Record Q2 Adjusted EPS - 22% Increase Over PY
CALHOUN, Ga., Aug. 6, 2015 /CNW/ -- Mohawk Industries,
Inc. (NYSE: MHK) today announced 2015 second quarter net
earnings of $186 million and diluted
earnings per share (EPS) of $2.53.
Excluding unusual charges, net earnings were $199 million and EPS was $2.69, a 22% increase over last year's second
quarter adjusted EPS and the highest adjusted quarterly EPS in the
company's history. Net sales for the second quarter of 2015 were
$2.0 billion, flat versus the prior
year's second quarter or a 7% increase on a constant currency
exchange rate basis. For the second quarter of 2014, net sales were
$2.0 billion, net earnings were
$153 million and EPS was $2.08; excluding unusual charges, net earnings
were $162 million and EPS was
$2.21.
For the six months ending July 4,
2015, net sales were $3.92
billion, an increase of approximately 2% versus prior year
or an increase of approximately 9% on a constant currency exchange
rate basis. Net earnings and EPS for the six-month period were
$209 million and $2.83, respectively. Net earnings excluding
unusual charges were $324 million and
adjusted EPS was $4.39, an increase
of 28% over the six-month period adjusted EPS result in 2014. For
the six-months ending June 28, 2014,
net sales were $3.86 billion, net
earnings were $234 million and EPS
was $3.19; excluding unusual charges,
net earnings and EPS were $252
million and $3.44.
Commenting on Mohawk Industries' second quarter performance,
Jeffrey S. Lorberbaum, Chairman and
CEO, stated, "For the period, our adjusted operating margin was
approximately 14%, an increase of 21% or 240 basis points
compared to the prior year due to the performance of our
differentiated new products, higher volume and improved
productivity and costs across the enterprise. In May, we completed
the purchase of KAI, giving us the leading position in the
Bulgarian and Romanian ceramic markets positioned as the low-cost
producer; and in mid-June we completed our acquisition of IVC,
providing us with leading positions in luxury vinyl tile (LVT) and
sheet vinyl on both sides of the Atlantic. The IVC and KAI
acquisitions have compelling long-term potential and expand our
business into new product categories and new markets. To maximize
our growth, we have invested more into the business including
developing differentiated products, hiring more sales personnel,
and increasing our product sampling and merchandising. Our capital
investments increased capacity to meet growing demand and improved
manufacturing efficiencies and costs.
"During the second quarter, the Company realigned its reportable
segments, organizing its carpet, wood, laminate and newly acquired
vinyl operations by geography into the Flooring North America
segment and the Flooring Rest of the World segment. Our Global
Ceramic segment remains the same with the addition of KAI in
Eastern Europe. Our management of
the business has been aligned with this change, which will allow us
to optimize our operations and sales by region while coordinating
our technology, manufacturing and product development across the
enterprise. We expect to gain synergies through enhanced customer
relationships, better utilization of our assets and distribution
systems and the implementation of best practices.
"For the quarter, our Global Ceramic segment's adjusted
operating margin was approximately 16%, up 220 basis points as our
mix, volume and productivity improved. The segment's sales were
down 1% as reported or up approximately 8% on a constant exchange
basis, including two months of KAI's results during the quarter. On
a pro forma basis, ceramic has become the largest product category
in our portfolio, constituting over 35% of our total revenues. Our
U.S. ceramic business continues to build momentum across all
channels with stronger growth in the residential new construction
and commercial sectors. We are adding sales personnel, service
centers and showrooms to maximize our U.S. sales and are utilizing
our worldwide assets to satisfy the increasing U.S. demand. In
Mexico, our sales continued their
rapid growth as the economy expands and we grow our market share.
We recently completed the acquisition of a small ceramic plant in
Baja, Mexico, which will expand
our position in Western Mexico and
the Southwestern U.S. market. In our European ceramic business, our
investments have significantly improved our product offering, sales
and margins. The KAI acquisition expands our Eastern European
business and creates opportunities to ship their products into
other markets. In Russia, our
second quarter revenues were up on a local basis as we grow market
share in a contracting environment.
"During the period, our Flooring North America segment's
adjusted operating income increased 40%, achieving a margin of
approximately 12%. All product categories contributed to the
increase through productivity and lower costs, offset by price, mix
and the start-up costs related to our new U.S. LVT plant. Segment
sales increased approximately 3%, including about three weeks of
IVC North American results. For the quarter, our carpet tile,
laminate, wood, rugs and vinyl sales increased with broadloom
carpet down slightly. Our new residential carpet introductions are
gaining traction and should improve our remodeling business. During
the quarter, we announced the closing of a yarn manufacturing
facility, initiated the consolidation of our woven manufacturing
and eliminated four regional warehouses. Sales of our hard surface
products are growing faster than carpet due to their increasing use
in new home construction and residential remodeling. With IVC, we
are leveraging Mohawk's relationships to expand our sheet vinyl and
LVT sales in all channels. Our new LVT plant in Georgia is starting up as anticipated, and is
increasing its production as we refine the manufacturing
processes.
"Our Flooring Rest of the World segment's adjusted operating
margin was 18.5%, an increase of 250 basis points over the prior
year, driven by improved volume, productivity initiatives and lower
costs, offset by the start-up expenses of our new Belgian LVT plant
and the translation impact of the stronger dollar. Net sales for
the segment were down 7% as reported but up 13% on a constant
exchange basis, including about three weeks of IVC sales in
Europe. Sales of almost all
product categories improved over the prior year with our new
laminate introductions enhancing our market position. Our Czech
wood plant is now operating near capacity with improved costs and
margins, although currency translation of wood products from
Malaysia impacted our costs. Our
Belgian LVT sales continue to increase as we broaden our product
offering, increase production and improve our manufacturing cost
and quality. The IVC acquisition adds a strong management team,
leading manufacturing capabilities and new market opportunities
that we can optimize with our existing business.
"Our business is benefiting from years of thoughtful investments
in new equipment and acquisitions. In addition to being the world's
largest flooring manufacturer, we have the most comprehensive
product portfolio with the best brands and assets. Looking ahead,
we anticipate the U.S. economy will continue to improve,
strengthening both the residential and commercial flooring markets.
During the third quarter, we anticipate that U.S. sales and margins
in all of our product categories will improve over last year.
Though foreign currency is creating significant headwinds, most of
our markets are improving and we are growing on a local basis. In
Mexico, we expect our sales and
margin expansion to continue in a ceramic market that is strongly
growing. Our European business should continue to improve with the
economy, as we benefit from our new ceramic manufacturing assets
and other significant investments we have made. Even though
Russia should be more difficult
going forward, we expect to gain market share by expanding our
position in all channels. In the third quarter, we will continue to
absorb the start-up costs related to our capital investments,
including two new LVT plants, a new ceramic plant and major
upgrades across the enterprise. Our new acquisitions of vinyl in
the U.S. and Europe and ceramic in
Eastern Europe and Western Mexico will improve our results and
long-term value. Taking all of these factors into account, our
guidance for third quarter earnings is $2.91
to $2.99 per share, excluding any restructuring charges. Our
third quarter earnings guidance would have been approximately
$0.24 per share higher on a constant
exchange rate relative to last year."
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, IVC, Lees,
Marazzi, Mohawk, Pergo, Quick-Step and Unilin. 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, 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
and deflation in raw material prices and other input costs;
inflation and deflation in consumer markets; 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, August 7,
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 # 81118248. A replay will
be available until Friday, September 4,
2015 by dialing 855-859-2056 for US/Local calls and
404-537-3406 for International/Local calls and entering Conference
ID # 81118248.
MOHAWK INDUSTRIES,
INC. AND SUBSIDIARIES
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
Consolidated
Statement of Operations
|
|
Three Months
Ended
|
|
Six Months
Ended
|
(Amounts in
thousands, except per share data)
|
|
July 4,
2015
|
|
June 28,
2014
|
|
July 4,
2015
|
|
June 28,
2014
|
Net sales
|
|
$
2,041,733
|
|
2,048,247
|
|
3,922,910
|
|
3,861,342
|
Cost of
sales
|
|
1,426,604
|
|
1,473,435
|
|
2,795,838
|
|
2,805,175
|
Gross profit
|
|
615,129
|
|
574,812
|
|
1,127,072
|
|
1,056,167
|
Selling, general and
administrative expenses
|
|
359,313
|
|
352,564
|
|
827,482
|
|
703,184
|
Operating
income
|
|
255,816
|
|
222,248
|
|
299,590
|
|
352,983
|
Interest
expense
|
|
16,838
|
|
20,702
|
|
33,287
|
|
42,798
|
Other expense
(income), net
|
|
2,928
|
|
(1,555)
|
|
1,845
|
|
3,335
|
Earnings before income taxes
|
|
236,050
|
|
203,101
|
|
264,458
|
|
306,850
|
Income tax
expense
|
|
49,276
|
|
50,240
|
|
55,180
|
|
72,936
|
Net
earnings including noncontrolling interest
|
|
186,774
|
|
152,861
|
|
209,278
|
|
233,914
|
Net earnings
(loss) attributable to noncontrolling interest
|
|
282
|
|
111
|
|
440
|
|
83
|
Net earnings
attributable to Mohawk Industries, Inc.
|
|
$
186,492
|
|
152,750
|
|
208,838
|
|
233,831
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share attributable to Mohawk Industries, Inc.
|
|
|
|
|
|
|
|
|
Basic earnings per
share attributable to Mohawk Industries, Inc.
|
|
$
2.54
|
|
2.10
|
|
2.85
|
|
3.21
|
Weighted-average
common shares outstanding - basic
|
|
73,264
|
|
72,832
|
|
73,123
|
|
72,788
|
|
|
|
|
|
|
|
|
|
Diluted earnings
per share attributable to Mohawk Industries, Inc.
|
|
|
|
|
|
|
|
|
Diluted earnings per
share attributable to Mohawk Industries, Inc.
|
|
$
2.53
|
|
2.08
|
|
2.83
|
|
3.19
|
Weighted-average
common shares outstanding - diluted
|
|
73,756
|
|
73,297
|
|
73,644
|
|
73,302
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Financial
Information
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
$
88,011
|
|
83,754
|
|
173,667
|
|
164,738
|
Capital
expenditures
|
|
$
122,628
|
|
127,616
|
|
228,422
|
|
249,697
|
|
|
|
|
|
|
|
|
|
Consolidated
Balance Sheet Data
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
July 4,
2015
|
|
June 28,
2014
|
ASSETS
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
|
|
$
171,087
|
|
70,044
|
Receivables, net
|
|
|
|
|
|
1,387,687
|
|
1,261,808
|
Inventories
|
|
|
|
|
|
1,592,403
|
|
1,644,768
|
Prepaid expenses and other current assets
|
|
|
|
|
|
303,871
|
|
267,210
|
Deferred income taxes
|
|
|
|
|
|
153,574
|
|
135,259
|
Total
current assets
|
|
|
|
|
|
3,608,622
|
|
3,379,089
|
Property, plant and
equipment, net
|
|
|
|
|
|
3,014,751
|
|
2,830,202
|
Goodwill
|
|
|
|
|
|
2,294,214
|
|
1,730,713
|
Intangible assets,
net
|
|
|
|
|
|
931,296
|
|
792,260
|
Deferred income taxes
and other non-current assets
|
|
|
|
|
|
316,787
|
|
149,417
|
Total assets
|
|
|
|
|
|
$
10,165,670
|
|
8,881,681
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Current portion of
long-term debt and commercial paper
|
|
|
|
|
|
$
1,698,044
|
|
619,229
|
Accounts payable and
accrued expenses
|
|
|
|
|
|
1,303,487
|
|
1,253,291
|
Total
current liabilities
|
|
|
|
|
|
3,001,531
|
|
1,872,520
|
Long-term debt, less
current portion
|
|
|
|
|
|
1,777,828
|
|
1,807,609
|
Deferred income taxes
and other long-term liabilities
|
|
|
|
|
|
750,125
|
|
528,252
|
Total
liabilities
|
|
|
|
|
|
5,529,484
|
|
4,208,381
|
Redeemable
noncontrolling interest
|
|
|
|
|
|
21,304
|
|
-
|
Total stockholders'
equity
|
|
|
|
|
|
4,614,882
|
|
4,673,300
|
Total liabilities and stockholders' equity
|
|
|
|
|
|
$
10,165,670
|
|
8,881,681
|
|
|
|
|
|
|
|
|
|
Segment
Information
|
|
Three Months
Ended
|
|
As of or for the Six
Months Ended
|
(Amounts in
thousands)
|
|
July 4,
2015
|
|
June 28,
2014
|
|
July 4,
2015
|
|
June 28,
2014
|
|
|
|
|
|
|
|
|
|
Net sales:
|
|
|
|
|
|
|
|
|
Global Ceramic
|
|
$
789,802
|
|
796,724
|
|
1,509,630
|
|
1,491,818
|
Flooring NA
|
|
920,337
|
|
895,912
|
|
1,767,248
|
|
1,676,243
|
Flooring ROW
|
|
331,622
|
|
357,738
|
|
646,364
|
|
695,804
|
Intersegment sales
|
|
(28)
|
|
(2,127)
|
|
(332)
|
|
(2,523)
|
Consolidated net sales
|
|
$
2,041,733
|
|
2,048,247
|
|
3,922,910
|
|
3,861,342
|
|
|
|
|
|
|
|
|
|
Operating income
(loss):
|
|
|
|
|
|
|
|
|
Global Ceramic
|
|
$
121,189
|
|
106,407
|
|
206,516
|
|
167,066
|
Flooring NA
|
|
95,143
|
|
76,602
|
|
19,951
|
|
123,955
|
Flooring ROW
|
|
53,052
|
|
47,398
|
|
97,693
|
|
78,864
|
Corporate and eliminations
|
|
(13,568)
|
|
(8,159)
|
|
(24,570)
|
|
(16,902)
|
Consolidated operating income
|
|
$
255,816
|
|
222,248
|
|
299,590
|
|
352,983
|
|
|
|
|
|
|
|
|
|
Assets:
|
|
|
|
|
|
|
|
|
Global Ceramic
|
|
|
|
|
|
$
3,950,088
|
|
3,900,387
|
Flooring NA
|
|
|
|
|
|
3,182,465
|
|
2,587,409
|
Flooring ROW
|
|
|
|
|
|
2,710,895
|
|
2,174,546
|
Corporate and eliminations
|
|
|
|
|
|
322,222
|
|
219,339
|
Consolidated assets
|
|
|
|
|
|
$
10,165,670
|
|
8,881,681
|
|
|
|
|
|
|
|
|
|
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
|
|
Six Months
Ended
|
|
|
|
|
|
|
July 4,
2015
|
|
June 28,
2014
|
|
July 4,
2015
|
|
June 28,
2014
|
Net earnings
attributable to Mohawk Industries, Inc.
|
|
|
|
$
186,492
|
|
152,750
|
|
208,838
|
|
233,831
|
Adjusting
items:
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring,
acquisition and integration-related and other
costs
|
|
|
|
20,485
|
|
11,169
|
|
33,014
|
|
22,894
|
Acquisitions purchase
accounting (inventory step-up)
|
|
|
|
6,156
|
|
-
|
|
6,156
|
|
-
|
Legal settlement and
reserves
|
|
|
|
|
-
|
|
-
|
|
125,000
|
|
-
|
Deferred loan
costs
|
|
|
|
|
|
-
|
|
-
|
|
651
|
|
-
|
Income
taxes
|
|
|
|
|
|
(14,490)
|
|
(2,229)
|
|
(50,044)
|
|
(4,620)
|
Adjusted net earnings
attributable to Mohawk Industries, Inc.
|
|
|
|
$
198,643
|
|
161,690
|
|
323,615
|
|
252,105
|
Adjusted diluted
earnings per share attributable to Mohawk Industries,
Inc.
|
|
$
2.69
|
|
2.21
|
|
4.39
|
|
3.44
|
Weighted-average
common shares outstanding - diluted
|
|
|
|
73,756
|
|
73,297
|
|
73,644
|
|
73,302
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Total Debt to Net Debt
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
July 4,
2015
|
|
|
|
|
|
|
|
|
Current portion of
long-term debt and commercial paper
|
|
$
1,698,044
|
|
|
|
|
|
|
|
|
Long-term debt, less
current portion
|
|
|
1,777,828
|
|
|
|
|
|
|
|
|
Less: Cash and cash
equivalents
|
|
|
171,087
|
|
|
|
|
|
|
|
|
Net Debt
|
|
|
|
$
3,304,785
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Operating Income to Adjusted EBITDA
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Trailing
Twelve
|
|
|
|
|
Three Months
Ended
|
|
Months
Ended
|
|
|
|
|
September 27,
2014
|
|
December 31,
2014
|
|
April 4,
2015
|
|
July 4,
2015
|
|
July 4,
2015
|
Operating
income
|
|
|
|
213,693
|
|
206,120
|
|
43,774
|
|
255,816
|
|
719,403
|
Other (expense)
income
|
|
|
2,374
|
|
(9,737)
|
|
1,083
|
|
(2,928)
|
|
(9,208)
|
Net (earnings) loss
attributable to non-controlling interest
|
|
6
|
|
(212)
|
|
(158)
|
|
(282)
|
|
(646)
|
Depreciation and
amortization
|
|
|
85,167
|
|
95,665
|
|
85,656
|
|
88,011
|
|
354,499
|
EBITDA
|
|
|
|
301,240
|
|
291,836
|
|
130,355
|
|
340,617
|
|
1,064,048
|
Restructuring,
acquisition and integration-related and other
costs
|
|
11,311
|
|
21,859
|
|
8,169
|
|
17,275
|
|
58,614
|
Acquisitions purchase
accounting (inventory step-up)
|
|
-
|
|
-
|
|
-
|
|
6,156
|
|
6,156
|
Legal settlement and
reserves
|
|
|
10,000
|
|
-
|
|
125,000
|
|
-
|
|
135,000
|
Adjusted
EBITDA
|
|
|
|
322,551
|
|
313,695
|
|
263,524
|
|
364,048
|
|
1,263,818
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Debt to
Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
2.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Net Sales to Net Sales on a Constant Exchange Rate
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
|
|
|
|
July 4,
2015
|
|
June 28,
2014
|
|
July 4,
2015
|
|
June 28,
2014
|
|
|
Net sales
|
|
|
|
$
2,041,733
|
|
2,048,247
|
|
3,922,910
|
|
3,861,342
|
|
|
Adjustment to net
sales on a constant exchange rate
|
|
|
|
140,913
|
|
-
|
|
277,616
|
|
-
|
|
|
Net sales on a
constant exchange rate
|
|
$
2,182,646
|
|
2,048,247
|
|
4,200,526
|
|
3,861,342
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
2015 Net Sales to Pro Forma Net Sales on a Constant Exchange Rate
Excluding 2015 Q2 Acquisition Volume
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
|
|
July 4,
2015
|
|
June 28,
2014
|
|
|
|
|
|
|
Net sales
|
|
|
|
$
2,041,733
|
|
2,048,247
|
|
|
|
|
|
|
Adjustment to net
sales on a constant exchange rate
|
|
140,913
|
|
-
|
|
|
|
|
|
|
Less: 2015 Q2 impact
of acquisition volume
|
|
(55,672)
|
|
-
|
|
|
|
|
|
|
2015 pro forma net
sales on a constant exchange rate excluding acquisition
volume
|
|
$
2,126,974
|
|
2,048,247
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Segment Net Sales to Segment Net Sales on a Constant Exchange
Rate
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
Global
Ceramic
|
|
|
|
July 4,
2015
|
|
June 28,
2014
|
|
|
|
|
|
|
Net sales
|
|
|
|
$
789,802
|
|
796,724
|
|
|
|
|
|
|
Adjustment to segment
net sales on a constant exchange rate
|
|
68,957
|
|
-
|
|
|
|
|
|
|
Segment net sales on
a constant exchange rate
|
|
$
858,759
|
|
796,724
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
2015 Segment Net Sales to Segment Pro Forma Net Sales on a Constant
Exchange Rate Excluding 2015 Q2 Acquisition Volume
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
Global
Ceramic
|
|
|
|
July 4,
2015
|
|
June 28,
2014
|
|
|
|
|
|
|
Net sales
|
|
|
|
$
789,802
|
|
796,724
|
|
|
|
|
|
|
Adjustment to segment
net sales on a constant exchange rate
|
|
68,957
|
|
-
|
|
|
|
|
|
|
Less: 2015 Q2 impact
of acquisition volume
|
|
(17,675)
|
|
-
|
|
|
|
|
|
2015 segment pro
forma net sales on a constant exchange rate excluding acquisition
volume
|
|
$
841,084
|
|
796,724
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
2015 Segment Net Sales to Segment Pro Forma Net Sales on a
Constant Exchange Rate Excluding 2015 Q2 Acquisition
Volume
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
Flooring
NA
|
|
|
|
July 4,
2015
|
|
June 28,
2014
|
|
|
|
|
|
|
Net sales
|
|
|
|
$
920,337
|
|
895,912
|
|
|
|
|
|
|
Adjustment to segment
net sales on a constant exchange rate
|
|
-
|
|
-
|
|
|
|
|
|
|
Less: 2015 Q2 impact
of acquisition volume
|
|
(10,036)
|
|
-
|
|
|
|
|
|
|
2015 segment pro
forma net sales on a constant exchange rate excluding acquisition
volume
|
|
$
910,301
|
|
895,912
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Segment Net Sales to Segment Net Sales on a Constant Exchange
Rate
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
Flooring
ROW
|
|
|
|
July 4,
2015
|
|
June 28,
2014
|
|
|
|
|
|
|
Net sales
|
|
|
|
$
331,622
|
|
357,738
|
|
|
|
|
|
|
Adjustment to segment
net sales on a constant exchange rate
|
|
71,955
|
|
-
|
|
|
|
|
|
|
Segment net sales on
a constant exchange rate
|
|
$
403,577
|
|
357,738
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
2015 Segment Net Sales to Pro Forma Segment Net Sales on a Constant
Exchange Rate Excluding 2015 Q2 Acquisition Volume
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
Flooring
ROW
|
|
|
|
July 4,
2015
|
|
June 28,
2014
|
|
|
|
|
|
|
Net sales
|
|
|
|
$
331,622
|
|
357,738
|
|
|
|
|
|
|
Adjustment to segment
net sales on a constant exchange rate
|
|
71,955
|
|
-
|
|
|
|
|
|
|
Less: 2015 Q2 impact
of acquisition volume
|
|
(27,961)
|
|
-
|
|
|
|
|
|
|
2015 Segment Pro
forma net sales on a constant exchange rate excluding acquisition
volume
|
|
$
375,616
|
|
357,738
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Gross Profit to Adjusted Gross Profit
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
|
|
July 4,
2015
|
|
June 28,
2014
|
|
|
|
|
|
|
Gross
Profit
|
|
|
|
$
615,129
|
|
574,812
|
|
|
|
|
|
|
Adjustments to gross
profit:
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring,
acquisition and integration-related and other
costs
|
|
12,341
|
|
6,755
|
|
|
|
|
|
|
Acquisitions purchase
accounting (inventory step-up)
|
|
6,156
|
|
-
|
|
|
|
|
|
|
Adjusted gross
profit
|
|
|
|
$
633,626
|
|
581,567
|
|
|
|
|
|
|
Adjusted
gross profit as a percent of net sales
|
|
31.0%
|
|
28.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Selling, General and Administrative Expenses to Adjusted Selling,
General and Administrative Expenses
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
|
|
July 4,
2015
|
|
June 28,
2014
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
|
$
359,313
|
|
352,564
|
|
|
|
|
|
|
Adjustment to
selling, general and administrative expenses:
|
|
|
|
|
|
|
|
|
|
|
Restructuring,
acquisition and integration-related and other
costs
|
|
(8,144)
|
|
(4,414)
|
|
|
|
|
|
|
Adjusted
selling, general and administrative expenses
|
|
$
351,169
|
|
348,150
|
|
|
|
|
|
|
Adjusted selling,
general and administrative expenses as a percent of net
sales
|
17.2%
|
|
17.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Operating Income to Adjusted Operating Income
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
|
|
July 4,
2015
|
|
June 28,
2014
|
|
|
|
|
|
|
Operating
income
|
|
|
|
$
255,816
|
|
222,248
|
|
|
|
|
|
|
Adjustments to
operating income:
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring,
acquisition and integration-related and other
costs
|
|
20,485
|
|
11,169
|
|
|
|
|
|
|
Acquisitions purchase
accounting (inventory step-up)
|
|
6,156
|
|
-
|
|
|
|
|
|
|
Adjusted
operating income
|
|
|
$
282,457
|
|
233,417
|
|
|
|
|
|
|
Adjusted
operating income as a percent of net sales
|
|
13.8%
|
|
11.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Adjusted Operating Income on a Constant Exchange
Rate
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
|
|
July 4,
2015
|
|
June 28,
2014
|
|
|
|
|
|
|
Operating
income
|
|
|
|
$
255,816
|
|
222,248
|
|
|
|
|
|
|
Restructuring,
acquisition and integration-related and other
costs
|
|
20,485
|
|
11,169
|
|
|
|
|
|
|
Acquisitions purchase
accounting (inventory step-up)
|
|
6,156
|
|
-
|
|
|
|
|
|
|
Adjustments to operating income on a constant exchange
rate
|
|
24,955
|
|
-
|
|
|
|
|
|
|
Adjusted
operating income on constant exchange rate
|
|
$
307,412
|
|
233,417
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Segment Operating Income to Adjusted Segment Operating
Income
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
Global
Ceramic
|
|
|
|
July 4,
2015
|
|
June 28,
2014
|
|
|
|
|
|
|
Operating
income
|
|
|
|
$
121,189
|
|
106,407
|
|
|
|
|
|
|
Adjustments to
segment operating income:
|
|
|
|
|
|
|
|
|
|
|
Restructuring,
acquisition and integration-related and other
costs
|
|
77
|
|
196
|
|
|
|
|
|
|
Acquisitions purchase
accounting (inventory step-up)
|
|
1,932
|
|
-
|
|
|
|
|
|
|
Adjusted
segment operating income
|
|
|
$
123,198
|
|
106,603
|
|
|
|
|
|
|
Adjusted
operating income as a percent of net sales
|
|
15.6%
|
|
13.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Segment Operating Income to Adjusted Segment Operating Income on a
Constant Exchange Rate
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
Global
Ceramic
|
|
|
|
July 4,
2015
|
|
June 28,
2014
|
|
|
|
|
|
|
Operating
income
|
|
|
|
$
121,189
|
|
106,407
|
|
|
|
|
|
|
Restructuring,
acquisition and integration-related and other
costs
|
|
77
|
|
196
|
|
|
|
|
|
|
Acquisitions purchase
accounting (inventory step-up)
|
|
1,932
|
|
-
|
|
|
|
|
|
|
Adjustments to
operating income on a constant exchange rate
|
|
11,919
|
|
-
|
|
|
|
|
|
|
Adjusted
segment operating income on constant exchange rate
|
|
$
135,117
|
|
106,603
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Segment Operating Income to Adjusted Segment Operating
Income
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
Flooring
NA
|
|
|
|
July 4,
2015
|
|
June 28,
2014
|
|
|
|
|
|
|
Operating
income
|
|
|
|
$
95,143
|
|
76,602
|
|
|
|
|
|
|
Adjustments to
segment operating income:
|
|
|
|
|
|
|
|
|
|
|
Restructuring,
acquisition and integration-related and other
costs
|
|
11,465
|
|
869
|
|
|
|
|
|
|
Acquisitions purchase
accounting (inventory step-up)
|
|
1,167
|
|
-
|
|
|
|
|
|
|
Adjusted
segment operating income
|
|
|
$
107,775
|
|
77,471
|
|
|
|
|
|
|
Adjusted
operating income as a percent of net sales
|
|
11.7%
|
|
8.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Segment Operating Income to Adjusted Segment Operating
Income
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
Flooring
ROW
|
|
|
|
July 4,
2015
|
|
June 28,
2014
|
|
|
|
|
|
|
Operating
income
|
|
|
|
$
53,052
|
|
47,398
|
|
|
|
|
|
|
Adjustment to segment
operating income:
|
|
|
|
|
|
|
|
|
|
|
Restructuring,
acquisition and integration-related and other
costs
|
|
5,109
|
|
9,904
|
|
|
|
|
|
|
Acquisitions purchase
accounting (inventory step-up)
|
|
3,057
|
|
-
|
|
|
|
|
|
|
Adjusted
segment operating income
|
|
|
$
61,218
|
|
57,302
|
|
|
|
|
|
|
Adjusted
operating income as a percent of net sales
|
|
18.5%
|
|
16.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Segment Operating Income to Adjusted Segment Operating Income on a
Constant Exchange Rate
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
Flooring
ROW
|
|
|
|
July 4,
2015
|
|
June 28,
2014
|
|
|
|
|
|
|
Operating
income
|
|
|
|
$
53,052
|
|
47,398
|
|
|
|
|
|
|
Restructuring,
acquisition and integration-related and other
costs
|
|
5,109
|
|
9,904
|
|
|
|
|
|
|
Acquisitions purchase
accounting (inventory step-up)
|
|
3,057
|
|
-
|
|
|
|
|
|
|
Adjustments to
operating income on a constant exchange rate
|
|
12,541
|
|
-
|
|
|
|
|
|
|
Adjusted
segment operating income on constant exchange rate
|
|
$
73,759
|
|
57,302
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Earnings from Continuing Operations incl Non Controlling Interest
Before Income Taxes to Adjusted Earnings from Continuing Operations
incl Non Controlling Interest Before Income Taxes
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
|
|
July 4,
2015
|
|
June 28,
2014
|
|
|
|
|
|
|
Earnings before
income taxes
|
|
|
$
236,050
|
|
203,101
|
|
|
|
|
|
|
Noncontrolling
interest
|
|
|
|
(282)
|
|
(111)
|
|
|
|
|
|
|
Adjustments to
earnings from continuing operations before income taxes:
|
|
|
|
|
|
|
|
|
|
|
Restructuring,
acquisition and integration-related and other
costs
|
|
20,485
|
|
11,169
|
|
|
|
|
|
|
Acquisitions purchase
accounting (inventory step-up)
|
|
6,156
|
|
-
|
|
|
|
|
|
|
Adjusted
earnings before income taxes
|
|
$
262,409
|
|
214,159
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Income Tax Expense to Adjusted Income Tax
Expense
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
|
|
July 4,
2015
|
|
June 28,
2014
|
|
|
|
|
|
|
Income tax
expense
|
|
|
|
$
49,276
|
|
50,240
|
|
|
|
|
|
|
Income tax effect of
adjusting items
|
|
|
|
14,490
|
|
2,229
|
|
|
|
|
|
|
Adjusted
income tax expense
|
|
|
$
63,766
|
|
52,469
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted income tax
rate
|
|
|
|
24.3%
|
|
24.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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,
integration-related and other costs, legal settlement and reserves
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-second-quarter-earnings-300125115.html
SOURCE Mohawk Industries, Inc.