CALHOUN, Ga., Nov. 5, 2015 /CNW/ -- Mohawk Industries,
Inc. (NYSE: MHK) today announced 2015 third quarter net earnings of
$215 million and diluted earnings per
share (EPS) of $2.89. Excluding
restructuring and acquisition charges, net earnings were
$222 million and EPS was $2.98, a 22% increase over last year's third
quarter adjusted EPS and the highest adjusted quarterly EPS in the
company's history. Net sales for the third quarter of 2015 were
$2.2 billion, up 8% versus the prior
year's third quarter or a 15% increase on a constant currency
exchange rate basis. For the third quarter of 2014, net sales were
$2.0 billion, net earnings were
$151 million and EPS was $2.06; excluding restructuring and acquisition
charges, net earnings were $179
million and EPS was $2.44.
For the nine months ending October 3,
2015, net sales were $6.1
billion, an increase of approximately 4% versus prior year
or an increase of approximately 11% on a constant currency exchange
rate basis. Net earnings and EPS for the nine-month period were
$424 million and $5.73, respectively. Net earnings excluding
restructuring and acquisition charges were $546 million and adjusted EPS was $7.38, an increase of 26% over the nine-month
period adjusted EPS result in 2014. For the nine-months ending
September 27, 2014, net sales were
$5.9 billion, net earnings were
$385 million and EPS was $5.25; excluding restructuring and acquisition
charges, net earnings and EPS were $431
million and $5.88.
Commenting on Mohawk Industries' third quarter performance,
Jeffrey S. Lorberbaum, Chairman and
CEO, stated, "In addition to our record earnings per share, our
adjusted operating income reached a record level at $309 million, up 30% over the same quarter last
year. All segments contributed to our sales and operating income
improvements. Our new segment structure that we announced last
quarter has benefited our performance, enabling us to optimize our
regional businesses by enhancing our product offerings,
manufacturing assets and distribution strategies. During the
period, we made significant progress in aligning our IVC
acquisition with our European and U.S. flooring businesses and our
KAI acquisition with our European ceramic operations. We are
introducing products to take advantage of the unique capabilities
and customer relationships of each organization. As we leverage the
strength of these businesses, we anticipate greater market
penetration and continued earnings growth in the future."
"For the quarter, our Global Ceramic segment sales were up 2% as
reported. On a constant exchange rate basis, sales grew 11% and
adjusted operating income rose 15% versus prior year with adjusted
operating margin increasing to 15% as a result of improved
productivity, volume, price and mix and the KAI acquisition
partially offset by currency headwinds. Our U.S. ceramic sales
continued to improve, as we increased our investments in new
products, additional sales representatives and new service centers
and galleries. The residential new construction sector remains the
strongest part of our U.S. ceramic business. To satisfy increased
demand in the U.S. market, we have begun importing ceramic tile
from both our Russian and Bulgarian businesses, leveraging our
global footprint to optimize our profitability. Growth in the
Mexican ceramic market remains strong as we improved our position,
and we are adding new sales representatives to expand our
distribution base in all channels. In Europe, our ceramic sales are outpacing the
market. We are benefiting from the upgraded assets at our
manufacturing facilities, which are increasing our competitiveness
and yielding more differentiated products, such as 3-dimensional
wall tiles, hexagons and brick visuals. Our Bulgarian ceramic
business is increasing its product mix, improving its manufacturing
and expanding sales outside the local market. Though Russia is in a recession, we are increasing
our share of the ceramic market. Our sales in Russia grew on a local basis, though our
margin contracted as inflation outpaced our price increases.
"During the quarter, our Flooring North America segment's sales
were up 8% over last year with adjusted operating income increasing
41%. The adjusted operating margin increased to almost 14% due to
improved volume, productivity, input costs and the IVC acquisition
partially offset by price and mix. The new structure of our North
American carpet and hard surface businesses is improving our
performance as we leverage the strength of our brands, marketing
strategies and customer relationships across all categories. During
the period, we increased our investments in sales personnel,
merchandising and promotions in both carpet and hard surfaces
categories to enhance our position in the marketplace. In our
carpet business, we are beginning to see improved margin from our
recent product introductions and the expansion of our Karastan
customer base. Our commercial carpet margins continue to expand
with the introduction of more stylized products, improved
manufacturing efficiencies and enhanced service. We are improving
our efficiency and reducing costs by closing two commercial carpet
plants and consolidating the operations. Our rug sales and margins
were up during the period as our new product introductions gained
traction in the market. Sales of our hard surface products are
growing faster than carpet across all channels, with builder and
commercial sectors expanding the fastest. Our sheet vinyl and LVT
sales continue to grow, and we are introducing new Mohawk branded
products from IVC to expand our vinyl offering in all channels.
"For the quarter, our Flooring Rest of the World segment's sales
rose 24% as reported or 41% on a constant exchange rate with
adjusted operating income improving 48% over the prior year. The
adjusted operating margin increased to almost 16% due to improved
volume, input costs and the IVC acquisition partially offset by
currency headwinds. Our laminate sales increased during the period,
and our new product collection is one of our most successful ever
due to its differentiated features and performance benefits such as
our water resistant technology that is unique to the marketplace.
Our wood sales improved along with our mix as we enhanced our
Quick-Step and Pergo products with matt finishes, rustic visuals
and brushed planks. Our vinyl business also improved with
significant growth in LVT. We are introducing new LVT sizes with
embossing, enhanced scratch resistance and superior click
installation systems to add more value to our offering and
participate in the commercial sector. As our Russian sheet vinyl
business declined, we increased sales in other geographies to fully
utilize our capacity. Our non-flooring product categories are up
slightly with improving margins due to some relief in material
costs. One of our chip board lines experienced an unplanned stop
and will be down for four weeks, impacting operating income by
approximately $3-4 million in our
fourth quarter.
"Mohawk's performance benefited from strategic acquisitions, new
investments in sales and operations and improved manufacturing and
logistics. The U.S. residential and commercial flooring markets
have improved throughout 2015, with hard surface sales growing
faster. Looking to the fourth quarter, we anticipate that the U.S.
economy will continue its gradual growth. We expect year-over-year
margin growth to continue in all segments as a result of our
strategies and acquisitions. We are selectively increasing our
SG&A relative to sales to optimize future market share. Our
recent acquisitions are being integrated into our businesses and
are positively impacting our earnings. The costs associated with
new plant start-ups, interruption of our board production and four
fewer days will be absorbed in the period. Taking all these factors
into account, our guidance for the fourth quarter is $2.66 - $2.75 per share, which would
be a 17 -21% increase over 2014, excluding any restructuring
charges. Our fourth quarter earnings guidance would have been
approximately $0.15 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, IVC,
Karastan, Lees, 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, 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, November 6,
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 # 53645820. A replay will
be available until Friday, December 4,
2015 by dialing 855-859-2056 for US/local calls and
404-537-3406 for International/Local calls and entering Conference
ID # 53645820.
MOHAWK INDUSTRIES,
INC. AND SUBSIDIARIES
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
Consolidated
Statement of Operations
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
(Amounts in
thousands, except per share data)
|
|
October 3,
2015
|
|
September 27,
2014
|
|
October 3,
2015
|
|
September 27,
2014
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
2,150,656
|
|
1,990,658
|
|
6,073,566
|
|
5,852,000
|
Cost of
sales
|
|
1,489,252
|
|
1,434,236
|
|
4,285,090
|
|
4,239,411
|
Gross profit
|
|
661,404
|
|
556,422
|
|
1,788,476
|
|
1,612,589
|
Selling, general and
administrative expenses
|
|
372,670
|
|
342,729
|
|
1,200,152
|
|
1,045,913
|
Operating
income
|
|
288,734
|
|
213,693
|
|
588,324
|
|
566,676
|
Interest
expense
|
|
19,319
|
|
34,786
|
|
52,606
|
|
77,584
|
Other expense
(income), net
|
|
4,249
|
|
(2,374)
|
|
6,094
|
|
961
|
Earnings before income taxes
|
|
265,166
|
|
181,281
|
|
529,624
|
|
488,131
|
Income tax
expense
|
|
49,463
|
|
30,021
|
|
104,643
|
|
102,957
|
Net
earnings including noncontrolling interest
|
|
215,703
|
|
151,260
|
|
424,981
|
|
385,174
|
Net earnings
(loss) attributable to noncontrolling interest
|
|
798
|
|
(6)
|
|
1,238
|
|
77
|
Net earnings
attributable to Mohawk Industries, Inc.
|
|
$
214,905
|
|
151,266
|
|
423,743
|
|
385,097
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share attributable to Mohawk Industries, Inc.
|
|
|
|
|
|
|
|
|
Basic earnings per
share attributable to Mohawk Industries, Inc.
|
|
$
2.91
|
|
2.08
|
|
5.77
|
|
5.29
|
Weighted-average
common shares outstanding - basic
|
|
73,915
|
|
72,864
|
|
73,384
|
|
72,814
|
|
|
|
|
|
|
|
|
|
Diluted earnings
per share attributable to Mohawk Industries, Inc.
|
|
|
|
|
|
|
|
|
Diluted earnings per
share attributable to Mohawk Industries, Inc.
|
|
$
2.89
|
|
2.06
|
|
5.73
|
|
5.25
|
Weighted-average
common shares outstanding - diluted
|
|
74,438
|
|
73,376
|
|
73,907
|
|
73,332
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Financial
Information
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
$
94,955
|
|
85,167
|
|
268,622
|
|
249,905
|
Capital
expenditures
|
|
$
123,648
|
|
141,883
|
|
352,070
|
|
391,580
|
|
|
|
|
|
|
|
|
|
Consolidated
Balance Sheet Data
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
October 3,
2015
|
|
September 27,
2014
|
ASSETS
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
|
|
$
110,716
|
|
105,569
|
Receivables, net
|
|
|
|
|
|
1,340,650
|
|
1,209,557
|
Inventories
|
|
|
|
|
|
1,621,154
|
|
1,640,487
|
Prepaid expenses and other current assets
|
|
|
|
|
|
273,775
|
|
275,981
|
Deferred income taxes
|
|
|
|
|
|
152,899
|
|
137,220
|
Total
current assets
|
|
|
|
|
|
3,499,194
|
|
3,368,814
|
Property, plant and
equipment, net
|
|
|
|
|
|
3,046,491
|
|
2,772,722
|
Goodwill
|
|
|
|
|
|
2,280,722
|
|
1,668,520
|
Intangible assets,
net
|
|
|
|
|
|
918,655
|
|
746,304
|
Deferred income taxes
and other non-current assets
|
|
|
|
|
|
319,420
|
|
145,100
|
Total assets
|
|
|
|
|
|
$
10,064,482
|
|
8,701,460
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Current portion of
long-term debt and commercial paper
|
|
|
|
|
|
$
1,927,815
|
|
583,495
|
Accounts payable and
accrued expenses
|
|
|
|
|
|
1,371,969
|
|
1,247,862
|
Total
current liabilities
|
|
|
|
|
|
3,299,784
|
|
1,831,357
|
Long-term debt, less
current portion
|
|
|
|
|
|
1,263,176
|
|
1,806,821
|
Deferred income taxes
and other long-term liabilities
|
|
|
|
|
|
723,489
|
|
486,764
|
Total
liabilities
|
|
|
|
|
|
5,286,449
|
|
4,124,942
|
Redeemable
noncontrolling interest
|
|
|
|
|
|
22,150
|
|
-
|
Total stockholders'
equity
|
|
|
|
|
|
4,755,883
|
|
4,576,518
|
Total liabilities and stockholders' equity
|
|
|
|
|
|
$
10,064,482
|
|
8,701,460
|
|
|
|
|
|
|
|
|
|
Segment
Information
|
|
Three Months
Ended
|
|
As of or for
the Nine Months Ended
|
(Amounts in
thousands)
|
|
October 3,
2015
|
|
September 27,
2014
|
|
October 3,
2015
|
|
September 27,
2014
|
|
|
|
|
|
|
|
|
|
Net sales:
|
|
|
|
|
|
|
|
|
Global Ceramic
|
|
$
791,538
|
|
779,842
|
|
2,301,168
|
|
2,271,660
|
Flooring NA
|
|
955,099
|
|
886,317
|
|
2,722,347
|
|
2,562,560
|
Flooring ROW
|
|
404,026
|
|
326,146
|
|
1,050,390
|
|
1,021,951
|
Intersegment sales
|
|
(7)
|
|
(1,647)
|
|
(339)
|
|
(4,171)
|
Consolidated net sales
|
|
$
2,150,656
|
|
1,990,658
|
|
6,073,566
|
|
5,852,000
|
|
|
|
|
|
|
|
|
|
Operating income
(loss):
|
|
|
|
|
|
|
|
|
Global Ceramic
|
|
$
120,055
|
|
101,254
|
|
326,571
|
|
268,320
|
Flooring NA
|
|
125,910
|
|
83,623
|
|
145,861
|
|
207,578
|
Flooring ROW
|
|
55,471
|
|
35,046
|
|
153,164
|
|
113,909
|
Corporate and eliminations
|
|
(12,702)
|
|
(6,230)
|
|
(37,272)
|
|
(23,131)
|
Consolidated operating income
|
|
$
288,734
|
|
213,693
|
|
588,324
|
|
566,676
|
|
|
|
|
|
|
|
|
|
Assets:
|
|
|
|
|
|
|
|
|
Global Ceramic
|
|
|
|
|
|
$
3,938,242
|
|
3,788,164
|
Flooring NA
|
|
|
|
|
|
3,195,904
|
|
2,641,171
|
Flooring ROW
|
|
|
|
|
|
2,699,255
|
|
2,033,718
|
Corporate and eliminations
|
|
|
|
|
|
231,081
|
|
238,407
|
Consolidated assets
|
|
|
|
|
|
$
10,064,482
|
|
8,701,460
|
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 3,
2015
|
|
September 27,
2014
|
|
October 3,
2015
|
|
September 27,
2014
|
Net earnings
attributable to Mohawk Industries, Inc.
|
|
|
|
$
214,905
|
|
151,266
|
|
423,743
|
|
385,097
|
Adjusting
items:
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring,
acquisition and integration-related and other
costs
|
|
|
|
12,770
|
|
14,013
|
|
43,784
|
|
36,907
|
Acquisitions purchase
accounting (inventory step-up)
|
|
|
|
7,160
|
|
-
|
|
13,316
|
|
-
|
Legal settlement and
reserves
|
|
|
|
|
-
|
|
10,000
|
|
127,000
|
|
10,000
|
Bond
redemption
|
|
|
|
|
|
-
|
|
15,450
|
|
-
|
|
15,450
|
Deferred loan
costs
|
|
|
|
|
|
-
|
|
1,080
|
|
651
|
|
1,080
|
Income
taxes
|
|
|
|
|
|
(12,940)
|
|
(12,792)
|
|
(62,984)
|
|
(17,412)
|
Adjusted net earnings
attributable to Mohawk Industries, Inc.
|
|
|
|
$
221,895
|
|
179,017
|
|
545,510
|
|
431,122
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted diluted
earnings per share attributable to Mohawk Industries,
Inc.
|
|
|
|
$
2.98
|
|
2.44
|
|
7.38
|
|
5.88
|
Weighted-average
common shares outstanding - diluted
|
|
|
|
74,438
|
|
73,376
|
|
73,907
|
|
73,332
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Total Debt to Net Debt
|
|
|
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
October 3,
2015
|
|
|
|
|
|
|
|
|
Current portion of
long-term debt and commercial paper
|
|
$
1,927,815
|
|
|
|
|
|
|
|
|
Long-term debt, less
current portion
|
|
|
1,263,176
|
|
|
|
|
|
|
|
|
Less: Cash and cash
equivalents
|
|
|
110,716
|
|
|
|
|
|
|
|
|
Net Debt
|
|
|
|
$
3,080,275
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Operating Income to Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Trailing
Twelve
|
|
|
|
|
Three Months
Ended
|
|
Months
Ended
|
|
|
|
|
December 31,
2014
|
|
April 4,
2015
|
|
July 4,
2015
|
|
October 3,
2015
|
|
October 3,
2015
|
Operating
income
|
|
|
|
$
206,120
|
|
43,774
|
|
255,816
|
|
288,734
|
|
794,444
|
Other (expense)
income
|
|
|
|
(9,737)
|
|
1,083
|
|
(2,928)
|
|
(4,249)
|
|
(15,831)
|
Net (earnings) loss
attributable to non-controlling interest
|
|
(212)
|
|
(158)
|
|
(282)
|
|
(798)
|
|
(1,450)
|
Depreciation and
amortization
|
|
|
95,665
|
|
85,656
|
|
88,011
|
|
94,955
|
|
364,287
|
EBITDA
|
|
|
|
291,836
|
|
130,355
|
|
340,617
|
|
378,642
|
|
1,141,450
|
Restructuring,
acquisition and integration-related and other
costs
|
|
21,859
|
|
8,169
|
|
17,275
|
|
11,690
|
|
58,993
|
Acquisitions purchase
accounting (inventory step-up)
|
|
-
|
|
-
|
|
6,156
|
|
7,160
|
|
13,316
|
Legal settlement and
reserves
|
|
|
-
|
|
125,000
|
|
-
|
|
-
|
|
125,000
|
Adjusted
EBITDA
|
|
|
|
$
313,695
|
|
263,524
|
|
364,048
|
|
397,492
|
|
1,338,759
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Debt to
Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
2.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Net Sales to Net Sales on a Constant Exchange Rate
|
|
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
|
|
|
|
October 3,
2015
|
|
September 27,
2014
|
|
October 3,
2015
|
|
September 27,
2014
|
|
|
Net sales
|
|
|
|
$
2,150,656
|
|
1,990,658
|
|
6,073,566
|
|
5,852,000
|
|
|
Adjustment to net
sales on a constant exchange rate
|
|
131,068
|
|
-
|
|
408,745
|
|
-
|
|
|
Net sales on a
constant exchange rate
|
|
|
$
2,281,724
|
|
1,990,658
|
|
6,482,311
|
|
5,852,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
2015 Net Sales to Pro Forma Net Sales on a Constant Exchange Rate
Excluding 2015 Q3 Acquisition Volume
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
|
|
October 3,
2015
|
|
September 27,
2014
|
|
|
|
|
|
|
Net sales
|
|
|
|
$
2,150,656
|
|
1,990,658
|
|
|
|
|
|
|
Adjustment to net
sales on a constant exchange rate
|
|
131,068
|
|
-
|
|
|
|
|
|
|
Less: 2015 Q3 impact
of acquisition volume
|
|
|
(178,560)
|
|
-
|
|
|
|
|
|
|
2015 pro forma net
sales on a constant exchange rate excluding acquisition
volume
|
|
$
2,103,164
|
|
1,990,658
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Segment Net Sales to Segment Net Sales on a Constant Exchange
Rate
|
|
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
Global
Ceramic
|
|
|
|
October 3,
2015
|
|
September 27,
2014
|
|
|
|
|
|
|
Net sales
|
|
|
|
$
791,538
|
|
779,842
|
|
|
|
|
|
|
Adjustment to segment
net sales on a constant exchange rate
|
|
75,785
|
|
-
|
|
|
|
|
|
|
Segment net sales on
a constant exchange rate
|
|
$
867,323
|
|
779,842
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
2015 Segment Net Sales to Segment Pro Forma Net Sales on a Constant
Exchange Rate Excluding 2015 Q3 Acquisition Volume
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
Global
Ceramic
|
|
|
|
October 3,
2015
|
|
September 27,
2014
|
|
|
|
|
|
|
Net sales
|
|
|
|
$
791,538
|
|
779,842
|
|
|
|
|
|
|
Adjustment to segment
net sales on a constant exchange rate
|
|
75,785
|
|
-
|
|
|
|
|
|
|
Less: 2015 Q3 impact
of acquisition volume
|
|
|
(26,827)
|
|
-
|
|
|
|
|
|
|
2015 segment pro
forma net sales on a constant exchange rate excluding acquisition
volume
|
|
$
840,496
|
|
779,842
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
2015 Segment Net Sales to Segment Pro Forma Net Sales on a
Constant Exchange Rate Excluding 2015 Q3 Acquisition
Volume
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
Flooring
NA
|
|
|
|
October 3,
2015
|
|
September 27,
2014
|
|
|
|
|
|
|
Net sales
|
|
|
|
$
955,099
|
|
886,317
|
|
|
|
|
|
|
Adjustment to segment
net sales on a constant exchange rate
|
|
-
|
|
-
|
|
|
|
|
|
|
Less: 2015 Q3 impact
of acquisition volume
|
|
|
(37,779)
|
|
-
|
|
|
|
|
|
|
2015 segment pro
forma net sales on a constant exchange rate excluding acquisition
volume
|
|
$
917,320
|
|
886,317
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Segment Net Sales to Segment Net Sales on a Constant Exchange
Rate
|
|
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
Flooring
ROW
|
|
|
|
October 3,
2015
|
|
September 27,
2014
|
|
|
|
|
|
|
Net sales
|
|
|
|
$
404,026
|
|
326,146
|
|
|
|
|
|
|
Adjustment to segment
net sales on a constant exchange rate
|
|
55,283
|
|
-
|
|
|
|
|
|
|
Segment net sales on
a constant exchange rate
|
|
$
459,309
|
|
326,146
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
2015 Segment Net Sales to Pro Forma Segment Net Sales on a Constant
Exchange Rate Excluding 2015 Q3 Acquisition Volume
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
Flooring
ROW
|
|
|
|
October 3,
2015
|
|
September 27,
2014
|
|
|
|
|
|
|
Net sales
|
|
|
|
$
404,026
|
|
326,146
|
|
|
|
|
|
|
Adjustment to segment
net sales on a constant exchange rate
|
|
55,283
|
|
-
|
|
|
|
|
|
|
Less: 2015 Q3 impact
of acquisition volume
|
|
|
(113,955)
|
|
-
|
|
|
|
|
|
|
2015 Segment Pro
forma net sales on a constant exchange rate excluding acquisition
volume
|
|
$
345,354
|
|
326,146
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Gross Profit to Adjusted Gross Profit
|
|
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
|
|
October 3,
2015
|
|
September 27,
2014
|
|
|
|
|
|
|
Gross
Profit
|
|
|
|
$
661,404
|
|
556,422
|
|
|
|
|
|
|
Adjustments to gross
profit:
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring,
acquisition and integration-related and other
costs
|
|
7,291
|
|
7,261
|
|
|
|
|
|
|
Acquisitions purchase
accounting (inventory step-up)
|
|
7,160
|
|
-
|
|
|
|
|
|
|
Adjusted gross
profit
|
|
|
|
$
675,855
|
|
563,683
|
|
|
|
|
|
|
Adjusted gross profit
as a percent of net sales
|
|
31.4%
|
|
28.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Selling, General and Administrative Expenses to Adjusted Selling,
General and Administrative Expenses
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
|
|
October 3,
2015
|
|
September 27,
2014
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
|
|
$
372,670
|
|
342,729
|
|
|
|
|
|
|
Adjustment to
selling, general and administrative expenses:
|
|
|
|
|
|
|
|
|
|
|
Restructuring,
acquisition and integration-related and other
costs
|
|
(5,479)
|
|
(6,752)
|
|
|
|
|
|
|
Legal settlement and
reserves
|
|
|
-
|
|
(10,000)
|
|
|
|
|
|
|
Adjusted
selling, general and administrative expenses
|
|
$
367,191
|
|
325,977
|
|
|
|
|
|
|
Adjusted selling,
general and administrative expenses as a percent of net
sales
|
|
17.1%
|
|
16.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Operating Income to Adjusted Operating Income
|
|
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
|
|
October 3,
2015
|
|
September 27,
2014
|
|
|
|
|
|
|
Operating
income
|
|
|
|
$
288,734
|
|
213,693
|
|
|
|
|
|
|
Adjustments to
operating income:
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring,
acquisition and integration-related and other
costs
|
|
12,770
|
|
14,013
|
|
|
|
|
|
|
Legal settlement and
reserves
|
|
|
-
|
|
10,000
|
|
|
|
|
|
|
Acquisitions purchase
accounting (inventory step-up)
|
|
7,160
|
|
-
|
|
|
|
|
|
|
Adjusted
operating income
|
|
|
$
308,664
|
|
237,706
|
|
|
|
|
|
|
Adjusted
operating income as a percent of net sales
|
|
14.4%
|
|
11.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Adjusted Operating Income on a Constant Exchange
Rate
|
|
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
|
|
October 3,
2015
|
|
September 27,
2014
|
|
|
|
|
|
|
Operating
income
|
|
|
|
$
288,734
|
|
213,693
|
|
|
|
|
|
|
Adjustments to
operating income:
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring,
acquisition and integration-related and other
costs
|
|
12,770
|
|
14,013
|
|
|
|
|
|
|
Legal settlement and
reserves
|
|
|
-
|
|
10,000
|
|
|
|
|
|
|
Acquisitions purchase
accounting (inventory step-up)
|
|
7,160
|
|
-
|
|
|
|
|
|
|
Adjustments to
operating income on a constant exchange rate
|
|
21,392
|
|
-
|
|
|
|
|
|
|
Adjusted operating
income on constant exchange rate
|
|
$
330,056
|
|
237,706
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Segment Operating Income to Adjusted Segment Operating
Income
|
|
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
Global
Ceramic
|
|
|
|
October 3,
2015
|
|
September 27,
2014
|
|
|
|
|
|
|
Operating
income
|
|
|
|
$
120,055
|
|
101,254
|
|
|
|
|
|
|
Adjustments to
segment operating income:
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring,
acquisition and integration-related and other
costs
|
|
118
|
|
4,248
|
|
|
|
|
|
|
Acquisitions purchase
accounting (inventory step-up)
|
|
949
|
|
-
|
|
|
|
|
|
|
Adjusted
segment operating income
|
|
|
$
121,122
|
|
105,502
|
|
|
|
|
|
|
Adjusted operating
income as a percent of net sales
|
|
15.3%
|
|
13.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Segment Operating Income to Adjusted Segment Operating Income on a
Constant Exchange Rate
|
|
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
Global
Ceramic
|
|
|
|
October 3,
2015
|
|
September 27,
2014
|
|
|
|
|
|
|
Operating
income
|
|
|
|
$
120,055
|
|
101,254
|
|
|
|
|
|
|
Adjustments to
segment operating income:
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring,
acquisition and integration-related and other
costs
|
|
118
|
|
4,248
|
|
|
|
|
|
|
Acquisitions purchase
accounting (inventory step-up)
|
|
949
|
|
-
|
|
|
|
|
|
|
Adjustments to
operating income on a constant exchange rate
|
|
12,701
|
|
-
|
|
|
|
|
|
|
Adjusted
segment operating income on constant exchange rate
|
|
$
133,823
|
|
105,502
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Segment Operating Income to Adjusted Segment Operating
Income
|
|
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
Flooring
NA
|
|
|
|
October 3,
2015
|
|
September 27,
2014
|
|
|
|
|
|
|
Operating
income
|
|
|
|
$
125,910
|
|
83,623
|
|
|
|
|
|
|
Adjustments to
segment operating income:
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring,
acquisition and integration-related and other
costs
|
|
5,148
|
|
10,578
|
|
|
|
|
|
|
Acquisitions purchase
accounting (inventory step-up)
|
|
1,527
|
|
-
|
|
|
|
|
|
|
Adjusted
segment operating income
|
|
|
$
132,585
|
|
94,201
|
|
|
|
|
|
|
Adjusted operating
income as a percent of net sales
|
|
13.9%
|
|
10.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Segment Operating Income to Adjusted Segment Operating
Income
|
|
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
Flooring
ROW
|
|
|
|
October 3,
2015
|
|
September 27,
2014
|
|
|
|
|
|
|
Operating
income
|
|
|
|
$
55,471
|
|
35,046
|
|
|
|
|
|
|
Adjustment to segment
operating income:
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring,
acquisition and integration-related and other
costs
|
|
4,030
|
|
8,437
|
|
|
|
|
|
|
Acquisitions purchase
accounting (inventory step-up)
|
|
4,683
|
|
-
|
|
|
|
|
|
|
Adjusted
segment operating income
|
|
|
$
64,184
|
|
43,483
|
|
|
|
|
|
|
Adjusted operating
income as a percent of net sales
|
|
15.9%
|
|
13.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Segment Operating Income to Adjusted Segment Operating Income on a
Constant Exchange Rate
|
|
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
Flooring
ROW
|
|
|
|
October 3,
2015
|
|
September 27,
2014
|
|
|
|
|
|
|
Operating
income
|
|
|
|
$
55,471
|
|
35,046
|
|
|
|
|
|
|
Adjustment to segment
operating income:
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring,
acquisition and integration-related and other
costs
|
|
4,030
|
|
8,437
|
|
|
|
|
|
|
Acquisitions purchase
accounting (inventory step-up)
|
|
4,683
|
|
-
|
|
|
|
|
|
|
Adjustments to
operating income on a constant exchange rate
|
|
8,691
|
|
-
|
|
|
|
|
|
|
Adjusted segment
operating income on constant exchange rate
|
|
$
72,875
|
|
43,483
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Earnings from Continuing Operations Including Noncontrolling
Interest Before Income Taxes to Adjusted Earnings from Continuing
Operations Including Noncontrolling Interest Before Income
Taxes
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
|
|
October 3,
2015
|
|
September 27,
2014
|
|
|
|
|
|
|
Earnings before
income taxes
|
|
|
|
$
265,166
|
|
181,281
|
|
|
|
|
|
|
Noncontrolling
interest
|
|
|
|
(798)
|
|
6
|
|
|
|
|
|
|
Adjustments to
earnings from continuing operations before income taxes:
|
|
|
|
|
|
|
|
|
|
|
Restructuring,
acquisition and integration-related and other
costs
|
|
12,770
|
|
14,013
|
|
|
|
|
|
|
Acquisitions purchase
accounting (inventory step-up)
|
|
7,160
|
|
-
|
|
|
|
|
|
|
Legal settlement and
reserves
|
|
|
-
|
|
10,000
|
|
|
|
|
|
|
Bond
redemption
|
|
|
|
-
|
|
15,450
|
|
|
|
|
|
|
Deferred loan
costs
|
|
|
|
-
|
|
1,080
|
|
|
|
|
|
|
Adjusted earnings
before income taxes
|
|
|
$
284,298
|
|
221,830
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Income Tax Expense to Adjusted Income Tax
Expense
|
|
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
|
|
October 3,
2015
|
|
September 27,
2014
|
|
|
|
|
|
|
Income tax
expense
|
|
|
|
$
49,463
|
|
30,021
|
|
|
|
|
|
|
Income tax effect of
adjusting items
|
|
|
12,940
|
|
12,792
|
|
|
|
|
|
|
Adjusted income tax
expense
|
|
|
$
62,403
|
|
42,813
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted income tax
rate
|
|
|
|
21.9%
|
|
19.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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,
and acquisitions purchase accounting (inventory step-up) 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-announces-record-third-quarter-earnings-300173534.html
SOURCE Mohawk Industries, Inc.