Record Q4 Adjusted EPS; 27% Increase Over PY
Adjusted Operating Income Up 160 bps
CALHOUN, Ga., Feb. 19,
2015 /PRNewswire/ -- Mohawk Industries, Inc. (NYSE:
MHK) today announced 2014 fourth quarter net earnings of
$147 million and diluted earnings per
share (EPS) of $2.00. Excluding
unusual charges, net earnings were $167
million and EPS was $2.27, a
27% increase over last year's fourth quarter adjusted EPS and the
highest Q4 adjusted EPS in the company's history. Net sales for the
fourth quarter of 2014 were $1.95
billion, an increase of 1.4% versus the prior year's fourth
quarter or approximately 5% on a constant exchange basis. For the
fourth quarter of 2013, net sales were $1.92
billion, net earnings were $95
million and EPS was $1.29;
excluding unusual charges, net earnings were $131 million and EPS was $1.79.
For the twelve months ending December 31,
2014, net sales were $7.8
billion, an increase of 6% versus the prior year as reported
or 7% on a constant exchange basis. Net earnings and EPS for the
twelve month period were $532 million
and $7.25, respectively. Net earnings
excluding unusual charges were $598
million and adjusted EPS was $8.15, an increase of 24% over the twelve month
adjusted EPS results in 2013. For the twelve months ending
December 31, 2013, net sales were
$7.3 billion, net earnings were
$349 million and EPS was $4.82; excluding unusual charges, net earnings
and EPS were $473 million and
$6.55, respectively.
Commenting on Mohawk Industries' fourth quarter performance,
Jeffrey S. Lorberbaum, Chairman and
CEO, stated, "During the period, we significantly increased our
adjusted operating income by 18% compared to the prior year as a
result of productivity initiatives, aggressive cost containment and
benefits from our acquisitions. We delivered solid results
during the quarter, generating increased earnings even with
negative translation impact from foreign currency. On a local
basis, our European operations improved across all product
categories in a challenging market. Across the enterprise, we
reduced SG&A as a percentage of sales and held total dollars
flat while still investing in growth areas of the business."
Carpet segment net sales for the quarter were $780 million, up 4% over last year. Our adjusted
operating income increased approximately 32% over the prior year to
11%, producing our best quarterly performance in over a decade. We
continue to benefit from product innovation, enhanced raw material
strategies, plant simplification, investments in state-of-the-art
technologies and improved sales execution. In the quarter, we
introduced SmartStrand® Forever Clean™, the next generation of our
exclusive franchise, which was selected by retailers at the
national flooring trade show in January as the most innovative new
product in any flooring category. Forever Clean combines
SmartStrand's luxurious softness and exceptional durability with
exclusive Nanoloc™ spill protection for quick and easy clean-up.
The company continued to expand its Continuum™ polyester offering,
which is gaining momentum across all price points. In commercial
carpet, the business improved both top line growth and margins as a
result of enhanced design, productivity improvements and material
optimization.
Ceramic segment net sales for the quarter were $744 million, up 1% over last year as reported or
7% at a constant exchange rate. The segment's adjusted
operating income grew 16% over the prior year, even with the impact
of the declining euro and ruble; and the margin increased 150 basis
points due to increased productivity as well as improved pricing
and mix. In the U.S., the combined Dal-Tile and Marazzi
organization is operating exceptionally well. The consolidated
organization has enhanced the styling of our new products as we
expand our offering of larger tile sizes, rectangles and planks,
increasing our product mix and average selling prices. The
company's new ceramic plant in Tennessee is on track to start up in the
beginning of next year, with the building pad nearly complete.
The company's ceramic sales in Mexico are growing rapidly from providing a
complete product line of higher styled premium products and
value priced products as well as expanding participation in the
retail and new construction channels. Sales and margins in the
company's European ceramic business grew by improving product mix,
replacing inefficient manufacturing assets and reducing SG&A.
Ceramic sales in Russia expanded
significantly in local currency as consumers purchased ahead of
anticipated price increases.
Laminate and Wood segment net sales for the quarter were
$459 million, decreasing
approximately 2% over last year as reported and increasing 4% at a
constant exchange rate. Adjusted operating margin for the segment
was approximately 12%, growing 30 basis points over the prior year.
Laminate sales in Europe benefited
from the rapid acceptance of the new Quick-Step® Impressive™
collection with enhanced surface texture and water repellency.
Construction of the company's LVT plant in Belgium has been completed, and the start-up
is focused on new product development. During the period, the
company purchased a New Zealand
flooring distributor, which expands the company's distribution
model successfully executed in the U.K., Eastern Europe and Australia. The integration of Spano into the
company's European board business is largely complete, creating
improved mix, increased operational efficiencies and reduced
SG&A costs. In the U.S., wood flooring sales grew, with
engineered wood sales rising substantially, while laminate sales
were impacted by lower mix, product changes and inventory
reductions by our customers.
We anticipate stronger organic growth on a local basis in 2015,
driven by improvements in the U.S. economy and the flooring market.
In the U.S., rising consumer confidence supported by lower gasoline
prices, low interest rates, increased home values and an improving
job market should drive higher growth in our category. The U.S.
dollar has recently strengthened considerably relative to the euro,
ruble and other currencies and our translated results will be
impacted. While we cannot affect the exchange rates, we are
aggressively implementing productivity initiatives, SG&A
reductions and other cost containment projects to minimize the
impact. We will continue to invest in product innovation and
operational improvements to drive our top line growth and margins.
The first quarter of 2015 has four additional days, increasing
sales 6%, and the fourth quarter will have four less days than in
the same periods last year. Taking all of these factors into
account, our guidance for first quarter earnings is $1.54 to $1.63 per share, excluding any
restructuring charges and new acquisitions.
In January, we announced the continuation of our aggressive
acquisition strategy with the purchase of the IVC Group, and we
anticipate that the transaction will close early in the second
quarter. Recently, we also signed an agreement to purchase a small
Eastern European ceramic manufacturer, with the transaction
expected to be completed in the second quarter. We have a strong
foundation for future growth in all flooring categories in
North America, Europe, Russia, Asia
and Australia as we enhance our
position as the world's largest flooring manufacturer.
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, New
Zealand, 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,
February 20, 2015 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 # 64529911. A replay will
be available until Friday,
March 6, 2015 by dialing 855-859-2056
for US/local calls and 404-537-3406 for International/Local calls
and entering Conference ID # 64529911.
MOHAWK INDUSTRIES,
INC. AND SUBSIDIARIES
|
|
|
|
|
|
|
|
|
|
Consolidated
Statement of Operations
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
(Amounts in
thousands, except per share data)
|
|
December
31, 2014
|
|
December
31, 2013
|
|
December
31, 2014
|
|
December
31, 2013
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$ 1,951,446
|
|
1,924,104
|
|
7,803,446
|
|
7,348,754
|
Cost of
sales
|
|
1,409,843
|
|
1,411,307
|
|
5,649,254
|
|
5,427,945
|
Gross profit
|
|
541,603
|
|
512,797
|
|
2,154,192
|
|
1,920,809
|
Selling, general and
administrative expenses
|
|
335,483
|
|
361,809
|
|
1,381,396
|
|
1,373,878
|
Operating
income
|
|
206,120
|
|
150,988
|
|
772,796
|
|
546,931
|
Interest
expense
|
|
20,623
|
|
22,148
|
|
98,207
|
|
92,246
|
Other expense
(income), net
|
|
9,737
|
|
2,656
|
|
10,698
|
|
9,114
|
Earnings from continuing operations before income taxes
|
|
175,760
|
|
126,184
|
|
663,891
|
|
445,571
|
Income tax
expense
|
|
28,680
|
|
15,420
|
|
131,637
|
|
78,385
|
Earnings
from continuing operations
|
|
147,080
|
|
110,764
|
|
532,254
|
|
367,186
|
Loss from
discontinued operations, net of income tax benefit of $268 and
$1,050, respectively
|
|
-
|
|
(15,981)
|
|
-
|
|
(17,895)
|
Net
earnings including noncontrolling interest
|
|
147,080
|
|
94,783
|
|
532,254
|
|
349,291
|
Net earnings
(loss) attributable to noncontrolling interest
|
|
212
|
|
132
|
|
289
|
|
505
|
Net earnings
attributable to Mohawk Industries, Inc.
|
|
$
146,868
|
|
94,651
|
|
531,965
|
|
348,786
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share attributable to Mohawk Industries, Inc.
|
|
|
|
|
|
|
|
|
Income from
continuing operations
|
|
$
2.01
|
|
1.52
|
|
7.30
|
|
5.11
|
Loss from
discontinued operations, net of income taxes
|
|
-
|
|
(0.22)
|
|
-
|
|
(0.25)
|
Basic earnings per
share attributable to Mohawk Industries, Inc.
|
|
$
2.01
|
|
1.30
|
|
7.30
|
|
4.86
|
Weighted-average
common shares outstanding - basic
|
|
72,905
|
|
72,654
|
|
72,837
|
|
71,773
|
|
|
|
|
|
|
|
|
|
Diluted earnings
per share attributable to Mohawk Industries, Inc.
|
|
|
|
|
|
|
|
|
Income from
continuing operations
|
|
$
2.00
|
|
1.51
|
|
7.25
|
|
5.07
|
Loss from
discontinued operations, net of income taxes
|
|
-
|
|
(0.22)
|
|
-
|
|
(0.25)
|
Diluted earnings per
share attributable to Mohawk Industries, Inc.
|
|
$
2.00
|
|
1.29
|
|
7.25
|
|
4.82
|
Weighted-average
common shares outstanding - diluted
|
|
73,452
|
|
73,214
|
|
73,363
|
|
72,301
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Financial
Information
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
Net cash provided by
(used in) operating activities
|
|
$
338,765
|
|
198,190
|
|
662,188
|
|
525,163
|
Depreciation and
amortization
|
|
$
95,665
|
|
86,329
|
|
345,570
|
|
308,871
|
Capital
expenditures
|
|
$
170,224
|
|
111,027
|
|
561,804
|
|
366,550
|
|
|
|
|
|
|
|
|
|
Consolidated
Balance Sheet Data
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31, 2014
|
|
December
31, 2013
|
ASSETS
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
|
|
$
97,877
|
|
54,066
|
Receivables, net
|
|
|
|
|
|
1,081,963
|
|
1,062,875
|
Inventories
|
|
|
|
|
|
1,543,313
|
|
1,572,325
|
Prepaid expenses and other current assets
|
|
|
|
|
|
257,333
|
|
248,918
|
Deferred income taxes
|
|
|
|
|
|
151,784
|
|
147,534
|
Total
current assets
|
|
|
|
|
|
3,132,270
|
|
3,085,718
|
Property, plant and
equipment, net
|
|
|
|
|
|
2,703,210
|
|
2,701,743
|
Goodwill
|
|
|
|
|
|
1,604,352
|
|
1,736,092
|
Intangible assets,
net
|
|
|
|
|
|
702,009
|
|
811,602
|
Deferred income taxes
and other non-current assets
|
|
|
|
|
|
143,703
|
|
159,022
|
Total assets
|
|
|
|
|
|
$ 8,285,544
|
|
8,494,177
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Current portion of
long-term debt and commercial paper
|
|
|
|
|
|
$ 851,305
|
|
127,218
|
Accounts payable and
accrued expenses
|
|
|
|
|
|
1,104,509
|
|
1,193,593
|
Total
current liabilities
|
|
|
|
|
|
1,955,814
|
|
1,320,811
|
Long-term debt, less
current portion
|
|
|
|
|
|
1,402,135
|
|
2,132,790
|
Deferred income taxes
and other long-term liabilities
|
|
|
|
|
|
504,782
|
|
570,270
|
Total
liabilities
|
|
|
|
|
|
3,862,731
|
|
4,023,871
|
Total stockholders'
equity
|
|
|
|
|
|
4,422,813
|
|
4,470,306
|
Total liabilities and stockholders' equity
|
|
|
|
|
|
$ 8,285,544
|
|
8,494,177
|
|
|
|
|
|
|
|
|
|
Segment
Information
|
|
Three Months
Ended
|
|
As of or for
the
Twelve Months
Ended
|
(Amounts in
thousands)
|
|
December
31, 2014
|
|
December
31, 2013
|
|
December
31, 2014
|
|
December
31, 2013
|
|
|
|
|
|
|
|
|
|
Net sales:
|
|
|
|
|
|
|
|
|
Carpet
|
|
$
779,865
|
|
747,143
|
|
3,013,948
|
|
2,986,096
|
Ceramic
|
|
743,619
|
|
738,004
|
|
3,015,279
|
|
2,677,058
|
Laminate and Wood
|
|
458,728
|
|
466,082
|
|
1,890,567
|
|
1,792,260
|
Intersegment sales
|
|
(30,766)
|
|
(27,125)
|
|
(116,348)
|
|
(106,660)
|
Consolidated net sales
|
|
$ 1,951,446
|
|
1,924,104
|
|
7,803,446
|
|
7,348,754
|
|
|
|
|
|
|
|
|
|
Operating income
(loss):
|
|
|
|
|
|
|
|
|
Carpet
|
|
$
84,759
|
|
60,087
|
|
255,938
|
|
209,023
|
Ceramic
|
|
82,793
|
|
57,637
|
|
351,113
|
|
209,825
|
Laminate and Wood
|
|
45,004
|
|
40,290
|
|
194,734
|
|
159,365
|
Corporate and eliminations
|
|
(6,436)
|
|
(7,026)
|
|
(28,989)
|
|
(31,282)
|
Consolidated operating income
|
|
$
206,120
|
|
150,988
|
|
772,796
|
|
546,931
|
|
|
|
|
|
|
|
|
|
Assets:
|
|
|
|
|
|
|
|
|
Carpet
|
|
|
|
|
|
$ 1,986,081
|
|
1,786,085
|
Ceramic
|
|
|
|
|
|
3,542,594
|
|
3,787,785
|
Laminate and Wood
|
|
|
|
|
|
2,542,566
|
|
2,716,759
|
Corporate and eliminations
|
|
|
|
|
|
214,303
|
|
203,548
|
Consolidated assets
|
|
|
|
|
|
$ 8,285,544
|
|
8,494,177
|
|
|
|
|
|
|
|
|
|
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
|
|
Twelve Months
Ended
|
|
|
|
|
|
|
December
31, 2014
|
|
December
31, 2013
|
|
December
31, 2014
|
|
December
31, 2013
|
Net earnings
attributable to Mohawk Industries, Inc.
|
|
$
146,868
|
|
94,651
|
|
531,965
|
|
348,786
|
Adjusting
items:
|
|
|
|
|
|
|
|
|
Restructuring,
acquisition, integration-related costs and disposal of
subsidiary
|
|
26,649
|
|
37,812
|
|
63,556
|
|
113,420
|
Acquisitions purchase
accounting (inventory step-up)
|
|
-
|
|
-
|
|
-
|
|
31,041
|
Discontinued
operations
|
|
-
|
|
16,249
|
|
-
|
|
18,945
|
Legal
reserve
|
|
-
|
|
-
|
|
10,000
|
|
-
|
Bond
redemption
|
|
3,472
|
|
-
|
|
18,922
|
|
-
|
Deferred loan
costs
|
|
-
|
|
-
|
|
1,080
|
|
490
|
Interest on 3.85%
senior notes
|
|
-
|
|
-
|
|
-
|
|
3,559
|
Income
taxes
|
|
(10,444)
|
|
(17,621)
|
|
(27,856)
|
|
(42,841)
|
Adjusted net earnings
attributable to Mohawk Industries, Inc.
|
|
$
166,545
|
|
131,091
|
|
597,667
|
|
473,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted diluted
earnings per share attributable to Mohawk Industries,
Inc.
|
|
2.27
|
|
1.79
|
|
8.15
|
|
6.55
|
Weighted-average
common shares outstanding - diluted
|
|
73,452
|
|
73,214
|
|
73,363
|
|
72,301
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Adjusted Diluted Earnings Per Share on a Constant Exchange
Rate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31, 2014
|
|
|
|
|
Adjusted diluted
earnings per share attributable to Mohawk Industries,
Inc.
|
|
$
2.27
|
|
|
|
|
Adjustment to constant
exchange rate
|
|
0.09
|
|
|
|
|
Adjusted diluted
earnings per share attributable to Mohawk Industries, Inc. on a
constant exchange rate
|
|
$
2.36
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Total Debt to Net Debt
|
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31, 2014
|
|
|
|
|
|
|
|
|
Current portion of
long-term debt and commercial paper
|
|
$
851,305
|
|
|
|
|
|
|
|
|
Long-term debt, less
current portion
|
|
1,402,135
|
|
|
|
|
|
|
|
|
Less: Cash and cash
equivalents
|
|
97,877
|
|
|
|
|
|
|
|
|
Net Debt
|
|
$ 2,155,563
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Operating Income to Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
Trailing
Twelve
|
|
|
|
|
Three Months
Ended
|
|
Months
Ended
|
|
|
|
|
March
29, 2014
|
|
June
28, 2014
|
|
September
27, 2014
|
|
December
31, 2014
|
|
December
31, 2014
|
Operating
income
|
|
130,735
|
|
222,248
|
|
213,693
|
|
206,120
|
|
772,796
|
Other (expense)
income
|
|
(4,890)
|
|
1,555
|
|
2,374
|
|
(9,737)
|
|
(10,698)
|
Net (earnings) loss
attributable to non-controlling interest
|
|
28
|
|
(111)
|
|
6
|
|
(212)
|
|
(289)
|
Depreciation and
amortization
|
|
80,984
|
|
83,754
|
|
85,167
|
|
95,665
|
|
345,570
|
EBITDA
|
|
206,857
|
|
307,446
|
|
301,240
|
|
291,836
|
|
1,107,379
|
Restructuring,
acquisition and integration-related costs
|
|
11,725
|
|
11,169
|
|
14,013
|
|
26,649
|
|
63,556
|
Legal
reserve
|
|
-
|
|
-
|
|
10,000
|
|
-
|
|
10,000
|
Adjusted
EBITDA
|
|
218,582
|
|
318,615
|
|
325,253
|
|
318,485
|
|
1,180,935
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Debt to
Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
1.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Net Sales to Net Sales on a Constant Exchange Rate
|
|
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
|
|
|
|
|
December
31, 2014
|
|
December
31, 2013
|
|
December
31, 2014
|
|
December
31, 2013
|
|
|
Net sales
|
|
$ 1,951,446
|
|
1,924,104
|
|
7,803,446
|
|
7,348,754
|
|
|
Adjustment to net
sales on a constant exchange rate
|
|
72,152
|
|
-
|
|
56,052
|
|
-
|
|
|
Net sales on a
constant exchange rate
|
|
$ 2,023,598
|
|
1,924,104
|
|
7,859,498
|
|
7,348,754
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Segment Net Sales to Segment Net Sales on a Constant Exchange
Rate
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
Ceramic
|
|
December
31, 2014
|
|
December
31, 2013
|
|
|
|
|
|
|
Net sales
|
|
$
743,619
|
|
738,004
|
|
|
|
|
|
|
Adjustment to segment
net sales on a constant exchange rate
|
|
44,742
|
|
-
|
|
|
|
|
|
|
Segment net sales on
a constant exchange rate
|
|
$
788,361
|
|
738,004
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Segment Net Sales to Segment Net Sales on a Constant Exchange
Rate
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
Laminate and
Wood
|
|
December
31, 2014
|
|
December
31, 2013
|
|
|
|
|
|
|
Net sales
|
|
$
458,728
|
|
466,082
|
|
|
|
|
|
|
Adjustment to segment
net sales on a constant exchange rate
|
|
27,411
|
|
-
|
|
|
|
|
|
|
Segment net sales on
a constant exchange rate
|
|
$
486,139
|
|
466,082
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Gross Profit to Adjusted Gross Profit
|
|
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
|
|
|
|
|
December
31, 2014
|
|
December
31, 2013
|
|
December
31, 2014
|
|
December
31, 2013
|
|
|
Gross
Profit
|
|
$
541,603
|
|
512,797
|
|
2,154,192
|
|
1,920,809
|
|
|
Adjustments to gross
profit:
|
|
|
|
|
|
|
|
|
|
|
Restructuring and
integration-related costs
|
|
11,568
|
|
16,707
|
|
31,222
|
|
49,151
|
|
|
Acquisitions purchase
accounting (inventory step-up)
|
|
-
|
|
-
|
|
-
|
|
31,041
|
|
|
Adjusted gross
profit
|
|
$
553,171
|
|
529,504
|
|
2,185,414
|
|
2,001,001
|
|
|
Adjusted gross
profit as a percent of net sales
|
|
28.3%
|
|
27.5%
|
|
28.0%
|
|
27.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Selling, General and Administrative Expenses to Adjusted Selling,
General and Administrative Expenses
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
December
31, 2014
|
|
December
31, 2013
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
$
335,483
|
|
361,809
|
|
|
|
|
|
|
Adjustments to
selling, general and administrative expenses:
|
|
|
|
|
|
|
|
|
|
Restructuring,
acquisition and integration-related costs
|
(3,127)
|
|
(19,644)
|
|
|
|
|
|
|
Adjusted
selling, general and administrative expenses
|
$
332,356
|
|
342,165
|
|
|
|
|
|
|
Adjusted selling,
general and administrative expenses as a percent of net
sales
|
17.0%
|
|
17.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Operating Income to Adjusted Operating Income
|
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
|
|
|
|
|
December
31, 2014
|
|
December
31, 2013
|
|
December
31, 2014
|
|
December
31, 2013
|
|
|
Operating
income
|
|
$
206,120
|
|
150,988
|
|
772,796
|
|
546,931
|
|
|
Adjustments to
operating income:
|
|
|
|
|
|
|
|
|
|
|
Restructuring,
acquisition and integration-related costs
|
14,695
|
|
36,351
|
|
63,556
|
|
111,939
|
|
|
Legal
reserve
|
|
-
|
|
-
|
|
10,000
|
|
-
|
|
|
Acquisitions purchase
accounting (inventory step-up)
|
-
|
|
-
|
|
-
|
|
31,041
|
|
|
Adjusted
operating income
|
$
220,815
|
|
187,339
|
|
846,352
|
|
689,911
|
|
|
Adjusted
operating income as a percent of net sales
|
11.3%
|
|
9.7%
|
|
10.8%
|
|
9.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Adjusted Operating Income on a Constant Exchange
Rate
|
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
|
|
December
31, 2014
|
|
December
31, 2013
|
|
|
|
|
|
|
Operating
income
|
|
$
206,120
|
|
150,988
|
|
|
|
|
|
|
Adjustments to
operating income
|
|
14,695
|
|
36,351
|
|
|
|
|
|
|
Adjustments to
operating income on a constant exchange rate
|
8,050
|
|
-
|
|
|
|
|
|
|
Adjusted
operating income on constant exchange rate
|
$
228,865
|
|
187,339
|
|
|
|
|
|
|
Adjusted
operating income as a percent of net sales
|
11.3%
|
|
9.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Segment Operating Income to Adjusted Segment Operating
Income
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
|
Carpet
|
|
December
31, 2014
|
|
December
31, 2013
|
|
December
31, 2014
|
|
December
31, 2013
|
|
|
Operating
income
|
|
$
84,759
|
|
60,087
|
|
255,938
|
|
209,023
|
|
|
Adjustment to segment
operating income:
|
|
|
|
|
|
|
|
|
|
|
Restructuring,
acquisition and integration-related costs
|
1,999
|
|
6,005
|
|
1,999
|
|
13,603
|
|
|
Legal
reserve
|
|
-
|
|
-
|
|
10,000
|
|
-
|
|
|
Adjusted
segment operating income
|
$
86,758
|
|
66,092
|
|
267,937
|
|
222,626
|
|
|
Adjusted
operating income as a percent of net sales
|
11.1%
|
|
8.8%
|
|
8.9%
|
|
7.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Segment Operating Income to Adjusted Segment Operating
Income
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
|
Ceramic
|
|
December
31, 2014
|
|
December
31, 2013
|
|
December
31, 2014
|
|
December
31, 2013
|
|
|
Operating
income
|
|
$
82,793
|
|
57,637
|
|
351,113
|
|
209,825
|
|
|
Adjustments to
segment operating income:
|
|
|
|
|
|
|
|
|
|
Restructuring,
acquisition and integration-related costs
|
2,905
|
|
15,982
|
|
9,330
|
|
42,876
|
|
|
Acquisitions purchase
accounting (inventory step-up)
|
-
|
|
-
|
|
-
|
|
31,041
|
|
|
Adjusted
segment operating income
|
$
85,698
|
|
73,619
|
|
360,443
|
|
283,742
|
|
|
Adjusted
operating income as a percent of net sales
|
11.5%
|
|
10.0%
|
|
12.0%
|
|
10.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Segment Operating Income to Adjusted Segment Operating Income on a
Constant Exchange Rate
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
Ceramic
|
|
|
December
31, 2014
|
|
December
31, 2013
|
|
|
|
|
|
|
Operating
income
|
|
$
82,793
|
|
57,637
|
|
|
|
|
|
|
Adjustments to
operating income
|
|
2,905
|
|
15,982
|
|
|
|
|
|
|
Adjustments to
operating income on a constant exchange rate
|
4,493
|
|
-
|
|
|
|
|
|
|
Adjusted
operating income on constant exchange rate
|
$
90,191
|
|
73,619
|
|
|
|
|
|
|
Adjusted
operating income as a percent of net sales
|
11.4%
|
|
10.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Segment Operating Income to Adjusted Segment Operating
Income
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
|
Laminate and
Wood
|
|
December
31, 2014
|
|
December
31, 2013
|
|
December
31, 2014
|
|
December
31, 2013
|
|
|
Operating
income
|
|
$
45,004
|
|
40,290
|
|
194,734
|
|
159,365
|
|
|
Adjustment to segment
operating income:
|
|
|
|
|
|
|
|
|
|
Restructuring,
acquisition and integration-related costs
|
9,424
|
|
13,852
|
|
38,788
|
|
54,235
|
|
|
Adjusted
segment operating income
|
$
54,428
|
|
54,142
|
|
233,522
|
|
213,600
|
|
|
Adjusted
operating income as a percent of net sales
|
11.9%
|
|
11.6%
|
|
12.4%
|
|
11.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Segment Operating Income to Adjusted Segment Operating Income on a
Constant Exchange Rate
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
Laminate and
Wood
|
|
December
31, 2014
|
|
December
31, 2013
|
|
|
|
|
|
|
Operating
income
|
|
$
45,004
|
|
40,290
|
|
|
|
|
|
|
Adjustments to
operating income
|
9,424
|
|
13,852
|
|
|
|
|
|
|
Adjustments to
operating income on a constant exchange rate
|
3,557
|
|
-
|
|
|
|
|
|
|
Adjusted
operating income on constant exchange rate
|
$
57,985
|
|
54,142
|
|
|
|
|
|
|
Adjusted
operating income as a percent of net sales
|
11.9%
|
|
11.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Earnings from Continuing Operations Before Income Taxes to Adjusted
Earnings from Continuing Operations Before Income
Taxes
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
|
|
December
31, 2014
|
|
December
31, 2013
|
|
|
|
|
|
|
Earnings from
continuing operations before income taxes
|
$
175,760
|
|
126,184
|
|
|
|
|
|
|
Adjustments to
earnings from continuing operations before income taxes:
|
|
|
|
|
|
|
|
|
|
Restructuring,
acquisition, integration-related costs and disposal of
subsidiary
|
26,649
|
|
37,812
|
|
|
|
|
|
|
Acquisitions purchase
accounting (inventory step-up)
|
-
|
|
-
|
|
|
|
|
|
|
Legal
reserve
|
-
|
|
-
|
|
|
|
|
|
|
Bond
redemption
|
3,472
|
|
-
|
|
|
|
|
|
|
Deferred loan
costs
|
-
|
|
-
|
|
|
|
|
|
|
Interest on 3.85%
senior notes
|
-
|
|
-
|
|
|
|
|
|
|
Adjusted
earnings before income taxes
|
$
205,881
|
|
163,996
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Income Tax Expense to Adjusted Income Tax
Expense
|
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
|
|
December
31, 2014
|
|
December
31, 2013
|
|
|
|
|
|
|
Income tax
expense
|
|
|
$
28,680
|
|
15,420
|
|
|
|
|
|
|
Income tax effect of
adjusting items
|
|
10,444
|
|
17,353
|
|
|
|
|
|
|
Adjusted
income tax expense
|
|
$
39,124
|
|
32,773
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted income tax
rate
|
|
19%
|
|
20%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proforma Net Sales
and Operating Income Adjusted by FX
|
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
Twelve Months
Ended
|
|
|
|
|
|
|
|
|
|
|
December 31,
2014
|
|
|
|
|
|
|
|
|
|
|
Net Sales
|
|
Operating
Income
|
|
|
|
|
|
|
Net Sales and
Operating Income as reported
|
$ 7,803,446
|
|
772,796
|
|
|
|
|
|
|
FX adjustments using
average rates of Euro/USD: 1.14 and Ruble/USD: 61.0
|
(392,838)
|
|
(56,436)
|
|
|
|
|
|
|
Proforma Net Sales and
Operating Income Adjusted by FX
|
$ 7,410,608
|
|
716,360
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/mohawk-industries-inc-announces-fourth-quarter-earnings-300038769.html
SOURCE Mohawk Industries, Inc.