CALHOUN, Ga., Nov. 3, 2016 /CNW/ -- Mohawk Industries,
Inc. (NYSE: MHK) today announced 2016 third quarter record net
earnings of $270 million and diluted
earnings per share (EPS) of $3.62, a
25% increase versus prior year. Excluding restructuring,
acquisition and other charges, net earnings were $261 million and EPS was $3.50, a 17% increase over last year's third
quarter adjusted EPS. Net sales for the third quarter of 2016 were
$2.3 billion, up 7% versus the prior
year's third quarter as reported and on a legacy basis applying
constant days and currency rates. For the third quarter of 2015,
net sales were $2.15 billion, net
earnings were $215 million and EPS
was $2.89; excluding restructuring,
acquisition and other charges, net earnings were $222 million and EPS was $2.98.
For the nine months ending October 1,
2016, net earnings and EPS were $696.6 million and $9.34, respectively. Net earnings excluding
restructuring, acquisition and other charges were $697.1 million and EPS was $9.35, an increase of 27% over the nine-month
period adjusted EPS result in 2015. For the nine month period, net
sales were $6.8 billion, an increase
of 12% versus prior year as reported and 5% on a legacy basis
applying constant currency rates. For the nine-month period ending
October 3, 2015, net sales were
$6.1 billion, net earnings were
$424 million and EPS was $5.73; excluding restructuring, acquisition and
other charges, net earnings and EPS were $546 million and $7.38.
Commenting on Mohawk Industries' third quarter performance,
Jeffrey S. Lorberbaum, Chairman and
CEO, stated, "During the period, our growth strengthened, and our
margins continue to expand compared to the last year. Our strategy
of investing in our existing business as well as synergistic
acquisitions continues to deliver record results. Our earnings per
share for the period were an all-time record for the company,
marking the tenth consecutive quarter that Mohawk has delivered a
year-over-year record quarterly EPS. Our operating margin rose to
an all-time record of 16.5% or 16.0% on an adjusted basis, an
increase of 160 basis points, as a result of higher sales volume
and productivity.
"Our organization continues to create new products with greater
value for the consumer, to introduce unique ideas that enhance our
processes and to invest in technology and equipment that improve
our cost, quality and service. The four acquisitions we completed
in 2015 contributed to our results as we enhanced their performance
by upgrading their offerings, expanding their distribution and
improving their productivity. As expected, our SG&A costs,
excluding restructuring, integration and other charges, as a
percentage of sales improved by 60 basis points as our investments
in sales personnel, marketing and merchandising increased our sales
and mix.
"In many of our product categories and geographies, our
operations are running at or near capacity. These include all of
our global ceramic, laminate and sheet vinyl assets. Additionally,
we are currently selling all of the LVT we are manufacturing even
as we continue to increase our production capacity in the U.S. and
Europe. To meet our growing
customer demand, our capital investments this year will be the
highest in our history with almost $650
million allocated to additional capacity, more efficient
assets and new products. Our strong results have increased our cash
flow, enabling the expansion of our capacities and pursuit of
attractive opportunities. We continue to explore potential
acquisitions from around the globe that complement our business and
expand our geographic reach or product portfolio.
"For the quarter, our Global Ceramic Segment sales were up 4% as
reported; on a constant days and currency basis sales were up
6%. Operating income for the segment rose approximately 13%
to an operating margin of 16.5%. Our North American ceramic sales
trends improved from the second to the third quarter, and operating
margins expanded over last year. New home construction and the
commercial sector outperformed residential remodeling, and sales
growth through our service centers exceeded other channels. Our new
Tennessee ceramic plant is fully
operational with improving throughput and new differentiated
products. Our sales in Mexico
continue to outpace the strong market, and we are broadening our
product offering and distribution ahead of the expansion of our
Salamanca plant, which will be
operational by late 2017. Our European ceramic business grew
significantly from our sales and product strategies that satisfy
local markets and consumer preferences. In Western Europe, our investments in modern
equipment have allowed us to bring unique products to market and
expand our margins and mix. We increased the capacity at our
Bulgarian facility and upgraded the style and design of our
products which enhanced our mix. In Russia, our sales improved on a local basis as
we increased participation in the new construction sector and
expanded our distribution through investments in owned and
franchised stores.
"During the quarter, our Flooring North America Segment's sales
were up 6% as reported or 7% on a constant days basis. Operating
income grew 35% to a margin of 17% as reported or excluding
restructuring, integration and other charges, to a margin of 15%.
Both our hard and soft surface flooring increased with hard surface
growing faster. Our strong commercial carpet and rug sales offset
softer residential carpet which was impacted by polyester
growth and pressure on commodities. Product innovation continues to
drive our business, and recent introductions comprised about
one-third of our soft surface sales during the period. Our
commercial carpet performance continues to strengthen with all end
markets growing. We have expanded our commercial sales force and
are increasing our participation in individual projects and large
national accounts. We announced a residential and commercial carpet
price increase of 3-5% for January
2017 to offset costs. Our rug sales grew as we introduced
new fashion-forward collections and entered new categories with
outdoor rugs and utility mats. Our hard surface sales continue to
grow significantly with expanded margins. Improvements in our LVT
production continue to increase our capacity and broaden our
product offering. We are completing our new engineered wood plant,
which will allow us to introduce larger sizes with unique finishes.
The expansion of our laminate capacity in 2017 will help to satisfy
increasing demand for our premium collections with superior
performance and realistic visuals.
"For the quarter, our Flooring Rest of the World Segment's sales
were up 15% as reported; on a constant days and currency basis,
legacy sales were up 8%. Operating income grew 47% as
reported to a margin of 18% and increased 41% on a constant
currency basis, excluding restructuring and integration charges, to
a margin of approximately 19%. Our laminate business continues to
grow on the strength of our premium Quick-Step and Pergo brands. We
are leveraging the strong performance of our 2016 laminate
introductions by expanding the designs and sizes we offer across
all brands. Our European and Russian laminate facilities are
operating near capacity with expansions planned for Europe and Russia in 2018. Our LVT sales are
increasing dramatically, and our margins are expanding as our
product mix and productivity improve. To alleviate capacity
constraints, we are modifying our LVT equipment and processes to
further increase production speeds, and we are supplementing our
collections with sourced products. Sales of our insulation boards
continue to grow, although lower material costs and manufacturing
improvements are being offset by competition and unfavorable
exchange rates. We are increasing prices based on market conditions
to offset currency fluctuations.
"Today, Mohawk is in the best position in the company's history.
This year, we are investing at our highest level ever to meet
increasing demand around the globe. We are preparing for future
growth by expanding our differentiated product offerings and
increasing the capacity and efficiency of our operations. With our
continued investments in manufacturing technology, we are
introducing distinctive collections to improve our sales and
enhance our mix. We are aggressively implementing productivity
improvements across the enterprise in all facets of our business,
and we are bringing new capacity online to support our growth. This
year, our strong operating results have expanded our cash flow and
reduced our leverage to historically low levels. We are currently
exploring numerous investment options to further our expansion,
including green field opportunities and acquisitions to broaden our
geographic presence and product portfolio. Taking these factors
into account, our EPS guidance for the fourth quarter is
$3.16 to $3.25, which represents a
12% to 15% increase over our fourth quarter 2015 EPS, excluding any
restructuring charges."
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, Daltile, Durkan, IVC,
Karastan, Marazzi, Mohawk, Mohawk Group, 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 4, 2016, 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 # 92116089. A replay will be
available until Friday, December 2,
2016, by dialing 855-859-2056 for US/local calls and
404-537-3406 for International/Local calls and entering Conference
ID # 92116089.
MOHAWK INDUSTRIES,
INC. AND SUBSIDIARIES
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
Consolidated
Statement of Operations
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
(Amounts in
thousands, except per share data)
|
|
October 1,
2016
|
|
October 3,
2015
|
|
October 1,
2016
|
|
October 3,
2015
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
2,294,139
|
|
2,150,656
|
|
6,776,521
|
|
6,073,566
|
Cost of
sales
|
|
1,567,580
|
|
1,489,252
|
|
4,654,695
|
|
4,285,090
|
Gross profit
|
|
726,559
|
|
661,404
|
|
2,121,826
|
|
1,788,476
|
Selling, general and
administrative expenses
|
|
348,252
|
|
372,670
|
|
1,147,155
|
|
1,200,152
|
Operating
income
|
|
378,307
|
|
288,734
|
|
974,671
|
|
588,324
|
Interest
expense
|
|
9,410
|
|
19,319
|
|
32,062
|
|
52,606
|
Other expense
(income), net
|
|
3,839
|
|
4,249
|
|
1,461
|
|
6,094
|
Earnings before income taxes
|
|
365,058
|
|
265,166
|
|
941,148
|
|
529,624
|
Income tax
expense
|
|
94,231
|
|
49,463
|
|
242,090
|
|
104,643
|
Net
earnings including noncontrolling interest
|
|
270,827
|
|
215,703
|
|
699,058
|
|
424,981
|
Net earnings
attributable to noncontrolling interest
|
|
949
|
|
798
|
|
2,444
|
|
1,238
|
Net earnings
attributable to Mohawk Industries, Inc.
|
|
$
269,878
|
|
214,905
|
|
696,614
|
|
423,743
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share attributable to Mohawk Industries, Inc.
|
|
|
|
|
|
|
|
|
Basic earnings per
share attributable to Mohawk Industries, Inc.
|
|
$
3.64
|
|
2.91
|
|
9.40
|
|
5.77
|
Weighted-average
common shares outstanding - basic
|
|
74,154
|
|
73,915
|
|
74,084
|
|
73,384
|
|
|
|
|
|
|
|
|
|
Diluted earnings
per share attributable to Mohawk Industries, Inc.
|
|
|
|
|
|
|
|
|
Diluted earnings per
share attributable to Mohawk Industries, Inc.
|
|
$
3.62
|
|
2.89
|
|
9.34
|
|
5.73
|
Weighted-average
common shares outstanding - diluted
|
|
74,613
|
|
74,438
|
|
74,551
|
|
73,907
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Financial
Information
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
$
103,680
|
|
94,954
|
|
305,088
|
|
268,622
|
Capital
expenditures
|
|
$
183,846
|
|
123,648
|
|
460,760
|
|
352,070
|
|
|
|
|
|
|
|
|
|
Consolidated
Balance Sheet Data
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
October 1,
2016
|
|
October 3,
2015
|
ASSETS
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
|
|
$
112,108
|
|
110,716
|
Receivables, net
|
|
|
|
|
|
1,506,316
|
|
1,340,650
|
Inventories
|
|
|
|
|
|
1,673,242
|
|
1,621,154
|
Prepaid expenses and other current assets
|
|
|
|
|
|
284,648
|
|
273,775
|
Total
current assets
|
|
|
|
|
|
3,576,314
|
|
3,346,295
|
Property, plant and
equipment, net
|
|
|
|
|
|
3,340,893
|
|
3,046,491
|
Goodwill
|
|
|
|
|
|
2,331,821
|
|
2,280,722
|
Intangible assets,
net
|
|
|
|
|
|
876,715
|
|
918,655
|
Deferred income taxes
and other non-current assets
|
|
|
|
|
|
294,850
|
|
464,047
|
Total assets
|
|
|
|
|
|
$
10,420,593
|
|
10,056,210
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Current portion of
long-term debt and commercial paper
|
|
|
|
|
|
$
1,548,251
|
|
1,927,815
|
Accounts payable and
accrued expenses
|
|
|
|
|
|
1,435,069
|
|
1,353,512
|
Total
current liabilities
|
|
|
|
|
|
2,983,320
|
|
3,281,327
|
Long-term debt, less
current portion
|
|
|
|
|
|
1,165,577
|
|
1,254,904
|
Deferred income taxes
and other long-term liabilities
|
|
|
|
|
|
574,267
|
|
741,946
|
Total
liabilities
|
|
|
|
|
|
4,723,164
|
|
5,278,177
|
Redeemable
noncontrolling interest
|
|
|
|
|
|
24,741
|
|
22,150
|
Total stockholders'
equity
|
|
|
|
|
|
5,672,688
|
|
4,755,883
|
Total liabilities and stockholders' equity
|
|
|
|
|
|
$
10,420,593
|
|
10,056,210
|
|
|
|
|
|
|
|
|
|
Segment
Information
|
|
Three Months
Ended
|
|
As of or for the Nine
Months Ended
|
(Amounts in
thousands)
|
|
October 1,
2016
|
|
October 3,
2015
|
|
October 1,
2016
|
|
October 3,
2015
|
|
|
|
|
|
|
|
|
|
Net sales:
|
|
|
|
|
|
|
|
|
Global Ceramic
|
|
$
822,040
|
|
791,538
|
|
2,425,560
|
|
2,301,168
|
Flooring NA
|
|
1,008,553
|
|
955,099
|
|
2,895,610
|
|
2,722,347
|
Flooring ROW
|
|
463,546
|
|
404,026
|
|
1,455,351
|
|
1,050,390
|
Intersegment sales
|
|
-
|
|
(7)
|
|
-
|
|
(339)
|
Consolidated net sales
|
|
$
2,294,139
|
|
2,150,656
|
|
6,776,521
|
|
6,073,566
|
|
|
|
|
|
|
|
|
|
Operating income
(loss):
|
|
|
|
|
|
|
|
|
Global Ceramic
|
|
$
135,985
|
|
120,055
|
|
376,368
|
|
326,571
|
Flooring NA
|
|
170,507
|
|
125,910
|
|
364,804
|
|
145,861
|
Flooring ROW
|
|
81,757
|
|
55,471
|
|
262,356
|
|
153,164
|
Corporate and eliminations
|
|
(9,942)
|
|
(12,702)
|
|
(28,857)
|
|
(37,272)
|
Consolidated operating income
|
|
$
378,307
|
|
288,734
|
|
974,671
|
|
588,324
|
|
|
|
|
|
|
|
|
|
Assets:
|
|
|
|
|
|
|
|
|
Global Ceramic
|
|
|
|
|
|
$
4,118,510
|
|
3,938,242
|
Flooring NA
|
|
|
|
|
|
3,354,286
|
|
3,195,904
|
Flooring ROW
|
|
|
|
|
|
2,851,227
|
|
2,699,255
|
Corporate and eliminations
|
|
|
|
|
|
96,570
|
|
222,809
|
Consolidated assets
|
|
|
|
|
|
$
10,420,593
|
|
10,056,210
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Net Earnings Attributable to Mohawk Industries, Inc. to Adjusted
Net Earnings Attributable to Mohawk Industries, Inc. and Adjusted
Diluted Earnings Per Share Attributable to Mohawk Industries,
Inc.
|
(Amounts in
thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
|
|
October 1,
2016
|
|
October 3,
2015
|
|
October 1,
2016
|
|
October 3,
2015
|
Net earnings
attributable to Mohawk Industries, Inc.
|
|
|
|
$
269,878
|
|
214,905
|
|
696,614
|
|
423,743
|
Adjusting
items:
|
|
|
|
|
|
|
|
|
|
|
Restructuring,
acquisition and integration-related and other
costs
|
|
|
|
30,572
|
|
12,770
|
|
44,309
|
|
43,784
|
Acquisitions purchase
accounting (inventory step-up)
|
|
|
|
-
|
|
7,160
|
|
-
|
|
13,316
|
Legal settlement and
reserves
|
|
|
|
(90,000)
|
|
-
|
|
(90,000)
|
|
127,000
|
Release of
indemnification asset
|
|
|
|
2,368
|
|
-
|
|
2,368
|
|
-
|
Tradename
impairment
|
|
|
|
47,905
|
|
-
|
|
47,905
|
|
-
|
Deferred loan
costs
|
|
|
|
-
|
|
-
|
|
-
|
|
651
|
Income taxes -
reversal of uncertain tax position
|
|
|
|
(2,368)
|
|
-
|
|
(2,368)
|
|
-
|
Income
taxes
|
|
|
|
2,856
|
|
(12,940)
|
|
(1,764)
|
|
(62,984)
|
Adjusted net earnings
attributable to Mohawk Industries, Inc.
|
|
|
|
$
261,211
|
|
221,895
|
|
697,064
|
|
545,510
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted diluted
earnings per share attributable to Mohawk Industries,
Inc.
|
|
$
3.50
|
|
2.98
|
|
9.35
|
|
7.38
|
Weighted-average
common shares outstanding - diluted
|
|
|
|
74,613
|
|
74,438
|
|
74,551
|
|
73,907
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Total Debt to Net Debt
|
|
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
October 1,
2016
|
|
|
|
|
|
|
|
|
Current portion of
long-term debt and commercial paper
|
|
$
1,548,251
|
|
|
|
|
|
|
|
|
Long-term debt, less
current portion
|
|
1,165,577
|
|
|
|
|
|
|
|
|
Less: Cash and cash
equivalents
|
|
112,108
|
|
|
|
|
|
|
|
|
Net Debt
|
|
$
2,601,720
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Operating Income to Pro forma Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
Trailing
Twelve
|
|
|
Three Months
Ended
|
|
Months
Ended
|
|
|
December 31,
2015
|
|
April 2,
2016
|
|
July 2,
2016
|
|
October 1,
2016
|
|
October 1,
2016
|
Operating
income
|
|
$
249,242
|
|
245,672
|
|
350,692
|
|
378,307
|
|
1,223,913
|
Other (expense)
income
|
|
(11,525)
|
|
(3,429)
|
|
5,807
|
|
(3,839)
|
|
(12,986)
|
Net (earnings) loss
attributable to non-controlling interest
|
|
(446)
|
|
(569)
|
|
(926)
|
|
(949)
|
|
(2,890)
|
Depreciation and
amortization
|
|
94,025
|
|
100,194
|
|
101,215
|
|
103,680
|
|
399,114
|
EBITDA
|
|
331,296
|
|
341,868
|
|
456,788
|
|
477,199
|
|
1,607,151
|
Restructuring,
acquisition and integration-related and other
costs
|
|
30,820
|
|
7,718
|
|
6,020
|
|
30,572
|
|
75,130
|
Acquisitions purchase
accounting (inventory step-up)
|
|
21
|
|
-
|
|
-
|
|
-
|
|
21
|
Legal settlement and
reserves
|
|
(2,520)
|
|
-
|
|
-
|
|
(90,000)
|
|
(92,520)
|
Release of
indemnification asset
|
|
11,180
|
|
-
|
|
-
|
|
2,368
|
|
13,548
|
Tradename
impairment
|
|
-
|
|
-
|
|
-
|
|
47,905
|
|
47,905
|
Acquisitions
EBITDA
|
|
7,337
|
|
-
|
|
-
|
|
-
|
|
7,337
|
Pro forma
Adjusted EBITDA
|
|
$
378,134
|
|
349,586
|
|
462,808
|
|
468,044
|
|
1,658,572
|
|
|
|
|
|
|
|
|
|
|
|
Net Debt to Pro forma
Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
1.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Net Sales to Net Sales on a Constant Exchange Rate and Constant
Shipping Days Excluding Acquisition Volume
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
|
|
October 1,
2016
|
|
October 3,
2015
|
|
October 1,
2016
|
|
October 3,
2015
|
|
|
Net sales
|
|
$
2,294,139
|
|
2,150,656
|
|
6,776,521
|
|
6,073,566
|
|
|
Adjustment to net
sales on constant shipping days
|
|
35,775
|
|
-
|
|
-
|
|
-
|
|
|
Adjustment to net
sales on a constant exchange rate
|
|
10,139
|
|
-
|
|
52,001
|
|
-
|
|
|
Net sales on a
constant exchange rate and constant shipping days
|
|
2,340,053
|
|
2,150,656
|
|
6,828,522
|
|
6,073,566
|
|
|
Less: impact of
acquisition volume
|
|
(40,440)
|
|
-
|
|
(525,772)
|
|
(55,672)
|
|
|
Net sales on a
constant exchange rate and constant shipping days excluding
acquisition volume
|
|
$
2,299,613
|
|
2,150,656
|
|
6,302,750
|
|
6,017,894
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Segment Net Sales to Segment Net Sales on a Constant Exchange Rate
and Constant Shipping Days
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
Global
Ceramic
|
|
October 1,
2016
|
|
October 3,
2015
|
|
|
|
|
|
|
Net sales
|
|
$
822,040
|
|
791,538
|
|
|
|
|
|
|
Adjustment to net
sales on constant shipping days
|
|
13,066
|
|
-
|
|
|
|
|
|
|
Adjustment to segment
net sales on a constant exchange rate
|
|
5,284
|
|
-
|
|
|
|
|
|
|
Segment net sales on
a constant exchange rate and constant shipping
days
|
|
$
840,390
|
|
791,538
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Segment Net Sales to Segment Net Sales on Constant Shipping
Days
|
|
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
Flooring
NA
|
|
October 1,
2016
|
|
October 3,
2015
|
|
|
|
|
|
|
Net sales
|
|
$
1,008,553
|
|
955,099
|
|
|
|
|
|
|
Adjustment to net
sales on constant shipping days
|
|
16,009
|
|
-
|
|
|
|
|
|
|
Segment net sales on
constant shipping days
|
|
$
1,024,562
|
|
955,099
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Segment Net Sales to Segment Net Sales on a Constant Exchange Rate
and Constant Shipping Days Excluding Acquisition
Volume
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
Flooring
ROW
|
|
October 1,
2016
|
|
October 3,
2015
|
|
|
|
|
|
|
Net sales
|
|
$
463,546
|
|
404,026
|
|
|
|
|
|
|
Adjustment to net
sales on constant shipping days
|
|
6,700
|
|
-
|
|
|
|
|
|
|
Adjustment to segment
net sales on a constant exchange rate
|
|
4,856
|
|
-
|
|
|
|
|
|
|
Segment net sales on
a constant exchange rate and constant shipping
days
|
|
475,102
|
|
404,026
|
|
|
|
|
|
|
Less: impact of
acquisition volume
|
|
(40,440)
|
|
-
|
|
|
|
|
|
|
Segment net sales on
a constant exchange rate and constant shipping days excluding
acquisition volume
|
|
$
434,662
|
|
404,026
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Gross Profit to Adjusted Gross Profit
|
|
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
October 1,
2016
|
|
October 3,
2015
|
|
|
|
|
|
|
Gross
Profit
|
|
$
726,559
|
|
661,404
|
|
|
|
|
|
|
Adjustments to gross
profit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring,
acquisition and integration-related and other
costs
|
|
17,459
|
|
7,291
|
|
|
|
|
|
|
Acquisitions purchase
accounting (inventory step-up)
|
|
-
|
|
7,160
|
|
|
|
|
|
|
Adjusted gross
profit
|
|
$
744,018
|
|
675,855
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Selling, General and Administrative Expenses to Adjusted Selling,
General and Administrative Expenses
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
October 1,
2016
|
|
October 3,
2015
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
|
$
348,252
|
|
372,670
|
|
|
|
|
|
|
Adjustments to
selling, general and administrative expenses:
|
|
|
|
|
|
|
|
|
|
|
Restructuring,
acquisition and integration-related and other
costs
|
|
(13,112)
|
|
(5,479)
|
|
|
|
|
|
|
Legal settlement and
reserves
|
|
90,000
|
|
-
|
|
|
|
|
|
|
Tradename
impairment
|
|
(47,905)
|
|
-
|
|
|
|
|
|
|
Adjusted
selling, general and administrative expenses
|
|
$
377,235
|
|
367,191
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Operating Income to Adjusted Operating Income on a Constant
Exchange Rate
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
October 1,
2016
|
|
October 3,
2015
|
|
|
|
|
|
|
Operating
income
|
|
$
378,307
|
|
288,734
|
|
|
|
|
|
|
Adjustments to
operating income:
|
|
|
|
|
|
|
|
|
|
|
Restructuring,
acquisition and integration-related and other
costs
|
|
30,572
|
|
12,770
|
|
|
|
|
|
|
Legal settlement and
reserves
|
|
(90,000)
|
|
-
|
|
|
|
|
|
|
Tradename
impairment
|
|
47,905
|
|
-
|
|
|
|
|
|
|
Acquisitions purchase
accounting (inventory step-up)
|
|
-
|
|
7,160
|
|
|
|
|
|
|
Adjusted operating
income
|
|
366,784
|
|
308,664
|
|
|
|
|
|
|
Adjustment to operating income on a constant exchange
rate
|
|
6,832
|
|
-
|
|
|
|
|
|
|
Adjusted
operating income on constant exchange rate
|
|
$
373,616
|
|
308,664
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Segment Operating Income to Adjusted Segment Operating Income on a
Constant Exchange Rate
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
Global
Ceramic
|
|
October 1,
2016
|
|
October 3,
2015
|
|
|
|
|
|
|
Operating
income
|
|
$
135,985
|
|
120,055
|
|
|
|
|
|
|
Adjustments to
segment operating income:
|
|
|
|
|
|
|
|
|
|
|
Restructuring,
acquisition and integration-related and other
costs
|
|
456
|
|
118
|
|
|
|
|
|
|
Acquisitions purchase
accounting (inventory step-up)
|
|
-
|
|
949
|
|
|
|
|
|
|
Adjusted segment
operating income
|
|
136,441
|
|
121,122
|
|
|
|
|
|
|
Adjustment to
operating income on a constant exchange rate
|
|
1,684
|
|
-
|
|
|
|
|
|
|
Adjusted
segment operating income on constant exchange rate
|
|
$
138,125
|
|
121,122
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Segment Operating Income to Adjusted Segment Operating
Income
|
|
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
Flooring
NA
|
|
October 1,
2016
|
|
October 3,
2015
|
|
|
|
|
|
|
Operating
income
|
|
$
170,507
|
|
125,910
|
|
|
|
|
|
|
Adjustments to
segment operating income:
|
|
|
|
|
|
|
|
|
|
|
Legal settlement and
reserves
|
|
(90,000)
|
|
-
|
|
|
|
|
|
|
Restructuring,
acquisition and integration-related and other
costs
|
|
26,193
|
|
5,148
|
|
|
|
|
|
|
Tradename
impairment
|
|
47,905
|
|
-
|
|
|
|
|
|
|
Acquisitions purchase
accounting (inventory step-up)
|
|
-
|
|
1,527
|
|
|
|
|
|
|
Adjusted
segment operating income
|
|
$
154,605
|
|
132,585
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Segment Operating Income to Adjusted Segment Operating Income on a
Constant Exchange Rate
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
Flooring
ROW
|
|
October 1,
2016
|
|
October 3,
2015
|
|
|
|
|
|
|
Operating
income
|
|
$
81,757
|
|
55,471
|
|
|
|
|
|
|
Adjustments to
segment operating income:
|
|
|
|
|
|
|
|
|
|
|
Restructuring,
acquisition and integration-related and other
costs
|
|
3,596
|
|
4,030
|
|
|
|
|
|
|
Acquisitions purchase
accounting (inventory step-up)
|
|
-
|
|
4,683
|
|
|
|
|
|
|
Adjusted segment
operating income
|
|
85,353
|
|
64,184
|
|
|
|
|
|
|
Adjustment to
operating income on a constant exchange rate
|
|
5,147
|
|
-
|
|
|
|
|
|
|
Adjusted
segment operating income on constant exchange rate
|
|
$
90,500
|
|
64,184
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Earnings incl Noncontrolling Interests Before Income Taxes to
Adjusted Earnings incl Noncontrolling Interests Before Income
Taxes
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
October 1,
2016
|
|
October 3,
2015
|
|
|
|
|
|
|
Earnings before
income taxes
|
|
$
365,058
|
|
265,166
|
|
|
|
|
|
|
Noncontrolling
interests
|
|
(949)
|
|
(798)
|
|
|
|
|
|
|
Adjustments to
earnings including noncontrolling interests before income
taxes:
|
|
|
|
|
|
|
|
|
|
|
Restructuring,
acquisition and integration-related & other
costs
|
|
30,572
|
|
12,770
|
|
|
|
|
|
|
Acquisitions purchase
accounting (inventory step-up)
|
|
-
|
|
7,160
|
|
|
|
|
|
|
Legal settlement and
reserves
|
|
(90,000)
|
|
-
|
|
|
|
|
|
|
Release of
indemnification asset
|
|
2,368
|
|
-
|
|
|
|
|
|
|
Tradename
impairment
|
|
47,905
|
|
-
|
|
|
|
|
|
|
Adjusted
earnings including noncontrolling interests before income
taxes
|
|
$
354,954
|
|
284,298
|
|
|
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Reconciliation of
Income Tax Expense to Adjusted Income Tax
Expense
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(Amounts in
thousands)
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Three Months
Ended
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October 1,
2016
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October 3,
2015
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Income tax
expense
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|
$
94,231
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|
49,463
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Income taxes -
reversal of uncertain tax position
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2,368
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|
-
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Income tax effect of
adjusting items
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|
(2,856)
|
|
12,940
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Adjusted
income tax expense
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|
$
93,743
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62,403
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Adjusted income tax
rate
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26.4%
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21.9%
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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,
tradename impairment 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.
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To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/mohawk-industries-reports-record-third-quarter-300357115.html
SOURCE Mohawk Industries, Inc.