's third
quarter adjusted EPS and the highest quarterly adjusted EPS in the
company's history. Net sales for the third quarter of 2014 were
$1.99 billion, an increase of 1.5%
versus the prior year's third quarter or approximately 2% on a
constant exchange basis. For the third quarter of 2013, net sales
were $1.96 billion, net earnings were
$119 million and EPS was $1.63; excluding unusual charges, net earnings
were $147 million and EPS was
$2.02.
For the nine months ending September 27,
2014, net sales were $5.9
billion, an increase of 8% versus the prior year. Net
earnings and EPS for the nine-month period were $385 million and $5.25, respectively. Net earnings excluding
unusual charges were $431 million and
adjusted EPS was $5.88, an increase
of 24% over the nine-month adjusted EPS results in 2013. For the
nine months ending September 28,
2013, net sales were $5.4
billion, net earnings were $254
million and EPS was $3.53;
excluding unusual charges, net earnings and EPS were $342 million and $4.76.
Commenting on Mohawk Industries' third quarter performance,
Jeffrey S. Lorberbaum, Chairman and
CEO, stated, "During the period, we significantly increased our
adjusted operating income by 12% compared to last year through
productivity enhancements, cost containment and acquisition
synergies. Ongoing initiatives to control our expenses and increase
our productivity yielded our highest operating margins in 8 years.
We delivered good results this period, even in an environment with
sluggish demand, due to our market diversification and strong
execution. We will continue investing into our business to support
future growth and profitability. The $550
million in capital investments we will make this year are
increasing our productivity, allowing us to further differentiate
our products and improve our margins."
Carpet segment net sales for the quarter were $779 million, up 1% over last year. Adjusted
operating income for the segment rose approximately 20% over the
prior year and the margin was up 170 basis points as a result of
investments in new technology, increased productivity, cost
reductions and improved quality. During the period, Mohawk's
participation in the more value-oriented polyester category
increased due to the company's proprietary Continuum fiber process
that delivers superior post-consumer recycled carpet with
outstanding stain and soil resistance as well as greater softness.
Mohawk's position in modular tile continues to grow and is enhanced
by the introduction of new 12-by-36-inch plank carpet tiles that
can be utilized to create stylish new designs for public spaces.
The price increase on certain products announced in April was fully
executed at the beginning of the quarter and helped to offset
increased raw material prices and freight costs. To offset
escalating transportation costs, an additional freight increase was
implemented in July.
Ceramic segment net sales for the quarter were $780 million, up 2% over last year as reported or
3% at a constant exchange rate. The segment's adjusted
operating income grew 16% over the prior year due to increased
productivity, better quality and improved pricing and mix. In the
U.S., the integration of Marazzi into the company's U.S. ceramic
operations is substantially complete. Site work has begun for the
new ceramic plant in Tennessee,
which will make higher value technical porcelain products that the
company historically has imported. To recoup higher freight and raw
material costs, a price increase was announced for implementation
in January. In Mexico, new larger
sizes, planks and market-leading designs should fuel further sales
growth and improve mix, margins and average selling price. In
Russia, sales grew on a local
basis as enhancements in design, value and service helped capture
increased share in a slowing ceramic market. In Europe, sales were essentially flat, although
margins grew due to reduced costs and improved mix as new higher
value products replaced older ones.
Laminate and Wood segment net sales for the quarter were
$463 million, up approximately 3%
over last year as reported and at a constant exchange rate.
Adjusted operating margin for the segment was 11.6% due to lower
sales in laminate, higher costs in new products and equipment
start-ups offset by acquisitions and productivity improvements.
In the U.S., new residential construction strengthened wood
flooring sales, although market pricing did not keep pace with
higher material costs. The segment's U.S. manufacturing facilities
are aggressively implementing productivity improvements and cost
reductions. In Europe, the Pergo
product revision has upgraded the styling and performance of the
brand, and the new Quick-Step laminate collection is being well
received as a result of its luxurious appearance and distinctive
texture. The segment's insulation business continued to grow with
operational and formula improvements offsetting pricing pressures.
The segment's European board business delivered top line growth due
to a broad product offering and increased margins from productivity
improvements and higher material yields.
Lorberbaum said, "We anticipate that growth in the U.S. economy
and the flooring category will remain unchanged during the fourth
quarter with residential remaining slow as commercial grows.
Overall we expect improvement in our sales and operating margins
compared to last year. However, due to the strengthening U.S.
dollar, we anticipate foreign currency translation will reduce
sales and profits as reported. Our performance will benefit from
new products, productivity improvements, synergies from our
acquisitions and cost containment initiatives. We remain confident
in our ability to execute our business strategy within the
prevailing economic conditions. With these factors, our guidance
for fourth quarter earnings is $2.18 to
$2.27 per share, excluding any restructuring charges. We
foresee upside for the U.S. flooring industry over the medium to
long term. The forecast for new home construction in the U.S. is
for robust growth for the next several years, and we believe that
stronger employment numbers and improving consumer confidence will
result in increased home remodeling."
ABOUT MOHAWK INDUSTRIES
Mohawk Industries is the leading global flooring manufacturer
that creates products to enhance residential and commercial spaces
around the world. Mohawk's vertically integrated manufacturing and
distribution processes provide competitive advantages in the
production of carpet, rugs, ceramic tile, laminate, wood, stone and
vinyl flooring. Our industry-leading innovation has yielded
products and technologies that differentiate our brands in the
marketplace and satisfy all remodeling and new construction
requirements. Our brands are among the most recognized in the
industry and include American Olean, Bigelow, Daltile, Durkan,
Karastan, Lees, Marazzi, Kerama Marazzi, Mohawk, Pergo, Unilin and
Quick-Step. During the past decade, Mohawk has transformed its
business from an American carpet manufacturer into the world's
largest flooring company with operations in Australia, Brazil, Canada, China, Europe, India, Malaysia, Mexico, Russia and the
United States.
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.
Conference call Friday, October 31,
2014 at 11:00 AM Eastern
Time
The telephone number is 1-800-603-9255 for US/Canada and 1-706-634-2294 for
International/Local. Conference ID # 10924357. A replay will
be available until Friday, November 14,
2014 by dialing 855-859-2056 for US/local calls and
404-537-3406 for International/Local calls and entering Conference
ID # 10924357.
MOHAWK INDUSTRIES,
INC. AND SUBSIDIARIES
|
|
|
|
|
|
|
|
|
|
Consolidated
Statement of Operations
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
(Amounts in
thousands, except per share data)
|
|
September 27,
2014
|
|
September 28,
2013
|
|
September 27,
2014
|
|
September 28,
2013
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
1,990,658
|
|
1,961,536
|
|
5,852,000
|
|
5,424,650
|
Cost of
sales
|
|
1,434,236
|
|
1,444,646
|
|
4,239,411
|
|
4,016,638
|
Gross profit
|
|
556,422
|
|
516,890
|
|
1,612,589
|
|
1,408,012
|
Selling, general and
administrative expenses
|
|
342,729
|
|
340,987
|
|
1,045,913
|
|
1,012,069
|
Operating
income
|
|
213,693
|
|
175,903
|
|
566,676
|
|
395,943
|
Interest
expense
|
|
34,786
|
|
25,630
|
|
77,584
|
|
70,098
|
Other expense
(income), net
|
|
(2,374)
|
|
1,168
|
|
961
|
|
6,458
|
Earnings from continuing operations before income taxes
|
|
181,281
|
|
149,105
|
|
488,131
|
|
319,387
|
Income tax
expense
|
|
30,021
|
|
28,993
|
|
102,957
|
|
62,965
|
Earnings
from continuing operations
|
|
151,260
|
|
120,112
|
|
385,174
|
|
256,422
|
Loss from
discontinued operations, net of income tax benefit of $297 and
$782, respectively
|
|
-
|
|
(553)
|
|
-
|
|
(1,914)
|
Net
earnings including noncontrolling interest
|
|
151,260
|
|
119,559
|
|
385,174
|
|
254,508
|
Net earnings
(loss) attributable to noncontrolling interest
|
|
(6)
|
|
491
|
|
77
|
|
373
|
Net earnings
attributable to Mohawk Industries, Inc.
|
|
$
151,266
|
|
119,068
|
|
385,097
|
|
254,135
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share attributable to Mohawk Industries, Inc.
|
|
|
|
|
|
|
|
|
Income from
continuing operations
|
|
$
2.08
|
|
1.65
|
|
5.29
|
|
3.59
|
Loss from
discontinued operations, net of income taxes
|
|
-
|
|
(0.01)
|
|
-
|
|
(0.03)
|
Basic earnings per
share attributable to Mohawk Industries, Inc.
|
|
$
2.08
|
|
1.64
|
|
5.29
|
|
3.56
|
Weighted-average
common shares outstanding - basic
|
|
72,864
|
|
72,575
|
|
72,814
|
|
71,467
|
|
|
|
|
|
|
|
|
|
Diluted earnings
per share attributable to Mohawk Industries, Inc.
|
|
|
|
|
|
|
|
|
Income from
continuing operations
|
|
$
2.06
|
|
1.64
|
|
5.25
|
|
3.56
|
Loss from
discontinued operations, net of income taxes
|
|
-
|
|
(0.01)
|
|
-
|
|
(0.03)
|
Diluted earnings per
share attributable to Mohawk Industries, Inc.
|
|
$
2.06
|
|
1.63
|
|
5.25
|
|
3.53
|
Weighted-average
common shares outstanding - diluted
|
|
73,376
|
|
73,087
|
|
73,332
|
|
71,975
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Financial
Information
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
Net cash provided by
(used in) operating activities
|
|
$
225,549
|
|
213,059
|
|
323,423
|
|
326,973
|
Depreciation and
amortization
|
|
$
85,167
|
|
81,550
|
|
249,905
|
|
222,542
|
Capital
expenditures
|
|
$
141,883
|
|
109,426
|
|
391,580
|
|
255,523
|
|
|
|
|
|
|
|
|
|
Consolidated
Balance Sheet Data
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 27,
2014
|
|
September 28,
2013
|
ASSETS
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
|
|
$
105,569
|
|
63,580
|
Receivables, net
|
|
|
|
|
|
1,209,557
|
|
1,154,368
|
Inventories
|
|
|
|
|
|
1,640,487
|
|
1,612,696
|
Prepaid expenses and other current assets
|
|
|
|
|
|
275,981
|
|
221,767
|
Deferred income taxes
|
|
|
|
|
|
137,220
|
|
136,052
|
Total
current assets
|
|
|
|
|
|
3,368,814
|
|
3,188,463
|
Property, plant and
equipment, net
|
|
|
|
|
|
2,772,722
|
|
2,683,984
|
Goodwill
|
|
|
|
|
|
1,668,520
|
|
1,713,883
|
Intangible assets,
net
|
|
|
|
|
|
746,304
|
|
811,116
|
Deferred income taxes
and other non-current assets
|
|
|
|
|
|
145,100
|
|
166,711
|
Total assets
|
|
|
|
|
|
$
8,701,460
|
|
8,564,157
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Current portion of
long-term debt and commercial paper
|
|
|
|
|
|
$
583,495
|
|
89,031
|
Accounts payable and
accrued expenses
|
|
|
|
|
|
1,247,862
|
|
1,296,192
|
Total
current liabilities
|
|
|
|
|
|
1,831,357
|
|
1,385,223
|
Long-term debt, less
current portion
|
|
|
|
|
|
1,806,821
|
|
2,257,391
|
Deferred income taxes
and other long-term liabilities
|
|
|
|
|
|
486,764
|
|
587,910
|
Total
liabilities
|
|
|
|
|
|
4,124,942
|
|
4,230,524
|
Noncontrolling
interest
|
|
|
|
|
|
-
|
|
-
|
Total stockholders'
equity
|
|
|
|
|
|
4,576,518
|
|
4,333,633
|
Total liabilities and stockholders' equity
|
|
|
|
|
|
$
8,701,460
|
|
8,564,157
|
|
|
|
|
|
|
|
|
|
Segment
Information
|
|
Three Months
Ended
|
|
As of or for the Nine
Months Ended
|
(Amounts in
thousands)
|
|
September 27,
2014
|
|
September 28,
2013
|
|
September 27,
2014
|
|
September 28,
2013
|
|
|
|
|
|
|
|
|
|
Net sales:
|
|
|
|
|
|
|
|
|
Carpet
|
|
$
778,849
|
|
772,751
|
|
2,234,083
|
|
2,238,953
|
Ceramic
|
|
779,842
|
|
767,005
|
|
2,271,660
|
|
1,939,054
|
Laminate and Wood
|
|
462,574
|
|
450,723
|
|
1,431,839
|
|
1,326,178
|
Intersegment sales
|
|
(30,607)
|
|
(28,943)
|
|
(85,582)
|
|
(79,535)
|
Consolidated net sales
|
|
$
1,990,658
|
|
1,961,536
|
|
5,852,000
|
|
5,424,650
|
|
|
|
|
|
|
|
|
|
Operating income
(loss):
|
|
|
|
|
|
|
|
|
Carpet
|
|
$
74,082
|
|
68,836
|
|
171,179
|
|
148,936
|
Ceramic
|
|
101,254
|
|
75,908
|
|
268,320
|
|
152,188
|
Laminate and Wood
|
|
44,768
|
|
39,020
|
|
149,730
|
|
119,075
|
Corporate and eliminations
|
|
(6,411)
|
|
(7,861)
|
|
(22,553)
|
|
(24,256)
|
Consolidated operating income
|
|
$
213,693
|
|
175,903
|
|
566,676
|
|
395,943
|
|
|
|
|
|
|
|
|
|
Assets:
|
|
|
|
|
|
|
|
|
Carpet
|
|
|
|
|
|
$
2,016,109
|
|
1,830,869
|
Ceramic
|
|
|
|
|
|
3,788,164
|
|
3,820,002
|
Laminate and Wood
|
|
|
|
|
|
2,672,599
|
|
2,721,707
|
Corporate and eliminations
|
|
|
|
|
|
224,588
|
|
191,579
|
Consolidated assets
|
|
|
|
|
|
$
8,701,460
|
|
8,564,157
|
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
|
|
|
|
|
|
|
|
|
September 27,
2014
|
|
September 28,
2013
|
|
September 27,
2014
|
|
September 28,
2013
|
|
|
Net earnings
attributable to Mohawk Industries, Inc.
|
|
$
151,266
|
|
119,068
|
|
385,097
|
|
254,135
|
|
|
Adjustments to net
earnings:
|
|
|
|
|
|
|
|
|
|
|
Restructuring,
acquisition and integration-related costs
|
|
14,013
|
|
24,431
|
|
36,907
|
|
75,608
|
|
|
Acquisitions purchase
accounting (inventory step-up)
|
|
-
|
|
12,297
|
|
-
|
|
31,041
|
|
|
Discontinued
operations
|
|
-
|
|
851
|
|
-
|
|
2,696
|
|
|
Legal
reserve
|
|
10,000
|
|
-
|
|
10,000
|
|
-
|
|
|
Bond
redemption
|
|
15,450
|
|
-
|
|
15,450
|
|
-
|
|
|
Deferred loan
costs
|
|
1,080
|
|
490
|
|
1,080
|
|
490
|
|
|
Interest on 3.85%
senior notes
|
|
-
|
|
-
|
|
-
|
|
3,559
|
|
|
Income
taxes
|
|
(12,792)
|
|
(9,772)
|
|
(17,412)
|
|
(25,220)
|
|
|
Adjusted net earnings
attributable to Mohawk Industries, Inc.
|
|
$
179,017
|
|
147,365
|
|
431,122
|
|
342,309
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted diluted
earnings per share attributable to Mohawk Industries,
Inc.
|
|
$
2.44
|
|
2.02
|
|
5.88
|
|
4.76
|
|
|
Weighted-average
common shares outstanding - diluted
|
|
73,376
|
|
73,087
|
|
73,332
|
|
71,975
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Net Sales to Net Sales on a Constant Exchange Rate
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
|
|
|
|
|
|
September 27,
2014
|
|
September 28,
2013
|
|
September 27,
2014
|
|
September 28,
2013
|
|
|
|
|
Net sales
|
|
$
1,990,658
|
|
1,961,536
|
|
5,852,000
|
|
5,424,650
|
|
|
|
|
Adjustment to net
sales on a constant exchange rate
|
|
8,517
|
|
-
|
|
(16,100)
|
|
-
|
|
|
|
|
Net sales on a
constant exchange rate
|
|
$
1,999,175
|
|
1,961,536
|
|
5,835,900
|
|
5,424,650
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Net Sales to Pro Forma Net Sales on a Constant Exchange
Rate
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months
Ended
|
|
|
|
|
|
|
|
|
|
|
September 27,
2014
|
|
September 28,
2013
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
5,852,000
|
|
5,424,650
|
|
|
|
|
|
|
|
|
2013
Acquisitions
|
|
|
|
333,994
|
|
|
|
|
|
|
|
|
Adjustment to net
sales on a constant exchange rate
|
|
(16,100)
|
|
-
|
|
|
|
|
|
|
|
|
Pro forma net sales
on a constant exchange rate
|
|
$
5,835,900
|
|
5,758,644
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Segment Net Sales to Segment Net Sales on a Constant Exchange
Rate
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ceramic
|
|
Laminate and
Wood
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
September 27,
2014
|
|
September 28,
2013
|
|
September 27,
2014
|
|
September 28,
2013
|
|
|
|
|
Net sales
|
|
$
779,842
|
|
767,005
|
|
462,574
|
|
450,723
|
|
|
|
|
Adjustment to segment
net sales on a constant exchange rate
|
|
9,098
|
|
-
|
|
(581)
|
|
-
|
|
|
|
|
Segment net sales on
a constant exchange rate
|
|
$
788,940
|
|
767,005
|
|
461,993
|
|
450,723
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Gross Profit to Adjusted Gross Profit
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
|
|
September 27,
2014
|
|
September 28,
2013
|
|
|
|
|
|
|
|
|
Gross
Profit
|
|
$
556,422
|
|
516,890
|
|
|
|
|
|
|
|
|
Adjustments to gross
profit:
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring and
integration-related costs
|
|
7,261
|
|
14,699
|
|
|
|
|
|
|
|
|
Acquisitions purchase
accounting (inventory step-up)
|
|
-
|
|
12,297
|
|
|
|
|
|
|
|
|
Adjusted gross
profit
|
|
$
563,683
|
|
543,886
|
|
|
|
|
|
|
|
|
Adjusted
gross profit as a percent of net sales
|
|
28.3%
|
|
27.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Selling, General and Administrative Expenses to Adjusted Selling,
General and Administrative Expenses
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
September 27,
2014
|
|
September 28,
2013
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
|
$
342,729
|
|
340,987
|
|
|
|
|
|
|
|
|
Adjustments to
selling, general and administrative expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring,
acquisition and integration-related costs
|
|
(6,752)
|
|
(9,712)
|
|
|
|
|
|
|
|
|
Legal
reserve
|
|
|
(10,000)
|
|
-
|
|
|
|
|
|
|
|
|
Adjusted
selling, general and administrative expenses
|
|
$
325,977
|
|
331,275
|
|
|
|
|
|
|
|
|
Adjusted selling,
general and administrative expenses as a percent of net
sales
|
|
16.4%
|
|
16.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Operating Income to Adjusted Operating Income
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
|
|
|
|
|
|
September 27,
2014
|
|
September 28,
2013
|
|
September 27,
2014
|
|
September 28,
2013
|
|
|
|
|
Operating
income
|
|
$
213,693
|
|
175,903
|
|
566,676
|
|
395,943
|
|
|
|
|
Adjustments to
operating income:
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring,
acquisition and integration-related costs
|
|
14,013
|
|
24,411
|
|
36,907
|
|
75,588
|
|
|
|
|
Legal
reserve
|
|
10,000
|
|
-
|
|
10,000
|
|
-
|
|
|
|
|
Acquisitions purchase
accounting (inventory step-up)
|
|
-
|
|
12,297
|
|
-
|
|
31,041
|
|
|
|
|
Adjusted
operating income
|
|
$
237,706
|
|
212,611
|
|
613,583
|
|
502,572
|
|
|
|
|
Adjusted
operating margin as a percent of net sales
|
|
11.9%
|
|
10.8%
|
|
10.5%
|
|
9.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Segment Operating Income to Adjusted Operating
Income
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carpet
|
|
Ceramic
|
|
Laminate and
Wood
|
|
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
|
|
|
September 27,
2014
|
|
September 28,
2013
|
|
September 27,
2014
|
|
September 28,
2013
|
|
September 27,
2014
|
|
September 28,
2013
|
Operating
income
|
|
$
74,082
|
|
68,836
|
|
101,254
|
|
75,908
|
|
44,768
|
|
39,020
|
Adjustments to
operating income:
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring,
acquisition and integration-related costs
|
|
-
|
|
1,570
|
|
4,248
|
|
3,070
|
|
9,015
|
|
19,246
|
Legal
reserve
|
|
|
10,000
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Acquisitions purchase
accounting (inventory step-up)
|
|
-
|
|
-
|
|
-
|
|
12,297
|
|
-
|
|
-
|
Adjusted
operating income
|
|
$
84,082
|
|
70,406
|
|
105,502
|
|
91,275
|
|
53,783
|
|
58,266
|
Adjusted
operating margin as a percent of net sales
|
|
10.8%
|
|
9.1%
|
|
13.5%
|
|
11.9%
|
|
11.6%
|
|
12.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Total Debt to Net Debt
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 27,
2014
|
|
|
|
|
|
|
|
|
|
|
Current portion of
long-term debt and commercial paper
|
|
$
583,495
|
|
|
|
|
|
|
|
|
|
|
Long-term debt, less
current portion
|
|
1,806,821
|
|
|
|
|
|
|
|
|
|
|
Less: Cash and cash
equivalents
|
|
105,569
|
|
|
|
|
|
|
|
|
|
|
Net Debt
|
|
$
2,284,747
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Operating Income to Adjusted EBITDA
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
Trailing
Twelve
|
|
|
|
|
|
|
Three Months
Ended
|
|
Months
Ended
|
|
|
|
|
|
|
December 31,
2013
|
|
March 29,
2014
|
|
June 28,
2014
|
|
September 27,
2014
|
|
September 27,
2014
|
|
|
Operating
income
|
|
$
150,988
|
|
130,735
|
|
222,248
|
|
213,693
|
|
717,664
|
|
|
Other (expense)
income
|
|
(2,656)
|
|
(4,890)
|
|
1,555
|
|
2,374
|
|
(3,617)
|
|
|
Net (earnings) loss attributable to noncontrolling
interest
|
|
(132)
|
|
28
|
|
(111)
|
|
6
|
|
(209)
|
|
|
Depreciation and
amortization
|
|
86,329
|
|
80,984
|
|
83,754
|
|
85,167
|
|
336,234
|
|
|
EBITDA
|
|
234,529
|
|
206,857
|
|
307,446
|
|
301,240
|
|
1,050,072
|
|
|
Restructuring,
acquisition and integration-related costs
|
|
37,812
|
|
11,725
|
|
11,169
|
|
14,013
|
|
74,719
|
|
|
Legal
reserve
|
|
-
|
|
-
|
|
-
|
|
10,000
|
|
10,000
|
|
|
Adjusted
EBITDA
|
|
$
272,341
|
|
218,582
|
|
318,615
|
|
325,253
|
|
1,134,791
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Debt to
Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
2.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Earnings from Continuing Operations Before Income Taxes to Adjusted
Earnings from Continuing Operations Before Income
Taxes
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
September 27,
2014
|
|
September 28,
2013
|
|
|
|
|
|
|
|
|
Earnings from
continuing operations before income taxes
|
|
$
181,281
|
|
149,105
|
|
|
|
|
|
|
|
|
Adjustments to
earnings from continuing operations before income taxes:
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring,
acquisition and integration-related costs
|
|
14,013
|
|
24,431
|
|
|
|
|
|
|
|
|
Acquisitions purchase
accounting (inventory step-up)
|
|
-
|
|
12,297
|
|
|
|
|
|
|
|
|
Legal
reserve
|
|
10,000
|
|
-
|
|
|
|
|
|
|
|
|
Bond
redemption
|
|
15,450
|
|
-
|
|
|
|
|
|
|
|
|
Deferred loan
costs
|
|
1,080
|
|
490
|
|
|
|
|
|
|
|
|
Interest on 3.85%
senior notes
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
Adjusted
earnings before income taxes
|
|
$
221,824
|
|
186,323
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Income Tax Expense to Adjusted Income Tax
Expense
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
September 27,
2014
|
|
September 28,
2013
|
|
|
|
|
|
|
|
|
Income tax
expense
|
|
$
30,021
|
|
28,993
|
|
|
|
|
|
|
|
|
Income tax effect of
adjusting items
|
|
12,792
|
|
9,475
|
|
|
|
|
|
|
|
|
Adjusted
income tax expense
|
|
$
42,813
|
|
38,468
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted income tax
rate
|
|
19%
|
|
21%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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. In particular, the Company believes
excluding the impact of restructuring, acquisition and
integration-related costs is useful because it allows investors to
evaluate our performance for different periods on a more comparable
basis.
|
SOURCE Mohawk Industries, Inc.