CALHOUN, Ga., Oct. 26, 2017 /PRNewswire/ -- Mohawk
Industries, Inc. (NYSE: MHK) today announced 2017 third quarter,
net earnings of $270 million and
diluted earnings per share (EPS) of $3.61. Adjusted net earnings were $281 million and EPS was $3.75, excluding restructuring, acquisition and
other charges, a 7% increase over last year. Net sales for the
third quarter of 2017 were $2.4
billion, up 7% in the quarter and 5% on a constant days and
currency basis. For the third quarter of 2016, net sales were
$2.3 billion, net earnings were
$270 million and EPS was $3.62; adjusted net earnings were $261 million and EPS was $3.50, excluding restructuring, acquisition and
other charges.
For the nine months ending September 30,
2017, net earnings and EPS were $731
million and $9.77,
respectively. Adjusted net earnings and EPS were $763 million and $10.19, excluding restructuring, acquisition and
other charges, a 9% increase over last year. For the nine-month
period, net sales were $7.1 billion,
an increase of 5% and 5.5% on a constant days and currency basis.
For the nine-month period ending October 1,
2016, net sales were $6.8
billion, net earnings were $697
million and EPS was $9.34;
adjusted net earnings and EPS were $697
million and $9.35, excluding
restructuring, acquisition and other charges.
Commenting on Mohawk Industries' third quarter performance,
Jeffrey S. Lorberbaum, Chairman and
CEO, stated, "During the period, Mohawk delivered record adjusted
earnings and EPS, with sales growing approximately 7%. Our
businesses outside the U.S. had stronger revenue growth, as the
economies of those countries expanded. In the period, we overcame
rising material costs, disruptions from hurricanes and reduced
patent revenue. Our price and mix improved as we enhanced our
product offering and implemented pricing actions to recover
inflation. Our many operational and process improvements resulted
in productivity gains of approximately $49
million and we incurred $8
million of start-up costs.
"For the full year, we are investing about $900 million to optimize long-term results by
entering new product categories, extending our reach into new
geographies and facilitating growth in our existing businesses.
These projects include ceramic expansions in Mexico, Russia, Italy
and Poland; additional premium
laminate, engineered wood, rug and polyester carpet capacity in the
U.S.; and increased premium laminate capacity in Europe and Russia. These investments will satisfy
increasing demand for our products as well as introduce
state-of-the-art manufacturing technology to further our position
as the industry's innovation leader. During 2018, in the U.S., we
will launch production of rigid LVT as well as quartz countertops.
In Europe, we will enter the rigid
LVT, carpet tile and porcelain countertop businesses, and in
Russia we will open a
manufacturing plant to participate in the country's large sheet
vinyl market.
"For the quarter, our Flooring Rest of the World Segment's sales
increased 13% as reported and 8% on a constant days and currency
basis. The segment had an exceptional quarter with the majority of
our manufactured product sales and earnings growing dramatically.
Our patent revenue is running at a higher rate than we anticipated
due to broader use of our patents and the increase in worldwide
sales of LVT. During the period, our price and mix
improvements offset inflation and currency changes. Our laminate
innovation in proprietary structures and water-proof technologies
is increasing the selection of our products by customers who would
ordinarily purchase wood flooring. Our present European LVT
manufacturing is nearing capacity, and our new plant will begin
operating by the end of the year. The new plant will expand our
capacity of flexible LVT as well as produce rigid LVT. We are
expanding the segment's commercial sales force to increase the
specifications of sheet vinyl, LVT and our upcoming carpet tile
collections. Our new commercial carpet tile plant should initiate
limited production in the fourth quarter.
"For the quarter, our Global Ceramic Segment sales increased 9%
as reported and 7% on a constant days and currency basis. In the
quarter, the strongest growth in our ceramic business was in
Russia and Mexico as well as our acquisitions in
Italy and Poland, which have been integrated with our
existing European ceramic business. New capacity came online during
the period with new production in Mexico and our modernized commercial tile
plant in Italy. We also started up
idled assets at our Polish plant, and we are installing additional
equipment to broaden our position in the Northern and Central
European markets. Our U.S. ceramic business was softer than we
anticipated due to the impact of hurricanes in two of the country's
largest ceramic markets. In the third and fourth quarters of this
year, we are opening about 15 service centers and stone centers in
key U.S. markets. Our North American manufacturing plants are
operating at record levels for volume, quality and cost. Our sales
and margins in Mexico increased as
we broadened our product offering and enlarged our customer base.
During the period, our European ceramic business increased
dramatically, with growth in our local markets and the addition of
our Italian and Polish acquisitions. Our Russian ceramic business
is meaningfully outperforming the industry, and we are adding
capacity to increase our share as the market expands.
"During the quarter, our Flooring North America Segment's sales
increased 2% as reported. The segment's price, mix and productivity
improved significantly during the period, covering increases in raw
materials and other inflation. Our new product introductions
improved our average selling prices and margins, and our process
innovations and investments in manufacturing technology improved
our costs. The hurricanes in Texas
and Florida interrupted normal
purchasing patterns and impacted our sales during the period. For
the quarter, our soft surfaces sales growth exceeded hard surfaces,
which were constrained by production limitations that will be
addressed in the fourth quarter. Growth in our residential carpet
outpaced our commercial sales. We have recently announced a 5 to 6%
price increase on all of our carpet products effective the end of
this year to cover our increasing costs. We have enhanced the
productivity of our U.S. LVT operations, and we are expanding our
product offering in both the residential and commercial categories.
We have introduced a proprietary rigid LVT collection designed for
exceptional stability and durability as we prepare for our new U.S.
LVT production in the second quarter of next year. Our new laminate
production will be operational this quarter and will allow us to
expand our successful water proof laminate that improves on Mother
Nature in both performance and visuals.
"In the fourth quarter, we anticipate that the business will
improve as we benefit from innovative new products, increased
volume and the performance of our recent acquisitions. We expect
higher sales with the relief of some of our capacity constraints,
enabling us to expand our market position. During the upcoming
period, we will absorb higher start-up costs estimated at
$15 million in our results as new
operations come online. The disruptions caused by hurricanes in the
U.S. should diminish as those markets begin their recovery. Greater
productivity, better product mix and price changes should improve
our fourth quarter results, overcoming the reductions from our
expired patents. Taking all of this into account, our EPS guidance
for the fourth quarter is $3.25 to
$3.34, excluding any one-time 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, 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, October 27,
2017, 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 # 95629983. A replay will be
available until Friday, November 24,
2017, by dialing 1-855-859-2056 for US/local calls and
1-404-537-3406 for International/Local calls and entering
Conference ID # 95629983.
MOHAWK INDUSTRIES,
INC. AND SUBSIDIARIES
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
Consolidated
Statement of Operations Data
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
(Amounts in
thousands, except per share data)
|
|
September 30,
2017
|
|
October 1,
2016
|
|
September 30,
2017
|
|
October 1,
2016
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
2,448,510
|
|
2,294,139
|
|
7,122,193
|
|
6,776,521
|
Cost of
sales
|
|
1,665,209
|
|
1,567,580
|
|
4,879,403
|
|
4,654,695
|
Gross profit
|
|
783,301
|
|
726,559
|
|
2,242,790
|
|
2,121,826
|
Selling, general and
administrative expenses
|
|
403,203
|
|
348,252
|
|
1,232,083
|
|
1,147,155
|
Operating
income
|
|
380,098
|
|
378,307
|
|
1,010,707
|
|
974,671
|
Interest
expense
|
|
7,259
|
|
9,410
|
|
23,854
|
|
32,062
|
Other expense
(income), net
|
|
1,285
|
|
3,839
|
|
1,455
|
|
1,461
|
Earnings before income taxes
|
|
371,554
|
|
365,058
|
|
985,398
|
|
941,148
|
Income tax
expense
|
|
100,532
|
|
94,231
|
|
251,572
|
|
242,090
|
Net
earnings including noncontrolling interest
|
|
271,022
|
|
270,827
|
|
733,826
|
|
699,058
|
Net income
attributable to noncontrolling interest
|
|
997
|
|
949
|
|
2,566
|
|
2,444
|
Net earnings
attributable to Mohawk Industries, Inc.
|
|
$
270,025
|
|
269,878
|
|
731,260
|
|
696,614
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share attributable to Mohawk Industries, Inc.
|
|
|
|
|
|
|
|
|
Basic earnings per
share attributable to Mohawk Industries, Inc.
|
|
$
3.63
|
|
3.64
|
|
9.84
|
|
9.40
|
Weighted-average
common shares outstanding - basic
|
|
74,338
|
|
74,154
|
|
74,330
|
|
74,084
|
|
|
|
|
|
|
|
|
|
Diluted earnings
per share attributable to Mohawk Industries, Inc.
|
|
|
|
|
|
|
|
|
Diluted earnings per
share attributable to Mohawk Industries, Inc.
|
|
$
3.61
|
|
3.62
|
|
9.77
|
|
9.34
|
Weighted-average
common shares outstanding - diluted
|
|
74,841
|
|
74,613
|
|
74,830
|
|
74,551
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Financial
Information
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
$
113,515
|
|
103,680
|
|
328,300
|
|
305,088
|
Capital
expenditures
|
|
$
229,207
|
|
183,846
|
|
654,630
|
|
460,760
|
|
|
|
|
|
|
|
|
|
Consolidated
Balance Sheet Data
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
2017
|
|
October 1,
2016
|
ASSETS
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
|
|
$
84,502
|
|
112,108
|
Receivables, net
|
|
|
|
|
|
1,656,064
|
|
1,506,316
|
Inventories
|
|
|
|
|
|
1,911,029
|
|
1,673,242
|
Prepaid expenses and other current assets
|
|
|
|
|
|
345,515
|
|
284,648
|
Total
current assets
|
|
|
|
|
|
3,997,110
|
|
3,576,314
|
Property, plant and
equipment, net
|
|
|
|
|
|
4,090,099
|
|
3,340,893
|
Goodwill
|
|
|
|
|
|
2,454,360
|
|
2,331,821
|
Intangible assets,
net
|
|
|
|
|
|
890,298
|
|
876,715
|
Deferred income taxes
and other non-current assets
|
|
|
|
|
|
390,946
|
|
294,850
|
Total assets
|
|
|
|
|
|
$
11,822,813
|
|
10,420,593
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Current portion of long-term debt and commercial
paper
|
|
|
|
|
|
$
1,172,781
|
|
1,548,251
|
Accounts payable and accrued
expenses
|
|
|
|
|
|
1,524,237
|
|
1,435,069
|
Total
current liabilities
|
|
|
|
|
|
2,697,018
|
|
2,983,320
|
Long-term debt, less
current portion
|
|
|
|
|
|
1,544,665
|
|
1,165,577
|
Deferred income taxes
and other long-term liabilities
|
|
|
|
|
|
755,020
|
|
574,267
|
Total
liabilities
|
|
|
|
|
|
4,996,703
|
|
4,723,164
|
Redeemable
noncontrolling interest
|
|
|
|
|
|
28,508
|
|
24,741
|
Total stockholders'
equity
|
|
|
|
|
|
6,797,602
|
|
5,672,688
|
Total liabilities and stockholders' equity
|
|
|
|
|
|
$
11,822,813
|
|
10,420,593
|
|
|
|
|
|
|
|
|
|
Segment
Information
|
|
Three Months
Ended
|
|
As of or for the Nine
Months Ended
|
(Amounts in
thousands)
|
|
September 30,
2017
|
|
October 1,
2016
|
|
September 30,
2017
|
|
October 1,
2016
|
|
|
|
|
|
|
|
|
|
Net sales:
|
|
|
|
|
|
|
|
|
Global Ceramic
|
|
$
893,399
|
|
822,040
|
|
2,581,038
|
|
2,425,560
|
Flooring NA
|
|
1,031,773
|
|
1,008,553
|
|
3,011,568
|
|
2,895,610
|
Flooring ROW
|
|
523,338
|
|
463,546
|
|
1,529,587
|
|
1,455,351
|
Intersegment sales
|
|
-
|
|
-
|
|
-
|
|
-
|
Consolidated net sales
|
|
$
2,448,510
|
|
2,294,139
|
|
7,122,193
|
|
6,776,521
|
|
|
|
|
|
|
|
|
|
Operating income
(loss):
|
|
|
|
|
|
|
|
|
Global Ceramic
|
|
$
143,368
|
|
135,985
|
|
411,961
|
|
376,368
|
Flooring NA
|
|
163,494
|
|
170,507
|
|
383,118
|
|
364,804
|
Flooring ROW
|
|
83,042
|
|
81,757
|
|
245,189
|
|
262,356
|
Corporate and intersegment eliminations
|
|
(9,806)
|
|
(9,942)
|
|
(29,561)
|
|
(28,857)
|
Consolidated operating income
|
|
$
380,098
|
|
378,307
|
|
1,010,707
|
|
974,671
|
|
|
|
|
|
|
|
|
|
Assets:
|
|
|
|
|
|
|
|
|
Global Ceramic
|
|
|
|
|
|
$
4,826,619
|
|
4,118,510
|
Flooring NA
|
|
|
|
|
|
3,699,633
|
|
3,354,286
|
Flooring ROW
|
|
|
|
|
|
3,128,213
|
|
2,851,227
|
Corporate and intersegment eliminations
|
|
|
|
|
|
168,348
|
|
96,570
|
Consolidated assets
|
|
|
|
|
|
$
11,822,813
|
|
10,420,593
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Net Earnings Attributable to Mohawk Industries, Inc. to Adjusted
Net Earnings Attributable to Mohawk Industries, Inc. and Adjusted
Diluted Earnings Per Share Attributable to Mohawk Industries,
Inc.
|
(Amounts in
thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
|
|
September 30,
2017
|
|
October 1,
2016
|
|
September 30,
2017
|
|
October 1,
2016
|
Net earnings
attributable to Mohawk Industries, Inc.
|
|
|
|
$
270,025
|
|
269,878
|
|
731,260
|
|
696,614
|
Adjusting
items:
|
|
|
|
|
|
|
|
|
|
|
Restructuring,
acquisition and integration-related and other
costs
|
|
|
|
13,853
|
|
30,572
|
|
33,709
|
|
44,309
|
Acquisitions
purchase accounting , including inventory step-up
|
|
|
|
3,551
|
|
-
|
|
13,314
|
|
-
|
Legal
settlement and reserves
|
|
|
|
-
|
|
(90,000)
|
|
-
|
|
(90,000)
|
Release of
indemnification asset
|
|
|
|
-
|
|
2,368
|
|
-
|
|
2,368
|
Tradename
impairment
|
|
|
|
-
|
|
47,905
|
|
-
|
|
47,905
|
Income taxes -
reversal of uncertain tax position
|
|
|
|
-
|
|
(2,368)
|
|
-
|
|
(2,368)
|
Income
taxes
|
|
|
|
(6,545)
|
|
2,856
|
|
(15,637)
|
|
(1,764)
|
Adjusted net earnings
attributable to Mohawk Industries, Inc.
|
|
|
|
$
280,884
|
|
261,211
|
|
762,646
|
|
697,064
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted diluted
earnings per share attributable to Mohawk Industries,
Inc.
|
|
$
3.75
|
|
3.50
|
|
10.19
|
|
9.35
|
Weighted-average
common shares outstanding - diluted
|
|
|
|
74,841
|
|
74,613
|
|
74,830
|
|
74,551
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Total Debt to Net Debt
|
|
|
(Amounts in
thousands)
|
|
|
|
|
September 30,
2017
|
Current portion of
long-term debt and commercial paper
|
|
$
1,172,781
|
Long-term debt, less
current portion
|
|
1,544,665
|
Less: Cash and cash
equivalents
|
|
84,502
|
Net
Debt
|
|
$
2,632,944
|
|
|
|
Reconciliation of
Operating Income to Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
Trailing
Twelve
|
|
|
Three Months
Ended
|
|
Months
Ended
|
|
|
December 31,
2016
|
|
April 1,
2017
|
|
July 1,
2017
|
|
September 30,
2017
|
|
September 30,
2017
|
Operating
income
|
|
$
305,272
|
|
274,784
|
|
355,825
|
|
380,098
|
|
1,315,979
|
Other
(expense) income
|
|
3,190
|
|
2,832
|
|
(3,002)
|
|
(1,285)
|
|
1,735
|
Net
(income) loss attributable to noncontrolling interest
|
|
(760)
|
|
(502)
|
|
(1,067)
|
|
(997)
|
|
(3,326)
|
Depreciation and amortization
|
|
104,379
|
|
105,024
|
|
109,761
|
|
113,515
|
|
432,679
|
EBITDA
|
|
412,081
|
|
382,138
|
|
461,517
|
|
491,331
|
|
1,747,067
|
Restructuring, acquisition and integration-related and other
costs
|
|
16,214
|
|
3,978
|
|
15,878
|
|
13,853
|
|
49,923
|
Acquisitions purchase accounting, including inventory
step-up
|
|
-
|
|
192
|
|
9,571
|
|
3,551
|
|
13,314
|
Release
of indemnification asset
|
|
3,004
|
|
-
|
|
-
|
|
-
|
|
3,004
|
Adjusted
EBITDA
|
|
$
431,299
|
|
386,308
|
|
486,966
|
|
508,735
|
|
1,813,308
|
|
|
|
|
|
|
|
|
|
|
|
Net Debt to Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
1.5
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
September 30,
2017
|
|
October 1,
2016
|
|
September 30,
2017
|
|
October 1,
2016
|
Net sales
|
|
$
2,448,510
|
|
2,294,139
|
|
7,122,193
|
|
6,776,521
|
Adjustment to net
sales on constant shipping days
|
|
1,111
|
|
-
|
|
36,358
|
|
-
|
Adjustment to net
sales on a constant exchange rate
|
|
(39,769)
|
|
-
|
|
(9,234)
|
|
-
|
Net sales on a
constant exchange rate and constant shipping days
|
|
2,409,852
|
|
2,294,139
|
|
7,149,317
|
|
6,776,521
|
Less: impact of
acquisition volume
|
|
(47,118)
|
|
-
|
|
(95,342)
|
|
-
|
Net sales on a
constant exchange rate and constant shipping days excluding
acquisition volume
|
|
$
2,362,734
|
|
2,294,139
|
|
7,053,975
|
|
6,776,521
|
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
|
Global
Ceramic
|
|
September 30,
2017
|
|
October 1,
2016
|
Net sales
|
|
$
893,399
|
|
822,040
|
Adjustment to net
sales on constant shipping days
|
|
1,111
|
|
-
|
Adjustment to segment
net sales on a constant exchange rate
|
|
(16,758)
|
|
-
|
Segment net sales on
a constant exchange rate and constant shipping
days
|
|
877,752
|
|
822,040
|
Less: impact of
acquisition volume
|
|
(47,118)
|
|
-
|
Segment net sales on
a constant exchange rate and constant shipping days excluding
acquisition volume
|
|
$
830,634
|
|
822,040
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Segment Net Sales to Segment Net Sales on a Constant Exchange
Rate
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
Three Months
Ended
|
Flooring
ROW
|
|
September 30,
2017
|
|
October 1,
2016
|
Net sales
|
|
$
523,338
|
|
463,546
|
Adjustment to segment
net sales on a constant exchange rate
|
|
(23,012)
|
|
-
|
Segment net sales on
a constant exchange rate
|
|
$
500,326
|
|
463,546
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Gross Profit to Adjusted Gross Profit
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
September 30,
2017
|
|
October 1,
2016
|
Gross
Profit
|
|
$
783,301
|
|
726,559
|
Adjustments to gross
profit:
|
|
|
|
|
Restructuring, acquisition and integration-related and other
costs
|
|
8,845
|
|
17,459
|
Acquisitions purchase accounting, including inventory
step-up
|
|
3,551
|
|
-
|
Adjusted gross
profit
|
|
$
795,697
|
|
744,018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Selling, General and Administrative Expenses to Adjusted Selling,
General and Administrative Expenses
|
(Amounts in
thousands)
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
September 30,
2017
|
|
October 1,
2016
|
Selling, general and
administrative expenses
|
|
$
403,203
|
|
348,252
|
Adjustments to
selling, general and administrative expenses:
|
|
|
|
|
Restructuring,
acquisition and integration-related and other
costs
|
|
(5,008)
|
|
(13,112)
|
Legal
settlement and reserves
|
|
-
|
|
90,000
|
Tradename
impairment
|
|
-
|
|
(47,905)
|
Adjusted selling, general and administrative expenses
|
|
$
398,195
|
|
377,235
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Operating Income to Adjusted Operating Income
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
September 30,
2017
|
|
October 1,
2016
|
Operating
income
|
|
$
380,098
|
|
378,307
|
Adjustments to
operating income:
|
|
|
|
|
Restructuring, acquisition and integration-related and other
costs
|
|
13,853
|
|
30,572
|
Legal
settlement and reserves
|
|
-
|
|
(90,000)
|
Tradename impairment
|
|
-
|
|
47,905
|
Acquisitions purchase accounting, including inventory
step-up
|
|
3,551
|
|
-
|
Adjusted operating
income
|
|
$
397,502
|
|
366,784
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Segment Operating Income to Adjusted Segment Operating
Income
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
Three Months
Ended
|
Global
Ceramic
|
|
September 30,
2017
|
|
October 1,
2016
|
Operating
income
|
|
$
143,368
|
|
135,985
|
Adjustments to
segment operating income:
|
|
|
|
|
Restructuring,
acquisition and integration-related and other
costs
|
|
2,800
|
|
456
|
Acquisitions
purchase accounting, including inventory step-up
|
|
3,551
|
|
-
|
Adjusted
segment operating income
|
|
$
149,719
|
|
136,441
|
|
|
|
|
|
Reconciliation of
Segment Operating Income to Adjusted Segment Operating
Income
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
Three Months
Ended
|
Flooring
NA
|
|
September 30,
2017
|
|
October 1,
2016
|
Operating
income
|
|
$
163,494
|
|
170,507
|
Adjustments to
segment operating income:
|
|
|
|
|
Legal
settlement and reserves
|
|
-
|
|
(90,000)
|
Restructuring,
acquisition and integration-related and other
costs
|
|
8,682
|
|
26,193
|
Tradename
impairment
|
|
-
|
|
47,905
|
Adjusted segment operating income
|
|
$
172,176
|
|
154,605
|
|
|
|
|
|
Reconciliation of
Segment Operating Income to Adjusted Segment Operating
Income
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
Three Months
Ended
|
Flooring
ROW
|
|
September 30,
2017
|
|
October 1,
2016
|
Operating
income
|
|
$
83,042
|
|
81,757
|
Adjustments to
segment operating income:
|
|
|
|
|
Restructuring,
acquisition and integration-related and other
costs
|
|
1,620
|
|
3,596
|
Adjusted
segment operating income
|
|
$
84,662
|
|
85,353
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Earnings including Noncontrolling Interests Before Income Taxes to
Adjusted Earnings including Noncontrolling Interests Before Income
Taxes
|
(Amounts in
thousands)
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
September 30,
2017
|
|
October 1,
2016
|
Earnings before
income taxes
|
|
$
371,554
|
|
365,058
|
Noncontrolling
interests
|
|
(997)
|
|
(949)
|
Adjustments to
earnings including noncontrolling interests before income
taxes:
|
|
|
|
|
Restructuring,
acquisition and integration-related & other
costs
|
|
13,853
|
|
30,572
|
Acquisitions
purchase accounting, including inventory step-up
|
|
3,551
|
|
-
|
Legal
settlement and reserves
|
|
-
|
|
(90,000)
|
Release of
indemnification asset
|
|
-
|
|
2,368
|
Tradename
impairment
|
|
-
|
|
47,905
|
Adjusted
earnings including noncontrolling interests before income
taxes
|
|
$
387,961
|
|
354,954
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Income Tax Expense to Adjusted Income Tax
Expense
|
|
|
|
|
(Amounts in
thousands)
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
September 30,
2017
|
|
October 1,
2016
|
Income tax
expense
|
|
$
100,532
|
|
94,231
|
Income taxes -
reversal of uncertain tax position
|
|
-
|
|
2,368
|
Income tax effect of
adjusting items
|
|
6,545
|
|
(2,856)
|
Adjusted
income tax expense
|
|
$
107,077
|
|
93,743
|
|
|
|
|
|
Adjusted income tax
rate
|
|
27.6%
|
|
26.4%
|
|
|
|
|
|
The Company supplements its consolidated financial statements,
which are prepared and presented in accordance with US GAAP, with
certain non-GAAP financial measures. As required by the Securities
and Exchange Commission rules, the tables above present a
reconciliation of the Company's non-GAAP financial measures to the
most directly comparable US GAAP measure. Each of the non-GAAP
measures set forth above should be considered in addition to the
comparable US GAAP measure, and may not be comparable to similarly
titled measures reported by other companies. The Company believes
these non-GAAP measures, when reconciled to the corresponding US
GAAP measure, help its investors as follows: Non-GAAP revenue
measures that assist in identifying growth trends and in
comparisons of revenue with prior and future periods and non-GAAP
profitability measures that assist in understanding the long-term
profitability trends of the Company's business and in comparisons
of its profits with prior and future periods.
The Company excludes certain items from its non-GAAP revenue
measures because these items can vary dramatically between periods
and can obscure underlying business trends. Items excluded from the
Company's non-GAAP revenue measures include: foreign currency
transactions and translation, more or fewer shipping days in a
period and the impact of acquisitions.
The Company excludes certain items from its non-GAAP
profitability measures because these items may not be indicative
of, or are unrelated to, the Company's core operating performance.
Items excluded from the Company's non-GAAP profitability measures
include: restructuring, acquisition and integration-related and
other costs, legal settlements and reserves, tradename impairments,
acquisition purchase accounting, including inventory step-up,
release of indemnification assets and the reversal of uncertain tax
positions.
View original
content:http://www.prnewswire.com/news-releases/mohawk-industries-reports-q3-results-300544312.html
SOURCE Mohawk Industries, Inc.